No.

Subject

Traditional contract

Alliance contract

Material difference and trade-off between traditional contract and alliance contract

13

Suspension of Works

The work under the contract may be suspended by:

the Superintendent, if the Superintendent considers such suspension is necessary:

because of an act or omission of the Principal, the Superintendent or the Contractor;

for the protection or safety of any person or property; or

to comply with a court order; or

the Contractor, if it wishes to do so and provided that the Superintendent has approved the suspension.

The costs of any suspension will be borne by the Contractor, unless the suspension is due to an act or omission of the Principal or the Superintendent, in which case any additional costs will be valued as a variation under the contract.

The Participants may only suspend the Works:

with the approval of the Owner; or

if there is a real risk of injury to persons or damage to the environment.

In addition, the Owner may suspend the Works at any time it considers it necessary or appropriate.

The Owner must reimburse the NOPs all Reimbursable Costs incurred during the period of any suspension directed by the Owner (unless the suspension is caused by a breach of the Agreement by the NOPs). In addition, unless the suspension is caused by a breach of the Agreement by the NOPs or is necessary to ensure that the Works comply with the requirements of the alliance contract, the TOC will be adjusted by that amount for the purposes of the Risk or Reward* regime (in circumstances where the Owner agrees to take the sole risk of the cost of any suspension under the alliance contract). However, if the Owner does not agree to take the sole risk of the cost of any suspension under the alliance contract, then the TOC will not be adjusted in these circumstances and the Owner and the NOPs will share the additional costs as part of the Risk or Reward* regime (unless the ALT recommends and the Owner otherwise approves adjustment to the TOC in these circumstances).

Right to suspend the Works

Under a traditional contract, the work under the Contract may only be suspended by the Superintendent or with the approval of the Superintendent.

Unlike under a traditional contract, there are circumstances under an alliance contract in which the Participants may suspend the Works without the separate approval of the Owner. However, in making any decision to suspend the Works, the Participants (being the Owner Participant and the NOPs) must act in good faith* and in accordance with the Alliance Charter.

Cost of suspension of the Works

Unlike under a traditional contract, the NOPs under an alliance contract do not bear the costs of the suspension. Rather, the Owner must reimburse the NOPs the Reimbursable Costs incurred during the period of any suspension (unless the suspension is caused by a breach of the alliance contract by the NOPs or is necessary to ensure that the Works comply with the requirements of the alliance contract) and the TOC will be adjusted by that amount for the purposes of the Risk or Reward* regime. Therefore, unless the suspension is caused by a breach of the alliance contract by the NOPs or is necessary to ensure that the Works comply with the requirements of the alliance contract, the Owner will bear the costs of the suspension in the form of reimbursing the NOPs the Reimbursable Costs incurred during the period of any suspension and making allowance for those additional costs in the Risk or Reward* regime. Also, under some alliance contracts, the NOPs will not be entitled to suspension costs where the Owner directs the suspension by reason of a material cost overrun or delay in completion.