Business Models and Fair Practices

Introduction from CLC Workstream Lead

Sustainable and productive supply chains are critical for the success of our industry.  This workstream is therefore focussed on improving collaboration within supply chains in order to improve project outcomes and profitability.

In the longer term we believe the industry’s business model needs to change.  However, to build towards that, and to address current fundamental issues, the focus of this workstream is on improving the fairness of commercial practices. This includes elimination of onerous contractual clauses, improving payment practices, including retentions, and driving better procurement approaches, particularly price evaluation.

Much good work has been done to date by people within the industry and more is due to follow.

Steve Bratt – Group Chief Executive Officer, Electrical and  Contractors’ Association  /  Business Models and Fair Practices Workstream Lead 

Scope and Mission

To identify, support and develop interventions that will lead to successful and sustainable supply chain relationships and improved project outcomes. Including the development of collaborative contracts, fair payment practices, efficient and value-based procurement processes and the adoption of e-commerce.

Mission

  • Retentions: Identify and promote sustainable solutions for the practice of cash retentions.
  • Payment Improvement: Develop and implement initiatives for wider coverage and greater transparency on payment performance including digitalisation, payment reporting and the wider legislative landscape.
  • Onerous Contract Clauses: Identify and promote the exclusion of unfair contractual clauses from contracts.
  • Procurement: Develop and promote best practice procurement guide.

Onerous Clauses

The CLC has the ability to demonstrate leadership to: clients, consultants, contractors, supply chain and suppliers and publicise what is common ground for fair and unfair contractual practices.

The Next Generation Delivery: Fair Practices: Contracts Group is seeking to develop a collaborative view from industry to agree: a) what is fair, in doing so provide b) a public barometer for what is unfair, and c) allow SMEs to access a range of support on approaches to contractual good practice.

In the longer term, we will be seeking to work with the wider industry to consider existing contract forms and the potential development of collaborative approaches to support the Construction Playbook, Modern Methods of Construction (MMC), whole-life and Value Toolkit etc.

As a first step, we have created this resource section tool to identify sectoral approaches to best practice with regard to fair risk apportionment. The aim is to develop an active and comprehensive industry-wide resource tool for the benefit of the whole industry.

There are a number of great guides already available across our industry on what should and should not be included and they can be found at the links below.

This page and its contents are live. They will be regularly updated with examples of good practice. If you have any recommendations for this resource page, please contact the CLC at construction.enquiries@businessandtrade.gov.uk

Resources:

Procurement

  • Under Construction

Payment

  •  Under Construction

Retentions

  • Under Construction

Further Useful Resources

News