9 May 2016
Architects and Quantity Surveyors who are planning to tender projects in the coming months will be alarmed at a recent development. The CIF has advised its members not to accept unilateral contract changes put out by the RIAI since 2014. This affects most construction work in the private sector, estimated to be worth at least €3 billion annually.
Following the introduction of BCAR SI.9 against industry stakeholder advice in March 2014, by the then Minister Phil Hogan, an Addendum to the RIAI Building Contract was rushed out as a short term measure to keep building tenders on track from March 2014.
More than two years on, this interim “quick fix” is still being promoted by the RIAI and the builders are not happy. The temporary arrangement would appear to leave contractors at a disadvantage and they say that enough is enough. Last week on 3rd May 2016, the CIF wrote to all members saying:
“Addendum to Agreement and Schedule of Conditions of Building Contract,
Edition 1 2014
I would like to draw your attention to the above document, a copy of which is attached for your information. This document has been issued by the RIAI to be appended to all forms of RIAI Construction Contract published prior to 1st March 2014.
Members are advised not to accept this document, which has been unilaterally added to the RIAI Forms of Contract without the agreement of the Liaison Committee. This document is therefore not agreed and does not form part of the contract documents. The CIF has requested that the RIAI remove this document from circulation in agreed forms of contract immediately.
If you have any queries on this matter, please do not hesitate to contact me.
Director, Main Contracting”
This means that architects, quantity surveyors and building owners will have to get their own legal teams to draw up their contracts or just delay tenders until the contracts are fixed permanently, through negotiation between the RIAI, CIF, EI, ACEI and SCSI (architects, builders, engineers and surveyors), joint members of the Liaison Committee*. Recently, another strand of BCAR, the Ancillary Certificates, were criticised for ‘atrocious drafting’ by Construction Lawyer, Sarah Fox. (link here).
The bottom line is just more delay and more cost for the construction industry. The legal profession and many senior professionals are confounded as to why nothing was done for two years when the problems were so evident.
BRegs Blog posted concerns and advice on the issue from a senior architect in May 2014 (link here). The collateral damage in claims and disputes is difficult to quantify yet. How much of industry output is affected by these issues? Industry estimates suggest most private sector output may be facing contractual difficulties.
It seems that there is no end to the challenges that BCAR has added to an industry struggling to recover from the economic crisis, and contractual delay and uncertainty will place yet another barrier to recovery, in our housing sector in particular.
*The Liaision Committee is made up of the same member organisations as the Construction Industry Council (ACEI, CIF, EI, RIAI and SCSI). The primary function of the Liaison Committee is to monitor the provisions of the Contract for privately funded building projects in Ireland and from time to time make recommendations to its Constituent Bodies for any amendment to the Agreement and Schedules of Conditions of the Contract issued by the RIAI in agreement with the CIF and the SCSI that may be required.
Other posts of interest: