Public WorksPublic Works C t tContracts

------ The Client’s Perspective The Client’s Perspective ------I t d tiIntroduction:

William Horgan, Senior Engineer, Dun Laoghaire Rathdown County Council.

Speaker:

Ivar Blanker Senior Resident Engineer Dun Laoghaire Rathdown County CouncilIvar Blanker, Senior Resident Engineer, Dun Laoghaire Rathdown County Council.

Engineers Ireland, Clyde Road, 6:30 pm 24th March 2010

IntroductionIntroductionIntroductionIntroduction

Excerpts from John Harvey Jones Excerpts from John Harvey Jones –– Make It HappenMake It Happen

Project ManagementProject Management

Prepare, Prepare,

Plan,Plan,

Client’s Needs. Client’s Needs.

IntroductionIntroduction contract timelinescontract timelinesIntroduction Introduction –– contract timelinescontract timelinesIEI contract

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Design

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Final Acc

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New form of PWC

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D esign

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R E Experience with the new PWCR E Experience with the new PWCR.E. Experience with the new PWCR.E. Experience with the new PWC

Sandyford to Drummartin Link Road Scheme. (Sandyford to Drummartin Link Road Scheme. (BenildusBenildus Avenue)Avenue)

MonkstownMonkstown Ring Road Scheme.Ring Road Scheme.

MurphystownMurphystown Road Improvement Scheme.Road Improvement Scheme.

Appointment of consultants Appointment of consultants

Disclaimer: This lecture and its content do not represent the position of Disclaimer: This lecture and its content do not represent the position of DLRCC in schemes which are ongoing.DLRCC in schemes which are ongoing.

What is the Employer’s What is the Employer’s Representative?Representative?

The Resident Engineer is now called the Employer’s Representative but must still retain impartiality.

ER has a wider range of powers available.

The Employer’s Representative (ER) is a person appointed toThe Employer’s Representative (ER) is a person appointed toThe Employer s Representative (ER) is a person appointed to The Employer s Representative (ER) is a person appointed to administer the Contract on behalf of the Employer and to administer the Contract on behalf of the Employer and to represent the Employer’s interest. represent the Employer’s interest.

The ER can be from within the Employer’s organization; or filled by a consultant architect, engineer, surveyor or other person capable of carrying out the required responsibilities.

Duties of the ERDuties of the ERDuties of the ERDuties of the ER

Issues Instructions to the Contractor, in writingIssues Instructions to the Contractor, in writing

ReviewsReviews the monthly progress reports, statements and issues interim the monthly progress reports, statements and issues interim payment certificatespayment certificates

Assesses Delay and Compensation events. Assesses Delay and Compensation events.

Schedules regular meetings with the Contractor and records minutes. Schedules regular meetings with the Contractor and records minutes.

Checks post contract award design (DB contracts) to see that it meets the Checks post contract award design (DB contracts) to see that it meets the specification etc.. All design risk, however, remains with the contractor.specification etc.. All design risk, however, remains with the contractor.

Limits to the ER’s authorityLimits to the ER’s authorityLimits to the ER s authorityLimits to the ER s authority

The maximum adjustment to the Contract SumThe maximum adjustment to the Contract Sum

Cannot issue Change Orders that contribute to a reduction in safety qualityCannot issue Change Orders that contribute to a reduction in safety qualityCannot issue Change Orders that contribute to a reduction in safety, quality, Cannot issue Change Orders that contribute to a reduction in safety, quality, usefulness, or scope of the Works Requirements unless approved by the usefulness, or scope of the Works Requirements unless approved by the EmployerEmployer

ER must consult with the Employer ER must consult with the Employer on any adjustment to the Contract Sum;on any adjustment to the Contract Sum;On value engineering proposalsOn value engineering proposals

Any other restrictions as entered by the Employer in the Schedule. Any other restrictions as entered by the Employer in the Schedule.

Delegation of the ER’s authority:Delegation of the ER’s authority:

The ER may delegate any functions or powers under the The ER may delegate any functions or powers under the Contract and revoke any such delegation at any time. Contract and revoke any such delegation at any time.

The appointment of such a representative must not prevent the The appointment of such a representative must not prevent the ER from exercising any functions directly at any time. ER from exercising any functions directly at any time.

The ER should promptly (within five working days) notify the The ER should promptly (within five working days) notify the Contractor and the Employer of any such delegationContractor and the Employer of any such delegationContractor and the Employer of any such delegation.Contractor and the Employer of any such delegation.

ER’s authority: Reviews and objectionER’s authority: Reviews and objectionER s authority: Reviews and objectionER s authority: Reviews and objectionContractor can make a written submission to the ER to carry out say,Contractor can make a written submission to the ER to carry out say,Contractor can make a written submission to the ER to carry out say, Contractor can make a written submission to the ER to carry out say, temporary works, temporary works,

the ER must review the submitted materialthe ER must review the submitted material and determine theand determine thethe ER must review the submitted material the ER must review the submitted material and determine the and determine the outcome. outcome.

ER can request any additional information that might help with theER can request any additional information that might help with theER can request any additional information that might help with the ER can request any additional information that might help with the determination. determination.

ER may object to the submission on a number of groundsER may object to the submission on a number of grounds ––ER may object to the submission on a number of grounds ER may object to the submission on a number of grounds

ER’s objection must be made in writing, within 10 working days of ER’s objection must be made in writing, within 10 working days of receiving the submission.receiving the submission.receiving the submission. receiving the submission.

ER may subsequently alter or withdraw an objection, or may require ER may subsequently alter or withdraw an objection, or may require the Contractor to make a new submission to meet the objections. the Contractor to make a new submission to meet the objections. t e Co t acto to a e a e sub ss o to eet t e object o st e Co t acto to a e a e sub ss o to eet t e object o s

PWC: A few general points of notePWC: A few general points of notePWC: A few general points of notePWC: A few general points of note

Use of the English languageUse of the English languageUse of the English languageUse of the English languageSimplerSimplerUse of commas etc.Use of commas etc.

Common Law and the QSCommon Law and the QSContra PreferendumContra PreferendumQuantum MeruitQuantum MeruitQuantum MeruitQuantum Meruit

The Designer / ConsultantThe Designer / Consultant

The focus needs to be aimed at:The focus needs to be aimed at:removing any conflicting statements within the Works Requirements, thereby removing any conflicting statements within the Works Requirements, thereby producing a, producing a, Robust set of documents which will bring a contract as close as possible to aRobust set of documents which will bring a contract as close as possible to aRobust set of documents, which will bring a contract as close as possible to a, Robust set of documents, which will bring a contract as close as possible to a, Fixed Price.Fixed Price.

Competent contractorCompetent contractorCompetent contractorCompetent contractor

Invitation To TenderInvitation To TenderInvitation To TenderInvitation To Tender

T d t b ll hi h l t iT d t b ll hi h l t iTenderers may not use abnormally high or low rates or pricesTenderers may not use abnormally high or low rates or prices

The Employer may change the MEAT criteria at any time before The Employer may change the MEAT criteria at any time before p y y g yp y y g ytenders are opened.tenders are opened.

Model formsModel forms –– use them!!!use them!!!Model forms Model forms use them!!!use them!!!

Letter of IntentLetter of IntentNotification to Apparent Unsuccessful TenderersNotification to Apparent Unsuccessful TenderersLetter of Acceptance.Letter of Acceptance.AgreementAgreementAgreementAgreementAward Notice to Office of Official EC Publications.Award Notice to Office of Official EC Publications.

PWC Guidance NotesPWC Guidance NotesPWC Guidance NotesPWC Guidance Notes

The Guidance Notes for Public Works ContractThe Guidance Notes for Public Works Contract suggests thatsuggests thatThe Guidance Notes for Public Works Contract The Guidance Notes for Public Works Contract suggests that suggests that Employers should carefully consider the circumstances that warrant Employers should carefully consider the circumstances that warrant the use of Bills of Quantities. The policy is to have design developed the use of Bills of Quantities. The policy is to have design developed so that "No" can be inserted in so that "No" can be inserted in Schedule KSchedule K. . This requires comprehensively developed design documentation This requires comprehensively developed design documentation including, for example, completed reinforcement drawings and including, for example, completed reinforcement drawings and mechanical and electrical designs.mechanical and electrical designs.

Risk Risk Guidance notes state that ‘Guidance notes state that ‘the object at this stage is to place the the object at this stage is to place the j g pj g prisk with the party best placed to manage it’.risk with the party best placed to manage it’.Also ‘Also ‘The level of risk transfer, however, should be based on the The level of risk transfer, however, should be based on the information made available in the tender documents information made available in the tender documents –– the more the more

h i th i f ti th t th l l f i k th th i th i f ti th t th l l f i k th tcomprehensive the information, the greater the level of risk that comprehensive the information, the greater the level of risk that can be transferred to the Contractor at a realistic cost’ can be transferred to the Contractor at a realistic cost’

Form of Tender and ScheduleForm of Tender and ScheduleForm of Tender and ScheduleForm of Tender and Schedule

F f T dF f T dForm of TenderForm of Tender

Schedule Part 1Schedule Part 1

Where the Employer can set out the Timeframe and Financial Where the Employer can set out the Timeframe and Financial limits of the contractlimits of the contractlimits of the contract.limits of the contract.

Schedule G: Schedule G: Date for Substantial Completion to include for programme Date for Substantial Completion to include for programme contingencies.contingencies.Rate of Liquidated damages.Rate of Liquidated damages.q gq g

Schedule H: Early CompletionSchedule H: Early Completion

SCHEDULE KEvent

Delay Event

Comp Event

1 The Employer’s Representative gives the Contractor a Change Order Yes Yes2 The Employer’s Representative directs the Contractor to search for Defects or their cause and no Defect is found, and the

search was not required because of a failure of the Contractor to comply with the ContractYes Yes

search was not required because of a failure of the Contractor to comply with the Contract3 The Employer’s Representative directs the Contractor to suspend work under sub-clause 9.2 Yes Yes

4 The Contractor suspends work in accordance with sub-clause 12.3 Yes Yes 5 There is a factual error in information about the Site or setting out information in the Works Requirements. [This does not

include an error of interpretation.] Yes Yes

6 The Employer takes over part of the Works before Substantial Completion of the Works and any relevant Section Yes Yes6 The Employer takes over part of the Works before Substantial Completion of the Works and any relevant Section Yes Yes

7 The Employer’s Representative does not give the Contractor an instruction required under sub-clause 4.5.4 within the time required under sub-clause 4.11.2 when the Contractor has asked for the instruction in accordance with sub-clause 4.11.1

Yes Yes

8 The Employer does not allow the Contractor to occupy and use a part of the Site in accordance with sub-clause 7.1 Yes Yes

9 Th E l d i h C W k I h hi i d b h C h h C h Y Y9 The Employer does not give the Contractor a Works Item or other thing as required by the Contract when the Contractor has asked for it in accordance with sub-clause 4.11.1

Yes Yes

10 Employer’s Personnel working on the Site under clause 7.6 interfere with the execution of the Works on the Site, and the interference is unforeseeable and not in accordance with the Contract

Yes Yes

11 The Employer instructs the Contractor under sub-clause 3.2.3 to rectify loss of or damage to Risk Items for which the Contractoris not responsible

Yes Yes is not responsible

12 Loss of or damage to the Works that is at the Contractor’s risk in accordance with sub-clause 3.2 Yes No

13 A weather event as described below Yes No 14 A strike or lockout affecting the construction industry generally or a significant part of it, and not confined to employees of the

Contractor or any Contractor’s Personnel Yes No

15 D l t th W k d b th d th t f t th bli th it i i th it d L th t did Y N15 Delay to the Works caused by the order or other act of a court or other public authority exercising authority under Law, that did not arise as a result of or in connection with an act, omission or breach of Legal Requirements of the Contractor or the Contractor’s Personnel or a breach of the Contract by the Contractor

Yes No

16 A breach by the Employer of the Contract delaying the Works that is not listed elsewhere in this table. Yes Yes

17 A difference between the Contract value of the Works according to the quantities and descriptions in a Bill of Quantities in the No No17 A difference between the Contract value of the Works according to the quantities and descriptions in a Bill of Quantities in thePricing Document, if there is one, [taking into account the method of measurement and any amendments identified below] and the Contract value of the Works described in the Works Requirements, because the Bill of Quantities, when compared with the Works Requirements • includes an incorrect Quantity or • includes an item that should not have been included or

excludes an item that should have been included or

No No

• excludes an item that should have been included or • gives an incorrect item descriptionand the difference for an item in, or that should have been in, the Bill of Quantities is more than €500.

18 An item of archaeological interest or human remains is found on the Site, and it was unforeseeable Yes No

19 The Contractor encounters on the Site unforeseeable ground conditions or unforeseeable human-made obstructions in the ground other than Utilities

Yes No

The Schedule, cont’dThe Schedule, cont’dThe Schedule, cont dThe Schedule, cont dPart 1 to be filled in by the EmployerPart 1 to be filled in by the Employer

S h d l K d tiS h d l K d tiSchedule K, recommendationsSchedule K, recommendations

ItemItem EventEvent Delay Delay EventEvent

Comp Comp EventEvent

1717 Bill f Q titiBill f Q titi NN NN17.17. …Bill of Quantities……Bill of Quantities… NoNo NoNo

1818 …Archaeological interest or human remains……Archaeological interest or human remains… YesYes NoNo

1919 …Unforeseeable ground conditions……Unforeseeable ground conditions… YesYes NoNo

2020 …Unforeseeable Utilities……Unforeseeable Utilities… YesYes NoNo

2121 …Owners of Utilities on the Site do not …Owners of Utilities on the Site do not relocate or disconnect Utilities…relocate or disconnect Utilities…

YesYes NoNo

The Schedule cont’dThe Schedule cont’dThe Schedule, cont dThe Schedule, cont d

Programme ContingencyProgramme ContingencyProgramme ContingencyProgramme Contingency

Guidance Notes Guidance Notes -- The Contractor must factor in theThe Contractor must factor in the ProgrammeProgrammeContingency in the Programme of Works for the project mustContingency in the Programme of Works for the project mustContingency … in the Programme of Works for the project. …. must Contingency … in the Programme of Works for the project. …. must be reasonable and proportionate to the scope, complexity and be reasonable and proportionate to the scope, complexity and duration of the Contract. duration of the Contract.

The Contractor’s programme must take into account the programme The Contractor’s programme must take into account the programme contingency …. The programme should clearly show how the contingency …. The programme should clearly show how the contingency is accommodated relative to key critical activities and contingency is accommodated relative to key critical activities and g y yg y ythe Date for Substantial Completion…. The Date for Substantial the Date for Substantial Completion…. The Date for Substantial Completion is fixed and can only be changed if an extension of time Completion is fixed and can only be changed if an extension of time is granted by the ER after the awarding of the Contract. The is granted by the ER after the awarding of the Contract. The Contract provides for the use of the programme contingency by theContract provides for the use of the programme contingency by theContract provides for the use of the programme contingency by the Contract provides for the use of the programme contingency by the Employer…Employer…up toup to the Date of Substantial Completion the Date of Substantial Completion

The Schedule cont’dThe Schedule cont’dThe Schedule, cont dThe Schedule, cont d

Extract from old (redundant?) Guidance Notes: Programme Contingency - Impact On the Contractor

The Contractor must factor in the programme contingency set by the Employer in tender documents both in the Contractor's tendered price and work programme for the project. For example take a project where an p g p j p p jemployer has set in the tender documents:

the Date for Substantial Completion which gives an overall construction period of 24 calendar months andperiod of 24 calendar months. and the programme contingency at 60 working days (i.e. 3 calendar months). If there is no extension of time granted the Contractor must complete t e e s o e te s o o t e g a ted t e Co t acto ust co p etethe project within 21 months as the last three months belong to the Employer. The Contractor's programme must show this time at the end of the programme where there is no activity.

The Schedule, cont’dThe Schedule, cont’dThe Schedule, cont dThe Schedule, cont dPart 2 to be completed by tenderer.Part 2 to be completed by tenderer.

In older versions (Part 2E) allowed the tenderer to leave blank and In older versions (Part 2E) allowed the tenderer to leave blank and Compensation Events cannot be determined fairly on a zero labour Compensation Events cannot be determined fairly on a zero labour rate.rate.

Part 2D, updated in Nov 09, Part 2D, updated in Nov 09, if left blankif left blank, at least 75% of the , at least 75% of the relevant rate in the Const Industry Wages and Conditions of relevant rate in the Const Industry Wages and Conditions of y gy gEmployment, Registered Employment Agreement., but contractors Employment, Registered Employment Agreement., but contractors may still enter zero, or low rates and risk the tender being may still enter zero, or low rates and risk the tender being invalidated for abnormally low rates. invalidated for abnormally low rates.

Contractor also inserts ‘Rate of Delay Costs’, which is used to Contractor also inserts ‘Rate of Delay Costs’, which is used to determine delay costs resulting from Compensation Events. determine delay costs resulting from Compensation Events.

This is where the ER can use the Thresholds against Delay costs.This is where the ER can use the Thresholds against Delay costs.

P i i D tP i i D tPricing DocumentPricing Document

Include a Include a BoQBoQ to be priced fully by the to be priced fully by the tenderertendererBut ensureBut ensure BoQBoQ errors are neither Delay of Compensation Eventerrors are neither Delay of Compensation EventBut ensure But ensure BoQBoQ errors are neither Delay of Compensation Eventerrors are neither Delay of Compensation Event

Breakdown of the Initial Contract SumBreakdown of the Initial Contract SumVery useful, and monthly valuations are easily determined.Very useful, and monthly valuations are easily determined.Payments at 30, 60, 90, 100% (DB)Payments at 30, 60, 90, 100% (DB)Suggest 5 or 10% increments, but be nice to the contractor.Suggest 5 or 10% increments, but be nice to the contractor.

Minimum payment of Minimum payment of €€250K250KNot practical for final paymentNot practical for final paymentNot practical for final payment Not practical for final payment

ClausesClausesClausesClausesClause 1 3Clause 1 3 –– inconsistenciesinconsistencies –– document precedencedocument precedenceClause 1.3 Clause 1.3 inconsistencies inconsistencies document precedencedocument precedence

Works requirements Works requirements -- spec and drawings have same level of spec and drawings have same level of precedence.precedence.

Clause 4.7 Required Contractor SubmissionsClause 4.7 Required Contractor Submissions11 subheadings in this clause.11 subheadings in this clause.ER has 10 day period for objection if he has received enoughER has 10 day period for objection if he has received enoughER has 10 day period for objection, if he has received enough ER has 10 day period for objection, if he has received enough information from the contractor, otherwise can ask for additional information from the contractor, otherwise can ask for additional information.information.

Clause 4.8 Value Engineering.Clause 4.8 Value Engineering.Very useful Very useful Gi th t t d l t it t t lGi th t t d l t it t t lGives the contractor and employer an opportunity to get value Gives the contractor and employer an opportunity to get value for money.for money.ER determines the reduction of the contract sum (or adjustment ER determines the reduction of the contract sum (or adjustment to Date for Subst Completion)to Date for Subst Completion)to Date for Subst. Completion)to Date for Subst. Completion)

More ClausesMore ClausesMore ClausesMore Clauses

Clause 4 9 ProgrammeClause 4 9 ProgrammeClause 4.9 ProgrammeClause 4.9 Programme

4.9.3: If requested by the ER, the Contractor to provide a revised 4.9.3: If requested by the ER, the Contractor to provide a revised ithi 15 d h 15% f th t tithi 15 d h 15% f th t tprogramme within 15 days, or have 15% of the next payment programme within 15 days, or have 15% of the next payment

withheld.withheld.

Cl 4 11 N ti d Ti f E l ’ Obli tiCl 4 11 N ti d Ti f E l ’ Obli tiClause 4.11 Notice and Time for Employer’s ObligationsClause 4.11 Notice and Time for Employer’s ObligationsContractor to give at least 10 working days notice... The ER Contractor to give at least 10 working days notice... The ER should not have to make any ‘spur of the moment’ decisions.should not have to make any ‘spur of the moment’ decisions.

Clause 4.15 MeetingsClause 4.15 MeetingsMinutes to be issued by ER within 5 days and objections within 5 Minutes to be issued by ER within 5 days and objections within 5 days thereafterdays thereafter

More Clauses cont’dMore Clauses cont’dMore Clauses cont dMore Clauses cont d

Clause 9.3 Delay and Extension of time.Clause 9.3 Delay and Extension of time.No cost to the EmployerNo cost to the EmployerE t i f ti iti t i t li id t d d lE t i f ti iti t i t li id t d d lExtension of time mitigates against liquidated damages only.Extension of time mitigates against liquidated damages only.

Clause 9.4 Programme ContingencyClause 9.4 Programme ContingencyCan be used for delays due to Compensation Events onlyCan be used for delays due to Compensation Events onlyContractor to include the Contingency Contractor to include the Contingency withinwithin the programme, before the programme, before Date for SC.Date for SC.

Clause 10.3 ClaimsClause 10.3 ClaimsContractor must issue claims stating Contractor must issue claims stating given under Clause 10.3 of the given under Clause 10.3 of the C t tC t tContractContract20 days deadline, 20 days thereafter, contractor to give All details 20 days deadline, 20 days thereafter, contractor to give All details pertaining to the claim pertaining to the claim

Even More ClausesEven More ClausesEven More ClausesEven More Clauses

Clause 10.4 Proposed Instructions Clause 10.4 Proposed Instructions Very UsefulVery Useful

Clause 10.6 Adjustments to the Contract SumClause 10.6 Adjustments to the Contract Sum10.6.3 the ER shall make a fair valuation. 10.6.3 the ER shall make a fair valuation.

Clause 10.7 Delay CostClause 10.7 Delay CostOnly as a result of delay due to a Compensation EventOnly as a result of delay due to a Compensation EventOnly as a result of delay due to a Compensation Event.Only as a result of delay due to a Compensation Event.No delay cost for the period of a concurrent delay.No delay cost for the period of a concurrent delay.

Clause 10.9 Employer’s ClaimsClause 10.9 Employer’s ClaimsReductions in the Contract SumReductions in the Contract Sum

Other Clauses Other Clauses

Clause 11 PaymentsClause 11 Payments

Clause 12 Termination Clause 12 Termination

Clause 13 Disputes Clause 13 Disputes pp

This is This is ARBICLAUSEARBICLAUSE

www constructionprocurement gov iewww constructionprocurement gov iewww.constructionprocurement.gov.iewww.constructionprocurement.gov.ie

NNNewsNews

UpdatesUpdates

PWCPWC--type 3type 3

Where to find ‘the Agreement’ +Where to find ‘the Agreement’ +

GuidelinesGuidelines

RecommendationsRecommendationsRecommendationsRecommendations

R d th G id N tR d th G id N tRead the Guidance NotesRead the Guidance NotesAdditional resources in design stage.Additional resources in design stage.Extensive Site InvestigationExtensive Site InvestigationThe contractor shall……..The contractor shall……..Utilities Utilities –– get sign off.get sign off.Use model formsUse model formsUse model formsUse model formsProduce a schedule of claims to keep an eye on Produce a schedule of claims to keep an eye on timelinestimelinestimelinestimelinesMaintain good site diaries and files.Maintain good site diaries and files.

AcknowledgementsAcknowledgementsAcknowledgementsAcknowledgements

Thanks to:Thanks to:

DLRCC Transportation Department.DLRCC Transportation Department.

The Contractors The Contractors

The ConsultantsThe Consultants

Roads and Transportation Society, Engineers IrelandRoads and Transportation Society, Engineers Ireland