Ownership rights in performance-based contracting: A case study of English law

Clients and contractors need to be aware of the project’s legal environment because the viability of a procurement strategy can be vitiated by legal rules. This is particularly true regarding Performance-Based Contracting (PBC) whose viability may be threatened by rules of property law: while the PBC concept does not require that the contractor transfers the ownership in the building materials used to the client, the rules of property law often lead to an automatic transfer of ownership. But does the legal environment really render PBC unfeasible? In particular, is PBC unfeasible because contractors lose their materials as assets? These questions need to be answered with respect to the applicable property law. As a case study, English property law has been chosen. Under English law, the rule which governs the automatic transfer of ownership is called quicquid plantatur solo, solo credit (whatever is fixed to the soil belongs to the soil). An analysis of this rule reveals that not all materials which are affixed to land become part of the land. This fate only occurs in relation to materials which have been affixed with the intention of permanently improving the land. Five fictitious PBC cases have been considered in terms of the legal status of the materials involved, and several subsequent legal questions have been addressed. The results suggest that English law does actually threaten the feasibility of PBC in some cases. However, it is also shown that the law provides means to circumvent the unwanted results which flow from the rules of property law. In particular, contractors who are interested in keeping their materials as assets can insist on agreeing a property right in the client’s land, i.e. a contractor’s lien. Therefore, the outcome is that English property law does not render the implementation of the PBC concept unfeasible. At a broader level, the results contribute to the theoretical framework of PBC as an increasingly used procurement strategy.

The competitive dialogue procedure: Advantages, disadvantages, and its implementation into English and Dutch law

Competitive Dialogue (CD) is a new contract award procedure of the European Community (EC). It is set out in Article 29 of the 'Public Sector Directive' 2004/18/EC. Over the last decades, projects were becoming more and more complex, and the existing EC procedures were no longer suitable to procure those projects. The call for a new procedure resulted in CD. This paper describes how the Directive has been implemented into the laws of two member states: the UK and the Netherlands. In order to implement the Directive, both lawmakers have set up a new and distinct piece of legislation. In each case, large parts of the Directive’s content have been repeated ‘word for word’; only minor parts have been reworded and/or restructured. In the next part of the paper, the CD procedure is examined in different respects. First, an overview is given on the different EC contract award procedures (open, restricted, negotiated, CD) and awarding methods (lowest price and Most Economically Advantageous Tender, MEAT). Second, the applicability of CD is described: Among other limitations, CD can only be applied to public contracts for works, supplies, and services, and this scope of application is further restricted by the exclusion of certain contract types. One such exclusion concerns services concessions. This means that PPP contracts which are set up as services concessions cannot be awarded by CD. The last two parts of the paper pertain to the main features of the CD procedure – from ‘contract notice’ to ‘contract award’ – and the advantages and disadvantages of the procedure. One advantage is that the dialogue allows the complexity of the project to be disentangled and clarified. Other advantages are the stimulation of innovation and creativity. These advantages are set against the procedure’s disadvantages, which include high transaction costs and a perceived hindrance of innovation (due to an ambiguity between transparency and fair competition). It is concluded that all advantages and disadvantages are related to one of three elements: communication, competition, and/or structure of the procedure. Further research is needed to find out how these elements are related.

Hypotensive effects of hawthorn for patients with diabetes taking prescription drugs: a randomised controlled trial

Background: Hawthorn (Crataegus laevigata) leaves, flowers and berries are used by herbal practitioners in the UK to treat hypertension in conjunction with prescribed drugs. Small-scale human studies support this approach. Aim: To investigate the effects of hawthorn for hypertension in patients with type 2 diabetes taking prescribed drugs. Design of study: Randomised controlled trial. Setting: General practices in Reading, UK. Method: Patients with type 2 diabetes (n = 79) were randomised to daily 1200 mg hawthorn extract (n = 39) or placebo (n = 40) for 16 weeks. At baseline and outcome a wellbeing questionnaire was completed and blood pressure and fasting blood samples taken. A food frequency questionnaire estimated nutrient intake. Results: Hypotensive drugs were used by 71% of the study population with a mean intake of 4.4 hypoglycaemic and/or hypotensive drugs. Fat intake was lower and sugar intake higher than recommendations, and low micronutrient intake was prevalent. There was a significant group difference in mean diastolic blood pressure reductions (P = 0.035): the hawthorn group showed greater reductions (baseline: 85.6 mmHg, 95% confidence interval [Cl] = 83.3 to 87.8; outcome: 83.0 mmHg, 95% Cl = 80.5 to 85.7) than the placebo group (baseline: 84.5 mmHg, 95% Cl = 82 to 87; outcome: 85.0 mmHg, 95% Cl = 82.2 to 87.8). There was no group difference in systolic blood pressure reduction from baseline (3.6 and 0.8 mmHg for hawthorn and placebo groups, respectively; P = 0.329). Although mean fat intake met current recommendations, mean sugar intake was higher and there were indications of potential multiple micronutrient deficiencies. No herb-drug interaction was found and minor health complaints were reduced from baseline in both groups. Conclusions: This is the first randomised controlled trial to demonstrate a hypotensive effect of hawthorn in patients with diabetes taking medication.