News Archive – 2018

4 September 2018 – Revision of GN 1.4 ‘Procurement and Contract Strategy for Public Works Contracts’

Guidance note GN 1.4 has been updated to reflect:

– the threshold change introduced by Circular 10/2018 last week;

– reference to Directive 2014/24/EU; and

– updates to the CWMF since January 2012.

Details of the revisions are available here.  GN 1.4 v1.1 17/01/2012 has been archived and v1.2 04/09/2018 has been published.

29 August 2018 – Revision of threshold for the use of the Short Public Works Contract (PW-CF6)

The Short Public Works Contract (PW-CF6) was introduced by Circular 04/08specifically for non-complex works projects with a value of €0.5m or less.

Following the review of the public works contracts in 2014, a number of changes were made to the forms of contract for larger projects in 2016 in order in increase project definition and discipline.  However these new requirements have proven disproportionate for projects at the lower end of the spend thresholds.  The use of a Bill of Quantities (BQ) is generally not considered cost effective on a project with a value less than €1m unless there are particular circumstances which would justify its use.

The threshold has been raised from €0.5m to €1m where the simpler form of contract (PW-CF6) may be used, thereby reducing costs and complexity for public bodies and contractors where used.  Contracting authorities who require a BQ on a project with a value less than €1m may do so by opting to use PW-CF5.

Circular 10/2018, published today, modifies the threshold figures cited in the original Circular 04/2008, leaving the circular itself in place.  With effect from today (i.e. the date of Circular 10/2018), the revised threshold value of €1,000,000 will apply to all contract notices published.

Guidance under the CWMF will be updated to reflect the threshold change next week.

9 August 2018 – Revision to MF1.13 (dated 27 June 2018)

Please note that MF1.13 published on 27 June 2018 contained a typographical error. The reference to the ‘Employer’s Representative’ in the signatory box should have read ‘Contractor’s Representative, and this error has now been corrected in the version dated 9 August 2018.

5 July 2018 – Publication of amended GN 1.5.1 (v1.1 05-07-2018) – Public Works Contracts: Managing the Pre-Contract Phase

Further to the publication of Circular 08/18 on 24 May 2018, which set out the amendments to the Capital Works Management Framework (CWMF) to reflect the introduction of Sectoral Employment Orders under the Industrial Relations (Amendment) Act 2015 in the construction sector; GN1.5.1 – Public Works Contracts:  Managing the Pre-Contract Phase is being published today.  GN 1.5.1 (v1.1) has been updated to reflect changes to the comparative cost of tender exercise, details which are available here.

27 June 2018 – Publication of amended PW-CF 1 to 5 inclusive, MF 1.13, and Guidance Note 2.3

Further to the publication of Circular 08/18 on 24 May 2018, which set out the amendments to the Capital Works Management Framework (CWMF) to reflect the introduction of Sectoral Employment Orders under the Industrial Relations (Amendment) Act 2015 in the construction sector; and the second phase of the revised CWMF documents  on 6 June, the final phase of the revised CWMF documents are being published today.

The amended contracts PW-CF1 to PW-CF5 inclusive being published today are to be used for all tenders, which are to be submitted on or after 7 July 2018.

An amended MF 1.13 Rates of Pay and Conditions of Employment Certificate is also being published with updated legislative references.  GN 2.3 has also been updated and other relevant guidance notes will be revised to reflect the changes introduced by Circular 08/2018.

Amended forms of PW-CF6 to PW-CF8 inclusive, PW-CF10 and PW-CF11 and the Rates of Pay and Conditions of Employment Certificate that accompanies each of these contract forms, were published on 24 May; and FTS1 to FTS5 inclusive, FTS 13, ITT-W1, ITT-W1a, ITT-W2 and ITT-W8 were published on 6 June.

6 June 2018 – Publication of amended forms FTS1 to FTS5 inclusive, FTS 13, ITT-W1, ITT-W1a, ITT-W2 and ITT-W8

Further to the publication of Circular 08/18 on 24 May 2018 setting out the amendments to the Capital Works Management Framework (CWMF) to reflect the introduction of Sectoral Employment Orders under the Industrial Relations (Amendment) Act 2015 in the construction sector; the second phase of the publication of revised CWMF documents are being published today. This is in addition to the publication of amended forms of PW-CF6 to PW-CF8 inclusive, PW-CF10 and PW-CF11 and the Rates of Pay and Conditions of Employment Certificate that accompanies each of these contract forms, which were published on 24 May.

Publication of amended forms FTS1 to FTS5 inclusive, FTS 13, ITT-W1, ITT-W1a, ITT-W2 and ITT-W8 today include the revised Comparative Cost of Tender exercise and will affect the tender submission, evaluation, award and contract administration stages where the forms of contract used are PW-CF1 to PW-CF5 inclusive and the NN Sub-contract. These documents are being introduced in advance of amendments to these contracts to facilitate an orderly transition to the revised Comparative Cost of Tender exercise which is to be undertaken on all tenders using PW-CF1 to PW-CF5 inclusive and the NN Sub-contract which are to be submitted on or after 7 July 2018.

Please note that the Schedule, part 1K of FTS1, FTS3, FTS5 and FTS 13 has been changed to make the ‘expenses unavoidably incurred as a result of the delay’ as the default position for the amount to be added to the Contract Sum in accordance with sub-clause 10.7 Delay Cost.  Under the previous versions of these forms the ‘daily rate tendered by the Contractor’ was the default position and it remains the default position for FTS2 and FTS4.

24 May 2018 – Amendments to the Capital Works Management Framework (CWMF) to reflect the introduction of Sectoral Employment Orders in the construction sector.

Circular 08/18 setting out the amendments to the Capital Works Management Framework (CWMF) to reflect the introduction of Sectoral Employment Orders under the Industrial Relations (Amendment) Act 2015 (the Act) in the construction sector was published today. Amendments have also been made to the manner in which the Comparative Cost of Tender is carried out for certain forms of contract in the CWMF.

The amendments to the CWMF fall into two categories; the first primarily affect the contract administration stage and involve updating legislative references and including references to the new legal provisions introduced under the Act. These amendments affect:
• The standard conditions of public works contract PW-CF1 – PW-CF8 inclusive, PW-CF10 and PW-CF11;
• Model Form MF 1.13 Rates of Pay and Conditions of Employment Certificate and the equivalent for PW-CF6, PW-CF7, PW-CF8 and PW-CF11;
• Guidance notes.

The second category is a change to the Comparative Cost of Tender exercise which applies to the tender, award and contract administration stages of PW-CF1 – PW-CF5 inclusive and to the Conditions of Sub-contract (NN) published by the Construction Industry Federation (the NN Sub-contract). The amendments to give effect to the change affects the following:
• The standard conditions of public works contract PW-CF1 – PW-CF5 inclusive;
• FTS1 – FTS5 inclusive: the forms of tender and schedule for use with the standard conditions of public works contract PW-CF1 – PW-CF5 inclusive;
• FTS 13: the form of tender and schedule for use with the NN Sub-contract;
• Instructions to Tenderers ITT-W1, ITT-W1a, ITT-W2 and ITT-W8;
• Guidance notes.

As noted above the amendments to the CWMF documents affect the contract administration stage under all forms of the public works contract and the tender and award stage for PW-CF-1 – PW-CF-5 inclusive and the NN Sub-contract. In order to facilitate an orderly transition to the use of the amended documents, and in particular the use of the revised Comparative Cost of Tender exercise, the introduction of the amendments will be phased. The Circular sets out the action, if any, that is necessary for contracting authorities to undertake with regards to the particular circumstances.

With regards to the change to the Comparative Cost of Tender exercise which only applies to PW-CF1 – PW-CF5 inclusive and the NN Sub-contract, contracting authorities are asked in particular to take note of whether the following circumstances apply to any of their current or imminent tender competitions;

• Where they have a tender procedure currently underway or are scheduled to commence a tender procedure after 24 May 2018, and
• The forms that apply to the tender are PW-CF1 – PW-CF5 inclusive and the NN Sub-contract (for Reserved Specialists), and
• The tender submission date is on or after 7 July 2018

Where all three circumstances apply, contracting authorities should be aware that the transitional arrangements set out in the Circular mean that the amended forms of PW-CF1 – PW-CF5 inclusive will apply to the tender along with the change to the Comparative Cost of Tender exercise.

The change to the Comparative Cost of Tender exercise may be summarised as follows:
• The requirement to tender hourly rates for labour and related costs for categories of workers in the Form of Tender and Schedule, part 2D has been removed. In its place tenderers will be asked to tender a percentage addition to the hourly rates of pay that have been established in any applicable Sectoral Employment Order.

• The percentage addition is to include all costs related to the employment of labour over and above binding pay rates for the various categories of workers that are determined in accordance with any applicable sectoral employment ordermade in compliance with the Industrial Relations Acts 1946 – 2015. It shall include Plus Rates and Allowances (a new definition of which will be provided in Sub-clause 1.1); PRSI (Pay Related Social Insurance); pension, death in service and sick pay contributions; general insurance and administrative overheads; profit. It excludes VAT.

• A limit to the percentage deduction that may be made for the costs of plant in the Form of Tender and Schedule, part 2D has been introduced. Instead of a percentage deduction of 100%, a maximum deduction of 50% is now permitted.

• Sub-clause 10.6.4 (1) of PW-CF1 – PW-CF5 inclusive has also been changed to reflect the omission of the requirement for tendered hourly rates for labour and related costs. Instead it refers to the percentage addition to the hourly rates of pay in any applicable sectoral employment order for the categories of worker required to undertake the works associated with the Compensation Event.

• Sub-clause 10.6.4 (3) of PW-CF1 – PW-CF5 inclusive has also been changed to reflect the limit to the percentage deduction that may be made for the costs of plant.

• Where forms PW-CF1, PW-CF3 and PW-CF5 are concerned the default position to determine delay cost has been changed in the associated Form of Tender and Schedule to read ‘the expenses [excluding profit and loss of profit] unavoidably incurred by the Contractor as a result of the delay to the Date for Substantial Completion of the Works caused by the Compensation Event in respect of which that date has been extended under the Contract.’ Contracting authorities may still opt to use the ‘tendered daily rate of delay’ however unless this option is selected tenderers will not be required to provide a tendered daily rate of delay and it will form no part of the Comparative Cost of Tender exercise.

Key dates in the phasing of the publication of the amendments:
24 May 2018: Publication of amended forms of PW-CF6 – PW-CF8 inclusive, PW-CF10 and PW-CF11 and the Rates of Pay and Conditions of Employment Certificate that accompanies each of these contract forms. In accordance with the tendering rules set out in Particulars to the Instructions to Tenderers documents these amended forms of contract will apply to all tenders using PW-CF6 – PW-CF8 inclusive, PW-CF10 and PW-CF11 which are to be submitted on or after the 3 June 2018.

6 June 2018: Publication of amended forms of FTS1 – FTS5 inclusive, FTS 13, ITT-W1, ITT-W1a, ITT-W2 and ITT-W8. These amendments include the revised Comparative Cost of Tender exercise and affect the tender submission, evaluation, award and contract administration stages where the forms of contract used are PW-CF1 – PW-CF5 inclusive and the NN Sub-contract. These documents are being introduced in advance of amendments to these contracts to facilitate an orderly transition to the revised Comparative Cost of Tender exercise which is to be undertaken on all tenders using PW-CF1 – PW-CF5 inclusive and the NN Sub-contract which are to be submitted on or after 7 July 2018.

27 June 2018: Publication of amended forms of PW-CF1 – PW-CF5 inclusive and MF 1.13 will be published. In accordance with the tendering rules set out in the Particulars to the Instructions to Tenderers documents these amended forms of contract will apply to all tenders using PW-CF1 – PW-CF5 inclusive and the NN Sub-contract which are to be submitted on or after the 7 July 2018. (These amendments reflect the amendments made in the Form of Tender and Schedule and Instructions to Tenderers published on 6 June 2018.)

Note: A Sectoral Employment Order (SEO) is established in accordance with Chapter 3 of Part 2 of the Act. An SEO imposes obligations on employers with regards to the rates of pay and conditions of employment for those categories of worker covered by the SEO. To date, two SEOs that cover certain categories of workers in the construction sector have been signed into law by the Minister of State at the Department of Business, Enterprise and Innovation, being: (i) SI 455 of 2017 covering the construction sector was signed into law on 19 October 2017; and (ii) SI 59 of 2018 covering the mechanical engineering building services contracting sector was signed into law on 6 March 2018.