Tuesday, 1 October 2013

Procurement needs to be concerned with planning permission risk

I have written before about the need to ensure that all relevant planning permissions are in place prior to signing a contract on which gaining planning approval is a dependency. Ironically we learn of yet another waste contract potentially wasting money as commercial agreements appear to have been signed prior to the appropriate planning conditions having been complied with.

So while the formalities of procurement seem to have rushed ahead, the dependent approval processes doesn't appear to have achieved the necessary signed-off. This failure in choreography could now prove costly and embarrassing. A judicial review will now establish what happens next but the key lesson, once again, is don't commit to commercial contracts unless you know you can progress to delivery. Contracts are expensive to exit prior to running their natural term. I am not remotely qualified to provide a legal opinion, but it does appear that those concerned should either have delayed signing, or alternatively included a 'get out of jail free' break clause which would have covered such an eventuality. Either of those routes may have helped but that assume someone would have completed a risk assessment and viewed those as risk mitigation - it looks unlikely that happened too.

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