Construction Procurement Contracts UK: Legal Guide

What this document is

A construction procurement contract is the written agreement between a client (sometimes called the employer) and a contractor that sets out how a construction project will be designed, built, priced, programmed and managed. In practice it is rarely a single document.

It typically pulls together a form of contract (such as a JCT, NEC or FIDIC standard form, or a bespoke agreement), drawings, specifications, a pricing document, programme dates, and various schedules covering insurance, collateral warranties and retention. The 'procurement method' sits one layer above the contract itself.

It describes how responsibilities are split between the client and the contractor: who designs, who builds, who takes the risk on buildability, and how the price is fixed. Common routes in the UK include traditional (design by the client's team, construction by the contractor), design and build (single point responsibility for both), management contracting, construction management, and various forms of framework or partnering arrangement.

The route chosen drives the contract wording, which in turn drives how disputes play out if something goes wrong on site.

How to use this document

1. Pick a procurement route that fits the project. Match the route to the size, complexity and risk appetite of the job. A straightforward extension or fit-out often suits traditional procurement where the client controls the design. A complex commercial development with tight programme pressure may work better under design and build, because the contractor owns buildability risk and the programme in one package. 2. Use a recognised standard form where possible. JCT, NEC and FIDIC contracts have decades of case law behind them, and both sides generally understand how the clauses work. Bespoke contracts can be drafted, but they often hide ambiguity that only surfaces in a dispute. If amendments are made to a standard form, get them marked up clearly in a schedule of amendments rather than buried in the body. 3. Allocate risk explicitly in writing. Design risk, ground conditions, statutory approvals, delay, defects, fluctuations in material costs and force majeure should each be addressed head-on. Silence in a contract is not neutral: it usually means the risk falls on whichever party the common law or the standard form default places it on, and that may not be what either side expected when they shook hands. 4. Lock down payment, variations and the programme. The Housing Grants, Construction and Regeneration Act 1996 (as amended) requires construction contracts to contain specific payment and adjudication provisions. Make sure payment notices, pay less notices, interim valuations and the final account process are clearly defined. Variations should have a written instruction procedure, and the programme should identify key dates and any liquidated damages for delay. 5. Plan for disputes before they happen. Include a sensible dispute resolution ladder: early warning, senior management escalation, mediation, adjudication, and finally arbitration or litigation. Statutory adjudication is available as of right on most construction contracts in the UK and is often the fastest route to a binding (if interim) decision, so understand how it works before you need it.