5 November 2018
On 3 July 2018, the Asian International Arbitration Centre (AIAC) introduced its Standard Form of Sub-Contract for Design and Build Contracts, released as part of its suite of Standard Form of Contracts (“SFC”), which were released in August 2017. The AIAC announcement of the introduction stated that the Sub-Contract for Design and Build SFC are designed to complement the initial set of the SFC including the Standard Form of Main Contract for Design and Build Contracts.
The launch of the SFC in respect of the Main Contract and Sub-Contract for Design and Build Contracts is in reaction to the increasing popularity of design and build contracts. Relating to this, successful coordination of construction projects significantly depends on the effective and efficient administration of the contractual chain, including the design and build contracts entered into by the contractors and subcontractors. The SFC relating to Design and Build Contracts are designed to complement the initial set of the SFC and provide smooth administration of contractual relationships.
The key features of the SFC relating to design and build include:
- the possibility to maintain “single-point responsibility” on the design and build contractor;
- the contractor’s responsibility for all aspects of the works, such as quality of materials, quality of workmanship and standard of design, etc.;
- the employer’s responsibility for the general contract administration and auditing of the contractor’s works;
- the finalisation of the account on an elemental basis; and
- compliance with the Construction Industry Payment and Adjudication Act and, applicable goods and services tax provisions.