The way industry participants have been dealing with project risks provides an excellent illustration of how the culture of mistrust is perpetuated by industry participants. The Report identifies: • Previous experience with poor contractor behaviour towards client retained risk has meant that public sector participants no longer trust that contractors will act in the project's best interests and has driven the public sector to transfer such risks in future projects to contractors in order for the contractor to take interest in mitigating or managing such risks • Conversely, a practice by the public sector of transferring risk to contractors by stealth has meant that contractors no longer trust that they won't be held accountable for a risk over which they have no control (and are also not being paid for). For example, where the public sector requires contractors to take on design risk in construct only contracts as a result of making buildability or efficiency suggestions. It is reasonable to ask a contractor to stand behind a solution it proposes. However, contractors have not wanted to take on that risk and this has meant that contractors have stopped proposing any ideas for fear of being seen as accepting that risk. The above practices are counterproductive behaviours that impact on productivity. It is legitimate for the public sector to transfer risk that the contractor has control of and is better able to manage. However, it is an issue if the risk is not being priced for or it is already being managed by a third party who has been paid to do so. The cumulative effect of this contracting environment is increased risk and exposure to contractors. The Report outlines a number of prudent opportunities for improvement by the public sector in relation to risk transfer: • "Issue guidance in relation to risk transfer, its purpose and management, and the potential impacts if risk is inappropriately transferred. This guidance could require risk transfer to be fully assessed and signed off at an executive level • The public sector should assess the level of risk transferred to individual contractors across all public sector projects that they are undertaking • Follow-up with public sector engaged legal advisors in relation to expectations of fair risk transfer when drafting special conditions of contract." If implemented, the opportunities for improvement outlined in the Report will transform public sector procurement. In particular, if there is an understanding of the value of risk transfer and acceptance that it must be budgeted for and priced, this will likely change current attitudes about who should bear some project costs and, hopefully, win back some of the private sector's lost trust. The Government has already taken steps to address these issues and implement the Report's improvement opportunities by issuing a revision of its Construction Procurement Guidelines in September 2019 (Guidelines). The new Guidelines promote better procurement practices and include guidance on risk management and associated resources. The Accord has built on this progress in the Transformation Plan programme of work which includes as an action step the ongoing review of the Guidelines which are to be adopted by both the public and private sector members of the Accord. These Accord members will also work with central and local government agencies to ensure their contracts: • Are transparent on risk and where it sits • Limit the number of special conditions • Hold all consultants to account for their work including designers, project managers and quantity surveyors • Ensure any Engineer to the Contract is fully independent • Include provisions for efficient and fair dispute resolution. The Transformation Plan also provides for the Accord's steering group (and then the Transformation Plan's leadership group) to design