‘Construction frameworks are widely recognised as the best medium through which procurement and contracting can deliver transformational improvements, overcoming the ‘Groundhog Day’ of lost learning from one project to the next’ (Constructing the Gold Standard, 2021).
Modern methods of construction (MMC) is a collective term for any building methods and materials which are designed to improve productivity and safety, while reducing the need for labour. Often when discussing large scale MMC projects, the focus is on demountable modular units where the units are assembled off site and delivered fully built, although it is worth noting that the term "MMC" covers a whole range of off-site and efficiency solutions.
In a recent summit (New Homes in New Ways Summit 2025) hosted at the Building Centre in collaboration with the Housing Festival, industry experts met to discuss (i) how the construction and housing industries could accelerate social rent housing delivery through the use of MMC, (ii) the challenges facing MMC and (iii) how some of these challenges could be overcome.
Whilst MMC has been touted as a potential solution to the issues around a lack of social housing, particularly to address homelessness in our cities, there are still concerns around ensuring how MMC can be harnessed to deliver housing quickly through standardisation and aggregation of resources. Framework Alliance Contacts, in particular the FAC-1 contract, may offer a potential solution to these issues.
Why use an FAC-1 framework contract for MMC projects?
In the 2020 Build Homes report ‘Build Homes, Build Jobs, Build Innovation – A Blueprint for a Housing Industrial Strategy’ it was found that ‘more innovative and progressive contracts reflect earlier and closer engagement with manufacturers, for instance the ACA Framework Alliance Contract (FAC 1) for long-term strategic relationships enabling one or more clients to integrate housing programmes that are delivered through smart construction linked to separate design, construction and operation contracts.’
FAC-1 is a multi-party contract which can be used with multiple industry standard forms such as JCT, NEC and PPC forms of contract. It governs (i) joint project planning and risk management, (ii) standardised and integrated working practice between the parties to the framework, (iii) collaboration between the parties and the wider supply chain and (iv) learning from project to project (subject to robust intellectual property protections).
FAC-1 may offer a way to create integration under developments with one or more clients to one or more tier 1 contractors. It aims to connect the parties to early input by tier 2 / 3 specialists in order to collaborate on design, costs, programmes, etc. through collective supply chain collaboration. This may offer a solution to the issues of standardisation, collaboration between parties and early engagement of the supply chain to ensure integration in MMC projects.
Forms of contract
One of the recommendations of the Construction Playbook was that parties should use standard forms of contract to reduce the negotiation and time required when entering into contracts for public housing.
Developers interested in using MMC in their projects should consider standard forms such as PPC2000 (soon to be updated by PPC2025) which provides for early engagement, multi-party collaboration, include requirements for project bank accounts and contains provisions promoting sustainability such as the requirement under PPC2025 to have a Net Zero and Sustainability Action Plan and Project Carbon Budget.
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