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How does the MMCD allocate risk?
The Owner owns the risk to start. Transferring it to the Contractor means the Owner pays a risk premium which may be more expensive than carrying the risk over the long term. When the Contractor knows if the risk is limited, the risk allowance can be reduced. The contractor then relies on the contract wording to ensure fair payment when the risk situation arises. In many cases the MMCD language works both ways to limit risk to both Owner and Contractor. The situation of quantity over/under runs is a good example.
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How can we get a referee?
There are two ways to get a Referee. First, and most preferable, the two parties can exchange names and agree on a person whose opinion will be valued by both. In this case, the parties negotiate the Referee's fees with the selected candidate. If the parties cannot agree, they can apply to the MMCD Association who will then appoint a Referee. Appointed Referees are required to charge out at a standard rate set from time to time by the Association. You can get suggestions for Referee names from the Association, but as the Association has a very limited number of Referees, you will have to declare that you accept the risk that if you later have a Referee appointed you may get a Referee which one party of the other has already declined.
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Is the "Contract Administrator" the same as "The Engineer"?
In non-MMCD contracts, the Engineer often has decision making powers on claims and disputes. In the MMCD, the Contract Administrator makes the initial decisions, but if a claim or dispute arises, the Contract Administrator only provides information to others - he or she does not make the final ruling. In addition, since the MMCD was designed for municipal works, we wanted to be sure there was no confusion between "The Engineer" on the job and the "Municipal Engineer".
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Why doesn't the MMCD produce a lump sum contract?
The principle of a Lump Sum contract is to transfer all risk to the Contractor. Often when people ask for a Lump Sum contract, a simplified contract is an acceptable substitute. The MMCD Association have as an upcoming project a simplified contract for small works.
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Why does MMCD make a difference between a Change and an Extra Work item since they both need a Change Order?
The MMCD provides flexibility for new items which were not contemplated by either the Owner or Contractor. In the case of an Extra, the Owner does not have to offer the work to the Contractor and if offered, the Contractor does not have to do the work. New items which are not Extra Work are those which are similar to bid items and occur generally within the work site. These become Changes and if the Owner wants them done, they must be awarded to the Contractor and then the Contractor has no choice but to do the Change. Although they both require a Change Order to initiate the work, this simply means that only one type of form is needed to amend the contract.
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Why is an unexpected occurrence of a hazardous material not simply a Concealed or Unknown Condition?
GC 11 deals with Concealed or Unknown Conditions and GC 12 deals with Hazardous Materials. The major difference is that under GC 11, dealing with the condition may be a Change or an Extra Work item depending on the nature of the condition. Under GC 12, dealing with Hazardous Materials is defined as an Extra so that both the Owner and the Contractor have choices about who deals with the hazardous material.
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Builder’s Lien Act change:
All liens must be filed within 45 days and payment released by the 55.
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Questions about 'Wrap Up' Insurance:
This supplementary SGC 24.1.1b removes sub-contractors from the insurance coverage. The use of “wrap-up” insurance not required.
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The Maintenance Period
The maintenance period is one year.
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Quantity Variation (Quantity Variation Threshold):
We are often asked how we arrived at +/- 15 % for this index. (GC 9.4.1) It was as a result of consultation with many agencies and we chose 15% as an average. This can easily be varied with a supplementary but it may result in increased costs.
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If a tenderer submits a schedule of quantities and prices (i.e. a tender) but notices an error in a unit price prior to award, is he allowed to 'correct' the error?
Absolutely Not. Failure to accept award usually leads to a call on the Bid Bond. This was the essence of the Ron Engineering case at the Supreme Court of Canada wherein they defined "Contract A" and "Contract B".
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