JCT Target Costs Contract 2024 (TCC)

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.

Target Cost Contract (TCC 2024):

• Can be used on large or smaller scale projects, but generally where detailed provisions are necessary.
• Can be used where the Employer wishes to incentivise the Contractor by the use of a Target Cost and difference sharing arrangements.
• Can be used where Employer’s Requirements have been prepared and provided to the Contractor enabling a Target Cost to be agreed.
• The Contractor is responsible for completing the design, as well as carrying out the works.
• The Contractor is paid its allowable costs together with a contract fee (which may be a fixed sum or a percentage of allowable cost)
• Provisions are included for collaborative working, sustainability, advance payment, bonds (advance payment, off-site materials, retention), third party rights and collateral warranties.
• Pre-Construction Services Agreement (General Contractor) (PCSA) and Pre-Construction Services Agreement (Specialist) (PCSA/SP) can be used (with minor adaptation) with this contract.
• This contract can be used with the Framework Agreement (FA).
• For use of both private and public sector projects.