TYPICAL CONSTRUCTION CONTRACTS USED IN SOUTH AFRICA
Contracts are written or spoken agreements between clients and service providers/contractors that provide the framework for the execution of infrastructure projects. The importance and critical role of the contractual framework within construction projects has made it imperative for successful project execution, delivery and dispute resolution, that these construction contracts are standardised, as has been local and international practice over many years. Generally the construction contracts are divided into two categories, those for professional services that encompass the planning, design and administration of projects and those for contractors encompassing the actual construction of projects. The following are examples of the typical contracts used for the execution of construction projects in South Africa:
JBCC – Joint building Contracts Committee: This suite of contracts, which only applies to contractors, is developed, maintained and administered by the Committee, which is representative of building owners and developers, professional consultants, and general or specialist contractors. The contract promotes an equitable distribution of contractual risk, and is mostly used in South Africa and its neighbouring countries in Southern Africa.
NEC Engineering and Construction Contract: The NEC suite of contracts, which cater for professional services and contractors, is a formalised system created by the UK Institution of Civil Engineers that guides the drafting of documents on civil engineering and construction projects for the purpose of obtaining tenders, awarding and administering contracts. This contract is utilised internationally mainly within countries with a British heritage, including South Africa.1
FIDIC is a French language acronym for Fédération Internationale Des Ingénieurs-Conseils, which means the international federation of consulting engineers. The FIDIC suite of contracts, catering for professional services and contractors, was originally compiled in 1913 by the France, Belgium and Switzerland. The contract is well developed and widely used internationally, including Africa. In South Africa, the FIDIC contracts are well-known and widely used particularly for major infrastructure projects, in both the public and private sectors.
GCC – General Conditions of Contract: The GCC is a contract compiled by the South African Institution of Civil Engineers (SAICE) in conjunction with several South African engineering associations that is applicable to contractors only. It is a contract that outlines the minimum performance requirements for the contractor, the terms and conditions applicable to both the client and the contractor, including their rights and responsibilities. It is extensively used in South Africa in both public and private sectors. Many African nations have adapted and published their own versions of the contract. 4
COLTO – Committee of Land Transport Officials, originates from the South African Department of Transport. The document specifies the standard and is widely promoted by the South African government for use exclusively by the state road authority for road and bridge works. 3
CESA Forms of Agreement – Consulting Engineers South Africa, an association of consulting engineering firms, has for many years developed and maintained a suite of contracts catering for professional services only, especially for the engineering discipline. The contracts are mainly used in South Africa but also in the neighbouring countries in Southern Africa. The ‘forms of agreement’ include the main client/consultant agreement, a short form of agreement , a sub-consultant agreement and a Joint Venture agreement.
PROCSA Agreement- This is a contract developed for multi-disciplinary professional services developed and administered by a Committee made up of a number of professional associations. It is widely used in South Africa, mainly for building projects. Its strength lies in its separation of the responsibilities of the various professions and elimination of duplication in building projects, which are typically multi-disciplinary.
In summary, the various contracts used across projects in South Africa is largely dependent on the project stakeholders.
Sources: NEC | JBCC | FIDIC | GCC | COLTO | CESA SAICE Epilite 398