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Building and Construction Procurement - Roles and Responsibilities
Contracts relating to building and construction (including roads and bridges) primarily involve four entities - the Principal, the Contractor, the Superintendent and Subcontractors. In turn, these entities enter into the following contracts:
The Status of the Principal to a Construction Contract
Except where a statute specifically confers contracting power (eg upon the Director of Housing under the Homes Act 1935 or upon a corporate body such as the Forestry Corporation under the Forestry Act 1920), the appropriate party to a contract which is to be entered into by the Crown is "The Crown in Right of Tasmania" (Treasurer's Instruction 1203).
This means that 'The Crown in Right of Tasmania' should be named as the contracting party (Principal) and execution of the contract on behalf of the State will be either by the Minister or such officer as delegated by the Minister in accordance with Treasurer's Instruction 1203.
Procurement for all building and construction projects must be undertaken in accordance with the Treasurer's Instructions and any relevant Procurement Practice Manuals.
The Principal has obligations prior to the award of the contract, and further obligations once the contract is in place.
The Principal's initial obligations prior to the award of the contract include:
Under AS 4120-1994 Code of Tendering, the Principal also has an obligation to:
Under the contract between the Principal and the Contractor, the Principal's obligations include:
The Principal's Representative
The Principal for building construction contracts is "The Crown in Right of Tasmania".
The Principal delegates powers, duties and discretions under the contract to the Principal's representative and the Superintendent, but these delegations do not prevent the exercise of such powers, duties, discretions or authorities by the Principal himself.
The delegations are usually made to persons who are skilled and experienced in building or road and bridge construction and who are able to offer the best advice and service to the Principal.
The role of Principal's representative is very important and the appointee must be a person who has expert knowledge of the building and construction industry and who is able to give the Principal the best advice, protection and service.
The Principal's representative is the person stated in the Annexure to the General Conditions of Contract (the Annexure) and is appointed, in writing, by the Principal to be the Principal's representative and notified as such in writing to the Contractor by the Principal.
The Principal's representative will come from the agency.
The delegation as Principal's representative carries with it all power and duties vested in the Principal under the contract but usually with the exception of two clauses. They are:
Clause 23 of the General Conditions of Contract, AS 2124-1992, states that the Principal shall ensure that at all times there is a Superintendent and that in the exercise of the functions of the Superintendent under the contract, the Superintendent:
The Superintendent is the person stated in the Annexure as the Superintendent or other person from time to time appointed in writing by the Principal to be the Superintendent and notified as such in writing to the Contractor by the Principal; and this, so far as concerns the functions that can be exercised by a Superintendent's representative, includes a Superintendent's representative.
The obligations of the Superintendent apply equally to the role of the Superintendent as agent for the Principal and to the role of the Superintendent as certifier under the contract.
It is considered appropriate that the procuring agency has a role and thus a responsibility in the performance of the contract. Therefore, under the procurement arrangements, the role of Superintendent will be the responsibility of the agency. The agency is responsible for ensuring that a suitably qualified and experienced Superintendent is appointed for all major or high risk projects.
The terms of the engagement are for the Principal to determine. The Principal can appoint a State Service employee, or any other person, as the Superintendent. The terms of appointment would require the Superintendent to fulfil the functions set out under the terms of the contract.
The agency should be quite clear in the appointment of a Superintendent whether the Superintendent is acting as an independent certifier or as an agent of the Principal, or both.
The Superintendent as administrator of the contract has the dual role of acting as agent for the Principal in conveying the Principal's instructions to the Contractor, and as certifier for the purpose of issuing certificates and making decisions as to reasonable measures or values of work, quantities or time.
The functions of the Superintendent vary depending on the form of the contract utilised. The degree to which the Principal and the Contractor are bound by the determinations of the Superintendent also varies depending on the form of contract employed.
Superintendent as Certifier
The Superintendent has an obligation to act independently in the certifying functions, these functions usually include:
Superintendent as Agent
The Superintendent, as agent of the Principal, could be authorised to issue instructions to the Contractor in respect of:
The extent of the Superintendent's obligations to issue instructions is defined by the terms of the Superintendent's appointment, and by the terms of the contract.
In addition, the Superintendent would normally:
The General Conditions of Contract, Clause 23, AS 2124-1992, states that the Principal shall ensure at all times that there is a Superintendent. The superintendent is the person named in the Annexure to the General Conditions of Contract as the Superintendent. The Superintendent may appoint a Superintendent's representative, in writing, to exercise defined powers or duties on the Superintendent's behalf.
The obligation of the Contractor is the performance of the contract works, in accordance with the terms and conditions of the contract, and in accordance with the General Conditions of Contract, specifications and drawings. The obligations of the Contractor would normally include:
The Contractor enters into sub-contracts for various components of the work under the contract. The terms of the sub-contract would normally require the Subcontractor to:
The client agency is not specifically mentioned in the contract documents, but the Superintendent is generally engaged by the agency to prepare the design and document the tender. The Superintendent is required to administer the contract and report to the agency on all matters pertaining to the project.
The Department of Treasury and Finance has developed Prequalification Criteria (PQC) for contractors, selected specialist subcontractors and consultants. The criteria are to "best practice" standards and similar processes are in use in other jurisdictions.
The Department of Treasury and Finance has an interface role which encompasses industry leadership to effect the Government's commitment to building and construction industry reform by providing initiative in the development and implementation of an integrated package of reforms which have industry-wide relevance. This includes developing procedures, standards and guidelines which will engender a consistent and professional approach by the State Sector to construction tendering and contracts practice. A set of strategies has been developed for the procurement of building works whereby all tenders for particular categories and values of work are called through newspaper advertisements with the provision that only prequalified contractors may tender.
The Parliamentary Standing Committee on Public Works approval process is a legislative requirement for public works projects valued in excess of $5 000 000. The review process conducted by the Committee is an integral part of the legal framework for asset procurement by the Tasmanian Government. The Committee's charter is set out in the Public Works Committee Act 1914.
The Committee includes Members of the Government, Opposition and Independents drawn from both the House of Assembly and the Legislative Council. The Committee reports to the House of Assembly or, if the House is not sitting, His Excellency the Governor.
The Committee scrutinises major Government public works projects, and in particular reports on the "...necessity or advisability of carrying [the project] out" (Public Works Committee Act, Section 15(2b)) and on the "present and prospective public value of the work" (Public Works Committee Act, Section 15(2c)).
For more information refer to The Process for the Referral of a Project to the Parliamentary Standing Committee on Public Works.
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