Rail contract forms 'fail' to employ best practice

Network Rail has run into a storm with the launch of a new suite of contracts starting this month.

Professor Rudi Klein, the chief executive of the Specialist Engineering Contractors (SEC) Group, lambasted Network Rail for ignoring a raft of government procurement advice to use model forms of collaborative contract that encourage supply chains.

"The contracts do not reflect advice from the National Audit Office, or the Treasury, or the Office of Government Commerce, all of whom have urged people using public money to use collaborative forms," he said.

Klein claimed no representatives from the supply chain organisations were involved in putting together Network Rail's strategy and the SEC Group was not asked for its views.

However, the Civil Engineering Contractors Group, which helped prepare the new strategy, said it is "extremely happy" with the new plans. "The right people were around the table when the decisions were made and we have come up with a far more equitable sharing of risk," said a spokesman. "We believe they have come up with a set of contracts that will be well understood and we look forward to them being implemented."

Network Rail director of contracts and procurement Ian Sexton said: "The final documents reflect a sensible allocation of risk between the parties and we hope that the change will save management time for us and our suppliers and contractors when setting up and managing contracts."

At issue are seven contracts based on amendments to standard forms for use on major works. They include The Institution of Civil Engineers conditions of Contract, Measurement, Target Cost and Design and Construct versions the Joint Contract Tribunal (JCT) Private with Quantities version and the Institutions of Mechanical and Electrical Engineers' Model Forms MF/1 and MF/2.

Klein said Network Rail should have looked at the New Engineering Contract, the PPC 2000 or the latest JCT, all of which encourage collaborative working and supply chains.