Tute 6 (Tara)

Question 1

Contracts usually come into existence as a result of:

Answer 1

competitive tendering

negotiation

non-competitive quoting

a combination of any of these

Question 2

CT.02 Tender documents include:

Answer 2

Notice to tenderers

Conditions of tendering

Building contract (by reference)

Schedules/annexure/appendix to the selected building contract [delete as appropriate]

Form of tender pro forma

Schedules of monetary allowances to be incorporated in the contract

Schedule of prices [if applicable]

Schedule of rates [if applicable]

Specification preliminaries

Specification

Tender drawings

Additional information (including bills of quantities if applicable)

Question 3

What is the legal document that outlines the tendering process?

Answer 3

Australian Building and Construction Commission (ABCC) Code of Tendering

Question 4

What do the builders need to submit with the tender when there has been multiple addendums?

Answer 4

addenda acknowledgement form

Question 5

What are qualifying and non-conforming tenders?

Answer 5

A ‘qualified tender’ is where the tenderer offers to build as designed, but under conditions
that differ from those stated in the tender documents. The conditions o

Question 6

CT.07 Documents to be lodged with tenders

Listed below are the documents which need to be completed and lodged with the tender:

Answer 6

Form of tender

Schedules of monetary allowances to be incorporated in the contract [if applicable]

Schedule of rates [if applicable]

Schedule of prices [if applicable]

Schedule of proposed substitutions for specified items [if applicable – see CT.13]

Evidence of the builder’s current registration or licence, as applicable, to carry out the
work where the project is located

[others as required]

Question 7

What is deemed acceptance of a tender

Answer 7

A tender will not be deemed to have been accepted until notice in writing of acceptance is
handed to the tenderer or is sent by prepaid post or facsimile, or is left at the address stated in the tender form for the service of notices

Question 8

who is required to execute the building contract

Answer 8

the Tenderer
or
On being notified that the owner intends to accept a tender, the tenderer is required to
execute a building contract incorporating its terms, or terms otherwise agreed by the parties.

Question 9

what can be a prerequisite to accepting a tender

Answer 9

Notwithstanding any other requirements of the tender documents, a tenderer must, if so
required, submit additional information to allow further consideration of the tender before
any tender is accepted or a preferred tenderer is nominated.

Question 10

Who is responsible for the accuracy of the site information at tender stage

Answer 10

The owner does not guarantee or warrant any site or sub-surface information it supplies for
the convenience of tenderers. Any such information or opinion does not form part of the contract. Any tenders submitted must be based on the tenderer’s own investigations and determinations.

Question 11

When proprietary names, brands, catalogue or reference numbers are specified in the tender
documents, they are intended to set a minimum standard, and preference for any particular
material or equipment is not intended. What does the tender have to provide when suggesting substitutions and what should you do if they submit this with their tender?

Answer 11

The tenderer may offer material or equipment of
equivalent characteristic type, quality, appearance, finish, method of construction and performance provided detail of all proposed substitutions is stated with the tender.

Nicole - call them after tender and ask if they are willing to stand by their price with the originally specified product/material and if they are = conforming tender. If their price needs to change = non-conforming tender.

Question 12

Additional clauses to include in tender:

Answer 12

the tenderer has no knowledge of the tender price, including rates, of any other tenderer

except as disclosed in the tender, the tenderer has not in relation to this tender, entered into any contract, arrangement or understanding to pay or allow, or enter into a future contract to pay or allow, any money directly or indirectly to a trade or industry association
(above the published membership subscription fee) or to, or on behalf of, any other tenderer, nor paid or allowed any money on that account

the tenderer has not allowed or entered into any contract, arrangement or understanding to receive, or enter into a future contract to receive, any money directly or indirectly from, or on behalf of, any other tenderer in relation to this tender nor received any money on that account

Question 13

Will alternative proposals from tenderers be considered?

Answer 13

Tenderers may submit alternative proposals for consideration, but must also submit a
conforming tender otherwise alternatives are considered non-conforming.
Where an alternative is tendered, the tenderer must include a fully detailed description and
must state clearly the manner in which it differs from that specified. It can be specified in the tender that Tenderers may submit alternatives for only those items nominated hereunder: [list items] but the tenderer must also submit a tender that complies completely with the
tender documents.

Nicole - Be aware that the alternative might be specific to the expertise of that tenderer and may not be guaranteed that price with another tenderer.

Question 14

Tenderers offering different times of practical completion

Answer 14

The schedule to the contract specifies the time for practical completion and the liquidated damages applicable under the contract or each separable part of the Works.
Tenderers must submit a tender in accordance with these requirements. Consideration will be given, however, to additional tenders that offer different times for practical completion.

Question 15

Common methods of obtaining competitive tenders are:

Answer 15

1. Public advertisement (open tendering)
   Nicole - usually done by having an expression of Interest first which then turns into a invited tenderers method as below.
2. Selected (or invited) tenderers

Question 16

What is a ‘qualified tender’?

Answer 16

A ‘qualified tender’ is where the tenderer offers to build as designed, but under conditions that differ from those stated in the tender documents.

Question 17

Information to be provided by tenderers:

Answer 17

schedule of rates
schedule of main subcontractors
schedule of extension of time costs
estimated monthly cash flow
priced bill of quantities, if required
schedule of rates, if required
schedule of current commitments*
referees*
submission of daily rate for overheads and profit
bank guarantees (if owners’ requirements)
licence number (where applicable),
type of licence (as applicable)
dilapidation report, if applicable, (what is required, e.g. photographs, description etc)
insurances (insurers, validity to, amount, type and scope)
program (preliminary) as required
daywork (conditions, if applicable)
noise control (requirements)
names of responsible personnel, should tender be successful
contract time if to be nominated by tenderers
statement that no arithmetical errors made in tender

*These items are part of the pre-tender assessment procedures in ‘selected’ tenders.

Question 18

What information should be given by the builder for pre-tender?

Answer 18

schedule of current commitments*

referees*

Question 19

During the contract, what must the subcontractor verify with the Owner in relation to prime-cost or provisional sums?

Answer 19

the contractor must, in relation to provisional sum or prime-cost items, call for quotations to be accepted by the owner before engaging the subcontractor and carrying out the work

Question 20

The minimum essential terms for partial agreement/engagement with contractor must include….

Answer 20

The minimum essential terms must include identification of the parties, the contract sum, time for completion and a clear definition of the works.

Question 21

Building contracts normally comprise three components:

Answer 21

Building Contract, Specifications/Schedules and Drawings

Question 22

What does the Building Contract do And what organisations publish standard form contracts?

Answer 22

The building contract defines the obligations, rights and responsibilities of the principal and the contractor. Various standard-form contracts are available, published by bodies including the Institute, the MBA, Standards Australia, the Property Council of Australia and the HIA.

Question 23

What does the Specification/Schedules do?

Answer 23

Specifications and schedules – the specifications describe in writing the workmanship and materials, and the manner in which certain work is to be undertaken. The schedules further list and prescribe aspects of the work to be carried out, and items to be supplied and installed under the contract.

Question 24

What do the Drawings do?

Answer 24

The drawings are prepared to visually describe the works and the details. The drawings provide the graphical representation of the design intent from the original layout through to construction details.

Question 25

Contracts should be selected having considered a number of criteria including:

Answer 25

the size and complexity of the project

specific needs of the project

state legislation (ie whether standard special conditions are needed and available or incorporated).

Question 26

In addition to the contract documents, other documents may include:

Answer 26

addenda issued during the tendering period
le ers and other correspondence regarding negotiations that occurred following the closing of tenders
the completed tender form
the completed schedules
le ers of acceptance
any other documents that alter the scope or extent of work identified in the tender documents
construction program (if applicable)**
bills of quantity (where they form part of the contract) – these include: schedules of monetary sums, schedules generally and technical specifications

**Nicole: do not include program in the contract documents as you will need to create a contract variation every time the programme changes which if usually often.

Question 27

What is the typical order of precedents to contract docs?

Answer 27

1. Special conditions shown in the schedule to the contract (including any owner occupied special conditions).
   2 . The conditions set out in the contract/general conditions. This document is generally referred to as ‘the contract’ and will contain a number of clauses describing the roles and responsibilities of the parties and other ma ers relating to the construction of the works. The contract may consist of a number of standard clauses, or include a set of special conditions or a combination of both to reflect the requirements of the parties for a particular project. Some standard forms of contract require a separate document known as the ‘Instrument of Agreement’, which will be unique for any particular project and will be executed by the parties to signify their agreement to the standard form of contract.
   3 . The specification for the works. This will describe the standards and quality of labour and materials required to complete the works.
   4 . The drawings for the works. The drawings describe by way of plans, elevations, sections and details, the scope and extent of the works. The drawings would normally form a part of the documents used to obtain tenders for the works but the tender drawings may not be the same as the contract drawings due to any agreed amendments to the scope of the works made a er the close of tenders but prior to the execution of the contract. The contract set of drawings must reflect the actual scope of work as agreed between the parties at the time of the execution of the contract.
   5 . Any other documents in the order shown in the schedule of the contract.

Question 28

How should you go about amending standard-form contracts?

Answer 28

Unless you are a legal advisor, it is possible that completing an amendments contravenes your state’s Legal Practitioners Act. A legal practitioner should make the amendments.

Question 29

What are liquidated damages vs common law damages

Answer 29

Liqudated damages refer to the contract terms on what happens if the date of practical completion is extended.

Common Law damages in not related to the contract and therefore is outside of the scope of Contract Admin by the Architect. Common Law damages my be able to be claimed after the build even if liquidated damages were paid.

Question 30

How should signing of contracts be handled?

Answer 30

initial or sign each page or drawing and to initial each hand-wri en amendment within them.
Usually two directors or one director and the company secretary must sign. signatures may be required to be accompanied by the company seal.
Separate witnesses are required for each party as there is doubt about the legality of the architect being the witness to both parties.
A witness should not be a related party to the person signing the document.
Both parties must initial specific changes or amendments on any particular page.

Question 31

Signing contract Specification/schedules

Answer 31

While some clients will request each page of the specification to be initialled, It is ok to stamp and sign the cover if it clearly indicates the number of pages the status of the document.

Question 32

Signing contract: Bill of Quantities

Answer 32

Where a priced set of bills of quantities is required, it is wise for both parties to initial every page of the document.

Question 33

What is needed to confirm in a letter to client with tender details before tender?

Answer 33

list of tenderers;
relevant dates (documents available, questions, answers, closing of tenders including place and time);
opening procedure; and
disclosure of tender information and/or tender documents on ma ers agreed in guide le ers17 and 19.

Question 34

How to recommend a tenderer:

Answer 34

Advise:
list of tenders received (name, price, construction period and relevant ma ers), compared to pre-tender estimate, if applicable;
whether all tenders are valid;
on conditional tenders – whether they should be considered or whether they are invalid; and
other irregularities.

Recommend:
a particular tender on price and/or time in accordance with tender conditions. Give full and precise reasons for assessment. With selected tenders, generally the lowest price is accepted, if time is not of the essence (refer also 5.1 below);
negotiation with lowest tenderer, if necessary and explain what negotiation means; and make your recommendation as simple and unambiguous as possible.

Question 35

What to do if the tender price comes back higher than expected?

Answer 35

Negotiate to change the scope with the highest tenderer.

It may be necessary to enter into negotiations on behalf of your client if all tenders are higher than anticipated. The accepted method is to select and then negotiate with a preferred tenderer with a view to modifying the scope of work to arrive at an alternative and acceptable price. It may be prudent to invite the client to such negotiations as decisions on quality, quantity or time will need to be made. Alternatively establish with your client the acceptable limits of your authority to negotiate. Similarly, ensure the representative of the preferred tenderer has the required authority to negotiate. Only if negotiations break down and the preferred tenderer loses that status should the next preferred tenderer be approached for negotiation. At the conclusion of negotiations a recommendation can be made.

Question 36

What are the options to recommend if for some reason no tender can be recommended

Answer 36

the project be abandoned;
scope of works and documents be amended, and re-tender;
client can re-tender a fter a delay in accordance with AS4120-1994 Code of Tendering.

Question 37

What is a Letter of Acceptance to a tenderer and waht is included?

Answer 37

summary of contract terms that provide irrefutable evidence of the agreed contract terms and conditions.

Use language consistent to contract.

Included:
a statement that confirms acceptance by the owner of the contractor’s tender, the use of the words ‘accept’ or ‘acceptance’ is highly recommended;
confirmation of the legal identity of both parties;
precise confirmation and identification of the tender offer which has been accepted; dates, tender numbers etc should be quoted;
confirmation of the general conditions of contract, and the version, date of issue etc; identification of all tender documents by version or issue number, consistent with the principles outlined in item 4.1. Specialist consultants’ tender documents must be similarly referenced; and
confirmation of the architect’s status as the agent for the owner.

Question 38

When should you tell the un-sucessful tenderers?

Answer 38

if the client wishes to negotiate with a preferred tenderer, a two stage notification process is possible. Again, this must only be done with the consent of your client. In the first instance the non-preferred tenderers are advised of their status as non-preferred. Subsequently, a er the successful tenderer has been notified of acceptance, they will receive notification that they have been unsuccessful.
Nicole advises not telling unsuccessful tenderers until you have the successful tenderer locked in (contract) or as locked in as possible - has answered all RFIs.

Question 39

What is the type of imformation that generally relates to a successful Tenderer RFI?

Answer 39

critical path analysis;
construction schedule;
cash flow;
list of proposed subcontractors;
name and contact details of senior personnel; and
rates and percentage allowances to be inserted in Schedules.
Note Some practitioners seek all of this information at tender time. You should advise your client before tenders are called about available alternatives, but it would be prudent to explain that difficulties may be encountered if too much information is sought as part of the tender.

Question 40

How many pieces of paper does Nicole say to put behind your arse between you and the spikes coming at you from lawyers?

Answer 40

Three.