School Event

Comparing Construction Contracts

 

INTRODUCTION

 

While South African construction professionals may, in the past, have “got by” with a knowledge of our local construction

contracts such a knowledge is no longer sufficient. The construction arena is becoming more global as professionals look

beyond our borders for work and as increasing numbers of employers use international forms of contract such as FIDIC and

NEC/ECC. In this two day seminar we examine the key differences between the standard construction contracts currently in

use and compare the approaches taken by these contracts to important issues. Advice on fitting the contract to the project

will be given and the advantages and disadvantages of the various forms of contract discussed.

The contracts to be compared in this one day seminar are the following:

 

THE NEW ENGINEERING CONTRACT

 

The NEC/ECC contract is a contemporary contract which makes a clear break with traditional contracting and rather introduces innovative contractual tools aimed at sound project management and fair allocation of risk. While the benefits of working with the NEC/ECC contracts are great many find it a difficult contract to get used to, given the new approach to key issues and the language used in the contract. For this reason it is vital that anyone thinking of

using the contract has had some training on its terms, its philosophy and its approach to the allocation of risk.

Some of the topics highlighted which make the NEC/ECC a uniquely modern contract are:

·         Early warning and Pricing variations;

·         The role of the employer’s agent;

·         The adjudicator;

·         The NEC approach to subcontractors.

·         The traditional design under which the architect

·         designs the works;

·         Dispute resolution under JBCC;

·         The use of nominated and selected subcontractors.

 

THE GCC CONTRACT

 

The GCC 2010 contract was released in July 2010. Being a radical departure from GCC 2004 we touch on some relevant issues including:

·         Versatility of the document

·         The role of the Agent

·         Subcontractors

Both the 2nd Edition GCC 2010 and the new 3rd Edition

GCC 2015 are discussed in the course. In accordance

with our policy of providing hands on, relevant training, information will be conveyed by way of case studies, practical examples and hands on exercises.

Delegates will be given the opportunity to refer to the standard contracts, to analyze key clauses and to discuss problem areas.

 

THE JBCC CONTRACT

 

While many engineering contracts are being let under international forms of contract the Building industry has been slower to move to the international contracts and many building (and even some engineering) projects are currently being let under the JBCC contract, both in

South Africa and in neighbouring states. Time will therefore be devoted to a consideration of this contract insofar as it differs from the other contracts. Both the long-standing Edition 5.0 and the new Edition 6.1 will be discussed.

 

THE FIDIC SUITE OF CONTRACTS

 

The FIDIC contracts, published in 1999 are rapidly gaining wide acceptance internationally due, in part to the fact that the World Bank has committed itself to use these contracts. With the 1999 contracts FIDIC has introduced a Construction Contract suitable for use in building works and a Small Works Contract. The contracts have also contributed a focused Design & Build/ Turnkey contract.

While the FIDIC contracts undoubtedly hold many advantages over the previous suite of FIDIC contracts they have been criticized, in particular for the manner in which they allocate risk. Contractors, in particular, have raised concerns about the risk allocation. Some of the topics to be discussed in relation to the new FIDIC suite are the following:

·         Taking-Over and Completion under the FIDIC contracts;

·         The Dispute Adjudication Board;

·         The FIDIC approach to subcontractors;

·         Value engineering.

Discussions will cover the FIDIC Red, Yellow and Silver books.

This event has been cancelled