Lawyer issues tender costs and supply chain warning amid upcoming gas and oil boilers ban

Lawyer issues tender costs and supply chain warning amid upcoming gas and oil boilers ban

Andrew Boccoli

An upcoming ban on the installation of gas and oil boilers in new buildings in Scotland has prompted a construction lawyer to urge contractors to consider the implications when pricing projects or agreeing to completion dates.

Andrew Boccoli, a director in the Commercial Property department at Scottish legal firm Lindsays, believes firms bidding for work would be wise to factor in the upcoming law change when tendering for projects.

He also suggests that contractors should consider whether their supply chains can cope with the anticipated increase in demand for alternative heating systems and to make advance orders in good time where they can.

The ban will affect all new domestic and non-domestic properties applying for a building warrant from April 1, 2024.

It is a change which the lawyer is urging designers, contractors and developers to begin budgeting for immediately - potentially putting legal safeguards in place before the new law comes into force.

Mr Boccoli, who heads construction law services at Edinburgh-headquartered Lindsays and acts widely for developers and contractors across the country, said: “Energy efficiency and emissions from new buildings has improved greatly in recent years, but this is an historic marker for the construction trade - with the Scottish Government’s aim to eventually make buildings zero carbon by 2045.

“It is one which the industry at all levels cannot afford to lose sight of - particularly those in the process of tendering for projects, who would be prudent to factor in the additional costs of fitting compliant systems and who do not want to have to go back to the drawing board with plans.

“Contractors do not want to face running into financial difficulties on projects because they have planned and priced work based on fitting gas boilers, for example, and then find themselves legally required to make a change.

“Firms will also need to consider if they will be able to source appropriate alternative systems in a timely manner so as not to put them in breach of any contractual deadlines for completion. We expect to see significant competition between firms for limited supply, at least initially.”

“We would suggest having appropriately-worded contracts in place which cover all eventualities should costs or timescales for completion of works change significantly, for whatever reason.”

Permitted systems from April will include the likes of heat pumps, solar thermal and solar thermal storage systems, electric storage heaters, electric boilers, fuel cells and direct electric heaters.

Mr Boccoli added: “This will clearly impact on all businesses involved in the design, specification, installation or procurement of heating systems for new buildings in Scotland.

“The industry’s biggest players are certainly on top of the change, but I would encourage smaller enterprises, contractors and sub-contractors to be prepared too, whether they are involved in design or build.”

Lindsays is urging firms to consider enhancing contractual terms on future projects so that they can manage and mitigate risks, including costs and timescales for materials including compliant heating systems.

With the building industry typically operating on tight margins, Mr Boccoli is urging firms to ensure they are realistic about costs when pricing projects generally. He also recommends they seek specialist legal advice to ensure that robust contracts - specific to each scheme - are in place.

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