New principles and guidelines to boost productivity and ensure risk and responsibility is fairly allocated during the planning stage of major construction work has been unveiled by Master Builders.
With lengthy and inconsistent procurement and pre-contract processes having been identified as the most significant issue impacting productivity and the sector’s ability to deliver critical infrastructure such as hospitals and schools effectively, to time and on budget, Master Builders’ Commercial Working Group identified there was a need for greater education, support and clarity. Alongside the Vertical Construction Leaders Group and Hazelton Law, the working group addressed processes such as pre-project planning and tender-preparation, pre-contract services and contract negotiations.
Master Builders Chief Executive Officer, Ankit Sharma says the formula is simple: good contracting produces good outcomes.
The Principles of Good Contracting offer thorough guidance and information sheets for contractors, partners and clients about key areas including Termination for Convenience clauses, Extension of Time Principles and Float, Risk and NZS 3910 Guidance. It also introduces a standard form pre-construction contract template to ensure the equitable distribution of risk and responsibility on long-lead procurement opportunities.
“This is especially important when unfamiliar contract terms imposed by clients lead contractors to agree to terms and risks, they cannot manage. A lack of trust at the pre-construction stage leads to poor decision-making throughout the project delivery cycle, nobody wins when this occurs – not the client, the contractor or the country,” Sharma said.
Wellington Director of commercial construction company Naylor Love, Nick Clayton, is part of both the Commercial Working Group and Vertical Construction Leaders Group and has been pivotal in the creation of the new resources. He said, when contracting is done well, nothing should be left to chance.
“Clients, both private and government, often seek to transfer risk away from themselves to the contractor by using special conditions. Contractors, who don’t have the specialist expertise and experience then accept those conditions even though it means they take on more risk than they should."
From my own experience at Naylor Love, project success is always a team effort led by best for project decisions rather than self-interest. Beyond the technical jargon, this is all about building trust and ensuring all parties have the confidence to proceed with a project,” Clayton said.
“This material has been designed by the sector, for the sector and is reflective of Master Builders’ ethos to Build a Better New Zealand. We look forward to seeing the positive effect these resources can have in terms of lifting productivity in the sector and encouraging contractors to feel confident when they take on projects,” Sharma added.
