![Counter Offer
⢠If the âbidderâ receiving the bid offer does not accept the
specifications, terms and conditions but submits a
variance to the bid offer. It is a Counter Offer.
⢠Contract âAâ is formed only if the bidder accepts the
terms and conditions in the bid offer.
⢠A âcounter offerâ [alternative, amended, bid proposal, etc.
] does not constitute Contract A.
⢠âŚ..RememberâŚ.
⢠[Other] bidders can sue for losses if a compliant bid (that
âshouldâ be accepted) is not accepted.
ArbiďˇTECH](https://image.slidesharecdn.com/contractbasicsfeb172017-170217193053/85/Construction-Contracts-Basics-of-Contracts-and-Contract-Administration-8-320.jpg)
Construction Contracts: Basics of Contracts and Contract Administration
- 1. Construction Contracts: Basics of Contracts and Contract Administration Gerald R. Genge, P.Eng., C.Eng., BDS, BSSO, C.Arb. Q.Med. Principal â Arbitech ADR
- 2. Topics ⢠Contracts ⢠What forms a Contract? ⢠Forms of Contract ⢠CCDC Contract ⢠Constituent Parts GRG Building Consultants Inc. ArbiďˇTECH
- 3. What is a Contract? ⢠Five elements: 1. An offer capable of acceptance 2. Communicated acceptance 3. Consideration 4. Capacity to âcontractâ 5. Compliance with statutory requirements ArbiďˇTECH
- 4. Offers ⢠An offer must be able to be accepted ⢠Must be defined in sufficient terms to result in an agreement (contract) ⢠The offeror must actually intend to enter into a contract. ArbiďˇTECH
- 5. Bid Requests ⢠A Bid Call ⢠A Request for quotations ⢠A Request for Tender âŚâŚis a Bid Offer as soon as there is a compliant bid. âŚ..It forms a âContractâ (Contract A) ArbiďˇTECH
- 6. Contract A ⢠A bid offer that can be accepted is a Contract. ⢠The importance is that if the person who made the bid offer fails to enter into a Contract with compliant bid, they are in breach of Contract âAâ. ⢠Bidders can sue for losses if a compliant bid (that âshouldâ be accepted) is not accepted. ArbiďˇTECH
- 7. Acceptance ⢠To form a contract there must be âacceptanceâ ⢠Contract âAâ is formed when the bidder accepts the specifications, terms and conditions in the bid offer. ArbiďˇTECH
- 8. Counter Offer ⢠If the âbidderâ receiving the bid offer does not accept the specifications, terms and conditions but submits a variance to the bid offer. It is a Counter Offer. ⢠Contract âAâ is formed only if the bidder accepts the terms and conditions in the bid offer. ⢠A âcounter offerâ [alternative, amended, bid proposal, etc. ] does not constitute Contract A. ⢠âŚ..RememberâŚ. ⢠[Other] bidders can sue for losses if a compliant bid (that âshouldâ be accepted) is not accepted. ArbiďˇTECH
- 9. Capacity to Contract ⢠Each âPersonâ who is a party to a Contract must be legally able to enter into a Contract. ⢠i.e. Legal age, sound mind, not forced ⢠Corporations are âPersonsâ in the eyes of the law. ⢠Corporations are able to contract within their individual articles of incorporation. ArbiďˇTECH
- 10. Compliance with Statutory Requirements ⢠Whether oral or in writing, a Contract is not enforceable if to comply with the terms, etc. a law must be broke or circumvented. ⢠Basically, you can not contract out of the law. âŚBut the law that was allegedly broken is typically dealt with on a case-by-case basis⌠ArbiďˇTECH
- 11. Forms of Contracts ⢠Written ⢠Oral ⢠Purchase Orders ⢠Sign back offers ⢠Standard Construction Documents ArbiďˇTECH
- 12. Required Provisions ⢠Some Contracts must include certain provisions to be legal. ⢠Consumer Protect Act 2000, for example. ⢠Protects consumers against unscrupulous contractors and agreements. ⢠Includes âcooling off periodâ ⢠Personal services agreements (dieting, fitness, etc.) ⢠Direct selling agreements ⢠Internet agreements, etc. ArbiďˇTECH
- 13. Construction and Repair Contracts ⢠Typically involve a written bid offer and acceptance with specific deliverables, terms, and conditions. ⢠Often standard forms of agreement are employed. ⢠CCDC / CCA Documents ⢠Corporate Agreements ⢠Professional Associationâs Agreements (PEO, OAA). ArbiďˇTECH
- 14. Written and Oral Contracts ⢠Contracts (except transfer of real estate) need not be in writing. ⢠Contracts require a âmeeting of the mindsâ to be enforceable ⢠Obviously oral contracts are much more difficult to enforce. ArbiďˇTECH
- 15. Contract Interpretation ⢠Often if there is a dispute as to the fulfillment of a Contract the courts will usually try to interpret the expressed intention of the terms. ⢠If the terms are vague, the court will likely look at the overall intent of the Contract to interpret the matter. ⢠If the Contract is too one-sided or unfair, the court may interpret against the party that drafted the Contract. ArbiďˇTECH
- 16. Good Faith ⢠Persons making bid offers, reviewing bid submissions, and choosing must do so in good faith of the process. ⢠Tends to apply in terms of the bid process and selection of a bid. ⢠Not supposed to ârigâ a bid offer or treat any bidder unfairly ArbiďˇTECH
- 17. CCDC Contracts ⢠CCDC 2 - 2008 Stipulated Price Contract ⢠CCDC 3 â 1998 Cost Plus (Guaranteed Maximum Price) ⢠CCDC 4 - 2011 Unit Price Contract ⢠CCDC 5A - Construction Management Contract for Services ⢠CCDC 5B - Construction Management Contract for Services and Construction ⢠CCDC 14 â 2000 Design Build Stipulated Price Contract ArbiďˇTECH
- 18. CCDC Other Documents ⢠CCA 11 - 2006 Contractors Qualification Statement ⢠CCA 1 â Stipulated Price Subcontract ⢠CCDC 20 - 2008 A Guide to the use of the CCDC 2 Contract ⢠CCDC 9A -2001 Statutory Declaration of Progress Payment Distribution by a Contractor ⢠CCDC 9B - 2001 Statutory Declaration of Progress Payment Distribution by a Subcontractor ArbiďˇTECH
- 19. CCDC Contracts ⢠CCDC 2 â Stipulated Price ⢠Most common if the scope is well defined ⢠For unknown scope ⢠include unit prices ⢠include cash allowances ArbiďˇTECH
- 20. CCDC Contracts ⢠CCDC 3 â Cost Plus ⢠Not commonly used ⢠Uses fixed mark-up on given rates ⢠No real incentive / motivation ⢠To cut corners or ⢠Accelerate the work. ArbiďˇTECH
- 21. CCDC Contracts ⢠CCDC 4 â Unit Price ⢠(Was) very commonly used ⢠Uses established rates based on estimated quantities ⢠Allows price adjustment for significant increase or reduction in quantity ⢠No real incentive / motivation ⢠To cut corners or ⢠Accelerate the work. ArbiďˇTECH
- 22. CCDC Contracts ⢠CCDC 5A/B â Construction management ⢠A - Makes the Owner the head contractor ⢠B â Makes the Construction Manager the head contractor ⢠A - makes owner responsible for safety ⢠B - makes the CM responsible for safety ⢠Sometimes useful if the project has multiple facets and OH/P costs for a GC would be too high. ArbiďˇTECH
- 23. CCDC Contracts ⢠CCDC 14 â Design-Build Stipulated Price ⢠Sole source warranty ⢠Usually includes large cash allowances for undefined items and allows the D-B Contractor to be innovative. ArbiďˇTECH
- 24. CCDC 2 ⢠CCDC Contract Documents are Copyright protected. ⢠TCA Members can order pdf copies but the copies are only valid if they have a seal. ArbiďˇTECH
- 27. CCDC 2 â Stipulate Price Contract ⢠Articles of the agreement âŚ.A-1 to A-8 ⢠Definitions (important to assign responsibilities) ⢠General Conditions âŚ12 Parts ⢠CGs typically amended or deleted by Supplementary General Conditions (SGCs) to suit specific project or client requirements. (read carefully!) ArbiďˇTECH
- 28. CCDC 2 â Articles ⢠A-1 Defines the âWorkâ, its start and completion (Substantial Performance). ⢠A-2 States this agreement supersedes all previous negotiations or agreements unless included in A-3 ⢠A-3 Lists all contract documents, specifications, drawings, letters, conditions, etc. in the agreement. ⢠If it is not listed in A3⌠it is not part of the Contract ArbiďˇTECH
- 29. CCDC 2 â Articles (Contâ) ⢠A-4 Defines the Contract price both in words and digits). ⢠A-5 Sets out: ⢠Holdback percentage (superseded by Construction Lien Act in Ontario) and ⢠Interest on overdue accounts per annum ⢠A-6 Lists the Owner, Contractor and Consultant & the addresses for service. ArbiďˇTECH
- 30. CCDC 2 â Articles (Contâ) ⢠A-7 Language of the Contract (important for legal interpretation) ⢠A-8 States that all items in A-3 are in the Contract. ArbiďˇTECH
- 31. CCDC 2 â Definitions ArbiďˇTECH ⢠1. Change Directive ⢠2. Change Order ⢠3. Construction Equipment ⢠4. Consultant ⢠5. Contract ⢠6. Contract Documents ⢠7. Contract Price ⢠8. Contract Time ⢠9. Contractor ⢠10. Drawings ⢠11. Notice in Writing ⢠12. Owner ⢠13. Place of the Work ⢠14. Product ⢠15. Project ⢠16. Provide
- 32. CCDC 2 â General Conditions ⢠Part 1 - General Provisions (1.1.9 deals with order of priority of the documents in case of conflict) ⢠Agreement ⢠Definitions ⢠SGC ⢠GC ⢠Division 1 (Usually the General Requirements) ⢠Divisions 2 to ? (Technical Specifications) ⢠Material and Finish Schedules ⢠Drawings ArbiďˇTECH
- 33. CCDC 2 â GCs (Contâd) ⢠Part 2 - Administration ⢠Describes the Consultants Authority and Role to interpret documents and act on behalf of the Owner . ⢠Requires Consultant to review Work and the Contractor to remove/correct defective Work ⢠GC 2.2.6 and 2.2.7 deal with Consultants obligation to make a an interpretation and finding in respect to conflicts. ArbiďˇTECH
- 34. CCDC 2 â GCs (Contâd) ⢠Part 3 - Execution of the Work ⢠States Contract has control over the Work and requires the Contractor to incorporate the Work as set out into the Contract documents. ArbiďˇTECH
- 35. CCDC 2 â GCs (Contâd) ⢠Part 4 - Allowances ⢠States that the Owner directs use of Cash allowances. ⢠The Contractor can not add overhead and profit to Cash Allowances. ⢠Approved use of Allowances beyond the stated allowance is to be by Change Order. ArbiďˇTECH
- 36. CCDC 2 â GCs (Contâd) ⢠Part 5 - Payment ⢠âŚ..often amended by SGCs to accommodate the ownerâs and consultantâs payment process and schedule. ⢠Except, Holdback and Substantial Performance Provisions (which are governed by the CLA) ArbiďˇTECH
- 37. CCDC 2 â GCs (Contâd) ⢠Part 6 â Changes in the Work ⢠Changes made by the Owner/Consultant do not invalidate the Contract ⢠Contractors are not to implement a change without a signed Change Order. Exception is a Change Directive by the Owner ⢠Contact must do the work promptly ⢠Cost increase/decrease to be accounted for in detail â often results in disputes ArbiďˇTECH
- 38. CCDC 2 â GCs (Contâd) ⢠Part 7 â Default Notice ⢠Owner may stop Work, Terminate the Contract or Perform Work under certain circumstances â e.g. if the Contractor ⢠Defaults, is bankrupt, or neglects the Contract. ⢠Fails to correct defects ⢠Provides unacceptable schedule amendments or schedule to correct defects. ⢠Contractor may stop work if delayed by court or by Owner or is not paid. ArbiďˇTECH
- 39. CCDC 2 â GCs (Contâd) ⢠Part 8 â Dispute Resolution ⢠Consultant to give âinterpretationâ ⢠Provides Negotiation, Mediation and Arbitration process. âŚ.More later ArbiďˇTECH
- 40. CCDC 2 â GCs (Contâd) ⢠Part 9 â Protection of Persons and Property ⢠Contractor responsible unless damage is due to an error by another party not a Party bound by the Contract. ⢠Owner to identify and remove toxic substances (unless such is part of the Work) âŚ..frequent cause of delay claims ⌠More on that later. ArbiďˇTECH
- 41. CCDC 2 â GCs (Contâd) ⢠Part 10 â Governing Regulations ⢠Permit costs are to be paid for by the Owner. ⢠The Contractor must comply with the governing Regulations, by-laws, and codes but is not responsible to check the compliance of the Contract documents. ⢠If the Contactor knowingly violates a law â must pay for correction ArbiďˇTECH
- 42. CCDC 2 â GCs (Contâd) ⢠Part 11 â Insurance & Bonds ⢠Often amended for individual project scope and cost. ⢠Bonds bind the full contract including warranty periods ArbiďˇTECH
- 43. CCDC 2 â GCs (Contâd) ⢠Part 12 â Indemnification and Warranty ⢠Mutual Indemnification for / against claims by third parties arising form work of the other. ⢠Warranty is minimum one year â amended often for specific items of Work. ArbiďˇTECH
- 44. CCDC Contract Summary ⢠Currently the most widely adopted form of Contract ⢠Generally acknowledged as balanced and reasonable ⢠Included provisions that define responsibilities and duties incumbent on all parties to the Contract and administering the Contract ⢠Provides (almost) all necessary resolution vehicles ArbiďˇTECH
- 45. Construction Contractsâ Basics of Contracts and Contract Administration For moreâŚ. Visit https://www.linkedin.com/in/gerald-r-jerry-genge-34587943/ Thank you for watchingâŚ..
Editor's Notes
- #3: DAY 3 Contracts Forms & Parties of and to a Contract Payments and Holdbacks Performance of Contract Completion & Deficiencies Construction Liens Contract Disputes .
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