Contracts

The construction industry standard form contract differs markedly from standard form contracts generally used in the commercial business environment. Standard form construction contracts are not characteristically one-sided.

The standard form contract is negotiated at industry level through an inclusive consultative process with various stakeholders and designed to reflect current industry norms and practices. The product of this process is a set of documents, which represent industry norms as they are perceived and experienced, at a particular point in time, by a constituent representative group.

Construction activities are progressively being regulated under either of the following standard form construction contracts:

• The Fédération Internationale des Ingenieurs – Conseils 1999 First Editions of four standard form construction contracts (FIDIC, First Edition, 1999) and the new Rainbow Suite of Contracts (FIDIC, 2017);

• The General Conditions of Contract for Construction Works, Second Edition (GCC 2004, GCC 2010, GCC 2015);

• The JBCC Series 2000 (JBCC 2000); and

• The NEC3 and NEC4 family of standard contracts.

The standard form construction contract used is typically chosen by the employer (or the employer’s representative) who then amends, modifies and supplements the standard form to reflect the employer’s risk appetite. The product of this process is generally a set of construction contract documentation, which aims to secure the particular employer’s commercial (and related) objectives.

MDA, through either a combination of the following activities or engagement in each activity individually, ensures our clients are contractually best placed to manage their commercial obligations and realise their commercial objectives.

Commercial Structuring

MDA facilitates commercial risk assessment workshops with our clients to crystallise their risk appetite; commercial objectives and appropriate commercial risk distribution in each project.

Taking the outcomes of the workshop into account, MDA advises on an effective commercial structure, enquiry documentation (and procedure), pricing strategy and commercial terms.

Commercial Risk Assessment

MDA advises on the spectrum of South African and internationally developed standard form construction contracts as well as a variety of employer specific bespoke construction and related supply and service contracts.

MDA reviews enquiry documentation focusing primarily on the proposed contractual commercial terms to identify particular commercial risks. MDA develops strategies to ensure our clients achieve the best possible balance of commercial risk and are contractually best placed to realise their commercial objectives.

Negotiation

In supporting our clients through contract negotiation MDA:

• compiles qualifications on the proposed contractual commercial terms;
• critically assesses submitted tender qualifications;
• determines negotiation strategies to best place our clients through the negotiation process; and
• achieves commercial terms to satisfy the client’s individual commercial objectives.

Drafting Contract Documentation

MDA applies a holistic approach to preparing each component of the contract documents, including enquiry documentation, returnable schedules and commercial terms.

MDA produces cohesive contract documents that:

• accurately identifies project risks;
• allocates responsibility for identified project risks;
• determines project appropriate contractual mechanisms to manage change through the project lifecycle;
• prescribes internationally accepted, best practice dispute management solutions; and
• records jurisdictional relevant procedures to manage conflict and resolve disputes.