Types of contract and procurement
In procurements and contracts, clients and contractors have different roles and thereby different legal responsibilities. The division of responsibilities between the parties depend on the type of contract.
The client needs to prepare clear RFQ documentation for procurement of contractors. The RFQ documentation shall clearly present the type of procurement as well as requirements and provisions for the contract. It is the client who decides on the type of contract, procurement and compensation for a project.
Type of contract
There are two types of contracts in Sweden:
- Design-build contracts
- Construction contracts.
The terms design-build contracts and construction contracts have no legal significance. It is the provisions that the parties have agreed on in the specific case that determine what applies between the parties.
Division of responsibilities in design-build contracts
The client transfers the responsibility for project design and performing the contract to a design-build contractor.
The design-build contractor is responsible for ensuring that the contract meets the functional requirements that are in the contract documents. The design-build contractor is responsible for possible faults and deficiencies in the contract works.
Division of responsibility in construction contracts
The client performs the project design for the contract and is responsible for that function in the contract works.
The contractor is responsible for professional performance based on the documents that the client has provided.
Types of procurement
There are two types of procurement in Sweden:
- Divided contract
- General contract.
The type of procurement regulates the relationship between different contractors and the number of contractors that the client procures. It must be clear in the RFQ documentation what type of procurement is applied.
The client procures and has agreements with all contractors needed for the construction project. The various contractors become parallel contractors to each other.
The client procures one contractor that becomes the general contractor. The general contractor in turn procures the subcontractors needed for the construction project and signs its own contracts with them. The subcontractors become parallel contractors to each other.
In a coordinated general contract, it is the client that first procures and has agreements with all contractors needed for the construction project. Then, one contractor, usually the building contractor, becomes the general contractor and takes over the developer's contracts with the other contractors. The rest of the contractors become parallel contractors to each other.
New types of collaboration
New types of collaboration between clients and contractors have been developed recently. Partnering or collaboration contracts involve a close cooperation between the client and contractors where the parties often work towards a common cost target and share profits or additional costs, so-called incentive agreements. This type of contract includes an agreement for collaboration. The implementation is usually regulated through standard agreements according to AB, ABT, etc.
Public Procurement Act, 2016:1145
The Public Procurement Act entered into force on 1 January 1994. The act shall prevent discrimination, achieve a commercial basis and create competition in national and municipal procurement.
The Public Procurement Act requires the tender accepted by the contracting authority to be the most advantageous, that reasons for the choice can be given and that the procurement shall be published. Note that in public procurement only tenders exactly following the RFQ documentation can be considered for the contract.