Comparison between AS 2124 and AS 4300 Contracts
Describe about the Contract Administration for Cost Business Consultant.
For every construction contracts and tendering, every company and stakeholder personnel must abide by some contract laws and directions passed by the respective authorities. Similarly, Australia has some rules and guidelines called “Australian General Conditions of Contract” (Porwal and Hewage 2013). This report is to produce a statement for finding the best contract most appropriate for Curtin University.
There are two contracts AS 2124 and AS 4300 that are suitable for Curtin University. However, they have to select one of the two contracts that are most suitable for their requirements. Moreover, both the two clauses have their advantages and disadvantages that need to be analyzed and proper selection is to be made.
AS 2124 – This contract mainly deals with some rules and policies for commercial public sector projects. This contract stated that:
“The law governing the Contract, its interpretation, any agreement to arbitrate and the conduct of any arbitration or litigation, is the law of the State or Territory stated in Annexure A.
Unless otherwise provided, prices are in Australian currency and payments shall be made in Australian currency at the place stated in Annexure A.
Communications between the Principal, the Superintendent and the Contractor shall be in the English language.
Measurements of physical quantities shall be in Australian legal units of measurement within the meaning of the National Measurement Act 1960, as amended from time to time.
Where provisions in the General Conditions of Contract are expressed to be alternatives and the Contract fails to state which alternative applies, the first alternative shall apply.” (Votano and Sunindijo 2014)
AS 4300 - This contract mainly deals with some rules and policies for commercial design and construction projects. This contract stated that:
“Under Clause 47 one party shall serve on the other and the Superintendent a Notice of Dispute by hand or certified mail. Notwithstanding this process is invoked the performance of the contract shall continue (i.e. works and time continue to run). Clause 47.2 provided 2 alternative procedures (Alternative 1 applies by default pursuant to Annexure A, Item 52). The parties are to confer as specified and if not resolved within a specified time the matter is deemed to be referred to Arbitration.
If the dispute escalates to arbitration, a nominated will hear and determine the matter. Arbitrations are governed by uniform state legislation that prescribes the manner and form as well as the process for reviewing an arbitrator’s award (which is limited).” (Hardie and Love 2013)
AS 2124 mainly deals with the basic guidelines for trade or exchange and has set some definite units and currencies that must be used during trade exchange. The main advantage of this clause is that it can be easily followed in Australia as all the points are easily understandable by the workers and management involved in the project. The main disadvantage of this clause is that it does not really provide any guideline regarding other important factors that are to be followed before the project like land dispute, resource management and others.
AS 4300 is a more strict policy and deals with the minute but serious procedures that must be followed during the project. However, it does not state anything regarding the exchange and trade processes (Thomas and Wright 2016). The main advantage of this clause is that it provides strict guidelines regarding land and resource use. However, the disadvantage is that some unexpected consequences may result in the significant loss of the project management team.
From the study, AS 4300 is suggested for Curtin University’s medical school project. This is because, although it is a public sector project, the company should emphasize on the design and construction guidelines as the company has already planned for some unique design inputs.
This report is to inform the executive director of Prime Projects about some disputes and claims of the losing tenderers. Most of the tenderers are claiming that the tender process was not conducted fairly and they have solid evidences against the process and the chosen tenderer.
As per the claims of the losing tenderers, the tender process was not conducted fairly and the selection of tenderer was made based on the low price factor rather than the quality of services offered. Moreover, they are claiming that they have solid evidences that the winning tenderer have not even submitted confirmation of the tender but the company has still selected them.
The concerned authority must look into this matter and find some ways in order to stop this dispute. Several important points can be advised to the authority.
The authority should accept and analyze the reports and proofs presented by the loosing tenderers regarding the issue (Mitkus and Mitkus 2014). They should also re-examine the tendering and contract declaration processes.
The company should review the documents and forms presented by the winning tenderer before the tendering process.
The company should also analyze the points on the basis of which, the winning tenderer was chosen.
If the claims of the losing tenderers are found to be valid, then the company can take the following actions.
The company can immediately terminate the contract of the winning tenderer and reconduct the tender process.
The company should sit with the winning tenderer regarding the tender process and the discrepancies noted in the contract process (Bailey 2014). If a mutual agreement is reached, the company can impose a deadline within which the winning tenderer will have to provide quality work that is required by the company.
If none of the points are feasible, the company should seek legal help.
All the points mentioned are only mere suggestions. The authority holds the right for actions that they want to take and it will take any suitable action against any misconducted procedure or fraud company.
Curtin University have decided that they will draft contract conditions based on the AS 2124 clauses. Now, the university has to select a suitable form of performance undertaking in order to enhance the project performance undertaken by the company (Zou and Sunindijo 2013). This report is aimed to suggest the best performance undertaking clause that will really help to enhance project performance.
There are two options available to the company i.e. security to retention monies or recourse to retention monies. Security to retention monies provides security to retention monies and provides some protection policies. On the other hand, recourse to retention monies provides some guidelines for recoursing and recouping retention moneys (Mariappanadar 2013). It also provides some strict guidelines regarding transferring and handling of retention monies.
The main advantage of security to retention monies policy is that it allows some rigid policy structure for retention monies. It also looks after the security of retention monies that are used and kept by the contractor (Klee 2015). However, the main disadvantage is that it fails to provide rigid rules regarding the handling and possession of retention monies. The main advantage of recourse to retention monies policy is that it provides rigid rules and guidelines regarding handling and possession of retention monies (Cakmak, Irlayici and Cakmak 2013). It also provides some strict rules regarding the use of retention monies during project management. However, the main issue with the recourse to retention monies policy is that it contains a number of management risks and other security issues and hence, although it provides some rigid management policies, it is too risky to implement in case of projects in which, huge amount of money is involved (Doloi 2014).
It can be concluded that the best policy for the company to follow is security to retention monies policy. First, it will provide secure handling and management of retention monies. Secondly, the flexibility of the policy means the company can implement some changes and modifications in the contract policy during the course of the project. Thirdly, the policy’s guidelines are easy to follow and the rules are easy to implement. On the other hand, the recourse to retention policy is too risky and it does not provide any strict guidelines on the security of retention monies. Moreover, the non-flexibility of the policy will also provide barriers for the company dealing with huge amount of money for the purpose of the project.
The company has assigned a subcontractor namely, Trump Engineering Pty. Ltd. for some subparts of the construction project. This assignment for Trump Engineering also contains some contractual obligations that they must honor or will face legal action or termination from their employers (Aibinu and Sudha Venkatesh 2013). This report contains the contractual obligations needed to be followed by Trump Engineering Company.
The contractual obligations of Trump Engineering are as follows:
Agreements of service have been reached between the two companies regarding the services and payments (Ndekugri and Rycroft 2014). Now, Trump Engineering must abide by the contractual clauses imposed or will faced immediate legal action.
Trump Engineering must be able to meet the requirements of quality as agreed mutually between the two parties (Shokri-Ghasabeh and Chileshe 2014). If the company fails to provide sufficient quality of services, legal actions will be taken and they may also face termination.
The employer company has all right to change or terminate the contract if the requirements are not met.
If the requirements are met, the payments will be done as per the agreed transfer of money.
Complete Contractors previously worked with Trump Engineering and they do not have good management experience with them (Hampson et al. 2014). Hence, they alerted Curtin University regarding poor management system at Trump Engineering and their failure to meet sufficient quality of service. However, Curtin University still employed them as subcontractors but after that, Trump Engineering have again failed to provide sufficient quality of service (Laryea and Ibem 2014). Now, Curtin University can take certain steps.
They should take immediate steps against Trump Engineering for not being able to meet the requirements of quality and fraud services.
Claims of Losing Tenderers
Curtin University can also take legal action against Trump Engineering; so that they are not able run their business anymore.
In case the university is unwilling to take extreme steps, they should give a deadline to Trump Engineering so that they can improve their services. Otherwise, extreme actions will have to be taken.
The university should also demand proof documents containing the fraud services provided by Trump Engineering in the past. They can use them as evidences against Trump Engineering.
In this report, some vague ideas regarding the contractual obligations of Trump Engineering and Complete Contractors are given. They must abide by the rules and clauses as the contracts have been mutually agreed and Curtin University have all rights to take suitable legal actions against any of the companies if the requirements are not met or the contractors fail to meet the clauses agreed mutually between the company and the contractors. Hence, Curtin University should deal with the situation carefully and take actions that deem suitable to them.
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