HEAD CONTRACT Commercial Building (BC3) Lump sum contract for Commercial / Industrial projects with no architectural administration.
Commercial Building (BC3) New South Wales CONTENTS The Agreement and Particulars of Contract i Schedule 1 – The Work ii Schedule 2 iv Schedule 3 – Construction period v Schedule 4 – Insurance details vi Schedule 5 - Allowances vii Schedule 6 – Special conditions viii The Conditions of Agreement 1 1. Compliance with plans and specification 1 2. Warranty that site will support the work 1 3. Owner’s responsibilities and duties 1 4. Approval of works by relevant authorities 2 5. Date for commencement of and practical completion of works 2 6. Delays and extensions of time 2 7. Compliance with the requirements of local and other authorities 3 8. Progress surveys & inspections 3 9. Variations - how to deal with changes to the work 3 10. Assignment and sub-letting 4 11. Insurance 4 12. Suspension of work - the builder has the ability to stop work! 5 13. PC items or provisional sums 5 14. Foundations and Owner’s warranty that site will support the works 5 15. Deposit & progress payments 6 16. GST 6 17. Retention fund may be applicable if agreed 6 18. Practical completion 7 19. Payment on achieving practical completion 7 20. Liquidated damages - Builder to Owner 7 21. Defects liability period 7 22. Final payment - Builder to notify and Owner to release remaining security 8 23. Builder has authority to exclude people from the site 8 24. Regular meetings – parties required to attend. 8 25. Dispute resolution 8 26. Termination by Owner 9 27. Termination by Builder 9 28. Details required to support notices under clauses 25, 26 or 27 10 29. Notices 10 30. Direct payment by mortgagee 10 31. Charge 10 32. Cancellation of previous contracts 10 33. Work involving alterations to existing structures 11 34. Occupational health and safety 11 35. Certificate that no wages are owing 11 36. Definitions 11 NOTICE OF PRACTICAL COMPLETION OF WORKS 12 NOTE: Advice regarding disposal of building waste A number of Councils require a waste management plan as part of the development approval. Review this carefully. For further information and advice you can contact The Department of Environment and Conservation by phoning 131 500, or visit the following website www.environment.nsw.gov.au. Alternatively you can contact your Local Council and speak to the Waste Management Officer there. The responsibility for waste disposal rests with everyone including Owners and Developers of the works.
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES i THE AGREEMENT AND PARTICULARS OF CONTRACT OWNER: Address: ABN No.: Owner’s Representative: Telephone: Facsimile: Mobile: Email: BUILDER: Address: ABN No.: Builder’s Representative: Telephone: Facsimile: Mobile: Email: The above parties agree that:- (a) the Builder will, subject to the Conditions of Contract, execute and complete the work. (b) the Owner will pay the contract price referred to in Schedule 2 or such other sum which becomes payable under the Conditions of Contract at the times and in the manner stated. The parties have signed below this ____________________________ day of ____________________________20________ to confirm their agreement. SIGNED BY THE OWNER: SIGNED BY THE WITNESS: WITNESS NAME AND ADDRESS (PRINT): SIGNED BY THE BUILDER: SIGNED BY THE WITNESS: WITNESS NAME AND ADDRESS (PRINT):
ii MASTER BUILDERS ASSOCIATION OF NSW - © Copyright Schedule 1 – The Work 1. Site address: 2. Description of the work to be completed by the Builder eg a brief description, or, as per attached or dated quotation:- 3. Documents relevant to the work: A: Drawings A: Architectural E: Electrical H: Hydraulics L: Landscape M: Mechanical S: Structural TYPE DRAWING NUMBER REVISION DESCRIPTION DATE Received or Reviewed (Parties to initial) Note: If the above tables have insufficient space or are unsuitable to list all documents then the parties are to ensure that all documents relevant to the works are detailed and provided to the Builder.
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES iii B: Specification PREPARED BY DATED SECTIONS RELEVANT Received or Reviewed (Parties to initial) C: IS ANY aspect of the work set out in the contract drawings and specifications excluded from the work and therefore the contract sum? Yes n No n If yes list below the aspects of the work shown in the drawings or described in the specification which will not be carried out by the Builder as part of the work. This, for example, would be work which the Owner will do such as painting, landscaping, fencing, and driveways etc. which may form part of work to be done under the terms of approval but not work to be done by the Builder. Note: If the above tables have insufficient space or are unsuitable to list all documents then the parties are to ensure that all documents relevant to the work of the Builder are detailed and provided to the Builder.
iv MASTER BUILDERS ASSOCIATION OF NSW - © Copyright Schedule 2 (a) Contract price: $ Note: Unless otherwise specifically stated, the contract price is inclusive of the Goods and Services Tax. (b) Deposit (refer clause 15 (a)) A deposit of ___________% of the contract sum of $ ______________________________ (identify a specific amount) will be payable to the Builder before commencement of work. Refer to clause 15. (c) Progress claims & payments (refer clause 15(b)) (i) Payment claims are to be made on the due date which is determined by the following:- (A) every ___________ days from commencement of work; or (B) on or before the ___________ day of the month (ii) Payment of the claim, as agreed or approved, will be made:- (A) ___________ days after the payment claim is received; or (B) by the ___________ day of the next month after the payment claim is submitted provided the payment claim is submitted by the due date. The parties are encouraged to make frequent and smaller claims and to agree on more regular and consequently smaller payments as this will improve cash flow and allow the work to be monitored and changed if necessary. (d) Liquidated damages (Builder to Owner) (refer clause 20) $______________________ per work day (unless otherwise stated) payable by the Builder to Owner. (e) Delay costs (Owner to Builder) (refer clause 6(h)) $______________________ per work day (unless otherwise stated) payable by Owner to Builder. (f) Retention money n not applicable n applicable Retention money, if any, is to be released in accordance with clause 17 and clause 22. (g) Allowance for supervision, overhead and profit on variations and allowance overruns (refer clause 9(g) clause 9(i) and clause 13(d) as appropriate.) ______________________%
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES v (h) Labour rates (refer clause 9(h)) These are to be used with reference to work carried out by the Builder’s employees which is in addition to the contract work or agreed to be done under a rates regime. Foreman/Builder/Director $ per ordinary hour Plumber $ per ordinary hour Tiler $ per ordinary hour Plasterer $ per ordinary hour Electrician $ per ordinary hour Painter $ per ordinary hour Carpenter $ per ordinary hour Labourer - Skilled $ per ordinary hour Bricklayer $ per ordinary hour Labourer - Unskilled $ per ordinary hour Schedule 3 – Construction period Construction period (refer clauses 5 and 6) (a) Proposed date for commencement (b) Number of days to carry out the work (c) Specific days not included in construction period. For example - Christmas break, school holidays, Easter etc. Note: definition of days at clause 36. If in stages: Stage 1 Commence ________/________/20 ________ Complete ________/________/20 ________ Stage 2 Commence ________/________/20 ________ Complete ________/________/20 ________ Stage 3 Commence ________/________/20 ________ Complete ________/________/20 ________ (If stages are used ensure the scope of works for each stage is properly specified at Schedule 1.) Authorised work hours Monday to Friday ________________am to ________________pm Saturday ________________am to ________________pm
vi MASTER BUILDERS ASSOCIATION OF NSW - © Copyright Schedule 4 – Insurance details Insurance details relevant to the works (refer clause 11) Workers compensation: provider: policy no: value: current to: Public liability: provider: policy no: value: current to: Contract works insurance: provider: policy no: value: current to: Other (specify): provider: policy no: value: current to:
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES vii Schedule 5 - Allowances Prime cost items (refer clause 13) Table ”A” Description of each prime cost item Builder’s supply allowance per item Quantity of components or materials Prime cost allowances Builder’s % margin on excess # Item (g) Schedule 2 Example Taps (Internal Sets) $120.00 8 $960.00 +20% 1 2 3 4 5 6 7 8 9 10 11 12 Provisional sum items (refer clause 13) TABLE “B” Description of provisional sum Item Estimated quantity of components or materials Builder’s allowance (Including labour) for each component or unit of material Total provisional sum allowance for labour and materials Builder’s % margin on excess # Item (g) Schedule 2 Example Site excavation cut & fill 50m3 $12.00 per m3 $600.00 +20% 1 2 3 4 5 6 7 8 9 10 11 12 Note: All allowances are to be quoted as GST inclusive. # Refer to clause 13 (d) when dealing with amounts in excess of allowances.
viii MASTER BUILDERS ASSOCIATION OF NSW - © Copyright Schedule 6 – Special conditions (Add an additional page if insufficient space)
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES 1 The Conditions of Agreement 1. Compliance with plans and specification (a) The Builder will, in a workmanlike manner and subject to these Conditions, execute and complete the work recorded in Schedule 1. Warranty as to accuracy of documents detailing the work. (b) The party that is responsible for the production of the contract drawings and/or specification and/or other contract documents expressly warrants that such documents are accurate, correct and of an appropriate standard to allow the works detailed in them to be built. The contract party who produced or produces such documents acknowledges that it is upon the basis of this warranty that the other party has entered into this contract. (c) The following provisions apply where the Owner is responsible for the drawings and or specification documents detailing the work to be done under the contract:- (i) if the Builder finds a discrepancy or ambiguity in the drawings or between the drawings and the specification, he is to refer it to the Owner in sufficient time in order to obtain instructions as to how the matter is to be dealt with. (ii) the Owner is to provide written instructions on how the discrepancy or ambiguity is to be dealt with. (iii) should the Owner fail to direct the Builder within five (5) days of the reference for directions then the Builder may exercise his own discretion in determining which course he will follow. (d) Where the Builder is the party who created the drawings and specification for the works then he will be liable to resolve any discrepancy or ambiguity arising from the documents. (e) Notwithstanding the foregoing, in the case of any difference between scaled dimensions and figures on the drawings, the figures prevail. Conditions of contract to have precedence (f) Should there be any divergence or conflict between the specification and these Conditions, then these Conditions take precedence over the specification. 2. Warranty that site will support the work (a) In the absence of specific written details to the contrary, it is a warranty by the Owner, relied upon by the Builder, that the site will support the works. If details are provided after the Builder has submitted it’s price for the works and those details impact upon this warranty then the Builder will, subject to the clauses below, be entitled to alter it’s price for doing the work. Builder to advise of site support concerns. (b) If the Builder upon commencing work finds that the actual site conditions do not enable the warranty in (a) above to be relied upon then the Builder must advise the Owner in writing of the matter, circumstances or issue which leads him to this view. (c) The Owner must provide written instructions to the Builder in response to the notice issued pursuant to clause (b) above. These instructions must be provided within ten (10) days of the notice from the Builder being given to the Owner. (d) Should the Owner fail to direct the Builder within ten (10) days of the reference for directions required by clause (c) above then the Builder may exercise his own discretion in determining which course he will follow. (e) If the above results in additional costs include delay costs, they will be detailed by the Builder to the Owner and will be paid by the Owner as part of the next progress payment. 3. Owner’s responsibilities and duties The Owner must do all things necessary to:- (a) produce to the Builder prior to the commencement of the works:- (i) documentary evidence of the Owner’s title to the land on which the works are to be executed; and (ii) documentary evidence of the Owner’s capacity to pay the Builder the contract sum. If requested by the Builder the Owner will provide a copy of the terms of any loan facility relied upon to pay for the works. If the Owner fails to produce the evidence required by this clause within fifteen (15) days of the execution of this Contract (or other agreed time period) then the Builder may determine the Contract in accordance with clause 27. (b) provide to the Builder upon request, at any time during the contract, reasonable evidence of the Owner’s capacity to pay for the works. A failure to do so may, pursuant to clause 12, allow the Builder to suspend work. (c) make payment as required by the contract (refer Schedule 2). This includes directing any lending Authority to make payment direct to the Builder. (d) provide instructions to the Builder, when required, in a timely and proper manner so as to avoid delay to the works. (e) ensure that any access required for the Builder to carry out the Work has been obtained and is maintained during the course of the works. (f) maintain a safe work environment and avoid doing things, such as attending site without the Builder’s permission, which may affect occupational health and safety at the work site. 4. Approval of works by relevant authorities (a) Full details of approval conditions to be provided It is the duty of the Owner to ensure that the Builder receives all terms and conditions of any approval which affect the works. If the drawings and
2 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright specifications are lodged by the Builder this duty will be deemed to have been met only if the Builder collects the approval documents and approved drawings and specifications from the Authority. All approval documents should be given to the builder before the contract is signed (b) (i) If the Builder receives the terms of approval after submitting its price for the works or after the contract is signed then the Builder is required, within fifteen (15) days to advise in writing the impact, if any, of the terms of approval on the costs of the works and the time to do the work. (ii) The Builder will be entitled to be paid any increased costs and will be allowed additional time to do the work required by the terms of approval provided that such work and time was not previously allowed for in the contract price and construction time frame. (c) Delay in approval Should any necessary approval not be issued within forty (40) days of the execution of this Contract, then either party may, by giving written notice to the other, terminate this Contract without liability to the other except that the Builder will be entitled to a reasonable sum for services performed and reimbursement of all expenses incurred and payable as at the date of termination. Any such sum must be paid prior to or upon termination. (d) Compliance The works will be deemed to comply with the requirements of any Authority upon the issuing, if applicable, of a certificate of compliance or similar document by the Authority. 5. Date for commencement of and Practical Completion of works (a) The Builder is to commence the works no later than one (1) month after the Owner has produced to the Builder:- (i) evidence of his title to the land as required by clause 3; (ii) evidence of his capacity to pay the contract sum, as required by clause 3; and , (iii) where applicable, terms of approval enabling the works to commence whichever is the later to occur. (b) The Builder will diligently proceed with the works and bring them to Practical Completion within the period stated in Schedule 3. This period starts from the actual date of commencement of the work. (c) The date for Practical Completion may be altered pursuant to clause 6. 6. Delays and extensions of time (a) If the progress of the works is delayed by any of the following causes or conditions resulting from them:- (i) variations; (ii) suspension of the works under clause 12; (iii) latent conditions affecting the site, the ability to carry out work or requiring work which is a variation; (iv) proceedings taken or threatened by, or disputes with adjoining or neighbouring Owners or residents; (v) any act, default, delay or omission on the part of the Owner in providing instructions, making payment or doing a thing necessary to allow the works to proceed; (vi) civil commotion or industrial dispute affecting any of the trades employed upon the works or the manufacture or supply of materials for the works; (vii) inclement weather and the consequences of weather on site access, site safety and or the ability to do work; (viii) delay by any local or other authority in granting any necessary consent or approval; (ix) any other cause, thing or matter beyond the reasonable control of the Builder, such as trade shortages or material shortages, which affect the Builder’s ability to do the work; then in any such case the Builder is entitled to and will receive a fair and reasonable extension of time to the Construction Period. The date for Practical Completion will be adjusted as required by such extensions of time. Builder to advise of matters causing delay (b) The Builder is to notify the Owner in writing of any matters which cause delay. The notice is to be provided within a reasonable time of the Builder becoming aware of the matter and is to state a period of time or provide an estimate of the period of extension affecting the construction period. (c) If the period stated above is an estimate then the construction period will be adjusted by the actual period of delay once that is determined. The Builder should advise in this regard within fifteen (15) days of the matter causing delay ending. (d) Should the Owner not dissent in writing from the notification within five (5) days, the construction period will be extended by the period claimed in the notification under clause (b) or, as appropriate, clause (c) above. (e) Delay in notifying or a failure to notify a delay will not of itself prohibit an extension of time provided the matter which is claimed to cause delay is shown to cause delay to the works. (f) The Builder must use his best endeavours to minimise delay. However if delay is caused by matters beyond the Builder’s control then the Builder is not required to incur additional costs to reduce the period of delay unless the Owner agrees to pay and does pay the same. Compensation for delay (g) If the delay results from any of the matters listed in paragraphs (i), (ii), (iii), (iv), (v) or (viii) of clause 6(a), then the contract price is to be adjusted to include an amount calculated to cover the cost or expense of the delay as incurred by the Builder. (h) The amount payable under clause 6(g) will be determined with reference to Schedule 2 item (e).
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES 3 In addition any actual costs incurred by or payable by the Builder because of the delay which in total exceed the amount payable with reference to the period of delay and the amount stated at Schedule 2 item (e) will be payable by the Owner. 7. Compliance with the requirements of local and other authorities (a) (i) the Builder is to comply with and give all notices required by an Act of Parliament or by any regulation or by-law of any local Authority or of any public service company or Authority which has any jurisdiction with regard to the works or with whose systems the same are or will be connected. (ii) the Builder is to pay and indemnify the Owner against any fees or negotiated charges legally demandable under an Act of Parliament, regulation or by-law in respect of the works. However the Builder will not be responsible for any legally demandable fees or charges that are imposed or adjusted (to the extent of the adjustment) after the date of this contract. Any such new or increased amounts are payable by the Owner. Written notice of need to alter proposed work or processes (b) The Builder, before making any variation from the contract drawings or specification necessary for compliance with clause (a) above, is to give to the Owner written notice specifying and giving the reason for the variation and applying for instructions. The Owner must provide written instructions to the Builder within five (5) days of the Builder’s request. (c) If the Builder does not receive those instructions after, five (5) days of having applied for the instruction referred to in clause (b) above, then the Builder is entitled to proceed with the work conforming to the provision, regulation or by-law in question and any work or changes thereby necessitated will be treated a variation under clause 9. Circumstances which require quick action or involve insufficient time to provide notice (d) The Builder is not required to provide the written notice pursuant to clause (b) above whenever the work to be carried out is, in the opinion of the Builder, urgently necessary in order to prevent loss of or damage to the works or to any property or to prevent personal injury to or the death of any person. (e) The Builder is to give to the Owner written notice (as soon as practicable after the work has been commenced) specifying the reasons for not giving the notice in writing required by clause (b) above and also giving the reason for the variation. (f) If compliance with the requirements of this clause involves the Builder in loss or expense beyond that provided for in this contract, the amount of that loss or expense is to be added to the contract sum and paid by the Owner. 8. Progress surveys & inspections Where check or progress surveys or inspections are required by an Authority or Financial Institution, the Builder is to inform the Owner when the works reach the required stage. The Owner is responsible for having any such survey or inspection carried out and the cost of the same. 9. Variations - how to deal with changes to the work (a) The works may be varied by: (i) increases or decreases in or omissions from the works; (ii) execution of additional work; (iii) changes in the character or quality of any material or work such as may be caused by latent conditions; (iv) changes in the levels, lines, positions or dimensions of any part of the works. (b) The Builder is not obliged to vary the works or carry out any extra work unless he consents, which consent is not to be unreasonably withheld. (c) If the Builder agrees to undertake a variation, the work constituting the variation is to be detailed in writing by the Owner to the Builder. Writing in this context can be in the form of any document which of its nature confirms that the Builder is to do something different to that previously required by the contract. Emails, new drawings or product samples will evidence this. If the Builder believes an instruction constitutes a variation but the Owner refuses to provide written instructions to confirm that position then the matter, issue or instruction giving rise to the respective beliefs of the Builder and the Owner must be referred to a clause 24 meeting. If that does not resolve the issue then clause 25 procedures are to be followed. Builder to advise value of variations (d) The Builder within a reasonable time of receipt of instructions to execute a variation, is to notify the Owner in writing of the value of the variation. The Builder may require, prior to the execution of any variation, that the Owner produce evidence, satisfactory to the Builder, of the Owner’s capacity to pay for the variation. Less work due to a variation (e) Where the works are decreased or omissions from the works are made the cost of the work not now required is to be deducted from the contract price. Cost in this case means the actual expense or amount saved by the Builder because the work is not required to be done. No other deduction is required by reason of the work or aspect of such work not being required. Additional work due to a variation (f) Where the work to be done is increased, the cost of the extra work is to be added to the contract price. The Builder can choose when and how often to claim payment for variation work and is not required to wait until the next progress claim. (g) Where a price has not been agreed, the Builder may proceed with the variation work and the price to be paid for the variation will be the cost as calculated in accordance with clause (h) below plus the allowance specified in Schedule 2 item (g) for supervision, overhead and profit together with an amount to pay
4 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright the proper impact of the GST on the variation work. If Schedule 2 item (g) is left blank then 20% will be applied. (h) In calculating the cost of the work which is the variation:- (i) the rates for labour provided by the Builder’s employees are those set out in Schedule 2 item (h). If no rates are shown, then the rates published by the Master Builders Association of NSW current at the time the variation is performed are to be used; and (ii) the price for materials is the cost of the materials to the Builder. Cost here means the amount paid or payable by the Builder for the materials. (iii) where the work is executed by a trade contractor, the cost to be paid is the amount properly paid or payable to the trade contractor which will be evidenced by provision of a proper tax invoice from the trade contractor who did the variation work covering the variation work, with such resulting amount properly treated for the effect of GST. Different work due to a variation (i) If the variation results in different work being done, then the contract price will be adjusted by deducting the cost of the work not to be done and adding the cost of the work now to be done plus the Builder’s margin as set out in Schedule 2 item (g). Different work means a change in the character of work as opposed to new work. For example wooden floors changed to tiled floors. (j) If the Builder commenced work prior to receiving or without a written instruction as to the work being a variation or as to the price of the variation, the same will not as of right prevent a claim for payment for the variation being allowed. However in the absence of a written instruction the Builder has to substantiate that the work is not part of the original contract works and verify that the amount claimed is reasonable. 10. Assignment and sub-letting (a) Neither party to this contract is to assign the contract without the written consent of the other. Such consent will not be unreasonably withheld. (b) However the Builder may sub-let any portion of the works, but sub-letting does not relieve the Builder from any of his liabilities or obligations under this contract. 11. Insurance Note: Insurance details are to be set out in Schedule 4. (a) Injury to persons The Builder is to insure against any legal liability, loss, claim or proceedings whatsoever whether arising under any statute (other than as provided in the next clause) or at Common Law, in respect of personal injury to or the death of any person arising out of or in the course of or caused by the execution of the works. The Owner is responsible to cover any act or neglect of the Owner or of other persons for whom the Owner is responsible. (b) Workers compensation etc. The Builder is to insure any person employed by him in or about the execution of the works against any legal liability, loss, claim or proceedings whatsoever, whether arising at Common Law or by virtue of any statute relating to Workers Compensation or Employer’s Liability. The Builder is to ensure that every sub-contractor is insured against the same liability in the case of employees of that subcontractor. (c) Injury to property (i) the Builder is liable for, indemnifies the Owner and must insure against any legal liability, loss, claim or proceedings in respect of any injury or damage arises out of or in the course of or by reason of the execution of the works. The Builder will only be liable if the injury or damage is due to any negligence, omission or default of the Builder, his servants or agents or of any sub-contractor. (ii) with regard to loss or damage by fire, explosion, lightning and civil commotion this clause is to be read subject to the provisions of clause 11(e). (d) Notwithstanding the foregoing, should any portion of the works be utilised by the Owner or a tenant of his or their employees during the progress of the works, the Builder shall not be liable for any injury to or the death of any person or loss or damage to property which may be occasioned by reason of the utilisation of the portion of the works by the person or persons. (e) Fire insurance The Builder must insure the works against loss and damage whether by fire, explosion, earthquake, lightning, storm and tempest and civil commotion and to an extent not less than that approved by the Owner from time to time as to adequacy for at least the full reinstatement value of the works including all unfixed materials stored upon the site, and shall keep the works insured until the works are delivered up to the Owner; should the Builder make default, the Owner may insure and deduct the premiums paid from any monies due or to become due to the Builder. (f) The Builder must, upon settlement of any claim under these policies, proceed with due diligence to rebuild or repair the works and replace or repair the materials destroyed or damaged. Any amount so payable in respect of the settlement must forthwith be paid into a bank mutually agreed upon by the parties in an account in the joint name of the Owner and the Builder, and the proportion of the monies payable to the Builder shall be paid to him out of the account by instalments as with normal progress payments, and the Builder shall not be entitled to any payment in respect of the rebuilding or repair of the works or the replacement or repair of the materials destroyed or damaged other than the monies received under the policies together with the bank interest that accrues from the joint account. (g) Notwithstanding clause (f) above, should any loss or damage occur affecting the works then either party may, by notice in writing forwarded by certified mail, determine this Agreement subject to the right of the other party to refer to arbitration pursuant to clause 25 (within ten (10) days after receipt of that notice) the question of whether that determination would
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES 5 be just and equitable having regard to the extent of the loss or damage and to the effect of that loss and damage upon the further performance of this Agreement. 12. Suspension of work - the builder has the ability to stop work! (a) (i) Should the Owner fail to pay or fail to cause to be paid any progress payment or payment within the period nominated at Schedule 2 item (c)(ii) then the Builder may, without prejudice to his right to determine his engagement under this Contract pursuant to clause 27, suspend the works. (ii) If the Owner fails to comply with a written request by the Builder pursuant to clause 3(b) within five (5) business days the Builder may suspend the works. If such suspension lasts for more than ten (10) business days the Builder may terminate the contract pursuant to clause 27. (b) A notice of the suspension is to be given to the Owner in writing. Resumption of work and impact on construction period. (c) (i) The Builder is to resume work as soon as practicable after the cause of the suspension is remedied by the Owner provided the contract remains active. (ii) The construction period and the date for Practical Completion is to be extended by the period of suspension and the period taken to resume work. 13. PC items or provisional sums (a) A prime cost allowance is for the cost to the Builder of a provisional item and does not include any installation. A prime cost item has not yet been selected and/or cannot be or has not been costed at the time of the Contract. A provisional sum allowance is for the cost to the Builder of work/labour including the supply of any items/materials necessary. A provisional sum item and work cannot be or has not been costed at the time of the Contract. (b) Details of any prime cost items or provisional sums relevant to the works and the contract price are set out in the table of allowances for:- “A” Prime Cost Items; and “B” Provisional Sums at Schedule 5. (c) Where prime cost or provisional sum items are included in the contract price and works, the Owner must furnish to the Builder all necessary directions regarding the selection and supply of the work and or goods represented by such sums in sufficient time to ensure that no delay is occasioned in the progress of the works. The Builder should make any request for information about such work or goods in reasonable time. (d) Where any part of the total allowances for such work or items is not expended, then the amount not spent is to be deducted from the contract price. (e) If the total amount expended in respect of such work or items exceeds the total of allowances included in the contract price then the following will be done: - (i) the amount by which the allowance is exceeded exclusive of GST; (ii) plus the percentage on the excess specified in Schedule 2 item (g); (iii) plus GST on the amount arising from (i) and (ii) is to be added to the contract price. (e) Normal trade discounts are to be allowed in favour of the Owner. However any discounts for prompt payment are to be allowed in favour of the Builder. 14. Foundations and Owner’s warranty that site will support the works (a) The Owner warrants that the site of the works will satisfactorily support the works. This warranty may be eliminated but only if the Contract specifically adopts as contract documents, documents such as reports which make this warranty untenable. (b) Builder to notify owner of differing site conditions. If the conditions below the surface of the site are shown on the drawings or described in the specifications and in fact differ from what is so shown or described, then the Builder upon discovering this must notify the Owner in writing of the conditions encountered and obtain his written instructions before proceeding. (c) If the conditions of the site are not shown on or described in the drawings or the specification and the Builder with his tender has stated to the Owner what he assumed to be the conditions below the surface then any difference in the conditions met as compared with the Builder’s stated assumption must be notified by the Builder to the Owner upon discovery in writing. The Builder is to obtain the Owner’s written instructions before proceeding. (d) Should the Builder consider that the works as shown on the drawings or described in the specification need to be varied because of conditions encountered at the site, the Builder is to notify the Owner in writing and obtain his written instructions before proceeding. (e) (i) any additional cost or any saving in cost arising out of any difference in the conditions encountered below the surface of the site and notified to the Owner pursuant to clauses (b) or (c) above are to be added to or deducted from the Contract Sum as the case may require. (ii) any consequent variation of the works is to be dealt with in accordance with clause 9. Upon the issue of the Owner’s instructions to the Builder, the Owner’s warranty for that portion of the site is to be treated as reaffirmed. 15. Deposit & progress payments (a) If a deposit is to be paid details of it will be set out in Schedule 2 item (b). The deposit will be accounted for upon Practical Completion being reached and is not otherwise to be deducted from progress claims made prior to Practical Completion. See clause 19.
6 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright (b) The contract price or sum is to be claimed and paid in accordance with the timetable described in Schedule 2 item (c). If no period or date is identified at Schedule 2 item (c)(ii) for payment to the Builder to be made then the period will be five (5) business days after a payment claim or request, which complies with clause 15, is made by the Builder. (c) A progress payment claim by the Builder is to show:- (i) the value of the contract work performed at the date of the claim; (ii) the value and brief description of any variations; (iii) any other adjustments under the provisions of the Contract; (iv) the amount previously paid by the Owner; (v) the amount claimed by the Builder being the difference BETWEEN the total of paragraphs (i), (ii) and (iii) AND paragraph (iv); and (vi) the proper GST charge relevant to the works to which the claim relates. (d) The Builder is not entitled to include the value of any unfixed materials and goods intended for and delivered on or adjacent to the works in a request for a progress payment unless those materials and goods are the property of the Builder and have reasonably, but not prematurely, been delivered on or adjacent to the works and then only if the materials and goods have been properly stored and adequately protected. (e) (i) When the value of any unfixed materials and goods which includes such material and goods is included in a request for a progress payment, those materials and goods become the property of the Owner upon payment by him to the Builder of the progress payment. The Builder thereafter is not to remove such material and goods except for use in the works without the Owner’s written consent. (ii) The Builder remains responsible for loss or damage to materials and goods paid for by the Owner which are left in the care of the Builder. (f) The making of any progress payment to the Builder is to be taken as payment on account. (g) Should any progress payment or the final payment not be made within ten (10) days after request the Builder is entitled to interest thereon at the rate of one per cent (1.00%) per month. The Builder may also act to suspend work and, as appropriate, terminate the contract. Refer clauses 12 and 27. 16. GST (a) The works under this contract are subject to GST. All prices or amounts stated in the contract will be treated as GST inclusive unless specifically stated to be “plus GST” or words of a similar affect. (b) The Owner is the party liable to pay the proper amount of GST applicable to the works. (c) When the work is varied or changed the amount payable for GST will be adjusted to include the proper amount of GST applicable to the work as varied or changed. (d) The Builder must include the proper amount of GST in each progress claim or any final claim and warrants that the proper amount of GST has been included. (e) To recover the GST the Builder must:- (i) be a GST registered entity; and (ii) provide the Owner with a tax invoice in a form approved by the Australian Taxation Office for the amount which includes GST. (f) Non payment of GST by the Owner is to be treated as equivalent to non payment of a contract amount (refer to clause 15(g)). The Builder may act as allowed under the contract in such circumstances. 17. Retention fund may be applicable if agreed (a) Retention is only applicable if it is agreed, by both parties, that it will apply to the contract works. (b) As security that the Builder will carry out his obligations, under this contract the Owner may retain no more than five per cent (5%) of each progress payment. The sum retained in accordance with this clause is to be known as the Retention Fund. (c) If it is agreed that retention or security is to be provided by the Builder, then the Builder may provide a bank guarantee, guarantee, bond or other form of security acceptable to the Owner equal in total to five per cent (5%) or other agreed amount of the contract sum or equal to an amount otherwise agreed in writing. In that event this security will be effective as security in lieu of the Retention Fund and the provisions of clause (a) above will not apply. The alternate security can be provided by several similar or different forms of security which when combined total no more than five percent (5%) or other agreed amount of the original contract sum. (d) (i) The sums which the Owner is entitled to retain pursuant to the above provisions are to be paid by him to the credit of an interest bearing deposit in the joint names of the Owner and the Builder at a bank or other financial institution nominated by the Builder and approved by the Owner (the retention fund account) (ii) Payments to the retention fund account are to be made by the Owner within five (5) days of making a progress payment to the Builder and evidence of each payment must be provided to the Builder, within a further five (5) days. Upon request, by the Builder is to be provided with full details of the operation of the retention fund account. (iii) The amount to be held in the Retention Fund account will be upon trust whereby the Owner is the trustee of the retention money and the Builder the beneficiary of the money held by way of retention. The provisions of clauses 17(e) and 17(f) are to be applied as applicable. (iv) In the event of the Builder terminating his engagement pursuant to clause 27, the rights and interests of the Owner in respect of the retention money are to and will be transferred to the benefit of the Builder
COMMERCIAL BUILDING CONTRACT BC3 JANUARY 2021 - NEW SOUTH WALES 7 (v) The Owner and the Builder are to ensure that withdrawals from the retention fund account occur only upon the signature of both the Builder and the Owner unless allowed by clause (c)(iv) above. (e) Within five (5) days of the works being practically completed (refer clause 18), the Owner and the Builder must jointly arrange for the payment to the Builder of one half of the amount held in the retention fund together with all interest accrued on the amount held in the retention fund account. (f) The amount held in the Retention Fund, following the operation of clause 17(e), is to be dealt with in accordance with clause 22(a). (g) (i) Where the Builder provides a security in lieu of the Retention Fund, the security is to be maintained until the works are practically completed. Upon achieving Practical Completion this security is to be reduced to a sum equal to one half of the security first provided. (ii) The balance of the security is to be released in accordance with clause 22(a). (iii) In the event of the Builder terminating his engagement pursuant to clause 27, the Owner must release his interest in any security immediately upon written notice from the Builder to do so. 18. Practical Completion (a) Definition The works are practically completed when they are reasonably fit for their proposed use or ready for occupation. Minor defects and minor ommissions do not affect Practical Completion. In this contract unless stated otherwise as a special condition it is not the Builder’s obligation to obtain an occupation certificate. (b) Builder to notify The Builder, is to give the Owner notice in writing when he believes the works are practically complete. (c) Owner may respond (i) Within five (5) days after the service of the notice, the Owner must give to the Builder a notice in writing of those matters and things (if any) required by this contract to be done for Practical Completion to be achieved. (ii) The Builder in the immediate future will do all the things as may be necessary for Practical Completion and give to the Owner a notice in writing once the things to be done have been done. The Defects Liability Period in such circumstances will commence to run from the date of the last-mentioned notice. (d) If the Owner does not provide a notice as allowed by the provisions of clause 18(c) the works will be treated as having reached Practical Completion as from the date notified in the Builder’s notice under clause (b) above. (e) Should the Owner take possession of the works or any part of the works either with or without the agreement of the Builder the date of Practical Completion will be the date possession is taken unless Practical Completion has already been established. (f) When the works are practically completed they will be at the risk of the Owner in respect of damage, loss or theft of the structure, fittings and fixtures. 19. Payment on achieving Practical Completion (a) Subject to clause 17, the Builder is to receive all monies due and payable under this contract when the works reach Practical Completion. At this time the deposit will be accounted for by the Builder. (b) These monies are to be paid to the Builder within five (5) days of the works reaching Practical Completion. (c) On payment of these monies the Builder is to hand all keys to the works and any certificates to the Owner or any other person as the Owner may authorise to receive them. 20. Liquidated damages - Builder to Owner If the works do not reach Practical Completion (as defined by clause 18) within the time required by clause 5, as adjusted under clause 6, the Builder will pay or allow the Owner by way of liquidated and ascertained damages the amount set out in Schedule 2 item (d) for the period that passes from the time when Practical Completion under the contract should have been reached until the works are brought to Practical Completion. An amount for liquidated damages can only be deducted from monies which, upon achieving Practical Completion, are then, or thereafter become, payable to the Builder by the Owner. The Owner is not entitled to rely on any action or inaction by the Owner which impacts upon when Practical Completion was achieved. 21. Defects Liability Period (a) Any defect or other fault which may appear is to be notified in writing to the Builder within a period of twenty six (26) weeks after the date of Practical Completion. If the defect or fault is due to materials specified by and supplied by the Builder or workmanship of the Builder being things which are not in accordance with this Contract (called a “Builder defect”) then they will be made good by the Builder at his own cost. The period of twenty six (26) weeks is to be known as the Defects Liability Period. Proper and actual notice of a Builder defect is critical. (b) The Owner is not entitled to engage an alternate Builder to do work in relation to clause (a) above nor recover any cost of having work done by an alternate Builder unless the Builder has been advised in writing of all matters which the Owner requires to be rectified and has afforded the Builder a reasonable time to attend to such matters. If the Owner fails to do this then any costs or expense incurred by the Owner in having the work carried out by another Builder will be solely at the liability of the Owner.
8 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright (c) The Builder is not obliged to carry out work where the need for the work is due to: (i) due to a failure by the Owner to properly maintain the works; or (ii) is necessary due to fair wear and tear caused by use of the works; or (iii) due to the exposure of the works to the environment in which they are situated; or (iv) due to a design related matter where the design is not the Builder’s responsibility; or (v) a matter beyond the control of the Builder. 22. Final payment - Builder to notify and Owner to release remaining security (a) Upon the expiration of the Defects Liability Period or upon completion of any builder defects which were properly notified to the Builder in accordance with clause 21 (whichever is the later date) the Builder is to give written notice of the same to the Owner and the Owner must, within five (5) days of the receipt of that notice, release any security held by the Owner. This notice is to be known as the Final Notice. (b) Together with or after giving the Final Notice the Builder may issue a final account to the Owner containing particulars of the monies, if any, remaining due to the Builder. This account must be paid by the Owner within ten (10) days. (c) At any time after payment of any monies referred to in clause 22(b) the Builder, upon request in writing from the Owner, must release to the Owner any certificates obtained in respect of the works. (d) Except in the case of fraud, dishonesty or fraudulent concealment relating to the works (and subject to what may be awarded in any arbitration proceedings founded on a notice of dispute given by either party to the other at any time prior to the expiration of fifteen (15) days after the giving by the Builder of the Final Notice), the giving of the Final Notice by the Builder is conclusive evidence as to the sufficiency of the works and materials. 23. Builder has authority to exclude people from the site The Owner hereby appoints the Builder his agent for the period of this contract for the following purposes:- (a) to permit any persons to enter upon the site or premises. (b) to refuse any persons the right to enter and to exclude any persons from entering upon the site or premises. (c) to remove any unauthorised persons from the site and premises provided that the appointment does not apply to persons specifically authorised by the Owner to enter upon the site or premises at the relevant time. 24. Regular meetings – parties required to attend. (a) The Owner and Builder are to meet regularly. The Builder will be responsible for organising meetings. The Owner must attend such meetings. The purpose and function of the meetings will be to:- (i) review the progress of the works and their compliance with the plans and specifications relative to the construction program or construction period; (ii) prioritise works which have become a priority due to events that have happened or may happen; (iii) discuss the status of the work relative to the construction program or construction period and the work which remains to be done; (iv) co-ordinate and deal with any matters affecting delivery of the Builder’s work pursuant to the plans and specifications; and (v) review the cost of the work to account for the impact of things like variations, delays, choices made regarding provisional sums or prime cost items or other things which will affect the cost to the Owner and the Owner’s capacity to pay for the work. The Builder is to record and detail any decisions arising from such meetings and provide a copy of the same to the Owner within five (5) days of the meeting. Each party will do all things necessary to comply with a decision or direction of a meeting and will treat any such document as a direction from the Owner to the Builder. (b) The Owner may at its discretion call a meeting with the Builder to discuss other issues relevant to the work and their completion on time, to the appropriate standard and for the contract price. The Builder has a general duty to advise the Owner of any matter, event, thing or circumstance which impacts upon:- (i) delivery of the works pursuant to the construction program or construction period; (ii) for the contract price; and (iii) to the required standard. Such advice is to be provided within a reasonable time of the matter, event, thing or circumstance giving rise to the need to report to the Owner, occurring. (c) The contract imposes a duty on both parties to let the other one know what is happening with the work, it’s cost and the capacity to pay for the work under the contract. The parties are to act reasonably and objectively when dealing with each other and or matters arising under the contract. 25. Dispute resolution Notify the other party of matters in dispute (a) If any dispute or difference (a dispute) concerning this Agreement or the work arises between the Owner and the Builder then the party relying on the dispute must give the other written notice of the dispute. Parties must meet and seek to resolve dispute (b) Within five (5) days after the giving of such a notice the parties must confer at least once to attempt to resolve the dispute or to agree on methods of resolving the dispute by other means such as mediation, expert determination or arbitration. At any such conference each party must be represented by someone having authority to agree to a resolution of the dispute.