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    ICE Lecture 26 Feb 2018: Commonly Used Standard Form Contracts

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    Siavash Bayegan
    This document summarizes a lecture about commonly used standard form construction contracts. It outlines different types of contracting models and historical development of standard forms from organizations like JCT, ACE, FIDIC, and ICE/NEC. It compares terminology, risk allocation, claims processes, and dispute resolution approaches between forms like JCT SBC, ACE ICC, and FIDIC Red Book. Factors for choosing a standard form include project type, funding sources, familiarity, and allocating risks to the appropriate party. Amendments to standard forms are sometimes needed due to legislation, court decisions, or developing new contracting systems.

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    ICE Lecture 26 Feb 2018: Commonly Used Standard Form Contracts

    Uploaded by

    Siavash Bayegan
    80 views21 pages
    This document summarizes a lecture about commonly used standard form construction contracts. It outlines different types of contracting models and historical development of standard forms from organizations like JCT, ACE, FIDIC, and ICE/NEC. It compares terminology, risk allocation, claims processes, and dispute resolution approaches between forms like JCT SBC, ACE ICC, and FIDIC Red Book. Factors for choosing a standard form include project type, funding sources, familiarity, and allocating risks to the appropriate party. Amendments to standard forms are sometimes needed due to legislation, court decisions, or developing new contracting systems.

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    pressie - week 3 Contract Forms lecture - 26 Feb 2018

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    This document summarizes a lecture about commonly used standard form construction contracts. It outlines different types of contracting models and historical development of standard forms from organizations like JCT, ACE, FIDIC, and ICE/NEC. It compares terminology, risk allocation, claims processes, and dispute resolution approaches between forms like JCT SBC, ACE ICC, and FIDIC Red Book. Factors for choosing a standard form include project type, funding sources, familiarity, and allocating risks to the appropriate party. Amendments to standard forms are sometimes needed due to legislation, court decisions, or developing new contracting systems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    80 views21 pages

    ICE Lecture 26 Feb 2018: Commonly Used Standard Form Contracts

    Uploaded by

    Siavash Bayegan
    This document summarizes a lecture about commonly used standard form construction contracts. It outlines different types of contracting models and historical development of standard forms from organizations like JCT, ACE, FIDIC, and ICE/NEC. It compares terminology, risk allocation, claims processes, and dispute resolution approaches between forms like JCT SBC, ACE ICC, and FIDIC Red Book. Factors for choosing a standard form include project type, funding sources, familiarity, and allocating risks to the appropriate party. Amendments to standard forms are sometimes needed due to legislation, court decisions, or developing new contracting systems.

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    ICE lecture 26 Feb 2018:

    Commonly used standard form


    Contracts
    Dr Ronan Champion BSc LLb Phd FRICS FCIOB

    r.champion@reading.ac.uk
    www.championpearce.com
    University of Reading
    Outline of this talk

    • Commonly used contracting types


    • Commonly used contracts (Standard forms)
    – JCT, NEC, ACE and FIDIC forms
    • Bespoke forms, amendments
    • Which form? How to choose?
    Different forms of contracting
    Employer Employer
    Engineer (design Engineer
    and contract
    administration)

    Contractor has
    Contractor Finance &
    operate also =
    Contractor design
    responsibility
    DBFO/PPP Engineer so “Design &
    s/c s/c s/c s/c (design) Build”(D&B)

    Employer Employer

    Management or Construction Engineer


    ‘Prime’ Contractor manager (CM)

    s/c s/c Eng Contractor Contractor Contractor Contractor

    Eng Eng
    Historical development of forms
    (construction contracts)
    Building Engineering (UK) Engineering (Int)
    Pre-1950 RIBA forms (from 1903) ICE – 1st Ed (1944)
    1950 to 1960 RIBA - 1957 ICE – 2nd, 3rd & 4th FIDIC – Red book
    1960 to 1990 RIBA 1963, 1977 ICE – 5th (1973) FIDIC – later edns
    JCT 1980
    1990 to 2000 JCT - 1998, ICE – NEC 1st & 2nd FIDIC 1999 Edn
    ICE – 6th and 7th
    Post 2000 JCT 2005, 2011 ICE – NEC 3rd FIDIC 2006 MDB
    (ICE 7th sold to ACE) version
    ACE – “ICC form”
    Position at 2016 JCT 2016 ACE – ICC 2014 Edn FIDIC 1999
    ICE – NEC 3rd ICE – NEC 3rd ICE – NEC 3rd
    and 2017 NEC4 FIDIC revised suite
    And…
    CIOB – Major project form
    IChemE – suite of contracts
    Historical development of forms –
    all forms of construction contract
    Building Engineering (UK) Engineering (Int)
    Pre-1950 RIBA forms ICE – 1st (1944)
    1950 to 1960 RIBA - 1957 ICE – 2nd, 3rd & 4th FIDIC – Red book
    1960 to 1990 RIBA 1963, 1977 ICE – 5th (1973) FIDIC – Yellow Book
    JCT SBC 1980 ICE minor works (M&E– plant)(1963)
    JCT D&B form
    JCT Minor, IFC form
    JCT MC form
    1990 to 2000 JCT SBC 1998, ICE – NEC 1st & 2nd FIDIC – Orange
    JCT CM form ICE – 6th and 7th Book (Turnkey)
    JCT Major Projects ICE Design & FIDIC 1999 Edn
    Construct
    Post 2000 JCT 2005, 2011 ICE – NEC 3rd FIDIC 2006 MDB
    JCT CE form (ICE 7th sold to ACE) FIDIC 2008 Gold
    ACE – “ICC form” Book (DBO)
    • The ideal box-set for Christmas…
    • The CECA/ACE suite: • With Quantities
    • Measurement version
    • Term version
    • Minor works version
    • Partnering addendum
    • Design and Construct version
    • Target Cost version
    • Ground investigation version
    • Archaeological investigation
    version
    And the JCT suite
    Contract families, Agreements,
    Collateral Warranties,
    procurement advice…
    Some distinctions between forms
    JCT SBC 16 ACE ICC 14 FIDIC 1999 Red Bk
    Terminology Architect/Contract Engineer Engineer
    Administrator
    Risk on quantities Paid based on Remeasurement Remeasurement
    quantities in BQ
    Contractor’s claims None, or no Early warning Clause 20.1: claims
    Notice provisions consequence for notice and meeting, barred if not
    providing no notice then … notified in 20 days
    Completion Practical Substantial Detailed provisions
    completion completion re testing on
    completion
    Dispute resolution Adjudication and Adjudication and Dispute Review
    litigation (and other arbitration Board/DAB, then
    options…) Arbitration
    Generally For buildings For civils, some For non-UK (no
    collaborative bits… mention of UK law)
    Some comparisons with NEC4
    Payment-types NEC4 JCT ACE FIDIC
    Lump Sum Option A JCT SBC  
    Lump Sum w BQ Option B JCT SBC  
    Target Cost Option C ? JCT CE 
    Target Cost w BQ Option D -
    Cost Reimbursable Option E Prime Cost form
    Management Option F Management form
    Contract

    NEC4 form options are FIDIC’s different forms


    based on different Most popular in UK: are based on design
    payment mechanisms • JCT D&B form responsibility:
    • NEC Option C Employer; D&B; DBFO
    Structure of a standard form
    • Form of Agreement
    • Appendices (details of insurance cover, etc)
    • Conditions of Contract
    Extracts from FIDIC Red Book 1999
    FIDIC Conditions
    So why are standard forms revised?
    • In response to new/changes in legislation
    – Payment terms changed and adjudication provisions added to all forms in
    1998 following Housing Grants Act 1996
    – Current amendments in 2015 following changes to CDM regulations
    • In response to matters noted in Court decisions
    – Changes to EoT provisions to include ‘breaches by the employer’ as a relevant
    event (to avoid a ‘time at large’ issue arising)
    • To address a practical problem
    – What sanction is incurred if no programme is provided? (see FIDIC 4th & 5th)
    • To standardise a ‘suite’ of forms
    – E.g. in 1999 FIDIC rewrote all its forms so that the new forms all had similar
    strutures, clause nos, etc (see also ACE in 2014)
    • For use in other countries
    • In response to Government Policy
    – Production of JCT CE form (with collaboration provisions…)
    • To develop entirely new contracting systems (like D&B)
    Amendments and bespoke
    contracts…Why?
    • Amendments required to fix perceived
    inadequacies
    • The dominant party does not want to use a
    (neutral) form
    • A large number of amendments need to be
    made…
    – PFI/PPP projects where the funder needs step-in
    rights and there is a large suite of documents.
    • Where there is no suitable standard form for the
    circumstances
    Which standard form/contracting
    method do I choose?
    Some criteria used…
    • “Use the same form as we used for the last job”
    – Don’t want to think about it
    – Fear that contractors/subcontractors will not be familiar with a new form (esp
    NEC3)
    – Convenience: In-house documents already set up for one form
    • What is the source of funding?
    – If the work is partly Gov’t funded, you may have to follow Gov’t policy to use
    NEC3, or JCT CE, or…
    – If World Bank funded, then FIDIC…
    • What (blatantly) favours our team? (vodafone)
    • A risk-based choice: which party is best placed to carry certain risks –
    choice of contracting model
    • See http://fidic.org/bookshop/about-bookshop/which-fidic-contract-
    should-i-use
    Some points to take-away
    • Standard forms evolve. Where a party wants
    amendments, consider why?
    • JCT, ACE and FIDIC are publishers, each with
    near-identical suites of forms for various
    contracting bases.
    • NEC4 is the same, only different. Different
    language, but similar underlying principles.
    • The real question to ask is what contracting
    type you might need, what payment structure
    Some further sources
    • NBS National Construction Contracts and Law Survey 2012
    or 2013
    • RICS Contracts in Use survey 2008, 2010, 2012
    • Government Construction Strategy July 2012 (Final Report
    to Government by the Procurement/Lean Client Task
    Group)
    • JCT & FIDIC websites
    • NEC3 Procurement and Contract Strategies
    • Report on PWC contracts in Ireland (2015)
    • Books:
    – Construction Contracts: Law and Management by Hughes,
    Champion and Murdoch, (5th edition, from 28 April 2015)

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