The recommended use and advantages of reliance information in construction contracts

The concept of reliance information has been developed mainly for EPC (Engineer-Procure-Construct) Contracts when the Employer provides information to tenderers often in the form of reports usually parked in an appendix which contain a limited list of data for which the Employer takes responsibility.

This has the function to minimize the information to those design inputs that are essential and cannot reasonably be verified by the tendering Contractor.

The Employer issued information, referred to as rely-on or reliance information, often includes:

? geotechnical reports

? concept/reference design

? utilities data

? as built drawings

? contamination reports

? condition of existing assets

The information is critical to both design, construction and the assessment of risk when executing the project.

The Australian Constructors Association and Consult Australia published a guidance in June 2022 on the essential nature of reliance information in construction and has a number of key recommendations. It is well worth a read and can be found here.

Mainstream contracts such as FIDIC, Australian Standards and NEC4 have no such definition of reliance information within their terms and conditions.

FIDIC, Australian Standards and NEC4 are based on the experienced contractor test. Only the NEC4 includes Site Information as a contract document but without the provision that it is reliance information the test still remains that which an experienced contractor would have judged at the Contract Date to have ‘such a small chance of occurring that it would have been unreasonable for him to have allowed for them’. This is subjective and far from ideal.

Recently in Australia the General Conditions of Contract for Construction NCW4 has been published. It was developed in consultation with Australian state government building and road transport agencies (“Agencies”) for use on construct only contracts. The NCW4 is unique in that it contains a reliance information provision.

Clause 12 Site Conditions of NCW4 states :

12.1 General

a) Reliance information and non-reliance information comprise of those documents listed in Items 9 and 10 respectively.

b) With respect to reliance information:

i) the Contractor may rely on the factual accuracy of reliance information, but

ii) the Principal does not warrant or make any representation with respect to the completeness of the reliance information.

Strangely perhaps there is no guidance on what properly constitutes reliance or non-reliance information.

For industry guidance we need to go back to 1987 and the Guidelines for the Provision of Geotechnical Information in Construction Contracts prepared by a Construction Industry Committee convened by the Institution of Engineers, Australia.

Sadly the guidelines are out of print, lost in the mists of time and not accessible on the internet, a copy can be obtained from Engineers Australia. They do offer an excellent set of guidelines for what reliance information is.

One of the guidelines objectives was to establish and define broad categories of geotechnical data for purposes of presentation in contract documents and to define the differences between them. It is this which is worth highlighting some 40 years later.

The guidelines differentiate between factual data, interpretation and opinion.

Examples of the differences that I took from the Guidelines are included in the table below.

?Of note in the table is categorising bore logs as interpretation documents, it is worth realising this is the drillers summary of what he/she is observing.

Keeping core logs is essential as they can be inspected or sampled at a later date.

A crucial thing for contract drafters to realise is not to just include for instance a whole Geotechnical Report as reliance information rather to reference the source data only. A Geotechnical Report is often a mix between factual data and interpretation by the report author.

The NCW4 contract in its guidance notes writes - ?‘interpretations, deductions, opinions or conclusions should be clearly identified as non-reliance information’.

The FIDIC suite of Contracts has a provision that ‘the Contractor shall be responsible for interpreting all such data’ so that refers to the source Site data and not any interpretation or opinion statements.

The NCW4 goes on to say :

Notwithstanding clause 12.1 a), any interpretations, deductions, opinions or conclusions set out in any document provided by the Principal in connection with site conditions are deemed to be non-reliance information and the use of such information is entirely at the Contractor’s risk.

The NCW4 Guidance Notes which can be found here say further :

The Principal should always provide the tenderers with all of the information in its possession regarding the site, such as geotechnical investigations, planning studies and “as built” drawings of existing infrastructure. A failure to provide this information may expose the Principal to a claim for misleading or deceptive conduct under Section 18 of the Australian Consumer Law. However, if the Principal is not certain of how reliable the information is, it can categorise the information as either reliance information or non-reliance information.

This I believe is the right approach. I would also say that providing the 'source' reliance information Site data in a format that the Contractor can easily access and use is critical for both Employer and Contractor alike.