Viewers attending the online launch event for the JCT Target Cost Contract were given a detailed overview of the contract and the background to its production on Wednesday, 10 September.
The presentation featured JCT chair, Karen Kirkham, and vice-chair of the JCT Drafting Sub-Committee (DSC), John Riches.
In his position as DSC vice-chair, John Riches had a central role (alongside colleagues in the DSC) in the production of the Target Cost Contract and its drafting.
John and Karen’s discussion explored in greater detail the background to the contract, including why JCT decided to produce it, how it fits in the JCT 2024 Editon, the benefits, and the types of project at which the contract is aimed.
They then expanded on some of the key details and terms within the contract family, explaining the mechanics of how it works, including the payment mechanism, and an overview of the Target Cost Sub-Contract.
In explaining JCT’s decision to produce the Target Cost Contract for the 2024 Edition, John Riches said:
“What’s changed since 2016 [the last JCT Edition] is the level of risk in the industry. It’s prevalent in terms of the number of bankruptcies, and some people are just taking too much risk. So, we thought we would try to find a way to balance the risk across the contract.
“We’ve also had demand from law firms and the like because there are versions of Target Cost in the market place which are different ours […] we think the industry is ready to move from other systems of Target Cost or Cost Plus, and we hope that we have pitched it right and are in the right place in the market at the right time.”
Interest in the Target Cost Contract from the industry has been high, which was reflected in the over 500 registrations for this online launch event, and the many articles already published in the industry press. An audience Q&A gave an opportunity for those working in the industry to put their questions on the contract to John and Karen.
The full video is now available to view from the JCT Target Cost Contract hub, at corporate.jctltd.co.uk/target-cost-contract-hub.