clients APPLAUD - NEW ENGINEERING CONTRACT - PROFESSIONALS PLEASED

Client organisations have welcomed the Latham Report which looks to strengthen their role in the industry.

The Chartered Institute of Purchasing & Supply called it the most significant industry report for over 30 years.

It was the CIPS that urged Sir Michael to call for a 30% reduction in construction costs over the next five years. The institute had also called for the setting up of a new enterprise, the Construction Clients Forum.

Frank Griffiths, the CIPS assessor, said: 'At present a climate of insider dealing pervades the construction industry, with contracts littered with obstacles for clients to trip up on. Greater cooperation must replace traditional adversarial practices.'

And William McKee, director-general at the British Property Federation, said: 'We are pleased that Sir Michael has recognised the need to change the structure of the JCT radically.

'We cannot continue to have parties who are not signatories to contracts vetoing the form of those contracts and frustrating the wishes of the parties who do sign them.

'The recommendation for a checklist of design responsibilities, adjudication becoming the normal method of dispute resolution, will do much to enhance the procurement process.' The New Engineering Contract was developed by Coopers and Lybrand in March 1993 for the Institution of Civil Engineers.

It boasts:

- simple language defining an integrated family of contracts covering design, project management, construction and commissioning

- flexibility to allow use in all types of project with up to date allocation of risk to reduce cost and time overrun for clients and losses for contractors

- it is based on project management procedures and applicable to all types of engineering in the UK or abroad

- claims are replaced by pre-agreed 'compensation events' The RICS and ICE have welcomed the Latham Report's recommendations. The RICS says it strongly endorses the report and is particularly pleased at the emphasis placed on understanding and meeting the needs of the client. It approves of the proposal for a Construction Clients Forum, CIC briefing guide for clients and DoE Construction Strategy Code of Practice. RICS is also pleased that many of its recommendations had been adopted, including: the emphasis placed on the need for quality to be taken into account as well as price for tenders; that adjudication should be the normal method of dispute resolution; and the need for a check list of design responsibilities.

The ICE also welcomed the report and particularly its recommendations for the wider use of the ICE's New Engineering Contract. It supports the proposal that the NEC should be used as the basis for a standard construction contract and should be used on one third of all Government projects to be started over the next four years.