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An investigation of the document bias between the GCC 2004 and the GCC 2010

Klingenberg, Wolfram Georg (2014-04)

Thesis (MEng)--Stellenbosch University, 2014.


Construction projects have developed over several decades through the advancement of technology, increased scarcity of resources and the ever increasing pressure of time and cost constraints. Because of new technology and modern construction methods, construction projects have become increasingly complex. These complexities inherently bring new risks that must be dealt with accordingly. A contract is the primary method through which risks are allocated between the Employer and the Contractor. The conditions allocating the risks legally bind both parties to accept responsibility of those risks, therefore it is important to understand the aspects of law that has bearing on contracts. In this thesis the scope is restricted to construction contracts. Because of the role that a contract plays, especially in the construction industry context, it is important to know the requirements of a modern contract to ensure the successful completion of projects and the continued sustainability of Employer-Contractor relationships. In South Africa, the Construction Industry Development Board (CIDB) is a body that monitors developments in the construction industry. The CIDB has the authority to enforce legislation to ensure that contracts conform to a standard that protects the interests of both the Employer and the Contractor. One of the procurement documents endorsed by the CIDB is the General Conditions of Contract for Construction Works published by the South African Institution of Civil Engineering (SAICE). The first edition of the GCC was published in 2004 (GCC 2004) and a revised second edition was published in 2010 (GCC 2010). In this study the GCC 2010 and the GCC 2004 are compared first through a content analysis, to establish the effect the revisions on the bias of the document (or favouring a particular party) and then by means of a survey. The objectives are: a. To test whether revisions to the GCC from the 2004 edition to the 2010 edition resulted in a change in bias (assuming it exists) and compliance with the requirements of the modern contract; b. To determine the extent and effect of alterations to standard clauses of the GCC 2010 on the way in which the contract favours a particular party; c. Providing recommendations for future revisions that would potentially improve project success, relationship building and reduce the need for significant alterations to the standard clauses. Although a construction contract is undertaken between the Employer and the Contractor, the Consultant (who is not party to the contract) commonly drafts the contract on behalf of the Employer. The findings of the study show that the revision had a significant impact on improving the clarity of the roles of the Employer and the Contractor. A marginal improvement was found in the area of payment operating mechanisms. The perceived fairness of the document neither increased nor decreased. Clauses on claims and disputes and risk and related matters were the two areas that respondents identified as having the most bias that may be detrimental to the success of a construction project. Despite survey respondents finding the GCC 2010 procurement document to be fair, clauses are still altered by Employers (probably through Consultants) resulting in a biased contract favouring the Employer. Employers and Consultants should thus be educated more on bias and fairness in contracts and on the implications of shifting more risk to Contractors by altering clauses. Ultimately, the success of any construction project is dependent on the attitudes of the participants. Even the most fair procurement document is not a substitute for a relationship built on honesty and trust.

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