Which Contract?

Citation preview

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,

fl,

.-+

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

(_

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.

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).
, 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_

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