The JCT has issued a new life cycle consultation, calling for the construction industry to get rid of some of those bad habits and push the green initiative up the agenda.
1. Reduce calories carbons
The idea is for the construction industry to look at the whole of the life cycle of a building from its conception through to its occupation, and to get those involved in designing and constructing the building to more formally invest in its success in terms of waste, energy bills, embedded carbon, carbon performance during occupation and carbon impact at the end of the building's life.
2. Plan for the future
To support the Government's Strategy for Sustainable Construction, the JCT is considering options such as introducing a new contract for a single contractor to design, construct and maintain a building, to give continuity across a building's lifespan. Few smaller contractors will be capable of offering the additional FM role for a building, once constructed. It is difficult to see how this can be achieved beyond those large contractors who have dedicated FM contracting arms. Perhaps a new type of contractor may emerge from this change in the market.
Alternatives may include requiring the contractor to train and advise the facilities manager before and in the months following practical completion or to assume the role of facilities manager for certain M&E elements of the building for a number of years after its completion.
3. Find a mate
Should old acquaintances be forgot? Partnering is again a great fit for parties wishing to promote initiatives that require more than just financial incentives to achieve long term success.
The JCT have asked whether the industry want to see financial incentives included in their new contracts, such as:
- Payments linked to Key Performance Indicators (KPIs) – these are briefly referred to in the 'Supplemental Provisions' that were introduced in revision 2 of the old 2005 suite of JCT contracts, though it was for the parties to incorporate the actual KPIs in the contract documents.
- Payments that are linked to process rather than output, such as receiving payment upon taking specific steps intended to maximise sustainability e.g. comparing embedded carbon levels in materials to make an informed product selection.
- Payment of liquidated damages in the event of failure to achieve standards, such as BREEAM or EPC ratings.
- Payment of bonuses in the event that standards, such as BREEAM or EPC, are exceeded.
One size will not fit all. Some elements of sustainability may be more easily measurable than others, and therefore more suited to KPIs; whilst others may be more suited to payments linked to processes.
These types of financial incentives are likely to be more palatable to parties who are in long term relationships and who can realise greater profits over a succession of projects. Another idea being put forward by the JCT is to allow for post occupancy reviews by project teams to facilitate better performance on subsequent projects, which again has more of a partnering feel about it.
Will old habits die hard?
Is this the wrong time for companies to be pushing the green agenda? Possibly not. We are now seeing a shift in the commercial developer's market, with larger developers now recognising the potential impact of this issue on their stock market value. The JCT's lifecycle consultation runs online until 5 April 2012. Have your say and add your views to the online consultation.
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