Head Contract - for private sector project owners
I have previously suggested the project owners should consider utilising the Suite of Facilities Contracts published by the Australian Department of Defence. The reasons for this recommendation are explained in this article
Below is a link to a precedent Head Contract that I have created from the Defence Head Contract, so that it is suitable for use by private sector project owners.
The document departs from the Defence Head Contract in the following respects:
Defence-specific clauses have been removed, together with clauses that give effect to Commonwealth procurement policy.
An express right for the Contractor to suspend work and, if not remedied, terminate for non payment or Owner insolvecy have been included.
The limitation on the damages the Contractor can claim following termination has been removed.
An amount on account of profit foregone has been added to the payment that the Owner must make if it terminates the contract for its convenmience
The indemnity for breach in clause 1.3 has been deleted, together with the associated exception to the limitation on liability, because these render the limitation useless.
A subcap on liability for LDs for delay has been added.
The Insolvency Event triggered by a notice from the Commissioner of Taxation requiring the payment of overdue tax has been deleted.
The Project Lifecycle and HOTO Plan has been replaced with a Commissioning and Handover Plan.
WHS obligations have been simplified, since these are governed by WHS legislation in any event.
Other ‘over the top’ requirements have been deleted (such as the obligation not to comply with directions of the Owner other than as stated in the Contract).
There are further opportunities to simplify the document, for example by incorporating any of the Specicial Conditions (in Annexure 2) that are relevant directly into the Conditons of Contract, and integrating the Building Information requirements (in Annexure 1) into your Works Description.
Obviously, users of the document should carefully consider its suitability for their needs and amended it as appropriate. Feel free to contract me if you require any assistance in this regard.
