Last edited 29 Dec 2020

TAC-1 alliance contract


[edit] Introduction

TAC-1 is a versatile standard form term alliance contract which:

TAC-1 supports and integrates the provision of any type or scale of works and/or services and/or supplies. It is endorsed by the Construction Industry Council and by Constructing Excellence. TAC-1 can be purchased in hard copy or on-line from the Association of Consultant Architects and in hard copy from bookshops.

TAC-1 sets out:

[edit] Background to TAC-1

TAC-1 is based on:

[edit] Benefits of TAC-1

  • Savings and improved value

TAC-1 follows closely the provisions of TPC2005 (see below for details of changes) which has established a strong track record over the last ten years. TAC-1 develops the provisions of TPC2005 that have helped to deliver Improved Value including:

TAC-1 makes clear the mutual commitments of Alliance Members and states:

It is critical to create a system for management of risks under a framework contract. The TAC-1 Risk Register in Schedule 3 is kept up to date by the Alliance Manager, for approval by the Core Group of agreed individuals (clause 9.4). The Core Group also acts as a forum through which Alliance Members can raise issues with each other in order to resolve problems before they become disputes (clauses 1.6, 1.7 and 15.1).

In assessing risks it is important for contractors and other providers to understand how Objectives and Success Measures affect the future award of work. TAC-1 provides clarity (in Schedule 1 and clause 14.2) as to which Targetsare so important that a failure to meet them will require urgent action and may ultimately determine whether a term appointment may be terminated. It also includes an Early Warning system (clause 1.8) enabling notification to the Core Group of the reasons behind any issues or obstacles that are encountered.

A major problem arises if a term contract does not create the conditions most likely to achieve the results that the client wants. The failure of a term contract is a client failure too, and re-procurement creates huge costs for the client and the bidders. Therefore, it is worth building into a term contract the commitment of all parties to implement specific activities designed to improve value.

TAC-1 does this by providing for agreed Alliance Activities in order to achieve Improved Value (clause 6), linked to agreed deadlines under the Timetable set out in Schedule 2. These activities include the “Supply Chain Collaborationsystem for the joint review and agreed improvement of tier 2/3 supply chain relationships.

[edit] Supply Chain Collaboration

TAC-1 describes Supply Chain Collaboration as a system to achieve Improved Value by means of:

Surrey County Council used Supply Chain Collaboration under TPC2005 combined with a bespoke alliance agreement (now both included in FAC-1 and TAC-1) to agree 15% post-tender cost savings against previously approved rates with its Provider and Supply Chain members. 3% of these savings were offered by the Provider as a result of new collaborative working methods, and the following 12% savings were offered by tier 2/3 Supply Chain members:

The Project Horizon term alliance also enabled agreement of other Improved Value comprising:

Project Horizon is also an alliance case study in the 2015 Infrastructure Client Group “Alliancing Code of Practice”.

[edit] Procurement and prices

TAC-1 is compatible with any procurement and pricing model. It supports:

Term Proposals and Term Prices are submitted by the Provider. Pricing will vary according to the nature of the Term Programme and according to whether the Term Alliance Contract governs the appointment of consultants, tier 1 contractors, tier 2/3 sub-contractors/manufacturers/suppliers.

There is an option for Term Prices to identify Profit and Overheads separate from other costs, and this enables Alliance Members to gain Improved Value from joint Alliance Activities without eroding margins.

[edit] Changes from TPC2005 to TAC-1

Many clients and other Alliance members are familiar with TPC2005 and wish to know the changes introduced through TAC-1 . Improvements in the provisions of TAC-1 compared to TPC2005 include:

[edit] TAC-1 and the law

TAC-1 is for use in any jurisdiction and does not contain provisions taken from English law.

The payment and adjudication provisions in TAC-1 clause 8 (Payment) and clause 15.3/Appendix 4 Part 2 (Adjudication) are drafted to be compliant with the UK Housing Grants Construction and Regeneration Act 1996 as amended, without specifically referencing any provisions of that Act.

Other specific provisions required for compliance with English law need to be set out in Schedule 6 Part 1 (Legal Requirements). For example, these can include the following provisions taken from TPC2005:

[edit] TAC-1 and Building Information Modelling

Successful use of Building Information Modelling (BIM) is closely linked to the interfaces and systems established in the procurement model and contract terms, and some leading BIM projects have used a multi-party term alliance. These are described in the King’s College London research report “Enabling BIM Through Procurement and Contracts”, which can be downloaded at

For example, the City of London Corporation used TPC2005 in conjunction with BIM to procure the replacement of mechanical and electrical systems at the Central Criminal Court (the “Old Bailey”). BIM was adopted to retrofit digital designs and data that will support the future repair, maintenance and facilities management of the building.

TAC-1 provides the option for BIM to underpin the agreed approaches to design, supply chain engagement, costing, Risk Management and programming. BIM provisions are set out in TAC-1:

TAC-1 provides the means to obtain Improved Value through BIM including:

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