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New conditions of contract include pain/gain clause

ICE NEWS

THE ICE Design and Construct Conditions of Contract have been completely revamped in the second edition, released this week.

For the first time, an optional pain/gain clause is included, following the success of similar clauses in the New Engineering Contract.

'This second edition of the Design and Construct Conditions of Contract provides a contractual framework for employers, consultants and contractors to work co-operatively and share responsibility for delivery of the project, ' said conditions of contract standing joint committee chairman David Hodgkinson.

Under the terms of the clause, the employer and contractor share the consequences of alterations to the employer's requirements proposed by the contractor.

Since the contractor is responsible for design of the works, it is reasoned that he is in the best position to identify potential improvements or cost saving measures.

Clause 51 allows the contractor to propose alterations to the employer's requirements. Clause 52 makes provision for sharing any changes in value or time fairly between the parties.

The revamp was needed to ensure the contract complies with new legislation, particularly the Housing Grants Construction and Regeneration Act 1996 (HGCR Act), which came into force in May 1998.

The Act introduced scope for adjudication in disputes between the employer and the contractor. The disputes procedure now includes options for conciliation and adjudication before a reference to arbitration.

Clause 66 empowers the employer's representative to resolve a dispute or, where this is not possible, to ensure the dispute is clearly defined. It is hoped this will save time and cost.

Clause 66 complies with adjudication provisions in the HGCR Act and will make the Act's 'Scheme for Construction Contracts' redundant.

The role of the employer's representative differs significantly to that of the engineer in traditional ICE contracts who is expected to act impartially.

Under the new Design and Construction contract, the employer's representative will act impartially only in particular sub-clauses.

The new contract reflects the fact that 'civil engineering is a dynamic profession that constantly evolves to meet the needs of its professionals and the community they serve, ' said Hodgkinson.

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