Speaker: Edward Quigg BEng LLB LLM PGDipArb MCIPS FCIArb FInstCES Barrister (Non-Practising)

Transcription

1 Making and defending claims Speaker: Edward Quigg BEng LLB LLM PGDipArb MCIPS FCIArb FInstCES Barrister (Non-Practising)

2 Public Works Contracts Dealing with Change Introduction Minimising Change Schedule Part 1 K Notices What notices are required? Making and assessing notices Assessing the cost of change

3 Introduction

4 History Lesson Public Perception Cost Control Certainty Value for money

5 The Government s Objectives Greater cost certainty at contract award stage Award contracts on the basis of a lump-sum fixed-price to the greatest extent possible Rebalance risk so that there is optimal allocation of risk Achieve value for money; and Achieve more efficient delivery of the projects

6 The Contracts A single concept The Suite: one size fits all Consultancy Contract Civil Employer Design Civil Contractor Design Building Employer Design Building Contractor Design Minor works Other derivatives

7 Change

8 Change Change is the most common cause of construction disputes. Main Types of Change 1. Change to Price 2. Change to Timing Can be due to: 1. Additional work 2. Less work (Omissions) 3. Different working conditions (ground condition, archaeology, utilities) 4. Differing requirements of Employer type of material, design. etc

9 Change (Contd.) Main methods of change 1. Express Change Variations Instructions 2. Necessary Change Ground Conditions Unanticipated Events Increased Cost of Labour / Materials

10 Minimising change New Contract is an attempt to achieve: Cost Certainty Value for money Only way to achieve cost certainty is to minimise change

11 Minimising Change (Cont d) Full Design and Specification Investigation Contracts properly used

12 Minimising Change (Contd.) PWC attempts to minimise change by: 1. Fixed Price No increased costs for projects <36 months 2. No PC sums 3. No Provisional sums 4. No Nominated Subcontractors (only specialists) 5. Transfer of risk (Schedule part 1 K)

13 Principles of Risk Management Contract risks should be placed with the party best placed to deal with them.

14 Schedule Part 1K Risk fixed by Employer with Schedule 1K 21 Events, which are either Time(Delay) or Money (Compensation) Events An Event can be time, money, both or neither Other project specifics filled in by Employer at tender stage Weather Event Programme Contingency Daily Delay Rate or Actual Expenses

15 Change What must you do if you are on a project and you feel that change is required?

16 Change (Employers Rep) Employers Representative Limitations on authority, check schedule 1A May give an instruction on any matter connected with the works Instruction will be a direction or Change Order A direction does not necessarily give rise to a Change Order, unless Contractor claims it is (4.5.2)

17 Change (Employers Rep) Employers Rep (contd.) May direct Contractor to make proposals for Proposed Instruction in accordance with Clause 10.4 Detailed Calculation Proposed Delay Proposed Revised Programme Any Contract Documents

18 Change (Contractor) Contractor: NB Even if Employer initiated change Check Schedule part 1K Delay event - Yes/No? Compensation event - Yes/No?

19 Change (Contractor) Compensation Event (listed Schedule 1K) Must not be Contractor s fault Adverse effects must be unavoidable Contractor must make all reasonable attempts to mitigate Must comply with Clause 10 in full Contract must not provide otherwise

20 Contractor Claims (10.3) if the Contractor considers that. there should be an extension of time or adjustment to Contract Sum, or it has any other entitlement under or in connection with the Contract

21 Contractor (10.3) Send 1 st Notice In accordance with Clause , within 20 days of becoming aware, or should have become aware, give initial notice, prominently stated to be given under Sub Clause 10.3

22 Contractor (Contd) Send 2 nd Notice In accordance with Sub Clause , within 20 days of having given first notice, Contractor shall give E.R details of 1. All relevant facts about the claim 2. A detailed calculation and proposal for adjustment of the Contract Sum, based on that calculation 3. Use of programme contingency, if any.

23 Obligations of E.R Having received the two notices in accordance with C1.10.5, the E.R. shall, within 20 working days, do one of: 1. Request additional instruction or revised proposals 2. Accept the proposals 3. Determine or reject the proposals 4. Notify the proposed instruction will not be given.

24 NEW Version Deemed Rejection if no ER response ER Decision final and binding if no Notice of Dispute within 28 days of determination If determination is that ER agrees with Contractor s proposal then final and binding within 28 days unless either Contractor or Employer issue Notice of Dispute

25 Assessing the Cost of Change Compensation Event : Clause 10.6 Delay Event : Clause 10.7

26 Assessing the Cost of Change Similar work => Rates in Pricing Document No similar work => Rates as Basis Fair Valuation Cost Comparision Labour Schedule, part 2D Materials Cost, + % as schedule 2D Plant as per Schedule 1K

27 Assessing the Cost of Change Delay Event Clause Number of days x Daily Rate of Delay (Per Schedule 2D) or expense unavoidably incurred Concurrent Delay If delay has two causes, and one is not fault of Employer, then no delay cost

28 General Timing Late Notice Severe Consequences If Contractor does not comply with the notice requirements all entitlement to claim is lost. Cl E.R Determination Important changes Version 1.7

29 Thank You Questions?