Modern Methods of Construction (MMC) are being lauded as a way to improve quality and address skills shortages but there are risks and challenges

Managing risks in MMC offsite manufacturing contracts

Modern Methods of Construction (MMC) refer to the use of innovative and non-traditional methods of building construction that sees housing built in a factory and then assembled onsite. The key objective is to build better by improving quality, efficiency, and sustainability. WP Housing’s Luke Beard explores how a proactive approach to risk management can mitigate risks based on the experience of managing the development of more than 500 MMC homes.

The use of MMC often involves the use of proprietary technology or patented processes. Developers need to be aware of the intellectual property rights associated with the technology and ensure that they have the necessary licenses and permissions to use it.

Contracts often require collaboration with multiple suppliers, contractors, and subcontractors. Developers must consider risks associated with MMC’s complex supply chain and ensure that they have appropriate contracts in place with all parties involved.

As MMC can involve the use of new and innovative materials and processes, developers need to be aware of the warranties and liabilities associated with these materials and processes and ensure that they have appropriate insurance coverage to mitigate risks.

Quality control of MMC requires careful attention to ensure that the construction meets the required standards and specifications. Developers need to be aware of the quality control processes involved and ensure that they have the necessary controls in place to ensure the quality of the final product.

MMC often involves higher upfront costs than traditional construction methods. Careful financial planning is essential to ensure that they have the necessary funding in place to complete the project.

Developers must understand the ownership and risk challenges associated with MMC contracts and take appropriate steps to manage these risks. This may involve collaborating with suppliers and contractors, ensuring appropriate contracts and insurance coverage, and implementing effective quality control processes.

However, one of the benefits of MMC is the ability to take complex and potentially dangerous building activities away from a traditional open-air building site and into the controlled environment of a factory setting. This also different risks to traditional on-site activity when managing, monitoring and measuring the progress of construction work.

Traditionally applications for payment are prepared by a contractor, and these constitute an application for part payment for work undertaken since the last valuation. It is checked and signed off by the client’s contract administrator.

MMC contracts require contract administrators to find different ways to measure applications and work alongside MMC manufacturers and avoid breaching any proprietary rights.

In addition, the point at which ownership of materials passes from the contractor to the housing organisation will vary depending on the terms of the contract. Some contracts say ownership passes on delivery (the NEC approach) while others state it passes upon payment (the JCT approach).

The final stage of MMC involves the assembly of building components on-site. While this can be a faster and more efficient process than traditional construction methods, it also presents certain risks. For example, if the assembly is not properly managed or supervised, there is a risk of defects or quality issues, which could compromise the integrity of the finished building. Additionally, if the assembly is not properly planned or coordinated, there is a risk of delays, which could impact the overall project schedule and budget.

Our experience shows that to mitigate the risks associated with MMC, house developers should take a proactive approach to risk management. These include:

  • Proposing an appropriate contract that addresses a combination of offsite and onsite activity
  • Conducting regular inspections of the factory or manufacturing facility to ensure that it is properly maintained and operated.
  • Implementing quality control measures to ensure that building components are defect-free before they are shipped to the construction site.
  • Ensuring that lorries used to transport building components are properly maintained and operated, and that the building components are properly secured during transit.
  • Providing proper training and supervision to workers involved in the on-site assembly of building components and subsequent maintenance and repairs.

By taking a proactive approach to risk management, housing companies can mitigate these risks and ensure that their MMC projects are successful. With proper planning, supervision, and quality control, MMC can be a safe and efficient way to build homes that meet the needs of modern homeowners.


120 MMC homes for Stonewater Housing




© 2023 WP Housing, a trading name for Walker Pritchard Limited. All rights rerserved.

A member of the Walker Pritchard Partnership