Olympic Games 2012: Construction

Lord Luke
asked Her Majesty's Government:

What financial penalties are built into the contracts for those awarded work on the Olympic site; and what mechanisms they propose to resolve potential disputes. [HL2896]

Lord Davies of Oldham
The main construction contracts are yet to be let by the Olympic Delivery Authority (ODA), but this process will commence over the next few months.

The new engineering and construction (NEC) form of contract, which reflects current best practice and has been used successfully on similar large infrastructure projects, such as Heathrow terminal 5, will be the main form of contract used by the ODA. Within this there is scope for both financial incentivisation and penalties, as well as dispute resolution provisions.

It is not the ODA’s intention to implement measures which hamper its ability to work with its suppliers and contractors. The principles which the ODA will adopt in regard to withholding retention money and/or use of bonds within each contract will be considered on the merits of each case. In the event that disputes arise, it is important that they are dealt with in an appropriate and expedient manner. The form of dispute resolution will be determined by the circumstances.