A critical appraisal of the use of standard forms of contract in the Maltese construction industry

Abstract

The primary aim of the study is to critically appraise the current use of Standard Forms of Contracts (SFCs) in their original and amended forms within the Maltese Construction Industry. This includes an assessment of the extent to which SFCs and Ad-hoc forms are currently being adopted, the identification of the underlying reasons for any amendments to SFCs, and ultimately, an assessment of the potential risks and repercussions that such amendments may constitute towards contracting parties. Qualitative research methodology is utilised in a quest to gather rich data from twelve participants who are professionals in the fields of procurement and contracting. To this effect, a semi-structured interview comprising of a series of close-ended and open-ended questions was composed as the research instrument, with the close ended questions serving as a supplementation and representation of the qualitative data. The results received from twelve participants engaged with various employers and contractors working on a mix of small, medium, and large construction projects within the Public and Private sectors is thoroughly analysed and compared and integrated to the literature pursued. The study is a first of its type in appraising the SFCs adopted by the Department of Contracts within the Public Construction Sector. Furthermore, the extent of use and amendments with regards to the FIDIC suite of contracts within the private sector were found to be widespread for medium to large scale projects, particularly when compared to other SFCs (JCT and NEC). In addition, the results are indicative that the use of Ad-Hoc contracts and the KTP ‘Kuntratt Ta’ Bini’ are still in use on low sized projects. The findings pertaining to this study generally correlate with the international literature review pursued. It is hoped that this research may serve as a guide for academics and construction stakeholders to consider the potential benefits of adopting SFCs within the private sector, in particular on smaller sized projects.