Procurement & Building Contracts
12th April 2019 - Sarah Lupton
Nature of Client
Governmental intervention for public good/protection (regulations)
Trialing for new procurement routes
Partnering: to increase efficiency and reduce disputes
- government driven to waste less time and money (Latham Report)
- https://www.designingbuildings.co.uk/wiki/Latham_Report
Must include specific info on payment and adjudication (Housing Grants, Construction & Regeneration Act 1996)
- impacts all clients, unless residential occupier
Public Sector - Public Contract Regulations
Domestic/Consumer - Consumer Rights Act
Client Preference
Existing
Single point responsibility?
Cost-Time-Quality
Banks? Funding? Cash flow and stake holders, Brexit
Risk scope
Procurement Route preferred
Two-party (various versions within)
- D-B-B (traditional) (client supplies design)
- D&B (contractor supplies design)
- MGMT
Multi-party
- Project team agreement/supplemental provisions
- suggests collaboration
Contractor supply chain (sub-contractors)
Tendering
- at the end of Stage 4 (D-B-B)
- between 2 and 3 (locked in?) D&B one-stage
- twice (PCSA, not responsible for design at first) D&B two-stage
Problematic keeping the same contractor, “foot through the door”, budget out of control
Can do D&B without Novation
- more Appointment issue, not Procurement
Example: Change of Architects during the project
Stage 1 and 2 (architect A)
Stage 3 and 4 (architect B)
Stage 5, 6 and 7 (architect C)
- concept architect>technical architect>delivery architect
Management
- Contract Manager to oversee all the contracts that exist between the Client and the Client-selected/appointed Contractors (more than one)
- each package has its own cycle of tendering
Alliancing
- Board of Directors behind the scene
- Large projects
- Shared risk & reward (insurance)
- pay&gain mechanism
- collective goals
- no-claim-clause
- panels checking before (because of risk)
Project Profile
- matching Client’s needs
Bespoke
- based on Standard form
Lawyers comfortable with JCT because they are used to them
ACA - PPC2000 (Project Partnering Contract)
D&B - turnkey
- handed over: operational (power plant e.g.)
Constructing Excellence
- form that can be set up between any two parties involved
JCT HO
- small projects
- short contract
- e.g. a house
D&B
- Contractor doesn’t take liability in mistakes in any design (might be desirable from the Employer’s point of view)
Liability
Guaranteeing performance criteria
ER provided to tender, Contractor gives his Contractor’s Proposal (CP)
Sub-Contractor liability
- collateral warranty to protect the Client
- balance risk
Design
- ?
TIme
- ?
Cost
- cost-plus: when it’s hard to judge, feeding drawings ad hoc
Contract Administration
12th April 2019 - Sarah Lupton
(JCT SBC - focus for this lecture)
Duties & Powers
Time
- Contract Dates
- Date of Possession
- Date of Completion
- Length of Contract - flaws and benefits
- Extensions
- list of events that are allowed to defer the Date of Possession
- sequence: only start some work when other work has started (i.e. the critical path)
- affect the Date of Completion?
Constructing Excellence
- most innovative form
- schedule of all parties, very clear (time & event)
- the parties all share the risk
CDP-(CP/ER) -> D&B -> SBC
Don’t override clauses, add unique ones
Clause 2.13.2 - crucial for Contractor
PC
Dimininus
Partial Possession (part of building which is completely finished)
Rectification Period (checking for mistakes)
- instruct remedial works
Cost
- Acceleration Quotation (Client wants to speed it up)
- Fluctuations Provisions (pay more or less if price changes, e.g. governmental, indices, tax, tarriffs) - risk allocation device
- Provisional Sum (adjusted later up or down)
- Quotation vs Instruction & Cost Assessment
- Cost Savings (issued by Architect’s Instruction)
- Instruction is ground for extension f time
Certification (Inclusions & Deductions)
- Housing Grants Act (Interim Certificates)
- risky paying for things before they have arrived on site
Don’t interfere whether Contractor gets paid or not
BIM-protocol (BIM + D&B?)