QUESTION 1.1 (Option 1)

Subcontracting

You are a contract administrator of a developer Elitle Development Co. Ltd. Your team have just completed the final drafts of the Main Contract and the associated Nominated SubContract for a 30-storey office development project in 288 Lonsdale Street, Melbourne. The drafts were sent internally to Mr. Newbie (project manager of the project) for comments. Mr. Newbie is the son of the CEO. In spite of his title, he is not as experienced and he is not familiar with the contract administration practice Mr. Newbie sent you the following internal memo:

INTERNAL MEMORANDUM

11th June, 2023

From: Mr. Newbie, Project Manager

To: XXX, Contract Administrator

Re : Proposed Office Building Development at 288 Lonsdale Street, Melbourne, 3000

Please reply with thorough explanation the followings: 1. Noted that I have to sign on the attestation page of the Main Contract but not on that of the Nominated Sub-Contracts. I wonder if this is a deliberate arrangement and would like to ask for the rationale behind this. I am not sure how my companys interest could be safeguarded as I can find that the Employer is not a party to the Nominated Sub-Contracts. 2. It has come to my attention that there are a couple of Nominated Sub-Contract packages that have to be awarded prior to the award of the Main Contract. Please advise on how to ensure the contractual proprieties are observed in awarding the sub-contracts in the absence of the Main Contractor. 3. Is it feasible for me to sign the sub-contract with the Nominated Sub-Contractor followed by assigning the sub-contract to the Main Contractor upon the award of the Main Contract. Your prompt reply is much appreciated.

You are too busy to take prompt action. Therefore, your asked the junior contract administrator to draft a reply first. Three hours later, you received a draft from him as follows:

DRAFT REPLY TO MR NEWBIE

11th June, 2023

From: XXX, Contract Administrator

To: Mr. Newbie, Project Manager

Re : Proposed Office Building Development at 288 Lonsdale Street, Melbourne, 3000 reply from the CA Team

Regarding your concern, we are pleased to reply as follows:

1] How the Employers interest could be safeguarded if the Employer is not a party to the Nominated SubContract? If the employer is not a party to the nominated sub-contract, it can be challenging to safeguard the employer's interests. However, there are several steps that the employer can take to mitigate the risks and protect their interests: Include provisions in the main contract: The main contract between the employer and the main contractor should include provisions that protect the employer's interests in case of subcontracting. These provisions could include requirements for the main contractor to seek the employer's approval before awarding sub-contracts and provisions for the employer to inspect and approve the sub-contractors' work. Pre-qualify sub-contractors: The employer can pre-qualify sub-contractors before awarding the main contract to ensure that the sub-contractors have the necessary experience, expertise, and resources to perform the work. This can help to reduce the risk of sub-standard work and ensure that the project meets the required standards. Monitor the work of sub-contractors: The employer can monitor the work of sub-contractors to ensure that they are performing the work according to the agreed standards. This can include regular inspections and audits of the sub-contractors' work. Establish communication channels: The employer should establish communication channels with the main contractor to ensure that they are aware of any sub-contracting activities and can provide feedback and guidance if necessary. This can help to ensure that the project meets the employer's requirements and standards. Include indemnity provisions: The main contract should include indemnity provisions that require the main contractor to indemnify the employer against any losses or damages resulting from the sub-contractors' work. This can help to protect the employer's interests in case of sub-standard work.

2] How to ensure the contractual proprieties are observed in awarding the sub-contracts in the absence of the Main Contractor? When awarding sub-contracts in the absence of the main contractor, it is important to follow a transparent and fair process that ensures contractual proprieties are observed. Here are some steps you can take to ensure that the process is conducted properly: Define the scope of work: Before initiating the sub-contracting process, clearly define the scope of work and the requirements for the sub-contractors. Pre-qualify sub-contractors: Conduct a pre-qualification process to shortlist potential subcontractors who have the relevant experience, expertise, and resources to undertake the work. Prepare a comprehensive RFQ document that outlines the scope of work, technical specifications, and commercial terms. Ensure that the RFQ is issued to the pre-qualified sub-contractors. Evaluate the bids: Evaluate the bids received from the sub-contractors based on the technical and commercial criteria outlined in the RFQ. Ensure that the evaluation is conducted in a fair and transparent manner. Award the sub-contracts: Once the evaluation is completed, award the sub-contracts to the selected sub-contractors who have met the technical and commercial requirements. Ensure contract compliance: Monitor the sub-contractors' performance to ensure that they comply with the terms and conditions of the contract. Conduct regular inspections and audits to ensure that the work is being performed according to the agreed standards. Maintain documentation: Ensure that all documentation related to the sub-contracting process, including the RFQ, bids, evaluation reports, and contracts, are maintained in a proper and organized manner.

3] Is it is feasible to sign the sub-contract with the Nominated Sub-Contractor followed by assigning the subcontract to the Main Contractor upon the award of the Main Contract? It may be possible to sign a sub-contract with a nominated sub-contractor followed by assigning the sub-contract to the main contractor upon the award of the main contract, but it depends on several factors and circumstances surrounding the specific situation. Firstly, it is important to consider the terms of the sub-contract and whether they allow for the assignment of the sub-contract to a third party. If the sub-contract prohibits assignment or requires consent from the sub-contractor before assignment, then it may not be feasible to assign the subcontract to the main contractor.

Secondly, the main contractor would need to be willing to accept the assigned sub-contract and be comfortable with the terms and obligations outlined in the sub-contract. The main contractor would also need to have sufficient resources and capacity to fulfill the obligations of the subcontract. Finally, it is important to ensure that the arrangement complies with any relevant laws and regulations, such as those related to procurement and contracting. You received the above draft reply, felt not right. It is because the draft looks written professionally but the content is full of flaws. You asked the junior contract administrator to explain and told him the consequences of breaching professional ethics. The junior contract administrator admitted that he used ChatGPT to generate the reply.

Your task:

[Part 1] State five flaws (the draft is full of flaws but just state five) of the draft to the junior contract administrator

[Part 2] Write a new memo to reply to Newbie