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Julian Scott -  Contract Law and CDM 2007 Regulations
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Julian Scott - Contract Law and CDM 2007 Regulations


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Good contracts will take into account CDM 2007 arrangements. Learn from these practical examples when drafting your contracts - presentation by Julian Scott of Squire Sanders exclusively for ARMSA …

Good contracts will take into account CDM 2007 arrangements. Learn from these practical examples when drafting your contracts - presentation by Julian Scott of Squire Sanders exclusively for ARMSA Consulting wind energy clients.

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  • 1. The Construction (Design and Management) Regulations 2007 Incorporation of the CDM Regulations in contract terms for the procurement of an offshore windfarm 39 Offices in 19 Countries
  • 2. Julian Scott • Thanet Windfarm • Borkum West II in Germany • Re-finance of UK offshore windfarm • Advice in relation of R3 Projects 2
  • 3. CDM Regulations • “Not a bolt on” • How do typical offshore windfarm contracts deal with CDM Regulations and roles of: – Client – Principal Contractor – CDM Co-ordinator – Designer 3
  • 4. Logic • General Conditions of Contract 2004 • Health Safety and Environment  The COMPANY places prime importance on health, safety and environment (hereinafter “HS&E”) issues and requires that the CONTRACTOR GROUP subscribes to and actively pursues the highest standards of HS&E performance.  The CONTRACTOR shall take full responsibility for the adequacy, stability and safety of all its operations and methods necessary for the performance of the WORK and shall keep strictly to the provisions of Section V1 - Health, Safety and Environment. The CONTRACTOR shall collaborate with the COMPANY in establishing HS&E interface arrangements and the production of a HS&E interface document.  Failure to meet the requirements of Section V1 – Health, Safety and Environment or to satisfy the COMPANY’s reasonable requirements with regard to the control of HS&E risks in any material respect will be regarded as due cause for the COMPANY giving notice to terminate all or any part of the WORK or the CONTRACT in accordance with Clause 30.1(b).  The CONTRACTOR shall co-operate with the COMPANY in providing an appropriate response to any emergency occurring at the WORKSITE and shall immediately take such action as may be necessary to protect life and make safe property where such is imminent peril. 4
  • 5. FIDIC – Yellow Book • The Contractor shall at all times take all reasonable precautions to maintain the health and safety of the Contractor’s Personnel. In collaboration with local health authorities, the Contractor shall ensure that medical staff, first aid facilities, sick bay and ambulance service are available at all times at the Site and at any accommodation for Contractor’s and Employer’s Personnel, and that suitable arrangements are made for all necessary welfare and hygiene requirements and for the prevention of epidemics. • The Contractor shall appoint an accident prevention officer at the Site, responsible for maintaining safety and protection against accidents. This person shall be qualified for this responsibility, and shall have the authority to issue instructions and take protective measures to prevent accidents. Throughout the execution of the Works, the Contractor shall provide whatever is required by this person to exercise this responsibility and authority. • The Contractor shall send, to the Engineer, details of any accident as soon as practicable after its occurrence. The Contractor shall maintain records and make reports concerning health, safety and welfare of persons, and damage to property, as the Engineer may reasonably require. 5
  • 6. ICC – Design and Construct 2011 • Safety and Security  The Contractor shall throughout the progress of the Works have full regard for the safety of all persons entitled to be upon the Site and shall keep the Site (so far as the same is under his control) and the Works (so far as the same are not completed or occupied by the Employer) in an orderly state appropriate to the avoidance of danger to such persons and shall among other things in connection with the Works provide and maintain at his own cost all lights guards fencing warning signs and watching when and where necessary or required by the Employer’s Representative or any of his assistants or by any competent statutory or other authority for the protection of the Works or for the safety and convenience of the public or others. • Employer’s Responsibilities  If the Employer carries out work on the Site with his own workpeople he shall in respect of such work – Have full regard for the safety of all persons entitled to be on the Site and – Keep the Site in an orderly state appropriate to the avoidance of danger to such persons  The Employer employs other contractors on the Site he shall require them to have the same regard for safety and avoidance of danger. 6
  • 7. CDM Compliance • Does it matter? • Statutory obligation therefore applies • Is it therefore just a “bolt on”? 7
  • 8. Contract Terms • Contract should define roles of: – CDM-C – Client – Design – Principal Contractor 8
  • 9. Multiple Principal Contractors • Particularly important off given multiple and changing principal contractor • Need to define how principal contractor hands over to client or another principal contractor 9
  • 10. Example Clause • The construction of the [ ] Windfarm is a notifiable project as defined by the Construction (Design and Management) (CDM) Regulations 2007. [The Developer] is the Client for the construction of the [ ] offshore Windfarm as defined by the CDM Regulations 2007 and has appointed [ ] Limited to act as CDM Co-ordinator for the project. • The Contractor is appointed to act as the Principal Contractor for the Work and shall undertake the duties required of the Principal Contractor as defined by the Construction (Design and Management) Regulations, 2007 This status shall apply to all the works undertaken by the Contractor unless specifically agreed otherwise in writing. As the Contractor is providing design services, the Contractor is a Designer as defined by the CDM Regulations 2007 as are any organisations appointed by the Contractor for the design of any elements of the temporary or permanent works. 10
  • 11. Phasing of Principal Contractor Role • CONSTRUCTION PHASING  The construction phase of the project shall be managed by [Developer/CDM-C] to ensure that the Contractor is assigned a clearly defined zone which shall comprise the limit of the contractors duties and rights as Principal Contractor. The Construction Sequence and zone boundaries shall be defined by the Developer during the course of the works. It is expected that the size and number of zones will be developed during the course of the [ ] offshore Windfarm Project; however the Developer’s initial expectations are that there will be [number] zones comprising the Offshore Substation and WTG locations as Zones [1-?]. The envisaged Construction Sequence is set out in drawing [ ] which is included in Section X.  The Contractor shall act as Principal Contractor for the works carried out within the zone designated by [the Developer/the Project Manager] and shall be expected to co-ordinate access to and control the health and safety of all personnel working within that zone, irrespective of who they are employed by. The Contractor may not undertake any Work outside the limits of any zone assigned by [the Developer/Project Manager] without the written agreement of [the Developer/Project Manager].  Upon taking over control of a zone and the commencement of the duties as 11 Principal Contractor, the Contractor shall be given all the health, safety and environmental information relevant to the zone as specified by the CDM 2007 Regulations. This shall include the Pre-Construction information file for that zone.
  • 12. Phasing of Principal Contractor Role – continued • Upon completion of the work within a zone the Contractor shall hand over control of the zone to another party (either [the Developer] or another Contractor). Upon handing over control the Contractor shall cease to be Principal Contractor for the zone now vacated and shall not re-enter or carry out any works in that zone without the written agreement of [the Developer/the Project Manager]. Upon handing over control of a zone the Contractor shall pass on all health, safety and environmental information relevant to the zone which has now been completed as specified by the CDM 2007 Regulations. This shall include the completed Construction Phase Plan and all as-built information. 12
  • 13. Termination of CDM Roles • Replacement in role of Principal Contractor • Not necessarily termination of contract • Contractor likely to be responsible for the cost of third party principal contractor replacement 13
  • 14. Permit to Work • A Permit to Work system shall apply to all situations where the actions of another party could affect the safety of the Contractors Work as Principal Contractor within a construction zone controlled by the Contractor. This shall apply but not be limited to:  The electrical termination works at the WTG foundations  The electrical termination works at the Offshore Substation  The cable jointing works at the Onshore Junction Pit  Any other location as instructed by the Company for Health and Safety reasons. • The Contractor shall not carry out any Work for which a Permit to Work is required without receiving the Permit to Work that ensures the electrical safety of his personnel. The Permit to Work system shall be operated by [the Developer] or a Contractor appointed by [the Developer] and will require the Contractor to:  Provide a detailed method statement and application permit detailing the precise time, duration and nature of the proposed works and any associated electrical isolation required to ensure safety. This shall be submitted a minimum of two (2) weeks prior to the intended activity.  Commence work only upon receipt of a signed and fully authorised permit to work that fully satisfies the Contractor’s isolation requirements. 14
  • 15. Permit to Work - continued  Sign off and return the Permit to Work upon completion of the work, or intermediate stage of the work (as agreed), which shall confirm that the electrical isolation may safely be discontinued. • 15 The Contractors detailed programme shall identify all Work that requires a permit to work, including details of when such Permit shall be applied for. The Company shall take all reasonable steps to ensure that the Sequencing Contractor shall be given a Permit to Work that satisfies his programme. The Company retains the right to request the Contractor modify his Programme to suit the requirements of other Contractor’s programmes.
  • 16. Other points to consider • Contractual JV as client • delay 16
  • 17. Delay • LADs • Contractor’s in the same zone • Permit to work 17
  • 18. Conclusion • Terms and roles need to be defined in contract • Schedule must be included to deal with multiple Principal Contractors • Termination and replacement provisions required 18
  • 19. Worldwide Locations North America • • • • • • • 19 Cincinnati Cleveland Columbus Houston Los Angeles Miami New York Latin America • • • • • • • Northern Virginia Palo Alto Phoenix San Francisco Tampa Washington DC West Palm Beach + Independent Network Firm Europe & Middle East Asia Pacific • • • • • • • • • • • • • • • • • • • • • • • • • Bogotá+ Buenos Aires+ Caracas+ La Paz+ Lima+ Panamá+ Santiago+ Santo Domingo Beirut+ Berlin Birmingham Bratislava Brussels Bucharest+ Budapest Frankfurt Kyiv • • • • • • • • • Leeds London Madrid Manchester Moscow Paris Prague Riyadh Warsaw Beijing Hong Kong Perth Seoul Shanghai Singapore Sydney Tokyo