Model Contracting in the UK

The British Crown Commercial Service and the UK Government Legal Service have developed a substantially revised set of model terms and conditions for major procurement contracts with the government.  This “model contract” is for use as a base template in any government procurement framework where the procurement will “typically require some form of formal dialogue with potential suppliers.” 

Model contracts may ease of negotiations in situations where there is a real or perceived disparity in bargaining positions.  They could also help parties predict and thus avoid potential practical and legal pitfalls in the contractual performance and relationship.  Legal fees may be saved over having to reinvent the contractual drafting wheel every time a (new) supplier does business with, in this case, the government.

Among other improvements, the new model contract is considered to be less one-sided (in favor of the government) than the previous version although some “authority friendly” provisions still exist.  The model furthermore shifts some of the due diligence risk of contracting away from the supplier and onto the government.  It also allows the authorities to withhold a “proportionate amount” of the service charges until a performance failure is rectified “to the reasonable satisfaction” of the government; a provision that stands out as interesting in this country as well given the notoriously low quality of services seemingly provided by suppliers to the U.S. government.  True, the government here probably most often has to pick the most inexpensive provider, but that still does not seem to address the underlying issue of why suppliers are not held accountable to fix the various problems at an earlier stage and at a greater extent than they seem to be, even in connection with major problems (think Obamacare website or the many poorly constructed state and federal government buildings).

In the USA, “contracting officers” issue “warrants” for products and services for the government.  As can be expected, our system seems considerably less transparent and more complicated than that in the UK.  A model contract taking the interests of the suppliers in addition to just the government seems a highly user-friendly and modern approach that the US government might benefit from as well.