WINNING A PROJECT!

LEARNING OBJECTIVES

 To familiarise students with basic legal knowledge in contract law with presentations and role-plays, including what makes a contract, legal terms and case studies.

 To introduce common ways of selecting consultants and the pros and cons respectively. It will be further elaborated with the two-envelope system which is one of the most common methodologies in government projects.

 To explain the typical hierarchical working structure in construction practice - the relationship between the main consultant and sub-consultant.

 To introduce payment terms under “Condition of Engagement and Professional Charge” and current financial arrangement.

FACT SHEET

Session 3a- Winning a Project!

1. Contract and Legal Concepts

3 Essentials of a valid contract :

- Intention to Create a Legal Relations

- Consideration

Something must be paid or exchanged for the contract to be binding and enforceable by law.

*One way permission is not a contract unless it is made by “Deed (formal contract e.g. Wills 遺囑)”

- Agreement

Offer and Acceptance

 Situation 1-Direct Acceptance:

 Situation 2-Invitation to Treat:

An invitation to another person to make an offer to contract

Display of goods is an “Invitation to Treat”

Tender invitation is an “Invitation to Treat”, LA firm make an offer (tender Submission), and Client accept (Tender award)

 Situation 3-Counter Offer:

Making a counter offer automatically rejects the prior offer, and requires an acceptance under the terms of the counter offer or there is no contract

2. Selecting a Consultant - Two Envelope System and Sub-contract

Forms of Selection:

 Selecting a Consultant

Two-envelope System

 Tender list

- taken from the list of up to 20 approved consultants (compiled on the basis of registered firms / Government’s previous experience of working with the consultants

 Expressions of Interest (EOI)

- technical proposal looking at the consultants previous experience / key staff available / understanding of the project type / knowledge of the project site & proposed development, and allows 4 or 5 consultant firms to be shortlisted

 Technical Submission (TS)

- two envelope system (quality then price), in which tenders comprise:

o Technical Submission - relevant projects list, current projects list, key staff (CVs), staff deployment, methodology, response to the brief, approach to cost effectiveness

o Fee Submission - usually as a lump sum (payment stages), together with a schedule of hours to be worked, and charge rates for professional and technical staff, often also requires a multiplier to be used in the event of additional services.

Additional Information:

List of Consultants of the Architectural and Associated Consultants Selection Board

https://www.archsd.gov.hk/en/consultants-contractors/consultants/list-of-consultants-of-aacsb/who-have-been-included/landscape-architectural-category.aspx

List of Consultants of the Architectural and Associated Consultants Selection Board

https://www.archsd.gov.hk/media/339761/la_rev26_.pdf

Development Bureau Technical Circular (Works) No. 4/2014

Tender Evaluation Methods for Works Contracts

 Sub-Consultant

- A majority of landscape work comes from subcontract under the Architectural professions.

- In traditional practice, architects and engineers usually take the leading position of the project. In recent decade, in landscape predominant project (e.g. Park), landscape architects are assigned to take the leading role and take control in managing the project.

Hierarchical Structure

“A collateral warranty is a legal agreement which stand alongside the agreement between the client and the Landscape Architect. It forms a legal responsibility with a third party who would not normally have any right to claim on the contract. Collateral warranties therefore create direct contractual relationships between parties that would not otherwise exist and could include the funder/tenant/purchaser of a building”

(Garmory, Nicola, Rachel Tennant, and Clare Winsch. Professional Practice for Landscape Architects. Third ed. 2016.)

- Collateral Warranty

Contract duty (duty of care) should only act to parties who form the contract

Sub-consultant shall not contact the client in case of accidency

- Back-to-back Contract

“A head contractor usually cannot complete the work single handedly – they may engage several subcontractors to assist. In this case, they want to make sure that they are not directly liable to the client for work a subcontractor completed. As such, they will ensure that their contract with the subcontractor mirrors their contract with the client. The key terms affected are usually the head contractor’s obligations including:

liabilities;
the rights of the subcontractor; and
dispute resolution clauses.

Obligations of the head contractor passed down to the subcontractor may include:

responsibility of maintaining the design for the project;
specified date for completion of that part of the project; and
quality and standard of work.

For a subcontractor, there are also rights that should be passed down from the head contractor, including:

entitlements for extension of time to complete the work;
where some variation of the work is needed; and
right for additional compensation against the head contractor if the head contractor breaches a term of the subcontract.”

3. Payment Terms and Financial Arrangement

Condition of Engagement and Professional Charge, HKILA 1990 (old version)

Remuneration on -

- Percentage: (rarely use now, for more information please refer to the uploaded information on the website)

- Time Basis:

“Staff shall be charged at a minimum hourly rate of 0.15% of salary plus all reasonable out of pocket expenses; i.e. $15.00 per hour for each $10,000 of gross annual salary. Salary for this purpose shall be defined as gross annual salary including bonuses and any employers contributions towards pensions.”

- Lump Sum (the most common today):

“Lump Sum fees should not be applied for projects to which the Percentage Basis is applicable”

Reference

Book

-Garmory, Nicola, Rachel Tennant, and Clare Winsch. Professional Practice for Landscape Architects. Third ed. 2016.

Other:

-Clamp, Hugh. Landscape Professional Practice : A Guide to Legislation, Conduct, Appointments, Practice and Contract Procedures. 2nd ed. Aldershot, England ; Brookfield, Vt.: Gower, 1999.

-Fraser, Gordon Rowland. Landscape Professional Practice. 2015.

-Marshall, Lane L., and American Society of Landscape Architects. Landscape Architecture : Guidelines to Professional Practice. Washington, D.C.: American Society of Landscape Architects, 1981.

-Rogers, Walter. The Professional Practice of Landscape Architecture : A Complete Guide to Starting and Running Your Own Firm. 2nd ed. Hoboken, N.J.: Wiley, 2011.

-Sharky, Bruce. Ready, Set, Practice : Elements of Landscape Architecture Professional Practice. New York: Wiley, 1994.

Document

-Hong Kong e-legislation - Cap. 619 COMPETITION ORDINANCE

https://www.elegislation.gov.hk/hk/cap619!en@2018-04-20T00:00:00?SEARCH_OPTION=K&INDEX_CS=N

-Hong Kong e-legislation - Cap. 123 Buildings Ordinance

https://www.elegislation.gov.hk/hk/cap123

-AACSB (Architectural and Associated Consultants Selection Board)

https://www.archsd.gov.hk/en/consultants-contractors/consultants/list-of-consultants-of-aacsb.aspx

-ISO 9000 Certification (prequalification of listed consultant)

https://www.devb.gov.hk/en/construction_sector_matters/other_information/index.html

-Searching for Information of Registered Professionals or Contractors - Building Department

https://mwerdr.bd.gov.hk/REGISTER/RegistrationSearch.do?method=PageRegistration®Type=AP(A)