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Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region (Standard Form of Building Contract)

8/7/2021: Full version with commentary removed because of copyright issue.

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26/12/2014: Moved form wiki.

Draft Standard Form of Domestic Sub-Contract
標準自選分包合同草擬

CIC Taskforce Meetings and Snapshots of Draft
建造業議會專責小組會議及討論稿存照

基本工種標準自選分包合約指引 http://www.hkcic.org/files/eng/documents/publications/Guideline-SF-w.pdf

 

 

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27/4/2020: Chinese terms added. Clause 12.4.3 specially amended to opt for Schedule 2 to the Arbitration Ordinance.

24/2/2015: Created.

FOREWORD

The Hong Kong Institute of Surveyors has published a Standard Form of Contract for Maintenance and Renovation Works (維修及裝修工程標準合同) for use in Hong Kong, First Edition 2013 (First Amendments in December 2014) to cater to the need of major maintenance and renovation works, instead of using the current Standard Form of Building Contract which is mainly for new construction.

This article presents the key features introduced in the new form of contract to suit the special nature of major maintenance and renovation works.

PREVAILING SITUATION

Hong Kong is densely populated with blocks of high rise residential buildings.

They are under multiple ownerships.

After decades of development, a lot of these buildings require major repair and maintenance works such as repair of spalling concrete, re-surfacing of external facades, replacement of plumbing and drainage systems, refurbishment of lobbies and staircases, etc. which are the common properties of the multiple ownership.

The market of the major repair and maintenance works is huge.

Generally, the Standard Form of Building Contract, which is basically for new construction, is used and adapted for these maintenance works in the private sector.

Special conditions of contracts are introduced:

• Some of them are poorly drafted causing argument over interpretation.
• Some of them are very harsh.
• Some of the harsh terms are for the building professionals’ convenience.
• Some are driven by the building owners who are mostly laymen pressing for commercial terms unusual to the construction industries.

Preliminaries clauses are also usually adapted from those used for new construction:

• They have become extensive because they have been added on top of those used for new construction and have accumulated from project after project.
• To play safe, irrelevant clauses are not readily deleted.
• This makes the Preliminaries rather complicated and cumbersome.
• Some of them are repetitive but inconsistent amongst themselves and with the Form of Contract.

The overall tender and contract documents are not easily understood by building owners.

This also applies to the junior building professionals managing the contracts.

INITIATION FOR CHANGE

New versions of the Standard Form of Building Contract (“SFBC”) were published in 2005 (with quantities version) and in 2006 (without quantities version) to reflect the latest legal development and the more complicated modern day construction practice.

The documents have become thicker with more clauses.

It was considered to be too complicated for repair and maintenance works.

The building professionals would likely stay with the old versions when handling repair and maintenance works.

On the initiation of the Building Surveying Division of the Hong Kong Institute of Surveyors, and with the co-operation of the Quantity Surveying Division, a Standard Form of Contract for Maintenance and Renovation Works was drafted and published in 2013 (“Standard Form”).

The First Amendments were published in December 2014 mainly for the correction of typographical errors.

INTENDED PURPOSES

The intended purposes of the Standard Form are as follows:

• Project types:
  • tailor-made for major maintenance and renovation works:
    • whether residential buildings or not
    • not involving nominated sub-contracts (which is the usual case)
  • also useful for fitting out works which do not involve nominated sub-contracts
  • to be managed by building professionals:
    • who can be architects, engineers or surveyors, instead of traditionally “the Architect”
• Provisions:
  • comparatively simple to read
  • simple yet comprehensive enough to cover all the basics
  • reduce the need for special contract conditions
  • reduce cumbersome preliminaries clauses
  • more structured for inserting and supplementing with project specific information
  • contain good and equitable practice
  • standard provisions will offer better persuasion to building owners to use more equitable terms
• Building owners:
  • can understand their contractual rights and obligations more easily
• Building professionals:
  • tasks to draft special contract conditions and preliminaries reduced
  • volume of paper reduced
  • easier to administer the contracts
• Contractors
  • less exposed to ambiguous harsh terms
  • able to offer better prices and end products.

CONTENTS

The Standard Form is made up of the following sections:

• Contract Agreement (合同協議) (7 pages)
  • 4 Recitals (序文)
  • 4 Articles (約章)
    • Object of this Contract (合同標的)
    • Contract Price (合同總價)
    • Contract Periods (合同工期)
    • Contract Documents (合同文件)
  • Signing section (簽署部分)
    • Options to sign as a deed (契約) or as a simple contract (簡單合同)
• Particulars of Agreement (合同細節) (5 pages)
• Contract Conditions (合同條款) (37 pages)
• Appendix A – Surety Bond (Pro-forma) (履約保證書(樣本) )(4 pages)

The traditional terms of “Articles of Agreement’, “Conditions of Contract” and “Special Conditions of Contract” have been simplified to “Contract Agreement”, “Contract Conditions” and “Special Contract Conditions”.

The traditional “Appendix to the Conditions of Contract” has been replaced with “Particulars of Agreement”.

To reflect the actual practice, the following documentary flow is specifically envisaged by the Recitals and Articles:

• Tender Documents (including Conditions of Tendering, Form of Tender, Special Contract Conditions, Specification, Schedule of Works and Drawings) ==> Tender Addenda ==> Tender ==> Tender Correspondence (including Letter of Award) ==> Contract Documents.

These documents together with the Standard Form of Contract make up the Contract Documents.

The pre-2005/2006 SFBC do not envisage Special Conditions of Contract, Tender Addenda and Tender Correspondence. SFBC 2005/2006 envisage Special Conditions of Contract and Tender Correspondence.

PARTICULARS OF AGREEMENT (合同細節)

The Particulars of Agreement are a part of the Contract Agreement which shall be read in conjunction with the Particulars of Agreement.

Other than the signing section, the Contract Agreement does not require any filling in of information. Project specific particulars are to be inserted in the Particulars of Agreement which are in a table form.

The Particulars of Agreement serve the purposes of the traditional Appendix to the Conditions of Contract but have been expanded to cover all the essential project specific particulars which may vary between projects.

There are 32 Items for entry of project specific particulars:

• Contract Signing and Award Dates (合同簽訂日及定標日)
• Project Title and Address (項目名稱及地址)
• Contract Title, Works Description and Site Locations (合同名稱、本工程簡要說明及工地位置) (Site locations may be specific locations at the Project Address)
• Contract Parties (合同雙方)
  • Employer (發包方)– name and address
  • Contractor (承包商) – name and address
• Consultants (合同顧問)
  • Contract Administrator (合同監理) – name and address
  • Quantity Surveyor (工料測量師) – name and address
• Contract Type and Price (合同類型及價款) (to select one)
  • Lump Sum Contract (總價承包合同)
  • Remeasurement Contract (重新計量合同)
  • Rates Only Contract (純單價承包合同)
• Time (時間) (see PHASING below)
  • Site Access Dates (進入工地日期)
  • Works Sections (工程分部)
  • Contract Periods (工期)
  • Rate of Liquidated Damages for Delayed Completion (誤期竣工的算定賠償率)
  • Defects Liability Period (保修期)
• Documents (文件)
  • Tender Documents (招標文件)
  • Tender Correspondence (投標來往函件)
• Payment Terms (付款條款)
  • Amount of advance payment (預付款的金額)
  • Method of recovery of advance payment (扣回預付款的辦法)
  • Retention Percentage (保修金的百份率)
  • Maximum Retention (保修金上限)
  • Period for Honouring Payment (付款寬限期)
• Insurances and Bond (保險及履約保證)
  • Contractors’ All Risks and Third Party Liability Insurance (工程一切險及第三者責任險)
    • Party responsible for taking out the insurance (負責投保的一方) - The Employer / the Contractor
    • Percentage of professional fees in case of reinstatement (重置時顧問費的百份率)
    • Amount for the removal of debris (殘礫清理保額)
    • Percentage for escalation clause (工程費上漲百份率)
    • Material Damage insurance excesses in respect of each and every occurrence of loss or damage (物質損壞保險就每次損失或破壞 事故的免賠額)
    • Limit of indemnity for third party liability (第三者責任險的賠償限額)
    • Third party liability insurance excess in respect of each and every occurrence of loss or damage (第三者責任保險的每次損失或破壞事故的免賠額)
  • Amount of Surety Bond (履約保證書的金額()
  • (No particulars needed for Employees’ Compensation Insurance here – covered by the Conditions)
• Other Terms and Conditions (其他條款) (for entry of non-standard terms)

A set of partially completed Particulars of Agreement should be included in the Tender Documents for tendering.

The fully completed and updated set should be used for signing the Contract.

SIMPLIFICATION

Terms have been simplified:

• “Contract Agreement” (合同協議) used for “Articles of Agreement’
• “Contract Conditions” (合同條款) used for “Conditions of Contract”
• “Special Contract Conditions” (特殊合同條款) used for “Special Conditions of Contract”
• “Materials” (物料) defined to mean materials and goods, and include equipment or machinery for incorporation into the Works, eliminating the need to write “materials and goods” or “materials, goods and equipment” all the time
• “Plant” (施工機械) defined to mean construction plant, equipment or machinery used for carrying out the Works

Instead of trimming down based on SFBC 2005/2006, the clauses have been completely re-written with a view of making them as simple as possible but keeping the principle of SFBC 2005/2006.

The Standard Form consists of 48 pages vs 98 pages for SFBC 2005/2006. In particular, the clauses on insurances have been very much simplified.

Provisions for Nominated Sub-Contracts and Nominated Supply Contracts have been omitted because they are not usually required for maintenance and renovation works.

PHASING 分期

The pre-2005/2006 SFBC do not envisage phased possession of the Site nor phased completion of the Works (though there is an optional Sectional Completion clause).

SFBC 2005/2006 do envisage phasing and use such expressions as “the whole or parts of the Site” and “the Works or a Section”.

To simplify, the Standard Form assumes phasing by default, simply uses the expressions "Portion of the Site" and “Works Section”, and requires the following entries in the Particulars of Agreement:

	Time (時間)
18	Date for Access to the Site (進入工地日期)	Portions of the Site (工地的部分)		Date (日期)
		Portion / Area / Zone X or 1		<>
		Portion / Area / Zone Y or 2		<>
19	Names of Works Sections (工程分部的名稱)	Phase / Section / Stage (期/分部/階段)		Description (說明)
		Phase A or 1		<>
		Phase B or 2		<>
20	Contract Periods (工期)	Works Sections (工程分部)	Commencement Date (or a mechanism to determine the Commencement Date) (開工日(或定開工日的機制))	Completion Date (or a mechanism to determine the Completion Date) (應竣工日(或定應竣工日的機制))	Durations in calendar days (公曆天計的工期)
		Phase A or 1	<>	<>	<>
		Phase B or 2	<>	<>	<>
21	Rate of Liquidated Damages for Delayed Completion (If none or “N/A” stated, general damages apply) (誤期竣工的算定賠償率(如沒說明或注明“不適用”，則採用非算定賠償額))	Works Sections (工程分部)		Rate HK$/calendar day (每一公曆天HK$)
		Phase A or 1		<>
		Phase B or 2		<>
22	Defects Liability Period (保修期)	Works Sections (工程分部)		Durations in calendar months after Completion Date of each Works Section (每工程分部竣工日後起以公曆月計的期限)
		Phase A or 1		<>
		Phase B or 2		<>

If there is no phasing, “the Whole” can be used for the Portions and Works Sections.

Each Works Section is to have its own Substantial Completion Certificate and Defects Rectification Certificate.

Comprehensive checklists - To eliminate the task of searching over the entire Contract Conditions for relevant clauses, and facilitate easier administration, comprehensive checklists have been given for:

• computation of the net interim amount payable; and
• computation of the final Contract Price (see below).

Excusable Events and Compensable Events (可延期事件及可賠償事件) - Events eligible for extension of time and monetary compensation are now called “Excusable Events” and “Compensable Events” respectively, instead of “listed events” and “qualifying events” in SFBC 2005/2006, to facilitate easier understanding. They have been presented in a tabular format for easier reading (see below).

UPDATING

To keep in line with modern day legal development since the pre-2005/2006 SFBC:

• “Excepted Risks” has been adapted from that used in SFBC 2005/2006, but “a cause due to any neglect or default of the Architect, the Employer or any person for whom the Architect or the Employer is responsible” in SFBC 2005/2006 has been removed from the definition because it is considered to be too wide in scope.
• “Excusable Events” and “Compensable Events” have been respectively adapted (with suitable adjustments) from the “listed events” and “qualifying events” used in SFBC 2005/2006. Like SFBC 2005/2016:
  • When an Excusable Event occurs in the period of delay after the (extended) Completion Date but before the substantial completion of a Works Section, extension of time shall still be granted but only for the net duration of the delay rather than granting the gross period until the end of the delay.
  • While the Contractor shall continuously use his best endeavours to prevent or mitigate delay or disruption to the progress of the Works however caused, and to prevent the completion of the Works from being delayed or further delayed, the use of best endeavours by the Contractor shall not require the Contractor to accelerate the carrying out of the Works to recover delay caused by an Excusable Event.
•  “Separate Contractor” has been defined, like SFBC 2005/2006, to exclude any statutory undertaker or utility company carrying out work in pursuance of its statutory obligations and not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible. Pre-2005/2006 SFBC do not have such distinction.
• “Variations” (工程變更) has been expanded, like SFBC 2005/2006, to include, apart from physical changes, a change to the time or manner for carrying out the Works.
• Like SFBC 2005/2016, the dispute resolution procedures have been expanded from arbitration only to:
  • Reference to Designated Representatives (提交指派的代表解決);
  • Reference to Mediation (提交調解解決); and
  • Reference to Arbitration (提交仲裁解決).

Users who would like to stay with the pre-2005/2006 SFBC should be aware of the legal development.               

To keep in pace with the new terms used in SFBC 2005/2006:

• “Substantial Completion Certificate” (充份竣工證書) used to replace “Practical Completion Certificate” in pre-2005/2006 SFBC; and
• “Defects Rectification Certificate” (保修完成證書) used to replace “Certificate of Completion of Making Good Defects” in pre-2005/2006 SFBC.

TAILOR-MADE ENHANCEMENTS

There are enhancements to suit the need of maintenance and renovation works. They are generally not available in the pre-2005/2006 SFBC. This made the Standard Form to have 48 pages vs 32 pages for the pre-2005/2006 SFBC.

1.  Interpretations

Definitions - They have been introduced to simplify subsequent wording.

Building Manager (物業管理人) - The likely presence of a Building Manager, being the person providing estate, property or facility management services to the premises where the Site is (the Site can be within a part of existing premises), is recognized.

Counting days - The method of counting days has been clarified. A day means a calendar day unless otherwise stated. When counting days, 1 day means 24 hours. Within 1 day means within 24 hours, not within the same day. “Commencing or starting from a certain day” means that certain day is day 1 for counting. “Commencing or starting after a certain day” means the day following that certain day is day 1 for counting.

Defects Rectification Certificate (保修完成證書) - This term has been used, like SFBC 2005/2006, to replace “Certificate of Completion of Making Good Defects” in pre-2005/2006 SFBC, but with no intentional change of meaning.

Excepted Risks (免責風險) - Their definition has been introduced. They are:

(a)       any consequence of war (whether war be declared or not) in which Hong Kong is actively engaged, the invasion of Hong Kong, acts of terrorists in Hong Kong, civil war, rebellion, revolution or military or usurped power in Hong Kong, riot, commotion or disorder in Hong Kong other than amongst the employees of the Contractor or any person for whom the Contractor is responsible;

(b)       any direct consequence of the faulty design provided by the Contract Administrator or other designers engaged by the Employer or the Contract Administrator;

(c)       ionising radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; and

(d)       pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds.

(a), (c) and (d) are the same as those newly introduced in SFBC 2005/2006. (b) has been intended to improve “the Architect’s design of the Works insofar as damage, loss or injury is the direct consequence of the design” as used in SFBC 2005/2006. “a cause due to any neglect or default of the Architect, the Employer or any person for whom the Architect or the Employer is responsible” in SFBC 2005/2006 has been removed from the definition because it is considered to be too wide in scope.

Excusable Events and Compensable Events (可延期事件及可賠償事件) - “Excusable Events” (with extension of time) and “Compensable Events” (with monetary compensation) have been introduced and adapted from the “listed events” and “qualifying events” in SFBC 2005/2006 to keep in line with modern day legal development since the pre-2005/2006 SFBC. They have been presented in a tabular format for easier reading:

Event Code (事件編碼)	Delays or disruptions by reason of (由於下列原因引致有延誤或干擾)	Excusable Events (可延期事件)	Compensable Events (可賠償事件)
A	Force majeure (不可抗力)	Yes	No
B	Inclement weather conditions, being rainfall in excess of twenty millimetres in a twenty-four hour period (midnight to midnight) as recorded by the Hong Kong Observatory station nearest to the Site, and/or their consequences adversely affecting the progress of the Works (惡劣天氣情況，即香港天文臺最接近工地的監測站在24小時(零時到零時)內錄得超過20mm的降雨量，及/或它們的後果(對本工程的進度有不利影響的))	Yes	No
C	The hoisting of tropical cyclone warning signal No. 8 or above or the announcement of a Black Rainstorm Warning, and/or its consequences adversely affecting the progress of the Works (8號或以上的熱帶氣旋警告信號或黑色暴雨警告信號的發出，及/或它的後果(對本工程進度有不利影響的))	Yes	No
D	An Excepted Risk (免責風險)	Yes	Yes
E	Fire, lightning, explosion, flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft and other aerial devices or articles dropped from them, not caused by the Contractor or any person for whom the Contractor is responsible (非由承包商或他應負責的任何人士造成的火災、閃電、爆炸、洪水、水箱或儀器或水管爆破或溢出、地震、飛機及其他飛行物體或從它們墜下的物件)	Yes	No
F	Late provision of Contract Administrator’s instructions expressly required by this Contract to be provided by a specific time or before implementation of the matter being affected (合同監理未能及時於本合同明確要求的時間前或在實施受影響的事宜前提供所需的指示)	Yes	Yes
G	Late provision by the Contract Administrator of instructions or information (including clarification of any ambiguity, discrepancy in or divergence between documents provided by the Employer or the Contract Administrator, and including outstanding or new information) required for the progressing of the Works, after taking into account any mitigating effect which could have been afforded if the Contractor had requested for such instructions or information reasonably in advance of the occurrence of the delays or disruptions (合同監理未能及時提供本工程持續進行所需 的指示或資料(包括對發包方或合同監理所提供的文件之內或之間的任何含糊、差異或分岐的地方作出澄清，及包括尚欠或新增的資料)，但可計入如果承包商合理地提早要求該指示或資料時對延誤或干擾所造成的減輕效果)	Yes	Yes
H	The opening up for inspection of work covered up or the testing of materials or work and the consequential making good which are additional to the Contract requirements and instructed by the Contract Administrator, provided that such materials and work are in accordance with this Contract (本合同原要求以外的、並經合同監理指示的、並證明到物料或工作乃符合本合同的，對已掩蔽的工作進行打開檢查或對物料或工作進行測試及其後的修復)	Yes	Yes
I	The carrying out of a Variation or the happening of an event deemed to be a Variation (工程變更的進行或視為工程變更的事件的發生)	Yes	Yes
J	Increase in the work to be carried out pursuant to provisional items in this Contract of sufficient magnitude that the increase was not apparent from the Contract Documents (按本合同內暫定款進行的工作大幅度增加，而該增幅不能從合同文件顯而易見的)	Yes	Yes
K	A postponement of the Date for Access to any portion of the Site unless this Contract has provided for such occurrence (進入工地的任何部分的日期有延遲，除非本合同對該延遲已有規定)	Yes	Yes
L	A postponement of the Commencement Date of a Works Section unless this Contract has provided for such occurrence (任何工程分部的開工日有延遲，除非本合同對該延遲已有規定)	Yes	Yes
M	A suspension of the provision of the whole or a portion of the Site as instructed by the Contract Administrator beyond any provided for in this Contract and not being due to a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible (按合同監理的要求，超過本合同規定的程度，暫時中止提供工地的全部或部分，而不是因承包商或承包商應負責的任何人士的違約行為或其他過失造成的)	Yes	Yes
N	A suspension of the progress of the whole or a part of a Works Section as instructed by the Contract Administrator beyond any provided for in this Contract and not being due to a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible (按合同監理的要求，超過本合同規定的程度，暫時中止進行任何工程分部的全部或部分，而不是因承包商或承包商應負責的任何人士的違約行為或其他過失造成的)	Yes	Yes
O	A delay or disruption caused by a Separate Contractor (其他承包商造成的延誤或干擾)	Yes	Yes
P	A delay caused by a statutory undertaker or utility company carrying out work in pursuance of its statutory obligations, not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible, and failing to commence or to carry out its work in due time provided that the Contractor has taken all practicable measures to cause it to commence, carry out and complete its work on time (法定承辦機構或公用事業公司與發包方、承包商或他們所應負責的任何人士沒有合同關係的情況下履行其法定工作，但未能按時開工或進行它的工作，而承包商已採取使它能按時開始、進行及完成它的工作的一切可行的措施)	Yes	No
Q	A failure of the Employer to supply or supply on time materials that he agreed to provide for the Works (發包方未能供應或未能按時供應他同意供應給本工程用的物料)	Yes	Yes
R	A delay by a Government department in giving an approval or a consent which is not the Contractor’s responsibility to obtain (政府部門延誤發出不屬於承包商應負責取得的批准或許可)	Yes	Yes
S	An unreasonable delay by a Government department in giving an approval or a consent which is the Contractor’s responsibility to obtain, provided that any disallowance of approval or consent attributable to the Contractor’s lack of adequate submission shall not be considered as unreasonable (政府部門不合理地延誤發出屬於承包商應負責取得的批准或許可，但如果拒絕發出該批准或許可乃由於承包商未有提交足夠的資料則不能視為不合理)	Yes	No
T	A special circumstance considered by the Contract Administrator as sufficient grounds to fairly entitle the Contractor to an extension of time (合同監理認為有充份的理由合理地給予承包商延長工期的特殊情況)	Yes	No
U	An act of prevention, a breach of contract or other default by the Employer or any person for whom the Employer is responsible (發包方或發包方應負責的任何人士造成的妨礙行為、違約行為或其他過失)	Yes	Yes

Separate Contractor (其他承包商) - This term has been defined, like SFBC 2005/2006, to exclude any statutory undertaker or utility company carrying out work in pursuance of its statutory obligations and not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible. Pre-2005/2006 SFBC do not have such distinction.

Substantial Completion Certificate (充份竣工證書) - This term has been used, like SFBC 2005/2006, to replace “Practical Completion Certificate” in pre-2005/2006 SFBC, but with no intentional change of meaning. Each Works Section is to have its own Substantial Completion Certificate and Defects Rectification Certificate.

2.  Site (工地)

Provision of Site (工地的提供) - This is by way of granting access to the site rather than giving exclusive possession to reflect the usual nature of carrying out the works while the buildings are continued to be occupied and used by owners and tenants. This can be in phases as stipulated in the Particulars of Agreement.

Site access (進入工地) - The Employer is only responsible for providing access to the Site through land or premises which are under his control. Where the Employer is the landlord or the incorporated owners or the Building Manager of the premises in which the Site is situated, any individual units of the premises which are separately owned or rented (such as residential flats, car parking spaces, offices, shops, workshops, stores, and the like) shall be deemed to be under the control of the Employer.

House rules (管理守則) - The Contractor shall comply with the house rules of the Building Manager and pay any deposit temporarily required as security for loss or damage, but any restrictions on access or working hours more stringent than those announced by the Building Manager prior to the award of the Contract and affecting the Works shall be deemed to be a Variation.

Site investigation or condition survey reports (工地勘察及現況勘察報告) - As usual, any site investigation or condition survey reports or other information which may be made available to the Contractor prior to the award of this Contract are given without any warranty on the part of the Employer as to their accuracy or completeness, and they shall be deemed to be supplied for the Contractor's information only. However, it has been clarified that they must be the whole record of such investigation or survey as has been carried out.

3.  Works (工程)

Works - As a catch-all definition to avoid the fine argument that the Works are for "build only" not including design, service and maintenance, “the Works” has been defined to include:

• permanent work (永久工程) required to be carried out and completed by the Contractor under the Contract;
• temporary work (臨時工程) required for the carrying out and completion of the permanent work;
• services (服務) required to be carried out and completed by the Contractor under the Contract;
• materials (物料) supplied by the Employer for incorporation by the Contractor into the Works after they are handed over to the Contractor;
• design (設計) of any part of the permanent work if this is specified to be part of the Works;
• service and maintenance (服務及保養) required to be carried out after substantial completion of the Works; and
• provision of warranties and guarantees (保證及擔保).

The Works exclude:

• materials supplied by the Employer for incorporation by the Contractor into the Works but only until such time when they are handed over to the Contractor;
• materials (物料) or workmanship (工藝) or method (方法) or work (工作) which is not in accordance with the Contract; and
• work or services carried out by the Contractor without authority under the Contract.

Design responsibility – The following have been clarified:

• design of permanent work – the Employer shall engage the Contract Administrator or other designers to carry out the design work;
• development of “design intent drawings” (設計意念圖) (declared as such) into detailed design of the components making up the complete system, installation or fitting, basically by way of shop drawings (製配圖) - the Contractor shall be responsible;
• development of design of schematic and layout drawings (示意及佈置設計圖) of building services installations 機電工程 into shop or installation drawings – the Contractor shall be responsible;
• design of temporary work – the Contractor shall be responsible; and
• Contractor’s design to be approved and be fit for the intended purpose (適合意圖達到的目的).

Testing and commissioning (測試及調試) - Before they may be certified as substantially completed, all mechanically, hydraulically, electrically or electronically operated parts (機械、水壓、電力或電子操作的部分) of the Works and any parts of the Works connected by and including pipes, ducts, conduits, trunking, wiring or cables shall be tested and commissioned in accordance with the requirements of this Contract.

Equal and approved (獲准相等) - For a material where the Contractor is permitted to propose “equal and approved” or “approved equal” brands or models, the Contractor may propose a brand or model of the same kind of material equal in performance and quality to that originally specified or proposed in the Contract. Traditionally, such proposal should have no cost effect. However, there have been cases where the standard of performance and quality is not precise enough and the prices of the alternatives apparently meeting the standard are too cheap. On the other hand, it would not be reasonable to accept only more expensive alternatives. It is therefore clarified that no cost reduction shall be required if the alternative brand or model is not cheaper than the cheapest of those originally specified or proposed in this Contract by more than 10%, otherwise a share of the cost saving shall be proposed.

Contractors’ alternative proposals (承包商的另選建議) - For other cases, as usual, the Contractor’s alternative proposals shall not be adopted without the prior written approval by the Contract Administrator. The approval shall have no effect on the Contract Price or the Completion Date unless the effect is specifically stated in the written approval, in which case, the approval shall be deemed to be a Variation instruction. Under no circumstances shall the approval relieve the Contractor of his responsibilities under this Contract.

4.  Time

Extension of time (工期延長) - Early and progressive submission of extension of time and delay and disruption monetary claims has been encouraged with time frames specified (as good practice rather than as time limits).

It was noted when drafting the Standard Form that in spite of the usual contract practice of specifying a short period of time after the commencement of a delay or disruption event as the time limit for submitting notices and claims, Contractors are still late in submitting their notices and claims, and Contract Administrators are late in ascertaining the claims pending the Employers’ blessing. It was considered that for maintenance and renovation works, Contractors are less sophisticated, laymen building owners as Employers would want to be consulted before granting time and monetary compensation, and Contract Administrators would want to play safe. Therefore, short time bars were considered to be not practicable nor desirable, a more practical approach has been adopted:

• A more relaxed time bar with longer time has been specified for the Contractor to submit extension of time and delay and disruption monetary claims:
  • Extension of time claims to be submitted regularly but not later than the Completion Date of the relevant Works Section or its extended completion date previously claimed by the Contractor; and
  • Delay and disruption monetary claims to be submitted regularly but not later than 3 months after the direct loss and/or expense having been incurred, progressive submissions permitted for continuing events.
• On the other hand, with the relaxed time limit, the Contractor shall bear the consequence of his own non-submission, late submission or insufficient submission of notices or information. The Contract Administrator and the Quantity Surveyor are only obliged to act based on information received without an obligation to demand for further information from the Contractor.

It has been clarified that the Contractor shall continuously use his best endeavours to prevent or mitigate delay or disruption to the progress of the Works however caused, and to prevent the completion of the Works from being delayed or further delayed, but the use of best endeavours by the Contractor shall not require the Contractor to accelerate the carrying out of the Works to recover delay caused by an Excusable Event.

An extension of time is to compensate the working time lost. This means that working days should be suitably converted to calendar days.

When an Excusable Event occurs in the period of delay after the Completion Date but before the substantial completion of a Works Section, extension of time shall still be granted but only for the net duration of the delay rather than granting the gross period until the end of the delay.

Extension of time granted shall not be reduced unless it has been based upon incorrect information provided by the Contractor.

Determining time and cost effects (工期及造價影響的確定) - To remedy the situation of some contracts of specifying a time limit for the Contractor to submit notices and claims without at the same time specifying a time limit for the Contractor Administrator and the Quantity Surveyor to respond, the Standard Form requires the Contract Administrator and the Quantity Surveyor respectively to respond within 14 days after the receipt of an extension of time notice or monetary claim, while subsequent review is permitted in light of further evidence at any time before issuing the Final Certificate.

Handover after completion (竣工後交付) - 14 days have been specified for the Contractor to hand over a Works Section after substantial completion and 7 days for demobilizing from the residual retained areas.

5.  Contract Basis (合同基礎)

Interpretation of Contract Documents (合同文件的釋義) - The order of precedence of the Contract Documents has been clarified, with wider coverage, as:

• Contract Agreement (合同協議);
• Tender Correspondence (投標來往函件);
• Form of Tender or the Tender (投標表格或投標書);
• Special Contract Conditions (特殊合同條款);
• Schedule of Works (工程項目清單);
• the Preliminaries section of the Contract Specification (合同規範內的開辦經營要求部分);
• Contract Conditions (合同條款);
• Contract Drawings (合同圖紙); and
• Sections of the Contract Specification other than the Preliminaries section (合同規範內的開辦經營要求部分之外的其他部分) (i.e. Technical Specification).

Documents issued later in time shall take precedence, particular specification shall take precedence over general specification, detailed drawings shall take precedence over general drawings, specification and drawings specially prepared for the Works shall take precedence over standard specification and drawings.

6.  Prices (價款)

Types of contract (合同類型) - To offer greater flexibility and reduce the need to amend a standard form suiting one type to suit another type, optional clauses have been included to deal with the three different common types of contract, which may be selected in the Particulars of Agreement:

• Lump Sum Contract (總價承包合同)
  • basically quantities are to be estimated by the Tenderers at their own risks;
  • there is also a clause dealing with cases where the quantities are at the Employer’s risks; however, if full scale Bills of Quantities are to be used, this clause may need special conditions to make it more comprehensive;
• Remeasurement Contract (重新計量合同); and
• Rates Only Contract (純單價承包合同).

Measurement and pricing clauses - Clauses have also been introduced to deal with:

• Arithmetical errors (算術錯誤);
• Provisional quantities (暫定數量);
• Method of measurement (工程量計算規則);
• Provisional sums (暫定款); and
• Prime cost rates (暫定成本單價).

It may be argued that these clauses should, as usual practice, be included in the Conditions of Tendering, Preliminaries or Preambles. Because of their common nature, these matters are usually encountered, but there are no standard Conditions of Tendering, Preliminaries or Preambles amongst building professionals. This makes the wording of the clauses and therefore interpretations vary amongst building professionals. It was therefore considered more appropriate to deal with these common matters in the Standard Form.

Valuation (計價)- The valuation rules for valuation of Variations and of work carried out by the Contractor covered by a provisional sum are basically the same as those used in the traditional forms of contracts, being Contract Rates ==> pro-rata rates ==> star rates ==> daywork rates, but with the following enhancements:

• The terms “pro-rata rates” (換算單價) and “star rates” (打星單價) have been formally used. (While they have been used in everyday work, they have not been formally used in the traditional forms of contracts.)
• It has been clarified that a pro-rata rate shall use the Contract Rates for comparable items as the base with adjustment for the net difference in costs due to the difference in character or conditions plus the same percentage for profits and overheads as used in the relevant Contract Rates.
• It has also been clarified that a star rate shall be derived from market rates including rates used on other comparable projects fairly adjusted to take into consideration the nature and conditions under which the work is carried out under this Contract or from first principle based on actual costs plus the percentage for profits and overheads generally used in the Contract Rates.
• If there is any disagreement as to the percentage for profits and overheads generally used in the Contract Rates, 15% shall be used for mark-up on the costs of direct labour, materials and plant. If the work is sub-contracted, then 10% shall be used for mark-up on the subcontract prices. For the SFBC 2005/2006 or before, 15% is usually taken as a convenient but not mandatory norm for all cases.

Contractor’s claims for extras (承包商索賠) - The usual practice that any changes made to the Contractor’s submissions such as drawings, samples or catalogues in consequence of any comments made by the Contract Administrator shall not be a Variation has been retained, but it has been clarified that if the Contractor disagrees, he shall immediately upon the receipt of the relevant comment or instruction write to the Contract Administrator to seek clarification.

Payment (付款) - The usual payment practice of: Contractor’s payment application ==> Quantity Surveyor’s valuation ==> Contractor Administrator’s certification ==> Contractor’s invoice ==> Employer’s payment, has been retained, with the following specific details:

• Payment applications are to be submitted at monthly intervals before substantial completion, and at bimonthly intervals thereafter.
• A Payment Certificate is to be issued within 14 days of receipt of the Contractor’s application.
• A comprehensive checklist of how to compute the net amount payable has been given.
• There is a reminder that any advance payment shall be made only after the provision by the Contractor of a surety bond in a form acceptable to the Contract Administrator and of a value not less than the amount of the advance payment.
• Unlike the SFBC 2005/2006 or before, it is permissible to deduct liquidated damages from the net amount payable.

Final Account (結算) - A comprehensive checklist of how to compute the final Contract Price has been given. The Contractor’s proposed Final Account shall be submitted within 3 months from the completion of the whole of the Works. The whole Final Account shall be agreed as soon as possible not later than 1 month after the issue of the Defects Rectification Certificate. If the Quantity Surveyor considers that he has taken into account all the representation of the Contractor but still fails to obtain the Contractor’s agreement, he may issue a unilateral Final Account to the Contractor and declare it as such.

Final Certificate (最終證書) - The Contract Administrator shall issue the Final Certificate within 14 days after the issue of the Defects Rectification Certificate of the last Works Section or within 14 days after the agreement of the Final Account or after 1 month has lapsed after the issue of the unilateral Final Account, whichever is the later. The Final Certificate is not final in respect of liabilities for any latent defects not discovered at the time of the Final Account, or matters affected by any bribery offence, fraud, dishonesty or fraudulent concealment.

7.  Quality (質量)

This Section covers the usual matters like: Quality liability; Materials, workmanship and method to comply with Contract; Approval; Samples; Testing and inspection; Defects liability; and Warranties and guarantees.

Excepted Risks (免責風險) - The Contractor is exempted from loss or damage arising from the Excepted Risks.

Warranties and guarantees (保證及擔保) - Apart from warranties and guarantees specifically required by the Contract, it may be possible that the Contractor’s suppliers and sub-contractors provide standard warranties or guarantees. The Contractor shall assign the benefits of all such warranties or guarantees to the Employer (so far as he is lawfully able to do so). To prevent undue delay in the submission of warranties and guarantees, it has been specified that the submission of all warranties and guarantees satisfactorily in full compliance with the Contract shall be a pre-requisite to the release of one half of the retention fund upon substantial completion of the relevant Works Section.

8.  Contractor’s Documents (承包商的文件)

This Section covers the usual matters like: Shop drawings (製配圖), Construction method statement and programme (施工方案及進度計劃), Progress reports (進度報告), and As-built records (竣工記錄).

9.  General Obligations (一般責任)

This Section covers the usual matters like: Statutory obligations (法定責任); Intellectual property (知識產權); Assignment (轉讓); Care of the Works (工程的保護); Injury to persons and property and indemnity to Employer (人身及財產的損傷及對發包方的保障); Provision of all things necessary (提供一切必需的); Labour and site management team (人力及現場管理班子); Temporary site facilities (現場臨時設施); Setting out (開線定位); Cleanliness and tidiness (清潔及整齊); Protection (保護); and Visitors (訪客).

It may be argued that some of the clauses under “7. Quality”, “8. Contractor’s Documents”, and “9. General Obligations” should, as usual practice, be included in the Preliminaries. They have been included in the Contract Conditions to reduce the need to draft Preliminaries clauses to cover these usually encountered matters.

Administrative charge (行政費)- A special provision has been introduced to impose a 10% administrative charge on payment of statutory charges on behalf of the defaulting party.

Prevention of bribery offences (防止賄賂罪行) - Clauses on Prevention of Bribery Offences with consequence of determination of the employment of the Contractor have been introduced to stress the importance:

10.  Insurances and Bond (保險及履約保證)

This Section covers Employees’ Compensation Insurance; Contractors' All Risks and Third party liability Insurance; and Surety Bond or cash security.

As compared with SFBC 2005/2006, these clauses have been very much simplified.

Employees’ Compensation Insurance (僱員補償保險) - It is the Contractor’s responsibility to take out Employees’ Compensation Insurance, to follow the statutory requirements.

Contractors’ All Risks and Third Party Liability Insurance (工程一切險及第三者責任險) - Either the Employer or the Contractor may be specified in the Particulars of Agreement to take out the Contractors’ All Risks and Third Party Liability Insurance.

The Building Manager has been specified as one of the “the principals” (委託人).

Use of a company master policy or annual policy is permissible.

Administrative charge - A 15% administrative charge is to be imposed on insurance premium paid on behalf of the defaulting party who fails to insure.

Bond and cash security (履約保證書或押金) - A cash security equal to the amount of the Surety Bond may be withheld temporarily from the Payment Certificate if the Contractor so elects or if the Contractor fails to submit an approved Bond.

Upon the issue of a Defects Rectification Certificate of a Works Section and the settlement of all claims (if any), the amount of the Bond or cash security shall be reduced pro-rata to ratio of the value of that Works Section to the final Contract Price currently estimated. Upon the issue of the Defects Rectification Certificate of the last Works Section and the settlement of all claims (if any), the Bond or the balance of the cash security shall be released to the Contractor without interests.

Pre-2005/2016 SFBC stipulate the release of the Surety Bond upon Practical Completion. SFBC 2005/2006 offer a choice between Substantial Completion and Defects Rectification Certificate.

11.  Determination (終止)

This Section covers the determination by the Employer or by the Contractor himself of the Contractor’s employment (僱用).

Apart from the usual grounds for determination, the following grounds for determination by the Employer of the employment of the Contractor have been introduced:

• the Contractor without reasonable cause fails persistently to rectify defects after substantial completion of the whole of the Works and the Employer pursuant to another clause employs others to rectify the defects for 5 times or more and the total cost of rectifying defects exceeds $100,000;
• the Contractor without reasonable cause fails to submit evidence of the Employees’ Compensation Insurance and the Contractors’ All Risks and Third Party Liability Insurance in the specified manner within 1 month after the Contract Award Date; and
• the Contractor (or any person for whom the Contractor is responsible with or without the knowledge of the Contractor) is convicted of a bribery offence.

12.  Dispute Resolution (爭議解決)

Like SFBC 2005/2016, the dispute resolution procedures are:

• Reference to Designated Representatives (提交指派的代表解決);
• Reference to Mediation (提交調解解決); and
• Reference to Arbitration (提交仲裁解決).

Pre-2005/2016 SFBC 2005/2016 only provides for arbitration.

13.  Amendments

The following amendments in {} are recommended:

4.5       Notices and claims

 

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Standard Form of Contract For Maintenance and Renovation Works - For use in the Hong Kong Special Administrative Region
維修及裝修工程 標準合同 - 用於香港特別行政區

8/7/2021: Full version with commentary removed because of copyright issue.

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Note

20/1/2023: Various forms of Senior Representative added.

8/8/2022: General updating.

18/7/2022: Created.

Identified Terms (terms identified in the Contract Data and shown in italics)

• access date
• access dates
• activity schedule
• additional conditions of contract
• Adjudicator
• Adjudicator nominating body
• Adjudicator’s
• arbitration procedure
• assessment interval
• beneficiaries
• beneficiary
• bill of quantities
• boundary of the site
• Client
• Client’s
• completion date
• completion dates
• condition
• conditions of contract
• Contractor
• Contractor’s
• Contractor’s share percentages
• Cost Manager
• Cost Manager’s
• currency of the contract
• defect correction period
• defects date
• defects dates
• delay damages
• Dispute Avoidance Board nominating body
• exchange rates
• fee percentage
• fee percentages
• incentive schedule
• information execution plan
• interest rate
• key date
• key dates
• key person
• key persons
• language of the contract
• law of the contract
• method of measurement
• named supplier
• named suppliers
• people rates
• period for reply
• project bank
• Project Manager
• Project Manager’s
• Promoter
• Promoter’s objective
• retention free
• retention percentage
• section 
• section’s
• sections
• sections’
• Senior Representative
• Senior Representative's
• Senior Representatives
• Senior Representatives’
• share ranges
• starting date
• Subcontractor undertaking to Others
• Subcontractor undertaking to the Client
• Supervisor
• Supervisor’s
• tribunal
• undertaking to Others
• value engineering percentage
• weather data
• weather measurements
• working areas
• works

(various forms of Senior Representative added, 21/1/2023)

Defined Terms (have capital initials)

• Accepted Programme
• Activity Schedule
• Authorisation
• Base Date Index
• Bill of Quantities
• Budget
• Completion
• Completion Date
• Contract Data
• Contract Date
• Core Group
• Core Group Members
• Corrupt Act
• Defect 
• Defects
• Defects Certificate
• Defined Cost 
• Disallowed Cost 
• Dispute Avoidance Board
• Early Warning Register
• Equipment
• Fee
• Insurance Table
• Joining Deed
• Key Date
• Key Performance Indicator
• Latest Index
• Materials
• Named Suppliers
• Others
• Own Contract
• Parties
• Partnering Information
• Partners
• People Rates
• Plant
• Price Adjustment Factor
• Price for Work Done to Date
• Prices
• Pricing Information
• Project Cost
• Provide the Works
• Schedule of Partners
• Scope
• Short Schedule of Cost Components
• Site
• Site Information
• Specialist Subcontractor
• Stage One
• Stage Two
• Subcontractor
• Supplier
• Total of the Prices
• Trust Deed
• Working Areas

Terms to be converted from GCC or SMM4 to NEC4

GCC or SMM4	NEC4
Architect (as Supervising Officer)	Project Manager
Bill of Quantities	bill of quantities
Bills of Quantities	bill of quantities
claim for additional payment	notification of compensation event
claim for extension of time	notification of compensation event
claim for extension of time and/or additional payment	notification of compensation event
Conditions of Contract	conditions of contract
condition (working condition)	condition
Cost (in GCC)	Defined Cost (many different names)
date for commencement of the Contract	Contract Date
date for commencement of the Works	starting date
date for possession of the Site	access date
date of acceptance of the Tender	Contract Date
date of the award of the Contract	Contract Date
date of the letter of acceptance	Contract Date
Defects Liability Period	The period between Completion and the defects date
Employer	Client (Employer in NEC3)
equipment (for incorporation into the Works)	Plant
expiry of the Maintenance Period	defects date
extension of time	change to the Completion Date
Final Contract Sum	final total of the Prices
GCC Clause 16 Programme	Accepted Programme
Period of Maintenance	The period between Completion and the defects date
plant (construction plant)	Equipment
Price Fluctuation Factor	Price Adjustment Factor
Schedule of Rates	bill of quantities
Supervising Officer	Project Manager
Supervising Officer's Representative	Supervisor
Surveyor (Quantity Surveyor)	Cost Manager
the Contractor	the Contractor
the date for completion of the Works	completion date
the extended date for completion of the Works	Completion Date
the Main Contract	the contract
the Works	the works

 

(conversions from Architect, Employer, Supervising Officer, Supervising Officer's Representative, Surveyor and Contractor added, 8/8/2022)

  

A global search and replace action may cause errors with these terms

Terms which are used both as identified terms and defined terms

• activity schedule vs Activity Schedule
• bill of quantities vs Bill of Quantities
• completion date vs Completion Date
• key date vs Key Date
• named suppliers vs Named Suppliers
• Dispute Avoidance Board Nominating Body vs Dispute Avoidance Board
• people rates vs People Rates
• working areas vs Working Areas

Previous terms which may mix up with or form part of other expressions 

• Architect as in Architectural Services Department
• Contractor as in Sub-contractor
• condition
• cost
• section
• Surveyor 
• tribunal
• works
• (Adding "the " before the word or a space at the end may help in some cases.)

(added, 8/8/2022)

Identified terms which may mix up with or form part of other expressions 

• (when changing to italics)
• contract
• Contractor
• condition
• section 
• tribunal
• works

(note in brackets and Contractor added, 8/8/2022)

Defined terms which may mix up with or form part of other expressions 

• (when capitalising the first letter) 
• Authorisation
• Budget
• Completion
• Defect
• Defects 
• Equipment
• Fee
• Materials
• Others
• Parties
• Plant
• Prices
• Scope
• Site
• Supplier

(note in brackets added, 8/8/2022)

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