Q&As

Does the HGCRA 1996 apply to onshore and offshore operation and maintenance agreements?

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Published on LexisPSL on 24/05/2017

The following Construction Q&A provides comprehensive and up to date legal information covering:

  • Does the HGCRA 1996 apply to onshore and offshore operation and maintenance agreements?
  • Construction operations
  • Hybrid contracts

The Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) only applies to a ‘construction contract’, namely a contract that satisfies all of the requirements set out in HGCRA 1996, ss 104 to 106 (and, for contracts concluded prior to 1 October 2011, HGCRA 1996, s 107).

A construction contract is an agreement to carry out ‘construction operations’ or arrange/supply labour for such operations (HGCRA 1996, s 104). The activities which constitute construction operations for the purposes of the act are set out in HGCRA 1996, s 105(1), albeit subject to HGCRA 1996, s 105(2) which lists excluded works that do not amount to construction operations.

Where a contract involves both construction operations and non-construction operations (sometimes referred to as a hybrid contract) the HGCRA 1996 will still apply but only to those parts of the contract which are concerned with construction operations.

Construction operations

If the works in question do not fall within the list in HGCRA 1996, s 105(1), they are not construction operations under the HGCRA 1996; therefore any agreement for them to be carried out will not be covered by the HGCRA 1996. It is important to consider whether the entirety of the works in a contract are captured, for example maintenance work may fall within HGCRA 1996, s 105(1)(a) and (b) but operating services might not. See Practice Note

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