PowerPoint - Construction Engineering

advertisement
A Guide to Standard Forms of
Construction Contracts
(Source: Rethinking Construction, 2004)
The need for contracts
 The transition from successful design to
successful project completion requires the
selection of a contract which reflects the
aspirations of all Parties involved and meets the
demands of the project.
 Key criteria must be identified and risks allocated
before the form of contract is selected.
2
Client Requirements
 Balance of time/quality/cost
 Can be defined by following criteria:
Speed – design & construction
Separation of design & construction
Cost certainty
Dealing with complexity
Client involvement
Capacity for variations
Clarity of remedies
3
Procurement Method
 Choice of contract dependant on procurement
method
General contracting
Design & build
Construction Management
Partnering
Management contracting
4
Risk
The allocation of risk is a major element of any contract.
 Contractor includes cost of risk in tender calculation
 E.g. ‘Price certainty’ is bought by paying the contractor
to accept the risk in a changing commercial market
 Degree of risk must therefore be assessed and the
economics of risk apportionment assessed – part of
‘best value’ calculations
 Key areas of risk are:

Default
Delay
Quality
5
6
JCT 98: Standard Form Building Contract


6 versions; private, L.A., +/- quantities, approx. quantities
A much used standard form
7
JCT: IFC (Intermediate Form of Building Contract)

Used for well specified traditional building work without complex
service packages. With or without BoQ
8
JCT: MW 98, Agreement for minor work

For small & simple works, Conditions give bare outline of duties
& responsibilities. Risk allocation very simple
9
JCT: PCC 98 Prime cost contract

Cost plus contract, works not fully defined, all work on instruction
of Architect
10
JCT: CD 98 Standard form with contractors design

Let on basis of ‘Employers Requirements’ and performance
specification
11
JCT: MC 98 Management contract

All works sub contracted, main contractor coordinates
12
JCT: MTC 98 Measured term contract

Used for regular maintenance or repeating minor works
13
JCT Construction management contract

Alternative clauses give flexibility, tailored for specific contract
14
ICE Conditions of Contract

Work to satisfaction of the Engineer, who has high powers of
control
15
FIDIC Conditions of Contract


Engineer employed as Client’s agent (as JCT 98)
2 parts – 1)General Conditions, 2)Project specific conditions
16
NEC - Engineering and Construction Contract


Core clauses common to all projects plus suite of alternative
procurement options
Common in Partnering Agreements, written in plain English,
promotes team approach
17
Conclusions
Many forms of contract have developed
 The initial form has often been amended to suit
particular role definitions and issued as a separate
standard document
 The type of contract influences;

Degree of client involvement
Design & management separation
Complexity
Variations
Speed
Cost certainty and
RISK APPORTIONMENT
18
Download