The effectiveness of the joint building contracts committee principal building agreement in the South African built environment

Government investment in infrastructure development in South Africa is set to increase in the next few years to facilitate its mandate of radical economic transformation; contractually there is no margin for error in the execution of infrastructure projects. With a rising inflation, low economic growth and high unemployment, greater need for service delivery and an ever-increasing level of competition, contractor profit margins on are dwindling year on year. Things should not go wrong during construction but often do which results in serious reputational damage to all members involved, companies being liquidated, leaving workers in a desperate plea for employment and leaving them and their families facing poverty in the face. The choice and understanding of a particular contract is very important. The Joint Building Contracts Committee (JBCC) concentrates primarily on the compilation of contract documentation aimed at an equitable distribution of contractual risk in the building industry. The suite is approved by the Construction Industry Development Board (CIDB) and is used by Local Government, District Municipalities, Provincial and National Departments and the Private Sector. The Principal Building Agreement (PBA) is the cornerstone of the JBCC Suite of documents. For the purpose of the research, only JBCC PBA will be the focus area. Contract documents have to be reviewed and revised regularly. Regular revisions to the JBCC contract documentation suite aim to ensure that available documentation remains current. Construction contracts have evolved into standard contract forms. This is not only because of their advantages of familiarity and the prohibitive cost of customisation but also to provide certainty on the nature of the transaction between the contracting parties on a construction project. The study found that the JBCC PBA Edition 6.1 of March 2014 is not widely used, as stakeholders largely prefer to utilise its predecessors, Edition 4.1 of March 2005 and Edition 5.0 of July 2007. The lack of usage could be attributed to prevailing negative perceptions by the users on the contractual risks involved. The study found that contractual risk is better mitigated than in previous JBCC PBA Editions. Furthermore, there are some areas of concern identified where the JBCC PBA document could be further enhanced to improve its overall effectiveness as a contract management tool. The discovered that the JBCC PBA Edition 6.1 standard form of contract are compiled in the interests of standardisation and aim to portray the consensus concerning good practice and an equitable distribution of contractual risk. The findings will help all stakeholders in the South African Building Industry to better understand the implications, benefits and improve their understanding of the JBCC PBA, especially Construction Project Managers employed by the State at different levels, either Local Government, District Municipality, Provincial Departments and National Departments. It will also be beneficial to Architects, Construction Project Managers, Construction Managers, Quantity Surveyors and Engineers operating as consultants, contractors or academics