Curtin University has approached Prime Projects requesting advice on the most appropriate way of
contracting/procuring the construction of a medical school on the Bentley campus. Curtin
University’s director of Properties, Facilities and Development has suggested one of two contracts:
AS 2124 General Conditions of Contract, AS 4300- 1995 General Conditions of contract for design and
construct and a third approach through alliance or partnering procurement. This latter approach is
driven by the unusual design and infrastructure requirements for the medical school.
(A copy of the AS 2124 and AS 4300 contracts can be obtained on the electronic data base at Curtin
The director of Properties, Facilities and Development has asked Prime Projects to advise on the
most appropriate contract arrangement for the construction of the school. In turn the executive
director of Prime Projects has asked Cary Grant to provide a report on whether these three
arrangements would be suitable.
As stated above you stand in the shoes of Cary Grant. Prepare a statement that sets out the different
type of contracts (and other procurement) Curtin University thinks is appropriate, set out the
advantages and disadvantages and come to a conclusion on what you believe to be the most
appropriate contract for the construction of the medical school.
Prime Projects, in preparing the tender conditions for Curtin University adopts AS 4120 ‘Code of
Tendering’ (a copy of this Standard is available from the electronic data base at Curtin University’s
Library). A supplementary clause placed under AS 4120 clause 6.5 ‘Evaluation of Tenders’ states that
the principal will evaluate the tenders on the basis of the technical qualities of the tenderers
submission (issues including the quality of the tenderers managerial system) and on a commercial
evaluation (the tender price). The assessment is based on a ratio of 60:40 (60% for the tenderers
technical qualities and 40% for the tender price).
At the close of the tender, Complete Contractors is the ‘winning tender’ and after negotiation enters
into a contract with Curtin University. An announcement is made to the losing tenderers.
A losing tenderer becomes aware that Curtin University approved Complete Contractors solely on
the basis of the low fee (tender price) and did not give consideration to the technical qualities of the
tenderers. The losing tenderer also believes there is evidence that Complete Contractors has not
submitted a conforming tender. Both concerns are made known to Prime Projects.
Carry Grant is to provide advice to the executive director of Prime Projects in response to the losing
tenderer’s claims. A copy of Cary Grants’ report will be provided to Curtin University.
(For this assignment assume that Curtin University has given a directive to Prime Projects to draft the
contract conditions based on AS 2124)
In preparing the Annexure to AS 2124, Curtin University will need to identify the form of the
performance undertaking to ensure the proper performance of the contract. Curtin University
proposes either security or recourse to retention monies under clause 5 of AS 2124. Curtin
University is concerned about the performance undertaking clause in the contract and wants Prime
Projects to set out the advantages and disadvantages of these two forms of performance
The executive director of Prime Projects has asked Cary Grant to provide a report on the suitability
of the performance undertaking. As stated above you stand in the shoes of Cary Grant. Prepare a
report that sets out the advantages and disadvantages of these two forms of performance
undertakings and the procedures that would need to be adopted should Curtin University draw upon
the security or the retention monies for a breach by the future contactor (Complete Contractors).
As this is a medical school of some complexity with an estimated cost of construction at $100 million
provide a conclusion to your report on the most appropriate form for the performance undertaking
of the contract.
Curtin University has nominated a subcontractor called Trump Engineering Pty Ltd for the air
handling plant to heat and cool the medical school. This sub contract work is complex as there needs
to be sterile zones within the medical school laboratories.
Complete Contractors has entered into an AS 2545 -1993 Subcontract Conditions contract with
Trump Engineering. This contract is identified as a ‘back to back’ contract with the AS 2124 contract.
Complete Contractors has used Trump Engineering on a previous project and found their
management style not to their liking. Complete Contractors wrote to Prime Projects expressing their
concern at Trump Engineering being the nominated subcontractor for the air handling plant.
After considering the notice that was given by Complete Contracting objecting to Trump
Engineering, Prime Projects did not support the appeal and Trump Engineering was approved as a
Difficulties occur during the construction as a result Trump Engineering failing to conform to the
construction critical path resulting in delay to Complete Contractors. Prime Projects has given notice
to Complete Contractors about the work being not conforming to the construction program with the
likelihood that Complete Contracting will fail to meet the contractual date for practical completion.
The executive director of Prime Projects has asked Cary Grant, with reference to the contractual
obligations under AS 2124 and AS 2545 contracts, to provide a report on the contractual obligations
of Trump Engineering and Complete Contractors.