Collaborative construction: the ICC Design and Construct contract

The ICC suite of contracts is sponsored and published by the Association of Consultancy and Engineering (ACE) and the Civil Engineering Contractors Association (CECA). The suite is intended primarily for use on civil engineering and infrastructure projects, as opposed to construction projects.

Written by Tom Botterill of Pinsent Masons.

The sponsors see the D&C 2018 as a complete revision of the 2011 edition. It has been significantly shortened in both length - from 47 pages to 26 - and number of provisions - from 72 conditions to 24. The provisions have also been reordered, giving the D&C 2018 a different flow and feel from its predecessor.

Unlike its predecessor, the D&C 2018 is a ‘lump sum’ contract which seeks to include the risk items that may entitle the contractor to additional time and money within a single clause.

The role of the engineer

A new role of ‘engineer’ has been created in the D&C 2018, replacing the previous role of employer’s representative.

The role shares some responsibilities with that of the employer’s representative including certifying payments, substantial completion and correction of defects and approving various documents and matters. However, the engineer also has a role in determining disputes referred to them by the contractor or the employer. The engineer’s determination of a dispute can become binding on the contractor and employer unless it is disputed by either party within 28 days.

Collaboration

The D&C 2018 contains new provisions requiring collaboration between the parties, as well as widening some of the ‘collaborative’ provisions found in the D&C 2011.

A new provision requires the contractor, employer and engineer to collaborate in a spirit of trust and mutual support “in the interests of the timely, economic and successful completion of the Works”. There was no equivalent requirement for the parties to collaborate in this way under the D&C 2011.

The contractor and the engineer are also required to give early warning to each other of matters likely to affect the design of the works or to cause delay or additional cost, irrespective of whether the contract provides for any relief in respect of that matter. Where an early warning notice is given, the D&C then sets out the process to be followed by the parties and the engineer in order to avoid or mitigate any delay or additional cost.

These provisions are wider than the equivalent provision in the D&C 2011, which only required the employer and the contractor to give each other notice of a matter that, if not resolved, could become a dispute.

There is also a collaborative element to the engineer’s role. Clause 5.4 of the D&C 2018 provides that the engineer will “act impartially where the Contract requires him to decide any matter as between the parties to the Contract”. This general requirement is wider than the equivalent provision in the D&C 2011, which required the employer’s representative to exercise their functions impartially only in connection with a limited number of specified clauses as well as matters relevant to safety.

Price and payment

In contrast to the D&C 2011, the D&C 2018 is a ‘lump sum’ contract. In the D&C 2011, quantities included in any bill of quantities or schedules of work are recognised as estimates. In the D&C 2018, quantities in the bill of quantities are deemed to be fixed, and there is no re-measurement of work. The D&C 2018 provides for interim monthly payments of the contract price, based on assessment of the value of work carried out and the valuation of milestones achieved up to the valuation date.

Like most standard form building contracts, the D&C 2011 provided that the initial statement of final account was prepared by the contractor. The D&C 2018 instead requires the engineer to submit its statement of final account to the contractor within six months of the certificate of substantial completion. This is intended to ensure that a proactive approach is taken to the preparation and agreement of the final account. However, alternative final account provisions are included in appendix 3 that also allow for the traditional approach of the initial statement of final account being prepared by the contractor - suggesting that the contract sponsors recognise that this may be the market’s preferred approach.

Risk allocation

The D&C 2018 seeks to bring the provisions covering the events and circumstances in respect of which the contractor may have an entitlement to additional time and money under one clause, clause 8. These events and circumstances are separated into:

• employer’s risks - these may entitle the contractor to both time and money; and
• shared risks - these give the contractor a potential entitlement to additional time, but not additional money.

Clause 8 also includes a further category of risks, excepted risks. Under clause 8, the contractor is generally made responsible for the care of the works and rectification of any damage to the works until the date of substantial completion at its own cost, as well as any works that the contractor does during the defects rectification period. It is not liable for damage caused by the excepted risks - these will be rectified at the expense of the employer, as instructed by the engineer. The excepted risks are also listed as shared risks under the D&C 2018, and so in effect the contractor will be entitled to additional time and money in connection with damage to the works caused by the excepted risks.

The contractor assumes all risks in carrying out the works other than excepted risks, employer’s risks and shared risks to the extent set out in the contract.

The provisions of the D&C 2011 covering events and circumstances that may entitle the contractor to additional time and money were found at various different places in the contract. The D&C 2018, by grouping all the relevant risk items under clause 8, is therefore more reader-friendly.

Adverse ground conditions

The provisions covering adverse ground conditions are less prominent in the D&C 2018 than in the D&C 2011. The D&C 2011 set out a specific, detailed process for how adverse ground conditions encountered during the carrying out of the works should be dealt with by the employer and the contractor. It also contained detailed, specific provisions regarding how risk of adverse ground conditions was allocated.

In the D&C 2018, adverse ground conditions are covered under a shorter and simpler provision. Under clause 8, physical conditions - other than weather conditions - and artificial obstructions are an employer’s risk, if these conditions could not reasonably have been foreseen by an experienced contractor.

BIM

The D&C 2018 also includes provisions regarding compliance with a building information modelling (BIM) Protocol. However, like a number of other recent updates to standard form contracts, it does not specify a proposed or default form of BIM Protocol. The parties will need to agree their own BIM Protocol, and include this in the appendix.