The Joint Contracts Tribunal (JCT) has published the 2016 edition of the Design and Build Contract (D&B 2016), arguably the most popular form of standard building contract in England and Wales. We look at what's new.
The JCT standard form contracts have been in use for over 85 years, with new contracts and new versions being released regularly to keep up with industry practice and prevailing law. Not only has the 2016 Edition been revised to keep up with the times, the JCT has streamlined it to ensure that it is as user-friendly as possible.
The JCT will continue to roll-out the 2016 Edition on a suite-by-suite basis over the coming months. We will keep you posted. Other 2016 contracts that have already published include the Minor Works Contract suite and Short Form of Sub-Contract and Sub-subcontract.
Here's a summary of some of the key changes. There are more, so please get in touch with us if you want to learn more.
The payment provisions in D&B 2016 have undergone the biggest change:
- D&B 2016 no longer distinguishes between interim payments due before practical completion and after practical completion. Previously, the period between interim certificates during the rectification period was two months rather than one.
- D&B 2016 now includes aspects of the government's fair payment principles. Interim Valuation Dates have been introduced. This requires the parties to insert a specific payment date in the contract particulars. If left blank, the default payment date will be one month after the possession date.
Insurance Option C (insurance by the Employer of existing structures and works to them) has been extended by giving the parties the option of adding a "replacement schedule C". This allows the parties flexibility to dis-apply paragraph C1 and record their own, bespoke insurance arrangements (for example, where a tenant/employer in a multi-tenanted building requires a complex insurance regime with different levels of cover for refurbishment works).
More generally the JCT has simplified the insurance provisions by re-arranging and consolidating key clauses.
Performance Bonds and Guarantees
D&B 2016 includes an obligation for Performance Bonds and/or a Parent Company Guarantee. This reflects what is, already, a standard industry requirement. The JCT has not provided the form of security documents. These will still need to be prepared by the parties.
Third Party Rights and Collateral Warranties
D&B 2016 now provides the option of using Third Party Rights as an alternative to separate Collateral Warranties. Again, the parties will still need to prepare the Third Party Rights document themselves (but JCT guides are available).
Building Information Modelling (BIM)
Parties now have the option to include BIMs, to reflect the increased use of BIMs across the construction industry. If a BIM protocol is included, it will form part of the Contract Documents and so must be complied with. However, the Conditions of Contract will take precedence over any BIM protocol. Often BIM protocols attempt to claim precedence over the terms of a contract, but the JCT considers that technical documents should not override or modify the conditions of contract.
CDM Regulations 2015
D&B 2016 incorporates the changes under the Construction (Design and Management) Regulations 2015. These changes were previously included in a separate amendment sheet that was issued by the JCT in March 2015.
Public Contracts Regulations 2015
D&B 2016 now contains optional, supplemental provisions to reflect the relatively new Public Contracts Regulations (for example Supplemental Provision 11 relates to the Freedom of Information Act 2000). These provisions will be used by public bodies and also contractors and sub-contractors who are engaged to act on public sector building projects.
TRANSITIONING TO D&B 2016
There will be a transitional period as clients and users familiarise themselves with the changes and gradually begin to use D&B 2016. Clients will need to update their standard form documents to reflect the changes and users will need to be trained in how to use them.
Bevan Brittan can support you in all aspects of D&B 2016. We can help you update your standard form documents, negotiate building contracts or provide training on all aspects of the JCT 2016 Edition.