Amendments to the Public Works Contracts 7 March 2017

Amendments to the PWC’s Primacy of Bill of Quantities Specialist Work Packages New Dispute Management Procedures

Bill of Quantities – A return to Primacy (Guidance Note 1.5.3)

The Need for Change Schedule Part 1K17 – No Errors between Works Requirements and BoQ at Contractor’s risk Measures and descriptions were inadequate Accuracy of drawings were not tested at tender stage Contracts being tendered not fully designed with an under-measured/under-descriptive BoQ Price certainty?!

Making Contracts “With Quantities” Fully measured BoQ is mandatory for Employer Designed Projects Employer retains the risk of errors in the BoQ The BoQ is the primary reference for pricing purposes – no other document is to be included in the Pricing Document

Inconsistencies - Cl1.3.4 Inconsistencies between the Works Requirements and the Pricing Document resolved by an instruction from the ER. Works Requirements takes precedence and a Compensation Event may arise in accordance with the Schedule, Part 1K(17).

Resolution of Inconsistencies Works Item Works Item described in the Works Requirements but not in BoQ The Contractor will be required to complete the Works Item, if so directed by the ER, and shall be entitled to an adjustment to the Contract Sum The ER may direct the Contractor not to complete the Works Item, and there shall be no adjustment to the Contract Sum

Resolution of Inconsistencies Works Item Works Item described in BoQ but not in the Works Requirements The ER may direct the Contractor to complete the Works Item but the Contractor shall have no entitlement to an adjustment to the Contract Sum The ER may direct the Contractor not to complete the Works Item, and the ER or Employer shall be entitled to adjust the Contract Sum

Resolution of Inconsistencies Quantities Both the Works Requirements and BoQ include the Works Item but an inconsistency in the quantities exists. If the ER directs the quantity shown in the Works Requirements to be completed, the Contract Sum may be adjusted If the ER directs the quantity shown in the BoQ is to be completed, the Contract Sum shall not be adjusted

Other Risk Allocation Overall risk allocation in Schedule 1K must be considered e.g. ‘unforeseeable ground conditions’ is contractor risk Unforeseen ground encountered resulting in quantities of work increasing or decreasing K(19) overrules K(17) and a Compensation Event shall not arise The BoQ Preliminaries Section shall detail the allocation of risks, as per Schedule 1K

Related Issues Clause 4.4 – ER Communications Clause 4.5 – Instructions Clause 4.11 – Contractor to request instruction Clause 10.3 – condition precedent remains Schedule 1K (1), (9), (17) – €500

Specialist Works Procurement

Specialists and Employer Appointment subject to varying levels of involvement Little or no engagement – e.g. tax compliance, i.e. sub contractors not specialists Sets pre-qualification standards Direct tendering of specialist works Successful specialist tenderer → novated to contractor Naming successful specialist → appointed by contractor as sub-contractor (nomination?)

When should named Specialists be considered? Early engagement is necessary, Detailed design required for Works Requirements Specialist required to undertake portion of their works in advance of main contractor agreement Value of single specialist works exceeds 15% of overall pre-tender estimate for the works Not possible to accurately define the specialist works enable it to be tendered as part of main contract

Types of Specialist Employer designed works: Reserved Specialist Novated Specialist Contractor designed works: D&B Specialists

The Appointment Process for Reserved Specialists

Identify successful Reserved Specialist tenderer specialist candidates Shortlist main contract and Award contract to successful tenderer for main contract Identify successful Main Contract tenderer Reserved Specialist tender deadline Main Contract tender deadline Main Contract tender 1 Evaluate tender 3 Standstill Specialist tender 2 Evaluate tender 4 Standstill 5 Contract admin 6

Reserved Specialists Restricted procedure used to pre-qualify both main contractors; and specialists Specialist contract in NN CIF

Novation – Specialists Employer tenders the specialist work Informs tendering specialists that its intention is to novate Must provide novation agreement and collateral warranty Specialist and contractor enter contract Form of contract dependent on CWMF guidance

Novation – Main Contractor Employer tenders for Main Contractor Informs Main Contractor of novation Novation agreement Identity of specialist Programme for novated specialist works

D&B Specialists Extent of contracting authority’s involvement: Sets appropriate pre-qualification criteria/standards that proposed specialists must meet Establishing pre qualification panel of specialists Novation – where specialist is required in advance of contractor appointment

Main Contract Pricing

Main Contract Pricing Schedule Part 1F(iii) sets out the named Specialist Works Packages: Reserved Sums and Contract Sums (for Novated Specialists) are to be provided in the Pricing Document Pricing Documents (unpriced) for each of the named Specialist works packages should be provided in the main contract Pricing Document

Main Contract Pricing Pricing Document must include items to allow for the pricing of the following: General attendances – lump sum items Special attendances defined as required – lump sum items Contractor’s management, risk acceptance and indirect overhead costs – lump sum item Contractor’s profit – percentage of Specialists Reserved/Contract Sum Lump sum items priced less than zero will be deemed to be zero and negative percentages will be treated as zero per cent

New Dispute Management Procedures

The Dispute Management Procedure The Project Board: Members stated in Schedule Part 1A 1-3 members nominated from each side Function of Project Board: review disputes referred to Clause 13.1 10.5.4 and 10.5.5 determinations only No authority to review any other such dispute or may arise Must have capacity and authority to negotiate binding agreements

The Dispute Management Procedure Project Board must meet at least every 60 days to review disputes referred to it All binding agreements reached must be signed by the Employer and the Contractor If no agreement is reached, the Board shall on the next working day, notify the parties of the failure to resolve dispute

Standing Conciliator When Contract Value is in excess of €10m Appointed by the Parties When Contract Value is below €10m Employer has option of requiring a Standing Conciliator to be appointed by the Parties Can chair the Project Board and advise/draft binding agreements Reserved sum shall be included in the Pricing Document – 50% of fee

Questions? Pauric Marray Pauric.Marray@QuiggGolden.com London +44 (0)20 7022 2192 London@QuiggGolden.com Dublin +353 (0)1 676 6744 Dublin@QuiggGolden.com Belfast +44 (0)28 9032 1022 Belfast@QuiggGolden.com Jeddah +966 (0)2 651 82 22 Jeddah@QuiggGolden.com