New Standard Form Contracts
Following on from the Scottish Government's Budget in November 2010 announcing a new pipeline of revenue financed investment estimated to be worth up to £2.5bn through NPD (non-profit distributing), the Scottish Futures Trust ('SFT') has recently released new standard form documents for use on NPD Projects in Scotland. The package includes:
- a Standard Form Project Agreement;
- a Standard Form Services Specification (forming part of the Standard Form Project Agreement); and
- Standard Form Articles of Association (also mandatory on NPD Projects).
Guidance on Standard Form Contracts
NPD Explanatory Note
An explanatory note on the NPD model is also now available on the SFT's website.
The explanatory note provides a useful summary of the principles, perceived benefits, structure and key features of the model.
User's Guide to Standard Project Agreements (hub DBFM & NPD Model)
In addition to the explanatory note, SFT have also produced a User's Guide to the two Standard Project Agreements that exist. The User Guide explains that the Standard Project Agreement exists in two forms: one for hub DBFM projects procured through the hub initiative, and one for projects adopting NPD principles. The Guide explains that it is expected that the Standard Project Agreements will be used for individual or grouped schools, colleges, community health facilities and other design, build, financing and maintenance accommodation projects.
The Guide goes on to set out how these contracts vary from the 2009 Scottish Standard Health Contract, it highlights differences between the two new forms of contract, and it explains changes that will be required to the contracts depending on whether the contracting authority is an NHS body or a local authority. There are also a large number of other clause-specific comments.
All changes to the Standard Project Agreements will require SFT approval, and approval will only be given to changes required for project-specific reasons or to reflect changing guidance or demonstrable changing market circumstances. SFT has stated that it does not intend to apply any previous rules or practices in managing the derogations process. However, SFT appear to recognise that the Standard Project Agreements include some new drafting that has not been tested/analysed on live projects, and appear willing to correct errors and consider arguments that drafting in the Standard Project Agreements does not achieve the contractual intention.
The User's Guide to Standard Project Agreements (hub DBFM & NPD Model) can be viewed here.
Release of the new standard form documents and the User Guide comes on the back of the Permanent Secretary's letter to the Audit Committee this summer, reiterating that a significant number of pipeline infrastructure projects will be procured under the NPD model.
The letter from the Permanent Secretary, reporting on progress of major capital projects as at June 2011, can be viewed here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.