Projects & Construction Quarterly Bulletin (June 2022)

Welcome to the Projects & Construction team’s Quarterly Bulletin.

In this edition, we touch on the recently published Procurement Bill and the proposed new secondary option clause for the NEC4 Engineering and Construction Contract. We also consider what insurance is required on fit-out projects and  when an Employer can adjudicate over the true value of its Contractor’s Works.

If you have any questions, please get in touch with your usual Clyde & Co contact or reach us at our Infrastructure@clydeco.com.

All change: Transforming Public Procurement in the UK : The Procurement Bill

The Procurement Bill (the ‘Bill’) has now been published, following its first reading in the House of Lords. The second reading, where all aspects of the Bill would have been generally debated, took place on 25 May 2022. The Bill now moves on to the committee stage on 4 July where it will be examined line by line.

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Taking the X29 from Chancery Lane

In March 2022, NEC released (for consultation) a new secondary option clause for the NEC4 Engineering and Construction Contract (ECC). Titled ‘Impact of the works on climate change’, NEC’s goal is to give parties a contractual framework to ‘support the reduction in the climate change impact of built assets’, rather than having such requirements buried away in the technical documentation.

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Tenant’s Fit-Out Works: Is Your Insurance Fit For Purpose?

1. What insurance is required on fit-out projects?

When a tenant intends to undertake fit-out works to a premises forming part of a larger, multi-let building, they need to address the insurance arrangements for both the operational existing structure and the fit-out works themselves. While the arrangements are often stipulated in the relevant property documents (for example, an agreement for lease or licence to alter), they do not always address the practical reality of what and who needs to be insured.

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When can an Employer adjudicate over the true value of its Contractor’s Works? - Bexheat Ltd v Essex Services Group Ltd

It’s been almost four years since the Court of Appeal decided, in S&T (UK) Ltd v Grove Developments Limited[1], that an Employer was prevented from embarking upon an adjudication to obtain a true valuation of the Contractor’s Works during a payment cycle, until it had complied with its “immediate obligation” to pay the “notified sum” due in the same cycle. The TCC decision in Bexheat Ltd v Essex Services Group Ltd provided another opportunity for the Court to address and clarify these circumstances.

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Clyde Commentary: Thoughts on FIDIC

Clyde & Co has launched a new FIDIC series, Clyde Commentary: Thoughts on FIDIC, which is focused on both the 1999 and 2017 editions of the Red, Yellow and Silver Books (the FIDIC Suite). The series explores each of the Clauses in the FIDIC Suite on a month-by-month basis and will contribute incrementally to a guide to the whole Suite. This guide aims to provide clients with a nuanced and in-depth understanding of the main FIDIC contracts.

Read more about our FIDIC Guide here