A “radical” revision of the Infrastructure Conditions of Contact has been launched by ACE and CECA. Rosemary Beales reports.

Three years after the publication of the Infrastructure Conditions of Contract (ICC) an ICC With Quantities Version, together with associated Guidance Notes, has been launched. This follows  a major revision of the ICC Measurement Version.

The ICC with Quantities Version is an up to date contract for infrastructure projects designed to incorporate current best practice and provides a fair and flexible basis for clients and contractors to work together. And its simple structure and provisions for collaborative working offer an attractive alternative to existing forms of contract.

"Risk is clearly allocated between the parties within a single clause which ensures that risks are carried by the party best able to manage them. The contract is designed to provide better financial control, to deliver a project that is completed on time and to the desired quality for an outturn cost that is within budget, without the need for large contingency provisions."

According to Professor John Uff QC, who chaired the ICC Restructuring Group,  “it is the most radical revision of the Form of Contract since it was originally published. The new contract cuts out a large amount of redundant and outdated wording, particularly relating to the resolution of those disputes which cannot be avoided where now the Engineer has a pre-adjudication role which either party may choose to use at no cost. The contract is also much clearer with its provisions contained in just 20 Clauses in logical order, retaining much familiar wording which will assist current users to relate to its content.”

John Banyard, who chaired the ICC Development Forum, explains: “This contract has been drafted with the aim of providing greater certainty of outturn cost. To do that the concept of fixed quantities has been adopted and the role and authority of the Engineer are closely defined. Risk is clearly allocated between the parties within a single clause which ensures that risks are carried by the party best able to manage them. The contract is designed to provide better financial control, to deliver a project that is completed on time and to the desired quality for an outturn cost that is within budget, without the need for large contingency provisions”. 

The client, consultant and contractor representatives who were members of the redrafting group were aware that the existing contract included provisions which were tried and tested and remained relevant and effective in dealing with the areas that they covered. Whilst these remain recognisable, overall the revision is radical and the contract not only includes several new concepts but also strengthens certain areas which is viewed as beneficial.

The new contract is significantly shorter than the current ICC forms being more economic with words with each topic drawn into a single clause which, to take the example of risk, provides a greater clarity of where the risk lies and how it should be managed.

Traditionally the ICC contracts have adopted the strategy of allocating the risk to the party best able to control it and this has been retained. There are clear provisions for ensuring collaborative working and as a part of this the requirement for the early warning of matters that may affect the contractual process.

By facilitating the management of the contract, requiring a fully developed design and associated accurate Bills of Quantities before the contract is put out to tender and making clear provision for any Contractor designed Works, the contract does not envisage the re-measurement of all of the Works. That is unless it is specifically provided for, such as excavation in mixed ground, where accuracy may well not be possible at tender stage making the contract largely lump sum.

The power of the Engineer to order variations is now restricted to those necessary for the satisfactory completion of the Works (rather than what may be viewed as “improvements”) and continue to be priced using the rates in the Bill of Quantities or analogous rates.

Provisions dealing with verbal instructions have been redrafted and all instructions must be in writing by the person issuing the instruction.

All financial matters are grouped together in logical sequence in terms of timing from the preparation of the Bill of Quantities and payments through to Variations and their valuation followed by any additional payments and the Final Account.

Other areas of change include how the Final Account is to be dealt with and where the preparation of the final account moves from the Contractor to the Engineer, who must issue it significantly earlier than currently. This, in turn, gives a much earlier indication of out-turn cost to the Employer and the Engineer.

The dispute resolution process has also been simplified which is intended to assist if a dispute does arise.

Improved cost control should flow from the tightening up of the contract and its simpler structure.

ACE chief executive Nelson Ogunshakin said: “We are delighted at how the updated contract has been restructured to meet industry requirements and the government’s focus on best practice. This timely refresh takes place at an important moment when increased investment in infrastructure projects is happening and early engagement with relevant clients and their supply chains is taking place.

 “I am especially pleased to see the contract has been brought up to date and become more practical, flexible and fair, while retaining a familiar feel. It also now has the potential for international application, a further aspect I am sure the industry and those commissioning infrastructure projects will welcome and benefit from."

Copies of the ICC Quantities Version cost £30/copy and associated Guidance Notes are £20/copy and are available from ACE.  Visit the website www.acenet.co.uk/publications 

There will be a progressive revision of the complete suite of ICC contracts from 2015 with the “core” clauses included in the With Quantities Version being included where appropriate.

Rosemary Beales is ACE contracts adviser.