Subcontractors and Suppliers
Definitions and Interpretations:
Headings shall not be used in interpretation and unless a contrary intention applies:
“Accepted” means that the Goods, Materials or Services have been accepted by the Head Contractor as compliant with the Purchaser’s Subcontract and any purported acceptance by the Purchaser’s Representative shall be construed as conditional pending such Head Contractor’s acceptance.
“Annexure” means the “Annexure to General Conditions – Subcontractors and Suppliers” attached to and to be read as part of these Conditions. Where the Annexure states that a clause of these General Conditions is to be amended or deleted, then that clause shall take its amended form or shall not form part of the Subcontract as applicable.
“Confidential Information” means any information or process which is confidential to the Purchaser or Head Contractor which is not in the public domain and of which the Subcontractor becomes aware arising out of or incidental to execution of the work under the Subcontract.
“Day” or “day” means a business day where Banks are open for business in the location nearest to the Site and excludes the days from Christmas Day to and including New Year’s Day, together with any additional Gazetted Public Holidays.
“Date for Substantial Completion” means the date stated in the Purchase Order or if none is so stated, as set out in the Annexure and amended pursuant to the Subcontract.
“Goods or Materials” means the goods or materials to be supplied under the Subcontract as specified in and in conformity with the requirements of the Subcontract Documents, together with such goods or materials obviously necessary to ensure the Works are complete and fit for the intended purpose.
“Head Contractor” is the party to whom the Purchaser is contracted and identified in the Annexure.
“Intellectual Property” means all copyrights, trademarks, patents, registered designs, trade secrets and know-how and all other Intellectual Property defined in Article 2 of July 1967 Convention of the World Intellectual Property Organization.
“Principal” is the party to whom the Head Contractor is contracted.
“Project” means the project identified in the Annexure.
“Proportionate Liability Acts” means each of:
(i) the Civil Law (Wrongs) Act 2002 (ACT) and the Building Act (ACT);
(ii) Civil Liability Act 2002 (NSW);
(iii) the Proportionate Liability Act 2005 (NT) and the Building Act 1996 (NT);
(iv) the Civil Liability Act 2003 (Qld);
(v) the Law Reform (Contributory Negligence and Apportionment of Liability (Proportionate Liability)) Amendment Act 2005 (SA);
(vi) the Civil Liability Act 2002 amended by the Civil Liability Amendment (Proportionate Liability) Act 2005 (Tas) and the Building Act 2000 (Tas);
(vii) the Wrongs Act 1958 (Vic); and
(viii) the Civil Liability Act 2002 (WA).
“Purchase Order” means a Purchase Order issued by the Purchaser on the Subcontractor to procure supply of the Works.
“Purchaser” means the party issuing the Purchase Order.
“Purchaser’s Subcontract” is the agreement between the Purchaser and the Head Contractor identified in the Annexure which has been made available for inspection (excluding prices) by the Subcontractor and the Subcontractor hereby acknowledges it has made the inspection and satisfied itself that its work under the Subcontract will be suitable for incorporation as part of the Work and will be in accordance with and enable the Purchaser to comply with all its requirements under the Purchaser’s Subcontract.
“Purchaser’s Representative” means the person named in the Annexure, detailed in the Purchase Order or as nominated from time to time by the Purchaser.
“Security of Payment Acts” means:
(i) if the Governing Law is the Law of Western Australia, then the Construction Contracts Act 2004 (WA);
(ii) if the Governing Law is the Law of New South Wales, then the Building and Construction Industry Security of Payment Act 1999 (NSW);
(iii) if the Governing Law is the Law of Queensland, then the Building Industry Fairness (Security of Payment) Act 2017
(iv) if the Governing Law is the Law of Tasmania, then the Building and Construction Industry Security of Payment Act 2009 (Tas);
(v) if the Governing Law is the Law of the Northern Territory, then the Construction Contracts (Security of Payments) Act 2004 (NT);
(vi) if the Governing Law is the Law of Victoria, then the Building and Construction Industry Security of Payment Act 2002 (Vic); or
(vii) if the Governing Law is the Law of South Australia, then the Building and Construction Industry Security of Payment Act 2009 (SA).
“Services” means the services to be provided by the Subcontractor as specified in and in conformity with the requirements of the Subcontract Documents together with such services obviously necessary to ensure the Works are complete and fit for the intended purpose, whether expressly specified or not.
“Site” means the location described in the Annexure where the Purchaser has been contracted to execute its part of the Project. The Site is more particularly defined in the Purchaser’s Subcontract which (bar prices) the Subcontractor acknowledges the Purchaser has made available for review.
“Special Conditions” means those conditions identified in the Annexure and prefixed as “SC [No.]”.
“Substantial Completion” is that stage in the execution of the work under the Subcontract when:
(i) the Works are complete except for minor defects and minor omissions which do not prevent the Works from being capable of use for their intended purpose;
(ii) the Purchaser’s Representative has determined that the Subcontractor has reasonable grounds not to promptly correct the defects or the omissions;
(iii) all tests required by law, the Subcontract or the Purchaser’s Subcontract have been carried out, passed and evidence thereof which is satisfactory to the Purchaser’s Representative have been supplied in writing to him;
(iv) all documents and other information required under the Subcontract including “as-built” drawings, warranties, operating and maintenance manuals and any other items which the Purchaser’s Representative considers are reasonably necessary for the efficient use, operation and maintenance of the Works have been supplied in a form satisfactory to the Purchaser’s Representative; and
(v) all Goods, Materials and Services have been accepted by the Purchaser’s Representative pursuant to the Subcontract.
(vi) the Works have been incorporated as part of the Purchaser’s scope and subject of a Notice of Substantial Completion issued by the Head Contractor under the Purchaser’s Subcontract.
“Subcontractor” or “Supplier” means the party named in the Annexure or the Purchase Order. Where these Conditions apply to a party required to execute part of the work under the Subcontract at Site, the party shall adopt the title of Subcontractor and where the party is to execute the work under the Subcontract wholly off Site to supply Goods, Materials or Services the party shall adopt the title of Supplier. For the purposes of this Subcontract, the terms Subcontractor and Supplier shall be deemed interchangeable.
“Subcontract” means the agreement for the supply of goods, materials or services between the Purchaser and the Subcontractor evidenced by the Subcontract Documents.
“Subcontract Documents” mean documents detailed in the Annexure or identified in the Purchase Order.
“Subcontract Sum” means the fixed amount stated in the Annexure or the Purchase Order or if none is so stated, the fixed amount calculated pursuant to the Subcontract.
“Work Under The Subcontract” includes any work required of the Subcontractor including that of a permanent or temporary nature to fulfil all its obligations under the Subcontract.
“Works” comprises all elements of Goods, Materials and Services to be supplied, delivered, installed and commissioned by the Subcontractor to form part of the Purchaser’s obligations under its Purchaser’s Subcontract and forming part of the Project.
1.0 Nature of Subcontract
1.1 The Subcontract shall be:
a) a Fixed Lump Sum; or
b) a Schedule of Rates; or
c) part Fixed Lump Sum and part Schedule of Rates;
as stated in the Annexure or the Purchase Order.
1.2 A Schedule of Rates Subcontract Sum shall be the sum of the amounts ascertained by multiplying the unit rates detailed in the Subcontract Documents by the actual quantities required for the Works.
1.3 For a partly Fixed Lump Sum and partly Schedule of Rates the Subcontract Sum shall be ascertained by addition of the amount determined pursuant to Clause 1.1 above for the Fixed Lump Sum portion and the amount determined pursuant to Clause 1.2 above for the Schedule of Rates portion.
1.4 Money amounts shall be expressed in AUD$ and allow for all duties and taxes. The Goods and Services Tax (“GST”) and any duty are to be shown separately for each rate or price but if not so shown, shall be deemed to be included.
2.0 Applicable Law, Approvals and Fees
2.1 The Subcontract shall be governed by and construed in accordance with the laws applicable in the State or Territory of Australia in which the Work is to be performed and the parties agree to submit to the jurisdiction of the Courts thereof.
2.2 The Subcontractor shall satisfy all relevant legislative requirements including but not limited to the giving of any necessary notices and obtaining any necessary consents or approvals. The Subcontract Sum shall be deemed to include the costs of such compliance and the payment of any fees in accordance with all legislative requirements unless stated otherwise in the Annexure or the Purchase Order.
2.3 The Subcontractor shall be deemed to have carefully examined the scope prior to entering the Subcontract and to have allowed for compliance with all legislative requirements in force at the date award of the Subcontract. Any change in legislative requirements occurring after the date of award of the Subcontract will be valued as a variation provided the Subcontractor provides evidence of additional cost.
2.4 The Parties agree that the Proportionate Liability Acts will not have any application to the Subcontract, the performance of the work under the Subcontract, or any of the obligations of the Subcontractor under the Subcontract or at law.
2.5 Despite the provisions of the Proportionate Liability Acts, the Subcontractor acknowledges that it is solely responsible for and indemnifies the Purchaser in respect of any loss, damage, cost, claim, expense or proceeding suffered or incurred by the Purchaser arising out of or in connection with any wrongful or negligent act or omission on the part of the Subcontractor, or its sub-subcontractors or their respective officers, employees, agents and contractors, in relation to or in connection with the performance of work under the Subcontract.
2.6 If, despite the provisions of this clause, one or more of the Proportionate Liability Acts does apply to any aspect of the Works or its execution, the Subcontractor acknowledges and agrees that, for the purposes of the Proportionate Liability Acts, the Subcontractor is entirely and solely responsible for any act or omission on the part of any of its officers, employees, its sub-subcontractors or agents. The Subcontractor further undertakes to the Purchaser, as a separate and independent obligation, to rectify or complete any of the work under the Subcontract which in the Purchaser’s opinion is defective, incomplete or not in conformance with the Subcontract, or to compensate the Purchaser for any cost, loss or expense incurred by the Purchaser as a result of the application of the Proportionate Liability Acts or for having such work rectified or completed.
3.0 Ambiguities in the Documents
3.1 Notwithstanding any other provision, the Subcontract Documents shall be read and construed as a whole and taken as mutually explanatory. In the event of any error, ambiguity, omission, discrepancy or inconsistency in or between any of the Subcontract documents, the Subcontractor warrants the Subcontract Sum is and may be deemed to include the highest quality or extent described or reasonably inferable as necessary or required by any part of the Subcontract Documents to ensure the Works are complete, operational and fit for their intended purpose.
3.2 Where clarification is sought on the meaning of any requirement of the Subcontract Documents, the Purchaser’s Representative shall determine the interpretation that will apply and the Subcontractor shall comply at its own cost.
4.0 Language and Measurements
4.1 All measurements of physical quantities shall be in SI units and all communications shall be in the English language.
5.0 Notices
5.1 All notices by the Subcontractor must be written.
5.2 All notices must refer to the Purchase Order Number.
5.3 A notice and any other documents shall be deemed to have been received if delivered by hand, by courier or otherwise forwarded to the relevant address in the Subcontract Documents or last communicated in writing to the person giving the notice on the earliest of:
a) actual receipt; or
b) confirmation of correct fax transmission;
c) on the third day after posting prepaid mail;
d) or where initially submitted by e-mail and if confirmed in writing within 48 hours, when correct email transmission was confirmed.
6.0 Time, Progress, Delays, Extra Costs
6.1 The working hours are defined in the Annexure or within the Subcontract Documents. If not so defined or contained, they shall be those necessary to effect completion of the Works by the Date for Substantial Completion.
6.2 The Subcontractor shall proceed with the work under the Subcontract with due expedition to achieve Substantial Completion by the Date for Substantial Completion, in a manner satisfactory to the Purchaser’s Representative.
6.3 If the Subcontractor becomes aware of anything which may cause delay to the Works, it must immediately issue written notice thereof to the Purchaser’s Representative (but in any event no later than 2 days after the cause of delay first arose) detailing the cause and estimated extent of delay.
6.4 The Subcontractor shall not be entitled to any extension of time and the Purchaser’s Representative shall not be required to grant a reasonable extension of time unless:
a) the Subcontractor is or will be delayed by events which are beyond the control of the Subcontractor, the Subcontractor has not contributed to the delay and has taken all reasonable steps to mitigate the effects thereof; and
b) the Subcontractor gives written notice of delay to the Purchaser’s Representative within 2 days of the first day of the cause of delay and, within 2 days of the cessation of the delay, submits its written claim for an extension of time in the prescribed form; and
c) the Purchaser is entitled to an extension of time under its Purchaser’s Subcontract with the Head Contractor, the requirements for which the Subcontractor shall be deemed to have fully assessed prior to entering this Agreement.
6.5 The prescribed form of a claim for an extension of time must contain all of the following:
a) full particulars of the delay and its cause;
b) how the delay affects work under the Subcontract critical to completion;
c) details of actions taken by the Subcontractor to mitigate the effects of the delay;
d) the extent or likely extent of delay; and
e) the basis of the Subcontractor’s claims under the Subcontract or at law, together with reference to any documentary or other evidence upon which the Subcontractor relies in support of its claim.
6.6 If the Subcontractor fails to comply with the requirements of Clauses 6.3, 6.4 or 6.5 within the times prescribed, the Subcontractor shall be deemed to have waived its entitlement to any extension of time and the Subcontractor will, at its own cost, apply such resources or take such other actions as necessary to bring the Works to the stage of Substantial Completion by the Date for Substantial Completion which existed prior to the delay occurring.
6.7 The Subcontractor acknowledges that the Works and Services form part of the Work under the Purchaser’s Subcontract and access to the Site shall be subject to similar conditions as prevail for the Purchaser, including the likelihood that other contractors will require co- operation and co-ordination from the Subcontractor to achieve timely progress. The Subcontractor undertakes to provide all possible co-operation and co-ordination with all parties working on the Site.
6.8 The Subcontractor accepts the risk of all increased costs resulting from delay or disruption to its Works or Services or from mitigating or overcoming such delay or disruption howsoever arising from any cause for which an extension of time is not provided under clause 6.4(c).
6.9 Notwithstanding any other provision of this Subcontract, where an extension of time for the work under the Subcontract is granted pursuant to clause 6.4(c) the Subcontractor shall be responsible to justify any amount payable under the Purchaser’s Subcontract in respect of any delay or disruption costs and the Purchaser will only be liable to the Subcontractor for the amount the Subcontractor justifies as payable and is paid under the Purchaser’s Subcontract, less a reasonable amount for the Purchaser’s margin and overhead.
6.10 If the Subcontractor does not reach Substantial Completion by the due date:
a) the Purchaser shall be entitled to recover from the Subcontractor Liquidated Damages at the rate in the Annexure as a genuine pre-estimate of the Purchaser’s direct costs and not a penalty, by deduction from any moneys due or to become due to the Subcontractor and if these amounts are insufficient, to recover any balance from the Subcontractor as a debt due and payable to the Purchaser; and
b) if the Subcontractor’s failure to achieve Substantial Completion by the due date results in or contributes towards the Purchaser becoming liable to any third party for damages, whether liquidated or otherwise, the Subcontractor shall be liable to the Purchaser for those damages or so much of them as the Purchaser’s Representative determines as due to the Subcontractor’s delay.
6.10.1 Notwithstanding that the Subcontractor is not entitled to an extension of time the Purchaser’s Representative may at any time before the end of the Defects Liability Period extend the Date for Substantial Completion by any period and for any reason.
7.0 Payments, Retention and Security
7.1 The Subcontractor shall submit its Payment Claims to the Purchaser at the intervals stated in the Annexure. Each claim must contain full details of each element of the Goods, Materials or Services supplied or completed and incorporated into the Works, clearly state the Purchase Order No. issued by the Purchaser and be accompanied by a Statutory Declaration in the form of Schedule A.
7.2 The Subcontractor shall submit its Payment Claims in a form satisfactory to the Purchaser’s Representative for only that portion of the Works complete in accordance with the Subcontract at the date of the claim and shall, prior to incorporation into the claim, be agreed with the Purchaser’s Representative as claimable.
7.3 The approval of the Purchaser’s Representative is required for any Payment Claim to include any unfixed materials or an advance payment. The Subcontractor shall not be entitled to any advance payment or payment for unfixed materials until it delivers to the Purchaser’s Representative an unconditional Bank Guarantee for the same amount as claimed. Such guarantees shall be held by the Purchaser until the unfixed materials are incorporated into the Works or until the value of any advance payment can be set off against the value of Works complete in accordance with the Subcontract.
7.4 Where the Subcontractor becomes entitled to reimbursement of any extra costs, claims for reimbursement must be supported with invoices or other evidence to the satisfaction of the Purchaser’s Representative.
7.5 The Purchaser’s Representative shall, within ten (10) days of receipt of the Subcontractor’s Payment Claims, certify and issue to the Subcontractor the amount payable in a “ Payment Schedule” or identify such additional information necessary to enable valuation and certification.
7.6 The Purchaser may deduct retention from any Payment Claim at 10 % of the amount otherwise due as security for performance, together with any additional security stated in the Annexure.
7.7 Any amount claimed by the Purchaser from the Subcontractor for any extra costs, loss or expense due to a breach of the Subcontractor’s obligations or otherwise, under or arising in connection with the Works or otherwise, may be recovered from any amounts due or to become due for payment to the Subcontractor or if that is insufficient from any retention or security held.
7.8 Subject to Clause 7.7, any retention or security held at Substantial Completion shall be reduced so that the balance shall not exceed 5% of the Subcontract Sum, and that residual shall, again subject to Clause 7.7, be returned to the Subcontractor at the end of the defects liability period stated in the Annexure.
7.9 If the Purchaser’s Representative requires further clarification or amendment of any Payment Claim the Purchaser’s Representative may withhold certification until such is provided by the Subcontractor or, at the Purchaser’s Representative’s absolute discretion, provide a Payment Schedule for such lesser amount obviously payable based on the information provided.
7.10 The Subcontractor expressly agrees that, notwithstanding any other provision of this Subcontract, it waives any entitlement to payment under a Payment Claim following Substantial Completion unless it has provided its Payment Claim endorsed as a “Final Claim” and has executed a Deed of Release in the form of Schedule B.
7.11 The Purchaser may, at its absolute discretion to which the Subcontractor agrees, prepare a Recipient Created Tax Invoice for the amount of any Payment Schedule or issue the Payment Schedule to the Subcontractor for preparation and delivery of a compliant Tax Invoice and pay the amount thereof within the period stated in the Annexure but any such payments are not evidence of due or proper performance and shall be deemed payment on account only.
8.0 Variations
8.1 The Purchaser’s Representative may give a direction to the Subcontractor to vary the scope of the Works to:
a) increase, decrease, omit or alter any part of the work under the Subcontract;
b) change the quantity or quality of any part of the work under the Subcontract;
c) perform additional works;
d) change any design, drawing or specification for the works under the Subcontract, but the Subcontractor shall not vary the Works without a prior written direction from the Purchaser’s Representative to do so.
8.2 If the Subcontractor undertakes or implements a change to the Works or works under the Subcontract other than in strict accordance with the preceding clause, the Subcontractor shall have no claim for any extra costs, loss, expense or extension of time or any other claims upon the Purchaser pursuant to the Subcontract, at law or in equity and shall be deemed to have affected the change for its own convenience and benefit at its own cost.
8.3 Where the Purchaser’s Representative directs a variation, the parties must, prior to its execution, attempt to agree its value and any affect upon the date for Substantial Completion.
8.4 Where a variation involves a change to the Work for which a price has not been agreed and: a) scheduled rates or prices which might reasonably be applied form part of the Subcontract, the variation shall be valued using those rates or prices; or b) involves work for which no rate or price may reasonably apply from the Subcontract Documents, a reasonable price for the variation shall be determined by the Purchaser’s Representative.
8.5 Notwithstanding any other provision of Clause 8, where a direction is given by the Purchaser’s Representative resulting from a change directed under a Purchaser’s Subcontract and which alters the scope of works under the Subcontract, the Subcontractor agrees to implement the change on the express understanding that the Subcontractor will be responsible to justify the amount payable under the Purchaser’s Subcontract in respect of the change in the Subcontractor’s scope and the Purchaser will only be liable to the Subcontractor for the amount the Subcontractor justifies as payable under the Purchaser’s Subcontract, less a reasonable amount for the Purchaser’s margin and overhead.
9.0 Assignment and Subcontracting
9.1 The Subcontractor shall not assign or sub-subcontract any benefit or any part of the Works without the prior written approval of the Purchaser’s Representative.
9.2 Approval to sub-subcontract shall not relieve the Subcontractor from any liability or obligation under the Subcontract and the Subcontractor shall be liable to the Purchaser for any acts, defaults or omissions of its sub- subcontractors as if they were acts, defaults or omissions of the Subcontractor.
9.3 The Subcontractor expressly acknowledges and agrees that no delay in supply of any materials or provision of any work or service for which the Subcontractor has arranged a sub- subcontract or order shall qualify as a basis for an extension of time and the Subcontractor shall, at its own expense, increase its resources or arrange special delivery to complete the Works by the date for Substantial Completion.
10.0 Subcontractor’s Obligations
10.1 The Subcontractor warrants that it has the necessary skills, resources and expertise to complete the Works in accordance with the Subcontract and shall ensure that its employees, authorised sub-subcontractors and suppliers have the necessary skills and expertise to perform any work allocated to them.
10.2 The Subcontractor warrants that the Works or any part thereof are not, when invoiced to the Purchaser, the subject of any lien or charge and are then the unencumbered property of the Subcontractor.
10.3 The Subcontractor warrants that it has fully informed itself as to the Site including access to and the prevailing conditions on the Site, the drawings, specifications and other documents forming part of the Subcontract Documents or as necessary for performance of the Works, and made all necessary enquiry and allowance regarding any other matter or thing that might reasonably be expected to affect the carrying out of the Works by a competent Subcontractor experienced in the type of Works the subject of this Subcontract.
10.4 The Subcontractor warrants it has made due allowance in its rates and prices for delay and disruption and acknowledges that it shall have no claim against the Purchaser for any additional payment under the Subcontract or at law resulting from any extension of time or delay or disruption to the work under the Subcontract.
10.5 The Subcontractor warrants its rates or prices are inclusive of all transport, travelling, costs of consumables, temporary work, plant, tools, care of the Works, management and supervision, together with all overheads and indirect costs or expenses required in completion of the Works.
10.6 The Purchaser’s Representative may give written notice to the Subcontractor to remove from Site any of its employees, agents or sub- subcontractors whose performance the Purchaser’s Representative considers to be unsatisfactory. The Subcontractor shall promptly comply with such notice at its own cost.
10.7 The Subcontractor shall not represent himself as an employee or agent of the Purchaser and shall, wherever capable of compliance, give effect to all directions of the Purchaser’s Representative.
11.0 Insurance
11.1 The Subcontractor shall effect and maintain insurance against liability from claims arising from the death or injury of the Subcontractor’s employees, sub- subcontractors and agents in carrying out the Works. Such insurance shall be in accordance with all statutory requirements for Workers’ Compensation and Employer Liability.
11.2 The Subcontractor shall effect and maintain policies of insurance for Contractor’s All Risk, Product Liability and an appropriate level of insurance against claims by any other party arising from death or injury of any person or loss or damage to any property arising out of or in connection with performance of the work under the Subcontract. See Special Conditions for levels of insurance required.
11.3 If the Subcontractor is required to prepare any designs or provide any professional or specialist advice or service, the Subcontractor shall effect and maintain a Professional Indemnity policy with the Purchaser and the Head Contractor as named insured’s, in an amount of not less than stated in the Annexure.
11.4 The Subcontractor shall, before commencing work, provide evidence satisfactory to the Purchaser’s Representative of current policies of all required insurances. Policies for Contractor’s All Risk and Professional Indemnity must name the Purchaser and the Head Contractor as co-insured’s and, notwithstanding any other provision of the Subcontract, the Subcontractor shall not become entitled to any payment under the Subcontract or at law until it has complied with this requirement.
12.0 Royalties, Fees, Intellectual Property Rights, Confidentiality
12.1 All payments relating to Royalties, Intellectual Property rights and other such fees associated with the Goods, Materials or Services used by the Subcontractor to complete the Works are deemed included in the Subcontract Sum.
12.2 The Subcontractor hereby grants the Purchaser an enduring, free, transferable licence for the operation, use, maintenance and upgrading of any proprietary system employed in execution of the work under the Subcontract.
12.3 The Subcontractor hereby indemnifies and keeps indemnified the Purchaser from and against all actions, suits, claims, demands, costs and proceedings howsoever caused by breach by the Subcontractor of any Intellectual Property right or failure to pay any royalty or fee due.
12.4 The Intellectual Property rights in any system or design created for or arising as the result of the Subcontractor’s performing the Works shall vest in the Purchaser upon creation.
12.5 The Subcontractor shall not disclose to any person any Confidential Information of the Purchaser that becomes known to the Subcontractor in the course of completing the work under the Subcontract and the Subcontractor shall ensure its sub-subcontractors, employees and agents are similarly restrained.
13.0 Warranties
13.1 The Subcontractor warrants that for the period of warranty specified in the Annexure or as otherwise required under the Subcontract that the Works will achieve the performance requirements and characteristics as specified and operate satisfactorily for their intended purpose. If no such specified period exists in the Subcontract Documents or the Annexure, this warranty shall operate for 12 months from the end of the Defects Liability Period and if no intended purpose is inferred in the Subcontract Documents it shall be the purpose reasonably inferred for the Goods or Services if provided for their ordinary purpose, but adopting the highest merchantable quality available.
13.2 If required by the Purchaser, the Subcontractor will execute and provide to the Purchaser a Deed of Warranty in the form of Schedule C or such appropriate Deed as complies with the requirements of the Purchaser’s Subcontract.
13.3 The Subcontractor undertakes to enter and ensure its sub-subcontractors and suppliers provide the warranties and indemnities specified in the Subcontract Documents for the benefit of the Purchaser and the Head Contractor and the Subcontractor warrants that it will enter contracts with its suppliers and sub-subcontractors to enforce this undertaking.
14.0 Defects Liability
14.1 The Subcontractor shall protect and provide preventative maintenance for the Works until Substantial Completion or to meet the obligations of the Purchaser under the Purchaser’s Subcontract (whichever is the later) and will thereafter attend to and replace any defective component of the Works for the longest period stated in the Annexure, the Purchaser’s Subcontract or elsewhere in the Subcontract Documents as the defects liability period (the “Defects Liability Period”).
14.2 In the event there is no Defects Liability Period in the Annexure or the Subcontract Documents, then a period of 12 months shall apply from Substantial Completion.
15.0 Accommodation and Access
15.1 Unless otherwise provided in the Subcontract the Subcontractor shall provide, at its own cost, suitable accommodation, power, water, messing and ablution facilities for all its personnel and storage for all plant, equipment and supplies necessary to complete the Works.
15.2 The Subcontractor shall at all reasonable times give any person authorised by the Purchaser access to premises used by the Subcontractor where the works under the Subcontract are being performed for testing or inspection.
15.3 Where the Subcontractor uses the Purchaser’s premises or facilities (including without limitation any at Site), it shall comply with all reasonable directions and procedures in effect at those premises or facilities.
16.0 Standards
16.1 All Goods, Materials or Services shall be new and comply with the higher standards or more stringent requirements of the latest Australian, New Zealand or International Standard applicable to the Work or such other standard specified by the Subcontract Documents.
16.2 Packaging and labelling of all Goods and Materials and in particular (without limitation) any poisons, drugs, chemicals, flammables, gases, volatiles, corrosives, explosive or goods of a dangerous nature must comply with the provisions of the relevant statutory requirements in force at the time of delivery.
17.0 Delivery of Goods and Materials
17.1 Delivery Dockets, properly completed, stating the Purchase Order Number and particulars of Goods and Materials or Services supplied, must accompany any delivery. Failure to comply with this requirement may result in additional costs which shall be borne by the Subcontractor.
17.2 Any component of the Works which are in the opinion of the Purchaser’s Representative of inferior quality, improperly described or not of merchantable quality shall be at the Subcontractor’s risk until replaced at its cost.
17.3 Goods and Materials may be examined by the Purchaser’s Representative as soon as practicable after delivery but shall be deemed not to be supplied until the Purchaser’s Representative verifies that the Goods and Materials have been delivered without damage and are in accordance with the requirements of the Subcontract.
18.0 Suspension/ Security of Payment
18.1 The Purchaser may, for its convenience, notify the Subcontractor in writing to suspend the whole or any part of the work under the Subcontract and that part shall be suspended from the date or event specified in the notice.
18.2 The Purchaser’s Representative may at any time notify the Subcontractor in writing to recommence the suspended Works.
18.3 Where the whole or part of the works under the Subcontract is suspended pursuant to clause 18.1, the Subcontractor may, subject to clause 18.4, be entitled to recover its direct extra costs necessarily incurred in complying provided that the Subcontractor has not caused or contributed to the suspension. The necessarily incurred direct extra costs shall be the Subcontractor’s sole monetary entitlement arising from suspension. If the Subcontractor is directed to recommence following suspension the Subcontractor may become entitled to claim an extension of time subject to compliance with clause 6.
18.4 Notwithstanding any other provision of the Subcontract, the Subcontractor shall have no monetary claim under the Subcontract or at law against the Purchaser for any suspension which allows sufficient time for completion of the Works by the date for Substantial Completion or for which the Subcontractor has caused or contributed to the need for the suspension.
18.5 If any Subcontractor at any time suspends or becomes entitled or required to suspend the provision of the Goods, Materials or Services (which are required for the work under the Subcontract) pursuant to the Security of Payment Act then, despite any other provision of this Contract:
a) the Subcontractor; is not relieved of any of its obligations under this Subcontract and the suspension or other action by the Subcontractor does not entitle it to any Claim against the Purchaser; and
b) the Subcontractor must immediately provide to the Purchaser full details of the circumstances giving rise to the Subcontractor’s right, alleged right or requirement to suspend;
c) the Subcontractor acknowledges and agrees the date on which the Purchaser must issue a Payment Schedule pursuant to clause 7 is, for the purposes of the Security of Payment Act, the ‘reference date’;
d) the Subcontractor must, promptly and without delay, give the Purchaser’s Representative a copy of any written communication of whatever nature in relation to the Security of Payment Act that the Subcontractor gives to or receives from any of its suppliers or sub- subcontractors.
19.0 Termination for Convenience
19.1 The Purchaser may at its absolute discretion terminate the Subcontract for its convenience by notice in writing and, provided the Subcontractor has not by breach of any provision of the Subcontract or by wrongful act or omission caused or contributed to termination, the Subcontractor may become entitled to be paid the value of the Works completed prior to termination, together with such extra and unavoidable costs incurred due to the termination but excluding loss of profit on the incomplete portion of the Works or any other loss or expense.
20.0 Termination Otherwise
20.1 If the Subcontractor:
a) commits any act of bankruptcy or is made bankrupt;
b) advises the Purchaser or creditors that it is insolvent;
c) enters into an arrangement with creditors;
d) takes action to wind up the Subcontractor;
e) has a winding up order made against it;
f) has a receiver or manager appointed to control any part of the Subcontractor’s business or assets; or
g) fails to observe any of its obligations under the Subcontract and the Purchaser’s Representative forms the opinion that damages are not an adequate remedy, then the Purchaser’s Representative may issue a written notice to the Subcontractor requiring it to show cause within the period stated in the notice why the Subcontract should not be terminated or why the Purchaser should not take over the balance or any part of the Works and recover any additional costs from the Subcontractor.
20.2 If the Subcontractor fails within the period specified in the above notice to satisfy the Purchaser’s Representative why termination should not proceed or why the Purchaser should not take over the balance or any part of the Works then, without prejudice to any other rights, the Purchaser may in its absolute discretion serve a notice terminating the Subcontract or taking over the balance or any part of the Works.
20.3 If the Purchaser becomes entitled to terminate the Subcontract or take over the Works or part thereof pursuant to the above provisions then the Subcontract shall be at an end on and from the date of the notice of termination and the Subcontractor shall be deemed to have repudiated the Subcontract and the Purchaser shall be deemed to have accepted that repudiation.
20.4 Upon termination of the Subcontract or taking over of the balance or any part thereof the Purchaser shall be entitled to withhold all moneys which are due or would otherwise become due to the Subcontractor and deduct from such moneys the Purchaser’s costs of completing the Works and if such moneys are insufficient, the Purchaser may elect to convert any security it then holds from the Subcontractor (whether on the Project the subject of this Subcontract or otherwise) or to recover from the Subcontractor the balance of its costs as a debt due and owing to the Purchaser.
21.0 Dispute Settlement
21.1 Any dispute or difference arising out of or in connection with the Subcontract must be dealt with pursuant to this clause.
21.2 Each dispute shall in the first instance be notified in writing by one party to the other requesting a meeting within seven (7) days to be attended by representatives having the capacity to reach a binding agreement by negotiation and each party shall negotiate in good faith using their best endeavours to resolve the dispute.
21.3 Where a dispute arises as to whether the Works or any part thereof are of inferior quality or not fit for the intended purpose and compliance with Clause 21.2 has not resulted in resolution, the dispute must be referred to an independent expert as agreed by the parties or failing agreement, appointed by the President of the Institute of Arbitrators and Mediators Australia (or nominee) in the State or Territory in which the Works are performed, upon the application of either party. The decision of such expert shall be final and binding.
21.4 Each party shall bear their own costs. The costs of the expert and the reference referred to in Clause 21.3 shall be borne by the Subcontractor if the Works or part thereof is found not to comply with the Subcontract but if they are found to comply, by the Purchaser.
21.5 In the event the provisions of Clause 21.2 have not resolved any other dispute it shall be subject to facilitation under the direction of a person of adequate experience and expertise as the Purchaser believes and nominates as appropriate to the dispute and that person shall have the conduct of the facilitation and be empowered to direct the parties who must comply with such directions.
21.6 The Purchaser’s Representative shall within seven (7) days of any agreement resolving a dispute or part thereof issue a direction to give effect to the agreement. In the event that the Purchaser’s Representative forms the view that agreement will not be reached, he shall issue a direction giving effect to the points or issues where agreement appeared most likely.
21.7 In the event that either of the parties is dissatisfied by the Purchaser’s Representative’s direction pursuant to Clause 21.6 it must within fourteen (14) days of that direction give notice to the other party of its dissatisfaction with full particulars of the reasons therefore, requesting the matter be referred to arbitration or to court.
21.8 Any claim arising out of or in connection with a dispute subject of determination by the Purchaser’s Representative pursuant to Clause 21.6 above which is not subject of a written request for reference to arbitration or to court within fourteen (14) days of such determination shall be deemed final and binding and any further action or claim in relation thereto shall be absolutely barred and each party hereby agrees to release, discharge and indemnify the other against any subsequent proceedings.
21.9 If either Party gives notice to the other requiring any dispute to be referred to arbitration or to court it shall pay to a solicitor acting for the other an amount of $5,000 or 10% of the total amount claimed (whichever is the greater) and such money shall be held in trust as security for the costs. If the Party giving notice requiring a reference to arbitration or court fails to pay such an amount within seven (7) days of its notice then its rights to pursue any claim arising out of or in connection with the referred dispute shall thereafter be absolutely barred.
21.10 The above payment as security for costs of the arbitration shall be retained until the final determination of the referred dispute and shall then be disbursed in respect of costs as directed by the Arbitrator or the Judge.
21.11 Any dispute referred to arbitration in accordance with these provisions shall be and is hereby referred to Expedited Arbitration in accordance with the Rules of the Institute of Arbitrators and Mediators, Australia and shall be conducted by a single Arbitrator appointed by agreement between the parties or failing agreement by the Ombudsman upon the application of either party.
21.12 Neither party shall be entitled to enforce any arbitral or judicial finding of any dispute or claim which is barred by failure to comply with the requirements of this Subcontract for the timely issue of particulars or notices.
21.13 Notwithstanding the existence of a dispute, the Subcontractor must continue to meet its obligations under the Subcontract but the Purchaser may withhold payment of any amount in dispute
22.0 Time Bar on Claims
22.1 Notwithstanding any other provision of the Subcontract, the Purchaser shall not be liable upon any claim by the Subcontractor in respect of or arising out of this Subcontract or the execution of the Works unless:
a) within 3 days of the first day of the event or circumstances giving rise to its alleged entitlements the Subcontractor gives to the Purchaser’s Representative written notice of its intention to claim;
b) such notice includes full particulars of the circumstances giving rise to each alleged entitlement, along with any provision of the Subcontract or other basis for the proposed claim, detailing by calculation the quantum or likely quantum of the proposed claim; and
c) within fourteen (14) days of the notice of intention to claim the Subcontractor submits a fully particularised claim; but this clause does not apply to amounts in a Payment Claim certified as payable by the Purchaser’s Representative.
23.0 Purchaser’s Subcontract
23.1 The Works to be supplied under the Subcontract form part of the work under the Purchaser’s Subcontract and the Subcontractor hereby acknowledges that the Purchaser has made details of the Purchaser’s Subcontract available to the Subcontractor (except pricing) and the Subcontractor warrants that it has informed itself of all documents, conditions and requirements of the Purchaser’s Subcontract and allowed in the Subcontract Sum for the timely compliance with all requirements of the Purchaser’s Subcontract so far as they relate to the works under the Subcontract so that the Purchaser may meet all its Purchaser’s Subcontract obligations.
23.2 The Subcontractor agrees to indemnify the Purchaser against any extra costs, loss or expense which the Purchaser incurs through breach of the requirements of this Clause 23 by the Subcontractor.
24.0 Safety and Other Management Plans
24.1 The Subcontractor shall assume full responsibility for the safe management of the works under the Subcontract and warrants that it has made all necessary enquiries of the Site procedures as they relate to the Works and Services and allowed for preparation and submission of all documentation to ensure full compliance by the Purchaser with its obligations under the Purchaser’s Subcontract.
24.2 The Subcontractor acknowledges responsibility for preparation of all Risk Assessments, Safety Management Plans, Work Method Statements and the like for ensuring the safety of its employees and sub-subcontractors and to abide by all safety procedures at Site as in force from time to time.
25.0 Indemnities
25.1 The Subcontractor shall indemnify the Purchaser and any third party (including but not limited to the Head Contractor and the Principal) from and against any claim, demand, action or proceeding made or brought by any person for any loss or damage whatsoever (including personal injury, sickness or death) arising out of or in connection with the execution of the Works or provision of the Services.
25.2 The Subcontractor shall indemnify the Purchaser and the Head Contractor from and against any claim, demand, action or proceeding made or brought by any person for any loss or damage whatsoever arising out of or as a consequence of any breach of this Subcontract, statutory duty or legal obligation by the Subcontractor.
25.3 All indemnities provided by the Subcontractor under this Subcontract shall, to the extent permitted by law, include all legal costs and expenses of the indemnified parties on a solicitor and own client basis.
25.4 In addition to and as a separate indemnity to those under clause 13, the Subcontractor hereby indemnifies the Purchaser from and against any claim arising out of or in connection with the failure of the Goods or Services to comply with the standards required under any consumer legislation or common law and such indemnity shall extend to include the costs and expenses of repair, replacement and re-instatement of any adjacent materials, plant or equipment the repair or removal of which is necessary to rectify the non-compliance.
25.5 The Purchaser is and shall be entitled to rely upon any undertaking, guarantee or warranty by the Subcontractor and such entitlement may be pleaded as an absolute bar to any action or defence by the Subcontractor in any matter or proceedings arising out of or associated with the subject of such undertaking, guarantee or warranty .
26.0 Special Conditions
26.1 The Special Conditions in the Annexure are in addition to and shall take precedence over these Conditions in the event of conflict or ambiguity.
26.2 Until the Supplier provides all documents and other information required under the Subcontract including “as-built” drawings, warranties, operating and maintenance manuals and any other items which the Purchaser’s Representative considers are reasonably necessary for the efficient use, operation and maintenance of the Works in a form satisfactory to the Purchaser’s Representative, the Purchaser may withhold 5% of the value of any payment other-wise due upon Substantial Completion.
26.3 Further Special Conditions are annexed and identified as SC[#].
