Five risks to look for in the administrative provisions

The administrative provisions set the terms for the whole contract. Five things to check before you price.

In a Swedish tender, the administrative provisions (the AF section) set out how the standard contract applies to this particular project. Usually that is AB 04 for construct-only contracts or ABT 06 for design and build, and the AF section is often laid out according to AMA AF. Each time it changes or adds to the standard contract, risk moves between the parties. Here are five places to start.

1. Uncapped liquidated damages

Check how damages for delay are calculated and whether there is a maximum. A weekly rate with no cap can grow larger than your margin. Check too whether the damages are the client's only remedy for delay, or whether further compensation can be claimed.

2. Longer warranty or wider liability

The standard contracts set warranty periods and liability rules. If the AF section extends the warranty, or adds special warranties for certain parts, that belongs in the price.

3. Unclear scope boundaries

Who provides site huts, temporary power, scaffolding, hoists and coordination of separate contractors? If the wording is vague, the responsibility can land with you without being priced.

4. Payment and security

Read the payment schedule, the security required, such as a bank guarantee or parent company guarantee, and whether part of the payment is held back until the final inspection. It affects your cash flow for the whole project.

5. Variations

See how variations must be notified and priced, and whether the AF section is stricter than the standard contract. A late or informal notice can make it harder to get paid.

When it is a public tender

Under the Public Procurement Act (LOU), the terms usually cannot be negotiated, and a reservation against a mandatory requirement can get the bid rejected. So ask your questions during the tender period, while answers are still possible.

Read it together with the rest

Risks often arise where two documents say different things, and you only see it if you read both. If you are unsure how a clause should be read, ask a construction lawyer before you submit.