National Specialist Contractors Council (NSCC, see www.nscc.org.uk) launched the NSCC No Retention Policy on 16 February 2011 - see press release below.
http://www.fairpaymentcampaign.co.uk/docs/press/10NSCCCelebratesLaunchof%27NoRetention%27Policy.pdf
All good stuff of course, retention is long overdue an overhaul. Maybe one day we will be defect free, rending all of this debate redundant. If not, contractors will actually do what they promised they would do in accordance with the terms of the contract in the first place (ie fix the defect in a timely manner, assuming of course it is indeed a defect!). Finally, if all else fails, in many instances the cost effective provision seems to be have a retention bond in place to call off. The old fashioned method of tying up retention monies for long periods of time often at a level that is greater than the profit to be gained in delivering the works is crazy, especially as the money is only intended to act as an 'incentive' or 'stick' for the contractor to correct and only therefore only needed towards the end of construction. If you absolutely must have retention, have a look at NEC3 ECC Option X16 which provides for a retention free amount.
My preference is the 1st 2 outcomes, anything else is waste, costs money and gets us pretty well nowhere as an industry.
Rob
Thursday 17 February 2011
Friday 4 February 2011
Measured Term Contracts - Good Value?
For a while now I've been wondering about the merits of using measured term contracts as the basis for procuring maintenance work. As a QS, I can see the benefits of having an agreed set of rates to cover the types of work likely to be required over the contract period - the contractor's QS measures and values, the client's QS checks. As the Meer Cats say, simples!
But hang on a minute, is that the best we can do in the 21st Century? Does the process of measuring and valuing really add any value to the client or does it just keep QSs gainfully employed? Oh dear, I can almost hear the sharp intakes of breath ... have I offered up the sacred cow?
On construction projects we have become familiar with cost plus arrangements so why can't we apply this methodology to maintenance work? We have the technology these days to be able to handle the large amounts of data that would need processing - operatives using handheld devices to record on / off site times, cost clerks coding and inputting invoices, use of online CAFM systems for managing workload and payments.
I can hear someone at the back saying "but if the contractor puts down that a job took 3 hours, how do we know that it actually did take 3 hours, or if it should have taken 2 hours?". Good question. Surely we could carry out sample audits to confirm that the resources being paid for have been used. Surely we could carry out annual benchmarking exercises to confirm that value for money is being delivered? Couldn't we use KPIs to incentivise improved performance? I'm sure it isn't beyond the wit of man to devise such checks and balances.
I'm convinced that a properly set up NEC3 Term Service Contract could deliver this, now I just need to convince a client to give it a go!!!
But hang on a minute, is that the best we can do in the 21st Century? Does the process of measuring and valuing really add any value to the client or does it just keep QSs gainfully employed? Oh dear, I can almost hear the sharp intakes of breath ... have I offered up the sacred cow?
On construction projects we have become familiar with cost plus arrangements so why can't we apply this methodology to maintenance work? We have the technology these days to be able to handle the large amounts of data that would need processing - operatives using handheld devices to record on / off site times, cost clerks coding and inputting invoices, use of online CAFM systems for managing workload and payments.
I can hear someone at the back saying "but if the contractor puts down that a job took 3 hours, how do we know that it actually did take 3 hours, or if it should have taken 2 hours?". Good question. Surely we could carry out sample audits to confirm that the resources being paid for have been used. Surely we could carry out annual benchmarking exercises to confirm that value for money is being delivered? Couldn't we use KPIs to incentivise improved performance? I'm sure it isn't beyond the wit of man to devise such checks and balances.
I'm convinced that a properly set up NEC3 Term Service Contract could deliver this, now I just need to convince a client to give it a go!!!
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