LCPL Group

Commercial Risk Analysis

CRA – 4
Alliance Projects

FOR

[Insert Project Name]

[Insert Project No]

PREPARED BY

[Insert Name]
[Insert Company Name]
(If not Leighton)

[Insert Date]

COPIED TO

[Insert Name(s) of Business Unit GM(s)]

[Insert Name(s) of other Accountable Executive Authority(ies)]
(if not just BU GM(s))
[Insert Name(s) of BU Commercial Manager(s)]
(where applicable)
[Insert Name of Tender Manager]
[Insert Name of CRA Initiator]
(if not Tender Manager)
[Insert Name(s) of other CRA Recipients required by CRA Request]
[Insert Name(s) of relevant LCPL Legal Counsel]
(if not CRA Author)
John Morton (General Counsel)
Josh Baker (GM, Group Operational Services)
Greg Brookes (Group Manager, Legal & Contracts)

© Copyright 2009 Leighton Contractors Pty Limited

PART A – EXECUTIVE SUMMARY
1. Project Description
[Note to CRA Author: Insert a brief description of the project, including its principal features]

2. General Risk Profile

[Note to CRA Author: Include an outline summary of some of the more substantial commercial
risks (and opportunities) to identify the general flavour of the client’s proposed contract
documents and so that ‘Part A – Executive Summary’ is no more than about two pages]
Some of the more substantial commercial contractual risks (and opportunities) are:
(1) [insert]

CRA – 4 Page 2 of 17 CRA - 4 REV 02

Alliance Projects
PART B – PROJECT BACKGROUND
1. Project Details
[Note to CRA Author: Under ‘Tender Completion Status’, ‘Subject to Probity’ means LCPL is
required to execute a probity deed, ‘Restricted’ means LCPL is competing against at least one
other LHL company (but a probity deed is not required) and ‘Not Restricted’ means LCPL is not
competing against any other LHL company]
Item Project Details

Client

Project Type [State type of mining, civil, building or telecommunications project]

Project Value (approx)

Location of Site/Project

Tender Completion Status [State whether ‘Subject to Probity’, ‘Restricted’ or ‘Not Restricted’]

Tender Closing Date

Tender Validity Period

Contract Type Alliance

TOC GST Status [State whether GST ‘inclusive’ or ‘exclusive’]

Date/Period for (Practical)

Completion

Defects Liability Period

(if applicable)

2. Key Performance Factors (as advised to CRA Author)

[Note to CRA Author: Set out here are the key factors advised to the CRA Author that are likely to
drive the successful performance of the work on the Project, including any design]
The CRA Author understands that the following factors are likely to drive the successful performance of
the work on the Project:
(1) [insert]
3. Tender/Project Participants (as advised to CRA Author)
[Note to CRA Author: Complete the following table with details of the LCPL Business Unit(s) and
any external proposed Alliance participant(s) jointly pursuing the project, as advised to the CRA
Author]
The CRA Author understands that the following LCPL Business Unit(s) and/or external Alliance
participant(s) are jointly pursuing the project:
Participant Role

CRA – 4 Page 3 of 17 CRA - 4 REV 02

Alliance Projects)
PART C – DOCUMENTS MADE AVAILABLE
[Note to CRA Author: Insert here a complete list of all documents received for CRA preparation. In
doing so, seek any further documents that you consider may be relevant to preparing the CRA in
addition to those received with the CRA Request]
(1) The documents made available to the CRA Author for the purposes of preparing this Commercial Risk
Analysis were as follows:
(a) [insert]
[Note to CRA Author: Delete or amend the following paragraph as necessary]
(2) The following documents were sought but were not made available to the CRA Author for the purposes of
preparing this Commercial Risk Analysis:
(a) [insert]

CRA – 4 Page 4 of 17 CRA - 4 REV 02

Alliance Projects)
PART D – TABULATED RISK DATA
[Note to CRA Author: Do not include extensive comments in the ‘Comments’ columns. Where relevant
insert a clause reference(s) and otherwise leave blank or insert one of a:
 very brief comment; or
 cross reference to a ‘Topic No’ in Part E or F,
if any further explanation is necessary]
1. Time and Cost Adjustments/Entitlement

Time Direct Cost TOC

Item Adjustmen Entitlemen Adjustmen Comments
t t t
(Y or N) (Y or N) (Y or N)
1.1 Acts of Client
Variations

Late possession of Site

Ambiguities in documents

Sequence of work

Acceleration

Suspension

Termination for convenience XXXXXXXX

Other acts and omissions of Client

(including exercise of reserved powers)

Wilful default

1.2 Neutral Events and Circumstances

Inclement weather

Changes in the law

Authorities changing their requirements

Changes in authorities charges, duties or XXXXXXXX

taxes

Development Approval delay/conditions

Construction Approval delay/conditions

Authorities delaying other necessary

approvals

Site related strikes

Industry wide strikes

Force majeure

Physical damage to the works (fire, flood,

other)

Neighbours

Latent conditions

Other events or circumstances beyond the

control of Alliance participants

CRA – 4 Page 5 of 17 CRA - 4 REV 02

Alliance Projects
CRA – 4 Page 6 of 17 CRA - 4 REV 02
Alliance Projects
2. Payment and Security
Item Details Comments
Frequency/Date in month for progress
claims
Period after progress claim for certificate

Period after progress claim for payment

Interest on late payment

Parent Company Guarantee – if any

Timing of gainshare payment

Is gainshare paid on termination Yes No

3. Insurance
Insurance Type Amount of Cover Effected by Excess Comments
Works
Public Liability
Marine
Workers Compensation
Vehicles and Plant
Professional Indemnity
Insurance required to cover difference in insurance conditions Yes No
Is there potential recourse to NOPs ‘business as usual insurance’ Yes No

4. Late Completion KRAs

Date/Period for
KRA Amount KRA Limit
Part of Project (Practical) Comments
($) per ……… ($)
Completion

5. Damages/KRAs other than for Late Completion

Amount of Damages Limit of Damages
Obligation Comments
($) ($)

CRA – 4 Page 7 of 17 CRA - 4 REV 02

Alliance Projects
PART E – DETAILED COMMENTS ON RISK ISSUES (AND OPPORTUNITIES)
[Notes to CRA Author:
(1) Use Part E to:
 where necessary, include any further explanation on ‘Tabulated Risk Data’ in Part D (but not if any necessary further explanation is
sufficiently covered in Section 2 (LCPL Policy section) of Part F); and
 include details on observations made (including on potential risk issues and opportunities) in reviewing documents and discussing matters
with other tender team members that may ‘add value’ to the tender process (such as things that may influence tender price, time, strategy
and contingency allowances)
(2) Part E should not report on the ‘P’, ‘N’ and ‘?’ ‘LCPL Policy’ risk issues required to be reported on in Section 2 of Part F (unless there is good
reason to reference any of these in Part E in a different context)
(3) Document subject matter on a ‘topic by topic’ basis (not a ‘clause by clause’ basis)
(4) Ensure that ‘contract clauses’ are referenced to facilitate CRA review, preparation of tender qualifications and contract negotiation
(5) Where relevant, complete the ‘CRA Author’s Proposed Strategy’ column]

Document/Clause
Topic
Topic Item No. Comments CRA Author’s Proposed Strategy
No
Reference(s)

CRA – 4 Page 8 of 17 CRA - 4 REV 02

Alliance Projects
PART F - EXECUTIVE AUTHORITY APPROVAL
[Notes to CRA Author:
(1) The primary purpose of Part F is to report on and obtain ‘Executive Authority Approval’ as to how to treat:
 non-compliant and unclear ‘LCPL Policy’ risk issues; and
 any other significant risk issues identified in Part E that require ‘Executive Authority Approval’
(2) Section 2 of Part F:
 includes a ‘checklist’ of all ‘LCPL Policy’ risk issues (correspondingly numbered to the relevant ‘Part’ of the LCPL Policy);
 only requires details on those ‘LCPL Policy’ risk issues marked ‘P’, ‘N’ and ‘?’, and then only to the extent of the non-compliance or uncertain
compliance with LCPL Policy;
 must include ‘contract clause’ references to facilitate CRA review, preparation of tender qualifications and contract negotiation; and
 must be completed on a ‘stand-alone’ basis.
(3) Section 3 of Part F is included to deal with the ‘other significant risk issues’ referred to in (1) above. Do not repeat the level of detail in Part E but
sufficiently identify the risk issue and include the ‘Tender Strategy’ or the ‘Result Achieved for Contract Execution’ (as the case may require)
(4) Part F is required to be initially prepared, to the extent possible, by the CRA Author (including the Tender Strategy) but should finally be
completed jointly by the CRA Author and the Tender Manager. Notwithstanding, the ‘Tender Strategy’ column must ultimately reflect (at
Executive Authority Approval stage) the actual position adopted for the Tender, including any tender qualifications.]
1. General Details and Approval
1.1 General Details

Project Project Value $

Client Contract Type Alliance
Division(s)/Branch(es) Other Alliance Participants
Part F Stage: [EOI/Tender/Contract Execution/Other] Part F Rev No.
Part F Author(s)

1.2 Executive Authority Approval

(to be signed by each relevant LCPL level of Executive Authority in accordance with project value authority limit)

(1) _____________________________ ________________________________ ____________________________

(GM Signature(s)) (Name(s)) (Date)

(2) _____________________________ ________________________________ ____________________________

(EGM Signature) (Name) (Date)

(3) _____________________________ ________________________________ ____________________________

(MD Signature) (Name) (Date)

CRA – 4 Page 9 of 17 CRA - 4 REV 02

Alliance Projects
2. LCPL Policy Risk Items
(Under ‘Complies’: ‘Y’ means yes, ‘P’ means partially, ‘NA’ means not applicable, ‘N’ means no, and ‘?’ means unclear)

Risk Item Details of Non-compliance or

Complies Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)

4/1 Client capacity and willingness to pay

1.1 Blue chip client

Off-shore client or
1.2 NOP

1.3 Trust

1.4 SPV

1.5 Novation

4/2 Ensuring that LCPL will be paid

2.1 Payment terms

2.2 Suspension

2.3 Wilful default or

indemnity

2.4 ‘Direct Costs’ and

‘Fee’

2.5 Cost to complete

2.6 Pay when paid

2.7 Early payment

2.8 Tender cost

commitment

4/3 Liability for damages

3.1 Cap liability to ‘Fee’

3.2 Excluded liability

3.3 Insured liability

CRA – 4 Page 10 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
3.4 Personal liability (not
J&S)

3.5 Third party liability

3.6 PI insurance

3.7 Program Alliances

4/4 Indemnities
4.1 Limit of indemnities

4.2 Proportional reduction

4.3 Indemnity for actual

loss

4/5 Damages for delay

5.1 Measure of damages

5.2 Quantum/cap

4/6 Damages for a shortfall in production, loss of product or product contamination (mining)
6.1 Measure of damages

6.2 Quantum/cap

4/7 LCPL parent company guarantee

7.1 Details

4/8 LHL parent company guarantee

8.1 LHL approval

8.2 Form of PCG

4/9 LCPL performance guarantees (supported by bonds, bank guarantees or retentions)

9.1 LCPL security amount

CRA – 4 Page 11 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
9.2 Recovery of security
cost

9.3 No cash retention

9.4 Return of security

9.5 No “top up”

9.6 Triggers for calling

9.7 No “no injunction”

4/10 Industrial relations risk

10.1 Details

4/11 Site risks

11.1 Latent conditions

11.2 Contamination

11.3 Access to site

11.4 Other contractors

11.5 Site responsibility

4/12 Changes (in terms of ‘delay’)

12.1 Qualifying causes of
delay and ‘Change’

12.2 ALT - Float

12.3 Mining transactions

12.4 Program

12.5 Non-Primavera
software

CRA – 4 Page 12 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
12.6 Delay costs TOC
adjustment

12.7 Acceleration

4/13 Changes (in terms ‘other than delay’)

13.1 ALT ‘Change’ scope

13.2 Sufficient funds

13.3 Impact on warranties

13.4 Client deleted work

13.5 Clients ‘reserved

powers’

4/14 Completion and Defects Liability Period

14.1 Definition of PC

14.2 Second defects period

14.3 ’Schedule’ gainshare

4/15 Termination
15.1 Termination rights

15.2 Cure period(s)

15.3 No client ‘wilful

default’ notice

15.4 No ‘anticipatory’
breach

15.5 No use of LCPL plant

15.6 Termination for

convenience

15.7 Insolvency event

CRA – 4 Page 13 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
15.8 Joint notice of ‘Wilful’
default

4/16 NGERS and proposed CPRS (greenhouse reporting and emissions trading scheme)
16.1 No ‘operational
control’

16.2 No statutory
obligations

16.3 Exception(s)

16.4 If an Exception does

apply

16.5 NGERS – related cost

issues

16.6 CPRS – related cost

and time issues –
before CPRS
legislation is passed

16.7 CPRS – related cost

issues – after CPRS
legislation is passed

4/17 Accepting responsibility for process design and guaranteeing the outputs from plant or a facility
17.1 Component
performance

17.2 Process design risk

4/18 Fit for Purpose

18.1 Certainty of LCPL
obligation

4/19 Warranting the financial performance of a project or facility

19.1 Do not warrant

4/20 Warranties for performance of materials and equipment

20.1 Obtaining supplier

CRA – 4 Page 14 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
warranties

20.2 Form of supplier

warranties

4/21 Design Generally

21.1 NOPs design
obligations

21.2 Client’s review time

21.3 Client’s right to reject

21.4 No client dictated

design

21.5 Proceed at NOPs risk

21.6 Stakeholder input

21.7 Design certification

21.8 NOP PI insurance

4/22 Accepting the risk of achieving development/planning approval for a project

22.1 No acceptance of risk

4/23 Forced NOP arrangements

23.1 Details

4/24 Probity
24.1 Details

4/25 Execution of client related contract documents

25.1 Details

4/26 Execution of contract documents by client

26.1 Details

CRA – 4 Page 15 of 17 CRA - 4 REV 02

Alliance Projects
 Risk Item Complies Details of Non-compliance or Result Achieved for Contract
Clarity Required (include ‘contract Tender Strategy
No Description (Y/P/NA/N/?) Execution
clause’ references)
4/27 Change in Control
27.1 No LCPL default

4/28 Tender Acceptance Period

28.1 Acceptance period

28.2 Construction
completion time

4/29 Submission approval

29.1 EOI or other PAA
response

4/30 Off-Shore Projects

30.1 Details

CRA – 4 Page 16 of 17 CRA - 4 REV 02

Alliance Projects
3. Other Significant Risk Issues
Part E
Risk Issue Tender Strategy Result Achieved for Contract Execution
Topic No

CRA – 4 Page 17 of 17 CRA - 4 REV 02

Alliance Projects