Complex Projects Contract

Last updated

The CIOB Complex Projects Contract2013 was a form of construction and engineering contract, developed by the Chartered Institute of Building (CIOB). Its formal name was the 'Contract for Use with Complex Projects, First Edition 2013'.

Contents

In November 2015, the Complex Projects Contract was updated by the Chartered Institute of Building in response to feedback from the industry. Despite effectively being a second edition, it was renamed the Time and Cost Management Contract 2015 (abbreviated to TCM15) to reflect the core strengths of the contract.

Launch

Based upon extensive research carried out by the CIOB, [1] the contract was formally launched on 23 April 2013. The contract was billed as the world's first contract specifically aimed at the management of time in complex construction and engineering projects. [2] The authors also stated that it was the first form to follow the Society of Construction Law Delay and Disruption Protocol, [3] and that it was also the first standard form contract to cater for Building Information Modelling (BIM) and the future of collaborative design.

Purpose

It is suited for works of high value or complexity, major real estate projects and engineering or infrastructure projects. It is not suited to simpler works, those of short duration or with inexperienced clients /contractors. It anticipates Special Conditions for the particular requirements of each project and if using construction management as the procurement method, it cannot be used without the appropriate terms being included in the Special Conditions.

CPC2013 is designed for use by companies and public authorities in the UK and in any other country where works comprise complex building and / or engineering, which cannot reasonably be expected to be managed intuitively. It can be used where the contractor is expected to construct only that designed by or under the direction of the client with traditional drawings, specification and/or bills of quantities, or BIM, or on projects which require a contractor's design in part, or for design-build projects in which the contractor designs the whole of the works with or without an employer's reference design.

The contract requires a collaborative approach to the management of design, quality, time and cost. The working schedule, planning method statement and progress records (which are to be inspected and accepted by a competent project time manager and independently audited for quality assurance) are at the core of management. They are the tools by which all time and time-related cost issues are to be determined and are to conform with the standards required by the conditions, appendices and the CIOB's Guide to Good Practice in the Management of Time in Complex Projects. [4]

Collaboration

In order to promote collaboration and to ensure transparency of data, schedule and database submittals are to be made in native file format either by maintenance of the material in a common data environment or transfer by a file transfer protocol to all having a continuing design, administrative, or supervisory role, who are identified as Listed Persons. The contract also requires the appointment of a Contract Administrator to carry out administrative functions during the course of construction, a Project Time Manager to advise on time related matters, a Valuer to advise on cost matters, a Design Coordination Manager to manage the integration of the Contractor's design, and a Data Security Manager to supervise and maintain the integrity and security of digital communications.

Risk management

Central to the philosophy of the Complex Projects Contract is its approach to transparency in risk management. CPC2013 provides for both the owner and contractor each to identify one or more time contingency allowance, which each can use as it wishes to manage its own risks. Unusually for a standard form construction contract, it defines "float" and provides that if either party creates free float or total float as a result of its own improvement of progress, that party may keep the created float as its own contingency. Additional powers are provided in CPC2013 to enable the construction project's developer, following consultation, to instruct acceleration, recovery and changes in resources sequences and logic in order to manage its risks contemporaneously.

Time management

CPC2013 is distinctive in taking a prescriptive approach to the management of time and associated cost risk and combining critical path network techniques with resource-based planning. The time model, referred to as the Working Schedule, combines a high-density, short-term look-ahead similar in concept to that used in agile software development with medium and long-term lower density schedule along the lines of that used in the waterfall model planning technique, the whole being revised regularly on the Rolling Wave planning principle. In the short-term look-ahead, the logic is to be resource and location-related, instead of activity based, as it is in waterfall. The agile part of the schedule is to have its activity durations calculated by reference to the resources to be applied and their expected productivity.

Cost management

The activities in the Working Schedule are also to be valued so that the Working Schedule also functions as the pricing schedule to predict current value for the purposes of interim payment and the ultimate out-turn cost for cost risk management purposes.

Progress records

Progress is required to be recorded in a database identifying, at specified intervals, the resources used, productivity achieved and earned value. Apart from being the source data for subsequent progress update of the schedule, the database also serves for benchmarking productivity achievable for quality assurance of the schedule and future planning.

Dispute resolution

The emphasis of CPC2013 is on contemporaneous Issue Resolution by an appropriate expert. CPC2013 it also provides for an escalating Dispute Resolution procedure, embracing negotiation, mediation, adjudication and arbitration. Where issues are required to be determined by Issue Resolution within a certain timescale, if the procedure is not invoked there are deeming provisions which determine the outcome of an issue. If Dispute Resolution is required, the expert, adjudicator or arbitrator are either those named in the contract or, in default, they are appointed by the Academy of Experts in London [5] or the CIOB. The default adjudication rules are those of the Scheme for Construction Contracts [6] and the default arbitration procedure is that of the London Court of International Arbitration.

Ancillary publications

A back-to-back Consultancy Appointment and Subcontract, both of which followed the same principles of time and cost risk management, were published in November 2015 as part of the Time and Cost Management Contract 2015 suite.

Industry reception

A number of reviews and commentaries have been written on the subject of the Complex Projects Contract. Some have criticized the complexity of the contract itself . [7] [8] whereas others have noted the benefits of the clear language, and have commented on the incorporation of its positive features. [9] [10] [11] [12] [13] Reviews published have consistently commented that it will be necessary for the contract to be tested on a live project before the effectiveness can be proven.

Related Research Articles

<span class="mw-page-title-main">Architect</span> Person who designs buildings and oversees construction

An architect is a person who plans, designs and oversees the construction of buildings. To practice architecture means to provide services in connection with the design of buildings and the space within the site surrounding the buildings that have human occupancy or use as their principal purpose. Etymologically, the term architect derives from the Latin architectus, which derives from the Greek, i.e., chief builder.

Earned Value Management (EVM), earned value project management, or earned value performance management (EVPM) is a project management technique for measuring project performance and progress in an objective manner.

Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, and budget. The secondary challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives.

Adjudication is the legal process by which an arbiter or judge reviews evidence and argumentation, including legal reasoning set forth by opposing parties or litigants, to come to a decision which determines rights and obligations between the parties involved.

Design–build, also known as alternative delivery, is a project delivery system used in the construction industry. It is a method to deliver a project in which the design and construction services are contracted by a single entity known as the design–builder or design–build contractor. It can be subdivided into architect-led design–build and contractor-led design–build.

Design–bid–build, also known as Design–tendertraditional method or hardbid, is a project delivery method in which the agency or owner contracts with separate entities for the design and construction of a project.

A general contractor, main contractor or prime contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of a building project.

Construction management (CM) is a professional service that uses specialized, project management techniques and software to oversee the planning, design, construction and closeout of a project. The purpose of construction management is to control the quality of a project's scope, time / delivery and cost—sometimes referred to as a project management triangle or "triple constraints." CM is compatible with all project delivery systems, including design-bid-build, design-build, CM At-Risk and Public Private Partnerships. Professional construction managers may be hired for large to jumbo-scale, high budget undertakings, called capital projects.

Security of Payment refers to any system designed to ensure that contractors and sub-contractors are paid even in case of dispute. This can involve a system of progress payments, interim arbitration decisions, or a system which legally requires a company to pay an invoice within a set number of days, regardless of whether the company believes they are accurate.

The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations. Following recommendations in the 1994 Latham Report, the current operational structure comprises seven members who approve and authorise publications. In 1998 the JCT became a limited company.

The Chartered Institute of Building (CIOB) is a UK-based international professional association which exists to promote and advance for the public benefit the science and practice of building and construction. Originating in 1834 as the Builders Society and incorporated in 1884 as The Institute of Builders, the institute was renamed the Institute of Building in 1965 and granted its royal charter of incorporation in September, 1980.

Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". "Cost Engineers budget, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements."

Construction law is a branch of law that deals with matters relating to building construction, engineering, and related fields. It is in essence an amalgam of contract law, commercial law, planning law, employment law and tort. Construction law covers a wide range of legal issues including contract, negligence, bonds and bonding, guarantees and sureties, liens and other security interests, tendering, construction claims, and related consultancy contracts. Construction law affects many participants in the construction industry, including financial institutions, surveyors, quantity surveyors, architects, builders, engineers, construction workers, and planners.

The New Engineering Contract (NEC), or NEC Engineering and Construction Contract, is a formalised system created by the UK Institution of Civil Engineers that guides the drafting of documents on civil engineering, construction and maintenance projects for the purpose of obtaining tenders, awarding and administering contracts. The NEC contract is widely used in both the United Kingdom and Hong Kong. There have been attempts, largely unsuccessful, at introducing the NEC contract into both Australia and New Zealand from at least 1994 but the contract remains relatively obscure in both countries.

Engineering, procurement, and construction (EPC) contracts are a form of contract used to undertake construction works by the private sector on large-scale and complex infrastructure projects.

<span class="mw-page-title-main">George T. Heery</span> American architect (1927–2021)

George T. Heery, FAIA RIBA FCMAA was an American architect and known for developing the concepts of Construction Program Management, Strategic Facilities Planning and the Bridging Method of project delivery.

Fast-track building construction is construction industry jargon for a project delivery strategy to start construction before the design is complete. The purpose is to shorten the time to completion.

A fixed-price contract is a type of contract such that the payment amount does not depend on resources used or time expended by the contractor. This is opposed to a cost-plus contract, which is intended to cover the costs incurred by the contractor plus an additional amount for profit. Such a scheme is often used by military and government contractors to require vendors to incur the risk of cost overruns, and to control costs. However, historically when such contracts are used for innovative new projects with untested or undeveloped technologies, it often results in failure if costs greatly exceed the ability of the contractor to absorb unexpected cost overruns.

Australian Construction Contracts govern how the parties to a construction contract behave and how the project manager and the contract manager administer the relationship between the parties. There are several popular standard forms of construction contracts that are currently used in Australia.

A construction contract is a mutual or legally binding agreement between two parties based on policies and conditions recorded in document form. The two parties involved are one or more property owners and one or more contractors. The owner, often referred to as the 'employer' or the 'client', has full authority to decide what type of contract should be used for a specific development to be constructed and to set out the legally-binding terms and conditions in a contractual agreement. A construction contract is an important document as it outlines the scope of work, risks, duration, duties, deliverables and legal rights of both the contractor and the owner.

References

  1. ↑ "Managing the Risk of Delayed Completion in the 21st Century" http://www.ciob.org/time-management Archived 2014-06-04 at the Wayback Machine
  2. ↑ "The CIOB Complex Projects Contract 2013, by Keith Pickavance " http://www.thenbs.com/pdfs/NBS-NationlC&LReport2013-single.pdf%5B%5D at p.22.
  3. ↑ "The Society of Construction Law Delay and Disruption Protocol, 2002" "SCL Delay and Disruption Protocol |". Archived from the original on 2014-05-07. Retrieved 2014-06-13.
  4. ↑ "The Guide to Good Practice in the Management of Time in Complex Projects", Chartered Institute of Building, Wiley Blackwell 2010, ISBN   978-1-4443-3493-7
  5. ↑ "Home". The Academy of Experts. Retrieved 2022-07-15.
  6. ↑ "The Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011".
  7. ↑ "Complex Projects Contract 2013 - A complex solution for a complex problem" http://www.nabarro.com/Downloads/Construction-newsletter-October-2013.pdf
  8. ↑ "Speechly Bircham: The New CIOB Complex Projects Contract: What you need to know". Archived from the original on 2014-05-12.
  9. ↑ "The CIOB Complex Projects Contract 2013 |". Archived from the original on 2015-03-13. Retrieved 2014-06-14.
  10. ↑ "Navigant Consulting, Inc., Construction Forum Issue 8,The New CIOB Contract For Use On Complex Projects, by Jeremy Glover," http://www.navigant.com/~/media/WWW/Site/Insights/Construction/IFH%20Winter%202013/CON_IH_NewCIOBContractForUseOnComplexProjects_TL_1213%20final.ashx Archived 2014-07-14 at the Wayback Machine
  11. ↑ Fenwick Elliott LLP, Insight Issue No.33 “The Complex Project Projects Contract 2013” http://www.fenwickelliott.com/files/insight_issue_33.pdf
  12. ↑ Practical Law Construction Blog “CIOB’s Contract for use with Complex Projects: take the plunge!” http://construction.practicallaw.com/blog/construction/plc/?p=1612
  13. ↑ "FTI Consulting: James Myers Discusses the New CIOB Complex Projects Contract" "James Myers of FTI Consulting discusses the new CIOB Complex Projects Contract | FTI Consulting". Archived from the original on 2014-05-21. Retrieved 2014-05-20.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.