Greater use of project bank accounts in UK

Cash is king in the construction industry and the UK Cabinet Office recently announced £4bn to flow directly to SMEs through project bank accounts (PBAs) over the next 3 years.

http://www.cabinetoffice.gov.uk/news/%C2%A34-billion-flow-directly-smes-through-government-construction-projects-and-new-construction-pip

All good stuff of course and would be nice to have a revolutionary approach to payment. Remember that NEC already has in place a Z clause for this, link below, the clause is half way down the useful downloads page

http://www.neccontract.com/about/ContractDownloads.asp

I wonder what if there is an appetite in the UK private sector and public/private sectors in other countries for this? I hope so......

Rob

Achieving cost certainty with NEC

A few times now I have heard people suggest that cost certainty is more likely achieved by using NEC3 ECC Option A than any of the other Options. Interesting. All Option A is at the end of the day is a pricing mechanism, this one happens to be lump sum. In the highly unlikely event that no compensation events arise, the lump sum agreed is that which is paid so I suppose cost certainty has been achieved. Whether this is a lower price paid than would have been obtained using Option C is debatable however my point is these are just finer points and surely the best way for clients to achieve 'cost certainty' is to act intelligently by having a good, clear scope of works with little change thereafter (ie know what you want); sensibly avoid, reduce or mitigate as much project risk as you can; sensibly allocate the residual risk left over (of course ensuring the contract matches this); surround yourself with sensible people; make sure the 'price' is realistic; and then press the go button......

So which do you think is likely to achieve cost certainty
1. Option A?
2. Option C?
3. The intelligent client?

Rob