JCT05: 2009 Amendments – the ‘Green’ Suite19 January, 2010
During 2009 the JCT released in tranches its latest set of amendments to the 2005 suite of construction contracts. In the absence of guidance from the publishers we have produced this note to summarise the key changes.
The focal point of the changes is sustainability, and the amended framework is intended to encourage parties to think about it at both the design and construction phases. The changes follow on from the JCT’s industry consultation and the subsequent publication of their Guidance Note ‘Building a Sustainable Future Together’ (available from the JCT website: www.jctltd.co.uk ).
Although the press releases for the 2009 amendments concentrated on sustainability, there were other notable changes including payment provisions, insurance options and notice clauses. Amendments were also incorporated to comply with the Office for Government Commerce’s (OGC) Achieving Excellence criteria.
There are two new clauses by which Contractors are:
• Encouraged to suggest economically viable amendments to Employers Requirements, which if instructed as a variation, may result in an improvement in the environmental rating and/or performance of the Works, during construction and on completion; and
• Obliged to provide the Employer with all information reasonably requested on the environmental impact of the supply and use of materials that the Contractor has selected.
The JCT Framework Agreement suggests the Employer should be assisted in exploring ways to improve environmental performance and sustainability involving:
• Reductions in waste;
• Reductions in energy consumption;
• Reductions in mains water consumption;
• Reductions in C0² omissions;
• Reductions in materials from non-renewable sources;
• Reductions in commercial vehicle movements;
• Maintenance or optimisation of biodiversity;
• Maintenance or optimisation of ecologically valuable habitat; and
• Improvements in whole life performance.
There has also been a subtle shift in the value engineering clauses to encourage Contractors to suggest changes which would result in both financial benefits to the Employer and improved environmental performance and sustainability.
The sustainability changes are a framework rather than a set of prescriptive criteria, and the focus remains on encouragement rather than obligation. Some may say that the JCT has not gone far enough to make a significant difference but this is a starting point that advantages can be taken from. Contractors in particular can gain a competitive edge in this tough economic climate by being forward-thinking in this regard. Inventive design and use of materials can mean that green is not necessarily more expensive, and can reduce both capital costs and long term expenditure.
Other Amendments: Payment
The following should be noted:
• After Practical Completion interim certificates are now to be issued at regular 2 month intervals (or as otherwise agreed) instead of as and when further amounts are ascertained
• If the Final Certificate means that the Contractor has to pay an amount to the Employer, the Contractor is now obliged to issue a payment notice, and if applicable, a withholding notice
• A Schedule 2 Quotation has now become a Variation Quotation or an Acceleration Quotation
• Liquidated damages are now withheld from ‘sums’ rather than ‘monies’ due to Contractors
• When dealing with loss and expense, a matter arising from antiquities is now a Relevant Matter
Other Amendments: Insurance, Notices and Sub-Contracting
These changes also reflect the now common business practice of using electronic communications. All references to ‘written notice’ are now simply to ‘notice’, however notices do still have to be in writing! The difference is that they can now be sent by any means (electronic or otherwise) as agreed in writing between the parties. The electronic communications clause and the notices clause have also been amalgamated which has changed the clause numbering dealing with the Final Certificate so users again should take note.
Be aware also of the changes to termination notice periods as given by both Contractor and Employer. The first period for remedying the default given by notice remains 14 days, however if the default is not remedied in that period the non-defaulting party now has up to 21 days after expiration of the first 14 to serve notice to terminate.
Professional indemnity insurance cover now includes a default aggregate amount for pollution, contamination and asbestos claims as is the industry norm.
Finally, where considered appropriate, sub-contractors are encouraged to be appointed using the JCT Sub-Contract. The JCT contracts are designed to work back-to-back and appointing under a JCT sub-contract will therefore avoid discrepancies and inconsistencies between the main and sub contracts. This is preferable to utilising contractor’s or subcontractor’s own terms unless these have been specifically amended to work with the JCT format.
Reviewed in 2015