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International Construction Law Review

THE GROVE REPORT: THE BACKGROUND TO THE CONFERENCE ON WHOSE RISK?

In March 1998, Mr Jesse B Grove III of the well known New York firm of Thelen Reid & Priest LLP, was commissioned by the Government of Hong Kong Special Administrative Region to review its general conditions of contract for construction works. As Mr Grove noted in his subsequent report, this was not an innovative move by the Government since the Hong Kong Works Bureau had periodically reviewed and revised its conditions of contract. In addition, a Joint Discussion Group on the Standard Form of the Conditions of Contract was created in 1981 and had considered a number of subjects including consultancy agreements, time limits, mediation, arbitration, contractor’s alternative designs, adverse sub-surface conditions, the role of the engineer, insurance of the works, issues relating to the design and build contracts, site safety, utilities and immigration procedures for projects connected with the new airport. In 1990 a sub-committee of the Joint Discussion Group, the Utilities Working Group, was formed to consider the problems of utilities in Hong Kong. The Joint Discussion Group evolved into the Contracts Committee of the Construction Advisory Board. Within the Government, another group consisting of representatives of various Government departments engaged in public works, the Department of Justice and the Works Bureau was working in parallel. In the light of all these discussions, it was thought useful to seek advice from a distiguished consultant who could provide the perspective of “best international practice” and who was not involved in Hong Kong work or contracts and therefore would be free from any bias that might be thought to arise from such connections.
Mr Grove was engaged to carry out a “fundamental review of the GCCs [the General Conditions of Contract] and in particular the allocation and management of risk in the procurement and works projects…with recommendations on any modifications necessary in the interests of public finance based on international best practice”. The purpose of the review was “to enable the employer to make policy decisions on specific issues, and to facilitate a revision of the procedures and the GCCs, if necessary”. Mr Grove was asked to consider in particular the following subjects in the conditions of contract: ground conditions (clause 13), physical impossibility (clause 15), care of the works (clause 21), delay caused by public utility works (clause 50) (1 (b) (ix) and 63 (d)), fees and charges, new legislation, etc. (clauses 29 and 30), payments to sub-contractors (clause 69) and time bar provisions in
Pt. 2]
The Grove Report

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