Last month saw the release of the JCT Design and Build 2016 contract. The headline changes from the 2011 form relate to payment, insurance and performance bonds/parent company guarantees. The purpose of the changes was to simplify the provisions and provide greater flexibility in the contract. In summary:
- the payment provisions have been streamlined with the aim of clarifying the Construction Act requirements for payment. The commonly encountered problem of identifying payment due dates after practical completion has been addressed and the contract now provides for them after practical completion;
- the insurance options have been consolidated. They have also been revised to provide an alternative arrangement in the event insurance cannot be obtained by an Employer under Option C (alterations or extensions to existing structures) allowing for bespoke insurance arrangements to be made;
- there is now provision for the grant of a performance bond and/or a parent company guarantee as additional security for the Contractor’s performance under the contract, reflecting the reality of current practice; and
- the CDM Regulations 2015, the JCT Public Sector Supplement and the Public Contracts Regulation 2015 are now incorporated.
We expect the SBCC will follow the lead of the JCT and amend their suite of contracts on a similar basis in due course. Do get in touch with us if you would like to be notified when SBCC publish their changes.