FAC-1, a contractual integrator for UK and international construction

The FAC-1 Framework Alliance Contract (‘FAC-1’) is a new type of contract, recognised by the UK Government as creating a ‘Gold Standard’ that can help to deliver improved value, reduced risks and net zero carbon targets. FAC-1 has attracted support in the UK and around the world because it operates alongside other contracts, looking beyond basic risk allocation to support a whole team undertaking the design, planning and integration of one or more projects. FAC-1 was developed by King’s College London Centre of Construction Law and the Association of Consultant Architects, in consultation with 120 organisations in 14 jurisdictions, and it has been used on projects and programmes of work ranging in value from £5 million to £1 billion.

FAC-1 has been translated into six other languages. An early user was the Liscate Municipality in Italy who integrated contributions to Building Information Modelling (‘BIM’) by the consultants, contractor and specialist suppliers engaged on a £5 million new build school and civic centre. The Liscate team reported how the use of FAC-1 led to 6.8 per cent cost savings and 48 per cent time savings plus design innovations and improved health and safety.

The Italian energy company Enel has adopted FAC-1 in order to integrate the work of contractors and specialists engaged on windfarm projects in Spain and Brazil. FAC-1 is also providing a contractual integrator for a new build campus being developed by University of Milan and Lendlease. Further information on these and other FAC-1 projects can be found at allianceforms.co.uk.

FAC-1 does not include any references to English law, and collaborative work on translations in Germany, Italy, Spain, Bulgaria, Brazil and Peru showed that few amendments are required to reflect the legal requirements of these countries. For example, FAC-1 is easily aligned with FIDIC and other contract conditions, and its ‘Special Terms’ clarify any required changes to duties of care or intellectual property rights or options in respect of dispute resolution.
FAC-1 is not a substitute for consultant appointments such as the RIBA or ACA forms or for construction contracts such as FIDIC, JCT, NEC and PPC. Instead, it draws these forms together and covers the preparatory, integration and improvement processes that other contracts are not designed to deal with. FAC-1 describes agreed systems for:

  • Integrating the roles of alliance members through shared objectives, success measures and targets linked to agreed incentives
  • Awarding work on any number or range of projects
  • Planning the early engagement of alliance members and supply chain members in advance of projects commencing on site
  • Implementing a timetable of alliance activities designed to achieve improved value
  • Capturing learning and improvement from one project to another
  • Managing risks and avoiding disputes through shared preparatory measures and through early warning referred to a ‘core group’ of individuals who seek agreed solutions.

FAC-1 avoids the ‘Groundhog Day’ of lost learning in construction design and innovation. Its collaborative systems capture improvements in quality, safety and net zero while protecting the intellectual property rights and other commercial interests of team members. The multi-party structure of FAC-1 and its accessibility as a published contract form create mutual confidence between team members and provide a consistent basis for learning and exchanges of experience.

UK FAC-1 procurements include airfield, asset management, custodial, education, environmental, health, highways, infrastructure, maritime, public buildings and residential developments. They range from an LHC schools programme with a projected value of over £5 billion, to small programmes of work such as a £7.5 million refurbishment programme of Southern Housing Group. Private sector users include Football Foundation, Sport England and the Football Association , integrating the work of designers, contractors and modular suppliers under a £150 million programme for new sportsgrounds.

The UK Crown Commercial Service report how FAC-1 formalises agreement for all parties to work towards the same objectives, targets, success measures and incentives. They have created FAC-1 strategic delivery models and ‘sub-alliance’ agreements for:

  • A programme of works (single client, multiple contracts, one or more contractors)
  • A supply chain (incorporating tier 2 and lower suppliers)
  • A multi – client purchasing consortium (multiple clients, multiple contracts, one or more contractors)
  • A BIM alliance
  • A project whole life approach (for example, an alliance of client, contractor, designers and facilities management providers).

Project teams can suffer from fragmentation where different specialist disciplines work in sequence or in parallel, focusing on different elements of design, manufacture, construction and operation rather than the whole asset and its whole life cycle. FAC-1 can break down these barriers by creating complete teams with aligned long-term interests. It can drive an integrated and collaborative approach to the interlocking ‘Four I’s’ of:

  • Intention: A framework strategy establishing the intention of clients in terms of credible plans and commitments, clear requirements for project outcomes and clear expectations for improved value and reduced risks
  • Information: Framework procurement exchanging the information between clients and prospective designers and contractors that forms the basis on which to implement agreed plans and commitments, to achieve required project outcomes and to meet expectations for improved value and reduced risks
  • Integration: A framework contract creating and sustaining integration of the mutual commitments of clients, designers and contractors to implement agreed plans and commitments, to achieve required project outcomes and to meet expectations for improved value and reduced risks
  • Management: Framework management achieving incentivisation through instructions, support, guidance and motivation for clients, designers and contractors to integrate their mutual commitments, to implement agreed plans and commitments, to achieve required project outcomes and to meet expectations for improved value and reduced risks.

Through these interlocking systems FAC-1 users can deliver:

  • Better, safer, faster and greener outcomes from projects and programmes of work
  • Net zero carbon and social value targets through agreed joint actions
  • Improved safety through whole life value and optimal use of digital information
  • Industry investment through aggregation, standardisation and optimal use of modern methods of construction
  • Improved efficiency and innovation through strategic use of early supply chain involvement
  • Improved contributions from local and regional businesses
  • Efficiency savings for clients and industry through consistent, transparent documents
  • Savings for clients and industry through collaboration and dispute avoidance.

LHC and London Borough of Southwark used FAC-1 to procure and integrate a group of ‘micro-SME’ architects and other design consultants, harnessing their specialist community experience and innovations. This created new opportunities for local professionals plus combined purchasing power for surveys and other sub-consultant services.

The UK Ministry of Justice is using FAC-1 on its £1 billion new prisons programme to integrate the work of MACE, ISG, Kier, Laing O’Rourke and Wates, using modern methods of construction and BIM to drive innovation, optimise social value and deliver on 2050 net zero carbon targets. The team are building on the success of HMP Berwyn which achieved cost savings of 26 per cent plus innovative building services, BREEAM excellence and extensive local business opportunities using an FAC-1 prototype.