Construction sector given guidance on contractual relief

07/04/2020 | DOMINIC BROWNE

The Cabinet Office has released construction-specific guidance on its recently published Procurement Policy Note 2/20, which outlined how public sector clients can support the supply chain during the coronavirus crisis.

Prepared by its executive agency, the Crown Commercial Service, the guidance blocks companies from furloughing staff that are due to work under contracts subject to relief. 

”Local

'Any supplier found to have acted fraudulently by claiming under the Coronavirus Job Retention Scheme (CJRS) (or other COVID-19 support schemes) for workers that are being paid under a public sector contract, may be excluded from future public contracts on grave professional misconduct grounds under regulation 57(8)(c) of the PCRs.'

It also blocks a supplier from claiming separate relief from another source of Government financial support on COVID-19, 'to the effect that the supplier gains an undue advantage by claiming relief twice for the same hardship'.

There is an exception 'where separate relief from the Government is in relation to recovery of costs, which are distinct from any other relief available under the PPN and have been properly incurred by the Contractor.

The new update includes model deeds of variation to provide a set of terms that contracting authorities can use for NEC3 and JCT standard forms of contracts.

The Cabinet Office said it would shortly be publishing Model Terms which will set out some examples of how JCT and NEC contracts may be varied to provide relief to suppliers.  

It also suggests that clients establish Project Bank Accounts for current projects to help with industry cashflow during the COVID-19 crisis. This system is already employed by Highways England.

Immediate cash flow issues seem to remain the focus of the relief for contractors, as opposed to also giving an extension of time.

However, the guidance does state that 'the authority should consider the supplier's request for relief as well as the various forms of relief available under PPN02/20 (whether or not these have been requested by the supplier) and what is the most appropriate relief to the relevant supplier, to enable the works to continue both during (if appropriate) and after the current COVID-19 outbreak'.

It adds that not all relief options will be necessary or appropriate for each supplier under each contract and the authority and the supplier 'will need to engage in discussions on a case-by-case basis to determine the most effective relief or combination of relief(s) and how these should be applied in the individual circumstances'.

Any relief granted will need to be accompanied by provisions around open book transparency and the provision by the supplier of supporting information to allow the authority to check that the commercial principles are complied with when relief is given.

This may include an ability to audit where savings are being applied during the period of relief.

Last week representatives from across the construction industry wrote to the government recommending public sector clients to release retentions to support cashflow in the sector.

The new guidance stops short of proposing this, instead it says that clients may consider doing so, but 'the premature release of retentions by an authority may result in the authority taking on significant risks which are not in its control and which are inappropriate for it to bear'.

Highways InProfile

latest magazine issue
Highways jobs

Street Lighting Project Engineer

PO2 - £41,442 to £44,331
Help us keep our streets safe, efficient and ready for the future Greenwich, London (Greater)
Recruiter: Royal Borough of Greenwich

Principal Engineer - Highways Development Management

£47,181.00 - £50,269.00, Grade 11, 37 hours, Permanent
We are seeking a dedicated Principal Highways Development Management Engineer to join our team. Wakefield, West Yorkshire
Recruiter: Wakefield Council

Highways Development Management Engineer

£32,061.00 - £46,142.00, Career Grade 7-10, 37 hours, Permanent
Do you want to join a team helping to shape the future of Wakefield through HIghways Development Management? Wakefield, West Yorkshire
Recruiter: Wakefield Council

Highways Project Engineer

£31,537 - £42,839 per annum
Would you like to be part of our friendly, welcoming Highways team, proud to manage all aspects of the highway network? Boroughbridge, York
Recruiter: North Yorkshire Council

Highways Project Engineer

£31,537 - £42,839 per annum
Would you like to be part of our friendly, welcoming Highways team, proud to manage all aspects of the highway network? Skipton, North Yorkshire
Recruiter: North Yorkshire Council

Technician - Highway Inspector

Grade 8 £29,719 - £31,691 per annum
Within the Highways Maintenance Team we are looking for an enthusiastic, customer focused and experienced person Derbyshire
Recruiter: Derbyshire County Council

Highway Design and Construction Manager

Grade N, scp50 £62,443 to scp53 £65,663 per annum, plus essential car user allowance
We embrace AI to enhance our operations and to innovate our services. Bolton, Greater Manchester
Recruiter: Bolton Council

Technician - Highway Inspector

Grade 8 £29,719 - £31,691 per annum
At Derbyshire, we have been on a journey to transform the way we deliver highway services. Derbyshire
Recruiter: Derbyshire County Council

Team Leader (Maintenance Operations)

Grade 10 - £48,226 - £51,356
Cardiff is growing faster than any other capital city in Europe. Cardiff (Caerdydd)
Recruiter: Cardiff Council

Highways Supervisor

£Competitive
We have a fantastic opportunity for a permanent Highways Supervisor Forfar, Angus
Recruiter: Amey

Tree Surveyor

£Competitive
We are excited to offer fantastic opportunities for Permanent Tree Surveyors Scotland
Recruiter: Amey

Chief Operating Officer – South West Wales Corporate Joint Committee

£Competitive
We’re looking for a bold, visionary leader to take on the role of Chief Operating Officer Carmarthenshire (Sir Gaerfyrddin)
Recruiter: Carmarthenshire County Council

Clerk of Works - Highways

£Competitive
We have a fantastic opportunity for a Clerk of Works to join our dynamic NMC SW Account team at Polmadie. Glasgow, Glasgow City
Recruiter: Amey

Highways Supervisor

£Competitive
We have a fantastic opportunity for a permanent Highways Supervisor to join our NMC NE account in Kinross. Perth and Kinross
Recruiter: Amey

Planner - Highways

£Competitive
We have a fantastic opportunity for Permanent Planner – Highways to join our NMC SW Account. Glasgow City
Recruiter: Amey

Highways Maintenance Manager

£51,356 - £55,539 per annum
We are looking for an experienced Engineer to join the team as a Highways Maintenance Manager Selby, North Yorkshire
Recruiter: North Yorkshire Council

Highways Maintenance Manager

£51,356- £55,539 per annum
We are looking for an experienced Engineer to join the team as a Highways Maintenance Manager Brompton on Swale, Richmond
Recruiter: North Yorkshire Council

Permit Officer - Internal works promoter - WMF2244e

£34,434 - £35,412
The streetworks Permit Officer role within the highways service Kendal, Cumbria
Recruiter: Westmorland and Furness Council

Highways Development Management Engineer

£41,816 - £45,175
You will be based in the Highways Development Team and work closely with colleagues across the wider transport service. Northamptonshire
Recruiter: West Northamptonshire Council

Transport Project Officer

£34,203 - £37,067
We are seeking an enthusiastic and motivated project officer to work in our Highways and Transport Service. Northamptonshire
Recruiter: West Northamptonshire Council
SUBSCRIBE NOW

Latest Video

Subscribe to Highways today to ensure you keep your finger on the pulse of everything happening in the UK road network throughout the year.

SUBSCRIBE NOW