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Construction industry aims to future-proof contracts as Covid impacts continue

'Collaboration' continues to be the order of the day in construction contracts says the CLC who are urging clients, contractors and sub-contractors to act responsibly and fairly in contractual arrangements.

Last month the CLC updated its guidance and tools to help manage the effects of the pandemic within construction contracts as we approach the end of another unique year.

Primarily it wants to future-proof JCT / NEC amendments for new contracts so that if circumstances change parties take a more collaborative approach. It also published a suite of templates which helps parties to formally record how they can avoid disputes.

The CLC's efforts are very much welcomed given the situation before us. Delays on site largely caused by material and labour shortages have plagued the construction industry throughout 2021 and the outlook for 2022 is for more of the same.

Whilst the impacts vary across individual businesses, it is very unlikely that anyone has got through the pandemic period unscathed. But is the industry about to hit even choppier waters as the spirit of collaboration gives way to more 'business as usual'?

Has 2021 panned out as predicted?

Back at the beginning of 2021, after a year of greater collaboration the CLC predicted that: "Commercial behaviour was hardening throughout the supply chain, including greater emphasis on management of existing contracts, increased tender lists and sub-economic pricing, increasing insolvencies and robust protective discussions on risk allocation in new contracts."

The CLC said they were expecting a rise in the number of claims during 2021 that turn into more formal disputes, with the main triggers being reaching final account, tightening cash-flow within industry, financial reporting requirements, project/client type and reduced good will.

It was a prediction that wasn't far off the mark. We are continuing to see an increase in the number of Covid-related disputes and enquiries from companies who want to put steps in place to avoid them in the first place.

We have already highlighted that one of the biggest issues here is the lack of legal protection for contractors and sub-contractors - you can read our blog here. Uncertainty and unpredictability will be with us until there is a proper legal framework to accommodate how claims are treated for variations, time and money due to the pandemic.

Proper contract administration and management - more important than ever

Nobody has a crystal ball, and it is impossible to manage events outside of our control. But what every business can do is make sure their understanding of contracts, liabilities and claims, and their processes for record and deadline-keeping and reporting, are all thorough and a priority.

We know it is not always easy to put these administrative responsibilities at the top of your agenda, so why not consider outsourcing these tasks to Quantum CPM? Our contract specialists provide a range of low-cost services specially designed for construction industry contractors and sub-contractors - large and small - to keep their projects on track, avoid disputes and ensure they make the expected profits.

Find out more https://quantumcpm.co.uk/services/bundle-services/.