Your contract was written for scaffolding, not factories: why MMC stalls at the commercial stage
The UK has had a presumption in favour of off-site construction for relevant government departments since 2019. The technology works, the case studies are impressive, and construction productivity still trails the wider economy badly enough that doing nothing is the expensive option. So why does Modern Methods of Construction keep underdelivering in public programmes? The government's own MMC guidance note points at an unglamorous culprit: contracts. Traditional forms assume design evolves until late in the build. Factories assume the opposite. Most procurements never reconcile the two.
Manufacturing punishes indecision
A traditional contract lets the client change scope more or less whenever it likes, and prices the consequences afterwards. A manufacturing process needs every element fixed before production starts. The guidance is blunt about what happens when these worldviews collide: late client changes become costly and slow, and standard contracts do not even surface the impact until it is too late to reverse the instruction.
The fix is not exotic. Require the contractor to identify critical manufacturing dates in its programme. Set a contractual design freeze for manufactured elements. Demand rapid early warnings of anything that threatens production, including your own proposed changes. These are ordinary drafting decisions, but they have to be made before tender, which means the commercial team has to know, early, which parts of the project are products and which are construction.
The manufacturer is a strategic supplier, not a subcontractor
In the default model, the Tier 1 contractor selects the manufacturer late, the client rubber-stamps the choice under programme pressure, and every insight the manufacturer could have contributed to design, cost and risk is lost. The guidance's alternative is to treat significant manufacturers as strategic suppliers: engage them early, consider appointing them directly, and use multi-project call-off contracts so volume certainty funds their investment in innovation and net zero.
Direct appointment brings real obligations with it. Manufacturing slots are booked with money, so payments need security: vesting certificates only protect assets that exist, so advance payment bonds matter for the period before anything is made. The site now includes the factory, so inspection, audit and insurance must follow the work there. And the product IP usually stays with the manufacturer, which is fine, provided the contract says so and nobody tries to quietly assign it later.
Platforms are a portfolio decision
The deeper message of the guidance is that the biggest MMC gains are not available to a single project. A platform approach, a standardised kit of parts with defined interfaces, pays back through repetition: across a schools programme, an estate, or several departments sharing a framework with enabling provisions. The SEISMIC case study shows the ceiling, 75 per cent faster than traditional delivery and 70 per cent less whole life carbon, but those numbers were built on standard design rules and a digital component library, not on a heroic one-off.
For public buyers the practical question is therefore organisational, not technical: do you have a pipeline visible enough, and demand aggregated enough, to make product thinking rational for your suppliers? If not, that is the problem to solve first. A well-run procurement platform, a published pipeline and a portfolio view of repeatable requirements are the boring prerequisites that make the exciting factory economics possible.
The takeaways
- MMC fails commercially before it fails technically: fix the contract model first.
- Set design freeze dates and early warning duties for manufactured elements in every MMC contract.
- Secure manufacturing payments properly and extend audit and insurance rights to the factory.
- Treat significant manufacturers as strategic suppliers with early engagement or direct appointment.
- Platform economics need aggregated, visible demand: pipelines and portfolios come before products.
Want the full breakdown?
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