Fast-tracking is a popular method in high-rise construction, allowing projects to begin while the design is still in progress. However, this approach introduces complexities in risk allocation that must be carefully managed to avoid disputes and project failures.
Understanding Risk Allocation in Fast-Tracking In fast-tracking, risks are often allocated among multiple parties, including enabling contractors, main contractors, nominated subcontractors, and project consultants. The standard forms of contract, such as FIDIC, often do not clearly address the unique risks associated with fast-tracking, leading to ambiguities and potential disputes.
One of the main challenges in risk allocation is ensuring that each party is responsible for their own faults. For example, in the FIDIC Red Book 1999, Clause 4.10 requires the main contractor to inspect and satisfy themselves of the site conditions before tendering. However, this clause may not adequately cover the complexities of fast-tracking, where enabling works are completed before the main contract is awarded. In such cases, the risk of soundness of executed works may be unfairly shifted to the main contractor, who may not have had sufficient time to thoroughly inspect the site.
Addressing Risk Allocation Challenges To address these challenges, contracts for fast-tracking projects should include specific provisions that clearly allocate risks. For instance, amendments to standard contracts may be necessary to define the responsibilities of each party in phased construction. Additionally, contractors should be involved in the nomination process of subcontractors to minimize the risk of scope conflict and ensure better coordination.
Moreover, employers should provide adequate time for contractors to tender for complex projects, allowing them to thoroughly review tender documents and site conditions. This approach can reduce the likelihood of disputes arising from errors, omissions, and discrepancies in the contract documents.
Conclusion Risk allocation in fast-tracking high-rise projects is a complex issue that requires careful consideration and clear contractual provisions. By ensuring that risks are equitably distributed among all parties and providing adequate time for tendering and coordination, the potential for disputes can be minimized, leading to more successful project outcomes.