
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
What is it?
FAC-1 is short for the “Framework Alliance Contract” which was published by the Association of Consultant Architects (“ACA”), and fuses a traditional framework agreement with an alliancing contract.
It is the inclusion of alliancing principles that distinguishes it from other standard form framework agreements. As such, it is a multi-party framework agreement under which all parties “work collaboratively” to deliver “framework objectives”.
Have we seen this before?
For those familiar with PPC 2000 (“PPC”) and TPC 2005 (“TPC”), FAC-1 feels very familiar. Drafted and developed by the same author as PPC and TPC, FAC-1 contains many of the same concepts. These include:
Consequently, the FAC-1 “alliancing” principles are very similar to the “partnering” principles in PPC. Effectively FAC-1 is a stripped-back version of PPC, with the inclusion of some framework agreement provisions. The exclusions are the project-specific terms in PPC (CDM Regulations compliance, the quality of materials and standard of workmanship, etc. ) which are intended to be governed by the called-off contract.
Collaboration under JCT FA and NEC FC
Both the JCT and NEC standard form framework agreements can also be used to achieve collaborative working. Under JCT FA this is done through shared framework objectives, collaborative risk analysis and value engineering. In the NEC F, this is through the potential to add collaborative provisions in the “Framework Information”.
Call-off procedures
Both of the other standard form framework agreements (JCT FA and NEC FC) and FAC-1 are all drafted as single provider frameworks. However, only FAC-1 includes a schedule for direct award procedures, mini-competition rules or “objective criteria” stating when call-offs are to be by mini-competition and when they are to be by direct award.
One form or many?
The way that the JCT FA and NEC FC are drafted means that it is necessary to enter into a separate framework agreement document with each framework provider.
The opportunity to have a single framework agreement using FAC-1 may, therefore, seem attractive. However, in order to be a valid framework agreement under the Public Contracts Regulations 2015, a framework agreement must include pricing information. Under FAC-1, this is contained in a separate document entered into between the Client(s) and each individual framework provider.
There is, therefore, no saving of administration by using FAC-1 compared to JCT FA or NEC FC, as there is minimal difference between them. The main differences are:
It remains to be seen whether clients will use FAC-1 as a multi-party contract, as it is intended. In practice, PPC has generally been used as a two-party contract, with clients, contractors and consultants showing little appetite for all signing up to the same contract.
How/when should it be used?
The “stripped back” nature of FAC-1 makes it very flexible. It is shorter than many bespoke Framework Agreements (although longer than JCT FA and NEC FC). However, don’t let this apparent accessibility fool you – this agreement needs careful and experienced handling to avoid issues further down the line.
As a “starter for ten” here are a few issues to consider:
- Alliance Activities - such as activities to achieve improved supply chain collaboration, innovation, etc.; and
- Pre-Contract Activities - being the types of support activities that a client may need from a provider before it is known whether or not a project is feasible.This is before you get to works carried out under a called-off Project Contract. These alliance activities and pre-contract activities may or may not be paid for. Pre-contract activities may become subject to a Project Contract where those activities roll into one that is later called off. It is important to understand the distinctions between these different types of activities, in order to use the correct instruction mechanism. For example, FAC-1 does not include CDM 2015 obligations, which can “kick in” early on a construction project (e.g. the CDM principal designer must be appointed from the start of the pre-construction phase). This means that a Project Contract must be called off before obligations under the CDM Regulations are triggered, rather than just relying on alliance activities or pre-contract activities.
In conclusion
Overall, the “alliancing” concept of FAC-1 does not feel new. Essentially it involves a re-working of collaborative working concepts that have been familiar to users of PPC since 2000.
For fans of PPC, FAC-1 will be a welcome addition as it reproduces the same collaborative working mechanisms at framework agreement level.
Otherwise, clients who are already using one of the other standard form or a bespoke framework agreement, or who have had a bad experience of collaborative working in the past, will not rush to use FAC-1.
For more information about this article, please contact Beulah Allaway. For more information about the work we do in this area, please visit our website.
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
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