NZS 3916:2013

New Zealand Standard

Conditions of contract for building

and civil engineering
– Design and construct
Superseding (in part) NZS 3910:2003
NZS 3916:2013
NZS 3916:2013

COMMITTEE REPRESENTATION
This Standard was prepared under the supervision of the P 3910 Committee the Standards Council established under the
Standards Act 1988.

The committee consisted of representatives of the following organisations.

Sherwyn Williams (Co-opted Chair)
Peter Degerholm Arbitrators’ and Mediators’ Institute of New Zealand Inc.
Andrew Brickell Association of Consulting Engineers New Zealand Inc. and Institution
  of Professional Engineers New Zealand Inc.
Beatrix Bergner Auckland Council
Michael Weatherall Auckland Transport
John Sutton Institute of Public Works Engineering Australasia (New Zealand)
Bob Oldnall Insurance Council of New Zealand Inc.
Simon Guillemin Local Government New Zealand
Malcolm Abernethy New Zealand Contractors’ Federation Inc. and Roading New Zealand Inc.
Colin Orchiston New Zealand Institute of Architects
Garrett Butt New Zealand Institute of Building Surveyors
Paul Maynard New Zealand Institute of Quantity Surveyors
Paul Turner New Zealand Institute of Surveyors
Rod Fulford New Zealand Specialist Trade Contractors’ Federation
Richard Quinn New Zealand Transport Agency
Peter Fehl Registered Master Builders’ Federation
Curt Martin Water New Zealand

And observers from the following organisations.

KiwiRail Ltd New Zealand Law Society
Registered Master Builders Royal Institute of Chartered Surveyors

ACKNOWLEDGEMENTS
Standards New Zealand gratefully acknowledges the contribution of time and expertise from all those involved in developing
this Standard. The contribution of the Chair was made possible by Kensington Swan, and assistance with the division of the
previously single Standard into three Standards was facilitated by Simpson Grierson.

Standards New Zealand gratefully acknowledges the financial support of the following organisations.
 NZS 3916:2013

New Zealand Standard

Conditions of contract
for building and
civil engineering
– Design and construct
Superseding (in part) NZS 3910:2003

ISBN (Print) 978-1-77551-164-9

ISBN (PDF) 978-1-77551-165-6
 NOTES

AMENDMENTS

No. Date of issue Description Entered by, and date

 NZS 3916:2013

CONTENTS
Committee representation IFC
Acknowledgement IFC
Copyright IBC
Referenced documents viii
Latest revisions viii
Review of standards viii
Foreword ix
Outcome statement x

Contract Agreement 1

General Conditions of Contract

1 INTERPRETATION 3
1.1 Application 3
1.2 Definitions 3
1.3 General 9
1.4 Law, currency, and language 10
1.5 Computation of time 10
1.6 Duties of Engineer 10

2 THE CONTRACT 11
2.1 Type of contract 11
2.2 Lump sum contract 11
2.3 Cost reimbursement contract 12
2.4 Local authority contracts, contracts in public places,
and road contracts 13
2.5 Evidence of Contract 14
2.6 Documents prepared by the Engineer or Principal 14
2.7 Documents prepared by the Contractor 15
2.8 Assignment 16
2.9 No waiver 16

3 BONDS 17
3.1 Contractor’s Bond 17
3.2 Principal’s Bond 18

4 SUBCONTRACTS 20
4.1 General 20
4.2 Nominated Subcontractors 20

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5 GENERAL OBLIGATIONS 22
5.1 General responsibilities 22
5.2 Contractor’s Representative 25
5.3 Control of employees 25
5.4 Possession of the Site 25
5.5 Separate Contractors 26
5.6 Care of the works and Site 27
5.7 Protection of Persons and property 28
5.8 Setting out 29
5.9 Materials, labour, and Plant 30
5.10 Programme 31
5.11 Compliance with laws 32
5.12 Intellectual property 35
5.13 Underground and above-ground utilities 36
5.14 Treasure 36
5.15 Clearance of Site 36
5.16 Late supply by Principal 36
5.17 Safety plan 37
5.18 Quality plan 37
5.19 Traffic management plan 38
5.20 As-built drawings and operation and maintenance manuals 39
5.21 Advance notification 40

6 ENGINEER’S POWERS AND RESPONSIBILITIES 41

6.1 Appointment of Engineer 41
6.2 Role of Engineer 41
6.3 Engineer’s Representative 42
6.4 Inspection, recording, measuring, and testing 43
6.5 Removal and making good 44
6.6 Certification 45
6.7 Suspension of work 45
6.8 Engineer may instruct urgent work 46

7 INDEMNITY 47
7.1 Indemnity 47

8 INSURANCE 48
8.1 General 48
8.2 Contractor arranged insurances – General 49
8.3 Contractor arranged construction insurance 50
8.4 Contractor arranged Plant insurance 51
8.5 Contractor arranged public liability insurance 52
8.6 Contractor arranged professional indemnity insurance 53
8.7 Principal arranged insurances – General 53
8.8 Principal arranged construction insurance 55
8.9 Principal’s option to insure public liability 56

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9 VARIATIONS 57
9.1 Variations permitted 57
9.2 Variation orders 58
9.3 Valuation of Variations 58
9.4 Daywork 61
9.5 Unforeseen physical conditions 62

10 TIME FOR COMPLETION 63

10.1 Commencement 63
10.2 Due Date for Completion 63
10.3 Extension of time 63
10.4 Practical Completion Certificate 65
10.5 Damages for late completion 66
10.6 Bonus for early completion 66
10.7 Occupancy by the Principal 67

11 DEFECTS LIABILITY 68
11.1 Defects Notification Period 68
11.2 Remedying of defects 68
11.3 Final Completion Certificate 69
11.4 Effect of Final Completion Certificate 69
11.5 Warranties 70
11.6 Guarantees 70

12 PAYMENTS 71
12.1 Contractor’s payment claims 71
12.2 Progress Payment Schedules 72
12.3 Retention monies 74
12.4 Final payment claim 74
12.5 Final Payment Schedule 75
12.6 Effect of Final Payment Schedule 78
12.7 Interest 78
12.8 Cost fluctuations 79
12.9 Provisional Sums 79
12.10 Provisional Items 80
12.11 Prime Cost Sums 80
12.12 Contingency sums 81
12.13 Goods and services tax 81

13 DISPUTES 82
13.1 General 82
13.2 Engineer’s review 82
13.3 Mediation 83
13.4 Arbitration 84
13.5 Suspension during dispute 85
13.6 Award of interest 85

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14 FRUSTRATION AND DEFAULT 86

14.1 Frustration 86
14.2 Default by the Contractor 87
14.3 Default by the Principal 89

15 SERVICE OF NOTICES 90
15.1 General 90

Appendix

A Cost fluctuation adjustment by indexation 91

B Contracts in public places and road contracts 93

Schedules to general conditions of contract

1 Special Conditions of Contract – Specific Conditions of Contract 95
2 Special Conditions of Contract – Other Conditions of Contract 107
3 Form of Contractor’s performance bond 108
4 Form of Principal’s bond 110
5 Form of Contractor’s bond in lieu of retentions 112
6 Form of Producer Statement – Construction 114
7 Information on Contractor arranged construction insurance 115
8 Information on Contractor arranged Plant insurance 117
9 Information on public liability insurance 119
10 Information on Contractor arranged motor vehicle insurance 121
11 Information on Contractor arranged professional indemnity insurance 123
12 Information on Principal arranged construction insurance 124
13 Form of Contractor (or Subcontractor) warranty 127
14 Agreement for off-site Materials 130
15 Practical Completion Certificate 134
16 Final Completion Certificate 135
17 Deed of novation 136

Conditions of tendering
101 Interpretation 138
102 Issue of documents 138
103 Tenderers to inform themselves 138
104 Ambiguities in Tender Documents 138
105 Submission of tenders 139
106 Acceptance of tender 140
107 Tender evaluation 140
108 Notification of acceptance 140
Schedule to conditions of tendering 141

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Guidelines
G Contract Agreement 143
G Section 1 Interpretation 143
G Section 2 The Contract 145
G Section 3 Bonds 146
G Section 4 Subcontracts 146
G Section 5 General Obligations 147
G Section 6 Engineer’s Powers and Responsibilities 149
G Section 7 Indemnity 150
G Section 8 Insurance 151
G Section 9 Variations 158
G Section 10 Time for Completion 161
G Section 11 Defects Liability 163
G Section 12 Payments 165
G Section 13 Disputes 170
G Section 15 Service of Notices 172
G Schedule 14 Agreement in respect of off-site Materials 172

Index 175

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REFERENCED DOCUMENTS
In this Standard reference is made to the following:

New Zealand Standards

NZS 3910:2013 Conditions of contract for building and civil engineering
construction
NZS 3917:2013 Conditions of contract for building and civil engineering
– Fixed term
NZS 4202:1995 Standard method of measurement of building works
NZS 4224:1983 Code of practice for measurement of civil engineering
quantities

New Zealand legislation

Arbitration Act 1996
Cadastral Survey Act 2002
Construction Contracts Act 2002
Forest and Rural Fires Act 1977
Goods and Services Tax Act 1985
Health and Safety in Employment Act 1992
Personal Property Securities Act 1999
Property Law Act 2007

Other publications
Labour Cost Index, Statistics New Zealand
Producers Price Index, Statistics New Zealand

Websites
Reserve Bank of New Zealand www.rbnz.govt.nz
Statistics New Zealand www.stats.govt.nz
New Zealand legislation www.legislation.govt.nz

LATEST REVISIONS
The users of this Standard should ensure that their copies of the above-mentioned New
Zealand Standards are the latest revisions. Amendments to referenced New Zealand
and Joint Australian/New Zealand Standards can be found on www.standards.co.nz.

REVIEW OF STANDARDS
Suggestions for improvement of this Standard will be welcomed. They should be sent
to the Chief Executive, Standards New Zealand, Private Bag 2439, Wellington 6140.

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FOREWORD
Contracts that are comprehensive but at the same time easy to understand are important
in today’s technical and highly competitive building and construction environment. New
Zealand’s building, construction, engineering, and infrastructure industries rely on the
New Zealand standard conditions of contract for building and civil engineering to ensure
that their contracts are suited to New Zealand’s industrial and legislative scene. They
contain essential commercial provisions designed to allocate risk fairly and are aligned
with the requirements of the Construction Contracts Act.

NZS 3916:2013 is based on NZS 3910:2013 Conditions of contract for building and
civil engineering construction. NZS 3910 was first published in 1987, derived from
provisional Standard NZS 623P:1984 which was a radical rewrite of the previous Standard
NZS 623:1964. The Standard has undergone regular revisions over the past 25 years, most
recently in 2003. Following feedback from the sector over recent years, and analysis
completed by the Engineering Leadership Forum, a scoping meeting held in March 2011
identified key areas of the 2003 Standard that required review. It was decided that this
‘limited technical review’ would focus only on these key areas, resulting in a Standard
that was clearer and has a reduced need for extensive special conditions.

During the development of the Standard, the Committee concluded that it should be
published as three tailored Standards. ‘Superseding (in part) NZS 3910:2003’ on the cover
of this Standard means the revised provisions of NZS 3910:2003 are now distributed
across the new suite of Standards:

(a) NZS 3910 Conditions of contract for building and civil engineering construction;

(b) NZS 3916 Conditions of contract for building and civil engineering – Design and
construct;

(c) NZS 3917 Conditions of contract for building and civil engineering – Fixed term.

Together these three Standards supersede NZS 3910:2003.

This new NZS 3916 is similar to the new NZS 3910, but has been adapted to provide for
the situation where the Contractor is responsible for design as well as construction. Being
adapted from NZS 3910, it was not developed as an entirely new Standard. Standards
New Zealand is therefore keen to receive feedback and improvement recommendations
from the sector once the Standard has been in use for some time.

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NZS 3916:2013

Design and construct contracts differ from construction-only contracts in several

respects, including:

• The addition of design responsibilities to the Contractor’s obligations

• The Principal’s Requirements for the Contract Works are described in the Tender
Documents, but the detail of the design, including Specification requirements, is
then developed by the Contractor both before and after the submission of its tender

• A hierarchy of documents, so that the Principal’s Requirements will prevail over

the Contractor’s tender,

• Professional indemnity insurance, effected by the Contractor

• Measure and value payment arrangements are rare

• A process for review of the Contractor’s design documentation prior to construction

• Constraints on the Engineer’s power to vary the Contract Works

• A right for the Principal to terminate the Contract if unacceptable conditions are
imposed by public authorities in licences for design or construction

• Other minor changes, which appear throughout the General Conditions.

OUTCOME STATEMENT
This Standard enables Principals, Engineers, and Contractors to quickly establish
contractual arrangements that deliver a wide variety of building and civil engineering
projects on a design and construct basis. Contracts based on this Standard will reflect
fair risk allocation between the parties.

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 NZS 3916:2013

CONTRACT AGREEMENT

CONTRACT FOR (Contract name)

CONTRACT NUMBER (Number)

THIS AGREEMENT is made on 20

BETWEEN (‘the Contractor’)

AND (‘the Principal’)

IT IS AGREED as follows:

1. The Contractor shall carry out the obligations imposed on the Contractor by the Contract.

2. The Principal shall pay the Contractor the sum of $

or such greater or lesser sum as shall become payable under the Contract together with goods and
services tax at the times and in the manner provided in the Contract.

3. Each party agrees to the terms and conditions as set out in the Contract.

4. The Contract comprises the following documents:

(a) This Contract Agreement;

(b) The notification of acceptance of tender or award of Contract;

(c) The following post-tender documents (Identify any agreed post-tender documents to be included, for example
correspondence or minutes or pre-award meetings dealing with tender tags, and so on):

(d) Schedule 2: Special Conditions of Contract – Other Conditions of Contract;

(e) Schedule 1: Special Conditions of Contract – Specific Conditions of Contract;

(f) The General Conditions of Contract NZS 3916:2013 (including other Schedules);

(g) The Principal’s Requirements;

(h) The Schedule of Prices;

(Select if NOT applicable)

(i) The Contractor’s tender;

(j) Notices to tenderers (give details with dates);

(k) The Schedule to the Conditions of Tendering;

(l) The Conditions of Tendering; and

(m) The following additional documents: (Identify any additional documents to be included):

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NZS 3916:2013

5. The documents comprising the Contract shall be taken as mutually explanatory, but in the case of
ambiguity or conflict the priority of documents shall be as listed in clause 4 above, with each document
prevailing over a document lower in the list.

6. This Contract shall constitute the entire agreement between the parties. This Contract supersedes
all prior negotiations, representations, and warranties, except insofar as the same are expressly
incorporated herein.

SIGNED BY Authorised Signatory of Contractor

SIGNED BY Authorised Signatory of Principal

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 General conditions
NZS 3916:2013

New Zealand Standard

Conditions of contract for building and

civil engineering – Design and construct

GENERAL CONDITIONS OF CONTRACT

1 INTERPRETATION

1.1 Application
This section shall apply to the Contract except where inconsistent with the context.

NOTE – See 1.3.1 on singular including the plural.

1.2 Definitions
Adjudication As defined in the Construction Contracts Act

Adjudicator’s As defined in the Construction Contracts Act

Determination

Base Value The value determined in accordance with 9.3.5, 9.3.6,

9.3.7, or 9.3.8, as the case may be

Comprehensive As defined in 5.10.4

Programme

Contract The documents referred to in the Contract Agreement

as comprising the Contract, or the documents which
constitute the Contract under 2.5.1

Contract Agreement The written agreement for the fulfilment of the Contract
signed by the Principal and the Contractor

Contract Price The sum provided in the Contract as payable for the
completion of the Contract Works calculated in accordance
with 2.2 or 2.3 as applicable, subject to such adjustments
as are provided for in the Contract

Contract Works The works including Temporary Works to be executed in

accordance with the Contract

Contractor The Person whose tender has been accepted by the

Principal or the Person who has been so named in the
Contract, and includes the executors, administrators, and
successors of the Contractor

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NZS 3916:2013 Conditions of contract for building and civil
engineering - Design and construct

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