The much anticipated update to the New Zealand Standard 3910:2003 Conditions of Contract for Building and Civil Engineering Construction has recently been published. It should be no surprise that 3910 is New Zealand’s most used contract in civil engineering and construction. It is written specifically for the New Zealand construction industry and to align with New Zealand legislation.
The update is welcome as within the next year the planning for the seventeen Christchurch CBD Blueprint Anchor projects should be complete. Many other projects have been on hold until these are finalised as they must not conflict with the Anchor projects. The rebuild of the Christchurch CBD is only just about to begin.
P3910 is the name of the committee that undertook the review of the standard. It is made up of representatives from organisations across the construction industry including yours truly representing the New Zealand Institute of Building Surveyors. The diversity of the committee representatives enables an even-handed process and a fair allocation of risk between Principal and Contractor.
A contract that allocates risk fairly between the two parties is desirable. The majority of construction projects involving Prendos with contract administration has been with our lead consultant as Engineer to the Contract under NZS3910. The Engineer is required to be impartial and independent and in my experience administering a contract that shares risk fairly and appropriately requires less time and cost for both parties.
The scope of the changes to 3910 were set down as a “limited technical review” in March 2011. The most significant change is the removal of Design and Build Contracts and Term Maintenance Contracts from the existing appendices and the creation of two new separate standards. NZS3916:2013 Conditions of Contract for Building and Civil Engineering Construction – Design and Construct – was published October 31st. NZS3917:2013 Conditions of Contract for Building and Civil Engineering Construction – Fixed Term – is at ballot stage for final review..
Other key changes are:
- Easier payment schedule process – e.g. the interim payment schedule automatically becomes final if the Principal does not instruct any deductions.
- Alignment with changes to the Construction Contracts Act.
- Provisional sum contracts have been included for the first time rather than just being treated as variations. This is particularly relevant to repair or refurbishment projects where liquidated damages apply.
- Insurance provisions and schedules have been clarified.
- An advanced notification provision of any matter likely to delay the contract, alter the contract price, or result in a breach of statutory duty.
- Provision of a warranty on the works.
- Basic and Comprehensive programmes
- Quality, Safety and Traffic Management Plans
- The schedules provide standard forms:
- Practical Completion Certificates
- Final Completion Certificates
- Off Site Materials Agreements
I would like to thank my fellow Directors for their contribution and support of this standard as I, like all committee members for all New Zealand Standards, was an unpaid volunteer. Prendos is one of many organisations nationwide that both encourage and support participation in activities that benefit our industry and in the end our country.
Standards New Zealand estimate the cost of paying the volunteers would be $14 – 15 million annually. New Zealand and its trading partners depend on the quality and recognition that our Standards receive internationally and this could not be achieved without the support of the businesses, organisations and individuals that annually contribute to bridge this shortfall.
We will all just have to hold our breath and see what happens with the recently announced takeover of Standards New Zealand by the Ministry of Business, Employment and Innovation.
For further info on the Christchurch Blueprint – check out progressmap.ccdu.govt.nz for updates on each of the Anchor Projects along with who is leading and who is funding them (they are not always the same entity).