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FAC-1 Guidance

FAC-1 Guidance

Completing the FAC-1 Framework Alliance Agreement

The details inserted in the FAC-1 Framework Alliance Agreement and its schedules set out the specific requirements and expectations of the Alliance Members and the processes that they will implement in order to bring their Alliance to life.

QuestionPage number in Framework
Agreement and clausenumber of Contract Terms 
Details to be inserted
What are the scope of works, services or supplies comprising the Framework Programme and the name of the ClientPage (i)Only a title is required here, and details should be set out in the Framework Brief.The name of the Client should appear here, with further details at signature page (vi). 
What are the names of the other Alliance Members?Page (i)Clause 1.1Alliance Members may be one or more consultants, main contractors, sub-contractors, suppliers or other providers in any combination.A list of names should appear here with further details at signature pages (vi) and (vii).
 Are there any additional or amended Framework Documents other than those listed? Page (i)Clauses 1.3, 1.4 and 1.5Review the list of Framework Documents in Framework Alliance Agreement and ensure that these are completed and signed for identification where necessary. Note for example suggested  details in the definition of  Framework Brief in Appendix 1 to the Contract Terms. Note also clauses 4.2, 4.3 and 4.4 of the Contract Terms as to aspects of the Framework Prices.
What are the names of the Core Group members, including any alternates?    Page (ii)Clause 1.6     The Core Group provides a well-proven governance forum  to support Alliance relationships, to encourage Improved Value and to resolve misunderstandings and avoid disputes.Insert the names of the Core Group members including any alternates.
What are the agreed communications systems?Page (ii)Clause 1.9.3Systems  may comprise for example electronic information exchange systems for all communications, for management of the Alliance, for the Project Contract award procedures or in connection with BIM
What are the names of any Stakeholders and what is the nature of their intended involvement? Page (ii)Clause 1.10 Insert the names of any Stakeholders and cross-refer to the Framework Brief for their interest in the Framework Programmeand the ways in which Alliance Members need to engage with them.Alliance Members will not owe a direct duty of care to Stakeholders other than pursuant to clause 10.6 of the Contract Terms
Are there any named Additional Clients and/or other Additional Alliance Members that it is agreed may join the Alliance  Page (ii)Clause 1.11    The form of Joining Agreement is set out in Appendix 2 to Contract Terms.Insert the names of any Additional Clients and/or other Additional Alliance Members that it is agreed may join the Alliance.
 What is the name of the Alliance Manager and are there any restrictions on his/her/its authority? Page (ii)Clause 3.1Insert the name of the Alliance Manager, who may be a Clientofficer or an independent consultant. The Framework Documents include the Alliance Manager Services and Alliance Manager Payment Terms as required.Insert any limits on the authority of the Alliance Manager by reference to clause 3.1 of the Contract Terms
In what matters can the Alliance Manager act on behalf of the ClientPage (ii)Clause 3.2 In addition to the matters described in clause 3.1, insert any authority delegated by the Client to the Alliance Manager to act on its behalf.
Is there an Independent Adviser?Page (iii)Clause 3.3The Independent Adviser is an optional source of impartial and constructive advice to the Core Group and the Alliance Members on the implementation of the Framework Alliance Contract under clause 3.3 of the Contract Terms and on the avoidance or resolution of disputes under clause 14.1 of the Contract Terms. In order to be objective the Independent Adviser is not an Alliance Member and his or her terms of appointment are separately agreed.Insert details/delete as required. 
Will Framework Prices state separately an Alliance Member’sagreed levels of Profit and Overheads?Page (iii)Clauses 4.3 and 4.4This  enables the separate identification and agreement of ways to reduce costs without eroding agreed margins, and is essential as a starting point for  Supply Chain Collaboration under clause 6.3 of the Contract Terms.Delete if not applicable. 
Will any minimum value or type of Projects will be awarded to Alliance MembersPage (iii)Clause 5.6Insert any minimum value or type of Projects that will be awarded to any one or more Alliance Members.
Will all or any part of the Framework Programme be awarded exclusively to any one or more Alliance Members?Page (iii)Clause 5.7Insert details of any agreed exclusivity, with or without any minimum under clause 5.6.Insert also in Part 2 of Schedule 1 to the Framework Alliance Agreement any provision for adjustment of exclusivity according to achievement of agreed Targets
What Supply Chain Collaborationand other Alliance Activities will be undertaken by AllianceMembers in accordance with the Timetable or as otherwise agreed? Page (iii)Clause 6Insert details of the agreed joint processes and shared working practices intended to achieve improved efficiency, cost savings and other Improved Value through agreed Alliance Activities. These should  be linked to dates and periods of time set out in the Timetable at Schedule 2 to the Framework Alliance Agreement.See also guidance on Supply Chain Collaboration (in conjunction with two Stage Open Book)  drafted by King’s College London, published by the UK Cabinet Office and launched by Sir Vince Cable  in August 2014  
Are there amended payment periods in respect of amounts agreed to be paid for AllianceManager ServicesAlliance Activities and Pre-Contract ServicesPage (iii)Clause 8.6Insert any amended payment periods in respect of amounts agreed to be paid for Alliance Manager ServicesAlliance Activities and Pre-Contract Services.EU public sector Clients are subject to the maximum 30-day payment periods under legislation such as Section 113 of the Public Contracts Regulations 2015. 
Is there an agreed rate of interest on any late payment?Page (iii)Clause 8.11Insert the rate of interest on late payment.UK Clients are subject to minimum rates under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations 2013. 
Are there any amendments to the duty of reasonable skill and care and to the parties between whom a duty of care is owed?   Page (iv)Clauses 10.1 and 10.2      The duty of reasonable skill and care is described in clauses 10.1and 10.2 and is limited to certain Alliance Members in respect of certain documents and activities under clauses 1.11.3, 10.3, 10.4, 10.5 and 11.2.Insert any amendments in respect of the duty of reasonable skill and care and in respect of the parties between whom a duty of care is owed. 
Is a duty of care extended to any other parties? Page (iv)Clause 10.6 Insert details of any agreed third party warranties or other third party rights. 
What types and levels of insurance cover are to be taken out by each Alliance MemberPage (iv)Clause 12Insert agreed types and levels of insurance cover in respect of obligations under FAC-1, which can include third party liability insurance and professional indemnity insurance in respect of Alliance Manager ServicesAlliance Activities and Pre-Contract Activities.Any requirements as to insured risks, exclusions, deductibles and other terms should be stated in the Framework Brief.These insurances are separate from insurances under Project Contracts which should be stated in the Template Project Documents. 
Is any Alliance Member entitled to assign or sub-contract its rights or obligations under theFramework Alliance Contract to another party?Page (iv)Clause 13.2    Insert for example any agreed entitlement of an Alliance Member to assign rights under FAC-1 to a funder or a group company.Cross-refer to sub-contracting that is part of Supply Chain Collaboration agreed in accordance with clause 6.3 of the Contract Terms. 
Are there amended confidentiality provisions? Page (iv)Clause 13.3Insert any extension or relaxation of the confidentiality provisions set out in clause 13.3, for example by reason of the identity of the Client or the nature of the Projects comprising the Framework Programme
What are the commencement date and duration of the Framework Alliance Contract, and are there any extension procedures? Page (v)Clause 14.1  Insert the date of commencement of the Framework Alliance Contract, its duration and any extension procedures.EU public sector Clients are subject to a 4-year limit under legislation such as Regulation 33(3) of the Public Contracts Regulations 2015 “save in exceptional cases duly justified”. 
Is there an agreed Conciliator and Conciliation Procedure or a Dispute Board? Page (v)Clause 15.2 These are optional non-adversarial dispute resolution approaches additional to the role of the Core Group and anyIndependent Adviser. It would be unusual to adopt more than one of them.Insert details/edit/delete as required and see Part 1 of Appendix 4 to the Contract Terms regarding conciliation. 
Is there an agreed Adjudicator and Model Adjudication ProcedurePage (v)Clause 15.3 Adjudication is an implied dispute resolution approach for construction contract disputes in the UK and in certain other jurisdictions.Insert details/edit/delete as required and see Part 2 of Appendix 4 to the Contract Terms. 
Are there agreed arrangements for appointment of arbitrators, and as to applicable arbitration rules, and the location and language of arbitration? Page (v)Clause 15.4 Arbitration is an optional dispute resolution approach and is used more widely in relation to international disputes.Insert details/delete as required and see Part 3 of Appendix 4 to the Contract Terms.  
What are agreed law of Framework Alliance Contract and the courts with jurisdiction? Page (v)Clauses 13.4 and 15.5The selected law will govern all aspects of the Framework Alliance Contract and may necessitate amendments to the Contract Terms as Legal Requirements under Schedule 6 the Framework Alliance Agreement.Insert applicable law. 

Important details also need to be set out in Schedules 1 to 6 which form part of the FAC-1 Framework Alliance Agreement.  These define the Alliance Members’ working relationships as well as any amendments to the Contract Terms:

Schedule 1 – Objectives, Success Measures, Targets and Incentives

Schedule 2 – Timetable

Schedule 3 – Risk Register

Schedule 4 – Direct Award Procedure and Competitive Award Procedure

Schedule 5 – Template Project Documents

Schedule 6 – Legal Requirements and Special Terms.

Schedule 1 – Objectives, Success Measure, Targets and Incentives

The FAC-1 Objectives set out in Schedule 1 Part 1 state the agreed objectives of the Alliance and the Framework Programme, and of the Alliance Members in relation to the Alliance and the Framework Programme. They form the basis for the Success Measures and Targets stated in Schedule 1 Part 2 and for seeking Improved Value in accordance with clauses 2.2, 6.1 and 6.3 of the Contract Terms.

The FAC-1 Success Measures are the agreed basis for determining the success of the Alliance and the Framework Programme in achieving the Objectives, and for measuring the performance of the Alliance Members by reference to clause 2.3 of the Contract Terms and Schedule 1 Part 2. They state the Targets set for each Success Measure, including the method of recording relevant data, the Alliance Member responsible for measuring against that data and the system for reporting to the other Alliance Members.

The FAC-1 Incentives under Schedule 1 Part 4 by reference to clause 2.4 can include for example:

  • additional payments including shares of savings achieved through Supply Chain Collaboration and other Alliance Activities described in the Framework Alliance Contract and clause 6 of the Contract Terms, stating whether payable under a Project Contract or under clause 8 of the Contract Terms
  • adjustment of any exclusivity in the award of Project Contracts, under clause 5.7 of the Contract Terms and Schedule 1 Part 2
  • extension of the duration of the Framework Alliance Contract, linked to clause 14.1 of the Contract Terms.

Schedule 2 – Timetable

The FAC-1 Timetable records the commitment of Alliance Members under clause 2.5 of the Contract Terms and states:

  • agreed deadlines, gateways and milestones in respect of the Framework Programme and achievement of theObjectives
  • timescales for Alliance Activities, including the nature, sequence and duration of the agreed actions of each Alliance Member and any consents or approvals (whether required from Alliance Members or third parties) that are pre-conditions to subsequent actions.

The Timetable is important in establishing clear mutual commitments that Alliance Members can rely on, and this is crucial to the progress of Supply Chain Collaboration and other Alliance Activities that are the agreed means to seek Improved Value. If for any reason specific dates and periods of time for agreed Alliance Activities cannot be agreed at the time of signing FAC-1, then the Timetable should as a minimum include the deadlines within which Alliance Memberswill agree specific dates and times for those Alliance Activities.

Clause 2.6 of the Contract Terms provides for the Timetable to be updated by the Alliance Manager for Core Group approval.

Schedule 3 – Risk Register

The FAC-1 Risk Register records the commitment of Alliance Members under clause 9.3 of the Contract Terms to undertake agreed Risk Management actions. It states the nature of each risk, its likelihood and impact on the Framework Programme and/or achievement of the Objectives and/or any Alliance Activities (including any anticipated financial impact), the Alliance Member(s) responsible for each Risk Management action, the agreed Risk Management actions (including actions to reduce the likelihood of each risk and to reduce its financial and other impact) and the agreed periods/deadlines for completing those actions.

Risk Management is defined in FAC-1 as “a structured approach to ensure that risks are identified at the earlier opportunity, that their potential impacts are allowed for and that by agreed actions those risks and/or their impacts are eliminated, reduced, insured, shared or apportioned”.

Clause 9.2 of the Contract Terms provides for Alliance Members to “undertake Risk Management together and individually in accordance with the Framework Documents in order to analyse and manage those risks using the most effective methods”.

Clause 9.4 of the Contract Terms provides for the Risk Register to be updated by the Alliance Manager for Core Groupapproval at intervals stated in the Timetable.

Schedule 4 – Direct Award Procedure and Competitive Award Procedure

FAC-1 Schedule 4 establishes by reference to clause 5 of the Contract Terms two options for the criteria and related procedures that lead to the award of Project Contracts, namely the Direct Award Procedure and the Competitive Award Procedure It is fundamental to the Alliance relationships that Alliance Members understand not only the prospective scope and nature of the work covered by FAC-1 but also how that work will be awarded.

The Direct Award Procedure and Competitive Award Procedure in Schedule 4:

  • state the agreed procedure and timescales for the issue of each Project Brief, for the submission of proposed Agreed Pricesand other Project Proposals and for all steps leading to award of Project Contracts, including the method, rules and criteria for evaluation of proposed Agreed Prices and other Project Proposals and the required format for proposed Agreed Pricesand other Project Proposals
  • explain how the Template Project Documents will be applied to each Project
  • explain the procurement model for each Project, including the sources and timing of all contributions to design, Supply Chain engagement, costing, programming and Risk Management, and incorporating the required approach to BIM as appropriate
  • explain all procedures relating to the conditional and/or unconditional award of Project Contracts including any intended Orders for Pre-Contract Activities
  • explain how it will be decided when the Direct Award Procedure or the Competitive Award Procedure will be used.

 Schedule 5 – Template Project Documents

The Template Project Documents to be used in any Direct Award Procedure or Competitive Award Procedure are listed in Schedule 5 to the Framework Alliance Agreement and include:

  • the Project Contract Conditions to be used for each Project comprising the applicable standard forms of contract and any amendments. These can include all or any of the FIDIC, JCT, NEC and PCC contract forms or any bespoke form, any one or more consultant appointment forms and any supply contract forms
  • the structure and standard components of the Project Brief that forms part of each Project Contract describing the scope and nature of a Project, setting out the Client’s technical, management and commercial requirements and expected outcomes in respect of the Project, and including all required standards and warranties
  • all standard requirements in each Project Brief in respect of insurances and securities and all standard processes and procedures in each Project Brief for the management of communication, performance, quality, design, Supply Chain engagement, cost, payment, time, change, risk, health and safety and all other project management processes and procedures, in each case including the required approach to BIM as appropriate
  • all standard requirements in each Project Brief in respect of Sustainability Operation of the completed Project and engagement with Stakeholders and with Users of the Project
  • the required structure and content of the Agreed Prices and other Project Proposals forming part of each Project Contract .It is likely that the Template Project Documents will be too bulky to set out in Schedule 5, in which case they should be identified in Schedule 5 and signed by all Alliance Members separately for identification.

Schedule 6 – Legal Requirements and Special Terms

FAC-1 Schedule 6 Part 1 and clause 13.4 of the Contract Terms provide for the Contract Terms to be supplemented or amended to state particular Legal Requirements in order to comply with the laws of the jurisdiction stated in the Framework Alliance Agreement.

Clauses 8 (Payment) and 15.3 (Adjudication) are drafted to conform to the requirements of the UK Housing Grants Construction and Regeneration Act 1996 as amended, but without specifically referring to that legislation. Clients and other Alliance Members need to decide:

  • whether specific legislative provisions need to be restated in the Legal Requirements
  • whether the selected applicable laws (stated in the Framework Alliance Agreement by reference to clauses 13.4 and 15.5) give rise to the need for additional provisions to be set out in the Legal Requirements.

FAC-1 Schedule 6 Part 2 and clause 13.5 of the Contract Terms provide for the Contract Terms to be supplemented or amended by Special Terms. These are not Legal Requirements but that reflect the particular needs of the Client or other Alliance Members or are required by reason of the nature of the Framework Programme