Responsive repair maintenance: smarter contracts

Fri 19 Sep 2008

Contractual disputes are usually a result of a written contract not matching the way in which the Employer (eg: a housing association) and the Contractor intend to work together in practice.  This article gives a short overview of matters which Employers and Contractors often encounter but fail to adapt fully to the circumstances of each new deal.

Type of contract

The most common forms of contract are the JCT Measured Term and the TPC2005 contracts.

JCT contracts are often presented in an Employer biased form. Handwritten amendments are made that do not tie in well with the rest of the contract.  Preferably, all changes should be typed up as formal amendments, the effect of which has been considered against all the provisions of the contract.

TCP2005 partnering contracts encourage parties to select clauses to suit their working relationship and develop KPIs jointly.  The key to successful partnering, however, lies in the attitude of the parties and not what is written on paper.

Key Performance Indicators

KPIs must be established with a practical perspective.  The KPI’s may look OK on paper but they need to work in practice; otherwise they cause apparent underperformance by the Contractor and a resulting “work to rule” that results in tenant dissatisfaction.

For example, what should “first time fix” mean?  Will a tradesman be allowed to visit a house, assess the job, leave to buy what he needs, return to finish the job and record it as a first time fix; or, will his temporary absence mean a failed “first time fix”?  TCP partnering should allow the flexibility of the first arrangement but with suitable controls.

Open book arrangements

What will an open book relationship mean in practice?  Will all information be made available to your partner or just some; what might be the effect of withholding certain information?  Can you make available information your partner is seeking?  For example, data protection issues will arise if your partner is seeking employee salary information.  You will need a clear process to define the outcome of your partner challenging your costs.

Levels of authority

Variation orders are a common arrangement but can cause significant delay to completion of a job.  How will a requirement for a variation order tie in with the KPIs?  If a tradesman is to have authority to progress a job without a variation order, will there be limits on that authority and what process will be used where the authority is restrictive? 

Personal Digital Assistants (PDAs)

Some Employers now make it a requirement that their Contractor provides PDAs to their tradesmen.   Web access for the Employer and Contractor allows better knowledge of manpower utilisation and cost recovery and the system can be used to let the Employer book appointments directly.  If errors arise from the Employer’s entries, that must be factored into the KPI measurement.

Companies that do not have PDAs are beginning to lose out on tenders but if getting a PDA system seems attractive, remember that it must be carefully costed in terms of the price of each unit, software, servers and, possibly, the personnel required to support the system.  That cost may need to be factored into the tender price if a Contractor’s appointment is to remain profitable.

Appeared in Inside Housing published 19 September 2008.