The Department of Public Expenditure and Reform published Circular 01/16: ‘Construction procurement – revision of arrangements for the procurement of public works projects’ on 18 January 2016.
A review of the performance of the Public Works Contract was undertaken by the Government Contracts Committee for Construction (GCCC) in 2014. The ‘Report on the Performance Review of the Public Works Contracts’ was published by the Office of Government Procurement in December 2014, setting out a series of interim recommendations and a framework for engagement of a medium term strategy for the procurement of public works projects.
Extensive consultation was undertaken throughout 2015 by the Office of Government Procurement following the publication of its proposals to implement the interim recommendations. Work on the interim recommendations which amend the Public Works Contracts is now complete and the conditions of contract for Public Works Contracts PW-CF1 – PW-CF5, inclusive, their associated tender documents and guidance have been published.
The interim measures introduced to amend the Public Works Contracts are as follows:
1. Mandatory production of a fully measured Bill of Quantities to an approved method of measurement, and inconsistencies between the Bill of Quantities and the Works Requirements, for projects using Public Works Contracts forms PW-CF1, PW-CF3 and PW-CF5, will be a Compensation Event.
The Pricing Document for Public Works Contract Forms PW-CF1, PW-CF3 and PW-CF5 shall be a Bill of Quantities to an approved method of measurement for use with the Public Works Contracts. No other document is to be included in the Pricing Document for these forms of Contract. The Schedule to the Contract will define which approved method of measurement the Bill of Quantities must be completed in accordance with and the option to transfer, to the Contractor, the risk of quantities under Schedule Part 1K(17) has been removed. (Please refer to Guidance Note GN 1.5.3 – The Pricing Document, for full details of this interim amendment)
2. The direct tendering of Specialist works packages, by the Employer, whereupon the Contractor will enter into a sub-contract with the respective successful Specialist tenderer
For all projects designed by the Contracting Authority and carried out under PW-CF1, PW-CF3 and PW-CF5 this process allows for Specialists to tender for defined Works packages directly to the Contracting Authority, and following completion of evaluation of the tender, by the Contracting Authority, the successful Specialist and the Contractor shall enter a sub-contract for a Specialist Contract Sum, which will form part of the Contract Sum with the Contractor. The Contractor will be entitled to tender, in their tender, a percentage addition for each Specialist which will form part of their Contract with the Employer. (Please refer to Guidance Note GN 2.3.3 – Specialists and the Public Works Contract, for full details of this interim amendment)
3. (i) The introduction of an informal dispute resolution process at senior management level within the respective organisations that are Parties to the Contract.
For all projects carried out under Public Works Contract forms PW-CF1 to PW-CF4, inclusive, the Parties to the Contract may engage, without prejudice, in a dispute resolution process on certain disputes prior to reference to conciliation. The Conditions of Contract detail the Dispute Management Procedure for resolution of disputed Employer’s Representative Determinations. The procedure shall consist of meetings of the Project Board, for the purpose of reviewing disputes referred thereto with the intent of reaching a resolution. (Please refer to Guidance Note GN 3.1.1 – Dispute Resolution, for full details of this interim amendment).
3. (ii) The introduction of a Standing Conciliator for pre-dispute management purposes
For all Contracts carried out using Public Works Contract form PW-CF1 to PW-CF4, inclusive, where the anticipated Contract Sum will be in excess of €10million, a Standing Conciliator must be appointed by the Parties. Where the anticipated Contract Sum will be less than €10million, the Employer will have the option of requiring a Standing Conciliator to be appointed by the Parties. The Standing Conciliator shall fulfil the role of the Conciliator in all cases, should a dispute be referred to conciliation under sub-clause 13.2. The intention behind the introduction of the Standing Conciliator is to encourage proper engagement between the Parties to assist the Parties in the avoidance of disputes, to assist the Parties in avoidance of costly and lengthy formal dispute resolution procedures, and to assist the Parties to establish agreement upon issues before they crystallise into a dispute. (Please refer to Guidance Note GN 3.1.1 – Dispute Resolution, for full details of this interim amendment).
The arrangements to be undertaken by contracting authorities are the subject of Circular 01/16. The revised arrangements are being put in place with effect from 4 April 2016 for the procurement of public works projects using the Public Works Contracts PW-CF1 – PW-CF5, inclusive.
Contracting authorities are encouraged to adopt the amended conditions of Public Works Contract from the date of their publication, however it is recognised that the extent to which they can be adopted will depend on the scope of service under which the design team has been engaged [on Employer designed contracts].
In recognition of this the Circular sets out a derogation for projects where the design team has been engaged prior to 4 April 2016 and their scope of service does not reflect the service provision required to meet the requirements of the amended forms of contract. This derogation is available for a limited period – up to 8 January 2017 – thereafter the amended forms must be used unless written sanction is given by the GCCC following an application from the Contracting Authority concerned.