UK: Constructing The Olympics – Procurement And Avoiding Disputes

Last Updated: 5 April 2007
Article by Nicholas Gould

This article focuses on the construction aspects of property issues relating to the 2012 Games. In particular, consideration is given to the procurement of the facilities, the contractual approach of the Olympic Delivery Authority ("ODA") and dispute resolution.

The ODA is the single body that has been created to ensure the delivery of the venues and infrastructure for the Olympics and beyond. In particular, the ODA is responsible for the planning, designing and building of the venues, facilities and accommodation and developing of the infrastructure to support these. The ODA is also required to look at issues of regeneration and sustainability, and to ensure that the permanent structures created for the 2012 Games are utilised beyond these.

The ODA is responsible for the procurement of the contracts for the infrastructure, construction and transport with the services being let by the London 2012 Organising Committee.

The ODA released its draft Procurement Policy for consultation on 11 July 2006. This policy outlines the ODA’s requirement that the 2012 Games are delivered on time and budget, in a way that benefits the community and environment, in keeping with the spirit of London’s Olympic Bid.

The ODA has developed "procurement principles" which are; the delivery of the Venues and Infrastructure and the achievement of the legacy. It is recognised that there must be sustainable development, as the 2012 Games will leave a significant footprint on London and the surrounding area.

When examining the issue of the procurement processes it is necessary to note that the ODA are required to comply with the Public Contracting Regulations which are the EU’s Public Procurement Directives and the UK legislation. One of the primary objectives of the procurement policy is to ensure that there is no discrimination in the appointment of companies for the construction works. The ODA’s challenge is to ensure that the procurement process is open to all companies, regardless of their location or size. For example, the ODA proposes using electronic procurement as a cost effective means of advertising opportunities, and also for undertaking negotiations. However, it must be aware and take into consideration those companies who do not have the resources or ability to utilise this service.

In order to ensure that there is consistency, quality and fairness in all contracts, so far as is possible, the ODA proposes using the New Engineering Contract Version 3 ("NEC") in its various forms where appropriate. The NEC3 reflects a partnering based approach to the resolution of issues. Co-operation within the parties at an early stage of any issue identified by the Contractor or Project Manager provides an opportunity for the parties to discuss and resolve the matter in the most efficient manner.

The NEC is in essence based on three core principles, flexibility, simplicity and clarity, and a stimulus for good management. The NEC3 contains six options, each with varying risk allocation and reflecting modern procurement practice. These are: Option A (priced contract with activity schedule); Option B (priced contract with bill of quantities) which provide that the contractor will be paid at tender prices. Basically, a lump sum contract approach in Option C (target contract with activity schedule); Option D (target contract with bill of quantities) provides that the financial risks are shared between the contractor and the employer in agreed proportions; Option E (cost reimbursable contract); and Option F (management contract) which is also a cost reimbursable contract, where the risk is largely taken by the employer. The contractor is paid for his properly incurred expended costs together with a margin.

The NEC3 contains several clauses dealing with the operation of the contract and dispute resolution. In addition there are then a series of additional conditions of contract known as Z clauses. These provide the parties or with the opportunity to insert bespoke terms or amendments to the Contract. It is anticipated that the Z clauses will be used to accommodate terms such as sustainability and other social requirements.

It is recognised that the ease of resolving any disputes that arise will be a key factor in determining whether the contracts are executed on time and on budget. The ODA therefore must ensure there is an adequate dispute resolution procedure in place to deal promptly and fairly with any issues that arise. The ODA are currently in the process of establishing a Dispute Board. The collective term Dispute Board covers the concept of Dispute Review Boards and Dispute Adjudication Boards. Dispute Review Boards comprise three independent people who evaluate disputes during the course of the project and make settlement recommendations to the parties. The recommendations are not binding.

Each party selects a board member and the parties may then agree on the third, or if they cannot agree the two board members will select the third board member. The Dispute Review Board then periodically visits the site to gain familiarity with the project and the individuals working on the project. This means that if a dispute arises the board members understand the project and have already built some rapport with the individuals working on the project. They can then deal with disputes by hearing presentations from the parties and suggesting solutions.

There is also the term Dispute Adjudication Board, a concept which has been included in the 1999 international FIDIC suite of standard form contracts. The key distinction between a Dispute Review Board and a Dispute Adjudication Board is that a Dispute Adjudication Board considers submissions from the parties and then issues a written binding decision. The parties are obliged to comply with the decision, and unless they issue a notice of dissatisfaction within 28 days of the giving of the decision, the decision becomes final and binding.

In summary, the role of the ODA is to ensure that the 2012 Games are delivered on time, on budget and with sustainability as a leading consideration, especially in relation to the legacy and footprint that these games will leave. The current approach is one of co-operation, openness and transparency in the procurement and operation of the contracts for the construction of the venues and infrastructure. It is hoped that the use of the NEC3, a progressive partnering based contract, may lead to the diffusing of potential disputes before they escalate, and should this not be possible that the Dispute Boards will be able to promptly and swiftly deal with issues, enabling parties to move forward and the 2012 Games to be delivered on time and budget.

Nicholas Gould is a partner at Fenwick Elliott LLP, Senior Visiting Lecturer at King’s College, London and Chairman of the Society of Construction Law. To view further articles by Nicholas, please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Nicholas Gould
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.