CIEC outlines its vision

A radical restructure of the Joint Contracts Tribunal limiting the powers of veto is being sought by contractor members of the Construction Industry Employers Council. It wants the JCT to be split into four separate 'colleges' which would represent clients, consultants, main contractors, and subcontractors. Only the 'college' representing the parties to a particular contract form would be entitled to vote on its terms.

In a weighty, and at times controversial, statement of evidence to the Latham inquiry, CIEC contractors argue strongly that pay-when-paid terms must remain a freely available option. They support a move to milestone payments and want payment of subcontractors within 30 days to be written into all standard forms. In addition, they back accreditation of contractors and the use of adjudication to resolve disputes.

The CIEC submission was compiled by the BEC, FCEC, and FMB. Separate evidence has been forwarded to Latham by specialist subcontractor and building materials producer members of the council.

Key features of the contractors' evidence include -

l Contracts Tribunal: the new 'college' structure should enable the JCT to publish a full range of documents including domestic forms of subcontract and conditions of engagement between client and consultant. This would lead to the availability of 'a matrix of contracts which are fully compatible with each other.'

l Payment: despite support for pay-when-paid, a compromise is offered. Where pay is delayed by the client due to the default of the main contractor or another subcontractor, then the main contractor should pay 'innocent' subcontractors. And subcontractors appointed on a genuinely domestic basis should retain the right to be paid in full in the event of client insolvency.

To increase contractors' security of payment, a trust should be imposed by statute on the approximate value of three months' work. Clients should honour architect's certificates within seven rather than 14 days.

The introduction of a contractor's lien is not supported. The QS or engineer should be contractually obliged to measure and value variations within a fixed timescale. Where this is not done, the client should be required to pay interest. And final accounts should be settled within three months of completion with interest again paid in the event of failure.

l Qualification: it is acknowledged that a system of accreditation of contractors for public sector work 'is becoming desirable.' But companies should not be forced to adopt quality systems such as BS5750 to become accredited.

Adjudication: it is argued that adjudication should be introduced into all JCT main contract forms, except for the minor works form or any form involving a consumer.

l Government: the DoE should have a co-ordinating and advisory role among all Government departments setting an example of best practice.

l Bonds: the sum bonded should not exceed 10% of contract value and the liability under bond should terminate on practical completion. Government is strongly urged to condemn any form of on-demand bond.

l Implementation: CIEC opposes the idea of a regulatory board to implement any recommendations in the final Latham report. It calls for the team of inquiry assessors to continue for a further six months to carry forward the proposals before considering any such board.

Commenting on the CIEC submission this week, Jennie Price, legal affairs director at the BEC, said: 'The whole exercise has generated a new spirit of communication. We have talked to more bodies more openly than we have for a long time.'