Master Builders Association Western Cape offers the following cautionary advice to its members regarding submission of tenders, due to the water crisis in the Greater Cape Town area:
At the time of submitting a tender for any works, both main contractors and subcontractors need to be very careful concerning the risks that the situation arising from the current water crisis presents and should carefully consider the following:
Access to the municipal water supply for use on building site activities is likely to be further restricted, possibly to a major degree, and;
The cost of municipal potable water is likely to increase significantly;
To this end, the specific contract conditions should be carefully studied, particularly as they relate to the party recorded in the contract documentation as being responsible for the supply of water, and the cost thereof.
Note should also be taken that relevant conditions of contract vary significantly. Such variance is not only between different types of contractual agreements, but also between various editions (this is the case with various recent JBCC editions).
Care should be taken to study the specific contract conditions, particularly any amendments to standard conditions, and note taken of the fact that, even where Agreements contain force majeure provisions, this is unlikely to protect the contractor on newly submitted tenders.
Qualifying tenders is permissible in law, but carries risks, particularly in the public sector, where qualifications are likely to result in disqualification. Needless to say, collusion with other tenderers is unlawful.
The risks that will confront contractors and subcontractors include contamination of water from sources other than the municipal supply and stringent quality control measures must be maintained to ensure both the quality of the water as well as the testing of structural concrete and mortars to ensure compliance with design strengths.
Many subcontract agreements allocate the responsibility of supplying water to the contractor. Contractors need to take due account of this
Contract conditions in current tenders are likely to qualify and reduce the employer’s responsibility and risk and contractors must scrutinise the documents to ensure that they have a thorough understanding of the risks that any amended documentation shifts to them and take the appropriate precautions when submitting their tenders in order to contain or manage these risks.