The interaction between construction phase technical and legal documentation under the Scottish Standard Form Project Agreement

Euan PirieOctober 2015

Introduction

• No distinction between provisions in NPD SSFPA and hub SSFPA relating to Construction Phase technical documents

• SSFPA Construction Phase technical documents, including: – contractual status– consequences of absence of comprehensive "hierarchy of technical

documents" provision and – related definitions

• Guidance provided by SSFPA "Standard User's Guide" regarding preparation of technical documents

• Main legal provisions in SSFPA relevant to each of the technical documents and how these influence content

• HM's experiences of moving to "paperless" technical documents• Challenges faced in passing down technical documents to sub-

contracts and whether a review is needed following the decision in the Martifer case

SSFPA Construction Phase technical documents

Authority's Construction Requirements: Sect 3 of Sch Pt 6

DBFM Co's Proposals: Sect 4 of Sch Pt 6

Reviewable Design Data: Sect 5 of Sch Pt 6

Room Data Sheets: Sect 6 of Sch Pt 6

SSFPA

Outline Commissioning Programme: Sch Pt10

Completion Criteria: App A

Thermal and Energy Efficiency Testing Procedure: Sect 7 of Sch Pt 6

Quality Plans (Design and Construction): Sect 8 of Sch Pt 6

Decant Protocol: App B?

Programme: Sch Pt 7

Table of Finishes: Sch Pt 8

Contractual status of technical documents

• All technical documents have contractual status as Schedule Parts or Sections of Schedule Parts to SSFPA – under Para 3 in Section 2 of Schedule Part 1:– "The Schedule and Attachments (if any) to this Agreement are integral

parts of this Agreement and a reference to this Agreement includes a reference to the Schedule and the Attachments (if any)."

• SSFPA does not include general provision regulating conflicts between obligations under “front end” legal clauses and provisions in Schedule Parts– technical documents generally have equal status with "legal" provisions

and other technical documents• Terminology used in technical documents should be consistent with

SSPFA defined terms, which apply to "this Agreement unless the context otherwise requires"

• Technical documents should not include provisions regulating matters already covered by legal provisions

Hierarchy of technical documents under SSFPA

• SSFPA includes limited provisions relevant to hierarchy of obligations under technical documents– Clause 5.2 (ranking of specific obligations relative to performance of

Project Operations) – Clauses 12.2.1 and 12.2.2 (both ACRs and DBFM Co’s Proposals have

to be complied with) – Clause 12.7 (amend DBFM Co’s Proposals and rectify the Works where

it is found that DBFM Co’s Proposals “do not fulfill” ACRs)• DBFM Co’s obligation to ensure consistency of obligations within a

technical document and between all technical documents before financial close

• Consider adding hierarchy of technical requirements provision in ACRs if there are concerns about possible conflicts

SSFPA definitions relevant to technical documents

• Definitions included in Section 1 of Schedule Part 1Definition Explanation

Authority PSB who is counter party to the Project Agreement – no references to “the Council”, “the Health Board” etc

Contractor Used where reference made to party appointed by DBFM Co to design and build the Works, as opposed to obligations undertaken by DBFM Co to the Authority directly

DBFM Co Project company who is counter party to the Project Agreement – no references to “the Company” etc

Facilities Normally used when reference made to completed works

Project The overall project (works and services) required by the Authority

Project Operations Used when reference made to entirety of DBFM Co’s obligations in relation to the Project – to aid pass down refer to Works instead in technical documents, where possible

Service Provider Used where reference made to party appointed by DBFM Co to perform the Services (usually following completion of the Works)

Services Used to refer services to be performed by DBFM CO at the Facilities, normally following completion of the Works

Works The works to be designed and built by DBFM Co as part of the Project Operations – which may be split into “Phases” in some projects

Guidance in “SUG” regarding preparation of technical documents

Document SUG page number

Summary

ACRs 35 and 36 List of typical contents (including specifications) provided and details of further matters that the Authority may wish to include, based on discussions with technical adviser

DBFM Co’s Proposals

36 List of typical contents provided, including: “full design to be developed at least to 1:200 level, with a sample drawing of each key area of the Facility developed to 1:50 level”

RDD 36 Basic guidance: “This section should include the design that is to be developed in accordance with principles set out in the Review Procedure e.g. 1:200 drawings of site plans, 1:50 drawings of room layouts, etc”

RDS 36 Very basic guidance: “This section should include a room by room design and contents schedule”

TEETP 36 Basic guidance: “This section should contain provisions relating to the monitoring (through design and construction) and testing (on completion) of the Authority’s thermal and energy efficiency requirements”

QPs 36 Very basic guidance: “This section should contain Design and Construction Quality Plans”

Programme N/A No guidance provided

Table of Finishes

37 Statement that template included in SSFPA “is intended to be for guidance only”

OCP 37 and 38 To outline “who is responsible for what (and when)”. Recognises that there may be no requirement for commissioning in some projects: “in which cases this Schedule Part may become no more than the Completion Criteria”

Completion Criteria

38 Limit “to matters for which the construction sub-contractor will be solely responsible as senior funders will want to be certain that the construction sub-contractor is liable for liquidated damages if the Payment Commencement Date is delayed”

Decant Protocol

N/A No guidance provided

SSFPA legal provisions relevant to ACRs

• Clause 12.1.1 – carry out Works to procure satisfaction of ACRs• Clause 17.4 – carry out final commissioning related activities described in ACRs • Clause 17.5 – notify Independent Tester when works will be complete in accordance with ACRs • Clause 17.11 – Independent Tester to notify o/s matters to be attended to before Works

completed in accordance with ACRs• Clause 23.12 – Facilities to be maintained so that Facilities comply with ACRs• Clause 30.1.4 – ACRs to provide details of any stand by power facilities to be provided by DBFM

Co• Clause 53.22.3 – work to repair, reinstate or replace Facilities (following occurrence of insured

risks) to be in accordance with ACRs• Schedule Part 1: “Maintenance Works” – includes works for maintenance or repair of Facilities so

that they comply with ACRs• Review Procedure: Para 3.3.1(a) and 3.3.3(a) – non compliance with ACRs ground for Authority

objecting to RDD• Review Procedure: Para 3.5.2 – non compliance with ACRs ground for Authority objecting to

Finishes• Change Protocol: “Low Value Change” – object based on increased likelihood of DBFM Co failing

to meet ACRs• Change Protocol: Section 3: Para 3.2 and Section 4: Para 3.4.6 – provide details of any reliefs

from requirement to meet requirements of ACRs during implementation of MVC or HVC• Handback Requirements: Para 2.2 – set out applicable design life requirements

SSFPA legal provisions relevant to DBFM Co’s Proposals

• Clause 12.1.2 - carry out Works to procure satisfaction of DBFM Co’s Proposals• Clause 12.5 – Authority “Operational Functionality” sign-off of parts of DBFM Co’s

Proposals• Clause 12.8 – submit proposals to amend DBFM Co’s Proposals to rectify matters

under Clause 12.7 under Review Procedure• Clause 17.11 – Independent Tester to notify o/s matters to be attended to before

Works completed in accordance with DBFM Co’s Proposals• Clause 23.12 – Facilities to be maintained so that Facilities comply with DBFM Co’s

Proposals• Schedule Part 1: “Maintenance Works” – includes works for maintenance or repair of

Facilities so that they comply with DBFM Co’s Proposals• Review Procedure: Para 3.3.1(a) and 3.3.3(a) – non compliance with DBFM Co’s

Proposals ground for Authority objecting to RDD• Review Procedure: Para 3.5.2 – non compliance with DBFM Co’s Proposals ground

for Authority objecting to Finishes• Change Protocol: “Whole Life Cost” - DBFM Co’s Proposals to confirm intended

design life of Facilities

SSFPA legal provisions relevant to RDD

• Clause 12.6.1 – submit RDD to Authority’s Representative for review under Review Procedure

• Clause 12.6.2 – once Approved RDD, RDD deemed to satisfy requirements of Authority as set out in Table A in Appendix 1 to Review Procedure

• Clause 12.6.3 – allow Authority to view items of Design Data• Clause 12.6.4 – maintain computerised design database• Review Procedure: Para 1.2 – Authority (short) fixed period to respond to item of

RDD, with “deemed approval” where fails to reply• Review Procedure: Para 1.3.2 – DBFM Co option to proceed with item of RDD

prior to approval “at risk”• Review Procedure: Para 3.1 – general grounds for Authority objection to

Submitted items• Review Procedure: Para 3.3 – specific grounds for Authority objection to RDD • Review Procedure: Para 4.1 – DBFM Co to comply with approved RDD• Review Procedure: Para 4.3 – DBFM Co obligations where Authority objects• Review Procedure: Para 4.5 – DBFM Co entitlement to use approved RDD

SSFPA legal provisions relevant to RDS and TEETP

There are no operative legal provisions in SSFPA re RDS and the TEETP

SSFPA legal provisions relevant to Quality Plans

• Clause 5.2.3 – perform Project Operations “in a manner consistent with the Quality Plans”

• Clause 20.3 – ensure there is a Design Quality Plan and a Construction Quality Plan (but these may be combined)

• Clause 20.4 - submit QPs to Authority’s Representative for review under Review Procedure

• Clause 20.5 – procure Contractor implements DP and CP• Clause 20.9 – any quality manual or procedure referred to in QP

also to be submitted for review under Review Procedure• Clause 20.11 – Authority permitted to audit compliance with QPs• Review Procedure: Para 3.7 – specific grounds for Authority

objection to QP

SSFPA legal provisions relevant to Programme and Table of Finishes

• Clauses 14.2 and 14.3 – any revised Programme to be prepared in accordance with GIP and ”in sufficient detail so as to enable the Authority's Representative to monitor the progress …of the Works” and to be submitted to Authority’s Representative for review under Review Procedure

• Clause 14.4 – Authority power to call for reports/proposals to eliminate or reduce delay where Works fall behind programme

• Clause 14.6 – notify Authority’s Representative where Works are significantly ahead of Programme and Actual Completion Date may occur earlier than Completion Date

• Review Procedure: Para 1.2.1(b) – Authority (short) fixed period to respond to revised Programme, with “deemed approval” where fails to reply

• Review Procedure: Para 3.6 – specific grounds for Authority objection to revised Programme

• Review Procedure: Para 1.2.3 – DBFM Co to submit range of selection of finishes detailed in ToF to Authority’s Representative by Finishes Proposal Date and Authority’s Representative to confirm selection by Finishes Selection Date, failing which DBFM Co is free to proceed with its selection

• Review Procedure: Para 3.5 – grounds for Authority objection to Finishes

SSFPA legal provisions relevant to OCP and Completion Criteria

• Clause 17.2 – Final Commissioning Programme to be in accordance with OCP and to “impose no greater or more onerous obligations on the Authority” than those set out in OCP

• Clause 17.12 – Independent Tester to issue CPC when satisfied Facilities complete in accordance with Completion Criteria (note no references to ACRs or DBFM Co’s Proposals)

• Clause 18.8 – OCP to include decant and decommissioning protocol where DBFM Co is responsible for those activities

• Completion Criteria to be Appendix to OCP

Experiences of moving to "paperless" technical documents

• SSFPA provides for technical documents being inserted as Schedule Parts, Sections of Schedule Parts or Appendices to Schedule Parts– Contract does not require that hard copies be included

• Production of “financial close” hard copy versions of technical documents expensive and time consuming– management of financial close process made more difficult– experience was that hard copies seldom reviewed after close

• Adding financial close versions in locked folder(s) in online platform would be ultimate solution

• Current solution is to burn final versions onto two “Technical Documents Discs” that are Agreed Form documents under SSFPA (i.e. initialled by signatories) – HM provide “folders lists” to confirm where individual documents are to be saved– SSFPA amended to cross refer to Technical Documents Discs– Protocol agreed for burning of Technical Documents Discs at close

Passing down technical documents under subcontracts and impact of Martifer

• Martifer case does not relate to SSFPA project– involves whether main contract technical documents (programmes) were passed-down in

sub-contract

– principle (that main contract programme related documents inserted in a sub-contract did not impose a binding sub-contract programme due to inclusion of some works that did not form part of sub-contract works and omission of other works that were part of such works) may have implications in SSFPA projects

• Generic pass down of technical documents common in SSFPA projects – due to budget constraints– incorporate all project agreement technical documents by reference

– attempt pass-down by “name change” provision and statement Contractor is to perform obligations so as not to put Employer in breach

• Risk elements always present (due to risk of PA definitions not be consistently and correctly used in technical documents and lack of clarity re “buffer” periods)

• Martifer decision raises additional risk of pass down rejection due to PA technical documents dealing with wider range of obligations than apply to sub-contract– only deal with Works related obligations in ACRs/DBFM Co’s Proposals

– create bespoke technical documents for sub-contracts placed by Contractor

Contact details

Euan PiriePartner and Head of Infrastructure & Projectst: +44131 247 2505m: +447795100183 e: euan.pirie@harpermacleod.co.ukTwitter: @EuanPirieHMEastLinkedIn: https://uk.linkedin.com/pub/euan-pirie/1a/48b/51b