ABIC Simple Works Contract (Melany)

Question 1

Define a ‘Business Day’

Answer 1

Any day other than a Saturday, Sunday, or Statutory public holiday in the State or Territory shown in item 35 of Schedule 35.

Question 2

Define ‘Contract Price’

Answer 2

Is the ‘Cost of Building Work’ + GST.

Is a lump sum and the Contractor allows for:

• the *works
• provisional and prime cost sums
• installation of any item to be supplied by owner and installed by contractor
• rise and fall
• statutory charges
• exchange rates (5 days before closing of tenders)
• imports and tariffs (5 days before closing of tenders)
• industrial awards and workplace arrangements
• exchange rates (5 days before closing of tenders)
• GST

Question 3

Define ‘Cost of Building Works’

Answer 3

Actual net cost of the *works, excluding GST

The Cost of Building Work + GST = Contract Price

Question 4

Define a ‘Critical Construction Activity’

Answer 4

An activity which is part of the necessary work that if delayed will have direct effect on subsequent activities such that the contractor’s ability to achieve practical completion by the date for practical completion will be affected.

Question 5

Define a ‘Defect’

Answer 5

Work that is:

• in breach of any warranties outlined in the contract documents
• not in accordance with the standard or quality of building work specified in the contract documents.

Question 6

Define ‘Non-Working Days’

Answer 6

• Statutory public holidays
• rostered days off
• recognised industry shut-down days

Question 7

Define ‘Site’

Answer 7

The place at which the *works are to be constructed and any other place mad available by the owner to the contractor under this contact (eg, a public area used for a bin skip).

Question 8

Define ‘Valuable Item’

Answer 8

A valuable item includes minerals, money, treasure, fossils, archeological remains, historic objects or relics.

Question 9

Define what an ‘Arete’ is in climbing

Answer 9

A small ridge-like feature or a sharp outward-facing corner on a steep rock face.

Question 10

Define a ‘Working Day’

Answer 10

Monday to Friday, excluding *non-working days.

Question 11

What are the the 3 insurances that Contractors generally are responsible for, as part of executing an ABIC SW contract?

At what point do they cease?

Answer 11

• Public liability
• Contract Works
• WorkCover

After Final Certificate is issued.

Question 12

Are the ‘Adjustment of Time Costs’ (as noted in Item 18 Schedule 1) excl. or incl. GST?

Answer 12

Including GST.

Question 13

Is the Rate for Liquidated Damages (as noted in Item 24 Schedule 1) excl. or incl. GST?

Answer 13

Including GST.

Question 14

List the order of precedents for the *contract documents.

Answer 14

1. The Special Conditions
2. The owner occupier Special Conditions
3. The Contract Schedules
4. Specification
5. Drawings
6. All other drawings

Question 15

After how many days of taking possession of the site must the Contractor begin the Works?

Answer 15

10 days.

Question 16

If the contractor’s capacity to complete the work is altered to the extent that it may not be able to meets its obligations, how much time do they have to notify the architect and owner? (A2.2)

Answer 16

It must notify them immediately in writing.

Question 17

If the client’s financial position is altered to the extent that it may not be able to meets its obligations, how much time do they have to notify the architect and contractor? (A4.2)

Answer 17

It must notify them immediately in writing.

Question 18

How many days does a Party have to dispute an architect’s certificate notice or written description? (A8)

Answer 18

20 Working Days after receiving the certificate, notice, etc..

Question 19

After the Architect receives a notice of dispute from the Contractor or Client, how long do they have to assess and provide a written response?

Answer 19

10 working days.

Question 20

Which take precedence; large or small scale drawings?

Answer 20

Large scale.

Question 21

If the security is cash retention, what is the % of each progress claim that is withheld until it equates to the total % of security?

Answer 21

10% is withheld from each progress certificate, until it equates to 5% (typically) of the contract price.

Question 22

How does the owner hold cash retention?

Answer 22

In a seperate bank account as trustee of the contractor, including interest earned & less any bank fees or charges.

Question 23

By when is the contractor required to give the Client the bank guarantees?

Answer 23

Within 10 working days of the contract being executed.

Question 24

If the owner is registered for GST, is the value of the bank guarantee incl. or excl. GST?

Answer 24

Excluding GST.

Question 25

Are Provisional and Prime Cost Sums exclusive or inclusive of GST?

Answer 25

Excluding GST.

Question 26

When does an owner have the right to draw on security?

Answer 26

Only if:

1) a certificate issued by the architect is in favour of the owner under N4 (Progress Claim), N11 (Final Certificate), Q9 (Termination by client) or Q17 (Termination by contractor), and:
2) The contractor has not disputed the certificate, and
3) The owner firstly notifies the contractor and architect of the basis of their entitlement (excl. Q9 or Q17, as they have the right to immediately withdraw security).

Question 27

Describe the 3 risks that the Contractor has to bear before Practical Completion:

Answer 27

1) The risk of injury, illness or death of any person occurring as a result of the works.
2) The risk of loss, or damage to, the property in the immediate vicinity of the site.

3) The risk of loss/damage on or in the immediate vicinity of the site:
- the works
- the necessary work
- any structure on site
- plant, tools and equipment,
- any on-site work intended to be incorporated into the works.

Question 28

Describe the 3 risks that the Client has to bear before Practical Completion:

Answer 28

1) The risk of injury, illness or death of any person on or in the immediate vicinity of the site
2) The risk of loss, or damage to, the property in the immediate vicinity of the site.

3) The risk of loss/damage on or in the immediate vicinity of the site:
- the works
- material and equipment intended to be incorporated into the works.

Question 29

What should the Contract Works Insurance cover? (4)

Answer 29

1) The full reinstatement or replacement cost of the works, materials and equipment on the site and plant, tools and equipment etc.
2) Additional consultants’ fees relating to the reinstatement or replacement (as noted in $ in Schedule 1)
3) Any necessary demolition and removal of debris (as noted in $ in Schedule 1)
4) All GST associated with reinstatement and replacement of the works.

Question 30

Can the client arrange for the insurances instead of the contractor if the schedules notes that this responsibility is the contractor’s?

Answer 30

Yes.

They can do so if:

• they are not satisfied that they remain in place
• they are not in place by the date for possession.
• they cannot prove they have the insurances under request.

They can also recover the cost of the premium if they issue to the architect the excess certificate. The architect will assess the value of this in the next progress claim and adjust the Contract Price.

Question 31

If the client has to pay the Contractor’s insurance excess, how do they recover this cost?

Answer 31

They can recover the cost of the premium if they issue to the architect the excess certificate.

The architect will assess the value of this in the next progress claim and adjust the Contract Price accordingly,

Question 32

Is the contractor entitled to submit an additional progress claim as a result of loss of damage to *necessary work or *materials and equipment delivered to site for incorporation into the works?

Answer 32

Yes.

Question 33

What needs to be in place or be received by the owner before they must give the contractor possession of the site? (3)

Answer 33

• a copy of the signed contract executed by both parties
• confirmation that all insurances are in place
• any necessary document required to begin the works that the contractor needs to provide.

Question 34

When a contractor gives a programme to the architect, what 4 things should it include?

Answer 34

1 - the dates for commencement and completion of the major stages of works

2 - the date for practical completion

3 - the start and completion dates of all trades

4 - a critical path

Question 35

Up until what point can the architect issue an instruction for a variation to the works?

Answer 35

The date for (adjusted) practical completion.