RI BA
Publishing
Which Contract?
f `I
K
vi H riginal
Fourth Edition
Hugh Clamp, Stan
RIBA
Publishing 3
First Edition (1989) by Stanley Cox and Hugh Clamp
Second Edition (1999) by Stanley Cox and Hugh Clamp Third Edition (2003) by Stanley Cox and Hugh Clamp Fourth Edition (2007) by Sarah Lupton
Published by RIBA Publishing 15 Bonhill Street London EC2P 2EA ISBN-13 978
1
85946 237 9
Stock Code 58319
61L
The rights of Stanley Cox, Hugh Clamp and Sa
Lu pto ,
a
Desig
All rights reserved. No part of th publics i .nay be repi u ced, s transmitted, in any form or by a mean , electronic, mechani I, phot otherwise, without prior permissi p of th copyright o British Library Catalogui A catalogue record for Publisher: Steven C
in is
PO
s
avails
s
Data e
from
Briti
Libra
ss
Commissioning Edit Project Editor: Anna
T,Kompso
Millbank
Design and ty, iesettiA Printed and ound by MP
omplet
cati
boo
revi s
pd by s
003.
le F
ComW Editi
Fou
of this boo which first appeared in 1989 and which was e Second Edition was published in (1999) and the eferred to are those believed to be current at the time
ents iri rms of
riting: hile ake the ould Iwa ,,missta ements made in
heck the accuracy of the information given in this book, readers ether the Authors nor the Publisher accept any responsibility isunde tandings arising from it.
madet
hecks. i
4
Contents
Foreword
age 7
Introduction
9
1
Thinking about contracts
15
2
Establishing
3
Which procurement me
31
4
Which type of contract?
53
5
Which contract fo
61
6
Traditional procu JCT
a
contract prgfil
truc on Contr
uil
GC/Works/ With NEC Eng
7
st-Andard
Major Project Co
JCT Standard
23
ntrac
16
67
2
69
005
83
antitie
eering
96
Contract T
Traditiona
117
ilding
JCT
119
racts 2
J
JU
Reoal
107
andlMaAenanc
ontra
`t
130
(Commercial) 2006 Edition (Third Edition 1998, 2003 Revision)
139
143 153 159
:C Engineering LI
162
Aareerrientfor
168
ontra s
8
172
of Con
179
Traditional procurement: consumer contracts
185
JCT
Agreement for Housing Grant Works HG(A) 2002 Edition
187
JCT
Building Contract for
194
JCT
Contract for Home Repairs and Maintenance
a
Home Owner/Occupier
5
200
Contents continued
Architecture and Surveying Institute Mini Form of Co `tract and Mini Form of Contract (Home Improvement A ncies)
enera
Traditional procurement: measurement for JCT
Standard Building Contract With Approxi
tities 2005
Conditions of Contract Measurement Ve ion Seve (September 1999) ICE
ICE
Conditions of Contract for Minor W
JCT
Measured Term Contract 2006 Edi
i~tion 13
itio`(200
227
10 Traditional procurement: cost p JCT Standard Form
C
237
tract
itiori
239
Design and build procurem Contr ;t 2005
JCT Design and Build ICE
249 251
Design and Construct C nditi ns o Contract Build
GC/Works/1 Two Sta
12 Management pr JCT
urem
Works Contract Standard Fo JCT
JCT
r
nd 2 and 3
Contt
265 273
(1
(1999)
Des
of M
Standard For
ion (2001)
S
W
11
of Prime Cost
221
273
emertrrorms
279
ntr1998
281
E
998 trac
292
greeMent C/
JCT Trad
297 307
13 Partn Framewo
partneringreements
313
A)
315
W
9
(
315
Fra
Par:`nering Option
dard Fo
rfi
318
act for Project Partnering PPC2000
321
335 347 349
6
Foreword
This is the fourth edition of the popu that edition the book has increased Sid
formsth
in the number of standard whereas this new edition inclu new 2005 suite of JCT forms,. an writing (the cut-off point included. In addition the b for example NEG and the Cl
The first three editio Clamp, and much is still relevant toda
developments and chronology of
989. Since uge growth 15 contracts, ed to cover the lished at the time of opular ones are all er publishing bodies, by Stanley Cox and Hugh ers has been retained, as it
been added to include recent ocurement, together with a contract.
Sarah Lupt
7
nal
8
Introduction
f standard
The last twenty-five years have seen forms of contract available for use in th range of forms currently availabl development and refinement. Conditions of Builder's Contrac Builders Society. Subseque
ts. The wide
of invention, first 'Heads of BA with the London tions of Contract in ifty years, there was his document has been ew editions, its current ndard Building Contract,
1895, intended for tradit effectively only one standard revised, expanded a manifestation bein the 200 available in three v riants.
the Institut for use on a r
Engineer u andard form, the first available measure men basil' The first edition of Keating on rence to b( h the ICE and the JCT Conditions of ad e r the e r Hu on's Building and Civil Engineering legal corn entary on the interpretation of these
In 1945
t on
f-1
Constructio Contr' Contract d, to provi Contrac forms.
ecb
follo
stry,
ng th u
ing fro
,--r
in-
in
fl,
World War there were extensive changes in an increased volume of construction, new olo and new m thods of working. From the 1960s alternative re ent a stand d forms began to appear. The JCT published the act in 1967 d e Agreement for Minor Building works in 1968, ew forms in the 1980's; the Standard Form 'with contractor's nd build procurement, the Intermediate Form of Building form of Management Contract, and the Measured Term
es
L(1
((DD
,-4.
l0_
This upw curv is reflected in the activity of other publishing organisations. ng the p blic tion of its first edition of the Conditions of Contract in 1945, the ICE wen on publi a further three forms, including the New Engineering Contract in 199 . FIDIC pu ished its first form in the 1950s, the Government published GC/Works/1 3, and the ACA first published its form in 1982. The first edition of Which Contract? in 1989 covered around X forms of contract. The Latham Report (Constructing the Team, by Sir Michael Latham, HMSO (1994)) has had a considerable effect on contract forms and procedures. This was a wide ranging look at the industry as it then existed. It recommended better project strategy, more
9
-+,
Introduction
°-'
integrated ways of working, fairer tendering, improved payme t pro duress rapid resolving of disputes by adjudication. It stressed e plZns of cl' nts the force, the importance of a full brief, design quali to be i ere Ion ide th lowest price to determine best value, fair dealingtfo II partleVin an mosph of mutual cooperation, and the outlawing of unf it d ns. It laid e fo o for new thinking about procurement, the pl ce of p neq, an he enefits f long-term relationships. i
.-+
O
The Egan Report (Rethinking Constructio, ,t o Coh uc n Tas Force chaired by Sir John Egan, HMSO (199 , built on o poi ra see by the Latham Report, and took further the c f rea icu it stressed the need for improvements in con sts, on truction m edictability concerning delivery, and a reductio in the m of tom, ding clef ts: It called for the elimination of wastage through lea thinki a n a re i he number of site accidents. The idea of er rmanc me u re nt indicators and benchmarking as aids to ach ving plan d an onsis t ro ment, reflected a changing climate of opinion on pr ent.
fficiy.
l l
vii
g
i
two reports, together ith rt II of t srn hts, Construction and Regeneration Act 199 lowe as a dir t res It ofthe Latham Report, have h significantly affected rocur en etho and he to t of current contract forms. The initiatives, org isatio rs an u ications at foll wed the Latham and Egan reports are listed the f owi p g ch no , and dis ssed further in Chapter 3. .-+
-*,
.-t
These
o
In 1998 the Joint Con acts Tribunal ecam body with a distinct legal persona, The Joint Contra ribu L' and a egiste db ness address. Its immediate concern was to up ,lade and co oidate th d cumen previously published by the Joint Contracts ibuna ludin, the i-tegration o he changes required by the Housing Grants A a nd t trod ced to ive eff ct to Latham's recommendations. This resulted in t F- u blic ion of 1998 edit of all its forms.
0QrCo
-
fl,
I
Oe five y rs N tween 999 and 2004 the 1CT published a further five new near o m s of u ntrac Three of these (the two contracts for Home 0 ner/ ccu r, an for Repairs and Maintenance) took account of e ontra con simer protection legi ati d were a response to the boom in the home impro ent mar ey e in nded for domestic work only. In addition the JCT published a on- indin q Par nering Charter for a Single Project, and the suite of documents for u tion management procurement.
0rl-
.-+
.-+
fl,
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fl,
st
fl,
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In
fl,
ova
fl,
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At around this time era her publishing bodies produced new contracts. The ICE publishing the third edition of the NEC form, considerably expanding the earlier suite. The ACA published PPC2000, and subsequently SPC2005 and TPC2005. The Reading Construction Forum published the BeCollaborative form of contract.
The most recent revision to the JCT suite of forms took place in 2005. Most of the
10
Introduction
then current forms were republished, with n numbering, and with extensive re-drafti and addition two new forms for Framework green nts,6ppead,
tether
variants of the existing Intermedi d Mift& Wo s bu di incorporating provisions for contrac r de n. t the ti of w tin new editions of JCT forms are still t be issuA an t is un r ood th Constructing Excellence form is to be a There are currently over 40
s
Figure
1
uildi
o
ndar'
emanating from eight publis ing sources two contract, including variants Pro contracts, warranties and gui around 15 forms, including riants, ACA suite of 23 documents, and bodie list of contact detail
J
evrk a
ract
w e
is'hA
p
ent
Advisor
ph
e Civil Estate publish
contracts, plus the NEC including PPC2005. A appendix A. s,
.1
t of stand
Chronology of dev Dates show:
first pu
icati,on ions of in
first ound
1
34 870
09 1931
1939 1945 1955 1963
1967 1968
tit
of Ci
ks
itutes
and rep
a
Engi eers
itish Ar itects ute o ads Co itions of B ilders' Contract RI A wit the Lo on ilders' Society udson' Building a Civil Engineering Contracts RIBA/ BA Form of Contract A / LB Form of Contract r tives contracts with and without quantities included RI=,o itio of Contract tra s Tribunal RIB Sta dard Form of Contract Stan and Form of Contract ICE Con itions of Contract on Building Contracts JCT Standard Form of Building Contract 1963 edition Two versions, private and local authority, each with alternative editions for use with or without bills of quantities JCT Prime Cost Contract JCT Agreement for Minor Building Works Roya
ns
r+..
18 8
forms-(r luding
11
Introduction
1973
GC/Works/1
uildiw co
1981 1981
1982 1987 1988 1989 1989 1989
;::
Dog
The first government sponsored standard
Association of Consultant Architects (A JCT SFBC With
Approximate Quantitie
Standard Form of Building Contr, ct Six variants, private and local auth 'city JCT Intermediate Form of Building C trac JCT Standard Form of Contract racer's D ACA Form of Building Agree nt JCT Standard Form of Manag ent Gontra` Construction Industry Cou (CI JCT
.-f
1973 1979 1980
pan-industry forum repr entm Which Contract?
e
JCT Measured Term
Association of Con
Utant ArE itect
Amalgamation o the F I Construction Surv ors I stitute 1990
GC/Works/2
1991
Reading Co tr oru Private Fin ce In' introd Emphosi on red blic seMTor borro ICE De gn and ons u( rtions of Co
1992 1992 1993 1993 1994
built
to
(governm t dec G sign and first edi onstrung th it Mi aelIT tho ,sting
earn
-6
V)+
Construc on Forum best practice guide to partnering try Board (CIB) over ent, mainly concerned with the implementation of ecomm ions in e Latham Report and the Egon Report, ceased to exist in June i initiatives now mostly run by the Government ^ag
throughhe-IC 1995 1996 1996 1997 1997
12
sec
ition
Housin Grants, Co Partne in the CIB Election of Tony Blair PFI emphasis shifted to 'value for money' Lean Construction Institute
Introduction
1998
The Seven Pillars of Partnering Reading Construction Forum
1998 1998
formed standard forms Revised to comply with H CR Rethinking Construction Government sponsore revs identified five drivers or ng which was partneri the supp Movement for Innov 'on (NN le Established to ve e i JCT
=ti
1998
JCT Ltd
1998
recom indu
amour in
of
recommendoti 1998
Construction Best
Working a learnt fr 1999 1999
CPB ons ation roject t for Ho Owne ence launch(
JCf Buil Achievin Govemme lent, Guid CIC, c
ctice
6onse to E an, r4cus ving th effi t Tea r ering heads of tJ
ted
tain.
editio 20 2 del P oject win
P.
tractor Handbook of Supply Chain Management Prime long-term s ategic supply chain alliances
fishes
Aril I I key performance indicators) Health tinge of initiatives to improve the NHS's planning, procurement, of its estate
NH
Introd NI
2000 2000
r
es
rtnering framework for the Department of Health and the
New part ering contract published by Association of Consultant Architects, veto d by the CIC partnering task force GC/Uorks amendment Supplemental clauses: risk assignment, value engineering Confederation of Construction Clients (CCC) Formerly the construction Clients Forum, aims to encourage clients 'to achieve value for money through best practice' 13
Introduction
4 (second series): Partneri Construction Clients Charter launched Construction Clients Forum Strategic Forum Replaces CIB JCT Building Contract for Home Owner/occ ier'With consultants agfeeergen Accelerating change Strategic Forum. Sets out measurable rg ' g p erlorman in construction, including client em %t1o egr ng e teorr)l and people issues JCT Contract for Home Repair' JCT Construction Manage Architects and the Chan JCT Practice Note f_1
2001 2001
+''
2001
2002 2002
+,+
LL.
tap
2002 2002 2002
RIBA
2003
oundation Working Group 2
+.,
2003 2003 2004
Be (Collaborating for Reading Constructn Forum erg with sign uil Be Collaborative c ntracta ing Con uctio oru JCT Major Projects
Constructing xcell iii
Includes: R Foun tion, Construction Best Practice esikq, Bui Programm Mli, e sing ethin ng Construction, Be, LGTF Construc NEC3 ORice of vernrravft Com erce recor sends the use of NEC3 by public ,
2005
sect
tr tion proc ers on hh' construction projects
JCT)Cons
by Constructing Excellence fiction` ,:ccellence Contract (forthcoming)
2005 2005 2006
20W
14
The term 'procurement method' relationships which are forme companies, to enable a buildin are formalised by entering in parties), but are occasion y m contracts develop, for ex ple c contractor, main contractor-so ialist-
network of construction
--K
ese relationships ateral (ie with two
n-0
Often 'chains' of ervice-provider-main 't-sub-contractor, subcoined to describe this
u
pN
cha
pa-1em is o
en mo ally b
en there will into sever-ar
It is important
ely described as a network. network of bilateral contracts,
V),
contractor-supplier. relationship, but in r In any given project with each individual
al re tionships from managerial links, and m this is ometimes far from easy. A contract onal offer unconditionally accepted (for a full is usually f explanati see a nt led ch as F cus on Contract Formation). A legally evidenced in writing, although it is good practice binding cont ct doe not h to en is. Amo gs, legislation such as the Housing Grants enera Act 19 6 only apply to contracts in writing. It has (Co b the constructi on industry to use standard forms of contract, itten a cume s are equally binding, and are often used on larg glow).
odern rmed
ArcWii
e
ries of
rac
rocur
.^-+
in complex
i
professional consultants will be primarily concerned with two ose under which professional services are provided and those tion ork is carried out.
i ppdse, the two categories are essentially complementary. The bli g tions of the professional acting for the client during the iod fight be significantly conditioned by the wording of the bntract. Li ke ise, the part played by the professional during the pre-contract hd ermined largely by the contract for services, will be influenced by the type of procurement to be adopted and the role to be played by other professionals and by the contractor. To this extent at least, the choice of the one contract might be influenced by the content of the other.
and
r)'
hori
S'^
Although different
15
Thinking about contracts
Contracts for professional services Leaving aside the fact that many architects offer directly building specific, it is for this latter rd Nowadays, architects increasingly find thems partial service, or a service which is not 'tradi onal' i be the lead consultant. Sometimes they s rt out a
il ls
Vage
re
provid
alv
they/(night
l/)
nse th
t
mmis r itial on
au,
to eventually becoming part of the contracto ' o ssi gladly rise to the challenge of an entre re le eve suited to a construction management r le. But wh services need to be covered by an ap,r op to c tracf I
`-°
0-0
ti
rte,
Some forms of appointment may quire he nature of becau the services to be provided, and it increas mbh,tt 'nd cl nts who insist on their own forms or who will ndme to n ms. However, in this book it is assumed that ny ccontra for ar ervic s is likely to be on one of the RIBA standard ap ointin o uments ith its dum of Agreement or Letter of Appointment, =ondi ions of Enga e dule of Services, and Schedule of Fees etc. Itis im rta n that the poi ment clearly identifies whether the commi io es to role ther s lead consultant, contract administrator, or de gn lea atib wit the procurement method. d is co
t
It might be that e app ntm stage, and will n -d to ende
,-+
vii
ti-
'-'
p to a defined Plan of Work roceeds. It might be that the agreement will req ui amending if the Architect changes, or if there are shifts in the rocure roced tandard appointing documents are flexible an can be adap use inmost situ ions. An alternative from may be the propose CIC i tment, but is document is not yet finalised at the
time of
ting.
-+,
`+-
C3)
o.-,
?gin
i
+-C
ntment is f r services as dsub-consultant, it is vital to check that the k-to-b k form as far as terms are concerned, and that the IS o refe bly patible with those of standard RIBA forms of poi*Qe dition forms are proposed, whether these relate to eying charters or col anties, then a careful check is essential to ensure tobligati s e no more onerous than those which arise from the main eement nditi
uilding ate.
Building construction -to-day often entails complex and intensive site operations, with huge sums of money locked into development programmes. Contractors may have partial or total design responsibilities, and in addition may undertake demanding management and coordinating roles; patterns of working have never been so diverse. As outlined in the introduction, this change of emphasis, together with the C3)
16
Thinking about contracts
1
increasing range and scale of work, has inevit forms of building contract, both standard
se dried.
orm of tuildin ern
ttoa
(
fl,
There are many advantages to using normally be less expensive and genera more co to arrange for one to be specially draft relevant guidance, which is in tur through having been tested in courts:
rto a pros
ritati fl,
For the majority of building ave a stated role, standard printed forms are eadi lar are widely used, and have the unique distinct that ibunal on which there is representation of the professio the dies. As a consequence these documents are eneraiiy o be ed in the interests of the parties. A whole ran eof d ocu ents isles w av over a variety of situations from jobbing or m intena ce nd repair rk on` e one hand to management contracting and part ring rrangeme 0 th Many of the forms published by other bodie rity Ever recent years. Although not of n eased in op offering suc an ext ran 9, these re o en flexible documents that can be adapted to uit a r u msta n ,fore mple the NEC suite of documents. n.,
(CD
3'<
(
i
'All parties in the construction process should Forms without amendment' and this is ice. Be bke am ndments can easily impair the balance of the e m ning of t e contract conditions could be a matter for een la ers. ere is also the practical point that if a contractor wing that is proposed to use a special or amended form of toy's first action will be to pass it to its legal advisers for checking. en be reflected in the tender. It is sound advice to resist ndme s wherever possible.
rt recom
bst of t
Iter tt nsart
I
,-r
T e
t
F).
use
Non-standard a ay instances where no standard form of building contract fits the ents and a specially drafted agreement is needed. There is an .trend towa ds non-standard agreements on commercial or larger contracts. should be entrusted to a lawyer with the appropriate specialist knowledge, and he or she should always be engaged directly by the client. Architects without legal training and experience in such matters are strongly advised not to attempt even seemingly minor changes to standard wording or drafting of additional clauses which might make published documents non-standard. there
CI-
ui
17
Thinking about contracts
era
Standard forms of contract are drafted taking int common law and statutory rules. It is generally usef they give insight into why many aspects of a for way, and aid the interpretation of these forms. The Sale
Ulpt
I
g
ersta.Rd
th
ba e
rule ,and
en
of Goods Act 1979
ith Implies terms into contracts for the sale of goo regarding ction description, quality and fitness for purpo `aid s amp rse and the the 14 implies a term that where the seller ells go to 41. elle pa purpose buyer, expressly or by implication, mak kno is a for which the goods are being bou e con iti th the goods rcu mstances for t urpose. I supplied under the contract will be. reason ed b in which these rights can be exclude are li i
._-+
tracts hire of goods, and Applies to contracts for w rk and na erials, contracts for services. Impl term into contracts fo :work d materials' equivalent hich the property has in to the SOG terms listed abo wit respect service ct implies terms regarding care been transferred uncle, th act. consi and skill, time of pe orma 7c-
t(
raises
Applies where wo work, and st a dwelling workman so
that
is ca
r+
out
person t %to see
i
connect
ing o e
wor
th
a
dwelling, including design
in connection with the provision of which he takes on is done in a
ofessio al manner, with proper materials and elling wj befit for habitation when completed.
ffecf
ng various exclusion clauses void including: any clauses ersonal injury resulting from negligence; any clauses e of Goods Act 1979 Section 12 obligations (and exclud em in Goods and Services Act); any clauses attempting quivalent under the e liabili o ale o Goods Act 1979 Sections 13, 14 or 15 obligations (and the equiva ent der he upply of Goods and Services Act) where they are operating again t any perso dealing as a consumer. It also renders certain other exclusion clause oid in s far as they fail to satisfy a test of reasonableness, for example liability for ne igence other than liability for death or personal injury, and liability for breach of Sections 13, 14 and 15 obligations in contracts which do not involve a consumer. 's
has the
ilitv for
r+.
cludinaJi
18
Thinking about contracts
1
Unfair Terms in Consumer Contracts Regul
.-+
r Applies to terms in contracts between a s Zten services and a consumer, and where the ter :onsum (this would generally include all standarr who, in making a contract, is acting or pur which would include a home owner: n ' nfai significant imbalance in the partiesi-sights t detri e ing regulations state that any such t
C
The Housing Grants, Constructs
ege-r
otidi
ct
uppr i
ds and
tiated
dividua is defies
person business'
t
causes a er, and the
mer.
1
dii
Iling in the h in the Act contain Requires that all constructio con stNe p ts, th right to notice of the certain provisions including e righ non end t, and the right to take amount to be paid, the right ion. the parties fail to include any dispute arising o of th e n t r ttoa to provide these rights (s. these provisions in t eir con trac , the Abt,will ntracts (England and Wales) 114) by means of he S em for Const ction but does not apply to a Regulations 1998. e A t is of b r ith esidenti oc construction c i
CD)
f
Provides
r inter
commercia
of the
I
f r
for late p
re
ervices. The rate
su
Secr eta
g rate. deaZcy
on the late payment of debt in a of interest is set by Order being 8 per cent per annum over the official State, th curren de th right unless a contract contains a 'substantial' ossibl rd forms contain their own remedy). (mos sta n purchaser
e
e Con
abloersons who are not party to a contract (termed 'third parties') to
be able to inst a person who is a party to that contract. It is possible to a third rty rig is if a contract expressly agrees that a third party may spec that third party or where the contract purports to confer The third party who is being given the right to enforce a-benefit on the her identified in the contract as a member of a class or the contr+ust rcula description. The contract may expressly exclude or limit liability. a
.
c
Contracts Regulations 2006
for public procurement of contracts for works, services and supplies. These Regulations implement the European Commission's Consolidated Sets
out
never-
s
E
Directive, adopted in March 2004, into UK law, and cover the tendering and award of public contracts. Strict rules now apply to frameworks agreements, for example, they must not generally exceed a term of four years and the terms of any framework must be determined at the outset. 19
Thinking about contracts
Advising the client vii
fl'
In some procurement contexts, the choice of contr, ct may/be d erh factors, such as requirements of the funder. For ex ple th rld B Ak now quire the FIDIC forms of contract to be used on pro c er f6 millio ,andj as if the NEC form may be the preferred choice or e Olyr is c nstru programme. In such cases the form to be u ed will ha bi__w selec befor Architect and other consultants are appoipted.
n,3
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However it is frequently the case that here th ite ovi essional services, it may be his or her duty'to co ult vvi andvis Erri ydr as to the form of contract to be used' (Huds gin ohd B C tracts 10th Edition, 1970). These words mig our the ma of architects today, and it has been said that the b t cour an gainst' leaving aive t the Employer to make the cho) t rsem many JCT forms of contract refers to the cli fit eng ag m a p fessio ult t to advise on and to administer its terms'. Th J CT h ctice Note: Deciding lished a on the Appropriate JCT Fd -m of Main Contrac early written with the interests of the clientin m lated diagrams can be ke Practic ,.+
downloaded from th
ite.
/ w
case record of an -&r hitect being successfully sued for recommending a ontra whioh iteQheld not to ave been appropriate. But the range of availab rms Nnc(easin and a (particularly in the case of JCf forms of contr. d to be pu ished t, eep them current and consistent. Just keeping up to daf n a taxing business. Also, there is such sometim a disconc the publication of authorised amend nts a in? ucti e, particularly by bodies in the p ublic sector w have sl ng in Advising on the edition of a form d and vheth r are to be incorporated extends th Archit are in carrying out this duty and requires a thorough k owledae a rt.
V
((DD
There are very fe
timn
luencatters.
fl,
,C+
partents
likely to be easy in the wider European context. he meaning of provisions which may have been ay be subject to interpretation under a different legal btai s in the courts of England and Wales. Problems can also ng on proje is overseas, where the contractor or suppliers are based in another cou and erhaps the law of the contract has not been clearly established. Many standard forms can be adapted for use under the laws of Northern Ireland or Scotland but not all. Some specifically state that they are not for use in Scotland. The Scottish Building Contracts Committee has published its own range of forms specifically for use under Scots law.
orms o ems can arise in co' hich nslat
(D
visi
a-*
.-f
a`)
`+-
E
20
contract for
a
particular set of circumstances fl)
a
E
Recommending
is
not something to
Thinking about contracts
1
be undertaken lightly: it requires a knowled contract in question should first be studied and conditions, and also for its appropriat
odic
d me
bot
res
he
own ircu
a few architects who min* referring to the importance of trust. T ey bla being the one which is put into the dra e r and on milli terel An appropriate contract, fairly an44; mly e! ensure that things do not go wr
bf con
There are still
i
t
Dest ki
Oith performance , for most present rver prd on the basis of a a n situations the cautious a ice m enieh an a osphere of trust and 'handshake' agreement. Mil t cane rstanding' that has not to ome confidence is desirabl ' tp ple can have genuine but and prop rly e cuted' been fully document f what quite different uncle stand Despite the Egan Report's state measurement and bring reli n
ambi
n
rukpla
rmalZcuments i
i
en o ce p ointed difficu' (19 e con ue exis to e of
As architect Ronald G
Architectural depends on
P
h
conside&ion t contrac
itect's Guide to Running o job, entleman's agreement is that it tlemen'!
and choice at the earliest possible time.
pro ssiN al services and building contracts, although for ea other. The method of procurement has d documenta ion.
ntracts
r
iplica
ocu re
n
hod has not been decided before the architect
consultanSt may be the architect's duty to advise on the If so, do not allow this to be left to other consultants.
ements and conditions are set down in writing and the
work starts.
ement exe Recomme If particul
e us
f ``t ndard forms of contract whenever
possible.
irc msta ces require specially drafted or extensively amended contracts,
tial that leg
advice is taken.
recording
a form of contract, study its contents and understand its implications. It is important to set up a control system which ensures that stipulated procedures are followed.
Before
21
22
Establishing a con
profile
There may be clients who choose t increased efficiency and think that, it is rice, at breakneck speed for a knockbe dispelled at the outset. The reality is that although t usually cost, time and qual ,the some compromise or consci s bal ecog n r&ed in balancing of priorities
Constructing Excelle and careful though
e
urem
fact sh
s for any client are nt invariably calls for
This need for careful or example the useful es adequate thinking time
such management tools as as become part of life. To some anc ndicator and n increasing number of construction ra ' rgon, k tfor' all this mightj st b a u reminder of key points to be eful professiona Ther fore it might prove an interesting c ecorded. considere 'and r analysis in advance of f r cry or simi diagrammatic a gar exercise t set u p simply a manual exercise to help focus ct. Th' could be any propose what level of quality is required, prior or example alance the and to and for operations on site, ilable re con truction be ho much tim respects cos considerations are paramount. visual pres
((D
whe
(DO
so-O
unt
fl,
iE
t of
iaton needed.
r+'
lure
als suggest where design responsibilities are to rest the most uitable procurement methods and construction turn will affect tendering arrangements and the amount and
ges mig
rofile
d
fl'
ich presents the three elements of cost, time, and quality where they are not in conflict, these elements need
re 2.1 isarr in terms
of contrac
ncP
an
visu
propriate c
s. Even
ideally balanced. Asking the right questions at the right time profile which allows quick comparisons, and help in arriving tract. I
Figure 2.1 in-d*&t6s the contract priorities for a project at the minimum capital cost to be built in the shortest possible time. There must be reasonable certainty over cost and timing, and all this combined with the desire for reasonable design quality from the client's consultants!
Taking these three elements in greater detail: 23
2
Establishing
a
contract profile
Priority (0 lowest-5 highest scale) 2 3 4 5
1
we
QUALITY
24
C2
Certkty
C3
st val
T1
tI
pital expenditure
er co tract price, no fluctuation
for
oney overall
est po Bible start on site
T2
Certainty,/over contract duration
T3
S
Q1
Top quality, minimum maintenance
Q2
Sensitive design, control by employer
Q3
Detailed design not critical, leave to contractor
o est possible contract period
`D-
TIME
ossible
I
/I
Establishing
a
contract profile
2
facto building until quite recently, ubject Des h e oft nefs contracts. The repercussions are well kno fail' nguish e en et, ometimes to unrealistic cost constraints from the s role has os The q ntityurve between initial capital outlay and to fina vial control strin`nt assumed greater importance becau ave seemed s contracts man throughout the project. To ost tertai v. Desrtln and build or attractive because they promise rte. let on usisvT',a have en management contracts no sum, although the design Ofor motion ' wh le ri s ometim a`lte Despite the con tendering.
In this country, at least
.
fl,
h(0
dr
all too frequently the lowe
Now the emphasis ap greater efficiency r ulting in being encouraged. It is particularly imp rtant such questionVtothe ient
minis
rice
hiftih I
clarify so the outs'
e
considerations, by addressing the lead consultant might wish
to raise:
"set
li
Contract Su
e clien height
`ave
lirnite
unding and require the reassurance of
a
fixed
isk of fluct ation
recis'Wthe co of the work before operations start on site? at the wo needs to be measured and described in detail use o firm quantities. s signed, in the event of variations is the client authorised to
enditure? r"nal
Is
sour
the co-r9ract ration a
at the client has to rely heavily on some 'once and for all' or other funding, and there may be conditions attached.
awarded to the lowest tenderer regardless of other
for money will not always be achieved by this process. Designing figure ight mean excessive running and maintenance costs later on, should take into account. There might also be stipulations quality, imposed by a grant aiding body where this is conservation work.
the tenderer expected to allow for any increases in labour and materials etc. when pricing? Comment: it may be in the interests of the client to forgo cost certainty and accept
Q. Is
25
Establishing
Z
a
contract profile
price based on known factors, assuming that fair dealt with under fluctuations provisions. Much will d at the time, on the anticipated duration of the jo recovering the capital expenditure.
o
a
Q.
Ft
oroi
ted
eans
Is total accountability an imperative? accounted for?
Comment: public bodies in particular are are also understandably sensitive about ny aHegat1Rns4ubi
the client have rules or sta competition when sub-contractor.
Q. Does
kng
or ers -toich
lierse invited
edobe derri
Comment: commercially minded Tents opportunity for the best deal has been verloo lists for selected items. Q.
'
What is understood by 'c 'st consi de ations Capi maintenance and life cycl costs o be tak into Comment: the lead consul nt h a duty tom the
c
implications.
Quality No one really exp cts to y a ofts e for the pric of a family saloon, yet there are clients who c venien o erlook the fac s world you only get what you pay for. It is essentia o agree what{ is meai by 'quality' both in respect of services and the finis dto d at rr surable standards are to apply. For example t Might to rais questions such as: Q.
Are con the degre Co
s
m `rket-com
restig and public image likely to influence
ercl
nd
have a ce
hose
style which expresses the efficiency or
of the company, and which they would wish to see
their bui Q. Is
i
implant to use high
Co m yent: for example,
materials?
the profit might be located
in an environmentally sensitive spot suc serva-uon ea, or perhaps subject to stringent planning permission conditions. On t d, the project might just be an envelope for some retailing or indu 'trial proces :
this a listed or building where alterations or extensions will require higher than average standards of craftsmanship?
Q. Is
26
O+,
rya
Comment: it may not be possible to establish how much work is likely to be entailed, or to describe and measure it before opening up. Yet control by the client as work proceeds is essential, and any body responsible for funding might impose conditions.
Establishing
a
contract profile
z
it essential that all matters of design control of the design team, and that sp named or otherwise selected by the ch
s
Comment: where the architect is lead contrary, this is likely to bring at first tans work is to be undertaken by others, t e respons into the overall design will remain wit he3ead
it safe to entrust certain d ign (with agreement to sub-let) ithout th being impaired?
lit
-;'
-n'
to
y referred to in the obkiq tion is ied u e andar forms of contract. Even nsib e design input, it might esigns bmi to the client before work
Comment: unless a cont ctor building contract, this is un ly to where the contractor or sub-c6 ractor be essential to make is actually carried o Q. Is
or
ponce o an ibility. ven din ion ar
i
Q. Is
ly
?&icatio are
Q. Is
provisi
n
the building int ided to be relative
ce-free?
Tle
at can be achieved is minimum lSo at' the ected e spy n? When will major components be in radin or re acing. th oJer II appearance intended to last for a b cycle my illdu or a face-lift ich will not involve structural change? rammed at the outset? eed fo sucf; event aliti be
inable
aII
iii
an at
rpm
nap
ood com ercial e e for the client to provide for a constant site motor th cont ctor' ontrol of quality? cont t allow for this, and if so by what means will it be ht
13e,
expected
:e thro
rel
the contractor in terms of quality management ant KPI information?
song
he work only be performed by a firm with specialist expertise? t mean selecting a contractor after interview and negotiation ye tendering. It might result in appointing the contractor at efit from advice on construction methods and materials, ign stage and possibly to specialist design input. It would probably affect the n o Nnfor ation. It could result in appointing a specialist firm as the main iarodu ing neral builders' work to be sub-contracted. ,_«
i
.-+
ment:
speed are not obviously happy bedfellows. Where fast construction relies of numerous prefabricated major components and systems, much will whether manufacture has taken place under monitored and controlled in order that specified performance can be guaranteed.
°-o
Quality and on the use depend on conditions,
u
27
2
Establishing
a
contract profile
`°m
Good supply-chain management can reduce both stage Savings can also be achieved through overlapping d V tailed nstru stages, where the contractor controls the flow of ecessari the contract allows the contractor freedom in th choice sub-c tractor nd substitutions. Real savings in overall proj `_t omes th ugh f ti management, and not by taking short cuts Ii prema sheds I Clients, who sometimes take a long time e Lha thei procee are understandably disappointed when an mm sta sable. on si Whatever method of procurement is ad pted, it is rta alto nt time for all the relevant matters to be properly at o ract side ge. Design and build, for example, depends its s ss on e r he client's requirements have been carefully tim Id be lowed for this. The overall time of a project from ince tionls tre er significance than the time taken for site o all t he construction industry has a poor record of, fail strua time. Predictability is an im for mos
tyre-
Time considerations can sig explored thoroughly. questions such as:
candy affect t e,
thlead
cd sulta`rat m
there time for full br matically dev) loped, so that the client's detailed require nts cab prop he tender documents? Comment: this will b ssential for th ering who need full information when rsu price. nythi ig le could bring the uncertainty of submitting remeasu re e eve rapid lion being required, say in the case of restori hand-to-m th approach might be unavoidable. rim
Q. Is
Q.
mpletion ment: as
bo liest Dessi e start, a
they commen
Q.
to be an overriding objective?
ht be an overriding consideration which justifies the ting the probability of some uneconomic working.
external pressures which make it imperative
lete by a certain tch easonal trade for instance, or to be completed in time is al eady programmed and immovable. In such a case a etion date ght be needed despite the contractor pricing for the risk.
phased or sectionmpletion necessary? Comment: for example, to allow some office units to be occupied, or parts of an industrial complex to be commissioned, ahead of completion of the whole contract. Not all contracts will allow for this, and to be effective it needs to be included in the contract conditions as a programmed requirement.
Q. Is
A-+
28
a
contract profile ('1
Establishing
z
tove
it desirable to phase possession by an limit ' parts of redevelopment of the Works, in rder t at con ue during the building work? Comment: during redevelopment with' si is it esentia to co and also to accommodate some decantin of o pa s and p cesse duri site work? Is it necessary to restrict operations certain es f day termitt nt periods? Many standard building cont;e s ap ar ass e clusive pos ssion by the contractor, and with small do sti rod is arts lar is is n t practical and
Q. Is
bass
oi'ing
i
some allowances may be nee
29
0
enal
Which procureme method?
ready bee( decide, the procurement m thod wil uthority laid architect is appointed, either as the resu of mpa co tra s ve lirri tions, or because circumstances or ise a le been made `y the clie a su choice has already the Architect. In some instances
I
It is generally accepted th practised in this country. Th raditid in theory design and constructi
ree
ethod ti al app
curement currently
ach, in which at least epar ents, design and build, nag ent, by which either the responsibility. There are in
onv
which implies a mor integra ap roach; client or a contract r assumes he cen hese methods. Moreover there addition many varia its, h rid and compnc s, w Ithough possibly termed a have been many r cent developm more cu ra described as an approach to procurement mig procuremen For e Cam e mo part ring arrangements are an over-arching er co tracts let under one of the three key agreement hich comDa one or is it is freq ently possible to identify contracts let methods. imilarl ,nageme It is therefore useful to start by clearly on a desig sand b ods, before moving on to discuss some more differe e three prj cipal i
1
(DD
ial
r+.
rece
,-r
±-'
+-V
od is Fikely to rove the most appropriate in a given situation natu and sc pe of the work proposed, how the risks are to sponsibility for design is to be placed, how the and wh ated, and on what price basis the contract is to be awarded.
remember is that the choice of form (or forms) of contract til the procurement method and the type of contract have twill can considering the following: +-'
po rta n
led
been established'
defin d as devising an arrangement, then specifying the components t at arrangement, and lastly detailing a method of joining or ponents. Design can mean the overall concept or form of the building, it can relate to the component parts including specialist installations, or can be the result of meeting specified criteria for durability, performance etc. `s
realise
It is important to establish:
how, if at all, design responsibilities are to be apportioned between the Architect as 31
3
Which procurement method?
t
,_+
lead designer, other consultants, the contractor and suppliers; what contractual provisions will apply to the desi
Coordination responsibility
3-l
This might include responsibility for workm nship, g
+(O
methods, programming, ordering, general coo It is important to establish:
what contractual arrangements will ap whether the Works are to be car, combination of separate contracts either
fort c
i
i^.
,-+
A contract might be let on t e basis of sum desired, then measurement o som Alternatively a cost-plus app ach ight be appro the final figure could di gr tly fr' m the fire! and what tendering methods ar sui rest on the choice o procu r men
of Work thod
for the 'plan
fbe ad
d a d
typeof contract will have implications
vim,
,-r
The procurement
fl)
Plan
not possible or option. altho h there is the risk that The questions of what ocuments will be needed, will is
inly practical
f
roject into stages was devised by the accept d throughout the building industry. the 960s an ince be Work move from re-design stages (Feasibility) through The Outli e Plann design a d con u ti n (Pr Cons ction P iod) to post-construction (Construction Period) acts ies. It been (widely a t as the basis for calculating consultants' fees very usef description of work stages, particularly in traditional Ives m thods of procu ent. is
logical
n
RIBA in
I
appointed professionals are involved throughout uction work stages are separated as is usual with is in a linear pattern (see Figure 3.1).
fro
e
i,Q,nal
but the desi procure
Itho gh similar work stages are still present, they are not so r will normally be involved at design stage, to an extent muc he is responsible for scheme design as opposed to developing a design already produced by the client's consultants and embodied in the client's requirements. Some of the work stages are arranged in a different sequence, permitting parallel working or fast tracking to save time overall. The contractor will normally continue detailed design during construction stages (see Figure 3.2).
Q-0
((DD
,O+
t.0
he contrac
Plan
32
of Work
is
still relevant to management procurement, whether management
Which procurement method?
3
contracting or construction management. nu re simplified picture of operations. On a large roject operA or more works or trade packages and t complex. There needs to be considerable consultants and the managing contra and abortive work can easily occur.
le, n cz
7b orati
i
beco
tw
allel vv6
traditionaleth
u..
+--
In the traditional approach, th client a design, cost control, and con ct atminis` Th responsible for carrying out rk b workmanship and material inclu
th
ons ion, d t onsibili contra
appointed for --0
Procurement using
ere ,bight;
the contractor is atter extends to all and suppliers.
s to be engaged by the in some cases the client will sele some re-selected). In such cases ed, n contractor (variously r erred -t ance, or the contractor's the contractor may ake full res onsibiNY- for t me way, in hich e a collateral warranty between responsibility may be limite con ractor is usually chosen after client and sub-contr ctor ill be esse nd o uments competitive to ete information. However, the r, eit ugh negotiation or on the basis of contractor ca be a e d ea partial or n 4ional i
t sing
o stage endering or negotiated tendering, is r`aditional Method'. By this variant, design imited extent. Whilst this allows an early start cost.
erred IV as thee AcceI an run
i
parallel'
m approlrr quires the production of a full set of documents vited. Adequate time must be allowed for this.
n
oiigations. If th erforma
vii
ment method assumes that design will be by appointed of generally imply that the contractor has any design e case, for example with specialist sub-contract work or k, express terms should be included in the contract. -t,
nts,
E
raditio
--c
oints consultants to advise on all matters of design, and cost, y retains co trol over the design and quality required. There is certaty-ecost, to the extent that a lump sum is known before work begins, even if it has to be adjusted during the construction period as provided for in the
contract.
Q-3
(-r
E
The contractor depends heavily upon the necessary information and instructions from the architect being issued on time. There is a risk of claims if they are delayed.
33
3
Which procurement method?
Information release dates are sometimes agreed contractually binding can cause problems. The client may decide which specialist firms the contractor will require certain safeguards relati All matters of valuation and payment are the
qntit
If it is impossible to define precisely the still possible to adopt a traditional met provisional sums or cost reimburse solution: the fuller and more accuratethe of the lump sum approach.
There are widely accepted codes tendering, whether competitiv, be used whenever possible.
Figure 3.1: Plan of Work4stages'fi-iditional Pre-design
1
/"DXesn
Pre
onstr
ion
Construction
AB
3
F
4
5
H
6
J
7
K L
Consultan
s
Contractor
Key Appraisal and strategic briefing work by consultants Outline and detailed proposals by consultants 3 Final proposals and production information by consultants 1
2
34
Which procurement method?
3
4 Tender documentation by consultants 5 Tender action appointment of contractor 6 Mobilisation by contractor 7 Construction to practical completion and after comp
-
Procurement using design and b The client may need to appoint consult costs, if he does not have this, responsible to a greater or lesser and may appoint its own consu construction, or for design scheme design supplied by
ments and
contractor is g out the work fc,'r'total design and ation based on a
Figure 3.2: Plan of Work sta Pre-design
1
AB
'o
XPre-nstru-
Desig
2
Construction
C
D
5
H
6
F
7
J
T__
E
6
F
8
K L
Consultants Contractor
Key 1
2 3
4 5
6 7
8
Appraisal an tegic iefing work by consultants Outline proposals/client's requirements Detailed proposals by contractor Tender action including contractor's proposals Final proposals by contractor and specialists Production information Mobilisation by contractor Construction to completion and after completion
35
3
Which procurement method?
T-0 -0O
c
,-+
,.+
+-I
The contractor may be appointed either by comp eti veent ten er or the t negotiated agreement. Where a design and build agr, errs ne ate contractor, it is sometimes referred to as 'Single rect D ign nd 'Id'. ere approach is made to a number of contractors, ev is is a o stag opera io it only the most promising proceeding to the sec e, he agree ent is om referred to as 'Competitive Design and Buil . It tend o f e sligh ger, b usually results in a more developed design and cost and timid I
r;,
Frequently, in deign-build procurement e cn he req cont ctor to appoint some or all of its consultants at e time the a uild tra is entered into. This process is usually referred vati r co ulta t itchi, t requires a complex tripartite agreement to ee een cli sultant and into contractor. In addition to the c t-arch d ctor-a' itect terms of appointment published by the RIBA, th IC pu ita b or novation and
fl,
i
i
,-f
E+-
c
collateral warranties.
Watchpoints
burnt
the most straightforward de 'gn and theory there is usually single point of respo si ility. he cli t there re ha thevantage of only one firm to deal with and e fi rm to me ings o wr ng. In practice, however, the client's requireme s are ten de led to extent that the contractor's design contribution, an theref re lick lit, is diminished. In
a
15.
-
i
The client lacks acceptable relatively le,
c
trol
or
detai road lin
ponsibilit littl
oon ation
T
design; however, this might be eme are satisfactory and the detail
early as a reat deal of detailed design work can contr, ctor, however, who benefits from the
Constru proceed opera
is
ects
is
on t h c one of the
on time rests wholly with the contractor. There should allegations that information from the client is late. to be responsible for the flow of his necessary active features of design and build.
is -certain of c st, even to the extent that, if required, responsibility for investigating sit a-n-c Jb-soi conditions can be made entirely the contractor's. Any significant chan s in the cli nt's requirements will affect the Contract Sum however, and are likely to pro'
There
+.V
Often the client requires that the contractor appoints the client's consultants to develop the design under a consultant switch agreement or by novation. If this is not the case, it is always advisable to ask for information about who the contractor intends using as designer. Adequate professional indemnity insurance should always be a requirement. E
36
Which procurement method?
3
The client should appoint consultants to advise and it is important that adequate time is all
-.0
pTeparatTaQ OT t req hese a-be oerly
The requirements might include specific generally it is prudent to prescribe pe reliance is placed on the contractor.
?fovisio
-6'
r-r
,--t
that a/
the absence of any stipulations to the are absolute. However, they are u of the professional's duty of us g reason In
Valuation of changes by the the client has no quantity s
rsentir'
le'
kiIIX)-4 carte
the
pon`sftkty o
rr
erve
difficult to evalua desig schemes and prices ar ender used, and whether ice is likely e pri It is often
Benefits can arise fro contractor's awaren
that
a
contract
of
tion.
to work closely together. The and delivery times can ensure editiously.
arrent mar
oth Ieconom ,
.-+
ider,
desi neN and estim s
ectively where both med of the criteria to be
Id be
al
x-r
9-'
,-+
ent or rrepres tative oul be s ected with great care. He or she can mber the Jai is organisatio a professional consultant, a project r, dep on t ork, a clerk of works. The extent to of th tis e power, d to for e client needs to be clearly established.
,-+
=+;
v,'
.3+
.-+
,-+
re are ral v ian of managem nt procurement practised in this country, but nt ontra is an nage onstru ion management are the two most common. it ana ent ntracts lent usually starts by appointing consultants to are ro ject dra tings and a project specification. The management contractor is seec by roces f tender and interviews, and paid on the basis of the scheduled e e sts an management fee. es T
td
,-r
Q-0
(.0
7c'
,-+
.-+
Its role is literally nag the execution of the work, and he is not usually directly involved in g t a of the construction work, which will be done in 'packages' un en or ks ontractors usually appointed by the management contractor. In some ment arrangements, the management contractor might also accept o a design ability. In ' management contracting', works contractors are directly and contractually nsible to the management contractor. Its coordinated approach and potential for flexibility results in greater operational speed and efficiency.
-
-
(1)
Where the management contractor's obligation is total where, that is, it accepts responsibility for both design and construction the arrangement is sometimes referred to as 'Design, Manage, Construct'. It is usually featured as a contractor-led
37
3
Which procurement method?
t anno
procurement method, but there is no real reason architect-led. Indeed, where small works are someti contracts and coordinated by the Architect in the comes close to being such a procurement mtho degree of highly specialised expertise and e operations which most architects are unlikel to poss
quail weft nde irect des ain ntr tor, t how er, dem d 4
fl,
d ou
3rD
of a a
'+'
v,'
With 'construction management' agreem usually a lead designer responsible or o esi a c responsible for the management and c ordination rk, for directing the project and entering tra ontrs. are directly and contractually respo clie e constr some ways less accountable for time takes gist the'd fl,
0-0
is
there anager ponsible contractors anager is in the greater risk.
Watchpoints Management procurement methods projects where early compl Lion i This method of procur There is unlikely to be on site, and the d `ision
t s go
estimate on proje
atiork
infor
best able.
a e
ds upon
cont
i
ead
ally
ited
ig
t pri as
t f confidence and trust. before the work actually starts to be taken on the basis of an
contr toVconstr ction therefore put the cli is interests irst thr, The manageme
anag"e
It is essenti stage, s
edit and
throug
onst
contr for/construction manager at an early are available to the design team
experti
tion per)
care
-+,
CD-
work left to proceed in parallel with the site ackages, thus reducing the time needed before the project atdeal of detailed design will need to be left to specialist
'ration's
arts on sit b-c
be of flexibility on design matters. The design can proceeds, without sacrificing cost control. However, wore for components or elements can be difficult, with an
lient has a consider usted as costTy
abor ve work.
Specialist contractbrrscai:i-be selected and appointed and materials on long delivery ordered in good time without any of the uncertainties and complexities which attend traditional nomination procedures.
Although the project proceeds on the basis of a contract cost plan only, effective cost control is still possible with the help of an independent quantity surveyor. 38
Which procurement method?
O..
3
A competitive tendering element is retained usually account for most of the overall pri normally be on a lump sum basis. This method of procurement is most a
le, co
that only large construction firms 'th the suitable. At present these are relat ely i management is only likely to b int est'Ao ex expertise to undertake the high egret
nce
rien
-+0
A management contractor's sta in adjusting to the idea of providing a service in t appointment of a managem involved.
the` e
fl,
ay la FtRq
th
nt. Be
+'O
itise
ce and have difficulty ofi motive in favour of r6' recommending the interview the key staff
eri
ess
le vvork-
a s
ex re lik
It
e
a manag ment cont actor o onstr nager should be appointed because of his or h r assu e r preferab rove bility to manage. He or she will need to use and be milia with a vari istic ted techniques to deal with the coordination at ofte a large ?Nmb rks contracts.
Above all,
Wor*,,stage's Pre
1
ign
A
a
age re-construction
esign
Construction
CD
2
3
4
EF
5
J
6
EFG
7
H
6
EFG
8
K L
Consultants/Managing Contractor
T
Managing Contractor /Works Contractors I
39
3
Which procurement method?
Key 1
2
3
4 5
6 7 8
Appraisal and strategic briefing by consultants and contractor Outline and detailed proposals Appointment of contractor and agreement on trade or works a Final proposals and production information (continuing pr, Mobilisation Production information and coordination of works pac Tender action and adjustments (continuing process) Construction to practical completion and after co
Contractual relationships The pattern of contractual and func fta
the procurement method adopte
tionss shifts or
cording to
11
Figure 3.4: Contractual relationshi 0
traditiori (lateral
e
eem
arranty
Collateral
-aqreemen Contract for
ant
services
nt cted sub-contractors
uilding co
Client selected suppliers
act
Consult
tractor.
Domestic sub-contractors suppliers
the traditional approach, the client is in direct contractual relationship with the consultants on the one hand and the contractor on the other. Any contractual links In
40
Which procurement method?
3
for sub-contracts or sales contracts will be b)6tween he co
actor question. The consultants have no contract link th t, e Architect or another consultant may be named the ildi con act ontract administrator'. Where the client selectsny b-con actor' or su may be advisable to recommend collateral en to proZu t the clie 's interests, ie particularly in respect of matter ntractor's responsibilities.
th,ntr
I
.
rqh
idhe
Figure 3.5: Contractual rela
Consultants
sign ) ild
Sub-contractors suppliers
Contract for services
gna d buil , it is likely that in the absence of in-house professional staff, the clie will wish o engage outside consultants to advise on the preparation of requiremen to evaluate and select tenders etc. Often one or more of these consultants will switch from being appointed by the client to being appointed by the contractor at the time the contractor is engaged. The main contractual link is between the client and the contractor and if the client's agent or representative has only a limited role. The contractor might also have a contractual link with his own design consultants, and with sub-contractors and suppliers. As the contractor is wholly r+'
r-.
'm'
With de
41
3
Which procurement method?
responsible for their performance, both in terms of esign aAd co tructi 0 might be less need for collateral agreements betwe n them/and e clitot.
Figure 3.6: Contractual relationships: management contracting
nage
Ilat
I
agr
epa proAure
en
Client
Contract for services ks
contrac
Manageme contra t
s
Works
tract Consultants
Sub contractors
42
Nominated/ domestic suppliers
Which procurement method?
3
Figure 3.7: Contractual relationshi construction management
in a management contract is between the client and the all works contractors in direct relationship with
{ with
,-+
-p'
o be desirable to establish a contractual relationship between the clie n eac works contractor by means of a collateral agreement. In constru tion manag ment the contractual relationship is between the client and the construc ' man er, with all trades contractors in direct relationship with the former.
Assessing the risks building contract there is some degree of risk. People may be injured or property damaged. This category of risk, often referred to as pure and particular risk, is usually covered by the appropriate insurance. Contract conditions often make it a contractual In every
43
3
Which procurement method?
obligation to take out the cover required (for exam damage to property due to fire, storm, water, collap fl,
Another category of risk is fundamental risk. This nuclear pollution, supersonic bangs, etc. Such in
againjA pel on encepyibra` Qn, et
war, ill inc e amag due re is all t e sub' ct of situ
-
(2'
third cate liability, and no insurance cover is normally av able or n ded. T ortioWin adva often referred to as speculative risk, is somethin which ca include ses ' time or as decided by the parties to a contract. T, a erse w. which are the result of unexpected groun con shortages labour unforeseeable of or aterials, to out sen beyond the control of the contractor, It losses from such bear arising event
nr
%hl
-+,
Lt
With traditional lump sum contracts t
sually be a fair at intent alan be adjusted as balance of speculative risk be arties' by e contractor, the required, but obviously the reater th e` risk`t be a ionrri -he app `sk accepted by the higher the tender figure is kely to ending on the ty of co ract. parties also varies considera fl,
I
As can be see from Fig
with the contractor
i
lance o
the'
se
package is supplied onver -ely, management pro reme pat
44
T
te is
a a
al ance e
o
d.
tive-,rAk will lie almost wholly buil contract, where a complete st on ous for the client where the
pec
Which procurement method?
3
Figure 3.8: Speculative risk Contract Type
isk
ont ctor
Client
Design and build Complete 'package' by supplier
vii
Design and build Design input by contractor
Traditional lump sum Fixed price
Traditional lump sum Fluctuations
Traditional measure ent Bill of approximate qua ities Traditional mea
men
Fixed fee prime wosi
Traditional
Ment
Percentage
cost
Mana
nt c
,
0
45
3
Which procurement method?
Figure 3.9: Comparison of procurement metho Complexity
Speed Not the fastest of methods.
straightforwa but complicai can arise if clieri requires
Relatively fas
n efficient single ontractual ar ngement
scribed
Client c rrKrols desig
and ions to large extent, ri
ctor is olly nsib fob
achie
th
gyp'
a
,n.
ruction erti within accoun
ganisatipR.
be limited.
design b ilding l. in p llel.
in'
,n.
Virtually none for the client once the contract is
signed,
without heavy cost penalties. Flexibility in developing details or making substitutions is to
the contractor's
+L+
Client has little say in the choice of specialist sub-contractors.
vii
ecause
rmance. actor's )den expertise .Q1
uction fime
co
.-r
,7+
sauireme
esign
I
'in
ient's
ing
integ
lient ha dir t contr er th o tractor's fl-
Pre-ten time large) dep s on e amou t of de ail in th
advantage.
on site '_^
is poss
9
before ten have-even b r so
Design and
nstruction skills tegratedd at an early stage. Complex management operation C51
orks
packages.
or
requiring sophisticated techniques.
Client requires certain standards to be shown or described. Managing contractor responsible for
quality of work and materials on site.
Client can modify or develop design requirements during construction.
Managing contractor can adjust programme ICU
and costs.
46
ility
d quality
method.
invited
ow
III con
'06
are useo.
ndards
ain
to b
certain sub-c tractors
negotiated tendering.
requires
Clie c
Fle
C51
Desirable to have all information at tender stage. Consider two stage or
Basically
Qgr'ahty
Y
Which procurement method?
Certainty
Competition
3
ibility
Respo
Risk
ary
Su
Certainty in cost and time before
Competitive tenders are
commitment to
possible for all items. Negotiated tenders reduce
build. Clear accountability and cost
monitoring at all
Can
competitive element.
cl -cu divi on of de n an onstruction.
Confu
Generally air and lanced etwee arties.
there is
i
in cost
P
uality t the
eense of time.
n
ble
p
a
(OD
14
ere m
desig inpu m co ctor
stages.
or
r-+
cialist trac s an
sup
ropo
re
.-t
esentative
ring
Success depends
on the management
contractor's skills. An element of trust is essential. r0-.
rip
rip
construction.
mainly with the client almost wholly in the case of construction management. Lies
-
Benefits in time and quality
but at the expense of cost.
The professional team must be
well coordinated
through all the c))
anage nt ractor is poi d be use o man gement exper ise rather tha because his fe is competitive. However, competition can be retained for the Works packages.
of quality.
ctor
for
co
Benefits in cost and time but at the expense
educes relian on
the cent's
ecialist work materials.
almost oily with the contractor. n lie
detailed as this
ntra r seeks co ter gre com etitivene
fl,
prod rawings and Specifi ti only.
r
divisi , t con ed w re the clie is uire ents ar
design or pert ance. Limite role for
o3,
cost plan,
Can be a cl
competitive ss. o benefit asses to nt if
o°°
to start building on fitte
whi
uatefor
v
a
is
Is
are
inc de both pri and d n. D. ect d ' n a uild v ry di ult t
Clie
cult for the
clien to co
stages.
fl,
fl,
Di
a-,
There is a guaranteed cost and completion date.
rs.
47
3
Which procurement method?
Recent developments in procurement. fl)
Some of the more recent developments in procure in order of their appearance. The outline is very bri consult the references in the bibliography.
outl'
l l
.
1,
er etails eader
'Guaranteed maximum price' (GMP) cont GMP contracts have been around for some
time pe *ng fl the design build procurement meth , h ev re ienced tly t something of a resurgance. There are o GMP sta'rtdS fo of c he FIDIC silver book is the closest), so contrac a ed s dard lump sum form, or on the client's or con act here are of possible arrangements, but normally the c tracto for ac cost incurred plus a fixed fee, subject to an agree iling. re w a stipulated construction cost are passed to (or iri ared) but the risk of ses any overrun is borne by the ontractor. t exte ri assumed can only be determined by examinin the t df each act. T frequently claim to pass all risks to the contractor, , but practice articu arly those drafted by contracting companies clau ?s which` ional payment in limited
o°+
sbe
rpm
0(D
as
..6
or exceptional circu
enable major capita Governmen public sect.
operatio governor or P3.
reisawi mm to res.
initi
the government in 1992 to without initially requiring the input of urpose FI is'deliver all kinds of projects to the nstru of buil. ings and the provision of associated funded nd operated through a partnership of leas are a priva ector ompanies, sometimes referred to as PPP i' ve
rojec
PFI) w,' &s
s,
to
int
funde
but they have some ortia, usually involving large construction firms, are c ptra ed design some cases manage new projects. The public sec r authority first sign t with a private sector "Operator". Frequently the 'Oper sect consortium which forms a special company called a "special purpose ehicl (S V) to build and maintain the asset. The consortium is usually made up f a-Uuilding contractor, a maintenance company and a bank lender. As well as signO contra with the government, the SPV will enter into contracts with other companies esign and/or build the facility and then maintain it. The PFI contract will typically last for 30 years, during which time the building is leased by a public authority.
T
e way PFI projects are organised,
7c'
c
for providing the service, the Operator is paid for the work over the course of the contract, linked to its performance in meeting agreed standards of provision. In return
48
Which procurement method?
3
This payment is frequently above the price tha the service. If the Operator fails to meet any, lose an element of its payment until stand after an agreed period, the public sector a
nc sec r coura< ree ds it an ove. sta and c 2 led to erminate >u
Constructing the Team Sir Michael Latham's report Constructiri the eam the dissatisfaction among client se ce a construction industry. In particu r, it not cts e n-t ran over budget, were not of th ualit at to high a proportion of in laim turnover was spent on disp ort asi d the importance adversarial forms of of the client's role, the ne d for procurement and contracts, tip ctin s the team, and more efficient ways of dealin tes. roveer
mwan kdd
Partnering Partnering had alrea y em rged prior to 1994, given greater impetus by the `ortnering can bring significant above report wlch ted e are c n fi t benefits by im ro q lity timely ess o completion whilst reducing costs. " A rusts g the Team series of rep is fall 'ved cludin the Best Practice Guide to Partnering lished y the R ading Construction Forum (RCF) in Con r u iced by th onstruction Industry Board in 1996, 1995; Pa nering ea and in 199 he R follo up report even Pillars of Partnering.
-
i
ctip
am d
g as
follows:
O.2
d morageme t approach to facilitate team working across fundo entol components are formalised mutual uti
methods, and on active search for continuous
+.S
It is a parent
efinition that partnering was not intended as
a
particular type
0-0
ent or procurement method, but an approach to ai e roving performance over time, through team working, curement, t im p early identf.i tion nd olution of problems, and measurement of achievement
fl.
n_,,
fl,
0
o-0
obje tives. Many organisations developed partnering charters or men s, and some publishing bodies produced standard versions of these, s ch as the non-binding partnering charter, all intended to be used alongside a ing contract, which could be based on any of the three principal procurement methods. One standard form, PPC2000, was developed by the CIC Partnering Task Force, comprised both the partnering objectives and elements of design build procurement, and was uniquely a multi-lateral agreement (see the later chapter on this form).
framewor
49
3
Which procurement method?
The Construction Industry Board The Latham recommendations were put into Construction Industry Board, set up in 1995; implement, monitor and review' the recom Although no longer in existence, it has had securing 'a culture of co-operation, teamw
industry's performance'.
Rethinking Construction
Ton
,Construction n Egan. This
tion, and made cesses were felt
tion in accidents on It also called for a erative methods of
'"*
--I
0-v
The work of the CIB was given furthe_r (DETR, 1998) prepared by the Cons report echoed the Latham Report comparisons with other industries, sue to be more efficient. It point site, and in the defects whi
significant improvement
t identified five drivers
procurement involving partri for change, and four process chain.
partnering the supply
fl,,
as
In
.--r
d in 1998 to coordinate the recommendations through: the use ups and knowledge exchange. nchmark performance, be open and standards in safety and respect for ork to the rest of the industry through It had v®r ing groups covering: Key Performance g; the Knowledge Exchange; Partnering the Supply Chain; Training and Research; Sustainability and Respect for o Constructing Excellence, and information about can be found on its website. O_.
implementation of of demons Demonstr honest, people case histof
;;-
The Movement
The Egan report e licit nd measurable targets for improvement. In 1999 M41 devised and pu ished a set Key Performance Indicators (KPIs), which were refined and re-publishe ril 2 00). Eleven KPIs covered several aspects of the process of construction but did not cover the performance of the product. In April 2000 the M41 piloted a set of Sustainability Indicators, which went some way towards redressing the balance between process and product. A wide variety of organisations have now developed KPIs, most recently Constructing Excellence has launched the 2006
2-6
-"'
#
r-.
Construction Industry Key Performance Indicators. 50
Which procurement method?
3
ntly
it er testy 'Achi ing Ex IIE ro NHS's annin ProC re21, hich lS
on Health sets out a range of initiatives t operation and disposal of its estate. T se inc
partnering framework for the Depar
LIFT is an
ent of
H
initiative of the NHS fo the procur
(at a larger scale than those u
with principles of partnerin
N1qu
major projects
b
VZO, bi
CU
.-+
a
i
FI
fu
t initiat
ing arrangements .-.
pto
In May 2000, Ministers launched 'Sold on H and the Public Services Productivity Panel, as
e
procurement of
schools called 'LAPP'.
Prime Contracting
-
,-+
2003 y the Ministry of Defence Prime contracting is system lau hched nts. The Pri e Cori ctor, is the single client source and other governme t dep< it does not is. som what confusing for an integrated pro ss. ( e use of tl o types of Prime Contract. The eo ontract. Ther relate to a Prim aint nance of the entire estate within a first is a cont ct for he`c rat-'an a ntract)L: secon type is a stand-alone contract for region (the egiona Prime e projects wi a planned through-life cost model, the design nd co tructor compliance period (the Stand Alone Yi thro which mu be cd Prime Cont ct). T¢ intention of the initiative is to foster a more Capital Pr p b'e weeq( e Estates and the Prime Contractor and to colla brativ6 Althou h the supply chain forms a partnership with e clie deli er better val efense Est `tes are not part of that partnership. Prim Co ractd in'
i
G-)
e
i
Me
51
52
For traditional procurement ing contracts -°°
the contractor the documents thods. This might e the contractor to e of anything to the r design. The contract limited design obligation
.-_c
.01
Imo-
nn,
a"'
Under this method, with design se are strictly work and material co is to carry out and complete th supplied by the client, and i include the design of any empo achieve the desired result. A rt fro it contrary expressly in the wording may of cours be exten by the contractor.
has`
,-+
xpres
for workma terials and this is in respect of dard of the co` tract workmanship is concerned and complying with rms of me hantab qua ty etc. concerning goods and material of satisfying plie ntract rs of whatever description or status. etc. This will ormal exten to all s nsible for any efects, other than those which are The contr for wi ise fro misuse. The contractor is not normally ulty d ign directly at ibutabf mainAfaining he b ing: any such requirement would have to be responsible expre, in the c ntract./ fl,
-.o
The contractor is res onsib i
co
types bf contr
available with the traditional procurement
als
here theyr Tract Sum is determined before construction starts,
htered in the Agreement;
rement
where the Contract Sum is accurately known only on surement to some agreed basis;
cts: where the Contract Sum is arrived at on the basis of ost reimburseme cost of lal our, plant and materials, to which is added a fee to cover the rof it.
tic
contrac
(DD
--I
The contractor undertakes to carry out a defined amount of work in return for an agreed sum. This can be a fixed amount not subject to recalculation, in which case there would be no opportunity for the client to make variations after work has started on site. The sum is more likely to be subject to limited fluctuations, usually to cover tax etc. changes not foreseeable at the time of tendering. The sum may be subject to
53
4
Which type of contract?
fluctuations in the cost of labour, plant and materials provisions. Recovery may be by use of a formul checking vouchers, invoices, etc.
ull flu aThc, usin o
calle
the Xediou
Lump sum contracts 'with quantities' are pric bill of quantities. Items which cannot be acc rately approximate quantity or a provisional sum, t these sh
rings e coy
Lump sum contracts 'without quantitie, d the gs and another document. This may simply b a specifi Zn in which case the lump sum will not be itemise at i the tent that the Contract Sum is the total of the pri b might atisfactorily described by Schedules of Work, sum total priced items. In the latter cases, an itemised break wn o s be useful basis for valuing any additional work. lump end en a supporting Schedule of Rates or a Con act Sum A will b fro the tenderer.
E-3
Sa
eore
OOH
ti-
Tenders can be prepared o the b f notional replaced by firm quantities ,itisi tended to
N-0
Iup
antiti
contract.
->>
emeasurem t' contracts. This is where the work which the ontra r ndert,ekes to' of for some good reason be accurately measure re before to ering presumption is that it has been substantiall desig d that reaso nably ccurate picture of the amount and quality of 'what is req e i give the nderer. Probably the most effective measur ent cts, Inq least ri to the client, are those based on drawing nd ap mate uantiti
ua)
These are also so etime refer ed
.-+
c.>_
isly the clienJJ4ks 4--
of the totak-est*and
(71
in'
to agcep
f`ie risk involved in starting work with no accurate idea this type of contract is best confined to small jobs. (7D
Obvi
'+Q
ntracts ca also be based on drawings and a Schedule of Rates or ces prepar, e clie for the tenderer to complete. This type of contract might e ap there not enough time to prepare even approximate r where anti ntity work is very uncertain.
+-'
A variant of this/s the meas red term contract under which rates can be established for categories o ork, al ough instructions or orders will be required before any single job in the anticipated programme is carried out. '+J
inn,,
Cost reimbursement contracts 2>1
These are sometimes referred to as 'cost plus' contracts. The contractor undertakes to carry out an indeterminate amount of work on the basis that it is paid the prime
54
Which type of contract?
4
ftion th contr
or actual cost of labour, plant and materia agreed fee to cover management, overhe which are directly related to the Works is r fee, which should be agreed beforehan basis of the fee can give rise to man `varia to be the most appropriate will dep d on the
profi
hec
th
rin varia ng pre isely w at co s )st olu contr ts. ich rat
.
tfo
g
rd.
Cost plus percentage fee The fee charged is directly relat d but it can also be on a slidina s c
to the p
l. Ho
i
work at maximum efficien requirements are particul
os
L
I
for
ver, var
is
to p
-
only Ii tract.
I
o
rate percentage, no real incentive to e considered where
Cost plus fixed fee
The fee to be charg d the amount and ty e
is
to work efficiently s
as
sin e cos
is
`st
p
der tender
bye
largely remain prof
of
i
t
bporti
They
to t
ithin
appropriate provided that contractor has an incentive e agreed fee.
tion
iff rence' between the estimated cost and the is that if, the latter cost increases due to the
a
en th fee will be reduced accordingly. This realistic chance of ascertaining the amount and
ose ineffi ends on th tinder st
su
reimbursement
cto r. eseea
sed oWa targe,
t
type. The fee is related to an agreed target. The act prim ost ab e or be e target affects the fee earned. On the whole this type o ntract isi of popular, and is likely to prove complex to administer. is is a
fight variarl
I
L
n
revio
lways en to the client to pay direct for the cost of labour, materials, etc., W the contractor receiving only an agreed fee for managing re-c or tKe execution o he
isAf cours
pIap,+
hod gained acceptance in the early 1980s with the introduction of a 'wi contracto s design' variant of the standard JCT form. It was endorsed by the preferred procurement option, and most publishers of standard public secto forms now produce documents which allow for a contractor's design responsibility. This pro/ur-eTrrdnt m
tea,
The contractor may have responsibility for some or all of the design of the project. The contract wording must expressly refer to this, and the extent of the design obligation needs to be set out as clearly as possible.
55
4
Which type of contract?
The requirements of the client can be stated briefly a little more than a site plan and schedule of accomm likely to be stated in a document of several hundre accompanied by a well worked out concept design. might even be restricted to developing des information based on the design informatio supplie ,-+
'How er, ith d
fhare
recis peci role o the contr
for
podr 11
prep ring
tt
Unless the contract states otherwise, it see
v-0
he ' ility olute liability under which the contractor rran fit ss the nded. However, usually standard design and uild forms ess it t liability of the contractor to the normal profe exer re o ble re and skill. duty Independent consultants engaged ctor herefor n r, liability no greater than normal. An indemnity r acce f lia 's likely o be worthless unless backed by adequate indemnity in ra nce, dais is s n that should be checked before a contractor is porn re the or s not have in-house designers and intends to us outside co sultan their s uld be established before a tender is accepted i
,-+
fl,
o-0
Generally it is better to to prescribe in detail, ecz firmly with the cont ctor. Q=,
in to vee
,-+
example) the more recise out with the fixe intenti shell designs. It is claimed
d
bring cost relative fr most effe
of th erf quirement rather than pons ility-for design and selection s the r with me ypes f development (housing, for nts the ess likel it is that a tenderer will start ietary co ponents or its own standard s
is lea
c
of certainty on the Contract Sum and tnteg rb n of d gn and working methods, and the o use its p chasing power and market knowledge ately, it is often very difficult to find out
just how co O the matted of cl
uld be possible to ensure a quicker start on site, and the d construction should result in more effective pr How e1 ded for the client's consultants to prepare an ade ate set of requireme me is also needed to compare and evaluate offers and sc Premes fro tenderers. The success or otherwise of a design and build operation depend ent on the client properly setting out the requirements in the first place c4efully evaluating the contractor's proposals. Once the contract is signed; s are likely to prove costly, and the client has little further opportunity to comme`n on how the requirements are to be met. lam
,-+
((D
in'
s
56
om,
0
It may be possible to modify a traditional 'work and materials' agreement where it is desirable to make the contractor responsible for design of part of the Works. For example the Standard Form of Building Contract (SBC05) now incorporates provisions for a Contractor's Designed Portion. Work such as piling, roof trusses etc. could well
Which type of contract?
4
of such an agreement, wish to sub-contract such work, it would design. These provisions, however, should design obligations for a substantial part original contract into one of a design be made the subject
thoug
;h
vi,
Basically such contracts concent suitab contractor and are particula requirements. There are man designed by the client's pr es major design role, to also eptM out and maintain the operati of a nrrdi- q Q the perhaps playing a sub ill hav the majority of such cases, deve
nts,igin
i
the
of a
c
a
wa
bv ffectivaw
faith
larg
tractor
ponslit'
pt
Jes
f intr n.d
pertise of the with complex ement of a building
addition playing a ement obligation to fit cific period, and even ing of the project. Clearly in orms of contract specially
drafted to suit their requir forms av
appoi ,,The c
am, and d ring c n works ntra tors. it
manage part o should preferabl can
advise-she uctid
nal team, and also a management pre-construction stages will be as an ruction it will be responsible for executing the
nt profess
in
actor' involve
is
possible o make an early start on site and achieve early xibility it allows the client to develop the design during matters of detail can be adjusted and finalised a
ract to be successful there must be trust and good teamwork professionals and the management contractor. The latter ted no later than the outline design stage. The contractor signrogramme, tender action, delivery of materials and goods, pro ra m m es.
The ma agement co tractor will normally make a written submission which includes ana ment fee, and will be appointed after interviews with the client a propose and the professional team. The fee will include for the total management service, expressed as a percentage of the total project cost, and for a service to cover preconstruction stages should the project not proceed to site.
57
4
Which type of contract?
sfpf
of a c tract roje ec ation. The ya t sts ert lat ,and o
The management contractor undertakes the work on prepared by the quantity surveyor, project drawing client accepts most of the risk because ther
si
-
.+n
tht
programme. Competitive tenders for the Work usually, though not always, be lump sum coq
an bills
f qua
There is a Standard Form of Management Co tract issu the Standard Works Contracts and an Agr r+,
works contractor.
Construction management Again, the construction manager paid a management fee.
i
ntracts, although One basic difference from a ma gaaeme ana the constr irec between the client arranged and administered t a greater measure sense t k aives and the trade contractors. Ithou risk. The construction all of of control, it also means tha he or he a ccepts vi manager is a coordin or, a d us ally canny e hat the project will be
ctior
.-r
(D'
e proje, t an risk. 0 viou
Construction many contracts, b
likely o
expertise
is
mentems t rk by th
experience commerce :l1 standard orms available (Q'
th
have crease in popularity over management proc rerr nt method has been undertaken by b poke a reements. There are now also a few is usi struction ma agement.
nage; or}struc development of the management approach, offering a a single source. It can be led by the contractor, or by is only likely when the design aspects of the project The la
,n'
ice fro
me
,^+
fl,
ore rece fal integra a
svailable as yet, and developers or contracting ially drafted forms. Architects involved in this kind of lawyer to check forms, and advise on the terms. de the scope of building contracts, a nd is the subject special agreements.
elist TisJ
Ther are no organisa work should
maher
Maintenance is of facilities
+-'
Contracts where the Architect administers a series of separate trade contracts where there is no main or general contractor, may also fall into this category. As well as being the designer, the Architect assumes the managing and coordinating roles for the project. This arrangement sometimes occurs with fairly small projects and is a
58
Which type of contract?
4
quite traditional way of working. Trades cont client and the firms concerned.
ordinarily be
diet b`e
Choosing the type of contract trying to decide which type of con act to` or herself (or others) a number of q stions:
itect
In
orrn What is the nature or category in rk? completely new Comment: is it predominantly uilding istina one ork, maybe of a building or an addition to an Is it ncerned with new of a oricuil specialist nature such as re alter ? Is its allj bbing work, perhaps uses for an old building, olvin sera of b which form part of a term on a 'one-off' basis, or
fish =r'
i
maintenance program Q.
Who is to be resp 'nsible for esign. rchTtect as lead designer and the st entirely-* th th Comment: is respo sibility the be dir ctly involved in any important professional design ea m re to e signifi ign t from specialist sub-contractors aspect of desig P is or suppliers?
ccnnrr
-
allow// and
ture
`mighie desir rile to carrr of be possi le in etimes o
ome
gar
exploratory work before going to tender, ent. With work to existing buildings, problems t after ite operations have started. e
prepare
there mme
ecessi
made'-crh the
information at tender stage? for an early start on site mean that it will have or approximate information, to be replaced later
fu,
instructi
t docu
is ar
eeded for a particular type
of contract?
hich can best be shown mainly in a drawn form? Are bills roj ec ent: is S uld the specification be a composite document which or schedules ne includes des riptiVe sections, some scheduled and itemised, and some with at is en to be the status of the respective sections or documents in ofconflict r discrepancies? Q.
What is t
et
d of selecting the contractor?
it to be by a direct negotiated approach, or by competition? Will Comment: tendering be straightforward single stage, or is two stage tendering the competitive only practical answer? This might affect the information to be prepared and will affect the time needed. is
59
4
Which type of contract?
the client able to state his requirements precisel befoT wor, tarts: des tan cha es Comment: is it desirable or necessary to allow for adjust ents during the course of the work? What flexibility is eeded{ nd he n e th critic times for final decisions?
Q. Is
v4=
ore st rts? ' the client need to know a precise Co tract is construction cost of second Kv import ce ear omple on r rental of sting e deal (because, say, large sums of money are tiedo p premises, or because of dependence on cono ur
3(D
Q. Does
Comment: E
Q.
o
20'
60
0
tracfor, o
v.`
Who is to be mainly responsible for c Q rdina#g Comment: is responsibility to rest pri a w the to reserve the right to nominate s cialis8 o a c have work carried out by others whils e con
is
sit th
client wish
purch sin deals, or to stilt inl Qsses on of the site?
Decisions on the preferred procurem on the contract types which might be contract to be used should d particular project, which need described in the contract form events which might arise needs therefore to be base of prejudice, doctrinaire alleg
rounding the and procedures ons and foreseeable he choice of form rVand not be the result
;,o
,-«
='O
onclusions ual forms of
Some contract arran ments, novel procurement r be proje use of specially dra ed fo
s
e
familiar.
ments which might involve xity, could well require the
of co idera whi
y of architects are likely to be orms of contract should prove satisfactory. as b en to introduce option clauses and table for use in a wider range of , more ecent le slation and changing practices in the constructs o7ndust has ay a-Fout a considerable increase in the number an be c egon d of fo being standard. As a result there is now a hd the ecision about which form, or even which co iderable on o c mbina is likely to b the most appropriate, becomes increasingly fficult`to make. For most buildi
s
in
involved, one r ec However, t tend ncy ecent ake suppleme is to situation The resp
A
blishe standard form which will satisfy the requirements, or will a went be needed? ff_axfensive am dry eded, or if a specially drafted document seems advisable, then the matter e referred to the client for appropriate legal advice. An mig t be small job in very straightforward circumstances which could be e%cepti adequate ov red b an exchange of letters. Even so, such a task should never be undertZe n a standard form which uses widely understood terminology might ble. The in dustry has addressed the need for agreements which can be used by consumers on domestic work where no consultants are involved during construction, and the JCT home owners contracts, for example, are true consumer contracts. In all cases care is needed to ensure that contract provisions satisfy the requirements of relevant legislation.
th re a
-ti
iallt-
r-.
((DD
Q. Is
lid
61
5
Which contract form?
Q.
Q.
What standard forms are published, and whic appropriate? Chapters 6 to 13 below set out and compare, un features of the forms most commonly in use today:
if the contractor wants to use its own orm The client should be advised to pass any suc ocumen for an opinion. Even simply worded and a ly ar d weighted in favour of the contractor's ow ndNoe risk
What
the client. Q.
What if the client wants alteration This might in effect make the cont
oas
darfor
could f e construed contra proferentem. The basic rule ever t aame is w ich might have unintended effects on othe r ses he of the whole document. The Latham Rep rt recomr ies the construction process should be encoura dto use s andard rms endment. Where there are exceptional reason for s ch amendments, he Ark tect should make sure that the client is aware of an is the ris should be dealt with en by his or her legal advi rsis the p ctic point that ad hoc alterations often lead to inflated ender ices the risks. and
as
i
d
0_0
ificant in`f'nce, a is some mesa matter over which there is little esult of t need 6 mply with the standing orders of an authority, or, b follovJ fficia uid ce on Procedural matters. Several standard forms of c tract in alt pu ative v rsions, for use by either the private or the publi sector 4 tabl The esent tre d is for forms in only one version which can be use egar f sec or, ande di inction between what is permissible for priva public sec r use is no ecoming more fluid.
fa ly
rk for government departments was invariably orks contracts, then the responsibility of the nt. Today the situation is less clear cut. fl,
r sth r c out under one o 110, ar ent of it
fl,
L^1
ontra
fl,
mar
((D
Unio
30)3=`
now identifies three categories of authorities: central hich seem to include NHS Trusts); sub-central government bodie hic include local authorities, police authorities, universities etc.); private bodies subsidised by government (e.g. Arts Council or English Heritage grant funded projects). Secondly, there are apparently no absolute rules about whether these authorities should use the GC/Works contracts in preference to other forms and the question is left fairly open-ended. The Latham Report clearly wished to see their use reduced in favour of the New Engineering Contract, but there is a the Eur
government de artments
62
Which contract form?
5
considerable body of opinion in favour of co would appear that most departments have JCT, NEC or GC/Works forms.
ne
use o
vorKs-zo
fl,
discretion ver w
The GC/Works range of forms has been x and all the forms have been extensiv, ly revi They a recommendations and recent legislat wolf Office, and the forms can be used
ther to
rprocur
ount X
in.
inoth t
Local authority requirements The public sector (or, more own version of the JCT Sta ar the contract is referred to ;'the provisions peculiar to local gove ment and public versions h
I
au
ritii`bk
now th ow t/the o ract com
e
.as
AZ
d
fd many years had its rson administering inistrator', and some nt, the need for private
to take into account the work for the pu lic se ;ua there m also r client body. Some have firm published requirem nts of the particular de tmen nd for m what a e insist are made and procedures views on the ch administration. c on ning c tr which are to In
ing appropri to form of contract, to be thoroughly never of course be the justification for miliarity s effo to ep abreast of changes to published forms and tract a ministration procedures.
tant, it
en 96nsi its pro ions. es
time a fects
,-+
make sure hat the editions of the contract forms and any urrent issue and compatible. Checks are also ents a ure that 'contract administration forms are current and form of building contract being used. Pads of forms can quickly d it is unreasonable to expect office staff to check these things It is for the contract administrator to check such matters.
becotne out
.
Personal prefer evit bly some subjective element in choosing
architect
a
form of contract. An
eel a )personal allegiance to one or other of the professional bodies. le, ACA m hers might understandably incline towards an ACA form, while
For exa ASI membe
rip
feel a brand loyalty for their published forms. A majority of architects, mindful of the RIBA representation on the JCT and of its leading role historically, might instinctively turn to the JCT's range of standard forms. E
Of course, equally it might be the client body which has strong preferences not only about the procurement method but also about the choice of form. Developers and 63
5
Which contract form?
fl,
might stipu members of organisations such as the British Property derati forms which contain certain conditions. A project nanager mig adv theme a form 'based upon' a well respected standard rm ally airl oos !), ora ich colla agr ement powerful funding body might require terms, in necessitate considerable changes to those in t ntract. I
foi
Notwithstanding, the advantages of using a standa overstated. Modern forms drafted by expgrts d should result in fairer conditions and faj surrounding the choice of form, it sh Id be the a analysis of the situation - an exercis fess
canno
d hoc
alter
th circum.7ta hou
As discussed above, the choice of buil
ve implications
+-'
-
'r0
for the contract for professio s ognised this by its e Lat including a total recommendation for a co plete fa mil of dard matrix of interlocking cons Itant ' ements d con cts' Publishers of some building contract forms a o p v ide comp u b-c6 tracts, and ancillary documents including c ajority of consultants at ulta t agr merits present seem to pr fer po tin g ocu blished by their respective professional bodies The form of buil ing co ract hos overlooked when aIculatl the f
for
have sig ficance which should not be al services relating to contract
le, SBCO
dema
tha
thosE
l
.'^
-
.,_.
airly sophisticated procedures likely to d under, say, MW05. The type of Kt formivhich it s proposed to use, needs to be taken id alwa ys assuming that the contract choice is
administratio be far mor contract, into acc known in
with
mn
tforward traditional lump sum contracts, there could be eed t be borne in mind. For example, it might be expedient t arr ge f nary eli enabling contract to cover investigation work, de oliti ork, advan d . e wor etc. ahead of the main contract, and this should not fees; or again, it might be decided to have work overlooked when a es carried a nu ber f parallel trades contracts with the Architect assuming a management ordi ating role, and charging an additional fee for this Eve
ar
cial facto
tly strai
whit
a"'
s
.
4--
E°;
..O
The services provided acrd-andfee appropriate will always depend on the nature of the work. For example, work on the preservation or restoration of historic buildings might warrant a considerable departure from the Outline Plan of Work stages, with a great deal of investigation and reporting needed in the earlier stages followed by unusually frequent and detailed inspections both before and during construction.
64
Which contract form?
5
Another matter which often brings close lin contract for professional services is design design liability to an extent agreed an professional indemnity insurance purpose, any liability that is more onerous, for incautiously entering into some coll when acting for a contractor involved I
vii
65
P
nal
66
The Joint Contracts Tribunal Ltd Major Project Construction Co tract 2 The Joint Contracts Tribunal
Standard Building Contra The Stationery Office GC/Works/1 With Q antities The Institution of Ci NEC Document
0
eers
Engineering a, r
roject
proach.
Contra C
I
nstru
9N,n '
tract
ght of wocurement.
also b
f the of itional osition
is pTaced
the list because it is a relatively new and necessarily, it will be for a lump sum ri-satile enough for use with either traditional or
first
i
ally, though n
seem like)
a
form
listed a ve, the last two are also suitable for use with sum. T y are listed under this heading for convenience, and as majo orms of contracts
67
68
Traditional procurement: standard lump sum forms
6
JCT MP05
The Joint Contracts Tribunal Ltd
Major Project Cons 2005 Edition Background it appears that for some time th no longer entirely satisfied
act (JCT98) had
dertaking major commercial developments. T, e se ion is less of a clear cut reality than it traditions was, a .shes the contractor to take responsibility for some det fed desi ime requiring flexibility and allowing the Emp "yer to e a me The extended time scale of major projects has frequently d pro phases, in parallel working for both design and :onstr , in payme s relat to progress and performance, and with incentives f savi s in time n th past this has often resulted in employers nditions in otherwise standard sive odificat ns forms of con b eskefor p sscessit
took t the c rent
f introducing
(CD
a entirely new standard form to take market. )is quite a significant departure from ously lishe y JCT an in ormat, style and language, it breaks new espects might ee to be something of a hybrid, although direct C05 o D /are of altogether helpful. However, it should s likely those well tried forms of contract, if used for nstan is intended. In other circumstances the two might s o appropriate option, and it appears they will gside the Major Project Construction Contract (MP05).
ft
L.0
to
eec
i
Iteto
open and flexible but demands such attributes of its users. The and language, and clear procedures make it immediately att(active. How is li y to be an appropriate choice only for parties who are ced already expp OD ations of a major scale, and who fully appreciate the nature )and' rocedures. They may be relatively brief and uncomplicated, but a hig level of understanding and involvement by the parties.
ocume re
itfo
hET
elate
1)
O_(
MPF05 is much shorter than SBC05. This relative brevity is due in part to the use of enabling clauses which avoid the inclusion of that which might be irrelevant for the particular project, and allow the parties to include their own detailed project-specific requirements on matters such as insurance.
69
6 Traditional procurement:
standard lump sum forms
JCT MP05 It is logically structured, but interestingly there are n 0 onven nal ides and the document goes immediately into the 43 ntract ondi ons hich out under nine Section headings. The Conditions egin ith a un II all
definitions including the meaning of practical
4etion.
Unlike most other JCT forms, in MP05 the Cont icularsappe aft Conditions, at the back of the form. These r uire proj ific in ryhation entered, and the choice of option clau be icate i, l es require relating to completion by Sections, and i su ra e icula ire-follow Attestation. Understandably, this is a ontract to as a ec
i
The document also includes two
i
Th
s
t,.
artyRigh
of third party rights from the cont ctor i of t from the contractor in favour of a pd aser an last document includes the rWe--,-whi gove Contractor, and pricing inf mation. elatin Progress Payment schedul analy
der, a ricin h
e in respect d party rights Document. This
payment to the ce payment bond, be attached where
relevant. inl,grestir
ponsib E m pJgye r';s,,R eq
ikion p
i
key
ional) desid m e n ts;
ui
re
ure en u res
ntractor's d r
e
may na
for
cialist
tar per
no ate t er m respo Bible f
Employe
their se
the co
e
im payments to
theln
the
there are provi ions for benefits of saving va
parties to agree upon;
will usually be made monthly, but may be to any no provision for retention, but bonds or security could be created if required;
T ere
o ret6ntio
ultant previously appointed and the contractor performed pursuant to the Requirements;
Factor access to the site, rather than possession;
suraince arr
s
ub-con,
i
eration, bonus for early completion, and sharing of improvements;
the Employer must appoint a sole representative who has authority to act in all matters under the contract. Other consultants appointed by the Employer can expect cooperation from the Contractor, but will have no authority under the contract to act for the Employer. 70
Traditional procurement: standard lump sum forms
6
JCT MP05 of comparisons, in this book t employed for notes on the other forms of, reflect the structure used in the actual con For the purpose
g6is is
0
alto CI
u
to be found in MPF05.
The form is published in one version in both the private and public s large commercial development
in f
a
it
rac
is
rele
oh
It is for a lump sum contracan Particulars. The Employer' eq is is no specific reference to th se in th accompanied by a Contract Su analysi and the Proposals ar on
Fl
ted in the Contract uantities, but there tor's Proposals must be tion. The Requirements
is,t-obe
c&M include ricinagr
able for use mainly with projects.
s
ment
is
founded.
00)
fl,
for a ependen nd contract administrator, and administrative func ons r quired under he ontra are to be taken direct by the Employer or theCont actor. Empl er's n ative may exercise all the powers and function There is no provisio
i
he
s obliged t pletio or wa
dinat
it
W
ipal
er is re
fort
y.,
Requirements is found, the contractor must notify the
t intends to follow. If the Employer wishes the contractor ,
that instruction
is
treated as
a
Change (10.2).
-arrWwithi the Proposals is found, the Employer will instruct the contractor vision sho, Id be adopted and that instruction is not treated as a Change a--_
which (10.3).
for construction
onsible for the Requirements, and the contractor is not responsible se, or for the adequacy of design contained in these (11.1).
Employer which If a discr
is
that it has th competence and resources to act as CDM Coontra or, and esigner as required under the CDM Regulations
Vtdiscrepan to proceedofherwi
complete the Project, that
L.0
e contr
execut.
of thg clesid (7.1).
Where the contractor takes over design, it warrants that it will perform to the standard of reasonable skill and care appropriate to a competent professional, and does not warrant fitness for purpose (1 1.3). Should it be thought necessary to stipulate a fitness for purpose obligation, then the 71
Traditional procurement: standard lump sum forms
JCT MP05
b le
Major Project Construction Contract Guide sugg gives a reminder of some of the practical problem provision (footnote to 1 1.3).
JCT
Materials and goods are to be of the kinds and
fit f6 Where described goods and materials are not alternatives of an equivalent or better stand standard, and acceptable to the Employe !will it-
arise
ds he tended
rding
wit this
n
c
d o
'n the urpos;
cur ble t Itern d th Cha
ed
crib The contractor is responsible for the repara for re these are to be submitted to th as identified in the CP's, an as shown Requirements or Proposals 12.2).
The Employer is to respond either 'A Action', 'B Ac
The contractor
is
t
Iurtr
sign ra m
nts to
Wing design
Zion' (12.1 ction
execut
accordingly (12.6. o exe to ork The contractor comments are incoworate , and The coif submitted to i
rkec
furth
tractoi
provided that the Employer's copy of the document is immediately ect to be paid accordingly (12.6.2).
to wofk mar d 'C Action', but must resubmit he Empl er's comments (12.6.3).
i foyer and subsequently incorporated into be by the still responsible for ensuring that any design document kith all the requirements of the contract (1210).
esign repares is
in
acc
ntractor must oroc pleti (together with
s
es
arly and diligently to achieve practical completion (15.1).
ompl tion by Sections, and completion dates for each Section of da ages and bonus) are to be entered in the Contract cr
The contract allo
a
Particulars. The contractor must use reasonable endeavours to prevent or reduce delay to progress
or to completion (15.3).
72
Traditional procurement: standard lump sum forms
6
JCT MP05 The contractor must notify the Employer whe occurred and, if it agrees, the Employer will
RID
anion actic Co' actic ertificete o
(15.4).
6:_
If the contractor fails to achieve pra becomes liable for liquidated damag
'he co/MKIet ntra the
(16.1).
the m With the consent of the Contr Et u th Project prior to practical compl in, an 17 part, the date, and the value o t e pa
Whenever the cont likely to be delayed cause of the
0-00
se
no ss of the Project is being or is ith notify the Employer of the eticin of the Project (18.2).
ecomes awar it Ikel ye se ct upo
used by one of these events, it must revise this a necessary (18.3).
tha
of r'eipt of uch n tifica on, the Employer must notify the contractor comd date as he or she then considers fair and ent to t pletion date should not be adjusted (18.4). asons
dor
in
actor will be entitled four are for 'neutral y other persons on site, acts of prevention by the
t
ay!
iously, an
No adjust_mRQt to
practical completion of the Project, the contractor may provide n to support any further adjustment to the completion date, and g that information the Employer must review decisions made m or adjust the completion date (18.6).
M--
r
is
to ny caus
ontra or cons pporti s
non-
ctor
e
sue
tract, t s. Of
Unless there is anything to to an extension of time in r ect o causes', and the other four rela to any
rform valid suspension of Employer. Interesti gly, advers
'
cmpletion date to bring
an earlier completion date is possible
(18.8). Howeve , the Empl yer can investigate the possibility of acceleration by inviting ontractor. The contractor must either make proposals or explain proposa om th why it is impracticable to achieve an earlier date (19.1). If the date
Employer (20).
is
of practical completion is earlier than the completion date, then the liable to pay the contractor a bonus at the rate entered in the Appendix
73
6
Traditional procurement: standard lump sum forms
JCT MP05 3
Control The contractor may not assign either the benefit the consent of the Employer, and this would app
o,'burdeviof tVe-tontr'
design work (35.1). However, the Employer may assign the benefi of the c and furthermore the contractor consents the Emp benefit and burden of the contract to the amdint at any time (35.3).
buThir
Rights of third parties in general are e part of the contract, in respect of th
The contract has no provision for a co entio act are to be administered direct b er an the Employer is required to a oint an iplo`y is Rep powers and functions of th Emplor nder th ontra
The Employer may appoint o the Contractor, have no,,Ntho
mploy
"Istrato ctor
tive
and the terms tively. However, o will exercise the
assur. d
er the cd
inting)and
with nen
suc`f)
instru
s ,-+
others to gi e effea z,3).
this may entitle the contractor to s rrse to ai'Chang However, not all instructions will be i\exten ion of ti h( e the contract states this, the contractor This will not relieve the contractor of any C+.
.-f
Where the contra or Employer may enga liable for th
d
S
Tent
of cooperation from the Employer (21.2).
visers who,
be
is
aser or
da
.
eive
gations u
eE
findlrs e.
show all t If the work mate
tractor to open up and test work and materials. If rdance with the contract, this will constitute a goods are not in accordance with the contract, it
.1p
0)°
fl,
fl-
E
Where work, m eriairs or gods are not in accordance with the contract then the Employer may in uct their emoval, or may allow them to remain but with a price reduction. The contrac r will not be entitled to loss and/or expense or extension of time. The Employer may also instruct additional work necessary as a consequence, and may also instruct further opening up and testing relating to similar work materials or goods elsewhere (22.2). No such instructions shall be treated as a Change (22.3). During the 12 months following Practical Completion (termed the Rectification 74
Traditional procurement: standard lump sum forms
1CT
6
MP05
Period), the Employer may instruct the contr,
struztec then
Where the contractor does not remedy de engage others to give effect to the instru
tified
After expiry of the Rectification Period, issue a certificate to that effect (23. Consultants may be pre-appoin the nWct appointment will be novated appointment and the propos Mod For
tion that the f their original
and
e included in the ct Particulars (24.1).
I
Requirements. This also requ
pro
to
e
The Model Form of Novat
ediatel
(24.2).
ontra The Employer may a 6o recl ui th subcontractors or nsulta nts) y inclu in g a P contractor may ch e, in e quirement Such design or carrying t of orks (24.3) solely
be
hinted
named specialists (that is, of names from which the ointments may be in respect of `st
sponsi e un er the contract for services provided by !und taken by named specialists (24.4).
Employer depends upon the novation of preof specialists being carried out in the sand Tne app consu Fred under th releva contract clauses (24.5).
the contr ctN
`to
e
ppoirdconsult ctor without he prior written consent of the Employer (24.6 ediately fo'WWing termination of such contracts, the contractor loyer of the proposed replacement, and the Employer has seven reasonable objection (24.8).
ithe eforE mu no ' day in whic
1
contracto
e
i
ns fu
it
`tract Sum,
e
liable under the contract for replacement consultants or ponsible for any delay and additional cost incurred (2410). '4--
specialists, and e
AT exclusive, is entered in the Contract Particulars (31.1). +-'
Pricingr6ent identified in the Contract Particulars is part of the contract, and should contain the rules which will determine the method of payment, the Contract Sum Analysis, and pricing information such as rates, preliminaries, and overheads which can be used in the valuation of Changes.
The
Changes are alterations in the Requirements or Proposals which affect either the
75
6 Traditional procurement:
standard lump sum forms
JCT MP05 `^. -+.
r
Zt-j
-on
substance or manner of what the contractor is to pro contractor is responsible for all further design discrepancies and statutory requirements, Chang required by the Employer.
th e ontra exce
te
to
maip9v
,-+
Each party is to notify immediately the other if i dered rise to a Change, or any event occurs which hould b
ing
ratio
that ar6nstru
Change (26.1). ent
No later than 42 days after practical c provide particulars of any furth aiu of receipt of the particulars th Employer
pleti spect
Eli
Valuation of a Change and any adjus agreement, or by the Employer on Contractor, or, if no quotation is re valuation is to be inclusive of any
o
,..f
bas
ag ense
a-3
ti,
0-0
,-+
I
etiord
co q on
p
3 e Pr
fair a atio to 26. ontractor may and within 42 days mo s valuations (26.9).
han
+ew rele
fl,
Tin
Other factors which may esult adjustments ontract Sum include amendments to the Require ents nd Prop s `ted by the contractor which will be cost savi gs lue ftprovem is re ultin in a financial benefit to the Employer (25), a a bo a able f6rearly ompl ion (20). The former will be the proportion of a fy bene as stared in the ontract Particulars, and the latter will be at t daily table in t Contract Particulars. fl,
fl,
fl,
(D_
i
f
,-+
..,
nt deletions in the to rece iv.Q payme aer Rele
(Progress Payment Pricing Documen If no
rpm
,-+
,_..
fl,
by
Employe itio
'+.
fl,
ma
1
r
articulars will indicate whether the contractor is 40(interim valuation), Rule B (stage payment), Rule C ule (some other method). These Rules are described in the Rule i selected then A will apply. nom
Employe included in
limited right to rei rsement of loss and/or expense outside ctor wishes to claim, it must give Change If the ide an essmen of the loss and/or expense with days of receipt of information, the essay Within t and otify the Contractor. Payment will be 3 amo advice. ,-rayclaim for further ascertainment must be in 42 days after practical completion of the Project, and hese particulars and notify the contractor of any ithin a further 42 days (27). ,-+
timely noti informati
fl)
The contractor has the inclusive
is tolra-e detailed application for payment not later than seven days before payment is due, and the Employer is to issue a payment advice on the day of each month as entered in the Contract Particulars (28.1).
The contractor
+}'
E
,-r
After practical completion the Employer will issue further payment advice at monthly intervals, always provided that the amount due is not less than the figure entered in 76
Traditional procurement: standard lump sum forms
6
JCT MP05 the Contract Particulars (28.2).
to state the amo accordance with the Pricing Document), th of any reductions. It should be noted t t materials or cost fluctuations, althou these Each interim advice is
th
ract ges, an
,-+
co ny Ch
The Employer may withhold p notice is given not later than se states the grounds for withh ,-+
If payment is not made in
th6. ontra n days befdre-die
corda
ounce's
,-+
attNb able
d that effective ment, and which each ground (29).
thract, iN am
Final payment beco ees due w ificati the Employer consi rs that r ea nable time taken place. The E loye us issue a fina binding on the part Fes in elation in referred to ad orI ration w
fi
n
30
as been certified, or when wed for rectification to have certificate, and this is final and ! subject to any dispute being days (28.7).
ligati requir dertakWs regu tions a6 Lng the for, Ompk,w.Ah all s tutory requirements and warrants that the ept for that ontained in the Requirements) complies with nd 11;
make any alications and give any notices required by statute of relevant documents to the Employer (9.1). en
mployer, requirements (9.2
es in stat announ (10.5).
te that specific fees and charges are the responsibility of pay all fees or charges in connection with statutory
trwill
bligations that arise after the Base Date and were not previously ken into account and will be treated as giving rise to a Change
.-.-
fl,
The contractor is appointed as both CDM Co-ordinator and Principal Contractor for the purposes of the CDM Regulations (1.2). The Contract Particulars also allow for the name of a CDM Co-ordinator previously appointed by the Employer to be entered, and if this person is to be retained then the contract would need amending (7.2).
77
6
Traditional procurement: standard lump sum forms
JCT MP05
The contractor indemnifies the Employer in respe damage to property other than the Project, alway course of carrying out the Project and are not the Employer has responsibility (32.1).
.,r
0-0
The Employer indemnifies the contractor aga' st lia lity, loss, clai ens or proceedings arising under statute or co la in ect f p sonal in' ry or death and damage to property other t an the e a mi s as t t these arise in the course of carrying out the Pr 'ect arare to e ac r neglect for which the Employer has responsibili ,-r
Most major projects are likely to contract requires the relevant documen Contract Particulars (33.1). Either party may be require to pro ' nd main in cov an`dAhe other party may request documentary eviden e (33 2). Failure to p o e sati ctory evidence within seven days will allow tl, e of r pa to tak out sur c and recover the costs involved (33.3).
t provision and the insurer ement these and this is not
0(D
-i.
Where compliance requires remedial treated as giving
'y.
Where cover, ga -tterorism is requir d ceases to be available, the party responsible or that in ra must-n of y the oper party (33-7). The risk then rests with the +'i
Where pr ssion in mnit insura e is r quired, a relevant deletion is required in the Contract rticulars, an the limit o demnity is to be entered. The contractor ma be req ' e take ut and maintain cover until 12 years from the date of pr ctical co pletion the ect, always assuming that cover remains available at co
m
cia
so
le
tes
(
-2).
iiay, by sui a further notice, terminate the employment of the contractor if, afte ' g giv n the contractor 14 days' notice of a material breach, the contractor s failed to emedy the breach (38.1 and 38.2). The contractor's employment may a terminated in the event that the contractor becomes The Emp
insolvent (38.3).
Material breach by the contractor is defined, and includes failure to proceed regularly and diligently, failure to comply with an instruction, suspension of the Project, breach of the CDM Regulations, breach of provisions relating to named specialists or pre-appointed consultants (1). 78
Traditional procurement: standard lump sum forms
6
JCT MP05 Upon termination, the contractor must documents, and must not remove any mater, permission. The Employer may then make Project (38.4). Only when the Project has for completion have been made, withi 'six r-6 issue a payment advice (38.5 and 38` The contractor may, by issuing a having given the Employer 14 ays no failed to remedy the breach (3 L1 and 39. employment in the event th plo
Material breach by the
/ir
enge t
mee ents
o oth termi tion, r/k r,
a'
ateria
e c
eco
acto
es iftsOivent
E
t e contra equipment from sit without delay, Upon termination,
a
inateVhe contractor' st ted in tie Co ecifie eril, ciXI co
Either party may ter
pkiod
suspended for
include force
t pro ide the Employer with all design ant or eq pment from site without delay, and
nation the ,con actor s, a
rem ccou
gs
aAfully letion,
n I,
ntracto Project
R
to led. Note in particular Design Documents, uirements and Proposals (1).
,
are set ncluding a gender bias clause, and that a 'person' firm, partnership, company, and any other body corporate (2). ccess (not exclusive possession) to the site or parts of the site, ree to have work undertaken by others at the same time
Dloye
eaves
asthe
t if the Project is substantially rticulars due to causes which
(1
ns o man-made obstructions encountered by the
give rise
contr actor will only
vhere they could not have been foreseen (14.2).
in all desi n documents prepared by the contractor remains vested in the contractor a e Employer is given an irrevocable licence to use them for the purposes of the Project. Where the contractor does not own the copyright in any design document it shall procure a licence from the copyright holder (13.1 and 13.2).
Copyrig
The stated period in which acts are to be done will commence immediately after the specified date. Christmas Day, Good Friday and bank holidays are excepted (3).
79
tD
6
Traditional procurement: standard lump sum forms
JCT MP05
_(D
All communications between the parties relating to or may be made electronically by the procedures sp (5.1). Any notice under the Third Party Rights Sche be given by actual delivery, registered post or r 9 Disputes r
do to th Pro' ct (nole not s ply e s ediatio if the 7itte to a ce the ro ko of the
-+,
Disputes or differences between the parties in the customary 'arising under this contr t parties agree, or referred to adjudicati n relevant Scheme for Construction Contr
Although the contract states that /he o ecti of binding agreement, the only final re lution f di utes proceedings. There is no provision for
00
80
tion shbu( o
appe
r
to reach a to be by legal
Traditional procurement: standard lump sum forms
6
JCT MP05 This contract? If considering using MP05 remember that: ra the Contr tor, t er th their i-contr for , are e rie ed in bstantial uir d to poi t a Re esentat' e who will o he plo r u er the c tract. Other fa horit n the ontract to act o
It is intended for use where both the Em to
respective teams of specialists and commercial projects. The Employer exercise all the powers and func advisers may be appointed but on behalf of the Employer.
is
are
rip
ha,
-+,
The Requirements and the important that both are fu be remembered that this cont what is to be delivere considered for inclu on are hel
s
t
is
nner
e
eqi,
ements stating clearly
is points which may be
de in
is
-format ormat but it should
rescri
'
t on
ve
contract, and it
heart
e
ere
e
e
J
for this contract.
for esign by the
loyer, shown and described in the ntr tor. The Requirements may onsu antspre-appointed by the Employer e lis some of the matters which need to be covere in th no agree nt, w ich should become part of the isb to conside using the CIC Novation Agreement). Req u rem nts (th part s rr Normally li ty is t fit of e care and skill, but the Requirements could i fitness for, pu rpo e bligation although there might be practical iaht be i imio rta nt atter in the case of PFI projects.) diffi fl,
The contract provid
s
design cto re ngages
(DG
i
u rth
.=+
Requirements, with stipulate that under a nova rion agr
i
_n+
(1)
.-f
.=r
I
mar-
an
fl,
+-.
O^^
articulars re uires entries on matters such as the Contract m, Re ire ents, Propo Is, Prig g Document, names of Planning Supervisor, Fun adju ator, ntries rely to the application of option clauses such as those 0 ou conditi s, liquidated damages, bonus rates, pre-appointed consultants and ame eciali cost savings, payments, insurances, professional indemnity, S
orxuff
r and shorter than either SBC05 or D1305, and which can of the project. However, it should be approached with becaus alth ugh the openness and apparent brevity of the Conditions is admirabl , prb-ression and sometimes legal advice might be advisable to produce a reasona balance set of documents. The contractor assumes more risks and under other JCT forms of contract, but provided that the risks can responsibilitie be fully identified and priced for at tender stage, this should not present a problem for experienced operators. What effect this admirable document will have on the use of the more traditional JCT forms remains to be seen!
tailore
(ND
E-0
vi'
I
°.c
e
c.^
This is a form whi
81
6
Traditional procurement: standard lump sum forms
JCT MP05
JCT
JCT
Major Project Construction Contract 2005 Major Project Sub-Contract 2005
References JCT
Major Project Construction Contract Guide
Commentaries Note: these relate to the previous edition of the Sarah Lupton
Guide to MPF03 RIBA Enterprises (2003) Neil F. Jones The JCT Major Project Form Blackwell Publishing (2004)
82
Traditional procurement: standard lump sum forms
6
1CT SBC05
The Joint Contracts Tribunal Ltd
Standard Building Background as the RIBA on (SBC05) is 39, 1963, 1980 Contracts Tribunal
LL.
The original agreed Standard Form Form. In many respects the JCT
direct descendant through vii
a
a se
and 1998, although now pubs Limited OCT).
to overcome rious appeared over time in the 1963 Edition, and, re se reco so the Banwell Report - in particular those relat gto t he tr atme t of rs. At the time it was felt that JCT80 had strut a fair ce betwe the rests of the contracting parties and others involved. nitiall concern wa-s, sed some who saw the form as being much longer th its edecess, emanding to administer, yet it quickly gaine acce eas th orm d for major building projects in the United King om. S Opleme is avail ble to cater for contractor's design and, secti hal co pled ?1; ther with d umentation for nominating subcontracto and s JCT80 was drafted
i
wer
t to 18 A/rhend n the last of which was an attempt to meet commend ions in the Latham Report of 1994, and to ensure h Nrt f the ousin Grants, Construction and Regeneration Act tion and, ayment provisions. The 1998 Edition of the co olidated version of JCT80 which subsequently
((DD
((DD
nt edition of this long standing form. It constitutes a radical mat, layout, language and content. The clauses have been rt-g ouped and -n ber and the language has been clarified throughout. The provisions of the cti Completion Supplement and the Contractor's Design pple ent ave been incorporated in the form, as have the fluctuations isions omin ted sub-contractor provisions and the performance specified work pr isions hav been omitted. The form contains a new design documents submission e, and provisions for Third Party Rights and warranties. For a full e analysis of the changes see the references at the end of this section.
Nature to over 100 pages. The Articles of Agreement include Recitals, Articles, Contract Particulars (to be completed by the parties) and an Attestation. The SBC05 runs
83
6
Traditional procurement: standard lump sum forms
JCT SBC05 xne par
t cariee
CND
0--
°'c
--O
numbering of Recitals and Articles may vary depen SBC05, and if incorporating any separate amend to achieve consistency.
r.,
.-+
The Conditions are set out in nine Sections iorl,1 deals witV defin interpretation of the form. Section 2 sets o t the c n s, including its obligations with respect to ogrammi for adjusting the completion date. Section 3, vers he ntro uding the giving of instructions. Sections 4 an 5 de wit va ion a Section 6 with insurance, Section 7 with assi ment nd Pa igh n 8 with termination, and Section 9 with dis v les a included at Sc )ms oluti the back of the form, which cover as sign su n procedure, insurance options, bonds and fluc tions:
o,-
in'
Ce
Obviously such a contract is n asy'read'an the) ptions need to be considered with great care. mpl , ontra equire very careful consideration of whether ses co ri `a, into ies/does not apply category. Many of the cla lude not onl con tions but also detailed procedures and rules. some especi y th rning extending time or payment, might app ut they re in nded to secure sound practice and should be foll iculo
the
;--r
-n,
I
Despite its lengt and co ple : y,N basically si ple in its overall structure, and the changes to Joe late ition, ,An par more logical layout, with the grouping of so erial under hedu ake it much easier to navigate than its predecessor, r with ratio f new provisions, may go some way e int towards r t flag popu rity. 1
e versions
use with quantities,
without quantities, or
s.
T e W p fes
uld only be used where the Employer, through its d at the time of tender a full set of drawings and bill of quantities to S M Information Release Schedule is part of the docu tatio a tte t to identify responsibility for any further information an which might be ness to mplify the contract during the carrying out of the Works. sion
es
consultan
s
fl,
prove
Q_-
CND
ua
+.,
l./1
-4,
The Without Q ntities ver on also requires preparation of a full set of drawings to be accompanied ei a Specification or Schedules of Work. In order to give valuation of variations and fluctuations a substantive basis the contractor is also required to submit a Schedule of Rates or a Contract Sum Analysis; this should be provided, and the measure of detail required of the contractor is often stipulated at tender stage by the Employer.
,-+
=moo
.'^
vii
E
84
Traditional procurement: standard lump sum forms
6
JCT SBC05 All three versions now incorporate sectional pleti and -ct-Contrak4o'r Portion, both optional provisions. The first Ilows f completion of the Works, and for setting ate for li idat dam each section. The second allows for the c r to ign a identif' d r of the Works, and includes a new pr edu D ubmitti its d ve in information for comment. The parties hould b a r to se u any rep, as to scope, format and timing of such bmission t Contract Par
parat I
E
In response to the Employer's Contractor's Proposals and a C relates to the Contractor's D variations.
th ontr at Offof t
equir Anal Ys is Po rtf
.
Thi
,Jatt
I
as
SBC05 requires the appointmm to g ct the various contract terms. The Employer w II oint a ntract administrator to itect this role, and such a rson wi ll b regax ed as den and impartial. SBC05 also provides for the Em loyer t ploye oint an esentative' to act on behalf of the Employer. A f otnot emphasises ndam tal difference in roles.
for
rryt and comp
is
fl,
an and Statutory Requirements (2.1).
ly
with al
'M
st comp
tions
of any Contractor's Designed Portion, and ct relating to the integration of the Portion The c ntractor's liability for design is limited to the of a rchitect or other professional person. 6
(2.2 re
Archi
-.O
?mrat
goods an workman are to be to the standard set out in the bills, equire ents or Contractor's Proposals as relevant. If stated to be to the chifect's sat action, hey are to be to the Architect's reasonable satisfaction. Where are to be a standard appropriate to the Works (2.3). r
slue directions to the contractor to make certain that the be integrated into the design of the Works as a whole (2.2.2). 1.1
liabili y for design is limited to exercising reasonable care and skill owever, y/here the contract is for housing work which is subject to the ve Premises Act 1972, then this limit of liability might not apply. tin
r+,
.°i
The contractor must be notified if the Architect detects a defect in the contractor's design, and the Architect must be notified if the contractor considers that its design will be adversely affected by an architect's instruction. The contractor's obligations for design work are otherwise not reduced (3.10.3).
85
6
Traditional procurement: standard lump sum forms
JCT SBC05 The Contract Documents are to be read as a Conditions and Appendix prevail (1.3).
the case of discrepancies in or divergence instructions must be given (2.15). In
The provision for dealing with a discrepan or dive Requirements, the Contractor's Proposals an he Apalys
Contract bills, except where specifica Xy stated accordance with the Standard Metho of Measu
the
'se, t,
The contractor must be provided wi ies e Information Release Schedule by t e stat (2provided with such further drawings detai The contractor must keep on 5ite_b
The contractor is required o submit d a relation to the design (th 'Cor Contract Documents, or a reas nably necesa
k 1 (2:
Editi he cont
1).
refe ed to in the must also be ecessary (2.12). d (2.8.3).
o Docu
ents it prepares in as set out in the mission is to follow a
n&),
e su
42).
turnip the design documents marked either 'A ntractor is to ex ute work marked 'A Action' or 'B Action', in e cas the it tincorpor e comments by the Employer. The contractor mu`streviseNVawing marked The Employer is to espo n by Action', 'B Action; or 'C A tion I
hedule 1:
executing an
er relieve/the co
E
copies 'ot hi master programme as soon as possible equire a pre minary draft with the tenders.) ie CDM here 5)
R
gulati
airyany need to
the Employer to nominate a CDM Co-ordinator and ctor. This is also a contractual duty (Articles 5 and a r placement is also covered (3.26).
on ant
Dates for posses d co pletion should be entered in the Contract Particulars. There is provi on for div' ing the Works into Sections, and setting separate commencement a co letion dates, and rates of liquidated damages for each section. All provisions relating to timing, for example extending the date for completion, apply separately to each section, except that there is only one Final Certificate. i
a,.
The contractor must proceed regularly and diligently and complete on or before
86
Traditional procurement: standard lump sum forms
6
JCT SBC05 completion date (2.4). Early completion is an opt 6n for achieved, issue of the Practical Completion ertifica can t the Employer is not obliged to assist the ntract in tern
iori
exceedir)o six
fl,
fl,
n-0
An option clause for deferment of po subject to an Appendix entry (2.5).
°-'
(ID
fl,
Notice of delay must be given in writin yt Co toge supporting information including its estima ke ffect ?aMpletio (2.27.1). The Architect is required to conside a new c ion te, ar the contractor Thi ref of his or her decision within 12 ,weeks -28 nt events' are listed which are grounds for an e e f tim 29 the nt of which relates to any impediment, preve tion o t mploy e interim decision is itect la th subject to review by the we ks following practical completion. Whilst it reduc ion y awarded, the original contract period cann, t be reduc there i visi for accelerating progress, dures foN ealin except by agreeme t. The p elay and extensions of time are detailed and ne d to e followed witb e. i
owere he contr e con acto chitect (2 3) an foyer
ctor
-20).
plete within th contract period is certified as a fact ges may be deducted or otherwise T32)he mployer is obliged to give notice in writing .
rrD
the E
bec
i,s,certifby the ik oblige d
a
Control o asst -ime
without written consent refers to 'the contract, or any rights
rovi s for Third Party Rights to be assigned to purchasers/tenants and IIIQ funders. The requirement to grant third party rights to identified persons, together with information regarding limits to the contractor's liability, must be set out in the Contract Particulars. The rights are set out in Schedule 5. The cont
fl,
3
instead.
partial possession (2.33), and where the Employer wants to use ed works for storage etc., this is possible subject to proper
The
art insur&me
to rectify defects (2.38) unless the Employer
agrees`"propriate deduction
The contract provides for collateral warranties to be provided by the contractor to funders and purchasers/tenants, and by sub-contractors to the purchasers/tenants, 87
6 Traditional procurement:
standard lump sum forms
JCT SBC05 funders, and the Employer. The requirement to enter to war antie in the Contract Particulars, the relevant persons nd su together with information regarding limits to the ontrac or's bil
ust )6_contractor-s
beams
iden
IA
The warranties to purchaser, funder and tenan CWa/P&T, CWa/F, SCWa/F and SCWa/P&T. T relation to the Employer, although this is no eferred
Sub-contracting any part of the work, in written consent (3.7.1), and the contra, for is r sub-contractors. It is a condition of any b-letti certain provisions (3.9).
on the JCT/stand iblish Wa/E
t
tontr E%
O:3
ate
Visits, inspections, etc. by th Architect or clerk or affect the contracto 's ci'n5ibilit Contract Document (3.6).
The i
r
flucl
rovisi nal surds
for is aauire to permit the pre
t#, alth the Archit
inspe
the Arc
d in o annexed
to the
g' to carry out Ar tects who use this c oice at the time of h' auctioning. n
illa
of in any way diminish Works in accordance with the
inriting,
l
(3.15) and e
form.
he
The contractor may sub-let to pers list Contract Bills. There must be not less f n thre abl the specified sub-contract v fired ti 711 might consider whether the l require th contra for to submitting its tender, in or er to dtim rage so-c ed 'D
Architect's instr tions lust confirmation of instr tioi are empowered, an these-may
t`he
altho gh this can mean written early defines what instructions iations (3.14), postponement of work ).
the site full time the Emp yer's clerk of works. The clerk of works or e can issue directions which require
e a coYnpeten person-in-charge on
ials do of comply with the contract, the Architect can order Ae (3.1 Where, after consultation, it is agreed that nonforrhiiqT work sho ain 3-18-2), then the Employer is entitled to an riate deduction. Th ct is empowered to order tests and inspection, and n-co pliance in similar work elsewhere is covered (13.18.4
ere work it re
The contract req s all wo to be carried out in a proper and workmanlike manner, and in accordance wi e Health and Safety Plan (2.1). In the event of failure to comply, and although this might under other circumstances be interference with the contractor's working methods, the Architect is empowered to issue instructions (3.19). The contract does allow for work under the direct control of the Employer to be carried out during the time that the contractor is in possession (2.7).
88
Traditional procurement: standard lump sum forms
6
JCT SBC05 4 Money ly
beadste
The Conditions provide for the contrr cto including landfill tax, levies or contri utions p (Schedule 7, Option A). Increases in the st (Alabo ccmanc as net increases (Schedule 7, Opti tions is 7, Option C), if either of these
ver 4er
--O
r+.
The Contract Sum is VAT exclusive (4.6) an the Conditions (4-2).
e recovered
iculars.
t
rovisio
ai or
w
,-+
O':0
in
h taxes,
of tender les (Schedule
ed,`rtrM
Where provisional sums ha contractor (3.16). In accor, defined or for undefined approximate quantity is includ rdereo, a variation has been application of the v uation rule
i
e by
work visio
be given to the will be either for arried out where an 's
are included, or where the quantity surveyor's
(5'2
r be invited to s chedule 2 Quotation' for work addition, the cont ctor which is the subiect o an ar itect's in ruct' n a quotation, if accepted, would the time implications and any loss bind the cont ct Pest cost f wo The ork v ould not be carried out on this basis and/orexpe e whi was issued. In he event that the quotation is not unless a c firme issued to 'roceed with the work, but it will then accepted an inst uctio ation r. les and pro ures (5 6.1). be subject
In
.
ation which is part of the Contractor's Designed n of th Employer's Requirements and will be valued odific
If th Po
tte application for reimbursement of loss and/or ontra1CV mus make The grou s for are set out (4 24) and include only vv4 ov w hich e contractor has no control and which occur because of action e b t Emp er. The procedures should be followed precisely, and the tactor's p writte notice and supporting information is a requirement (4.23). ns
ancation
.
4--'
Contract
ad nce payment of the contractor (4.8, an entry is required in the icu'la rs) a nd this might be subject to an advance payment bond (Part 1, 6). The su is to be reimbursed to the Employer in agreed amounts and at
Schedul agreed time
Interim payments to the contractor are made to the contractor following the issue of Interim Certificate by the Architect at intervals as entered in the Contract Particulars (usually monthly). Interim valuations will be made by the quantity surveyor (4-11). but may arise from application by the contractor and his own assessment of the gross
89
Traditional procurement: standard lump sum forms
JCT SBC05 valuation (4.12).
i
.-t
Interim Certificate must show the amount due, t calculation. Within five days of issue the Empl writing of the amount of payment it intends to, deduct must be clearly stated in a written no ce w a o such action. This must be given to the contra r no le the e for final payment. The final date for paym 4 s fro ate of issue Interim Certificate, and if no valid noti c#s a iv e EZI then b must be made in full. Failure to pay by he final rp of 5 per cent over current base rate,
cart aIso
th
ntra
suspend work (4.14).
Where the traditional operating of ention bonding (4.19), then this will a terie amount will be released at actical c ton.
feren
There are precise procedur s to b --fe0wed in f prep tiorY of the final account after practical completion ( ti 5). Is ue of the Fin ificate within two months of sending the final accot to e co ractor (a ays that work to be carried out at the end of th Rec on Pe d has een s tisfactorily dealt with (4.15)). h egard to notices, as those outlined Similar rules apply the Ffnal Ce ficate above for Interim Certific tes, e cc t the final dat for payment is 28 days from the date of the rtifica e
of-the Architect
is
onl
concltfsi_ve
ractL1.10
ices (2.1
The
omply with'a'll statutory obligations and give all required entitled to recover fees and charges not otherwise
r is
(2.21
T
contrctor is to n ifs hitect if it finds any conflict between statutory req ements and the C ocuments (2.171). The Architect must issue an instr uc a e c tra or is thereafter not liable to the Employer under the cont ract for any - ompl ance with statutory requirements resulting from the instruction (2.1
If divergences betw-eerrstatutory requirements and documents relating to the Contractor's Designed Portion are discovered, the contractor is to propose the necessary amendments, to be at its own cost unless one of the 217.2 exception applies.
The contractor is empowered to carry out limited work for emergency compliance and
90
Traditional procurement: standard lump sum forms
6
JCT SBC05 this will be treated as
a
#gly
variation to be value
The contractor is contractually obliged
t
wit t >ly with
(D.
particularly, where the project is notifiabl Construction Phase Plan and the healt
il
r+3
What a particular contract inclu ep d to Contract Particulars (for exampl K wh er ti amount of cover required, etc The Arch' c call for documentary eviden a 0< pass gthe ,-f
The contractor indemnifie the E and injury or damage to erty o mini backed by insurance ( the Contract Partic
in
'
C
ties
rec d
or
respt of per
nt
fl'
18).
c
entries in the the minimum sue instructions, cking. injury or death (6.1
alw
to be er required is entered in
a
oun
rks (6.2). This is
)-r-
If instructed, the c ntrac take o es insurance for the Employer against the risk of c aims rising due t uisa e. There is a list of exceptions, and damage no be at ibutable o an neg'Hge'nce by the Contractor. An entry will indicate er ma be req red 6.5), and the amount of cover to be
nt
i
provided.
treat
uranc
of0
(Schule
f
contracto
fo
xistir
3, Optio
esign,
o
stru res a d the contents is a matter for the Employer 'mited to specified perils. New work in existing and still a matter for the Employer, requires all risks cover. C)
--/,
to IeaJ
i
requi d to carry professional indemnity insurance to cover its liability should be set out in the Contract particulars. s_of consequential loss arising due to design errors not covered may be limited to a figure entered in the Contract Particulars. a''
The contra s
,-r
(Sch
be
isles where w buildings are concerned and should alue. It cary-Be taken out either by the contractor tion A)# e ployer (Schedule 3, Option B). Normally it is isk wi contra or under Option A, since restoration under riatio work d will be valued accordingly.
reinstment
773
Insuranc be for fu
fl,
.-e
'L-
the Cont act Particulars will show whether the Joint Code of Practice on ion from Fire of Construction Sites is to apply (6.13) and if so, both contractor must comply with it. In the event of non-compliance, the insurers can specify remedial measures which must be undertaken. In the event that terrorism cover is withdrawn and is no longer available, the situation and options open to the Employer are dealt with in clause 6.10 as applicable. '++
8
Termination 91
6
Traditional procurement: standard lump sum forms
JCT SBC05 v,'
The Employer is allowed to terminate the employmen of the ntr or by `a ca+ ff specified defaults (8.4). A warning notice may be sued the rch' ct, b the notice of termination is a matter for the Employe, In th case f Ive of t Contractor, depending on the circumstances, th mplo might enter in an i
r+.
otion.
fl,
agreement with the contractor for continuatio fl,
If no such agreement is reached, and in all o er cases, Works completed by another contractor 18.7), to ecid i carried out and completed at all after de con of (8.8).
w
ployely have have the
cto
'
empl
The contractor is allowed to termina n e melt forpecifie the Employer (8.9). Again, the proc ciures e fol meticu of insolvency of the Employer, th contra aye c ter
employment. .-+
Either party can terminate tl) employment o (8.11). The respective rights and d ories12) the parti1s completion are set ou
ice
8 Miscellaneous
A list of definitio releva t to Co' s in sled (1-1). ules for interpretation are set ,Xnd that out, including a g rider bi ause, 6n' refers to an individual, firm, partnership, c nd any of er bodv porate (1.4).
c
third
rights
nder the Contracts (Rights of Third
overed 1) t this might be subject to reasonable ps are conc ned.
Architect/has
der the exclusion of persons from the Works (3.2.1).
of the discovery of antiquities, the contractor is to take all necessary action to preserve the status 12 ). The Architect must issue instructions, and the `gained loss and/or expense (3.24). >eca
ed
to inform the Arc avoid di
an
9 Disputes II of the Housing-Crants' Construction and Regeneration Act 1996 gives either party a statutory right to refer any difference or dispute arising out of the contract to adjudication. Article 7 of SBC05 provides for this.
Part
The procedure for adjudication is as set out in the Scheme for Construction Contracts, subject to some limited provisions regarding the appointment of the 92
Traditional procurement: standard lump sum forms
6
JCT SBC05 adjudicator (9.2). The adjudicator's decision is binding on th determined at arbitration or by legal proce
Article 8 establishes arbitration as an the Contract Particulars indicate that The appointment of the arbitrator his or her powers are defined (
The parties agree that either
Arbitration is to be cond Construction Industry Mo Arbitration Act 1996 shal
s,
provided
apply. rticulars, and on of law (9.7).
005 Edition of the the provisions of the
93
6
Traditional procurement: standard lump sum forms
JCT SBC05 This contract? If considering using SBC05 remember that: Of
LA.
<<00
It is intended for substantial lump sum contr c is available or us without quantities. Work needs to be fully d cume d tende tage and completion within a stated period. The con ;actor m3 e quire desig identified part of the Works, in which m be def ntra Employer's Requirements at tender stag ! 0th is the with fully detailed design information; ideally at r s provided later may give rise to claims, plo is re administrator and a quantity surve
0
If used for work in Northern Ireland while for work in Scotland the
vers
be used.
Amendments are issued by the J ro time to ti The RIBA publishes contract dmiNstration for It can include partial ion, ands tional c mple ion. The completion date may be subject to adjust ent if elays re cau by a ran e on 'neutral events', as well as by events whic are th respsibi of the Employ, r. k
It allows for sub-c three names. A whereby th
tractd this 'listin
whether f
a list of not less than no mechanism within SBC05 se any particular sub-contractor, aspect of the work.
actor from
by
prov
an be requi hin o r
,
there
d
is
uired relating to decisions on matters (whether in lieu of retention, advance the Works; Joint Fire Code; liquidated fluctuations; and electronic communications. are re
nd
ages; ad
ersta
ing of its pro
or note that SBC05 requires a comprehensive s, many of which are detailed and likely to prove
nsuming.
o<3
SBC05 places mor, Employer than some other standard forms, for example MP05 or GC/Wo ks/1. The so etimes lengthy provisions are not always easy to grasp, although the late dition s gone a long way towards improving its clarity and ease of use. The form is supported by a considerable body of case law, and many helpful commentaries and guides. It is still probably the most widely used form for major
building work.
94
Traditional procurement: standard lump sum forms
0
JCT SBC05
References fact Gui -contrail ding n
1Cf JCT
F
wow
.jct rlier Prac itten h JCT Not 23: (198 Pr Note No Reg s (1995 Pr tice e 28:
Pras
JCT
P
e
6:
ediation (1995) ote (yellow covers): n Contract Tendering forms) (')
Series
Nof
Building Contract With Quantities Building Contract Without Quantities Building Sub-contract Agreement Building Sub-contract Conditions Building Sub-contract with subcontractor's design Agreement Standard Building Sub-contract with su contractor's design Conditions Contractor Collateral Warranty for a Contractor Collateral Warranty for Tenant Sub-contractor Collateral Warranty for Funder Sub-contractor Collateral War Purchaser or Tenant Sub-contractor Collateral arranty for E ployer Standard Standard Standard Standard Standard
SaLu Gui etc RIBA
uk
Davi Chappell SBG 5 Contract Administration Guide IBA Publishing (2006)
James Davidson JCT 2005 What's New? RICS Books (2006)
95
6
Traditional procurement: standard lump sum forms
GC/Works/1 (1998) The Stationery Office
GC,/Works/1 With Qua Background GC/Works/1 first appeared in 1973 as a central government departments. GC/W is published for use in major civil engi design and build, or management government agencies and private
f,
The form is part of a family of GC/W versions as follows:
GC/Works/1: GCJWorks/1: GC/Works/1: GC/Works/1: GC/Works/1: GC/Works/1:
With Quantiti
Without Qua
-9-98)
Single Stage D Two Sta e
nd Build (1 uild (1
With With
racts range of contracts
antiti a
struct structi
misL buildin
nt Trade Contract (1999) ment Trade Contract (1999) and engineering projects. The further includes:
rks label is-comprehensive and
nd civi ering inor works (1998) nd ele ical enci veering works (1998) engK eering, me, anical and electrical small works (1998) ment cons tants (1999) eement fo?, bnsultancy services (1999)
GC/Works/ GC/Work GC/Wor GC/Wor
GCNV W5'. Works C1Works/7. C/W rks
C(
titie
ra
or /9: for operat otions (199 r facili
term contract (1999) m contracts (1999) contract for equipment maintenance (1999) nd maintenance of plant, equipment and
-+,N
GC/Works/1 (19 8) With Qu ntities is a particularly complete publication and can be wide ange of applications. It is similar in structure to its adapted to sui immediate predecessor and even uses the same numbers for most of the Conditions. There are fundamental differences, however, in the text which are not always immediately apparent. The earlier published form was intended almost exclusively for use by government departments and reflected the methods and procedures of contract administration then used by them. The form was not intended to be even-
96
Traditional procurement: standard lump sum forms
6
GC/Works/1 (1998) handed in all matters, and the Project Manag afforded solut ut many of his or her decisions being 'final an ive/e`n`tecur t for is claimed ?rn ample ploy (f to be adaptable enough for use by non-c NIna'rus c.) and local authorities, educational institution to-produce by private sector employers. To facilit e this a form which strikes a fair balance be een the ver n the one e has been hand and those of the contractor. on e o er. Jai? ct t th er's decisions introduced, and there is recognit are now open to adjudication.
com ing complies with the conditio soft Act 1996 (Part II). Amendme 1, ap take only, was published in_ 000 claus Excellence' initiativ engineering and w le life costi The form takes account o
datns to
ham Report, and and Regeneration esign and build forms
e L
ts, Cons uc rks/1
to
n
vernment's 'Achieving over
isk management, value
over SQ, pages. There is JW introduction and contents list, h ar set ut in a clear graphic style using well ablishe terminology. Also included are a straightfor and la m7s mmary fo contract administrators); a detailed s Schedule f Tim Particulars but with an Addendum for alphabetic index--t],jpe cust ofm a ry information et to uppliedl- and the tender forms. The Contract entrie Ag r versi s so hat th contract can be under Scots law, or under les an Northe Ireland. th The documen r followed by 'the
,gtd fins w Li
for use in nNjor building or civil engineering works. bnditi y th d sub-contractors; rance for design; professional inde incentive bergs for arly'-6ompletion; charges; on praymen to the co ractor on the basis of stages, milestones or valuations; s;
parent company guarantee; collateral warranties. The factual details relating to a particular contract and the incorporation of option provisions will be determined on how the Abstract of Particulars is completed. The
97
6 Traditional procurement:
standard lump sum forms
GC/Works/1 (1998) Abstract is detailed and among other things re qu es the name3-,of th Pro Manager and Planning Supervisor (who may be th rojectilanr) entered There is also space for the adjudicator and the arbitr torto ed in this dcbcumen It is recommended in the notes that the same adiudic in all the Employer's related contractual docu ents; consultants or others. This could be problem tic if the
tie
A Contract Agreement is to be execu Government contracts are not normally, execu attestation if required.
Synopsis 1
Intentions a fair dealing clause cooperative and open rela onship
There is a
The contractor is to exec e th Programme, with all reason le s
J-'o
with di
ks
and care, form tin ith the
part of the Works doe Manager, then it mu terms 'the Works' The contractor of such work care
(1
%
accordance with the anlike manner. If any ntra ands rejected by the Project for a its own expense (31 [6]). The
fined responsi ility for design work in respect -d-sub-contractor or supplier. The e fessional duty to exercise reasonable give a itness for purpose warranty (10
uire
out-by
contractor's li
e
skill and ca
hi
either [ve A)
-
Alternativ ave sabified iVelf about the conditions under which he payment i3-,Alowed except for unforeseeable ground
itions
s'f
'
bills an
oration ra
ctor must be prepar of th Wgrks, a competent contr
e
The 'contract'
is
to conform to the requirements of the
fit for their intended purposes (31[2]). The
`sfy the Project Manager in respect of the execution sing the skill and care expected of an experienced and
_+.
con
be
ELF
i
00.0
f
qu :ifi
ans the C htract Agreement, Conditions, Abstract of Particulars, bitfs of quantities, Programme, tender, and the Employer's
Specification, drawii written acceptance (1
st
[1
]).
If discrepancies occur between Specification and drawings, or between drawings, the contractor is to draw the Project Manager's notice to any discovered (2[3]). The Conditions prevail where documents conflict with them (2[1 ]).
98
Traditional procurement: standard lump sum forms
0
GC/Works/1 (1998) Bills of quantities are to be prepared in accor identified, except where stated otherwise are to be rectified by the Employer (3[31).
the Vyicrr
The contractor is to receive a copy of Works' in a form which the Project M agerco
fl,
The contract period will be state
in the ay
tai,
will notify the contractor when All notices under the contra
e
r o
slued 'durX fg th p gr uitabf or r orodu
ide
ct
st
__10
iing1 tae
mi
rs
artic the [3
.
accordance with the hole of the Works or thYthe contract, and to the tion (34[1 ]).
,C7
The contractor is required proc Programme, or as the Project nager ted ri ject Mana e dat i
,-+
The date for comple ion is set out in or asc ained' om the Abstract of Particulars (1 [1 ]). This envisages ra ct al comp) on It 9 not called such) and includes all Th>I s not clearing of rub orpo ated (34[2]). i
i
ired
re
t submit-a, ogram
lo61 [11). The Pr
ion, a
(35[21), and the contractor is obliged to ing requests for extensions of time and reat lest five ays before each meeting (35[31). If notice is er is alrea dy aware of likely delay, he or she shall consider nsi (36[1 ]). The causes for which an extension may (36[21), and the Project Manager is to indicate whether the final. The Project Manager is to keep interim decisions under ikon is possible (36[3]). It is interesting that weather is not
meetings
re to
e
mar
ogr ss, incl
until a`final
fl,
COQ
(D-
--O
+-C
it a writt gram ven, or
e prior to acceptance of the tender, gramme is to be for the whole period other specified information (33[11). fl,
ris g reed
iced as
ay.
ired to issue a written statement of progress within seven
The Project Manag
meeting (35[4]). v,'
ss
is possible upon direction by the Employer, subject to of contri tor's priced proposals (38). The contractor may also choose to l5osals and Programme amendments for the Employer to consider.
on or com etion
r6)
The Project Manager shall issue a certificate when the Works, or any Section, are completed in accordance with the contract (39). +-.
0-O+
+-,
Failure to complete the Works or a Section (which includes clearance) by the relevant Date of Completion makes the contractor liable to the Employer for liquidated
99
6
Traditional procurement: standard lump sum forms
GC/Works/1 (1998) damages (55). There is no reference to
a
certificate
BCD
--+
The Maintenance Period will be stated in the contract accepts that there might be more tha contractor is obliged to make good defects at Is the Employer. Any arguments about liability d reirri defects have been rectified.
ion-
rn leti
f
A
Pa
icu
s
1
D.
e IVWjA tenan e Perio sst
rs
aand
to t
ent m
e satis a
io
t wa until
There is provision for completion of the of Particulars (1 [1 ]). There is provision for the Employer and this also relates to completio
w
a,°v
arly
3
sess
Control The contractor is not allowe o assign written consent of the Emp yer (61). S b-lettir of the Employer or the Proj ct M r (62[1 ]). In any sub-contract, t contractor is respons imposed upon the completed (62[41
rre
is requir to rtain terms (62[2]). The ing th sub-c6 tract rs comply with all obligations ntra c m t see that sub-contract works are
acto
supplf(s/may (63[1 ]). The c
a
is
sub-contra will bear t sub-con complete a pa
ted-(the
basis of a Prime Cost sum for the performance of any nominated tif o lau 3A is stated to apply, the Employer the e ent of determination of a nominated gay r ominate replacement or direct the contractor to ere are o sta d procedures and no requirement to use t. The cont for is given right of reasonable objection
entirely
r
b
nomin
spons)onal
(6
I
struoti can be o
(Ii ted) are
nager must be in writing (40[31) except for a few ed later. The contract sets out what instructions
powered (40[2]).
te n y the Project Manager or delegated to his or her representative (4 a re! co tractor must comply forthwith. Instructions requiring a variation are ter ed 'Vls'. T Project Manager may require the contractor to submit a quotation of the fu of complying with a VI within 21 days of the instruction (40).
Instructio
In the event of failure to comply with the Project Manager's instruction, the Employer may have the work done by others at the contractor's expense (53). This right extends to rectifying defects (21[3]).
The Project Manager is to provide the contractor with information necessary for 100
Traditional procurement: standard lump sum forms
6
GC/Works/1 (1998) setting out the Works, and the contractor the setting out (9).
is
for th cor
lely
-(D
The contractor shall employ a competent a t (5) *4(/is to s pervise in attendance at site during all workin rs, d supply t Proje a returns (15). A clerk of works or Resid r vbe a point d, an Manager or quantity surveyor may app int reores cise th powers which must be listed (4)
-
The Project Manager may in ect, exa n or vet is d out (31[4]). Independent experts may be bro 101-it irt, tes es o uita ity-of Things, and if their findings disclose nonit e contra t n e contractor must
bear the cost of rectificatio
ertest
ssar
connection with the
[51).
e exec
4 Money The Contract Sum is s
re
f
Proje
ire instruc
]) in
and ns in
o
.
the atio
iting is as
gins
t Ma age
there
[1 ])
om the Project Manager before work ovided for in the contract (42). u
ems b
1
ay be by acceptance of a lump sum `tity surveyor will value on the basis set of o v iation instruction, or (43) in the case of other d &u ptio costs may be included as part of the
uctions (40)
gre, ment, c
rinance charges stated per (47[
able to the contractor only for limited reasons, and for and43]). The rate is to be stated in the Abstract of Particulars
E
contr
tion d disru tion expenses generally is limited (46[11). The in the d" ions. Interest and finance charges are expressly overy of expenses depends on written application from the ie Project Manager in time (46[3]). The application must meet Qn3
';-.
O)._
e
Progress ayments, t rmed 'advances on account' (48), are based on either Stage Payments, Llesto Payments or Valuations (50[2]). Payments will include for work executed to the satisfaction of the Project Manager, and the contractor is entitled to 95 per cent of the relevant sum, plus 100 per cent of certain other sums and certain adjustments (48[2]). Stage Payment Chart and Milestone Payment Chart are defined (1111).
After completion of the Works, the contractor
is
entitled to be paid the amount 101
6 Traditional procurement:
standard lump sum forms
GC/Works/1 (1998)
#f
uiiy
Th the tent estimated by the Employer as the Final Sum, less mon s of in surveyor shall send a copy of the final account to th contr for notif agr me or herw certified completion (49[2]). The contractor m hen th final o n is ased within three months. The other half of any and AW t Certificate is issued at the end of the last ai en ce Perio contractor has complied with making good efects. 5
.
Statutory obligations The contractor is to give all statutory n ices req ' e , ob ' any loyer ill re' s or urs and pay fees and charges arising. The E rin 'pal act incurred. An obligation on the co r or ting with the CDM Regulations is expr ssly st
The contractor is also required to cori stated in the Abstract of Part he is working (22). The contractor is required t storage and use of all Thing
ly
with all statuto ht on to
requin
ll
6 Insurance
the duration o the Contract and the longest rance; in rance against loss or damage ' liai insurance against personal injury atement va required within 21 days from The e be evide f-qp e ny, (8). nder native ). e con actor may be required to maintain the E ployer, he contractor and all sub-contractors to the A stract of Particulars (Alternative B).
The contractor is r
uired Maintenance Per od: e ng to the Works and
ma
r
=follrein
or damage acceptance
I
insurance in accor
and in connection with a contractor's act of ntractor may be required to take out and maintain ce cover (8A).
ofessional
or damage to the Works and even extending to the Works 0 9[61). This is in respect of any loss or rises because of 'accepted risks', defined in (1[11), ndit ons or unforeseeable circumstances beyond the control of the contract r, the contr, ctor will be reimbursed by the Employer. There is an absolute obliga ion on th contractor to reinstate, replace or make good to the (19). satisfaction of the Emp
T e co
tr
or
t'-6
00-0
an Things not da ma but unforeseea
is
resp
for incorp
vrthis
oyer
±-a
The contractor is to take precautions needed to take care of the site and the Works against loss or damage from fire, and any other cause, and shall take all reasonable steps for security and protection of the site and Works including lighting and watching (13[1 ]). 102
Traditional procurement: standard lump sum forms
6
GC/Works/1 (1998)
The Employer may determine the contr Contractor. This is a discretionary power upon some default by the contractor
addition, the Employer has the rig by the contractor including insolvency In
The contractor may determine following determination by th
Matters following determ 'on removal, transfer of sub- ntrac surveyor shall ascertain and t
completion of the W
Mr
th
ar Proje
r
Ngerl
The cont
quantity the ost to the Employer of
reasonable notice before covering up the Project Manager has examined the
`r
ns until
(
ProjMan'ageriay
order
th, replacement
of the contractor's site staff, Manager has power to control the admittance vii
TJe
ment, completion,
ground conditions (7(4)).
The Proje
work
a
in Co di on 57. The
'-`
uch as a requirement for passes (27), the taking of photographs all employees of the Official Secrets Acts (29) may be an the Abstract of Particulars. r-+
obligations relating to the protection of the Works (13), isance (14) and the removal of rubbish (34[2]).
There
is
ron
)for the discovery of antiquities (32[3]).
is xtrem wide provision for recovery of sums where money is owed by the contractor or to the Contractor, under this or any other contract with the
There
Employer (51). 9 Disputes
There is provision for adjudication for the resolution of any dispute arising during the
103
6
Traditional procurement: standard lump sum forms
GC/Works/1 (1998) re tice course of the Works (59[1 ]). There are precise require, ents f 'r the 2 ays o the and the procedures. A decision may normally be xpecte wit notice. The adjudicator's decision is binding until e disp e is hally O et& ined legal proceedings or by arbitration. 13
0
Arbitration is included in addition to adjudicati (60[1 ]), and the arbitrator is given wide pow
104
ea
under t
of dea co
ract.
ng wi
disp
es
Traditional procurement: standard lump sum forms
6
GC/Works/1 (1998) This contract? If considering using GC/Works/1 rememb
for lump c government, but it was substantially vise wider application, including use by rivate sector intended primarily for use by govnme itho a version for use with quantities This was the major form
.-f
us
tion t alto
rthern Ireland or iffer nces in arbitration n Irelan
and Scots law. There ntries, and a different c(0
it can be used for work in End Scotland. In the latter case resulting from the contract eing are relevant references to sta e law Contract Agreement f Scots given in the Comm tary unde Back
fted f
er helpful information is
I
r,.
tages, de e contractor with professional it can include co pletio indemnity ins uranc , sec rity measur ession, acceleration and cost 'suppliers, mobilisation payment, savings, bonus no inati 0 o f sub- ntracN lieu of retention. The wording is bo alternatives f r adv ce o n ac unt, roced are logical, and there are many clear, with good raphi Iyout. featur sin e ro ons, for exa ple, that the contractor is to provide interestin gress contract administrator, and that the regular p its for /com mer by t contractor b rs any losse_ resul c from failures on the part of nominated sube whole the orm aces more risk on the contractor than JCT con actors. Qn 'v,
'
SB 05.
hen ckmpNing f
act detai
,
the Abstract of Particulars
is a
vital document
whicNo/tailor
t Manager, contract administration should
tines
0a)
0)(D
be relatively obligations and responsibilities are clearly stated, the person derable authority, and the procedures are not arduous. eep a careful watch on the Schedule of Time Limits.
ihtfor
epor recommended that government departments then using egin to change to the New Engineering Contract. The current 199 G or s/1 f mily of forms may be seen as a robust response to that It has merged as a versatile and well structured document which suggests embodies many of the Latham Report's points for 'an effective form of contract in modern conditions'. Amendments to the design and build versions were published in 2000, to introduce some of the recommendations of 'Achieving Excellence'.The Government Central Advice Unit also publishes some excellent Information Notes from time to time. he 199
am
1
sh uld
fl,
ork
G
3
105
6
Traditional procurement: standard lump sum forms
GC/Works/1 (1998)
GC/Works/1 With Quantities (1998) General
Conditions
o
106
Traditional procurement: standard lump sum forms
6
NEC3 The Institution of Civil Engineers
New Engineering Contract Doc
Engineering and Contract Third E Background This form is placed under (ng o> `T clit-ional ent and Lump Sum Forms purely for reasons f conv' it ally pah system which was a bold and major initiative in draft onst c co racts. This resulted in a form which is adapta in lump sum, design and ed to ble build, or managem t procure en neering and building works. d for i
a -Third Edition development of tract NEC). This was an entirely new contracts undertaken for the by a panel of engineers and lawyers
The Engineering a Con ru on Contra what was first calle the ew Engine hto draftingir clean sheet' cons
Institution chaired by
Civil
o.
r
ers.
Barn
pare
of Coo
and
L
brand, London.
to r+'
was
gi
Mar
aking one purp document suitable for traditional procurement, c)or ma gem t co acts. It was further claimed that it could be ost t s of civi engineering and building work, from largeably adapte fo cale pr sect mestic-sca work. Although drafted as a head contract, it houg t that' could Iso be used as a sub-contract, thus providing the s origi II tein b k to ack compa ' ility. The language of the form was such that it was uitab le r use under UK law and also overseas.
terming
,.,
,-r
form to be exportable, understandable, and therefore likely isnutes: was also drafted with plain language and relatively short e precise meaning of some of the more unfamiliar Has yet to be defined by case law. er, pro
f fici ad to fe clauses kept ity__s.V
°v,'
fl,
n an
fl,
0
c>.
0-0
tfnent n the part of all parties: it was felt that there should be an end to adve arial posturing by bringing into the contract an obligation for frank and open discussion lems as they arose, thereby minimising the risk of disputes escalating to the point where time and costly overruns became inevitable. It was further thought desirable to introduce incentives for good performance and early completion.
3 Good m n
r(6
Sir Michael Latham bestowed high praise on
the original New Engineering Contract 107
6
Traditional procurement: standard lump sum forms
NEC3 in his 1994 Report. After listing what he considered G be d irab featu should be present in all modern construction contra he s ted at e app ach of the New Engineering Contract is extremely -acti e' a d t t it ontai < 'virtually all these assumptions of best practice'. went to ad ocate c tain changes to the New Engineering Contract, so e hish were as f Ilows:
f
that the name should be changed to New Co struct ion to NEQ that there should be provision for a sec u tr t fu in that there should be prompt payment rovision -co ctor that there should be affirmation by the p ies t al lin ere t basis;
that core clauses should be left una ende nd that terms of appointment for consulta sand contract; given to a that consideration should
ly *u
cobble su tors-sliold
in
available).
f'-
omm nded tha Departments should begin changing to the th a 'the use ded) by private sector gly clients should be d Sin the Report was published, with its 13 principles for mod ion of the form appeared in 1995. Reports in cate th, een taken p widely, and that it is now being used on pro' is in se ors of car on and engineering in various parts of the w A example o this is t the English National Health Service requires an ende r of N K2 to e use on its Procure 21 projects. .-+
The Latham Report also str,
bus
tion
e
th
conce is
s
h
indicators a thir rt opti s ee increas those dealina1with 0
ced some significant changes to the register, 'Key Dates', key performance introduced. The number of secondary been made to existing clauses such as ion events, correcting defects and adjudication. intro
a nsla
fl,
The publi suite. Ne
w Engineerin hand on ction Contract system comprises 23 documents, which i We ICE-C3, a short ontract, sub-contracts, a professional services contract, an adjudicator's erm services contract, and a framework agreement, together with r nce notes and comprehensive flow charts. NEC3 is intended as a refer ment, and contains Core clauses and Optional clauses.
in'
-0.
fl,
The
108
O..
rpm
The Core clauses are set out in nine Sections, and apply in all contracts. The core clauses allow for a flexible amount of contractor design, enabling the form to be used in traditional and design build procurement. The Main Option clauses constitute six sets of clauses A to F, and one set will be added to the Core clauses to adapt the
Traditional procurement: standard lump sum forms
6
NEC3 document to the type of contract requir Quantities or Activity Schedule; Target Management Contract). These Main 0 payment system. For convenience, ver with each of the six Main Options ar
/xample
rice
Cot
eim relat to ase 3 with t e cor
+n.
;
There are also Secondary Option required. Some can only work in are 22 headings (X1-X20, Y(UK and
to allow for performance bon payment; sectional comp) fluctuations; retention; bo g
The NEC3
is a
no
I
h
n
as
lauses. There
cer
K) w can ted as required part erin y rma icators; advance imita o bility for design; ont c is mp delay es; low performance to ta' e co itions to the intended
piece of draft
terminology could ause
or not
hic
ses
roblems tense throughout is Iso r her disconce attempting to nstr its terms. s
in
er inf d has
to the
wage' but non-traditional tion. The use of the present een criticised by lawyers when
min
sum o o def is ou is h mea s that so m
p_0
oncer
(o,
to more traditional standard forms. contractor is paid the value of work which is witho delay or be covered by immediately following ork', ective work will be paid for during the proje tho h the co ractor ultimately be responsible for correcting all def ts. Ano oblem tha the co tract does not state clearly the contractor's Ot el of liability bf n, a ough e inclusion of Option X15 implies that it is ende ortunatel, this lack of clarity means that the form is nt. uently Some conce `ts will For exam , and the
'vi
'
r"6
mulate good management, emphasis is laid on the contractual ve programming, sound management, and the need for early ct Manager and the contractor in order that matters which ss and additional costs can be properly considered at the e recently introduced risk register is a further tool to identification and management of potential problems. Use sa select the appropriate Main Option. Then the Secondary Options can be considered and incorporated as desired. It is necessary to determine the makeup of the contract content before completing the statements of Contract Data. The Core clauses are relatively brief, and the information carried in the Works Information and the Contract Data therefore becomes extremely important. Part One of the latter consists of information to be provided by the Employer, and Part Two is data provided ,-+
fl.
First, it is n
109
6 Traditional procurement: standard
lump sum forms
NEC3 le/and tRe
by the Contractor. Because of the number of options will be related to the selected options, completion o, Contract Data needs to be precise and approache
Os
I
I
rma
at c re.
Synopsis of Core clauses
ramvocu
The intentions of the parties as indicated in from the Core clauses, the choice of Op by the Employer.
The contractual spirit of mutual try Section' (10.1) of the Core clauses:
is expre
There are clear rules relating to submissions, records, etc.) (1
unica
Early warning is a significan difficult concept in practice
A register of risks is set The register may be a Project Manager m
ntract,,
start the pro ct ari incbded in the Contract Data. du g the urse f the roject, and the contractor or a risk r uction ting t discuss the noted risks (16).
1ecanager
quired notify t
tion to prov e the Works in accordance with the necl in c s 11.2. It is important therefore to make is full, clear and accurate, e
contract
I
ntractor
y the contractor (21) and questions
lows
is
respons is
of copyright are
'ooperation over providing information, and the contractual obligation (25).
Title to plant, eq pri eml and aterials is normally vested in the Contractor, but may pass to the Empl er where t e Supervisor marks goods and materials as being 'for the contract' (70). The s f title is allocated a complete Section of the Core clauses. 2
Time vii
Starting and completion arrangements are straightforward (30). Possession of the site, access and use is subject to conditions (33).
110
Traditional procurement: standard lump sum forms
6
NEC3 Programmes should be identified in the Contr Project Manager by the contractor. If the c 25 per cent of any amount that would oth until the contractor complies (50.3). T Programmes may be revised subject to The Project Manager is empowered to i not started until instructed (34).
,for other fails
ro ue o the o n t r a b incl ed is des
ue iostru
hi defin' The contract may stipulate ' y Dates or ge complete. This allows the work f on cont the Empl e hr urre dovetailed with that of anot efault ainst t a key date can be claimed
Procedures for using or to to conditions. Posses on of a6
ipa
upon certification b
Manag
The Project Manager
the Proiect
e Employer are subject
art o
rtef the
whole site,
is
dependent
(35).
uire the contr hieve ompleti
it a quotation for accelerating contract completion date (36).
terve ing events, these may constitute occur re are fisted, nd for weather in particular, precise Compensat, n Eve Contract D a. The contractor is obliged to notify req u rem is can e in de'd Project Manager will decide whether f such/events, the Projecf lanag ue (61). viousl t early warning' requirement will betaken into compe d a complete Section 6 in the Core clauses. on Ev tsar at acco
Where dela i
instruct the ontractor to submit ssoaa
accor
if the con
a
quotation to deal with
e delays (62).
pensation Vents is a matter for the Project Manager in pin rules and procedures (63 and 64). The Project Manager must cto his or her decision.
rol he early
o
r+u1aaager nd the Supervisor are both given considerable powers, and delegate. T e Project Manager is empowered to issue instructions to the tin o changes of Works Information or a Key Date (14). The contractor must submit names, qualifications and experience of key people. Replacements are subject to acceptance by the Project Manager (24). The Project Manager may order the removal of an employee from any further
connection with the particular contract (24.2). 111
6
Traditional procurement: standard lump sum forms
NEC3 The contractor must arrange for access to Works, ma Project Manager, Supervisor and others notified b
7
plant-( _
ect NP-Qag
The contractor must obey instructions from the Pr
authorised under the contract (27.3). The contractor is wholly responsible for th contractors are subject to acceptance by the
work o
t&
Tests and inspections carried out by "the tr ay b,;-,, sts, Supervisor, who may also order the c tractor to-EkhW o
own tests (40). The Supervisor may instruct the c tracto not the Supervisor notifies him the ractor end of the Defects Correction
rch for-,defects
(
char
no r teren
The contract mak
s
obligation to assi
the b
efitxA co
to
i
n
ent,
Q..
,-+
Where Works have been t )ken over y the Emuploy ject Manager is to arrange access for the con actor o rrect defec Whe it is agreed that defects need not be corrected, then there ay be ork nformation and a cost reduction (44).
ther than the contractor's
racts on termin tion of his employment (96).
4 Money An Addend
ssential saa Gra
takes acco
this affec
a
.-«
mee
is on NEC3 in the United Kingdom), nstruc on and Regeneration Act 1996 and set ut in Section 5 of the Core clauses.
e Project p
The
Vana(
a
ust show the amount of payment due, subject to ction, and the basis on which the figures are calculated
oject Mana
any Emp
u
(Y2.2).
1
The date on
whit
payment on or before the date on which a payment d payment is made on or before the final date for fl,
e, and ea meftx l.)-i).
aymen
the final date for payment
ecomes due is seven days after the assessment date, and days after the date on which payment becomes due
is 21
(Y2.2). If the Employer intends to withhold payment after the final date, he must notify the contractor at least seven days before the final date, stating the amount he intends to withhold and the grounds for so doing (Y2.3). 112
Traditional procurement: standard lump sum forms
6
NEC3 Interest is payable on amounts due but npaid, and Manager's certificate which is due but issue late. T e in the Contract Data (51). Suspension of performance by the cony fa r to make proper payment is treated as Comp Y2.4). There can be price adjustments fc(r
the event o/the
i
do Option X1 (applicable only for Vain Opti Adjustment Factor.
sa
n Eve
D)
culat
o1e
t
oykXfailure inco
(60
orated by
under 6pplementary
ion
i
E
o
o
h
basis of
a
Price
Statutory obligations tify t
The contractor is obliged to
anything in the Works 0
do
The standard isks to to be carrie by th Risks
not emised
s
r
corrects th Work
oul
r
e ill
form
al
if /he becomes aware of )
at it complies with Statute,
'on
fl,
fl,
If the Project Manag this may be a Comp
Pro' ct
hich
ec
ob ried b
;),y0-r,.my b ng ca
he Em loye are itemised, and any additional risks Bred the Contract Data (80).
ied
vii
5
respe
i
i
to be carried by the contractor
e Empl yer are
(81). Each
I
arty in arisin
m
fro
k
ies th n ent
ther 'n resp t of claims, proceedings, compensation or 'his at sk of the party concerned (83).
w
esp nsibil ties ar abled a d as stated in the Contract Data. Policies are to in joi t names, a en o in the case of the contractor policies and t to acceptance by the Project Manager. If the contractor fails ployer may insure and charge to the contractor (85 and 86).
uranc
fl,
be
s
ils
Details of 7
jurahce obligations and
(1)
policies and certificates must be submitted to the to submit, then the contractor may insure and charge ,-+
es,
~.,
co
cover are to be stated in the Contract Data.
Termina Valid reasons for termination by the Employer and by the contractor are set out in Termination Table (90.2).
the event of termination the Project Manager issues within 13 weeks certifies final payment (90). In
a
a
Termination Certificate and
113
6
Traditional procurement: standard lump sum forms
NEC3 Following the certificate, termination procedures ar Termination Table. The Employer may elect to complete the Works hi and may use any plant or materials to which h
er co
Payments which may be due on termination ar, as set o
8 Miscellaneous
Main Option clauses can include Activi (for B or D).
Sch
Use of the NEC engineering and con uc services contract seem to be re i red
su ss o
ntract
a
ich
incorporated. Secondary Option clauses ca beincor p rate to ma for inflation (X1); changes i the l 2); m ulti e curr cies
+>,
r price adjustment 3); parent company mpl ion (X5); bonus r ear guarantee (X4); sectional ompletion (X6); delay damages (X7); partner' g (X ); p ormanc e onc vanced payment to the contractor (X14); limi do of ntra c s de si ccii lia bi ty to using reasonable skill and mag s (X17); limitation of liability care (X15); retentio (X16). low erf or c (X18); key perfor nce in and aTditional onditions of contract (Z) may be incorporated in whici e stated i the Contract Data (option Z).
-Co
`dam
Option Y(UK)3 shou the law of E glan of third p y rights
Contract Data for all contracts to which fern I` nd applies, and is a contracting out (Right of Third Parties Act) 1999.
d into
e inc6rpora les, a
Cont
9 Disput
met
dication out in Options W1 and W2. Option W2 using Grants, Construction and Regeneration Act 1996
Alternative
tbeu plies to
t
n
der`Qp
W1
the
etailed procedures ksation TablLd Botion
,
2
Fs
a
contract and the Project Manager are to follow including the limits on timing as set out in the procedure which complies with the Act.
' final and binding unless and until referred to a further to be arbitration or legal proceedings will presumably be stated in the Contract Data. If arbitration, the procedures to be followed appear not to be stated in the contract and would presumably be for the parties to agree.
The adjudicator
ecision
'tribunal'. Whether this
114
is
Traditional procurement: standard lump sum forms
0
NEC3 This contract? If considering using the NEC3 remember
tkt:
The idea of Core clauses to which sele( e clauses may be added to produce a tract W
of circumstances is seductively attractiv n and the various options can res producing great variability and risk o
clause and n be t re
al
ci
k
Nkor Thkre
n
di
s W
%
The Contract Data and Works Info at io former is not to be changed ntra supplied by the Employer formats, and is information ne sary a
S
o a pa
this
pproac lawy rs
on
is of the NEC3. The
ichme
nc
tia
o
orks Information n be p
sented
in a
variety of
e law of the contract, the There are no stated `trictions' language of the con ract, a n d t r)e curren of th onrdt should be entered in Part country in which the site is One of the Contrac Data. Cha ges in the w of e p ' n is incorporated. Additionally located might be a mpe sation Ev Addendum Y(. 12 es account ous ng Grants, Construction and Adde K)3 akes account of the Contracts (Rights Regeneration ct 199 will be applicable for England and of Third Pa ies) A 199 Wales, N rthern relar (UK)3 will be applicable only to England an Wale dd Nort ern Irela
cted in a for w6 this engineering provenance, there is no hi ct or a tity sur yor by profession. The key persons are the ages the pr curement of the Works for the Employer; and er, who certai responsibilities on site for the Employer with sor,
to an
lect M
Supe he or
who
releva
e has
entri
r.
fl-
Pr
t
t
°,v
As m refe er
ervices.
m requires selecting or assembling the appropriate options, and to 13 pages of Contract Data. Attestation is by a separate
quires attention to communications, early warnings, rmation, and Compensation Events in particular. A cooperative itude is essential with NEC3, and there is a strong emphasis on ent. is as little legal pronouncement, but some well respected legal commentators have expressed reservation over what they consider to be many unresolved legal issues. However, the form seems to have been widely used without serious problems.
There
vii
115
6
Traditional procurement: standard lump sum forms
NEC3
and and and and and and and and and and and and and and and
construction construction construction construction construction construction construction construction construction construction construction
c22222-,,
contract contract A: Priced contract contract B: Priced contrac contract C: Target contra contract D: Target contract contract E: Cost contract F: Manag contract: Guidan contract: FlowKhart subcontract short subco professional services contrac professional services contract: construction short construction sho Adjudicator's contract Adjudicator's contract: guidance Term services contract Term services contract: gui Term services contract: fl Framework contract Framework contract: Procurement and co Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering
Commentary (rela Brian Egglesto The NEC3 E Blackwell P,
116
The Joint Contracts Tribunal Ltd
Intermediate Building Contra The Joint Contracts Tribuna
Minor Works Building
C
The Joint Contracts Tri Repairs and Maintoance Con rac
Coma rcia
Association of Cons ACA Form of Building Agrgement 1,992
hir
200 Edition
dAion 1998, 2003 Revision)
Scottish uilding Co ract Committee (SBCC) SBCC Forms of Co tract
(Do
3.O
Just what constitutes a shorter form is arguable. For the purposes of this book, contracts which are comparatively brief and easy to handle in terms of administration are included under this heading. This need not necessarily imply that they are solely for smaller works nor indeed only suitable for lump sum contracts.5ee also Chapter 8 below, in which short forms which are more likely to be categorised as consumer contracts are covered.
0
118
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05
The Joint Contracts Tribunal Ltd
Intermediate Buildi Background With the introduction of a then 0 he Standard oplii Form of Building Contract (JCT ),m a hi s fel ked a contract suitable for middle range jobs. he RIBA ex s d t on in October 1981 the JCT set up a working pa o epar 'in me 'a for With considerable input from constituent both rti ar th the n of District Councils oc' and the Association of Me o lita ut rities, nterm ate Form appeared in i
l
September 1984.
of 12 Am h was to meet many of the recommendations adeinf h4atham R ort o 94-*corporation of Amendment 12 ensured compl nce with Part II o Hod ng Grants, Construction and Regeneration 19 6 in Stpect of kdj_ a d payment provisions. IFC84 was the subje
t
The 1998 IFC84. Th
have be n
i
.-+
Contract which is
tion nterni iate F as basically a consolidated version of most entitled the Intermediate Building n twos versa orporates m ny significant changes, the scope of ilar t rthM for SK05. T 'r provisions for naming sub-contractors retained.
E
m iate uildi Contract ifs now published in two versions, one 'with ision for the contractor to design an identified tracto ' d sign' which ort IN of th Work (ICD05), ar one which does not (IC05). In all other respects the verz ins a e id enti al, therefore the points raised below can be assumed to apply to bot version unle Vindicated otherwise.
-
am=
e Int
v_0
n,.
how run to over 80 pages. There are eleven Recitals in the icles. The Conditions are arranged under nine headings, in e wit 5. T p re is a contents list at the front which gives clause and page numbers. ontr ct iculars (to be completed by the parties) are also included at the front, a d the Con tions are followed by four Schedules dealing with insurance ed su -contractors, forms of bonds (in relation to advance payment, and options, off-site materia s and goods), and fluctuations.
versions ICD05 version an
-l,
Q-0
,-+
The Intermediate Building Contract has the virtue of relative brevity, a clear layout and commendably easy cross-referencing. Although the wording of the clauses is of necessity truncated in parts, the Conditions should be adequate for the foreseeable circumstances of most middle range projects. The introduction of the ICD05 version
119
Traditional procurement: shorter lump sum forms
JCT IC05/ICD05
,-r
expands the range of projects on which the form to be a popular choice.
for sfiiWili
r-+
Oo'
,-r
a
c,_.
-+,
The inside front cover of IC05 (not part of th e These refer to building works of simple c ntent a installations. Most important, there is a remin th this eJ mu be priced entirely by the Contractor, and t billed or specified at tender stage. tea,
JCT Practice
Note 5 (Series 2) suggest
projects and it
v.-+
n-0
of up to f375,000 (at 2001 prices) but accepted that contracts may Experience suggests that the form is
the nature
It is important to note that
t
e
e new Prac
suit ty isr ica`t ya act de?iQd not ex'ceeN
assfu
ich sh does
the'
o
its suggested. 0 'siderably larger
ica
mate determinant. any limits in value
1ong`6,QTKkn e use
tract value 12 months,
the
or period. ICD05 lists an additional crite ion fd suitabilit part contractor is to design that design have be n detai r on
!e t
m is suitable where the the Arks;and the requirements for the mployer.
The notes state c `arty th t it i n ble for desig and build procurement. The dministrator (Article 3), and to Employer is requi d to a of t an ar hitec inted to un rta ke duties required of a quantity surveyor name whoever is a (Article 4). T twervison and Pr ontractor will be identified in entries
to Articles
e Co tract Do
me
ract Doc ents as being the Contract Drawings, ent or e pecification. Where a sub-contractor is s are also t be included. For the ICD05 version, the elude Employer's Requirements, Contractor's Proposals CS'
d a ODP-4halvsis.
ws the contractor to tender either by pricing the ecital (fifth itemi bills, Specification ules (Option A), or to state just a lump sum based t itemised for pricing (Option B). If the latter then the on a Spe Employer will req cont}actor to submit a Schedule of Rates, or a Contract Sum Analysis. The E e wise to stipulate a Contract Sum Analysis option. The Employer might al's e it to be in a preferred format, and perhaps this should be prepared by the quantity surveyor for completion by the tenderers. Th
There is a provision for sectional completion, and if partial possession before practical completion is required, then clause 2.25 provides for this.
120
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05
is obliged to carry out an Contract Documents and with the He th a (2.1). The contractor must compl to the Portion, and comply with all instructio of of the Portion with the rest of t
The contractor
The quality and quantity of wo and is related to the docum
included
in acc r d stat
or
Co tracl
ith the equirements Designed
integration
i
d.
winged
other'
to`Pain th
relation to the design as real (2.10.2, ICD05 only) stipulated in the Co, tract Docu
d
a
2.10.
ments it prepares in Contractor's Proposals when necessary' or as
on
standard set out in the Contract Materials, goods a d wor mNship are to Requirements or Contractor's Documents (2.1 an 4.1) including chittL-Et's satisfaction, they are to be to Proposals as r sta tad to be t the her no standard is set out, they are to be satis the Architec s reas ?na 2). iate Wor a standard e read d
pe case o
ve priArity
r between documents (including the tender 'rrors i sisten ed sbb`-contra 'tor) corrective instructions must be given
O+'
fticulars for 13.1}
Apndix
stated otherwise, must be prepared in exce, t with tVe Standard Method of Measurement 7th Edition (2.12.1).
ce
,N+
act bH&,
ractor must be provided with two copies of the information tion Release Schedule by the stated times (Third/Fourth 2e contractor must also be issued with further drawings as t-6/complete the Works (2.11). Use of them is limited and s is to be respected (2.8.3).
plicable; he co
to ecital and clad reasonab
Infor
O73
(CD
(110
ons oblige the Employer to nominate a CDM Co-ordinator and where relevant a Principal Contractor. This becomes a contractual obligation also (Articles 5 and 6 and clause 3.18) and any need to appoint a replacement is also covered (3.19).
The CDM
121
Traditional procurement: shorter lump sum forms
JCT IC05/ICD05
for possession and completion must be enter contractor must proceed regularly and diligently completion date (2.4).
CoZe a Partl .i iol on r be
.-+
N-0
O_3
Dates
-'.
'-'
There is provision for dividing the Works into Se commencement and completion dates, and es liqu section. All provisions relating to timing, for xte ing t e ( ly o apply separately to each section, except at th& Fina I
.-.
t ex Notice of delay must be given in writ hg by t acto the Works (on any information any Section) appears likely to be u st e con reasonably necessary (2.19.4) he Arch cons we pletion date and as he or she is able to notify the contractor of hi s or her e ision, riting, it is stated, this must to see the effect on comple on (2 9.1 Although time be within a reasonable time Relev nt 'event ' are for, which the Architect is nsions up to 12 weeks empowered to make n on 0). Re Xew beyond practical co pletion etion
ink
.
to
c
may
clucte
ils
on date, this act must be certified (2.22). vered by the Employer (2,23).
rtified by
rectifdefects
(2.21). -30) unless the Employer decides
late deductio instead.
.,this
r
n
is
IpioY,( p ssible
to occupy part of the uncompleted Works for storage roper insurance arrangements (2.6).
to assignment with ut'itten consent refers to 'the Contract or any rights Sub- ttin any part of the work requires the Architect's written
122
u
5
The contract proves for c lateral warranties to be provided by the contractor to funders and purchaser enants, and by sub-contractors to the purchasers/tenants, funders, and the Employer (Section 7). The requirement to enter into warranties must be set out in the Contract Particulars, the relevant persons and sub-contractors identified, together with information regarding limits to the contractor's liability. The warranties to purchaser, funder and tenant are to be on the JCT standard forms
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05 CWa/P&T, CWa/F, SCWa/F and SCWa/P&T. relation to the Employer, although this is
t
te JCT Also p referYed to/iq_the orm.
subrovisi or re firing All sub-contractors are domestic. There i ating to e ork (3.7). T,14e proy cans contractor to execute identified parts requ the se of e standard named sub-contractors are set out in chedu roug naming the methods ailable, form sub-contract ICSub/NAM/A. T ru n regardi a provisional or an sub-contractor in the Contract Do for o ICSu sum. Both require the use ICSub/NAM/T. i
fen
`1,
ee n s, and sbl h There is no provision for a is es offer necessary. However, the N SSma ersio care should be taken to state at this sub-
LAC
t pers
i
e
-in-charge on the Works at all
f the Employer's clerk of works
or m teria not co-r4efm to he contract, the Architect may order Instructions re empowered concerning inspection vaI fro the ite` there a par elpful provision concerning similar work x,(3.14 /s kh may be s, spect owing established failure (3.15).
ft
Aled
to'arrVout wo not forming part of the contract during the fl,
rt..
ns empowered include for of provisional sums (3.13).
iting stponeme
The contractor is re u red to have a com reasonable times (3- an o permi thority. (3-3) who ha ed Zed
pr ctice should not be ble clauses, although d not under clause 3.7.
is in
possess]
in
subject to certain conditions (2.7).
VAT-exclusive (4.3) and may only be adjusted as provided for in
Co
ontra or fluctuations (4.15 and 4.16). These are limited to tax etc. chedule 4). ums have been included, instructions must be given (3.13). SMM7 applies, to distinguish between defined and undefined this is partj ularly important where a provisional sum has been included for contr work (Schedule 2, paragraph 5). ronal ed,
i
ro
Applications for reimbursement of loss and/or expense must be made in writing by the contractor (4.17). The grounds for a valid application are set out (4.18) and include only matters over which the contractor has no control and which occur because of action or failure by the Employer. The procedures must be followed precisely. Other rights at common law are preserved.
O-0
123
Traditional procurement: shorter lump sum forms
JCT IC05/ICD05
e` stag
Interim payments to the contractor can be at pre intervals of one month (unless stated otherwise). R alternative rate is entered in the Contract Particular
is 5
(4*6 -mot r ce
05 cles n
unle use
e
an
ter
'retention'). ulatior(s (41 ). Interim Certificates show the amount due and state e Within five days of issue, the Employer must otify the ust amount of payment it intends to make (4.8) enn to ction, t ro be clearly stated in a written notice whic also is fore for final and this must be given to the contractor of less tha to ue the Interim payment. The final date for payment ays 1ved ve Certificate, and if no valid notices e Empl ent in full t wi ctintei st of 5 per cent is required. Failure to pay by the fina to for' iaht t u n work (4.11). over current base rate, and can give the ontrac
n-0
r-«
-Q!
+..
v,'
Z=+,
t
Within 14 days after practical which only half the retentio money-Ls _>,
erim (4.9
date-of-isfic
preparatio f a count after practical is a precise timescale or t completion (4.13.1). Issof t Fina ertificat is wi ays of sending the final account to the Con or ertify that defe is have been made good, whichever is the lat There
alGertificate wi ate,
t
is
28`dAys fro
In regard to notices, and the ue of the Final Certificate (4.14).
the
igatio tractor' duty t 1). T
ly
con racto
witK all sta tory obligations and give all required itled to r over fees and charges not otherwise
2 3).
o notify, the Architect if it finds any conflict between statutory Contr t Documents (2.15.1). The Architect must issue an ntrac r is not liable for any non-compliance if it results l carried ou in a ordance with the Contract Documents or any g-
contra-c
)uirement
truct ha
ion
(2.15.3)_ carry out limited work for emergency compliance and to be valued accordingly (2.16).
n
°Q(D
The contractor is c-orAQct&ally obliged to comply with the CDM Regulations and
particularly, where the project is notifiable, to comply with duties in relation to the Construction Phase Plan and the Health and Safety File (3.9). 6 Insurance
What 124
a
particular contract includes will depend to
a
large extent on the entries in the
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05 .-+
Contract Particulars (e.g. whether option cla cover required, etc.). The Architect may documentary evidence and pass policies t
dt to
i
r
is to indemnify the Emp injury or damage to property other t an the backed by insurance, and an entry wi state the
ecki
bnal in'
.-+
The contractor
uei t
for ,1 a
or 6 2).
If instructed, the contractor is t the Employer nc ere exceptions, and against risk of claims arising d 'e to lega glig e b t Con ctor. An entry in the damage must not be attributabl her r may be re and the amount of Contract Particulars will in cover to be provided (6.5)
ian
vii
Insurance of existi (Schedule 1 Opon although still
or is detai e
can
Emplor (Sch
ctures and united to nd
tents
str
i
r
the
uired to
r
e concerned and should either by the contractor ption B).
isks vJ
vii
Insurance of 'the Works' is be for full reinstat ent va (Schedule 1 Option A) or by th
i
i
matter for the Employer New work in existing buildings, s a
ploye rry
prosional
demnity insurance to cover its liability be set out,i n the Contract Particulars. i
icular will show whether the Joint Code of Practice on n Sites is to apply (6.11) and if so, both the y with it. In the event of non-compliance the tractd dial measur which have to be taken.
Contract
P
m Fire
thdrawn and
is
no longer available, the situation
inati ploy specified defaul notice is rca-uired ate the co
terminate the employment of the contractor by reason of the event of the insolvency of the Contractor. A warning he actual notice of termination by the Employer. he contractor's insolvency, whether or not the Employer decides ractor's employment, are set out in clause 8.5.3.
If the Emproy ecides to terminate the contractor's employment, the respective rights and duties of the parties concerning payment, removal and completion are set out in detail in clauses 8.7 and 8.8. The contractor is allowed to terminate its own employment for specified defaults of the Employer (8.9) or in the event of the insolvency of the Employer (8.10).
125
7
Traditional procurement: shorter lump sum forms
JCT IC0511CD05 Either party can terminate the employment of the con
r
listet neutr ca
(811). The respective rights and duties of the parties co qrning-ymeniremova 0 8.1 1 are se out in d*,tai completion following termination under clause clause (8.12).
8 Miscellaneous
Definitions are included 0.1). There is
a
contracting out of third part
iahts,underth)a CoNf- acts
Parties) Act 1999 (1.6). t
There
is
no reference to access for t
There
is
power to exclude pers
Arch i
quities. Contract Sum Analysis (Sec (original series, green cgver)
cital) is define. seful ex
ITa n
2.5). 9 Disputes
rants, Cons, (ructio II of the Housing ifferenl party a statu adjudicatiq Article 7 p Part
Act 1996 gives either spute arising out of the contract to
d Regeneration
.
durO isions
e adjudica or's derision is
ding on the parties at least until the dispute is finally proceedings. I
ation may be selecte (Article The appointment are clearly defin
greed method for final determination of disputes
rbitr for is subject to clause 9.4, and the arbitrator's powers
The parties agree that either may appeal to the courts on a question of law (9.7).
Arbitration is to be conducted in accordance with the JCT 2005 Edition of the Construction Industry Model Arbitration Rules and the provisions of the Arbitration Act 1996 shall apply.
126
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05 Where the Contract Particulars do not indica then Article 9, legal proceedings, will auto
rticle apply'
127
Traditional procurement: shorter lump sum forms
JCT IC05/ICD05
(-1
This contract? If considering using IC05 or ICD05 remember tha
hout special. t instaRatio fo tender The E plo
Q30
L.0
It is intended for building work of a simple con and where the work is adequately specified o required to appoint a contract administrator
rA
quan%
i
sAai
aisE incorp n ated.
site
sisin
A-4
-+,
too
i-+
If used for work in Northern Ireland an Ad tion ch le The form is not suitable for use in Sco nd, an re Scotland, the appropriate SBC form sho d be med.
is
eyor.
s
+`J
There is now a version which provid s the ntra to desig id citified part of the Works. This depends on detail Emplo is quir bein ssued at tender stage. Although the contractor is to sub it furt de n in io before work is carried out, the Employer wo era e Fu he to se ut ctly 0 hat information is required and when in the Re m uirements. SIlO t at ICD05 does not also no include the detailed design s bmissb-n-E rocedure s out in BC E 5 and DB05. r°+
S`<
t
for partial p N ssess o n and io etion. There are also provisions for the cont, ct an or its b-contr tors p provide collateral warranties on JCT standard for to pu Chas tenan fun ers a to the Employer. There are no provisions for T i rd Pa Rigl It can include
I
3
ntrac be n are two procedures. The first ed, anc the requires the naming ay seem inflexible but brings greater be pre-con fact an certainty. Th rsecon a ming urih construction and is covered in the s for contract by provisiona m: n bot b-contractors are domestic and the es the responsibi ity oft e icated documents is mandatory with in C tra r. Use of d named s -contr for As e mai contr for is not responsible for named subcontractor d iqn, e ployer should be ised to use an ICSub/NAM/E agreement for ch na d b-contr for involved in some design relating to their work.
(Do-
^.,.
-+-
It allows for sub-
.
a pz etin
the
rm"ossessid
cisions are required relating to matters including ds (fo dvance payment, 'listed items'); insurance of the
Orm,
b
u
de
at.
L~'
W en
,n-
o
,-+
5-.
L.0
Wo'
0j1
W o s; Joint Fire Cod A ted damages; fluctuations; and electronic Ii co mm -cations. autior is peded over naming a quantity surveyor-this should not be left blank and e n if he Er ployer does not agree to appointing a quantity surveyor, the mechanism the contra t still requires a name to be entered to fulfil this role (usually that of th ArchitectY (-n
tom
If acting as contract administrator note that while the procedural rules are less demanding than those for SBC05, care is needed to make sure that action is taken within a reasonable time even though no time limit is stated. This is particularly so concerning named sub-contractors.
128
U'7
-43
Amendments are issued by the JCT from time to time. The form is available on disk. The RIBA publishes contract administration forms for IC05 and ICD05.
Traditional procurement: shorter lump sum forms
7
JCT IC05/ICD05
(lD
nonOnO
p>>
Intermediate Building Contract Intermediate Building Contract with contractor's Intermediate Sub-contract Agreement Intermediate Sub-contract Conditions Intermediate Sub-contract with sub-contractor's Intermediate Sub-contract with sub-cont Intermediate Named Sub-contract Ten Intermediate Named Sub-contract Cori Intermediate Named Sub-contracto Contractor Collateral Warranty for Contractor Collateral Warranty f Sub-contractor Collateral Warranty Sub-contractor Collateral Wa Sub-contractor Collateral
Intermediate Building Co Intermediate Buildin Sub
129
7
Traditional procurement: shorter lump sum forms
JCT
MW05/MWD05
The Joint Contracts Tribunal Ltd
Minor Works Building
N vrk
ea The Agreement for Minor Building Works, for minor building operations and mai tenarse Form of Building Contract (then JCT63) as clearly i long, compared with nearly 40 pag t oe with bills of quantities, and was sta. suita not exceed £8,000.
f
fn
in
whi
op
Fo=t w
here th
1963 Standard the 1970s the RIBA, consci nae ew, simpler 'short Form and the Minor Works 4greement,; set approve with acclamation in form' of building contract. IBA C June 1978. The aim was fo a fo page contra_t itions written in plain v un r eight h English and structured accepted the proposal in principle, but the re po heicar vrking ip w to-draft a new 1980 version nifica nce, wever, and this was the first of the Minor Works rm. It rranged under ection headings. Incidentally time that Conditio in JCT resu ce in the, rafting of IFC84. the 'short form' oncept vii
In
tai
MW80 was the subje the Hou7ntrat foi of the MW80.
Ament
In
11
Ame
tructio ildin
of which was to take account of tion Act 1996. The 1998 Edition basically a consolidated version of
e last egern
orks w
s
2005 the
J CT
B
of
inor Buil&"orks was revised along with all the other new editions were published, entitled the Minor Works inor Works Building Contract with contractor's design. ding Con ?ract,`aq iifica.nt c course, the introduction of the new version allowing derta a limited amount of design. This new version will hkaWcontracto 0 ubt be very welcom as is requently the case in practice that even on smaller ome d gn ' put om the contractor is needed, and previously there had m ithin lthe JCT suite.
91nzb4 f
s, a
i
vii
Q.;
'"*
The 2005 editio s also con in some other changes. The format, sequence, clause numbering and ter y have been revised, and the language used has been clarified throughout. There is a new Contract Particulars Section at the start of the Form. The Scheme for Construction Contracts has replaced the JCT's own adjudication provisions, and legal proceedings, rather than adjudication, are now the default mechanism for the final resolution of disputes.
130
Traditional procurement: shorter lump sum forms
JCT
7
MW05/MWD05
The Minor Works form has always been a editions are undoubtedly an improvement extensive use of this form.
s
all pr
en
cts.
uraq
vim,
73+
ice for ands
The Minor Works Building Contract now pu contractor's design' which has prcvisio for e cd portion of the Works (MWD05) an one wh doe respects the versions are identic therefor h of raise to apply to both versions, unless othese.
Both versions of the form e ove up only around half of these. he Ag and eight Articles, and sons ar
but the nclWe,,- ur
f
thon
t un
A two-page Contrac 'Particulars at th information relating o the rt. There two Schedule 1, incorp ated by clause 7ers incorporated by .11, s,a fluctu tic at the back of
aears on
fl)
fl,
in the G
fl,
use
et o
o
form requires entries of
ed'dles at the back of the form. a udication, and Schedule 2, Guidance Note is also included
he inside of the front cover of both versions, dance Notes. These give a clear reminder that rere the ient as engaged a professionally qualified person to inistrator in administering the terms. It is for use e contract a works of simple character are to be carried out for an agreed not for use with works for which bills of quantities are tion is likely to be such that full labour and materials ie d e r quired. There is no provision in the form for the Employer sub-contractors for specialist work. 3
,
itals (five in MWD05) on headings.
e. However, it should be remembered be the entire picture. Terms might be implied e used with thought and treated with care.
relativ ressWstated
?minim sum. T or fluctuations provis
e
act Conditions take R
tr ctor' design' version, unlike SBC05 and IC05, contains very brief provision relating to hat design, and does not include requirements for approving design info do or for the contractor to carry Professional Indemnity Insurance. MWD05 should therefore only be used where the design input is limited, and should never be used for design-build procurement. ,-+
The 'with
fl,
fl,
There can be 'Contract Drawings', a 'Contract Specification' or Schedules which are also Contract Documents (First Recital). The contractor will price a detailed contract document, or may provide a lump sum price supported by a Schedule of Rates (Second 131
Traditional procurement: shorter lump sum forms
JCT
MW05/MWD05
Recital). There are no supplements published to exte d the range
ohis cobra
Minor Works Agree ntis est work, tract Housing Grants Construction and Regeneration A may rh"t )ply a d the re to ad ca will therefore not be subject to the statutory nts relatin and payment provisions. Nevertheless, th for ms e the Vequir men t for c adjudication and certain procedures relating pa ymen If t st ute, they may be removed but only after takin lega dve. In many instances where the
rey
.
nt
nsumer
Rgula ns the c
care should be taken to explain th t take legal advice. The JCT now as of consumers in connection with work their been engaged, which may b le.
or
oil
(SI
1
umer, or
tractscially
4/31
o which might apply
mer should d for use by consultant has
Synopsis 1
Intentions lete t
The contractor is obli
whe
Contract Document requirements (2.1
s in accordance with the applicable and the statutory
e Contr
or is
is
toolMe further infor riatio
reasonably`Rec
ary
itect
(5, ny
elating to the Contractor's Designed
MW, 05 only).
furt
r
information necessary to enable the
-4 in MWD05). nsisten'
eated as
a
s ir1
or betw en Contract Documents shall be corrected and this may be nstru
'variatio
(2.5.1).
rxa 0
e
i l
arty uncle
s
to
.
The, erest
2
n
older that it will comply with the requirements of the rchitect is to act as CDM Co-ordinator unless the name d in Article 5.
Time The Works may be commenced on and shall be completed by dates to be inserted in the Contract Particulars (2.2 or 2.3). The contractor is to notify the Architect if completion by the stated date is unlikely, for reasons which are not within the contractor's control (2.7 or 2.8).
132
Traditional procurement: shorter lump sum forms
JCT
7
MW05/MWD05
The Architect is empowered to make such e (Note: no specific grounds are listed.) If the contractor fails to complete by the damages (2.8 or 2.9) and the rate is t there is no reference to a non-compl ion ce Practical completion is certified by the
chit V (2
eferi-M
,-
ssior
s_r
ate..
lige tify period m b sta ian ha en ha
Following this the contractor is three months, although a long by the Architect when this o There is no provision for
Yentitle'dc tract P,,i i.cu
)
A
e
for p
sectional completion.
nt witbeut Written c itten konsent to subwcd
ract is
erson' Ts to ion fdr a cl
e &,Qo pro
fl-
sub-contrac. or, and no provision for including a at neith 'r is there anything which prevents this, estssuitable ways of achieving this. _+.
a
ote h Veve s Ver: on su
'"'
provisi oved fi mall
-a,
(Dg
ons ar to b issue in writing (3.4 3.4.1) but may be oral and lnstru ns ma include variations (3.6.1) and this would onement, s no specific reference is made elsewhere.
i
E
or testingg"r ripening up of work. In the event of failure to meet Is, and problems over remedial works, refusal to certify leading Id seem to be the ultimate sanction.
ork to be carried out by persons engaged directly by the
The Contract-S-fm is
AT-exclusive (Article 2).
is fixe price (4.10) except for limited fluctuations (tax etc.) provided for by Schedule 2-(4.11). A percentage addition entry is required in the Contract Particulars. (If none, NIL is entered.)
0-)
Instructions must be given if provisional sums are included (3.7). The cost of variations is either to be agreed in advance or valued (3.6).
133
Traditional procurement: shorter lump sum forms
JCT
MW05/MWD05
Direct loss and/or expense is limited to variations included in the valuation (3.6.3). Progress payments are to be made at four-week) issue certificates (presumably to the Employer). a
different figure
is
Archi per ce)
entered).
s of he mod Certificates of Progress Payment will n the ou nt ntr for calculations (4.3). The Employer must intends not than five a e is of te. Any he to pay later days t ttene intention to withhold or deduct sum must e g by o and the is n tice grounds for such intention must b rf7state t be iven to the date final date for aymen contractor no less than five days valid notices 14 from issue te, nd if o is days th e date t rtifi payment e to the final date for have been given, then paym e ' ull quire the cu se ra and can also give payment will attract interest f 5 per ce 4.7). the contractor a valid right to stop wo i
A penultimate certificate releasing all
is
i
to belissued withi4 t half Ne
outstandimo
is to b issu with 28 ys of either issue of the certificate signifying comple on of king bO_the eects, or the contractor submitting all necessary infor 8.1). The ntractor is given three months tion fo the f al a (unless a different "ciure is ted in he Contrac iculars) from the date of practical this. completion t
Certifkat'e with 's apply to th`eFi The fi a to f ent in this ue of e Fi al C tificat
r,
Q-1
The Final Certificat
ations s
mply with all statutory obligations, including giving all
the contkactor's n-6t
contractor
is
require
to not
chitect in writing if it finds any conflict between other contractual obligations. Having done that, it will under this contract (2.5 or 2.6).
is S
i obliged to omply with the CDM regulations and particularly, where the project is note e comply with duties in relation to the Construction Phase Plan and the Health and Safety File (3.9).
The contractor
6 Insurance
The contractor indemnifies the Employer in respect of personal injury or damage to property (5.1 and 5.2). He is required to arrange insurance to back this (5.3). The
134
Traditional procurement: shorter lump sum forms
JCT
7
MW05/MWD05
minimum cover as
a
contractual obligati
Particulars (5.3). The contractor is obliged to arrange insur damage by perils specified in clause 5should be inserted.
There is no provision for the Employer
Joint names insurance of existi alteration or conversion, is requirement is for cover aga
The Employer may terminate t satisfactorily with the, Regulations, or if warning notice, bu
for if it fails to proceed obligations under the CDM he Architect may issue a r for the Employer.
i
7
or stated reasons (6-8 and 6.9).
The contractorKnay
Either party suspended
The resp
the Condit
'Architect, presumably this is implied. n
e
of any person from the Works (3.8).
to antiquities, terrorism cover, etc. out of third party rights under the Contracts (Rights of Third
Grants, Construction and Regeneration Act 1996 gives either party a syalbfer righ to refer any difference or dispute arising out of the contract to adjudic ion. Articl 6 of MW05 provides for this.
-Adjudication is to be conducted according to the procedures set out in the Scheme, except that the adjudicator and the nominating body may be stated in the Contract Particulars. There is an optional provision for arbitration (Article 7), and if disputes are required to be resolved by arbitration then the Contract Particulars must state that Article 7 and 135
Traditional procurement: shorter lump sum forms
JCT
MW05/MWD05
Schedule
1
apply.
The appointment of the arbitrator is subject to A defined in Schedule 1.
Arbitration
is to be conducted in accordanc Construction Industry Model Arbitration Rul
136
Editi
Traditional procurement: shorter lump sum forms
JCT
7
MW05/MWD05
This contract? If considering using MW05 or MWD05
emb
r
tha
.
his
for small building work q a sim one-off' ture, suitable for jobbing or maintenance type w 'rk. The ar ons one To use where some design input is required from th contractot, n -one wnere it is na t. It can only It is intended
ea
be used where the Employer has e ag p essi C aDSUILanr ro e ct as contract administrator. There is no prov, ion antit a ra aitne ugh a quantity b o surveyor may be named, it is ith no eci le r th on ilA ions.
If used for work in Norther The form is not suitable Scotland, the SBC Scottish
I
r
I
Ad u tion Sche'du'lesh Id be incorporated. land wher th intended work is in
r'
use
c
or Wo
fd
is
JvailWe.
There is no provision br phas co letion, am p o b-contractors, or design by the contractor. The orm is dra ed to pli lude c with the CDM Regulations, and with the Housi g Gri ts, onstructio nd R eneration Act 1996, whether or not these apply in f to t particularrccl-*ac Whe, completing the form decisions are required r ng t insu nce of t e Wd ks a damages for non-completion. i
If acting as contra adrri rtyistrato , not that Ithough the Conditions are likely to prove ad uate f a r mo itu ions, should th nature of the work require it, then it might b advisa le t clari the` cedural les pre-contract, especially if working
with
a
con
Am ndmeri T
RIBA
the fi t tim
ctor r
ublis
sued the fro time to time. The form is available on disk. sc tract o ministr tion forms for MW05/MWD05.
f
at 98 was Appropriate for contracts up to 100,000 (2001 was so ti es used incautiously well beyond this. The new JCT ic Note doe not suggest a limit in value for MW05, but it is unlikely to be fo large ojects. Although the conditions are clearly worded and the are b f and easy to administer, it should be remembered that the Ded aLru p ition to those expressly in the contract. d-w may imp er in a e JCT'su gg
pri
)
in va
ted
but
sle
e
fl-
The suited to commercial rather than domestic work where t-hpre-ifa'n be p oble s with the client remaining in occupation. For slightly larger se wh ch require more comprehensive conditions, then IC05 might be projects, or a safer For nice. ork on domestic projects, perhaps consumer contracts, then the JCT forms o e owners might be more applicable. The Minor Works Agreement in has featured a surprising number of court cases, often due to use beyond its intended limits or because of careless administration, and a RIBA expert has commented that although it appears to be a favourite with the profession, at the same time it appears to be little understood. It has limitations, particularly concerning the design insurance and determination provisions, and needs to be treated with respect and administered with diligence. E
137
Traditional procurement: shorter lump sum forms
JCT
MW05/MWD05
Minor Works Building Contract Minor Works Building Contract with contractor's design Short Form of Sub-Contract
References Practice Note JCT: Deciding on the Appropriate JCT
Commentaries David Chappell The JCT Minor Works Building Contract 3rd edn, Blackwell Science (2006) Sarah Lupton
Guide to MW05 RIBA Publishing (forthcoming) David Chappell
MWO5 Contract Administration RIBA Publishing (2006)
138
Traditional procurement: shorter lump sum forms
7
JCT RM06
Repair and Maint (Commercial) 20 Background The Repair and Maintenance ntract Co on 'individual, substantiall , pro specified buildings or sit `s'. It iced Building Works of a Jobbin Chara
ployers w o ha
a
undertaken from me to in the 6 would be reasona y exp rienced in co use by home owner does no and
i
is inte for w
J
ich
w
which requires small jobs
bu u re
ions of Contract for originally introduced in in 1998.
paw and maintenance, and who oning uch work. It is not intended for o
role of
a
contract administrator.
ed small proj cts, but is not to be used as a term m Cont ct would be more appropriate. It allows ases or pri ng, either as a lump-sum contract, or as a rei
h
fferen
t
Mea
ntract, ition
for
0
the
with
1990, but not re-published al The form is for e
m
re
ixtu k mea
of the two with defined work being priced red using an agreed schedule of rates.
as
lativ y sh running o 18 pages in total. Unusually for JCT contracts, safo rm of in tatio to Tender, and a form of Tender. It also includes Contract Particula r , and a g ance note, together with 6 pages of conditions ge un der ven Sections. In contrast to the contract for Home Repairs and tenanc this cwract follows the format of the 2005/2006 suite he
06o
is
ai
use by local authority or commercial clients, who will be orders for such work, and in dealing with contractor's accounts.
All the etails regar ing the work to be carried out and the information required under t ontra Particulars must be sent to the contractor at time of tender. In particular, the contractor must be told on which basis it is to price the work, as a lump sum and/or a schedule of rates, and the start and completion dates for the Works. +"'
The contract will come into existence after the contractor has completed and returned the Tender form, and the Employer has accepted that tender. The completed tender, signed by the Employer and returned to the Contractor, is the evidence that 139
Traditional procurement: shorter lump sum forms
JCT RM06
O_°'
agreement has been reached, and there is therefore o nee an attestation. As an alternative, as explained in e Gu ployers conditions may be incorporated by reference in an relevant parts of the form should be marked 'no
or reals, acle anclotethe r,
06
in-Nhich ise th
fl,
It should be noted that the form does not incl de any ce to health did saf will ap or to the CDM Regulations, although there mi t be occa ffe desi either in full, or to the extent that Regulati The form is generally compliant wit the hovu ver, Regeneration Act 1996. It should be not for payment in a single stage, for so this several stages for payments will ne ified.
ts,
,
not com
vh ith
Synopsis 1
Intentions
orry out
The contractor is obliged to blige competent manner, in accor ance
ith all appj
As there are no article ,th
tender and the Cont ct
Works` a regular, diligent and islati n' (2.1).
carried
Pa rti
further infor.
bliged, o car epted
jes, these w,
or shall be completed by dates that are entered in
work ma
r
ployer must fix
tion date if the contractor
a n
is
delayed for
a
reason
its contr
nable endeavours to prevent delay (2.4).
ici,rfor
liq
dated damages.
There is no requirement for a statement of practical completion, and the rectification periods runs for six weeks after the completion of the Works. 3
Control There
140
is
no bar to assignment.
Traditional procurement: shorter lump sum forms
7
JCT RM06 is no provision for naming or listing included in the specification.
There
t
The Employer may appoint
a
representati
The Employer may issue instructions r is limited to those of 'a nature and s
Works' (3.4).
4 Money The contract may be let on a lu combination of these.
Variations are to be value by the Employer on a fair and and including an a
s,
or failing agreement
rates where applicable,
fered (3.5).
Payment may be b
If instalments are used, the Employer must pay within 14
contractor is to inv days of the invice On comple (4.4), whi
the JCsuite'Statutory Requirements' are not defined, instead out the Works in accordance with all applicable icable legislation' (2.1) would include the CDM regulations, c mention of these in the conditions.
The con or is to demnify the Employer in respect of personal injury or death, or damag to property ther than the Works caused by its own negligence (5.1 and 5.2). This is to-15 bac by insurance, and an entry in the Contract Particulars will state the minimum cover (5.4.2). i
Unless otherwise agreed, insurance of the Works is the responsibility of the contractor under a joint names 'all-risks' policy (5.4.1). Insurance of existing structures against listed perils
is
the responsibility of the Employer
(5.4.2). 141
7
Traditional procurement: shorter lump sum forms
JCT RM06 7
Termination Each party is entitled to
terminate the contract imme insolvent, or after a seven day warning notice has b material breach (6.1). The Employer may terminate the contracto corruption (6.2). 8 Miscellaneous The contractor must take all reasona6 contractor's etc. are registered cardh Scheme. There is no reference to access for the
E
implied. 9 Disputes
Disputes may be resolved th Scheme for ConstructioK-Contr There is no arbitratio clause/ther a claim through litigation.
re eit
party world have the right to pursue
incorporated forms of invitation and order. It`a so (lows for a variety of methods of pricing, ssioning work of this nature.
form doe not co ovisions for liquidated damages or for retention, and r n where the contractor may be undertaking any e is othi oc d to experienced employers on very short, onedesi n. It ill therefore b m mer p ects MW05 or MWD05 should be considered, and off job For longer where a s jobs re a ticipated, MTC06 may be more appropriate. If the Employer is there occ pier of the property on which the work is to be carried out, the homelo ner occupi contracts may be used.
Th
'
I
O-0
th
*
Related matters Documents Repair and Maintenance Contract (Commercial) 2006 edition (includes a Guidance Note)
142
Traditional procurement: shorter lump sum forms
7
ACA Form Association of Consultant Archite
ACA Form of Build Background
byye
(DD
fl,
When the ACA Form first app ed, itwas a retion against the relatively complex procedur ce o years later some of the advantages claime for rm eva eA d when IFC84 was introduced. Nevertheless, th CA rRitiativ it is still an interesting an form unencumbered by tad itior nd ha e fir' ished. The first edition took two years and Xdrafts to ro ice. It ed t the new agreement was suitable for use on very wider nge o bs of es and types (although the initial reaction of le al co r entators steep in th hraseology of JCT documents was cautious, not to ay di issive). rt.
C
1
J
a f,
he
rm
w hfch
contraan
°0-
produce architect that the
'-{.
A ontracworkin claimed that their intention was to wa 'a flex y balanced contract for an efficient rking th a. efficient client'. Early criticism was rm w fted u ilate any contribu tion from contractors. Indeed the rmer 'Nation Fedel tion of Building Trades Employers advised its ter int contra/is u g the ACA Form. However, it has been used vii obs, in ding fast-track projects. Major client bodies essfully on variet t ye us withou problems, and the British Property Federation pear orm opera a fthef, rm suitable for use under the BPF System of o ocremen hich vas not vJithdfawn until 1998.
At the outset
*r
^'+
E
viin
is little evid ce of problems with the form, and no body of case law has yet built upmay that the ACA members using the form are, in line with the nefficie architects working with efficient contractors.
included a number of significant improvements. The form and revised from time to time. The Third Edition appeared in dme is needed to take account of the Housing Grants, Construction neration Act 1996 (Part II). fl,
The second (1984 der r viev ke t
The ACA has continued in its progressive and non-traditional path and recently launched the first standard partnering contract. (See Chapter 13 below for further details on PPC2000.)
Nature fl..
The total document runs to over 30 pages. There
is a
contents page which lists the 143
Traditional procurement: shorter lump sum forms
ACA Form Sections in which the clauses of the Conditions ar are Vouped his Agreement which includes alternative clauses relat gto t appointed; who will be responsible for the pre aratio of details; and whether the Works are to be compkte in Sec
is
olloW s a
Flexibility is a feature of the form, made possi e by t alter tives oth Agreement and also at various points throug gut the Co The ies exe the document either as a deed, or not as,,kd at e en e Condition expressed intention was to produce a for i wh' w pl wo ed. oweve of the terminology used is peculiar to t e ACA for m' t cau administrative procedures are relativ, then s tho guidance on their detailed use.
t otRer-forms
Examples of where the terminology
i
completion date: the alternat e ciau tensi taking-over in parts, and p Bible accel ration;
contractor of his ement,
extra costs: the production of an architect's instruction,
information: the atte pt to the supply of infor ation design: the atte contractor are eac
maticA
ontract th
ablis
iablefbdthe
ign
d
ofthe'
which follow after the Conditions. is to be completed as one operatio or Alrhative be completed in Sections. A further Schedule ovide or etail n the ue of ' formation; what this is to be, who is to be resoonsi , awhen t is to be pplied. A final Schedule provides stage To help in m ing t' The Time chedule o
ible, th
e are
the
rnati wher the job is
s
1the job -0.
i
Q..
..
"e
cost r type of job for which the form is thought to be o ithout a bill of quantities and where no quantity used where the Employer is private or is a local authority, tion is by an Architect or by a supervising officer. (13
r suggested IT t suits e. It app can be ed w h surveyor ' ted. It an b and where contr inistr
Th re is
>.-
144
N-0
ms's
The contract ca fixed rice, or fluctuations based on an ACA index can be incorporated. The form may be used as a traditional work and materials contract, or the contractor may be required to accept a measure of responsibility for design and the provision of drawings. The flexibility in the document is made possible only by the introduction of alternative clauses, and great care is needed to ensure that the intended alternatives are clearly evident.
Traditional procurement: shorter lump sum forms
ACA Form The Third Edition takes account of the Housing Act 1996 (Part II).
onstru
on anit
Regg
The contractor is obliged to execute ari strict accordance with the Contrac skill, care and diligence (1.2).
What constitutes 'the Contr Agreement, and incorporat re is a
.-r
a
The provisions of the printed
Alternative 1) or may be t he A The drawings may b supplied sblely takes responsibility details fo hich cohtractor supplemented by dr wing, 2 in clause F of the r Alte ative 1 or is will Iso be evident (2.1 Alternative 2). T Agreement. `r
ons)ble for-the hd vvarrts con)
is res
him,
racy
ance
of drawings and other information ith performance specifications and
purpo is to
e Schk
phas w
ers e
pntrid set o6f the ernati e 2
aged directly by the Employer to carry out work t, whilst he has possession (10.1).
i4ortant
alloor
dates. Alternative 1 is used for a single possession in parts and/or completion by
ns.
giv the contractor possession to the date or dates stated in the ractor is to commence immediately and proceed regularly .-+
mployerto
,-+
Se
'ob.
permit o
and diligently (11
r''
ctor's, enO ement to extensions of time will be subject to Alternative or laus 11.5. The first alternative includes solely delay caused by the his architec or persons appointed under the CDM Regulations. The second clu s for neutral causes. The Architect has 60 days in which to notify the contractor of his or her decision, and decisions are subject to review within a reasonable time of taking over (1 1.6 and 1 1.7). cor
1
+-.
,-+
The Architect is also empowered to issue an instruction to accelerate or postpone the dates set out in the Time Schedule. This is an unusual provision, although it may be subject to the test of reasonableness. There must of course be a fair and reasonable 145
Traditional procurement: shorter lump sum forms
ACA Form adjustment to the Contract Sum as (1
1.8 and
1
a
result, and
a
1.9).
fl,
The onus is on the contractor to notify the Archit taking over by the Employer. The contractor outstanding items. The Architect may then is eaTa architect's list of items which need attention b ore taking even though there are outstanding items, And is rsnect of practical completion in JCT forms (1
a re reag_y
`itract Lis cate r issu
i
t
Where the contractor has failed to have dates, this fact is certified by the Ar (1 1.3 Alternative 1 or Alternative
WoN,s rea
`Jor tk-inci ove
es may menpec
Outstanding work at taking over, repairs eplace as instructed by the Archite either= or im Period (12.2). The contractor may be req Works or any Section 3
allow the
sted
for
the
i
ertot
E
ueofaTac
Control either party r om this
is and ney is
work by t actors
ne,al r
in Contract ocuments. This may be by way of a n m. If t Vs arises out of an architect's instruction, siona is nar.ght of r objection (9.3, 9.4 and 9.5). The onsible f all sub-contractors, including those named (9.9). This rs of ;*ign, compliance with performance specification, and v be
or
pro
"sable
0.)
full-tine e
sl
r y is I
I
Facilities are to b
fl,
`s
'nsible for all management of the Works , and this lanning and superintendence (5.1). The contractor e manager a person approved by the Architect. This d (5.2 and 5.3). fl,
a
r
access and visits by the Architect, both v_,
contractor is clearly
kks
to the Works
and workshops (4.1 and 4.2).
146
--0
_+.
E
far
Instructions and notices given by the Architect must be in writing (23.1) although the contract does allow for oral instructions in an emergency, provided these are confirmed in writing (8.3). Matters on which the Architect is empowered to issue instructions are conveniently listed, and include removal of work or materials from the
Traditional procurement: shorter lump sum forms
7
ACA Form site, dismissal from the Works, opening up connected with the Works'. Immediate c required (8 1).
fg varia ns, a 'an by ;V con ctor
a
i
c
4 Money The Contract Sum may be adjusted in will become the 'Final Contract Su-m Agreement, and 15.1).
A quantity surveyor, if appointe may be defined (15.2 and 1 The contract may include
is
cordance
oth , re e
named i
iEtions
flucf
r
rally
A index. Deleting this and 18.3).
'
e inclu ction with
cto rs
rah
ct's structions vvikta vide tract i
fl,
of
(if appropriate)
I
r
be instructed and valuation made otherwise on a fair and reasonable
7.3
is to the co stage
ractorrill
rnative
the ting th
and
ap
be either on the basis of monthly valuations fl,
17.2,
comMance kan st
r ach h
c
B)
(16.1).
htractor is to present the Architect with an total due, and supported by documentary fl,
not
.-+
s
Sched le
evi
ue an Interim Certificate within 10 working days of receipt of the ting tN amount due and the basis of calculation (16.2).
0-O
t mplo p contractor written of ian five da s
vrkg
oex.i tithe
is 10 day fl,
nt
to withhold or deduct any sum, he must give the wing the amount and grounds for such action not later ore the final date for payment (16.5). '-`
tion,
,-+
appli
ise entitled to payment of the amount certified. The final date from the date of the Interim Certificate (16-3).
E
Retention of 5-p7cent will normally be retained by the Employer, and in the case of private employers will be placed in a separate bank account without obligation to the contractor for interest gained (16.4). fl,
-c-
The contractor has 60 working days following the expiry of the Maintenance Period within which to submit a final account (19-1). The Architect is required to issue the
147
7
Traditional procurement: shorter lump sum forms
ACA Form Final Certificate
within 60 days after the contractor
under the Agreement (19.2). The Final Certificate must show the amount calculation is made. The final date for payment of the Final Certificate 0 9.3). 5
on
vvRc
lowince
i
Statutory obligations Unless instructed to the contrary, the c requirements and to make applicatio
tracts Ngui give rCotic
If there is any apparent conflict t e C requirements, the contractor mus otify (1.6). Where the contractor is respo ,ble fo responsibility for ensuring co wl statu
to c
d
p`aees
ct
ing
The Contractor, where also appointed rincipal ontra obligations in addition to tatut ry d-dties relatin o hea include cooperating with t h Plan ing in r Safety Plan, and the a Saf File.
d statutory uean instruction e also assumes (2.5).
articular contractual and safety (26). These pect of the Health and
6 Insurance In respect
of per
the contractor g to the extent
to roperty other than the Works, will be reduced proportionately indemnt y-.ted to the injury or damage (6.3).
nal inj ry or Rs
eat oyer a
the
mployer
h
i,psurar e
ver ag
tract, althou
be by the conntractor (Alternative 1) or by the Employer to be in joint names. The Conditions do not appear to to be covered (6.4).
ernativ` ate saecifi
ditidnaKnsurance erty (other than the nuis
nst these indemnified risks to no less of course this will not limit his liability
e
("
irement for an agreed sum against damage to is no negligence etc. by the Contractor,
here there
).
tractor to take out design indemnity insurance (6.6).
The contract includes for termination by the Employer for stated reasons of default. The last one is simply where the contractor 'shall otherwise be in breach' of the agreement (20.1). The Employer is to serve a default notice, which may be followed by a termination notice. A dispute over this may be referred to adjudication (20.1).
148
Traditional procurement: shorter lump sum forms
7
ACA Form The contract also includes for termination bf the c tract for `s default by the Employer. A default notice n may b issu to e termination notice. Adjudication may be ed disn re th re is
w4
theucontrattor's
Either party is given the option of to grounds of insolvency. It is not auto Either party is given the option of termi causes (21).
ons 6f ed
motion
(2
tinghe c
em'ployme
The consequences of terminati n, and act`bq'tQ beV of site, sub-contracts) is deal
en
8 Miscellaneous
There is an optional obstructions on the s
s"t
J of the Agr ement of Third Parties Act) 999
Clause
be deleted and the contract.
a
clau
ill
s that third part not apply, but margi
sub stituted w
li
ie
nder the Contracts (Rights note states that clause J may who may be given rights under I
is
advicy the
actor are hi s responsibility entirely irrespective of rchitect
ers are
ess
ed
to site (10.3).
toe the p operty of the Employer (14.1). The contractor Archite
,
There are aernati
for disputes to be resolved by four methods. There is first adjudication (256), and finally provision for either litigation fl-
AI
greer
liation (2 native
7-.>
ne
(Alternative 2) (25C). sions relating to litigation and arbitration depending on is English law or Scots law (25-11).
w of the contract
--+
Conciliati n can mea reference to a person named in the Agreement, or as otherwise agreed f e parties Where the parties sign any written agreement on the terms of a settlement,this is to be regarded as final and binding (25.3).
Under the Housing Grants, Construction and Regeneration Act 1996 (Part II) the parties have the right to refer any difference or dispute to adjudication. The adjudicator may be named in the Agreement, or be otherwise appointed in accordance with the CIC Model Adjudication Procedure (25.5). 149
Traditional procurement: shorter lump sum forms
ACA Form Adjudication is to be conducted according to the CIC and the adjudicator's decision will be final and bi finally determined by arbitration or in the courts
Arbitration is subject to the provisions of the law, or its counterpart if under Scots law. If t of the arbitrator, the appointor is to be th Arbitrators (25.9).
150
Traditional procurement: shorter lump sum forms
7
ACA Form This contract? If considering using the ACA form reme It is intended for lump sum contracts, e used rega though certain clauses may need to be delet if th ryer is 6tho . It may be used with or without a bill of qua titles. W needs fully 'signed and reasonably well documented at to de r g Itho re is altern 'tive provision for further detailing by either the chi ct the ctor. j6 ossession and completion may be in respect f a single ct od onal completion in accordance with a Time S Th plo is q red t ppoint an architect or Supervising Officer, and iQ a tity surv
.
The form is stated to be su
relating to litigation a law of Northern Irel nd. A notable feature most situations, for including dra insurance of, the payment p riodic Sections. he fo contract s, de n
ooi
is lam
ila itra
ther are alternative clauses its suitability under the
his the
native clauses available to cover
ran'
relating to -u C on at
further necessary information adverse ground conditions; magi s; grounds for extensions of time resol tion; possession and completion by in ave simple way with naming of suby sub tontr s the procedures are kept to a very minimum. TU flexibility c be ac eved all within the one document, and without the eed leme olt-on document is the ACA Conciliation Pr
edli'
r
cur'rts;
cedure 1998:
ompl ing binati
co
',Of
ility
ticular care over selecting the appropriate completing the Schedules. The form has a logical e and the nguage use-'is straightforward Fnglish. However, some of the may b unfamiliar to regular JCT users. he
uires p
f alter
di
I
inistr
r is
given considerable authority. The procedural rules are
ishes standard forms and certificates
for use with the
for traditional procurement, attractive, concise and modern. ted to contracts which are middle range in value, and in this pared with JCT IFC98. It seems not to have attracted adverse -'tractors despite its unilateral production.
151
Traditional procurement: shorter lump sum forms
ACA Form
ACA Form of Building Agreement 1982; Third Edition 1998 ACA Form of Sub-Contract 1982; Third Edition 1998 (200 ACA98 Appointment of a Consultant Architect
Notes
152
(
Traditional procurement: shorter lump sum forms
7
GC/Works/2 The Stationery Office
GC,/Works/2 (1998 This is sub-titled as a Contract for uildi Civil a Works, but it is more in the nature of an int ndin rm e major works GC/Works/1 form and the G orks/4 s m a ks c ded for contracts act. of between f25,000 and f2 in v e, an or litio works of any value. It replaces the former G ks C1010 (1990). 0) a e old s
eraKo-rrdition
,-+
It is published as a two volu Commentary. The for
The form is for use
0-D
ith lu mp um terms ers in e basis of Specification and drawings only - ithout pr ision for t4s of antities, and with the optional requirement for the ontr =tor to subma dule f Rates to enable fair valuation of any variatio
'ral
Codditiotfs some 45 p es and follow the well established atter o clear Araphi`c raightforward language and standard he Introdu ion a ontents list are followed by the Conditions of 4$, structi red L/ndE e headings. E
fl'
he C/Woi`Fks for there is a very useful Schedule of Time Limits ndex. se of the odel Forms is essential. Model Form 1 contains d endum; Model Form 2 is an Invitation to Tender ti ulars an wings; Model 3 is a Tender and Tender Price Form; Model Form 4 car7ies urance Documents; Model Form 5 is a Performance Bond; Model any Contract Performance Guarantee; Model Form 7 relates djudicator; and Model Form 8 is an 'Order to Proceed'. eat Sotfie A p p o The latter is in e ct `struction to the contractor to proceed with the Works on specifOd-d`tg. Th e is no separate Contract Agreement. E
i
Use
.-+
,-+
GC/Worh1Z has rel ively limited provisions, but almost certainly adequate for the kind of operations intended. As stated in the Commentary it is necessary when considering a choice of this form compared with, say, GC/Works/1, to establish whether certain features (e.g. sectional completion) are contractual requirements. If so, then this less comprehensive document might not prove suitable. The choice must be determined by the circumstances, the nature of the project, and the balance of risks to be covered. 153
Traditional procurement: shorter lump sum forms
GC/Works/2 As there is no formal Contract Agreement, a contract when the Employer signifies acceptance of the contr, houl e in writing to bring certainty to the arrangement, pa as alm invariably be a 'construction contract' as defined in Grant , Constr tion and Regeneration Act 1996 (Part II). GQWork no provisioh for a q n surveyor, but a Project Manager and Planni Super or ould b-q na ed in Abstract of Particulars, and the name of an a iudicator d a arbitr or may be entered.
r*llt
Synopsis 1
Intentions A fair dealings provision
is
include
The contractor is to carry out the Works accor (2), and instructions of the P ject Ma ge 5). T Specification and shown o drawl n s, and wi nclu works to be executed un er th co tract (1 ). ey a workmanlike manner and to he sa isfaction ofAli iect
act Documents described in the ified or additional s
i
The contractor is dee affect carrying out
e sati
dditio-naL_
to
be executed
in
a
nager (19).
out all matters which might will be allowed because of
misunderstanding
t
All 'Things' selec described in t of the contr
or for in ication and rawin
by
agreeme concluded by tender, acceptance, Spec 'cation and drawings, etc., all taken pancy, th e a detailed hierarchy (2).
Sri
n
ticula er d raw'
e to lone
ion
is
,
ructions etc. may be issued by the Project Manager from 25).
apl
Tng t give
e co ate,
r by written order to proceed. He must thereupon nd 'proceed with diligence' and complete by the Date
A reasonable exteA5 ion ay be awarded by the Project Manager, only for circumstances wholly beyond the contractor's control (23). The Works must be cleared of rubbish and delivered up to the Project Manager's satisfaction by the Date for Completion (21 [41).
154
Traditional procurement: shorter lump sum forms
7
GC/Works/2 Defects which appear in the Maintenance Pe, must be made good to the satisfaction of th
The contractor cannot assign the con the Project Manager (44). Sub-contr
Manager. There is no provision for subEmployer or Project Manager. i
riti
i
Instructions which r/lull in quotation and ag ement, or Manager, on fair ra es an (26). There
is
nor
er
The Projec Mana cost will e bor e
e r
pri
t setti
I
ter
f ecessary,
including
instrus confirmed in writing.
on wi e v ued herever practicable by prior rele nt ch r aywork, or by the Project e s, and will clude r disruption or prolongation costs ri
repre
and
an
a
out,
byeon
on any
truc
The Project Manager may e variations (25). Notices m t be The contractor must comply
n
to t
e
tive ar
ctor where
contractor's person-in-charge. empowered to order tests, and the ings are not in accordance with the
contract
Th
Contra
Sum it defined
N, od the 'Final Sum' will be adjusted in accordance
ust give written instructions before provisional sum work e valued as provided for in the contract (26).
is
r
contract
-.-0
.-r
certification by the Project Manager, shall be entitled to advances on account (30). Valuations will be prepared by the and, if ag ed by the Project Manager, the sum due will be certified by him.
The co ractor may,fiave to allow credit for old materials. 97 per cent of the value of work execu value of Things for incorporation will be paid during progress of the Works (30). On completion, the contractor can expect to be paid what the Employer estimates the Final Sum to be, less half the retention (31 [11).
155
Traditional procurement: shorter lump sum forms
GC/Works/2 The Project Manager will send the contractor a draft fi al acc nt hin si after completion, which is certified by the Project Ma ger. T e Fi=orv will b aid when the Project Manager certifies that the Works in a tisfa ate lowin the Maintenance Period (31). ((D
k
5
The contract fully complies with the Housing
ants,
Act 1996 provisions concerning payment pro
d u res.
Statutory obligations The contractor is required to give all not es, pay a supply all drawings required to s suN noti obligations (6). This includes the C ions.
The contractor is required to comply and use of all things brought on e site The contractor is required to omply in respect of the site (10).
regu atisns rel
wit
6 Insurance
The contractor is requ ed respect of his empl ees o `site, contracts (5[11). The contractor sha Things for whi
main iin a
insure'iRhint tractor
v+
n
is r
ponsi
e
d o inse
ployer's liability insurance in t a similar provision in sub-
isks damage to the Works and his will be for full reinstatement value
plus profess
The cont
damage (5[21 and 8).
mployer in espect of injury to persons, loss or y, loss f profit or use, and will cover this by insurance
'Employe is fb"t ctur d may e
certain specified risks arising from work to existing out insurance (5[61 and 8).
oyer has
det'drmine the contract for specified grounds including
Matters followin determinat' n (payment, completion, removal, etc.) are dealt with ro'e Manager must certify the cost of completion. in Condition 39. T fl,
The contractor may determine the contract for specific grounds, including insolvency of the Employer (40).
156
fl,
u
Either party may determine the contract following suspension of the whole or substantially the whole of the Works (41).
Traditional procurement: shorter lump sum forms
7
GC/Works/2 8 Miscellaneous
A full list of definitions
is
included (1).
There is no express reference to rights,r Contracts (Rights of Third Parties) Ac
The contractor has obligations for removal of rubbish (21[41).
thirQ parties, or tVcontr vkatch`iRg, Tlghting mid
Security matters such as admi ion to th t 0 king (15), and Official Secrets (17) m givee liga eva
of the
tir
protg6on
(7) and
(16), passes ns.
9 Disputes
There is provision for adjudica n for ere lutio o y spute arising out of the contract (42). Therdecisi ise equire ent n tice of referral and the or t procedures to be owed. T e a dicato ma be amed in the Abstract of Particulars, and his inding on e par s, a least until finally determined by arbitration. i
Arbitration given wide
isgi* as
he
form for filial
res`glutio"6 of
disputes and the arbitrator
is
157
7
Traditional procurement: shorter lump sum forms
GC/Works/2 This contract? If considering using GC/Works/2 remember that: It is intended for use when lump sum tende g invited drawings and a Specification only. Its use is no onger d to ce(ral govern nagerrWho is g departments. The Employer is required to ap int a Pro considerable powers to act for the Emplo ct t,exclu d tters whit qu tity s be listed in the Abstract of Particulars. Th ilit , the and functions normally ascribed to him re the resp The form may be used in England a or under Scots law. The arbitration rovisi
or oprXi
the law the
la
Condition 43. The Conditions are general, a r ra rtrs'L in tailoring the contract to t nature of he int ded sectional completion. Ther is no pro Ision for n suppliers by the Employer. T e tw volume pr ti. Model Forms should std as ome o the
for some flexibility is no provision for
i
supplemental to th informative.
mmeotary
s
of sub-contractors or mprehensive, and the information which is practical and particularly
Contract admini tration sho d b e stra' tforwa always provided that the administrator to k t'tduble be mie oroughly conversant with the res, and e tim li Rather unusually but very sensibly, terminology, progress m tings bec` ntract ligatio s, although there is no requirement
the
for
pro
a
r wh is has m y fe ures not found in other short forms. The substantial d cument w N& can cover a wide range of work which is t o comp fo C-to u s/ 4, but not justifying use of GC/Works/1. It may also be se n as an al ernative si nb-JCT forms MW98 and IFC98.
This
is
result
an i
active'
fai r
Rela
Docume GC/Works/2 (1998) C Conditions, Mode
158
ng and Civil Engineering Minor Works in two volumes: General mentary
Traditional procurement: shorter lump sum forms
7
GC/Works/4 The Stationery Office
GC/Works/4 (1998, Background
=00
This is sub-titled as a Contract for Small Works, and obviously int works of a varied nature. It is replaces Form C1001 (1990 i
It is published as a two vo Commentary. The former ind
and'are set out in clear graphic style, minology. There is a contents list structured under seven headings. 1
dule of Time Limits. Use of the Model the Abstract of Particulars; Model Form 2 is an wings; Model Form 3 is Tender and Tender icator's Appointment; Model Form 5 is the 3 are contract administration forms.
for most small contracts where o form part, but choice should ultimately depend on the nature he form accepts that either all the CDM Regulations will ulations 7 and 13 will be applicable. It also takes account nstruction and Regeneration Act 1996 (Part II).
`visions which should be sufficient
A fair d
on
is
included
(1
A).
Conditiprevail =otract
in the event of discrepancy, except where special supplementary conditions are included in the Abstract of Particulars (2.1).
Specification takes precedence over drawings unless otherwise instructed (2.2).
contractor responsible for care of site and Works, including sole responsibility for protection, security, lighting, and watching over the site and Works (5). 159
Traditional procurement: shorter lump sum forms
GC/Works/4 Contractor indemnifies Employer in respect of any los work under the contract (6). There is no provision f
gage wni nce irrthis
Making good defects in the Maintenance Perio Abstract of Particulars (7).
'state
The usual GC/Works provisions for matters s ch as occ passes, photography and Official Secrets, are luded in a The contractor's dates for commence Abstract of Particulars and subject to t e order
toeed.
The Works must be cleared of rub satisfaction on completion (15).
A reasonable extension of time may be circumstances beyond the co racto
withou
The contractor cannot assi Manager (30).
There
is
no provision
f tructi
The Project Manag variations (17).
Valuation of varia ion instia.c Ons wh never agreement, or b oject Mana er on t
contract
basis
will be by prior quotation and of fair rates and prices (18).
ovisions re
provtsion or pr
ion and di
the WoTks_01 e contract/price (t
ccepted) may be adjusted in the final account (21).
n`ttq-the contra or ill be a er completion, unless the Abstract of Particulars that there will be a an n account (20). This will mean one-third payable after -third _sf-tfiB wo completed, with the remainder after completion. Applications-must em deb the contractor to the Project Manager, and are subject to certification b the Project Manager (22). Pa
stat
the event of to time, the contractor may be liable for liquidated damages, or damages at large as stated in the Abstract of Particulars (26). In
The Employer has the right to determine the contract for specified grounds, including insolvency of the contractor (27). The contractor has no rights to determine the contract. 160
Traditional procurement: shorter lump sum forms
7
GC,/Works/4 Adjudication is the only provision for resolv,, adjudicator is binding until finally determin include for arbitration. Alternatively the p the adjudicator as final determination.
tratAn. but-the f6 agdee to
*cep
he de
There is no express reference to righ Contracts (Rights of Third Parties) Act
This contract?
It is intended for use wh lu drawings and a Specificati only. departments, although some p isions le the re sector client (for exa Employer is required to appoint Projec a quantity surveyor.
n
ed on the basis of fined to government relevant to the private under Condition 24). The ere is no stated function for
used under the la r Sco Bred b ion 29'
do
ions a rela riend althoug limited, are adequate for most small Partic ars bec important document. The two volume ,Abstra acti ly presente, althoUd erhaps a trifle over-sophisticated for this class
s
eP ntract tern'
Form
inistrNtio y is typical
e
infesting
be str ightforward, and the procedures are simple. orks ut clear.
alternativehnall Works Contract, particularly where services rt of the Works. Likely to appeal most to those already familiar Works ntracts. basi
form other
G
era
(1998) Contra t for Building and Civil Engineering, Mechanical and Electrical Small Works mes: Gene Conditions; Model Forms and Commentary
161
Traditional procurement: shorter lump sum forms
NEC3 (Short contract)
The Institution of Civil Engineers
New Engineering Contract Document
Engineering and Con Contract Background
prbed
93 at frst Although the New Engineering Con r the Lat f pro which could be used across the wh le spe ume ch the need for 'a simpler and shorter inor w
a contract eport stated a document, the 99 as one of the d in the ew NEC3 suite of
was Engineering and Construction as NEC family. The form has n w been re uide wftb flow Chart documents. There is a usef
,-r
The form is obvii oFI a, It thoughtfully struct miYorta major document. right up-front (t conv
tract, but it has been very paired down version of the ial peculiar to particular contract is placed cu ment), nd comprises: C
more
.
mages; inte/est on
h with
ke
payments; limit of contractor's liability; arbitration procedures (if relevant). if so they are to be listed.
udicafor an incor
igatio onditions
loyer's ntract of
c
ply
indicate wheth
nce: si ped and dated. The offer and acceptance bring about the u rse.
Li§t; a--cchedule
thquant
onthe
Works which the contractor is to carry out, and ntra for is to design; list of drawings; list of specifications any wor applicable; cons a-M&s-lon th contractor such as sequence, timing, methods, and conduct of wor - requireme is for a Programme, such as form, content, submission to be provided by the Employer. and updating; an
Wor
Site Information: ground conditions, access, position of adjacent structures etc.
The Conditions of contract, which occupy only 11 pages, are set out in a similar although not identical way to those in the major form. The clauses are of necessity briefer than those in the major contract, and some provisions are omitted entirely,
162
7
Traditional procurement: shorter lump sum forms
NEC3 (Short
contract)
such as testing, health and safety compliance contract administrator or Project Manage
e(e is no e E
rrk
authority for taking empowered actions. The language used in the form has attr, c
Sta n
cumen consistent with other hic is generally attractive. The only provi tons peNe demanding in terms of manage nt Compensation Events, which are p
mily/,
terminology
is
rd, the balance
articularly oncern the ajor form.
Housing Grants, ditions, there are icular contract is a then the payment es, whic art construction contract to Contracts Construction nti , unle provisions would also Construction ineering and Add ndu Y(U K) The cl uses in is left to apply. e in the Contract Data. The ncorpora by r Contract could be a a pted ontra is (Rights of Third Parties) Act ich t kes account o Y(UK)3 Addendum stated to be applicable to the ra t&d, and tl o 1999 may also short contract The contract as printed does, no Construction and Regenera on replacement clauses conc iing a
e
11
ontra
as
i~sticat
een
proc
s
ecifi
estrictioi on natur
ed for use with straightforward work, necessary, and where the risks are relatively e of contract work for which it might be he inte ded work which must be the determining
u res
tl
tio` arties ac
erms use
ractual spirit of mutual trust and cooperation (10.1). ct are helpfully and fully defined
ommunicatit s ar to bbb in writing, and if a period for reply en withi tha period (12).
(1
is
1).
stated in the Contract
byer may gi e instructions which change the Works Information (13.2). st obey empowered instructions issued by the Employer (13.1).
The Employer must allow the contractor access and use of the site (note: not necessarily possession), and provide the services stated in the Works Information (14). Early warning is a significant requirement in the contract (15).
163
7
Traditional procurement: shorter lump sum forms
NEC3 (Short 2
contract)
Time Starting date and completion date are entered in may not start before, and completion may be on or The contractor must submit each week (30.2).
a
The n
dat
forecast of th
The Employer may instruct the contracto, The contractor must submit a Program
on (31).
e as req
=Q3
events, constitute Where delay occurs due to cert action or tly arisi Compensation Events (60). Ther are These are for e net al caus inaction by the Employer, but als inclu t pe sical conditions ainst weather (measured in ratio of da en ex nd event which delays beyond those which could re onabfy ve r ally be expected to completion by more than t ro weeks a rd whi coul r loc for strike occur. This would presuma ly no
omp nsation E ents; The procedures for no g the ents asses or rates and the mec am contract as those the maaor ford (62
a63
i
3
Control ligatiorf can c nstitu or cann at the desig
lies
"
control mechanism (15). s
designed, before the Employer has
the W rks Information (20). may cancel any delegation (13.4).
oyer ay instruct e contract
n
ccess
employee (21.3).
for the Employer and others to work and to stored -contracting, but the contractor remains wholly
re isWo consent req sible (21). There
is
ng.
no provi
The Employer not the Employer
instruct n`o
e
contractor to search for defects (40.1) but whether or of a defect, he is obliged to correct them (41).
e contractor
is to correct notified defects before the end of the Defects Correction Period (stated in weeks in the Contract Data) (41.2), and the Employer is to issue a Defects Certificate (41.3).
After completion the contractor
164
Traditional procurement: shorter lump sum forms
7
NEO (Short contract) Uncorrected defects permit the Employer to en the cost of which can be charged to the co
:
ers
42).
to
/
able fo
Until the Defects Certificate has been issue in the event of loss of plant or material
once The contractor's application will and is for the amount due (
/orks4
o th
lude details
KQ 1). o
Contract Data, half is ificate is issued (50.6). The Employer
is
to pa within thr
receipt of applicatio for pa late payments (51).
expr es)obIi9
ions r
the
ent fied ag inst aii n
In part'
lar
ere is no
Regu ations, co ractor SL
than p
ch
for Vterest becomes payable on
ting o sta ute or regulations, but these would of statutory uty by the Employer, the contractor eedings
d costs arising (81 .1).
erence to health and safety and the CDM on for termination by the Employer if the regula ion (90.3).
press
brea
ovide in
e
6 this occ
ssment day which follows
t from f
joiames the insurances stated
in the Insurance Table
insurance where this is stated in the Contract Data, and ovided by the contractor (82.1).
The insuranGeJs for' eplac6ment cost in respect of loss or damage to plant, materials nd e: ends from starting date to Certificate of Completion in the case serial and Defects Certificate in the case of the Works.
Insurance-maq also e required in respect of the contractor's liability for damage to property other t an the Works, and injury or death to persons for the minimum cover as stated in the Contract Data. The contractor's liability for loss or damage to the Employer's property is limited to the amount stated in the Contract Data (80.1).
165
Traditional procurement: shorter lump sum forms
NEC3 (Short contract) 7
Termination Both the Employer and the contractor have t presumably means the contract, although not e
E
There are eight reasons stated which allow for other party (90.2). The Employer may also t The Employer must issue a Termination cease work (90.1). On termination the contractor must leave the site (91 the Works completed by others.
Em`ployeYmay have
Amounts due on termination are a 8 Miscellaneous Use of the NEC Engineerin necessary.
The Addendum Y(U K)2, is n6 provisions no doubt Data.
contract, but payment ed by reference in the Contract
The Addendum
the short form. Clauses
9/tUK
93UK to Construc
i
,
fo
ute resol in th
s
and-Reaen ati
ion in e ort form should be replaced by clauses Uni d Kin dom where the Housing Grants,
Act 1-496
aD
ies.
9 Dispute
S=t=orma T
s is
t 'be by reference to adjudication (93).
be na
d in
theContract Data.
ud or's de io is fina nd binding unless and until referred to a further tri unal'. The Contract ata ho Id state whether arbitration is the tribunal, and if so, w t the pr cedure is to be. T ea
166
7
Traditional procurement: shorter lump sum forms
NEC3 (Short
contract)
This contract? remen%er Mat:
for use as a lump sum o r rement confract f uilding and engineering works. Care is neede at the to est lish t at th onditions, which are short but generally com ensurate ith ork o his na re, will be is adequate for the intended wor em on e Offer and Acceptance near the front of the rks Information tract`6 are particularly important and r quire full e an refu by both parties. It is intended
=
tad W
The law of the contract is reference to the law of No amendments necessary to
whele th
ing
to ond iti
here is no express
aw. Pre Id h
e
*
e in
ly any consequential
uded in Contract Data.
in plici because whilst some of the The document is rath dece s ap p Conditions are adm rably brie S d stra tfo e seem to be lightweight by rks forms, for example over subcomparison with eq ivale e s in othe inor contracts or insuran :e. Th clauses for satio Events, however, seem rather muMe difficult to abbreviate this NEC out of hort rm, alth ug cling d ditio ml time oney.
R
proportor
i
with other
rthe pr at first an
give efiniti
form rks, see
Mo
not
tion b theYs
is
NE
documents,
is
somewhat difficult to
nairofi
precision. The terminology is standard clause. Recent UK legislation, where applicable been taken into account. This keeps the form denda can be a trifle confusing.
robably w come professional advice when it comes to ainly e Compensation Events procedures suggest the 'delega for contract administration.
itted and experienced NEC users, this form must be seen as family.
a
on Short Contract (June 2005) 2005) n , Option X12 (June 2005) nn Engineering and Construction Short Sub-Contract and Constru K)3 (Ju
Notes Engineering and Construction Short Contract Guidance Notes and Flow Charts
167
Traditional procurement: shorter lump sum forms
JCLI
Agreement
The Joint Council
JCLI
for Landscape Industri
Agreement for
La
Background The JCLI originally had two standard form and Without Quantities. In 1978 these
dsc e A
ere
the then current JCT Minor Works A reement
sin
TNrK new
JCTd
opted
a
Section headed format (two years additional oft clauses of specific relevance to Ian include ters as the S. T failure of plants, malicious damage dditi to cover plants dead at practical completion. The form r p rtial possession, Prime Cost sums, objections to n loy and full fluctuations, none of which were include Minor is fo was considerably revised in 1987, again in 1 urrently in visa n of a 1998 edition. Landscape contracts will mo need to take account 'construction of the Housing Grants, pd Rege 96 provisions.
rs
1985 the
ed dsc the time some to al auth rities In
(IFC84)
pu bli
JCLI al
for use on
contracts in exces
rgerI
ith a
elunt
o
th then JCT Intermediate Form hought desirable because at to use t standard JCLI Agreement on
f f75; reeme
ced u res gen
Supp rent tracts.
onn
ndsb e Maintenance Works for use where sible f the care of trees, shrubs and grass
ntracts' adjudication is a statutory right, and payment the provisions of the Housing Grants, Construction and
ust co
orm refers to 'the
ministrator' and sets out respective duties (1.2).
t Bills, and these are to be prepared in accordance with ierwi e 0.8). ntra
The applicable la whateve the nationality of the Employer, and wherever the Works are situated, is the la ngland (1.7).
Works may be subject to the 'CDM Regulations' (Fifth Recital). If mainly soft landscape works then this is likely not to be 'construction work' and Alternative A will apply. If landscape work includes earthworks, hard landscaping, drainage, demolition etc. this might constitute 'construction work' in which case Alternative B will apply. 168
Traditional procurement: shorter lump sum forms
Agreement
There
is
---I
JCLI
There
is
provision for partial possession (2.6
7
tate
provision for replacement of plant
ch fad before
ompletion
(2.7). There is provision for the maintena ce tr practical completion (2-8) either by he contr
plant
There is provision to cover maki goo fcil4yving an to practical completion, either tire tt co) acto 0 by a provisional sum (2.913). '-`
Although the form does contractors, there is refer, expenditure of Prime Cost is given to the contra The contract may
Adjudication arbitration or
is
p
efe
o an ocecxures ction the cor
n st
ri
s
e fixed pric
gh)f re
for (8-1), and tion 8.2 and
vide
o
t to
(4.7); i
tc. post-
e, Ero'i
for
putes
le o
or theft prior 9A), or covered les or nominating suba
administrator on the ection to a nomination
x tc. changes (4.6).
y be finally determined by
169
7
Traditional procurement: shorter lump sum forms
JCLI
Agreement
This contract? If considering using the JCLI Agreement remember
llt cov
up to practical completion, but maintenance i a ma Landscape Maintenance Works. It is in one ve ion only, or public sectors. There is provision for bills Qf qu tits The a contract administrator (not necessarily quantity surveyor.
Ag repi
tect
fl,
fl,
It is intended for new landscape work, both soft
fl,
O-0
i
flrk
fl,
0
uatio There is no provision for pha d com plet n, ape design by the Contractor. There is provisio for ppTti possessio nomi tiorVof sub-contractors, and clauses dealing with the ailur of plants, m dam e or theft, and postdrafted o pliance with the CDM practical completion carekThe orm structi usiri ts, C Regeneration Act 1996. i
easi
If acting as difficulties of retenti is used in par Con actor,
tor, -expe in landscape operations might find rleti defects lia ility obligations and staggered release les in neral e straightforward but if the agreement work bei arried out on the same site by a Principal
r-+
loose lei peculiar to Ian
JCL iss fl,
rs
ao
030-Q0
form,
e required relatin to insurance of the Works, pletion care. There is no ractical c nd entri to be made in the text of the
0-0
ods, healt.
an
IQ)
fl,
When completing t e form (comp) damages for no conventional appe ix to Conditions.
over coordination of contract periods, Defects Liability ments, indemnity and insurance. ision
w
nd Practice Notes which give useful advice on
plant specification, watering, frost ion, iability for plant failures and multiple Defects k such as
The wording of he Conditio s closely follows those of the JCf form MW98 and therefore the struct la age and terminology will be familiar to many. For large hard landscape work it might be worth considering the use of the JCT form IFC98 suitably modified as an alternative.
170
Traditional procurement: shorter lump sum forms
JCLI
7
Agreement
Related matters Documents JCLI JCLI
Agreement for Landscape Works 1998 Edition Agreement for Landscape Maintenance W
References JCLI
JCLI
Practice Note No 5 (February 2002) Practice Note No 7 (February 2002
171
Traditional procurement: shorter lump sum forms
CIOB Forms
Chartered Institute of Building
CIOB Forms
of Contract
The Chartered Institute of Building was on to 'she ers Society. It now has a wide range of e rsh' ' h iri torn, consultants and clients. In 2002 it assimil ted the m re and b shi the Surveying Institute (ASI). The ASI at that t i pub ' ed tan g d forms of contract and the CIOB consequently o ver eir p ation. T t range of forms are virtually identical to those evi ou he pu cont cts, with some minor changes to the text and termino iv All lion o inck des a Section ee ,--r
.t
for completion at the start
I
rathe
conditions or an appendix as he ASI ver
requ
basis. The CIOB a o pubs
eratio
as befits an Institute nd all branches of the ntracts have each been logists. These forms are for a) lump sum as the contract ties management, which is fl,
N~Co f6"
to cover a ide r nge of building which counts contractors, arc tects, rchitectu surveying profession a o its emb s. The Vtee approved by the Briti Instit use with traditional metho CIOB forms exist
beyond the scope
s g/r
Q._
dition): suitable for all types of works, but primarily of all types. It may be used either with or without -contract forms and nominated sub-contract
Quo
Building/ContrA nde or19.P of q ities. CIOB o mare available.
Conditi
in are commendably free from legal ructured to a common pattern, with uped under 11 headings. The contracts
°(D
5-o
-E'
,andii`them b-co? ra cts are It
entries in the
donb-
f+'
n-0
Q-°
O-v
ontr ct (2 04 Edition): intended for use with smaller works e.g. private houses, al era ions or extensions, with the work shown and described in cificationr Schedule of Works. Supplementary Conditions permit drawings and/or the use of bills of qu ies if required. This contract also makes provision for nominated sub-contractors and fluctuations if required. CIOB Small
172
'.P
Minor Works Contract (2004 Edition): for use with straightforward jobs or minor works of a relatively simple character carried out on a lump sum basis. It is not suitable for use with bills of quantities or where it is intended to nominate sub-contractors. CIOB
Traditional procurement: shorter lump sum forms
7
CIOB Forms CIOB Mini Contract: in
two versions, for
oveme
Ho,
Use (1998 and 2000 Editions respectively),
The forms referred to in this Section are Chapter 8 below for details of the Cl
CIOB forms are suitable
administrator
is
for use
needed in all c
t
to
"ses,
bu
t a
}bracts lis act.
to r o
maybe
er
ies. A contract tect, surveyor or
o Con as 'the Architect' efer engineer. The contract admini ator Wor ontr t, he viser' in the Minor in the Building Contract a n! tnote r er on p. 1 states that Works Contract regard s of elete pa ess th contract administrator the term 'Architect' must rthele ars t `t the term when relating is a Registered Archite to contract adminis ation the i
-
All the forms co contract. There are
particular
conct as
tract,
i
entries tifythe parties and date of the in which details relevant to the citals, and t g ' ion for attestation to be under st b entered. There is ie , or a dee Eac form has appendices peculiar to the list o clauses. The forms appear to comply as an ' eac kng Grants, Co struction and Regeneration Act 1996 nd if so then the relevant provisions of is ion b en enc rief
1
rovisio of adj r Constructi
(2004)
of quantiti of quantities or Specification. If the latter supply a Schedule of Rates.
re drawings, and bills
ract d
r
icular contract are to be entered in the Agreement.
Details relating
the Employer as contract administrator is referred to as 'the istra or'. If that person is 'Surveyor/Engineer' this will be an entry in tals and the wording of the Conditions is deemed to have been changed. oint
d by
The obligations-f the contractor and the role of the contract administrator are well described (1 and 2). The contractor must submit a Programme/progress chart within three weeks of
entering into the contract (4.11). Key
contract dates are entered in the Agreement, and the contract administrator may 173
7
Traditional procurement: shorter lump sum forms
C10B Forms award at his or her absolute discretion extensions of ti of delay (4.4). ed witf acco d
The contract requires practical completion (the d approved in writing by the Contract Administrat rPart/Sectional Completion as the 'Employer ma requir (4.6). Failure to meet the completion date will r confirmed in writing by the contract ad The Employer may appoint a Clerk of must be confirmed as contract ad
Domestic sub-contracting administrator (5.1).
as
the
u`ft
C
ntrac
Ii
inistrat
poked ipstru
nistr
t
s
(2.6).
is
There is provision for nomina `ed sub-con stated conditions (5.3 and 5 4). -
(
ractor
The Contract Sum is V d rates and prices for e0usive.4luctuati labour and materials yB incded, there djustment by use of formula rules. Otherwise only, chang rge will e allowable (7.3). The contract admi istrator/is embo o order vari ions, and the order will also the priced document; or rates stipulate the basis r valuV(i.e. ei er acc con ct administ tor; quotation approved by the contract approved by the re is no quantity surveyor, then administrator rk). N f the ccovfractor measuring
tetht
are n mally is ed at monthly intervals, with payment 3 . Amounts payable to nominated sub14 days in the Certificates, and the contractor must provide omply means direct payment by the Employer (6.81). ,,.
Architect' by the Emp contr, pr
f of
i
pay
hite 's Fi r 4 been ade good fo
issued as soon as practicable' after any defects :o yg th end of the Defects Liability Period normally six
-
onclusive evidence that work, materials or goods are
the contr t (6.91).
must7y'with
--6
The contractor all legal and statutory requirements, including giving necessary notices and paying fees and charges legally demandable (1.3). If changes from Contract Documents become necessary for reasons of statutory compliance, the contract administrator must receive written notice from the contractor (1.31).
Compliance with health and safety CDM Regulations becomes
174
a
contractual
Traditional procurement: shorter lump sum forms
7
CIOB Forms obligation as well as
a
statutory one (Agree
f da
Insurance of new work in joint names, aga contractor (8.1), although the Employer m of existing buildings against risk of da Employer (8.2).
3-0
There is provision for determining the e r o of default on the part of either E pl and if acts out, determination occur, yen site, completion of the Works,, an
ag
H
d pen
arry th insura ed perils sat tW
i
in
red all
ra nm =hte
Disputes or differences are, o be ted his or her decision (10.1). t resb ddt (10.2). The contract lists the se d ru shortened arbitratio yproced`u to refer a dispute to adjud icatio and tl p roce an adjudicator and :ondu t o he adjudic (on (1
eT4A sted reasons are clearly set
ctor.
settlel, %Oim
is
e. In
moval from the cribed (9.1 and 9.2).
nistrator initially for
proceed to arbitration can apply, including a tion on the right of parties
ting to the appointment of
ntrac,(2004) A headnote dicate tha he the use of bill of uant ies. CIOB Bu ding Condition t the a quantity appoi nom..,
i
for
is
inte ded
t shou
t be
vul
are
more
e
Con&
a
smaller works which do not warrant
for complex operations where the ropriate. However, Supplementary vide for bills of quantities, and for the u ed
rveyg' an
full Schedule, ,,,
D
personp The
tt
m
i,
and the
by the Employer as contract administrator is referred to as If the person is 'Surveyor/Engineer' then this will be a Recital e Conditions is deemed to be changed.
i
of
e co-6tractor and
the role of the contract administrator are listed
act dates ar entered in the Conditions (4.1), and the contract administrator r her absolute discretion 'an appropriate extension of time if warranted by the circumstances' (4.4). The contract requires practical completion, and this acceptable minor items to be completed') (4.2).
is
defined (leaving 'only
Failure to meet the completion date will result in payment of liquidated damages, as
175
Traditional procurement: shorter lump sum forms
CIOB Forms certified by the contract administrator (4.5). Domestic sub-contracting is permitted, but only approval by the contract administrator (5.1). There is provision for nominated sub-contracto stated conditions (5.3 and 5.4).
pliers,
The Contract Sum is VAT-exclusive. Fluct labour and materials may be included charges will be allowable (7.3). The contract administrator may ord r riati basis for valuation (i.e. according the p contract administrator; or quotation prove daywork) (7.2).
order i a(so ; or rate e co a adm e
s, a
cu
nor ally is ed at 5-0 -44 days (6- . Amo e Certificate fir
Architect's Interim Certifica payment by the Employer contractors must be identifi
ntervals (6.2) with is for nominated subadvised (6.8).
Architect's Final Certi f kate t be iss d after ny d fects have been made good, following the end o the DeActs Lk bility Pe-i iocl nor ally six months (6.9). ory requirements, including
al and stat
st coryiply
fety
d 1.6).
Insurance of ewwc oint na es ag nst-6 k of damage by listed perils is by the 1), altho contractorr h e Emp er may el t to carry this insurance. Insurance uildi agai s,it ri of da age by listed perils is at the 'sole risk' of the of existin -
Employe (8.2). vides
"e
o
rmination employment of the contractor for listed rt of either the Employer or the contractor (9.1 and 9.2). efere to action and claims subsequent to determination.
limite
E
of ere is ave ns
ute ar to be si e contract administrator initially for his or her deci 'on (10.1). If not sate resolved they may proceed to arbitration (10.2). There Iso a S ion n th' right of parties to refer a dispute to adjudication, and the procedures r ting to th appointment of an adjudicator and conduct of the Di
i
adjudication (11
A headnote indicates that this form is intended for 'minor' works on basis. No bills of quantities and no nominated sub-contractors. Contract documents are drawings and Health and Safety Plan. 176
a
a
lump sum
Specification or Schedule of Work, and
Traditional procurement: shorter lump sum forms
7
CIOB Forms Details relating to the particular contract are
ered
i
of the Conditions. The person appointed by the Employer as
or
is re
'Adviser'. the role
contract dates are to be enter in his absolute discretion, an ex nsion'
CoNdition e ilae cir
Key
{
The contract requires practica followed by a defects perio
mp
on
e
Failure to meet the completi
Sub-letting
is
ove
onths
Iv o
nt of
not per
uidated damages (4.1).
li
the Adviser (5.1). AT-excl usi
is (7tions, erim '2), wi I
C
rtificate
ill y
a
d
fro
Employer
time to time at the discretion of the within 14 days (6.3).
e
Q-6
Certiffcate Ilbei ued after proper completion of the work and defects fter thi of the defects period (6.5).
contractor
r
usf omplyv(iith all tatutory requirements and pay all fees and e (1.3).
nce otew wo k in joint `n rr s against specified perils is by the contractor (8.1). ran of existig buildings against specified perils is at the 'sole risk' of the Empl yer ). ins
trac reasons on the
to actionsich m Ived, they
termination of the employment of the contractor for listed mployer or the Contractor. There is very terse reference low (9.1 and 9.2). to be submitted to the Adviser initially for his decision (10.1). ay proceed to arbitration (10.2). There is also a Section on the 'fer a dispute to adjudication and the procedures relating to the CD-
r_+
ies to appointment of an adjudicator and conduct of the adjudication 0
1).
177
7
Traditional procurement: shorter lump sum forms
GOB Forms
If considering using CIOB forms remember that: The intended scope of the contract is carried in a eon each of he for use are all for lump sum contracts, and for pri ate o oc author ti The -memb ml t also d the obviously for use by CIOB members, but considerable interest and may use them.
th to that The Building Contract and Small Wor Contr trac this contract is English law, but the Minor ks C ilen forms refer to adjudication procedur bjec the w o E Ian The forms would therefore not ap ear to and
itablese
rovis Contract administrators should first be ain th ately cover the nature of the intended work,ano eck in' ar tffi e provisions for d djudication satisfy Practical Completion Certifi fates, insu nce, ai ermin mited, best used for traditional their requirements. They are some, to be light on detail work. Certainly as far as pay'Dent concerned required by the Housin Coh 5truction on Act 1996 and might Ktructi be subject to the Sch e fo Contr ere is no provision for design nd suppliers is provided for by the Contractor, ut no ination except in the Min `r Wor Cont tare available for nominated and domestic su ontra '
traightfo ator
orw i
tfacl m ree comp uctur
considerabl authority, and contract administration onve ional operation. There is a full range of r available.
inter ting forms, traditional in scope, clearly set out and ainWworde Likely to appeal to clients, and certainly to smaller
Idin
Documents Agreement for Appointment of Professional Building Contract 200 Small Works Contract 2004 Edition Minor Works Contract 2004 Edition Domestic Sub-Contract 2004 Edition Nominated Sub-Contract 2004 Edition Contract Administration Forms (eight in number, available in pad form)
178
Adviser
Agreement for Appointment of Planning Supervisor
Notes CIOB Contracts Guide
- Guide Notes on their use
Traditional procurement: shorter lump sum forms
SBCC
7
Documents
Scottish Building Contract Commi
SBCC Forms
of Co
Background Scotland might form part of the
--o
rical reasons, d Ki do but ots w, fi differs markedly from the la la a Wa statutes from Westminster apply to Scotland, :dso le on lies o cotland. Sources tho f En Ian , a the fluence of Roman of law in Scotland are not th law and Canon law over ime Ite uniqu system and courts hkolog`j con nental links in the past structure, not to mention a istinctiv what has described as an have also helped to 'intermediate betwe Civil la
confo Despite pressure frj m En measure maintained their oble and ind out work in Sco ed t take acc r pro rty, de r and in the la rel u rse English law f tort) nd o
8(o
aw, the Scots have in large Therefore architects carrying ificant differences in legislation, adly speaking the equivalent of the
tland wer bften based on an exchange of letters the pa , build' g co tr irect trades contracts. The Emmerson rather tha forma ocumq fits, and highlights the di'9` ent circumstances in Scotland and concluded Repor 9 de b basis as unsuitable for main contracting in the tha the exis com nded t at closer links should be established with b ' dino ind party b appointed in Scotland, which duly resulted in ittee. report from that committee, with the initiative ation of in Scotland, resulted in the formation of the jIdinc ntract Committee (SBCC) in 1964. The SBCC has now been Scot h a company. The SBCC Ltd board is advised by a Consultative tr ctured m representative bodies from within the building industry opff tee in Scotland as fo In
i
i
f Scottish The Roy Institution f Chartered Surveyors in Scotland; C; Scottish Convention of Scottish Local Authorities, Scottish Committee; National Specialists Contractor's Council Association of Consulting Engineers (Scottish Group), Scottish Executive, Building Division, Confederation of British Industry; i
I
-
179
Traditional procurement: shorter lump sum forms
SBCC
Documents
Association of Scottish Chambers of Commerce. This is obviously a wide representation compared,,
it
The Banwell Report, issued in March 1964, common form of contract for all construction q Engl Wales was both desirable and practicable'. plement the Joint Contracts Tribunal inviting the Scottish uil ' g C the Tribunal, and this invitation was ac p in 96 'subj SBCC to issue Tribunal forms in a m ner whi nfo d
theme
d, Sccy
I
practice'. SBCC Ltd is
therefore primarily res onsi
use in Scotland. It is also respon
kale
ation o
for
advising on the interpretation of these ontrac and publishing guidance an ractic to nomi party tribunals, and attendi g patio pal nd of r com
t
now the ' eleva within JCT Ltd, and takes an ctive JCT. SBCC Ltd is
rt in
uments for g such forms,
Scot
proves
t to
ractice, drafting mediators or third uding those at the Construction Industry afting where Scots law
and practice dictate.
t es with the JCT 200 ,editio' the ti of new forms. The forms are The SBCC is curre 'fly in
nditioi
are entirely
incorporat
t. Thi
a
welcomed y the users.
Scotlan
tish Bu-i ottish Buil
ications to bring them in line produced the first of a suite to the earlier SBCC 'supplements' but e Sco ish Building Contract terms are now signi cant step for the building industry in as
ontract
ra ct ottisl6 With Sc tish`R6ilding Contrast tinor Scott' h Building Caiatract Scottish Contr ct G
proximate Quantities orks orks with Contractors Design
ill to be up
Scottish Building contractor's design (2002 revision) Scottish Measured Term Contract for Maintenance and Minor Works (2002 Revision) with Scottish Supplement (Notes to Users), Scottish Management Contract (2002 Revision) with Scottish Supplement, Scottish Management Contract Phased Completion Edition (2002 Revision) with Scottish Supplement. 180
Traditional procurement: shorter lump sum forms
SBCC
7
Documents
(Both these Management Contracts need th eMorks Invitation; Tender and Works Contract; IScotti
Agreement; Works Contract/3/Scot (200 Works contractor (2002 Revision) and S,
ontrac );
ntra
tes to
sers.)
Revisi
11
addition the SBCC also publishes it own ve contract forms, the SBCC Contracts contracts.
/Sco
ETIn, oye
of
f nomf-aatedAnd do an2,,SBCC `rsions
In
Use The Conditions of the ada
Modifications relate to determination, payment
rms
sub-c ateria
a
s
off-si
e JCT documents.
IaQq y
omi
fini
ors and suppliers,
deducting liquidate
damages etc. The most significan difference ttesta made in accordance with Scots law. The SBC issues dance on testati procedures. Another difference concerns dispute re flutio in Scotland. bitrat n Act 1966 does not apply to Scotland, and a iron p ced u res e quite distinct. Adjudication is a statutory ri SB CClkas pro own Adjudication Agreement. i
Scotla#who
dertaW
eek advice
ra cts
MW/S'eot05
ar f,
ansons
cot05), and Minor Works Contract with clearly closely modelled on MW05 and ifferences between the JCT and SBCC versions of the forms
orks C ntra
(MV
t05)
a
(SD
WWD/
cot05
folio
r
the optional use of bills of quantities (second recital, third pointment of a quantity surveyor (Article 4). 3-:
s
There is an additio
10 to deal with 'registration hereof for preservation and
ecutioxr
o
O-,
p,i'ovisio for Attestation as set out in MW05, but the contracts e a page f the insertion of particulars of signing in a Testing Clause. Model ce are set out at the back of the forms.
Applicable law 2
is
stated to be the law of Scotland (1.7).
Time The wording of the clauses
is
identical, save for some clause number cross references.
181
Traditional procurement: shorter lump sum forms
SBCC 3
Documents
Control Covered under Section heading 3 in MW05, MW/Scot05 due to a provision for bills of quantities
Se, io
hem
rd nder S ction
3.
Wording of the provisions for listed sub-contractors.
is
mainly the same h both fo
The main contractor may choose a dome is s co ac from three names as set out in the Cont ct Docum t T is a maintaining the list at three, and a r on ere roJ p laus (4.3.2 and 4.3.3). This is similar to
4 Money Covered under Section headi The wording of the clauses 5
i
4 in
identic
ve for s
Statutory obligations The wording of the cl
statuto
6Insurance
ction h6adinc6 in ses is identic
e
account
ig 6
fit
W05 b Section heading 7 in the SBC versions. ide 'ca in both forms, except for an additional with pro edings in of erjurisdictions (7.1 -5) and adjustments to tish le station (7.6). hea
of
ut Sectio heading 6 in MW/Scot05. The orms, except for some minor cross
throvisi
i
Ins is
iscel ules are the same The w
f
ms in respect of 1: Arbitration and 2: Fluctuations
t 2: adjudication
is different to take account of Scottish nal Part legislation. Mere diti Schedule 3: Contract Documents under which lis all the documents forming the contract. the parties are r quired to le
P
9 Disputes
u
II of the Housing Grants, Construction and Regeneration Act 1996 applies to Scotland, and either party has a statutory right to refer any difference or dispute arising under the contract for adjudication.
Part
The procedures and rules for adjudication in clause 8.2 are identical to those in MW05. 182
Traditional procurement: shorter lump sum forms
Documents
SBCC
,
96, alx
Arbitration in Scotland is not subject to the rbitrati n Act 1 sets out the relevant procedures and C es wZr h unless it has been selected in the Contrac P artic s. The alternative of court proceedings is rights in relation to opening up and
re n
7
Th
o in clause4 and c ce icates d d isions.
This contract? If considering using MW/Scot '+_
It is intended for building w for work of such duration
fl-
used where the Employer administrator. There is provisio he or be appointed, althou ears t for such matters as aluations. required to design porti the Works This contract is is
drafted to
Housing Gr nts, As with
e formt eC
sta nsu C
and
ntrac
or
plia with stru ion ari cotzK
cles
re is also a
e for
ing works in Scotland. The form Regulations, and with Part II of the erati n Act 1996.
vision for p aced completion. Unlike the JCT form, sub-contractors by way of a list of three
J
this SBC names
and is not suitable uired. It can only be Itant to act as contract a quantity surveyor may ified role under the contract ed if the contractor is to be re
f edica
, de isions a e required relating to insurance of the Works pletion. Ap opriate deletions will indicate whether the final rbitrati n or court proceedings.
administra dr, the Conditions are likely to prove adequate for procedural rules are simple.
form can be seen as more of a middle range contract full SBC version of SBC05 cannot be justified. There is CT IC05 form.
s SBCC
e
Related Docum SBCC SBCC
Minor Works Contract 2005 Edition, 2006 Revision Minor Works Contract with Contractors Design 2005 Edition, 2006 Revision
Notes SBCC
Guidance Notes upon Dispute Resolution in Scotland
183
184
The Joint Contracts Tribunal Ltd Agreement for Housing Gran, Works
The Joint Contracts Tribuna
Building Contract for
a
intena
epairs a
f Building ct 2004 Editio tural erson entering into a contract for purposes cts betW,, nsu mer ' i.e. a cularna p on wish have w rk carried out on his or her own house) and (i.e. a services in the course of their business). pplie ss, in pa
'
1
put at a disadvantage. The Unfair Terms in er so that f cts Regulations 994 (SI 94/3159) apply to contracts which have not been nerati include all standard forms of building contract and is d (e.g. thi would re uire that here must be no unfair terms. Terms which are al s ises), a r e th e which might ca, se a significant imbalance in the parties' rights to the isu er uch terms not be binding on the consumer. The Regulations lain, i elligible language. pressed
to proteq 96
will normally
13-4
classed as consumer contracts, although some might also
185
00
986
Traditional procurement: consumer contracts
0
XT HG(A) The Joint Contracts Tribunal Ltd
Agreement for Ho, HG(A) 2002 Editi. Background ibunal first dduce" vari e Agreement for Minor Works 1963 Edition, wit? ous w h were grant-aided by the local authority. R ova nts under' cal Government and Housing Act 1989 saw t e intro of f e 1994 Agreement for in r ions. The white-covered Renovation Grant Works, whi was o RG(A) closely follo wed the v of the ino orks form and was for use where an architect vas appoint d. The ink-cored was a more maverick form and was for use w iiere th nt dealt di ctly wi the contractor and no architect was appointed. In 1970 the Joint Contracts
4z
With the intr, du 1996, a rev, ed for Grant Wo s HG( contrac is for grant is be Reg
,C+
'_'
w
,-+
c"'
L/)
C,+
(.p
the ousin Gran Construction and Regeneration Act ntract ca nec sary and the Agreement for Housing b ed in 2002. It s persedes the RG(A) 1994 Edition. The Narc ct or con ract administrator is appointed, and a o the Housing Grants, Construction and t 1996. ea arently no plans to revise the version for use Is dire ith the ontractor without appointing an architect or and e for er RG(C) is now so outdated that it must be ISO, o nurse, n. wer consumer contracts specially drafted for use ilable. Ive bi
eement for Housing Grant Works is closely modelled on the ing Works MW98. The total document runs to 31 pages my 10 of these. The Agreement includes six Recitals and c e and f e Conditions are Section headed. An Appendix comprises copies kno edgement and authority which must be completed by or on f the payee of the grant, and sent to the local authority. This sanctions the al authority direct to the Contractor.
eement but the Conditio seven
.
I
A very helpful Guidance Note is included with the form, and this precisely summarises the types of grant currently available, as well as giving some worthwhile advice on contract administration relating to grant aid. The Conditions reflect the nature of the work, and the wording is appropriate for
187
$
Traditional procurement: consumer contracts
JCT HG(A) 'construction contracts' to which Part II of the Hous fig Gra ts, Regeneration Act 1996 do not apply. Where Part does pply the concerning notices over payment procedures, sta utor ob ati requi obviously be complied with in addition to the ex ents the wording. i
Adjudication is included as probably the most the parties entitled to refer final resolution reason, still insist on going to arbitration need to be incorporated at the outse probably be suitable.
olvind
..l-
hQ
P
coract
utes,
for some avisionsn
Use The form is intended for use where an rchite appointed, and where a gran Construction and Regenerati n Act 199 The Works are to be carrie out or aln agreed lu fluctuations not even tax cfi nges. The Contract Drawings, co cifica pn, and S will be lump sum, ba ed upo,) prl\(ng rele
-
ofe
The Fourth Recital ates th ft the 5eQt Recital states the m for hi a gra are made for paym eats of th gran ides fo`r
ontractor
is
ments may comprise
ult.
The contractor's price
ntract Documents.
oyer has ap
t
ing uhder h
y out and
contracto
with no provision for
complete the Works in accordance with the
to per hose described in the Contract Documents
The Architect
is
contractor to carry
(1
1).
liged to issue any further information necessary to enable the
ou-tlNorks (1.2).
Inconsistencies in or between Contract Documents shall be corrected and this may be treated as a variation instruction (3.6). The printed Conditions prevail (3.6).
188
Traditional procurement: consumer contracts
0
JCT HG(A) Where the project is notifiable under the CD Principal Contractor must be identified, and Recital, Articles 4 and 5 and clauses 1.3 a
chite f c the c ntra
The contractor is to notify the for reasons which are not with
uivi
ntm4nt ma
_or if ne
date to b
The Works may be commenced on a date to be inserted (2.1).
contractors or suppliers
Coons, a
areithin
p
in
cto
e co
6
s c
h
(2
1
co
of ti
The Architect is empower (Note: no specific grounds
fisted.)
If the contractor fail o compr damages (2.3) and the rate certificate of non-c mplet
er is entitled to liquidated is no reference to a
there
i,oserted
i
certi ed by th
tra
the c
oriso
ths, al ou he Ar itec rovisi
recti
defects. (The Defects Liability Period inserted, 2.5.) A certificate is to be been discharged.
e
ibligation ferrin
s
possession, nor for partial possession, nor for
ion.
`tten consent refers
to 'this Agreement' (3.1).
nt to slob-contra
Written con
for naming
is n
a
sub-contractor, and no provision for including
a
approv be issued in writing (3.5) but may be oral and confirmed include variations (3.7) and this would presumably allow no specific reference is made elsewhere.
actors 'co petent person' (3.3). T
re is no provision
to be on site at all reasonable times (not for a clerk of works.
is
There is no provision for testing, opening up or action in the event of non-compliance. Non-payment would seem to be the ultimate sanction.
There is no provision for work to be carried out by persons engaged directly by the Employer.
189
$
Traditional procurement: consumer contracts
JCT HG(A) 4 Money The Contract Sum is VAT-exclusive (Article 2). unless stated of
The contract is fixed price
Docum
Where
a variation incurs additional work, the chitec whether this will be eligible for grant aid (3.7
Instructions must be given where provisio work is either to be agreed in advance valued Direct loss and/or expense is limite included in the valuation (3.7).
e in
fir va
riatibb s
ded ons.
or
Provided that the contract period is to er th ys, r can request that Progress Payments are ma (4 eekly e Architect is to issue certificates to the Empl yer. Reten ill be a cent unless a different figure is entered). 1
Certificates will show the am e and the of ons. The final date for payment by the Employis 14 Qrn issue th te. Failure to pay by the final date for paymen ill a ct`Fnteres f5pe ent ver the current base rate, and can also give the co tractor, a validht to nd w rk (4.6).
f r
tificate
t half the The Final Cer,
signifying
issue
rficate
different iqure
i
is
X
fort
ser ed)
ys of either issue of the certificate 28 he def ts, or the contractor submitting all account (4 ). He is given three months (unless a to of ractical completion to produce this.
g go
mpletion o
necessary, inform
f
ificate, the inal date e
14 d ys after practical completion ention (4.2).
is
14 days from the date of issue
Certific
e n a resi tial occupier (for example in the case of a landlord wit a h e in multiple cc atio grant) then JCT HG(A) might be a 'construction contr t' to which P t II o he using Grants, Construction and Regeneration Act 1996 ap this c se t Employer would be obliged to give notices to the contractor as req it der ections 10 and 11 of the Act. Notices would have to be given within e applicab time limits, stating the amount proposed to be paid, and any intention old or deduct money. This would apply to Interim, penultimate and Final Certificates, despite the absence of any such express provision
W ere
'c'
1
vii
+-.
in the contract Conditions. Clause 4.4 covers the payment of the grant or any part of it directly to the contractor by the local authority. Signed copies of the form of acknowledgement and authority
190
0
Traditional procurement: consumer contracts
1CT HG(A) n sen to t (in Appendix to JCT HG(A)) must have is by h Employer. Certificates ed itec will t contractor by the ul dZn d e cted fra the amount of the grant to be paid, and t is amo ce sha e Q E b amount otherwise due to be paid by t issue the Cert ficate the Employer within 14 days of the da
ts
l
5
oyes
Statutory obligations It is the contractor's duty to com
required notices (5.1).
tlAre
The contractor is to notify statutory requirements and he will not be liable to the
itect
ritir
tract
1ethis
Where the CDM Regul iafull a the Employer is to e ure that th Plah-r in g under th out the duties requi
SO
DM
i
if h`e bligatio ct.
c
i`Vthe Sixth Recital applies, ativ rv s an Principal Contractor carry ,aula ons.
6 Insurance
/ind requir, d to mange
ontrac is
requires an e
ry (6.2).
rCe of new works in joint names against o ed to arrange This is for full reinstatement value, but note specified Iclaus of spe ically nclu de heft, vandalism or impact, and advice should cover professional fees should be inserted. A pe ntage
,-+
or
ect of personal injury or damage to to ack this (6.1 and 6.2). The minimum re
ra ce
i
i
i
of ex event
Termination 4°-
!l'
ay d termine the employment of the contractor if he fails to proceed Wo ks, or wholly or substantially suspends carrying out the Works, comes inso. vent (7-2).The latter does not mean automatic determination.
tafTtes the Architect may issue matter for the Employer. determination In such
circur
a
warning notice, but notice of actual
is a
There
is
ac,
The contractor may determine his own employment for stated reasons (7.3). fl,
7
fl,
r
fl)
ing stru ures, together with any new work which forms convers n, s to be arranged by the Employer. As with clause quirement is for cover only against specified perils (6.313). In the e the Architect must issue instructions, and the cost of making un r clause 3.7 as for a variation.
part
no provision for determination by either party for neutral causes.
191
$
Traditional procurement: consumer contracts
JCT HG(A) The respective rights and duties of the parties follow the Conditions (7.2 and 7.3).
8 Miscellaneous There
is
no definitions clause.
There is no reference to access for the Archi The Architect may order the exclusion o
There
is
no reference to antiquities, to
There is a contracting out of third Parties) Act 1999 (1.8).
ri
is ur
th-6"Contr (Rights
of Third
9 Disputes
Article 6 of JCT HG(A)98 pr Procedures for referral to djudigal o,4, and theaRpointhcig of an adjudicator, the powers and conduct of an The adjudicator's dec' io determined by legal
Article 7 determi legal decided b
192
s
that
rocee
'
bil,ding bathe pariies,
aleasf until the dispute is finally
bjec to dj 'cation, p disput s or differences shall be finally There s no io r arbitration.
Traditional procurement: consumer contracts
0
JCT HG(A) This contract? If considering using JCT HG(A) remember It is intended for use in housing improv, t'work, where 'contr a has been appointed and a grant m- We und6r the/H to b Construction and Regeneration Act 1 ntracts 6. It is short duration, with a fixed price the app is
nnrov
onr
quantity surveyor. is for use only in Construction and Regenera Scotland.
The form
E
996Aaes
There is reference to grant paym 4.4. The Appendix is form There is provision for adjudicatio
n-ot ex
t proc
fth Recitals, and clause hority for grant payment. itigation is the final means
wled
tfor a
of dispute resolutio When completiog th ri completion a of the Hou hg Gr modificati of th
for
relating to damages for nonthe contract is one to which Part II nstrun add Re eneration Act 1996 applies, some uses will be re uired (as those for MW98).
decision
e of flae
i
Work
minist tor th
ontra
escales are
elaxed`
mus e co istrati
k
n
e
ral rules are brief and relatively easy to it is important to watch out for any grant within a specified time. The RIBA does not 'r HG(A), but some of those for MW98 could
A helpful guidance note is included, which of grant currently available and provides commentary on the
ative of ma>v
s
lotions.
Commentaries (relating to MW05 but relevant)
a'-m
a,c
David Chappell and Vincent Powell-Smith The JCT Minor Works Building Contracts 2005 3rd edn, Blackwell Science (2006)
Guidance Note Housing Grant Works (included with form of contract) JCT Guidance Note for MW98 (included with form of contract) JCT
Sarah Lupton
Guide to MW05 RIBA Publishing (forthcoming)
193
$
Traditional procurement: consumer contracts
JCT HOB
and HOC
The Joint Contracts Tribunal Ltd
Building Contract for a /Occupier who has n consultant to over
Building Contract Agreement for /Occupier wh consultant t It used to be thou t tha hom mpr veme is might prove lucrative for smaller builders, ch w ost pa was n t of interest to professional consultants. Ho ever, t e re nt b ousing 'provements and the potential for engagement in this arket ave show` e need for forms of contract appropriate of work. i
ms of`btyflding c ntract for home owners or occupiers ut me c building work. They both follow a relatively atte in t at t h y are ckage in a folder, there are counterpart copies or cus mer d the bui and guidance notes. They are written in reshi comme dably free from jargon and legalist language which has ined for t rk for Clarity approved by the Plain English Campaign. ysta att ket them widely through retail outlets such as book e to ps directly to custo
produced
to
c r
..C
I
i
The
ed i 1999 was the Building Contract for a Home Owner/ e wh re the customer chose to deal directly with a builder for small e; ensions or repairs. Obviously this promised a significant
nts,
improvement o -oral arr
0)m
Occupier, sui home improve
gements or poorly worded letters, and encouraged the parties to consider me odically and agree the important points before concluding the deal. The second form published in 2001 was the Building Contract and Consultancy Agreement for a Home Owner/Occupier who has appointed a consultant, and it
194
Traditional procurement: consumer contracts
JCT HOB
0
and HOC °+'
0
followed the same attractive format for packa ng an presen tion. His c ork now esti to be a more appropriate form for much f the rger- le Minor veyo , tha the J build' s attracting the involvement of architects a smalle work a co m ial ature. Works Contract which is perhaps more s to act the c sto pr'' behalf, It can be used only where a consultan s ap Agre t for ofessional and the document folder includes a JCT Cons tan nt t. It is likely t prove more services which is dedicated for use with t is b d ng ee nts blis d by t1j4 professional appropriate in these circumstanc s 5 ions: bodies. Both forms are now re blished I
fl,
a-'
,,,
i
Nature
ccuust
rpm
se The Building Contract for a licat h w en completed sets out two parts. First there is a ques ionnair ndly t the ct Conditions clearly and the arrangements for t two The ustomer is provided with simply worded uncle 11 headin ential bui er, an t of helpful guidance notes. an enquiry letter to s a Home Owner/Occupier is Contract which has two parts; nd P is the Conditions set out under t is als a two part document; Part is the e Conditio set out under nine headings, a total servi( an Pa for the customer and the Contractor, X. Ther yare cope es of e inside cover of the package. otes are prj ted
0
consultan of just 14 and G
s
uildi
1
fl,
The Building Contra and onsultanc rather more for, pear ce.The Part 1 is the rrange en for th work, nsul an Agree 13 heading ' The
o"
asy to un rstand. They are only suitable for construction Ho ing Grants, Construction and Regeneration Act not apply. e CDM Regulations will not apply. an
rt
II
of
must not be used where a consultant ated cost owlimit, but as will be obvious from the excellent tick aox pproach used document, and the basic contract Conditions, it is for very small ie ork only. Incidentally, for architects who are involved in a rtial s ice iestic work but whose clients nevertheless ask for advice about pointing-a_builder, his form would be a sound recommendation. -or a Home
o
30°o°3
The B ilding s pLOYdT
and Consultancy Agreement is for a home owner/occupier who intends to ap'p consultant to deal directly with the builder. Note that it is suitable only for a home owner. If the work is being carried on as a business venture, then one of the commercial contracts should be used.
Contra
a--
:L-
0
The Buil
+-.
195
$
Traditional procurement: consumer contracts
JCT HOB
and HOC
Brief synopsis 1
Building Contract for
Home Owner/Occupier
a
Lump sum contract. Note that contractor's quotati
Drawings and/or Specification or other docu Either customer or contractor may deal with building regulations and party wall cons Facilities for Contractor, as ticked, to
provided
Contractor's responsibilities includ orin regularly disposing of rubbish, an leavin Payment may be single payment or invoices within 14 days, 95
after Ime
e d o is
i
to omer. each day,
'ng the work.
t mer to pay on
art and corhoetion date entered.
or
wok deta'k.
t t
ent ins
e by
c
n an
agre
Working period may be Working hours may be spe Only customer can char
c
f
e
equ II
anninq permition,
plic,1tions or
contra or to ubnWa price before work goes
ahead.
Customer can ext
d
wor peri
Insurance provisi s cover for dama e to Provision
f
if
ntractoris delay
custo er's ork and unf' ed m
occupati
secu
a
'
h
d
for limited stated reasons.
insurance, contractor's all risks
rials, and public liability cover.
o premis s, very limited.
thmont
Defects per d is s, and c o r will pay remaining 5 per cent of money due,vgtd ays of con actor puttin right any faults promptly reported by the
14
c
ing Contract and
C
s
a
art court proceedings, or may opt for adjudication. y Agreement for a Home Owner/Occupier 2005 =O'
2 Bui
ty can
p
fl)
If isp
Descripti e wor is d tailed in contractor's quotation/consultant's drawings /consultant's spec i No ills of quantities, but 'other documents' may be included. .
.
is
VAT-inclusive. contractor to itemise this and ,-+
Lump sum contr Contra or's price show details of VAT c argeable.
for 'unexpected problems' which should have been foreseen by the contractor from the documents or a site visit. Contract figure can only be changed up or down if changes to the work are instructed. ,--r
Price includes
196
Traditional procurement: consumer contracts
0
JC T HOB and HOC A start and completion date should be enter hours may be specified.
ntrac
guara
The customer can expect to receive the be
4x
The contractor's responsibilities includ car and to be 'at the premises regularly t carry ou duties and responsibilities'.
the
The customer's responsibilities
the working period, keeping contractor to carry out work j time.
i
dto fe
the elude ov ing cess r o rking area stru or
derh
h
ns
e
nece
rons
tvng in The consultant will act for the stom xtensions of time, and two in issuing certificates. es, i of the work, second after contr t th end the defects period and th actor has-re ctifie of no hough are r neta consultant must be of three months. Al ertiflc`ates, the OW4 the tract invoices are ontract states that in the event satisfied that co s ith t e consulta, cjsj he contractor must take this up of any directly with
r.
e
wor details
only y the consultant. Where an increase ust quote t extra cost and time involved before mounts to a reduction of work, the nere c ropri`e eduction. be
likely, e au
make an
t
consultan to t comp nsult t or he c ons
con
a
ake a
'for
it nd rea onable extension if the contractor is unable reasons b and his control. If delay is caused by the he con actor may also be entitled to costs.
ant isrespo ible for pla?afing permission, building regulations and party wall nts Consult nts acting for the customer in serving party wall notices should ve written authorisation, otherwise their capacity to act might sure t they
Welfare facilities tbbe
ded for contractor free of charge by customer are as ticked.
to ke all practical steps to prevent or minimise health and safety omer and other occupants, to minimise environmental disturbance, pollutio In return the customer undertakes to take notice of warnings by not knowingly allow occupants or visitors to be exposed to dangers.
tractor
.
Payment may be a single payment or by instalments as agreed. Customer to pay 95 per cent of total amount due. If stage payments are selected, they should be clearly defined and amounts stated.
Customer
is
expected to pay 95 per cent within 14 days after completion has been 197
$
Traditional procurement: consumer contracts
JCT HOB and HOC certified by the consultant. There is a three months D of which the consultant will issue a list of any fauIZ the remaining 5 per cent will be due within 14 days
ility
i
plet
n h
en re ified bee ertifi
rce, co ac
fl,
Insurance provisions are minimal, and limited to us all risks cover for full cost of damage to ork a u stipulated) and public liability cover. The cc) ct liab ility ve fl,
riod,
ese ave
terials (no
c
Provisions for occupation and security re s esare Ii to ng in residence the customer should be mad aware t in a veni ce r u ption which might result, and the contra r sh o Id mp ryrotective measures as appropriate. If the cus vaca the rern\ er hou e insurance sp policies should be checked, as most do where re ises are left unoccupied beyond a stated pert and eci a ight become advisable. Also the contractoro bligati n to a p t racti a common-sense precautions' might require mething ore ecifie th peci cation. fl,
fl,
rrgents
If disputes arise, either part, can In the latter event the contr zto r Council to be appointgT
Other rights and re
198
edies
e
s
ayopt for adjudication.
urt proce y not apply_te h
no exting
hed
ation
I
Specialist Contractors
contract provisions.
0
Traditional procurement: consumer contracts
and HOC
JCT HOB
This contract?
form is intended for use only t customer wishes to appoint a consu nt, th which gives a role for the consulta t. In suc Agreement must also be used. cu nt t approach to defining the servi fs and ns considerably from the RIBA S II Works fo
Dwners
Each
to be
E04
be stra tries,
s. If the the version onsultancy al and clear ly. These differ d not be used.
are is
Problems could ex ft over po sessroQ responsibility partic larly roati to servi insurance.
insta
work sequence, design or other specialist work, and
,--F
Helpful guida are rovide ore F cMtract, and they should be read carefully, pa icular f the ersio where a consultant is appointed. As e cas yet there a no d Qicat dh contract nistrat on forms available, but letters should be clear) identifi d aser where they re intended to serve as such.
e forrt adop a miliar t most
plete
fresh and friendly approach which will administrators. The presentation and aging is ri and cus m r orien ted. The terminology is straightforward and e form bly written i plain English. As Tony Bingham was moved to e co mme in uildin 99, 'This little form is a beauty'. ember yy
corms ract
atters
ments 1CT
uilding Contr' Building Contract
ce N`ofe`s inclu
199
$
Traditional procurement: consumer contracts
JCT HO/RM The Joint Contracts Tribunal Ltd
Contract for Home Maintenance
JCT
Background The JCT published this contract for hom care and r wo 20 inte there was a form for all situations. It d t er minor works for which even the H e ccu Contract long. The JCT have now re-publishe the d t in editi revised format. The new version own edfree e
The form provides a most u ful service about, and commit to writi g, thosss tials too often been left as vagu assu ptions.
Where the contractor into an agreement su
i
t
.type
seem overly
with
a slightly website.
ing he co
own to
evio
short',
that of very re
i
form ng work ever produced. The ditional page of guidance notes. The ith a appr riate or thi kind and size of operations, clearly ns. As with other JCT contracts for home ort S the Crystal ark of the Plain English Campaign. ndar
ages long, e
t
mini
set out in 11
no s sugge tha t repairs and maintenance might, for example, cover ring, p bing s tallations or even painting and decorating. The form of h buil g work which might involve structural alterations, whemore than o ely to be involved.
guidan
fl'
ctrical re i
An im at the reduce the likeli small print of his
pha ied is that the customer should let the
contractor know
aq otation that this contract will be used. This will then od of the c ntractor submitting n
a
quotation which
is
subject to the
term
Brief synopsis A two line description of the intended work is followed by whether the premises will be in occupation at the time.
200
a
tick box indicating
0
Traditional procurement: consumer contracts
JCT HO/RM Documents are a 'specification' prepared eit and the contractor's quotation. The contractor's price is inclusive of VAT, rate.
Facilities to be provided by the custo
Payment is not made until the wo contractor's itemised invoice. The contractor must carry 'eno materials on site, in additio
t
A start date and the contraceriod of working. --+
anc-04 cbO full't-gsts of damage
h in
ened,tcgier wit the agreed daily hours
The contractor's obl, gation is to leave the work a
Sub-contracting The contract
is p
is r
%nromil
ible
the
t
and
ork sto
req
om&tently and carefully', and er's permission.
healand environmental matters. =safet
Third party open to There is no ro c a I
i
visionn-for los or exp se, but the contract accepts that the parties may tier in e eve t o ilure to keep to the contract.
c
Di putes can be
fer d
Lo 'a
dicati
,
and the right to litigation
is
preserved.
201
$
Traditional procurement: consumer contracts
JCT HO/RM
If advising using JCT Home Repairs Contract rem It is intended for repairs and maintenance w Grants, Construction and Regeneration Act 1 certainly not be subject to the full CDM Regu
It is a modest form, but it must provid a more bu lik o alinghan just relying on a contractor's estimate, w the ritt r or The de pair works may be simple, but the cost could s em ela ' ly la xpense t stomer and should be covered by a proper agre
There is no role under the co for nstruc n be approached for advice n a suita e m an recommendation. It migh also ,help to prot t cus
'cowboys' of the industry!
Related matters Documents JCT Contract
for Ho
References JCT
202
Guidance
but they might this should be a safe er from the so-called
Traditional procurement: consumer contracts
0
CIOB Mini Forms The Architecture and Surveying In
Mini Form of Cont Mini Form of Co (Home Improv Background 'ocument which they sible to find a standard
the C106 took a a Mini form of co form appropriate for architect or other pr In 1998
neatly styled
for the client to appoint an rator. At the time the Mini andard forms, this is now
had no real com published by the Cl
general use and the other developed use with residential works.
The form is pr in collabora
In
appear
for
ce an
with tes wri en in plat
`ructur the form--5- e omewhat conventional, and compared er co r ts, not so friendly. Having said that, they are fish a req ire the inimum of effort to complete.
CT consu E
of Conditions, and the Home Improvements of the form come with a dedicated Letter tender an Eter of acceptance. The Conditions are to a Section istent with that adopted generally for CIOB contracts. s
"sions
arily for use by members of the CIOB, but there by'-qp(n-members of that Institute. T e
re r com
and bo adminis
r
en
uire
is
no bar
1d for use in contracts up to the value of £6,000 at e
1998 prices, Employer to appoint an 'Adviser' to act as contract
Whilst the form for general use might well constitute a construction contract to which Part II of the Housing Grants, Construction and Regeneration Act 1996 applies, the version for residential work would certainly not. Whether or not the CDM Regulations applied in full would depend on the nature, scale and duration of the intended works, but there is no express contractual obligation in the Conditions. 203
$
Traditional procurement: consumer contracts
CIOB Mini Forms Brief synopsis 1
CIOB Mini Form
of Contract (General Use)
Completed Form of Tender and Letter of Acce Documents' constitute the agreement betwe
Contract Documents are referred to as Spe ification/S Contract Sum is VAT-exclusive. Any adj tments be entered in the Schedule of Adjustm ts.
kg
The contractor's obligations includ the Adviser's satisfaction' (this mig Certificate) (1.1 and 6.4).
cause
th`e rt+qrk s
'to
a
ovacanclusiv
The Adviser's role includes `nspection of t`he ractor information and instructio to th Dates for commencement at the Adviser's disc completion is delaye re to
pletion are
d co e
the Conditions, and date where t e contractor's control. n
or
he may r evis m sta es bey nd
thompletion
time, liquidated or part
from
ract.
he co is
a
to be confi (m ed ontrac 4.3). at e end the Adviser the cont actor (4.4).
Xractornot-wed
is
to list defects 'he
without iften consent of the other party, and the to sub-let any work without the written consent of the
viser (5).-15
Tie corgractis fixed viser may
statutory payments (7.3).
atid'nf, and the order must also stipulate the basis for a`,
The
r any changes in
valuation
ntractor wi be as agreed and entered in the contract, that is either yCment (6 or by interim payments made from time to time at the discretion of the Adviser ac,
Payment to the in a single main
a--'
ti-
Payment is to be made within a stated period (entered in the contract) of certificates issued by the Adviser. A retention of 5 per cent (or other as entered) will be held by the Employer until the Final Certificate (6.4 and 6.5). Retention money is held in trust.
204
Traditional procurement: consumer contracts
0
CIOB Mini Forms The Final Certificate would appear to be concl asive goods are in accordance with the contract -6). The contractor must comply with all legal a and charges (1.2). Presumably these w
equireents,
statut a
er and c
d
d pay
to the C ntract LQsura
mover Amount
property (other than the Works?) de al 'ury entered in the contract. The contr, c too le fo Works, unfixed materials etc. a d must m trac a names until the end of the Defe Lial3rkty Pe (8' i
e, loss
r'sW ri
mploy co ng to the Adviser initially adjudication (10.1).
Claims or disputes or ene a decision. If no 'resolved thin th
for
The adjudicator ma be a ers-6n agreed b wee n e parties, or nominated by the CIOB President. The ocedt4 res for ad' do are conctly stated in the contract, th adju cator is and the decisi be gard d as final and binding upon the parties (10). .-.
i
tiome of th Conditio 'arm for Gen al ;Letter of
In aa£
in th'
gl fA l
in the feneral is n
User
V fo
m refer to the appointment of an 'Agency', and the
e
n
the 'Adviser/Employer' as is the case for the each case in signed by the Employer.
Urefers to the appointment of
a
replacement
such provision in this form. use form refers to statutory increases being acceptable in ice co ract. There is no such fluctuations provision in this form, Ily fja ed price contract.
herwise fi thus making it lit
fl,
termination by Contractor', refers in 9.2 ii) to delays of A weeks in the General Use form. In this form 9.2 ii) elays of '4 eeks or longer at the Employer's insistence, except by previous d 'D
!
r).
,-+
ere
of the form are virtually identical with the following exceptions:
s in tFii
ency, and n
er is s d by ue forfn- Th Lett lausL,_2.3
Improve
t by rior agreement'
205
$
Traditional procurement: consumer contracts
CIOB Mini Forms
If considering using an CIOB Mini Form remember that: It is intended only for very small domestic work nc the payment rocedwtes8id adjudication provisions are simpler than woul oth e 'bQ r cl uir Part II of the Housing Grants, Construction nd ra ' n Act versions of the form the Employer must a n Adviser Rtis
The Home improvement Agencies form General Use form is suitable for use in E is available for use in Scotland.
s
suita
use
The provisions are probably adequa concerning insurance and determinati
of
e
The dedicated Letter of Invit ion, F orr of der a be used, because the last t o beco ontrac ocum documents, entries are also o be ade in the text the
The CIOB deserve for a consulta indeed an
friendly
la
uments ni For i For
206
tract (Ho
,--r
eme
If acting as contract ad drawings) note that t considerable discre Certificate which
ngl
arwan Am
land and
b ceptance should en completing the
ditions.
is a Advis rson who prepares the rule are rela 'vely m ple and the Adviser is given ity. C need d before issuing the Final clusive.
for (' I
pear
first to pr such forms, which also provide minis a (not necessarily an CIOB member, nor m re co entional than the more consumer
The Joint Contracts Tribunal Ltd Standard Form of Building C
With Approximate Quantities The Institution of Civil Eng ICE
Conditions of Contract
eers venth
The Institution of Ci ICE
Engineer Conditions of ontractfo ibuna ct
2
racts wh cr-are not surement have
sed on a lump sum figure and which en included as measurement contracts. It is
easurement to some degree, and that SMM hich of course is not the same thing as 'approximate e ure and extent of the work is broadly known before case ith 'cost plus' forms. These are dealt with separately
E
es of thi chapt provide for substa ial am unt-bf acknowled 4 that t I mp ssum Rules provide 'ar approximat quantj surement wor 4 not ge For the purp
Editid
in
207
208
Traditional procurement: measurement forms
9
JCT SBC05/AQ
The Joint Contracts Tribunal Ltd
Standard Buildin
Approximate Qu Background k is reasonably is often insufficient tim (even whe t e s of`N m t definable and measurable r uts to o let the drawings and Ilo the Specification in sufficient d ail t ity surv or fully measure, work up and collate measuremeri in or e to epar of qu tities on behalf of the Employer for the purpose of ob (ning to such circumstances the JCT Standard Buildin ontra`c Appro ties may be appropriate. ua
There
I
--I
This version of the tanda Xd-J,C form first ed in 1979 in response to pressure from prop rty d velopers. The ed a aditional method of building procurement, arly start on to a5 It was thought that this could c oul still be achiev di e desc ibed accordance with SMM Rules, even though the uantit k couidiot be acc rately determined. It has now been revised an updat 005 edition, al g with the other forms in the suite.
vh
onsider
e
firm
ce
efore
ed for early completion outweighed the need ork could start on site. Subsequent events
may have be h overstated and that the implications of not itment d not been fully appreciated. This would seem ini ally fewer copies of the Approximate Quantities
03-
Tbg-Keadnote ate Quantities edition states that the form is for use 'for larger works desig where or detailed by or on behalf of the Employer tailed ntr t pro` isions are necessary and with a approximate bill of quantities to and uantity of the work, which are to be subject to re-measurement, insufficient ime to prepare the detailed drawings necessary for accurate bills ies~to be V oduced'.
...
Reference is made to bills of quantities setting out 'a reasonably accurate forecast of the quantity of work to be done'. The form should not be used where only certain Sections of the Works are approximate. In such cases the Standard Form With Quantities should be used, and the relevant items might be marked 'Provisional' or, if under SMM7, could be the subject of 'an approximate quantity'.
209
9
Traditional procurement: measurement forms
JCT SBC05/AQ Brief synopsis As might be expected the text of the With Approxi closely that of the With Quantities version. The Recitals differs, and Article 2 and Clause 4.2 ref of a Contract Sum.
The With Approximate Quantities version diffe rules) to take account of the fact that all
2.29.4 work whose quantity Contract Bills is included as an additional contract period. In clause
The list of matters for which loss an refers to work 'for which the
accurate forecast'.
Interim Certificates cover ' II wor sured an alue the quantity surveyor'. Valuations are always requir un r the Appro to uanti ies form, and are to the doc usual valuation procec}es. ents a co ut ns are to be sent to the quantity surveyor by I
The use of price
N
210
forpftylaL-,for fluctuations QOption C)
is
not included.
Traditional procurement: measurement forms
9
JCT SBC05/AQ This contract?
reme)nber'l-hat:
-ice
It is intended for use in substantial con it is not/oossib are full quantities at tender stage. It permits a ertain a of fast-track g, he design needs to be well developed and in detail efore proximate quantities are taken off. This alto me esign` pment it parallel with construction work, but if the ap roxi m ant in area of reasonably accurate there can be penalties both st a me. er SBC05 forms the Employer is required to a con ad sst t and
withi
v-0
If used for work in Norther while for work in Scotland
relan
ottish
be used.
t
e basic st
language and termi logy. instead of a contract mps those in the of ersi Ps, b
for p bal p ntract
the o versions, using the same eis th use of an ascertained final sum lati to valuation are simpler than t aynYent provisions are similar.
, of rment of possession, sectional completion ortion. It allow, for sub-contractors to be chosen by
vii
essio
an
torfr
thr
names. r+.
The form has the sa
lses sele
fl,
dministrator note that some of the procedural rules are detailed e-consuming. irn
row
the JCT from time to time. The form is available on disk. administration forms for SBC05, many (though not all) wiN this Approximate Quantities version. `e least risky
O-0
remeasurement option for the Employer, and allows
t found
1
in cost plus contracts. However, successful use depends and accurate the approximate quantities are in the first place. !p'
ng sc ely to
ed. (1)
li
o
wheth
sion;
-'0
are required relating to matters including in lieu of retention, advance payment or of th orks; int Fire Code; liquidated damages; advance ions. are is nee d to ensure that the relevant Supplements are
o
+Qg the for
211
9
Traditional procurement: measurement forms
JCT SBC05/AQ
Standard Building Contract With Approximate
Quantities
f'1 f"1
,-.
Standard Building Sub-contract Agreement Standard Building Sub-contract Conditions Standard Building Sub-contract with subcontractor's design Agreement Standard Building Sub-contract with subcontractor's design Conditions Contractor Collateral Warranty for a Funder Contractor Collateral Warranty for a Purch Tenant Sub-contractor Collateral Warranty for a Fun Sub-contractor Collateral Warranty for Purchaser or Tenant Sub-contractor Collateral Warran David Chappell SBC05 Contract Administration RIBA Publishing (2006)
References Standard Building Co Standard Building S JCT Practice Note: Dec JCT Form
of Con
Series 2 JCT Pr
Practice Note (includes,
212
Traditional procurement: measurement forms
ICE
9
Conditions
Conditions of Measurement Ve (September 19 ICE
Background The sub-title of the docu Agreement and Bond for
Construction: Measurement Ve This is
a
ly imprecise nature of civil table. The Conditions show nd that it is not appropriate
form which
engineering operati
that the form is not for lump sum cpntra
f
This ICE for
Consulting under re warrante
Civil Engineers, the Association of Contractors Association. It is kept revised 'when such action seems
_+O
quite distinct from the New Engineering the Institution of Civil Engineers, are the ontract Panel. These forms continue to be g for the needs of the modernisers, as well as s
o
(DD
y
ages long and comprises the Conditions of contract; a Form in two parts, the first of which is to be completed prior nd of which is to be completed by the Contractor; and a
The latter identifies the documents which form part of the berawings, the Specification, and the priced bill of quantities, in contract addition to the Conditions.
Also include-&is4-1-r6ICE Form of Default Bond, and the Contract Price Fluctuations for Civil Engineering Work and Structural Steelwork. The Conditions are contained in 72 clauses, without any apparently logical sequence or structure, but with historic precedence. However, reference is made relatively easy for the uninitiated because there is a Table of Contents and a particularly detailed Index.
213
9 Traditional procurement:
ICE
measurement forms
Conditions
The Form of Agreement identifies the Contrac Appendix to the Tender will show detail such period, completion by Sections, liquidated insurance requirements etc. The key person for contract administration is in the event of his or her being unable t
tints,
a
en
es in
ment ate, n oavment and reten n
't
mper is
successor.
Synopsis '++
1
Intentions
v+'
The contractor undertakes to constru inferred from the contract (8 The contractor is responsib for al I ite operations and but not the design of permanent works (unles expre sly provided in t contra ), nor for the design of rks temporary and permanent signed r. ny design responsibility e ing r sonabl skill, are and diligence (8).
by
ork in trict ac
rdanc--m&K the c ntract, and to the satisfaction daretobea eptable to the Engineer (13).
of the Engineer. The definition of 'Contract' m acceptance
Agreeme
e
WdH& inclu Tender 0 rice are
The qua
es
both
orary and permanent work. The important Appendix) and written t quant es, Specification, and the Contract e tak as being mutually explanatory (5). s
t
esti m
actual quan
contract nderi e rates atter , f iei could ent possible (11 an
urth neer
inspect and examine the site and its surroundings before he quotes will be in the bill of quantities, and only if ably been foreseen are encountered is additional necessary drawings, Specifications and instructions to om time to time (7). `0)
The contractor in quired tOsubmit a Programme for approval by the Engineer, and to revise it within 21 if the Engineer instructs (14).
All materials and workmanship shall be as described in the contract, and as instructed by the Engineer. There is provision for samples and testing (36). Facilities must be afforded by the contractor for work not in the contract but ancillary
214
0
Traditional procurement: measurement forms
ICE
Conditions
b==a
to the Works undertaken by other contracto The duties and authority of the Engineer, assistants, are all clearly defined (2).
Time The contract may prescribe that posse ion of th in portions (42).
The contractor is to commenc as soon sib er f Date as stated in the Appendix the rm en , or vv The cont ct is contract is entered into, or ed d expedition (41). The time for completion Completion by Secti
is
to i
red
(
-_nay be a, rded' Interim extensions of ti delay; Engineer within 28 ays ai er the cause o The Engineer rWst an extension ht subject to f al revi
on
to all clai0 s u ei `t of particulars, and may award Th, overall extension of time awarded is .-e'bf a clai '44).
t
too sl w and no extension of time is possible, o expedite matters. The contractor will for taking such steps as may be necessary (46).
ress is
EnginE
ice ca
ntractor must inform the nd supply detailed particulars. -r,
given t d the co
to addition payme
o liqui ae a Ce
ficate f Completion when the whole of the Works are assed any final tests required by the contract (48).
(CD
2
d
ed and ha
ork and defects period runs from the date of substantial to d in the Appendix to the Tender as the Defects Correction Dr is o liged to finish any work outstanding, to deal with repair, gr46d. The co amendment, recd :r ti n, rectification and making good of defects either within or the peri so i as may be practicable. A Defects Correction Certificate is to be gine when he or she is satisfied, although this in no way relieves the r of any lia ility (61).
The contractor is prevented from assigning the contract or any benefit or interest under it without the written consent of the Employer (3). The contractor is not permitted to sub-contract any part of the Works including their design without giving written notice to the Engineer (4).
215
Traditional procurement: measurement forms
ICE
Conditions
Sub-contractors may be nominated, although the objection (59). There is a detailed set of provisions f, as is normal, the Employer is required to bear so If any design obligation rests with the sub-contr contract and the sub-contract (58[3]). The contractor is wholly responsible for the unless incorrect information was given b own cost 0 7).
is g
n
th
f`ghht-a
atio
nhee
ndefa
9
occ
stated
the
curate se
any pert o Ire Wq'rk (4 efin Fin thb con`t(a (51
r-°
The Engineer is empowered to suspen variations, subject to their being of The contractor is obliged to give work before it is covered up (38). The Engineer
is
in accordance
empowered
instruct
with the con ract,
art
oval e
prope
f
site
.e-exec
e necessar
tantly o
agent or representativ 4 Money Because this is no a lump
quay of the priced bill the figure finally_asc aine
ere is referen
n
or agr (1[1]) r
ave bee
Tender,
sums Ana ryrime ost it subject'of pr sional
su
oth defined (1 [11), and work or goods and Prime Cost items may be ordered by
tam
t Engineer (51). Wherever possible quotations should order. therwise variations are valued at the rates in the act if applicable, or i! at rates fixed by the Engineer, as the Engineer d)sq reason N,aywork is to be used as a basis if the Engineer thinks it ble, and he rates will be as set out in the daywork schedule ntract (56[ D.
4agr
d
'
d by
advance, t
"e2).
,-+
vii
roc
Payment is on the b'asi&_ monthly statement submitted to the Engineer (60[11). The Engineer must issue a certificate within 25 days of delivery of a statement. Amounts for nominated sub-contractors are listed separately. The certificate must show the amount due and the basis of calculation. If the Employer intends to withhold payment, he must notify the contractor not less than one day before the final date for payment, and state the grounds for any deduction. Final date for payment by the
216
Traditional procurement: measurement forms
Conditions
I/1
ICE
t is mo hly s tem Is to ify, the ctor is enti ed t me
Employer is 28 days after delivery of the Engineer (a quite tight timescale). If the En to make proper payment to time, then t overdue amount (60[7]). Rate
9
of retention, and the limit of
re
ntion
(60[51).
Half the retention is released it-hi-p- 14 daJ of th days Substantial Completion, and t e other ha v hin Correction Period (60[6]). Defect ction Certificate, the Not later than three mont s aft rting documents. The ccou contractor is to give the E ineer a nths issu the tificate which states the Engineer then has up t f c& cation (60[41). ithin 2 amount due. Payme t is requi
.-±
:-+
The contractor is ob iaed give all These might tern orary contractor II recei Y men of
contr
all fees required by legislation. it, then the
is
th7' Engineer certifies
rks.
ums
i
volved (26).
ides the Emplo er against the consequences of any ill not pply if it arises because of compliance th the E ineer. There is no express obligation on the doc i s or instructions by the Engineer conform to e found not to, the Engineer must issue s,
ions g en
utory requ structixTs,(26).
b,
ck whet ts, b
f
Safe
du
la statutory obligations on both employer and - e ulati ns 199 tor, particul rly in respe of the Health and Safety Plan and the Health and The E loyer is obliged to appoint a Planning Supervisor and a Principal Fi ra ctor. orporation of these provisions into the contract, the statutory ough also cont tual obligations (71). o .
The New Ne Roads a d Jsa p cular efer e
ce-t
Works Act 1991 is given detailed attention (27). There is ce to legislation on damage to highways (30) and unnecessary
oads and
footpaths (29).
is to take full responsibility for the care of the Works and materials for incorporation, from the date of commencement until the Engineer has issued the Certificate of Substantial Completion. The risk covers damage from any cause whatsoever, except where the damage is due to the Employer, or is a defined Excepted Risk, or is due to faulty design of the permanent works (20).
,-r
The contractor
217
9
Traditional procurement: measurement forms
ICE
Conditions
-''
The contractor is to insure in joint names, against h# risk ofdama liciere for the full replacement cost plus an additional 10 (er cen to approval by the Employer before Works Co encerO tend stag prudent for the Employer to state the kind of c quire
s
C-0
ate,d inay b
The contractor indemnifies the Employer ag nst al ss and cl ms ar'sing I orks. T death or injury to any person, and damage to roperty other an th are certain stated exceptions (22).
f thZxisks
The contractor is required to be insured gainst the Employer has been indemnified (23-
ty of
The contractor's obligations concer, Employer is indemnified in respect 7
Kkmen
is
4).
Termination The Employer is given the ri
t to termi ate th
mplo
contractor in the ified defaults by the e site, have the work the Defects Correction e
of s
(-1
event of the contractor's ii, insolv nc or becau Contractor. The Employer is entitl d to take completed, and postp an settl vent of ccou Period has expired (6 ). O..
of
t ie rig
iven ploye
Termination of nomi
rminate his o
or M
ted sub-co
racts
n
employment for specified
become; insolvent (64).
plo i
8 Miscellane
Definitio
removal
Enbinee
I
is
to hav
relating to
:-t
'..f
s
event of discovery of fossils, antiquities, things of
nsio intere
='G
eisp haeoloai
'ntractor's employees (16). rt.
The Engine
Works, the site and workshops (37). ite and site access, beyond that prescribed in the ontr tor's responsibility (42), although extensions of time and applic ble in the event of failure to give adequate possession.
sses
e
contractor
is
to be removed from the site without
The rights and obligations of the parties on the outbreak of war are fully stated (63). tin
There is a provision contracting out of the Contracts (Rights of Third Parties) Act 1999 (3[21).
218
9
Traditional procurement: measurement forms
ICE
Conditions a4%
O-0
Special conditions can be properly consecutively as a continuation (72). 9 Disputes The terms of the contract require th tm to the Engineer in the first instanc The En decision in writing to both the Employe and4he c reference (66). ,-r
actio
CO)))
°a°'
nnot
Since the Housing Grants, Co
ructio
-.,
of dissatisfaction Engineer, then it become consideration of the disp If a matter
,-+
be conducted in
at
a
noticelof a
reference to the
agreement, seek re 0 999) (66(5)).
genat ren
e rig i%udicati
djudi
1996 (Part II) came into djudication. With the ICE be iven, and adjudication is to rocedure (1997) (66(6)).
Q.-
0 arbitration. The party seeking
inally etermine
t
e p
ICE
O-1
a"'
force, parties to the c Conditions of Conu ct
cto reso ht, tie 'liation
e s
ispute.
QM-
rve note to refe Arbi atioMiis to be under the Arbitration Act ce wit eith r the ICE Arbitration Procedure 0 997) nduct d in ccord tratio Rules. tructi .
219
9
Traditional procurement: measurement forms
ICE
Conditions
This contract? If considering using ICE Conditions of Contract re This is a contract primarily intended for use with basis of measurement. It is not readily suitabl find themselves involved in some secondary b
orl-Ml enaineeriM work woe
will apply. The form is for use under the law of E land an es, ma ale for use in Northern Ireland and under S D,ts la If th con o Scotland or Northern Ireland, then nt enc ICE c Arb. should be incorporated.
The Conditions are comprehensive, the to engineers, might need to b stud iedcar Ily b commencement and com etion, nor inatio of variations, and design by th
Completing the form is,con Conditions, in particul
entries istho
°-'
admiastration the
pedigreq' It m
>>o
uments Cond'
Ktemb)
Knciliation Procedure (199 97) ' 97)
Condit
220
is
a logical structure and some legal unds o being rather imprecise, but it seems tice foY a veryong time.
it on
w
tion Procedu
is gi n greater authority than on under bu' ding contracts.
En
-contMed fore' without t need e for supplements. Much used
commentat to have
s
endix'to the T&der
usually the case w h contact admaisf It is the traditional and with a di
amiliar to civil flexibility over ors, valuation of is
Traditional procurement: measurement forms
ICE
Minor Works
ICE
Minor Works
9
Conditions of Works Third Edit ICE
Background The sub-title to this form is Co for use in connection wit sponsoring authorities ar Consulting Engineers, and
ontract Schedule Construction. The the Association of Contractors.
This is a document ntended fo use wh e the mall, the contract period six months or less, t ere ate n nominati s, de n of the Works is essentially complete, the contra for h no respo desi n of the permanent works, and do,not e eed f2 ,00 It isform suitable for straightforward i
and,this includes th Conditions, an Appendix, and a Form er 13 headings, and are commendably diti o rys are re d. The are pr aced by a full index, and helpful Guidance Notes, ntract, e inc4 ith the form. This latest edition takes account ing G ction and Regeneration Act 1996.
ent. T e C
rasy
or lump contracts, or with measurement contracts using a tities, valuation based on a Schedule of Rates or a Daywork t plus form. An Appendix entry will show which is applicable.
to appoint an Engineer to administer the terms of the ovides for the appointment of a Planning Supervisor. A entered in the Appendix, together with a period for completion.
mploy contract. The fo to starting 4a 'etion of he
orks can be in phases.
Synop 1
Intentions This
is
essentially
a
contract for engineering rather than building work.
The Employer must appoint an Engineer, who is to be named in the Appendix (2.1).
The Engineer may appoint a named Resident Engineer, and delegate any powers except those dealing with disputes (2.2). 221
9
Traditional procurement: measurement forms
ICE
Minor Works
The contract means the Agreement (curiously qualifj d by tKe words 'if a Conditions, the Appendix, and other items listed in he 'CohtractSche not defined in the Conditions and the Contract S edule 4hich was i Second Edition of this form has now been omitt esuma this c referring to the drawings, Specification, priced ties, Sch documents now listed as part of the Form of g reeme (1 The contractor undertakes to perform an responsibility for the care of the Works f me issue of the practical completion Certifi ate (3.2).
s1).
ete he ce
nt
The contractor is liable for design o y expr staffed in respect of temporary works other han f sign the standard expected is that of reasona skill, dili
The Engineer must provide
necessm in
a
He tak
u
E
uctio
(3.6).
Other persons engaged direc 2
Employer are t_q b
Time The starting date The contract peri
thAppe
ntered in
is
written instruction within
8 d
ix; if)not, after acceptance of
will b
r must pr vide
a
ed where p ogress is delayed for reasons stated in taken all reasonable steps to avoid. vii
If required, th date (4.3).
e
when the `Works are fit to be taken into use or The Engineer is to certify practical completion, or must what remains to be done to achieve it. Partial pletion by Sections identified in the Appendix.
n
ted completi
,-+
session by; vise sess
cont
possible b
A Defects Correc on Period stated in the App _dix (5.1
le where the
contractor fails to complete by the
f lows practical completion.
The duration of this will be
rt.
Completion is to be certified by the Engineer after the defects have been made good and the Defects Correction Period has expired. Certification is in response to a request by the Contractor, and shows that the contractual obligations have been discharged to the Engineer's satisfaction (5.4).
222
Traditional procurement: measurement forms
ICE
Minor Works
Instructions which the Engineer is empo, variations, testing, suspension of work, re contract and exclusion of persons (2.3 Each
9
iss e a
list
o
accor
noti
nstructio'tor is bound by ever matter referred for disput esd,kjtion`(2-7
of the parties
it concerns
a
The contractor cannot assign th contract 61\anJ icrhts Lder aIIy`r\ uirestie c consent of the Employer (8.1). consent.
The contractor may not the Engineer (8.2).
-contr t anlmpart &ftze Wor
s
There is no referenc o nomi Notes suggest that pproved su -contr ion. by the Engineer in t ie Sp
full
for
is
tors
ppliers, but the Guidance named and listed
rs can be
a
t and for the stability and safety
onsibili
r
t
the
is
of
me
rthods
used on any one contract. The Appendix
can
t used Options are for lump sum, measurement on
chedule
Rates, valuation on a Daywork Schedule and
in the tender figure.
ntitled to additional payments due to unforeseeable adverse of delay or disruption to progress (6.1).
ontract The contractor is
't a
r
monthly statement giving the value of work executed
items to be included (7.2).
to ue an Interim Certificate, within 25 days of delivery of the atement -3). The Appendix may include a minimum figure for any Interim ertificate shall show the amount due and the basis on which it was calculated. Payment by the Employer becomes due on certification, with a final date for payment 28 days after delivery of the monthly statement. If the Employer intends to withhold payment, he must notify the contractor not less than one day before the final date for payment, and state the grounds for any deduction (7.10). i
E
vii
Tom
.-+
ee`r-i's
223
9
Traditional procurement: measurement forms
ICE
Minor Works
Within 28 days after the Engineer has certified comp of any outstanding work at the expiry of the contractor shall submit a final account. Within 42 should issue the Final Certificate. The amount p the final date for payment is 14 days later (7.6, Half the retention is to be released within completion Certificate, the remainder completion (7.4 and 7.5).
ao
ma ' Corr tion Perio ,the cep of t th ngin on c ificatio ,and f311owi
4 days o
Interest may be added to overdue pay 5
Statutory obligations The contractor is required to compl notices required, and pay all fe
Responsibility for any conse It, approval oval licen rests with the Employer. Th s wou lude plan matters of land law includin part walls conserA
issi
ere this has occurred because
Engin
).
fl,
a The CDM Regula ions 1 utory obligati ns on both Employer and rwise, the E Contractor. Unle state inates the Engineer to act as Planning Supervisor the ontrac r as P cipal Contractor. There are requirements nd Safety Plan and the Health and under the R ulati cernin Safety File, nd these o ions be"Goryiie contr, ctual as well (13).
r
the contractor an Appendix to be he cont# ctor is then obliged to take out joint names insurance in nd pe pect of to ipora anent works. Unfixed materials and construction plant incl full va e against all loss or damage, bar Excepted Risks as is re
fined
re
e
contract
The c ractor damage to extent that the E the cause (10.2)
itions 10.1).
indemnity against loss and claims for injury or rty. This liability will be reduced proportionately to the ose for whom he is legally responsible contributed to
loyL`r an
ployer or t
There are further exceptions to the contractor's liability for matters beyond his control and in respect of which he does not indemnify the Employer (10.4).
Insurance required under the contract
224
is
subject to approval by the Employer (10.6).
Traditional procurement: measurement forms
ICE
9
Minor Works
There is no express provision for determinin must rely on common law. The matter of
of contract obligations
is
left unexplor
Definitions are included as part of, fl,
There is a contracting out of ri (Rights of Third Parties) Act 199 9 Disputes
The terms of the contract req the Engineer in the firs
n must be referred to state his or her decision ne month of the reference
writing to both th (Addendum clause in
If a matter of dissa Engineer, the
resolved by reference to the parties might, by agreement, seek iliation Procedure (1999) (Addendum
consideratio clause A-5) Notice of referra to conducted actor
Zludic ce
ion
wrh the,ICE
en to
ther party, and adjudication is to be ludication Procedure (1997) (Addendum
claus
reference to arbitration. The party seeking Arbitration is to be under the Arbitration Act in act ant with either the ICE Arbitration Procedure (1997) Industry WWI Arbitration Rules.
225
9 Traditional procurement:
ICE
measurement forms
Minor Works
If considering using the ICE Minor Works form renf ember that: It is intended primarily for minor engineering ks,iort duratior}/ not ercQe £250,000. It is for lump sum with or without bill o ua ties, or or m sure contracts. The Employer is required to a oint an n eer t6,6e con f Eri n administrator. The contract is for use under th la nd Wales, w suitable for use in Northern Ireland or u ro vied in clak
It is a truly short but balanced form Conditions are succinctly and clearl Specification.
Completing the form the Appendix.
is
hich -q,Ilow-!
straightforwar
.
rtes
Contract administration s could considerable authority, and the p cedures are strai
w
riproject
Related matters Documents ICE
Conditions of
tract
Minor Work9Third E
Notes ICE
226
Condit
ks
Third Editio
r p
Traditional procurement: measurement forms
9
JCT MTC06
The Joint Contracts Tribunal Ltd
Measured Term Co Background tra was 9 for use by The Standard Form of Measured Employers in both public and ivate w have ckin need of min im m viously tiresome planned regular maintenance a ork. arat and wasteful having to raC%S foe sm II job, and in some repair nde short notice. In all cases a contractor might b nee dea ntractor appointed to such circumstances it is usua prefe one handle all such work under one ontra spec d, on terms previously D
entero
i
agreed.
Competitive tender nature of the intend of the contract commercial cli nt b form specifi lly for the 2005 itions Term Co act'.
-r 4ited
eeme .. ith fi Con tion set
cts
rm cont
es
t
taking into account the
be covered, and the duration been used by corporate and
this JCT contract is the first standard n re-published in 2006, in line with in rms the suit with the shorter title of 'Measured ding
ck,
b1
as b
r-«
/total docu en
bas s area
on
the geogra
s
42 'aqs long, nd contains a Contents table, Articles of kals and eigh Articles, Contract Particulars, an Attestation, r nine ections headings, all following the pattern of
to the nature of the intended work as being 'maintenance and e 'Contract Area' to be defined. The Employer is required to trator, a person who has special significance under this contract because ate job within the period of the contract must be initiated y an orclq ss ed b theontract administrator. The Fourth Recital also refers to CDM ons co pliari e in respect of each separate order. .---.
it also
..E
bodies the offer by the contractor to carry out work under the erms of payment set out by the contract administrator, and acceptance of this offer by the Employer. d Recital e
ree
E.°1-o
Article 3 identifies the name of the person or firm acting in the capacity of contract administrator, and requires that any replacement needed must be nominated within 14 days. Article 4 identifies the Planning Supervisor and Article 5 the Principal Contractor. Entries in the Contract Particulars are particularly important with this type of long term arrangement. 227
9
Traditional procurement: measurement forms
JCT MTC06 Details should be given of the types of work for whit, order may nissue d properties in the Contract Area which may be incl ed tl cor act, a indication of the estimated value of work which be anti ate alth gh n guaranteed). There is opportunity to assign a pr ode t ach a icipated der,, for example an 'A' Code could require respons wit f r hours. T e dura o contract period, which will normally be for minimu o e yea , sh Id als entered. The terms for measurement, valuation nd paym t a under tems 8 of the Contract Particulars. o
By nature the Measured Term Contract
can be no precise amount of work es an enabling document, which allow to be valued according to rates, pr
p conic iffers from I shed at oub4f an n Con fic order e of ges
ered
i
Use
After the identity of the pa an entry which states the documents other than the must be named under
date
t he 4 'the Recitals require rea'. Ther is no ference to drawings or terms of iae Th contract administrator erm 'Arc itect' 'sed at all in the contract. .
derand arnot as
a d
d, or as a deed.
The Contract Pa culars quir a eri stating the Eimurn and maximum value of any one order be is d toget r wit imate total figure or figure per annum. A priori co ing for order may b troduced, which would signal the need for rapid re contr for tq/speci eiE)K t orders such as emergency repairs within sti riods' necessary to id v-.
tify whether payment is based on the Schedule of Rates. The contract can be subject to fluctuations.
t and valuation can rest with either the contractor or is
to undertake
With
:t'
administr ated \Nlue
Contract Particulars should indicate whether the urement and valuation, or conversely, that the 'sponsible. Alternatively it can be shown that only ill be the responsibility of the contract administrator for
a contract elativel ong duration, it is desirable that there should be a break provision. The perio o notice required to bring this about is 13 weeks unless a different period is entered in the Contract Particulars.
Synopsis 1
228
Intentions
Traditional procurement: measurement forms
0
JCT MTC06 The definitions in this contract have a particul (1.1).
ance,
b>ausethei
conflict with Schedules, Specification o
work is with the e
e
and Safety e Contract Area -°R'
The contractor is obliged to carry out ork whe to be executed in a good and work Contract Documents, empowere in cti s, d an Plan. The contractor does not h e exclusiv t to work iit and the Employer can use oth ovtractor hi wn ur fo
if desired (2.1 and
2.3.1). pply The Employer has the right td for carrying out work, an the tracto
ma riaplan or equipment needed ve r ilities concerning these
(2.3). If supplied by the En1 ployer rials an Schedule of Rates, a d the contractor is
failure to
3
).
ices he
Co-drdina
L7-
otifid starting date are entered in the Contract ty code imposed.
the contr, blars (ite
ate Ad re onable com
starti 11
be
rog
There
s,
mme must
uo
the contractor where the contract administrator
(2-7).<
control of the contractor cause delay, an extension to the 'for compl on,.or eac order may be given by the contract administrator on a 10). fair and reasonabl i
req u red to make good any defects appearing within six months of etion Date. E
actor
The bar to assignment without written consent extends to the contract, or any part share or interest (3.1). Sub-contracting in any order is restricted to the extent that
previous consent in writing of the contract administrator
is
required (3.2).
The contractor is obliged to employ a competent representative (3.3). (Note: there is
229
9
Traditional procurement: measurement forms
JCT MTC06 no reference to his or her being constantly or othe Access to the site, which can be a complicated
se
up9h the
orks:
i
considerable burden upon the contract admini entitled to a degree of possession sufficient to any order. Where access is restricted, unp daywork basis (3.4).
vious
initor,
Variations may be instructed by the co variation under this contract is define
at cons
d i
The contract administrator has the the site (3.7).
If the contractor does in administrator, then, after Employer to give effect to
curred
wer t6
from the contract
comply roper ioite, other ie ins uction at the
rsons
ay be brought in by the
ctor' expense (3.8).
4 Money The work covere
/by
is
ea.
sub*ctAo
mi
surement and valuation in
If daywork is the appropriate basis, the Sched of H ly harge va he Order (5.4.1). Where neither are appropriate, the air ra esorp ces sh apply. In the event that agreement is still required, t sha e tween par as a last resort it shall rest with the contract a ministrator h ust ult wit the contractor (5-5). accordance with
e
agr
Rates (5-3-1) I
ntract
is
inist
p
gres
the
asis (5.8).
rru pted
ecause of an instruction issued by the other unproductive costs are valued
e or
,
and valuation rests with the person designated in the It is ssible to set a value limit whereby in the case of lue r sponsibility rests with the Contractor. Above this W an estim unless there is anyt e contrary, responsibility will rest with the contract m
sure
.
Most work carri d ouTunder n order will be subject to Part II of the Housing Grants, Construction a Regener ion Act 1996, and the contract provisions relating to payment take accoun this. :-r
Progress payments at monthly intervals may be appropriate, depending upon the value of the order (4.3). In these cases the contract administrator should issue a certificate which states the amount estimated as due for payment, and also the basis on which this is calculated.
230
Traditional procurement: measurement forms
9
JCT MTC06
y
ent Where the contract administrator is respons le for easu Or r Co certificate for payment is to be issued withi 56 da alua n, (4.4). Where the contractor is responsible f meas in 6 da trator must be submitted to the contract a ca is issued ithin 8 Completion Date, and, if acceptable, Fce the lu of wor of the account (4.5). In all cases the c ificat e m i show th Nhich e v&e was calculaf, under the order, together with the basi
ean
The final date for payment by certificate. Within five days of t notice to the contractor of th
t
e Em
or withhold money, then t no later than five days befo Failure to pay amount at the rate of 5 per nt over ba
first became overd
y
days
is
date of th t
ific
ma
mu
for
he
e
Erp
of issue of
a
'shall give written
If e plo r intends to deduct notifie ing of this intention nt (4'
ment will attract interest payments by the Employer
urren
(4-6-
and without prejudice to any otices fro the absence of an vali dies, ilure to ay thdate for final payment on any other rights a certificate ca give tract a righ to s pend performance of all contractual to th particular order) (4.7). of con obligations, i.e. pr In
oblig tor's duty t compl i,s entitl to r4 ire in re
no the c ntract administrator if he finds any conflict an order. The contract administrator must issue uiremen a will be a variation. The contractor is then not liable for nonfrom the order or a subsequent variation (2.8).
s
nsi
ii i
,-+
r
com lianc
ith all statutory obligations and give all required es and charges not otherwise provided for y work undertaken in response to an order.
igatio of the Employer and the Contractor, with regard to the Regulation ap ing o an order, and in particular Construction Phase Plans and y les, come contractual as well as statutory duties (3 9). Health
MM
anfet
The con actor is to demnify the Employer in respect of death or injury to persons erty other than the Works, which arises from carrying out an order or damage (6.1 and 6.2). This indemnity is to be backed by insurance, and an entry against item 13 of the Contract Particulars will state the minimum cover required. k
Insurance of existing structures and contents which might be affected by an order is the responsibility of the Employer (6.7). Cover will be for the full cost of reinstatement,
231
9
Traditional procurement: measurement forms
JCT MTC06 of e sta a p+ ctur am dmen will twe the arts prior
repair or replacement after loss or damage due to Where the Employer does not wish to insure the exi need to be made to the form, which should be a entering into the contract. ,-+
m re
,-f
All risks insurance of work or supply instructe under e is the r onsi Contractor. It will most likely be covered by annual .1 risks. Dolic be a joint names policy. Cover for each or er is Date (6.9).
the event that terrorism cover ceas insurance shall inform the other par in writing which clause 6.15 opti
tfarty
to be,_avaita, e Em)fover must ihsftuct t
fl,
In
The Employer is allowed to erminate e loym ntractor for given reasons (8.4). Termination ill aff t e contr as a though the default may arise only in respect an der. The clause ers to ork being 'materially' suspended, disrupted gr de gyed, nd min or ivia ns nces would clearly be excluded by the word 'b unre nably vexa'iiousfy' (8.4). A warning notice is required before t actua of of de minaLion b the Employer. In the case of insolvency, termin ion is o 8.5.1). The contractor is include failure by payment (8-
'rminat its o Employer to ay aq
Common and the remedies.
d
ract are
ination
is
by employer or contractor,
ithout prejudice to any other rights or
ties of the parties concerning outstanding payments and rising from determination are set out in detail (8.9, 8.10).
'respec rigxtts direct los and/or
ontract inclu
whher ter
visions, which allow for determination of the Such action could become necessary on a to ing ontract because of changes to the Employer's building programme or e to a fluct ating workload. Thirteen weeks' notice (or lesser period if previously agree 4s- r fired (7.1).
The
contrac
es br
t by ither party after six months.
Rights of third parties under the Contracts (Rights of Third Parties) Act 1999 are expressly excluded (1.5).
232
Traditional procurement: measurement forms
9
JCT MTC06 9 Disputes
right to refer any disput to adjudication (Article 6 and clause 9.2). Either party has
a
is stated to apply, determination of disputes (9.4.1). W itten noti
reed
fl-
Where Article 7
The conduct of the arbitration an (9.1.3 and 9.5). The parties agr The JCT has adopted the 200 Arbitration Rules, and the p
e- is
1
thaermae ap JCT
Editio`
th
f th4rbitration
Unless it is stated that Artic 7 app be by legal proceedings and no` by arb fl,
,-+
thee-finKcleter
Industry Model shall apply.
nation of disputes
is
to
fl,
of resolving disputes may There is a reference clause 9 1 0 diatio relative w co ort duration of work carried be particularly appr priate out under individual order It will not remov the sta tory right to adjudication, nor 0 edings. a contractual aareem nt td fl,
fl,
i
I
233
9
Traditional procurement: measurement forms
JCT MTC06 This contract? If considering using MTC06 remember that: It is intended for maintenance and small wor ween ,sine three years' duration, and the approximate v ue o tried o as a sum either per annum or relating to the ntract pe for both private and public sector use. The_Emp er ' requ administrator. The form avoids the nee fo um ou par appointed contractor may only carry o each sep t ob en in issued by the contract administrator The applicable law of the contract as printed for work in England and other laws. There is an SBC Me Scots law.
the es.
ngla
A
m
,ere th to c
Co
1.7 re
001
The form includes break rovisi ommencT mpletion of orders, arrangements for site acces i, and cancellation an rders are subject to a minimum and maxim ea entered n th ct Particulars. Contract documents comprise, 'the' Co itions dS edule of Rates. There is one contract period and rders 're give comm ce ent a d completion dates. All work is subject to mea reme and and this can e made the responsibility of the contractor o he co act dmini trato uctuati ns provisions may apply or the contract may be fix price:
.-+
entrie n th Contr Particulars are required on matters cripti of ty s of work; value of works; contract rovisions; nd the break provision.
dell
.
sdard f,
-+,
Sin
rator, this_ eE*nsibility will extend to all work carried out nclude the issuing of orders, and may include issue of tructions, kariati icates for Progress Payments, extension of time, and ncell re no standard format for orders, but the JCT Practice to and Gui 89 i luded a model Order Form and Completion icate in Annex E w d be adapted for use with MTC06. The JCT are ew iuide to MTC06 in 2007. r`t
rm of contract published specifically for term contract itions ar clearly worded and Section headed.
234
Traditional procurement: measurement forms
9
JCT MTC06 Related matters Documents Measured Term Contract 2006 Edition
References Measured Term Contract Guide (forthcoming Practice Note MTC/1 and Guide (includes excellent annexed material on
235
236
Traditional procurement Cost plus forms
The Joint Contracts Tribunal Ltd
Standard Form of Prime Cost
bntract 99S.Ed nation
For the Employer who must procee
cost of labour, materials and plan plus a plus sit standard forms may be used in a c exclusively under this arrangement.
237
t fort
n
of t to prick
nbut ther
aXagre
tractor's rs to b p
i
to pay the actual ds and profit. Several my one published for use
238
Traditional procurement: cost plus forms
10
JCT PCC98
The Joint Contracts Tribunal Ltd
Standard Form of 1998 Edition
P
Background Repairs and rebuilding during fast and sometimes even eme
a
materials plus a percentag were an obvious answer at th out that fixing contractor's in the public interest d unlik In 1967 therefore, t fee', thus introducin should be able to reco would only b Bust, which altere the 'n
immediate'It-after t0,-Seco d War called for tion`CQntra s bdwa-on th cost of labour and over contrac erheads and profit fter e ar, th imon Report pointed eo t of the work was not p acce o bu owners in the future.
I4hed a hich incorporated a 'fixed ment of com whils still ensuring that contractors le of i eir r abour and materials. Fixed fees if th archite t wa precluded from issuing instructions rks'. the
rty to revis the form as essentially a Prime Cost J CT s UP wool ,ut wit contr. ct fee e d or a percentage basis as desired. The 1983 use o headed format. An attempt was also made to 6 ich ar6 re the were changes to the scope of the Works. requir not to increase labour and materials more ctor W ary to cart out the Works. .
Contrac
eventually published in 1992, and
is
currently in
ent over 150 pages long, including an Appendix, with relating to bonds, an Annex 2 to the Conditions relating visio s, S plemental Provisions in respect of VAT, and Modifications mS tion Completion under Article 7. These Modifications are quite and clause throughout the contract which are affected as the result of Tonal ompletion are identified by small letter 's' in the margin. This arrangement of printing Sectional Completion provisions in the body of the text, although convenient in many ways, does make for a rather bulky document and arduous cross-referencing. _°Q
's a heav an Annex 1 to the
I
E
9-'
The Articles of Agreement include seven Recitals and nine Articles, and the Agreement may be executed under hand not as a deed, or as a deed if required. ate,
239
10
Traditional procurement: cost plus forms
JCT PCC98 '++J
The contract Conditions are set out under nine S ect headi gs,'h a Contents page at the front of the form. A key f ature contracting is the provision of eight Schedules. T h se are ry port s follo on which a great deal of reliance is placed. The ch uIes a i
fullZd7-lex-e
ti-
senwi i
t co s:
description of the natur drawings (if any);
First Schedule:
Second Schedule: definitions of the Pri site staff, materials nd
sub-contract works Contract Fee
Third Schedule:
-
g
td
obds, r
se-
C. ;
erce fee;
Fourth Schedule: estimate of the
so
items of
Fifth Schedule:
the Spe ification; items o work to be executed b
Sixth Schedule:
pd sub-contractors;
ominated suppliers; Eighth Schedule:
ork o be executeq by t
Employer or others direct.
ould efully comple, ed because the nature of the kely be let on minimal information. intended work th a tthe co There may or ma be drawing to acc any the Specification, and the contents of the Sche fore vit for broth ering and valuation purposes. These schedules i
c
itals, ter tatin in ge ral to s the nature of the Works (also to be a First Schedule), reference is made to a clear as p ssible in an any dra ings (which if used, are to be listed in the First Schedule). T e Archite t/cont t adm' istrator responsible for the preparation of these is the erso na-ffi . The uantity surveyor is the person named in Article 4. In
the
described S cificati
Th contractor unclertak t ar out and complete the Works (as described in the First edule) er th o her items as instructed by the Architect (although presumab y e scope f th contract may not be materially altered).
dertakes to pay the contractor the Prime Cost (hence the importance ' econd Schedule) and the Contract Fee (Third Schedule). There is provision for the fee to be revised if alterations in the nature or scope of the Works justifies this. The Employer
of the definitions
One criticism of this kind of contracting is the lack of incentive for the contractor to work efficiently. Protection for the Employer is afforded (C1.5.1) in that the Architect
240
Traditional procurement: cost plus forms
10
JCT PCC98 is empowered to disallow costs where the co economically as possible, or uses a greater tuber f op tive han easonably far a abour required. However, this might not be easy o impl ent n pra ice. is concerned it could be very tricky for ar arc tect to ay 'yo haveXh ed or six carpenters but four could have done t ,-+
,-r
i
The Simon Report concluded that 'the c is a
form of supervision, veto, and
a
trol to b ing t
ccoun
practicable today, as in any even/it wo
.
p
ba
xer
'
ed
inmost rei rpb ursement whether is would be tant onitoring.
is db-q bt
co
call
Synopsis
The contractor
is
obliged to
accordance with the
Architect
(1
5).
Protection for the E*loyer(agairist wastefuNA e of (1.5). Quality and (3-10).
lour and materials is a provision
sta.
with such urther drawings or details as are The contr ctor st b p vi Specification (1.6). There are limits to reasonably ecessa t explai and a the ecification nd all 91 aVings, and the confidentiality of rates must be respe,
v0-
and complefion are to be entered in the Appendix. There is t of possession for up to six weeks. The contractor is to proceed d complete on or before the completion date. en by the contractor in writing (2-5). The Architect is tension of time should completion be delayed beyond the corrrpleti6n date, prov ed the reason is one or more of the Relevant Events listed. The Architect ake i writing a fair and reasonable extension within 12 weeks of receipt o he notice nd particulars. ,
Failure by the contractor to complete within the contract period is to be certified by the Architect (2-2). Liquidated damages are then recoverable by the Employer. Practical completion is to be certified by the Architect (2.8).
There
is
provision for partial possession by the Employer (2.9).
241
10
Traditional procurement: cost plus forms
JCT PCC98 The contractor is obliged to rectify defects (2.10) w within 14 days of the expiry of the Defects Liabili
otifie
The bar to assignment of the contract without (3.1). The contractor may not sub-contract wit
itterconse
Sub-contractors may be named and in uded in or annexed to the Specification (3
Rn-a
There is also provision for nomin forms and procedures, (i.e. NSC/T Conditions incorporated by reference
ontr
Architect's instructions mu work is not empowered. The contractor is required (3.6). The Employer is although these mus
There is provisio
familiar
provision
is
for op
eof
JCT Co
inclu
Pr
at tB
There is pro, (3.13) an
e C);
s
(8A-1)
T*q
l(PCC);
be in wri
competent e on the site constantly oint a c rk of\wor+_s/Who can issue directions, d as i ructio by t e Architect to have effect (3.9).
have
i to
a
ing/.p,1 pectionand he fair a
vela
nd of ection 3 to be rk
informa
d
tes ing (3.11 and 3.12) and the reasonable operation of this
r6-form.
rried ut b thers engaged direct by the Employer t listed n the Eighth Schedule, and relevant
are
ification.
reis6
onac
rect loss
d/or e
e C6,ntraefFee is
ontractor may mak expens
t
lift of)bt fevv
c
ut Article
2 refers
to a Prime Cost, Contract
Fee and any
ertained.
the Third Schedule, but may be adjusted (4.10). application for reimbursement of direct loss and cified headings or 'matters'. Common law rights are
preserved (4.13)
Interim valuatio are to b made by the quantity surveyor, and the contractor must provide the quantity urveyor with necessary details of expenditure to enable valuations to be made (4.4). Certificates are to be issued monthly and the first date Appendix.
242
is
to be
as entered in
the
Traditional procurement: cost plus forms
10
JCT PCC98 =!-
Certificates should include for work properly ex properly on site, an instalment of the fixed f site where these are 'listed items', subject requested provision of a bond (4.6). e
f mat
Nia oroo of o et de
tabl
Interim Certificates must state what calculation (4.2). Retention is applied otherwise agreed.
#ie cos
ay
am all Inter=
date of issue. The final date for payment on I terim Ce es da later ifi c ployer Not a the should give than five days after th amoun written notice to the contr `t dying oses to pay. If he intends to withhold money, e mu e c6 T&Qt wr otice not later than five days before the date for fina ayme Emp ails pay amounts properly due by the date for fin e con as a o suspend work (4.3).
<_-
issuf
i
of the Final Cer =ificate is n f later thaD two Liability Period, or makin od defect or fr information from the Cont ctor, whicWE est Issue
t amou is duk and the basis of calculation. Not later of the rtifi ate, t e Employer is to give the contractor ount he propo es to pay. If he intends to withhold itten n ice not later than five days before the Final ate or payment is 28 days from the date of the ,-+
fl'
final date fo certifi
12). u.?
The Final Certif ate us than five day, after t e iss u written no 4ce spe fyingltk money, In must
om the end of the Defects receiving certain necessary
V.
t date
issue)
utory obligation pr's c' uty to
the cbri c`
`th
all statutory obligations and give all required
(5.1
cntr`ktor is t notify the Architect if he finds any conflict between statutory ui/ements'wd the ocuments. The Architect must issue an instruction and the liable to the Employer under the contract for any nononfr or is
The
compliance
with`at for IJbe
quirements resulting from the instruction (5.2 and 5.5).
em's owered to carry out limited work for emergency compliance, as a variation and valued accordingly (5.4).
reate
for is obli ed to comply with the CDM Regulations and particularly, where the project isi-tet+#iable, to comply with duties in relation to the Construction Phase Plan and the Health and Safety File (5.20). The cont
6 Insurance
The contractor indemnifies the Employer in respect of personal injury or death, unless
due to the Employer's negligence (6.1). 243
10
Traditional procurement: cost plus forms
JCT PCC98 The contractor indemnifies the Employer in respect
that this
is
due to the contractor's negligence (6.1
The contractor is to maintain insurance to cover cover required by contract is the sum entere necessarily limit the contractor's liability.
t
e
th
ind6"n'
an
iies,
ppendix (6
).
the This
If instructed, the contractor is to take out jo t n es i7+u against the risk of legal nuisance. There of xc ions, be attributable to any negligence by t e contra 2
i
Insurance of 'the Works' is for all ris names policy may be taken out b
e nevWauildirkas ar
cern
for 64ke Emplo
or 6.313). ified
out in joint names by the In
ployer (6- K).
E
the event of terrorism
Employer are stated in clau
over ;es 6.
Where insurance is r ui to an extension of ti e foll in
the Appendix
ainst
g 6.313
"I,--, to be
ilabld,
and er's
Wor
ss s,
of liquidated damages due then this should be entered
-3D).
An Appendix en will s iqtheJ de of Practice on the Protection from Fire of Constr tion Sites is apply f so, both contractor and employer will need to res nce, the insurers can specify remedial e event f non c measures hich must ertak -3FC).
toy pecifie
s allbVf ed
to letermineemployment of the contractor by reasons warning notice may be issued by the Architect, but the matter for the Employer. In case of insolvency of the on Me circumstances determination might be automatic g leTent/or the Employer might enter into an agreement reement') for continuation or novation (7.5). ;2.1
Its (7.2) A
btice of d termin ontr ject`tdpossible rei he contractox-(a
' 7
Dependingupon cum tances, the Employer can have the right to make interim arrangements f r certain wo k to be carried out during the holding period under this agreement. He still el to have the Works completed by a different contractor, or abandon the idea`o completing the Works altogether. The contractor is allowed to determine his own employment for specified defaults by the Employer (7.9). The procedures must be followed meticulously. In the event of insolvency of the Employer, the contractor may elect to determine his own
employment. 244
Traditional procurement: cost plus forms
10
JCT PCC98
actoor listed ne
Either party can determine the employment of, (7.13).
°''
The respective rights and duties of the completion are set out in detail in the
8 Miscellaneous
A full list of definitions, many of t
cifi2qo
P
Special provisions apply to th keeping f co concerning the ascertainment o rime st iteib
sub-co
v_,
min
en
l/1
Section 8A of the form is given up to nominated su
me (1
iers. -8).
Action necessary as
ities (3-16)
conseque
the Contracts
Third party rights excluded 0.25)
is
included.
Third Parties) Act 1999 are
9 Disputes
The Housi g Gran
party a s tutory adjudicatio Articl d u res
Iitratio
of P
on and Regene ation Act 1996 (Part II) gives either erence dispute arising out of the contract to 98 prpvides or this.
udicati
detail in clause 9A. etho'd for fin
ateme
been)delete
i
conducte"
resolution of disputes (unless the Appendix tailed in clause 9B. I
'+F
on
e
ref
accordance with the JCT 1998 Edition of the
en deleted as the chosen method, then clause 9C will apply
dispu
245
Traditional procurement: cost plus forms
1.0
10
JCT PCC98 This contract? If considering using PPC98 remember that:
for contracts where work mu arteclon sit work i such that is documentation, or where the nature of t e int sion ther pri ate impossible to prepare full information. It is p lished in e or public sector clients. The Recitals call foKa Sp ifi ion t d s h drawings s are ms of ork as listed in the First Schedule, and an estim eo st o e ime may be shown in the Fourth Schedule. The C tract Fee ed he c tra h ule. e Employer either on a fixed or percentage basis izatei r. is required to appoint a contract a an antity s v It is intended
"
i
thud
The form is for use in England and published its own SBC Prime
tract
withdrawn.
for parti facilitate this are included a design by the Contracnor PPC98 provides
etion (Modifications to ere is no provision for
se ction
list of not less than three which case the use 'dato rocedures4 ollow closely those for JCT98, ents arry the a
the
Sub-contractors ma be sel names. Sub-contr tors a of dedicated doc ments d but the prescribe SC do When com including
,
=dof the co p formanc so trac
ay also
m, ent ies ar
scion;
regLf s
Oiste
d EDI. The
Fire Cod
r frog,
a
e nom nated, in
d relating to decisions on matters items); insurance of the Works; Joint ght Schedules should also be checked
for com con ticularly here
ator it is essefitial to follow carefully the procedural rules, ns are made.
oes not se for JCT98 can be'ada
from time to time. The form is available on disk. dministration forms for use with PCC98 but many
d, self-contained but bulky document. The Conditions -headed, but the procedures are rather complex for administration. o have sold in great numbers, not surprising perhaps as ethod which brings considerable risks for the Employer. this is a procuremen However, it seems to have been used without serious problems, possibly due to careful selection of the Contractor, a realistic attitude on the part of the Employer and sound practice in contract administration.
This is an atfractiv are Section hea
Q-0
246
Traditional procurement: cost plus forms
10
JCT PCC98
-0p
Standard Form of Prime Cost Contract 1998 Edition Amendment 1: 1999 (Construction Industry Sch Amendment 2: 2000 (sundry amendments) Amendment 3: 2001 (terrorism cover/Joint Fi Code/CIS) Amendment 4: 2002 (extension of time/loss an xpe Ks ) ,LL
Nominated sub-contractor forms: NSC/T 98 (PCC): Part (tender invitati , NSC/T 98 (PCC): Part 2 (tender) NSClr 98 (PCC): Part 3 (particular itiori NSC/A 98 (PCC) (agreement, con actor ontra NSC/N 98 (PCC) (nomination fro chitect ctor) NSC/W 98 (PCC) (warranty agreemen mploye -contr NSC/C 98 (PCC) (condition (all these documents hav to be used i ting subs ontra 1
or)
Nominated supplier for TNS/1Tender TNS/2Warranty JCT Domestic Con ra (no equire ent in con act th Sub-contract A eemenf S SC , dition
Sub-contract
ndition
SC/C/S
002 Edi
PCC/1'Md Guid (for the 1992 Edition but largely relevant for 1998) CT Pra t to JCT 8 butr itten with JCT80 in mind): $es (relev ice Note No ai Contrac (1992) yency o ctice No o 27: gulations 0995) on oft e CDM actice to No 8: M iatiori 995)
4
PrrWce Note (yellow cd rs): to 1: Constru on Industry S&eme Practi Not : Adjudi ation (includes text of agreements) Practi Note 3 surancT errorism Cover Prac'fic it iing on Appropriate JCT Form of Contract Seri
JCT
247
0
N
248
Design and build
procurement
Design and build forms
The Joint Contracts Tribunal Ltd
Design and Build Contract 20 5
Institution of Civil Engineer ICE Design and Constru The Stationery Office GC/Works/1 Single tage Desi n
GC,/Works/1 Two S
age
ition (2001)
on
ark
and
DVsi
19
B
Traditional procurement rms o ontract do rib ea bf anything to the contrary, provide for design by the Con actor. ` 4ey are sim ly 'wb and'rfaterials' contracts. The wording u
d in so scan rd for cont act ex essly includes for a limited measure of design responsibility y the M h Contrac sometinxes'by optio al or supplemental provisions.
With one
ception,
specifically
use
wit
is ch
nce
ign and
uild
d only procu
the contractor.
249
rms of contract which have been drafted and take full account of design responsibility by
with
250
Design and build procurement: design and build forms
11
JCT DB05
The Joint Contracts Tribunal Ltd
Design and Build Background During the mid-1970s, a time of th iasm pproachesto building, contractor-led design id bui e me ablisltQ ortant method nt of building procurement. It wa recom en ED Construction for Industrial Recovery. The part t o th ent development management working gr up o for ey in hority housing also pressed its apparent advant es. Th was a raise ith the Joint Contracts Tribunal the need for a standa form hic , ump sum, a contractor would design and c struct f rs' s s to requirements. .-r
I
this time the D pa rtn f the En Building Trades Em oyers later to becon
the National Federation of ction Confederation) had their nd e scales or p here a building was designed (sometimes u ng to r-d aned po nts) to a client's specific requirements. However, n form ct exis fo use bj local authorities or the private sector which fair appo one t onsibilities, obli ations and risks of the parties. Clearly a new fo was eed d whi deal wi the situation where the appointment of neither n archit t nor a rm w
fl-
pro acted, nd continued for six years. However, when Form of Building Contract With Edition (J WCD81), it was an immediate success and ildin ndustry. Supplementary Provisions introduced in e usefulness and flexibility of WCD.
ase JCT/ tandard
`^.
islaed
Do°aQ
By
the fo
up to the fact than
welcome)
.ct'.
e
ostl
fl,
(1)
inded. As t
eared, public sector housing has declined, and it has been used r more complicated than those for which it was originally statement in a 1987 report put it: 'Architects should face and build is here to stay and that many clients appear to sign and build is now an established procurement method with
contractor-led but frequently design-led.
f preparin
is re
'
fl,
fl,
import
fl,
a tender for design and build contracts with a substantial design high. The JCT Series 2 Practice Note 6 Main Contract Tendering, gives an excellent framework which should be adopted. If it is to be demonstrably competitive both in design quality and price, then two stage tendering is essential with design and build procurement.
The cos
251
11
Design and build procurement: design and build forms
JCT DB05
A new edition was published in 1998, wich was es the 1981 edition and the 11 subsequent am necessary to bring the form in line with the r Construction and Development Act 1996. Th later and represents a radical overhaul, with simila hanges t
co J
o ich
the
was
Itlousra ate
i
s'o'
lirn
blish
23--I
The total document runs to over 100 pa Recitals and nine Articles, and may be xecute deed. e
for
-- vhich
uranc 1 states the express ob he co b 'complete the to the f the Works' (note design for the Works and car Ky out and sign ana of ca that the obligation is to co plete t e design). In Article This agent may be an 3 the Employer nominates a perso to act as Employ gr any oth suit n, and his or her duties architect, surveyor, pro1( ct m Id be c rly ed right from the outset. and any limits to his or er er' ha ing a duty in certain matters, (The contract wordi often is duty might and depending o the a r might not rest with the Employer's Agen
fl,
v0,
Article
in practice the form a
'often used it
substantia
consultant
f
co
ti-.
includin However Agent, and
scheme design has been developed to racti to appoint an architect and other ments in considerable detail, often de'* ed design nd even some production drawings. loye is quite distinct from that of Employer's o the
is
d ra
ti-
hou
nditi is
Qs
...Q
arked resemblance to SBC05, and in parts the difference between the forms is fundamental. con inistrator to act fairly as between the parties. The th compatibility between the Employer's Requirements on tor's Proposals on the other.
,e simila?fy
no role for a he agree
its
-6_
By the Second ecital, the c ntractor is obliged to submit proposals, and a tender figure. The contrac-to s obliged to produce a Contract Sum Analysis. The Third Recital places on the Employer the obligation to examine the Contractor's Proposals. The wording falls short of a warranty by the Employer, but this obligation must be treated cautiously because it is the Contractor's Proposals which prevail in the event of a conflict. (The form is frequently amended to reverse this.) Where the Employer accepts some divergence, the Employer's Requirements should be amended before ,-+
<(1
Fl;
..,
252
Design and build procurement: design and build forms
11
JCT DB05
,--r
relie the Contract Documents are signed. This oes n obligation to satisfy the Employer's Requi ments in to components and materials, and standards f work an ip are covered by performance specificati
sign;
rticuly
'=r
fl,
The Contractor's Proposals should re and to consi ent h th mployer's Requirements, indicating where amen ent or a 6ation is tvis'table hey should ns less loyer agr es to this, in not include Prime Cost or provis, which case the Requirements st e ey s t-nclu any necessary ical d tai s, rm plans, elevations, Sections and ab 'structural design, ifica ' workmanship not services layout drawings, a ma ire ifically requested in already provided in the E . althod
e
vii
belie
those Requirements.
n
-6 makes the form equally R ription of accommodation suitable for projects here ther required', or a full " n" prepa oyer by his own consultants' with planning permi sion ready obtaine e 0 Pract e Note CD1/A.) The Employer's Requirements state learIy w ther', oyer or the contractor is to be als. Thi is a st important matter, and experience responsible f ob 'niri suggests t at ast ni g is desirable before inviting tend( rs. If e co ract e responsible f r approvals, and these have not been of nde? h en u e r clause 2.15.2, if the Employer's obtaine by th da Requireme n% have ated t at any men muents necessary to ensure compliance are not t dasaCh4 nge th mployer, the contractor may have to bear any ext bra tice No Fee CD/1A paras 11-13 for further guidance.) The term Employer's
I
t
tract Payable in stages or periodically based on the The n. nditi ns make no reference to bills of quantities or a he Contra Sum Analysis will therefore be used for valuing loyer's Requirements, valuations for interim payments, and for sement of increased costs by the Formula Rules. The Contract e su itted with the tender, and the Employer's Requirements rm and headings to be used, possibly as prepared by the sur yor consultant. n c
lating t naiys
might stipulate Use The for
,--r
`n°
.F.
rub
*"'
places o the contractor the same design responsibility as that of an architect or appropriate professional designer (2.17). This of course is to use reasonable skill and care. It is not an absolute warranty except to the extent that housing designs must satisfy the provisions of the Defective Premises Act 1972. There is now a requirement in the form for the contractor to take out professional indemnity insurance to back this warranty. Details of the cover required, including the period for which it must be taken out, are entered in the Contract Particulars.
253
Design and build procurement: design and build forms
11
JCT DB05 r-.
esig rauura ntra Parti he app pria fig uId to e advice
Liability for consequential loss occurring as the re, contractor may be limited to an amount to be en (2.17). Opinion is divided on the worth of this, and be. As each set of circumstances is different, thp- E insurance experts.
r
i
fl'
,-+
The form, as used, sometimes places respon i ility for contractor. It also permits design input mp er b he design warranty is only applicable 'insofa as de n the Contractor's Proposals'. There ca be prob wh ur substantial design input, because the e v t o
the`r e b
i l
responsibility become blurred.
,-+
The Employer's Requirements may erefor' yth 'frpm a imple written scheme design, statement of performance req dev with outline specification and gs dica ge nts, materials and finishes, which may have re I nning p . However, there is pletion of the tender no provision for design in the Employer documents, except by w on or 'C rm terms it. Where this ge h full co of ch variation, including any occurs the Employer ctor. luati nisi the hands of the contractor. consequential expen i
g
ty con authority of Em o inspe tion ins`
re
Q1-
sect
,-f
,-+
1'r
itect or contrac administrator in the contract he Employer's Agent or other er or his Agent is to be allowed access ditional sense. The contractor might have enga td+`epare esigns and assist with production nsider the Fchitect's work to be finished once he drawings wings. ome ntractors choose to retain an architect or she ha for site dutie that drawl are being correctly interpreted, or to see wh subs ccommodated without injurious consequential effects. raised by their architect about workmanship and iers regar, teri :e rice, and consider that the inspection of work on nt an contracts manager. Therefore it might be highly is best-reft to their si le for the Errloyer to advantage of clause 3.1 and appoint an architect spe and report back, to ensure that the standards of alit y of materials is in accordance with the Requirements. The fact that there can leave the pro person acting with t to the Works
E
,--r
fl,
'(Q
Synopsis 1
Intentions
fl..
,-+
fl,
,.+
The documents are to be read as a whole, and the printed Articles, Conditions, Appendices and Supplementary Provisions prevail in the event of any conflict (1.3).
254
rip
E
The contractor is obliged to carry out and complete the Works referred to in the
Design and build procurement: design and build forms
11
JCT DB05 Contract Documents (the Employer's Requir ents, e Co actor Pr`o Contract Sum Analysis and the printed Con itions) 1 1 her expr to completing the design for the Works; t elia ce u n t contr materials, goods and workmanship of neceary bu;'not refer documents (2.2.1). k
t
t
Kinds and standards will be either Employer has specified these in th contractor. If not, then the cont
se
referr
cumen
th
me
wh
and if the ability on the everx of failure (2.1
ill reduce
liab
in
and 2.2). The Contractor's Proposals a Recital) and the Employer is that he is satisfied that the
com
d by a C e b
:oyer
itact
refully, R
ire
m Analysis (Second ause the assumption ents (Third Recital). S
There is no means ithin f a mismatch between the Requirements and th Proposals. here iscrep cy hd within the Requirements, the Proposals prevai Whe re is a discr ancy hin the Proposals, the Employer is to be notified an he m make a c' ion bou the discrepancy and proposed amendments (?11.2). his m ht cons ute a han
ble
is
u bject ,1 will
o»bvdign
ork to the extent that it warrants is for housing work efective remises Act 1972, the limit of liability
its
1). However, w ere the contract
terms
t app! esign
arran lo s
inc
f
use, endix (2.11
for consequential loss not covered by of profit, etc.) and can be limited to an
-3)
is re uired toorvb it drawings and other documents it prepares in o the umde 'gn (the 'Contractor's Design Documents'), as set out in the or as reasonably necessary. The submission is to follow a en et t in S edule 1 (2.8). .-r
U)+-
The
es ss
DJ:
br
care a d skiIJ
iso
'Ction'. The contractor is to execute work marked ,-+
'A Action' of the latter it must incorporate comments by the Employer. ust r vise drawings marked 'C Action and return for approval before se
<<-
c
any
by returning the design documents marked either 'A
0-P
e Employer
Action', 'B on', in he c
work( Schedule 1:
5).
.=r
No comments of the Employer relieve the contractor of any of its responsibility for design (Schedule 1: 8.3). The contractor is obliged to supply 'as built' drawings after completion, and before commencement of the Rectification Period. These may or may not comprise part of the Health and Safety File, according to the circumstances.
255
Design and build procurement: design and build forms
11
JCT DB05
In; ran ation
The CDM Regulations require the appointment of a Contractor, and under Articles 5 and 6 and provisi both employer and contractor become contractu
ohe
o
s
rin
uto uto
2 Time e enter
ntlwand
-«,
An option for deferment of possessio to an entry in the Contract Particular
not excee
W
;41o
There is provision for dividing t e commencement and completion section. All provisions relating to apply separately to each sect] n, except
Event for
ing de
to strikes etc. affe
approvals, an ..,
which arise fter the b
is
lik
e to
the
C
thelorks
to time, the Employer may recover written notice to the contractor (2.29). _0.
issues a
ufficient compliance by the contractor in providing .y File, is signified by a written statement from the gyp'
inclu
tract Particulars (2.26). The interim no later than 12 weeks following (L)
that it
awarded includes reference
g from necessary permissions or requirements or terms of consents
bject Yo revie plete
pletion,
Fina Certificate.
pporting information, mpletion (2.24). The th contra or o hiscision relating to the na bl y ractica le an in any event within 12 weeks
of the
of chan to ent
provi
s,
for completion,
ing
ich
the Pm-pl oye decision practica compl on 25-
ng separate ages for each
mlbloyer, tod
wor
n
d da
»-«
The listed Releva
fy
xamp ere
ands
s,
liq
c.°
to th tima
Notice of delay must be giv including the contractor's Employer is required completion date as s (2.25.2).
o Se
esf
an
roe
`<.
r+,
'n+
Dates for possession and completion should The contractor must proceed regularly and dill completion date (2.3).
rm ho or the oyer (2.27).
tract
ris I bliged to
rectify defects unless the Employer decides L(1
+-'
appr priate deduction instead (2.35). r early
3
`se
or occupation by the employe (2.5.1) and for partial
Control The bar to assignment without written consent relates to the contract 'or any rights thereunder' is a (7.1).
256
Design and build procurement: design and build forms
11
JCT DB05 The contract provides for Third Party Rights e assi ned to urcha funders. The requirement to grant third pa y ngh to tifie with information regarding limits to the c ntract s li ility, ust Contract Particulars. The rights are set o iSchedu 5. i
The contract provides for collateral funders and purchasers/tenants, and funders, and the Employer. The re in the Contract Particulars, th together with information reg
provi
d
set o
tractor to
by/the
to th to
urcha s/tenants, st be set out rranties b- ntra ors identified,
The warranties to purchaser, CWa/P&T, CWa/F, SCWa/F relation to the Employer, alth
There is a requireme for wri n sent to the carrying out o work, but ISO to tters P, sub-letting that the u b-c shall con in cert ina ay b
na b-co
ntal
Employer' instr,
ractors P
K
confirmati of o (3.7 `structi are em wer and these ay con ruction or des m the have a
The and
ntrt i
accor
s
in
provisions (3.4).
contractors or suppliers in the part of the Employer's Requirements
2.1.
writin
although this can mean written ditions clearly define what instructions Change (3.9.1) and postponement of any Employer cannot order a Change which ut the contractor's consent.
mpetent person-in-charge on the site full-time
all work to be carried out in a proper and workmanlike manner, the Health and Safety Plan (2.1.1).
under the direct control of the Employer to be carried contractor is in possession (2.6).
0
V.Cie-'contract a
out during the ti
isio
ting which refers not only -3). It is a condition of any
e
Venrork or
ate 'als do not comply with the contract, the Employer may instruct o rem ve them from site (3.13.1). The Employer may also order any Chan es necessary, which will not attract any extension of time or consequ addition to ntract Sum. It may order tests and inspections (3.12) and the likelihood of any non-compliance in similar work elsewhere is covered (3.13.3 and Code of Practice). vii
the
4 Money The contractor is required to provide Priced Statements; there are strict timescales to
257
11
Design and build procurement: design and build forms
JCT DB05 aid cash flow; and non-payment to time can be a val The Contract Sum is VAT-exclusive (4.4.1) and ma in the Conditions (4.1).
The valuation of Employer's Changes can be `the of the Valuation Rules set out in clauses 5.4 o 5.7 (5The contractor can recover increases in t or ntri the base date (Option A). Increases in la ur a m eri ay by the traditional method (Option B) by thus he ula
4.19). Where provisional sums have en in instructions must be given about the expen
in
tt,-LMploye
The contractor must make ritteri tion u rse ent of loss and/or expense. The grounds for a alid applica pon are et out n include loss arising from delay in obtaining pla fining scion, or o er con nts which the Employer has undertaken
to obtain.
Interim payments d r P m tt ose der of r JCT,\ forms. They may be periodic (Alternative B) or sta e pay ynts sterna A). he ch sen method should be stated in the Employer's equire ents, e Contract Parti ulars (4.7). Applications for erim must be supported details as sti
ulate
ntractor, and each application the Employer's Requirements (4.9).
`-L
vs froom th date of receipt of each application. mploVer mus notify the contractor in writing of the tion to `thhold or deduct money must be stated clearly in a lich also s Gt the grounds for such action. This must be give ontractor o less than Me days before the date for final payment. 6o valid n tices e giv by the Employer, then payment in full must be made. ilure rop er ue by the final date for payment will attract interest nt over current base rate, and can also give the outkarW ng amou 5 per actor the right to rk until payment is made (4.10). er
The final d
is 14
+L,
Within fiv amount e
v_`_
+L,
k
.+,
thr mo the following practical completion in which to submit The his detailed Final/AA ht an the Final Statement (4.12.1). If the contractor fails to submit these tw important ocuments within the timescale, the Employer is entitled to prepare his own count and Final Statement and, if not disputed, these will be conclusive as to monetary matters (4.12.5). r11
L+,
ti-
v0.
258
+L,
+L,
Final date for payment is 28 days from the date when the Final Statement from the contractor or the Employer becomes conclusive. Failure to make payment in full by the final date for payment will attract interest of 5 per cent over current base rate.
Design and build procurement: design and build forms
11
JCT DB05 Statutory obligations
and
r r quir en The contractor must comply with all sta this tract oblig required by statute (2.1). The only exceptio se are in c plia e in the Employer's Requirements it is stat ntr permission, 2.1.2). All consents or p mission obt ed b he passed on to the Employer (2.1.3). I
w
The contractor can only claim fe, Employer's Requirements by
adjustment to the Contract
S
itheN The contractor is to notify t e Em ploye requirements and either the equir to ari The Employer's consent
anydiv
irerrhnr the
between statutory ontractor's Proposals. ents (2.15.1).
essary due to changes in ract is Pr`a{ osals Contract ould normally constitute a statutory requireme is aft -tW base dat then not wou be at the contractor's Change in the Em ,oyer' Requirement yerquirements expressly preclude ever, here th Er expense (2-15the contractor's expense. d m e r s woul this, then nec
If amendments to
t
le
k
Xor is
is e
o
iged
not iabl Healt
,
c
Regulations and particularly, where
ply w-ittrfhe CD
with duties
to
n
relation to the Construction Phase
d Safe
mim#Jes th Employ, r in respect of personal injury or death, and pertXothi han the orks (6-1). This is to be backed by insurance
=O'
contractor in
tor's negligence. An entry on the extent of cover rticulars (6.5.1).
to.
the, contr'
Of-
caused b
required by the Co
vii
tin
d, the co 'tractor may be required to take out joint names insurance for the risk of legal nuisance. This will have been stated in the inst t There is a list of exceptions, and damage must not have emen
D-0
is
orks' follows the SBC05 provisions in clauses Schedule 3 B or Q. The full reinstatement value of work must include for the cont ctor's design work. Which alternative clause is to apply should mployer's Requirements and shown by deletions in the Contract e
0p`-ffons A,
,-«
5
the event that terrorism cover is withdrawn and is no longer available, the situation and options open to the Employer are dealt with in clause 6.10. In
The contractor required to carry professional indemnity insurance. The amount of
259
Design and build procurement: design and build forms
11
JCT DB05 '-r
ur Pr cover and the period of expiry are inserted in the Contract P ticula The Th must be taken out immediately following exec tion o the ntr is provision for inserting a level of cover for pollutio or con min tion ims if no is inserted, the level is the same as the level of co in rted in e Co ract Parti ars. i
.
fl,
Z
rt.
An entry in the Contract Particulars will show If the J Code f Pra ice o Protection from Fire of Construction Sites (stoapp - 3) an if so, Employer and contractor must comply w evence fno compliant result in the insurers specifying remedi 7
Termination The Employer is allowed to termin e th the cob specified defaults (8.4). One reaso is wh suspe design work and is therefore unable to scharg liga The Employer is first to is e a w otice, in ay r flow this with the determination notice. In th case of in DIvencc f the o. the Employer may at any time terminate the ntrac mployme by no e (8.5.1). =l;
The contractor is allow if the Works are susp m fo (8.9.2). In the eve of in olven determine its ow emplo
Either party can (8-11-1). Onej blameless.
e his o e
em
for specified defaults or
to a default of the Employer ied per dd m loyer, the contractor may elect to
oft
empl anent
erminL,4l
in obtaini
plant'
of the parts concerning payment, removal and ctive ri s an clb@ u n are t o, ind tail ( and 8-1/2). Note that the contractor's obligation e Em loyer wit co ies of all drawings etc. prepared, and that ovidin bligation r payment includes design costs. ...
t
iscellane ist
o`kditions
is
arty
he`Contracts (Rights of Third Parties) Act 1999 are ,for in the Contract Particulars (1.6).
Access for the
E ployer's Ag nt, and any person authorised by the Employer, is to be provided (3.1). s_migh e subject to reasonable restrictions as far as access to workshops is concerne'
Discovery of antiquities etc.
is
covered (3.15).
Sums payable in respect of royalties are deemed to have been included in the Contract Sum, and the Employer is indemnified against infringements of copyright (2.18).
260
Design and build procurement: design and build forms
11
JCT DB05 However, where the contractor is complyi n with fnploy 's ins cto matters not covered by the Employer's Requi ements the co racto for infringements, and any additional sum are adoed t the ntra-Lt Sum
the boundaries oftKe s rtaM in the`contM of th
The Employer is wholly responsible for contractor (2.9). This could be conside bly im etc. Act 1996.
An appropriate deletion in the C tf Supplemental Provisions apply, These necessarily be relevant for all con cts. of the form, and they are as. 1: the contractor may be r uired representative on site, and shou a char consent of the Emplo er is req
2: the Employer is e titled t (note not to be int duc
-
is
to notify the ERplo
wh
r
e a ,n
fl,
firm
ills,
ariatio
of
of time nd cor t over icatior :
I
ably
A
erso
ntrac ogres s,
m
e Employer's Requirements
f the Works). The contractor een entered
into.
part of the Employer's Requirements, asurement used is to be stated.
ajor na re have been issued by the Employer, mitestimates of the anticipated effects in terms ential expense, before work is authorised. If the instruction may be withdrawn, or the
tiob,
...
Vac
ap ication for loss and/or expense as provided for or ma onus is on We contractor to include a detailed estimate in the loyer may accept the estimate, or choose to negotiate, or refer stn
atter to
The
int
of
dto s
ota
i
Ca4
ey
ies a
Jhe
or ang may b requir
e
the sufcc
pclu 're
sub'
later during
sho*
icu
Housirrant
Cor truction and Regeneration Act 1996 (Part II) gives either righ to refer any difference or dispute arising out of the contract to n.-Article 7 provides for this.
atutor
L.0
Procedure r refe al to adjudication and the appointment of an adjudicator are covered in clause 9.2. Any adjudication will be subject to the provisions of the Scheme for Construction Contracts. The adjudicator's decision is binding on the parties at least until the dispute is finally determined at arbitration or by legal proceedings.
261
-
11
Design and build procurement: design and build forms
JCT DB05 as the method for finally, 9.3). Unless this provision is shown in the Contract are to be referred for legal proceedings (Article 9
Arbitration may be agreed
262
Ydispu s
s
to amply,
(Ar-8-aad en di
utes
Design and build procurement: design and build forms
11
JCT DB05 This contract? If considering using DB05 remember
rya
ccept resp r of the It is intended for use where the contra 71tu/iar equire althgbgh c etion of Works to a greater or lesser extent as nd care in the design is a stated obligation. The ntractor e reasable ski e more th ontractor is achieving this (i.e. not a fitness responsible for design, the cle `er th ou dar of spor bility become. ila a fundamental Whilst at first sight, this cont ct has man for istrator or quantity difference is the absence o ovisi on surveyor to act on the Em oye England and Wales. if. TR-rm is for' The Scottish Building CoW t Corn ubl i 199 Contractor's Design form (200 evisid `~'
+-'
i
The Employer's R contract and it is i should be adequa
uirements and on tra in port at they ly d Ctailed in cove
particularly beKaause of provisions av s,
>
ubmis ranges and io a
rtarly those
incorporating the optional ating to named persons in Employer's es by the contractor relating to the E
ts,
e
of
sals are the core of this The Contract Sum Analysis Co m eting the form requires care, ct, Particulars and supplementary
h
c.-
dyer w Id ntary P ovisi
numbe
usi
tt,, ny limi to authority should be clarified, and a clear what is erypowered by the Employer under the contract. is(ng the Fhployer, care is needed to stay strictly within the tment eee''ally once work starts on site. If acting for the
s
Ag
n
trar under a/novation agreement, accountability should be clearly established and espe
263
11
Design and build procurement: design and build forms
JCT DB05
Design and Build Contract 2005 Design and Build Sub-contract Agreement 2005 Design and Build Sub-contract Conditions 2005 Contractor Collateral Warranty for a Funder Contractor Collateral Warranty for a Purchaser or Tenant Sub-contractor Collateral Warranty for a Funder Sub-contractor Collateral Warranty for a Purchaser, Sub-contractor Collateral Warranty for Employer
References JCT Design JCT Design
and Build Contract Guide and Build Sub-Contract Guide
JCT Practice Note:
Deciding on the A
Series 2 JCT Practice Notes (yellow
Practice Note 6: Main Contract Te Earlier JCT Practice Notes (relevant Practice Note No 23: Contract Sum JCT Practice JCT Practice
Note CD/1 A ( Note CD/1 B (
David Chappell and Vi The JCT Design and Buil 3rd edn, Blackw. Sarah Lupton
Guide to D RIBA Publis
264
Design and build procurement: design and build forms
11
ICE/D&C The Institution of Civil Engineers
ICE
Design and Co
of Contract
Seco
Background the basis for further f procurement, and e schemes more quickly ay be higher'.
the early 1990s governme awarding contracts for roa endorsement of the rapid the belief that there wou and save money overall - even
as
In
n. It was a
ely introduction in 1992,
The ICE Design and
onakYCE Conditions. The
although obviously of the two forms is however, the 5iMilari distinct. As
with th traditi
al ICE
structure
same Section headings. There, urpose the documents are quite
nditiorm4is for
ssoc ti Engineerd, the n, an Asso Contract
o is
Consulting kep
is produced by the Institution of Civil ngineers and the Civil Engineering gular review.
is includes the Conditions, a Form of Tender of Agreement, a Form of Default Bond, and
obligations are for both permanent and temporary works. The will be completed to show which documents are intended to be ong these the Employer's Requirements and the Contractor's Is.
s
foun
clause b c
e c(tract are in 72 clauses, and the sequence follows closely that in t e traditional ICE Conditions. The Contents list and index on a e basi are particularly helpful.
Use Entries in Part 1 of the Form of Tender Appendix will show a contractor tendering whether quality assurance or a performance bond is required, and provide detailed information such as commencement date, time for completion, completion by Sections, damages, payment provisions, CDM responsibilities and arbitration procedures. Part 2 of the Appendix will be completed by the tenderer.
265
11
Design and build procurement: design and build forms
ICE/D&C t
.-«
.-+
The key person in terms of contract administration is He or she is to be named in the Appendix Part 1, an to act within the terms of the contract. In the Employer must nominate a replacement.
Synopsis
The contractor undertakes to design, co Iete co providing all design services, labour and aterials hi het or a temporary nature as specified in or re onab`h to m
beerr
In all design
obligations the contra
(8) and this includes accepting resp
sibility
ign
v
uding manent contract (8).
t
nd diligence
ble skilr,
clud
'
as
part of the
Employer's Requirements. The contractor is to institut `a quality ssura which must be approved by he E Repre work at both design and co struc ion stages (8),
ntativ
fety of t e de
The contractor is resp of all site operations
truct
n (8).
Definition of the orks temporary an permanent work. Contract means Condition of Con act, mplo rsr uireme , Contractor's Submission and gree other documents y the/ partie (1). T He documents taken together are stated to be lanator but i t4event of discrepancies between the Contractor' n he Em Jo is irements it is the latter which prevail (5). (This i of D98.) rip
i,
r
n prove
resdntatiye
a
0D0
c+.
e
.-+
@..
fo, esee
ave ins cted nd examined the site and surroundings, by the Em yer before tendering (11). In the event of cial obstructions which could not reasonably have been at e contractor gives written notice to the Employer's )ayme may be authorised (12).
i'°°
The contr and t ph ical con'
ontractor must su nit
II necessary design drawings to the Employer's consent must be obtained before construction work is
st submit fl,
her acceptance. It
programme to the Employer's Representative for his or
mrevised from time to time as necessary (14).
266
0
fl,'
The Works must be designed, constructed and completed in accordance with the contract, and materials and workmanship must be as described in the contract, or be to appropriate standards and codes of practice. There is provision for checks and testing to be carried out.
Design and build procurement: design and build forms
11
ICE/D&C Reasonable facilities must be provided for Employer on or near the site of the Works The functions and authority of the name named assistants are clearly defined (
The contractor must start as expedition and without de
tatty
s
,-+
The contract may prescrib
.-r
wit7 n
e
z
nalty, bu
n !boe
a
ctorr
a
,lay
Tempo
not ime even if t
tM to co
,
I
-°`
Thex
'{+.
.
nd supply necessary particulars. The ter than 14 days after the completion re is no claim by the contractor.
w
plete the e or any designated Section of the Works loyer ma dedu retain liquidated damages. These must not be e no Thznitakfon to uidated damages is stated in the Appendix then Mquidat damages without limit shall apply (47). fl-
E
here
f
ah
epres ntative 'ward
ctor
of tim
so be due kind (4 day
ay
wf
s
fl-
er to give of extensio
I
r
Plo
tive requests accelerated completion and the
es,
for payment shall be agreed between the parties
ion is taf
e
.r)
.-r
re aroaress is too ow to ensure completion by the date agreed, the Employer's esentati T'ay noti he contractor of his or her opinion, and the contractor is obliged to take such e as may be necessary at his own expense (46).
ployerRe
a Certificate of Substantial Completion opinion the whole or a designated Section of the Works is substa tially compl ted. The contractor must notify the Employer's Representative when com as been achieved, and the Employer's Representative issues the certificate within 21 days of notification, always provided that he or she is satisfied
Th-e-
when
i
esentative must issue
r her
(48). °-'
The contractor is obliged to complete any outstanding work and deal with repairs during the Defects Correction Period. When the Employer's Representative is
267
11
Design and build procurement: design and build forms
ICED&C satisfied,
a
Defects Correction Certificate
is
issued, alth
contractor of any liability (61).
)must
Prior to the issue of the Defects Correction Certifi manuals and as-built drawings for the permen
co (61). a
obligation quite additional to material for the
itorltaieres
Neither party may assign the contract or written consent of the other (3). The contractor must first obtain c change of the contractor's designe Form of Tender, Part 2 (4).
ra
om
Em
oye
\
ore
rson`r rmed in th
The contractor
is permitted to must notify the Employer' Represent arriving on site (4).
?N Requir give t
Repre
erect
(
resenw e maa
ility
7c'
instruc moval from the site of any omply wit the c ct, and the removal and replacement ip. Thi! will tens replacement of work for which the
g°3
ir6
E o
The Employer's materials whic of materials y cl wor contractor as desici
t
order susp
The Employer's Representati and order alterations t
ged t it is c
rior
(
gust prov'de a necess y superintendence. A Contractor's overa response it and may delegate to a nominated deputy ement o the Employer's Representative (15). I
r)-offender inc rdance with the colt' istru
n a
p sum, or such other sum as may be ascertained nditions. The contract price will include for the co pletion of the Works (1).
nclud d in the contract price (70). Provisional sums a rime ost sums are not referred to in the contract, but a 'Prime Cost Item' means a Prime Cost sum for the supply of goods, materials or services (1). Use of Contingency and Prime Cost Items require prior consent by the Employer's
Representative.
268
Design and build procurement: design and build forms
11
ICE/D&C Variations to the Employer's Requirements Employer's Representative the contractor and delay involved. Otherwise, or if the es variations will be by the Employer's Repr in accordance with the contract (52). ork in accordance with the Federation of Civil Dayworks (55).
dered,
ita
nd if
tim
u
eoft
of
cepte , val tion fair a d reas na on a da ork sis ill n
E
0.37
Payment to the contractor is de on sis inter` submitted to the Employer's Representative s he tract, ed by an Interim Certificate within 25 days. T ificat ust sow e mou due and the basis of calculation. If the EmYoyer to old pa he must notify the contractor not less than or day b e fi to for' ayment, and state the grounds for any deduction. date ent mployer is 28 days after delivery of the contra or's m-or Em) yer's Representative. In the event of failure to ce ify, or failu yer to make proper payment to time, the contra for is to intere utstanding amounts (60). I
o the Form of Tender, and the they slue of the Certificate of Substantial :orre tion Period (60).
n
t
'kill
han t ee m nth the E must
-r,
ill be shown in
ten and th
the date of he Defects Correction Certificate, the entative a final account together with ments. Th mplo Representative then has three months to verify a Final 0 tific e. Fina date for payment by the Employer is within
days of certi
4ployer
(60).
tractor must give all noti and pay all fees required by legislation. This might ofd sign or construction relating to both temporary and permanent Representative certifies this, then the contractor can expect ream
The contractor in
the Employer against the consequences of any breach of arises due to complying with an by t e Employer's Representative. The contractor is not responsible ning planni permission unless the contract actually requires this. If the equirr ents do not conform with statutory requirements, then the Employer's Representative must issue necessary corrective instructions (26).
'-statutoGw6i`Ntion but this will not apply if this
fl,
fl,
o
+C-,
The CDM Regulations 1994 place obligations on both Employer and Contractor, particularly in respect of the Health and Safety Plan and the Health and Safety File. The Employer is obliged to appoint a Planning Supervisor and a Principal Contractor. With the incorporation of these provisions into the contract, these statutory duties become contractual obligations as well (71).
269
11
Design and build procurement: design and build forms
ICED&C 6 Insurance The contractor takes full responsibility for the care equipment from Commencement Date to Substa any loss or damage from whatsoever cause, b listed in the contract Conditions (20).
O-0
rks, a rial '11 a le on. Th risks i
Except
,-+
Jude th
The contractor must insure in joint names ains risk 11 .11 temporary and permanent works for the eins to t co cover additional costs (21). The term ce e fo Employer.
There appears to be no requiremen respect of design failure. O-0
tract
claims for injury There are stated 22).
'v,
The contractor indemnifies the inst t to persons and damage t property oth than -
take ou
,-0
is required to third party insurance co stated in the Appen x to extent of the contr tor's li
The contractor
e
mini
indemnit
cove equi Qnder,
obliga
ployis ind
the
ut t
ccident nified in-r
())
exceptions, and these remai the resczo sibility
E
is
mployer by taking out ntract will be the figure will not necessarily be the
DJ,
tractor` seven ays' notice in the event of specified vency nd may, xpel the contractor without releasing (65). ler the c tr Works, ascertaining the value of work already done, ter termination, are set out in the contract (65).
d u res
.-t
E5.
arranoin
on the part of the Employer, which include
of spec
ency, the contracto inate his own employment under the contract s ing sev dNs' notice.-If default continues for a further seven days the aso able dispatch remove all equipment from the site (64).
fl-
270
fl,
,-+
Following termi ation by th Employer, the Conditions provide for assignment of not appear to include for design drawings which might goods and materia be necessary to complete the Works.
Design and build procurement: design and build forms
11
ICE/D&C 8 Miscellaneous The Conditions include a full set of definiti The Employer's Representative can requir
tractor
(16). There is provision in the event o archaeological interest, etc. (32).
things of
The Employer's Representative Workshops. The Conditions refe but not to offices where de
e site and the als in manufacture,
Matters relating to the posse the contract are mainly the resp to give the contractor, be awarded (42).
nd those prescribed in here there is a failure e and additional costs can Is brought on to the site may mployer's Representative (54).
In
the event df an o for
k
of vvK the
obligations of the parties are
as
stated (63)
ights of Third Parties) Act 1999 are Spe
aft
I
r
con
i
ns
corp rated, nd they should be numbered consecutively itions contr t (72).
ay be
the standar Co
ract requirhat matters of dissatisfaction must be referred to esentative in the first instance. The Employer's Representative is er decision in writing to both the Employer and the contractor ference.
agreemen (1994).
n cannot be satisfactorily resolved by reference to the tative, then it becomes a dispute. The parties might, by deration of the dispute under the ICE Conciliation Procedure
Horants,
Since the Construction and Regeneration Act 1996 (Part II) came into force, all construction contracts carry a provision, either express or implied, that parties to the contract have the right of reference to adjudication. With the ICE Conditions of Contract a notice of adjudication is to be given, and adjudication is to be conducted in accordance with the ICE Adjudication Procedure (1997).
271
11
Design and build procurement: design and build forms
ICED&C All disputes may be finally determined by reference t arbitration must serve a notice to refer. Arbitration 1996, and conducted in accordance with either t or the Construction Industry Model Arbitration
sq
e par ion. nder he itrats
r
itrat'
n
ced
Act
(19
This contract? If considering using the ICE/D&C remem This form is intended for design and buj civil engineering work. It may be for,a required to appoint an Employer's
The key features are the Em loyer's R eq ireme ts , an ctor's Submission. Unlike the JCT WCD98, in t e eve ny conflic it is th Employer's Requirements which take precedence. Th onus on the coat to ch ck design information supplied as part of Emp yer' Require( ents. s originating from the contractor's designe by E ml loyer's Representative before pp r work is commence ay re the c ntractor's liability.
tl
and siiAnificint
od
nd build c tract. For civil engineers, the oyer's Re tative is likely to be much easier chit cts acting finder t onditions of the JCT WCD98 contract.
d Co)-,struct
272
Conditi
Design and build procurement: design and build forms
11
GC/Works/1 Design Build The Stationery Office
GC/Works/1 Singl Build (1998) GC/Works/1 T Build (1999) GC/Works/1 Edition 3, for trade a published in 1989. Shortly ocure ent s fir afterwards, with the emise of t e Prop e Serv A , government departments assumed responsib lity f t it ow n pr ' e looked to non-traditional procurement appro hes, esign an d icular, which was becoming increasingly po, respo e to t =ntee t, a ersion of GC/Works/1 for Single Stage Design nd Buid w intro ced in 1993 nd is currently in a 1998 revised form followed b a 199 version r Two e Desi n and Build. In 2000 Amendment was publi ed in espo se' t ov ernment ' Achieving Excellence' initiative, and is applicabl so botla forms It inclu visions for risk management, value mana hole life c tang a alue engineering.
hs
I
fl,
1
idBuild rsion is obviously an adaptation of the C/Works/1 ntract. It is mainly a lump sum contract and sepa to desi input phase. It is flexible in that it allows for varying by e contractor, as the contractor responds to the ents by deve oping the design outlined in these documents. sign
loyl r
1Q'
en
wo Sta
vii
fl,
l/1
,-+
and Build version is also mainly a lump sum contract, but e sufficiently advanced to enable the contractor to submit a-realistic tender's d e is submitted initially together with a Schedule of Rates. This is us he construction price at the end of the design phase. deign phase will not necessarily lead to the Employer proceeding ee
with constr--ttdn.
Nature For the purposes of this book, comments will in the main focus on the Single Stage version of the design and build contract. In common with other GC/Works forms, this comes as a two volume pack: first the General Conditions which run to over 80 pages, and secondly the Model Forms and
N N
273
11
Design and build procurement: design and build forms
GC/Works/1 Design Build Commentary. The General Conditions are prefaced b a ContE(nts lis, foIIo go-ac in /otther QVV6*s/1 Index. Language and terminology is as that to anima lar contracts. The 65 clauses appear under the sta very nal fo fi. The is also number are identical with those found in the tea t of Pa iculars w useful Schedule of Time Limits, the essen al Addendum which is really a schedule of desi n inform ion, n Invi do to Ten Tender and Tender Price Form, and the Contra Acifeem a
Use
to e. N-clpsig put required The Single Stage version is without a sep ate fired, th Employer's as i?7dica d from the contractor will be to the e f the Tender e su ed ass Requirements. The Contractor's P pposa together with a Programme, indemnity insurance.
a
a
tails
professional
The Tender Price Form in dudes alte native ntries using Condition 10, Alternative A desig is ity limite "
or Alternative
B
(warrant of itnes for purposo '
fo`ra se
ate desan
s
stag d Build provi
design documents; professional incentive b finance c mobilis payments
right j h desi +.nsurance
.
r desig
plet
perf,
rent com (late uil
rugs an
ctual detailsMating o a*articular contract, and the incorporation of option provisio ISe dete*inN by how the Abstract of Particulars is completed. The Abstract is deta e-d-a d am ngst other things requires the names of the Project Manager and P ' nning Supvisor (who may be the Project Manager). The provision rtg on the Employer's benalt, and given so much authority, of a Project Manag design and build contracts. The adjudicator and the in is somewhat unusual may be named. arbitrator also The
Synopsis (Single Stage version) The form is one of the family of GC/Works/1 contracts. The Conditions are broadly
274
Design and build procurement: design and build forms
11
GC/Works/1 Design Build /and it
fl,
similar to those of the traditional GC/Works/, to repeat much of which appears earlier in
here
i
ant res
However, the design and build forms diffe
which are
e un
6 a b&&
follows:
as
evant to
The definitions include items mainly Requirements, Contractor's etc.
The fair dealing and team-wor those responsible for desigg
the event of discrepan bet is the Requiremen which
's
equir
eats and Contractor's
design and
reverse of the position
ts.
The professional in emnity ins
both the traditional these would apply o
Zd
d
ante
re7 uirem
signand build ve
if 'dated in
is sa
that
ions
]),
ng to design are similar for although in the former case
fP rticulars.
for the corr' ctness of setting out, and there is also to as built' drawings and other relevant e Date of Com pletion (9).
withi
,-+
e contNctor
0
e
t on tl
fl'
JCT
--OR
with
pIo
L/)
Proposals, it
gi'
In
obli.catio
e pro sion an
build
r
n Fo
e
"celera
.-t
traditional form
is
not included in the design
on.
ctor mu btain
(10A), r+'
is
Design Do
-s,
r-.
an be incorporated into the traditional contra -t6r's des gn oblig obligatio are sl different from those for design and build (10).
prova
provide samples as are specified in the Employer's Requirements efore commencing work (31[3]).
ovisio
differ (38).
ns, the design and build form makes no reference to the sub-letting conf actors (62). Obviously therefore, the nominated sub-contractor aminated su the raditional form is not used.
In
275
11
Design and build procurement: design and build forms
GC/Works/1 Design Build This contract? If considering using GC/Works/1 Design and Buil
ro
Although there is a contractor's design provisi thtraditional is the true design and build version. Depen ng lar' n i/rfforma contained in the Employer's Requirements, a c ice betw le stag tendering will determine which versionf io, d an a d form is applicable.
ittn
The now defunct National Joint Consulta Co Industry Board, have both produce e Co or build contractors. Both advocate at de d bu' through the two stage process, and to tha
only where the Employer's no risk of further modificati
v+-
When completing the co Particulars is a key docu incorporated, then in This, of course, is th revers
for
re
etM
in
c
flict
wit
I
est achieved ill be suitable
ign with little or
efin
the
the;
os' 'on
than o design and
nderin
tagrin
f any sp e
rese7rt Construction e se
forms, the Abstract of ntary conditions are ovf the printed Conditions. ontracts.
The wording of th Condi ons i"Iea nd well presen ed. There are alternatives for design liability epend ier ,t e professional duty to use reasonable care an kill, ofor an solut fitness for purpose. i
(3p
traightforward and there is the for Oxa'gress etings in Condition 35. The Model upporting ocument and must be used. There are tract, nd a further 13 administration forms.
fl,
set departments targets to become best practice clients. tegrated supply chain routes such as design and build,
t
d val se
'AcWing
Exce
the Abstract of
Pa
..ten
3rD
se cover
account whole life costing and value management. ay be progressed by incorporating Amendment r GC/Works/1 Design and Build contracts.
This for
276
((DD
(D3
mos to those with experience of GC/Works/1, for the terminology and roeeaures ill be familiar. It is particularly interesting because it seems to give t Employer, nd the Project Manager a degree of control over the contractor not usua d with design and build contracts.
Design and build procurement: design and build forms
11
GC/Works/1 Design Build
GC/Works/1 Single Stage Design and Build (1998)nGe GC/Works/1 Single Stage Design and Build (199 GCJWorks/1 Two Stage Design and Build (199
Amendment
1:
Achieving Excellence
277
278
Management procurement Management forms
The Joint Contracts Tribunal Ltd
t Cont?act'1,998\lditio
00o
Standard Form of Managem The Joint Contracts Tribuna
tandar
vii
Works Contract 1998 Ed Contract The Joint Contracts i-ibunal Lt
Construction Man
gemerI A
reemen
The Joint Contracts
ith the
Trade Contra Agreement. d that r
by
/
uilding contra for traditional procurement can be adapted included in this chapter are those exclusively However, s where the pry opal rot or h the contractor is to manage the intended works, which o er person 'under h or h control. s
eral
'
279
280
Management procurement: management forms
12
XT MC98 The Joint Contracts Tribunal Ltd
Standard Form of Contract 1998 E Background
t e Employer an e over gn, Specification se and contract administration the s o in e nde professional team, management contracts ar on n.T d Kingdom became int l popular during the 1980s, ut in cen vear seem o have lost ground to construction management. Ma iar clien hav more sophisticated and well able to hand) olvem ocia with this latter type of i
fl,
fl,
v,o
For 'fast-track' projects where
r-.
procurement. the advice Contr is Committee, asked the JCT to produce a anagem rh cd A the time, the only forms available isatid who were those d ise ntrac t4Qg orga s pioneered this kind of working. ycq rred orking procedures of the companies, These were ften g ared suit f d rat ith their particul r interests very much in mind. and uncle tanda :p'
U'+
-,,
In 1979 the RIBA C uncil,
e
J
ments htractor, an
is ued Tb Stan elated doc ments r
m of Management Contract (MC87) essary for management contracting. The main
contract ween the Employer and the Management cts bet een the Management Contractor and each ca rr +qg out a p kage of the work.
the he
orks
s
Con
Th ocu ents ar currently published in 1998 Editions and the Management Contract for is in amiliar t with Section headed Conditions, whilst the Works Contract is discr parts, the first of which is itself in three parts namely:
cfim
x
Works Contract/ ntr t/1, orks
ract/2
1: Invitation to Tender tion 2: Tender ction 3: Articles of Agreement (to which Sections
1
and 2 are
b-contract conditions, which may be incorporated by reference) (Employer/Works Contractor agreement)
The main contract between Employer and Management Contractor covers both the pre-construction period and the period of actual construction work. It contains a detailed Contents list and the Articles of Agreement which follow include Recitals, Articles and provision for attestation. The Conditions are followed by an Appendix in 281
12
Management procurement: management forms
JCT MC98 two parts, Part relating to information required g fore erally nd specific information which needs to be entered b, do c nstr Necessary to this kind of document are the Schedul whit app r i 1
the VAT agreement.
Too
(:D
The First Recital refers to the description of the and confirms that the Employer has appointe
roje
a profes
ered in t e FirstAch am. oh' 'gird Re rofessionaYI
r
ect of
,O+
confirms that the Management Contractor is to mop to w t both in the Pre-Construction Period and t do erio set out in the Third Schedule.
Article 1 confirms the Management defined in the Third Schedule, for under Article 2.
tor's
The names of the Architect, th to be entered in Articles 3A to be entered in Article 5.
minist
Teem
nt t6\60dorrri
-kie
E
mp
fl,
'~'.
whi
,-+
{3j
fl,
In Article 6 the Employer dert kes to ha ings and the Project Specification, and a n st P prepa d as s reasonably practicable after the date of the ntract: By)k icle , he E loye undertakes to have necessary information prepay d by t profes iQnal tea` n resp t of the Works Contracts. fl,
The appointme purposes of the CD
oft
of either part
PI
nning
egula Nons ar utes to
final resolu
Kto be r
hand an
O+,
ay be appointed by the Employer pre-construction, at
i
earl oug For his he will expect to
to carry o reimbursed the
,
th cka
P
bsts a
tea,
the c611 struction phi
contribute to the work of the professional team. that the project proceeds to Contractor will appoint Works Contractors es'. For this he will be paid a management fee and be defined in the Second Schedule. 'ee. Then, assuming fl,
e Ma a 4tage
Principal Contractor for the Artcle 9. Article 8 confirms the rights atio while Article 10 covers whether the itratio or by litigation.
Sups over
,-r
fl,
Management Con tors almost invariably selected by tender and after interview. The fee is not usually the main criterion; this is above all a contract about resources and the ability to manage effectively many Works Contractors. The Management Contractor will advise on the choice of the Works Contractors. They will normally be appointed on the basis of competitive tendering. The Management
282
Management procurement: management forms
12
JCT MC98
.-r
Contractor starts with a Contract Cost Pl.r'i and rogra me responsible for the appointment of Works C tracto s, th coo and the provision of all site services and f cilities. fl,
fl,
,--r
CND
Tight financial control is essential, and ide ble reliance ' place t the Management Contractor to o he ost PI tota of onito , eve independent surveyor is appointed b he Emplo e Man ement under a contractual obligation to chi e co letio on me, altho h any design k p developments or detailed cha ges ag es hi c-b occa as the work proceeds could give rise to e. till requires the e co t en you Management Contractor to e ' n allo for acceleration of parts of the Works. r
The Contract Documents c prise ojec (listed in the Fourth ati xed to the Appendix Part Schedule), the Project S a Con t Pla 2), and the Articles, onditions, appeAdix an ules' The fact that the work will be carried out on si e by t rks Con ctors i eferd to in the Second Recital.)
Synopsis
Intentions The Manaa ment fl,
1
ntracto
ndertak
o coo erate with the professional team (1.4).
Specific b ligati ns ar s e t ti nd the Third Schedule. These include preparati o f Pro mmess entering orks Contracts, being responsible for the contract and pr vi those site facilities and services listed in the Contr for is responsible for continuing supervision, anag project is car, ed through in an economical and expeditious detaile records for the quantity surveyor to verify the
stror Fia
is fully liable to the Employer for any breach of the occasioned through breaches of Works Contracts (1.7).
ontractor se
rch itectt
documents nece 10) specific The Con
Conditi 6 and 7).
he Management Contractor with further drawings and explain and amplify the Project Drawings and Project
raocu s
ents will be Project Drawings, Project Specification, Articles, and App hdix, the Contract Cost Plan and the Schedules (1.3, also Articles
is to be as described in the Project Specification, and in the Specification or bills of quantities for any Works Contract (3.8). There is no reference to Performance Specified Work in MC98, but there is in the Works Contract.
Quality
The description of the Project is to be entered in the First Schedule.
283
1
2
Management procurement: management forms
JCT MC98 Project Drawings are to be listed in the Fourth Sched 2 Time The Management Contractor proceeds to constructi notice by the Employer (2.1).
At this point, the provisional dates (Append Part (Appendix Part 2) for possession and completio The Management Contractor is given p is required to secure commencement a
1)
ssessi
and
ensure re
Deferment of possession for up to (2.3.2).
gen
subject
t
oject
Completion
is
provided for
A.
Project extensions of time ay be ceded to t Architect. The events or ite s whi h are relevan extension requires the men Contract tr prevent delay (2.12).
Contr itect
Completion of the
(2.13) and any its best endeavours to
ses to ext6nd th
-L-d and has
contract period of a Works right to dissent (2.14).
e
the completion date (2.3.1).
ject may be
Practical co her opinio
t Contractor by the u mber
he Architect and is subject to his or
roject
r fail com ete the Project by the completion date, to of non o pletion (2.9).
If the M the Architec Employ S MT `rtificate-of, non-co
ides for p
a
efects.Liability Period must be scheduled by the an 14 days after its expiry (2.5). When the defects tect issues a certificate of completion of making good ..C
ects`-Q,lee made go ect and delivered up be , th ecti Arc
to liquidated damages depends on the issue of
ial possession by
the Employer, subject to the consent
The contract provides for the issue of instructions to the Management Contractor to accelerate the work. It is possible to establish a completion date earlier than the date stated in Appendix Part 1, provided that clause 3.6 is shown to apply (3.6).
284
Management procurement: management forms
12
JCT MC98
The Management contractor has to identi the Project and/or site in a list attached to manager in the Appendix Part 2. The, changes (3.1 and 3.13).
age
en
ers
ched
e,
ei
and
er r
the Arc itect iOLlaui
The Architect is to issue written instru 'on o th reasonably necessary (3.3). The str tion mi req Contracts variations (3.4). The `rchitect to 'be inst sums in Works Contracts (3.4). i
i
The Architect has the pow to n e Mataaement ontractsto acc work (3.5) and, an unusua term i altering its sequence under stat circu i
The Architect shall ovide the setting out, etc. for he Prom!
II
issu
of works (3.18). actor' ust obtain vobcher o satisfy the Architect about the matbkOls (3 must also comply with Architect's (3 fr m the site of work not in accordance king good of defective work (3.12). th-e,i mediate
n
f
goo
concer
1
bntrac
ntract without written consent (3.19). However, pendix Part 1 entry states that it is to apply, right action against the Management Contractor o tran uent interes n the completed Works (3.20).
to assrqnmen
There is a b an ther all
s
the
0)ioval
clause
I
hich
instructio act (8.1). ect of the
Management Cob
hey
app
arried o r
if,
orks Contractors, and which are identified in the are subject to the Conditions in Section 8 of the
Contracts, the Management Contractor's obligations in vice versa are fully set out (3.21). Alleged breaches by the r by Works Contractors are covered.
ntract allows for work not forming part of the contract to be s directly engaged by the Employer whilst the Management still has ossession of the site (3.23).
t by-'perso r
4 Money Payment is made by the Employer to the Management Contractor at agreed and stated intervals, on Interim Certificates issued by the Architect. These can be issued at both pre-construction and construction stages (4.1).
285
12
Management procurement: management forms
JCT MC98 Amounts due to Works Contractors are included, an nd he Ar hitec ust Management Contractor as to the amounts due, ma b71p quit r to nt the Works Contractor (8.3). There is an option earl finaay Wor Contractors, subject to certain safeguards (8.4). -+.
i
Cost o ag nent ConJractor's
fl,
O-+
Payments to the Management Contractor inclu fort carried out, reimbursement of amounts incurr by the staff and services, and an instalment of the man em
4-5`aod 4.6).
,-+
Retention is not deducted from the inst 3 per cent of the work not yet at practic completion sa obligation to invest, and unless the Works Contractor may require it to epa is released at practical completion o e Proj an
Marj
I
L/)
Interim Certificates are issued t in the Appendix in respec of the pr construction (4.2).
ccount.
ue to the y nt by ter is e
a
Management Co ractor before the final da for p
e
ntractor, and the basis
ana
1°'
Em oyeris 14 days from the date Empl yer is to give written notice ,posedand if ums are to be withheld the her writte notice not later than five days giv -+.
Certificates must show the
of calculation. The fin of issue. Not later t an five specifying the am nt of
ctiori
ent (4j give pr per n ices the o nding
Inagement Cc
does not pay amounts properly due ms will attract interest at 5 per cent ntractor a right to suspend work (4.3).
issued n les than 28 days before the Final Certificate, ing sums du to Works Contractors (4-11). nn,
f
ng
.'The Constr (4-9 an
fl,
pleti
ust provide the quantity surveyor with all information Prime Cost no later than six months after practical keerio Management Fee may be adjusted in accordance -4,
Management C cessa(ry
'the contract
issues the)Final
of the latest of t
ertificate not later than two months from occurrence the contract (4.12).
d in
CDR
=foit
The requirement
C)-
--r
otices by theEmployer, and the application of interest on amounts properly due and not paid by the final date of payment, also applies in the case of the Final Certificate. The final date for payment is 28 days from the date
of issue. Applications in respect of loss and expense made by 286
a
Works Contractor must be
Management procurement: management forms
12
JCT MC98 iii,
passed to the Architect by the Managemen opinion that the application is valid and m Contract, the quantity surveyor can be
actor.
If
d
ns s asce tain
Icond
liqe Ar
collaboration with the Management Coptrac 5
Statutory obligations
fl'
The CDM Regulations require the ap Principal Contractor. Various othe and Safety Plan and the Healt
int
~
Krr
pa e.
ul
ision
contract (5.18 to 5.21).
0-K73
Responsibility for complia ces rests with the islatiand servi Management Contractor ( if t or finds a divergence between statutory requirements d Con rther drawings etc. he is to inform the Archi ect, who hin seven days (5.2). issue i
geontra
fl'
The Management C ntract r-+ mpowere to tak ctioM in any emergency to ensure compliance, and su sect t( certain condit this w be deemed a variation to the
Management Cpntra
Works Co
to pr
other
emnifies the E,Mployer in respect of personal injury an-the-actual corks (6.7 and 6.8). This is to be backed
v1°
'ement
li able (5.4).
6.10) nage nt C ntract is to take out joint names insurance for the irk of le nuisar e. There is a list of exceptions, and damages attril table to ri y negligence by the Management Contractor An endi entry including the amount of cover is required I
he Emplo risks. This must be
apply, insurance of 'the Project' (i.e. work executed and site ut by the Management Contractor in joint names (i.e. in his or the full reinstatement value of the Project against all fore any work begins on site. o apply, the requirement to take out such insurance rests
with
yer.
.-T
D-0
,-+
,-+
the eve hat to orism cover is withdrawn and is no longer available, the situation and options open to the Employer are dealt with in clauses 6.4.10 and 6.5.4, introduced by Amendment 4. In
Where clause 6.5 is to apply, and the Project comprises alterations of or an extension to existing structures, then the Employer is required to take out a joint names policy in respect of the existing structures and contents. This is to be for the full cost of 287
12
Management procurement: management forms
JCT MC98 reinstatement etc. in the event of loss due to Specifi Insurance for the Employer's loss of liquidated Appendix Part 1).
thePfo cti
An Appendix entry will show whether the Joi from Fire of Construction Sites is to apply (6F
Management Contractor must comply with
plo er and
if
is allowed to deterrri rRe the em Contractor for reasons of default war Architect, but the notice of deter inatid a matte
The Employer
In the case of insolvency of the Man circumstances, determination. or the Employer might elec allow continuation or novae
The Employer is allowed Contractor at will (7Construction Period
emen matic reem
ending on the to p
V-5-
e reinstatement,
Agreement') to
determine th course Tapp
The Management -ontra or is of default by th m plod (7;,
determine hi
T
ine the em
Either party c neutral cau
of the partj
ctive rkh% and are
s
ou in d
ail (7
ist of defiditions rs.inclu c e s s or
profes i n rights of the
team l
ct y on or er t Management by the Architect
The Ar
ssured, but subject to restrictions to protect any Contractor and Works Contractors (3.17).
e (ent
removal of the manager from the Project and the a suitable replacement (3 14) subject to approval
C=sbecause find
Where progress of the discovery of antiquities, the Management Contractor is obliged to inform the Architect, who must issue instructions (3.26 and 3.27). There is a contracting out of third party rights under the Contracts (Rights of Third Parties) Act 1999, introduced by Amendment 2.
288
Management procurement: management forms
12
JCT MC98 Section 8 also deals with relevant issues arisi the terms of such contracts, nominated sup
m iers
Wor Contr 'sir or ont tors, fi al p men and
t
6
to
ontrac Contrcto
Management Contractor under Works expense reimbursement to Works
imp First Schedule: Project description: a sh be completed by Employer;
Second Schedule: definition of rime Cost relating to Works Contracts; K-si tai materials, goods, plant, st ices
Third Schedule: services to
Dfie
blehe an
of
scope of
a
the
ent Contractor tor; ontr on-site labour, ment Contractor; r
provi
e o
latir
drawing
t
fa lities
plet
m by
fed
selected from a list of rno+eoblig period and after wo starts on bite;
yer;
ant. hey
seres t
be ' provided by the Management the onstr ction of the Project, and initialled at
d
befo
P2
is
l
signed.
r0+
ion and Regeneration Act 1996 gives either sing Gra ts, Co str iq t to refer a differ hce or dispute arising out of the contract to ovide for thi icatio
P
Articl
arbitration as the agreed method for final determination of ppendix entry shows that this has been deleted in favour of ,-r
s
proceedi
B
and 9C).
289
l"'
12
Management procurement: management forms
JCT MC98
If considering using MC98 remember that:
dministrat
.-+
It is intended for use where the Employer has quantity surveyor and other advisers to make pa has prepared project drawings and ject Spec drawings, Specifications and bills of wor Contractors enter into contracts direct th M acient is not a lump sum contract, and the s paid by wit e m erto fl,
vii
fl,
fl,
fl,
f
ork
ma
e
me
fee.
einth
fl,
The management contract is in e ve to or public sectors. The Conditions apply to bo the p uctib a d construction Appendix Part 2 d in period and the operative details ix Pa ion, celeration, partial respectively. The Conditions nclude nt o is contra sign. There also a possession, performances ecified wor Section relating to the Wor Con rs and resp tive o ations.
are
s
tor'
e s;
uId a
t
,-+
fl,
inist Al
,-+
dealing rectly with the Management inistration of Conditions in the inv i t e re are ne erthel s ome instances when the contract d wit the V rks cuments, and the procedural rules, m iculously observed. The whole process nee coord in ion if unnecessarily abortive work is to can be voluminous with this type of ocume uite arduo in terms of administration.
turn
T
ules
m
,-+
ct ad
d re tingtgdeferment of possession; acc lerati n, management fee; Joint Fire b heck for completeness of entries.
re requi
atN
0(D
(.O
When completing the f insurance of the Proje `t; liq Code; and EDI. The ve Sch
r 98 first appeared it was the first such standard form aila e. ent method seems to have declined in popularity, ce4he4a-th i gi ng agement as developer clients become more ct use expertise. It is a relatively high risk contract with with im ress e sop ' ticated 'with d tim ele ents initially. It depends on goodwill and a high degree impreci s of trust betwee Empl yer, the professional team, and the Management
Contractor.
290
1
,-+
fl,
r+'
fl"
fien the p edeces
Management procurement: management forms
12
XT MC98
Standard Form of Management Contract 1998 Edition (MC98) Amendment 1: 1999 (Construction Industry Sc Amendment 2: 2000 (sundry amendments) Amendment 3: 2001 (terrorism cover/Joint Fire Co Amendment 4: 2002 (extension of time) Phased Completion Supplement for Ma
References Note MC11: Managem Commentaries on the JCT Man (both written for MC87 but still large
JCT Practice JCT
Commentaries Vincent Powell-Smith and The JCT Management C Kluwer Publishing (1988)
291
1
2
Management procurement: management forms
JCT MC98 WORKS
The Joint Contracts Tribunal Ltd
Works Contract 1 and 1998 Editions for us Form of Managem h Background Contract Documentation for use w includes the following: Works Contract/1 (in three Se_ 1 Invitation to Tender; Sect n2The Sectio Works Contract/2 (Works ontract o r ditions) Works Contract/3 (Employ y/Wor Contractor A They can be used onl although this is lar ly a
Contractor, effec necessitates refe
e ad
nce
art Oes
e19 Edition CTWnagement Contract, and f or t eme t Contractor and each Works inistra t an of 1te-rhain anagement Contract often
Matt
'
t
&in the Work s ontract.
f Agr ction 3) contain Recitals and Articles. (Work Contr ct/1 ent is bet e Ma ment ontractor and the Works Contractor, irst Re it t the Mana#ement Contractor has entered into the onfi .ard Fo of)Man gement Contr t.
E4-2
>.O
to 'numb ed documenYs' which are effectively Contract Documents. confli between documents, the Works Contract Conditions are d doc ents (1.4). If bills of quantities form part of the Works to SMM7 unless stated otherwise (1.10). t/1 `Section 3) establishes Works Contractor's obligations. tract Sum which will be a lump sum, and is VAT exclusive.
(in
Imo-
an be execu
t Contr t
d under hand but not as a deed, or as a deed. However, is a deed then the Works Contract should be similarly vii
1
Use The choice of Works Contractors
292
rip
r=+
,-r
is a matter for agreement between the Architect and the Management Contractor, although the agreement is of course between the latter and the selected Works Contractor.
Management procurement: management forms
12
JCT MC98 WORKS The Architect has relatively few direct ob
gation to
Is
Architect's opinion is the overriding factor c cernn ra ac of off-site goods which may be included amou un r a c tifica Arc ect. S respect of which a direction for payment ed nominated by the Architect. Administr ion D-f th orks C tract m for the Management Contractor, alth ugh the chi ct mus e otified matters (e.g. extensions of time, comp li an ce with ecti s, de ermin r-«
i
i
Synopsis (clause numbers refer to Condit(
Intentions vi'
1
The Works Contractor is oblig
nd c fers
-+,
N, to
e even
eduliov
mnify t Ma ger'nt Contractor for liability to the perf rman e under the Works Contract (1.8). efaul r+'
for
Works in accordance dards, and obligations ren to a design obligation is hich is a warranty to the fl,
with the Works Contr is, claus relating to design a performa a reminder of the rr port Cntof Work Employer relating to esig in
carry g out will have been established in Works I will to a large extent on general progress of the nage nt rac r is obliged to keep the Works Contractor fore n mmence is given (2.1). i
ion 2. Starti
t, and ciently infor
r
,..'.
fail to complete on time, the Management Contractor may ment from the Works Contractor for any direct loss and 4-'
Works Coh be
,-+
vii
``G
t"ses.
4A6-
fl,
Wor Co ractd ive writ n notice to the Management Contractor in the Subject to receipt of notice, particulars and of del and al ;o state y, the question of granting an extension rests with the st1 to of dc eme Contr tor. he must first notify the Architect, who has a right Seril_f e13rosed action (2.2 to 2.10). Qom)
e
Practical ompletion i largely a matter for the Management Contractor and Works Contracto , ut th consent of the Architect is needed before the Management Contractor can issue a Certificate of practical completion of the Works (2.13 and 2.14).
Control The Management Contractor is obliged to issue further instructions, directions, drawings, Schedules as necessary for carrying out and completing work under the Works Contract (3.1). O_.
--o
fl,
fl,
3
293
1
Management procurement: management forms
2
JCT
MC98 WORKS
Relevant instructions issued by the Architect under be passed down, and the Management Contrac directions to the Works Contractor (3.3 and 3.4),
t
e
The Works Contractor may make reasonable ary rd to epreli issued under the Management Contract to ac elera or alter is seq nce The Architect must take this into account, the V t if the ri ice ands, Contractor must comply. However, he ca)Zexp t ei r)a ent for this/. i
o
trec
4 Money .2)
fo%96 is ap ion A (Par
'in
Statutory obligations concerning paym Housing Grants, Construction and The Works Contractor is paid by Architect in Interim Certificate valuation includes for work on site, and it may also inc
Retention in respect of Wor Works Contract (not the reached (4.23).
,f
t re
s
Os a
'off-site
irected by the o retention. The
as
These
ateria
materials properly (ods (4.22).
ttracts is redu eat under
The Works Contra or mu ntractor, and if instructed the quantity survey `r also, tion nece ary for computation of the Ascertained Final orks Cautract S Am (4.30 is no Final Certificate relating to Works Contr hat issued nder rta 4.12 of the Management Contract). 5
Statutory The CD Principal Stat th
se
relatM
ire n s will
appoin all
ent of
a
Planning Supervisor and
a
be covered in the main contract MC98.
are also like to implicate Works Contractors will include and Safety Plan and the Health and Safety File (5E).
orks Contractor are concerned with tax matters to
The Works Co ind mnifies the Management Contractor in respect of personal injury `r death, and, amage to property (which may include the Project), and is required to ins ai this (6.4 and 6.5).
Concerning loss or damage to the Project and to the Works, Works Contractors are entitled to the benefits of the joint names policy for the Project (i.e. 6.6 to 6.8), but this is not in respect of all risks, only for specified perils (defined in 1.3).
294
Management procurement: management forms
12
JCT MC98 WORKS
The Management Contractor has the right t Contractor for reasons of default. Determi
ine
The Works Contractor has the right to default by the Management Contrac or (7-7).
Rights and obligations following
t
e
to
ent oft om
n nsolve cy is a
own
e
ploy
nt
r r
term
8 Miscellaneous The provisions for nominate covered by a Prime Cost o
Nomination
is a
w
iers
tT*e f
uded in sum :1).
matter for
9 Disputes
Statute requires an
djudicati o provisia n in a
have the right to e ter a adjudication. The c16 ision determination df-,the sput
ion contracts. Both parties rising out of the contract to ill b binding, at least until a final proceedings (Article 3 and 9A).
4ferenc i
rbitr o
thod for final resolution of disputes ceedings (Article 9B and 9C).
If coKsideri`
It/s inte Ten
sole` v
ng
to
ch
the
n de r
SeleWai ntractor
certifying
s
fo
for the Magement Contractor, but the invitation might need mpatibility with the Management Contract Conditions. Similarly Nketween the Management Contractor and Works Contractor. heW orks ontractors is by agreement between the Management an ct administrator. The latter has a particular role in ue0'the Works Contractors, applications for loss and expense, ractical completion. f
Contract 'onditions are Section headed and synchronise with those in the t Contr t. If MC98 is used, then there is no choice other than to use WC98.
295
12
Management procurement: management forms
JCT MC98 WORKS
Works Contract/1 (1998) Section 1 Management Contractor's Invitation to Tender Section 2 Works Contractor's Tender Section 3 Articles of Agreement: Attestation
Works Contract/2 (1998) Works Contract Condition Amendment 1: 1999 (Construction Industry Sche Amendment 2: 2000 (sundry amendments) Amendment 3: 2001 (terrorism cover/Joint Fire de/CIS/S,(uvlM) Amendment 4: 2002 (extension of time/loss
ontract
296
Management procurement: management forms
JCT
12
GCM
The Joint Contracts Tribunal Ltd
Construction Man C/CM Background .-+
The fundamental distinction etween m d construction management lies in the de ee direct contractual relationship with the Contr tors y out work p With management contracting this will be ac hi Mar d tho cent tractor, and there will also be an independent team rofe`s ind architect and quantity surveyor with overallsponsi desig administration. -5.
whtheienf
fl,
With construction anage the Con uctio will be the key person or firm with an overall spon ibility for coor na n an ontract administration relating The lient als t as ig nt contribution to make, and is rt nt of e age Con ultant Team and nomination of a tam Le der. e Con to Tea will have a major involvement in the t peri ar,dalt ugh likely to lave some involvement during the t administration. on peri .
mentation for construction management. This f the JCT, but was then overtaken by the txtha rt, d the Housing Grants, Construction and 96 rt II). The raft was developed to take account of the full cons `ruction management documentation eventually i, and th
produced
raft d
uent
odies
L.0
'.,
cons
cum
is of an Agreement (C/CM) between the Client and the a Trade Contract (TC/C) between the Client and each of The is also an Invitation to Tender, a Tender document, and rad Contractor to a purchaser or tenant, and funding organisation +'j
onstruction Ma the Trade Ceiatract
,-+
The Agre-emQ nt ( M) between the Client and the Construction Manager is an attractively presented document, logically structured and with particularly clear layout making referencing relatively straightforward.
,-+
There are four Recitals, the first of which refers to the building works being phased, and a deletion is needed if this is to be a single stage operation. The Client undertakes to appoint the Consultant Team, and to have prepared an Initial Brief and preliminary 297
Management procurement: management forms
12
JCT
GCM
Project Cost Plan. The other Recitals refer to the fact t yet the f CD egulat apply; the services to be performed by the Construc on Ma agernd at the will be carried out under contracts directly betwee the Client a e Colntracto I
There are five Articles, which refer briefly to Manager and the Client; the identity of t e Pla Contractor; and the methods for resolving d utes.
ations of tKe Constru
incSupervior
an
tion he
The Conditions are relatively short (just
follows: 1.
Intentions of the Parties
2. Obligations of the Construction 3. Obligations
of the Client
4. Assignment and Sub-contr 5. Payment
6. Insurance and Indemnities
onstr putes
Probably the mo signifi nt arts o the pages in total). The act as refer, nce p, c
je
Conditions,
the
ption
an
suran
nities,
of Reimbu able Cc
nits
urth, Mo
Inde
I
Servers to b
cction
Site Facilities and Se
ht Team; Ninth, Cost Planning-arTd-Control; Tenth, Adjudication; Eleventh, Arbitration.
298
're the Schedules (taking up 35 is for much of what is carried in the
nnel; be provided by the Construction Manager;
Management procurement: management forms
12
JCT C/CM Some of the Schedules contain essential ailed iy(formatk entries to be made. They amplify many of t ZDrovisfcins are at the very heart of the agreement.
find
Perhaps surprisingly for a form more under hand or as a deed.
The nature of construction manageme r rem only for major building works un e rienc Construction Manager is large responsi th nag Trade Contractors, this still leave the ctrent w con3 cable on a day-to-day basis for th e-constru ti6Ran of th of the Project.
e of interest
Although the coordination of
b
Any role for archit `_ts will b e s rn Itant Team to which they h ers might be appointe under nsultanc gree hey might also be named as Consultant Team L ider rticularly for c stage at pre-construction, but much will depend onAhe ture bf the wor
h
art
Sche he sc
el/ma
ient's FAt
Cli
nt
is
to name the Team Leader, and to
mer ber. A copy of the Client's Initial Brief
Ian will be
veloped into the Project Brief and the fy the 'Client's Representative' and the nsultation between Construction Manager and sure m Lea r is 1,0 ut commendable detail in Part C with clauses d. Th volve ent of the Consultant Team during the Prection Perio s, which should be covered in any consultancy d in R rt D of the Eighth Schedule. rr
Planlien 1
he
work o must
a
are not involved directly in contract administration)
Subject to
contrary the work will be carried out in phases (First Recital).
thin
Possessior-and ontr of the site is given to the Construction Manager, but this will ssarily be e lusive to the Construction Manager (1.5). I
(_l
for the Client to use or occupy the site or the Project before completion (1.6). There
is
provision for partial possession by the Client
(1
-7).
The Construction Manager is to manage the Project in accordance with the Project Brief, Project Cost Plan and Health and Safety Plan (2.1).
299
Management procurement: management forms
12
JCT C/CM The Construction Manager must provide the services A (Pre-Construction) and Part B (Construction) Schedule).
d Fou
Sch
d side fa
uTF,Part
ities
xth
`^.
The Construction Manager must exercise skil expected of a reasonably competent Con tructi professional indemnity insurance as indicate n the Ap The Construction Manager is not liable (Eighth Schedule item 2.6). The Client may appoint a Client's Rekres
the client 0.4). The Client will appoint the Consultan (3.2) and may appoint a Cost st Ita
to
The Client will appoint Tr e Con trac ors, ing in the views of the be ma after terview, an analysis of the Consultant Team. Appointm nts wil tenders, and a written repor by th ConstructiouxP er (F, urth Schedule Part A).
Contract documents c m se Ti and Appendix to the g ree m nt Preliminary Cost Pla , and velo Project Specifica n, an Pro1o
ifications, d Mails a roject i ormat
Further drawings, to explain or
2
leted R itals, rtic es, Conditions, Schedules M). D me s refE red to include the Initial Brief, Brie, Project rawings, Project Programme, ect Eighth Sc edule Part D item 1.2).
e co
Time
re is no s rms, e constr by Con m Project Completio
teade
tion date with this agreement as found with traditional iod runs from the date of commencement of work on the scene, and ends with the date of issue of the to (1.3).
Pro ramme prepared by the Construction Manager after nsult nt Team. This will identify critical path, lead times, and key milestones ( urth Sched e item 5.1). The Construction Manager will update and expand this progr liaison with the Client and Consultant Team (Fourth Schedule item 5.4).
There vvi
rolec
consultation with
The Construction Manager will, before Trade Contract tenders are invited, prepare a detailed week by week programme (Fourth Schedule item 5.2).
300
Management procurement: management forms
JCT
12
GCM
During construction the Construction Manage, may cause delay in completing the Project all matters related to progress after consul item 9-11).
lent
e th
ite
((DD
Zh'esd
ons
tant
am
ma 8), a ur1
The Construction Manager is not to b held re caused by members of the Consuitan Team, b .-+
efforts' to avoid or mitigate the ects
:3).
The Construction Manager, w h agreerit\by lei certify practical completion in re ect
Cori ract
2):
After completion of the (CD
ast ont the Cd on Manager with agreement by the Consulta Team will u he Int im Project Completion Certificate and the Defects Liabii itv Perid ally s from the day named in the Interim Projec tificat ce (2.2). i
When defects in w rk carried4t under` the Construction M nage will issue a Ce of the Project (23).
advis the` Client that all obligations under the (filled; Client ill issue a Final Project Completion
nstruc acts
acts have been made good, aking Good defects in respect
h
(2.4).
structibp Moager personnel are to be entered in the Fifth es retire the onsent of the Client (2.2). ign the agreement without written consent (4.1). ac,
nager cani'r4 sub-contract his obligations without the Client's e Trade Contractors, after receiving recommendations from d where relevant the Consultant Team Members (3.6.1).
onstructi The Tradef_ ntrac ttherwis
t
wiMe ed
on the current JCT Trade Contract (TC/C) unamended,
with the Client (3.6.2).
may issue o the Construction Manager such instructions in writing as are ecess (3.7).
The Construction Manager will manage and coordinate the work of Trade Contractors
(Fourth Schedule item 9.2). The Construction Manager will hold regular meetings with Trade Contractors and provide monthly written reports for the Client and Consultant Team Leader (9.4).
301
12
Management procurement: management forms
JCT C/CM The Construction Manager will arrange and chair re which the Client and the Consultant Team will be the minutes (9.5).
e is ako
i
r6oonsib
for
4 Money
(D<
The Client undertakes to pay to the Construc bn Mana Management Fee as entered in Part 1 of the Se VAT, can be adjusted if circumstances ch .-t
Payment will be due in part on signi intervals to be stated in the Appendi
o
In the construction period, the Con ructio er mit to ent monthly str Perio Management accounts which show sums due in reject cost ned in the Third Fee (as shown in the Seventh Sc reimb struct Schedule); and any other su sdue to t age 5.3). i
cent
er b
til pa men
is
made (5.5). V'1
r
ti
r susp
rap
The usual five days' notices re re, from the ient payment is 17 days from the ate o issue of the Comt on
Final payment to t e Cons uctio r is dependen on the final account showing the total sum du ander e a reem e t. Thi e submitted not later than one month after the dat f issue of th Final R ect Completion Certificate (5.6).
ply, )rkd tl
final ManNger's a
full (Second Recital). er is the Principal Contractor he must ensure that the ith the Regulations (2.8),
ere the C nstruc
s appointed Planning Supervisor he must ensure ulalions, and in particular Regulations 14 and 15 (2.9). T'S
R
...
the Construction ce with lh-eCAM
a,-
e
---_.
ger s to liaise with statutory authorities and statutory ing to site s vices (4.1). The Construction Manag is to advise the Client on orders to be placed with statutory bodies, and to manage implementation of their work (4.2). rere
The Construction Manager will monitor Trade Contractors' compliance with statutory requirements and verify that all necessary approvals have been obtained (4.3).
302
Management procurement: management forms
12
JCT C/CM
r+'
Insurance and indemnities are dealt with
ditiohs'bbv a v
i
--I
to the Second Schedule. The Construction Manager is to ind mni personal injury and death, and agai t damag than the Project (Second Schedule item 3). The Construction Manager mus
injury or damage to property f item 17.2).
rah
er ma
in re
the sum e
nclftr d in
inst daims re
agree
requfired to
the A pendi
-5).
Insurance of the Pro ct wi be taken out clieri under a joint names policy for the II rei tatemen valu of oject and replacement value of site facilities, us a ount tered i the ppendix for professional fees. Where the Project mpris wo to exi s ructui s, cover must include the contents owned by he Cli will be only in espect of Specified Perils (Second Schedule tern 1); I
:-+
,-+
all risks cover,
ination re rmina on
Ivency,
uction e Client
ay r
f ilure
o exerc
anager's engagement.
the event of the Construction Manager's i egree of skill, care and diligence required under
eement (7.2) rminate the engagement of the Construction Manager at will
The Client e Constructio client's ins ncy; T riod
The consequences
f
ay terminate his own engagement in the event of the o pay amounts properly due; or if work is suspended for six months (7.4).
of
8 Miscellaneo
Third party rights under the Contracts (Rights of Third Parties) Act 1999 are excluded 0 -12). The Agreement is to be construed in accordance with the law of England (8-1).
303
r..
1
2
Management procurement: management forms
JCT
GCM
The Agreement is not for use under Scots law. 9 Disputes
Article 5 confirms the right of either party to fee difference or dispute (Article 5). Nominators for an adjudicator can be agre made in the Appendix (Tenth Schedule it The conduct of the adjudication and of the Tenth Schedule. Final determination will be in the
E
Appendix shows that clause 8.3 (a riate letion in Where arbitration applies, app e arbi appointors of an arbitrator. e condu o are covered in the Eleventh A footnote to Section 8 of khe Cdknditions is resolved by the procesf m
304
Apd -/Will
t
do
ayeTir er
nd
indicate the fects of the award
tha disputes
may also be
Management procurement: management forms
JCT
12
GCM
This contract? If considering using C/CM 2002 remembe It is intended for use with large projects sto e eparate contracts with members of the Consu ant Te respp r design, the Construction Manager who will pr fide servic nstruction period and the construction perio the each ho will carry out and complete the Works. Th Client-asses ugh a Client's Representative and a Cost Cons Itant may aafsq'ke a not a lump sum agreement (although the Trr the lient will pay the Construction Manager rei is anT anageXer f
The form is not for use in Scottish version.
S
The agreement is one versi n on and i d contract in a standard construction manag ment f docume The nditions apply to both the preconstruction and con tructi periods, erati 'e details are entered in a single Appendix. phases and partial possession. sin We for ctorni i
.
Theiditi
When comp ting t
ar requ ed relating to preparing the Project ding profession indemnity insurance; limitation of liability; yame dard Tra e Contracts; reimbursable costs; and he Co tructi A Man payments ring the pre-construction period. The 10 Sche particul y im o rt part of the Agreement and should be the aol eness entries.
If acting
desig
sign ons ant, reme er that the Construction Manager may also lie t in reparin the P ject Brief, make recommendations and review nd o er dr wings. A c working relationship with the Consultant Team s
fl,
the
WLt+f-e functio
specifically states
entative, then remember that this could involve carrying out o the Client, acting as agent unless the Agreement fl,
se
!
h
rram ement which will appeal only to an experienced client probably rvice It is relatively low risk for the Construction Manager. The has the rte erit of being logically structured, clearly laid out, and in taking `ver a very sophisticated operation.
is
u
an
.
O_<
a
decisi
suran
Cost Plan;
305
12
Management procurement: management forms
JCT C/CM Related matters Documents Construction Management Agreement C/CM 2002 Trade Contract TC/C Tender Document TC/T Part 1: Invitation to Tender Part 2: Tender by the Trade Contractor Warranty TCWa/P&T (warranty to purchaser or to Warranty TCWa/F (warranty to funder) Fluctuations Code
Earlier JCT Practice Notes: Practice Note No 27: Application of CDM Reg Practice Note No 28: Mediation (199
ions
(1
Series 2 JCT Practice Notes (yellow covers):
Practice Practice Practice Practice Practice Practice
Note 1: Note 2: Note 3: Note 4: Note 5: Note 6:
Construction Ind st ry Sch Adjudication (incl d es to of agreements) Insurance, Terroris Cove Partnering in des xt of n binding arter) ntrac Deciding/6n the iate 1 `Form of Main eludes m' rms) ntract T B ering I
tion Ma
306
ation
Management procurement: management forms
12
JCT TQC
The Joint Contracts Tribunal Ltd
Trade Contract TC/ Background This is the dedicated contract d Contractor (3.6.2 of C/CM Agr `emen H Special Trade Contract may be u d in lied by be required by the Client.
twee the
ev
em
or
a
f applicable the Client's
ascri
ain channel for contract administration, how giver, will be e Co ru ctio o r who is to be regarded as the agent of the Cli nt. Th no direct c tract relationship between a Trade Contractor and the C suit t Team e Ita Team Leader, but consultants need to have cable marking owle d understanding of the Trade Contract in or, er to a ucptioj re late an ntici ate t degree of support and cooperation on which t Cons pager ions ay depend.
Representative), then eference
e
prec
i
orb
LA=
form and structure. The Agreement, which to enable compatibility with C/CM, includes he st Recital refers to the use of the standard d copi of which are to be annexed to the Articles. nt Team Lea er is given in the Tender TC/T Part 1.
tivel conv
undr han rd seven A
d
n
fl-
is re
O=-
ct
pa s (compared with 19 for the C/CM Agreement), led. These elude uniquely specified suppliers; performance spec ed fluctuations (the detailed provisions of which are published sal tely). T ur Schedules relating to a bond in lieu of retention; collateral ies ise re to be on the JCT Trade Contractor Warranty forms); Performance Bon a J document); Parent Company Guarantee (again not a JCT issue). The fo wed by Annexes in respect of EDI, Advance Payment Bond, t pa yment for off-site materials, and Formula Adjustment.
ler 80 p
wl
>
Use
fflt- resultant Team Leader being co-signatory to Interim Certificates, members of the Consultant Team have no express role under this contract. Administration is in the hands of the Client or the Construction Manager. Architects may of course act as the Construction Manager, and nearly all consultants will need to work in close collaboration with the Construction Manager during the course of the Works.
0-0
Except for
307
Management procurement: management forms
12
J CT
TC/C
Brief synopsis of Conditions (likely to be of interest to the Consultant Team) 1
Intentions Trade Contract tender documents may hclu Specification, bills of quantities, or Schedule of Work. a 'Priced Document' perhaps together )kith ,Tra'de e& C Schedule of Rates on which the Contra
,,
Arti s,. Conditi othirlq sall over
The Trade Contract documents completed Schedules. In the event printed text (1.1 1).
Further necessary drawing ain
the- ra
e
Contr
Drawings, details etc. must b retu r ed to the Co.
ilt' information required (1.22).
Performance Specified 2
Time A commencem
t date
eriod are ust work ite will b
i
accor
uctio"ar ager llnay iss
a
Relevant Event (2.3).
instrVctions to postpone any work (2.1). Trade Contractor to submit
may
otation fob acc
with the progress of the Project (2.1) ent of delay by
evise
The Con
ce
a
written
he work (2.6).
ilure(by expense to e entered in t e App ndi orks
complete to time may result in payment of direct 11). There will be a limit to financial liability if a 1
is
2).
certified by the Construction Manager (2.13).
Defects liability runs from ractical completion to the end of the Project Defects Liability Period, w ally runs for six months after Interim Project Completion is certified (2.16). Phased completion (2.20) and partial possession by the Client are possible (2.21).
308
Management procurement: management forms
12
JCT TGC 3
Control The Trade Contractor must keep
*
person-
a
w b;ding
Instructions are issued by the ConstructKn
,t
The Construction Manager information (3.6).
pro
Access person
is
site
yo
resp risible
1
to the Works for the Clie is
provided for. Presuma y this co
The Construction Manage Contractor may wish to su disruption factors, and nee
issue
Var
uotdt to cov resob-r-cbs43.19
4 Money Payment by the clie t may be qrn the sis of sum) or the Ascerta aMade Contra
Where the Tra
(Ar le hen valuation of variations can ractor's rice tatement, or Alternative B-valuation made by th onstr ction anag sin the v luation rules (4.4). Where Article 2.2 rk applies, th valuati mprised in the orks is by remeasurement based on of rates or ices f ured or a Sched le of daywork prices (4.7).
in ract Tr
be by Alterna Ave
m appli
e Co
.
actor may :22).
b,
reimbursement of direct loss and expense due
entitl
make writte application to the Construction Manager for the Appendix, or at agreed stages. Whether or ervals tered st ction Manager, not later than 14 days after the de the t issue an Interim Payment Certificate signed jointly by the der and the Construction Manager (4-11). r
V
o
rst
9ltant
ient apply, and final date for payment is 14 days from the erti 'cate. Failure to pay may result in payment of 5 per cent the right of the Trade Contractor to suspend work (4 11). e, a the
ai n e
of issue of
interest ovex base r
be at 5 per cent, and the Client acts in fiduciary as trustee but invest. Alternatively, if so stated in the Appendix, a Trade ay be used in lieu of retention (4.15).
rmal Bond
t.
+-C
bligation
The Trade Contractor is to submit documents to the Construction Manager not later than three months after practical completion of the Works, in order that there can be final adjustments or ascertainment of the Final Contract Sum (4.17 and 4.18).
Subject to conditions stated in the Trade Contract, the client
is
to issue a Final Project 309
Management procurement: management forms
12
JCT TGC yes b the cK-,n- rapp-I y,
Completion Certificate and a Final Statement. The and the final date for payment is 28 days from the d
e
of the
al Statement
(419). 5
Statutory obligations The Trade Contractor is to comply with statut not already allowed for in the Trade Contract be added to the Contract Sum.
`ry
requi cu ments.
The Construction Manager will issue hstruction
statutory requirements, or emergenc
ontr
The Trade Contractor is to provide concerning the Health and Safety information for the Health and Safety
with ne nnir`ta'S
ervis
The Trade Contractor indem ifies t e cfient in respe of clai arising due to personal injury or death (except whe due o the clier for whom the client is responsible), and da orkZ provided that this is due plyperty,Rther th to the negligence of e Tra Co tractor -1 to V3). e Trade Contractor must take ntered in the Appendix. This is the out insurance cov rnotI ss e figur contractual limit not ne essa of liability ( 4).
t
iect anti of th M), and name
covered under Client and Construction ensure that Trade Contractors are to icies an a waiver of subrogation rights (6.9).
t is
ploymei urination nay ult for seq'ue+°rc'es
de Contras-t
Client on the insolvency of the Trade Contractor, or in the ed (7.2).
r
of dete
Of the Trade Contractor.
the Client are set out in the contract (7.6).
in
ine his own employment if the Client defaults or
may 10).
determina on by the Trade Contractor are set out in detail (7-11 ). Either party may deterntKe the employment of the Trade Contractor where there is no default but one or more of listed events occur (7.13) and the consequences of such determination are set out (7.14 to 7.18). The Client, except if he becomes insolvent, is entitled at any time to discontinue the Project and to require the Trade Contractor to cease work (7.19).
m
310
Management procurement: management forms
12
JCT TGC The contract provisions still leave other right 8 Miscellaneous
The contract
is
to be construed in accor,
There are supplemental provisions fo
td
The provision for uniquely specified supplier refe'-s to Contract documents (8.1).
Performance specified work re uires
Third party rights under theAoq (1.32).
each
pplier' namec,Vin the Trade
A
(Rig
"I). 1999 are ex cluded
9 Disputes
Article 6 confirms We right difference or dispu
Nominators for an djudi made in the A nd The conduc of Final det minati n on an A
to seek adibdication in the event of
itor
can
beac effe
wiration
a
ree
nd Oown by appropriate deletions
of
jud icator's decision are covered (9A).
s
(9B) o by legal proceedings (9C) depending
This
r use
used
'
h
wit
the/atCT Client and Construction Manager Agreement document. The Trade Contract is not for use
tter for the Client, but the necessary documents for tendering nt Team, and issued by the Construction Manager on the tendering will involve the TC/T Invitation and Tender to-Trade Contract (TC/C) unamended. The Trad act C nditions are a substantial 118 pages long, and Section headed. The clie t may acce a Special Trade Contract or amendments to TC/C, but otherwise there is no ut to use TC/C with the C/CM Agreement.
311
1
2
Management procurement: management forms
J CT
TC/C
Standard Form of Trade Contract TC/C 2002 Edition Tender Document TC/T Part 1: Invitation to Tender Part 2: Tender by Trade Contractor Warranty TCWa/P&T (warranty to purchaser or tenant) Warranty TCWa/F (warranty to funder) Fluctuations clauses for use with Trade Contract
Earlier JCT Practice Notes: Practice Note No 27: Application of CDM Practice Note No 28: Mediation (1995) Series 2 JCT Practice Notes (yellow co
Practice Practice Practice Practice
312
Note 1: Construction Indu Note 2: Adjudication (incl Note 3: Insurance, Terrori Note 6: Main Contract Ten
Partnering arrangements Partnering agreements
The Joint Contracts Tribunal Ltd
Framework Agreement (F Framework Agreement No ndi 1CT Partnering Charter (N
1CT
((t
1CT
The Institution of Civil Engine NEC3 Partnering Op o-r rip
The Association of a onsult aA B rchitects ACA Standard For of Cbntract for Proae 'Partnering is neit ra rtic% culture and the ay in w Itch
r
ng PPC2000
proc ement ap oach, or is if a particular type of contract; it is about is view and m age the project' (KT Note on Partnering).
tH ac articip
p to avoid adversarial conflict was the subject of a number of Partnering as, n ethos/which endorsed in b th the Latham and Egan Reports. studies an publicati ns in e 19 s, a form o project pa pplicable to a single project, or strategic Arrangemen may to partneringhic ay embrace a umber projects over time.
orkin togeth to achieve the client's objectives for a project by Proje Team Pa enn is abo u roach hich effis ent coordinated working is measured against ad ting a manage nt p rforrna n e i ca tors nd to ets. There mu first be some formalised expression of agreement his is ually achj ved by using either a free-standing non-binding charter ween t art ers, an tf single project or strategic partnering, perhaps through the le p r ; a bin, ing agreem fo a dard contract; or by using a form of contract specially r ing of additio al clauses in a s dra
ncl
for
`s
rtnering.
Iti party
Ltd ICE, a1m1 ACA h e each taken different approaches to partnering. The GC/Works suite k reemen pr use with consultants' appointments only (GC /Works/5 General a frame'
Conditions for the A
N
ointment
f Consultants:
313
Framework Agreement (1999)).
_
M
314 i6£
Partnering arrangements: partnering agreements
13
JCT FA and FAIN
Framework A Framework Binding (FNN)
JCT JCT
Background the JCT published
a No
t
address the increased inter
extremely simple and onl supplement any of t e main
"s
first publication to
was a model charter, e on a single project to
in p
fl,
In 2001
ages
dard
pemnts, in addition to the model ew Fram ith a guide on their use. These t charter, one bindin and ne non- bindi e model charter. They take the phis cated do ume s are longer and tha they are intended for use alongside a ne ode harter same approa he m el ch er as b en republished in a 2005 edition, another co tract. bsite. Together, these offer flexible options for those downloa ble fr i-Rioles in their contractual arrangements. wishing intro artne In 2005 the JCT pu lished
1
non-bindiri the ice
fl,
is a formal document by which the Client on vide gree to wor together in a collaborative and open manner, It incl des provisions regarding framework objectives, achie ag ed o jectiv isi n making, collaborative working, the supply chain, isatio stru c t re and d in f infor ation, communication, confidentiality, risk assessment and tion, alth a d safety, sustainable development, value engineering, change >, e warning and team approach to problem solving, and ica-tors. ormance
d
Pr'
fl,
.
i
-version a Tittle longer at 18 pages, and has additional provisions relating icable la (8) and dispute resolution (23-28), and has a facility for executing merrtfunde hand or as a deed. The clause covering the legal status of the t is different, but otherwise all clauses are identically worded. k agreem
The bindia
Use The Framework Agreements are intended to be used with either one or several underlying contracts, and are entered into for a term set out in the framework particulars at the back of the forms. They can be used alongside any other JCT contract, and standard forms produced by other publishing bodies. They are bi-lateral
315
13
Partnering arrangements: partnering agreements
and
JCT FA
FA/N
agreements between the Employer and the Service ovider bets client and contractor, or contractor and sub-contr tor). T, sew Lce endeavour to see that the members of its supply chain collaborative working.
n
f& vider iples
The Framework Agreements are intended to
pple the underlying contracts. In the case of confli the unde ontract+`evails The Agreements state that 'the Framewor ny way ha en shal legal or contractual effect or bearing apon he r tatio on, Th enforceability of any of the Underlyin Contract v addition states that neither party sh t eo the Framework Agreement. .
merle
,-+
The Latham Report called for contract onditi h parties to deal fairly, and that presumption to achieve 'w, -win' blame. Unlike some standar forms,, to act with mutual coopera ion an deal fairly, altho
But the climate is ch improved, more eff} ient' management of th supply, rocess:
creasin
teg ra t
inbia sp of to rath
ific duty for all k with a general
than apportion
for parties ay well be implied. ressly call
placed on achieving m working through better
Features (claus Underlying contracts; in
framewor
art and end gate, In the indin
t (n ot,t
arbitrator
a
erformance indicators are to be set out the name of the adjudicator and a o provision for mediation).
versa
ere is
o..
'greater,
formance nd icat
e
identified in the Particulars, and the Guide usefully rs published by the DTI Best Practice Programme. r
he
othevvft
an
-
angements is emphasised each party is to rganisation and management diagram of its internal 'vi
arency of manag
Collaborative working (10), sl}aring of information and know-how (12) are all included. The Service Provider is-Mendeavour to ensure members of its supply chain 'embrace and adhere to' the principles of collaborative working set out in the Agreement, and where practicable, engage them on terms reflecting those principles (11). The Service Provider must consult the supply chain on essential aspects of the project, e.g. design development and early warning (11).
316
Partnering arrangements: partnering agreements
JCT FA
13
and FA/N
The parties must endeavour to agree a com
-
g c tract, Identification of risks (15) prior to enterin into a y un er e service provider must undertake a risk analysis with th o er pr ect pa 'cipan s. The employer then prepares a risk or matrix, t e perica eviewed and updated.
Value engineering (18) service proide nc rage to gest saving easures, and rov er's hare of/{he benefits if Employer and service provider t oti e t implemented (there is no prior ,-r
pir
The parties are to endeavour tqa jree (19).
top raptly (2Msustain t a
Both parties are required
time quality cost
cosec. o
Health and safety Agreements, with f
am tea
e
y 0%
oTeGuide.
ap
ility E an ation inc ed
es b
*re implementation
atter which may affect blem solving (21).
ortant features of the i
Related matt Documents
317
1
3
Partnering arrangements: partnering agreements
X12 The Institution of Civil Engineers
Partnering Optio
N EC3
Background The Third Edition Engineering and Employer and the Contractor, to act as st ed trust and cooperation. This main con Tact also matters likely to result in increased pri ed
i
of the Works
tr
req nt rdc t an
plor ts
an
ire
in use.
0)-O
0-O
This partnering option, which touch others was published as a First Edition 1. It itle except the Adjudicator's Co tract. As fie im document, but is an option Which m e incorpb. any Team Members involved with Project, whether is consultants or sub-consultant If th Option these contracts will ha al re onsibili sit
the
acting parties, y NEC contract
sed es,
is n
t afree-standing
o th e NEC contracts for Con ctor, sub-contractors, D or ed, then the parties to I
i
ommon.
The Option can b used f r sin le pi rtnering for strategic partnering over several projects. It of co e only e used Wii contracts, and does not result C in a multi-pa itra
t s.
fl,
ibutio icators,
Cont,Yc Data, me of which will not change (e.g. ring formation n agreed methods of operating), and hedu f Cor Group Members, which might change le of Partners will include identity and e Wor s. The Sc artners j oining and leaving dates, and details of Key Performance gets, Neasure ent arrangements and any incentive payments. The emb s will give identity of partners, and joining and Both Sch obably need revising from time to time. b swill
short clauses set out under four headings, and the dance notes on these clauses. Use is incorpor`ate6into the contracts of the partners by entering 'X12' in the first line of Contract Data Part One: Data provided by the Employer and by completing the 'Optional Statements' Option X12 entry, including identifying the document in which the Partnering Information has been set out. The information for this entry is suggested in the text of the NEC Partnering Option, and covers details of
_.1
The Option
318
Partnering arrangements: partnering agreements
13
X12 the Client, the Client's Objective, and Partner
Synopsis of clauses The Option does not create legal partneRh Each partner collaborates to achieve
of every other partner. Each partner nominates a repres
4h 'Sulhoril
The Client is a partner.
mafion, aid-givi
Partners are to cooperate o e matters likely to affect of er par opinion and if so it must be ken fulTy;
A Core Group is sele d by t The Core Group is le by the Clie in the Option or th contr le
forma 'on
is d
senta
for pr
nerin
ay give ann'tkoNectiv
act on behalf of partners. on not specifically defined
arin
perati ed
as>4a conta under the
gethe. 'as stNted, i-nhe Partnering Information in a spirit of use com on in r tion systems as set out in that Information.
work
amo statedi the Schedule of Partners if the target stated icator is im roved upon or achieved.
319
w
13
Partnering arrangements: partnering agreements
X12 This contract? If considering using Option X12 remember that:
for use with any NEC contrac it brings more than the two main contractin but it does not create a multi-party contract. It is intended only
xc e9
The responsibilities for Team Members ingbdeed u
There will be additional Contract Data, The Option is a neat way of br, partnering clauses set out the action
0
Documents NEC3 Partnering Option: Optkon X1
First Edition (June 2001)
References
w
320
wide t
or's C B partn B ing rej6 ionstip, 12
ill be in
addition
ted
a
Related matters
Construction Industry ouncil,
a
ter tion ioht ave.
to the contractual responsibilities whic
ntit)
I the Ndjudic
mt
M Partnering
ps, and the
Partnering arrangements: partnering agreements
13
PPC2000 r_+
The Association
of Consultant Arc
ACA Standard For Project Partnerin Background
ctht`k
,=+
_-r.
fl,
r+.
ventional lementary, but Partnering agreements and there are essential difference tween t fun n o a ontr t and a partnering al oblig trictly between the arrangement. The former cont ertain which, in the event of contracting parties, and ide ing &,th tract and adherence to dispute, can be tested in the co Th latter seeks to establish sound administrati v proce-c es re es key d o putting the project first, collaborative workin between ers c management tool. Obviously invokes trust and f ess, an?+operates a nciples to contract Conditions. there can be difficul 1sint ding to mares I
Flying in the
Association
Cons
m, PPC2000 was produced by the and afted by David Mosey of Trowers & attempt to bri g together partnering arrangements,
ention6 wis
ace
f
'ant rchite
l
fl,
i
UO=
Hamlins, S elicitors. his br and consulta appoi tme t ter buildin ontract into one document covering cess o eliveri g the t is the first standard form of contract for the whole Ittf- arty building contract, and it is an architectproje , it is th first ime a partnering agreement and a building led a mergi c e par nering rocess.
ntial it
men , with a closely interlocking set of terms, which d mediately y to understand. Realistically the ACA advises that ith the benefit of experienced legal and or other professional
s
advi
on its
station.
it John Egan in September 2000, it has received the busing Forum, the Movement for Innovation, the Local Giovernmeti &sk Fd ce, and the Construction Best Practice Programme. It has also y th Construction Industry Council and the Housing Corporation. LA.
it was recommendation
Between the Tssy covers, there are 54 pages covering the Project Partnering Agreement, the Partnering Terms, and Appendices. The Partnering Agreement is signed or most likely executed as a deed, by the Client, the Constructor, Client's Representative and each consultant or specialist member of the Partnering Team. The Agreement will carry details of the Project, the site, 321
3
Partnering arrangements: partnering agreements
PPC2000 m.composition of the Partnering Team, Partnering composition. The Design Team and Lead Designer ar to the design development process as described i noted. Details are entered on other matters usually Data with conventional contracts, but here als, and insurance cover to be carried out by eac The Partnering Terms are set out under 2 hea%ing but some terminology is peculiar to th there is a full set of definitions. There e five be summarised as follows:
ico
Appendix
1:
CIM
d
Ters
8 of/The
0
Appe dix or matters ch
in
of he
Aes,
Partn
i
ng
C
ea
tract ti
guy y b
r
con
Definitions
Appendix 2: Form of Joining Agreemeri With a ime, a will be changes to the Partner e alre in new joining parties who ill be bou
inevitably there hanism for bringing ed obligations)
Appendix 3: Part 1. Form
of
Pre-Pimsess
preliminary or ena ing Part 2. Form of C mmen that the Projectis read
n
Ag ement ( is is' e an agreement to cover to be ndertak n by he Constructor) nfir ation by the Partnering Team reem commencem t of work on site)
Appendix 4: Part 1. Ins rant Part 2. T ird Part Part 3. Part 4. sura
iect an nsura
rofes
r
Public Lia
art 1.Co ciliat Part Rart
3-4hitration
(i
cro aditional boundaries. It is a combination of project 0 is uni managemertr prin iples; lega conditions and procedural rules. It is logically structured, with commenda le `crdss-ref encing. It holds out the prospect of an integrated team mless d very of the Project, but it calls for a high degree of approach and of all concerned. commitment on the
PCC2
r_+
1
Use Reports indicate that PCC2000 has been successfully used for both private and public sector projects ranging in value from multi-million pounds down to f600,000.
322
Partnering arrangements: partnering agreements
13
PPC2000 Partnering depends on an effective managem ht stru ure, a ntive dmi do and good communications. The Partnerin earn to the t will be beneficial to set it up as soon as possible. CC200 acc pts t %thomp os Lion is likely to change during the progress of th o t. Ide y the r em p9 rtu n ity to bring consultants, key specialists, ons and so e su con ac ors and suppliers together at pre-construction ages. Th art ring m be liabilities are proportional to their responsibilities, am ince ve Nvments. ,
shtract
A Core Group is to be established ti the rt to meet regularly to review an timul s rea Members must comply with as
he
ss
b
mb%
am
rin
e
r
P
e,
Grou
The Client's Representative as con le au t He she may call, organise, r an attend and minute meetings a k<erin Team, and may issue instructions to the Con powe edi b he P ne ng Terms. He or she will also be responsible r organisi g pa ne ring or op for the Partnering Team. However, restrictions can be, don his her a onn and these are to be entered in the Project Partne 'ng A reement. .
-
iser*ill bed person nthusiasm and a knowledge of partnering, a pref e abl Ireac ck record. He or she has a very wide remit whic inclu s retie g r consistency with the Partnering Documen ; prep n g Charter; eparing any of the agreements listed process, partnering relationships, and in Appen N,3; the p partneri acts; atten Fng rerfrl meetings of the Core Group and Partnering Tea ms and resolution of disputes. A tall order! Iving The Partnering
s
arelisted
a
being:
tni mmen nen
Consultant's Ser
th
sa s; I
any Joini emei the Price ramework; the Key Indicators; any other Partnering Documents.
PerEe
Unless there is anything to the contrary, this is the hierarchy prevail in the event of discrepancy or dispute.
of documents which
323
1
Partnering arrangements: partnering agreements
3
PPC2000 The ACA advises that at the time of signing the Pro team should have agreed the following:
erin
Client's Project Brief and the Constructor's Projec an initial Price Framework; provisional Key Performance Indicators; Consultant's Services Schedules and paymen erms for
With so many separate arrangements, t e rann then a lump sum contract. The Client is respo 'sible fob-r-- en amounts properly due under the Cons Cant Pavme rRd fo Constructor of agreed amounts pro in r ect o Pre-Fo6 sessi6 activities, and an Agreed Maxi Framework and other relevant Part
by refe
Icula
ring D
ts.
Synopsis of clauses is a uni comparisons the same he dings are used as the contract forms earlier in thi ook
(Despite the fact that thi
Intentions Roles, expertise ark
Services Schedu
s
trust, fairness an
descry in the Project Brief and
respo 'sibiliti erin
(Pa
n
utua
ich appl
Partnering Client and stages t Also in
Consultant's t) and Tea Members work in a spirit of for th t of the Project (1.3).
me ber of the Partnering Team including
t out UQOr six h
dings in clause 4.1 and cover design fl,
fl,
the Project vyi thin the agreed time, price and quality. hasi novation, improved efficiency, costio of waste, and measurable continuous Performance o Key Indicator targets (4.1). fl,
effectivene bjectives rtner em r o t,We iect and for the mut
Parr
ed by Partnering Targets under 10 headings, and each fl,
im
fl,
1
ndertakes to pursue these for the benefit of the of the Team Members (4.2). am Members shall act reasonably and without delay (1.7).
Do-c"Wments
govern the relationships between Partnering Team
The Partnering Documents comprise the Partnering Agreement, Partnering Terms, together with any of the documents listed in clause 2.2.
Priority of documents in the event of discrepancy clause 2.6.
324
is in
descending order as listed in
Partnering arrangements: partnering agreements
13
PPC2000 Partnering Team Members work to achieve tr information, and integrate activities as a co
pera
and
e
te(3.1
Communications between Team otherwise agreed (3.2).
'
e e
.
iting
Team Members are to establish a Partnering Agreement (3.3).
Decisions of the Core Group are comply with authorised decisio
y con
(3.6).
Partnering Team Members o others as soon as he or sh
arly v
ing systeNaid e
ttersrsely a
Meetings of the Partnerin are scheduled or request no-K ally b Only matters on the agenda are dealt 0, an
nt's Representative as Client's Representative. are by consensus (3.8). e
I
mber
are to devel access to co
i
itiat
m Members s tion by
I
ive is
keep-records as required by the Partnering Documents of the Partnering Team (3-11).
t"ct in ac ordance with the Partnering Terms and other
acilitate
ershi
ct Paztneri TYre'
Client's Repr
Group an
ents for secondments, office and databases etc. as may
s
er joi t initiatives which might benefit the sidered by t e Core Group (24.1).
flea m
such
ctlhg the project (3-7).
a
integrated design, supply, and construction
tative is authorised to represent the client in all matters, except re Group, and always subject to any restrictions stated in the ent (5.2). ay issue empowered instructions to the Constructor (5.3).
esen tive is to call, organise, attend and minute meeti ngs of the Core art eringTeam Members as required or scheduled (5.1).
The Clie 's Represe ative organises workshops for the Partnering Team Members, and organise monitors contributions of Partnering Team Members to value value management engineering, and risk management (5.1). The Partnering Adviser as named in the Project Partnering Agreement may be replaced at any time by a decision of the Core Group (5.7).
The Partnering Team Members may seek the advice and support of the Partnering 325
w
13
Partnering arrangements: partnering agreements
PPC2000 Adviser on a range of matters, including those liste 2 Time
he actiJ
The Partnering Timetable is a Partnering Docurperi the Partnering Team Members during the pr co The Project Timetable covers the period of co
truction
Agreement. Members of the Partnering Team are t procee eg'ularl and by the dates in the Partnering Tim able (Q-1). The Project Timetable is to be ann and entries will show the date o
osses
Constructor will submit the propose review by the Core Group a
timeta the Cli
Where the Project is to be omple ecl to each Section and the Pr
y Sectio
of the site programming may ke interrupted posses on int
d
Comme Agreement, corn etion (6.2). The r presentative for
dater
`
Con ructor rN
Possession
.s
adaccou
sentati
ins
roject
nyrrang eleration, imetable
deavour
A
ppro
to
r asons list d i
clud nq
tension f the date for completion may be given for any one of 16 ue to matters beyond the Constructor's control and
ineu
rn
%ral
uses
8`3).
Th Constructor must no }fent's Representative as soon as he becomes aware of an f the ev ted, nd upply appropriate evidence and detailed proposals for overcoming tJae ev is o minimising their impact (18`4).
The Client's Representative /rhust respond within 20 working days of the notification able extension of time. The Client or the Constructor has and make a fair a a 20 working days from the date of the Client's Representative's notice to dispute the award 0 8`4).
An extension of time which affects consultants, and is not caused by their default, will bring an equivalent extension of time for performance of Consultant's Services (18`7).
326
Partnering arrangements: partnering agreements
13
PPC2000 ve wor ved. The Cli
The Constructor will give the Client's Represe he considers that Project Completion has b is
invited to inspect and test as appropriat .
The Client's Representative, together h Members, shall inspect and test, and ithin t, of this, the Client's Representative sha ssue either confirming that Project Com tion the Project which the Construct mus i
`late S
P
foll
a
`.-
Following completion of the Proj r m'u rec fN nydefects, excessive the Canstr shrinkages or other faults in olec" hicFi are\d to materials, goods, ng Documents. The equipment or workmanshi not ir1 cco ance ntere Proj Par_tneri g Agreement (21.4). Defects Liability Period is to a"'
ifiative _bra efects hav
None of the ri
liga
tt
sub-contract (25.2).
can ctifie
PartlyerinAgreement may be assigned or onsen of al the other Partnering Team Members
liqlns of th
e pno
0-0
Specialist and P ferr d Spi ialists,Tay be resp Bible f, r the,Der Construct y the Cli
nstruc,V are gj en by the Client's Representative, and ds of com unication for the Partnering Team (3.2).
in
ire for inspection or testing of any part of the tion at no cost to the Client of any designs, works, services, uipment that are defective or otherwise not in accordance with 5(5-3).
mater,
Constructor working d y f
of
iss
V e
ections to an instruction for specific reasons, within two instruction (5.4).
.>_
mus promptly carry out empowered instructions issued by the presentativ If it fails to do so after five working days of a further notice ant, th lient may pay another party to carry out the instruction and the by the Constructor (5.5).
>o+
--0
Any Partnering Team Member may propose a Change to the Client, and proposed Changes shall be considered by the Client and the Client's Representative, and if approved will be notified by the Client to the Constructor (17.1).
327
13
Partnering arrangements: partnering agreements
PPC2000 The Constructor within 10 working days will then sub Change Submission setting out the likely effects in
e Client a Comtr
The Constructor and specialists are to equipment of the types and standards s
Q!°v
ent
ct s
aNthe s
tO
the`Cl-t w
eceives om 0 e sit& rrru t be
fl,
stru
men ement A ana
reserv
nen
e
yice Schedules (16.3). l/,
Partnering Team Members 're to imple uality in the Project Brief, Project Propo nd Consu From the date of the Co Constructor is respon site, unless otherwi
th6-i
sup
an
The Constructor is responsible for sec pity of the
Ownership of materials, goods a incorporated into the Project, or Such unfixed materials must not be and clearly marked as owned
,
U57
missi
rs(ubiett to
`3.
Within five working days from the Constructor Representative will either instruct the Constru of any aspects until later) or withdraw the C
completion date, the
all ris
4 Money The Constructor
Framework (P are as ente pay thes The Ag and other Co
en rease
If the Performance Ind each consulta consequential ad
obepladin
ac drdance 01i e Partnering Terms and the Price nering Age emen e amounts for pre-possession activities f Pre- sse ion Ad ement and the Client undertakes to
will b evelo ed by reference to the Price Framework uments ' is to be as entered in the Form of I. This is the sum payable by the Client to the Constructor, ses in accordance with the Partnering Terms.
link payment to performance targets stated in the Key when the level of achievement of the Constructor or rable, the Client's Representative will determine the reduced payment (13.5).
Where an extension of the completion date is awarded for certain events, the Constructor shall be entitled to additional payment in respect of site overheads and unavoidable additional work or expenditure (18.5 and 18.6).
328
Partnering arrangements: partnering agreements
13
PPC200O Applications for payment by the constructor Client at the intervals stated in the Project Bri Payment can also be related to payment in the Price Framework. Applications mu Project Brief, and such further infoy reasonably require (20-2).
ultar
ach co
hee .
ac
fea ity sc
dul
ied b detail e Clie 's Red
The Client's Representative will iss with ati Constructor's application, specif, ing the m unt and the basis of calculation all accor anc t ousi and Regeneration Act 1996. to fo me lien by from date of issue of valua rkin s from r
eceipt of the to be made ts, Construction d
i
s
15 working days
of VAT invoice from
the Constructor whichever Applications for paym by the Client, speci ing the p opos calculation all in acc rdanc *44 the Hou Act 1996. Final date for p ment by the r 10 orking a to r
to a notice issued made, and the basis of struction and Regeneration orking days from the date of eipt of VAT invoice from the
('9,4). ction 6v-the Clie t must be made not later than two for payme (20.6).
hholdi nt by`fhe Clie, Agreem pend
t will
result in interest at the percentage specified in the may give rise to a right by a consultant or )a rmanc until payment is received in full (20-17).
pllowing
oject Completion (or as stated in the Price enta; ive shall issue to the Client and the Constructor of the Agreed Maximum Price due, and the Client seek to agree taking into account any adjustments, and subject retention in the Price Framework (2014).
Fr
amoun
of issue of that account the Client's Representative shall if not agreed the amount that the Client's cons ers fair and reasonable. Final payment is due within 15 fr m d to of issue of the valuation (2014).
in 20 days issue a valuation
1tive rese
working
fd
ted amount, or
Within 211 orking d s following notice by the Client's Representative confirming that the Construc fulfilled all obligations in respect of rectifying defects, the Client's Representative shall issue to the Client and the Constructor a Final Account. When agreed this will be conclusive evidence as to the balance of the Agreed Maximum Price due, and the Client's Representative shall then issue a Final Account valuation (20.15).
329
13
Partnering arrangements: partnering agreements
PPC2OO0 work'
If agreement on the Final Account is not reached w, date of issue either the Client or the Constructor m dispute as set out in clause 27 (2016). 5
medies fo
day r esoly
e
the
Statutory obligations
v()
Partnering Team Members must comply w force in the country stated in the Partnering in the country in which the site is loca requirements (25.4).
all la ree Itent tt. II
ntra
The Constructor will act as Princioa Regulations, and the Planning Su Partnering Agreement (7.1)
r
A be
for
fft
st
he )aL rmoses erson aamed
i
All Partnering Team Members fulfi eir ob including development of t e Health pd fety P stated, this will also of cou se relate to the Hea and Each Partnering Team Me
all use reaso
individuals for whom Member will be liab to death caused by e ployee,
ers
eir
care to ensure that all ring Contract, and each r any loss, damage, injury or ill an
to t 1
contW7-4).
6 Insurance
responsibilit
Agreeme
O'^
Where s insuran default of
the sit
including structures on it, will be the t as shown in the Commencement of a with waivers of subrogation (19.1). ment Agre ment, the Constructor is to take out other than the Project, not caused by
stru cto or
vii
fl,
Insurance of the
thi
t e insure
h Nawl'ering Tea nce for the amou
are those set out in Appendix 4 Part 1.
fl-
e risks-to
to take out and maintain third party liability the Project Partnering Agreement and in
d in
Part 2 (19.3).
Professional ind mnay or pr duct liability insurance is to be taken out by Partnering Team Member amed in 'the Project Partnering Agreement in accordance with Appendix 4 Part 3
330
vin
+`'
Further insurance as required by entries in the Commencement Agreement can include environmental risk insurance (19.5), latent defects insurance (19.6), and whole project insurance (19.7).
Partnering arrangements: partnering agreements
13
PPC2000
O,-+
The Client may terminate the appointment `of all P rtne ng am embers longer wishes to proceed with the Project e er bec of fai ire to a ieve conditions to a start on site as set ou r clabs 14.1 or f r any foreseeable by the client prior to to of -Ne Com enc e n t Procedures for giving notice and the nsequen arbset out26-1 :!'
au
t
The Client (or Constructor as Partnering Team Member for aterial b? The appointment of a Partn
f
the`rtruct
point
or breaches of the P
A Partnering Team specified defaults or giving notice a If after the Project du Represen
edu
are set o
Mem
susp
ntial act
ns
r for specified defaults giving notice and the 26.4). `r
rm
appointment in the event of nts by the Client. Procedures for t in the Partnering Terms (26.5).
es impos ible to proceed with or complete the the Constru for must give notice to the Client's must b convened to consider the position and ions. an ac ptabl solution cannot be found then the Client may on the R oject ssessinn
to of
to sp cifie tive. A
possible
Partri
nfay termina of the Par
each nseq
orb
be uiII pt oZ`nsolvent
The Client may terminate the
consequential actio
he ap
tPartn wing
it be s,
is
ointme-M of any, inns of that
s
ass
ne ctive ro in
Members are to use reasonable skill and care appropriate to their e and responsibilities, and owe to each other such duty of care tnering Agreement (22.1). ber is to provide or obtain collateral warranties as listed ng Agreement (22.2). fl,
Each Partnering -Q-the Prorect-Partn
((DD
HII
btain specialist warranties in favour of the Client (22.3). ,..
The Agree nt ca Iso include for a design obligation by the Constructor, and in this event the obligation under clause 22.1 can be amended in the Project Partnering Agreement whereby the Constructor accepts full responsibility to the Client for the design, supply, construction and completion of the Project including the selection and standards of all materials, goods, equipment and workmanship, and including any design undertaken before or after the date of the Commencement Agreement by any
331
13
Partnering arrangements: partnering agreements
PPC2000 other Partnering Team Member. The Constructor may the completed Project shall be fit for its intended p, Section 8 in the Partnering Terms otherwise state hands of the Lead Designer and other Design T design with the object of achieving best valu
At pre-commencement stages the Lead Design and Core Group, and following Client ap `roval, develobed de Client and Core Group with detail suffi lent for
quirokto waaan
mentli to de
to
-3).
Designer Gro con tatI the Following Client approval, and aft e b s brings the ther n Team applies for full planning permission an ecia ' s, evelop ent of the Price design to the level necessary for th selecti atory approvals do Framework, and satisfying of plannin condi (&3).
After commencement all fu her dean lwork is epare com and other Partnering Team Mem or approva periods stated in the Project imet ble (8-6).e' Each Partnering Tea
M& ?er
other documents t at he p Partnering Team
Memb
completion of t
Proje
Nothing in t or rights to,
tains ' tellect al pry perty rights in all designs and rants to the Client and other r the , but copy and se such designs relating to
epares
reem fht
rtnering less
Nothing Member
e
ressK state
Partnering Terms confers any benefits otherwise (22.4).
nts creates
rted into thecontract must be identified as special terms must be set out in or attached to the Project Partnering ent Agreement (28).
to s to k Any b reference o thi Ii gree r the Co I
vent of
iffere
givp__noti e
The Partnering
shown in the Co Adviser (27.2).
to
ce
or dispute with other Partnering Team Members,
a
e other Members and the Client's Representative (27.1). s involved are to apply the Problem-Solving Hierarchy ent Agreement, guided as necessary by the Partnering
Where use of the Hierarchy fails to provide an acceptable solution within a stated timetable, the Client's Representative will convene a meeting of the Core Group in an attempt to reach an agreed solution (27.3).
332
Partnering arrangements: partnering agreements
13
PPC2000 chose
o
refe
the
rsMedia
If the dispute is still not resolved, the part conciliation as described in Appendix 5 Par, alternative dispute resolution (27.4). The
r
ny o
m,be`raame
er
m the
Partnering Agreement.
f their
The parties involved may exercise the,
(27.5) in accordance with Appendix Project Partnering Agreement.
adi
eren
d
cator
If the difference or dispute is no
arties may refer is covered in be named in the
the matter either to arbitration Appendix 5 Part 3. The no Project Partnering Agreem
ation
This contract? If considering using
PC.
It is the only standar cc
i0 re
embe the
act specificall
d
The conditions lai o ed and sy a single contr ct bri in II im tant r1 inevitably t s calls r an op an
1
Contract dmini demanding, If
tultima
res
in
rati
an
prod as appArent
artneri arr d initi
t of an archi ct-
roject partnering.
ea"owever attractive the together in
a
notion of binding relationship is,
i-nent under it seem likely to prove een used in practice with successful results.
is is desired, then this form, which competitors as yet.
is
the
ct for Project Partnering PPC2000 ontract for Project Partnering SPC2000
andard Fo
References lanai
333
W W
334
Taking into account There will be times when operation of contract. For example, some the need for some additional sp contract works proceed. This
contracts proceeding in se unrelated standard agreeme make sure that there is no obligations of contra ng parti
andard form contract, or as the main racts, or separate ation of otherwise n
ict or sp are learly
ki
t ou o
Standard forms curr ntly py im sded will a most situations, although this might necessitate the u of option cl r sup ements as provided for in the circumstances where only a particular contrr,,t ire may e ex pti bespoke agre ent ve a`satisfact ry aan wer, and if so then this should be structed directly by the client. drafted by a experi struc yer i
s
ntra t
the
count of eventualities that can be %-a-rthe parties are expressed clearly, with is as intended.
sly
0C:
to en that ie inten mat the alloct tion o
w
the common law of contract, and affected s.
ry to take into account applicable legislation least to have an awareness of what might at "sions, misht need to be considered includes:
It is neces! rr
n
and Management) Regulations 1994
(SI
1994/3140)
temporary and permanent works. The statutory duties for tracto are usually made contractual obligations also.
early
t1w,?mp1oyer an
heck whether- the it me
in respect
Unfair Ter-ft
in C
act terms take into account the role of the Employer in and the obligations of the Planning Supervisor and Principal the Health and Safety Plan and File.
s,
sumer Contracts Regulations 1994
(SI
1994/3159)
0-3D
ro
0-c
This legislation applies to contracts for goods and services between a consumer and a supplier. The former will be a natural person acting in a personal way (e.g. a home owner) and the latter a person acting in the course of business (e.g. a consultant or a builder). This is primarily a consumer protection measure, and applies to any term in a contract which has not been individually negotiated. It calls for fair terms, to be
335
14
Choice scenarios
expressed in plain intelligible language. An unfair consumer. In assessing the requirement of good fai parties will be taken into account.
t
m
willot
so care is e Check whether: one of the parties is a consu eded that the contract complies with the req uire nts plain ang erm s a Most standard forms have not been indi ' ually tia d. He e he pr tracts' for sy attempts to publish building contracts which e c nsu r c ildho or co domestic works. Care is needed if draft g as cla appointment agreements to make c ain that the rm understood by the consumer, v,.
nji
fl,
dl
Housing Grants, Construction Part II Construction Contracts
ion 7rtt 996,
a
This will apply to 'constructio d this professional services, interio or exterior ecora-on, la It will not apply to contra 'ts wit idential cupiei
principally on
a
dwelling fo own
incCude contracts
for
building contracts. roNded that the work is
occupation.
erms xpressly Check whether: the o adjudication, and w, ether Faym eet pro dures eet the Act. If the Act 's appli able t not ressly i for Construction ontra Re ill automati
the6'right to refer disputes to he requirements stipulated in cluded for, then the Scheme lly apply.
Party Wall etc. A
to d velop nt such as the Town and Country etc., "this will. not usually feature in the contract wall agr, ements or awards are concerned this r co tract administration.
As with m
elatin
?fl
Planning Conditi might bri
w
er..
issued or receiv
aff tructito cover p hich might becom
at work will affect party walls, because if so notices might the course of the Works, and construction work might award. Contract Conditions should provide for variations, extensions of time, disturbance costs, 11
fl-
E
that at co/rfimon law only the parties to a contract had obligations The and benefits fro reement touched only the parties, and third parties were outside the contract. Now this piece of legislation has brought the right of a third party to enforce contractual terms, always provided that the contract expressly provides for this or purports to confer a benefit, and that the third party is identified in the contract. The contract may expressly exclude or limit liability. It used to be h
*.,
336
Choice scenarios
14
ty rights re to
r.
re fired an taro egal vice. f ressly tate that
v':
BCD
('D
Check whether: it is intended that certain thi whether the contract expressly includes thi uncertain on this matter, it might be advis published standard forms of building co third parties under this legislation will
f Fai w has a b` ctor,, who has promised new prefabrica ed pa odu a sub to the company he owns. This will be supplied ected age. t al de oration will be needed, which the members fe can ndert sel ernal works will also be required, which mus e complet iQr to d loc contractor will be needed to carry out this wor which-incl cles the c ess r standing, bringing the site to proper levels, dra cage, the necessar oncre base for the pavilion. The tennis club in the afflue
to donate
a
he nat
e
of
t>
e
minor
wo&tpr th)s
preli inary contract, consider a lump sum uch as JCT MW 5 might be appropriate if the work
straig
ver p si wher there are sequential contracts, particularly rac rs , are volve The contractor responsible for erection must
ting
nd File c
I
N[2
beg' act beinc
ica
(1)
mpede
`I^
i
res.
possession on the due date and the site being ompletion of the preliminary contract will need e respective Nabilities for defects and damage clearly established r example, MW05 only refers to defects in work under that d by the original contractor). A separate Health and Safety ill probably be required. biz
ate. Pra
Scenario B rmis ion f r the latest 'Homeforce' DIY Superstore contained a condition acade f the 19th-century Boon Mills, which now occupies the site, should b tamed. ite clearance is imminent and the selected part of the listed facade needs to e stabilised and protected in what could be a delicate operation. It is decided that this work should be entrusted only to an expert demolition contractor. (.0
Planning
n-0
+-C
,-+
Fin
(El
that the
Which contract? A separate contract
is
required for the demolition work. Consider a suitable minor 337
14
Choice scenarios
P=}
works building contract e.g. GC/Works/2 (1998) or, (e.g. the Standard Form of the National Federation sure that the Specification and Conditions includ and insurance, and that the contract for the b contractor to work on the site occupied by th
II, a ecia act ition con ctors ake dem pro isio fo ar s allo s for other i
.
Comment
vii
The demolition contractor needs to be for ear ective f m rial i obligations for the safety and protectio ed and stored, it should be clearly stated. (Th Employer ex t to ed if the contractor is allowed to acquire salv teria emoon can dealt with as a preliminary contract or as a su -con the 'former, then a Health and Safety Plan specific quir e or it might be this fight contained in the Plan produced b incipa cto r. .
r(6
a_.,
Scenario C
Victoria Towers has been Ilow trdeterioratever si e a disastrous fire last century. Now Country Heri t e is repared t s sta ial restoration and has commissioned a det su ey'Out a repo on of the fabric. A contractor will be ne ed to ar cle ance a d op ping-up to allow investigation work, the precise tent o which c not be wn a 6e outset.
Consider cont relevant plus ap standard best
eliable buil er, pr bly one with experience of this kind of sup rvises raftsmen with a knowledge of the ho This nlikely o be a lump sum contract, and a cost only racticable/ne. It is doubtful whether any of the s ffective cover this is kind of operation, and it is probably of letters and an agreed Schedule of rates,
dersona
SAO
work who
co
er pr6tection and ese are no
operation. Retur
res are the contractor's responsibility, but check work needs close direction, and the contractor qu ting rates that this might not be a single continuous to for further investigation are a likely requirement.
s
Sh
Trades contract Scenario D
Champers is a popular cellar bar and restaurant in Westville. Success has brought more sophisticated patrons, a need for expansion, and a more chic ambience. Further vaults have recently become available, and these development ideas can now be 338
Choice scenarios
14
"
realised. The restaurant's reputation is such hat th e mu be n o down during building work, which may ne to be arrie ut a r at -ek fashion. What is equally important, patro of Ch per mus t a mes enjoy their food and wine safe from any won of t, dus , unsavou sm unwelcome noise resulting from the r i
'
fl,
It has been suggested that whilst build
work an
ancecapf p ro ded by one nd kitchen be must be ou arri per odic or phased atio rail direction will the situation now ate trades contracts.
0
reasonable building contractor, se ally left to specialists. It is envisaged th ork manner possibly over an extend period, an be critical. The Architect agr to, act suggests that the role is dev
Which contract?
ouno mana moment,
The situation calls for. Because of the inter
the builder is thougi this could best However, the
re of
u
ination, and firm control.
worK;
ikely to acgri eve
t by a consu
1
th
d lump sum contract with esired result. It is thought that
ratin as
a
management contractor.
relatively small, and probably N-volved a e lik s con actsenter into d ect b tween the client and each specialist r. A s ort form (e.g. JCT MW05, one of the e the ost sate tory a or G be an app priate document to use for these, additional conditions. ere m
0
y
!
ateveNpfm, sho.
agreement,
include for matters such as the following:
ncemen and completion. Consider problems of phasing
s
an
Id
osses
stkte basis or valuing work done. State when payments are to be made and ocedui sinvo
,y:
ol:
state
Establish procedu
nvolvecl_vMNs to lities
e
architect's instruction before any deviation is made. `sure integration and coordination of the various trades responsible for setting up site access, welfare provisions and
etc.
Insuranc state wh will be responsible for insuring the existing structure, contents and new w sider cover for any consequential losses arising from the carrying :
out of the work. Termination: if this is to be included, state whether it is an option open to either party and if so on what grounds. Trades contracts are almost certain to be construction contracts to which adjudication would be a statutory requirement.
339
14
Choice scenarios
0
It might also be worth considering whether there sho Ad be a rov event of key contractors falling behind, would allo the ar itec no extra cost to the Employer) to bring the wor back ti bringing in an additional labour force, or even ano er fir
An architect involved in such a management r for professional services with the Employer, d shoul
n w1171P
'
to
e ac rn
ropria r
t co riate
Contracts with substantial specialist co, Scenario E
N-?
The catalytic degrader at Hotwells ter AssiateProduc (1981) Ltd very has become redundant, and is du to be late d by Nation from Superlink Fibreoptics. The new de ched om i e a atively simple structure, but the services installation it i o hou complexity and far exceeds the capital cost the act fl4ing
Which contract? If the entire operation is to b sum contract (e.g. JCT
d by one
for the i stall
sub-contractors. Alternatively, the peciali firm could be considered as the principal contractor with erall r iIity r rcar work. The builder would then be a sub-contracto respo ible f r care g out work on the building envelope including ne ssa dant bui ders' vv ork` onsider either a lump sum building contract (e JCf98) o ropr"gineerj g contract as the main form. Where appropri e, a n e w is nveniently s, If-contained, there could be separate parallel ntract fort e bu ding rk and he engineering work. .
former
Pte 4 Placing of Contracts with a Substantial Building tent, vised that where parallel contracts are used, great is ded to e effecti e coordination and to eliminate the risk of ation. There might complications where consultants with differing nd ies der ifferent contracts of engagement are employed on the ceclu re
rvice e
dscape
vv,
For the proposed Eventide Homes cluster development, specially designed with the needs of the over-60s in mind, it is thought that the external landscaping needs to provide a particularly tranquil setting. The architect-led design team includes a
340
Choice scenarios
14
landscape architect, and although both soft out, it is thought best to treat this as a sub It is intended to use a particular landscape
is to be named u er appropriate forms either NAM or NSC
ing
a
to'
uildi
b- =ntrac
r.
IFC9
0
If the landscape firm
landsc
to
The Specification or bills of qua special provisions to cover u
mbtesho
ties
ters malicious damage or thef befo ora ical ordinarily appear in a building ntract,. m
i,
Ian
ake,.
fail e letion.
d u
ecific reference to aintenance, and items would not
fl,
Developers Rushe & oulet -aaye acquir office block in the City for the proverbial song; and romptly set ting it to make apartments attractive to you tives The site r eds ons of an innovative landscape architect, and uc is will -be hard using non-traditional materials and dsca specialist tec hology At refore ed th t although this work will proceed at the same ti eas th buil k it should be ui ertaken as a quite separate contract.
m contr ct (e.g JCN C98) perhaps modified after taking account ctice 11 es Altern ively, if the type of work suggests that
riate
_4'
a
evant JCL easurement
racticable (e if there is a substantial amount of earthciated rk of a civil engineering type), it may be more of ditions of Contract for Minor Works.
is
ring onsid
fl,
taine ntract for landscape work, it is probably best administered andscape tect. reful coordination will be needed if it is a contract in parallel with anoth Iclj g contract.
fl,
C
0
i
fl,
0
The new ouncil office under construction at Tan-y-groes have attracted a great deal of media est. W rk has not proceeded to programme and failure to complete by the contract completion date would be a matter of intense civic embarrassment, as arrangements are already in place for an opening ceremony by a distinguished person. To make sure that this will go ahead as planned, it has been decided to omit all the landscape work to the central sculpture court. The building can be occupied and the landscape work can proceed at a later date under a separate contract.
341
14
Choice scenarios
Consider the JCLI Form of Agreement for Landsca on the JCT MW05 contract, but includes additional such as plant failure, malicious damage or theft, will require a separate JCLI Agreement.
Thi clos mo led for ealin ith ;ffieation maint ance. tte+ i
It is perfectly acceptable for the administr for the CLI do s c a than a landscape architect (e.g. an arc tect), ildinur)era e utie esuppos which an architect experienced only,in t not s
bt
Contracts for fitting out Scenario J
Ground floor shop units on ne ne tes De new a le to be fitted out by tenants hey will as ume re t o nsibi and for providing shop onts, under direct co racts developer's contract with tH prin Opal contr or.
to be left as shells, ing out the interiors ite separate from the
terioiork
be car`ried out u der a lump sum contract in its gi'm pest is could be y written acceptance of the specialist firm's o r. HoOewer, sucVquotatid often subject to each firm's own conditions, a ight not e acce t le. Architects acting for tenants might be wiser t suggest appropri e st dard rm of contract (e.g. JCT MW05 or IFC98, de endin on th and n ure of e work). Alternatively an agreement suitable or inte for rk is from th hartered Society of Designers (formerly the Socie of In trial Arti sig rs).
Shop-fitting and respect of each
the
nit.
an
site, care should be taken to establish respective site ontractd is still Tw4 spo ibil s rticula proper insurance arrangements. The principal ractor might require ractors to work in accordance with the Health and Ian for or the t6nant's work is carried out under separate unrelated Heat Safety Plan for these works might be necessary.
the_
i
-f,
ntracts
0-0
The oil rich port of Fyl-yr-Up requires new state of the art terminal facilities. This is likely to be a large-scale and sophisticated construction operation calling for significant engineering installations which must be coordinated and integrated with great precision into a series of buildings which will operate as the necessary plant
342
Choice scenarios
14
housings. The conventional arrangement of sub-contractors specialists is not likely to pro detailed planning and coordination will b on site, and there must be absolutely po installation or integration problems.
in
a
ma
f ctory. d be
re
tre endo
t
co
le.
isruptio
.-r
ys or
Consider a joint venture approa ra tract. If joint venturing, then the selected ten ering c ies st b combine under one legally constituted partners p andacccep nt =everaQ lity. The use of a 8) traditional lump sum form no y b precluded, as the contractor would be a sing ka s p forme hership or company.
The partnership ag $ement s performance bond vould r r
rovid be`reqq uired-.
particularly effectiv wher design input is contributed by he ious Decialist rtn the larger org is
quire
d several liability and a ethod of working can be with elements of the design effectively coordinated within
contratt for a-new seve
r
er
h
ed u
of
oup we
tice veterinary surgery in Fairmeadow became
of 36-week contract. His employment was the ms of the contract, and it is accepted that
question.
+-V
ctor (ideally under the same contract Conditions as the original) first contractor. This might be achieved through negotiations derer on the original tender list, but if the work has been efforts and departure of the failed contractor, there will e more one certainly been inc aseethe Contract Sum.
,l<
If the cir umstances r climate for tendering has changed markedly since the original tenders, it h e necessary to amend the original documents and invite new competitive tenders. An insolvency practitioner acting on behalf of the original contractor should be consulted and must be kept fully informed of all developments. Employer's costs and expenses arising out of the determination might be part of the claim to be brought against the original contractor. 0-'
343
14
Choice scenarios
jrds
le
ewha errat o act recei 3rv cou e of aftioh js so
.-t
fl,
Work on the Limboland Fitness Centre was well ov contractor's performance became progressively sl no great surprise when a letter arrived from a fir, discussions, it was generally agreed that the have the contract completed by a substitute ontract&-
The contract just might be completed
nt
y rein st
substitute contractor accepts respons the original contract. A deed of assi Employer, receiver acting on contractor.
ity
co uld I
.-+
r-. fl,
previou payable fl,
a
.^+
'"'
g
ed
a
d novation. In this
for completing the acceptable. A deed of er, receiver acting on
ng
contr ctor w complete t e work, an adjustment of the almo i evitabl The r might also have reservations sibility for ork al carried out and perhaps covered up, ble The H s of taking on work undertaken by be in n be ared b an additional single fixed premium ew Healt and Safety Plan might be required. fl,
fl'
Where a substitu completion date about acceptin and additio
der
quired a co tor,
Alternatively, the contract mi tbec`o ple by re case, although the substitut contractor night at-c ept re Works, all the terms of th origi ntract mig not novation would be require ,as a reed behalf of the original r, a n lthe subs 'tut
betw`
ass
tin
.
ation refurbishment scheme was complete except for a reat reluctance, the architect yielded to pressure and rtifie pr ca allow unhappy decanted tenants to resume patio-n. Unfortunat is to bring back the contractor to complete the ding work fl-d. By iry of the defects liability period the contractor had mo ey was held back at practical completion, in addition to The issue now is to have the work completed. fl-
Dragon` iousm, out n ing ite
fl,
cc.
--6 fl-
fl,
fl,
fl,
c+'
The outstanding work could be carried out on a lump sum or preferably a cost plus basis by another contractor. An exchange of letters might be considered sufficient, but this would probably still be a 'construction contract' to which the payment procedures and adjudication option would apply. Depending on the extent and
c-0
344
Choice scenarios
14
nature of the outstanding work, it might be MW05 or an ASI form).
A Specification or Schedule will be nee The best course of action should first should be kept fully informed of develo
Contracts for jobbing repairs o
When the date for judgin announced, it was decide Street facades as a group ope renovation and some needs repainting, a work, and well with
0-o
a competition was inting of several High es is in need of some dwork and ironwork also ostly routine maintenance
For small -scal strai
tfo
enti '
w rk is woul
d, an
i
ti-
e
ident
s, tend rs mi ht be sought on the basis of minimal cificati r Sche ule. This might result in just a lump t contractor's f ures could give a useful breakdown. e su t any cases, but where a larger amount ndarg4(Zrm of contract should be used (e.g. JCT MW05
and j
drawn infor ation nd a sum, or if ufficie y ite is An excha e of le er might of work is inv ed, t en as or a
I
uilders.
tr Vtedaavonaecontract, then the client would need to be uthority to appoint a contract administrator. nication would need to be clearly established to avoid the risk of be
presume
ners issuing instructions directly. If the individual property
to separate contracts with a common contractor, then standard forms are used, and the same contract ink under each, coordination might be more exacting. Cambrian ank, which has premises in major towns throughout the Principality, to embark on a programme of regular maintenance and repair. It is envisaged that parcels of work on a regional basis will be offered for tender, in some cases with the added proviso that appointed contractors must also make themselves available to tackle emergency repairs at short notice. The Ne
E
.'^
345
14
Choice scenarios
a term contract. Contractors can be selec of rates. There may also be a standard call-out contract might cover a specified number of pro Orders would be issued to authorise ad hoc of the approximate total value of the work e
C--
Consider
be avoided.
erri
The JCT publishes the Standard Form Mea Pd bodies have their own model docu e s fo uch require the presence of a contract dmini ato
TC%05. Some
on acts usually
tracts
%th
m loyer.
fl,
The Architect engaged by t
%ve cquis
Allday fa
em
ily h
,-+
to update the cottage the have alteration work and some ainte ance and can safely be entrustedo th
y,
rk. It
i
vic on what a
is
D0-
Scenario Q needed
maamount of
agreed that this work
"
-.-
Assuming that th archite is se Vtcesarg, no longer reclfired, and that this is a private residence for oc upatio Vby e AI then consumer contract (e.g. JCT Building Contract a wn r/OccWier) would be a safe recommendation.
fl,
An excha ge of rs, or ve asic formal greement (e.g. JCT Contract for Home Repairs d Ma tena ce) c uld b conside ed as an alternative, but neither is likely to provide equa contr ct Condi n The fact that this is work to a private resi nc r ner occ ation means that statutory requirements relating to a Judication and ment rovisions under the Housing Grants, Construction and -Q-
i
pply.
346
.
Bibliography
rip
Chappell, D. The JCT Intermediate Building Contra 3rd edn, Blackwell Science (2006)
Chappell, D. The JCT Minor Works Buildi 3rd edn, Blackwell Science (
Chappell, D. The JCT Design and B 3rd edn, Blackwell Sc
nom
Davidson, J. JCT 2005 What's Ne RICS Books (20
0,v2
Egan, Sir Joh
Rethinking HMSO
(1
Egglesto The Bla
am,
Constructi HMSO
(1
Sarah Lupton rye
Guide to MPF03
RIBA Enterprises (2003)
347
Bibliography
0-O
Sarah Lupton
Guide to SBC05 RIBA Enterprises (2006)
Sarah Lupton
Guide to IC05 RIBA Publishing
(forthcoming)
Sarah Lupton
Guide to MW05 RIBA Publishing (forthcoming) Sarah Lupton
Guide to DB05 E
RIBA Publishing (forthcoming)
MacRoberts, Solicitors
MacRoberts on Scottish uilding Co tracts 2nd edn, Blackwell Scienc t(forth omi g)
IAI Y,1111
348
Index
ACA, see Association of Consultant Architects
Accelerated Traditional Method, 33
additional work, see variation of work
Agreement for Housing Grant Works Edition OCT HG(A)), 187-93
H
36,56
alterations and extensions, buildin minor works contracts)
(see also
Contract 2005, 253,
amended forms of contract, 17, 61,
Construction Contract,
su
tractors and
4,207,
'approximate quantities', architect's appointment,
of Building (CIOB) CIOB
1 LOB
design nd buil
ini Form
20, 64
1
procu
of Contract (CIOB Mini Forms),
men 363
d
manag
inor Works Contract (2004), 176-7
CIOB°Small Works Contract (2004), 175-6
architect's instruc ons, 3 architect's servi es, 15,
Iding Contract (2004), 173-5
ent, 3
ent pro
Architec
eying Institu
172-8,
58, 299 (ASI)
03-6
hitects ment 1982 003 Rev
advising the client, 20-1 basic questions, 59, 60
procurement methods, 46-7 scenarios, 315-46 CIOB see Chartered Institute
of Building (CIOB)
Civil Engineering Contractors Association, see ICE
Conditions of Contract
:A 3tanc
clerk of works, 37
rtneringg
client's representative, 15, 37
Conditions o
client's requirements, 28, 36, 37, 56, 60 collateral warranties, 33, 36, 40
commencement date, 28, 33, 36, 59 ts, 17,
design and build contracts, 56
management contracts, 57 bills of quantities,
break provisions, 228, 232 Building Contract (and Consultancy Agreement) for a Home Owner/Occupier (JCT HOC/HOB), 194-9
Compensation Events (Engineering and Construction Contract (NEC)), 111, 113, 164, 167
'Competitive Design and Build', 36
competitive tendering, 33, 39, 59
m
349
Index
C completion contracts, 343
19
88
conservation work, 26 Construction (Design and Management) Regulations 1994 (SI 1994/3140), 335
gn,
eg ,
an
09-10,
Cons c1 15,, 162,
Construction Industry Board, 50 construction management, 38-9, 58, 297 contractual relationships, 42-3
ontra
plan of work, 33, 39-40
Construction Management Agreement C/CM
/ forks
(J
C/CM), 297-306
ICE
Construction Manager (JCT Construction Management Agreement), 297
and Build Contrac
JCT
Measured Term Contra
2006
JCT
Minor Works Building
ntract
C
contrlactt profile`; 134
Contract C
ntrac' 2005,`Q1
ification the
design j
ontractor's design (see also Contractor's Designed Portion)
97 ,
16
en36,
and build procu?
37,
ment, 33
al
tual relations
m
S31070
ACA Form of Building Agreement, 144, 145 Engineering and Construction Contract (NEC), 110
min
ointmen
design an
9ctor ap
41
Consultant Tea m , 49, 57, a
60
typks BA-1
consultant's
,
ntract
f
'consultant switc h',
ontra
luctua uctura
Contra
Intermediate Building C itracts, 124
Ski Its Ce
ntit
easu'red Te[m Con
JCT
Construction
rth Q
CchrNtion
JCT Irate on,rme diate Bui
Construction Phase Plan 1CT Design
24
per
GC/Works/1 With Quantities (1998), 98 Design and Construct Conditions of Contract, 265, 266 ICE
rocure
cure
ent, 42
JCT Design
traV4Lo al procureme
254, 255
tant's design liability, 56
JCT
and Build Contract 2005, 253,
Intermediate Building Contracts, 119,
121, 128 design and buii)6pfzaremenJ, 35
traditional procure?niL4
1-2, 33, 34
consumer contracts, 61, 185, 335-6 Agreement for Housing Grant Works HG(A) 2002 Edition OCT HG(A)), 187-93
JCT
JCT Building Contract (and Consultancy
Agreement) for a Home Owner/Occupier
350
JCT
Major Project Construction Contract,
1CT
Minor Works Building Contracts, 131
JCT
Standard Building Contract 2005, 85,
86 JCT Trade
Contract, 308
Contractor's Designed Portion, 56-7 JCT
Intermediate Building Contracts, 121
71
Index
Contractor's Designed Portion (continued) JCT
ariso
co
Standard Building Contract 2005, 85, 86, 89, 90
c
JCT
tract
,
46-7
al relate
forms f contr
contractor's liability, 18 ACA Form
ild
and
Minor Works Building Contracts, 132
n
ships,
t, 249-7
assessme t, 44, 4
of Building Agreement, 148
Engineering and Construction Contract (NEC), 109 Engineering and Construction Contract (NEC), 165
ty,
sig
V
S
5
ng an C),
GCJWorks/1 With Quantities JCT Design and Build JCT
(bantities (1998), 98
G C/Works,
Cont
uild Contract 2005, 254
Intermediate Building Contra e
7, 91
contractor's responsibiliti design and build
c
tanda desig
tracts
ctor's Designed Portion) r
traditional procure ent, 33, 53
ctor's designed portion, 56-7
contractor's staff,
design and build contracts, 35, 36, 55-6
of Thirc! PartiN Act
Contracts (Righ
Building Contracts, 125
Building Contract 2005, 81, 85
336-7
1
contractual 'elationsl ps, 15/40 r
management procurement, 37, 38 ,
BA
i
traditional procurement, 33 ACA Form of Building Agreement, 145, 151
racts, 4Y-2
design ,and bui
ACA Standard Form of Contract for Project Partnering, 332
re ment, 4 d
E6a
Engineering and Construction Contract (NEC), 110
GC/Works/1 With Quantities (1998), 98
222
ontrac
ICE
Conditions of Contract for Minor Works, +-'
1w.1
ICE
lZ-
Conditions of Contract Measurement
Version, 214
cosy
ICE
39-47
Design and Construct Conditions of
Contract, 266
Defective Pr
,
ses
see nsurance
Act
JCT Design and Build
z
19 2, 18, 85
JCT
defects re ification, 53
defence cont
.
Major Project Construction Contract, 70,
71, 72, 81
51
JCT
demolition work, 337-8 Department of Health, NHS ProCure 21/1-IFT,
Standard Building Contract 2005, 85
domestic work (see also consumer contracts) 51
CIOB Mini Form
'Design, Manage, Construct', 37-8, 58-9
Forms),
Design and Build Contract 2005 (1CT DB05),
JCT
u-,
251-64
Contract 2005, 253,
254
of Contract (CIOB Mini
203-6
Agreement for Housing Grant Works
HG(A) 2002 Edition (JCT HG(A)), 187-93
w
rope
O_1
mage t
351
Index
0 a murrrjnce) co
domestic work (continued) Contract for Home Repairs and Maintenance (JCT HC/RM), 200-2
1CT
s,
51,
um
2
ice'
P) c
Minor Works Building Contracts 2005 OCT MW05/MWD05), 132
JCT
toric buildi
mlmprQveme
Egan Report, 10, 21, 50
employer's representative, see client's representative employer's requirements, see client's requireme enabling works contracts, 64
home
con
n
hour gran
g,
see
87-9
rks
ement for ou dition (J
Engineer (ICE Conditions of Contract), 214 223
g
nts, CbQstTn
Engineering and Construction Contract Third Edition (NEC3), 107-16
differ
r
Engineering and Construction Sho Ft Contract (NEC3 (Short Contract)), 16 -7
ment o
ICNCondif1ons 6
Federation of Civil Engine ring Con acto ICE Conditions of Co ract for inor Wok Third Edition (2 1), 221/6
ditionnN(2001), E
fitting out wor
C
221-6
dition of Contract Measurement Version Seventh dition (Sept 1999), 213-20
Design d Construct Conditions of Contract econd Edition (2001) (ICE/D&C), 265-72
Financial Control, 25
fitness for purpose obligat
.-«
European context, 20, 62
ICH orm of Default Bond, 213 inde pity, see insurance arrangements
forms of ap
InsR
forms of c Framework
tution of Civil Engineers, see
ICE; New Engineering Contract Document (NEC)
nsurance arrangements, 43-4 (see also risk assessment)
Fram
315-17
interest payments, 19 ements,
1
ctionkrel3itionships, se relationships
interior work, 342 Intermediate Building Contracts 2005 (JCT IC05/ICD05), 119-29
intermittent works, 338-9 GC/Works contracts GC/Works/1 Single 273
S,
age Design an
GC/Works/1 Two Stage Designand Build (1999),
273-7 GC/Works/1 With Quantities (1998), 96-106
GC/Works/2 (1998), 153-8 GC/Works/4 (1998), 159-61
352
JCLI, see
Joint Council for Landscape Industries
(JCLI) JCLI
Agreement for Landscape Works, 168-71
JCT, see
Joint Contracts Tribunal
jobbing repairs, see repair work Joint Contracts Tribunal, 10-11, 17, 20
Index
Joint Contracts Tribunal (continued)
C1_
Agreement for Housing Grant Works HG(A) 2002 Edition (JCT HG(A)), 187-93
Jojf t Councj}'for Lan cape In Aare6ment for Lan cape
f
re
stn'
co#itractsh342-
Building Contract and Consultancy Agreement for a Home Owner/Occupier who has appointed a consultant to ove the work (JCT HOC), 194-9
cators
fl-
Building Contract for a Home Owner/Occupier who has not app me consultant to oversee the work(J HOB),
194-9
laly, scape
to p
ent,
7
of Co
ay
99,
Construction Management
m Report,
C/CM (JCT C/CM), 297-30
X107
of coW
Contract for Home Repairs an
New',Rnai7reeri
tract 2005
ultant; 6,
(
31
335-6 FA),
ontractor's liability; design liability
315-17
!finding
(JCT
1
authority requirements, 63 to Buildi
sum contracts, 25, 53-4
5), 119,
roject
1
shorter lump sum forms, 117-83
nstru
standard lump sum forms, 67-1 16
9-82
m Contract 2
6 Editi
M41 (Movement for Innovation), 50
TC06),
Minor Works MW d
Repair
B
Idin Contracts O05 v 30-
(JCT,
I)
maintenance work (see also minor works contracts)
management contracts, 58
ainten
mmerc
maintenance period, see defects rectification
2006,
example, 345-6
2
JCLI
Xtandar
ilding
Agreement for Landscape Maintenance
Works, 168
SBC651,
Contract for Home Repairs and Maintenance (JCT HO/RM), 200-2 JCT
ilding
Standard For
(JCT98), 69
JCT
Sta
Appro SBCO
Stan
rd Fo
ate
/AQ
,
of uanti
09-12
Form of
Measured Term Contract 2006 Edition
(JCT MTC06),
A
1998 Editior-OCT MC98), 281-91 Standard Form of Prime Cost Contract 1998 Edition (JCT PCC98), 239-47 Trade Contract TC/C OCT TUC), 307-12
Works Contract 1 and 2 and 3 1998 Editions (JCT MC98 WORKS), 292-6
228-35
and Maintenance Contract (Commercial) 2006 edition (JCT RM06), JCT Repair
139-42 Major Project Construction Contract 69-82
(JCT
MP05),
management contracting, 37-40 contractual relationships, 42-3 plan of work, 32-3, 39-40
353
Index
M management contracting (continued) risk assessment, 45
Buildi g
types of contract, 57-8
tesi
Management Contractor, 282, 283, 292
Am6 75
n Build,
management of the Works, see site management
management procurement, 37-40, 57-9 Version, 2
comparisons, 46-7
contractual relationships, 42-3 forms of contract, 279-312
edi*',9.uildin
JCT
plan of work, 32-3, 39
126,
risk assessment, 44, 45
JCT
8
Mrafroject
management responsibility, 32 (see also cori administration; coordination of work; site management)
Co
inorW(o_UBuildin era
Measured Term Contract 2006 Edi on (JCT MTC06), 227-35
ndard
measurement contracts, 54 standard forms, 207-
Mini Form of Contract Ministry of Defence,
(Cl
B
203-6
51
005
s
F
Bering Contract Document (NEC)
Engineering and Construction Contract hird Edition (NEC3), 107-16
try (2004), ,4),
S
Wor
SBCC
minor works contracts
CIOB
42 CT
Minor Works Buildin Contrac MW05/MWDO ,, 130-8 CIOB Mi
nda
JCT S
Mini_Torms`),
175
Eng
Contr
Engineering and Construction Short Contract (NEC3 (Short Contract)), 162-7 Partnering Option X12, 318-20
orks/
r
ns
of
(2001
NHS LIFT, 51 NHS ProCure, 51
nominated sub-contractors, see 'named' subcontractors and suppliers non-standard agreements, 17,
61
Northern Ireland, applicable forms of contract, 20 GC/Works/1 With Quantities (1998), 105
GC/Works/2 (1998), 158 GC/Works/4 (1998), 161
Minor Works Building Contracts 2005 (JCT MW05/MWD05), 130-8
ICE
Scottish Building Contract Committee (SBCC), SBCC Forms of Contract, 181-3
ICE
1CT
Movement for Innovation (M41), 50
354
Conditions of Contract Measurement
Version, 220 Design and Construct Conditions of Contract, 272 JCT
Intermediate Building Contracts, 128, 137
Index
Northern Ireland, applicable forms of contract (continued) JCT
ini For
ieerin
Standard Building Contract 2005, 94
),
1
of
Conic tructi
d Co
-13
Standard Form of Building Contract With Approximate Quantities 2005, 211
f Constructi 165
JCT
novation, 36, 41 Olympic construction programme, 20
Outline Plan of Work, 32 23
overseas projects, 20
ICE
Condltiorof
C
rsion, 21
rking I
Contr
management proc
3
6ment,
traditional procur nent, 33 partial possession (see o o commencement an
phase
Ag re
(ding
and Co
lding Contract (and Consultancy ent) for a Home Owner/Occupier, 1W, 197
JCT
e
%ruc
t, 145
of
on ditio
JCT
Construction Management Agreement,
301
reemen for
La
struction
dscr V`
nageme)
T
,
169
Agreemen
Contract for Home Repairs and Maintenance OCT HO/RM), 201 1CT
JCT Design
ild Contract 20
ng ConMcts, 120
JCT
and Build Contract 2005, 257-8
Intermediate Building Contracts, 123-4
Major Project Construction Contract, 70, 75-7
JCT
JCT
Measured Term Contract 2006, 230
Minor Works Building Contracts, 133-4
JCT ?CT
stc
and Maintenance Contract (Commercial), 141
Contract,
JCT Repair
241
JCT
1CT Trael-PContra
,
rrange ents, and
Standard Building Contract 2005,
89-90
forms, 31:
Standard Form of Management Contract, 285-6
1CT
JCT
Standard Form of Prime Cost Contract,
Partnering`B.tion X12,18-20
242-3
Party Wall etc. Act 1996, 336
JCT Trade
payments to contractor
JCT
ACA Form of Building Agreement, 147 ACA Standard Form of Contract for Project Partnering, 328-9
Contract, 309-10
Works Contract
SBCC Forms
1
and 2 and 3, 294
of Contract, 182
performance indicators, 50, 315, 328 personal injury, see insurance arrangements
355
Index
P PFI
act (a1-'
(private finance initiative), 48-9, 71
Home 0
phased commencement and completion, 28-9, 85 (see also partial possession)
t Ag re
ACA Form of Building Agreement, 145 CIOB Forms
of Contract, 174
ICE
r Home Kepairs a
rac
GC/Works/1 With Quantities (1998), 99, 100
Maintena
Conditions of Contract for Minor Works,
ten-ftftate
JCT
JCT
Intermediate Building Contracts,
JCT
Standard Building Contract 2005, 8
JCT Trade
MajdhA.TqjecKo structi
Contract, 71
Measured Term
6, 228, 230
1
Minor`W6rkss Buildin
Contract, 308
and For
With )appro
traditional
e also
JCT Stan
preliminary works con
239, 2}s
cts, 337-.40
JCT Trade Contract,
see 'named' s iers
L
ts, see cost flu
rm of l7
B
f lding, gree
f Contract, 172, ,f
Contrac
and Corii )
price
309
uctuations, see cost fluctuations
Prim contracting, 51 e Cost Contract 1998 Edition (JCT PCC98),
239-47
CIOB Min` Engi
e
of Building Contract Quantities 2005, 209
Stan ntract
Planning Supervisor, 335
28-9
e
g Contract 2005, 89
tandar
management procurement, 3
(NE
06
(Comm
design and build contracts, 3
uction
prime costs, 54-5 Design and Construct Conditions of Contract, 268 ICE
JCT Design and Build
Thir
GQVZrrks/1 With Quanti orks/2
5 !i's
of Contr
Contract 2005, 253
Standard Form of Prime Cost Contract 1998, 245
JCT
Principal Contractor, 335 Private Finance Initiative (PFI),
f
Contract M
Version, 213, 216
and Construct Conditions of Contract Second Edition (2001) (ICE/D&C), 268 ICE Design
JCT
Agreement for Housing Grant Works,
188, 190
356
Contracts 2005,
d Mai
JCT
plan of work, 32-3
possession dates, possession)
Bu
48-9
ProCure 21, 51
procurement methods, 31-47
traditional procurement, 33-5 design and build contracts, 35-7
management procurement, 37-40 contractual relationships, 40-3
Index
krm of %ildiing
procurement methods (continued) comparison, 46-7
re'
antities
43-5
risk assessment,
98), 158
recent developments, 48-51
professional services, 16, 64
998)/ntla
Project Cost Plan (JCT Construction Managem
bf C
Agreement), 299 CE De
provisional sums, 34 Public Contracts Regulations 2006,
ract, 1
CLI
public sector contracts, 51, 62-3
Aa7semenf
ttisli
quality considerations, 24, 26-7
tract, 179-83
CC Form
quantity surveyor, 25, 38, 58
Landscape Works, 169
Cwtrac Committee (SBCC), letion see phased commencement
ectiori
n
'radar charts', 23-4
342
s
'reasonable skill and car
',
rectification period, see
37
efects
'Sing
ectification
refurbishment, see renova ion wd
of contract,
17, 61, 340
pose vehicle' (SPV), 48
Regional Prime
t
sign and Build', 36
irec
cial for
ialist contractors, 15, 27, 33, 38 (Engine ring an (NEC)) 10, 1
onstruc
appointment and management, 34 ulative risk, 44-5
ent' co
V (special purpose vehicle), 48 also maint nance
rk)
stage payments, 19 Stand Alone Capital Projects Prime Contract, nn,
Housind
Agreeni
Standard Building Contract 2005 (JCT SBC05),
1
Main nana 2006 e ti n (JCT
epair an
k, see
(Commerc)
mainte
ent Enginee
i_sk
101, 2
(JCT
PPC2000,321-33
-5, 4
ods Act 1979, SBCC, see Sc
Approximate Quantities 2005 SBC05/AQ), 209-12
Standard Form of Contract for Project Partnering
of Work, 3
asses5a<ent,
83-95 Standard Form of Building Contract 1998 (JCT98), 69
Standard Form of Building Contract With
ation work, RIBA Plan
51
Works,
000
1CT
h B
ing Contract Committee
Standard Form of Management Contract 1998 Edition (JCT MC98), 281-91
Standard Form of Prime Cost Contract 1998 Edition (JCT PCC98), 239-47 standard forms of contract, 17, 61-5
(SBCC)
Schedule 2 Quotation, 89
starting date, see commencement date
Schedule of
sub-contractor appointment and management (see also 'named' sub-contractors and
Rates, 54
Scotland, applicable forms of contract, 20,
179-83
suppliers)
357
Index
5 sub-contractor appointment and management (continued)
Con
traditional procurement, 33
uctio
164
ACA Form of Building Agreement, 146 CIOB Forms
of Contract, 174 GC/Wd
Engineering and Construction Contract (NEC), 112
ICE
ConditO
Engineering and Construction Short Contract (NEC), 164
nditi
`-'
GC/Works/1 With Quantities (1998), 100 ICE
Conditions of Contract for Minor W,
223
Ver3i9nl
esign
I
Cont
Design and Construct Con Contract, 268 JCLI
ct Co
ions of esign a
Agreement for Landscap Works 16' Agreement for Housing G ant Wo
Build Contract 2005, 256
uilding Contracts, 122
ediat
ks,
C3)
JCT
CbRs
67 greerRgnt or Housi
ICE Conditions of Contract Measuremen Version, 216 ICE
of Co
15
Construction Contract, 72-3 Mea ured Term Contract 2006, 229
300
CT
1CT Design
ild Contract 20,05,
and
JCT
Intermediate
JCT
Major
iIding
n dacts,
Con ruction
Pr
JCT
70, 75 1CT
Mino Works Building Contracts, 132-3
JCT Rep
it and Maintenance Contract ercial), 140
Standard Building Contract 2005, 86-7 Standard Form of Management
6, 230
Me
200
88, 94
ontract, 284 JCT Standard Form
of Prime Cost Contract,
241
Standard Form of Prime Cost Contract 1998 design and build contracts, 56
JCF SBCC For
ply of ensi
of
rti
and Servi 5rk,
19
JCT Trade Contract, JCT
Works Contract
308 1
and
2
and 3, 293
Time Schedule (ACA Form of Building Agreement), 145-6 Trade Contract TC/C (JCT TUC), 307-12
4,27-8,59 comparisons, 46 ACA Form of Building Agreement, 145
ACA Standard Form of Contract for Project Partnering, 326-7 CIOB Mini Form
of Contract, 204
Engineering and Construction Contract
358
trades contracts, 38, 39, 64
construction management, 58-9 example, 338-9 JCT
Construction Management Agreement
C/CM (JCT C/CM), 297, 300
traditional procurement, 33-5 comparisons, 46-7
Index
traditional procurement (continued) contractual relationships, 40-1
61
measurement forms, 207-35
term
risk assessment, 44, 45
la
ildin
late
or
onstructio
Project
types of contract, 53-5
consumer contracts, 185-206 JCT
cost plus forms, 237-47
3,
shorter lump sum forms, 117 standard lump sum forms,
1
1Cair an
3
omrl)
-116
work stages, 32, 34-5
J
CT'Sta
1
cl'akdki lding
two stage tendering, 33, 36, 59 GC/Works/1 Design Build, 273
Contra
1CT-Tr
4, 276
types of contract, 53-60
'withou
tr,
tracts egulations
C
,
stages,
1
309
84
'wi
977,
,
al warranties
ties, s
JCT Design and Build Co uaci
54,84
e plan
t
1
of work
and 2 and 3 1998 Editions (JCT
MC98 WORKS), 292-6
Works Contractors, ac g"' 282, 292
nsumer,Contrac
works
x
Wo
39 Bank funded projects, 20
ons, 37>54
X12 (NEC Partnering Option), 318-20 Ag
ment, 147
f Contra B
PDT
B
Mini or
or Proj ct
s
0
ditiorr'of Con ,216
f
Design-rod-Ce-Kstruct Conditions of Contract, 268, 269 ICE
Agreement for Housing Grant Works, 190
JCT
Building Contract (and Consultancy Agreement) for a Home Owner/Occupier, 197 JCT
359
forms of building contract currently available in the UX Ever since i first publication in 1989, architects and other construction professic have been turning to Which Contract? for guidance on whai procurement strategies to adopt and how to identify the most appropriate contract for a given set of circumstances. It has now been updated to take account of
domestic projects. Many will be using stan4ard forms of contract, and often the frequently difficult choice of which rests with the lead consultant. Fortunately, Which Contract? explains the tried and trusted techniques for
',-Z
fl.
--'-r --wntractual app;
:u ru:rrn Edition is an invawam ne
start of every now project anv
n or her
s.co
9 IIVIIIIIIII111111113711
I
