NZS 3916:2013. Conditions of contract for building and civil engineering Design and construct NZS 3916:2013. New Zealand Standard

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1 New Zealand Standard Conditions of contract for building and civil engineering Design and construct Superseding (in part) NZS 3910:2003 NZS 3916:2013

2 COMMITTEE REPRESENTATION This Standard was prepared under the supervision of the P 3910 Committee the Standards Council established under the Standards Act The committee consisted of representatives of the following organisations. Sherwyn Williams Peter Degerholm Andrew Brickell Beatrix Bergner Michael Weatherall John Sutton Bob Oldnall Simon Guillemin Malcolm Abernethy Colin Orchiston Garrett Butt Paul Maynard Paul Turner Rod Fulford Richard Quinn Peter Fehl Curt Martin And observers from the following organisations. KiwiRail Ltd Registered Master Builders (Co-opted Chair) Arbitrators and Mediators Institute of New Zealand Inc. Association of Consulting Engineers New Zealand Inc. and Institution of Professional Engineers New Zealand Inc. Auckland Council Auckland Transport Institute of Public Works Engineering Australasia (New Zealand) Insurance Council of New Zealand Inc. Local Government New Zealand New Zealand Contractors Federation Inc. and Roading New Zealand Inc. New Zealand Institute of Architects New Zealand Institute of Building Surveyors New Zealand Institute of Quantity Surveyors New Zealand Institute of Surveyors New Zealand Specialist Trade Contractors Federation New Zealand Transport Agency Registered Master Builders Federation Water New Zealand New Zealand Law Society Royal Institute of Chartered Surveyors ACKNOWLEDGEMENTS Standards New Zealand gratefully acknowledges the contribution of time and expertise from all those involved in developing this Standard. The contribution of the Chair was made possible by Kensington Swan, and assistance with the division of the previously single Standard into three Standards was facilitated by Simpson Grierson. Standards New Zealand gratefully acknowledges the financial support of the following organisations.

3 New Zealand Standard Conditions of contract for building and civil engineering Design and construct Superseding (in part) NZS 3910:2003 ISBN (Print) ISBN (PDF)

4 NOTES AMENDMENTS No. Date of issue Description Entered by, and date

5 CONTENTS Committee representation Acknowledgement Copyright Referenced documents Latest revisions Review of standards Foreword Outcome statement IFC IFC IBC viii viii viii ix x Contract Agreement 1 General Conditions of Contract 1 INTERPRETATION Application Definitions General Law, currency, and language Computation of time Duties of Engineer 10 2 THE CONTRACT Type of contract Lump sum contract Cost reimbursement contract Local authority contracts, contracts in public places, and road contracts Evidence of Contract Documents prepared by the Engineer or Principal Documents prepared by the Contractor Assignment No waiver 16 3 BONDS Contractor s Bond Principal s Bond 18 4 SUBCONTRACTS General Nominated Subcontractors 20 iii

6 5 GENERAL OBLIGATIONS General responsibilities Contractor s Representative Control of employees Possession of the Site Separate Contractors Care of the works and Site Protection of Persons and property Setting out Materials, labour, and Plant Programme Compliance with laws Intellectual property Underground and above-ground utilities Treasure Clearance of Site Late supply by Principal Safety plan Quality plan Traffic management plan As-built drawings and operation and maintenance manuals Advance notification 40 6 ENGINEER S POWERS AND RESPONSIBILITIES Appointment of Engineer Role of Engineer Engineer s Representative Inspection, recording, measuring, and testing Removal and making good Certification Suspension of work Engineer may instruct urgent work 46 7 INDEMNITY Indemnity 47 8 INSURANCE General Contractor arranged insurances General Contractor arranged construction insurance Contractor arranged Plant insurance Contractor arranged public liability insurance Contractor arranged professional indemnity insurance Principal arranged insurances General Principal arranged construction insurance Principal s option to insure public liability 56 iv

7 9 VARIATIONS Variations permitted Variation orders Valuation of Variations Daywork Unforeseen physical conditions TIME FOR COMPLETION Commencement Due Date for Completion Extension of time Practical Completion Certificate Damages for late completion Bonus for early completion Occupancy by the Principal DEFECTS LIABILITY Defects Notification Period Remedying of defects Final Completion Certificate Effect of Final Completion Certificate Warranties Guarantees PAYMENTS Contractor s payment claims Progress Payment Schedules Retention monies Final payment claim Final Payment Schedule Effect of Final Payment Schedule Interest Cost fluctuations Provisional Sums Provisional Items Prime Cost Sums Contingency sums Goods and services tax DISPUTES General Engineer s review Mediation Arbitration Suspension during dispute Award of interest 85 v

8 14 FRUSTRATION AND DEFAULT Frustration Default by the Contractor Default by the Principal SERVICE OF NOTICES General 90 Appendix A Cost fluctuation adjustment by indexation 91 B Contracts in public places and road contracts 93 Schedules to general conditions of contract 1 Special Conditions of Contract Specific Conditions of Contract 95 2 Special Conditions of Contract Other Conditions of Contract Form of Contractor s performance bond Form of Principal s bond Form of Contractor s bond in lieu of retentions Form of Producer Statement Construction Information on Contractor arranged construction insurance Information on Contractor arranged Plant insurance Information on public liability insurance Information on Contractor arranged motor vehicle insurance Information on Contractor arranged professional indemnity insurance Information on Principal arranged construction insurance Form of Contractor (or Subcontractor) warranty Agreement for off-site Materials Practical Completion Certificate Final Completion Certificate Deed of novation 136 Conditions of tendering 101 Interpretation Issue of documents Tenderers to inform themselves Ambiguities in Tender Documents Submission of tenders Acceptance of tender Tender evaluation Notification of acceptance 140 Schedule to conditions of tendering 141 vi

9 Guidelines G Contract Agreement 143 G Section 1 Interpretation 143 G Section 2 The Contract 145 G Section 3 Bonds 146 G Section 4 Subcontracts 146 G Section 5 General Obligations 147 G Section 6 Engineer s Powers and Responsibilities 149 G Section 7 Indemnity 150 G Section 8 Insurance 151 G Section 9 Variations 158 G Section 10 Time for Completion 161 G Section 11 Defects Liability 163 G Section 12 Payments 165 G Section 13 Disputes 170 G Section 15 Service of Notices 172 G Schedule 14 Agreement in respect of off-site Materials 172 Index 175 vii

10 REFERENCED DOCUMENTS In this Standard reference is made to the following: New Zealand Standards NZS 3910:2013 NZS 3917:2013 NZS 4202:1995 NZS 4224:1983 Conditions of contract for building and civil engineering construction Conditions of contract for building and civil engineering Fixed term Standard method of measurement of building works Code of practice for measurement of civil engineering quantities New Zealand legislation Arbitration Act 1996 Cadastral Survey Act 2002 Construction Contracts Act 2002 Forest and Rural Fires Act 1977 Goods and Services Tax Act 1985 Health and Safety in Employment Act 1992 Personal Property Securities Act 1999 Property Law Act 2007 Other publications Labour Cost Index, Statistics New Zealand Producers Price Index, Statistics New Zealand Websites Reserve Bank of New Zealand Statistics New Zealand New Zealand legislation LATEST REVISIONS The users of this Standard should ensure that their copies of the above-mentioned New Zealand Standards are the latest revisions. Amendments to referenced New Zealand and Joint Australian/New Zealand Standards can be found on REVIEW OF STANDARDS Suggestions for improvement of this Standard will be welcomed. They should be sent to the Chief Executive, Standards New Zealand, Private Bag 2439, Wellington viii

11 FOREWORD Contracts that are comprehensive but at the same time easy to understand are important in today s technical and highly competitive building and construction environment. New Zealand s building, construction, engineering, and infrastructure industries rely on the New Zealand standard conditions of contract for building and civil engineering to ensure that their contracts are suited to New Zealand s industrial and legislative scene. They contain essential commercial provisions designed to allocate risk fairly and are aligned with the requirements of the Construction Contracts Act. NZS 3916:2013 is based on NZS 3910:2013 Conditions of contract for building and civil engineering construction. NZS 3910 was first published in 1987, derived from provisional Standard NZS 623P:1984 which was a radical rewrite of the previous Standard NZS 623:1964. The Standard has undergone regular revisions over the past 25 years, most recently in Following feedback from the sector over recent years, and analysis completed by the Engineering Leadership Forum, a scoping meeting held in March 2011 identified key areas of the 2003 Standard that required review. It was decided that this limited technical review would focus only on these key areas, resulting in a Standard that was clearer and has a reduced need for extensive special conditions. During the development of the Standard, the Committee concluded that it should be published as three tailored Standards. Superseding (in part) NZS 3910:2003 on the cover of this Standard means the revised provisions of NZS 3910:2003 are now distributed across the new suite of Standards: (a) (b) (c) NZS 3910 Conditions of contract for building and civil engineering construction; NZS 3916 Conditions of contract for building and civil engineering Design and construct; NZS 3917 Conditions of contract for building and civil engineering Fixed term. Together these three Standards supersede NZS 3910:2003. This new NZS 3916 is similar to the new NZS 3910, but has been adapted to provide for the situation where the Contractor is responsible for design as well as construction. Being adapted from NZS 3910, it was not developed as an entirely new Standard. Standards New Zealand is therefore keen to receive feedback and improvement recommendations from the sector once the Standard has been in use for some time. ix

12 Design and construct contracts differ from construction-only contracts in several respects, including: The addition of design responsibilities to the Contractor s obligations The Principal s Requirements for the Contract Works are described in the Tender Documents, but the detail of the design, including Specification requirements, is then developed by the Contractor both before and after the submission of its tender A hierarchy of documents, so that the Principal s Requirements will prevail over the Contractor s tender, Professional indemnity insurance, effected by the Contractor Measure and value payment arrangements are rare A process for review of the Contractor s design documentation prior to construction Constraints on the Engineer s power to vary the Contract Works A right for the Principal to terminate the Contract if unacceptable conditions are imposed by public authorities in licences for design or construction Other minor changes, which appear throughout the General Conditions. OUTCOME STATEMENT This Standard enables Principals, Engineers, and Contractors to quickly establish contractual arrangements that deliver a wide variety of building and civil engineering projects on a design and construct basis. Contracts based on this Standard will reflect fair risk allocation between the parties. x

13 CONTRACT AGREEMENT CONTRACT FOR CONTRACT NUMBER (Contract name) (Number) THIS AGREEMENT is made on 20 BETWEEN AND ( the Contractor ) ( the Principal ) IT IS AGREED as follows: 1. The Contractor shall carry out the obligations imposed on the Contractor by the Contract. 2. The Principal shall pay the Contractor the sum of $ or such greater or lesser sum as shall become payable under the Contract together with goods and services tax at the times and in the manner provided in the Contract. 3. Each party agrees to the terms and conditions as set out in the Contract. 4. The Contract comprises the following documents: (a) (b) (c) This Contract Agreement; The notification of acceptance of tender or award of Contract; The following post-tender documents (Identify any agreed post-tender documents to be included, for example correspondence or minutes or pre-award meetings dealing with tender tags, and so on): (d) (e) (f) (g) (h) (i) (j) Schedule 2: Special Conditions of Contract Other Conditions of Contract; Schedule 1: Special Conditions of Contract Specific Conditions of Contract; The General Conditions of Contract NZS 3916:2013 (including other Schedules); The Principal s Requirements; The Schedule of Prices; (Select if NOT applicable) The Contractor s tender; Notices to tenderers (give details with dates); (k) (l) (m) The Schedule to the Conditions of Tendering; The Conditions of Tendering; and The following additional documents: (Identify any additional documents to be included): 1

14 5. The documents comprising the Contract shall be taken as mutually explanatory, but in the case of ambiguity or conflict the priority of documents shall be as listed in clause 4 above, with each document prevailing over a document lower in the list. 6. This Contract shall constitute the entire agreement between the parties. This Contract supersedes all prior negotiations, representations, and warranties, except insofar as the same are expressly incorporated herein. SIGNED BY Authorised Signatory of Contractor SIGNED BY Authorised Signatory of Principal 2

15 New Zealand Standard Conditions of contract for building and civil engineering Design and construct NZS 3916:2013 General conditions GENERAL CONDITIONS OF CONTRACT 1 INTERPRETATION 1.1 Application This section shall apply to the Contract except where inconsistent with the context. NOTE See on singular including the plural. 1.2 Definitions Adjudication As defined in the Construction Contracts Act Adjudicator s Determination As defined in the Construction Contracts Act Base Value The value determined in accordance with 9.3.5, 9.3.6, 9.3.7, or 9.3.8, as the case may be Comprehensive Programme Contract Contract Agreement Contract Price Contract Works Contractor As defined in The documents referred to in the Contract Agreement as comprising the Contract, or the documents which constitute the Contract under The written agreement for the fulfilment of the Contract signed by the Principal and the Contractor The sum provided in the Contract as payable for the completion of the Contract Works calculated in accordance with 2.2 or 2.3 as applicable, subject to such adjustments as are provided for in the Contract The works including Temporary Works to be executed in accordance with the Contract The Person whose tender has been accepted by the Principal or the Person who has been so named in the Contract, and includes the executors, administrators, and successors of the Contractor 3

16 Conditions of contract for building and civil engineering - Design and construct This is a free sample only. Purchase the full publication here: Or contact Standards New Zealand using one of the following methods. Freephone: (New Zealand) Phone: enquiries@standards.govt.nz

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