7 March 2017 Amendments to the PWCs Primacy of Bill of Quantities Specialist Work Packages New Dispute Management Procedures Bill of Quantities A return to Primacy Guidance Note 153 ID: 563091
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Slide1
Amendments to the Public Works Contracts
7 March 2017Slide2
Amendments to the PWC’s
Primacy of Bill
of Quantities Specialist Work Packages New Dispute
Management ProceduresSlide3
Bill of Quantities – A return to Primacy
(Guidance Note 1.5.3)Slide4
The Need for Change
Schedule Part 1K17 – No
Errors between Works Requirements and
BoQ at Contractor’s riskMeasures and descriptions were inadequateAccuracy of drawings were not tested at tender stageContracts being tendered not fully designed with an under-measured/under-descriptive BoQPrice certainty?!Slide5
Making Contracts “With Quantities”
Fully measured
BoQ is mandatory for Employer Designed ProjectsEmployer retains the risk of errors in the BoQ
The BoQ is the primary reference for pricing purposes – no other document is to be included in the Pricing DocumentSlide6
Inconsistencies - Cl1.3.4
Inconsistencies
between the Works Requirements and the Pricing
Documentresolved by an instruction from the ER.Works Requirements takes precedence and a Compensation Event may arise in accordance with the Schedule, Part 1K(17).Slide7
Resolution of Inconsistencies Works
Item
Works Item
described in the Works Requirements but not in BoQThe Contractor will be required to complete the Works Item, if so directed
by the
ER, and
shall be
entitled
to an
adjustment to the Contract
Sum
The ER may direct the Contractor
not to
complete the Works Item, and there shall be
no adjustment
to the Contract SumSlide8
Resolution of Inconsistencies Works Item
Works
Item described in
BoQ but not in the Works RequirementsThe ER may direct the Contractor to complete the Works Item but the Contractor shall have no entitlement to an adjustment to the Contract SumThe ER may direct the Contractor not to complete the Works Item, and the ER or Employer
shall be
entitled to adjust the Contract SumSlide9
Resolution of Inconsistencies Quantities
B
oth the Works Requirements and BoQ include the Works Item but an inconsistency in the quantities exists.
If the ER directs the quantity shown in the Works Requirements to be completed, the Contract Sum may be adjustedIf the ER directs the quantity shown in the BoQ
is to be completed, the Contract Sum
shall not
be adjustedSlide10
Other Risk Allocation
Overall risk allocation in Schedule 1K must be considered e.g.
‘unforeseeable ground conditions’ is contractor risk
Unforeseen ground encountered resulting in quantities of work increasing or decreasingK(19) overrules K(17) and a Compensation Event shall not arise The BoQ Preliminaries Section shall detail the allocation of risks, as per Schedule 1KSlide11
Related Issues
Clause 4.4 – ER Communications
Clause 4.5 – InstructionsClause 4.11 – Contractor to request instructionClause 10.3 – condition precedent remainsSchedule 1K (1), (9), (17) – €500 Slide12
Specialist Works ProcurementSlide13
Specialists and Employer
Appointment subject to varying levels of involvement
Little or no engagement – e.g. tax compliance, i.e. sub contractors
not specialistsSets pre-qualification standardsDirect tendering of specialist worksSuccessful specialist tenderer → novated to contractor
Naming successful specialist
→
appointed by contractor as sub-contractor (nomination?)Slide14
When should named Specialists be considered?
Early engagement is necessary,
Detailed design required for Works RequirementsSpecialist required to undertake portion of their works in advance of main contractor agreement
Value of single specialist works exceeds 15% of overall pre-tender estimate for the worksNot possible to accurately define the specialist works enable it to be tendered as part of main contractSlide15
Types of Specialist
Employer designed works:
Reserved SpecialistNovated Specialist
Contractor designed works:D&B SpecialistsSlide16
The Appointment Process for Reserved SpecialistsSlide17
Shortlist main
contract
and
specialist candidates
Main Contract tender deadline
Identify successful Main Contract tenderer
Reserved Specialist tender deadline
Identify successful Reserved Specialist tenderer
Award contract to successful tenderer for main contract
Main Contract tender
1
Evaluate tender
3
Specialist tender
2
Standstill
Evaluate tender
4
Standstill
5
Contract
admin
6Slide18
Reserved Specialists
Restricted procedure used to pre-qualify both
main contractors; andspecialistsSpecialist contract in N
N CIFSlide19
Novation – Specialists
Employer tenders the specialist work
Informs tendering specialists that its intention is to novateMust provide novation agreement and collateral warranty
Specialist and contractor enter contractForm of contract dependent on CWMF guidanceSlide20
Novation – Main Contractor
Employer tenders for Main Contractor
Informs Main Contractor of novationNovation agreementIdentity of specialist
Programme for novated specialist worksSlide21
D&B
Specialists
Extent of contracting authority’s involvement:Sets appropriate pre-qualification criteria/standards that proposed specialists must meetEstablishing pre qualification panel of specialists
Novation – where specialist is required in advance of contractor appointmentSlide22
Main Contract PricingSlide23
Main Contract Pricing
Schedule Part 1F(iii) sets out the named Specialist Works Packages:
Reserved Sums and Contract S
ums (for Novated Specialists) are to be provided in the Pricing DocumentPricing Documents (unpriced) for each of the named Specialist works packages should be provided in the main contract Pricing DocumentSlide24
Main Contract Pricing
Pricing Document must include items to allow for the pricing of the following:
General attendances – lump sum itemsSpecial attendances defined as required – lump sum items
Contractor’s management, risk acceptance and indirect overhead costs – lump sum itemContractor’s profit – percentage of Specialists Reserved/Contract SumLump sum items priced less than zero will be deemed to be zero and negative percentages will be treated as zero per centSlide25
New
Dispute Management ProceduresSlide26
The Dispute Management
Procedure
The Project Board:Members stated in Schedule Part 1A1-3 members nominated from each side
Function of Project Board:review disputes referred to Clause 13.110.5.4 and 10.5.5 determinations onlyNo authority to review any other such dispute or may ariseMust have capacity and authority to negotiate binding agreementsSlide27
The Dispute Management
Procedure
Project Board must meet at least every 60 days to review disputes referred to itAll binding agreements reached must be signed by the Employer and the Contractor
If no agreement is reached, the Board shall on the next working day, notify the parties of the failure to resolve disputeSlide28
Standing Conciliator
When
Contract Value is in excess of €10mAppointed by the Parties
When Contract Value is below €10mEmployer has option of requiring a Standing Conciliator to be appointed by the PartiesCan chair the Project Board and advise/draft binding agreementsReserved sum shall be included in the Pricing Document – 50% of feeSlide29
Questions?
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Marray
Pauric.Marray@QuiggGolden.com
London
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London@QuiggGolden.com
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