Understanding project partnership contract PPC25

This blog is our summary and key takeaways from  Session 8 from the New Homes in New Ways Summit, hosted by Trowers and Hamlins. Watch the Summit on our YouTube channel.

This workshop was hosted by Katie Saunders, Partner and Head of Manchester construction practice, Trowers and Hamlins, and Professor David Mosey CBE, Director of the Centre of Construction Law and Dispute Resolution at Kings College, London. 

This workshop was designed to be interactive, and questions were encouraged throughout. Katie began by introducing herself and her specialisation in collaborative forms of construction contracts, which were the theme of the workshop. She added that the workshop was about the place of contracts in unlocking housing delivery, and posed the question: “How can contracts be a support mechanism for these things?” 

Where do contracts fit into the ecosystem as a whole?

If we’re to deliver new homes in new ways, we will need to think collaboratively. We can only do this if we’re considering all the moving parts that need to be aligned. We know that aggregation of demand and aggregation of land supply is key, and we recognise that the sector will need to continue exploring standardisation, but the crux of it all is the legal machinery that needs to be in place to enable the housing delivery ecosystem. As Jez Sweetland pointed out during Q&A, you can have everything else in place but if you don’t have the right contracts, you will just end up with legal disputes and long delays. For this reason, this conversation about contracts was an important one. 

Framework Alliancing Contract (FAC 1)

David opened by saying that we have the know how, the technology and the will to deliver high quality housing, but we need a legal machinery that people can buy into. He added that our problem is that so often we do brilliant things and then part ways, then we do them again, but this is not progress, it’s flashes of brilliance that don’t move anyone forward. We therefore need a system that supports long term relationships, that facilitates trust with clients that their needs will be met, and allows contractors to work with their competitors. According to David, this is the only effective way to create a pipeline. 

He referenced Constructing the Gold Standard which produced 24 recommendations with a focus on strategic procurement through frameworks, and added that during the consultation, frameworks were seen as the best mechanism in terms of procurement and contracting. 

Find out more: What is the FAC-1 framework alliance contract?

PPC 2000 and why you’d use it on an MMC project

Katie said that for offsite manufacture, a multi-party contract is essential. We need a collaborative approach, and have a contract that recognises the key role of the manufacturer in this process. Using the example of the Rollalong home on the crescent at the Building Centre, Katie pointed out that this was a collaborative journey between Wates and Rollalong, and a lot of work had gone into it from the supplier side, from design, planning, manufacture in the factory etc. before the home hit the ground. You therefore need a contract that recognises this process. The PPC 2000 allows for contracting at the pre-construction stage (perhaps conditional) but you’re in a structure from an early stage and there is a commitment to work together. 

Find out more: What is PPC 2000?

Building legal capacity within Local Authorities

An interesting point was raised that in order for this to be beneficial, we must build legal capacity within local government, where lawyers may not be aware of these contracts. It was suggested that it might be the role of the supply chain to insist on these contracts to derisk projects for them. Participants added that unless lawyers in local government are encouraged in this way, they will keep doing what they’ve always been doing. One participant encouraged that these conversations are happening, and we’re in a key moment in time with national government support to come up with answers. David added that legal departments will benefit from the standard FAC1 forms which will save creating bespoke forms. 

Contracting and legal machinery remain a key part of the puzzle when it comes to enabling the housing delivery ecosystem.