karen bradbury monday 15.45 to 16.45 contract documentation supplement
TRANSCRIPT
Karen Bradbury
Monday
15.45 to 16.45
Contract DocumentationSupplement
Which document provides which function?
Generic Function Usual Contract Documentation
What? Type of projectScope, shape, sizeQuality of work
SpecificationDrawingsSpecification
How much? Amount of work Bill of quantities
Where? Location Drawings
When? Payment Conditions of contract
Who? PartiesResponsibilities
AgreementConditions of contract
How? Procedures Conditions of contract
What if? Prior agreement on liabilities & procedures
Conditions of contract
Based on Stephen Wearne, “Civil Engineering Contracts” 1989, p. 26, Thomas Telford.
Conditions of ContractFrom Warwick undergraduate module on Construction
Management, George Webb
• Set out the ‘rules’ by which Contract is run• Show rights and obligations of the parties• Set out action to be taken if issues arise• Form legal basis of the Contract• There are many standard forms, eg ICE, FIDIC, I Chem.
E. NEC. • Should not tamper with them!
Conditions of Contract• Details of the parties and description of the Works;• Employer's representative and their powers of
instruction;• Obligations (of Contractor and Employer) and sanctions
for non-fulfilment;• Time, Payment and claims for extra time and payment;• Liabilities and Insurance;• Quality of materials and workmanship (and, where
appropriate, Design);• Health and Safety;• Disputes and Termination.
From George Webb , lecturer on Warwick Undergraduate Construction Management module
Checks on DrawingsMany risks can be reduced by studying the drawings.
Suggested checks include:• The drawings are complete and match the bill of quantities.• Assess the likely requirements for the mechanical plant and
scaffolding.• Check access and working space and storage space for
materials.• Consider security. Is there a need to secure the area and/or
hire security guards?• Check the position of boundaries, access, and services.
(Tebin, 2009)
BondBond - a Client may require a Contractor to
provide a bond for the duration of the contract, which would become available to the client to meet any additional expenses that might result from a failure on the part of the contractor to meet his responsibilities. Such bonds are normally 10% of the contract value and are obtained from banks or insurance companies.
From George Webb , lecturer on Warwick Undergraduate Construction Management module
RetentionsRetentions - an amount, usually 5-10% held
back from the sum due to a contractor, for payment at a later date. The amount will be specified in the Conditions of Contract. Retentions are usually released on the basis of half at the issue of the certificate of practical completion, the remainder at the issue of the final certificate or end of maintenance period.
From George Webb , lecturer on Warwick Undergraduate Construction Management module
Liquidated Damages
Liquidated damages - a sum detailed in the Conditions of Contract which is designed to cover the financial loss a client would face in the event of late completion. The sum usually stated as a weekly or occasionally daily rate is recovered from the Contractor. Must be a realistic figure.
From George Webb , lecturer on Warwick Undergraduate Construction Management module
Collateral Warranties
Collateral Warranties - an agreement which is added to the appointment between a consultant and his client to bind the consultant into an agreement with a third party such as a funding institution.
From George Webb , lecturer on Warwick Undergraduate Construction Management module
Who Produces These?
• Form and conditions of contract – solicitor, lawyer, commercial manager
• Contract drawings – design consultant, employer’s advisor
• Bill of quantities – consultant, quantity surveyor
• Specifications - consultant
Traditional Complaints About Contract Documentation
• Missing information• Late information• Wrong Information• Insufficient Detail• Impracticable designs• Inappropriate information• Unclear information• Not-firm/Provisional information• Poorly arranged information• Conflicting information
Brook, M. (1998). Estimating and Tendering for Construction Work, 2nd Edition. Oxford: Butterworth-Heinemann pp. 36, 40
• Poor work description• Obscurity of specification clauses• Amendments to standard forms
of contract• The attempts by consultants to
cover inadequacies through the introduction of ‘all-embracing’ risk clauses
Quah, L. K. (1992). Comparative variability in tender bids for refurbishment and new build work. Construction Management and Economics Volume 10, 263-269
What documents should be on site?• Contract drawings• Bills Of Quantities (unpriced)• Descriptive schedules• Master programme• Additional drawings and details• Risk assessment and register• Contract • CDM co-ordinator• Permit to work• Allan Ashworth “Contractual Procedures”, 2006, p. 137
Architect’s (Engineer’s) instructions (AI's/EI’s) - instructions issued by an Architect/Engineer, first verbally and then confirmed in writing to a site agent as work progresses on site and, as questions arise over details and specifications.Certificate of Practical Completion - a stage reached in the contract where the Client can take beneficial occupation.Clerk of Works - a person, usually with wide building experience, often resident on a site and acting on behalf of a Client, in inspecting work, quality of materials etc during the course of a contract.Contingencies - a sum set aside to cover the cost of any additional or unforeseen work which may be encountered once the project is proceeding on site. Contingencies are also used to pay for changes which a client may request or meet extra payments which the contractor may be entitled to.Extension of time - an extension of time to a contract period authorised by the Architect/Engineer for reasons of adverse weather conditions, an unusual number of variations etc. The reasons for which an extension of time may be granted are usually given in the Conditions of Contract.
Contract Terms and Documents
Source: George Webb, ES3D4/ES4D5 Construction Management module, University of Warwick, 2012c
Final Certificate - a certificate stating that the works are now complete and the client is due a full and final settlement to the contractor.Preliminaries - matters which feature at the beginning of a Bill of Quantities, which are relevant to the contractor in terms of his obligations and responsibilities and which will therefore influence his costings. These would include such items as names of Clients and Consultants, insurance requirements, length of contract, descriptions of the site in terms of its access, working areas and adjacent buildings etc, a detailed description of the work to be undertaken and the order in which it should be tackled. Prime cost sum - an amount included in a Bill of Quantities to cover a particular bit of work or supply of materials to be carried out by a nominated sub-contractor or supplier. Provisional sum - a sum included in a Bill of Quantities for work that is required but cannot be sufficiently designed or specified at the outset of the contract.eu
Contract Terms and Documents
Source: George Webb, ES3D4/ES4D5 Construction Management module, University of Warwick, 2012c
Schedule of rates - a list of works activities usually priced at a rate per unit for example, a price might be included for building in common brick at so much per square metre. Snagging - the term used to describe unsatisfactory work or small items of work still to be completed which are discussed/discovered during final site inspections.Sub-contractor - persons employed to undertake specialist work beyond the capacity or capabilities of the main contractor. Domestic SCs are employed directly by the main contractor. Nominated SCs are specialist firms selected by the Client or the Architect/Engineer, with whom the main Contractor must then work. Variations - changes in work authorised by the Architect/Engineer.
Contract Terms and Documents
Source: George Webb, ES3D4/ES4D5 Construction Management module, University of Warwick, 2012c