Training Manual PWC - Construction Procurement

1 Tm-ccTraining ManualPUBLIC WORKS CONTRACTS - CONTRACTORSP ublic Works Contracts - Contractors TM-cc An Roinn Airgeadais Department of FinancePublic Works Construction Contracts Training Manual Department of Finance Page 2 National public Procurement Policy Unit NOTICE This Training Manual is both the course material from the Training courses and a reference document for government departments, bodies under their aegis, local authorities or other relevant bodies in the new public Works Contracts. All parties must rely exclusively upon their own skill and judgment, or upon those of their advisers when making use of this document.

2 Neither the GCCC, NPPU, Department of Finance, McCann FitzGerald, Project Management Ltd or Tobin Consulting Engineers nor any other contributor, assumes any liability to anyone for any loss or damage caused by any error or omission, whether such error or omission is the result of negligence or any other cause. Any and all such liability is disclaimed. The contents hereof do not form part of, and shall not affect the interpretation of, any contract . This Training Manual was used for courses delivered to senior members of the public Sector during December 2006 January 2007 and reflects the versions of the public Works Contracts current at that time.

3 This Manual refers to the following documents: public Works contract for the Provision of Civil Engineering Works Designed by the employer . public Works contract for the Provision of Civil Engineering Works Designed by the Contractor. public Works contract for the Provision of Building Works Designed by the employer . public Works contract for the Provision of Building Works Designed by the Contractor. Minor Works contract for the Provision of Building and Civil Engineering Works Designed by the employer .

4 Readers should also refer to the Guidance Note on public Works Contracts. First published in February 2007 by the Department of Finance. Reissued May 2008. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Department of Finance. public Works Construction Contracts Training Manual Department of Finance Page 3 National public Procurement Policy Unit Contents 1.

5 COURSE AGENDA 7 2. COURSE INTRODUCTION 15 Trainer Introductions 15 The Capital Works Management Framework 16 The Background 17 The New Forms of contract 18 Timeline for Rollout 20 The Government s Objectives 21 The Aim of this Course 21 The New Contracts as Enablers for Better Management 22 3. THE NEW CONTRACTS MAIN FEATURES 24 Structure of the contract 24 Key Changes from the Old Contracts 26 4. RISK MANAGEMENT 28 What is Risk? 28 The Broader Context 28 Risk Management Processes Generally 29 Commercial Context (Value for Money) 31 5.

6 RISK ALLOCATION, WHAT IS NEW? 34 Introduction 34 Selection of the Procurement Strategy 34 What is new in terms of risk allocation? 35 Delay and Compensation Events 36 Comparison of Risk Allocation Under the Various Forms 37 How Should Contracting Authorities Allocate Risk? 43 6. PRE Construction PLANNING OF PROJECTS, WHAT IS NEW? 46 Introduction 46 Who to do the Design? 46 Factors to Consider in Selecting the Procurement Strategy 47 Alignment with Consultant s Appointments 48 Which Form of contract ?

7 48 public Works Construction Contracts Training Manual Department of Finance Page 4 National public Procurement Policy Unit The Impact on the Project Programme 48 Further Issues 49 7. THE BROAD LEGAL PERSPECTIVE, WHAT IS NEW? 52 The Broad Legal Prospective, What is new? 52 8. Procurement WHAT IS NEW? 54 Introduction 54 Specialists 54 Evaluation of Tenders 55 Letter of Acceptance 56 9. contract ADMINISTRATION, WHAT IS NEW? 58 Time 58 Cost 58 Quality 59 Powers and Duties of the employer s Representative 60 Price Variation Clause 64 10.

8 THE LETTER OF ACCEPTANCE AND AGREEMENT 71 Letter of Acceptance 71 Agreement 71 11. COMPLETING THE SCHEDULE PART 1 75 Introduction 75 Section A 75 Section B 76 Section C 76 Section D 77 Section E 78 Section F 78 Section G 79 Section H 79 Section I 80 Section J 80 Section K 80 Section L 82 Section M 82 public Works Construction Contracts Training Manual Department of Finance Page 5 National public Procurement Policy Unit Section N 83 12.

9 COMPLETING THE SCHEDULE PART 2 85 Section A 85 Section B 85 Section C 85 Section D 85 Section E 85 13. WORKS REQUIREMENTS, WORKS PROPOSALS AND PRICING DOCUMENT 87 Works Requirements 87 Works Requirements Documents 87 Works Proposals 90 The Pricing Document 91 14. COMMENTARY ON THE CONDITIONS 95 Definitions 95 Health and Safety 97 Loss, Damage and Injury 97 Management 103 Contractor's Personnel 111 Property Rights 115 The Site 116 Quality Control 117 Time and Completion 120 Claims and Adjustments to contract Sum 128 Payment 135 Termination 141 Dispute Resolution 147 Comparison of Traditional and Design & Build Forms for Building Works 149 Comparison of Traditional and Design & Build Forms for Civil Engineering Works 162 Minor Works Form 174 15.

10 CASE STUDY 1A COMPLETING THE SCHEDULE PART 1 BUILDING WORKS 176 public Works Construction Contracts Training Manual Department of Finance Page 6 National public Procurement Policy Unit 16. CASE STUDY 1B COMPLETING THE SCHEDULE PART 1 CIVIL WORKS 198 17. CASE STUDY 2 TENDER EVALUATION 219 18. CASE STUDY 3 SOME contract ADMINISTRATION ISSUES 239 19. FREQUENTLY ASKED QUESTIONS 254 public Works Construction Contracts Training Manual Department of Finance Page 7 National public Procurement Policy Unit 1.