research report - standard forms of contract in the australian construction industry

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Standard Forms of Contract in the Australian

Construction IndustryResearch Report

Pr of esso

r John Sha



r key

AM Matthew Bell

Wayne JocicRami Marginean

June 201



Contents

Part A - Introduction1

Message from the !ean of Mel"ourne #aw School

2 Message from the $hair of the

Society of

$onstruction #aw Australia2

Mel"ourne #aw School%s$onstruction #aw Program&

'he Society of $onstruction #aw Australia&

Acknowle(gements&

Part B - Summary ofndings4

Part C - Background andmethodology6

1 Background6

1)1 Stan(ar( forms of

contract in the

Australian construction

in(ustry

*

1)1)1 +,er,iew*

1)1)2 AustralianStan(ar(s-

1)1)& AB.$/

1)1) +ther stan(ar(forms /

1)2 'he legal un(erpinningsof stan(ar( forms

1)& Pre,ious research10

! Aims of this research1!

2)1 ey uestions an( the

approach this

stu(y un(ertakes to

answering them

12

2)2 3urther research

1&

2)& Australian Stan(ar(sre,ision process1&

" #ata collection for this$ro%ect14

&)1 Sur,ey1

&)2 .nter,iews14

Part # - #etailed ndings16

4 Attitudes to&ardsstandard forms16

)1 Broa( support in principlefor stan(ar( forms 1*

)2 Suita"ility of currently5a,aila"le forms1-

)& 3orms ,iewe( as "eingcapa"le of use

without su"stantialamen(ment1/

' (se of standard forms!)

4)1 +,erall20

4)2 Break(own "y position ofcontract within

the contracting chain20

4)& Break(own "y initialcontract ,alue21

4) Break(own "y pro6ectlocation22

4)4 Break(own "y contractingsector 2&

6 *hich standard forms are+eing used,!4

*)1 +,erall24

*)2 Break(own "y initialcontract ,alue2*

*)& Break(own "y pro6ectlocation2/

*) Break(own "y contractingsector &0

*hich $arty makes thedecision to use

the standard form,



"!

. *hy are standard formsused,""

/)1 +,erall&&

/)2 3amiliarity&

/)& Risk allocation&

/) Minimising transactioncosts&

/ *hat $ro$ortion of

standard forms

are amended,

"'

)1 +,erall&4

)2 Break(own "y initialcontract ,alue&*

)& Break(own "y contractingsector&-

) Break(own "y form&/

1) *hy are standard formsamended,

"/

11 *hat ty$es of clauses areamended,

41

11)1 +,erall1

11)2 Break(own "y initialcontract ,alue*

11)& Break(own "ycontracting sector

1! Percei0ed outcomes from

amendment

of forms

'!

A$$endi 1 - Sur0ey2uestions'"

A$$endi ! - S$ecic

feed+ack on AustralianStandards forms

'

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Part A - Introduction

9,ery year< hun(re(s of

thousan(s of contracts

are entere( into for

construction work in

Australia) 'he work

un(ertaken un(er these

contracts< an( the ,alue

of that work< is e=tremely

,arie(< ranging from

minor home reno,ations

to multi5"illion (ollar

infrastructure an(

resources pro6ects)

'he comple=ity an( (i,ersity of

risks< an( the a(ministrati,e

proce(ures in,ol,e( in

construction pro6ects< ha,e

together resulte( in in(ustry

perception that use of

stan(ar( forms of contract

ten(s to minimise a,oi(a"le

transaction costs an( o,erall

lea(s to greater efficiency in

procurement) 8owe,er< it

seems

increasingly to "e the case that

5 especially in high5,alue

commercial pro6ects in,ol,ingsophisticate(

in(ustry participants >inclu(ing

legal a(,isers? 5 stan(ar(

forms are less freuently "eing

use( an(< where they are

use(< they are hea,ily

amen(e()

.n late 201&< Mel"ourne #aw School%s

construction law program< with the

support of the Society of

$onstruction #aw Australia< launche( a

research pro6ect to in,estigate whetherthese perceptions

reflect current practice in the Australian

construction in(ustry) .t sought to

assess the current use

an( effecti,eness of the range of

stan(ar( forms of construction contract

in Australia< particularly in

terms of their a"ility to reflect an

a

p

p

r

op

r

i

a

t

e

l

y



5"alance( risk allocation an( to

facilitate efficient

pro6ect a(ministration)

'he research pro6ect in,ol,e( a we"5

"ase( sur,ey >which collecte( (ata

"etween 7o,em"er 201& an( 3e"ruary

201? an( inter,iews with construction

in(ustry stakehol(ers >"etween January

an( March 201?) .t was un(ertaken< an(

this Report was prepare(< "y a research

team comprising the following Mel"ourne

#aw School personnel@

Professor John Sharkey AM >8onorary Professorial 3ellow?

Matthew Bell >Senior #ecturer an( $o5

!irector of Stu(ies lea( author of this

Report an( Responsi"le

Researcher un(er the Mel"ourne #aw

School%s 8uman 9thics A(,isory Croupappro,al for this pro6ect?

Wayne Jocic >Senior #ecturer?

Rami Marginean >Research Assistant?)

'his Report outlines the key fin(ings of

the research pro6ect) .n a((ition< it flags

a num"er of matters arising from this

initial pro6ect which< in the research

team%s ,iew< warrant further research)

Dthe

research

pro6ect

in,ol,e(

a we"5

"ase(

sur,ey an(

inter,ie

ws with

constru

ction

in(ustry

stakehol(ers%

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;1



3essage fromthe #ean of 3el+ourne a&School

. am (elighte( that Mel"ourne

#aw School has "een a"le to

pro,i(e support for this

important research)

Mel"ourne #aw School is an

outstan(ing research institution with

internationally recognise(

scholars who stri,e to pro(uce research

of the ,ery highest uality)

'his report is one e=ample of important

research "eing un(ertaken at the #aw

School in con6unction with mem"ers of the

profession an( in(ustry to pro,i(e insight an(

un(erstan(ing into the important

practical issues in law) .t was a pleasure to

(eepen our connection with the Society of

$onstruction #aw Australia< whose support of

this pro6ect . gratefully acknowle(ge)

'he construction law program at the #aw School

has long "een recognise( as one of

the worl(%s lea(ing teaching programs within this

speciality area of scholarship an(

practice) Stu(ents an( teachers within the program

ha,e pu"lishe( wi(ely an( recei,e( recognition at

the highest le,els for their scholarship< inclu(ing "y

way of international construction law essay priEes)

.n 201&< our construction law program%s research

capa"ility recei,e( a significant "oost through the

appointment "y the :ni,ersity of Mr John

Sharkey AM as an 8onorary

Professorial 3ellow) John is one of Australia%s most

e=perience( an( highly5respecte( construction law

practitioners an( has pu"lishe( an( lecture( wi(ely

in the area< inclu(ing ha,ing "een a su"6ect

coor(inator in the Mel"ourne #aw Masters from

20005201&)

'he (etaile( research pro6ect which has le( to

pu"lication of this Report represents

the first ma6or research ,enture un(ertaken un(er

Professor Sharkey%s lea(ership) My

thanks an( congratulations to him< Matthew Bell<

Wayne Jocic an( Rami Marginean for

the e=pertise an( har( work that they ha,e put into

this Report) 'he Report represents

a significant milestone in the continuing

(e,elopment of our construction law program<

an( . am (elighte( to commen( it to mem"ers of

the construction law community)

Professor Carolyn 50ansD

e

a

n

H

a

r

r

i

s

on

M

o

o

r

e

P

r

o

f

es

s

o

r

o

f

L

a

w



3essage fromthe Chair of theSociety ofConstruction a&Australia

'he uestions of DWhat contract

shoul( . useF% an( DWhat

amen(ments shoul( . makeF% are

constantly aske( "y (e,elopers<

owners an(

contractors an( constantly answere("y their a(,isers)

#ying "ehin( the uestions are

issues of cost effecti,eness< efficiency<

appropriate risk allocation an(

familiarity) 'he preferences which ha,e

(e,elope( o,er many (eca(es are ,ery often

manifeste( in "espoke contracts or ,ery hea,ilyamen(e( stan(ar( form contracts)

8ow ha,e these preferences (e,elope(F .s there a

"etter approach that is< an approach which will see

impro,ements in cost effecti,eness an( efficiencyF

What is the role

for stan(ar( form contractsF An un(erstan(ing of

these uestions an( the possi"le

answers to these uestions coul( ha,e a significant

impact on the construction in(ustry)

.t is this potential impact which moti,ate( the

Society of $onstruction #aw Australia to support

this :ni,ersity of Mel"ourne research pro6ect) 'he

choice of Professor John Sharkey AM< to lea( the

pro6ect< an( the e=perience an( wis(om which

Professor

Sharkey coul( "ring to "ear< "rought a((e( interestto the pro6ect)

'he Society is grateful for the opportunity to

support this important pro6ect an(

looks forwar( to continuing to participate in the

(iscussion which this report is certain to pro,oke)

Philli$ reenham




3el+ournea&Scho

ol7sConstruction a&Program

Mel"ourne #aw School "rings together lea(ing

local an( international scholars< alumni<

researchers an( mem"ers of the legal profession

to pro,i(e stu(ents with a range of transformati,e

e=periences< "oth insi(e an( outsi(e the

classroom) Mel"ourne #aw

School staff an( stu(ents commit to e=cellence

an( stri,e to make a (ifference to our local

community an( "eyon()

Mel"ourne #aw School commence( teaching

gra(uate courses in construction law

in 2000) 'he program offers a specialist Master

of $onstruction #aw an( Cra(uate

!iploma in $onstruction #aw) 'he specialisation

in construction law has "een tailore(

to gi,e construction lawyers an( professionals in

"uil(ing< construction< engineering

an( associate( in(ustries the specialise( legal

knowle(ge to take the ne=t step in their

careers) Working with teachers who are lea(ers in

their fiel(s< an( fellow stu(ents from throughout

Australia an( aroun( the worl(< stu(ents ha,e a

uniue opportunity to gain a thorough

un(erstan(ing of this ,ital area of law an( its

interaction with the commerce an( practice of the

in(ustry)

&&&la&unimel+eduau8constructionla&

9he Society of Constructiona& Australia

'he o"6ect of the Society is Dto

promote the e(ucation< stu(y an(

research >an( pu"lication of the

useful results of such research? in the

fiel( of

construction law an( relate(

su"6ects "oth in Australia an(

o,erseas for the "enefit of the

pu"lic an( the construction

in(ustry)%

'he Society was foun(e( in 200) .t is a single

national organisation of mem"ers (rawn from allprofessions in,ol,e( with construction< in(ustry

representati,es an( the legal profession who share

an interest in construction law) 'he Society

encourages the wi(est possi"le in,ol,ement of all

its mem"ership an( encourages (iscourse across

the "roa( spectrum of issues which comprise the

su"6ect of construction law)

&&&sclorgau

http://www.law.unimelb.edu.au/constructionlaw/

http://www.scl.org.au/

http://www.scl.org.au/

http://www.law.unimelb.edu.au/constructionlaw/



Ackno&ledgements

'he research team acknowle(ges with

thanks the contri"ution of the following

organisations an( in(i,i(uals@

'he pro6ect was fun(e( "y grants "y the !ean ofMel"ourne #aw School an( "y

the Society of $onstruction #aw Australia)

'he following organisations allowe( >an(< in manycases< acti,ely assiste( in?

the promotion of the sur,ey to their respecti,emem"erships@

5 Australian $onstructors% Association

5 Australian $onstruction .n(ustry 3orum

5 Australian .nstitute of Architects

5 $i,il $ontractors 3e(eration

5 $onsult Australia

5 9ngineers Australia

5 Master Buil(ers Australia

5 Mel"ourne #aw Masters construction lawprogram

5 Property $ouncil of Australia

5 Society of $onstruction #aw Australia)

'he many construction in(ustry professionals<

lawyers an( stu(ents who participate(in the sur,ey or inter,iews)

'he Mel"ourne #aw School $onstruction #aw A(,isory Boar( an( many col leagues

within or associate( with the #aw School whopro,i(e( ,alua"le a(,ice in the

planning an( implementation stages of thepro6ect)

Photo cre(its@ front co,er 5 top left an( mi((le@ Property$ouncil of Australia others@ Matthew Bell "ack co,er 5

Brookfiel( Multiple=< Clenn 8ester Photography)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;&



Part B - Summary of ndings

'his Report into the use of stan(ar(

forms of construction contract in

Australia is "ase( upon@1

sur,ey responses "y 24

in(i,i(uals< representing &-

pro6ects<

"etween !ecem"er 201& an(

3e"ruary 201 an(

- inter,iews con(ucte( "y the pro6ectteam "etween January an(

March 201)

'he e=perience reflecte( in these

sur,ey responses an( inter,iews

co,ers a (i,erse range of

participation in the in(ustry >inclu(inglawyers an( in(ustry professionals?<

pro6ect types< contract ,alues an(

geographical locations)

+ur primary fin(ings are summarise( asfollows)2

Attitudes to&ards standardforms (section 4)

'here is "roa( support in principle for

the in(ustry ha,ing a,aila"le

to it stan(ar( forms of contract whichare capa"le of "eing use(

without su"stantial amen(ment)

8owe,er< a ma6ority >4G? of

respon(ents "elie,e that there is no

such form currently a,aila"le)

1 See section 3.2 As is note( throughout this Report<the (egree of confi(ence with

which the ,arious fin(ings can "estate( (epen(s upon a range offactorsinclu(ing sample siEe< so the specific(iscussion shoul( "e referre( to)& Section 5.1.

(se ofstandard

forms(section 5)

:0erall< */Gof the contractsreporte( uponwere "ase( upon

stan(ar(forms)&

'here is<howe,er< wi(e,ariation in therate of usage(epen(ing

upon factorsinclu(ing@

5 where

the contract

sits within

the

;contracti

ng chain7<

-4G of

hea(

contracts

use a

stan(ar(

form as a"ase<

compare(

to &&G

ofsu"contractsHtra(econtracts

5

Contract

0alue<

use of

stan(ar(

forms isclose to

uni,ersal

on

contracts

with a

,alue less

than



I100<000< ranges "etween **G

an( -/G on ,alues "etweenI100<000 an( I400 million< an(

4

(rops to 2/G on ,alues o,er I400million

5 ocation< a lesser proportion ofcontracts use stan(ar( forms

in the States an( 'erritorieswhere mining an( resourcespro6ects

pre(ominate >WA< 7' an(

ueenslan( 5 here< the

range is >&G54/G??

compare( to the A$'< 7SW<

SA< 'asmania an( Kictoria

>*4G5100G?* an(

5 Contracting sector< use of

stan(ar( forms is highest in

the

resi(ential "uil(ing sector<

remains high in the commercial

"uil(ing an( process

engineering sectors< an(

(rops

progressi,ely through the

pu"lic sector an( pri,ate

sector infrastructure sectors<

with the lowest use "eing in

the mining an( resources

infrastructure sector)-

Section 5.2.4 Section 5.3.* Section 5.4.- Section 5.5.

D*/

G

of

the

contract

s

reporte(

upon

were

"ase(

upon

stan(ar(

forms%




*hich standard forms. are+eing used, (section 6)

+,erall< the Australian Standardsforms continue to dominate

the Australian construction

contracting landsca$e .naggregate< the four main forms

>AS&00 >2&G of pro6ects using a

stan(ar( form?< AS000 >1/G?<

AS212 >1-G? an( AS02 >1G??

represent close to -0G of the

stan(ar( forms which are use(< as

reporte( upon in this sur,ey)

Applying that -0G to the */G of

pro6ects o,erall which use stan(ar(

forms< these forms are used in

nearly half of all $ro%ects

re$orted u$on in this sur0ey

'he Australian Stan(ar(s ma6or worksforms are used across all

sectors >other than for resi(ential"uil(ing with a pri,ate in(i,i(ual

as principal? an( across all

contracting 0alues >although

no AS000 forms were reporte(

as "eing use( on pro6ects with a

,alue in e=cess of I400 million?)

'he FI#IC forms are only use( onrelati,ely high ,alue pro6ects

>LI100 million?< in pri,ate sectorinfrastructure >"oth mining an(

non5mining? an( process engineeringpro6ects)

'he C!1 form is primarily use( in7SW< "ut there is also some

use of it in ueenslan( we foun( thatit was use( only for contracts

with a ,alue o,er I4 million)

'he ABIC 3* form is little use(outsi(e relati,ely small ,alue >up to

I4 million? contracts its primary use isto "e foun( in the resi(ential

"uil(ing sector where the owner is a

pri,ate in(i,i(ual "ut it also has some

use in the commercial "uil(ing >pri,ate

sector principal? an( infrastructure

>pu"lic sector principal? sectors)

*hich $arty makesthe decision to use thestandard form, (section

7)

'he $rinci$al >44G? or the $rinci$al7s

la&yer >2*G? were responsi"le

for choosing the stan(ar( form in more

than /0G of cases)

*hy are standard formsused, (section 8)

'he (ominant factor i(entifie( "y

participants was Dfamiliarity

&ith the form of the party

choosing it%)

Amendment of standardforms (sections 9-12)

.4= of the contracts which employe(a stan(ar( form were

amen(e( from the rele,ant pu"lishe(

form)10

Whilst we (i(not attemptsystematically toi(entify the etent

of amen(ments<the responses in

inter,iewsin(icate( thatthe

amen(ments aretypically0oluminous)

'he inci(enceof amen(mente=cee(s '=across almost all

contract0alues>contractingsectors and

standardforms> an(

is particularlyhigh in thefollowingcategories@

5 Contract

0alue< I40

million5I100

million >G?

I100 million5

I400

million >-G?

LI400 million>100G?11

5

Contracting

sector<

resi(ential

"uil(ing5

commercial

(e,eloper

>4G?

pri,ate sector

infrastructure

>non5miningHresources?

>4G?

pri,ate

sector

infrastructu

re >miningH

resources?

>100G?



process engineering >100G?12

an(

5 Forms< AS212 >-G? AS&00>/G? 3.!.$ >100G?)1&

'he primary reason i(entifie( foramen(ing stan(ar( forms was the

;need to shift risk7)1

As to the ty$es of clauses &hichare amended from >inclu(ing

a((e( to? the stan(ar( forms< thehighest inci(ence of amen(ment

across all forms< contracting

sectors an( ,alues was in respect

of@ e=tensions of time >-*G of

forms where amen(ments were

reporte(?< (elay (amages

>inclu(ing liui(ate( (amages?

>-1G?<

site con(itions >*/G?< payment

>*4G? an( ,ariations >*&G?)14

'hat sai(< there were su+stantial0ariations across categories

as to the ty$es of clauses

amen(e() 3or e=ample >"ut< see

section 11 for further< (etaile(

analysis?@

5 the highest inci(ence of amen(ment

in respect of e=tension of time

clauses was in the resi(ential

"uil(ing5commercial (e,eloper sector

>2G? an( contract ,alues from I20million to I40 million >/G? an(

5 limitations of lia"ility were a((e( to/G of forms o,erall< "ut

this inci(ence rose to -&G in the

pri,ate sector infrastructure

>mining an( resources? sector)

+,erall >"ut< this was su"6ect to wi(e,ariation in ,iews?< the

$erce$tion of amendment ofstandard forms was that it le( to@1*

5 increase( un(erstan(ing "etween the

parties an( efficiency in pro6ect

a(ministration >which may "e

regar(e( as positi,e outcomes? an(5 increase( nee( for legal a(,ice<outturn cost an( (isputation

>negati,e outcomes?)

D/G of the

contracts which

employe( a

stan(ar( formwere amen(e(

from the rele,ant

pu"lishe( form%

/ See section 1.1 for an o,er,iew of the formsreferre( to in this Report) Section 8.2.10 Section 9.1.11Section 9.2.12 Section 9.3.1& Section 9.4.1 Section 1!.14 Section 11.1* Section 12.




Part C - Background and methodology

1 Background

11 Standard forms of contract in the Australianconstruction industry1

111 :0er0ie&

'he range of forms a,aila"le in

Australia to(ay has its origins in the

forms promulgate( "y professional

"o(ies in the late 1th an( early

20th centuries in the :nite( ing(om

an( then Australia) 'ypically<

these forms ha,e e,ol,e( "y a process

where"y a consensus is

forge( among ,arious in(ustry

interest groups an( reflecte( in

a stan(ar( form< that form

"ecomes increasingly the su"6ect

of

amen(ments< an( then the interest

groups sit (own once again in an

en(ea,our to (ocument a re,ise(

common approach)

'he fact that many of the stan(ar(

forms are (e,elope( through a

process of negotiation an( (iscussion

has important conseuences)

3irst< such Dconsensus% forms are more

likely to "e Dfair% to all parties)

3or e=ample< "oth the AB.$ MW form

an( AS00051- >"oth of

which are (iscusse( further "elow? ha,e

"een put forwar( on the "asis that they

reflect the Dprinciple(% risk allocation

promote( in the 7ational Pu"lic Works

$onferenceH 7ational Buil(ing an(

$onstruction $ouncil Joint Working Party

"o Dis#$te report of 10) Secon(ly< in

a negati,e sense< they are likely to

contain many compromises)

'he (ifficulties in getting the agreement

of all parties concerne( when a new form

is "eing (e,elope( or where amen(ment

is reuire(

mean that almost all stan(ar( form

contracts 5 inclu(ing those (iscusse( in

this Report 5 contain anomalies an(

am"iguities< an( that these are likely to

remain part of the form until a(,erse legal

interpretation necessitates amen(ment)

'he in(i,i(ual organisations usually

a(,ise their mem"ers of the pro"lem

areas an( often suggest amen(ments

which might "e incorporate()

Asi(e from

such

Dconsensus%

stan(ar(

forms< forms

(rafte( from

the point of

,iew of one

of the parties

also continue

to ha,e wi(e

use in the

Australian

in(ustry) 3or

e=ample< in

the pu"lic

sector@

the

Australian

!epartment

of !efence

>through its

!efence

Support

an( Reform

Croup? has

its own suite

of facilities

contracts

for

the

constr

uction

an(

maintenanc

e of

its

signifi

cant

estate

throu

ghout



the country< inclu(ing the

8ea( $ontract >current

,ersion< 8$51 200&?<

Managing $ontractor >M$$51

200&? an( Me(ium Works

>MW52 200? forms1/ an(

the 7SW Co,ernment has a suiteof contracts as part of its

DProcurement System for

$onstruction%< inclu(ing C$21

9(ition

2 >essentially< for pro6ects

,alue( at o,er I1 million?<

MW21 an( Minor Works >less

than I1 million? an( Mini Minor

Works >less than I40<000?)1

Pri,ate5sector organisations< whether

they "e procurers of< or

contractors for< construction work<likewise commonly put into the

market "espoke forms representing

the terms on which they e=pect

to (o "usiness) An e=ample of a peak

in(ustry "o(y promulgating

such a form e=plicitly to represent its

preferre( contracting strategy is

the Pro6ect $ontract P$51 1/<

pu"lishe( "y the Property $ouncil of Australia) Whilst P$51 is not wi(ely

use( nowa(ays >as note( in section

6.1 "elow< less than 1G of the forms

reporte( upon in the sur,ey use(

P$51?< its (rafting forms the "asis for

many contracts< whether "espoke

or stan(ar( forms use( "y particular

organisations) 7ota"ly< 8$51 200&

>use(< we foun(< in 2)1G of pro6ects

employing a stan(ar( form? is

(eri,e( from P$51< although the form

has "een significantly a(apte( to

a((ress specific concerns of the!epartment of !efence)20

Dalmost all

stan(ar(

form

contracts

contain

anomalies

an(

am"iguiti

es%

1- 'his section is a(apte( from ch / of .an Bailey an( Matthew Bell< %onstr$ction Law in &$stra'ia >&r( e(< 2011?)1/ See www)(efence)go,)au) 1 See https@HHwww)procurepoint)nsw)go,)auH"efore5you5"uyHprocurement5system5constructionHstan(ar(5form5(ocuments5construction)20 Australian Co,ernment< !epartment of !efence< D.nfrastructure !i,ision Suite of $ontracts@ An .ntro(uction% >200-?< p 2< a,aila"le atwww)(efence)go,)auHestatemanagement)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;*

http://www.defence.gov.au./



https://www.procurepoint.nsw.gov.au/before-you-buy/procurement-system-construction/standard-form-documents-construction./


http://www.defence.gov.au/estatemanagement./



http://www.defence.gov.au/estatemanagement./



were pu"lishe( in 1-/< 1/1< 1/*

an( 12)

At present< the suite comprises@

AS00051- >DCeneral $on(itions of$ontract% 5 for construct5only (eli,ery?

AS0151/ >su"5contract for usewith AS000?

AS0252000 >,ariant of AS000 for(esign an( construct (eli,ery?

AS0&52000 >su"5contract for usewith AS02?

AS12252010 an( 05200>consultants% agreements?

AS0452002 >minor works contract 5superinten(ent5a(ministere(?

an( AS0*52002 >minor workscontract 5 principal5a(ministere(?

AS1052002 >euipment supply withinstallation? an( AS115

200& >euipment supply withoutinstallation?

AS1252002 >perio(ic supply ofgoo(s?

AS1452002 >pro6ect management?

AS1*52002 >constructionmanagement?

AS1-5200& >constructionmanagement tra(e contract?

AS15200& >asset maintenance an(ser,ices 5 superinten(ent%s

,ersion >AS205200& is the

principal%s ,ersion an( AS215

200& the short ,ersion??

AS52001 >work or(er?)

Dthe use of

internat

ionally5

recognise(

forms

remain

s

relati,e

ly

infre

uen

t in Austr

alia%2 See John :ff< D!raft .nfrastructure $on(itions of $ontract@ 201 9(ition% >S$# Paper !1*-< March 201?)24 See www)icheme)org)2* See the article "y 'ony !ymons an( Michael Men(el"lat at >201&? &0 nternationa' %onstr$ction Law e*iew 2-)2- See www)saiglo"al)com)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;-

http://www.icheme.org./


http://www.saiglobal.com./






AS212 an( AS000 are (esigne( for use

on ma6or "uil(ing an( engineering

pro6ects where a Dsuperinten(ent% is

engage( to a(minister the contract) 'he

superinten(ent may "e an in(epen(ent

professional >or a firm of consultants? oran employee of the principal) 'he

contract price may "e calculate( as a

lump sum or re5measurement >sche(ule

of ratesH"ill of uantities? or a com"ination

of these)

'hough Stan(ar(s Australia inten(e( to

(iscontinue pu"lication of the AS2125

12 e(ition >which itself replace( the

superse(e( 1-/< 1/1 an( 1/*

e(itions? when the AS000 contract was

release(< it remains a,aila"le as a

current Stan(ar()

As at the time of preparation of this

Report< a process initiate( "y Stan(ar(s

Australia to re,ise >at least? the ma6or

works forms was well un(erway) See<

further< section 2.3 "elow as to the

potential interplay "etween that process

an( this research pro6ect)

11" ABIC

'he Australian Buil(ing .n(ustry $ontract

suite >AB.$? is promulgate( through a

Joint !e,elopment $ommittee which is a 6oint ,enture of Master Buil(ers Australia

#t( an( the Australian .nstitute of

Architects >A.A?) .t is (esigne( for use

with an architect as the principal%s

representati,e)

'he original ,ersion of the ma6or works

contract >AB.$ MW52001? was "ase(

upon the $onstruction .n(ustry $ontract

>$.$51 1-? which

was pro(uce( "y the >then Royal?

Australian .nstitute of Architects alone)

'he current ,ersion >AB.$ MW5200/?

has e,ol,e( significantly from that "ase)

3orms in the AB.$ suite are up(ate(

from time to time to a(( clarity or to

reflect minor changes to the rele,ant

law< an( a full re,ision

occurs appro=imately e,ery three to

fi,e years) .t is un(erstoo( that the

ne=t e(ition is e=pecte( to "e pu"lishe(

later in 201)

2/ See www)architecture)com)au)2 See< eg< www)master"uil(ers)asn)au for ueenslan()

'he suitecurrentlycomprises@2/

AB.$ MW5

200/ >ma6or

works?< withresi(ential

works

,ariants for

each

State an(

'erritory

AB.$ MW5

S$51

>su"contract

un(er MW

form there

are alsoshort

form

su"contracts

?

AB.$ SW5

200/

>simple

works?< with

resi(ential

works

,ariants for

eachState an(

'erritory

AB.$ SW5

S$51

>su"contrac

t un(er SW

form there

are also

short

form

su"contract

s?

AB.$ BW512002 >"asicworks >up toI40<000 in,alue??

AB.$ BW5S$51>su"contractun(er BW form?

AB.$ 9W51

http://www.architecture.com.au./


http://www.masterbuilders.asn.au/







200& >early works?)

114 :ther standard forms

'here are numerous stan(ar(

forms pro(uce( apart from those

(iscusse( a"o,e) Many pu"lic

authorities an( local go,ernment"o(ies ha,e their own stan(ar(

forms) Moreo,er< Master Buil(ers

Australia #t( an( its >State5"ase(?

mem"er associations pro(uce

stan(ar( forms for ,arious

purposes)2

Master Buil(ers recommen(s the use

of certain Australian Stan(ar(s

an( the AB.$ suite "ut also has its

own forms >some of which are for

use nationally an( others in certain

States an( 'erritories? inclu(ing@&0

B$& >commercial? an( B$ >resi(ential?5 lump sum

$M2012 5 $onstruction Management$ontract

$P& >commercial? an( $P4

>resi(ential? cost plus contract >there

are

also other cost plus5"ase( forms

in the suite?

!B1< RB$51 an( RBW 201

>contract sum LI400<000? 5 (omestic

>resi(ential? "uil(ing

Da

stan(ar(

form

contractshoul(

"e

assume(

to "e

"in(ing

in

accor(an

ce with

its terms%&0 See www)master"uil(ers)com)auHportfoliosHcontracts for further gui(ance a"out each form an( when it is to "e use()

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;/

http://www.masterbuilders.com.au/portfolios/contracts/





!9$+7 201& an( !9$+7 2 5 (esignan( construct< lump sum

C$$4 5 hea( contract for commercialconstruction

>with S$5- su"contract?

8$* 5 new homes 8.$4 5 home impro,ement

#S$2 5 $ommercial Buil(ing $ontract

MW$5$ >commercial? an( MW$51>resi(ential? 5 minor works

PB51 5 pool "uil(ing

PM2 5 pro6ect management

SW$ 5 small works an( SW$5R 5simple works

'$2012 5 tra(e contract un(er $M2012>also tra(e contract '$58?)

1! 9he legalunder$innings of standardforms"1

'he su"6ect matter of this Report is

Dcontracts%) 'hat term has many

(ifferent connotations) .n this Report< it

is largely "eing use( to refer to

(ocumentation which reflects the parties%

agreement< "ut 5 in the classical legal

conception 5 a Dcontract% is in fact the

>legally5"in(ing? agreement

itself)&2 'he legal conception of

construction contract (ocumentation

procee(s from an assumption that it

reflects the parties% D(eal% an(<

therefore< the parties will "e "oun(

"y it whether or not they fully

un(erstoo( >or< in fact< actually agree( to?the terms which are recor(e()

'his assumption is especially pre,alent

in commercial arrangements

>as oppose( to those in,ol,ing

in(i,i(uals as consumers where< to

a certain e=tent< the position has "een

mo(ifie( "y the common law

an( legislati,e inter,ention?)&& .n many

ways< this assumption sets the

conte=t for the way in which stan(ar(

forms of construction contract

are use( in Australia an(< we think< helps

e=plain many of the fin(ings in this

Report)

.t is< therefore< worth restating the

"asic legal principles applica"le

where parties seek to escape their

lia"ilities an( o"ligations on the

"asis that they (i( not fully comprehen(

what they were signing up to)

'hese are

illustrate(

"y the

8igh

$ourt of

Australia%s(ecision

in +o''

(,%+)

Pt Lt/ *

&'#0a#0

ar Pt

Lt/)& .n

that case<

an agent

of the

pharmace

utical

company

signe( a

stan(ar(

form

Dapplicatio

n for

cre(it% to

ha,e

3inemores

>now 'oll?

(istri"ute its

3lu,irin

,accines) 8e

(i( not

notice the

limitation of

lia"ility

clause on

the "ack of

the form)

3inemores

faile( to

keep its

trucks at the

correct

temperature

an( the

,accines

spoile()

'oll a(mitte(

negligence "ut

sought to rely

upon the

limitation

clause to



e=clu(e its lia"ility) :ltimately< the 8igh

$ourt foun( in its fa,our) .n (oing

so< the $ourt took the opportunity to

restate the rele,ant rule as follows@

NWOhere there is no suggeste( ,itiating

element< an( no claim for euita"le or

statutory relief< a person who signs a(ocument which is known "y that person to

contain contractual terms< an( to affect legal

relations< is "oun( "y those terms< an( it is

immaterial that the person has not rea( the

(ocument)&4

Applying this principle to the

construction sphere< Justice !a,i(

Byrne has o"ser,e( that< "y the time

a (ispute stemming from

inappropriate con(itions reaches the

court<

NtOhe law is ,ery much powerless to set

things aright) .t accepts< as it must< that<su"6ect to limite( e=ceptions< a contract freely

entere( into "etween competent parties must

"e gi,en effect to) 'he see(s of the financial

(isaster for all the parties ha( "een sown

months "efore)&*

.n a commercial conte=t< therefore<

in the a"sence of recognise(

,itiating factors in the formation of

the contract< a stan(ar( form

contract shoul( "e assume( to "e

"in(ing in accor(ance with its

terms as o"6ecti,ely interprete() .n

turn< the onus is on the person

or organisation signing it to

un(erstan( those terms) 'his (oes

not

mean that the formal contract is "y

any means the D"e5all an( en(5all% for

pro6ect success 5 as many

inter,iewees note(< the relationship

"etween the parties an( their a"ility

to a,oi( an( resol,e issues (uring

the pro6ect is crucial)&- 8owe,er< the

contract ine,ita"ly (oes "ecome ,ital

if that relationship "reaks (own an(

the parties nee( to ha,e recourse to

their respecti,e legally5enforcea"le

rights)

Dthere is

a (earth

of

pu"licly5a,aila"le

(ata as

to the

Australia

n

construc

tion

in(ustr

y%s use

of< an(

attitu(e

towar(s<

stan(ar(

forms of

contract%

&1 'his section is a(apte( from Matthew Bell< DStan(ar( 3orm $onstruction $ontracts in Australia@ Are our Rein,ente( Wheels $arrying us3orwar(F% >200? 24 B$# -< pp /*5/-)&2 Jeannie Paterson< An(rew Ro"ertson an( Arlen !uke< Princi#'es of %ontract Law>th e(< 2012?< p &) 'hat passage also notes< howe,er< that there are Dmany (ifferentways of un(erstan(ing what a contract is< an( what contract law is a"out)%&& See< eg< i"i(< Part K..)& >200? 21 $#R 1*4)&4 >200? 21 $#R 1*4 at 1/4 >Cleeson $J< Cummow< 8ayne< $allinan an( 8ey(on JJ?)&* Preface to .an Bailey an( Matthew Bell< n/erstan/in &$stra'ian %onstr$ction %ontracts >200/?< p ,iii)&-See< generally< Paula Cer"er an( Brennan +ng< est Practice in %onstr$ction Dis#$tes >201&?)



1" Pre0ious research As was note( a"o,e< a key reason for this research pro6ect "eingun(ertaken is that there is a (earth of pu"licly5a,aila"le (ata as to

the Australian construction in(ustry%suse of< an( attitu(e towar(s<stan(ar( forms of contract) 'hat sai(<the topic has "een >at least<in(irectly? the su"6ect of research in thepast two (eca(es< inclu(ing thefollowing reports@

Athol ;ates an( Bill Sashegyi< D9ffecti,eRisk Allocation in Ma6or

Pro6ects@ Rhetoric or RealityF% >2001 5D;ates an( Sashegyi Report%? an(

Blake !awson< DScope for .mpro,ement2011@ Pro6ect Risk 5 Cetting

the Right Balance an( +utcomes%>2011 5 DBlake !awson Report%?)

Both of these stu(ies were un(ertaken inthe framework of riskallocation an( management for ma6orpro6ects) 'hus< whilst neither of themin,estigate( specifically the types ofcontract forms which were use(< thetouchstone for each stu(y wasDprinciple(% >or Defficient%? risk allocationof the type espouse( "y Professor Ma= A"rahamson an( carrie( through< to,arious (egrees< in Australian stan(ar(

forms)&/

A key focus of these stu(ies<therefore 5 relate( to the aims of thisReport 5 was the e=tent to which partiesto constructioncontracts were taking on risks throughthe contract which they were not "estplace( to control or manage)

'he ;ates an( Sashegyi Report sought to(etermine whether Dthere wasa (ifference "etween efficient riskallocation an( actual risk allocation%in ma6or pro6ects carrie( out in Western Australia)& .t was un(ertaken"y the WA $ham"er of $ommerce an(.n(ustry an( the .nstitution of9ngineers Australia >now< 9ngineers Australia?) 'he research was "y wayof a sur,ey< sent to in(ustry participants inearly 2001< which recei,e(122 responses)

'he Blake !awson Report focuse( uponD(e,eloping a "etterun(erstan(ing of approaches to risk

i(entification< risk allocation an(risk management< an( the impact of thoseapproaches on pro6ectoutcomes%)0 .t was un(ertaken "y law firmBlake !awson >now< Ashurst Australia? with the support of the Australian

$onstructors Association<the 9nergy Supply Association of Australiaan( .nfrastructurePartnerships Australia) 'he research was"ase( upon sur,eys of< an(

&/ See< eg< Matthew Bell< DStan(ar( 3orm $onstruction$ontracts in Australia@ Are ourRein,ente( Wheels $arrying us 3orwar(F% >200? 24$i'/in an/ %onstr$ction Law -< p /1)& ;ates an( Sashegyi Report< p 2)0 Blake !awson Report< p )1 Blake !awson Report< p &0)2 9=trapolate( from ;ates an( Sashegyi< pp -5/ Blake!awson Report< p 12)& Blake !awson Report< p 1&)

."i( p 1)

inter,iewswith<in(ustryparticipants<con(ucte("etweenMay an(!ecem"er 2010) 'hesur,eyrelate( topro6ectscomplete(o,er thepast fi,eyears witha minimumpro6ect,alue of AI20million)Sur,eyresponseswererecei,e(from 121participants)1

3in(ingsfrom thisresearchwhich are

of primaryrele,anceto thecurrentpro6ectinclu(e@

Significant(ifferences e=istin the perceptionsof principals an(

contractors asto whether risk

is allocate( inconstructioncontractson theprinciple(Hefficient"asisreferre( to



a"o,e whilst thefigures (iffere( across thestu(ies< the percentage ofprincipalswhich "elie,e( that risk ha( "eenallocate( on such a "asis was inthe range -05/-G yet it was &45

44G for contractors)2

'he risk categories most commonlyi(entifie( as "eing key >time<

(esign< scope an( sitecon(itions? were also therisks most commonly,iewe( as "einginappropriately allocate()&

'he most important factor influencingrisk allocation in ma6or

pro6ects was the reuirements ofthe principal) 'his was i(entifie(in the Blake !awson Report "y

/&G of respon(ents< compare(to the a"ility of a party to manageor price the risk< which werei(entifie(< respecti,ely< "y 4*Gan( &*G) Similarly< in the ;atesan( Sashegyi Report< -G ofcontractors an( &&G of principals"elie,e( that risks were allocate(at the pro6ect (eli,ery stage >thatis< following contractualnegotiations? on the "asis of minimising risk to the principal)4

A su"stantial ma6ority of the parties toma6or pro6ects >accor(ing to

the Blake !awson Report< in the or(erof /050G?* ha,e riski(entification< managementan( allocation policieshowe,er< parties reporte( thatsuch processes ha( "een put

in place in aroun( *0G of pro6ects)-

'he current Report (oes not focus onrisk allocation to the same e=tent asthese pre,ious stu(ies) 'hat sai(< anum"er of key fin(ings from these

pre,ious stu(ies were matters inrespect of which this Report has "eena"le to make o"ser,ations) 'hese arei(entifie(in the following ta"le) Whilst thepre,ious sur,eys an( the currentReport (iffere( in their metho(ologyan( sample siEe</ the rele,antfin(ings are "roa(ly consonant)

4 ;ates an( Sashegyi Report< p -)* Blake !awson Report< p 14)- ."i( p 14 ;ates an( Sashegyi Report< p 1-)/ 3or e=ample< as note( a"o,e< the ;ates an(Sashegyi Report was con(ucte( in 2001an( "ase( upon 121 responses from Western

Australia only whereas the current sur,eywas Australia5wi(e an( recei,e( 24 responseso,erall an( - responses in respect ofWA pro6ects)

D'he most

importan

t factor

influencing risk

allocatio

n in

ma6or

pro6ect

s was

the

reuirem

ents of the

principal

)%




Findings in ?ates and Sashegyi8 Blake #a&son @e$orts A$$lica+le ndings in this@e$ort

.n the ma6ority of contracts >the ;ates an( Sashegyi Report puts the +,erall< /G of the stan(ar(forms use( were amen(e()40

figure at aroun( *0G?< the risk clauses in the contract ,arie( from

those in the rele,ant stan(ar( form)

.nappropriate risk allocation was

percei,e( to lea( to (etrimental

pro6ect outcomes<41 in particular@

-0G of the respon(ents to the

;ates an( Sashegyi sur,ey >/*G

of contractors an( &G of

principals? o"ser,e( that changes to

the risk allocation at the pro6ect

(eli,ery stage were likely to lea( to

claims42 an(

4G of contractors an( &/G of

principals "elie,e( that the pro6ect

cost woul( ha,e "een lower if riskha( "een allocate( on the

principle( "asis referre( to a"o,e)4&

+,erall >"ut< there

was a wi(e ,ariation

of responses on

these points?<

amen(ments to the

stan(ar( forms were

seen as lea(ing to

increases in@4

1) un(erstan(ing "etween the parties >greatest increase?

2) nee( for legal a(,ice (uring the pro6ect

&) pro6ect outturn cost

) efficiency in pro6ect a(ministration an(

4) (isputation >least increase?)

+f these factors< the

increases in 1 an(

may "e seen as

"eneficial pro6ect

outcomes an( the

increases in 2< & an( 4

as (etrimental)

.n(ustry stan(ar( forms were use( in -G of contracts Stan(ar( forms are use( in */Gof pro6ects Australia5wi(e4* an(

>Western Australia< 2001?)44 &G of pro6ects in WA)4-

'he most commonly5use( stan(ar( forms use( >WA< 2001? were 'he most wi(ely5use( forms Australia5wi(e are AS&00 >2&G?<

AS212 >G?< AS000 >4G? an( AS&00 >1&G?)4/ AS000 >1/G?< AS212 >1-G?an( AS02 >1G?)4 .n WA< they are

AS212 >20G?< AS000 >14G?<3.!.$ >10G? an( AS02 >10G?)*0

;ates an( Sashegyi Report< pp < 1*< 22)40 Section 9.1 "reak(owns are set out throughout section 9)41 Blake !awson Report< p -)42 ;ates an( Sashegyi Report< pp 1&< 2/)4& ."i( p 1)4 Section 12)44 ;ates an( Sashegyi Report< p &)4* Section 5.1)



4- Section 5.4)4/ ;ates an( Sashegyi Report< p )4 Section 6.1)*0 3igures pro(uce( "y applying the o,erall rate of usage of stan(ar( forms >*/G? to the WA5specific figures in section 6.3)




! Aims of this research

!1 ey 2uestions and the a$$roach this study undertakesto ans&ering them

'his research pro6ect aims to make a

su"stantial< e,i(ence5"ase(

contri"ution to the continuing e,olution

of the use of stan(ar( forms of

construction contract in Australia)

.ts primary aim is to suggest ways

of approaching the following key

uestions@

1) 8ow are stan(ar( forms "eing use(

in the Australian construction

in(ustry in 201F

2) What o$0t to "e the role of

stan(ar( form construction contracts

in the Australian construction

in(ustry in 201F

&) 'o the e=tent there is a mismatch

"etween current practice an( an

optimal role< w0at strateies

>whether "y way of amen(ing e=isting

forms< (e,eloping new forms or

otherwise? shoul( "e put in place to

a((ress itF

'he stu(y seeks to fulfil this aim "ypro,i(ing a snapshot of current

practice in relation to the use of

stan(ar( forms on Australian

construction pro6ects as at early 201)

+ur research has< therefore< "een

(irecte( to the following key

uestions@

'o what e=tent are stan(ar(

forms "eing use( on Australian

construction pro6ectsF

Where they are "eing use(< 0ow are

they "eing use(F

Acknowle(ging from the outset the

e=traor(inary (i,ersity of

mo(es in which construction pro6ects

operate in Australia<*1 an( the

ine,ita"le limitations of our (ata5

collection e=ercise >see section 3?< we

ha,e nonetheless sought to offer as

comprehensi,e an( (etaile( a picture

as possi"le of how stan(ar( forms are

"eing use() 'o (o this< we set up our

sur,ey an( analyse( its (ata to i(entify

correlations

across numerous ,aria"les)

'his Report< therefore< is (irecte(

primarily towar(s the first of the three

uestions i(entifie( a"o,e 5 0ow are

stan/ar/ fors ein $se/ .t also

offers insights into the types of issues

which ought "e consi(ere( "y

construction in(ustry stakehol(ers in

framing the (e"ate aroun( the

ne=t stage of e,olution of Australianstan(ar( forms)

'hese issues inclu(e< crucially@

the e=tent to which the Australian

construction in(ustry ,alues

the a,aila"ility of a stan(ar( form

which is capa"le of "eing use(

without su"stantial amen(ment*2 an(

current perceptions as to whether

such a form currently is a,aila"le

to the Australian construction

in(ustry)*&

D'his

resear

ch

pro6ect

aims

to

make

a

su"stantial<

e,i(enc

e5"ase(

contri"ution to

the

continui

ng

e,olutio

n of

the use of

stan(ar

( forms

of

constru

ction

contract

in



Australia)%

*1 See< eg< $ommonwealth of Australia< Royal $ommission into the Buil(ing an( $onstruction .n(ustry< Disc$ssion Pa#er 1 *er*iew of t0e "at$re an/ #eration of t0e $i'/in an/ %onstr$ction n/$str >2002?)*2 Section 4.1)*& Section 4.2)




!! Further research

+ur fin(ings in respect of the key

uestions referre( to in section 2.1

a"o,e are summarise( in Part an(

set out in (etail in Part D)

.n a((ition to these fin(ings< in the

course of the research< the pro6ect team

has encountere( certain issues relating

to the use of stan(ar( forms which we

consi(er merit further< (etaile( research)

Whilst

we were a"le in this Report to make

preliminary fin(ings in respect of

some of them< more focuse(

research coul( allow for more

meaningful analysis)

'hese inclu(e@

More (etaile( in,estigation of thecorrelation >if any? "etween contract

,alue an( stan(ar( form use< especiallyat the higher contract ,alue en(

>see section 5.3)) .t woul( also "e of

interest to ascertain the total ,alue of

pro6ects which are let each year "ase(

upon the ,arious forms)

'he e=tent of amen(ments ma(e tostan(ar( forms >section 9

makes fin(ings in relation to the

proportion of stan(ar( forms

which are amen(e( to some e=tent<

an( section 11 sets out (ata

in respect of the types of clauses

which are amen(e(< "ut the

sur,ey (i( not 5 other than "y

reference to o"ser,ations ma(e in

inter,iews 5 pro,i(e (ata in(icating

(irectly how e=tensi,e those

amen(ments are?)

More (etaile( correlation< againstfactors inclu(ing the type of

form< contract ,alue an( contractingsector >an( other possi"le

factors< such as the forms% rea(a"ility<

format< accessi"ility to non5

lawyers an( incorporation of

(ocument automation systems?< as to

the following matters (ealt with in a

preliminary manner "elow@

5 Which party ma(e the (ecision to usethe stan(ar( form

>section 7?

5 3actors going to use of stan(ar(forms >section 8? an(

5 3actors going to why stan(ar( formsare amen(e( >section 1!?)

Perceptions

as to the

effect of

amen(ment

s tostan(ar(

forms

upon

pro6ect

outcomes

>some

preliminary

fin(ings on

this are set

out in section12?)

'he role

of lawyers>whether

e=ternal to

the

organisatio

n or in5

house?

in

recommen

(ing forms

of contract

an(

amen(me

nts to

them >section1!?)

'he pro6ect

team woul(

"e happy to

(iscuss

these

potential

a,enues

further with

intereste(

researchersan( 5 to the

e=tent that it

is

consistent

with the

human

ethics

appro,al



grante( in respect of this Pro6ect

>see section 3 "elow? 5 make

a,aila"le to them more (etaile( (ata

than has "een pu"lishe( in this

Report)

Moreo,er< we "elie,e it woul( "e

useful to refine the sur,ey in the light

of our fin(ings an( repeat it

perio(ically 5 perhaps< e,ery two to

three years 5 in or(er to ascertain

whether >an(< if so< how an( why?

attitu(es towar(s an( use of

stan(ar( forms change o,er time)

!" AustralianStandardsre0ision

$rocess As was note( in section 1.1.2

a"o,e< Stan(ar(s Australia is

currently

engage( in a process for re,ision of

>at least? its ma6or works contract

forms) Although this research

pro6ect has "een un(ertaken at

arm%s

length from this process< mem"ers of

the pro6ect team are "roa(ly aware of

its aims an( progress)

'o that en(< we e=pect that fin(ingsin this Report 5 whether as to the

Australian Stan(ar(s forms or more

generally 5 will "e of interest to

those charge( with re,ising those

forms) .n a((ition< we ha,e set out

in &##en/i 2 a compilation of

fee("ack on the Australian

Stan(ar(s forms which goes to

specific aspects of the current

forms)

D'he Report

offers insights into the

types of issues

which ought

"e consi(ere(in framing the

(e"ate aroun(

the ne=t stage

of e,olution

of Australian

stan(ar( forms)%

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;1&



" #ata collection for this $ro%ect

'his pro6ect has "een un(ertaken in accor(ance

with a metho(ology appro,e( "y the

Mel"ourne #aw School 8uman 9thics Appro,al

Croup) 'hat metho(ology in,ol,e(

two key elements@ a we"5"ase( sur,ey an(

inter,iews) 9ach of these was con(ucte(

on an anonymous "asis@ the sur,ey (i( not

collect i(entifying (etails of participants

>unless they opte(5in to "e contacte( to un(ertake

an inter,iew? an(< in the inter,iews< participants

were gi,en the option whether or not comments

were to "e attri"uta"le to them@ most chose not to

make them so attri"uta"le)

"1 Sur0ey

'he sur,ey uestions are set out in &##en/i 1)

9ssentially< participants were in,ite(

to answer uestions a"out the contracts which

were use( on up to three construction

pro6ects un(ertaken in Australia (uring the past fi,e

years of which they ha( knowle(ge< either as a

(irect pro6ect participant or an a(,iser)

'he sur,ey was we"5"ase(< using the

Sur,eyMonkey tool)* 'he we" link< which

participants coul( click on if they wishe( to

un(ertake the sur,ey< was (isseminate( to

potential participants in a num"er of ways<inclu(ing@

!irect emails to stu(ents< alumni an( associates

of the Mel"ourne #aw School

construction law program< an( mem"ers of the

Society of $onstruction #aw Australia

* See www)sur,eymonkey)com)

http://www.surveymonkey.com./





7ews items on we"pages of the Australian

$onstruction .n(ustry 3orum an( Society

of $onstruction #aw Australia an(

Social me(ia< inclu(ing ,ia the 'witter an( #inke(.n

fee(s maintaine( "y the Mel"ourne#aw School construction law program)

'he sur,ey was a,aila"le online to participants from &

!ecem"er 201& to 1 3e"ruary 201) 24 in(i,i(uals

participate( in the sur,ey) 'he a"ility of participants to

report on up to three pro6ects in their responses

meant that responses were recei,e( in respect of

&- pro6ects >that sai(< gi,en that the sur,ey (i( not

ask participants to i(entify the pro6ects reporte( on< it

is possi"le that multiple participants reporte( in

respect of the same pro6ect?)

'he somewhat (iffuse nature of the sur,ey%s

(issemination< inclu(ing the o,erlap in

recipient cohorts >for e=ample< many Mel"ourne

#aw School alumni are also mem"ers

of the Society of $onstruction #aw Australia? makes

it impossi"le to state with certainty the num"er of

potential participants in the sur,ey) 8owe,er< it waslikely in the or(er of 2<0005&<000< resulting in a

notional response rate of appro=imately 10514G)

Sur,ey participants i(entifie( themsel,es as

falling within a range of pro6ect party

types< an( coul( i(entify more than one type)

'here were 1 responses to the

uestion DWhich of the following roles (escri"es

your own in,ol,ement in the pro6ectF >Please

choose as many as apply)?%< with the results as

follows@




Respon(ents to the sur,ey

represente(< therefore< the

perspecti,es

of a (i,erse range of pro6ect

participants >though< none i(entifie(

themsel,es as "eing fun(ersHfinanciers?) Appro=imately half were

lawyers< a little o,er a uarter were

(rawn from within the primary

contracting parties an( a little o,er a

uarter from consultants >of

which< more than half were contract

a(ministrators an( in(epen(ent

re,iewers?)

Sur,ey participants were not aske( to

(escri"e their primary location) 8owe,er<

it is e,i(ent from the locations of

pro6ects reporte( upon< an( theinter,iews< that participants were (rawn

from e,ery State an( 'erritory of

Australia< an( 5 whilst most participants

were "ase( in the ma6or cities 5 there

was a su"stantial representation of

participants "ase( in rural an( regional

areas)

"! Inter0ie&s

'he research team

con(ucte( -

inter,iews "etween

January an( March201) & >/&G? were

con(ucte( "y

telephone an( / >1-G?

face5to5face) 'he

ma6ority of

inter,iewees ha( self5

selecte( through a

prompt in the sur,ey<

"ut se,eral were

approache( (irectly "y

the research team on

the "asis that they ha(

significant e=periencein relation to stan(ar(

forms)

'he inter,iewees

represente( a range

of perspecti,es

within the in(ustry<

falling "roa(ly into

the following

categories@

'hey were o,erwhelmingly in(ustry participants an(a(,isers with su"stantial e=perience in the area<

inclu(ing construction firm e=ecuti,es< senior pu"lic

ser,ants< in5house lawyers at large contracting an(

consulting firms< law firm principals< senior counsel an(

representati,es of peak "o(ies) Most respon(ents

ha( significant e=perience relating to the construction in(ustry@

/1G ha( 10 or more years< an( 41G ha(

20 or more years)



Part # - #etailed ndings

'his Part pro,i(es the research

team%s (etaile( fin(ings in relation

to this research pro6ect) .t (oes so<

un(er each hea(ing >reflecting

the uestions?< "y presenting the

rele,ant (ata in ta"ulate( an(

chart form) 'he Report seeks to make

use of all meaningful (ata

"ut anticipates that not all sur,ey

respon(ents respon(e( to e,ery

uestion an(< as such< there are(ifferences in the sample siEes for

each element reporte(

upon) Where rele,ant<

these sample siEes are

note(@ for e=ample< "y

num"ers at the tops of

columns)

$ommentary on the

fin(ings is pro,i(e( for

most uestions< inclu(ing

"y reference to

o"ser,ations arising from

the inter,iews con(ucte(

for the purposes of this

research pro6ect)

4 Attitudes to&ards standard forms

41 Broad su$$ort in $rinci$le for standard forms

Participants were aske( to in(icate whether they agree( with the statement D'he

Australian construction in(ustry nee(s to ha,e a,aila"le to it stan(ar( forms of contract

which are a,aila"le for use without su"stantial amen(ment)% 1- responses were

recei,e(< with the responses summarise( in the chart "elow) 'he aggregate of these

responses place( the mean "etween Dslightly agree% an( Dstrongly agree%)

De=pe

rienc

e(

in(us

try

participant

swere

supporti,

e of the

i(ea that

a form

might

"e

a,aila"l

e for use

without

su"s

tanti

al



amen(ment across the in(ustry%

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;1*



.n line with this apparent strong support

>at least< in principle? for stan(ar( forms<

many inter,iewees ma(e comments

along the lines of this statement from a

contract a(ministrator with more than 20

years% e=perience@ Dthey esta"lish a"enchmark of reasona"leness an( this

"enchmark is important for the in(ustry

to ha,e)%

'hat sai(< / sur,ey participants

>&&)2G? skippe( the uestion@

such a lack of response coul( "e

in(icati,e of a range of attitu(es

to the uestion an( shoul( "e taken

to temper the confi(ence that

otherwise woul( e=ist as to support

for stan(ar( forms)

4! Suita+ility ofcurrently-a0aila+leforms

Participants were aske( whether< in

their ,iew< there is any current

stan(ar( form of contract which is

capa"le of "eing use( without

su"stantial amen(ment in the

Australian construction in(ustry) 1-

responses were recei,e(< with / sur,ey

participants >&&)2G? skipping the

uestion) 'he responses are set out in

the chart to the right)

'hus< whilst there is strong support

in principle for the a,aila"ility

of stan(ar( forms which are

capa"le of use without su"stantial

amen(ment >see section 4.1?< a clear

ma6ority of respon(ents in(icate( that

there was no such form currently

a,aila"le) +ne inter,iewee 5 a

commercial manager for a tier 2

contractor 5 commente( that there is at

present no satisfactory stan(ar( form in

Australia capa"le of use without

su"stantial amen(ment an( that contractors Dput up with% the

Australian Stan(ar(s D"ecause they ha,e to%)



'

h

e

i

n

t

er

,i

e

w

s

u

n

(

e

rt

a

k

e

n

f

o

r

t

h

is

r

e

s

e

a

r

c

h

p

r

o

6

e

c

t

p

r

o

,i

(e

(

i

n

si

g

h

t

s

into the comple=

foun(ations

un(erpinning these

responses) Broa(ly

speaking< e=perience(

in(ustry participantswere supporti,e of the

i(ea that a form might

"e a,aila"le for use

across the in(ustry

without su"stantial

amen(ment) +ne

lawyer suggeste( that

(e,elopment

of such a form woul(

"e a worthwhile

cooperati,e pro6ect in

which

the 3e(eral an( Statego,ernments shoul(

take a lea()*4 8owe,er<

inter,iewees i(entifie(

a num"er of challenges

to such (e,elopment<

primarily the (i,ersity of

types of pro6ects which it

woul( nee( to co,er an(

the nee( to anticipate

increasingly5

sophisticate( >an(

constantly e,ol,ing?

legislati,e an( financingreuirements)

Dcontract

ors Qpuup withthe

Australia

n

Stan(ar

(s

Q"ecaus

e they



ha,e to%

*4 Su"stantial in,estment has in fact alrea(y "een ma(e into pu"lic5sector contracting suites< such as those of the !epartment of !efencean( 7SW Co,ernment 5 see section 1.

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;1-



4" Forms 0ie&ed as +eing ca$a+le of use &ithoutsu+stantial amendment

+f the respon(ents who in(icate(

that there is a stan(ar( form

of contract currently a,aila"le

capa"le of use without su"stantial

amen(ment< a range of responses was

recei,e( as to which form that might "e)

'hese are summarise( in the chart

"elow) 'he aggregate

num"er of forms i(entifie( e=cee(s

the num"er of participants >0? who

respon(e( to the uestion< "ecause

participants were a"le to i(entify more

than one form as "eing suita"le)

3igures at the top of each column in(icate num"er ofresponses recei,e()

'he only forms which

recei,e( significant

support as "eingsuita"le

were AS000 an(

AS212 >though< an

a((itional se,en

responses

referre( generally to the

Australian Stan(ar(s

suite?) 'here is therefore a

partial correlation "etween

percei,e( suita"ility of the

forms an(

the forms% freuency of

use >as is note( in

section 6.1 "elow< the

four most wi(ely5use(

forms are >in or(er?

AS&00< AS000<

AS212 an( AS02?)

8owe,er< there is also an

apparent correlation

"etween

percei,e( suita"ility an(

freuency of

aen/ent 5 as is

note( in section 9.4< the

reporte( rates of

amen(ment of AS000

an( AS212 are //G an(

-G respecti,ely)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;1/



.t may "e< therefore< that the

results in(icate( in the chart a"o,e

primarily reflect the high (egree of

familiarity in respect of these

forms >see< further< section 8.2? rather than< necessarily< a wi(ely5hel( ,iew

that they are< in fact< suita"le for use

without amen(ment)

.t (oes nee( to "e acknowle(ge(<

howe,er< that the >relati,ely? high

(egree of perception that the

Australian Stan(ar( forms are suita"le

was also reflecte( in our inter,iews

with highly5e=perience( in(ustry

participants) Whilst almost e,eryone

who commente( on the issue

note( that the forms were out(ate(

an( in nee( of re,ision >a fact

implicitly acknowle(ge( "y Stan(ar(s

Australia itself through its

initiation of the re,iew process

referre( to in section 2.3?<

comments recei,e( inclu(e( that@

there was Dnothing much wrong% with

the forms >in5house lawyer

in a go,ernment (epartment? an(

the suite Dmet the market% for the

Dmi((le "an(% of pro6ects<especially "earing in min( that the

hea( contract risk allocation

then nee(s to "e "acke(

(own to let su"contracts

>lawyerH superinten(ent?)

'he chart also in(icates that there is

support 5 al"eit small 5 for the suita"ility

of forms outsi(e of the four key

Australian Stan(ar(s forms) +ur

inter,iews reflecte( this support

generally speaking< where

inter,iewees ha( use( AB.$< C$21<!efence or 79$ forms< they ha( a

reasona"ly positi,e ,iew of them)

Particular o"ser,ations inclu(e(@

+n ABIC< a compilation of fee("ack

from architects who ha( use(

it inclu(es (escriptions of it "eing

relia"le< a,aila"le for a range of

pro6ects< "alance( in risk allocation<

practically5focuse( in terms

of contract a(ministration an( written in simple

language on the

other han(< some non5architect inter,iewees saw the

form as

gi,ing too much (iscretion an( protection to architects)



+n C!1< a num"er of inter,ieweescommente( positi,ely along

the lines that it ha( ha( a lot ofthought go into it >inclu(ing

s

p

e

c

i

f

i

c

i

s

s

u

e

s

s

u

c

h

a

s

e

s

c

h

ew

i

n

g

t

h

e

t

r

a

(i

t

i

o

n

a

l

(ual agentH

certifier role for the

superinten(ent an(

replacing the

tra(itional

concept of practical

completion withD(efects free

completion%?

an( that its associate(

processes >such as

contracting workshops?

assiste( in a,oi(ing

(isputes) 'here was

also praise for the Dmini

minor works%

>flowchart? form) 'hat

sai(< contractors

complaine( in the

inter,iews a"out theD(efects free% regime

an( lack of a

limitation on (elay

(amages an( ,arious

other aspects >though

noting that they

nee(e( to accept

these aspects in or(er

to ualify at ten(er

time?)

Similarly< on the #efence forms >in respect of which weonly

recei,e( one comment in inter,iews< from a lawyer?< it wasnote(

that they work Duite

neatly% from an

a(ministrati,e point

of ,iew an( that the

D6ust in time% training

allowe( specific

issues of concern to

"e a((resse( for

particular pro6ects)

#ikewise< only one inter,iewee commente( on the 5C form)

8owe,er< they in(icate( a ,ery positi,e ,iew of thee=perience with

the form< reporting that<

"y using the cost

reim"ursa"le form

rather than a tra(itional

lump sum approach for

a comple= relocation

pro6ect< su"stantial sa,ings on out5turn cost were achie,e()



' (se of standard forms

'1 :0erall

'his chart is a compilation of responsesto the sur,ey uestion

+0in:in; ao$t t0e contract wit0

w0ic0 o$ were #riari' in*o'*e/

on t0e #ro<ect... was t0at contract

ase/ $#on a stan/ar/ for= &--

responses were recei,e( to that

uestion< of which 244 >*-)*G? were

Dyes% an( 122 >&2)G? Dno%) .n other

wor(s< stan(ar( forms were use( as at

least a "ase in appro=imately two5thir(s

of contracts across all contracting

sectors an( ,alues)

'! Breakdo&n +y$osition of

contract &ithin thecontracting chain

Dstan(ar(forms

were useleast a "

appro=im

two5thir(

contracts

all contra'his

chart

in(icate

s that

stan(ar ( forms

are

more

commo

nly use(

in

Dhea(%

or

Dmain%

contract

s

>"etwee

n theprincipa

lH

ownerH

(e,elop

er an(

contract

orH

consult

ant? than su"

term (escri"i

principal in a

'he sur,ey information a

where reporte

Dcontracting c

contracts >/0

the "ulk of th

contracts >1

Dsupply agree

these were e



sectors an( ,alues%




'" Breakdo&n +y initial contract 0alue

Dstan(ar(

use is clo

uni,ersa

contracts,alue les

I100<000

(rops sh'he sur,ey sought to o"tain acomprehensi,e picture of contractingin all aspects of the constructionin(ustry in Australia 5 it therefore setno upper or lower threshol( for participation "y reference to

contract ,alue)** .n turn< the sur,ey

employe( categories of contract ,alue

"ase( upon the initial >un,arie(?contract scope rather than

final pro6ect outturn cost) 'his was

primarily to ensure comparison of

Dapples with apples% an( also "ecause

many of the pro6ects reporte( upon

were still in progress)

'he use of categories rather thana"solute contract ,alues (oes notallow for a strict linear assessment of the correlation "etween use of

stan(ar( forms an( contract ,alues)'hat sai(< the chart (oes in(icate

that stan(ar( form use is close touni,ersal on contracts with a ,alue

less than I100<000 >al"eit "ase( on arelati,ely small sample siEe?< ranges

"etween **G an( -/G on ,alues

"etween I100<000 an( I400 million

an( then (rops sharply on ,alues

e=cee(ing I400 million) 'his correlates

with a ,iew e=presse( in the inter,iews

that< specifically< the Australian

Stan(ar(s< were most suita"le for use

in the Dmi((le "an(% of pro6ects)

,alues

e=cee(in

g I400

million%

** 'his is "y way of contrast with< for e=ample< the Blake !awson Report which onlysought responses in respect of pro6ects with a contract ,alue e=cee(ing I20 million 5see p &1 ofthat Report)



'4 Breakdo&n +y $ro%ect location

Da lesser

proportio

contracts

stan(ar(in the sta

territories

mining a'he sur,ey (ata in(icates< when

aggregating all contracting sectors<

that a lesser proportion of contracts

use stan(ar( forms >whether

amen(e( or unamen(e(? in the States

an( 'erritories where mining

an( resources pro6ects pre(ominate

>WA< 7' an( ueenslan( 5 here< therange is &G54/G? compare( to the

A$'< 7SW< SA< 'asmania

>al"eit only one pro6ect was reporte(

upon? an( Kictoria >range *4G5

100G?) 'his correlates with the fin(ings

"ase( upon sectors >see

section 5.5 "elow?)

'he Dother% category primarily

represente( work "eing (one "y

Australian go,ernment agencies

in Australian e=ternal territories)

resources

pro6ects

pre(omin

ate%

*- See< eg< Jim Minifie< D'he Mining Boom@ .mpacts an( Prospects% >Crattan .nstitute< July 201&?< p 1&)




'' Breakdo&n +y contracting sector

Duse of s

forms

in the"uil(ing

with

use "ein

'his chart in(icates a (i,ersity of le,el of

use of stan(ar( forms >whether amen(e(

or unamen(e(? across sectors) :se is

highest in the resi(ential "uil(ing sector<

remains high in the commercial "uil(ing

an( process engineering sectors< an(

(rops progressi,ely through the pu"licsector an( pri,ate sector infrastructure

sectors< with the lowest use "eing in the

mining an( resources infrastructure

sector)

Whilst further< (etaile( research

woul( "e reuire( to confirm this<

an( to analyse its (etaile(

implications< it may "e surmise( that

a num"er of factors contri"ute to

these results< inclu(ing that@

stan(ar( forms are not a,aila"le for all(eli,ery metho(ologies

>see section 1.1?< "eing primarily(irecte( to "uil(ing pro6ects on a

Dtra(itional% >construct onlyH (esign an(

construct? hea( contract "asis rather

than for relationship5"ase( mo(elssuch as alliancing an(

contracting in the resi(ential "uil(ingsector is the su"6ect of

su"stantial legislati,e inter,ention<

inclu(ing< in many States an(

'erritories< the man(atory inclusion

of certain warranties an( other

matters)*/ 'his< along with the

relati,ely small ,alue of the "ulk of

resi(ential pro6ects< woul( appear to

militate in fa,our of using the

numerous stan(ar( forms which area,aila"le in or(er to minimise

transaction costs)

the

mining

an(

resour ces

infrastr

ucture

sector%

*/ See< eg< Philip Britton an( Julian Bailey< D7ew 8omes an( $onsumer Rights@ 9nglan( an( Australia $ompare(% >2011? & nternationa' >o$rna' of Law in t0e $i't ?n*ironent 2*)



6 *hich standard forms are +eing used,

'he chart in section 6.1 aggregates

240 responses across all contract

,alues< geographic locations an(

contracting sectors) Break(owns

"y reference to each of these factors< in

respect of the most wi(ely5

use( ma6or works forms >AS&00<

AS000< AS212< AS02< C$21<

AB.$ MW an( 3.!.$?< are pro,i(e( in

the charts following in sections

6.2-6.4)

'he chart in section 6.1 also reflects

our key fin(ing that< o,erall<

the Australian Stan(ar(s forms

continue to (ominate the Australian

construction contracting lan(scape) .n

aggregate< the four main

forms represent close to -0G of the

stan(ar( forms which are use(<

as reporte( upon in this sur,ey)

Applying that -0G to the */G of

pro6ects o,erall which use stan(ar(

forms >see section 4.1?< these

forms are use( in nearly half >/G? of

all pro6ects reporte( upon in

this sur,ey)

'here appears to "e a large gap in

usage "etween the AS forms an( the

other commercially5a,aila"le suites of

forms for ma6or works@

the AB.$ MW form was use( in 2)G

of pro6ects >al"eit the DSimple Works%

form was slightly more freuently

use(< at )0G? an( 3.!.$ forms in

2)0G of pro6ects) +nly one pro6ect in

the entire sur,ey was reporte( as

using the 79$& form)

'he "reak(owns in sections 6.2-

6.4 pro,i(e the "asis for (rawing

out a num"er of (etaile(

o"ser,ations) .n terms of the (egree

of

conf i(ence with which these

o"ser,ations may "e state(< howe,er<

,arying sample siEes apply) 'hese are

note( in "rackets "esi(e the

rele,ant category) 3or e=ample< whilst

the secon( chart in section

6.3 in(icates< on its face< that >of the

most wi(ely5use( forms? only

AS212< AS000 an( AS&00 are use( in

South Australia< this was

"ase( on a sample siEe of / contracts in

total for that State) Similarly<

in section 6.4< the D100G% result for use

of AB.$ in the Dresi(ential

"uil(ing contracts 5 pri,ate in(i,i(ual as

principal% sector was "ase(

on a sample siEe of only 2 for that

category< an( the results in respect

of process engineering were "ase( on a

sample siEe of ) .t nee(s

also to "e

emphasise(

that the (ata

relates only to

contracts

where a

stan(ar( form

was use( 5 as

note( in

section 5.5

a"o,e< less

than half

of the

contracts in

the

infrastructuresectors use( a

stan(ar( form)

'hat sai(<

>at least?

the

following

o"ser,atio

ns may "e

ma(e with

a

reasona"le

(egree of confi(ence

@

the AS ma6orworks forms areuse( across allsectors >otherthan

for resi(ential"uil(ing with apri,atein(i,i(ual asprincipal?<

inclu(ing

across the

pu"lic an(

pri,ate

sectors<

an( for

pro6ect

(eli,ery

metho(s

>such as



process engineering? for which

they are not specifically (esigne(

those AS forms are also use( acrossall contracting ,alues<

although no AS000 forms werereporte( as "eing use( on

pro6ects with a ,alue in e=cess of I400million

the 3.!.$ forms are only use( onrelati,ely high ,alue pro6ects

>LI100 million?< in pri,ate sectorinfrastructure >"oth mining an(

non5mining? an( process engineeringpro6ects

the C$21 form is primarily use( in7SW< "ut there is also some use

of it in ueenslan( whilst< as wasnote( in section 1.1.1 a"o,e< it

is (esigne( for use on contracts

with a ,alue e=cee(ing I1 million<our sur,ey responses in(icate(

that it was use( only for contracts

with a ,alue o,er I4 million an(

the AB.$ MW form is little use(outsi(e relati,ely small ,alue

>up to I4 million? contracts theprimary use is to "e foun( in the

resi(ential "uil(ing sector where

the owner is a pri,ate in(i,i(ual<

"ut it also has some use in the

commercial "uil(ing >pri,ate sector

principal? an( infrastructure >pu"lic

sector principal? sectors)

'hese fin(ings are also "roa(ly

consonant with o"ser,ations arising

from the inter,iews in respect of use

of< an( attitu(es towar(s< these

stan(ar( forms >see section 4.2

a"o,e?)

Dthe Australian

Stan(ar(s

forms continue to

(ominatethe Australian

construction

contracting

lan(scape%




61 :0erall

Dthe four

Stan(ar(

represento -0G ostan(ar(

which ar

'his chart aggregates the 240 responses to uestion 12 of the

sur,ey >see &##en/i 1?< which aske( participants who ha(

pre,iously in(icate( that the rele,ant contract was "ase( upon astan(ar( form to i(entify the form)




6! Breakdo&n +y initial contract 0alue

&##'in *a'$e cateories to fors

Dthe Aust

Stan(ar(

are use(

all contra

,alues >a

no AS0

forms wereporte(

"eing us

pro6ects

,alue in

of I400 3igures in "rackets in(icate the num"er of responses analyse( for each ,alue category)


2*



&##'in fors to *a'$e cateories

Dthe 3.!.

forms ar

use( on

with a ,aI100 miin pri,ate

infrastru

an( proc

engineer

pro6ects%

3igures in "rackets in(icate the num"er of responses analyse( for each form)


2-



6" Breakdo&n +y $ro%ect location

Results from the A$'< 7' an( 'asmania are not taken into

account in the charts in this section *)& (ue to their almost

negligi"le num"er >respecti,ely< 4< - an( 1 contracts using a

stan(ar( form?)

&##'.in3 for1s to 'ocations

Dthe C$2is prima

"ut

there is a

some us3igures in "rackets in(icate the num"er of responses analyse( for each form)

ueenslan(%

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;2/



&##'in 'ocations to *a'$e cateories

3igures in "rackets in(icate the num"er of responses analyse( for each location)


2



64 Breakdo&n +y contracting sector

&##'.in3 for1s to sectors

Dthe Aust

Stan(ar(

works fo

are use(

all contra

sectors >

than forresi(enti

"uil(ing

pri,ate in

as princi

an( acro

the

pri,ate s

3igures in "rackets in(icate the num"er of responses analyse( for each form)


&0



&##'.in3 sectors to for1s

3igures in "rackets in(icate the num"er of responses analyse( for each sector)


&1



*hich $arty makes the decision to use thestandard form,

Dthe printhe princ

lawyer wresponsi

choosing

stan(ar(

more tha

of cases

3reuently< it was not possi"le to

(etermine which party ma(e the

(ecision to use a particular stan(ar(

form) Where it was possi"le<

respon(ents sometimes in(icate(

that multiple parties were

responsi"le) 'he chart a"o,e reflects this)

!espite these limitations<

it is clear that the principal

>in more than 4G of

cases? an( the principal%s

lawyer >in nearly 2*G of

cases? were primarily

responsi"le for the

(ecision) 'ogether< the

principal or the principal%s

lawyer were responsi"le

for choosing the stan(ar(form in more than /0G of

cases)



S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;&2



. *hy are standard forms used,

.1 :0erall

'his chart aggregates responses to a uestion

which aske( participants to in(icate< in

respect of the factors liste(< their perception of where each of those factors sat on a

spectrum from Dnot at all important% to D,ery

important% >D(on%t know% was also a,aila"le?) 9ach of

the i(entifie( factors was< in aggregate< regar(e( as

falling on the Dimportant% si(e of the spectrum< with

Dfamiliarity with the form% "eing regar(e( as the

most important

factor an( Dgaining a commercial a(,antage% theleast)

'he (ata which pro(uce( this chart >an( also the

(ata which pro(uce( similar charts

in sections 1! an( 12? pro(uce a mean< as

in(icate(< "ut are "ase( on wi(ely ,aria"leresults) By way of in(ication of this sprea(< we

ha,e marke( on the chart one stan(ar(

(e,iation either si(e of the mean) .n a normal

(istri"ution< this woul( in(icate the range

within which */G of the results for each matter lie)

8owe,er< for this (ata< the markings are "y way of

in(ication only gi,en the limitations inherent in

using a fi,e5point scale)

So< in this section 8< the stan(ar( (e,iation for each

category >"ase( on representing the range "etween

Dnot at all important% to D,ery important% as a 45pointscale?< is@ familiarity >1)1?< suita"ility of the risk

profile >1)2?< ease of contract a(ministration >1)2?<

minimising costs >1)2?< reflects the (eal >1)2?< form

well5(rafte( >1)2?< form recommen(e( >1)*?<

commercial a(,antage >1)&?)

Participants were also a"le to nominate other

factors) 'hat sai(< the most commonly

nominate( factor also relate( to familiarity of

one or more parties with the stan(ar( form)

Small num"ers of respon(ents nominate(

factors such as suita"ility of the

stan(ar( form for the particular pro6ect or a

preference for that stan(ar( form o,er another

particular stan(ar( form)



S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;&&



.! Familiarity

'he fin(ing that familiarity was

the most important factor >"y

a su"stantial margin 5 the mean

score for it was )21 out of 4<compare( with the ne=t highest score of

&)-4 out of 4? has< we think< significance

in at least two ways@

it helps e=plain why AS212 an( AS&00

5 two forms which were

inten(e( "y Stan(ar(s Australia to

"ecome re(un(ant an( "e with(rawn

from sale upon the pu"lication of<

respecti,ely< AS000 >in 1-? an(

AS02 >in 2000? 5 remain< as note( in

section 6.1 a"o,e< respecti,ely the

thir(5most5use( an( most5use(

stan(ar( forms in Australian

con,ersely< it in(icates that Dnew% forms>at least< in the Australian

conte=t? seeking to gain a foothol( in

the market on a competiti,e "asis

>such as AB.$< 3.!.$ an( 79$&? 5 as

oppose( to go,ernment5

man(ate( forms such as the !efence

Suite an( C$21 5 nee( to

o,ercome familiarity5generate(

inertia this goes< argua"ly< to the

relati,ely low use of these forms

(iscusse( in section 6)

+"ser,ations ma(e in the inter,iews a(((etail to this picture@

A strong theme came through thatDfamiliarity% (oes not necessarily

mean Dinforme( familiarity%) 3ore=ample@

5 +ne highly5e=perience( pro6ect

manager commente( that the

Australian in(ustry is Dat large< ,ery

na,e in their contractual o"ligations%)

5 Se,eral inter,iewees commente( inrespect of their own

>contracting? organisations alongthe lines that the company ha(

use( stan(ar( forms for relati,ely

low5,alueH risk pro6ects

when the company was in its early

years of (e,elopment) 'he

organisation ha( continue( to use

those forms as it mo,e( into

contracting of >often significantly?

greater ,alue an( comple=ity

an( ha( then "een Dcaught out%<

either through (eficiencies

in the forms or "y their continuing

to resource the pro6ect

management of the pro6ect as thoughit were a low5,alueHrisk pro6ect)

Amongst those who may reasona"ly"e regar(e( as possessing

a (etaile( knowle(ge of the ,arious

a,aila"le forms >for e=ample< Dfront5

en(% construction lawyers an( in5

house counsel?< most

(escri"e( the currently5

a,aila"le forms in terms of

"eing a D"aseline% only< which

then ought "e mo(ifie()

'he inter,iews confirme( that

familiarity was a key factor in whyforms other than the AustralianStan(ar(s are rarely selecte( for

use where a party has a choice >that

is< lea,ing asi(e forms such as

!efence an( C$21< which essentially

are man(ate( for the rele,ant

work?) 3or

e=ample< one

architect who

ha( worke(

e=tensi,ely with

the AB.$contracts an(

ha( a fairly

positi,e ,iew of

them< o"ser,e(

that the AB.$

MW form is

sel(om use(

Dnot "ecause it

has a

"a(

reputation "ut

simply

"ecause

most large

institutions

ha,e a

hea,ily5

amen(e(

,ersion of

AS212 or

AS000

which has

"een

knocking

aroun( the

pro6ect

managementteam for

years%)

.n(ee(< a num"er of inter,ieweesi(entifie( familiarityas a reason

why the newer

Australian

Stan(ar(s

forms >AS000

an( AS02?

were not as

wi(ely use( asthe ol(er ones

>AS212 an(

AS&00?)

+ne lawyer

opine( that the

newer forms

are D"etter

(rafte(% "ut that

they are not as



wi(ely use( (ue to a com"ination of

familiarity >or< in

their ,iew< Dstu""ornness%? an( the fact

that they (i( not make any

significant changes to the risk

allocation ,is5T5,is the ol(er forms)

." @isk allocation

'he sur,ey in(icates that factors relating to

risk allocation 5 inclu(ing Dsuita"ility of the

risk profile%< Dreflecting the (eal% an( gaining

a commercial a(,antage% 5 remain of

importance to pro6ect parties in their choice

to use a stan(ar( form) 'hese un(erpinne(

the in,estigations in the Blake !awson an(

;ates an( Sashegyi Reports referre( to in

section 1.3)

.4 3inimisingtransaction costs

'he sur,ey results< an( o"ser,ations

ma(e in the inter,iews< support the

continue( currency of the oft5state(

premise that stan(ar( forms are use(

so as to minimise transactionH legal

costs)* 8owe,er<

where stan(ar( forms are amen(e(<

any such gains in efficiency may "e

re(uce(@ see section 12< which reports

upon perceptions that amen(ments lea(

to increases in the nee( for legal a(,ice<

pro6ect outturn cost an( (isputation)

'he inter,iews in(icate( a

perception< at least on the part of

contractors< that unnecessary

amen(ment lea(s to higher pro6ect

outturn costs) 3or e=ample@

one tier 2 contractor in(icate( that

they ha,e "een prepare( to

offer clients a lower price on a

lump sum contract if the client

entere( into an unamen(e( AustralianStan(ar( contract an(

an in5house lawyer at an engineeringconsultancy firm who is

responsi"le for re,iewing the

se,eral thousan( consultancy

contracts which that firm enters

into each year estimate( that

appro=imately half of the forms are

"espoke< reuiring a significant in5

house an( e=ternal legal spen()

Dthe AB.$ MW form

is sel(om use( Qnot

"ecause it has a "a(

reputation "ut simply

"ecause most

large institutions

ha,e a hea,ily5

amen(e( ,ersion of AS212 or

AS000 which has

"een

knocking aroun( the

pro6ect

management

team for years%

* See< eg Philip #oots an( !onal( $harrett<Practica' $i/e to %onstr$ction %ontracts >200?< pp &25&)



/ *hat $ro$ortion of standard forms areamended,

+ur key fin(ing in this section is

that< where stan(ar( forms areuse(< o,erwhelmingly they are

amen(e( "y the parties from the

pu"lishe( form) +,erall< /G of

the forms reporte( upon >from

a sample siEe of 2&? were

amen(e()-0 'he inci(ence of use of

amen(e( forms amongst the four

most wi(ely use( forms range( from

//G >for AS000? up to /G >for

AS&00?)-1

'he uestion which generate( the (ata

for this section aske(

participants to i(entify whether thegeneral con(itions< rather than

pro6ect5specific information of the type

set out in Anne=ure Part A to

AS212< were amen(e() 8owe,er< the

sur,ey (i( not specifically ask

respon(ents to i(entify the e=tent of

such amen(ments >as is note(

in section 2.2 a"o,e< we ha,e

suggeste( this as an area for further

research?) 'hat sai(< a num"er of

inter,iewees ma(e o"ser,ations

along the lines that the amen(ments to

stan(ar( forms that theytypically see are more ,oluminous than

the general con(itions

themsel,es)

A num"er of further fin(ings may "e

i(entifie( from the (ata represente( in the

charts in this section 9) 'hese inclu(e@

the e=tent of use of amen(e( forms

was high across all contract

,alues< contracting sectors an(

forms >although section 9.4 only

reports upon the se,en most wi(ely5

use( ma6or works forms?-2

in(ee(< the only categories where use of amen(e( forms (i( not

e=cee( -4G were@

5 contract *a'$e U I100<000

>*-G amen(e(? an( I100<0005

I1 million >4G?

5 contractin sector resi(ential

"uil(ing5pri,ate in(i,i(ual >-G?

an( commercial "uil(ing5pu"lic sector principal >-2G?

an(

5 fors C$21 >*&G?)

-0 See section 9.1.-1 See section 9.4.-2 See section 6.



/1 :0erall

Dwhere stan(ar(

forms are use(<

o,erwhe

lmingly

they are

amen(e

( "y theparties

from the

pu"lishe

( form%


&4



/! Breakdo&n +y initial contract 0alue

Dthe e=te

use of am

high acro

contract

contract

sectors a

3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each ,alue category)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;&*



/" Breakdo&n +y contracting sector

3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each sector)


&-



/4 Breakdo&n +y form

Din &0 ye

e=perien

as a pro6

manageha( only

an Austr

Stan(ar(

(ocume

unamen(

two occa

3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each form)


&/



1) *hy are standard forms amended,

#ike the chart in section 8< the chart

"elow aggregates responses

to a uestion which aske( participants

to in(icate< in respect of the

factors liste(< their perception of where

each of those factors sat on a

spectrum from Dnot at all important% to

D,ery important% >D(on%t know%

was also a,aila"le?) Participants likewise

were also a"le to nominate

other factors) 'he factors

nominate( were generally

imprecise concepts such as Drisk

allocation%) A smaller num"er of

responses nominate( (isparate

specific factors such as corporate

policy< financiers% (eman(s an(

particular clauses)

Do,erall<

Qnee( to shift r

regar(e(

primary r

for amen

stan(ar(




.t will "e note( that< o,erall< the Dnee( to

shift risk% was regar(e( as the primary

reason for amen(ing stan(ar( forms)

As in section 8< the stan(ar(

(e,iation for each category >"ase(

on representing the range "etween

Dnot at all important% to D,ery

important% as a fi,e5point scale? is

rele,ant) 'hese stan(ar( (e,iations >as

in(icate( "y the ranges marke( on the

chart? were@ Dnee( to shift risk to another

party% 5 1)1< Dnee( to amen( to reflect

regulatory

reuirements% 5 1)< Dincrease( ease of

contract a(ministration

through mo(ification of the form% 5 1)&<

Dform percei,e( to "e poorly (rafte(% 5

1)&)

Ci,en the high rate of usage >see

section 6? of forms 5 primarily

AS212< AS&00< AS000 an(

AS02 5 the pu"lishe( ,ersions

of which ha,e not "een

su"stantially amen(e( for well o,er

a

(eca(e< it is not surprising that< o,erall<

the Dnee( to reflect statutory

reuirements% was i(entifie( as an

important factor) 'his alsocorrelates with the fin(ings in section

11 that clauses (ealing with relati,ely

recent statutory reuirements such as

CS' an( security of payment are

a((e( to appro=imately *0G of

stan(ar( forms)

'he uestion of w0 stan(ar( forms

are amen(e( was one on which

the inter,iews were especially

enlightening) 9ssentially 5 an(< noting

that our fin(ings here must "e regar(e(

as preliminary only 5 there

seems a clear (i,i(e in perception

"etween lawyers an( lawyers%

clients as to where the D"lame% lies

for e=cessi,e amen(ment of

stan(ar( forms) A sense of the

(i,i(e may "e gleane( from the

following representati,e sample of

,iews@

A"out lawyers< "y clients@

5 changes are (ri,en "y lawyers

rather than their clients when

clients are apprise( of the effectsof the changes suggeste(

"y their lawyers >such as in

relation to ownership of Dfloat% in

the contractual program?< they

often say that they (o not want the

changes to "e ma(e

5 lawyers are risk a,erse an( put to

their clients a conser,ati,e<

high5watermark risk position >ie

one which amen(s the forms

to "e more onerous to the counter5party?

5 e=ternal

lawyers

ha,e a

financial

interest

in >an(

internal

legal

(epartm

ents

nee( to

D6ustify

their

e=istenc

e% "y?

Dselling%

suites

of

contract

s< sets

of

amen(

ments

an(

pro,i(in

g

ongoing

a(,ice

(uring

the

pro6ectan(

5

lawyers

often

ha,e a

poor

un(erst

an(ing

of the

technic

al an(

commer cial

implicat

ions of

theiram

en(men

ts< such

as in

a(,



ising upon contract5specific

issues for insertion into the

Anne=ure >contract

particulars?)

A"out clients< "y lawyers@

5 clients can "e ,ery

conser,ati,e >especially wherethey ha,e

encountere( a(,erse

e,ents on pre,ious pro6ects?

an( want

certainty of risk transfer 5

this is what (ri,es more

(raconian risk allocation

5 many contractors make the

mistaken assumption that

they

un(erstan( the legal

implications of the stan(ar(forms an(

(iscount the nee( to make

amen(ments simply to

remo,e known am"iguities

>the Dualifying cause of

(elay% (efinition in AS000

an( AS02 was i(entifie(

in this conte=t?

5 certain amen(ments areuncontro,ersial< such as to anticipate

statutory reuirements >eg

workplace health an( safety<

security of payment? or to allowfor more efficient contract

a(ministration howe,er< e,en

such uncontro,ersial

amen(ments will necessarily a((

significant ,olume to the

stan(ar( form an(

5 whilst amen(ments may "e,oluminous< once contractors

work through them an( the

reasons for them they will

usually "e accepta"le<

especially where contractors

are at the more sophisticate(en( of the market)

Sitting "ehin( these o"ser,ations is<

we think< a "roa(er issue as to the

e,ol,ing role of construction lawyers)

Whilst this issue is "eyon( the (irect

scope of this Report< we ha,e

i(entifie( this >see section 2.2? as an

area for further< (etaile( research)

Dthere

seem

s

aclear

(i,i(e

in

perce

ption

"etween

lawyers

an(

clients as

to

where

theQ"lame

lies

for

e=cessi,e

amen(

ment of

stan(ar(forms%



11 *hat ty$es of clauses are amended,

Section 11 reports upon the

relati,e inci(ence of

amen(ments to stan(ar( form

contracts "ase( upon key risk<

legislati,e<

a(ministrati,e an( other matters)

'he uestions generating the

rele,ant (ata ma(e a (istinction

"etween clauses aen/e/ fro

those in the stan(ar( form an(

those a//e/ to the stan(ar( form)

'his (istinction is generally carrie(

through in the reporting "elow<

largely to make (igestion of the

large (ata set more managea"le)

Where the (istinction is not e=plicit<it may "e assume( that

Damen(e(% is referring to "oth Damen(e(%an( Da((e(% clauses)

By initial contract0alue

Sam$le sie

#ess than I100<000&

I100<0005I1 million12

I1 million5I4 million&0

By sectorSam$le sie

Resi(ential

"uil(ing 5

commercial

&- (e,eloper as

principal

Resi(ential

"uil(ing 5 pri,ate

- in(i,i(ual as

principal

$ommercial

"uil(ing 5 pri,ate

& sector principal

I4 million5I20 million

&2$ommercial "uil(ing 5 pu"lic1/

111 :0erallsector principal

'he charts in section 11.1 in(icate the

o,erall inci(ence of

amen(mentsHa((itions across all forms<

contracting sectors an(

,alues) 'hey were generate( "y

comparing the total num"er of

responses in respect of each matter to

the total num"er of responses

which in(icate( that a stan(ar( form

ha( "een amen(e( in respect

of one matter or more) So< for e=ample<

in respect of stan(ar( forms

which were amen(e( to any e=tent<

-*G were reporte( as ha,ing

ha( the e=tension of time clausesamen(e( an( 1G the change

in law clauses) 'hese are the same

figures as those set out in the

DAll Sectors% row of the charts in

section 11.3 >"reak(own "y initial

contract ,alue? 5 a slightly (ifferent (ata

set was use( for the charts

in section 11.2 >"reak(own "y

contracting sector? "ut the

o,erall

percentages are only

marginally (ifferent >within

152G?)

'hroughout this section

11< it nee(s to "e "orne

in min( that sample siEes

for the un(erlying (ata

,arie(< as follows@

I20 million5I40 million

24

I40 million5I100 million2

I100 million5I400 million42

Creater than I400 million



.nfrastructure >roa(s< ports<

energy

20 etc? 5 pri,ate sector

principal

>not mining an( resources?

.nfrastructure 5

pri,ate sector

11 principal

>mining an(

resources?

.nfrastructure 5

pu"lic sector

&-

principal

Process engineering10




'he (ata in(icate that< o,erall< there is a high le,el

of amen(ment

>inclu(ing a((ition? to stan(ar( forms) As is note(

in section 2.2 a"o,e<

it woul( "e useful for further research to "e

un(ertaken into such

Clause ty$e

amen(ment "y reference to

the specific forms) 8owe,er<

it may "e

surmise( 5 gi,en the high

le,el of use an( amen(ment

of the Stan(ar(s

Australia forms note( in pre,ious sections 5 that the

Stan(ar(s Australia

9=tensions of time forms are routinely "eing hea,ily

amen(e( in respect of multiple matters)

Across all forms<

contracting sectors

an( ,alues< the

0i0est inci(ence

of amen(ment is in

respect of@-&

Incidenceo0erall

-*G

Dighestincidence

By initialcontract

0alueI20540million@ /G

By sector

Resi(ential

"uil(ing 5commercial(e,eloper principal@ 2G

.nfrastructure 5

pri,ate sector

principal >mining an(

resources?@ 1G

Process engineering@

0GV

9=tensions of time 5 -*G

!elay (amages >inclu(ing liui(ate((amages? 5 -1G

Site con(itions 5 */G

Payment generally 5 *4G >security ofpayment >a((ition? 5 *0G?

Kariations 5 *&G Warranties as to uality 5 *2G

$laims >inclu(ing time "ars? 5 *2G an(

!elay (amages -1GI405100 million@ /&G >inclu(ing#!s?

Site con(itions */GI405100 million@ /&G

Payment generally *4GI4520 million@ -/G

Resi(ential"uil(ing 5commercial(e,eloper principal@ 2G

Resi(ential"uil(ing 5

commercial(e,eloper principal@ /G

Resi(ential"uil(ing 5pri,atein(i,i(ualprincipal@/*GV

Resi(ential"uil(ing 5commercial(e,eloper principal@ /G

Coo(s an( Ser,ices 'a= >a((ition? 5 *0G) Kariations *&GLI400 million@ -/GV Process engineering@ /0GV

'he lowest inci(ence of amen(ment is inrespect of@

!ispute A,oi(ance Proce(ures >a((ition?5 /G-

$ontract a(ministration >a((ition? 5 2&Gan(

.nspectionH testing 5 &0G)

Cenerally speaking< the inter,iews

in(icate( a similar sprea( of

inci(ence of specific amen(ments)

'he most commonly commente(5

upon

amen(ments were

in respect of

limitations of

lia"ility >(iscusse(

further

"elow? an( time



"ars@ many contractors regar(e( the

latter as "eing of

concern from a risk allocation an(

a(ministrati,e "ur(en point of ,iew)

'he "reak(owns "y contracting ,alue

an( sector >set out< respecti,ely< in

sections 11.2 an( 11.3? re,eal

su"stantial ,ariations within these< an(

other matters) By way of summary in

relation to the types of clauses i(entifie(

a"o,e as ha,ing the highest inci(ence of

amen(ment@

Warranties as to uality *2GUI100<000@ 100GV

$laims *2GI154 million@ -&G >inclu(ing time"ars?

CS'-4 *0GI4520 million@ -2G

Security of payment *0GI405100 million@ -*G

Resi(ential"uil(ing 5commercial(e,eloper principal@ -/G

Resi(ential

"uil(ing 5commercial(e,eloper principal@ /G

Resi(ential"uil(ing 5commercial(e,eloper principal@ /1G

Resi(ential"uil(ing 5commercial(e,eloper principal@ /G

V in(icates sample siEe 10or fewer@ see a"o,e

-& DPro6ect5specific reuirements% also ha( a high inci(ence >at */G? 5 it has< howe,er<"een e=clu(e( from further analysis as the fin(ing is unremarka"le in this conte=t 5 inother wor(s< it is inherent in the nature of stan(ar( forms that they will< to ,aryinge=tents< "e una"le to anticipate such reuirements)- 'hat sai(< the sur,ey also foun( that 4*G of the (isputes clauses wereamen(e( an( A!R clauses were a((e( in &*G of contracts using stan(ar(forms< so the o,erall rate of amen(ment in respect of (isputes remains high)-4 'he only sector where there was no su"stantial inci(ence of amen(ment >in(ee(< aninci(ence of 0G was recor(e(? in respect of CS' was resi(ential "uil(ing with a pri,atein(i,i(ualas principal) 'his likely may "e e=plaine( "y the fact that >as was note( in section 5.5?the legislati,e reuirements in respect of such contracts are highly prescripti,e in turn<the forms

typically use( in this sector >such as those pro(uce( "y the 8ousing .n(ustry an( Master Buil(ers Associations? are up(ate( freuently< so pro,ision for CS' is usually ma(e inthesecontract forms)




'he ta"les gi,e rise to a num"er of further< (etaile( o"ser,ations

>al"eit they nee( to "e tempere( "y reference to the respecti,e

sample siEes< as note( a"o,e?< inclu(ing@

imitations of lia+ility >inclu(ing in respect of Dconseuential loss%?< along with ca$s on li2uidateddamages were i(entifie( in our

inter,iews "y se,eral contractor representati,es as "eing a ,ital part of their organisations% preferre( riskmatri= for contracts) 8owe,er<

none of the most wi(ely5use( stan(ar( form construction

contracts in Australia currently incorporates such general

limitations)-* 'he sur,ey

(ifferentiate( "etween amen(ments to an( a((itions of such

clauses to contracts) .ts fin(ings may "e summarise( in this

respect as follows@

Clausety$e

Incidence

Dighest

incidenceo0erall Byinitial 0alue

o&est incidence

By sector

By initial 0alue

Dlimi

tationsof

By sector

lia"ility along#imitations42G of lia"ility>amen(ment?

#imitations of /G lia"ility>a((ition?

$ap onliui(ate(&G

(amages

I1005400 million@ *G

.nfrastructure 5 pri,atese

ctorprincipal>mining

an(reso

ur ces?@/2G$ommer

cial"uil(ing 5pri,atesectorprincipal@*0G

UI100<000@ *-GV

.nfrastructure 5 pri,atesectorprincipal>min

ingan(resources?@-&G

Processengi

neering@*0GV

LI400 million@*-GVProcessengineering@

*0GV



I405100 millionResi(ential "uil(ing 5>&/G?pri,ate in(i,i(ual as

principal>0G?V

.nf rastructure5pu"licsector principal>G?

UI100<000 >&&G?VResi(ential "uil(ing 5

pri,atein(i,i(u

al as pr incipal >2&G?V

.nfrastructure 5pr i,ate sect

or pr incipal>not mining

an(resources?>4G?

I1U5I4 million >&&G?

$ommercial "uil(ing 5pu"licsectorprincipal>1-G?

with caps

on #!s

were

i(entifie(

"y se,eralcontractor

represe

ntati,es

as

"eing a

,ital

part of

their organi

sation

s%

preferr

e(

risk matri=%

Vin(icatessamplesiEe10or fewer @seea"o,e



+,erall< there seems to "e a relati,ely low le,el of amen(ment

>e=cept in relation to payment clauses? in resi(ential "uil(ing

contracts with

a pri,ate in(i,i(ual as principal) 'hat sai(< it was only in this

sector that there was any su"stantial reporting of use of dis$ute

a0oidance

$rocedures >2G? 'hese fin(ings were< howe,er< "ase( upona sample siEe of -)

'he only sectors where there was a high reporte( inci(ence of

a((ition of clauses in respect of go0ernment $olicy

re2uirements were

where there was a pu"lic sector principal 5 commercial

"uil(ing >*1G? an( infrastructure >41G?)

-* AS212512 an( AS&00514 inclu(e caps on liui(ate( (amages >see clause&4)-? "ut AS000 an( AS02 (o not) #imitations on lia"ility are inclu(e( in se,eralwi(ely5use( consultancy forms< inclu(ing AS12252010 5 see Bailey an( Bell<a"o,e n 1-< pp 2/&5) 3or commentary on current contracting practice< see PatrickMea(< D9=ploring #imitations of #ia"ility an( 9=clusions of $ategories of #oss% >201?2*>? &$stra'ian %onstr$ction Law $''etin 22)




1111 Clauses a1en/e/ fro1 standard form

Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)




111! Clauses a//e/ to standard form





11! Breakdo&n +y initial contract 0alue

11!1 Clauses a1en/e/ fro1 standard form

eneral risk

Preliminary Access to

Performance Change inmatters the site

securityla&

assum$tion

*arrantiesand

as to 2ualityinsurance

#esign

Siteconditions

Programming

5tensions

#elayof time

damages

Payment

UI100<000 *-G &&G &&G 0G *-G &&G 0G *-G

I100<0005I1M &&G 40G 40G &&G &&G 40G 2G

*-G &&G -4G *-G 0G

I15I4M 0G &-G -G 2&G &G *&G &-G &G

I4520M 4&G 4G *G -G 4G -2G 40G-/G 4*G *G **G **G

I20540M 0G 42G *0G G 4*G *G /G -2G

I405100M &G *2G **G 1G 42G 4G -2G-*G 44G /&G /&G *2G

I1005400M *&G *2G *&G 4G *G *4G -4G -&G

LI400M G /G 4*G G &&G 4*G *-G-/G -/G -/G -/G -/G

A C:9@AC9EA(5S

4.= '6= 6)= 4!= ''= 6"= '= 6/=

0524G 2*540G 415-4G -*5100G


S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;*



Clauses a1en/e/ fro1 standard form contG

Contract

Safety

administration 8

re2uirementssu$erintendent

8 *DS

5n0ironmental Ins$ection8

imitations of re2uirements testinglia+ility

Eariations

Com$letion 8

9ermination Final

hando0er rightscom$letion

Claims

#is$utes

UI100<000 100G &&G &&G 0G *-G &&G*-G &&G &&G 0G *-G

I100<0005I1M 24G 2G 1-G /G 40G 4/G24G 2G &&G 40G 2G

I15IM -G &G 20G 20G -G -&G0G 0G &G *0G 40G

I4520M &/G *G -G &/G G 4&G4&G 4&G 40G 4G -G

I20540M &*G /G /G G 4*G */GG 0G G *G -2G

I405100M 42G 4G 42G &1G &/G **G44G 4G &G -*G *2G

I1005400M -1G 42G 40G &1G *G *-G4*G 4*G 42G *4G *2G

LI400M *-G 4*G 4*G G G 4*GG G 4*G *-G G

A C:9@AC9 '!= '"= 4"= "1= '"= 64=4/= 4/= 4'= 6"= '=

EA(5S

0524G 2*540G 415-4G -*5100G

Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "een

amen(e( to any e=tent)



S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;-



11!! Clauses a//e/ to standard form

imitationsof lia+ility

Ca$ on

Accelerationli2uidated

throughdamages

delay

*ork$lace FitnessforDealth and $ur$oseS9

Safety &arranty

Security of

Pro%ect-$ayment 8

s$ecicad%udication

circumstances

#is$ute

o0ernment

A#@

A0oidance $olicyProcedures

re2uirements

Contractadministration

UI100<000 &&G &&G &&G &&G 0G *-G &&G100G &&G &&G &&G &&G

I100<0005I1M 40G &&G 1-G 2G &&G &&G 4/G4/G 0G 0G 0G /G

I15IM &&G 2&G 2&G &G 4-G 40G 40G&G 20G 1&G 1-G 2-G

I4520M &/G -G 1G **G 1G *&G 4G4G 1G *G &G 24G

I20540M G &*G 2/G 42G 0G -2G */G-*G &2G 0G G 20G

I405100M 44G 1G /G 4G /G *G -2G

-G 4G 10G 2/G 2/G

I1005400M *2G /G &/G 4/G *&G *4G *2G/-G 40G 10G &-G 24G

LI400M *-G G 11G -/G G 4*G 4*G4*G &&G 11G 4*G 22G

A C:9@AC9 4/= 4)= "4= '6= 4/= 61= 61=)= "6= .= "1= !4=EA(5S

0524G 2*540G 415-4G -*5100G




S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;/



11" Breakdo&n +y contracting sector

11"1 Clauses a1en/e/ fro1 standard form

eneral risk

Preliminary

Access to

Performancematters

the site

security

Change in

assum$tion

*arrantiesla& andas to 2uality

insurance

#esign

Siteconditions

Programming

5tensions

#elayof time

damages

Payment

Resi(ential *4G -0G /1G -0G -&G -/G /1G/G */G 2G 2G /G"uil(ing 5co

mmer cial

(e,eloper

as

pr incipal

Resi(ential 2G 2G 1G 0G 0G 1G 2G2G 1G 2G 1G /*G"

uil(ing 5 pr i,



ate

in(i,i(ual as principal

$ommercial -G G 4/G &4G G -2G G-2G 0G /G -G 4/G"uil(

ing 5 pr i,ate

sect

or pr incipal

$ommercial 40G G 40G *1G 4*G *1G -/G*1G G -/G /&G *-G"ui

l(ing 5 pu"lic



sector pr incipal

.nfrastructure &4G 44G *0G &4G 40G *4G 4G*0G 40G -0G *4G *4G>roa(s< ports<energy etc)? 5pri,ate sectorprincipal >notmining an(resources?

.nfrastructure 5 &*G *G /2G 4G 44G /2G /2G/2G *G 1G /2G *Gpri,ate sectorpr incipal >mini

ng

an( r esour ces?

.nfrastructure 5 1G 41G 1G &0G G &4G &4GG *G 4G *G 41Gpu"lic sector principal

Process &0G *0G -0G 20G -0G 40G *0G*0G -0G 0G -0G /0Gengineering

A S5C9:@S 4= '6= '/= 41= '4= 6!= '6=6.= '1= 6= 1= 6'=



0524G 2*540G 415-4G -*5100G





Clauses a1en/e/ fro1 standard form contG

Contract

Safetyadministration 8

re2uirementssu$erintendent

8 *DS

5n0ironmental

Ins$ection 8

imitations of re2uirements testinglia+ility

Eariations

Com$letion 8

9ermination Final

hando0er rightscom$letion

Claims

#is$utes

Resi(ential "uil(ing 5 *4G *2G *G &4G 41G -*G*/G */G 4G /G /*Gc

ommer cial (e,eloper

as pr incipal

Resi(ential "uil(ing 2G 0G 0G 0G 0G 2G0G 0G 1G 1G 0G5

pr i,ate in(i,



i(ual as

pr incipal

$ommercial "uil(ing 5 41G 4&G &&G 21G *0G 4/GG 41G G 4/G 41Gpri,ate sector principal

$ommercial "uil(ing 5 -2G G &G &&G 4*G -2G*1G G G 4*G *1Gpu"lic sector principal

.nfrastructure 0G 4G 0G &4G 40G *4G0G 44G 44G 44G 4G>r oa(s< por ts< ener gy

etc)? 5 pr i,ate sector

p



r incipal >not mining

an( r esour ces?

.nfrastructure 5 *G *G 44G &*G /2G -&G4G *G 4G *G *Gpri,ate sector principal>mining an( resources?

.nfrastructure 5 pu"lic 2G 4G G &0G G 4G&0G 2-G &0G 4G Gsector principal

Process engineering /0G 40G -0G *0G 40G /0G40G -0G *0G /0G 0G

A S5C9:@S '1= '!= 4!= ")= '!= 6"=4.= 4.= 4'= 6!= '6=

0524G 2*540G 415-4G -*5100G





11"! Clauses a//e/ to standard form

imit

ationsof lia+ility

Ca$ on

Acceleration

li2uidated

throughdamages

delay

*ork$lace FitnessforDealth and $ur$oseS9

Safety &arranty

Security of

Pro%ect-

$ayment 8

s$ecicad%udication

circumstances

#is$ute

o0ernm

entA#@

A0oidance $olicyProcedures

re2uirements

Contractadminis

tration

Resi(ential 41G &G 41G -&G -*G /1G /G/G 4G 4G 22G 2-G"uil(ing 5commer cial

(e,eloper as

pr incipal

Resi(ential 2G 2G 1G 0G 0G 0G 1G&G 1G 2G 0G 1G"uil(ing 5 pr i



,ate

in(i,i(ual as principal

$ommercial G 0G &4G *0G 4*G *4G *4G-0G &&G 12G 21G 2&G"uil

(ing 5 pr i,ate

sec

tor pr incipal

$ommercial 40G 1-G &G G G -/G *1G-/G 4*G 0G *1G G"u

il(ing 5 pu"li



c

sector pr incipal

.nfrastructure 4G &4G 24G 44G 0G 40G 4G*4G &0G 14G &4G &0G>roa(s< ports<energy etc)? 5pri,ate sectorprincipal >notmining an(

resources?

.nfrastructure -&G 4G 1/G &*G 44G 4G 4G-&G 2-G 0G 1/G 1/G5 pr i,ate secto

r

pr incipal >minin

g

an( r esour c



es?

.nfrastructure G *G 22G 4G &0G 4G 4-G41G &0G /G 41G 1*G5 pu"lic sector principal

Process *0G *0G 40G *0G 20G *0G 0G0G 20G 10G 20G &0Gengineering

A S5C9:@S 4.= "/= ""= ''= 4.= 6)= 6)=6.= "6= .= "!= !"=

0524G 2*540G 415-4G -*5100G





1! Percei0ed outcomes from amendment offorms

'he rele,ant uestion in the sur,ey aske( participants to in(icate< on

a scale ranging from Dmuch (ecrease(% to Dmuch increase(%< theirper ceptions a

s to whether the r ele,ant amen(ments



to the

stan(ar ( f or m

af f ecte( cer tain matter s r elating to



pr o 6ect

outcomes)

+

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un(erstan(ing "etween the parties >greatest increase?

efficiency in pro6ect a(ministration<

"ut also to >(etrimental? increases in@

nee( for legal a(,ice (uring the pro6ect

pro6ect outturn cost

(isputation >least increase?)

'here was< howe,er a wi(e sprea( of responses on these points) As

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1)2< Dnee( for legal a(,ice (uring the pro6ect% 1)1< Dpro6ect outturn cost%

1)0< Defficiency in pro6ect a(ministration% 1)2< an( D(isputation% 1)0)

.nter,iewees offere( a range of o"ser,ations rele,ant to these

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)

A num"er of contractors an( pro6ect

managers commente( that

transaction costs are increase( where

contracts are amen(e( withoutgoo( reason an( that contractors will

inclu(e a contingency in their

ten(ere( prices for such amen(ments

where it is possi"le to (o so

>a num"er of comments were recei,e(

along the lines that< when

work is scarce< contractors nee( to

accept contracts on any terms?)

+ther comments recei,e( inclu(e( that

too much reliance is put on the

contract as a risk management tool<

neglecting contract management

techniues which can lea( to morefa,oura"le pro6ect outcomes)

-- Section 12.

+n the other han(< lawyers in,ol,e( in (rafting

amen(ments ten(e( to point out that the amen(ments

they were making were generally necessary< an( woul( "eseen to "e so when e=plaine( to the parties)

.n(ee(< some lawyers an( contract a(ministrators note(

that (isputation is increase( where contract

forms which (o not reflect the parties% agreement are use() .n

other wor(s< it was their ,iew that it is more efficient in the long

run to spen( time amen(ing the form to reflect the D(eal%

rather than procee(ing with an ina(euately tailore( contract

(ocument)




A$$endi 1 - Sur0ey 2uestions

1) 8a,e you worke( on or otherwise "een engage(

in connection with any construction

pro6ects in Australia (uring the past fi,e years<

either as a pro6ect participant or

a(,iserF

;es

A 7o

We are now going to ask you a series of

uestions in relation to pro6ects in which

you ha,e "een in,ol,e() When you come to

the en( of these uestions< you will "e

prompte( to ans&er the same 2uestions inrelation to u$ to t&o further $ro%ects

2) .n what year (i(

the pro6ect

commenceF

8ow woul( you

(escri"e the following

aspects of the

pro6ectF

&) Procurement metho() >Please choose the option

which "est (escri"es the primarycontract)?

$onstruct only

!esign $onstruct

$onstruction Management

Managing $ontractor H 9$.

Alliance

Partnering arrangement

+ther >please specify?

) Payment metho() >Please choose the optionwhich "est (escri"es the

primary contract)?

#ump sum

Reim"ursement H remeasurement >eg on asche(ule of rates "asis?


4) Sector)

Resi(ential "uil(ing commercial (e,eloper as

principal Resi(ential "uil(ing pri,ate in(i,i(ual asprincipal

$ommercial "uil(ing pri,ate sector principal

$ommercial "uil(ing pu"lic sector principal

.nfrastructure >roa(s< ports< energy etc? pri,atesector principal >not mining an( resources?

.nfrastructure pri,ate sector principal >miningan( resources?

.nfrastructure pu"lic sector principal

Process engineering


*) Where was the pro6ect primarily un(ertakenF

Australian $apital 'erritory

7ew South Wales

7orthern 'erritory

ueenslan(

South Australia

'asmania

Kictoria

Western Australia

+ther inclu(ing e=ternal territories an(

foreign ai( pro6ects >please specify? -) What

was the total pro6ect ,alueF

#ess than I100<000

I100<000 I1 million

I1 million I4 million








/) Which of the following roles (escri"es

your own in,ol,ement in the pro6ectF

>Please choose as many as apply)?

+,er,iew commercial (ecision5maker

Superinten(ent H contract a(ministrator

.n(epen(ent re,iewer

$ontractor H su"contractor H supplier

$onsultant not a party to the

contract >other than

superinten(ent

H lawyer?

3inancier

#egal a(,iser e=ternal solicitor

#egal a(,iser "arrister

#egal a(,iser inhouse

!ispute resolution >a(6u(icator< ar"itrator<me(iator< etc?


'hinking now a"out the contract with

which you were primarily in,ol,e( on

the pro6ect)))

) What was the initial contract ,alueF

#ess than I100<000

I100<000 I1 million







10) Where (i( that contract

sit within the Dcontracting

chain%F

>Please choose the

option which "est (escri"es

the contract)?

D8ea( contract% >entere( into "y principal with acontractor?

Su"contract H 'ra(e contract

Supply agreement


11) Was that contract "ase( upon a stan(ar( formF

;es

7o

12) :pon which of the following stan(ar( forms was

that contract "ase(F

AS21212

AS0001-

AS&0014

AS022000

J$$

AB.$ MW

3.!.$ forms

79$ &

C$21

P$1 1/


1&) Which party ma(e the (ecision to use the formF

;our organiEation >or the organiEation which youa(,ise?

Another party

!on%t know

.f another party< please i(entify the (ecision

maker "y role >i)e) "anker< lawyer for the

principal< (esigner< etc?

1) Please in(icate @$sin a sca'e fro 1-5

w0ere 1 was not i#ortant= an/ 5 *er

i#ortant=A /on=t :now a'so a*ai'a'eB

how important each of the following reasons

was for that form "eing chosen)

3amiliarity with the form of the party choosing it

3orm recommen(e( H man(ate( "y party%sorganiEation

>eg go,ernment

ten(ering

reuirements H

peak "o(y

recommen(atio

n?

Best Dreflects the (eal%

DSuita"ility of the risk profile%



Caining a commercial a(,antage for the partyprocuring the work

3orm well(rafte(

9ase of contract a(ministration through use ofthe form

Minimising transaction H legal costs +ther >please specify?

14) Were the general con(itions >i)e) the stan(ar(

terms< not pro6ectspecific information

set out in< eg< Anne=ure Part A to AS212? of

the stan(ar( form you use( amen(e(

from the pu"lishe( stan(ar( formF

;es >amen(e(?

7o >not amen(e(?

1*) Please in(icate @$sin a sca'e fro 1-5



how important you un(erstan( each of the

following factors was in (ri,ing amen(ments tothe stan(ar( form)

7ee( to shift risk to another party

1-) Which party was the risk shifte( to >contractor<consultant< su"contractor etc?F

@C$estion on' as:e/ w0ere answer toC$estion 16 was 3 4 or 5B

1/) Please in(icate N$sin a sca'e fro 1-5



how important you un(erstan( each of the

following factors was in (ri,ing amen(ments tothe stan(ar( form)

7ee( to amen( to ref lect

regulatory reuirements >eg CS'<

resi(ential

"uil(ing legislation?

3orm percei,e( to "e poorly(rafte(

.ncrease( ease of contract a(ministrationthrough mo(ification of the form


1) As "est you can recall< which of the following

types of clauses in the stan(ar( form

were aen/e/F >Please select as many as

apply)?

Preliminary matters >inclu(ing regulatoryappro,als?

Access to the site

Performance security >retention H "ankguarantees etc?

$hange in law

Ceneral risk assumption an( insurance

Warranties as to uality

!esign



Pro6ect outturn cost

7ee( for legal a(,ice (uring the pro6ect

!isputation

Please pro,i(e any further (etail to assist

us to un(erstan( your answers to thisuestion@ for e=ample< as to the e=tent of

increase( H (ecrease( pro6ect cost)

22) Please in(icate @$sin a sca'e fro 1-5


i#ortant=B how important you un(erstan(

each of the following factors to "e in the

stan(ar( form "eing use( unamen(e()

+ne party was in a position to D(ictate the (eal%

2&) Which party was that >principal< contractor<

financiers etc?F @C$estion on' as:e/

w0ere answer to C$estion 22 was 3 4or 5B

2) Please in(icate

Nusing a scale from

154 where 1 was

Dnot important%

an( 4 D,ery

important%O how

important

you un(erstan(

each of the

following factors

to "e in thestan(ar( form

"eing use(

unamen(e()

3amiliarity with the form of the party choosing it

Satisfactory risk profile

.ncrease( ease of contract a(ministrationthrough use of the form


@S$r*e res#on/ents were t0en i*en an

o##ort$nit to res#on/ to C$estions 2-24

in res#ect of $# to two a//itiona' #ro<ects.B

-&) 'o what e=tent @$sin a sca'e fro 1-5 w0ere

1 was stron' /isaree= an/ 5 stron'

/isaree=A /on=t :now= a'so a*ai'a'eB (o

you agree with the following statementF

D'he Australian construction in(ustry nee(s to

ha,e a,aila"le to it stan(ar( forms of contract

which are capa"le of "eing use( without

su"stantial amen(ment)%



-) .n your ,iew< is there any current stan(ar( form

of contract which is capa"le of

"eing use( without su"stantial amen(ment in

the Australian construction in(ustryF

;es

7o

@C$estions 75-76 on' as:e/ w0ere answer toC$estion 74 was es=B

-4) Which formF

-*) 3or which type of pro6ectHs is the form

capa"le of "eing use( without su"stantial

amen(mentF

--) Woul( you "e willing to "e inter,iewe( >"y

phone or in person? "y a mem"er of the

research team for this pro6ect in or(er to o"tain

more (etaile( ,iews from youF

;es @#ro#ts #artici#ant to enter contact/etai'sB

7o

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;4*



A$$endi ! - S$ecic feed+ack on AustralianStandards forms

As was foresha(owe( in section 1.1.2< we repro(uce here 5 without further comment or< necessarily<

en(orsement 5 fee("ack note( "y the pro6ect team recei,e( (uring inter,iews for this pro6ect) 'his listing(oes not purport to "e comprehensi,e >"earing in min(< as note( in section 3.2< that we con(ucte( -

inter,iews an( each co,ere( (ifferent specific su"6ect matter?< nor representati,e of any particular

interest group) .t is also presente( in the awareness that Stan(ar(s Australia is engage( in an ongoing

process of in(ustry

consultation< so many of these issues may alrea(y ha,e "een recei,e( an( consi(ere()

eneral - formatting

3orms shoul( "e +ased u$on sectors

>commercial "uil(ing< infrastructure etc? rather

than (eli,ery metho(ologies >construct onlyH

(esign an( construct< etc as at present?

Su"5clauses shoul( "e more easily refera+le rather than their current un5num"ere( format

AS co$yright and licensing re2uirements make it (ifficult to a(apt AS contracts

as reuire( >AS12252010 was specificallymentione( in this conte=t?

7ee( greater gui(anceH (efault positions for thecontract5specific information in the

Anneure Part A< so as to minimise taking ofunreasona"le positions

Where contractorsH su"contractors D,ulnera"le%<shoul( "e a checklist in(icating

clearly how the stan(ar( risk allocation has "een

amen(e(-/

!elete Anneure Part B >changes to the

stan(ar( form? 5 (oes not reflect current

reality of marke(5up (ocuments

$onsi(er inclusion of optional risk profiles

S$ecic risk matters

Shoul( "e an eclusion of conse2uential loss

and general limitation of lia+ility

>10 respon(ents?

Shoul( "e an o,erall cap on li2uidated

damages >& respon(ents?< make clear that

#!s are the sole reme(y in respect of therele,ant (elay< an( clarify effect of entering

Dnil%< etc< in Anne=ure Part A

Principal shoul( not "e a"le to set oH

across multiple contracts >see< eg< cl &-)*

of AS000?

Principal shoul( ha,e a right to suspen( works>an( pay costs accor(ingly?

'he consultancy contracts shoul( (o,etail "etter

with the typical no0ation process<

inclu(ing "ack5to5"ack limitations of lia"ility >orlack thereof?

Creater clarity an( rigour reuire( aroun(

$rogramming >eg whether contractor

retains Dfloat%? consi(er a(option of S$# :

(elay an( (isruption protocol or separate

anne=ure for programming reuirements



atent conditions< nee(s to "e greater clarityas to what is >an( is not? a Dlatent

con(ition% an( a more structure( process than thecurrent D(eeme( ,ariation%

approach 5 the latter means that many

generalH non5specific claims are "eing

funnelle( through the ,ariations process

as allege( latent con(itions

Contamination caused +y the contractorshoul( "e specifically a((resse(

Remo,e the reuirement for pro,ision of notices+efore ha0ing access to

$erformance security >2 contract

a(ministrator respon(ents an( one lawyer

in pri,ate practice? 5 means< in effect< that

principal una"le to access security as

reuire( when contractor "ecomes insol,ent

ualifying cause of delay (efinition>AS000HAS02? confusing an( shoul( re,ert to

tra(itional Dshopping list% of e,ents>AS212HAS&00? > respon(ents?

Shoul( "e greater clarity aroun( am+iguitiesand discre$ancies< eg< "y inclu(ing a

se,era"ility clause an( ha,ing the contractor"ear some risk for (iscrepancies

#ual roles of su$erintendent shoul( "e"etter a((resse(

Shoul( inclu(e a concept of key $ersonnel

References to +ankru$tcy shoul( "e remo,e(from ma6or works forms since so few

in(i,i(uals are party to these contracts

Insurance reuirements reuire re,iew >eg< itmay not "e possi"le to ha,e the

principal as a name( insure(?

-/ 'he approach of information pro,ision as a means of a((ressing ineuality of "argaining position is a feature of resi(ential "uil(ingcontracting "y reason of statutory inter,ention 5 see< eg< Doestic $i'/in %ontracts &ct 1995 >Kic?)

S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;4-

research report - standard forms of contract in the australian construction industry

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