Different Parties in a Public Works Contract
By TSE Ming-yip (CEG 2000, HyD)
To respond to a problem or to satisfy a social need, Government has carried out
enormous number of construction. To achieve the objective successfully and
satisfactory, it requires the cooperation of different parties taking part in the Contracts.
Employer
Pursuant to the General Conditions of Contract for Civil Engineering Works (GCC)
Clause 1(1), the ‘Employer’ means the Hong Kong Special Administrative Region
Government. Usually, the Government department responsible for the award and
administration of the Contract would be the Employer of the Contract. Works group
departments include Architectural Service, Civil Engineering, Drainage Services,
Highways, Territory Development and Water Supply.
The Employer should provide the Contractor the lands and other places in which the
Works are to be constructed for the purpose of the execution of the Works.
Throughout the progress of the Contract, the Employer should effect payment to the
Contractor.
The Employer should have a Consultancy Agreement with the Engineer for the
Contract and a Construction Contract with the Contractor.
The Engineer
When a Contract is entered between the Employer and the Contractor, an Engineer is
appointed by the Employer to administer the Contract. The ‘”Engineer” is defined in
GCC Clause 1(1) as “the person, company or firm appointed from time to time by the
Employer and notified in writing to the Contractor to act as the Engineer for the
purposes of the Contract. The person named or authorized may be described by name or
as the holder for the time being of a public office.
For government contracts, Chief Engineer or above may be named as the Engineer for
in-house projects, while Partner-in-charge in consultants’ firms will serve such role
for projects undertaken by them. They are the employer’s representatives and are
responsible for preparing the design and drawings for the works and subsequent
administration of contracts through contractors. While the Engineer is employed by
this Employer, and is bound to protect the client’s interest, he is also required to act
professionally in an impartial role to make fair and reasonable decision. The role,
functions, duties, powers/authority and limitations of the designated “Engineer” in
civil engineering contracts are specified in the contract document s between the Client
and the Contractor.
Specific rights and responsibilities of the Engineer, who is a Consultancy
Organisation, are detailed in the Consultancy Agreement between the Client and
Consultant. These functions and responsibilities include the Design of the permanent
works, Documentation of the design and preparation and issue of Tender Documents.
They would also include Tender Evaluation to select the contractor, Contract
Management and Site Supervision. To avoid confusion of the design, it is useful to
have same consultant undertaking these functions as well.
Contract Management refers to the ‘running’ of the construction contract – once
awarded to a Contractor and signed with the Client. The Engineer manages this
contract on behalf of the Employer, and is usually empowered to make most
decisions, except where substantial extra costs or delays are involved.
The roles and duties of the Engineer would therefore include: supervising of the
Works for both permanent and temporary; issuing instructions to the Contractor;
valuing Contractor’s work done; evaluating Extensions of Time needed/claimed and
Liquidated Damages; evaluating Variations to the Works; issue certificates
(Completion Certificate, Maintenance Certificate and Payment certificates) of the
Works; adjudication of dispute, in the first instance, etc.
However, the role of the Engineer in adjudication disputes has been questioned, since
the Engineer’s staff may have been involved in the disputes themselves. As
representatives of the Employer and being paid by the Employer, it is often asked how
the Engineer could remain impartial. The main answer (counter-arguments to this) is
based on the professionalism of the Engineer and the standardized procedures that
may be used.
Engineer’s Representative
The definition of the Engineer’s Representative (ER) is given in GCC Clause 1(1). He
should be “any person or persons appointed from time to time by the Engineer and
notified in writing to the Contractor to perform the duties set forth in Clause 2(2). The
person appointed may be described by name or as the holder for the time being of a
public Office.
As stated in Clause 2(2), the ER’s duties include three area namely: (a) to watch and
inspect the Works; (b) to test and examine any material to be used and workmanship;
(c) to carry out such duties and exercise such powers vested in the Engineer in
accordance with the provisions of Clause 2(3). ER, usually, relates to work that
require close attention on Site, day-to-day discussion with the Contractor and on Site
decision which are not practical to refer to the Engineer.
Generally, the duties of the ER in Contract Administration included: checking setting
out; inspecting the Works in general for Quality Control; checking site and safety
conditions; monitoring works progress against the programme; supervising the testing
and checking the compliances of materials; issuing site instructions; arranging
measurements of the Works; organizing site meetings and compiling minutes;
maintaining necessary site records; assisting the Engineer in valuing variation orders
and processing interim payments, etc.
The ER must be clear about the extent of his power and should inform the Engineer as
soon as possible for any matters that require the Engineer’s decision. He must keep
the Employer informed of the current and anticipated works progress and expenditure
and should ensure that the works are completed satisfactorily within the specified time
and quality. The ER should possess a helpful and cooperative attitude towards the
Contractor and provide prompt reply to the Contractor. He should remind the
Contractor immediately whenever the he identifies or foresees any problem.
Contractor
The “Contractor” means the person, firm or company whose Tender has been
accepted by the Employer and includes the Contractor's personal representatives,
successors and permitted assigns. The Contractor is required to execute the Works or
provide the services in strict accordance with the provisions stipulated in the Contract.
Contractor is required to meet stipulated criteria, such as experience, plant, and
finance, before they are permitted to tender. The Hong Kong SAR Government has
devised a very comprehensive set of rules governing the eligibility of tenderers for
government contracts. They are Contractors in the appropriate Categories and Groups
of the Approved Contractors for Public Works. There are five categories of
Contractors, namely, Buildings, Port Works, Roads and Drainage, Site Formation and
Waterworks. Contractors are also categorized into 3 Groups based on their financial
capability and past performance records in government contracts.
Sub-contractor
It is common for construction contractors to sub-let parts of the works that they have
contracted to perform, e.g. different elements of works or separated areas. For Hong
Kong, it is also common for such sub-contractors to sub-let in turn by trade, e.g.
excavations, steel bending etc. The main contractor would have the obligations to
organise works of their sub-contractors to achieve the target performance as laid down
by the main contract.
There are 2 types of sub-contractors: Domestic sub-contractors and Nominated sub-
contractors Domestic sub-contractors are chosen and appointed by the main
contractor, subject to any approval that may be required under the main contract.
Nominated sub-contractors are nominated by the Employer for specific items of
works, e.g. lifts in buildings, electrical and mechanical systems. The main contractor
still has to co-ordinate works among nominated sub-contractors.
Conclusion
To operate the Contract smoothly, various parties have to work in a cooperative
manner and communicate better so as to meet the increasing demand from the public.
(1246 words)
