chartered institute of building - launch of complex projects contract 2013 - ascot - 23 april 2013
TRANSCRIPT
An Introduction to the Complex Projects Contract 2013
23 April 2013
Introduction
Adam Constable Q.C., Keating Chambers
CIOB Research, background to CPC2013 and
availability
Keith Pickavance, Executive Consultant, Hill International, Past President
CIOB
Project suitability and procurement strategy Francis Ho
Senior Associate, Olswang LLP
Where should CPC2013 be used?
Suitable for: Less suitable for:
Works of high value or complexity ✓
Simpler works or those of short duration ✗
Major real estate projects ✓
Construction management/EPCM without amendment ✗
Engineering and infrastructure projects ✓
Inexperienced clients/contractors ✗
www.olswang.com 5
International Usage
Contract England and Wales International
CPC2013
✓
✓
JCT
✓
✗
NEC3
✓
✓
FIDIC
✗
✓
www.olswang.com 6
Procurement Routes
✓ Turnkey/EPC ✓ Works-only
Bankable
Control over quality
Time and cost certainty
Time and cost certainty
Single-point responsibility
Longer programme
More expensive
More client involvement
Contractor design input
Less contractor design input
www.olswang.com 7
Time and Risk Management Provisions, and
Contrast with other Standard Forms
Keith Pickavance, Executive Consultant, Hill International, Past President
CIOB
Cost and Risk Management Provisions, and
Contrast with other Standard Forms
Roy Pickavance, Director, DAQS Ltd.
To Review
• The Role of the Valuer
• Contractor’s Pricing Document
• The Method of Measurement
• Pricing of Time Contingencies
• Event Pricing and Valuation of Variations
• Compensation for Delay and/or Disruption
• BIM
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THE ROLE of the VALUER • Listed Person – Appendix B
• Appendix definition - The person identified as such in the Contract Agreement or, on ceasing to be the Valuer such other person as the Employer shall appoint and confirm to the Contractor and Contract Administrator, or, if none is appointed, the Contract Administrator
• Clause 5.2 - …exercise its discretion independently and fairly
• User Guide – Roles and Responsibilities - The Valuer is appointed by the Employer to advise the Employer, Contract Administrator and Listed Persons on
– the CONTENT of the CONTRACTOR’S PRICING DOCUMENT and the VALUATION OF ACTIVITIES in the WORKING SCHEDULE (Clause 28),
– the MEASUREMENT AND VALUATION OF VARIATIONS (Clause 24),
– the PREDICTED OUT-TURN COST OF THE WORKS (Clause 53) and
– for PAYMENT PURPOSES THE CURRENT VALUE OF THE WORKS, from time to time (Clause 54).
• Flow charts are provided- e.g.FC2 – Working Scheduled; FC7 – Extension of Time and Compensation; FC10 - Payment
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CONTRACTOR’S PRICING DOCUMENT • Clause 28 - The document setting out the work which the
Contractor identifies as being necessary to satisfy the Conditions of Contract, any applicable Model, Bill of Quantities, and/or Specification and Drawings together with any conditions, resources, materials or goods which the Contractor requires to be made available to it, and the detailed method of pricing the financial reward which the Contractor requires for carrying out the Works
• The importance of the Valuer’s Role – Active rather than passive
– Integration into the Working Schedule- Activity Based (Clause 28 and Appendix D)
– Utilisation of updated Working Schedule ( Clause 33) to determine the value of work completed (Current Value - Clause 54) and the Predicted Cost ( Clause 53)
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THE METHOD OF MEASUREMENT • Where quantities are provided to determine the scope
of part of or the whole of the Works, or where a schedule of descriptions is provided for pricing to be used in the valuations of variations, it is essential to specify the rules by which the quantities will be or have been measured. – Definition - Appendix A; – Defined - Appendix B -Default NRM2; User Guide – see
MOM and BOQ – BIM generated quantities
• Whatever form the measurement takes, if priced, it needs to be aligned to the working Schedule
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PRICING OF TIME CONTINGENCIES • Clause 27; Appendix Definitions; Included in Appendix D Working Schedule • Where Contractor’s Time Contingency periods are on the Critical Path to a
Relevant Completion Date, and hence included in the Contract duration, the effect of those time contingencies in the priced Working Schedule is to require the Contractor to pre-price (by virtue of its tender or bid) the prolongation costs it is likely to suffer as a result of those contingency periods later being absorbed by Contractor’s risks.
• Where Employer’s Time Contingency periods are on the Critical Path to a Relevant Completion Date, and hence included in the Contract duration, the effect of those time contingencies in the priced Working Schedule is to require the Contractor to pre-price (through its tender or bid) the prolongation costs it is likely to suffer as a result of those contingency periods later being absorbed by Events. If the Employer does not use its critical contingencies then, all other things being equal, there will be a reduction in the duration of the Works, an earlier Substantial Completion date and hence a reduction in the Contract price, to the Employer’s benefit.
23/04/2013 14
EVENT PRICING and VALUATION of VARIATIONS • Event - An occurrence which is an Employer’s
Cost Risk Event or an Employer’s Time Risk Event – Defined in Appendix F – brought into the Working Schedule – Calculation of the effect of Event on Time
• Dealt with by KAP
– Calculation of the effect of Event on Cost – Clause 39 • Direct Cost - Activity costed - Clause 24 Variations
• Indirect Cost – Level of Effort costed using the updated Working Schedule (Clause 38)
• Loss and/or Expense – Clause 28
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COMPENSATION FOR DELAY AND/OR DISRUPTION
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Compensation for Prolongation • Clause 28.5 - If no rate for Preliminaries and/or Overheads and
Profit is indicated in the Contractor’s Pricing Document, it shall be deemed to be agreed that the Contractor is not entitled to recover such Preliminaries and/or Overheads and Profit as a part of the loss and/or expense incurred as a result of any Employer’s Cost Risk Event.
• The Contractor is required to identify its Preliminaries (Clause 28.4.1 ) and Overheads and Profit (Clause 28.4.2) by Level of Effort durations logically linked to the Activities to which they relate.
• Provided that the information required has been incorporated in the Working Schedule (Clause 28.5), prolongation costs can be estimated during the course of the Works based upon the extent by which any Level of Effort durations are adjusted from time to time by the impact of Employer’s Cost Risk Events on the Working Schedule (Clauses 39.1 and 53.2.3).
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Compensation for Disruption • PROGRESS RECORDS - Although the Working Schedule cannot be accurately
updated without Progress Records(Clause 33.1) and they are thus the essential informational resource for managing time and for determining the extent to which an Event has caused delay or disruption, the Contract is unique amongst standard form contracts in requiring the Contractor to maintain any Progress Records other than those in support of a claim.(Appendix B)
• Loss and/or Expense is Quantified under Clause 39.2.4 arising from an Employer’s Cost Risk Event, and
• The Predicted Cost is to include for any change in a Level of Effort and any other loss and/or expense (Clause 53.2.3)
• If the Contractor fails to provide the information required to enable the Valuer to calculate the amount of the Contractor’s entitlement to compensation for disruption and/or prolongation, the amount shall be calculated after Substantial Completion using – 39.3.1 the progress records and schedules produced under Clause 25.2, or (if none) – such records and schedules as, in its absolute discretion, the Valuer adopts for the purpose of
this Clause 39.3.
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BIM
• Under CPC will the QS’s roll differ in Complex Contracts?
a) In a current procurement environment (e.g. Traditional, Design and Build etc. )
b) In a BIM environment
23/04/2013 19
Nick Lane
Partner and Head of Construction, Olswang LLP
Dispute resolution provisions and
procedures
Questions…?
Adam Constable Q.C., Keating Chambers
Contact us…
Francis Ho
Senior Associate
Olswang LLP
T +44 20 7067 3505
Nick Lane
Partner
Olswang LLP
T +44 20 7067 3548
Adam Constable QC
Keating Chambers
T +44 20 7544 2600
Contact us…
Roy Pickavance
Director, DAQS Ltd BSc, FRICS, FCIOB,
FCIArb
T +44 (0) 1949 829287
Keith Pickavance
Executive Consultant Hill International
T +44 (0) 207 618 1200