Consent to spend - Revision history

Designing Buildings at 07:35, 26 February 2021

2021-02-26T07:35:18Z

← Older revision		Revision as of 07:35, 26 February 2021
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	* Pre-construction Service Agreement.		* Pre-construction Service Agreement.

−	[[Category:Appointments]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Definitions]] [[Category:Appointments]] [[Category:Procurement]]

Designing Buildings at 10:25, 4 March 2020

2020-03-04T10:25:02Z

← Older revision		Revision as of 10:25, 4 March 2020
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	= Introduction =		= Introduction =

−	In construction the term consent to spend is sometimes referred to as an ‘if’ contract. A letter with instructions to proceed and consent to spend allows work to proceed up to a certain value while the contract itself is still being drafted. The consent to spend letter can be a legally binding contract~~. The letter will~~ pre-~~date~~ the principal contract. Once the principal contract is signed the consent to spend letter can be superseded. Consent to spend can also be captured in a ~~Letter~~ of intent.	+	In construction the term 'consent to spend' is sometimes referred to as an ‘if’ contract. A letter with instructions to proceed and consent to spend allows work to proceed up to a certain value while the contract itself is still being drafted. The consent to spend letter can be a legally binding contract that pre-dates the principal contract. Once the principal contract is signed the consent to spend letter can be superseded. Consent to spend can also be captured in a letter of intent.

	= Consent to spend letter contents =		= Consent to spend letter contents =
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	It is good practice to capture as a minimum the following items in a consent to spend letter:		It is good practice to capture as a minimum the following items in a consent to spend letter:

−	* The parties involved in the contract	+	* The parties involved in the contract.
−	* ~~The works – Description~~ of the works required ~~with clarity~~ to avoid ambiguity.	+	* A description of the works required to avoid ambiguity.
−	* A statement of the intention of the parties to enter into a formal contract	+	* A statement of the intention of the parties to enter into a formal contract.
−	* The ~~price– If~~ the price is not known, established rates can be mentioned or the administrator can ~~compile~~ specific ~~requests~~ to ensure financial control	+	* The price, or if the price is not known, established rates can be mentioned or the contract administrator can detail specific requirements to ensure financial control.
−	* The maximum expenditure limit relating to the consent to spend contract	+	* The maximum expenditure limit relating to the consent to spend contract.
−	* ~~The dates-~~ The date of possession and access to site. The completion date if known. The administrator can refer to a short-term program. There might be sectional completion requirements that can ~~also~~ be listed	+	* The date of possession and access to site.
−	* Insurance requirements	+	* The completion date if known.
−	* Termination procedure	+	* The contract administrator can refer to a short-term program.
−	* Confirmation that the contract created by the consent to spend will be ~~preceded and~~ terminated by the principle contract	+	* There might be sectional completion requirements that can be listed.
		+	* Insurance requirements.
		+	* Termination procedure.
		+	* Confirmation that the contract created by the consent to spend will be terminated by the principle contract.

−	It is advisable to capture as much ~~known~~ detail as possible in the letter of consent to spend. The letter can be a great advantage to construction program, but the risk of not capturing details or covering basic clauses can ~~have a negative effect on a construction project~~.	+	It is advisable to capture as much detail as possible in the letter of consent to spend. The letter can be a great advantage to the construction program, but the risk of not capturing details or covering basic clauses can result in problems.

	= An alternative to a consent to spend or letter of intent =		= An alternative to a consent to spend or letter of intent =

−	An employer can use a pre-construction service agreement (PCSA) if ~~he requires~~ the input of a contractor in the ~~project pre-~~construction contract. A pre-construction service agreement is a contract used ~~commonly~~ in ~~the~~ two-stage tendering ~~route~~. Two stage tendering involves the employer tendering the project on the basis of an incomplete design. A contractor is then chosen to work with the employer based on its proposal for the pre-construction second stage of the tender. The employer might want the contractor’s input on programming, ~~final~~ designs and buildability prior to issuing the construction contract. In the right circumstances, a PCSA can be beneficial to both parties and bring design improvements and costs savings, and encourage a strong working relationship. A letter of intent/consent to spend is not likely to achieve the same benefits as a PCSA. A PCSA is however a formal agreement and a small-scale project might not have the budget or program to accommodate this type of formal agreement.	+	An employer can use a pre-construction service agreement (PCSA) if they need the input of a contractor before the construction contract is in place. A pre-construction service agreement is a contract commonly used in two-stage tendering. Two stage tendering involves the employer tendering the project on the basis of an incomplete design. A contractor is then chosen to work with the employer based on its proposal for the pre-construction second stage of the tender.
		+
		+	The employer might want the contractor’s input on programming, designs and buildability prior to issuing the construction contract. In the right circumstances, a PCSA can be beneficial to both parties and bring design improvements and costs savings, and encourage a strong working relationship. A letter of intent/consent to spend is not likely to achieve the same benefits as a PCSA. A PCSA is however a formal agreement and a small-scale project might not have the budget or program to accommodate this type of formal agreement.

	= Conclusion =		= Conclusion =

−	~~There are various methods or procedures that can be implemented to help maintain a construction program.~~ A consent to spend letter can be a good tool ~~to use~~ to expedite work on site but contract administrators need to be aware of the legal implications to avoid ~~any~~ risk to the ~~construction~~ project.	+	A consent to spend letter can be a good tool to expedite work on site but contract administrators need to be aware of the legal implications to avoid unnecessary risk to the project.

−	= Related articles =	+	= Related articles on Designing Buildings Wiki =

−	* ~~[https://www.designingbuildings.co.uk/wiki/Construction_contracts~~ Construction contract].	+	* Construction contract.
−	* ~~[https://www.designingbuildings.co.uk/wiki/Contract_conditions~~ Contract conditions].	+	* Contract conditions.
−	* ~~[https://www.designingbuildings.co.uk/wiki/Essentials_of_a_contract~~ Essentials of a contract].	+	* Essentials of a contract.
−	* ~~[https://www.designingbuildings.co.uk/wiki/Letter_of_appointment~~ Letter of appointment].	+	* Letter of appointment.
	* Letter of intent		* Letter of intent
−	* ~~[https://www.designingbuildings.co.uk/wiki/Purchase_order~~ Purchase order].	+	* Purchase order.
	* Pre-construction Service Agreement.		* Pre-construction Service Agreement.
−	* [https://www.designingbuildings.co.uk/wiki/Tender_documentation Tender documentation].

	[[Category:Appointments]] [[Category:Procurement]]		[[Category:Appointments]] [[Category:Procurement]]

Editor2 at 16:26, 3 March 2020

2020-03-03T16:26:53Z

← Older revision		Revision as of 16:26, 3 March 2020
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	* Confirmation that the contract created by the consent to spend will be preceded and terminated by the principle contract		* Confirmation that the contract created by the consent to spend will be preceded and terminated by the principle contract

−	It is advisable to capture as much known detail as possible in the letter of consent to spend. The letter can be a great advantage to construction program, but the risk of not capturing details or covering basic clauses can be a ~~great risk to~~ a construction project.	+	It is advisable to capture as much known detail as possible in the letter of consent to spend. The letter can be a great advantage to construction program, but the risk of not capturing details or covering basic clauses can have a negative effect on a construction project.

	= An alternative to a consent to spend or letter of intent =		= An alternative to a consent to spend or letter of intent =

Editor2: Created page with "= Introduction = In construction the term consent to spend is sometimes referred to as an ‘if’ contract. A letter with instructions to proceed and consent to spend allows wo..."

2020-03-03T09:47:52Z

Created page with "= Introduction = In construction the term consent to spend is sometimes referred to as an ‘if’ contract. A letter with instructions to proceed and consent to spend allows wo..."

New page

= Introduction =

In construction the term consent to spend is sometimes referred to as an ‘if’ contract. A letter with instructions to proceed and consent to spend allows work to proceed up to a certain value while the contract itself is still being drafted. The consent to spend letter can be a legally binding contract. The letter will pre-date the principal contract. Once the principal contract is signed the consent to spend letter can be superseded. Consent to spend can also be captured in a Letter of intent.

= Consent to spend letter contents =

It is good practice to capture as a minimum the following items in a consent to spend letter:

* The parties involved in the contract
* The works – Description of the works required with clarity to avoid ambiguity.
* A statement of the intention of the parties to enter into a formal contract
* The price– If the price is not known, established rates can be mentioned or the administrator can compile specific requests to ensure financial control
* The maximum expenditure limit relating to the consent to spend contract
* The dates- The date of possession and access to site. The completion date if known. The administrator can refer to a short-term program. There might be sectional completion requirements that can also be listed
* Insurance requirements
* Termination procedure
* Confirmation that the contract created by the consent to spend will be preceded and terminated by the principle contract

It is advisable to capture as much known detail as possible in the letter of consent to spend. The letter can be a great advantage to construction program, but the risk of not capturing details or covering basic clauses can be a great risk to a construction project.

= An alternative to a consent to spend or letter of intent =

An employer can use a pre-construction service agreement (PCSA) if he requires the input of a contractor in the project pre-construction contract. A pre-construction service agreement is a contract used commonly in the two-stage tendering route. Two stage tendering involves the employer tendering the project on the basis of an incomplete design. A contractor is then chosen to work with the employer based on its proposal for the pre-construction second stage of the tender. The employer might want the contractor’s input on programming, final designs and buildability prior to issuing the construction contract. In the right circumstances, a PCSA can be beneficial to both parties and bring design improvements and costs savings, and encourage a strong working relationship. A letter of intent/consent to spend is not likely to achieve the same benefits as a PCSA. A PCSA is however a formal agreement and a small-scale project might not have the budget or program to accommodate this type of formal agreement.

= Conclusion =

There are various methods or procedures that can be implemented to help maintain a construction program. A consent to spend letter can be a good tool to use to expedite work on site but contract administrators need to be aware of the legal implications to avoid any risk to the construction project.

= Related articles =

* [https://www.designingbuildings.co.uk/wiki/Construction_contracts Construction contract].
* [https://www.designingbuildings.co.uk/wiki/Contract_conditions Contract conditions].
* [https://www.designingbuildings.co.uk/wiki/Essentials_of_a_contract Essentials of a contract].
* [https://www.designingbuildings.co.uk/wiki/Letter_of_appointment Letter of appointment].
* Letter of intent
* [https://www.designingbuildings.co.uk/wiki/Purchase_order Purchase order].
* Pre-construction Service Agreement.
* [https://www.designingbuildings.co.uk/wiki/Tender_documentation Tender documentation].

[[Category:Appointments]] [[Category:Procurement]]