WEDNESDAY, DECEMBER 11, 1991
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TYPE OF CONTRACTS DETERMINED TO ACHIEVE BEST VALUE FOR MONEY
DEPENDING ON THE NATURE, SIZE AND TIMING OF THE CAPITAL WORKS PROJECT, THE GOVERNMENT DETERMINES THE TYPE OF CONTRACT THAT WILL ACHIEVE THE BEST VALUE FOR THE PUBLIC MONEY SPENT, THE
THE SECRETARY FOR WORKS, MR JAMES BLAKE, SAID IN THE LEGISLATIVE COUNCIL TODAY
(WEDNESDAY).
LI, MR BLAKE SAID
REPLYING TO A QUESTION FROM THE HON DAVID THE ADOPTION OF CONTRACTS INCORPORATING PROVISION FOR FIXED-PRICE, LUMP-SUM OR DESIGN AND BUILD, WAS GIVEN CONSIDERATION OF AN INDIVIDUAL BASIS WITH NO HARD AND FAST RULES.
MR BLAKE SAID A FIXED PRICE CONTRACT, WITH NO PROVISION FOR PRICE FLUCTUATIONS, ALLOWED THE GOVERNMENT TO FIX THE COST ON THE PROJECT AT THE TIME WHEN WORK BEGAN.
A LUMP-SUM CONTRACT, SIMILAILY ALLOWS THE FIXING OF COST AT THE TIME OF AWARD AGAINST A CLEARLY DEFINED SCOPE OF WORKS.
"FIXED PRICE LUMP-SUM CONTRACTS THEREFORE ALLOW A GREATER DEGREE OF CERTAINTY IN BUDGETING, AND FOR THIS REASON WE ARE USING THIS TYPE OF CONTRACT FOR THE MAJOR COMPONENT PROJECTS OF THE AIRPORT CORE PROGRAMME, HE SAID.
T
MR BLAKE ADDED THAT AS THESE PROJECTS INVOLVED LARGE CONTRACT VALUES AND DEMANDING WORK SCHEDULES, BY AWARDING SUCH CONTRACTS WILL IMPROVE FINANCIAL CERTAINTY AND ENABLE THE GOVERNMENT ΤΟ HAVE AVAILABLE THE STRONGEST POSSIBLE MEANS то ENSURE THAT CONTRACTORS ACHIEVE COMPLETION BY THE CONTRACTUAL DATES.
MR BLAKE SAID GOVERNMENT'S CAPITAL WORKS PROJECTS INVOLVING CONTRACTS OF 12 MONTHS OR LESS WERE ALSO FIXED PRICE.
"THOSE WHICH ARE OF A CIVIL ENGINEERING NATURE ARE USUALLY RE-MEASURED, AND NOT LUMP-SUM, BECAUSE OF THE NATURE OF THE WORKS.
"ARCHITECTURAL CONTRACTS HAVE LESS UNKNOWNS, ARE OFTEN MORE STANDARDISED, AND ARE USUALLY LET ON A LUMP-SUM BASIS. PROVISION CAN MADE FOR VARYING THE SCOPE OF LUMP-SUM OR RE-MEASUREMENT
BE
"
CONTRACTS, HE SAID.
FOR CAPITAL WORKS PROJECTS INVOLVING CONTRACTS LONGER THAN 12 MONTHS, MR BLAKE SAID THESE WERE USUALLY INFLATION LINKED WITH THE PAYMENT OF INDEX-RELATED PRICE FLUCTUATIONS.
CIRCUMSTANCES IN IS BALANCED AGAINST
"THEY MAY BE RE-MEASURED OR LUMP-SUM, AS THE EACH CASE BEST DEMAND. INFLATION CONSIDERATION THE LESSER CONTRACT VALUES INVOLVED, HE SAID.
T
MR BLAKE SAID TURN-KEY CONTRACTS OR DESIGN AND BUILD WERE USED WHEN CIRCUMSTANCES CLEARLY SHOWED THAT CONTRACTORS' OF CONSTRUCTION TAKEN INTO ACCOUNT DURING DESIGN OF THE WORKS, WOULD BE COST ADVANTAGEOUS TO GOVERNMENT.
CONTRACTS METHODS PERMANENT
THEY ARE AWARDED ON A LUMP-SUM BASIS, AND MAY ALSO PRICE, HE SAID.
BE
FIXED
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LJ