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In the wake of the Egan Report's recommendations on construction procurement, there has been increasing demand for an Egan-compliant approach to housing maintenance and repairs. In response, Trowers & Hamlins has developed a groundbreaking maintenance contract. It has already been recognised in reports by the Housing Forum and the local government taskforce, and is being used by the London Borough of Haringey for its gas maintenance services.

The contract, called TPC2001 (TPC stands for "term partnering contract"), is designed to save money for both the council and the maintenance companies and improve services at the same time. It uses ideas formulated in the pioneering construction partnering contact PPC2000 for the creation of a single contract to govern all team members and all partnered processes, adapting these ideas for planned and responsive maintenance and repairs.

TPC2001 is designed for a programme of ongoing responsive, possibly cyclical and/or planned works and services, making it ideal for areas such as gas servicing and maintenance. These terms can be tailored to the needs to the client and contractor.

It has been developed to be flexible enough to cover a variety of term programmes ranging from £700,000 to £300m, and the partnering team can be expanded to include consultants, specialist subcontractors, subconsultants and suppliers of the constructor.

Because orders under term contracts tend to be carried out by the constructor's direct labour, TPC2001 allows for employee bonus schemes and corporate incentives.

In addition, there will be key suppliers of materials and equipment whom TPC2001 encourages to be brought into the partnering team or else engaged on beneficial volume supply agreements with improved warranties.

But, unlike other term contracts, TPC2001 requires continuous improvement, measured against key performance indicators, from the partners involved if the contract is to be extended beyond its initial period.

Work orders and costs are monitored on an open-book basis, with the council having access to the contractors’ IT systems

TPC2001 identifies new processes to improve performance that can be developed by the partnering team over the life of the contract. These include IT and computer links, direct communication between constructor and occupiers and provisions for more efficient programming of visits.

Pricing
Pre-selecting the contractor on the basis of profit and overhead, with a build-up of prices through business case evaluation or the tendering of supply chain packages, may not be appropriate for a maintenance contract. But partnering teams are increasingly keen to explore the lump-sum and open-book alternatives. So TPC2001 encourages the development of open-book pricing and incentives to improve productivity of the constructor and team.

For instance, in Haringey's £2.2m agreement, contractors price a schedule of rates for breakdown and call-out services but are then reimbursed by the council for the actual levels of work completed at cost, plus their tendered fixed profit and overhead costs. Work orders and breakdown costs are monitored and audited on an open-book basis, with council engineers having open access to contractors' IT systems and paperwork.

Trust
An integrated contract with an agenda for continuous improvement can underpin trust. For example, the need to reduce administration means the constructor may have a role in aggregating and valuing orders, diagnosing problems and assessing the position when on site.

An effective term contract needs to consider the level of trust that can be developed for the constructor's staff and supply chain members to diagnose a problem and respond to it without the need for further administration or delay.