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Wednesday, October 3, 2007 Panel Presentation CPPC Forum 2007, Calgary Panel Presentation Terry Brown – Contractor & CCA Rep Gregory Hersen – Lawyer & Bar Assoc. Rep Ron de Vries – Owner Rep Who is CCDC? Introduction to the “new” CCDC-2 Panel Presentation – Key Risks Q&A Who is CCDC? Canadian Construction Association Royal Architectural Institute of Canada Association of Consulting Engineers of Canada Construction Specifications Canada Who is CCDC? Public Sector Owners Private Sector Owners Legal Representation Member - Canadian Bar Association CCDC Mandate “CCDC is responsible for the development, revision and improvement of Canadian standard construction documents used by Owners, Consultants, Contractors and other participants in both public and private sectors throughout Canada.” Why Use CCDC Documents? Relied on as industry standards. Provide balance, uniformity and standardization for bidding and contract procedures. Fair allocation of risks and protects the rights of all parties equitably. Developed in collaborative environment. Unbalanced contracts increase risk of claims and disputes. Industry wide endorsement - CCDC sells over 50,000 documents annually. Document Development 1. Draft is prepared by working group 2. Reviewed in detail by Committee 3. Draft is submitted to constituent organizations 4. Final document issued for endorsement What’s special about CCDC Documents? CCDC Documents have endorsement from all of the constituent member organizations and are applicable to a broad range of construction industry use. CCDC Documents CCDC 2 - 1994 Stipulated Price Contract CCDC 3 - 1998 Cost Plus Contract CCDC 4 - 1982 Unit Price Contract CCDC 9a & 9b - 2001 Statutory Declaration CCDC 11 - 1996 Contractor’s Qualification CCDC 12 - 1994 Project Financial Info CCDC 18 - 2001 Civil Works Contract CCDC 20 - 1994 Guide to Use of CCDC 2 CCDC Documents CCDC 21 - 2000 Guide to Construction Insurance CCDC 22 - 2002 Guide to Construction Surety Bonds CCDC 23 - 2005 Guide to Calling Bids and Awarding Contracts CCDC 24 - 1996 Guide to Model Forms and Support Documents CCDC 40 - 1994 Rules for Mediation and Arbitration of Construction Disputes CCDC Documents CCDC 43 - 1998 Guide to Use of CCDC 3 CCDC 48 - 2002 Guide to Use of CCDC 18 CCDC 220 – 2002 Bid Bond CCDC 221 - 2002 PerformanceBond CCDC 222 - 2002 Labour & Material Payment Bond Documents Under Review CCDC 2 – Stipulated Price Contract CCDC 4 – Unit Price Contract CCDC 5A & 5B – Construction Management Contracts CCDC 14 – Design-Build Contract CCDC 15 – Design-Builder/Consultant Contract CCDC 20 – Guide to use of CCDC-2 CCDC 45 – Guide to Construction Management CCDC 46 – Guide to Design-Build CCDC Documents Introduction to the new CCDC - 2 Overview: Editorial updates to the 1994 version. Significant changes to key provisions. Indemnification Waiver of Claims Roll-out by end of 2007 CSC Training Sessions CCDC 2: Stipulated Price Contract GC 12.1: Indemnification Introduces concept of mutual indemnification between Owner and Contractor. Consultant removed. Introduces limits of liability. CCDC 2: Stipulated Price Contract Owner/Contractor Nature of Monetary Time Limitation Indemnify and hold the Claims Limitation harmless each other against Direct Claims Insured and Contract Price, but Shorter of 6 yrs uninsured no less than the from the date of claims greater of $2M and Substantial the insurance limit, Performance of the and no more than work and $20M provincial limitation statute Third-Party Claims Insured No Limit Relating to bodily Claims Injury or Property Damage Uninsured No Limit Claims CCDC 2: Stipulated Price Contract EXCEPTIONS Owner Nature of Monetary Time Indemnifies the the Claims Limitation Limitation Contractor Toxic/Hazardous Presence No limit No time Substances prior to the limitation Work Infringement of Supplied to No limit No time a patent of the limitation invention Contractor Lack of or defect No limit No time in title limitation CCDC 2: Stipulated Price Contract GC 12.2: Waiver of Claims Concept of mutual waiver Waiver period limit established – 6 days before expiry of the lien period. Now Substantial Performance vs. Final Certificate for Payment. Exceptions Claim for which a lien may be asserted and others … Panel Presentation – Key Risks Contractors Perspective Timely & Full payment. Owner’s Consultant Team Contract Security & Insurance Mould Indemnification & Waiver of Claims Panel Presentation – Key Risks Legal Perspective Qualified bids. Inappropriate use of supplementary conditions to CCDC. Failure to keep proper documentation for dispute resolution. Insufficient or inappropriate contract security. Non-compliant bids. Inappropriate use of bidding processes, ie. RFP’s v. Tenders Panel Presentation – Key Risks Owner Perspective Quality of bid documents. Accuracy of estimates. Funding uncertainty and phasing. Attracting bidders. Qualified or non-compliant bids. Contractor performance – quality & time. Construction site safety – “constructor”. Contract changes. Contract completions. Panel Presentation – Key Risks Owner Perspective Quality of bid documents. Enhanced communication with A&E firms during the preparation of contract documents. Bid-ability & build-ability reviews before tender. Restricted amendments within 5 days of closing. Panel Presentation – Key Risks Owner Perspective Accuracy of estimates. Funding uncertainty and phasing. Currently a serious risk. Must factor in market conditions. Build in alternates to ensure award. Retain professional quantity surveyors/estimators. Build in contingencies to project funding. Better understanding of the accuracy of estimates. Panel Presentation – Key Risks Owner Perspective Attracting bidders. Ensuring adequate funds are available. Appropriate packaging of work. Using bid documents that are familiar to the industry. Maintaining productive relationships. Ensuring payment. Track response to bids and follow-up with plan-takers to find out why they did not bid. Provide bid documents to Association Plans Rooms. Panel Presentation – Key Risks Owner Perspective Qualified or non-compliant bids. Waiver of non-compliance clause. Use industry standard documents. Ensure terms and conditions are appropriate to the target industry. Pre-tender site visits and briefings. Panel Presentation – Key Risks Owner Perspective Contractor performance – quality & time. On-site inspections and QA program. Pre-qualification for specialized work. Bond or security for all contracts >$100K Mandatory schedule with progress payments. Aggressive completion performance targets. Contractor Performance and Evaluation Review (CPER) on 100% of contracts. Restricted bidders list. Panel Presentation – Key Risks Owner Perspective Construction site safety – “constructor”. Safety section in the contract documents to clearly define responsibilities. Safety inspectors. Work closely with provincial authorities. Panel Presentation – Key Risks Owner Perspective Contract changes. Currently average 11% of contract award value. Part of corporate performance measure. Rigorous scope management. Includes extension of time & costs if warranted. Panel Presentation – Key Risks Owner Perspective Contract completions. Establish realistic completion dates in the contract. Set corporate targets for timeliness of substantial and final completions. Rigorous monitoring of schedule. Progress payments tied to schedule reviews. Early intervention for problem contracts. Use of contract funds to complete deficiencies.
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