The next generation of contracts should be designed to work with MMC.
The government's new construction playbook identifies the use of digital tools and modern methods of construction (MMC) as being critical to achieving its objectives of a leaner, greener building sector. The industry cannot return to its old ways, having learned so much during the pandemic about how to build more effectively.
Contracts have a vital role to play in facilitating new ways of doing business. Many standard form contracts have their roots in precedents from the mid-20th century and in some cases much earlier. While all the leading standard forms have had a number of refreshes in recent years, and there are numerous comparatively new forms that incentivise continuous improvement and collaboration (such as the NEC4 Alliance Contract), none have been drafted specifically to support MMC.
As was seen in the case of Bennett (Construction) Ltd vs CMC MBS Ltd (formerly Verbus Systems) Ltd (2019), many parties are therefore amending the standard forms of contract to adapt them to the milestone payment process typical of MMC projects. However, a more radical approach is needed to reflect the very different construction process that MMC entails.
Originally published on Building magazine's website.
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