Contracts

Ah the contracts! While sometimes contracts can carry with them an onerous reputation, ACENZ along with many other Industry Partners and Client Organisations, have recognised the need for simple but effective contracts. By developing a set of "standard use" contracts, both Client and Consultant can save time and money using one of these documents, which have been industry adopted and reviewed by a legal panel (where indicated).

ACENZ has developed several different contracts for both Consultant and Client use, and offer most of them free of charge to the community. The more used these are, the stronger they are, so after reading more about the various contracts below, you can download them in our Library

It is important to note that these are designed by both the Consultants as well as the Clients, as a team, to create a working document that suits the majority of projects for the majority of situations and standard jobs. All our contracts here and in the Library are the most current editions. Only ACENZ Members can get access to archived or older editions of contracts (where available). If an older edition is needed, please contact a member of the ACENZ staff

 

CCCS - Conditions of Contract for Consultancy Services

One of the most frequently used standard contracts, CCCS was originally developed in 2000 by Auckland Regional Contracts Group, ACENZ, Engineering New Zealand (formerly IPENZ), ALGENZ (then INGENIUM and now known as IPWEA NZ) and Tranzit NZ (now NZTA).

This contract is recommended for general use for the purpose of procuring and providing professional consultancy services. The general contract conditions are intended to be amplified or adapted as required to suit particular needs by using the "special conditions" section. Users are invited to copy this document in order to bind it into a contract, on the condition that any variations should be clearly identified to all parties. To assist in this matter, the document has been formatted to only allow editing of certain areas.

Due to the standardised nature of the document and it's general acceptance for use by many organisations throughout New Zealand, the editable fields are limited. Any change to font, format or extra inclusions can invalidate the contract for general and wide spread use. We will not circulate an unrestricted copy and please be wary of anyone who does use an unrestricted copy of the CCCS document.

You can download a FREE Word edition of this contract in the Library section of this website, click here.

 

SFA - Short form Agreement

The shortform agreement is a two page document acceptable for use with small to medium projects as risk and responsibility are reasonably shared between the parties. While this form can still be used for larger projects, it is recommended that CCCS be used. As with the CCCS, only certain parts of the SFA are editable. We will not circulate an unrestricted edition of this contract and you should be wary of anyone who is willing to use an unrestricted edition. All of the ACENZ standard documents have been reviewed by a mixed panel of both consultants and clients to garner fair and reasonable terms and conditions. Further to this, our standard documents have undergone legal review to ensure they comply with recent legislative changes.

Your consulting engineer should be able to recommend if CCCS or SFA is the more appropriate contract to use in the project, based on the scope you provided them about the works or project.

Download the FREE Word edition of this contract in the Library section of this website, click here.

 

PS - Producer Statements

A producer statement is a document prepared by an engineer confirming their professional opinion, based on stated reasonable grounds, that aspects of design of a building achieve compliance. This could be compliance with Building Code, or that elements of construction have been completed in accordance with approved building consent.

The intent of a producer statement is to signal to the Building Consent Authority (BCA) that certain design monitoring works have been done (or supervised) by a practitioner who is competent to perform the defined work.

The original producer statement forms were jointly developed by ACENZ, Engineering New Zealand (formerly IPENZ), and NZIA together with the builders and building officials to meet requirements of the Building Act 1991. They have since been modified and updated to reflect changes to the regulations and environment of use.

It is important to note that producer statements are not a guarantee that nothing will go wrong, but they should give some assurance that work has been carried out or under the control of a competent professional. As the forms require confirmation of professional indemnity insurance coverage, they also provide some security of financial redress for valid claims that relate to negligent work.

All ACENZ Members are required to hold a minimum level of Professional Indemnity (PI) Insurance of $500,000 or more in order to keep their membership valid. Another benefit of using an ACENZ Member firm.

Download the FREE editions of Producer Statement in the Library section of this website, click here.

 

Producer Statement Signatories

Some Councils are compiling lists of 'authorised signatories' for producer statement sign-off. We believe that list already exists in a consistent and nationally recognised context, through the Chartered Professional Engineer (CPEng) or Registered Architect register.

By that status (further reinforced if the CPEng Engineer's firm is an ACENZ Member) the BCAs can reasonably expect that the design professional is currently competent and is bound by a code of ethics to work within the range of his or her competency. Engineering New Zealand (formerly IPENZ - for CPEng) and NZIA (for registered Architects) can provide access to the list of qualified professionals.

 

Professional Services during Construction Phase

ACENZ encourages BCAs to require that a range and level of service carried out by the design professional during construction is appropriate to cover the project concerned. No design professional can provide a PS4 unless they have been engaged to undertake an appropriate level of construction monitoring or observation services.

 

Producer Statement Issues

Perhaps due to a rush for BCA accreditation, a significant issue for engineers, architects and surveyors, a plethora of miscellaneous local authority documents appearing in place of industry accepted producer statements has risen. Issues and other items to be wary of include:

  • Personal liability to the PS signatory: by such requirement, clients can negate their financial redress, which is guaranteed through PI insurance carried by the firm, not the individual.
  • Inclusion on documents of indemnities, warranties and guarantees: the insurance industry advise that PI insurance is valid for 'reasonable endeavours' and if a firm has been required to commit to any of the aforementioned, it may have invalidated their insurance cover.
  • Excessive liability and PI cover: ACENZ is now frequently hearing of engineers and architects engaged on small jobs being required to carry $2 million or more in PI cover. A higher requirement on smaller jobs will exclude smaller consultancies from the market, and will ultimately increase the cost of all industry cover and will increase the range of insurance 'exclusions' if this practice continues. ACENZ requires Members to carry a minimum cover of $500,000 which is sufficient to cover most small jobs. For larger jobs, firms do expect a higher PI requirement that is more in line with scale, scope and fee for the job.
  • The designer is required to carry insurance for the client and/or the contractor: this is a 'no-no' for the insurance industry and they will not meet a claim under such an agreement.
  • The professional is required to sign off on work for which they were not responsible: more often, ACENZ is hearing of attempts to have a designer sign a PS that covers construction works for which they have had no observation or supervision responsibilities.

Any of the above issues can nullify the availability of insurance to a consulting firm, and ACENZ actively recommends to all Member companies not to sign such forms. We also recommend clients not impose these issues on consulting engineers as it negatively affects the longevity and health of the overall industry. Increasingly, consulting engineers are taking a united stand in rejecting excessively onerous documentation.

A further benefit of ACENZ Membership includes industry advocacy to discuss and work through onerous documentation or industry conditions where possible. If you have a concern about contracts or onerous conditions, please let us know by submitting your issue to service@acenz.org.nz.