GCC – Important insights into the General Conditions of Contract

GCC

SAICE is the custodian of these contracts – The GCC General Conditions of Contract documents. The institute develops, updates and maintains these forms for the engineering fraternity.  So far 6 editions have been published by South African Institute of Civil Engineering (SAICE).  Where the contractor undertakes construction on the basis of comprehensive design created by the employer and bills of quantities are used for payment methods GCC remains a form of contract chiefly for use in contracts.

The Committee of Land Transport Officials’ altered the 6th edition of the General Conditions of Contract for Civil Engineering Works (GCC 1990). SAICE republished it as the General Conditions of Contract for Road and Bridge Works for State Road Authorities (COLTO 1998).

The General Conditions of Contract for Construction Works (GCC 2004) replace GCC 1990 and COLTO 1998, satisfy the Construction Industry Development Board requirements for a standard form of contract. They are also suitable for use in procurement documents that are prepared in accordance with the provisions of SANS 10403, Formatting and Compilation of Construction Procurement Documents. GCC 2004 retains the language, style and ethos of GCC 1990 and COLTO 1998. As such, GCC 2004 keeps as far as possible the present wording of these documents.

Main features of GCC 2004:

  • Its use is apt for both the construction and building works contracts.
  • Although GCC is focused on the design by employer contracting strategy, there is provision for design and build contracts.
  • A tender and a contract are seen as separate entities.
  • The design is intended to be by the employer but contract is flexible to allow for design by the contractor to the scope specified in the contract.
  • With regards to limitation of liability depletion of revenue, decrease of profit (indirect and consequential), can be addressed as an additional condition.  Other unconcealed losses during the contract period are unrestricted for defects to the extent which contractor is liable.
  • The contractor liable for rectifying physical loss and to fix damage from whatever cause except for “excepted risks” with regards to loss and damage to employer’s property.
  • The contractor is liable for latent defects for a period of ten years after the completion of the contract.
  • The risk apportionment is set on the principle that the risk is borne by the party best suited to deal with it.
  • The Engineer administers the Contract as agent of the Employer in accordance with the provisions of the Contract
  • In terms of subcontracting, the Contractor is accountable as if he had not subcontracted. An arrangement can be made for the appointment of subcontractors in consultation with the employer.
  • If the Contractor speculates himself worth of any claim for extension of time or additional payment, he shall advise the Engineer within 28 days of the situation leading to the claim, after which the Employer has no further liability. This is a strict / full time bar.
  • In terms of dispute management, all disputes must be referred to and settled by either a mediator or adjudicator, failing which arbitration or litigation, as provided for in the contract.

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