1
Q
What are Contract Documents?
A
- The set of documents that form a binding agreement between owner and contractor and define the agreed terms and conditions under which a project will be completed
- Should include documents used for tendering plus any addenda and/or records of negotiation
- Drawings and specifications should be amended to reflect amended scope or extent of work, labeled ‘for construction’ and issued
- ONLY Client & Contractor sign
2
Q
5 Types of standard lump sum Contracts in QLD
A
ABIC SW
ABIC MW
AS2124-1992 General Conditions of Contract
Masters Builders & HIA contracts (preferable to builders)
3
Q
Which contract would you recommend for a small residential project and why?
A
- ABIC-SW Simple Works contract
- Intended for simpler projects
- Plain English and clear, logical structure that reflects the sequence of the construction process
- Equitable allocation of virtually all project risks to one party or the other, eliminating uncertainty and many potential disputes
- Inclusion of a number of detailed supporting documents, including a user guide and pro forma notices and certificates for the architect and the contractor
4
Q
Why use Abic MW for a large commercial project /differences between SW & MW ?
A
- It provides for urgent instructions
- Separable parts to the works
- Change of type of security given by the contractor to the owner
- Provision of security for payments for offsite plant and materials
- Provision by the owner of security to the contractor
- Dangerous or contaminated materials
- Encroachments
- Quality assurance systems
- Separate contractors (except in QLD ?)
- Identified, project specific potential causes of delay that entitle the contractor to costs
- Owner initiated amendments to programs and the consequences of any amendments
- Arbitration or expert determination of disputes as alternatives for dispute resolution
- contract confidentiality
5
Q
After reading ABIC-MW your client asks you to adjust a few clauses. How do you respond?
A
- Avoid changing clauses in standard contracts
- You are not a legal expert in the matter – seek legal advice about the changes and potential additional risks that could be transferred between parties involved
- Standards contracts ABIC & AS are there to be fair for all parties involved
- Review the contract & have your insurance broker/insurer and/or AIA Professional Risk Services review
6
Q
Procurement Type: Traditional lump sum (fixed price contract & negotiated price)?
A
- Under these commonly used forms of contract the architect is engaged directly by the client to undertake all stages of the design process and assist in administering the client’s separate contract with the builder.
- The client tenders these documents to a field of competitive bidders,
- The client engages the builder independently of the architect to build the works as described in the contract documentation
Appropriate When:
- scope of work is well defined
- high quality design is critical
- Client requires expert advice independant of the builder
Strengths:
- client control scope and design
- tendering on complete documents reduce claims from builder (less variations)
- established process understood by all parties , architect, builder & client
Risks:
- Removes opportunity for collaboration & innovation between architect and contractor.
- client pays most of consultant fees before construction even starts
- Constructability issues not caught until late in the process
7
Q
Procurement Type: Cost plus?
A
- Risky - not advised
- A form of contract where the contractor is reimbursed for the costs they have incurred in the construction of the project, plus a fee to cover their overheads and profit
- Have an inbuilt biased towards the contractor who gets paid regardless of their efficiency
- All risks carried by the owner who does not know the end cost
- Useful for renovation work where the extent of work is not able to be determined until work starts
8
Q
Procurement Type: Two stage tender ?
A
- Traditional client architect relationship maintained
- First stage tender is sought using sketch plans and an outline specification.
- Selection of contractor is based on the overhead and profit rate, resources, and site and management facilities offered.
- Documentation is developed with the contractor & principle sub-contractors as part of the design team
- Design tailored to suit the clients budget
- second stage a fixed price is negotiated for the contract.
9
Q
Procurement Type: D&C
A
- client enters into a single contract with a construction company that provides both the design and construction of a project based on requirements specified by the client.
- The design services may be subcontracted to a team of designers, depending on the requirements of the tender
- Typically all design risk as well as construction risk is allocated to the contractor
Appropriate when:
- An early commencement on-site is required.
- The client can prepare clear, concise and well-documented performance and technical criteria for the project.
- The client requires a total commitment for time and cost
- Client control over design quality is not a priority
Stengths:
- Faster and less exposure to risk of variations for trivial or design related issues.
- Higher degree of innovation regarding buildability advice
- Potential for overlapping of design and construction activities, resulting in time and cost savings.
Risks:
- Indirect relationship between client and designers.
- Tender evaluations are complex, taking more time to evaluate and potentially increasing costs to client and causing contract award delays.
- Lack of option to select a preferred design expertise.
- Loss of control of design outcome
10
Q
Procurement Type: Construction Management
A
- A Construction Management contract is where the ‘traditional builder’ is replaced by a Construction Management organisation.
- The works are completed by a series of trade contracts between the client and each contractor.
- Manager performs a purely management and coordination role without the same risk in terms of delivery and is generally paid an agreed fee.
- The role of the design team and their relationship with the client and Construction Manager is very similar to the traditional contracts
Appropriate when:
- where the client needs to start work on the early stages of construction while the design and documentation of later trade packages are being finalised
- client needs to retain direct control over works e.g. in an operating hospital or rail corridor
- complex project where other work needs to happen prior ot design and doucmentation
Strengths:
- Input of construction advice into the design is readily enabled.
- The client selects the architect and design consultants.
- The direct payment by the client to the trade contractors provides a climate for a better working relationship on site
Risks:
- The final project cost is not known until later when last package is let.
- Client takes the risk of the trade contractors
11
Q
Procurement Type: Novation
A
- Novation is a form of design construct. Novation relates to the transfer of the architect’s contract with the client to the builder/head contractor after the design has reached an agreed stage
- After the selection of the builder consultants are then novated and become contracted to the builder
Appropriate when:
- client requires more extended control of the design than design construct allows
- client requires competitive, comparable prices through tendering
Strengths:
- Design team continues as Design Champion and carries the history of strategic decisions prior to contractor engagement
- Collaboration opportunities between design team and Head Contractor
Risks:
- There is limited opportunity for innovation by the contractor because of their late entry into the project.
- Tenderers may include a contingency price to cover the risks associated with entering into a contract without having established a close working relationship.
12
Q
Procurement Type: Project Manager Administered
A
- Appointed by the owner as the primary consultant responsible for all aspects of the delivery of a project
- Architect is then employed as a secondary consultant
- The project manager coordinates and controls, on behalf of the client, the work of all consultants, contractors and specialist contractors, by the detailed planning of the project and the management of its administrative processes.
13
Q
Procurement Type: Alliancing
A
- Introduces ‘risk & reward’ to the project team based on KPIs
- All team members are incorporated within a legal agreement
- Caution as is relatively untried in Australia
- Project alliancing has been used for major infrastructure and mining projects, but is relatively untried in the Australian building industry, although it has been used for the national Museum of Australia in Canberra.
14
Q
Procurement Type: Fast track
A
Designed to shorten the overall time between the decision to proceed with a project and its completion.
- Design and construction activities overlap, allowing construction to commence before all design or documentation is completed.
- Higher risk and possibly a higher price for client on both construction cost and consultant fees
15
Q
Procurement Type:PPP ?
A
- Public Private Partnerships (PPPs) are a very broad range of partnership where the public and private sectors collaborate for some mutual benefit.
- The private provider will not only build the facility but will also operate or maintain it to specified standards over a long period
