Contract

Description

Use this type of contract when:

Head Contract

This is the traditional contract structure. When using this structure the Department:

n           engages Consultants to design the project

n           calls for tenders from Contractors on a competitive lump sum or schedule of rates basis after the design is complete (apart from provisional sum work) to undertake construction in accordance with the design as documented

n           deploys its own personnel or engages either the Design Consultants or other building professionals to manage the construction process

n           The Contractor employs Sub-contractors and Suppliers for those parts of the project work not performed directly by the Contractor and is liable for the work of Sub-contractors and Suppliers.

·         the Department requires maximum control over design and thus wishes to engage and manage the Design Consultants directly;

·         the detailed design documentation is complete well in advance of calling tenders and there are quality control mechanisms in place to ensure that the detailed design documentation is without deficiencies and that the design is buildable;

·         experienced personnel are available to manage and co-ordinate the interface between preparation of detailed design for provisional sum work and the letting of provisional sum work;

·         the Department has internal personnel or can engage outside consultants with the expertise to manage the construction phase and administer the construction contract;

·         there is no requirement to overlap the design and construction phases other than for provisional sum work included in the Contractor's scope of work;

·         no changes in scope of the project work are predicted other than those additions or omissions dictated by cost management of the project;

·         there are few variations to the design because of deficiencies in design documentation or changing end-user requirements are anticipated during construction.

Design Services Contract

The optimum delivery system for projects involving simple building work, (i.e. barrack blocks, recreational facilities) is Design and Construct. In this delivery system, dependent upon the stage design has reached, the appropriate standard form is either the Design and Construct or Document and Construct.

·         The priority is best design for a price.

·         The Department has developed the concept design, performance specification and quality requirements for the Design Brief to a level of particularity sufficient to ensure the delivery of the required product prior to calling tenders.

·         The Department requires Tenderers to develop the design concept to satisfy the performance and quality criteria in the Design Brief, to prepare the detailed design and documentation in accordance with the Design Brief and to carry out the construction and commissioning of the project in accordance with the Design Brief.

·         The Design Brief is expressed in clear objective terms as to performance and quality criteria to measure whether the project satisfies those requirements when completed.

·         Sufficient experienced resources are available in the Department, or outside personnel can be engaged to be committed to documenting negotiation details of the successful Contractors design proposal to avoid subsequent dispute over the Contractors interpretation of the Design Brief.

·         The control required over design and construction is limited to minimum interference to ensure design and construction achieve the performance and quality criteria set out in the Design Brief.

·         The Department opts to hand over control of the detailed design to the Contractor in exchange for itself assuming no design risk.

·         Because of the simplicity of the project the Department requires only a project of a specified performance and quality delivered for an agreed cost and on time.

·         Limited variations necessitated by user requirements are anticipated during construction.

This contract strategy seeks to engage the services of an experienced contractor organisation in an arrangement which involves less adversarial interests between it and the Department than would be the case where a Head Contract standard form was used. The essential elements of this contract strategy are as follows:

·         The Managing Contractor is responsible for design in that it engages the Design Consultants but is required only to exercise the standard of care required of Consultants, not the standard required of a design and construct Contractor.

·         The Managing Contractor is the Head Contractor.

·         The Managing Contractor is responsible for sub-contract claims arising from its own inadequate performance.

·         The Managing Contractor is required to manage the project to achieve timely completion within a defined cost limit but does not have a fixed price, fixed time obligation.

·         the criteria set out for the Project Management structure are satisfied but where the Department opts to share some of the risks associated with a major construction project with a Contractor.

·         the Department requires maximum flexibility in determining: the elements to be included in a project, and the design of those elements, with the management expertise of a contractor organisation to assist and advise in developing the design, co-ordinating the interface between design and construction, undertaking the construction and planning for and remaining within a target cost and target time for delivery of the project.