For the construction phase:
Typically, large infrastructure projects have been procured under an EPC/Turnkey contract for a lump sum price, where the Contractor takes single responsibility for the design, construction, timely completion and cost of the project.
However, due to the high cost of EPC/Turnkey procurement (a premium for single point responsibility), EPCM (Engineering, Procurement, Construction Management) procurement is increasingly common whereby the SPV gives multiple works contracts to multiple Contractors and engages an EPCM Contractor to develop, design and manage the works contracts.
In relation to the form of construction contracts, the parties may use a standard form of contract which is tailored to fit the project or a completely bespoke form of contract.
The standard forms of contracts commonly used are:
- FIDIC Silver Book – commonly used on international EPC contracts/ suitable for process plant projects, where price certainty and time is critical / for turnkey projects designed by the Contractor. The Employer or the Employer’s Representative administers the contract.
- FIDIC Yellow Book – for projects designed by the Contractor, with an Engineer administering the contract – often for offshore wind projects.
- NEC ECC, and
- IChemE and IMechE contracts and less often PPC 2000.
The above contracts often have to be amended, and example of clauses that are usually amended by parties are:
- Risk profiles – risks relating to cost, programme, design, site, planning and permit procurement are passed down to the Contractor;
- Price circumstances when a claim for additional costs can be made – i.e. fixed price provides certainty for Lenders; and
- Interface issues – transfer of performance risks between construction and operating contracts.
The common forms of construction contracts was discussed in our webinar on 25 March 2021 with Gordon Nardell QC, Twenty Essex and Sue Kim, HKA. Click here to view the webinar and detailed notes.
How can Barton Legal help?
At Barton Legal we have extensive experience in all the standard contract forms, including JCT as well as NEC, IChemE, and FIDIC.
We believe that an increased understanding of contractual terms and the roles and responsibilities of all parties ensures a successful conclusion to a project, which is why we always use plain English and ensure you understand and can apply the terms of your contract.
Our aim is to reduce legal gobbledegook and increase collaboration between parties to increase the prospects of completing your project on time and on budget
We place great emphasis in the early stages of the contract on understanding and preparing thoroughly, in order to avoid costly disputes later.
If you have any queries regarding any of these contracts or any form of construction dispute, please do not hesitate to get in touch by email firstname.lastname@example.org or call our office on 0113 202 9550.