available when most owners will do everything they can to ensure that the bidders for their project will not benefit appropriately from it. There is no difference in principle with builders of houses, factories, hotels, apartments or anything else. There must be a shake-up in thinking. Some owners and their consultants understand that a vibrant and sustainable construction industry is to their advantage, but why does the majority not “get it”? My prediction is that the industry will eventually split into two. Financially sound and good quality contractors will largely pull back from bidding. They will negotiate on fair and reasonable terms with thoughtful owners who understand the problem, and the pool of good bidders will diminish even further. Penny-pinching owners who are obsessed with shaving the margins to a minimum will be left with bids from weak contractors who will accept unfair terms and minimum margins. It would be easy to say that they will then deserve each other but, sadly, that is of no help to the ultimate purchasers who may have to live with the consequences of builders who fail to complete. Owners and their consultants will have only themselves to blame. The first person to publish “A Guide to Negotiated Construction Contracts”, with input from all sides, should do well.
About the author
Derek Firth is an Auckland Barrister practicing as an arbitrator, mediator and adjudicator. He is a Fellow of AMINZ and a Fellow of the Chartered Institute, UK. Derek has had a number of party and Court appointments under the ICC Rules and is one of the leading dispute resolution practitioners in New Zealand, particularly in construction, property and commercial disputes.
Derek is the New Zealand Alternate Director of the ICC International Court of Arbitration (Paris) and has been appointed as Member of the New Zealand Order of Merit (MNZM).
He is Chairman of the Dilworth Trust Board, a Trustee of the Melanesian Trust Board; Chairman of BioDiesel Oils NZ Limited and a director of a number of companies in the InterTech Group in Australia.
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