It should also be noted that REGULATION 4902 requires the contractor to provide notice of delay to the client and the Superintendent, while REGULATION 4300 only requires that the notice be issued to the Superintendent. In their unchanged form, the circumstances in which the Contractor may claim an EOT under AS 4300 are likely to be broader than those under AS 4902. Regardless of the preferred form, many principals will try to reduce these causes in any case (for example. B by special conditions). The contractor assumes the time and cost risks associated with modifying a potentially impractical design or applying another method of work required for completion. D&C contracts allow for a lean approach, but they`re not without flaws, and the risks vary depending on the aspect of the construction you`re on. However, under a D&C contract, the same body is responsible for commissioning the project design and physical construction itself. Typically, the client assigns design consultants to carry out the preliminary projects and helps prepare the client`s project requirements. Not only are there differences between AS 4300 and AS 4902 in terms of evaluating certain elements, but there are also differences within each contract.
A major advantage of D&C contracts is the fact that all difficulties and challenges related to the location can be identified by the contractor in the preliminary stages and incorporated into the designs, resulting in simple construction and efficient delivery of the work. (Client project requirements are often a term defined in standard construction contracts such as 4300-1995 or AS4902-2000 and refer to documents that are part of the contract and specify the purpose for which the work will be ordered.) Contractors take a much higher risk when delivering a project under a D&C contract because they are responsible for the design, design development, documentation and construction of the project for an agreed amount prior to the start of design or construction. Both contracts are more than 15 years old, and since then there have been a number of legislative changes. In addition to introducing new clauses that address these changes, clients will often try to change the risk profile and/or make changes, including changes that address issues such as those discussed above. The main risk for customers is the lack of involvement in the entire process, as the contractor is responsible for the project from the beginning. Therefore, it is essential that the customer does not allow the accelerated nature of a D&C contract to affect the in-depth definition of design criteria, performance standards and work uses. The late payment interest rate associated with late progress payments under both contracts is high: 18% per year. This can and is usually modified by the parties in the annexes. Michael founded Morrissey Law + Advisory with the vision of combining legal and business advice with practical solutions to ensure businesses receive the right advice to build their future.
As a business and corporate lawyer with expertise in the construction and infrastructure industry, Michael Tier-One advises contractors, financiers, large contractors, developers, residential and commercial construction companies, subcontractors and energy suppliers. With both contracts, there are a number of circumstances that allow the contractor to demand additional amounts beyond the starting amount. However, different clauses offer different ways to calculate these adjustments. In an ordinary “bid-build design” delivery method (often referred to as “construction only”), the construction plans of the project are created by an external designer commissioned by the customer, these designs are then used as the basis for the formulation of purchase offers by the contractors. A contractor is then awarded the contract for the project and proceeds with the construction. Since a contractor is responsible for calculating the costs of the entire project, clients have the advantage that a contract price is negotiated before carrying out the work. Because contractors typically take a much higher risk when working under a D&C contract, the contract price is often higher to compensate the contractor for the additional risk. .