Term

Meaning

Actual Outturn Costs or AOC

The total verified sum of all Reimbursable Costs reasonably and actually incurred by the Participants, and all Corporate Overhead and Profit paid to the Non-Owner Participants (NOPs), to bring the Works to final completion (i.e. following completion of the defects liability period) under the alliance contract.

Alliance Charter

The charter (including alliance principles and alliance objectives) developed by the Participants for the performance of the Works and which underpins the relationship between the Participants under the alliance contract.

Alliance Leadership Team or ALT

The alliance leadership team which is established by the Participants to provide leadership, governance and accountability and ensure that the alliance contract runs as smoothly and efficiently as possible for the benefit of the Participants.

Alliance Management Team or AMT

The alliance management team which is established by the Participants to provide day-to-day leadership and management of the performance of the Works.

Corporate Overhead and Profit

The NOPs' agreed corporate overhead and profit.

Excepted Risk

(where used in Australian Standard 4300 'General conditions of contract for design and construct contracts')

The excepted risks causing loss or damage, for which the Principal is liable, which are:

any negligent act or omission of the Principal, the superintendent or the employees, consultants or agents of the Principal;

any risk specifically excepted in the contract;

war, invasion, act of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection or military or usurped power, martial law or confiscation by order of any government or public authority;

ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel not caused by the Contractor or the Contractor's consultants or subcontractors or the employees or agents of any of these;

use or occupation by the Principal or the employees or agents of the Principal, the Principal's consultants or other contractors of the Principal (not being employed by the Contractor), of any part of the work under the Contract; and

defects in such part of the design of the work under the Contract, including defects in any of the design for the work, other than design the suitability of which the Contractor has warranted under the contract

Force Majeure Event

An event set out in paragraphs 1 to 9 below which is beyond the reasonable control of the Participants:

war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection or military or usurped powers, martial law or confiscation by order of any government agency or public authority;

ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel not caused by a Participant;

an act of a public enemy;

industrial dispute which is not confined to the Participants, any subcontractor, or to the site or the Works;

pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds;

earthquake, cyclone, or other physical disaster or act of God;

fire, explosion (including radioactive and toxic explosion) provided that it is not caused by the negligence or breach of the alliance contract by a Participant;

aviation disaster, not caused by the negligence or breach of the alliance contract by a Participant; and

a Terrorist Act as defined in the Terrorism Insurance Act 2003 (Commonwealth),

but does not include:

any event which could have been prevented or overcome by the exercise by the Participants of the standard of a reasonable and prudent person;

any event which was caused by the Participants or contributed to by the Participants, to the extent of the contribution;

lack of funds for any reason or inability to use available funds for any reason (which is not itself caused by a Force Majeure Event).

Please note that, in some instances, an industrial dispute (as described in paragraph 4 above) will not constitute a Force Majeure Event under the alliance contract.

In addition, please note that, in some instances, the alliance contract will not include a Force Majeure Event regime. Rather, there will be an 'adjustment event' regime under which the occurrence of any 'adjustment event' (which events will be workshopped and agreed between the Participants prior to entry into the alliance contract) will entitle the ALT to recommend an adjustment to any part of the Commercial Framework for the Owner's approval.

Latent Conditions

The physical conditions on and off the site including the weather, soil and rock conditions, geotechnical conditions, contamination, pollution and artificial things.

Non-Owner Participants or NOPs

The Non-Owner Participants in the performance of Works under the alliance contract.

Open book

The commitment of each Participant under the alliance contract to:

maintain all of the records and other documentation that relate to the Works in accordance with, where applicable, good accounting practices, standards and procedures and Legislative Requirements (including the public records legislation applicable in the alliance's jurisdiction);

fully disclose any corporate or other objectives or affiliations that could reasonably be considered to have an adverse impact on the achievement of either or both of the Owner's VfM Statement or the alliance objectives;

make the records and other documentation available to each other (or each other's nominated auditor) on request; and

make available to each other (or each other's nominated auditor) any existing documentation or information in whatever form relating to the Works.

Please note that the open book commitment will include a commitment of each Participant to maintain and make available to each other Participant all documentation and information in respect of the Reimbursable Costs incurred by the Participant and the other costs incurred by the Participant which are not Direct Costs under the alliance contract.

Owner

The Owner in its capacity as [insert specific role e.g. the Commissioner of Main Roads], being the client for the Works under the alliance contract.

Owner's VfM Statement

The Owner's Value-for-Money proposition for the Project as set out in the alliance contract.

Owner Participant

The Owner in its capacity as one of the Participants in the performance of the Works under the alliance contract.

Participants

The Participants in the performance of Works under the alliance contract, being the Owner Participant and the NOPs.

Principal

Has the meaning given to it in the Australian Standard 4300 'General Conditions of contract for design and construct contracts'.

Reimbursable Costs

The costs defined in the Alliance Development Agreement and Project Alliance Agreement which the Participants are entitled to be paid in connection with the Works, including the cost of labour, plant, materials and specialist subcontract work required to deliver the project, but excluding any corporate overhead component not specific to the Works, any profit or mark- up of any kind and any costs incurred by the Owner in its capacity as client for the Works.

Reward Amount

A payment to the NOPs by the Owner which will be calculated and paid under the Risk or Reward* regime under the alliance contract.

Please note that, in some instances, this is referred to as a 'gainshare' payment.

Risk Amount

A payment by the NOPs to the Owner which will be calculated and paid under the Risk or Reward* regime under the alliance contract.

Please note that, in some instances, this is referred to as a 'painshare' payment.

Risk & Contingency Provisions

The provision for all possible Reimbursable Costs associated with risks that may arise in carrying out the Works that are to be included in estimating the TOC, including items such as Latent Conditions, foreign exchange fluctuations, cost-of-living increases, rise and fall events, availability of utility services, costs of coordinating the Works with other works and services undertaken by the Owner or its contractors (other than the NOPs) and the cost of rectifying any defects.

Scope Variation

Any direction made by the Owner under the alliance contract to increase, decrease or change the Works which amounts to:

a significant change, amendment or alteration to the Works; or

a change to the fundamental requirements of the Works.

Please note that, in some instances, the ALT may also direct Scope Variations under the alliance contract. Government agencies need to carefully consider the appropriateness (or otherwise) of entitling the ALT to direct Scope Variations under the alliance contract (particularly in the context of the effect a Scope Variation may have on achieving the objectives set out in the Owner's Value-for-Money Statement.

Statutory Requirements

Includes:

Acts of Parliament;

authorisations;

directions given under a statutory power which affect the performance of the Works; and

all other laws, regulations, conventions, orders, directions, guidelines and policies given by or on behalf of any Government agency which may apply to the Works.

Target Outturn Cost (TOC)

A specific sum estimated as being the pre-estimate of Reimbursable Costs, Risk & Contingency Provisions, Corporate Overhead and Profit to achieve the minimum conditions of satisfaction, perform the Works and bring the Works to final completion (i.e. following completion of the defects liability period).

Wilful Default

A deliberate and purposeful act or omission carried out, or real and substantial evidence of a deliberate and purposeful act or omission carried out, with a reckless disregard or calculated regard, for the consequences of the act or omission, but does not include any error of judgment, mistake, act or omission, whether negligent or not, which is made in good faith* by that Participant or by any director, officer, employee, agent or subcontractor of that Participant.

Works

The whole of the works and services which the Participants are or may be required to carry out under the alliance contract.

Please note that this guidance note refers to 'Works' (in the context of alliance contracting) and 'work under the contract' (in the context of traditional contracting) for the purpose of distinguishing the usage of the terms.