by Clair Mooney | 4 Mar, 2025 | Contractual and Legal, Payments
The Conflict Avoidance Coalition is launching a campaign to raise awareness of conflict avoidance and better dispute management. Conflict Avoidance Week 2025 is all about driving a cultural shift – fostering collaboration, cooperation, and communication across the construction industry. By raising awareness and sharing best practices, the Coalition wants to create:
- Stronger working relationships
- Smoother project delivery
- A more positive and productive work environment
Conflict Avoidance Week 2025 aims to highlight the importance of avoiding the time and expense associated with unnecessary disputes on construction and engineering projects. Instead, parties are encouraged to pursue resolution of issues through more collaborative efforts.
Conflict Avoidance Week will be officially launched on 24 March 2025 at an online event where delegates will hear from a range of industry professionals involved in conflict avoidance activities. You can register to join the launch event.
There will be an excellent line up of speakers, including FIS Chief Executive Iain McIlwee, our resident QS Len Bunton and Anthony Armitage from FIS member Thirdway to mention a few. They will be talking all things Pledge, highlighting upcoming activities, projects and plans, and showcasing real life conflict avoidance success stories.
The campaign encourages those associated with procurement and delivery of construction and engineering projects to commit to the Conflict Avoidance Pledge (www.capledge.org). Almost 600 organisations have signed the Pledge, indicating their commitment to maintaining business relationships and dealing with problems early and amicably. Businesses who have signed the Pledge have made this a keystone of their day-to-day commercial operations. Pledge signatories also commit to delivering value for money and working collaboratively to ensure projects are delivered on time, on budget and on par.
The Conflict Avoidance Coalition now comprises over 80 organisations, all associated with the procurement and delivery of construction and engineering projects. Participants include public and private sector clients, Tier 1 and Tier 2 contractors, trade organisations, and consultants.
The Week will be profiled via a range of events, maildrops, webinars and social media campaigns, all with a view to raising awareness.
Further information on Conflict Avoidance Week 2025, please contact the Coalition: CAPledge@rics.org
by Oscar Venus | 4 Mar, 2025 | Contractual and Legal
The Procurement Act 2023 and the supporting Procurement Regulations 2024 come into force on 24thFebruary 2025.
The Act, along with the Procurement Regulations 2024 and the National Procurement Policy Statement provide a new regime for awarding public contracts in England, Wales and Northern Ireland ending the obligation for the UK to comply with EU Procurement Directives. The Scottish Government has opted not to join the rest of the UK having transposed EU Directives into their own statute book. However, the Act does apply to contracting authorities in Scotland which are either cross-border bodies or exercise wholly reserved functions.
The reforms open up public procurement to new entrants such as small businesses and social enterprises so that they can compete for and win more public contracts. The Act also embeds transparency throughout the commercial lifecycle.
The primary purpose of the Procurement Act 2023 is to overhaul and improve the public procurement process in the UK. The Act aims to ensure that public funds are used efficiently and effectively, delivering the best possible value for taxpayers. Vitally to companies in the finishes and interiors sector, it emphasises the need for procurement processes to deliver broader social, environmental, and economic benefits to society as a whole.
Some key points it covers includes:
- Principles and Objectives: The Act emphasizes value for money (not necessarily lowest cost), public benefit, transparency, and integrity in procurement processes.
- Simplification and Unification: It consolidates over 350 different procurement regulations into a single regime, making the system quicker, simpler, and more transparent.
- Competitive Tendering: The Act outlines procedures for competitive tendering, including preliminary steps, award criteria, and conditions of participation.
- Direct Awards: It provides guidelines for direct awards in special cases, such as protecting life or switching to direct awards.
- Exclusions and Modifications: The Act includes provisions for excluding suppliers based on various criteria, such as national security threats or improper behaviour.
- Frameworks and Dynamic Markets: It introduces frameworks and dynamic markets to facilitate competitive awards and streamline procurement processes.
- Transparency and Accountability: The Act aims to deliver world-leading standards of transparency in public procurement, ensuring that every pound spent goes further for communities and public services.
The Construction Products Association have produced an excellent introduction to the Act (made available to FIS members by virtue of our membership of the CPA). This is available here
Recognising Culture and behaviour, as well as law, must change if we are to make the most of the opportunity the new system presents. An important aspect of the Act is that Procurers now have more discretion about how to design and evaluate public procurements. Using the flexibilities the new system presents wisely is likely to be one of the keys to success.
To this end the Construction Leadership Council have produce a publication that sets out best practice, points out the potential un-intended consequences of certain approaches, and addresses common misperceptions that may be driving behaviour. It also offers very practical and detailed advice on market engagement, evaluation methodology and ensuring that contractors deliver. This has all been designed with the new procurement system in mind, and complements the formal technical guidance produced by the Cabinet Office.
Launching the Guide, the claim of the joint chairs of the CLC Working Group, Steve Bratt of the Electrical Contractors Association and Isabel Coman Director Engineering and Asset Strategy. TfL claim
“If there is a gap between the aspirations for your project, and the outcome of your procurement evaluation, this document is likely to tell you why, and what you might be able to do to fix it.”
If you have any questions on the Procurement Act, don’t hesitate to contact FIS CEO, Iain McIlwee or call the FIS office on 0121 707 0077.
by Oscar Venus | 28 Feb, 2025 | Contractual and Legal
To coincide with the Procurement Act coming into force this week, which has introduced significant changes to public sector procurement, Build UK has published an updated version of the Common Assessment Standard to ensure that it remains relevant and up to date for use by public sector clients and their suppliers.
Version 4.1 includes minor updates to the question set and associated guidance to reflect the requirements of the Procurement Act, as well as the changes to company size thresholds from 1 April. Suppliers will be required to complete the updated question set when they next go through the certification process for the Common Assessment Standard with a Recognised Assessment Body.
The new Procurement Specific Questionnaire, which has been published for use by public sector clients under the Procurement Act, confirms at paragraph 45 that the Common Assessment Standard should continue to be used for pre‐qualifying suppliers for ‘works’ contracts. It also states that where possible, public sector clients should “avoid requiring Common Assessment Standard certified suppliers to re‐input their information”, which will reduce duplication for the supply chain even further.
by Clair Mooney | 27 Feb, 2025 | CICV - Best Practice Guides, Contractual and Legal
Introduction
Ensuring prompt and full payment is critical to maintaining healthy cash flow in construction projects. This Practice Note provides best practices for preparing and managing payment applications to maximize your chances of getting paid on time and in full.
Once entitlement—such as for variations (as covered in Practice Note 4)—is established, the next challenge is securing payment. Many businesses fail to take a proactive approach to financial management, leading to cash flow problems and disputes.
This guide outlines key steps to streamline payment applications, minimize delays, and protect your financial position.
- Understanding Payment Terms and Cash Flow Impact
Before Signing the Contract:
Evaluate the impact of payment terms on your cash flow. If the terms are unfavourable, discuss alternative provisions with the Client.
Agree on a clear payment schedule before signing the contract. The schedule should specify:
- Application date
- Due date
- Final date for payment
- Deadlines for issuing payment and pay-less notices
Ensure the contract provides fair and realistic payment terms. If provisions do not align with your cash flow needs, negotiate adjustments.
- Submitting Payment Applications
Many disputes arise simply because payment applications are not submitted correctly or on time. Follow these steps to ensure compliance:
Know where to send applications. Some contracts require applications to be sent to both the Client’s/Contractor’s QS and another designated contact. Failure to comply may result in delayed or missed payments.
Use email tracking. Enable delivery and read receipts when submitting applications. Confirm that electronic submissions are accepted under the contract.
Follow contract format requirements. Ensure your application is detailed, clear, and well-documented, including:
- Quantities with supporting evidence
- Material and plant invoices
- Site instructions
- Photographic records
- Any other relevant back-up documentation
Tip: Many payment applications get rejected due to lack of supporting evidence. Make sure yours is comprehensive and meets the contract’s requirements.
- Follow-Up and Communication
Call the Client/Contractor QS after submission to confirm receipt and check if additional information is needed.
Send a follow-up email summarizing the discussion to document the status of the application.
Engage in proactive communication—don’t just rely on email; pick up the phone and discuss payment matters directly.
Before the contract begins, schedule a pre-contract administration meeting to ensure all financial procedures are agreed upon and documented.
- Managing Payment Delays and Non-Payment
If payment is not received by the final due date, you may have the right to suspend work until payment is made in full.
However, before suspending work, follow all contractual notice requirements carefully to avoid breaching the contract.
Monitor outstanding payments closely—do not allow unpaid invoices to accumulate.
Act quickly if payments are overdue. Many businesses let unpaid balances drag on, leading to serious financial strain.
Remember: It’s YOUR money. It should be in YOUR bank.
Final Advice
Understand your contract’s payment provisions before signing.
Submit applications correctly and on time.
Provide full supporting evidence to avoid rejections.
Follow up and communicate proactively.
Enforce your rights if payments are late, but always follow proper procedures.
By adopting these best practices, you can protect your financial position, improve cash flow, and reduce payment disputes in construction projects.
by Clair Mooney | 27 Feb, 2025 | CICV - Best Practice Guides, Contractual and Legal
Introduction
This Practice Note highlights the risks associated with variations in construction contracts, including onerous clauses, conditional precedents, and the risks of performing work without formal instructions. It builds upon Practice Note 1 on Notices and reinforces the importance of the “no instruction, no work” principle.
A key challenge for both contractors and subcontractors is completing work on-site only to face disputes over payment. This PN outlines how to identify and mitigate contractual risks related to variations, ensuring proper documentation and adherence to contract terms.
- Understanding Variations and Instructions
One of the most common clauses in subcontracts requires that all variations must be formally confirmed in writing. In many cases, failure to obtain a written variation order may result in the subcontractor having no entitlement to additional time or money.
How Variations Typically Arise:
- Site managers often issue verbal instructions on-site for additional work.
- Subcontractors, keen to progress the project, proceed without formal written approval.
- When the final account is settled, contractors dispute or reject the variation due to a lack of records or proper authorisation.
- Best Practices for Managing Variations
Step 1: Always Obtain Written Instructions
If a verbal instruction is given on-site:
- Request a formal site instruction (SI) in writing from the site manager.
Email the Contractor’s Quantity Surveyor (QS), seeking confirmation that it is a variation.
- Provide a cost estimate and request written approval before proceeding.
- If no written instruction is received, do not proceed unless the subcontract allows the subcontractor to issue a variation notice. If the contract requires written approval, failing to obtain it may mean the work will not be paid for.
Step 2: Clarify the Contractor’s Position
If the contractor refuses or delays issuing an instruction, this is a red flag and a potential dispute risk. In such cases:
- Explain that the contract requires written approval to avoid future disputes.
- If the contractor insists that work must start without a written instruction, escalate the issue immediately.
- Document the request and refusal for future reference.
- Keeping Accurate Records for Variations – refer also to PN 2
Maintaining proper records ensures variation claims are substantiated. The following records should be maintained:
- A log of all variation requests with request and response dates.
- A tracker for site instructions (SIs) received and whether they were in writing.
- Photographic and video evidence of the work before, during, and after completion.
- Labour, material, and time records for all additional work.
- Regular correspondence with the contractor’s QS to ensure agreement on variation costs.
Tip: Agree on variations as they occur rather than leaving disputes until the final account stage.
- Handling Disputes Over Variations
If an instruction is disputed, or if the contractor refuses to issue a variation order:
- Red flag the issue and document the request.
- Request an official instruction allowing the work to proceed, pending valuation under the contract.
- If no resolution is reached, consider alternative dispute resolution (ADR) options, such as the Conflict Avoidance Process (CAP), and the Low Value Adjudication Schemes.
- Readers should note however the provisions in the JCT and SBBC Contracts in Schedule Part 2, which relates to Clause 5.3 in the Contract, which allows for a Variation Quotation to be submitted, and this will include the direct loss and expense to be incurred. This brings cost certainty to the employer, and the contractor, and goes a long way to eliminate payment disputes.
- Final Advice
- Be proactive in managing variations — do not wait until the final account stage.
- Always insist on written instructions — verbal agreements are not enforceable.
- Keep detailed records — this will strengthen any claims for additional payment.
- Communicate regularly with the contractor’s QS — avoid last-minute disputes.
By implementing these best practices, contractors and subcontractors can ensure clarity, fair compensation, and effective commercial management while minimising disputes.
by Clair Mooney | 27 Feb, 2025 | CICV - Best Practice Guides, Contractual and Legal
Introduction
Contract amendments continue to be a major issue in the construction industry, often shifting risk disproportionately onto contractors and subcontractors. This Practice Note aims to highlight key contractual risks, explain why early contract review is essential, and provide guidance on managing amendments effectively.
For those new to the CICV Best Practice Guide (BPG), we strongly recommend reviewing its contractual and commercial management recommendations to reduce disputes and improve cash flow stability.
- Why Early Contract Review Matters
Many contractors fail to review contracts until it is too late. A common scenario is when a contractor only seeks a contract review the day before work starts—by then, it’s too late to renegotiate.
Review the contract at the tender stage to identify risks early.
If amendments are unreasonable, negotiate or price the risk accordingly.
If the contract terms are unacceptable and non-negotiable, be prepared to walk away.
Tip: Some industry bodies, such as the Finishes and Interiors Sector (FIS), offer Contract Review Services to help members identify high-risk clauses before signing.
- Common Risk Areas in Contract Amendments
Below are some of the most problematic contract amendments contractors should watch for:
Payment Terms
- Amendments that delay payments beyond standard terms.
- Retention clauses that extend payment periods or increase retention percentages.
Notice Provisions
- Onerous “time-bar” clauses requiring notification of delays within a very short timeframe (e.g., 2-7 days).
- Strict notice requirements for submitting claims—refer to Practice Note 1 (PN1) on Notices for details.
Liquidated & Ascertained Damages (LADs)
- LAD amounts that are disproportionate to the subcontract value.
- No clear cap on liability, exposing subcontractors to excessive financial penalties.
Practical Completion
- Does the subcontract have its own completion date, or is it tied to the main contract completion?
- Are there unfair dependencies on other contractors’ work?
Variations and Design Responsibility
- Unclear variation procedures—refer to Practice Note 4 (PN4) on Variations for best practices.
- Expansion of Contractor Design Portions (CDP), shifting design liability to subcontractors.
- No clarity on interface issues with other trades or contractors.
Site Conditions and Title Issues
- Clauses that pass responsibility for ground conditions or existing buildings to the contractor.
- Unclear responsibilities for resolving title issues or dealing with external utility providers.
Insurance Requirements
- Contractual insurance provisions that do not align with your actual policies.
Design liability clauses that may not be covered under your Professional Indemnity (PI) insurance.
- How to Manage Unfavourable Amendments
If you encounter onerous contract amendments, you have three options:
- Negotiate the terms with the client/contractor. Many amendments can be modified if raised early.
- Price the risk—factor potential liabilities into your tender pricing.
- Reject the contract and walk away if the risks are too high.
Tip: Industry bodies and trade organisations can provide support if you face unreasonable contract terms.
- Industry Response and Conflict Avoidance
The construction industry is increasingly concerned about excessive contract amendments. The Conflict Avoidance Coalition is actively working with industry experts to address unfair practices.
If you are seeing highly unfair or unworkable contract amendments, reach out to your trade body or the Conflict Avoidance Coalition for support.
For further insights, watch the Cash Flow and Contract Webinar on the CICV website.
Final Advice
Always review contracts before signing—never wait until work is about to start.
Understand your obligations and risks—identify clauses that could impact your cash flow.
Engage in early discussions—negotiate terms that protect your interests.
Seek expert advice—use industry contract review services if needed.
Taking a proactive approach to contract amendments will help mitigate risk, reduce disputes, and improve financial stability.
