Standards Australia has released a draft AS 11000: General Conditions of Contract (AS 11000) for public comment. The draft AS 11000 is the first standard in a proposed suite of contract conditions intended to replace AS 2124-1992 and AS 4000-1997.
In early September 2013, Standards Australia made a commitment to revising AS 2124-1992, AS 4000-1997 and the suite of Australian standards related to those general conditions. A technical committee comprising stakeholders from regulatory bodies, industry groups, law associations and public authorities was subsequently formed in late 2013 and draft development began in January 2014.
The draft AS 11000 was prepared by a team comprising representatives from the Society of Construction Law, the Australian Procurement and Construction Council (APCC), Austroads, Australian Institute of Architects (AIA), Construction Industry Engineering Services Group (CIESG) and Civil Contractors Federation of Australia (CCF).
The objective of AS 11000 is to provide general guidance for legal contracts in all industry sectors, including construction, engineering, health, manufacturing and infrastructure.
While the draft AS 11000 has been prepared so as to observe the same risk allocation principles found in AS 2124-1992 and AS 4000-1997, some significant changes concerning (amongst other things) extensions of time (EOT), variations, subcontracts, acceleration of works, the impact of the various Security of Payments Act, dispute resolution, good faith, overheads and profit, bill of quantities and notices have been proposed by the drafting team.
A summary of the main proposed changes in AS 11000 is set out below:
- notice of any delays (including their cause and estimated duration) must be given to the Superintendent and the other party within five business days. Contractors must also advise if they intend to claim an EOT
- a contractor is entitled to an EOT for any delay which occurs before the date for practical completion and is beyond their reasonable control
- a contractor is entitled to an EOT for concurrent delays but no delay costs (even for principal-caused delays)
- the superintendent must assess an EOT claim, or request additional information from the contractor, within 20 business days. Otherwise, the date for practical completion will be extended by the EOT claimed
- if a contractor is of the opinion that a direction is a variation, it must notify the superintendent within five business days. The Superintendent must then confirm whether the direction was a variation within five business days
- a contractor will have committed a substantial breach if it does not engage subcontractors using an unamended version of AS: 11002 subcontract conditions (except for those amendments necessary to reflect the head contract)
- the superintendent may direct a contractor to accelerate the works
- the superintendent has the power to receive and issue documents on behalf of the principal where the relevant Security of Payment Act requires such documents to be received or issued by the principal
- an early warning procedure (separate from the dispute resolution procedures) must be initiated to resolve any issues that may arise in connection with the contract
- disputes may be resolved by a conference followed by arbitration or by a conference followed by expert determination
- all parties must satisfy their obligations under the contract in good faith
- rates and prices included in the contract are deemed to include an allowance for overheads and profit
- all bills of quantity are to be priced regardless of whether or not they form part of the contract, and
- all notices, consents or communications under the contract may be delivered, posted, faxed or emailed.
All changes are only proposed at this point and may be subject to further modification after the public comment process.
Call for submissions
Standards Australia has invited submissions from industry stakeholders on the draft AS 11000.
The closing date for submissions is Friday, 27 March 2015.
More details about AS 11000 can be obtained from McCullough Robertson or direct from Standards Australia.
Any submissions should be made via https://sapc.standards.org.au/sapc/public/listOpenCommentingPublication.action