Submission on the Draft Building and Construction Procurement Guide

Whilst there are regional variations dependent on the client/procuring authority a number of
members are parties to the 4000 series contracts and have raised issues with us in relation
to AS 4000 – 1997 General Conditions of contract
Whilst members in principle support the practicality and usefulness of standard form
contracts difficulties do arise in relation to the interpretation, construction and workability of
this series particularly given modern developments as noted in the draft guide.
In particular, in some cases members report to us of contracts which purport to be AS –
4000 based contracts and yet contain rafts of special conditions and exclusions which
change the whole basis of the contract.
We note that in developing the draft guide this point was also made to the Review group
“ Additionally, for contracts at all values the merits of appending voluminous supplementary
or “special conditions” to standard form contracts such as AS 2124 -1992 were questioned in
some of the submissions with a suggestion that these be minimised wherever possible.” 11
For smaller members without significant resources this practice can be problematic as they
may have little bargaining power or ability to influence the contract negotiation if they want
the work the subject of the contract.
We also strongly agree with the following comments in the draft guide:
“Standard form contracts are popular amongst project owners and industry because their
use helps reduce procurement and contract administration costs and they are generally well
understood by users, thereby resulting in fewer disputes or matters of interpretation. This
advantage may, however be reduced when amendments and supplementary or “special”
conditions are included that significantly alter the standard general conditions.” 12
Risk, indemnity, consequential loss, payments terms, latent conditions, accepted causes of
delay and subsequent extension of time, time bars and insurance provisions are commonly
altered in favour of the procuring party through this process.
Whilst we support efforts towards common principles we are concerned as to whether this
will result in better outcomes for members as in the end it will come down to the actual
contracting terms as well as the “mind set” of the procuring agencies.
11 See FAQ at page 6
12 See draft guide at page 38
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