Contract Administration and Practice.edited

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Executive Summary Aligned with the UK Government's 'levelling up' agenda, this paper offers a clear and accurate analysis of the contract types available for the construction of new infrastructure in the proposed freeport development. It addresses the possibility of drafting custom contracts while concentrating mostly on standard form agreements, such as those found in the Joint Contracts Tribunal, NEC, and FIDIC (International Federation of Consulting Engineers). Furthermore, this study looks at the functions of contract administrators and important parties in both standard and non-standard contracts. In light of the interests of the UK Government and the stakeholders in the Freeport Governing Body, the paper ends with a well-founded proposal regarding the best course of action for drafting construction contracts in this particular situation.

Contents Executive Summary ..................................................................................................................................... 1 1.0 Introduction ........................................................................................................................................... 3 2.0 Standard Form Contracts ....................................................................................................................... 3 3.0 Bespoke Contracts ................................................................................................................................. 4 4.0 Parties' and Contract Administrators' Roles ........................................................................................... 5 5.0 Recommendations ................................................................................................................................. 7 6.0 Conclusion ............................................................................................................................................. 9 References ................................................................................................................................................. 10

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Contract Administration and Practice 1.0 Introduction The 'levelling up' approach is a flagship project of UK government policy that aims to improve trade possibilities and alleviate regional economic imbalances by establishing freeports around the country (HM Government, 2022). These freeports, which are places set aside where items can be imported and exported without being subject to customs charges in the UK, have the power to boost global trade and revitalize regional economies. The foundation of this revolutionary idea is the necessity of building the necessary infrastructure for these freeports. The accomplishment of this ambitious goal depends on the careful selection of construction contracts that are specifically tailored to meet the requirements of these freeport facilities. The different contract choices for freeport infrastructure development are thoroughly and critically analyzed in this paper. Standard forms, including the JCT (Joint Contracts Tribunal), NEC (New Engineering Contract), and FIDIC (International Federation of Consulting Engineers), are examined. We also discuss the possibility of creating custom contracts that are painstakingly adapted to the unique and changing needs of freeport development. In addition, this paper provides useful insights into the crucial roles that contract administrators and key stakeholders play in the context of standard and non-standard contracts, clarifying important aspects of project management, conflict resolution, and interest dynamics. In the end, the recommendations are meant to help a well-informed decision-making procedure that balances the various interests of the UK Government and the parties involved in the Freeport Governing Body, thus contributing to the success of this transformative initiative. 2.0 Standard Form Contracts Three well-known standard form contracts have become well-known and widely used in the field of construction contracts; they are the Joint Contracts Tribunal (JCT), the New Engineering Contract (NEC), and the International Federation of Consulting Engineers (FIDIC) standard forms. These forms are well-established frameworks that can be taken into consideration when planning the infrastructure development of freeports as part of the 'levelling up' strategy.

JCT Contracts: The JCT is a well-recognized standard form that is recognized for its ability to define contractual duties and connections clearly. Certain clauses in JCT contracts, while often appropriate for traditional building projects, can be modified for freeport development. However, in order to handle the unique and complex character of the freeport effort, these adaptations call for important changes. JCT contracts offer a strong basis, but because of the particulars of this development—such as trade complexity, customs rules, and the engagement of multiple stakeholders—their considerable change may present challenges and uncertainties. Even though JCT contracts are straightforward, they might need to be customized to the point that they create uncertainty (Navas, 2020). Contracts under the New Engineering Contract (NEC): The NEC is a unique standard form contract that is both highly adaptable and process-driven (NEC, 2023). It places a strong emphasis on collaborative working, which makes it perfect for complex and dynamic projects like the development of freeports. Because of its inherent flexibility, NEC contracts can be customized to meet the unique requirements of a given freeport project. This flexibility is especially useful in the context of freeports, which are dynamic environments with many stakeholders, regulatory considerations, and operational details. FIDIC Contracts: FIDIC contracts are widely used in complex infrastructure projects and are internationally recognized. Although they provide a strong foundation, FIDIC contracts may need to be significantly modified in order to conform to the unique characteristics of freeport development. The special characteristics of freeports, such as complicated international trade, several stakeholders, and customs laws, would require these adjustments. Therefore, even though FIDIC contracts provide a solid foundation, tailoring them to the unique requirements of the freeport project could require a significant investment of resources and result in unpredictability (Aceris Law LLC, 2018). 3.0 Bespoke Contracts Given the particular and multifaceted nature of the freeport project, the exploration of bespoke contracts becomes a tempting possibility. Bespoke contracts are specially crafted legal documents created to precisely match the unique requirements, subtleties, and project goals. This

method can provide a very flexible and inclusive contractual framework for freeports under the 'levelling up' policy. It also gives stakeholders a way to address their interests and concerns. Tailored contracts shine in their capacity to provide accurate and all-encompassing answers to the intricate needs of the freeport development. Bespoke contracts are created from the ground up, in contrast to standard forms that could need significant revisions to suit the particular details of the project. This allows the parties to establish terms, duties, responsibilities, conflict resolution methods, and other essential features that are precisely customized to their goals and priorities. The parties participating include the UK Government and the stakeholders within the Freeport Governing Body (David St. Maur Sheil, 2016). Bespoke contracts also offer the adaptability required to adjust to the constantly changing requirements of freeports. These zones are dynamic and vulnerable to constant changes in international trade, new stakeholder emergence, and regulatory changes. Custom contracts can be made to change over time along with the project, allowing for seamless integration of modifications without the constraints of a pre-defined framework (Adam and Phillips, 2023). It is imperative to recognize, nonetheless, that creating customized contracts is challenging. Writing these contracts requires a major time, skill, and financial commitment. Project managers, legal specialists, and other interested parties need to work together to create a contract that fully takes care of the freeport's requirements, respects the law, and is in line with industry best practices. Another factor to think about is the price of creating custom contracts. It may be more expensive to hire legal counsel, negotiate a settlement, and provide continuing maintenance than to modify the current standard forms. Therefore, when deciding whether to pursue bespoke contracts, one should consider the financial ramifications and balance them against the long-term goals and benefits of the project (Craswell et al., 2007). Customized contracts are a desirable alternative for the Freeport project, providing a solution specifically suited to its complexities and the various interests of the UK Government and the Freeport Governing Body. Nevertheless, the development of these contracts must be done with a thorough understanding of the costs involved and the dedication needed to create, manage, and carry out these highly customized contracts.

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4.0 Parties' and Contract Administrators' roles The client, the contractor, and the architect or engineer usually make up a hierarchical hierarchy of parties in standard-form contracts. Within the framework of the standard form, each party's obligations and responsibilities are clearly specified, which promotes clarity and reduces the likelihood of disagreements (Carnegie Mellon University, 2019). As the party requesting the construction work, the client is essential in establishing the project's needs, granting the required permissions, and making sure the project's goals serve their interests. It is the contractor's responsibility to carry out the construction work, follow the requirements, and finish the project on schedule. The architect or engineer provides technical advice, monitors project progress, and guarantees adherence to design and quality standards—all while frequently serving as an unbiased expert (Watt, 2016). Most importantly, the contract administrator takes on a key role in standard-form contracts. This person is responsible for supervising the contract's implementation, guaranteeing that each party fulfills their end of the bargain, and mediating disputes as needed. The contract specifies the contract administrator's position in detail, including their authority, duties, and dispute resolution procedures. The duties and obligations of participants in bespoke contracts may differ significantly depending on the particular needs of the project. As such, it is necessary to clearly state the responsibilities and powers of each party in order to avoid confusion and possible disputes. The custom contract must clearly define the roles of the customer, contractor, architect, engineer, and any other pertinent parties (Markovits and Atiq, 2021). Additionally, the contract administrator's responsibilities must be precisely defined in a customized contract. This person is still in charge of supervising the contract's implementation, guaranteeing that its terms are followed, and mediating disagreements, just like they are in standard form contracts. The contract administrator's duties must be spelled out, and dispute resolution procedures must be established to expedite the resolution of disagreements or disputes (Singh, 2021). Bespoke contracts necessitate a customized approach, where roles and responsibilities are expressly established to meet the project's particular characteristics. In contrast, standard-form

contracts provide an organized and recognizable framework for specifying the roles of parties and contract administrators. Furthermore, the contract administrator's function in overseeing the contract and settling disagreements is critical to the construction project's effective completion in both standard and customized contracts. 5.0 Recommendations Given the unique features of the Freeport project and the differing interests of the UK Government and the stakeholders in the Freeport Governing Body, it is best to use NEC (New Engineering Contract) contracts as the framework for the construction agreements for the project. This suggestion is based on the natural adaptability and flexibility of NEC contracts, which are ideal for taking into account the special characteristics of the freeport while maintaining accepted industry norms. The freeport effort can benefit greatly from the process-driven and collaborative character of NEC contracts. They place a strong emphasis on collaboration, openness, and flexible project management, which fits in nicely with the fast-paced nature of freeport development. Because of their flexibility, NEC contracts can be customized to meet the unique needs of the project, which makes them a robust candidate for this complex and evolving endeavor (Walde, 1978). The parties involved can develop a tailored framework that tackles the complicated requirements of the freeport, including customs laws, the intricacies of international trade, and the various stakeholder interests, by expanding on the base of NEC contracts. This method combines the benefits of standardization and flexibility, minimizing the need for significant changes while allowing for contract customization to meet the project's changing requirements. Expert legal assistance in the areas of construction and international trade law is required due to the complexities and legal nuances present in customs laws and international trade. Experts in these fields must be consulted in order to guarantee that the contract complies with all applicable laws and regulations. When navigating the complexities of international trade agreements, customs compliance, and trade rules, expert legal advice can offer important guidance. They can also make sure that the relevant legal clauses and protections are included in the contract to guarantee that the interests of all parties are covered. This knowledge is especially important for projects involving complex legal environments, like freeport developments, where trade and

customs laws are always changing and becoming more complicated. In-depth legal advice guarantees that there is less chance of disagreements and legal issues because the contract is nevertheless strong, defendable in court, and flexible enough to meet changing legal needs (Mitchell and Mishra, 2018).

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6.0 Conclusion Selecting the right contract type for the freeport infrastructure development is essential to guarantee that the project is carried out successfully and in accordance with the overall 'levelling up' plan. Customization through bespoke contracts may be necessary to match the particular complexity of the freeport program, even while standard form contracts like JCT, NEC, and FIDIC offer well-established foundations. Prioritizing the interests of the UK Government and the Freeport Governing Body is crucial while making this decision. This entails developing a contractual structure that balances the interests of various stakeholders, captures the project's complex requirements, and takes into account the complex legal environment around customs and international trade. Encouraging an open, effective, and fair project delivery process is the ultimate goal. With the option for custom modifications, the choice of NEC contracts as the basic framework offers a well-balanced strategy that combines the benefits of well-established industry standards with the flexibility needed for a project as dynamic and ever-changing as the freeport development. In conclusion, the wise selection of building contracts is inextricably linked to the infrastructural development of the freeport. Informed decision-making that takes into account the special features of the project, as well as the interests of important stakeholders, will enable the freeport to effectively catalyze international trade, regional development, and economic growth—thus achieving the larger objectives of the 'levelling up' approach.

References Aceris Law LLC (2018). FIDIC Contracts: Overview of the FIDIC Suite . [online] Acerislaw.com. Available at: https://www.acerislaw.com/fidic-contracts-overview-of-the-fidic- suite/ [Accessed 2 Sep. 2019]. Adam, S. and Phillips, D. (2023). institute for Fiscal Studies Freeports: what are they, what do we know, and what will we know? IFS Report R251 . [online] Available at: https://ifs.org.uk/sites/default/files/2023-03/Freeports-what-are-they-what-do-we-know-and- what-will-we-know.pdf [Accessed 13 Apr. 2023]. Carnegie Mellon University (2019). The Design and Construction Process . [online] Cmu.edu. Available at: https://www.cmu.edu/cee/projects/PMbook/03_The_Design_And_Construction_Process.html. Craswell, T., Law, Economics Of Contracts, Economics, A., Mitchell and Steven Shavell, E. (2007). Columbia Law School Columbia Law School Scholarship Archive Scholarship Archive Recommended Citation Recommended Citation Chapter on the Law & Economics of Contracts. COLUMBIA LAW & ECONOMICS WORKING PAPER , [online] (296). Available at: https://core.ac.uk/download/pdf/230175865.pdf [Accessed 6 Mar. 2022]. David St. Maur Sheil (2016). ASSOCIATION FOR SUSTAINABLE & RESPONSIBLE INVESTMENT IN ASIA . [online] Worldbank.org. Available at: https://documents1.worldbank.org/curated/en/723411489567345587/text/113528-WP-ASrIA.txt [Accessed 7 Nov. 2023]. HM Government (2022). Levelling up the United Kingdom Executive Summary . [online] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file /1095544/Executive_Summary.pdf. Markovits, D. and Atiq, E. (2021). Philosophy of Contract Law . Winter 2021 ed. [online] Stanford Encyclopedia of Philosophy. Available at: https://plato.stanford.edu/entries/contract- law/.

Mitchell, A. and Mishra, N. (2018). Recommended Citation Recommended Citation . [online] Vanderbilt Journal of Entertainment & Technology Law Vanderbilt Journal of Entertainment & Technology Law . Available at: https://scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi? article=1104&context=jetlaw [Accessed 8 Apr. 2022]. Navas, J. (2020). What is a JCT Contract? Everything You Need to Know . [online] Britton & Time Solicitors. Available at: https://brittontime.com/2020/10/26/what-is-a-jct-contract- everything-you-need-to-know/. NEC (2023). Why Choose NEC | NEC Contracts . [online] www.neccontract.com. Available at: https://www.neccontract.com/why-choose-nec [Accessed 30 Mar. 2022]. Singh, D. (2021). What is Contract Administration? Definition And Key Aspects . [online] Sirion. Available at: https://www.sirion.ai/blog/what-is-contract-administration/ [Accessed 5 Oct. 2023]. Walde, T.W. (1978). Revision of Transnational Investment Agreements: Contractual Flexibility in Natural Resources Development. Lawyer of the Americas , [online] 10(2), pp.265–298. Available at: https://www.jstor.org/stable/40175798. Watt, A. (2016). Stakeholder Management – Project Management . [online] Opentextbc.ca. Available at: https://opentextbc.ca/projectmanagement/chapter/chapter-5-project-stakeholders- project-management/.

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