October 17, 2022
As we make our way out of the COVID-19 Pandemic, we are left with what appears to be the ‘new normal’ for the transport and main road industry in Queensland. This landscape contains contractual allowances and forms of relief for contractors who experience impacts related to the COVID-19 Pandemic (‘COVID-19’) and relief for other supply chain disruptions.
With the aim of bringing stability and sustainability back to the industry, the Queensland Department of Transport and Main Roads (‘DTMR’) introduced Annexure D and Annexure E to its TIC-CO contract suite. These new annexures provide an avenue for contractors to alleviate some of the time and cost risks associated with COVID-19 and increased supply costs.
As an update from our ‘Pandemic Projects’ article series (read Part 1 here), this four-part series will:
- identify some of DTMR’s projects and provide an overview of Annexure D and Annexure E;
- outline the process for claiming under Annexure D, including the requirements for establishing claims and other factors to consider when submitting a claim;
- outline the requirements and process for establishing claims under Annexure E, including other factors for contractors to consider; and
- discuss the current difficulties faced by contractors within the industry relating to labour, including possible future relief avenues and current actions contractors can take to mitigate ongoing increased costs.
DTMR Projects
Over the next 4-years, DTMR have committed to investing $29.7 billion for the delivery of various transport and road infrastructure projects across Queensland.
These investments include:
Coomera Connector (State 1)
A commitment of $2.16 billion from the Queensland and Australian governments for the planning and construction of Stage 1. This project consists of the construction of additional crossings of the Coomera and Nerang rivers covering 16km with construction expected to start in late 2022.
Pine River to Dohles Rocks Road
The Queensland and Australian governments have committed $2.1 billion for a program of works, upgrading the Gateway Motorway, Bruce Highway, Gympie Arterial Road and Dohles Rocks Road.
The program proposes the delivery of:
- north-facing ramps (northern connections) at Dohles Rocks Road interchange to the Bruce Highway; and
- a new North South Urban Arterial corridor between Dohles Rocks Road and Anzac Avenue to provide an alternative route for local traffic.
Rockhampton Ring Road
As part of the Bruce Highway Upgrade Program, the Rockhampton Ring Road project has received $1.065 billion in funding from the Queensland and Australian governments.
This project will result in 17.4km of new road with construction proposed to commence sometime in 2022.
Inland Freight Route
To support moving freight more efficiently across Queensland, there has been a long-term $1 billion commitment for the development of an alternative north-south route to the Bruce Highway and North Coast rail line. This funding commitment includes upgrade works to increase the capacity and safety by providing an alternative route to the Bruce Highway from Charters Towers to Mungindi.
Annexure D and Annexure E
Annexure D (COVID-19)
Introduced in mid-2020 to mitigate the impacts of COVID-19 being experienced by contractors to TIC-CO contracts, Annexure D provides relief for direct cost and / or time impacts experienced by contractors as a result of COVID-19.
Annexure D specifies that a direct COVID-19 impact may be categorised as a Pandemic Directive or Pandemic Relief Event, providing contractors with additional avenues to submit claims for COVID-19 related impacts.
Annexure E (Increase Supply Cost)
In July 2021, Annexure E was introduced to address the exceptional price increases and supply chain disruptions impacting the inability of contractors to procure the materials necessary to carry out and complete projects under TIC-CO contracts.
Annexure E only permits contractors to claim additional costs incurred related to increased prices for prefabricated steel, steel reinforcement (bar and mesh), ready-mix concrete and fuel. To the extent contractors encounter a delay in relation to these materials, Annexure E also permits extension of time claims.
Discrepancies
Where discrepancies arise in respect of the processes and entitlements under Annexure D and Annexure E, contractors should:
- consider the guidance document provided by DTMR, which was developed to assist contractors and contract administrators with the interpretation of entitlements and assessment obligations under Annexure D and Annexure E (this guidance document is non-binding); and
- discuss such discrepancies with DTMR pursuant to the relevant provision of Annexure D and Annexure E which requires parties to collaborate and cooperate in respect of the processes described and entitlements contemplated within each.
Which contracts apply?
Annexure D and Annexure E are only provided for under the TIC-CO contract suite, however, the DTMR guidance document provides that both annexures may be incorporated into other contracts on a case-by-case basis.
Contractors who are currently engaged by DTMR and interested in the use and application of these annexures should discuss the potential incorporation of such into current contracts with DTMR.
The associated Deed of Variation and Amendment for each annexure must be signed by both parties for the related entitlements to arise.
Importantly, both Annexure D and Annexure E are available under the ‘Administrative Forms’ category of the TIC-CO contracts, which means they are not included as part of the General Conditions in the Tender Documents. As such, contractors entering new contracts with DTMR should consider whether they can form part of the initial contract, rather than requiring a deed of variation and amendment be executed at a later date.
Lamont Project & Construction Lawyers
We have the industry knowledge and experience to assist contractors to understand the operative effect of both Annexure D and E in the TIC-CO contract. If you have any questions about any matters raised in the above article as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The content of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
Contact: Peter Lamont or Quinn Hironaka
Email: [email protected] or [email protected]
Phone: (07) 3248 8500
Address: Suite 1, Level 1, 349 Coronation Drive, Milton Qld 4064
Postal Address: PO Box 1133, Milton Qld 4064