Report on Procurement and Contract Management
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Added on 2020-05-11
Report on Procurement and Contract Management
Added on 2020-05-11
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Procurement & Contract Management 1PROCUREMENT & CONTRACT MANAGEMENTNameCourseProfessorUniversityCity/stateDate
Procurement & Contract Management 2Executive SummaryConstruction industry is susceptible to a wide range of disputes mainly because construction projects are usually performed by different parties with varied goals and objectives. This report presents an analysis of the dispute between Southern Han and Lewence. The two parties signed a$15.6 million contract for construction of a five-storey 60-unit apartment block in Breakfast Point, Sydney, Australia. The contract was executed in accordance with AS 4000 1997 Contract and Building and Construction Industry Security of Payment Act 1999 (NSW). Twenty months after signing the contract, southern Han took out the remaining work from Lewence on ground that the later had breached the contract. After terminating the contract, Lewence served Southern Han with a $3,229,202.50 payment claim. Following this claim, Southern Han issued a payment schedule to Lewence showing that it would pay zero claim and instead wanted Lewence to pay it$64,909.67 that had been paid in advance. Following this dispute, Lewence filed an adjudication application. The application was determined in favor of Lewence ordering Southern Han to pay Lewence $1,221,051.08. Southern Han filed summons in the New South Wales Supreme Court, which ruled in its favor. Lewence filed an appeal in the New South Wales Court of Appeal, which reversed the Supreme Court determination. Southern Han then filed summons in the High Court of Australia, which reversed the Court of Appeal determination. The High Court ordered Lewence to repay Southern Han $1,276,000 and costs of the appeals to the High Court and Courtof Appeal. The main problem in this dispute was that there was no reference date on which the payment claim issued by Lewence on December 4, 2014 would be based on. Additionally, the High Court stated that once the contract was validly suspended it meant that all contractual obligations of both parties were also suspended until the remaining work had been completed.
Procurement & Contract Management 3This dispute emphasizes the importance of reading and understanding contract terms and conditions, and applicable laws and legislations.
Procurement & Contract Management 4Table of Contents1.Introduction.......................................................................................................................................52.Type and value/size of project..........................................................................................................53.Type of procurement system used....................................................................................................64.Actual contract used..........................................................................................................................65.Description of the dispute and parties involved..............................................................................76.Contractual clauses applicable to the dispute..................................................................................87.The chronological history of the dispute..........................................................................................98.Dispute resolution approaches used and problems encountered.................................................109.The outcome of the dispute.............................................................................................................1110.The lessons learned......................................................................................................................1211.Personal reflections and recommendations on how to prevent a similar dispute in the future1212.Conclusion & Recommendations................................................................................................13References................................................................................................................................................14
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