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7/25/2019 Research Report - Standard Forms of Contract in the Australian Construction Industry
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Standard Forms of Contract in the Australian
Construction IndustryResearch Report
Pr of esso
r John Sha
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r key
AM Matthew Bell
Wayne JocicRami Marginean
June 201
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Contents
Part A - Introduction1
Message from the !ean of Mel"ourne #aw School
2 Message from the $hair of the
Society of
$onstruction #aw Australia2
Mel"ourne #aw School%s$onstruction #aw Program&
'he Society of $onstruction #aw Australia&
Acknowle(gements&
Part B - Summary ofndings4
Part C - Background andmethodology6
1 Background6
1)1 Stan(ar( forms of
contract in the
Australian construction
in(ustry
*
1)1)1 +,er,iew*
1)1)2 AustralianStan(ar(s-
1)1)& AB.$/
1)1) +ther stan(ar(forms /
1)2 'he legal un(erpinningsof stan(ar( forms
1)& Pre,ious research10
! Aims of this research1!
2)1 ey uestions an( the
approach this
stu(y un(ertakes to
answering them
12
2)2 3urther research
1&
2)& Australian Stan(ar(sre,ision process1&
" #ata collection for this$ro%ect14
&)1 Sur,ey1
&)2 .nter,iews14
Part # - #etailed ndings16
4 Attitudes to&ardsstandard forms16
)1 Broa( support in principlefor stan(ar( forms 1*
)2 Suita"ility of currently5a,aila"le forms1-
)& 3orms ,iewe( as "eingcapa"le of use
without su"stantialamen(ment1/
' (se of standard forms!)
4)1 +,erall20
4)2 Break(own "y position ofcontract within
the contracting chain20
4)& Break(own "y initialcontract ,alue21
4) Break(own "y pro6ectlocation22
4)4 Break(own "y contractingsector 2&
6 *hich standard forms are+eing used,!4
*)1 +,erall24
*)2 Break(own "y initialcontract ,alue2*
*)& Break(own "y pro6ectlocation2/
*) Break(own "y contractingsector &0
*hich $arty makes thedecision to use
the standard form,
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"!
. *hy are standard formsused,""
/)1 +,erall&&
/)2 3amiliarity&
/)& Risk allocation&
/) Minimising transactioncosts&
/ *hat $ro$ortion of
standard forms
are amended,
"'
)1 +,erall&4
)2 Break(own "y initialcontract ,alue&*
)& Break(own "y contractingsector&-
) Break(own "y form&/
1) *hy are standard formsamended,
"/
11 *hat ty$es of clauses areamended,
41
11)1 +,erall1
11)2 Break(own "y initialcontract ,alue*
11)& Break(own "ycontracting sector
1! Percei0ed outcomes from
amendment
of forms
'!
A$$endi 1 - Sur0ey2uestions'"
A$$endi ! - S$ecic
feed+ack on AustralianStandards forms
'
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Part A - Introduction
9,ery year< hun(re(s of
thousan(s of contracts
are entere( into for
construction work in
Australia) 'he work
un(ertaken un(er these
contracts< an( the ,alue
of that work< is e=tremely
,arie(< ranging from
minor home reno,ations
to multi5"illion (ollar
infrastructure an(
resources pro6ects)
'he comple=ity an( (i,ersity of
risks< an( the a(ministrati,e
proce(ures in,ol,e( in
construction pro6ects< ha,e
together resulte( in in(ustry
perception that use of
stan(ar( forms of contract
ten(s to minimise a,oi(a"le
transaction costs an( o,erall
lea(s to greater efficiency in
procurement) 8owe,er< it
seems
increasingly to "e the case that
5 especially in high5,alue
commercial pro6ects in,ol,ingsophisticate(
in(ustry participants >inclu(ing
legal a(,isers? 5 stan(ar(
forms are less freuently "eing
use( an(< where they are
use(< they are hea,ily
amen(e()
.n late 201&< Mel"ourne #aw School%s
construction law program< with the
support of the Society of
$onstruction #aw Australia< launche( a
research pro6ect to in,estigate whetherthese perceptions
reflect current practice in the Australian
construction in(ustry) .t sought to
assess the current use
an( effecti,eness of the range of
stan(ar( forms of construction contract
in Australia< particularly in
terms of their a"ility to reflect an
a
p
p
r
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r
i
a
t
e
l
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5"alance( risk allocation an( to
facilitate efficient
pro6ect a(ministration)
'he research pro6ect in,ol,e( a we"5
"ase( sur,ey >which collecte( (ata
"etween 7o,em"er 201& an( 3e"ruary
201? an( inter,iews with construction
in(ustry stakehol(ers >"etween January
an( March 201?) .t was un(ertaken< an(
this Report was prepare(< "y a research
team comprising the following Mel"ourne
#aw School personnel@
Professor John Sharkey AM >8onorary Professorial 3ellow?
Matthew Bell >Senior #ecturer an( $o5
!irector of Stu(ies lea( author of this
Report an( Responsi"le
Researcher un(er the Mel"ourne #aw
School%s 8uman 9thics A(,isory Croupappro,al for this pro6ect?
Wayne Jocic >Senior #ecturer?
Rami Marginean >Research Assistant?)
'his Report outlines the key fin(ings of
the research pro6ect) .n a((ition< it flags
a num"er of matters arising from this
initial pro6ect which< in the research
team%s ,iew< warrant further research)
Dthe
research
pro6ect
in,ol,e(
a we"5
"ase(
sur,ey an(
inter,ie
ws with
constru
ction
in(ustry
stakehol(ers%
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3essage fromthe #ean of 3el+ourne a&School
. am (elighte( that Mel"ourne
#aw School has "een a"le to
pro,i(e support for this
important research)
Mel"ourne #aw School is an
outstan(ing research institution with
internationally recognise(
scholars who stri,e to pro(uce research
of the ,ery highest uality)
'his report is one e=ample of important
research "eing un(ertaken at the #aw
School in con6unction with mem"ers of the
profession an( in(ustry to pro,i(e insight an(
un(erstan(ing into the important
practical issues in law) .t was a pleasure to
(eepen our connection with the Society of
$onstruction #aw Australia< whose support of
this pro6ect . gratefully acknowle(ge)
'he construction law program at the #aw School
has long "een recognise( as one of
the worl(%s lea(ing teaching programs within this
speciality area of scholarship an(
practice) Stu(ents an( teachers within the program
ha,e pu"lishe( wi(ely an( recei,e( recognition at
the highest le,els for their scholarship< inclu(ing "y
way of international construction law essay priEes)
.n 201&< our construction law program%s research
capa"ility recei,e( a significant "oost through the
appointment "y the :ni,ersity of Mr John
Sharkey AM as an 8onorary
Professorial 3ellow) John is one of Australia%s most
e=perience( an( highly5respecte( construction law
practitioners an( has pu"lishe( an( lecture( wi(ely
in the area< inclu(ing ha,ing "een a su"6ect
coor(inator in the Mel"ourne #aw Masters from
20005201&)
'he (etaile( research pro6ect which has le( to
pu"lication of this Report represents
the first ma6or research ,enture un(ertaken un(er
Professor Sharkey%s lea(ership) My
thanks an( congratulations to him< Matthew Bell<
Wayne Jocic an( Rami Marginean for
the e=pertise an( har( work that they ha,e put into
this Report) 'he Report represents
a significant milestone in the continuing
(e,elopment of our construction law program<
an( . am (elighte( to commen( it to mem"ers of
the construction law community)
Professor Carolyn 50ansD
e
a
n
H
a
r
r
i
s
on
M
o
o
r
e
P
r
o
f
es
s
o
r
o
f
L
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3essage fromthe Chair of theSociety ofConstruction a&Australia
'he uestions of DWhat contract
shoul( . useF% an( DWhat
amen(ments shoul( . makeF% are
constantly aske( "y (e,elopers<
owners an(
contractors an( constantly answere("y their a(,isers)
#ying "ehin( the uestions are
issues of cost effecti,eness< efficiency<
appropriate risk allocation an(
familiarity) 'he preferences which ha,e
(e,elope( o,er many (eca(es are ,ery often
manifeste( in "espoke contracts or ,ery hea,ilyamen(e( stan(ar( form contracts)
8ow ha,e these preferences (e,elope(F .s there a
"etter approach that is< an approach which will see
impro,ements in cost effecti,eness an( efficiencyF
What is the role
for stan(ar( form contractsF An un(erstan(ing of
these uestions an( the possi"le
answers to these uestions coul( ha,e a significant
impact on the construction in(ustry)
.t is this potential impact which moti,ate( the
Society of $onstruction #aw Australia to support
this :ni,ersity of Mel"ourne research pro6ect) 'he
choice of Professor John Sharkey AM< to lea( the
pro6ect< an( the e=perience an( wis(om which
Professor
Sharkey coul( "ring to "ear< "rought a((e( interestto the pro6ect)
'he Society is grateful for the opportunity to
support this important pro6ect an(
looks forwar( to continuing to participate in the
(iscussion which this report is certain to pro,oke)
Philli$ reenham
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3el+ournea&Scho
ol7sConstruction a&Program
Mel"ourne #aw School "rings together lea(ing
local an( international scholars< alumni<
researchers an( mem"ers of the legal profession
to pro,i(e stu(ents with a range of transformati,e
e=periences< "oth insi(e an( outsi(e the
classroom) Mel"ourne #aw
School staff an( stu(ents commit to e=cellence
an( stri,e to make a (ifference to our local
community an( "eyon()
Mel"ourne #aw School commence( teaching
gra(uate courses in construction law
in 2000) 'he program offers a specialist Master
of $onstruction #aw an( Cra(uate
!iploma in $onstruction #aw) 'he specialisation
in construction law has "een tailore(
to gi,e construction lawyers an( professionals in
"uil(ing< construction< engineering
an( associate( in(ustries the specialise( legal
knowle(ge to take the ne=t step in their
careers) Working with teachers who are lea(ers in
their fiel(s< an( fellow stu(ents from throughout
Australia an( aroun( the worl(< stu(ents ha,e a
uniue opportunity to gain a thorough
un(erstan(ing of this ,ital area of law an( its
interaction with the commerce an( practice of the
in(ustry)
&&&la&unimel+eduau8constructionla&
9he Society of Constructiona& Australia
'he o"6ect of the Society is Dto
promote the e(ucation< stu(y an(
research >an( pu"lication of the
useful results of such research? in the
fiel( of
construction law an( relate(
su"6ects "oth in Australia an(
o,erseas for the "enefit of the
pu"lic an( the construction
in(ustry)%
'he Society was foun(e( in 200) .t is a single
national organisation of mem"ers (rawn from allprofessions in,ol,e( with construction< in(ustry
representati,es an( the legal profession who share
an interest in construction law) 'he Society
encourages the wi(est possi"le in,ol,ement of all
its mem"ership an( encourages (iscourse across
the "roa( spectrum of issues which comprise the
su"6ect of construction law)
&&&sclorgau
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Ackno&ledgements
'he research team acknowle(ges with
thanks the contri"ution of the following
organisations an( in(i,i(uals@
'he pro6ect was fun(e( "y grants "y the !ean ofMel"ourne #aw School an( "y
the Society of $onstruction #aw Australia)
'he following organisations allowe( >an(< in manycases< acti,ely assiste( in?
the promotion of the sur,ey to their respecti,emem"erships@
5 Australian $onstructors% Association
5 Australian $onstruction .n(ustry 3orum
5 Australian .nstitute of Architects
5 $i,il $ontractors 3e(eration
5 $onsult Australia
5 9ngineers Australia
5 Master Buil(ers Australia
5 Mel"ourne #aw Masters construction lawprogram
5 Property $ouncil of Australia
5 Society of $onstruction #aw Australia)
'he many construction in(ustry professionals<
lawyers an( stu(ents who participate(in the sur,ey or inter,iews)
'he Mel"ourne #aw School $onstruction #aw A(,isory Boar( an( many col leagues
within or associate( with the #aw School whopro,i(e( ,alua"le a(,ice in the
planning an( implementation stages of thepro6ect)
Photo cre(its@ front co,er 5 top left an( mi((le@ Property$ouncil of Australia others@ Matthew Bell "ack co,er 5
Brookfiel( Multiple=< Clenn 8ester Photography)
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Part B - Summary of ndings
'his Report into the use of stan(ar(
forms of construction contract in
Australia is "ase( upon@1
sur,ey responses "y 24
in(i,i(uals< representing &-
pro6ects<
"etween !ecem"er 201& an(
3e"ruary 201 an(
- inter,iews con(ucte( "y the pro6ectteam "etween January an(
March 201)
'he e=perience reflecte( in these
sur,ey responses an( inter,iews
co,ers a (i,erse range of
participation in the in(ustry >inclu(inglawyers an( in(ustry professionals?<
pro6ect types< contract ,alues an(
geographical locations)
+ur primary fin(ings are summarise( asfollows)2
Attitudes to&ards standardforms (section 4)
'here is "roa( support in principle for
the in(ustry ha,ing a,aila"le
to it stan(ar( forms of contract whichare capa"le of "eing use(
without su"stantial amen(ment)
8owe,er< a ma6ority >4G? of
respon(ents "elie,e that there is no
such form currently a,aila"le)
1 See section 3.2 As is note( throughout this Report<the (egree of confi(ence with
which the ,arious fin(ings can "estate( (epen(s upon a range offactorsinclu(ing sample siEe< so the specific(iscussion shoul( "e referre( to)& Section 5.1.
(se ofstandard
forms(section 5)
:0erall< */Gof the contractsreporte( uponwere "ase( upon
stan(ar(forms)&
'here is<howe,er< wi(e,ariation in therate of usage(epen(ing
upon factorsinclu(ing@
5 where
the contract
sits within
the
;contracti
ng chain7<
-4G of
hea(
contracts
use a
stan(ar(
form as a"ase<
compare(
to &&G
ofsu"contractsHtra(econtracts
5
Contract
0alue<
use of
stan(ar(
forms isclose to
uni,ersal
on
contracts
with a
,alue less
than
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I100<000< ranges "etween **G
an( -/G on ,alues "etweenI100<000 an( I400 million< an(
4
(rops to 2/G on ,alues o,er I400million
5 ocation< a lesser proportion ofcontracts use stan(ar( forms
in the States an( 'erritorieswhere mining an( resourcespro6ects
pre(ominate >WA< 7' an(
ueenslan( 5 here< the
range is >&G54/G??
compare( to the A$'< 7SW<
SA< 'asmania an( Kictoria
>*4G5100G?* an(
5 Contracting sector< use of
stan(ar( forms is highest in
the
resi(ential "uil(ing sector<
remains high in the commercial
"uil(ing an( process
engineering sectors< an(
(rops
progressi,ely through the
pu"lic sector an( pri,ate
sector infrastructure sectors<
with the lowest use "eing in
the mining an( resources
infrastructure sector)-
Section 5.2.4 Section 5.3.* Section 5.4.- Section 5.5.
D*/
G
of
the
contract
s
reporte(
upon
were
"ase(
upon
stan(ar(
forms%
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*hich standard forms. are+eing used, (section 6)
+,erall< the Australian Standardsforms continue to dominate
the Australian construction
contracting landsca$e .naggregate< the four main forms
>AS&00 >2&G of pro6ects using a
stan(ar( form?< AS000 >1/G?<
AS212 >1-G? an( AS02 >1G??
represent close to -0G of the
stan(ar( forms which are use(< as
reporte( upon in this sur,ey)
Applying that -0G to the */G of
pro6ects o,erall which use stan(ar(
forms< these forms are used in
nearly half of all $ro%ects
re$orted u$on in this sur0ey
'he Australian Stan(ar(s ma6or worksforms are used across all
sectors >other than for resi(ential"uil(ing with a pri,ate in(i,i(ual
as principal? an( across all
contracting 0alues >although
no AS000 forms were reporte(
as "eing use( on pro6ects with a
,alue in e=cess of I400 million?)
'he FI#IC forms are only use( onrelati,ely high ,alue pro6ects
>LI100 million?< in pri,ate sectorinfrastructure >"oth mining an(
non5mining? an( process engineeringpro6ects)
'he C!1 form is primarily use( in7SW< "ut there is also some
use of it in ueenslan( we foun( thatit was use( only for contracts
with a ,alue o,er I4 million)
'he ABIC 3* form is little use(outsi(e relati,ely small ,alue >up to
I4 million? contracts its primary use isto "e foun( in the resi(ential
"uil(ing sector where the owner is a
pri,ate in(i,i(ual "ut it also has some
use in the commercial "uil(ing >pri,ate
sector principal? an( infrastructure
>pu"lic sector principal? sectors)
*hich $arty makesthe decision to use thestandard form, (section
7)
'he $rinci$al >44G? or the $rinci$al7s
la&yer >2*G? were responsi"le
for choosing the stan(ar( form in more
than /0G of cases)
*hy are standard formsused, (section 8)
'he (ominant factor i(entifie( "y
participants was Dfamiliarity
&ith the form of the party
choosing it%)
Amendment of standardforms (sections 9-12)
.4= of the contracts which employe(a stan(ar( form were
amen(e( from the rele,ant pu"lishe(
form)10
Whilst we (i(not attemptsystematically toi(entify the etent
of amen(ments<the responses in
inter,iewsin(icate( thatthe
amen(ments aretypically0oluminous)
'he inci(enceof amen(mente=cee(s '=across almost all
contract0alues>contractingsectors and
standardforms> an(
is particularlyhigh in thefollowingcategories@
5 Contract
0alue< I40
million5I100
million >G?
I100 million5
I400
million >-G?
LI400 million>100G?11
5
Contracting
sector<
resi(ential
"uil(ing5
commercial
(e,eloper
>4G?
pri,ate sector
infrastructure
>non5miningHresources?
>4G?
pri,ate
sector
infrastructu
re >miningH
resources?
>100G?
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process engineering >100G?12
an(
5 Forms< AS212 >-G? AS&00>/G? 3.!.$ >100G?)1&
'he primary reason i(entifie( foramen(ing stan(ar( forms was the
;need to shift risk7)1
As to the ty$es of clauses &hichare amended from >inclu(ing
a((e( to? the stan(ar( forms< thehighest inci(ence of amen(ment
across all forms< contracting
sectors an( ,alues was in respect
of@ e=tensions of time >-*G of
forms where amen(ments were
reporte(?< (elay (amages
>inclu(ing liui(ate( (amages?
>-1G?<
site con(itions >*/G?< payment
>*4G? an( ,ariations >*&G?)14
'hat sai(< there were su+stantial0ariations across categories
as to the ty$es of clauses
amen(e() 3or e=ample >"ut< see
section 11 for further< (etaile(
analysis?@
5 the highest inci(ence of amen(ment
in respect of e=tension of time
clauses was in the resi(ential
"uil(ing5commercial (e,eloper sector
>2G? an( contract ,alues from I20million to I40 million >/G? an(
5 limitations of lia"ility were a((e( to/G of forms o,erall< "ut
this inci(ence rose to -&G in the
pri,ate sector infrastructure
>mining an( resources? sector)
+,erall >"ut< this was su"6ect to wi(e,ariation in ,iews?< the
$erce$tion of amendment ofstandard forms was that it le( to@1*
5 increase( un(erstan(ing "etween the
parties an( efficiency in pro6ect
a(ministration >which may "e
regar(e( as positi,e outcomes? an(5 increase( nee( for legal a(,ice<outturn cost an( (isputation
>negati,e outcomes?)
D/G of the
contracts which
employe( a
stan(ar( formwere amen(e(
from the rele,ant
pu"lishe( form%
/ See section 1.1 for an o,er,iew of the formsreferre( to in this Report) Section 8.2.10 Section 9.1.11Section 9.2.12 Section 9.3.1& Section 9.4.1 Section 1!.14 Section 11.1* Section 12.
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Part C - Background and methodology
1 Background
11 Standard forms of contract in the Australianconstruction industry1
111 :0er0ie&
'he range of forms a,aila"le in
Australia to(ay has its origins in the
forms promulgate( "y professional
"o(ies in the late 1th an( early
20th centuries in the :nite( ing(om
an( then Australia) 'ypically<
these forms ha,e e,ol,e( "y a process
where"y a consensus is
forge( among ,arious in(ustry
interest groups an( reflecte( in
a stan(ar( form< that form
"ecomes increasingly the su"6ect
of
amen(ments< an( then the interest
groups sit (own once again in an
en(ea,our to (ocument a re,ise(
common approach)
'he fact that many of the stan(ar(
forms are (e,elope( through a
process of negotiation an( (iscussion
has important conseuences)
3irst< such Dconsensus% forms are more
likely to "e Dfair% to all parties)
3or e=ample< "oth the AB.$ MW form
an( AS00051- >"oth of
which are (iscusse( further "elow? ha,e
"een put forwar( on the "asis that they
reflect the Dprinciple(% risk allocation
promote( in the 7ational Pu"lic Works
$onferenceH 7ational Buil(ing an(
$onstruction $ouncil Joint Working Party
"o Dis#$te report of 10) Secon(ly< in
a negati,e sense< they are likely to
contain many compromises)
'he (ifficulties in getting the agreement
of all parties concerne( when a new form
is "eing (e,elope( or where amen(ment
is reuire(
mean that almost all stan(ar( form
contracts 5 inclu(ing those (iscusse( in
this Report 5 contain anomalies an(
am"iguities< an( that these are likely to
remain part of the form until a(,erse legal
interpretation necessitates amen(ment)
'he in(i,i(ual organisations usually
a(,ise their mem"ers of the pro"lem
areas an( often suggest amen(ments
which might "e incorporate()
Asi(e from
such
Dconsensus%
stan(ar(
forms< forms
(rafte( from
the point of
,iew of one
of the parties
also continue
to ha,e wi(e
use in the
Australian
in(ustry) 3or
e=ample< in
the pu"lic
sector@
the
Australian
!epartment
of !efence
>through its
!efence
Support
an( Reform
Croup? has
its own suite
of facilities
contracts
for
the
constr
uction
an(
maintenanc
e of
its
signifi
cant
estate
throu
ghout
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the country< inclu(ing the
8ea( $ontract >current
,ersion< 8$51 200&?<
Managing $ontractor >M$$51
200&? an( Me(ium Works
>MW52 200? forms1/ an(
the 7SW Co,ernment has a suiteof contracts as part of its
DProcurement System for
$onstruction%< inclu(ing C$21
9(ition
2 >essentially< for pro6ects
,alue( at o,er I1 million?<
MW21 an( Minor Works >less
than I1 million? an( Mini Minor
Works >less than I40<000?)1
Pri,ate5sector organisations< whether
they "e procurers of< or
contractors for< construction work<likewise commonly put into the
market "espoke forms representing
the terms on which they e=pect
to (o "usiness) An e=ample of a peak
in(ustry "o(y promulgating
such a form e=plicitly to represent its
preferre( contracting strategy is
the Pro6ect $ontract P$51 1/<
pu"lishe( "y the Property $ouncil of Australia) Whilst P$51 is not wi(ely
use( nowa(ays >as note( in section
6.1 "elow< less than 1G of the forms
reporte( upon in the sur,ey use(
P$51?< its (rafting forms the "asis for
many contracts< whether "espoke
or stan(ar( forms use( "y particular
organisations) 7ota"ly< 8$51 200&
>use(< we foun(< in 2)1G of pro6ects
employing a stan(ar( form? is
(eri,e( from P$51< although the form
has "een significantly a(apte( to
a((ress specific concerns of the!epartment of !efence)20
Dalmost all
stan(ar(
form
contracts
contain
anomalies
an(
am"iguiti
es%
1- 'his section is a(apte( from ch / of .an Bailey an( Matthew Bell< %onstr$ction Law in &$stra'ia >&r( e(< 2011?)1/ See www)(efence)go,)au) 1 See https@HHwww)procurepoint)nsw)go,)auH"efore5you5"uyHprocurement5system5constructionHstan(ar(5form5(ocuments5construction)20 Australian Co,ernment< !epartment of !efence< D.nfrastructure !i,ision Suite of $ontracts@ An .ntro(uction% >200-?< p 2< a,aila"le atwww)(efence)go,)auHestatemanagement)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;*
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were pu"lishe( in 1-/< 1/1< 1/*
an( 12)
At present< the suite comprises@
AS00051- >DCeneral $on(itions of$ontract% 5 for construct5only (eli,ery?
AS0151/ >su"5contract for usewith AS000?
AS0252000 >,ariant of AS000 for(esign an( construct (eli,ery?
AS0&52000 >su"5contract for usewith AS02?
AS12252010 an( 05200>consultants% agreements?
AS0452002 >minor works contract 5superinten(ent5a(ministere(?
an( AS0*52002 >minor workscontract 5 principal5a(ministere(?
AS1052002 >euipment supply withinstallation? an( AS115
200& >euipment supply withoutinstallation?
AS1252002 >perio(ic supply ofgoo(s?
AS1452002 >pro6ect management?
AS1*52002 >constructionmanagement?
AS1-5200& >constructionmanagement tra(e contract?
AS15200& >asset maintenance an(ser,ices 5 superinten(ent%s
,ersion >AS205200& is the
principal%s ,ersion an( AS215
200& the short ,ersion??
AS52001 >work or(er?)
Dthe use of
internat
ionally5
recognise(
forms
remain
s
relati,e
ly
infre
uen
t in Austr
alia%2 See John :ff< D!raft .nfrastructure $on(itions of $ontract@ 201 9(ition% >S$# Paper !1*-< March 201?)24 See www)icheme)org)2* See the article "y 'ony !ymons an( Michael Men(el"lat at >201&? &0 nternationa' %onstr$ction Law e*iew 2-)2- See www)saiglo"al)com)
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AS212 an( AS000 are (esigne( for use
on ma6or "uil(ing an( engineering
pro6ects where a Dsuperinten(ent% is
engage( to a(minister the contract) 'he
superinten(ent may "e an in(epen(ent
professional >or a firm of consultants? oran employee of the principal) 'he
contract price may "e calculate( as a
lump sum or re5measurement >sche(ule
of ratesH"ill of uantities? or a com"ination
of these)
'hough Stan(ar(s Australia inten(e( to
(iscontinue pu"lication of the AS2125
12 e(ition >which itself replace( the
superse(e( 1-/< 1/1 an( 1/*
e(itions? when the AS000 contract was
release(< it remains a,aila"le as a
current Stan(ar()
As at the time of preparation of this
Report< a process initiate( "y Stan(ar(s
Australia to re,ise >at least? the ma6or
works forms was well un(erway) See<
further< section 2.3 "elow as to the
potential interplay "etween that process
an( this research pro6ect)
11" ABIC
'he Australian Buil(ing .n(ustry $ontract
suite >AB.$? is promulgate( through a
Joint !e,elopment $ommittee which is a 6oint ,enture of Master Buil(ers Australia
#t( an( the Australian .nstitute of
Architects >A.A?) .t is (esigne( for use
with an architect as the principal%s
representati,e)
'he original ,ersion of the ma6or works
contract >AB.$ MW52001? was "ase(
upon the $onstruction .n(ustry $ontract
>$.$51 1-? which
was pro(uce( "y the >then Royal?
Australian .nstitute of Architects alone)
'he current ,ersion >AB.$ MW5200/?
has e,ol,e( significantly from that "ase)
3orms in the AB.$ suite are up(ate(
from time to time to a(( clarity or to
reflect minor changes to the rele,ant
law< an( a full re,ision
occurs appro=imately e,ery three to
fi,e years) .t is un(erstoo( that the
ne=t e(ition is e=pecte( to "e pu"lishe(
later in 201)
2/ See www)architecture)com)au)2 See< eg< www)master"uil(ers)asn)au for ueenslan()
'he suitecurrentlycomprises@2/
AB.$ MW5
200/ >ma6or
works?< withresi(ential
works
,ariants for
each
State an(
'erritory
AB.$ MW5
S$51
>su"contract
un(er MW
form there
are alsoshort
form
su"contracts
?
AB.$ SW5
200/
>simple
works?< with
resi(ential
works
,ariants for
eachState an(
'erritory
AB.$ SW5
S$51
>su"contrac
t un(er SW
form there
are also
short
form
su"contract
s?
AB.$ BW512002 >"asicworks >up toI40<000 in,alue??
AB.$ BW5S$51>su"contractun(er BW form?
AB.$ 9W51
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200& >early works?)
114 :ther standard forms
'here are numerous stan(ar(
forms pro(uce( apart from those
(iscusse( a"o,e) Many pu"lic
authorities an( local go,ernment"o(ies ha,e their own stan(ar(
forms) Moreo,er< Master Buil(ers
Australia #t( an( its >State5"ase(?
mem"er associations pro(uce
stan(ar( forms for ,arious
purposes)2
Master Buil(ers recommen(s the use
of certain Australian Stan(ar(s
an( the AB.$ suite "ut also has its
own forms >some of which are for
use nationally an( others in certain
States an( 'erritories? inclu(ing@&0
B$& >commercial? an( B$ >resi(ential?5 lump sum
$M2012 5 $onstruction Management$ontract
$P& >commercial? an( $P4
>resi(ential? cost plus contract >there
are
also other cost plus5"ase( forms
in the suite?
!B1< RB$51 an( RBW 201
>contract sum LI400<000? 5 (omestic
>resi(ential? "uil(ing
Da
stan(ar(
form
contractshoul(
"e
assume(
to "e
"in(ing
in
accor(an
ce with
its terms%&0 See www)master"uil(ers)com)auHportfoliosHcontracts for further gui(ance a"out each form an( when it is to "e use()
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!9$+7 201& an( !9$+7 2 5 (esignan( construct< lump sum
C$$4 5 hea( contract for commercialconstruction
>with S$5- su"contract?
8$* 5 new homes 8.$4 5 home impro,ement
#S$2 5 $ommercial Buil(ing $ontract
MW$5$ >commercial? an( MW$51>resi(ential? 5 minor works
PB51 5 pool "uil(ing
PM2 5 pro6ect management
SW$ 5 small works an( SW$5R 5simple works
'$2012 5 tra(e contract un(er $M2012>also tra(e contract '$58?)
1! 9he legalunder$innings of standardforms"1
'he su"6ect matter of this Report is
Dcontracts%) 'hat term has many
(ifferent connotations) .n this Report< it
is largely "eing use( to refer to
(ocumentation which reflects the parties%
agreement< "ut 5 in the classical legal
conception 5 a Dcontract% is in fact the
>legally5"in(ing? agreement
itself)&2 'he legal conception of
construction contract (ocumentation
procee(s from an assumption that it
reflects the parties% D(eal% an(<
therefore< the parties will "e "oun(
"y it whether or not they fully
un(erstoo( >or< in fact< actually agree( to?the terms which are recor(e()
'his assumption is especially pre,alent
in commercial arrangements
>as oppose( to those in,ol,ing
in(i,i(uals as consumers where< to
a certain e=tent< the position has "een
mo(ifie( "y the common law
an( legislati,e inter,ention?)&& .n many
ways< this assumption sets the
conte=t for the way in which stan(ar(
forms of construction contract
are use( in Australia an(< we think< helps
e=plain many of the fin(ings in this
Report)
.t is< therefore< worth restating the
"asic legal principles applica"le
where parties seek to escape their
lia"ilities an( o"ligations on the
"asis that they (i( not fully comprehen(
what they were signing up to)
'hese are
illustrate(
"y the
8igh
$ourt of
Australia%s(ecision
in +o''
(,%+)
Pt Lt/ *
&'#0a#0
ar Pt
Lt/)& .n
that case<
an agent
of the
pharmace
utical
company
signe( a
stan(ar(
form
Dapplicatio
n for
cre(it% to
ha,e
3inemores
>now 'oll?
(istri"ute its
3lu,irin
,accines) 8e
(i( not
notice the
limitation of
lia"ility
clause on
the "ack of
the form)
3inemores
faile( to
keep its
trucks at the
correct
temperature
an( the
,accines
spoile()
'oll a(mitte(
negligence "ut
sought to rely
upon the
limitation
clause to
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e=clu(e its lia"ility) :ltimately< the 8igh
$ourt foun( in its fa,our) .n (oing
so< the $ourt took the opportunity to
restate the rele,ant rule as follows@
NWOhere there is no suggeste( ,itiating
element< an( no claim for euita"le or
statutory relief< a person who signs a(ocument which is known "y that person to
contain contractual terms< an( to affect legal
relations< is "oun( "y those terms< an( it is
immaterial that the person has not rea( the
(ocument)&4
Applying this principle to the
construction sphere< Justice !a,i(
Byrne has o"ser,e( that< "y the time
a (ispute stemming from
inappropriate con(itions reaches the
court<
NtOhe law is ,ery much powerless to set
things aright) .t accepts< as it must< that<su"6ect to limite( e=ceptions< a contract freely
entere( into "etween competent parties must
"e gi,en effect to) 'he see(s of the financial
(isaster for all the parties ha( "een sown
months "efore)&*
.n a commercial conte=t< therefore<
in the a"sence of recognise(
,itiating factors in the formation of
the contract< a stan(ar( form
contract shoul( "e assume( to "e
"in(ing in accor(ance with its
terms as o"6ecti,ely interprete() .n
turn< the onus is on the person
or organisation signing it to
un(erstan( those terms) 'his (oes
not
mean that the formal contract is "y
any means the D"e5all an( en(5all% for
pro6ect success 5 as many
inter,iewees note(< the relationship
"etween the parties an( their a"ility
to a,oi( an( resol,e issues (uring
the pro6ect is crucial)&- 8owe,er< the
contract ine,ita"ly (oes "ecome ,ital
if that relationship "reaks (own an(
the parties nee( to ha,e recourse to
their respecti,e legally5enforcea"le
rights)
Dthere is
a (earth
of
pu"licly5a,aila"le
(ata as
to the
Australia
n
construc
tion
in(ustr
y%s use
of< an(
attitu(e
towar(s<
stan(ar(
forms of
contract%
&1 'his section is a(apte( from Matthew Bell< DStan(ar( 3orm $onstruction $ontracts in Australia@ Are our Rein,ente( Wheels $arrying us3orwar(F% >200? 24 B$# -< pp /*5/-)&2 Jeannie Paterson< An(rew Ro"ertson an( Arlen !uke< Princi#'es of %ontract Law>th e(< 2012?< p &) 'hat passage also notes< howe,er< that there are Dmany (ifferentways of un(erstan(ing what a contract is< an( what contract law is a"out)%&& See< eg< i"i(< Part K..)& >200? 21 $#R 1*4)&4 >200? 21 $#R 1*4 at 1/4 >Cleeson $J< Cummow< 8ayne< $allinan an( 8ey(on JJ?)&* Preface to .an Bailey an( Matthew Bell< n/erstan/in &$stra'ian %onstr$ction %ontracts >200/?< p ,iii)&-See< generally< Paula Cer"er an( Brennan +ng< est Practice in %onstr$ction Dis#$tes >201&?)
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1" Pre0ious research As was note( a"o,e< a key reason for this research pro6ect "eingun(ertaken is that there is a (earth of pu"licly5a,aila"le (ata as to
the Australian construction in(ustry%suse of< an( attitu(e towar(s<stan(ar( forms of contract) 'hat sai(<the topic has "een >at least<in(irectly? the su"6ect of research in thepast two (eca(es< inclu(ing thefollowing reports@
Athol ;ates an( Bill Sashegyi< D9ffecti,eRisk Allocation in Ma6or
Pro6ects@ Rhetoric or RealityF% >2001 5D;ates an( Sashegyi Report%? an(
Blake !awson< DScope for .mpro,ement2011@ Pro6ect Risk 5 Cetting
the Right Balance an( +utcomes%>2011 5 DBlake !awson Report%?)
Both of these stu(ies were un(ertaken inthe framework of riskallocation an( management for ma6orpro6ects) 'hus< whilst neither of themin,estigate( specifically the types ofcontract forms which were use(< thetouchstone for each stu(y wasDprinciple(% >or Defficient%? risk allocationof the type espouse( "y Professor Ma= A"rahamson an( carrie( through< to,arious (egrees< in Australian stan(ar(
forms)&/
A key focus of these stu(ies<therefore 5 relate( to the aims of thisReport 5 was the e=tent to which partiesto constructioncontracts were taking on risks throughthe contract which they were not "estplace( to control or manage)
'he ;ates an( Sashegyi Report sought to(etermine whether Dthere wasa (ifference "etween efficient riskallocation an( actual risk allocation%in ma6or pro6ects carrie( out in Western Australia)& .t was un(ertaken"y the WA $ham"er of $ommerce an(.n(ustry an( the .nstitution of9ngineers Australia >now< 9ngineers Australia?) 'he research was "y wayof a sur,ey< sent to in(ustry participants inearly 2001< which recei,e(122 responses)
'he Blake !awson Report focuse( uponD(e,eloping a "etterun(erstan(ing of approaches to risk
i(entification< risk allocation an(risk management< an( the impact of thoseapproaches on pro6ectoutcomes%)0 .t was un(ertaken "y law firmBlake !awson >now< Ashurst Australia? with the support of the Australian
$onstructors Association<the 9nergy Supply Association of Australiaan( .nfrastructurePartnerships Australia) 'he research was"ase( upon sur,eys of< an(
&/ See< eg< Matthew Bell< DStan(ar( 3orm $onstruction$ontracts in Australia@ Are ourRein,ente( Wheels $arrying us 3orwar(F% >200? 24$i'/in an/ %onstr$ction Law -< p /1)& ;ates an( Sashegyi Report< p 2)0 Blake !awson Report< p )1 Blake !awson Report< p &0)2 9=trapolate( from ;ates an( Sashegyi< pp -5/ Blake!awson Report< p 12)& Blake !awson Report< p 1&)
."i( p 1)
inter,iewswith<in(ustryparticipants<con(ucte("etweenMay an(!ecem"er 2010) 'hesur,eyrelate( topro6ectscomplete(o,er thepast fi,eyears witha minimumpro6ect,alue of AI20million)Sur,eyresponseswererecei,e(from 121participants)1
3in(ingsfrom thisresearchwhich are
of primaryrele,anceto thecurrentpro6ectinclu(e@
Significant(ifferences e=istin the perceptionsof principals an(
contractors asto whether risk
is allocate( inconstructioncontractson theprinciple(Hefficient"asisreferre( to
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a"o,e whilst thefigures (iffere( across thestu(ies< the percentage ofprincipalswhich "elie,e( that risk ha( "eenallocate( on such a "asis was inthe range -05/-G yet it was &45
44G for contractors)2
'he risk categories most commonlyi(entifie( as "eing key >time<
(esign< scope an( sitecon(itions? were also therisks most commonly,iewe( as "einginappropriately allocate()&
'he most important factor influencingrisk allocation in ma6or
pro6ects was the reuirements ofthe principal) 'his was i(entifie(in the Blake !awson Report "y
/&G of respon(ents< compare(to the a"ility of a party to manageor price the risk< which werei(entifie(< respecti,ely< "y 4*Gan( &*G) Similarly< in the ;atesan( Sashegyi Report< -G ofcontractors an( &&G of principals"elie,e( that risks were allocate(at the pro6ect (eli,ery stage >thatis< following contractualnegotiations? on the "asis of minimising risk to the principal)4
A su"stantial ma6ority of the parties toma6or pro6ects >accor(ing to
the Blake !awson Report< in the or(erof /050G?* ha,e riski(entification< managementan( allocation policieshowe,er< parties reporte( thatsuch processes ha( "een put
in place in aroun( *0G of pro6ects)-
'he current Report (oes not focus onrisk allocation to the same e=tent asthese pre,ious stu(ies) 'hat sai(< anum"er of key fin(ings from these
pre,ious stu(ies were matters inrespect of which this Report has "eena"le to make o"ser,ations) 'hese arei(entifie(in the following ta"le) Whilst thepre,ious sur,eys an( the currentReport (iffere( in their metho(ologyan( sample siEe</ the rele,antfin(ings are "roa(ly consonant)
4 ;ates an( Sashegyi Report< p -)* Blake !awson Report< p 14)- ."i( p 14 ;ates an( Sashegyi Report< p 1-)/ 3or e=ample< as note( a"o,e< the ;ates an(Sashegyi Report was con(ucte( in 2001an( "ase( upon 121 responses from Western
Australia only whereas the current sur,eywas Australia5wi(e an( recei,e( 24 responseso,erall an( - responses in respect ofWA pro6ects)
D'he most
importan
t factor
influencing risk
allocatio
n in
ma6or
pro6ect
s was
the
reuirem
ents of the
principal
)%
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Findings in ?ates and Sashegyi8 Blake #a&son @e$orts A$$lica+le ndings in this@e$ort
.n the ma6ority of contracts >the ;ates an( Sashegyi Report puts the +,erall< /G of the stan(ar(forms use( were amen(e()40
figure at aroun( *0G?< the risk clauses in the contract ,arie( from
those in the rele,ant stan(ar( form)
.nappropriate risk allocation was
percei,e( to lea( to (etrimental
pro6ect outcomes<41 in particular@
-0G of the respon(ents to the
;ates an( Sashegyi sur,ey >/*G
of contractors an( &G of
principals? o"ser,e( that changes to
the risk allocation at the pro6ect
(eli,ery stage were likely to lea( to
claims42 an(
4G of contractors an( &/G of
principals "elie,e( that the pro6ect
cost woul( ha,e "een lower if riskha( "een allocate( on the
principle( "asis referre( to a"o,e)4&
+,erall >"ut< there
was a wi(e ,ariation
of responses on
these points?<
amen(ments to the
stan(ar( forms were
seen as lea(ing to
increases in@4
1) un(erstan(ing "etween the parties >greatest increase?
2) nee( for legal a(,ice (uring the pro6ect
&) pro6ect outturn cost
) efficiency in pro6ect a(ministration an(
4) (isputation >least increase?)
+f these factors< the
increases in 1 an(
may "e seen as
"eneficial pro6ect
outcomes an( the
increases in 2< & an( 4
as (etrimental)
.n(ustry stan(ar( forms were use( in -G of contracts Stan(ar( forms are use( in */Gof pro6ects Australia5wi(e4* an(
>Western Australia< 2001?)44 &G of pro6ects in WA)4-
'he most commonly5use( stan(ar( forms use( >WA< 2001? were 'he most wi(ely5use( forms Australia5wi(e are AS&00 >2&G?<
AS212 >G?< AS000 >4G? an( AS&00 >1&G?)4/ AS000 >1/G?< AS212 >1-G?an( AS02 >1G?)4 .n WA< they are
AS212 >20G?< AS000 >14G?<3.!.$ >10G? an( AS02 >10G?)*0
;ates an( Sashegyi Report< pp < 1*< 22)40 Section 9.1 "reak(owns are set out throughout section 9)41 Blake !awson Report< p -)42 ;ates an( Sashegyi Report< pp 1&< 2/)4& ."i( p 1)4 Section 12)44 ;ates an( Sashegyi Report< p &)4* Section 5.1)
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4- Section 5.4)4/ ;ates an( Sashegyi Report< p )4 Section 6.1)*0 3igures pro(uce( "y applying the o,erall rate of usage of stan(ar( forms >*/G? to the WA5specific figures in section 6.3)
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! Aims of this research
!1 ey 2uestions and the a$$roach this study undertakesto ans&ering them
'his research pro6ect aims to make a
su"stantial< e,i(ence5"ase(
contri"ution to the continuing e,olution
of the use of stan(ar( forms of
construction contract in Australia)
.ts primary aim is to suggest ways
of approaching the following key
uestions@
1) 8ow are stan(ar( forms "eing use(
in the Australian construction
in(ustry in 201F
2) What o$0t to "e the role of
stan(ar( form construction contracts
in the Australian construction
in(ustry in 201F
&) 'o the e=tent there is a mismatch
"etween current practice an( an
optimal role< w0at strateies
>whether "y way of amen(ing e=isting
forms< (e,eloping new forms or
otherwise? shoul( "e put in place to
a((ress itF
'he stu(y seeks to fulfil this aim "ypro,i(ing a snapshot of current
practice in relation to the use of
stan(ar( forms on Australian
construction pro6ects as at early 201)
+ur research has< therefore< "een
(irecte( to the following key
uestions@
'o what e=tent are stan(ar(
forms "eing use( on Australian
construction pro6ectsF
Where they are "eing use(< 0ow are
they "eing use(F
Acknowle(ging from the outset the
e=traor(inary (i,ersity of
mo(es in which construction pro6ects
operate in Australia<*1 an( the
ine,ita"le limitations of our (ata5
collection e=ercise >see section 3?< we
ha,e nonetheless sought to offer as
comprehensi,e an( (etaile( a picture
as possi"le of how stan(ar( forms are
"eing use() 'o (o this< we set up our
sur,ey an( analyse( its (ata to i(entify
correlations
across numerous ,aria"les)
'his Report< therefore< is (irecte(
primarily towar(s the first of the three
uestions i(entifie( a"o,e 5 0ow are
stan/ar/ fors ein $se/ .t also
offers insights into the types of issues
which ought "e consi(ere( "y
construction in(ustry stakehol(ers in
framing the (e"ate aroun( the
ne=t stage of e,olution of Australianstan(ar( forms)
'hese issues inclu(e< crucially@
the e=tent to which the Australian
construction in(ustry ,alues
the a,aila"ility of a stan(ar( form
which is capa"le of "eing use(
without su"stantial amen(ment*2 an(
current perceptions as to whether
such a form currently is a,aila"le
to the Australian construction
in(ustry)*&
D'his
resear
ch
pro6ect
aims
to
make
a
su"stantial<
e,i(enc
e5"ase(
contri"ution to
the
continui
ng
e,olutio
n of
the use of
stan(ar
( forms
of
constru
ction
contract
in
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Australia)%
*1 See< eg< $ommonwealth of Australia< Royal $ommission into the Buil(ing an( $onstruction .n(ustry< Disc$ssion Pa#er 1 *er*iew of t0e "at$re an/ #eration of t0e $i'/in an/ %onstr$ction n/$str >2002?)*2 Section 4.1)*& Section 4.2)
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!! Further research
+ur fin(ings in respect of the key
uestions referre( to in section 2.1
a"o,e are summarise( in Part an(
set out in (etail in Part D)
.n a((ition to these fin(ings< in the
course of the research< the pro6ect team
has encountere( certain issues relating
to the use of stan(ar( forms which we
consi(er merit further< (etaile( research)
Whilst
we were a"le in this Report to make
preliminary fin(ings in respect of
some of them< more focuse(
research coul( allow for more
meaningful analysis)
'hese inclu(e@
More (etaile( in,estigation of thecorrelation >if any? "etween contract
,alue an( stan(ar( form use< especiallyat the higher contract ,alue en(
>see section 5.3)) .t woul( also "e of
interest to ascertain the total ,alue of
pro6ects which are let each year "ase(
upon the ,arious forms)
'he e=tent of amen(ments ma(e tostan(ar( forms >section 9
makes fin(ings in relation to the
proportion of stan(ar( forms
which are amen(e( to some e=tent<
an( section 11 sets out (ata
in respect of the types of clauses
which are amen(e(< "ut the
sur,ey (i( not 5 other than "y
reference to o"ser,ations ma(e in
inter,iews 5 pro,i(e (ata in(icating
(irectly how e=tensi,e those
amen(ments are?)
More (etaile( correlation< againstfactors inclu(ing the type of
form< contract ,alue an( contractingsector >an( other possi"le
factors< such as the forms% rea(a"ility<
format< accessi"ility to non5
lawyers an( incorporation of
(ocument automation systems?< as to
the following matters (ealt with in a
preliminary manner "elow@
5 Which party ma(e the (ecision to usethe stan(ar( form
>section 7?
5 3actors going to use of stan(ar(forms >section 8? an(
5 3actors going to why stan(ar( formsare amen(e( >section 1!?)
Perceptions
as to the
effect of
amen(ment
s tostan(ar(
forms
upon
pro6ect
outcomes
>some
preliminary
fin(ings on
this are set
out in section12?)
'he role
of lawyers>whether
e=ternal to
the
organisatio
n or in5
house?
in
recommen
(ing forms
of contract
an(
amen(me
nts to
them >section1!?)
'he pro6ect
team woul(
"e happy to
(iscuss
these
potential
a,enues
further with
intereste(
researchersan( 5 to the
e=tent that it
is
consistent
with the
human
ethics
appro,al
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grante( in respect of this Pro6ect
>see section 3 "elow? 5 make
a,aila"le to them more (etaile( (ata
than has "een pu"lishe( in this
Report)
Moreo,er< we "elie,e it woul( "e
useful to refine the sur,ey in the light
of our fin(ings an( repeat it
perio(ically 5 perhaps< e,ery two to
three years 5 in or(er to ascertain
whether >an(< if so< how an( why?
attitu(es towar(s an( use of
stan(ar( forms change o,er time)
!" AustralianStandardsre0ision
$rocess As was note( in section 1.1.2
a"o,e< Stan(ar(s Australia is
currently
engage( in a process for re,ision of
>at least? its ma6or works contract
forms) Although this research
pro6ect has "een un(ertaken at
arm%s
length from this process< mem"ers of
the pro6ect team are "roa(ly aware of
its aims an( progress)
'o that en(< we e=pect that fin(ingsin this Report 5 whether as to the
Australian Stan(ar(s forms or more
generally 5 will "e of interest to
those charge( with re,ising those
forms) .n a((ition< we ha,e set out
in &##en/i 2 a compilation of
fee("ack on the Australian
Stan(ar(s forms which goes to
specific aspects of the current
forms)
D'he Report
offers insights into the
types of issues
which ought
"e consi(ere(in framing the
(e"ate aroun(
the ne=t stage
of e,olution
of Australian
stan(ar( forms)%
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" #ata collection for this $ro%ect
'his pro6ect has "een un(ertaken in accor(ance
with a metho(ology appro,e( "y the
Mel"ourne #aw School 8uman 9thics Appro,al
Croup) 'hat metho(ology in,ol,e(
two key elements@ a we"5"ase( sur,ey an(
inter,iews) 9ach of these was con(ucte(
on an anonymous "asis@ the sur,ey (i( not
collect i(entifying (etails of participants
>unless they opte(5in to "e contacte( to un(ertake
an inter,iew? an(< in the inter,iews< participants
were gi,en the option whether or not comments
were to "e attri"uta"le to them@ most chose not to
make them so attri"uta"le)
"1 Sur0ey
'he sur,ey uestions are set out in &##en/i 1)
9ssentially< participants were in,ite(
to answer uestions a"out the contracts which
were use( on up to three construction
pro6ects un(ertaken in Australia (uring the past fi,e
years of which they ha( knowle(ge< either as a
(irect pro6ect participant or an a(,iser)
'he sur,ey was we"5"ase(< using the
Sur,eyMonkey tool)* 'he we" link< which
participants coul( click on if they wishe( to
un(ertake the sur,ey< was (isseminate( to
potential participants in a num"er of ways<inclu(ing@
!irect emails to stu(ents< alumni an( associates
of the Mel"ourne #aw School
construction law program< an( mem"ers of the
Society of $onstruction #aw Australia
* See www)sur,eymonkey)com)
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7ews items on we"pages of the Australian
$onstruction .n(ustry 3orum an( Society
of $onstruction #aw Australia an(
Social me(ia< inclu(ing ,ia the 'witter an( #inke(.n
fee(s maintaine( "y the Mel"ourne#aw School construction law program)
'he sur,ey was a,aila"le online to participants from &
!ecem"er 201& to 1 3e"ruary 201) 24 in(i,i(uals
participate( in the sur,ey) 'he a"ility of participants to
report on up to three pro6ects in their responses
meant that responses were recei,e( in respect of
&- pro6ects >that sai(< gi,en that the sur,ey (i( not
ask participants to i(entify the pro6ects reporte( on< it
is possi"le that multiple participants reporte( in
respect of the same pro6ect?)
'he somewhat (iffuse nature of the sur,ey%s
(issemination< inclu(ing the o,erlap in
recipient cohorts >for e=ample< many Mel"ourne
#aw School alumni are also mem"ers
of the Society of $onstruction #aw Australia? makes
it impossi"le to state with certainty the num"er of
potential participants in the sur,ey) 8owe,er< it waslikely in the or(er of 2<0005&<000< resulting in a
notional response rate of appro=imately 10514G)
Sur,ey participants i(entifie( themsel,es as
falling within a range of pro6ect party
types< an( coul( i(entify more than one type)
'here were 1 responses to the
uestion DWhich of the following roles (escri"es
your own in,ol,ement in the pro6ectF >Please
choose as many as apply)?%< with the results as
follows@
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Respon(ents to the sur,ey
represente(< therefore< the
perspecti,es
of a (i,erse range of pro6ect
participants >though< none i(entifie(
themsel,es as "eing fun(ersHfinanciers?) Appro=imately half were
lawyers< a little o,er a uarter were
(rawn from within the primary
contracting parties an( a little o,er a
uarter from consultants >of
which< more than half were contract
a(ministrators an( in(epen(ent
re,iewers?)
Sur,ey participants were not aske( to
(escri"e their primary location) 8owe,er<
it is e,i(ent from the locations of
pro6ects reporte( upon< an( theinter,iews< that participants were (rawn
from e,ery State an( 'erritory of
Australia< an( 5 whilst most participants
were "ase( in the ma6or cities 5 there
was a su"stantial representation of
participants "ase( in rural an( regional
areas)
"! Inter0ie&s
'he research team
con(ucte( -
inter,iews "etween
January an( March201) & >/&G? were
con(ucte( "y
telephone an( / >1-G?
face5to5face) 'he
ma6ority of
inter,iewees ha( self5
selecte( through a
prompt in the sur,ey<
"ut se,eral were
approache( (irectly "y
the research team on
the "asis that they ha(
significant e=periencein relation to stan(ar(
forms)
'he inter,iewees
represente( a range
of perspecti,es
within the in(ustry<
falling "roa(ly into
the following
categories@
'hey were o,erwhelmingly in(ustry participants an(a(,isers with su"stantial e=perience in the area<
inclu(ing construction firm e=ecuti,es< senior pu"lic
ser,ants< in5house lawyers at large contracting an(
consulting firms< law firm principals< senior counsel an(
representati,es of peak "o(ies) Most respon(ents
ha( significant e=perience relating to the construction in(ustry@
/1G ha( 10 or more years< an( 41G ha(
20 or more years)
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Part # - #etailed ndings
'his Part pro,i(es the research
team%s (etaile( fin(ings in relation
to this research pro6ect) .t (oes so<
un(er each hea(ing >reflecting
the uestions?< "y presenting the
rele,ant (ata in ta"ulate( an(
chart form) 'he Report seeks to make
use of all meaningful (ata
"ut anticipates that not all sur,ey
respon(ents respon(e( to e,ery
uestion an(< as such< there are(ifferences in the sample siEes for
each element reporte(
upon) Where rele,ant<
these sample siEes are
note(@ for e=ample< "y
num"ers at the tops of
columns)
$ommentary on the
fin(ings is pro,i(e( for
most uestions< inclu(ing
"y reference to
o"ser,ations arising from
the inter,iews con(ucte(
for the purposes of this
research pro6ect)
4 Attitudes to&ards standard forms
41 Broad su$$ort in $rinci$le for standard forms
Participants were aske( to in(icate whether they agree( with the statement D'he
Australian construction in(ustry nee(s to ha,e a,aila"le to it stan(ar( forms of contract
which are a,aila"le for use without su"stantial amen(ment)% 1- responses were
recei,e(< with the responses summarise( in the chart "elow) 'he aggregate of these
responses place( the mean "etween Dslightly agree% an( Dstrongly agree%)
De=pe
rienc
e(
in(us
try
participant
swere
supporti,
e of the
i(ea that
a form
might
"e
a,aila"l
e for use
without
su"s
tanti
al
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amen(ment across the in(ustry%
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.n line with this apparent strong support
>at least< in principle? for stan(ar( forms<
many inter,iewees ma(e comments
along the lines of this statement from a
contract a(ministrator with more than 20
years% e=perience@ Dthey esta"lish a"enchmark of reasona"leness an( this
"enchmark is important for the in(ustry
to ha,e)%
'hat sai(< / sur,ey participants
>&&)2G? skippe( the uestion@
such a lack of response coul( "e
in(icati,e of a range of attitu(es
to the uestion an( shoul( "e taken
to temper the confi(ence that
otherwise woul( e=ist as to support
for stan(ar( forms)
4! Suita+ility ofcurrently-a0aila+leforms
Participants were aske( whether< in
their ,iew< there is any current
stan(ar( form of contract which is
capa"le of "eing use( without
su"stantial amen(ment in the
Australian construction in(ustry) 1-
responses were recei,e(< with / sur,ey
participants >&&)2G? skipping the
uestion) 'he responses are set out in
the chart to the right)
'hus< whilst there is strong support
in principle for the a,aila"ility
of stan(ar( forms which are
capa"le of use without su"stantial
amen(ment >see section 4.1?< a clear
ma6ority of respon(ents in(icate( that
there was no such form currently
a,aila"le) +ne inter,iewee 5 a
commercial manager for a tier 2
contractor 5 commente( that there is at
present no satisfactory stan(ar( form in
Australia capa"le of use without
su"stantial amen(ment an( that contractors Dput up with% the
Australian Stan(ar(s D"ecause they ha,e to%)
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'
h
e
i
n
t
er
,i
e
w
s
u
n
(
e
rt
a
k
e
n
f
o
r
t
h
is
r
e
s
e
a
r
c
h
p
r
o
6
e
c
t
p
r
o
,i
(e
(
i
n
si
g
h
t
s
into the comple=
foun(ations
un(erpinning these
responses) Broa(ly
speaking< e=perience(
in(ustry participantswere supporti,e of the
i(ea that a form might
"e a,aila"le for use
across the in(ustry
without su"stantial
amen(ment) +ne
lawyer suggeste( that
(e,elopment
of such a form woul(
"e a worthwhile
cooperati,e pro6ect in
which
the 3e(eral an( Statego,ernments shoul(
take a lea()*4 8owe,er<
inter,iewees i(entifie(
a num"er of challenges
to such (e,elopment<
primarily the (i,ersity of
types of pro6ects which it
woul( nee( to co,er an(
the nee( to anticipate
increasingly5
sophisticate( >an(
constantly e,ol,ing?
legislati,e an( financingreuirements)
Dcontract
ors Qpuup withthe
Australia
n
Stan(ar
(s
Q"ecaus
e they
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ha,e to%
*4 Su"stantial in,estment has in fact alrea(y "een ma(e into pu"lic5sector contracting suites< such as those of the !epartment of !efencean( 7SW Co,ernment 5 see section 1.
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4" Forms 0ie&ed as +eing ca$a+le of use &ithoutsu+stantial amendment
+f the respon(ents who in(icate(
that there is a stan(ar( form
of contract currently a,aila"le
capa"le of use without su"stantial
amen(ment< a range of responses was
recei,e( as to which form that might "e)
'hese are summarise( in the chart
"elow) 'he aggregate
num"er of forms i(entifie( e=cee(s
the num"er of participants >0? who
respon(e( to the uestion< "ecause
participants were a"le to i(entify more
than one form as "eing suita"le)
3igures at the top of each column in(icate num"er ofresponses recei,e()
'he only forms which
recei,e( significant
support as "eingsuita"le
were AS000 an(
AS212 >though< an
a((itional se,en
responses
referre( generally to the
Australian Stan(ar(s
suite?) 'here is therefore a
partial correlation "etween
percei,e( suita"ility of the
forms an(
the forms% freuency of
use >as is note( in
section 6.1 "elow< the
four most wi(ely5use(
forms are >in or(er?
AS&00< AS000<
AS212 an( AS02?)
8owe,er< there is also an
apparent correlation
"etween
percei,e( suita"ility an(
freuency of
aen/ent 5 as is
note( in section 9.4< the
reporte( rates of
amen(ment of AS000
an( AS212 are //G an(
-G respecti,ely)
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.t may "e< therefore< that the
results in(icate( in the chart a"o,e
primarily reflect the high (egree of
familiarity in respect of these
forms >see< further< section 8.2? rather than< necessarily< a wi(ely5hel( ,iew
that they are< in fact< suita"le for use
without amen(ment)
.t (oes nee( to "e acknowle(ge(<
howe,er< that the >relati,ely? high
(egree of perception that the
Australian Stan(ar( forms are suita"le
was also reflecte( in our inter,iews
with highly5e=perience( in(ustry
participants) Whilst almost e,eryone
who commente( on the issue
note( that the forms were out(ate(
an( in nee( of re,ision >a fact
implicitly acknowle(ge( "y Stan(ar(s
Australia itself through its
initiation of the re,iew process
referre( to in section 2.3?<
comments recei,e( inclu(e( that@
there was Dnothing much wrong% with
the forms >in5house lawyer
in a go,ernment (epartment? an(
the suite Dmet the market% for the
Dmi((le "an(% of pro6ects<especially "earing in min( that the
hea( contract risk allocation
then nee(s to "e "acke(
(own to let su"contracts
>lawyerH superinten(ent?)
'he chart also in(icates that there is
support 5 al"eit small 5 for the suita"ility
of forms outsi(e of the four key
Australian Stan(ar(s forms) +ur
inter,iews reflecte( this support
generally speaking< where
inter,iewees ha( use( AB.$< C$21<!efence or 79$ forms< they ha( a
reasona"ly positi,e ,iew of them)
Particular o"ser,ations inclu(e(@
+n ABIC< a compilation of fee("ack
from architects who ha( use(
it inclu(es (escriptions of it "eing
relia"le< a,aila"le for a range of
pro6ects< "alance( in risk allocation<
practically5focuse( in terms
of contract a(ministration an( written in simple
language on the
other han(< some non5architect inter,iewees saw the
form as
gi,ing too much (iscretion an( protection to architects)
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+n C!1< a num"er of inter,ieweescommente( positi,ely along
the lines that it ha( ha( a lot ofthought go into it >inclu(ing
s
p
e
c
i
f
i
c
i
s
s
u
e
s
s
u
c
h
a
s
e
s
c
h
ew
i
n
g
t
h
e
t
r
a
(i
t
i
o
n
a
l
(ual agentH
certifier role for the
superinten(ent an(
replacing the
tra(itional
concept of practical
completion withD(efects free
completion%?
an( that its associate(
processes >such as
contracting workshops?
assiste( in a,oi(ing
(isputes) 'here was
also praise for the Dmini
minor works%
>flowchart? form) 'hat
sai(< contractors
complaine( in the
inter,iews a"out theD(efects free% regime
an( lack of a
limitation on (elay
(amages an( ,arious
other aspects >though
noting that they
nee(e( to accept
these aspects in or(er
to ualify at ten(er
time?)
Similarly< on the #efence forms >in respect of which weonly
recei,e( one comment in inter,iews< from a lawyer?< it wasnote(
that they work Duite
neatly% from an
a(ministrati,e point
of ,iew an( that the
D6ust in time% training
allowe( specific
issues of concern to
"e a((resse( for
particular pro6ects)
#ikewise< only one inter,iewee commente( on the 5C form)
8owe,er< they in(icate( a ,ery positi,e ,iew of thee=perience with
the form< reporting that<
"y using the cost
reim"ursa"le form
rather than a tra(itional
lump sum approach for
a comple= relocation
pro6ect< su"stantial sa,ings on out5turn cost were achie,e()
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' (se of standard forms
'1 :0erall
'his chart is a compilation of responsesto the sur,ey uestion
+0in:in; ao$t t0e contract wit0
w0ic0 o$ were #riari' in*o'*e/
on t0e #ro<ect... was t0at contract
ase/ $#on a stan/ar/ for= &--
responses were recei,e( to that
uestion< of which 244 >*-)*G? were
Dyes% an( 122 >&2)G? Dno%) .n other
wor(s< stan(ar( forms were use( as at
least a "ase in appro=imately two5thir(s
of contracts across all contracting
sectors an( ,alues)
'! Breakdo&n +y$osition of
contract &ithin thecontracting chain
Dstan(ar(forms
were useleast a "
appro=im
two5thir(
contracts
all contra'his
chart
in(icate
s that
stan(ar ( forms
are
more
commo
nly use(
in
Dhea(%
or
Dmain%
contract
s
>"etwee
n theprincipa
lH
ownerH
(e,elop
er an(
contract
orH
consult
ant? than su"
term (escri"i
principal in a
'he sur,ey information a
where reporte
Dcontracting c
contracts >/0
the "ulk of th
contracts >1
Dsupply agree
these were e
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sectors an( ,alues%
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'" Breakdo&n +y initial contract 0alue
Dstan(ar(
use is clo
uni,ersa
contracts,alue les
I100<000
(rops sh'he sur,ey sought to o"tain acomprehensi,e picture of contractingin all aspects of the constructionin(ustry in Australia 5 it therefore setno upper or lower threshol( for participation "y reference to
contract ,alue)** .n turn< the sur,ey
employe( categories of contract ,alue
"ase( upon the initial >un,arie(?contract scope rather than
final pro6ect outturn cost) 'his was
primarily to ensure comparison of
Dapples with apples% an( also "ecause
many of the pro6ects reporte( upon
were still in progress)
'he use of categories rather thana"solute contract ,alues (oes notallow for a strict linear assessment of the correlation "etween use of
stan(ar( forms an( contract ,alues)'hat sai(< the chart (oes in(icate
that stan(ar( form use is close touni,ersal on contracts with a ,alue
less than I100<000 >al"eit "ase( on arelati,ely small sample siEe?< ranges
"etween **G an( -/G on ,alues
"etween I100<000 an( I400 million
an( then (rops sharply on ,alues
e=cee(ing I400 million) 'his correlates
with a ,iew e=presse( in the inter,iews
that< specifically< the Australian
Stan(ar(s< were most suita"le for use
in the Dmi((le "an(% of pro6ects)
,alues
e=cee(in
g I400
million%
** 'his is "y way of contrast with< for e=ample< the Blake !awson Report which onlysought responses in respect of pro6ects with a contract ,alue e=cee(ing I20 million 5see p &1 ofthat Report)
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'4 Breakdo&n +y $ro%ect location
Da lesser
proportio
contracts
stan(ar(in the sta
territories
mining a'he sur,ey (ata in(icates< when
aggregating all contracting sectors<
that a lesser proportion of contracts
use stan(ar( forms >whether
amen(e( or unamen(e(? in the States
an( 'erritories where mining
an( resources pro6ects pre(ominate
>WA< 7' an( ueenslan( 5 here< therange is &G54/G? compare( to the
A$'< 7SW< SA< 'asmania
>al"eit only one pro6ect was reporte(
upon? an( Kictoria >range *4G5
100G?) 'his correlates with the fin(ings
"ase( upon sectors >see
section 5.5 "elow?)
'he Dother% category primarily
represente( work "eing (one "y
Australian go,ernment agencies
in Australian e=ternal territories)
resources
pro6ects
pre(omin
ate%
*- See< eg< Jim Minifie< D'he Mining Boom@ .mpacts an( Prospects% >Crattan .nstitute< July 201&?< p 1&)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;22
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'' Breakdo&n +y contracting sector
Duse of s
forms
in the"uil(ing
with
use "ein
'his chart in(icates a (i,ersity of le,el of
use of stan(ar( forms >whether amen(e(
or unamen(e(? across sectors) :se is
highest in the resi(ential "uil(ing sector<
remains high in the commercial "uil(ing
an( process engineering sectors< an(
(rops progressi,ely through the pu"licsector an( pri,ate sector infrastructure
sectors< with the lowest use "eing in the
mining an( resources infrastructure
sector)
Whilst further< (etaile( research
woul( "e reuire( to confirm this<
an( to analyse its (etaile(
implications< it may "e surmise( that
a num"er of factors contri"ute to
these results< inclu(ing that@
stan(ar( forms are not a,aila"le for all(eli,ery metho(ologies
>see section 1.1?< "eing primarily(irecte( to "uil(ing pro6ects on a
Dtra(itional% >construct onlyH (esign an(
construct? hea( contract "asis rather
than for relationship5"ase( mo(elssuch as alliancing an(
contracting in the resi(ential "uil(ingsector is the su"6ect of
su"stantial legislati,e inter,ention<
inclu(ing< in many States an(
'erritories< the man(atory inclusion
of certain warranties an( other
matters)*/ 'his< along with the
relati,ely small ,alue of the "ulk of
resi(ential pro6ects< woul( appear to
militate in fa,our of using the
numerous stan(ar( forms which area,aila"le in or(er to minimise
transaction costs)
the
mining
an(
resour ces
infrastr
ucture
sector%
*/ See< eg< Philip Britton an( Julian Bailey< D7ew 8omes an( $onsumer Rights@ 9nglan( an( Australia $ompare(% >2011? & nternationa' >o$rna' of Law in t0e $i't ?n*ironent 2*)
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6 *hich standard forms are +eing used,
'he chart in section 6.1 aggregates
240 responses across all contract
,alues< geographic locations an(
contracting sectors) Break(owns
"y reference to each of these factors< in
respect of the most wi(ely5
use( ma6or works forms >AS&00<
AS000< AS212< AS02< C$21<
AB.$ MW an( 3.!.$?< are pro,i(e( in
the charts following in sections
6.2-6.4)
'he chart in section 6.1 also reflects
our key fin(ing that< o,erall<
the Australian Stan(ar(s forms
continue to (ominate the Australian
construction contracting lan(scape) .n
aggregate< the four main
forms represent close to -0G of the
stan(ar( forms which are use(<
as reporte( upon in this sur,ey)
Applying that -0G to the */G of
pro6ects o,erall which use stan(ar(
forms >see section 4.1?< these
forms are use( in nearly half >/G? of
all pro6ects reporte( upon in
this sur,ey)
'here appears to "e a large gap in
usage "etween the AS forms an( the
other commercially5a,aila"le suites of
forms for ma6or works@
the AB.$ MW form was use( in 2)G
of pro6ects >al"eit the DSimple Works%
form was slightly more freuently
use(< at )0G? an( 3.!.$ forms in
2)0G of pro6ects) +nly one pro6ect in
the entire sur,ey was reporte( as
using the 79$& form)
'he "reak(owns in sections 6.2-
6.4 pro,i(e the "asis for (rawing
out a num"er of (etaile(
o"ser,ations) .n terms of the (egree
of
conf i(ence with which these
o"ser,ations may "e state(< howe,er<
,arying sample siEes apply) 'hese are
note( in "rackets "esi(e the
rele,ant category) 3or e=ample< whilst
the secon( chart in section
6.3 in(icates< on its face< that >of the
most wi(ely5use( forms? only
AS212< AS000 an( AS&00 are use( in
South Australia< this was
"ase( on a sample siEe of / contracts in
total for that State) Similarly<
in section 6.4< the D100G% result for use
of AB.$ in the Dresi(ential
"uil(ing contracts 5 pri,ate in(i,i(ual as
principal% sector was "ase(
on a sample siEe of only 2 for that
category< an( the results in respect
of process engineering were "ase( on a
sample siEe of ) .t nee(s
also to "e
emphasise(
that the (ata
relates only to
contracts
where a
stan(ar( form
was use( 5 as
note( in
section 5.5
a"o,e< less
than half
of the
contracts in
the
infrastructuresectors use( a
stan(ar( form)
'hat sai(<
>at least?
the
following
o"ser,atio
ns may "e
ma(e with
a
reasona"le
(egree of confi(ence
@
the AS ma6orworks forms areuse( across allsectors >otherthan
for resi(ential"uil(ing with apri,atein(i,i(ual asprincipal?<
inclu(ing
across the
pu"lic an(
pri,ate
sectors<
an( for
pro6ect
(eli,ery
metho(s
>such as
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process engineering? for which
they are not specifically (esigne(
those AS forms are also use( acrossall contracting ,alues<
although no AS000 forms werereporte( as "eing use( on
pro6ects with a ,alue in e=cess of I400million
the 3.!.$ forms are only use( onrelati,ely high ,alue pro6ects
>LI100 million?< in pri,ate sectorinfrastructure >"oth mining an(
non5mining? an( process engineeringpro6ects
the C$21 form is primarily use( in7SW< "ut there is also some use
of it in ueenslan( whilst< as wasnote( in section 1.1.1 a"o,e< it
is (esigne( for use on contracts
with a ,alue e=cee(ing I1 million<our sur,ey responses in(icate(
that it was use( only for contracts
with a ,alue o,er I4 million an(
the AB.$ MW form is little use(outsi(e relati,ely small ,alue
>up to I4 million? contracts theprimary use is to "e foun( in the
resi(ential "uil(ing sector where
the owner is a pri,ate in(i,i(ual<
"ut it also has some use in the
commercial "uil(ing >pri,ate sector
principal? an( infrastructure >pu"lic
sector principal? sectors)
'hese fin(ings are also "roa(ly
consonant with o"ser,ations arising
from the inter,iews in respect of use
of< an( attitu(es towar(s< these
stan(ar( forms >see section 4.2
a"o,e?)
Dthe Australian
Stan(ar(s
forms continue to
(ominatethe Australian
construction
contracting
lan(scape%
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61 :0erall
Dthe four
Stan(ar(
represento -0G ostan(ar(
which ar
'his chart aggregates the 240 responses to uestion 12 of the
sur,ey >see &##en/i 1?< which aske( participants who ha(
pre,iously in(icate( that the rele,ant contract was "ase( upon astan(ar( form to i(entify the form)
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6! Breakdo&n +y initial contract 0alue
&##'in *a'$e cateories to fors
Dthe Aust
Stan(ar(
are use(
all contra
,alues >a
no AS0
forms wereporte(
"eing us
pro6ects
,alue in
of I400 3igures in "rackets in(icate the num"er of responses analyse( for each ,alue category)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
2*
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&##'in fors to *a'$e cateories
Dthe 3.!.
forms ar
use( on
with a ,aI100 miin pri,ate
infrastru
an( proc
engineer
pro6ects%
3igures in "rackets in(icate the num"er of responses analyse( for each form)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
2-
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6" Breakdo&n +y $ro%ect location
Results from the A$'< 7' an( 'asmania are not taken into
account in the charts in this section *)& (ue to their almost
negligi"le num"er >respecti,ely< 4< - an( 1 contracts using a
stan(ar( form?)
&##'.in3 for1s to 'ocations
Dthe C$2is prima
"ut
there is a
some us3igures in "rackets in(icate the num"er of responses analyse( for each form)
ueenslan(%
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;2/
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&##'in 'ocations to *a'$e cateories
3igures in "rackets in(icate the num"er of responses analyse( for each location)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
2
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64 Breakdo&n +y contracting sector
&##'.in3 for1s to sectors
Dthe Aust
Stan(ar(
works fo
are use(
all contra
sectors >
than forresi(enti
"uil(ing
pri,ate in
as princi
an( acro
the
pri,ate s
3igures in "rackets in(icate the num"er of responses analyse( for each form)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
&0
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&##'.in3 sectors to for1s
3igures in "rackets in(icate the num"er of responses analyse( for each sector)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
&1
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*hich $arty makes the decision to use thestandard form,
Dthe printhe princ
lawyer wresponsi
choosing
stan(ar(
more tha
of cases
3reuently< it was not possi"le to
(etermine which party ma(e the
(ecision to use a particular stan(ar(
form) Where it was possi"le<
respon(ents sometimes in(icate(
that multiple parties were
responsi"le) 'he chart a"o,e reflects this)
!espite these limitations<
it is clear that the principal
>in more than 4G of
cases? an( the principal%s
lawyer >in nearly 2*G of
cases? were primarily
responsi"le for the
(ecision) 'ogether< the
principal or the principal%s
lawyer were responsi"le
for choosing the stan(ar(form in more than /0G of
cases)
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. *hy are standard forms used,
.1 :0erall
'his chart aggregates responses to a uestion
which aske( participants to in(icate< in
respect of the factors liste(< their perception of where each of those factors sat on a
spectrum from Dnot at all important% to D,ery
important% >D(on%t know% was also a,aila"le?) 9ach of
the i(entifie( factors was< in aggregate< regar(e( as
falling on the Dimportant% si(e of the spectrum< with
Dfamiliarity with the form% "eing regar(e( as the
most important
factor an( Dgaining a commercial a(,antage% theleast)
'he (ata which pro(uce( this chart >an( also the
(ata which pro(uce( similar charts
in sections 1! an( 12? pro(uce a mean< as
in(icate(< "ut are "ase( on wi(ely ,aria"leresults) By way of in(ication of this sprea(< we
ha,e marke( on the chart one stan(ar(
(e,iation either si(e of the mean) .n a normal
(istri"ution< this woul( in(icate the range
within which */G of the results for each matter lie)
8owe,er< for this (ata< the markings are "y way of
in(ication only gi,en the limitations inherent in
using a fi,e5point scale)
So< in this section 8< the stan(ar( (e,iation for each
category >"ase( on representing the range "etween
Dnot at all important% to D,ery important% as a 45pointscale?< is@ familiarity >1)1?< suita"ility of the risk
profile >1)2?< ease of contract a(ministration >1)2?<
minimising costs >1)2?< reflects the (eal >1)2?< form
well5(rafte( >1)2?< form recommen(e( >1)*?<
commercial a(,antage >1)&?)
Participants were also a"le to nominate other
factors) 'hat sai(< the most commonly
nominate( factor also relate( to familiarity of
one or more parties with the stan(ar( form)
Small num"ers of respon(ents nominate(
factors such as suita"ility of the
stan(ar( form for the particular pro6ect or a
preference for that stan(ar( form o,er another
particular stan(ar( form)
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.! Familiarity
'he fin(ing that familiarity was
the most important factor >"y
a su"stantial margin 5 the mean
score for it was )21 out of 4<compare( with the ne=t highest score of
&)-4 out of 4? has< we think< significance
in at least two ways@
it helps e=plain why AS212 an( AS&00
5 two forms which were
inten(e( "y Stan(ar(s Australia to
"ecome re(un(ant an( "e with(rawn
from sale upon the pu"lication of<
respecti,ely< AS000 >in 1-? an(
AS02 >in 2000? 5 remain< as note( in
section 6.1 a"o,e< respecti,ely the
thir(5most5use( an( most5use(
stan(ar( forms in Australian
con,ersely< it in(icates that Dnew% forms>at least< in the Australian
conte=t? seeking to gain a foothol( in
the market on a competiti,e "asis
>such as AB.$< 3.!.$ an( 79$&? 5 as
oppose( to go,ernment5
man(ate( forms such as the !efence
Suite an( C$21 5 nee( to
o,ercome familiarity5generate(
inertia this goes< argua"ly< to the
relati,ely low use of these forms
(iscusse( in section 6)
+"ser,ations ma(e in the inter,iews a(((etail to this picture@
A strong theme came through thatDfamiliarity% (oes not necessarily
mean Dinforme( familiarity%) 3ore=ample@
5 +ne highly5e=perience( pro6ect
manager commente( that the
Australian in(ustry is Dat large< ,ery
na,e in their contractual o"ligations%)
5 Se,eral inter,iewees commente( inrespect of their own
>contracting? organisations alongthe lines that the company ha(
use( stan(ar( forms for relati,ely
low5,alueH risk pro6ects
when the company was in its early
years of (e,elopment) 'he
organisation ha( continue( to use
those forms as it mo,e( into
contracting of >often significantly?
greater ,alue an( comple=ity
an( ha( then "een Dcaught out%<
either through (eficiencies
in the forms or "y their continuing
to resource the pro6ect
management of the pro6ect as thoughit were a low5,alueHrisk pro6ect)
Amongst those who may reasona"ly"e regar(e( as possessing
a (etaile( knowle(ge of the ,arious
a,aila"le forms >for e=ample< Dfront5
en(% construction lawyers an( in5
house counsel?< most
(escri"e( the currently5
a,aila"le forms in terms of
"eing a D"aseline% only< which
then ought "e mo(ifie()
'he inter,iews confirme( that
familiarity was a key factor in whyforms other than the AustralianStan(ar(s are rarely selecte( for
use where a party has a choice >that
is< lea,ing asi(e forms such as
!efence an( C$21< which essentially
are man(ate( for the rele,ant
work?) 3or
e=ample< one
architect who
ha( worke(
e=tensi,ely with
the AB.$contracts an(
ha( a fairly
positi,e ,iew of
them< o"ser,e(
that the AB.$
MW form is
sel(om use(
Dnot "ecause it
has a
"a(
reputation "ut
simply
"ecause
most large
institutions
ha,e a
hea,ily5
amen(e(
,ersion of
AS212 or
AS000
which has
"een
knocking
aroun( the
pro6ect
managementteam for
years%)
.n(ee(< a num"er of inter,ieweesi(entifie( familiarityas a reason
why the newer
Australian
Stan(ar(s
forms >AS000
an( AS02?
were not as
wi(ely use( asthe ol(er ones
>AS212 an(
AS&00?)
+ne lawyer
opine( that the
newer forms
are D"etter
(rafte(% "ut that
they are not as
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wi(ely use( (ue to a com"ination of
familiarity >or< in
their ,iew< Dstu""ornness%? an( the fact
that they (i( not make any
significant changes to the risk
allocation ,is5T5,is the ol(er forms)
." @isk allocation
'he sur,ey in(icates that factors relating to
risk allocation 5 inclu(ing Dsuita"ility of the
risk profile%< Dreflecting the (eal% an( gaining
a commercial a(,antage% 5 remain of
importance to pro6ect parties in their choice
to use a stan(ar( form) 'hese un(erpinne(
the in,estigations in the Blake !awson an(
;ates an( Sashegyi Reports referre( to in
section 1.3)
.4 3inimisingtransaction costs
'he sur,ey results< an( o"ser,ations
ma(e in the inter,iews< support the
continue( currency of the oft5state(
premise that stan(ar( forms are use(
so as to minimise transactionH legal
costs)* 8owe,er<
where stan(ar( forms are amen(e(<
any such gains in efficiency may "e
re(uce(@ see section 12< which reports
upon perceptions that amen(ments lea(
to increases in the nee( for legal a(,ice<
pro6ect outturn cost an( (isputation)
'he inter,iews in(icate( a
perception< at least on the part of
contractors< that unnecessary
amen(ment lea(s to higher pro6ect
outturn costs) 3or e=ample@
one tier 2 contractor in(icate( that
they ha,e "een prepare( to
offer clients a lower price on a
lump sum contract if the client
entere( into an unamen(e( AustralianStan(ar( contract an(
an in5house lawyer at an engineeringconsultancy firm who is
responsi"le for re,iewing the
se,eral thousan( consultancy
contracts which that firm enters
into each year estimate( that
appro=imately half of the forms are
"espoke< reuiring a significant in5
house an( e=ternal legal spen()
Dthe AB.$ MW form
is sel(om use( Qnot
"ecause it has a "a(
reputation "ut simply
"ecause most
large institutions
ha,e a hea,ily5
amen(e( ,ersion of AS212 or
AS000 which has
"een
knocking aroun( the
pro6ect
management
team for years%
* See< eg Philip #oots an( !onal( $harrett<Practica' $i/e to %onstr$ction %ontracts >200?< pp &25&)
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/ *hat $ro$ortion of standard forms areamended,
+ur key fin(ing in this section is
that< where stan(ar( forms areuse(< o,erwhelmingly they are
amen(e( "y the parties from the
pu"lishe( form) +,erall< /G of
the forms reporte( upon >from
a sample siEe of 2&? were
amen(e()-0 'he inci(ence of use of
amen(e( forms amongst the four
most wi(ely use( forms range( from
//G >for AS000? up to /G >for
AS&00?)-1
'he uestion which generate( the (ata
for this section aske(
participants to i(entify whether thegeneral con(itions< rather than
pro6ect5specific information of the type
set out in Anne=ure Part A to
AS212< were amen(e() 8owe,er< the
sur,ey (i( not specifically ask
respon(ents to i(entify the e=tent of
such amen(ments >as is note(
in section 2.2 a"o,e< we ha,e
suggeste( this as an area for further
research?) 'hat sai(< a num"er of
inter,iewees ma(e o"ser,ations
along the lines that the amen(ments to
stan(ar( forms that theytypically see are more ,oluminous than
the general con(itions
themsel,es)
A num"er of further fin(ings may "e
i(entifie( from the (ata represente( in the
charts in this section 9) 'hese inclu(e@
the e=tent of use of amen(e( forms
was high across all contract
,alues< contracting sectors an(
forms >although section 9.4 only
reports upon the se,en most wi(ely5
use( ma6or works forms?-2
in(ee(< the only categories where use of amen(e( forms (i( not
e=cee( -4G were@
5 contract *a'$e U I100<000
>*-G amen(e(? an( I100<0005
I1 million >4G?
5 contractin sector resi(ential
"uil(ing5pri,ate in(i,i(ual >-G?
an( commercial "uil(ing5pu"lic sector principal >-2G?
an(
5 fors C$21 >*&G?)
-0 See section 9.1.-1 See section 9.4.-2 See section 6.
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/1 :0erall
Dwhere stan(ar(
forms are use(<
o,erwhe
lmingly
they are
amen(e
( "y theparties
from the
pu"lishe
( form%
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&4
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/! Breakdo&n +y initial contract 0alue
Dthe e=te
use of am
high acro
contract
contract
sectors a
3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each ,alue category)
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/" Breakdo&n +y contracting sector
3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each sector)
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&-
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/4 Breakdo&n +y form
Din &0 ye
e=perien
as a pro6
manageha( only
an Austr
Stan(ar(
(ocume
unamen(
two occa
3igures a"o,e each column in(icate the num"er of contracts< "ase( upon stan(ar( forms< reporte( upon for each form)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
&/
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1) *hy are standard forms amended,
#ike the chart in section 8< the chart
"elow aggregates responses
to a uestion which aske( participants
to in(icate< in respect of the
factors liste(< their perception of where
each of those factors sat on a
spectrum from Dnot at all important% to
D,ery important% >D(on%t know%
was also a,aila"le?) Participants likewise
were also a"le to nominate
other factors) 'he factors
nominate( were generally
imprecise concepts such as Drisk
allocation%) A smaller num"er of
responses nominate( (isparate
specific factors such as corporate
policy< financiers% (eman(s an(
particular clauses)
Do,erall<
Qnee( to shift r
regar(e(
primary r
for amen
stan(ar(
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.t will "e note( that< o,erall< the Dnee( to
shift risk% was regar(e( as the primary
reason for amen(ing stan(ar( forms)
As in section 8< the stan(ar(
(e,iation for each category >"ase(
on representing the range "etween
Dnot at all important% to D,ery
important% as a fi,e5point scale? is
rele,ant) 'hese stan(ar( (e,iations >as
in(icate( "y the ranges marke( on the
chart? were@ Dnee( to shift risk to another
party% 5 1)1< Dnee( to amen( to reflect
regulatory
reuirements% 5 1)< Dincrease( ease of
contract a(ministration
through mo(ification of the form% 5 1)&<
Dform percei,e( to "e poorly (rafte(% 5
1)&)
Ci,en the high rate of usage >see
section 6? of forms 5 primarily
AS212< AS&00< AS000 an(
AS02 5 the pu"lishe( ,ersions
of which ha,e not "een
su"stantially amen(e( for well o,er
a
(eca(e< it is not surprising that< o,erall<
the Dnee( to reflect statutory
reuirements% was i(entifie( as an
important factor) 'his alsocorrelates with the fin(ings in section
11 that clauses (ealing with relati,ely
recent statutory reuirements such as
CS' an( security of payment are
a((e( to appro=imately *0G of
stan(ar( forms)
'he uestion of w0 stan(ar( forms
are amen(e( was one on which
the inter,iews were especially
enlightening) 9ssentially 5 an(< noting
that our fin(ings here must "e regar(e(
as preliminary only 5 there
seems a clear (i,i(e in perception
"etween lawyers an( lawyers%
clients as to where the D"lame% lies
for e=cessi,e amen(ment of
stan(ar( forms) A sense of the
(i,i(e may "e gleane( from the
following representati,e sample of
,iews@
A"out lawyers< "y clients@
5 changes are (ri,en "y lawyers
rather than their clients when
clients are apprise( of the effectsof the changes suggeste(
"y their lawyers >such as in
relation to ownership of Dfloat% in
the contractual program?< they
often say that they (o not want the
changes to "e ma(e
5 lawyers are risk a,erse an( put to
their clients a conser,ati,e<
high5watermark risk position >ie
one which amen(s the forms
to "e more onerous to the counter5party?
5 e=ternal
lawyers
ha,e a
financial
interest
in >an(
internal
legal
(epartm
ents
nee( to
D6ustify
their
e=istenc
e% "y?
Dselling%
suites
of
contract
s< sets
of
amen(
ments
an(
pro,i(in
g
ongoing
a(,ice
(uring
the
pro6ectan(
5
lawyers
often
ha,e a
poor
un(erst
an(ing
of the
technic
al an(
commer cial
implicat
ions of
theiram
en(men
ts< such
as in
a(,
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ising upon contract5specific
issues for insertion into the
Anne=ure >contract
particulars?)
A"out clients< "y lawyers@
5 clients can "e ,ery
conser,ati,e >especially wherethey ha,e
encountere( a(,erse
e,ents on pre,ious pro6ects?
an( want
certainty of risk transfer 5
this is what (ri,es more
(raconian risk allocation
5 many contractors make the
mistaken assumption that
they
un(erstan( the legal
implications of the stan(ar(forms an(
(iscount the nee( to make
amen(ments simply to
remo,e known am"iguities
>the Dualifying cause of
(elay% (efinition in AS000
an( AS02 was i(entifie(
in this conte=t?
5 certain amen(ments areuncontro,ersial< such as to anticipate
statutory reuirements >eg
workplace health an( safety<
security of payment? or to allowfor more efficient contract
a(ministration howe,er< e,en
such uncontro,ersial
amen(ments will necessarily a((
significant ,olume to the
stan(ar( form an(
5 whilst amen(ments may "e,oluminous< once contractors
work through them an( the
reasons for them they will
usually "e accepta"le<
especially where contractors
are at the more sophisticate(en( of the market)
Sitting "ehin( these o"ser,ations is<
we think< a "roa(er issue as to the
e,ol,ing role of construction lawyers)
Whilst this issue is "eyon( the (irect
scope of this Report< we ha,e
i(entifie( this >see section 2.2? as an
area for further< (etaile( research)
Dthere
seem
s
aclear
(i,i(e
in
perce
ption
"etween
lawyers
an(
clients as
to
where
theQ"lame
lies
for
e=cessi,e
amen(
ment of
stan(ar(forms%
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11 *hat ty$es of clauses are amended,
Section 11 reports upon the
relati,e inci(ence of
amen(ments to stan(ar( form
contracts "ase( upon key risk<
legislati,e<
a(ministrati,e an( other matters)
'he uestions generating the
rele,ant (ata ma(e a (istinction
"etween clauses aen/e/ fro
those in the stan(ar( form an(
those a//e/ to the stan(ar( form)
'his (istinction is generally carrie(
through in the reporting "elow<
largely to make (igestion of the
large (ata set more managea"le)
Where the (istinction is not e=plicit<it may "e assume( that
Damen(e(% is referring to "oth Damen(e(%an( Da((e(% clauses)
By initial contract0alue
Sam$le sie
#ess than I100<000&
I100<0005I1 million12
I1 million5I4 million&0
By sectorSam$le sie
Resi(ential
"uil(ing 5
commercial
&- (e,eloper as
principal
Resi(ential
"uil(ing 5 pri,ate
- in(i,i(ual as
principal
$ommercial
"uil(ing 5 pri,ate
& sector principal
I4 million5I20 million
&2$ommercial "uil(ing 5 pu"lic1/
111 :0erallsector principal
'he charts in section 11.1 in(icate the
o,erall inci(ence of
amen(mentsHa((itions across all forms<
contracting sectors an(
,alues) 'hey were generate( "y
comparing the total num"er of
responses in respect of each matter to
the total num"er of responses
which in(icate( that a stan(ar( form
ha( "een amen(e( in respect
of one matter or more) So< for e=ample<
in respect of stan(ar( forms
which were amen(e( to any e=tent<
-*G were reporte( as ha,ing
ha( the e=tension of time clausesamen(e( an( 1G the change
in law clauses) 'hese are the same
figures as those set out in the
DAll Sectors% row of the charts in
section 11.3 >"reak(own "y initial
contract ,alue? 5 a slightly (ifferent (ata
set was use( for the charts
in section 11.2 >"reak(own "y
contracting sector? "ut the
o,erall
percentages are only
marginally (ifferent >within
152G?)
'hroughout this section
11< it nee(s to "e "orne
in min( that sample siEes
for the un(erlying (ata
,arie(< as follows@
I20 million5I40 million
24
I40 million5I100 million2
I100 million5I400 million42
Creater than I400 million
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.nfrastructure >roa(s< ports<
energy
20 etc? 5 pri,ate sector
principal
>not mining an( resources?
.nfrastructure 5
pri,ate sector
11 principal
>mining an(
resources?
.nfrastructure 5
pu"lic sector
&-
principal
Process engineering10
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'he (ata in(icate that< o,erall< there is a high le,el
of amen(ment
>inclu(ing a((ition? to stan(ar( forms) As is note(
in section 2.2 a"o,e<
it woul( "e useful for further research to "e
un(ertaken into such
Clause ty$e
amen(ment "y reference to
the specific forms) 8owe,er<
it may "e
surmise( 5 gi,en the high
le,el of use an( amen(ment
of the Stan(ar(s
Australia forms note( in pre,ious sections 5 that the
Stan(ar(s Australia
9=tensions of time forms are routinely "eing hea,ily
amen(e( in respect of multiple matters)
Across all forms<
contracting sectors
an( ,alues< the
0i0est inci(ence
of amen(ment is in
respect of@-&
Incidenceo0erall
-*G
Dighestincidence
By initialcontract
0alueI20540million@ /G
By sector
Resi(ential
"uil(ing 5commercial(e,eloper principal@ 2G
.nfrastructure 5
pri,ate sector
principal >mining an(
resources?@ 1G
Process engineering@
0GV
9=tensions of time 5 -*G
!elay (amages >inclu(ing liui(ate((amages? 5 -1G
Site con(itions 5 */G
Payment generally 5 *4G >security ofpayment >a((ition? 5 *0G?
Kariations 5 *&G Warranties as to uality 5 *2G
$laims >inclu(ing time "ars? 5 *2G an(
!elay (amages -1GI405100 million@ /&G >inclu(ing#!s?
Site con(itions */GI405100 million@ /&G
Payment generally *4GI4520 million@ -/G
Resi(ential"uil(ing 5commercial(e,eloper principal@ 2G
Resi(ential"uil(ing 5
commercial(e,eloper principal@ /G
Resi(ential"uil(ing 5pri,atein(i,i(ualprincipal@/*GV
Resi(ential"uil(ing 5commercial(e,eloper principal@ /G
Coo(s an( Ser,ices 'a= >a((ition? 5 *0G) Kariations *&GLI400 million@ -/GV Process engineering@ /0GV
'he lowest inci(ence of amen(ment is inrespect of@
!ispute A,oi(ance Proce(ures >a((ition?5 /G-
$ontract a(ministration >a((ition? 5 2&Gan(
.nspectionH testing 5 &0G)
Cenerally speaking< the inter,iews
in(icate( a similar sprea( of
inci(ence of specific amen(ments)
'he most commonly commente(5
upon
amen(ments were
in respect of
limitations of
lia"ility >(iscusse(
further
"elow? an( time
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"ars@ many contractors regar(e( the
latter as "eing of
concern from a risk allocation an(
a(ministrati,e "ur(en point of ,iew)
'he "reak(owns "y contracting ,alue
an( sector >set out< respecti,ely< in
sections 11.2 an( 11.3? re,eal
su"stantial ,ariations within these< an(
other matters) By way of summary in
relation to the types of clauses i(entifie(
a"o,e as ha,ing the highest inci(ence of
amen(ment@
Warranties as to uality *2GUI100<000@ 100GV
$laims *2GI154 million@ -&G >inclu(ing time"ars?
CS'-4 *0GI4520 million@ -2G
Security of payment *0GI405100 million@ -*G
Resi(ential"uil(ing 5commercial(e,eloper principal@ -/G
Resi(ential
"uil(ing 5commercial(e,eloper principal@ /G
Resi(ential"uil(ing 5commercial(e,eloper principal@ /1G
Resi(ential"uil(ing 5commercial(e,eloper principal@ /G
V in(icates sample siEe 10or fewer@ see a"o,e
-& DPro6ect5specific reuirements% also ha( a high inci(ence >at */G? 5 it has< howe,er<"een e=clu(e( from further analysis as the fin(ing is unremarka"le in this conte=t 5 inother wor(s< it is inherent in the nature of stan(ar( forms that they will< to ,aryinge=tents< "e una"le to anticipate such reuirements)- 'hat sai(< the sur,ey also foun( that 4*G of the (isputes clauses wereamen(e( an( A!R clauses were a((e( in &*G of contracts using stan(ar(forms< so the o,erall rate of amen(ment in respect of (isputes remains high)-4 'he only sector where there was no su"stantial inci(ence of amen(ment >in(ee(< aninci(ence of 0G was recor(e(? in respect of CS' was resi(ential "uil(ing with a pri,atein(i,i(ualas principal) 'his likely may "e e=plaine( "y the fact that >as was note( in section 5.5?the legislati,e reuirements in respect of such contracts are highly prescripti,e in turn<the forms
typically use( in this sector >such as those pro(uce( "y the 8ousing .n(ustry an( Master Buil(ers Associations? are up(ate( freuently< so pro,ision for CS' is usually ma(e inthesecontract forms)
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'he ta"les gi,e rise to a num"er of further< (etaile( o"ser,ations
>al"eit they nee( to "e tempere( "y reference to the respecti,e
sample siEes< as note( a"o,e?< inclu(ing@
imitations of lia+ility >inclu(ing in respect of Dconseuential loss%?< along with ca$s on li2uidateddamages were i(entifie( in our
inter,iews "y se,eral contractor representati,es as "eing a ,ital part of their organisations% preferre( riskmatri= for contracts) 8owe,er<
none of the most wi(ely5use( stan(ar( form construction
contracts in Australia currently incorporates such general
limitations)-* 'he sur,ey
(ifferentiate( "etween amen(ments to an( a((itions of such
clauses to contracts) .ts fin(ings may "e summarise( in this
respect as follows@
Clausety$e
Incidence
Dighest
incidenceo0erall Byinitial 0alue
o&est incidence
By sector
By initial 0alue
Dlimi
tationsof
By sector
lia"ility along#imitations42G of lia"ility>amen(ment?
#imitations of /G lia"ility>a((ition?
$ap onliui(ate(&G
(amages
I1005400 million@ *G
.nfrastructure 5 pri,atese
ctorprincipal>mining
an(reso
ur ces?@/2G$ommer
cial"uil(ing 5pri,atesectorprincipal@*0G
UI100<000@ *-GV
.nfrastructure 5 pri,atesectorprincipal>min
ingan(resources?@-&G
Processengi
neering@*0GV
LI400 million@*-GVProcessengineering@
*0GV
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I405100 millionResi(ential "uil(ing 5>&/G?pri,ate in(i,i(ual as
principal>0G?V
.nf rastructure5pu"licsector principal>G?
UI100<000 >&&G?VResi(ential "uil(ing 5
pri,atein(i,i(u
al as pr incipal >2&G?V
.nfrastructure 5pr i,ate sect
or pr incipal>not mining
an(resources?>4G?
I1U5I4 million >&&G?
$ommercial "uil(ing 5pu"licsectorprincipal>1-G?
with caps
on #!s
were
i(entifie(
"y se,eralcontractor
represe
ntati,es
as
"eing a
,ital
part of
their organi
sation
s%
preferr
e(
risk matri=%
Vin(icatessamplesiEe10or fewer @seea"o,e
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+,erall< there seems to "e a relati,ely low le,el of amen(ment
>e=cept in relation to payment clauses? in resi(ential "uil(ing
contracts with
a pri,ate in(i,i(ual as principal) 'hat sai(< it was only in this
sector that there was any su"stantial reporting of use of dis$ute
a0oidance
$rocedures >2G? 'hese fin(ings were< howe,er< "ase( upona sample siEe of -)
'he only sectors where there was a high reporte( inci(ence of
a((ition of clauses in respect of go0ernment $olicy
re2uirements were
where there was a pu"lic sector principal 5 commercial
"uil(ing >*1G? an( infrastructure >41G?)
-* AS212512 an( AS&00514 inclu(e caps on liui(ate( (amages >see clause&4)-? "ut AS000 an( AS02 (o not) #imitations on lia"ility are inclu(e( in se,eralwi(ely5use( consultancy forms< inclu(ing AS12252010 5 see Bailey an( Bell<a"o,e n 1-< pp 2/&5) 3or commentary on current contracting practice< see PatrickMea(< D9=ploring #imitations of #ia"ility an( 9=clusions of $ategories of #oss% >201?2*>? &$stra'ian %onstr$ction Law $''etin 22)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;&
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1111 Clauses a1en/e/ fro1 standard form
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
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111! Clauses a//e/ to standard form
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;4
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11! Breakdo&n +y initial contract 0alue
11!1 Clauses a1en/e/ fro1 standard form
eneral risk
Preliminary Access to
Performance Change inmatters the site
securityla&
assum$tion
*arrantiesand
as to 2ualityinsurance
#esign
Siteconditions
Programming
5tensions
#elayof time
damages
Payment
UI100<000 *-G &&G &&G 0G *-G &&G 0G *-G
I100<0005I1M &&G 40G 40G &&G &&G 40G 2G
*-G &&G -4G *-G 0G
I15I4M 0G &-G -G 2&G &G *&G &-G &G
I4520M 4&G 4G *G -G 4G -2G 40G-/G 4*G *G **G **G
I20540M 0G 42G *0G G 4*G *G /G -2G
I405100M &G *2G **G 1G 42G 4G -2G-*G 44G /&G /&G *2G
I1005400M *&G *2G *&G 4G *G *4G -4G -&G
LI400M G /G 4*G G &&G 4*G *-G-/G -/G -/G -/G -/G
A C:9@AC9EA(5S
4.= '6= 6)= 4!= ''= 6"= '= 6/=
0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;*
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Clauses a1en/e/ fro1 standard form contG
Contract
Safety
administration 8
re2uirementssu$erintendent
8 *DS
5n0ironmental Ins$ection8
imitations of re2uirements testinglia+ility
Eariations
Com$letion 8
9ermination Final
hando0er rightscom$letion
Claims
#is$utes
UI100<000 100G &&G &&G 0G *-G &&G*-G &&G &&G 0G *-G
I100<0005I1M 24G 2G 1-G /G 40G 4/G24G 2G &&G 40G 2G
I15IM -G &G 20G 20G -G -&G0G 0G &G *0G 40G
I4520M &/G *G -G &/G G 4&G4&G 4&G 40G 4G -G
I20540M &*G /G /G G 4*G */GG 0G G *G -2G
I405100M 42G 4G 42G &1G &/G **G44G 4G &G -*G *2G
I1005400M -1G 42G 40G &1G *G *-G4*G 4*G 42G *4G *2G
LI400M *-G 4*G 4*G G G 4*GG G 4*G *-G G
A C:9@AC9 '!= '"= 4"= "1= '"= 64=4/= 4/= 4'= 6"= '=
EA(5S
0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "een
amen(e( to any e=tent)
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S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;-
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11!! Clauses a//e/ to standard form
imitationsof lia+ility
Ca$ on
Accelerationli2uidated
throughdamages
delay
*ork$lace FitnessforDealth and $ur$oseS9
Safety &arranty
Security of
Pro%ect-$ayment 8
s$ecicad%udication
circumstances
#is$ute
o0ernment
A#@
A0oidance $olicyProcedures
re2uirements
Contractadministration
UI100<000 &&G &&G &&G &&G 0G *-G &&G100G &&G &&G &&G &&G
I100<0005I1M 40G &&G 1-G 2G &&G &&G 4/G4/G 0G 0G 0G /G
I15IM &&G 2&G 2&G &G 4-G 40G 40G&G 20G 1&G 1-G 2-G
I4520M &/G -G 1G **G 1G *&G 4G4G 1G *G &G 24G
I20540M G &*G 2/G 42G 0G -2G */G-*G &2G 0G G 20G
I405100M 44G 1G /G 4G /G *G -2G
-G 4G 10G 2/G 2/G
I1005400M *2G /G &/G 4/G *&G *4G *2G/-G 40G 10G &-G 24G
LI400M *-G G 11G -/G G 4*G 4*G4*G &&G 11G 4*G 22G
A C:9@AC9 4/= 4)= "4= '6= 4/= 61= 61=)= "6= .= "1= !4=EA(5S
0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
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S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;/
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11" Breakdo&n +y contracting sector
11"1 Clauses a1en/e/ fro1 standard form
eneral risk
Preliminary
Access to
Performancematters
the site
security
Change in
assum$tion
*arrantiesla& andas to 2uality
insurance
#esign
Siteconditions
Programming
5tensions
#elayof time
damages
Payment
Resi(ential *4G -0G /1G -0G -&G -/G /1G/G */G 2G 2G /G"uil(ing 5co
mmer cial
(e,eloper
as
pr incipal
Resi(ential 2G 2G 1G 0G 0G 1G 2G2G 1G 2G 1G /*G"
uil(ing 5 pr i,
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ate
in(i,i(ual as principal
$ommercial -G G 4/G &4G G -2G G-2G 0G /G -G 4/G"uil(
ing 5 pr i,ate
sect
or pr incipal
$ommercial 40G G 40G *1G 4*G *1G -/G*1G G -/G /&G *-G"ui
l(ing 5 pu"lic
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sector pr incipal
.nfrastructure &4G 44G *0G &4G 40G *4G 4G*0G 40G -0G *4G *4G>roa(s< ports<energy etc)? 5pri,ate sectorprincipal >notmining an(resources?
.nfrastructure 5 &*G *G /2G 4G 44G /2G /2G/2G *G 1G /2G *Gpri,ate sectorpr incipal >mini
ng
an( r esour ces?
.nfrastructure 5 1G 41G 1G &0G G &4G &4GG *G 4G *G 41Gpu"lic sector principal
Process &0G *0G -0G 20G -0G 40G *0G*0G -0G 0G -0G /0Gengineering
A S5C9:@S 4= '6= '/= 41= '4= 6!= '6=6.= '1= 6= 1= 6'=
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0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;
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Clauses a1en/e/ fro1 standard form contG
Contract
Safetyadministration 8
re2uirementssu$erintendent
8 *DS
5n0ironmental
Ins$ection 8
imitations of re2uirements testinglia+ility
Eariations
Com$letion 8
9ermination Final
hando0er rightscom$letion
Claims
#is$utes
Resi(ential "uil(ing 5 *4G *2G *G &4G 41G -*G*/G */G 4G /G /*Gc
ommer cial (e,eloper
as pr incipal
Resi(ential "uil(ing 2G 0G 0G 0G 0G 2G0G 0G 1G 1G 0G5
pr i,ate in(i,
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i(ual as
pr incipal
$ommercial "uil(ing 5 41G 4&G &&G 21G *0G 4/GG 41G G 4/G 41Gpri,ate sector principal
$ommercial "uil(ing 5 -2G G &G &&G 4*G -2G*1G G G 4*G *1Gpu"lic sector principal
.nfrastructure 0G 4G 0G &4G 40G *4G0G 44G 44G 44G 4G>r oa(s< por ts< ener gy
etc)? 5 pr i,ate sector
p
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r incipal >not mining
an( r esour ces?
.nfrastructure 5 *G *G 44G &*G /2G -&G4G *G 4G *G *Gpri,ate sector principal>mining an( resources?
.nfrastructure 5 pu"lic 2G 4G G &0G G 4G&0G 2-G &0G 4G Gsector principal
Process engineering /0G 40G -0G *0G 40G /0G40G -0G *0G /0G 0G
A S5C9:@S '1= '!= 4!= ")= '!= 6"=4.= 4.= 4'= 6!= '6=
0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;40
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11"! Clauses a//e/ to standard form
imit
ationsof lia+ility
Ca$ on
Acceleration
li2uidated
throughdamages
delay
*ork$lace FitnessforDealth and $ur$oseS9
Safety &arranty
Security of
Pro%ect-
$ayment 8
s$ecicad%udication
circumstances
#is$ute
o0ernm
entA#@
A0oidance $olicyProcedures
re2uirements
Contractadminis
tration
Resi(ential 41G &G 41G -&G -*G /1G /G/G 4G 4G 22G 2-G"uil(ing 5commer cial
(e,eloper as
pr incipal
Resi(ential 2G 2G 1G 0G 0G 0G 1G&G 1G 2G 0G 1G"uil(ing 5 pr i
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,ate
in(i,i(ual as principal
$ommercial G 0G &4G *0G 4*G *4G *4G-0G &&G 12G 21G 2&G"uil
(ing 5 pr i,ate
sec
tor pr incipal
$ommercial 40G 1-G &G G G -/G *1G-/G 4*G 0G *1G G"u
il(ing 5 pu"li
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c
sector pr incipal
.nfrastructure 4G &4G 24G 44G 0G 40G 4G*4G &0G 14G &4G &0G>roa(s< ports<energy etc)? 5pri,ate sectorprincipal >notmining an(
resources?
.nfrastructure -&G 4G 1/G &*G 44G 4G 4G-&G 2-G 0G 1/G 1/G5 pr i,ate secto
r
pr incipal >minin
g
an( r esour c
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es?
.nfrastructure G *G 22G 4G &0G 4G 4-G41G &0G /G 41G 1*G5 pu"lic sector principal
Process *0G *0G 40G *0G 20G *0G 0G0G 20G 10G 20G &0Gengineering
A S5C9:@S 4.= "/= ""= ''= 4.= 6)= 6)=6.= "6= .= "!= !"=
0524G 2*540G 415-4G -*5100G
Percentages in(icate inci(ence of amen(ment of the rele,ant type of clause amongst stan(ar( form5"ase( contracts which ha,e "eenamen(e( to any e=tent)
S'A7!AR! 3+RMS +3 $+7'RA$' .7 '89 A:S'RA#.A7 $+7S'R:$'.+7 .7!:S'R;41
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1! Percei0ed outcomes from amendment offorms
'he rele,ant uestion in the sur,ey aske( participants to in(icate< on
a scale ranging from Dmuch (ecrease(% to Dmuch increase(%< theirper ceptions a
s to whether the r ele,ant amen(ments
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to the
stan(ar ( f or m
af f ecte( cer tain matter s r elating to
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pr o 6ect
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?
)
A num"er of contractors an( pro6ect
managers commente( that
transaction costs are increase( where
contracts are amen(e( withoutgoo( reason an( that contractors will
inclu(e a contingency in their
ten(ere( prices for such amen(ments
where it is possi"le to (o so
>a num"er of comments were recei,e(
along the lines that< when
work is scarce< contractors nee( to
accept contracts on any terms?)
+ther comments recei,e( inclu(e( that
too much reliance is put on the
contract as a risk management tool<
neglecting contract management
techniues which can lea( to morefa,oura"le pro6ect outcomes)
-- Section 12.
+n the other han(< lawyers in,ol,e( in (rafting
amen(ments ten(e( to point out that the amen(ments
they were making were generally necessary< an( woul( "eseen to "e so when e=plaine( to the parties)
.n(ee(< some lawyers an( contract a(ministrators note(
that (isputation is increase( where contract
forms which (o not reflect the parties% agreement are use() .n
other wor(s< it was their ,iew that it is more efficient in the long
run to spen( time amen(ing the form to reflect the D(eal%
rather than procee(ing with an ina(euately tailore( contract
(ocument)
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A$$endi 1 - Sur0ey 2uestions
1) 8a,e you worke( on or otherwise "een engage(
in connection with any construction
pro6ects in Australia (uring the past fi,e years<
either as a pro6ect participant or
a(,iserF
;es
A 7o
We are now going to ask you a series of
uestions in relation to pro6ects in which
you ha,e "een in,ol,e() When you come to
the en( of these uestions< you will "e
prompte( to ans&er the same 2uestions inrelation to u$ to t&o further $ro%ects
2) .n what year (i(
the pro6ect
commenceF
8ow woul( you
(escri"e the following
aspects of the
pro6ectF
&) Procurement metho() >Please choose the option
which "est (escri"es the primarycontract)?
$onstruct only
!esign $onstruct
$onstruction Management
Managing $ontractor H 9$.
Alliance
Partnering arrangement
+ther >please specify?
) Payment metho() >Please choose the optionwhich "est (escri"es the
primary contract)?
#ump sum
Reim"ursement H remeasurement >eg on asche(ule of rates "asis?
+ther >please specify?
4) Sector)
Resi(ential "uil(ing commercial (e,eloper as
principal Resi(ential "uil(ing pri,ate in(i,i(ual asprincipal
$ommercial "uil(ing pri,ate sector principal
$ommercial "uil(ing pu"lic sector principal
.nfrastructure >roa(s< ports< energy etc? pri,atesector principal >not mining an( resources?
.nfrastructure pri,ate sector principal >miningan( resources?
.nfrastructure pu"lic sector principal
Process engineering
+ther >please specify?
*) Where was the pro6ect primarily un(ertakenF
Australian $apital 'erritory
7ew South Wales
7orthern 'erritory
ueenslan(
South Australia
'asmania
Kictoria
Western Australia
+ther inclu(ing e=ternal territories an(
foreign ai( pro6ects >please specify? -) What
was the total pro6ect ,alueF
#ess than I100<000
I100<000 I1 million
I1 million I4 million
I4 million I20 million
I20 million I40 million
I40 million I100 million
I100 million I400 million
Creater than I400 million
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/) Which of the following roles (escri"es
your own in,ol,ement in the pro6ectF
>Please choose as many as apply)?
+,er,iew commercial (ecision5maker
Superinten(ent H contract a(ministrator
.n(epen(ent re,iewer
$ontractor H su"contractor H supplier
$onsultant not a party to the
contract >other than
superinten(ent
H lawyer?
3inancier
#egal a(,iser e=ternal solicitor
#egal a(,iser "arrister
#egal a(,iser inhouse
!ispute resolution >a(6u(icator< ar"itrator<me(iator< etc?
+ther >please specify?
'hinking now a"out the contract with
which you were primarily in,ol,e( on
the pro6ect)))
) What was the initial contract ,alueF
#ess than I100<000
I100<000 I1 million
I1 million I4 million
I4 million I20 million
I20 million I40 million
I40 million I100 million
I100 million I400 million
Creater than I400 million
10) Where (i( that contract
sit within the Dcontracting
chain%F
>Please choose the
option which "est (escri"es
the contract)?
D8ea( contract% >entere( into "y principal with acontractor?
Su"contract H 'ra(e contract
Supply agreement
+ther >please specify?
11) Was that contract "ase( upon a stan(ar( formF
;es
7o
12) :pon which of the following stan(ar( forms was
that contract "ase(F
AS21212
AS0001-
AS&0014
AS022000
J$$
AB.$ MW
3.!.$ forms
79$ &
C$21
P$1 1/
+ther >please specify?
1&) Which party ma(e the (ecision to use the formF
;our organiEation >or the organiEation which youa(,ise?
Another party
!on%t know
.f another party< please i(entify the (ecision
maker "y role >i)e) "anker< lawyer for the
principal< (esigner< etc?
1) Please in(icate @$sin a sca'e fro 1-5
w0ere 1 was not i#ortant= an/ 5 *er
i#ortant=A /on=t :now a'so a*ai'a'eB
how important each of the following reasons
was for that form "eing chosen)
3amiliarity with the form of the party choosing it
3orm recommen(e( H man(ate( "y party%sorganiEation
>eg go,ernment
ten(ering
reuirements H
peak "o(y
recommen(atio
n?
Best Dreflects the (eal%
DSuita"ility of the risk profile%
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Caining a commercial a(,antage for the partyprocuring the work
3orm well(rafte(
9ase of contract a(ministration through use ofthe form
Minimising transaction H legal costs +ther >please specify?
14) Were the general con(itions >i)e) the stan(ar(
terms< not pro6ectspecific information
set out in< eg< Anne=ure Part A to AS212? of
the stan(ar( form you use( amen(e(
from the pu"lishe( stan(ar( formF
;es >amen(e(?
7o >not amen(e(?
1*) Please in(icate @$sin a sca'e fro 1-5
w0ere 1 was not i#ortant= an/ 5 *er
i#ortant=A /on=t :now a'so a*ai'a'eB
how important you un(erstan( each of the
following factors was in (ri,ing amen(ments tothe stan(ar( form)
7ee( to shift risk to another party
1-) Which party was the risk shifte( to >contractor<consultant< su"contractor etc?F
@C$estion on' as:e/ w0ere answer toC$estion 16 was 3 4 or 5B
1/) Please in(icate N$sin a sca'e fro 1-5
w0ere 1 was not i#ortant= an/ 5 *er
i#ortant=A /on=t :now a'so a*ai'a'eB
how important you un(erstan( each of the
following factors was in (ri,ing amen(ments tothe stan(ar( form)
7ee( to amen( to ref lect
regulatory reuirements >eg CS'<
resi(ential
"uil(ing legislation?
3orm percei,e( to "e poorly(rafte(
.ncrease( ease of contract a(ministrationthrough mo(ification of the form
+ther >please specify?
1) As "est you can recall< which of the following
types of clauses in the stan(ar( form
were aen/e/F >Please select as many as
apply)?
Preliminary matters >inclu(ing regulatoryappro,als?
Access to the site
Performance security >retention H "ankguarantees etc?
$hange in law
Ceneral risk assumption an( insurance
Warranties as to uality
!esign
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Pro6ect outturn cost
7ee( for legal a(,ice (uring the pro6ect
!isputation
Please pro,i(e any further (etail to assist
us to un(erstan( your answers to thisuestion@ for e=ample< as to the e=tent of
increase( H (ecrease( pro6ect cost)
22) Please in(icate @$sin a sca'e fro 1-5
w0ere 1 was not i#ortant= an/ 5 *er
i#ortant=B how important you un(erstan(
each of the following factors to "e in the
stan(ar( form "eing use( unamen(e()
+ne party was in a position to D(ictate the (eal%
2&) Which party was that >principal< contractor<
financiers etc?F @C$estion on' as:e/
w0ere answer to C$estion 22 was 3 4or 5B
2) Please in(icate
Nusing a scale from
154 where 1 was
Dnot important%
an( 4 D,ery
important%O how
important
you un(erstan(
each of the
following factors
to "e in thestan(ar( form
"eing use(
unamen(e()
3amiliarity with the form of the party choosing it
Satisfactory risk profile
.ncrease( ease of contract a(ministrationthrough use of the form
+ther >please specify?
@S$r*e res#on/ents were t0en i*en an
o##ort$nit to res#on/ to C$estions 2-24
in res#ect of $# to two a//itiona' #ro<ects.B
-&) 'o what e=tent @$sin a sca'e fro 1-5 w0ere
1 was stron' /isaree= an/ 5 stron'
/isaree=A /on=t :now= a'so a*ai'a'eB (o
you agree with the following statementF
D'he Australian construction in(ustry nee(s to
ha,e a,aila"le to it stan(ar( forms of contract
which are capa"le of "eing use( without
su"stantial amen(ment)%
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-) .n your ,iew< is there any current stan(ar( form
of contract which is capa"le of
"eing use( without su"stantial amen(ment in
the Australian construction in(ustryF
;es
7o
@C$estions 75-76 on' as:e/ w0ere answer toC$estion 74 was es=B
-4) Which formF
-*) 3or which type of pro6ectHs is the form
capa"le of "eing use( without su"stantial
amen(mentF
--) Woul( you "e willing to "e inter,iewe( >"y
phone or in person? "y a mem"er of the
research team for this pro6ect in or(er to o"tain
more (etaile( ,iews from youF
;es @#ro#ts #artici#ant to enter contact/etai'sB
7o
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A$$endi ! - S$ecic feed+ack on AustralianStandards forms
As was foresha(owe( in section 1.1.2< we repro(uce here 5 without further comment or< necessarily<
en(orsement 5 fee("ack note( "y the pro6ect team recei,e( (uring inter,iews for this pro6ect) 'his listing(oes not purport to "e comprehensi,e >"earing in min(< as note( in section 3.2< that we con(ucte( -
inter,iews an( each co,ere( (ifferent specific su"6ect matter?< nor representati,e of any particular
interest group) .t is also presente( in the awareness that Stan(ar(s Australia is engage( in an ongoing
process of in(ustry
consultation< so many of these issues may alrea(y ha,e "een recei,e( an( consi(ere()
eneral - formatting
3orms shoul( "e +ased u$on sectors
>commercial "uil(ing< infrastructure etc? rather
than (eli,ery metho(ologies >construct onlyH
(esign an( construct< etc as at present?
Su"5clauses shoul( "e more easily refera+le rather than their current un5num"ere( format
AS co$yright and licensing re2uirements make it (ifficult to a(apt AS contracts
as reuire( >AS12252010 was specificallymentione( in this conte=t?
7ee( greater gui(anceH (efault positions for thecontract5specific information in the
Anneure Part A< so as to minimise taking ofunreasona"le positions
Where contractorsH su"contractors D,ulnera"le%<shoul( "e a checklist in(icating
clearly how the stan(ar( risk allocation has "een
amen(e(-/
!elete Anneure Part B >changes to the
stan(ar( form? 5 (oes not reflect current
reality of marke(5up (ocuments
$onsi(er inclusion of optional risk profiles
S$ecic risk matters
Shoul( "e an eclusion of conse2uential loss
and general limitation of lia+ility
>10 respon(ents?
Shoul( "e an o,erall cap on li2uidated
damages >& respon(ents?< make clear that
#!s are the sole reme(y in respect of therele,ant (elay< an( clarify effect of entering
Dnil%< etc< in Anne=ure Part A
Principal shoul( not "e a"le to set oH
across multiple contracts >see< eg< cl &-)*
of AS000?
Principal shoul( ha,e a right to suspen( works>an( pay costs accor(ingly?
'he consultancy contracts shoul( (o,etail "etter
with the typical no0ation process<
inclu(ing "ack5to5"ack limitations of lia"ility >orlack thereof?
Creater clarity an( rigour reuire( aroun(
$rogramming >eg whether contractor
retains Dfloat%? consi(er a(option of S$# :
(elay an( (isruption protocol or separate
anne=ure for programming reuirements
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atent conditions< nee(s to "e greater clarityas to what is >an( is not? a Dlatent
con(ition% an( a more structure( process than thecurrent D(eeme( ,ariation%
approach 5 the latter means that many
generalH non5specific claims are "eing
funnelle( through the ,ariations process
as allege( latent con(itions
Contamination caused +y the contractorshoul( "e specifically a((resse(
Remo,e the reuirement for pro,ision of notices+efore ha0ing access to
$erformance security >2 contract
a(ministrator respon(ents an( one lawyer
in pri,ate practice? 5 means< in effect< that
principal una"le to access security as
reuire( when contractor "ecomes insol,ent
ualifying cause of delay (efinition>AS000HAS02? confusing an( shoul( re,ert to
tra(itional Dshopping list% of e,ents>AS212HAS&00? > respon(ents?
Shoul( "e greater clarity aroun( am+iguitiesand discre$ancies< eg< "y inclu(ing a
se,era"ility clause an( ha,ing the contractor"ear some risk for (iscrepancies
#ual roles of su$erintendent shoul( "e"etter a((resse(
Shoul( inclu(e a concept of key $ersonnel
References to +ankru$tcy shoul( "e remo,e(from ma6or works forms since so few
in(i,i(uals are party to these contracts
Insurance reuirements reuire re,iew >eg< itmay not "e possi"le to ha,e the
principal as a name( insure(?
-/ 'he approach of information pro,ision as a means of a((ressing ineuality of "argaining position is a feature of resi(ential "uil(ingcontracting "y reason of statutory inter,ention 5 see< eg< Doestic $i'/in %ontracts &ct 1995 >Kic?)
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