Slides from Open Forum on latest draft ACA/ACE Framework Alliance Contract at King's College London on 25 February 2016

1. Francis Ho, Head of Construction | Thursday, 25 February 2016
francis.ho@olswang.com | +44 20 7067 3505 | @fkyh
King’s College London Centre of Construction Law: Open Forum
ACA/ACE Framework Alliance Contract
– Legal Implications

2. |
Framework Agreements - Generally
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20162
• Umbrella agreement under which terms agreed in advance for works
and services
• Works/services instructed each time via “call-offs”
• Each call-off becomes a separate contract
• Typically in place for several years
• Suitable for works or services
• No need to negotiate terms or tender prices each time
• Requires more upfront work; saves time and cost in the long-term
• No guarantee of work but economies of scale may reduce suppliers’
costs

3. |
Framework Agreements - Generally
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20163
• Create long term relationships with suppliers
• Can measure performance for continuous improvement
• May allow clients to gain advice from construction experts without
taking on staff, e.g. project management, cost management, legal
advice
• Multi-supplier framework allows mini-competitions between suppliers
• Mainly bespoke but some standard forms exist:
ACA/ACE (2016)

4. |
ACA/ACE Framework Alliance Contract – General Points
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20164
• Can work with any project agreement
• Minimum level of work or no guarantee
• Both private and public sectors
• Can be used for any type of construction or engineering work
• For use in UK and internationally

5. |
ACA/ACE Framework Alliance Contract – Key Differences
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20165
• Client, Alliance Manager and one or more other Alliance Members
• Alliance Members may be competitors, e.g. contractors
• Multi-party duties of care
• Single project or multiple projects
• BIM-ready

6. |
ACA/ACE Framework Alliance Contract – Key Differences
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20166
• Core Group
• Direct Award Procedure and Competitive Award Procedure
• Interested Parties
• Additional Clients (or additional Alliance Members)
• Special Terms

7. |
Roles and Responsibilities
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20167
• Client, Alliance Manager and other Alliance Members – the parties
• Alliance Manager – implements Direct Award and Competitive
Award Procedures, issues Project Contracts and Orders
• Core Group – represents Alliance Members and review achievement
of objectives, makes decisions by consensus, deals with Early
Warning
• Interested Parties – interested in a project (but not parties or
beneficiaries)
• Additional Clients/AM – further clients/AMs added through JA
• Spirit of trust, fairness and collaboration
• Local law can be expressed to take priority

8. |
Objectives, Incentives, Success Measures and Targets
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20168
• Proposals for Supply Chain Collaboration and other Alliance Activities
to improve value
• Success of Framework Programme and performance assessed by
Core Group by reference to Success Measures and Targets
• Incentives can be agreed against Objectives and/or Targets
• If Targets not achieved:
• Core Group meets and proposes actions to meet Targets or revised
Targets, which may be approved by Client
• Client may reject proposals and terminate FAC or take any other actions
set out in FAA

9. |
Alliance Manager
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 20169
• Alliance Manager implements Direct Award and Competitive Award
Procedures, issues Project Contracts and Orders
• Calls and chairs Core Group meetings
• May be an independent consultant or Client employee
• Client/Additional Client may authorise Alliance Manager to represent
it
• Services form part of Framework Documents
• Client pays fees

10. |
Prices
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201610
• Must be agreed:
• In accordance with relevant Direct Award Procedure or Competitive
Award Procedure (including within any Budget)
• Using Alliance Member’s Framework Prices in accordance with above
• Profit and Overheads set in accordance with Alliance Member’s
Framework Alliance Agreement and subject to DAP/CAP
• Alliance Members may agree fluctuations
• Open-Book basis if required under FAA, subject to DAP/CAP

11. |
Award of Project Contracts
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201611
• No competition  Direct Award Procedure
• Alliance Members compete  Competitive Award Procedure
• DAP/CAP requires Template Project Documents
• Project Contract issued with Agreed Prices and Approved Project
Proposals
• No minimum guarantee of work (but can be adjusted in FAA)
• No exclusivity to Alliance Members unless stated in FAA (but can be
adjusted in Success Measures and DAP/CAP)

12. |
Alliance Activities, Supply Chain Collaboration and Timetable
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201612
• Alliance Activities include Supply Chain Collaboration, Sustainability,
improved Operation and other benefits
• Achieved through longer term, larger scale Specialist appointments
through sharing information through the Core Group, reviewing and
comparing Specialists’ prices, renegotiating or tendering Specialists
contracts
• Alliance Activities to be carried out in accordance with Timetable

13. |
Orders
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201613
• Orders for Pre-Contract Activities (cf. “Project Contracts”)
• Governed by contract terms (if agreed, can be governed by Project
Contract terms)
• May be terminated by Client on 10 Working Days’ notice
• Form set out in Appendix 3 of FAC

14. |
Payment
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201614
• FAC governs payment under Orders
• Agreed Prices for Projects governed by Project Contract not FAC
• Monthly applications
• Suspension for non-payment if failure continues after Final Date for
Payment and Alliance Member has given notice of intention to
suspend

15. |
Risk Management, Insurances and Intellectual Property
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201615
• Alliance Members undertake:
• Risk Management according to Framework Documents and Risk
Register
• Alliance Activities according to Risk Register
• Insurances specified in Framework Alliance Agreement and
Framework Brief
• Market-facing intellectual property clause from Alliance Members to Client
in relation to Alliance Activities and preparation of Framework Contract and
Project Proposals or undertaking Pre-Contract Activities

16. |
Duty of Care
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201616
• Reasonable skill and care appropriate to roles, expertise and
responsibilities
• Multi-party but limited to Alliance Activities
• In respect of other activities, liability between Client and Alliance Member
only

17. |
Duration and Termination
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201617
• Term set out in FAA
• May be terminated for failure to meet Targets where Client
dissatisfied with proposals to remedy
• Automatic termination against insolvent Alliance Member or for all if
Client/Additional Client insolvent (unless agreed by Alliance
Members)
• Project Contracts will not automatically terminate

18. |
Confidentiality, Problem-Solving and Dispute Resolution
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201618
• Short confidentiality clause
• Core Group meeting convened when difference or dispute arises. Seeks to
achieve agreed solution
• Options to refer to Conciliation, Dispute Board, mediation or other ADR
• Adjudication where applicable in the jurisdiction
• Default is CIC procedure
• Slip rule
• Option to select arbitration or courts
• Parties to agree arbitration rules and seat

19. |
Why use the ACA/ACE Framework Alliance Contract?
constructiveblog.comKing’s College London: Open Forum | ACA/ACE Framework Alliance Contract – Legal Implications | 25 February 201619
• Legally binding
• Suitable with any forms, e.g. not biased towards ACA/ACE suites
• Deals with important issues that other standard forms do not, e.g.
• Deals with whole supply chain
• Alliance Activities (e.g. Supply Chain Collaboration) allow AMs to work together for
Improved Value
• Multi-party
• Compliant with EU procurement rules
• Allows for competition between suppliers
• Allows for early activities/services through Orders
• Truly collaborative through Core Group which resolves issues quickly
• Is a collaborative solution

20. |
For more information please contact
Olswang:
Changing Business.
www.olswang.com
Francis Ho
Head of Construction
+44 20 7067 3505
francis.ho@olswang.com
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