Transcript

INTRODUCTION TO THE CIOB COMPLEX PROJECTS CONTRACT 2013 PROJECT SUITABILITY AND PROCUREMENT STRATEGY

The following is a loose transcript of a talk given in London on 25 April 2013 at the launch of the Chartered Institute of Building s Complex Projects Contract 2013 by one of its authors.

BACKGROUND Guide to Good Practice in the Management of Time in Complex Projectspublished by CIOB in 2010 following detailed 2007 research into complex projects. The Complex Projects Contract 2013 (CPC) is designed for complex projects and built upon foundations of 2010 Guide. Not suited to simple projects. A simple projecttypically has all of following characteristics: o o o o o o o Repetitive work; Fewer than 5 storeys; One completion date, no phasing; Straightforward utilities; Single contractor; Less than 9 month build period; Fewer than 10 sub-contracts.

A complex project typically has any or more of the following characteristics: o o o o o o Incomplete design; More than 5 storeys; Below ground accommodation; Multiple sections and possessions; Civil engineering; Multiple contractors and sub-contractors.

Simple projects can be managed intuitively; have high chance of finishing on time using such traditional management techniques (finding of the 2007 research).

Examples of complex projects: airports, O&G projects, railway stations, high-rise buildings, engineering, power stations. Extremely likely to be late using traditional time management techniques.

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Added expense in using a contract written and intended for complex projects, which mean that the benefits will not be so evident on a simpler, low value project. Investment time needed for participants to understand the contract (e.g. understanding the 2010 Guide), workshops for the project team and upskilling main participants and advisers, completing the CPC s Appendices and client involvement.

Since CPC envisages that it is sensible the client be actively involved throughout the project, it is not for novice employers.

TO MANAGE COMPLEX PROJECTS, NEED TO CHANGE WAY OF THINKING Need regularly updated contractual programme with quality controls so the information is useful at the time given. Need Project Time Managerto advise independently on time management procedures and compliance. Need a programme which is a dynamic management tool in three different levels of detail so programme not simply tool in disputes. Need a 21 century contract specifically written for complex projects.
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WHAT DOES CPC DO DIFFERENTLY?

A single contract form does it all. Turnkey (EPC), traditional, design and build. With amendment CPC can even be used for EPCM, with Contract Administrator as EPCM Manager and CPC used as basis of trade contracts. The Contractor s Pricing Document allows for cost reimbursable or lump sum pricing. As well as use in England and Wales (and the rest of the UK), it is suitable to be used internationally (with provisions catering for mandatory local law and governing law being specified by CPC s Contract Agreement). Provisions for bonds, parent company guarantees and collateral warranties/direct agreements. Risk register. Professional skill and care in design. Either party may assign contractual rights and benefits by way of security. Special Conditions recognise and cater for the fact that all complex projects have different requirements.

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Bespoke testing and commissioning provisions can be included seamlessly.

WHAT IS UNIQUE TO CPC?

Time management procedures, detailed progress records, role of Project Time Manager. Provisions for Common Data Environment, Building Information Modelling (UK Level 2, with suggested Levels of Development). Defines the key terms of Concurrency , Free Floatand Total Floatso these are clearly understood. Confidentiality obligations on Employer for Contactor s rates and prices (if marked as confidential). By default, if the Employer provides information on site conditions to Contractor, Contractor may rely on it. Termination for convenience by Employer. Employer has to provide evidence if reasonably required that it has the means to pay the Predicted Cost, otherwise Contractor can suspend carrying out of the works.

INTERNATIONAL USAGE, NOT JUST FOR THE UNITED KINGDOM Adjudication applies where mandatory under the governing law, optional otherwise. Compliant with England s Scheme for Construction Contracts. Arbitration is the final, binding dispute resolution procedure. Can be used with English law as governing law, with mandatory provisions of local law being taken into account. References to local legislation or trade union recommended minimum wages, visas and work permits. Can also be used under a different governing law. Minimum standards of site safety and welfare, e.g. Contractor s safety manager, minimum medical and first facilities on site which may be beneficial when contracting in particular territories. Provisions for paying in different currencies. Anti-corruption provisions apply to both parties. Special Conditions act as modifiers to the General Conditions.

Francis Ho, Olswang LLP francis.ho@olswang.com

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Francis Ho April 2013