(This note is not part of the Order)
Part 2 of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”) makes provision as regards the terms of construction contracts and related matters. The Order excludes from the entirety of Part 2 of the Act infrastructure project contracts where a party to the contract is a sewerage or water undertaker, subject to the following requirements. The contract must relate to a project designated by the Water Services Regulation Authority as a direct procurement for customers project in accordance with the conditions of the relevant undertaker’s appointment. Such contracts must also involve the making of regular payments by reference to actual costs incurred and which become due after one or more parts of the construction operations are completed and are capable of performing a sewerage or water service.
The Order also excludes section 110(1A) of the Act from applying where a party to such a contract enters into a subcontract. Section 110(1A) of the Act provides that the requirement that contracts provide an adequate mechanism for establishing what payments become due and when under the contract is not met if payment is conditional on obligations being performed under another contract.
No regulatory impact assessment has been prepared in relation to this instrument as there is no, or no significant impact, on businesses, charities or the voluntary sector.