The 2007 JCT Framework Agreement (the “FA 07”) is now on the shelves and promises to be a credible and functional standard form of the framework agreement for the construction industry. Framework agreements can be a very useful tool. If used effectively, they will help the parties avoid the pitfalls identified in Sir John Egan`s “Rethinking Construction” report. This report described the inadequacies of the industry`s approach to conventional public procurement and encouraged industry to take a more collaborative approach to project acquisition and development. Why use framework agreements? Framework agreements can be very flexible rules while offering a structured approach to contracting. They encourage parties to move away from their traditionally rather contradictory approach to risk distribution and fragmentation of construction rollers. This allows them to work together and better understand the companies and values of others, so that they can benefit from this understanding in future sustainable improvements in project development. For clients with large construction programs or public sector clients who use a framework to acquire future projects, they can avoid renegotiating contracts per project and allocate their resources to the best of their ability. A Little History Already in 2005, the JCT launched its initial standard form of framework agreement (the “FA 05”) as part of its 2005 rejuvenating standard contracts. The prospect of a standard framework agreement pleased the industry. The stated objectives of THE FA 05 were welcomed, but unfortunately the form was not well received. Concerns have been expressed about its usefulness, including its ability to be used by public sector clients. (See “New JCT Framework Agreement: A Missed Opportunity?”) The main concerns were the most important: again, the government must ensure that the magnitude of these changes does not take the project outside the original framework.
If this is the need, the project must be tendered separately. They did so before the adoption of agreed procedures for the EU`s application of framework agreements contained in the new Public Sector Directive. This must be implemented by early next year. The JCT has sought to allay industry concerns about the use of its type of framework agreement.