AS 11000: General conditions of contract

23 January 2015

Statement

Standards Australia (SA) Technical Committee MB-010, General Conditions of Contract, is currently revising the suite of Standards related to general conditions of contract, AS 2124: 1992 and AS 4000: 1997. Under the proposed revision, the two existing Standards are to be merged into a new suite of Standards, AS 11000: General conditions of contract. The proposed AS 11000 is meant to supersede AS 2124:1992 and AS 4000:1997.

The objective of AS 11000 is to provide general guidance for legal contracts in all sectors of industry, including construction, engineering, health, manufacturing and infrastructure. A summary of the main proposed changes in AS 11000 are listed in Annex I. Further technical details on the proposed changes may be found in the explanatory notes accompanying this statement at Annex II.

The draft AS 11000 was prepared by a drafting team comprising representatives from the Society of Construction Law, the Australian Procurement and Construction Council (APCC), Austroads, Australian Institute of Architects (AIA), Construction Industry Engineering Services Group (CIESG) and Civil Contractors Federation of Australia (CCF). The drafting team is part of Technical Committee MB-010, which comprises stakeholders from regulatory bodies, industry groups, law associations and public authorities.

The Technical Committee MB-010 is chaired by Professor Ian Bailey, who represents the Society of Construction Law and the Australasian Procurement and Construction Council.

Professor Ian Bailey said, “The proposed new general conditions of contract in AS 11000 provide a broadly balanced approach to risk allocation in language which is focused on brevity and certainty. They include a new early warning procedure based upon an express good faith obligation, which is intended to assist in the management and resolution of issues under contracts.”

The Committee is also working on a proposed separate standard AS 11001 on dispute resolution and management in contracts, which will be a companion to AS 11000.

“The development in parallel of a new Standard setting out alternative procedures for efficient management and resolution of disputes, including a contract facilitation model, should provide benefits to industry and commerce by reducing the cost of management and administration of contracts,” said Professor Bailey.

Dr Bronwyn Evans, Chief Executive Officer of Standards Australia, welcomes public feedback on the revised Standard.

“The Standard on General Conditions of Contract is used widely and underpins many major business and public contracts. It is timely to update the Standard to bring it in line with new legislation and changing business needs. As part of our open and transparent standards development process, we welcome public feedback on the revisions,” said Dr Bronwyn Evans.

Leading up to the current draft, Standards Australia held two forums in Sydney and Melbourne to gather input from a wide cross-section of industry on desired changes to be incorporated into the new Standard. Following these forums, four subcommittees and one working group were created to work on issues raised at the forums.

The subcommittees and working group dealt with the following issues:
• Risk allocation;
• Good faith;
• Programming;
• Extensions of time;
• Payment provisions;
• Impact of the various Security of Payment Acts on the General Conditions; and
• Dispute resolution.

Recommendations from the four subcommittees and working group have been fully considered by the Technical Committee and incorporated into the current draft where possible.

In accordance with Standards Australia’s standards development process, the proposed draft AS 11000 will be open for public comment starting Friday, 23 January 2015. The last day for public comment will be Friday, 27 March 2015.

All draft Standards for public comment and instructions on how to comment are listed at the following link: https://sapc.standards.org.au/sapc/public/listOpenCommentingPublication.action

Standards Australia is conscious of the need for continued work on AS 11000 and remains committed to the openness and rigour of its standards development process.

Contact

Torrin Marquardt

Torrin Marquardt

Public Affairs Officer

+612 9237 6159