IT’S NOT JUST ABOUT THE PRICE: USING THE CONTRACT TO MEASURE YOUR PROVIDER’S PERFORMANCE

Lucion Group

7th November, 2018

Procuring consultants and contractors to manage asbestos can often feel like a daunting task. Often clients will choose a provider based on their experience, price and even through recommendation. But when it comes to measuring your provider’s performance, how confident are you about the KPIs set from day one?

Kelvin Hughes, Contract Consultant, KH Consultants, took to the main stage at Asbestos The Truth Conference 2018 to share knowledge with delegates about using the provider contract to communicate plans and timelines, methodology and agreed outcomes. Using the contract to set out goals and objectives enables clients to procure the best contractor, supplier, consultants or any other provider for the job.

How To Choose Your Consultants

There are many factors to consider when choosing or tendering for the correct consultant or provider for the job. These may include but are not limited to:

Expertise, certification and accreditation
Quality of services and reporting
Timescale compliance
References
Communication skills
Health and Safety record
Financial stability
Cost

Hughes’, during his main stage speech, stressed that the lowest priced consultant or providers may not necessarily be the lowest cost. Only factoring price when procuring your service provider can negate the quality of the work and may result in further costs and longer timescales to get the job done properly to achieve compliance. Using the contract to regulate the timescale, cost and quality reduce the number of risks taken when using a provider.

NEC Contracts

What is an NEC Contract?

Recently updated to promote further flexibility, clarity and ease of use, improving upon its predecessor the NEC3: Contracts, the NEC4: Contracts is a suite of contracts are end-to-end project management contracts that empower users to deliver projects on time, on budget and to the highest standards when implemented correctly.

Promoted for its simplicity, the NEC4 Contract is more accessible for both parties involved encouraging more effective clearer communication between client and provider. The contract also allows both parties to see what the risks involved are and decide who is in the best position to manage these risks during the project.

According to Hughes, only 2% of NEC Contracts go to court for resolution in breaking contract. This leaves 98% of NEC Contracts remaining with parties who have engaged in the contract in the first place.

NEC Contract Objectives

The objectives of NEC Contract suites are:

Promote flexibility – options for clients to add to the contract as the project develops
Applicable to multiple disciplines
Provide clarity and simplicity to both parties
User-friendly
Apply context – allows clients to give reasons for certain decisions or rejections of elements of the contract
Stimulate good management

The final bullet point objective stimulates good management, is imperative in forming a cohesive and coherent plan between both client and provider. Good management can be promoted by the contract using two key principles:

Foresight applied collaboratively mitigates problems and shrinks risk – anticipating potential risks and issue before engaging in works can help manage expectation
Clear division of function and responsibilities help to manage accountability and can be used as a motivator

Early Warning Signs

Through the contract, both clients and providers can put in place agreed early warnings where clients and providers agree to communicate if:

Increases total price
Delays in completion
Delays of meeting key dates within the agreed timeline
Impaired services
Any works that may affect the client’s’ ability to conduct other works

These early warnings are known as an early warning register and aim to encourage collaboration, innovation and gives flexibility to circumstance changes during the contract.

Quality Management Systems

During the period of the contract, the consultant or provider operates a Quality Management System for providing the services as stated in the scope and should provide the service manager with both a quality policy statement and a quality plan for the client to accept. This means the provider has contributed and understood the scope and has engaged in the contract agreeing to the expected outcomes and is responsible for the supervisions and implementation of the services and will name a person responsible to the observation and supervision of works within the scope.

Closing Thoughts

Hughes’ concluded his main stage speech stating that the best way to procure the best consultant or provider is through choosing the best contract. The best contract provides the foundation and plan for managing, monitoring and measuring the provider’s services and ultimately promotes communication between client and provider.