MINISTRY OF EDUCATION REVISED CONDITIONS OF ENGAGEMENT OF - PowerPoint PPT Presentation

MINISTRY OF EDUCATION REVISED CONDITIONS OF ENGAGEMENT OF CONSULTANTS

Aim of changes • Increased certainty to suppliers • Procurement process more efficient • Minimising contract negotiation • Ministry reserve the right to make changes

• Use is mandatory for MoE staff, Board of Trustees and Project Managers • Contracts cannot be amended without express written approval of EIS Procurement • If you find changes contact John Albert

Benefits to Consultants • Consistency over the documents • Minimal contract negotiation – less time, less legal fees • All clauses negotiated and approved by NZIA and NZACS • Greater certainty for architects when you sign an MoE Agreement for Services

Thresholds of use for consultancy services (based on fees) • IPENZ SFA and Special Conditions < $50K • CCCS and Special Conditions > $50K

The Changes to CCCS and SFA • Only covering off the most important changes today • We aimed to have consistency of clauses across CCCS and SFA • All available in Contracts Documents NZIA Website and MoE Website

IPENZ Short Form Agreement (SFA) PL Insurance requirements Previous Insurance Requirements: Public Liability: no less than $500,000 Revised Insurance Requirements: Public Liability: no less than $2,000,000 per occurrence

SFA PI Insurance requirements Previous Insurance Requirements: Professional indemnity insurance – the greater of $50,000 or five times the value of the Fees Revised Insurance Requirements: Professional Indemnity insurance- five times the fee with a maximum value of $500,000. Level to cover the limit of liability

SFA Limitation of Liability Previous Limitation of Liability Limited to the greater of five times the value of the Fees or the sum of $50,000. Revised Limitation of Liability Five times the fee with a maximum limit of $500,000 except in respect to weather tightness claims where the maximum aggregate amount payable shall be five times the fee with a maximum limit of $250,000.”

CCCS PL Insurance requirements Previous Insurance Requirements Public Liability : $1,000,000 if Project value is under $5,000,000. $2,000,000 if Project value is $5,000,000 - $10,000,000. $5,000,000 if Project value is over $10,000,000. Revised Insurance Requirements: Public Liability : No less than $5,000,000 per occurrence

CCCS PI insurance requirements Previous Insurance Requirements Professional indemnity - the greater of $50,000 or five times the value of the Fees Revised Insurance Requirements: Professional Indemnity – the Consultant shall take out and maintain for the duration of the Services Professional Indemnity Insurance for the amount of liability. This means five times the fee with a max of $2,000,000

CCCS Limitation of Liability Previous Limitation of Liability • $500,000 is the minimum acceptable limitation of liability. • $1,000,000 if the Project value is $500,000 - $1,000,000, or if the Consultant’s fee is over $100,000. • $2,000,000 if the Project value is over $1,000,000, or if the Consultant’s fee is over $200,000. Revised Limitation of Liability • Five times the fee with a maximum limit of $2,000,000, except in respect of weather tightness claims where the maximum aggregate amount payable shall be five times the fee with a maximum limit of $250,000.

Disputes for SFA and CCCS Previous Disputes If a dispute is not resolved within 5 working days the Parties may by agreement refer the dispute to mediation, failing which either Party may refer the dispute to other forms of dispute resolution. Revised Disputes If the dispute not resolved within 10 working days, then the dispute will be determined by mediation. If the Parties then fail to resolve the dispute by way of mediation within a reasonable period, then either Party may refer the dispute to arbitration

Intellectual Property for SFA and CCCS Previous Existing IP – Original Party owns New IP – Client owns Revised Existing IP – Consultant owns, Client royalty free unrestricted access New IP – Joint ownership

Delivery of Documents – New Clause for SFA and CCCS • Documents means to the extent applicable to the services • What is prepared NOT what may be used in their preparation • ‘Following delivery of any Documents, the Consultant will not be liable for any re-use of, or any changes to those Documents by the Client or any other person without the Consultant’s prior written approval’.

Appendix H Continuity Deed • Will not be included in contracts until further notice • Deed currently being reviewed • Will be used on certain projects – Fees greater than $X million • Will be advised in RFP

Insurance requirements – Limits for Public Liability • Contract requires per occurrence • Most PL policies are ‘occurrence’ based • Limit applies per Occurrence (Event) rather than being the maximum for the policy period • Product liability and P&E are often capped at the Policy limit (no per occurrence)

Insurance requirements – Additional Named Insured for Public Liability • SFA and CCCS requires provision for The Client (MOE as defined) to be named as additional insured, under Your insurance for vicarious liability (PL only) • MOE need to be added to Your PL as an ‘additional insured’ – You will need to advise your Insurer • They may want to see the contract with conditions • NZACS members – This requirement has been included for you

Limitations and Professional Indemnity • PI limit must align with the contract limitation of liability (recommend this as a minimum) • Aggregate limit – Most PI policies have a maximum limit payable (the aggregate limit) during the policy year • Contract requires you to maintain for a period of time following completion of the Services