An Introduction to the ComplexProjects Contract 201323 April 2013
IntroductionAdam Constable Q.C., Keating Chambers
CIOB Research, background to CPC2013 andavailabilityKeith Pickavance, Executive Consultant, Hill International, Past Presi...
Project suitability and procurementstrategyFrancis HoSenior Associate, Olswang LLP
Where should CPC2013 be used?Suitable for: Less suitable for:Works of high value or complexity ✓ Simpler works or those of...
International UsageContract England and Wales InternationalCPC2013 ✓ ✓JCT ✓ ✗NEC3 ✓ ✓FIDIC ✗ ✓www.olswang.com6
Procurement Routes✓ Turnkey/EPC ✓ Works-onlyBankable Control over qualityTime and cost certainty Time and cost certaintySi...
Time and Risk Management Provisions, andContrast with other Standard FormsKeith Pickavance, Executive Consultant, Hill Int...
Cost and Risk Management Provisions, andContrast with other Standard FormsRoy Pickavance, Director, DAQS Ltd.
To Review• The Role of the Valuer• Contractor’s Pricing Document• The Method of Measurement• Pricing of Time Contingencies...
THE ROLE of the VALUER• Listed Person – Appendix B• Appendix definition - The person identified as such in the Contract Ag...
CONTRACTOR’SPRICING DOCUMENT• Clause 28 - The document setting out the work which theContractor identifies as being necess...
THE METHOD OFMEASUREMENT• Where quantities are provided to determine the scopeof part of or the whole of the Works, or whe...
PRICING OFTIME CONTINGENCIES• Clause 27; Appendix Definitions; Included in Appendix D Working Schedule• Where Contractor’s...
EVENT PRICING andVALUATION of VARIATIONS• Event - An occurrence which is an Employer’sCost Risk Event or an Employer’s Tim...
COMPENSATION FORDELAY AND/OR DISRUPTION23/04/2013 16
Compensation forProlongation• Clause 28.5 - If no rate for Preliminaries and/or Overheads andProfit is indicated in the Co...
Compensation forDisruption• PROGRESS RECORDS - Although the Working Schedule cannot be accuratelyupdated without Progress ...
BIM• Under CPC will the QS’s roll differ in ComplexContracts?a) In a current procurement environment (e.g.Traditional, Des...
Nick LanePartner and Head of Construction, Olswang LLPDispute resolution provisions andprocedures
Questions…?Adam Constable Q.C., Keating Chambers
Contact us…Francis HoSenior AssociateOlswang LLPT +44 20 7067 3505E francis.ho@olswang.comNick LanePartnerOlswang LLPT +44...
Contact us…Roy PickavanceDirector, DAQS Ltd BSc, FRICS, FCIOB,FCIArbT +44 (0) 1949 829287E arp@daqs.co.ukKeith PickavanceE...
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Chartered Institute of Building - Launch of Complex Projects Contract 2013 - Ascot - 23 April 2013

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Chartered Institute of Building - Launch of Complex Projects Contract 2013 - Ascot - 23 April 2013

  1. 1. An Introduction to the ComplexProjects Contract 201323 April 2013
  2. 2. IntroductionAdam Constable Q.C., Keating Chambers
  3. 3. CIOB Research, background to CPC2013 andavailabilityKeith Pickavance, Executive Consultant, Hill International, Past PresidentCIOB
  4. 4. Project suitability and procurementstrategyFrancis HoSenior Associate, Olswang LLP
  5. 5. Where should CPC2013 be used?Suitable for: Less suitable for:Works of high value or complexity ✓ Simpler works or those of short duration ✗Major real estate projects ✓ Construction management/EPCM without amendment ✗Engineering and infrastructure projects ✓ Inexperienced clients/contractors ✗www.olswang.com5
  6. 6. International UsageContract England and Wales InternationalCPC2013 ✓ ✓JCT ✓ ✗NEC3 ✓ ✓FIDIC ✗ ✓www.olswang.com6
  7. 7. Procurement Routes✓ Turnkey/EPC ✓ Works-onlyBankable Control over qualityTime and cost certainty Time and cost certaintySingle-point responsibility Longer programmeMore expensive More client involvementContractor design input Less contractor design inputwww.olswang.com7
  8. 8. Time and Risk Management Provisions, andContrast with other Standard FormsKeith Pickavance, Executive Consultant, Hill International, Past PresidentCIOB
  9. 9. Cost and Risk Management Provisions, andContrast with other Standard FormsRoy Pickavance, Director, DAQS Ltd.
  10. 10. To Review• The Role of the Valuer• Contractor’s Pricing Document• The Method of Measurement• Pricing of Time Contingencies• Event Pricing and Valuation of Variations• Compensation for Delay and/or Disruption• BIM23/04/2013 10
  11. 11. THE ROLE of the VALUER• Listed Person – Appendix B• Appendix definition - The person identified as such in the Contract Agreement or,on ceasing to be the Valuer such other person as the Employer shall appoint andconfirm to the Contractor and Contract Administrator, or, if none is appointed, theContract Administrator• Clause 5.2 - …exercise its discretion independently and fairly• User Guide – Roles and Responsibilities - The Valuer is appointed by the Employerto advise the Employer, Contract Administrator and Listed Persons on– the CONTENT of the CONTRACTOR’S PRICING DOCUMENT and theVALUATION OF ACTIVITIES in the WORKING SCHEDULE (Clause 28),– the MEASUREMENT AND VALUATION OF VARIATIONS (Clause 24),– the PREDICTED OUT-TURN COST OF THE WORKS (Clause 53) and– for PAYMENT PURPOSES THE CURRENT VALUE OF THE WORKS, from time totime (Clause 54).• Flow charts are provided- e.g.FC2 – Working Scheduled; FC7 – Extension of Timeand Compensation; FC10 - Payment23/04/2013 11
  12. 12. CONTRACTOR’SPRICING DOCUMENT• Clause 28 - The document setting out the work which theContractor identifies as being necessary to satisfy the Conditions ofContract, any applicable Model, Bill of Quantities, and/orSpecification and Drawings together with any conditions, resources,materials or goods which the Contractor requires to be madeavailable to it, and the detailed method of pricing the financialreward which the Contractor requires for carrying out the Works• The importance of the Valuer’s Role – Active rather than passive– Integration into the Working Schedule- Activity Based (Clause 28 andAppendix D)– Utilisation of updated Working Schedule ( Clause 33) to determinethe value of work completed (Current Value - Clause 54) and thePredicted Cost ( Clause 53)23/04/2013 12
  13. 13. THE METHOD OFMEASUREMENT• Where quantities are provided to determine the scopeof part of or the whole of the Works, or where aschedule of descriptions is provided for pricing to beused in the valuations of variations, it is essential tospecify the rules by which the quantities will be or havebeen measured.– Definition - Appendix A;– Defined - Appendix B -Default NRM2; User Guide – seeMOM and BOQ– BIM generated quantities• Whatever form the measurement takes, if priced, itneeds to be aligned to the working Schedule23/04/2013 13
  14. 14. PRICING OFTIME CONTINGENCIES• Clause 27; Appendix Definitions; Included in Appendix D Working Schedule• Where Contractor’s Time Contingency periods are on the Critical Path to aRelevant Completion Date, and hence included in the Contract duration, the effectof those time contingencies in the priced Working Schedule is to require theContractor to pre-price (by virtue of its tender or bid) the prolongation costs it islikely to suffer as a result of those contingency periods later being absorbed byContractor’s risks.• Where Employer’s Time Contingency periods are on the Critical Path to aRelevant Completion Date, and hence included in the Contract duration, the effectof those time contingencies in the priced Working Schedule is to require theContractor to pre-price (through its tender or bid) the prolongation costs it is likelyto suffer as a result of those contingency periods later being absorbed by Events. Ifthe Employer does not use its critical contingencies then, all other things beingequal, there will be a reduction in the duration of the Works, an earlier SubstantialCompletion date and hence a reduction in the Contract price, to the Employer’sbenefit.23/04/2013 14
  15. 15. EVENT PRICING andVALUATION of VARIATIONS• Event - An occurrence which is an Employer’sCost Risk Event or an Employer’s Time Risk Event– Defined in Appendix F – brought into theWorking Schedule– Calculation of the effect of Event on Time• Dealt with by KAP– Calculation of the effect of Event on Cost – Clause 39• Direct Cost - Activity costed - Clause 24 Variations• Indirect Cost – Level of Effort costed using the updatedWorking Schedule (Clause 38)• Loss and/or Expense – Clause 2823/04/2013 15
  16. 16. COMPENSATION FORDELAY AND/OR DISRUPTION23/04/2013 16
  17. 17. Compensation forProlongation• Clause 28.5 - If no rate for Preliminaries and/or Overheads andProfit is indicated in the Contractor’s Pricing Document, it shall bedeemed to be agreed that the Contractor is not entitled to recoversuch Preliminaries and/or Overheads and Profit as a part of the lossand/or expense incurred as a result of any Employer’s Cost RiskEvent.• The Contractor is required to identify its Preliminaries (Clause28.4.1 ) and Overheads and Profit (Clause 28.4.2) by Level of Effortdurations logically linked to the Activities to which they relate.• Provided that the information required has been incorporated inthe Working Schedule (Clause 28.5), prolongation costs can beestimated during the course of the Works based upon the extent bywhich any Level of Effort durations are adjusted from time to timeby the impact of Employer’s Cost Risk Events on the WorkingSchedule (Clauses 39.1 and 53.2.3).23/04/2013 17
  18. 18. Compensation forDisruption• PROGRESS RECORDS - Although the Working Schedule cannot be accuratelyupdated without Progress Records(Clause 33.1) and they are thus the essentialinformational resource for managing time and for determining the extent to whichan Event has caused delay or disruption, the Contract is unique amongst standardform contracts in requiring the Contractor to maintain any Progress Records otherthan those in support of a claim.(Appendix B)• Loss and/or Expense is Quantified under Clause 39.2.4 arising from an Employer’sCost Risk Event, and• The Predicted Cost is to include for any change in a Level of Effort and any otherloss and/or expense (Clause 53.2.3)• If the Contractor fails to provide the information required to enable the Valuer tocalculate the amount of the Contractor’s entitlement to compensation fordisruption and/or prolongation, the amount shall be calculated after SubstantialCompletion using– 39.3.1 the progress records and schedules produced under Clause 25.2, or (if none)– such records and schedules as, in its absolute discretion, the Valuer adopts for the purpose ofthis Clause 39.3.23/04/2013 18
  19. 19. BIM• Under CPC will the QS’s roll differ in ComplexContracts?a) In a current procurement environment (e.g.Traditional, Design and Build etc. )b) In a BIM environment23/04/2013 19
  20. 20. Nick LanePartner and Head of Construction, Olswang LLPDispute resolution provisions andprocedures
  21. 21. Questions…?Adam Constable Q.C., Keating Chambers
  22. 22. Contact us…Francis HoSenior AssociateOlswang LLPT +44 20 7067 3505E francis.ho@olswang.comNick LanePartnerOlswang LLPT +44 20 7067 3548E nick.lane@olswang.comAdam Constable QCKeating ChambersT +44 20 7544 2600E aconstable@keatingchambers.com
  23. 23. Contact us…Roy PickavanceDirector, DAQS Ltd BSc, FRICS, FCIOB,FCIArbT +44 (0) 1949 829287E arp@daqs.co.ukKeith PickavanceExecutive Consultant Hill InternationalT +44 (0) 207 618 1200E keithpickavance@hillintl.com

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