01 Commercial Direction / Model
Configuring an alliance
Britain has four standard collaborative contract forms, and public policy has encouraged them for years[9][10]. Yet an alliance rarely fails because of the form chosen. It fails because the form does not fit what is being bought, or because the parts that make it collaborative are left blank.
This model compares the four forms across the ten decisions every alliance has to make, suggests which one fits, and lists the mistakes that most often undo that choice.
Position as at September 2026, and changing. FAC-1 and TAC-1 passed to NEC in 2025[1]. In June 2026 NEC announced an NEC4 Project Alliance Contract for Q4 2026, to succeed the Alliance Contract and, over time, PPC2000 [3]. This page states what each form does, not its clause numbers, and is not legal advice.
Forms compared4PPC2000, FAC-1, TAC-1, NEC4 ALC
Decisions10who signs to how to exit
Common mistakes12shown against each route
Answer four questions. The model suggests a form, says why, and lists the mistakes that most often undo that choice. The suggested form is highlighted in the comparison below.
What are you buying?
When can the team be brought in?
Will the parties waive claims against each other?
Who is the client?
Ten decisions every alliance has to make, and how each of the four UK forms makes them.
| Decision | PPC20002000, amended 2013 | FAC-12016 | TAC-12016 | NEC4 ALC2018, amended January 2023 |
|---|---|---|---|---|
| Who signs | One multi-party contract for one project. Others can join later. | Multi-party umbrella. Each project is let under its own two-party contract, in any form. | Multi-party. Work is ordered under TAC-1 itself. | One multi-party contract between the client and its partners. The board can add partners. |
| How it is governed | A core group working by consensus. | A core group and an alliance manager, with an optional independent adviser. | As FAC-1. | An alliance board that decides unanimously, and an alliance manager who acts for the board, not the client. |
| Timetable and early involvement | A partnering timetable and early selection of the team, with a pre-possession agreement before site work. | A timetable plus supply chain collaboration, with orders placed before project contracts. | A timetable plus supply chain collaboration. | A programme; two-stage early involvement is available as an option. |
| Objectives and measures | Partnering objectives and key performance indicators. | Objectives, success measures and targets in a schedule. | As FAC-1. | Alliance objectives, measured through a performance table. |
| Incentives | Agreed profit and overheads, shared savings and KPI-linked payments. | Agreed incentives, plus exclusivity or a stated minimum of work. | As FAC-1. | Cost reimbursed. Pain and gain shared on the whole alliance cost, including the client's own cost. |
| Risk and early warning | Early warning through the core group and joint risk management. | Early warning and a shared risk register. | As FAC-1. | Weather and physical conditions are not compensation events: they fall into the shared pain and gain. |
| How work is awarded | A commencement agreement once the project is ready. | Direct award or mini-competition, by a stated procedure. | An order procedure. | No call-off procedure: the partners are appointed to the whole alliance. |
| Disputes | A problem-solving hierarchy, then conciliation, adjudication and arbitration. | The core group and independent adviser, then conciliation or a dispute board, adjudication and arbitration. | As FAC-1. | Senior representatives, the board, a non-binding expert and mediation. No court or arbitration tier, but statutory adjudication still applies [8]. |
| Liability | Conventional. | Conventional, with limits. No waiver of claims. | Conventional. | No blame, no claim: the parties waive most claims against each other [6][7][8]. |
| Exit | Termination, and replacement of a team member. | Termination, including for failing critical targets. | Termination, with handover between providers. | The members can vote a partner out. |
| Status, September 2026 | Current, still published by the ACA; it was not part of the 2025 transfer to NEC [2]. The NEC4 Project Alliance Contract is intended to replace it over time [3]. | Current, name unchanged. Published by NEC since 2025 as the NEC Framework Alliance Contract [1][2]. Stays the form for framework alliances [3]. | Current, name unchanged. Published by NEC since 2025 [1][2]. It replaced the ACA's TPC2005 [4]. | Current, to be succeeded by the NEC4 Project Alliance Contract, announced for Q4 2026 [3]. |
Principles
Six rules for configuring one
- Choose the structure before the form. Decide whether you are buying one project, a programme, a framework or term work. The form follows from that.
- Bring the team in while it can still change the answer. Collaborative forms earn their cost in design, packaging, risk and price. Signed at construction, most of that value has gone.
- Fill in the timetable. The early activities are the point of the contract. Date them and give each an owner.
- Make the layers agree. Framework targets, project KPIs, early warnings and dispute routes must be mirrored between the umbrella and the call-off contracts.
- Give suppliers a reason to invest. State exclusivity or a minimum of work. Collaboration costs suppliers time; they spend it where there is work to win.
- Share only what you can price. In a pure alliance, weather and ground risk are shared, not transferred. Price them honestly, and check insurance before waiving claims.
Sources
- Construction News, "NEC acquires collaborative contract suite from ACA", 9 June 2025. https://www.constructionnews.co.uk/contracts/nec-acquires-collaborative-contract-suite-from-aca-09-06-2025/
- Association of Consultant Architects, "NEC acquires the ACA collaborative construction contracts". https://acarchitects.co.uk/nec-acquires-the-aca-collaborative-construction-contracts/
- NEC, "NEC4 Project Alliance Contract (PAC): a major step forward for collaborative contracting", 23 June 2026. https://www.neccontract.com/news/nec4-project-alliance-contract-a-major-step-forward-for-collaborative-contracting
- ACA, PPC2000 and alliance forms (PPC2000, SPC2000, TPC2005 now TAC-1; FAC-1) and FAQs. https://ppc2000.co.uk/ and https://ppc2000.co.uk/faqs/
- NEC, FAC-1 Guidance Notes, 2024. https://www.neccontract.com/getmedia/927fb0b0-eab4-406d-895e-7e3f14b4627a/NEC4_FAC-1-Guidance-Notes.pdf
- Pinsent Masons, "NEC4 Alliance Contract: the basics". https://www.pinsentmasons.com/out-law/guides/nec4-alliance-contract-the-basics
- Fenwick Elliott, Insight 81. https://www.fenwickelliott.com/research-insight/newsletters/insight/81
- Herbert Smith Freehills, "The no-claims clause in the NEC4 Alliance Contract and the statutory right to adjudicate", November 2019. https://www.herbertsmithfreehills.com/notes/construction/2019-11/the-no-claims-clause-in-the-nec4-alliance-contract-and-the-statutory-right-to-adjudicate
- Cabinet Office, The Construction Playbook, v1.1, September 2022, chapter 6, p.47. https://assets.publishing.service.gov.uk/media/6312222de90e075880923330/14.116_CO_Construction_Playbook_Web.pdf
- D. Mosey, Constructing the Gold Standard, Cabinet Office, December 2021, recommendation 4 and pp.27-28. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1041002/Constructing_The_Gold_Standard_Final.pdf
- NEC, NEC4 contract amendments, January 2023. https://www.neccontract.com/getmedia/80b59acb-13fc-447f-9d93-da23e5c9070a/NEC4-contract-amends-January-2023.pdf
- Procurement Act 2023 (commenced 24 February 2025). https://www.legislation.gov.uk/ukpga/2023/54/contents
Next step
We help clients choose and configure a collaborative contract, and check that the framework, the project contracts and the supply chain terms agree. Discuss an alliance strategy →