PPC2000—Pricing and Risk
Produced in partnership with David Gwillim of Pitmans

The following Construction practice note produced in partnership with David Gwillim of Pitmans provides comprehensive and up to date legal information covering:

  • PPC2000—Pricing and Risk
  • Pricing under PPC2000
  • Pricing during the pre-construction phase
  • Pricing during the construction phase
  • Key aspects of pricing under PPC2000
  • Competing for the contract
  • Open Book
  • Agreed Maximum Price
  • Discounts
  • Value Engineering and other incentives
  • More...

PPC2000—Pricing and Risk

Pricing under PPC2000

Pricing under the PPC2000 Partnering Contract follows a two stage process which is intended to lead to transparency and cost certainty and encourage the identification of cost savings, added value and value engineering. The pricing process is divided between two phases: the pre-construction phase and the construction phase.

Pricing during the pre-construction phase

At the start of the pre-construction phase, the Client appoints design consultants and cost consultants: the design consultants will produce preliminary designs and the cost consultants will validate the Client’s budgets. After that, an invitation to tender is issued to potential contractors (called ‘Constructor’ in PPC2000) each of who bids by tender on the basis of profit, central office overheads, site overheads and rates of the known costs, together with their design and risk proposals. During the bid process, in the lead up to the submission of bid prices and proposals, the Constructor bidders will review the early designs for the project, a site visit for the potential Constructors will take place and they will assess the budget.

Even the experienced Client, at whom PPC 2000 is aimed, will need to exercise care by putting in place robust checks on the budgets provided. Budgets that are inflated, only to be reduced later in the pre-construction stage, can give the Client a false impression of value gained through design development while

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