PARTIES AND PROCESSES

Deciding on appropriate contract

Parties

Client (employer)- developers, investors Contractor Subcontractors Nominated Domestic Suppliers Consultants Occupiers

Contractual relationships

Consultants not part of contract. (have their own terms with employer) Architect given extensive powers (but may not alter the terms of the contract themselves)

Privity

Novation Assignment Subletting

Justification of standard form of contract

Latham report recommended standard contract documentation Familiarity Ease of use Many and complex relationships Huge capital involved Eliminate misunderstanding- is detailed and comprehensive, accompanied with relevant guidance

Justification

Flexibility can be amended to suit different circumstances Held to be fair interest groups represented on the JCT panel. Less expensive

sources of JCT form

The sales of goods act 1979 The supply of goods and services act 1982 Defective premises act 1972 Unfair Contract Terms Act 1977 Unfair Terms in Consumer Contracts Regs 1999 The housing grants, Construction and Regeneration act 1996

Sources

Late payments of commercial debts interest Act 1999 The contract Rights of Third parties Act 1999 The public contracts regulations 2006

Factors considered in choice of contract

What is the nature or category of the work? Who is to be responsible for design? Will the nature of the work allow full and accurate tender documents to be prepared Is there enough time to prepare full information at tender stage What documents are needed for a particular type of contract What is the method of selecting the contractor? Is the client able to state his requirements precisely before work starts? Does the client need to know a precise Contract Sum before work starts? Who is to be mainly responsible for coordinating the work on site?

Listed buildings hall place

Hospitals

Hungerford bridges, London

Heathrow terminal 5 under construction

Factors considered in choice of JCT

Procurement method Client type e.g. government, L.A. Private. Etc Experience, major, minor, Size and complexity of the project- nature and category of work Risk attitude of the client Policy and accountability mechanism External factors Design responsibility Need for documentation

Factors

Methods of contractor selection- value for money? Cost Contract sum and pricing basis ie measured , firm or cost reimbursement etc. Funding methods State of market and Job duration accountability

Factors

Quality Client supervision Use of quality materials Consideration for commercial prestige Need for specialist expertise Control of design and specification Project life cycle Type of building (historic/ listed not easy to determine the extent of work)

Factors

Time Speed Financial commitment (need to recoup the cost as soon as possible Phased completion Availability Familiarity Sector

CONTRACT PROFILES

JCT MP (major Projects) 05

Used by experienced clients, contractor and respective teams. Employer to engage representative Employer provides design further design provided by contractor (novation) Form shorter than standard building contract Used in major commercial projects

JCT SBC

All lump sum contracts cover private and public sectors Works to be documented Appointment of contract administrator Provide for sectional completion Provide for contractor designed portion With quantities With approximate quantities Without quantities

With quantities

With quantities where the work is designed prior to contract Contractor risks is limited to price only Employer bears the risks errors on the bill of quantities

Approximate quantities

Where construction commences prior to design completion Re measured contract No contract sum Contract is ascertained after the contract has been agreed

Without quantities

Where design is completed prior to contract Contract documents include drawings, specification and schedule rates Costs higher therefore used as negotiated contract

JCT Design and Build

Contractor responsible for design and Construction Flexible used by local Authorities, private firms etc Permits design input from employer up to tender stage Single point of responsibility Low risks for employer

JCT I intermediate contract

Project simple in content (requiring basic trades and skills) Contract value of up to 370,000 (2001guide) can be used in larger contracts No specialist installation Works designed by employer prior to tender Used for both private and public contracts

JCT Intermediate contract

Forms permit use of specification or schedules of work or BOQs Forms permit subcontractors to be name by the employer

JCT Minor works

Short in duration Small and simple Contract value 100, 000 (2001) this is just a guide No provision for BOQ Professional consultant engaged to work as contract Administrator No provision for phased completion Design must comply with CDM Regulations Forms can be used for private and local authorities Forms not comprehensives

Other standard form contracts

Association of consultant Architects Form of Building Agreement. (ACA) CIOB Contracts The British Property Federation System ICE Contracts FIDIC Conditions The Engineering and Construction Contract Building Contract for a Home Owner/Occupier who has not appointed a consultant to oversee the work Building Contract and Consultancy Agreement for a Home Owner /Occupier who has appointed a consultant to oversee the work

Duties and responsibilities Architect

Discrepancies and divergences between documents Justification of instructions Instruction in writing Confirmation of verbal instructions Divergence between statutory regulations and project documents Opening up of work for inspection

Architect

Removal from site of work, materials or goods which are not in accordance with the contract Exclusion from the works of any person Instruction given to a person in charge Variation requirements Expenditure prime cost and provisional sums Sanction in writing of variations created by the contractor

Architect

Defects in the contractors work Postponement of any work Execution of protective work after an outbreak of hostilities War damage Antiquities Nominated contractor Nominated suppliers

Responsibilities in respect to certificates

Practical completion of works Completion of making good defects Estimate of the approximate total value of partial possession Completion of making good defects after partial possession Failure to complete the works by the completion date Determination Interim certificates final certificates

Other responsibilities

Provision of documents, schedules and drawings Stating levels and setting out the works Access to site and workshops Limitation of assignment and subletting Granting extension of time Reimbursement of loss and expense to the contractor Arbitration

Pre- contract role of QS

Initial cost advice Approximate estimating Cost planning, value engineering, life cycle costing Bills of quantities and tender documentation Specification writing (where bills are not required) Procurement Tender evaluation

Post contract role (QS)

Valuation for interim certificates final accounts Re-measurement of the whole or part of the works Measuring and valuing variations Day-work accounts Adjustment to prime cost sums Increased cost assessment Evaluation of contractual claims Cost analysis

Qs responsibilities

Valuing variations Calculation of loss and expense Preparation of interim valuations Preparation of final account Accounts of nominated subcontractors and suppliers Fluctuations

Contractors responsibilities

Contractors obligations Compliance with architects instructions Duties in setting out Compliance with standards described Responsibility for faulty work standards Duty to keep on site person in charge Requirement to give the architect access to the site and workshops Limitations on assignment and subletting Right to object nominated subcontractors Duty to employers directly employed contractor

Time

Procedure for partial possession Necessity to proceed diligently with the works Liabilities in the event of non-completion Duty to inform the architect of any delays Right in cases of determination of the contract

Cost

Duty to ask for any loss or expense Responsibility for payment to nominated subcontractors Procedure for certificates and payments

Others

Liability for injuries to persons and property Duties regarding insurances