What is AS4300? An Introduction to AS4300-1995 for Client-Side Project Managers

In the Australian construction industry, adherence to standard contractual frameworks such as those provided by Standards Australia is common practice.

The AS4300-1995 General Conditions of Contract (or simply, AS4300 or AS4300-1995) is a well-used contract throughout the construction industry.

This article explains the AS4300 General Conditions of Contract for project managers and introduces the process of managing payments within this contract’s framework.

What is AS4300?

AS4300, or AS4300-1995, is a set of general conditions for construction contracts developed by Standards Australia. AS4300, like most construction contracts, takes the form of a very very long A4 Microsoft Word document!

AS 4300 is supposed to provide a balanced legal foundation for the contractual relationship between:

• The Principal (the party commissioning the construction project, i.e. the Project's Owner);
• The Contractor (the party undertaking the construction work, which they call 'WUC' - work under the Contract)

What is Superintendent in AS4300?

AS4300 is administered by a third role, the Superintendent, aiming to foster fair dealing and efficiency in executing construction projects. Overall, the contract is neutral and does not inherently favour either party but the Superintendent does have meaningful power hence the name 'super'! 😎.

How to use AS4300

The flexibility and comprehensive nature of AS4300 make it suitable for various engagements, but it is mainly used on a lump sum arrangement to perform:

• Design and construction – where the principal provides a design brief (Principal’s Project Requirements) developed by the contractor and constructed.
• Design, development and construction – where the principal provides a more developed design such as a 5% design, 30% concept design, 50% schematic design or further, which is tendered and then developed by the contractor and constructed.
• Design, novate and construct – where the principal develops the complete design but then passes responsibility for the design over to the contractor.

The state library provides a good overview of the various phases here. Note that a modified version also enables early contractor involvement (‘ECI’) in arrangements.

Basic Features of AS4300  

1. Fixed Price / Lump sum price. The contractor must execute the work for a fixed price within a fixed timeframe. Changes to the contract price are a variation within a fixed timeframe.  

2. Design obligations. As we touched on above, the contract requires the principal to provide some sort of design by way of a brief or something more developed.

3. Variations. The contract prescribes a process for dealing with variations in the design, which must be directed in writing.

4. Payment. Payment is handled by Clause 42 and allows the contractor to claim payment progressively (i.e. ‘progress claim’, but this wording is not used in the Contract) following the schedule. It also has a warning in relation to the Security of Payments Act.

5. Fixed timeframe. The contractor must ensure the works are completed by Practical Completion. Else, liquidated damages will apply.

6. Extensions of time. The contractor may claim extensions of time to the date for practical completion if it is delayed.

Payment under AS4300

Payment is handled by Clause 42, ‘Certificates and Payments’ and is a crucial feature of AS4 300, which is why Mastt has digitised the contract and this clause. Within the AS4300 framework, ‘Payment Claims’ are governed by specific sub-clauses that outline the submission, assessment, and Payment Process, ensuring transparency and fairness for both parties.

1. Submission of Payment Claims to the Superintendent

Under AS4300, Clause 42 outlines how a contractor must deliver claims for payment to the superintendent. These claims must be at the specified time for payment stated in the Annexures, detail the value of work carried out (with evidence) and meet several compliance items outlined in clause 42.1 (best read your contract!). As is always the case, the submission must follow the format and requirements specified in the contract, including any necessary documentation to support the claim. Contractors should also follow the relevant Security of Payment Act requirements when submitting a Payment Claim.

2. Assessment of Payment Claim by the Superintendent

Upon receipt of a Payment Claim, the superintendent assesses the claim. This involves verifying the work completed and ensuring it aligns with the contract requirements. The assessment should be conducted on time to keep the project moving and within the days specified to issue the Payment. This document outlines the amount to be paid in response to the payment claim and the basis for any adjustments or rejections.

3. Payment

Once the contractor has received a Payment Schedule, an invoice will be issued with both the Payment Claim and Payment Schedule to the superintendent for review and assessment before being passed on to the principal for payment.

Reporting on AS4300

Mastt provides a comprehensive platform designed to enhance Contract Administrators on capital projects using AS4300. Here’s how Mastt can assist:

1. Dashboards and Reporting Automated: Mastt's dashboard offers a centralized view of all project activities, helping project managers track progress and manage tasks effectively.
2. Documentation and Tracking: The platform provides tools for documenting and tracking all project-related information, ensuring that everything is recorded and managed systematically.
3. Contract Management & Administration: Mastt allows Project Managers to digitally administer Standard Form Contracts like AS4000, AS4300, AS4902, AS2124 and Defene Standard Form Contracts to automate Payment, Variation and other clauses.
4. Security of Payments Act: Mastt provides compliance tools to ensure Payment Claims and Payment Certificates are compliant with SOPA.
5. Budget & Forecasting: Mastt helps project managers stay on top of budgets and cash flow forecasting by providing real-time insights and analytics.
6. ‍Risk Management: By offering robust risk management tools, Mastt enables construction managers to identify and mitigate risks early, ensuring projects stay on track.
7. Stakeholder Collaboration: Mastt enhances communication and collaboration between the project owner, contractors, and other stakeholders, ensuring that everyone is aligned and informed.

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Conclusion

Despite being created in 1995, the AS4300 general conditions of contract is still a well-used contract (though, at times, heavily amended) for managing design and construction projects in Australia. Client-side project managers administering an AS4300 contract should pay attention to their specific contract requirements and stay on top of clause 42 for payments to keep the capital project moving forward.

Further reading on AS4300 Contracts and Project Control Groups

Standard Form Construction Contracts are often an agenda item on Project Control Group meetings and within PCG Reports. Learn more about everything PCG related below.

• What is a Project Control Group? Understanding the Role of PCG in Capital Project Management
• The Best PCG Report for PCG Meetings in 2024
• What to Include in a PCG Report (Traditional)
• What to Wear to a PCG Meeting: A Guide for Client Side Project Managers

Disclaimer: While Mastt is dedicated to offering valuable industry insights, it's important to note that we are not legal experts. Therefore, our content should not be interpreted as legal advice. We encourage readers to exercise discretion and seek personalized guidance from qualified legal professionals.