Details

The Target Cost Contract is a new addition to the JCT suite of contracts and forms part of the JCT 2024 Edition. The Target Cost Contract family comprises a main contract, sub-contract, and guides.

The contract is for use where parties wish to use target cost and difference sharing arrangements. Instead of a lump sum, the method of remuneration for the contractor is payment of an “Allowable Cost” of the Works together with a “Contract Fee” (a fixed sum or percentage) and, if applicable, a “Difference Share” as calculated in accordance with the Contract.

The Target Cost Sub-Contract is made up of two parts: the Sub-Contract Agreement (TCCSub/A) which includes the Recitals, Articles and Sub-Contract Particulars, and the Sub-Contract Conditions (TCCSub/C).

It can only be used when the main contract is the Target Cost Contract 2024.
It can be used where the sub-contracted works are fully designed, or if the sub-contractor is required to design all or a part of the works.
It can be used when either the main contract works or the sub-contract works are to be carried out in sections.
It can be used for sub-contract works that are to be carried out on the basis of a sub-contract target cost or an adjusted sub-contract sum (adjustment for variations etc.) or by complete remeasurement.