The Irish Government recently published the amendments to the Irish Public Works Contracts. The amendments arise out of the Review of the Public Works Contracts conducted over the last 18 months. The amended forms of contract must, with limited exceptions, be used from 4 April 2016. We discuss the key changes involved.
The Irish Public Works Contracts were introduced in 2007. The aim was to reduce cost over runs and introduce price certainty. The idea was that risk would be transferred to the Contractor who would be paid a premium for assuming the extra risk. The introduction of the new contracts coincided with one of the worst recessions ever experienced in Ireland. Contractors competed for projects on price but found themselves assuming all the risk without adequate compensation. Inevitably claims escalated as contractors tried to recoup their losses. The inflexibility of the contracts together with the confidential dispute resolution procedure made it very difficult to manage and deal with claims. The amendments aim to deal with some of those issues.
Mandatory Bill of Quanitites
The Pricing Document will now be a compensation event meaning that the Employer will assume the risk for any errors or inconsistencies between the Pricing Document and the Works Requirements. The pricing document must be a Bill of Quantities prepared in compliance with a method of measurement approved for use with the Public Works Contracts. There will be a much greater onus on members of the design team, which will include a Cost Consultant, to liase with each other at design stage to ensure there are no inconsistencies between the Pricing Document and the Works Requirements.
Direct Tendering of Specialists
Direct Tendering of Specialists will be permitted in circumstances where: a) the specialist works exceed 15% of the value of the overall works, where certain elements of the works cannot be adequately defined, where early engagement is necessary; b) the specialist works have a significant bearing on the outcome of the project; or c) the Employer requires oversight of the appointment of specialists. This will not be nomination in the traditional sense. There will be Named Specialists who will become either Novated Specialists or Reserved Specialists depending on whether they are novated to or appointed by the Main Contractor. In all cases the...