Designing Buildings - User contributions [en]

Fee forecasting for design and construction

2014-04-30T00:19:05Z

Xela: Created page with " Fee Forecasting Fee forecasting is crucial to running a business in order to have an idea in regards our future financial position; to keep a record of potential fees. This in..."

Fee Forecasting

Fee forecasting is crucial to running a business in order to have an idea in regards our future financial position; to keep a record of potential fees. This income can be categorized into two groups, captive fees or possible fees.

Captive fees

These are fees, which are definitely going to happen at any particular time and their certainty is covered by a contractual agreement. Captive fees are therefore contractually agreed fees for current projects. A captive fee forecast can be made and will highlight the fees, which the practise plans to invoice. In addition it will be an indicator of how busy the practise will be in the medium/long term, and in doing so, measure risk; as long as our captive fees will break-even for a period of approximately six months all will be well. Unless this is the case and our captive fee forecast reveals that our income will only break even for three months then it should be considered as high risk and time for devoting efforts into encouraging for new jobs.

Possible fees

All future fees we hope to earn, and are not ‘certain’ income, should be deemed as possible fees. These can range from project bids or projects waiting for final sign-of from the client. Possible fees can be used by quantify their probability of becoming captive fees; this then allows for a possible fee forecast to be produced estimating the likely future fee levels. This will give us an idea of likely future events, for example how much time to devote in the marketing effort to ensure that new work is coming in the pipeline.

By monitoring these two it is possible to obtain a good sense of short-medium term prospects for work that can be invoiced.

Purpose of Tendering and Procedures

2014-01-05T12:54:46Z

Xela: Created page with " TENDERING == Purpose of tender == *A suitable contractor should be selected at a suitable time *The offer of a price is required from the contractor at an appropriate time *Thes..."

TENDERING
== Purpose of tender ==
*A suitable contractor should be selected at a suitable time
*The offer of a price is required from the contractor at an appropriate time
*These two events are often simultaneous, but they do not necessarily need to be
*This offer (tender) will be the basis for the ensuing contract
*There is no direct relationship between the type of tendering procedure and the form of contractual arrangement
*The tendering process marks the beginning of the contractual arrangement

== Types of tender ==

=== Standing offer ===
*Rare
*A contractor tenders for, say, such maintenance work as may be required by the employer over a specified time
*The acceptance does not create a binding contract: the employer is not bound to order any work, nor is the contractor prevented from withdrawing before the period is over
*However, if any order are placed, they must be carried out

=== Offer ===
*Usual
*An offer by the contractor to carry out the work specified in the invitation to tender
*Once the employer accepts this, it forms a legally binding contract

== Legal analysis of tenders ==

=== The parties’ obligations ===
*The employer’s request for tenders is an invitation to treat and therefore the employer is under no legal obligation to accept any tender
*Consequence: the (substantial) cost of tendering is to be borne by the contractor
*Where the preliminary work goes beyond what is normally expected, an employer may promise to pay
*A person who invites another to tender with no intention whatsoever of accepting that tender will be liable for any expenses that the latter incurs
*An employer who expressly promises to accept the lowest tender will be bound by that promise, if that tender complies with any conditions
*An employer may be under an implied obligation to give proper consideration to any tender submitted in accordance with published conditions
*Local authorities are required by the Local Government Act 1972 to have and to publicise formal contracting procedures, normally involving competitive tendering
*Local authorities are required to give reasons for their procurement decisions and are generally prohibited from taking into account non-commercial considerations in reaching those decisions

 

=== European Union control on procurement in the public sector ===
*European Treaty (which applies to all public sector contracts): prohibits discrimination within the European Union on grounds of nationality and restrictions on the free movement of goods or services
*A complex array of European Union Directives lay down rules governing the procedure for the awarding of contracts with a value greater than £4m by any public body:
#Intended contract must be published in the official journal of the European Community
#Specification must be based on European standards
#Contracts must be let by either an open or a restricted tendering procedure, which permits the selection of technically and financially competent contractors
#Negotiation possible only in exceptional cases
#Contract awarded to the lowest or most economically advantageous tenderer

Once bids have been opened, there must be no negotiation which distorts open competition

== Tendering procedures ==
*Main distinguishing feature is the extent of competition
*Increasing level of dissatisfaction with competition because all it guarantees is the lowest tender price
*Too low, and the employer may face higher costs due to contractor's insolvency
*Tender procedures have been codified by the National Joint Consultative Committee for Building (NJCC)

== Open tendering ==
*Traditional method
*Advert placed and interest contractors can apply for documentation
*Advert or documentation will state that the employer is not bound to accept the lowest tender, or indeed any tender
*It is an indiscriminate request for tenders, and there is no method of ensuring high quality building
*Preparation places unnecessary burden of time, effort and expense on industry
*Its use has been declining in the UK, but because of the effect of certain European Union legislation, its use in the public sector is increasing

== Single stage selective tendering ==
*A limited number of contractors (no more than six) are pre-selected to tender for the work
*An employer who builds regularly will have an approved list of contractors
*If the pre-selection process has been done properly, any of the contractors is satisfactory to the employer
*Therefore tenders may be considered on price alone

=== Selection of contractors ===
*A short list of suitable tenderers should be drawn up either from the employer’s approved list of contractors or from an adhoc list
*The number of tenderers invited should be a maximum of six
*One or two further names should be added to replace any firms that do not accept the preliminary invitation
*Points to be considered:
#The firm’s financial standing and record
#The firm’s recent experience of building at the required rate of completion
#The firm’s general experience and reputation in this area
#The firm’s competence and resources in respect of statutory health and safety requirements
#The firm’s approach to quality assurance procedures
#Whether the management structure of the firm is adequate for this type of contract
#Whether the firm will have adequate capacity at the relevant time
*This can be achieved by means of the NJCC Standards Forms of Tendering Questionnaire
*Lists should be periodically reviewed to exclude firms whose performance has been unsatisfactory and to allow the introduction of suitable additional firms

=== Preliminary enquiry ===
*In order that the contractors may be able to decide whether they will tender and to anticipate the demands on their tendering staff, each firm should be sent an should reply to a preliminary enquiry for invitation to tender
*It should include the following information:
*Project name
#Type and function of building
#General description of the project
#Employer’s name
#Employer’s professional team
#Location of site
#Approximate cost range
#Number of tenderers it is proposed to invite
#Nominated sub-contractors for major items
#Form of contract and any proposed amendments
#Examination and correction of bill (Alternative 1 or Alternative 2)
#Anticipated date of possession
#Period for completion of works
#Approximate date for despatch of tender documents
#Tender period
#Details of guarantee requirements
#Particular conditions applying to the contract

=== Interview ===
*After the responses to the preliminary enquiry letter have been received, each contractor suitable should be interviewed in order to:
*Determine that the forms of construction to be used will in general be suitable
*Discuss and establish the organisation of the work and the time required for tendering
*Discuss and establish (if required) the nature and extent of the design indemnity insurance to be taken out by the contractor
*Provide ay further information required by the contractor
*Make a final judgement on the competence of each firm’s competence

=== Sending out documents ===
*Tender documents will include:
#Checklist of drawings and documents
#Specification
#Tender form and instructions for their completion
#Complete sets of drawings
#Or the bills of quantities with a selection of drawings
#Pre-tender health and safety plan
#Proposed programme dates
#Specific contract terms and conditions
#Details of and bond and/or guarantees required
#Covering letter
*The covering letter should state:
#Invitation to tender (if not already sent)
#List on enclosures
#Date and place for delivery of tenders
#Whether the site is open for inspection and if so what arrangements should be made to visit
#Request for acknowledgement
*Also enclosed should be an envelop for the delivery of the tender already addressed and marked ‘tender for…’ on the face

Time for tendering
*As long as possible
*Determined in relation to the size and complexity of the job
*Four weeks should be regarded as the minimum time for tender
*Contractors tendering on a specification and drawings will need longer than when bills are supplied

The formulation of bids
*Where no bills are supplied, the tenderers must prepare their own quantities from a complete set of drawings with the guidance of the specification
*Estimating, (the contractor formulating rates for the items in the bills), does not:
#take account of the way in which the costs are incurred (brickwork on second floor is cheaper than brickwork on seventeenth floor)
#necessarily mean that the actual rates are the same as those in the in the bills
*If the contractor does not want to tender (too busy or not appropriate work), he will submit and inflated ‘cover bid’
*If the contractor is short of work he may be satisfied with a low profit or no profit at all
*If the contractor does want the job, but the contract is risky, he will add a premium to the rates
*The contractor’s cash flow has a significant effect:
#If the project is at the end of a tax year, he may reduce the rates at the beginning of a project and increase then at the end – back loading
#Or the contractor may wish to get cash quickly to meet liabilities and will therefore inflate the rates at the beginning – front loading
*Illustrates the danger of using bill rates to value variations

=== Withdrawal of tender ===
*As the contractor’s tender is merely an offer, it may be validly revoked at any time before it has been accepted
*This can cause problem for contractor’s relying on sub-contractor’s bids when formulating their own tenders

=== Opening of tenders ===
#When returned the marked envelopes will be left unopened until the time stated for delivery has passed and a check has been made that all have been delivered – if this procedure is not observed, the architect may be liable for the tenderer’s abortive expenditure
#Bills should be returned in separate envelopes and only the bill accompanying the lowest tender will be opened – the others are returned
#A list is prepared for the client in order of price, and the contract period may also be entered against the contractor’s name if this has been requested from the contractor
#As soon as any tender is accepted, all tendering contractors must be notified
#While confidentiality is important, contractors will want to know the result – therefore the architect publishes the list of tender prices without the names attached

=== Examination of a priced bill ===
*The QS will make a mathematical check and generally look through the rates for any possible serious errors or omissions in the pricing
*If there are none, the tender can be recommended for acceptance
*If mistakes are found, the architect, employer and contractor must be notified
*Under Alternative 1:
#The contractor will either be invited to stand by the tender price or to withdraw
#If he withdraws, the next lowest bid is considered
#If he stands by the tender, an endorsement should be added to the priced bills indicating that all rates and prices inserted therein by the tenderer are to be considered as reduced or increased in the same proportion as the correct total or priced items exceeds or falls short of such items
*Under Alternative 2:
#The contractor should be given the opportunity of confirming his offer or amending it to correct genuine errors
#Should he elect to amend his offer and the revised offer is no longer the lower, the offer of the firm now lowest in the competition should be examined
#If the tenderer elects not to amend his offer, an endorsement will be required as above

=== Negotiated reduction of tender ===
*Should the tender under consideration exceed the employer’s budget, the recommended procedure is for a reduced priced to be negotiated with the tenderer, based on agreed changes to the specification or the quantity of work

=== Preparing contract documents ===
*Completing the articles or agreement is left to the architect or QS
*All documents should be marked for identification and signed by both parties

== Two stage selective tendering (negotiated tendering) ==
*To separate the process involved with selection from the process for determining the pricing mechanisms
*Not to involve the contractor with responsibility for design, but to get the contractor involved in an advisory capacity before the scheme has been fully designed

=== First stage ===
*The process for the selection of the contractor and for the establishment of a level of pricing for subsequent negotiation
*Competitive selection takes place based on minimum amount of information needed to:
#Provide a competitive basis for selection
#Establish principles of layout and design
#Provide unambiguous pricing documents related to preliminary design and specification information in forms sufficiently flexible for a basis for pricing the second stage tender
#Define obligation, conditions of, and programme for second stage procedures
#State the conditions of contract
*When the first stage procedure has been completed and a contracted selected for the second stage, no contract for the execution of the work will have been entered into
*The costs incurred in preparing and submitting the first stage will be borne by the tenderers
*Tenderers should not be required to submit a response to the health and safety plan with their first stage tenders: the tenderer whose bid is most favourable should be required to submit its response as soon as possible

=== Second stage ===
*The process of finalisation by the employer’s professional team in collaboration with the selected contractor of the design and development of production drawings and the health and safety plan for the whole project and the preparation of bills of quantities for the works proceed on the basis of the first stage tender
*The result is an acceptable sum for inclusion in a contract, and completed contract documentation is prepared in conjunction with the contractor
*If the parties fail to proceed beyond the second stage, procedures, established during the first stage, will need to include equitable arrangements for reimbursement of the contractor’s participation in the second stage
*Used for complex projects

== Selective tendering for design and build ==
*The terms of any consultant switch should be communicated to the tenderers in the preliminary enquiry
*In order to limit unnecessary work by tenderers, the employer should include in his requirements all information about the site and building that is in his possession

=== ===

=== Selection of tenderers ===
*Preliminary list should comprise six to eight contractors
*Final list should (in additional to criteria outlined above) take into account:
#Whether the firm has had recent experience of designing and constructing to type of building envisaged by the Employer’s Requirements
#Whether the firm’s customary design capability is in-house and if not, what method will be used
*Final list should limited to no more than three firms, due to the high costs involved in in preparing tenders for work with contractor’s design involvement
*If two stage tendering is used, the list may be increased to no more than five firms with either one or two going through to the second stage

=== Employer’s Requirements ===
*The Employer’s Requirements should state the priority of the following items that will determine the successful tender:
#Appearance
#Functional requirements
#Capital cost
#Expected lifespan of the building
#Flexibility of use
#Quality
#Running and maintenance costs
#Time of construction
#Any other factors

=== Cost of tendering ===
*Where substantial high quality design work is required or excessive competition is introduced, it may be in the employer’s interests to offer payment fro the preparation of unsuccessful competitive tenders

=== Single stage or two stage? ===
*Most employers would benefit from a two stage procedure that would enable post-tender changes and development to the design and cost
*In exceptional circumstances where the employer’s requirements are well defined, then single stage tendering may be used

=== Extent of information ===
*A full set of drawings and specification should not be expected at tender stage
*Therefore the employer must indicate the minimum require to enable him to select a contractor
*Tenderers should be instructed to indicate in their tender the period they require to elapse between the acceptance of their tender and the commencement of work on site to enable them to complete production drawings and obtain necessary statutory approvals

=== Tender period ===
*Depends on the nature of the Employer’s requirements and whether a single stage or two stage procedure is being followed
*For most projects, the period is three to four months

=== Assessment ===
*The evaluation should be carried out in accordance with the criteria specified in the preliminary enquiry
*The best tender, which may not be the lowest, should be accepted

=== Two stage tendering ===
*The process of finalisation of the contractor’s proposals resulting in an acceptable basis for the contract
*Where the employer fails to reach an agreement with the selected contractor, it will be necessary either recommence with second stage procedures with another tenderer or invite further first stage competitive tenders

== Negotiation ==
*Newer forms of procurement (eg construction management and management contracting) demand a less adversarial approach
*The inherent flexibility demanded means no standard method for negotiating a contract
*Serial contracting: contractors are asked to bid for a project on the basis that if they build this one satisfactorily, others will follow and the same bill rates will be used - partnering
*Most effective way of selecting a contractor for non-traditional approaches
*Familiarity between employer and contractor is important factor

== Joint ventures ==
*For projects that are so complex that the distribution of liability becomes a problem
*Involves all parties taking on joint and several liability for the design and/or execution of the project
*The agreements must be carefully examined and backed up by bonds or guarantees

== Points to consider when preparing a Tender enquiry questionnaire to be sent to various contractors ==

''i) '''Tender enquiry questionnaire'''''
*''Name of firm''
*''Size of firm''
*''Turnover of firm''
*''Evidence of financial stability''
*''Location of firm''
*''Recent experience of this type of project''
*''References from previous clients/architects''
*''Recent experience of this type of time scale''
*''Health and safety records''
*''Availability of resources for that time period''
*''Information on key personnel to be working on project''
*''Management structure of firm''
*''Quality assurance procedures within the firm''
*''Details of liability insurance''

== Points to consider when preparing an agenda and objectives for a structured interview to establish a shortlist of contractors who will be invited to tender. ==

'''''Agenda for interview'''''
*''The information in the questionnaire''
*''Location of project''
*''Nature of site/ existing buildings''
*''Restrictions over site''
*''The firm’s general approach to the site conditions''
*''Description of the required retail development including cost''
*''Experience of the firm in large retail developments''
*''Discussion as to the type of contract and method of procurement that will be used''
*''Experience of the firm with this type contract and procurement method''
*''Whether there will be any contractor’s design''
*''Health and safety records and initial plan for the project''
*''Resource available for the project''
*''Initial thoughts as to programme and phasing''
*''Procedure to be adopted for the examination and correction of any errors in the tender''
*''Approximate date for despatch of tender documents and tender period''
*''Any additional questions that the firm may have''

=== ''Objectives'' ===
*''To establish whether the firm has the requisite skill and experience for this type of development''
*''To judge their competence''
*''To ascertain whether they have the adequate resources necessary to carry out the project''
*''To meet the firm face to face''
*''To give the firm an opportunity to ask any questions about the project, client and design team''

=== ''List of attendees'' ===
*''Client''
*''Architect and/or contract administrator and/or quantity surveyor''
*''Director of construction company''
*''Key personnel who would be involved with project''

Bonds and/or parent company guarantees are commonly used to protect the financial interests of the employer.

=== ''What bonds?'' ===
*''Bonds are financial assurances that can be purchased from finance institutions such as banks or insurance company by contractors to back up their tenders''

=== ''What are parent company guarantees?'' ===
*''Parent company guarantees are financial guarantees under which the contractual performance of one company within a corporate group is underwritten by other members of the group to back up the contractor’s tender''

=== ''In what ways do they provide security?'' ===
*''Bonds and/or guarantees can be provided to guarantee every aspect of the contractor’s performance''
*''They provide security for the employer in that in the event of insolvency of the contractor''
*''Bonds can be provided in return for early release of retention money, so that the employer is protected against any defects that he may later discover''
*''Advance payment bonds protect the client in the event that the contractor fails to fulfil obligations that have already been paid for''
*''Bonds can also be requested by contractors from subcontractors to protect their ability to deliver the project for the tender sum in the event that their tender was based upon the subcontractor’s tender and the subcontractor has subsequently withdrawn ''

=== ''How are the requirements for these included in the tender documents?'' ===
*''The need for a bonds and/or parent company guarantee would be stated in the preliminary enquiry for invitation to tender''
*''Details of the bonds and/or parent company guarantees would be outlined in the tender package''

Types of risk in construction projects

2014-01-05T12:35:45Z

Xela:

RISK

== Nature of risk in construction ==
*taking a risk involves a hazard combined with volition or will.
*different types of building contract will allocate risk in different quarters.
*even if a contract is silent on a particular risk, that risk will still lie with one party or the other

== Risk and price ==
*wherever risk is shifted from the contractor to the owner, there should be a counterbalancing advantage of price to balance the risk assumed by the owner.
*any discussion about whether or not a particular risk should be included in the price is a discussion of policy, not of ‘fairness’, ‘morality’ or ‘justice’.

== Types of risk in construction projects ==

Pure and particular risk
*damage to persons and property (fire, storm, water, collapse, subsidence, vibration, etc.)
*often a contractual obligation to take out insurance cover against these risks

Fundamental risk
*war, nuclear pollution and supersonic bangs
*government policy on taxes, labour, safety or other laws
*malicious damage
*industrial disputes
*all the subject of statutory liability and no insurance cover is normally available or needed

Speculative risk
*ground conditions
*exceptionally adverse weather
*unforeseeable shortages of labour or materials
*other similar matters beyond the control of the contractor
*apportioned in advance as decided by the parties to the contract

 

Other types of risk
*delays and disputes (possession of site, late supply of information, inefficient execution of work, etc.)
*poor direction, supervision or communication
*delays in payment
*delays in resolving disputes.

== Dealing with risk ==
*'''Identify the risk:''' linked to a clear statement of the client’s priorities for a project
*'''Analyse the risk:''' in terms of likely frequency of occurrence and severity of impact
*'''Respond to the risk:''' make risks explicit so that decisions can be taken as to who should bear them

== Transfer of risk ==
*contractual clauses are intended to transfer risks
*when laying-off risks, weigh up frequency of occurrence against level of premium paid for the transfer
*unwise to pass a risk that is difficult to assess to the contractor as he will either increase their prices to deal with it, or disregard it when preparing bid and then find himself in difficulty later

== Acceptance of risk ==
*client should carry highly unpredictable and poorly defined risks (war, earthquakes, etc.): alternative will be unacceptably inflated tenders

== Avoidance of risk ==
*redefine a project
*clarification of responsibilities, remuneration, and expenditure at the beginning of the consultant’s appointment will help avoid problems

== Insuring against risk ==
*most standard form contracts insist on certain types of insurance, e.g. insurance against, fire, loss of liquidated damages and professional indemnity insurance

== Doing nothing about risk ==
*either none of the project team considers the risk
*or consultants considered the risk and decided that they already lie with those who could best control them

== Allocating risk through methods of payment ==
*'''Fixed price:''' items paid for on basis of a contractor’s predetermined estimate
*'''Cost reimbursement:''' items paid for on basis of what the contractor spends in executing the work
*not independent but contract will be described in terms of dominant method.

== ''categories of risk that require assessing when deciding on a procurement method.'' ==

The first category of risk is often referred to as 'pure and particular risk'. It includes damage to persons and property (such as fire, storm, water, collapse, subsidence, vibration, etc.) Contract conditions often make it a contractual obligation to take out insurance cover against these risks.

The second category is 'fundamental risk'. This includes external factors such as: damage due to war, nuclear pollution and supersonic bangs; government policy on taxes, labour, safety or other laws; malicious damage; and industrial disputes. Such incidents are all the subject of statutory liability and no insurance cover is normally available or needed.

The third category, often referred to as 'speculative risk', is something which can be apportioned in advance as decided by the parties to the contract. This may include losses in time and money, which result from unexpected ground conditions, exceptionally adverse weather, unforeseeable shortages of labour or materials, and other similar matters beyond the control of the contractor.

There are also risks of losses of time and money due to: delays and disputes (possession of site, late supply of information, inefficient execution of work, etc.); poor direction, supervision or communication; delays in payment; and delay in resolving disputes. 

== ''The balance of risk for Design and Build, Traditional Lump Sum and Management forms of contract. '' ==

 
*''Design and Built''

There is a single point of responsibility with the contractor for both the design of the project and the operations on site. As such, most of the risk lies with the contractor, especially as the contract is let on a lump sum basis. However, risk is increasingly transferred back to the employer as more preparatory design work is carried out before the contract is let.
*''Traditional Contracts'' 

With traditional lump sum contracts, the intention is that there should be a fair balance of risk between the parties. As the diagram shows, the employer is responsible for the design and the contractor for the operations on site (although this is complicated when nominated sub-contractors and suppliers are included). The balance can be adjusted as required, but the greater the risk assigned to the contractor, the higher the tender figure is likely to be. The risk to the employer is lessened by the contract being let on a lump sum basis, although this will rise if fluctuations are included. 

 
*Management Contracting

Under management contracting the balance of risk is most onerous with the employer. Due to separate works contracts being let, the employer may develop the design during construction. Hence there is no certainty about cost or time. However, most of the risk of delays and defects are associated with the responsibility for the works contract. In some cases the management contractor may absorb this risk and put up the price of the contract, although this may compromise his desired position of impartiality. 

== ==

[[Category:Articles_needing_more_work]]

Types of risk in construction projects

2014-01-05T12:35:22Z

Xela: Created page with " RISK == Nature of risk in construction == *taking a risk involves a hazard combined with volition or will. *different types of building contract will allocate risk in different ..."

RISK
== Nature of risk in construction ==
*taking a risk involves a hazard combined with volition or will.
*different types of building contract will allocate risk in different quarters.
*even if a contract is silent on a particular risk, that risk will still lie with one party or the other

== Risk and price ==
*wherever risk is shifted from the contractor to the owner, there should be a counterbalancing advantage of price to balance the risk assumed by the owner.
*any discussion about whether or not a particular risk should be included in the price is a discussion of policy, not of ‘fairness’, ‘morality’ or ‘justice’.

== Types of risk in construction projects ==

Pure and particular risk
*damage to persons and property (fire, storm, water, collapse, subsidence, vibration, etc.)
*often a contractual obligation to take out insurance cover against these risks

Fundamental risk
*war, nuclear pollution and supersonic bangs
*government policy on taxes, labour, safety or other laws
*malicious damage
*industrial disputes
*all the subject of statutory liability and no insurance cover is normally available or needed

Speculative risk
*ground conditions
*exceptionally adverse weather
*unforeseeable shortages of labour or materials
*other similar matters beyond the control of the contractor
*apportioned in advance as decided by the parties to the contract

 

Other types of risk
*delays and disputes (possession of site, late supply of information, inefficient execution of work, etc.)
*poor direction, supervision or communication
*delays in payment
*delays in resolving disputes.

== Dealing with risk ==
*'''Identify the risk:''' linked to a clear statement of the client’s priorities for a project
*'''Analyse the risk:''' in terms of likely frequency of occurrence and severity of impact
*'''Respond to the risk:''' make risks explicit so that decisions can be taken as to who should bear them

== Transfer of risk ==
*contractual clauses are intended to transfer risks
*when laying-off risks, weigh up frequency of occurrence against level of premium paid for the transfer
*unwise to pass a risk that is difficult to assess to the contractor as he will either increase their prices to deal with it, or disregard it when preparing bid and then find himself in difficulty later

== Acceptance of risk ==
*client should carry highly unpredictable and poorly defined risks (war, earthquakes, etc.): alternative will be unacceptably inflated tenders

== Avoidance of risk ==
*redefine a project
*clarification of responsibilities, remuneration, and expenditure at the beginning of the consultant’s appointment will help avoid problems

== Insuring against risk ==
*most standard form contracts insist on certain types of insurance, e.g. insurance against, fire, loss of liquidated damages and professional indemnity insurance

== Doing nothing about risk ==
*either none of the project team considers the risk
*or consultants considered the risk and decided that they already lie with those who could best control them

== Allocating risk through methods of payment ==
*'''Fixed price:''' items paid for on basis of a contractor’s predetermined estimate
*'''Cost reimbursement:''' items paid for on basis of what the contractor spends in executing the work
*not independent but contract will be described in terms of dominant method.

== ''categories of risk that require assessing when deciding on a procurement method.'' ==

The first category of risk is often referred to as 'pure and particular risk'. It includes damage to persons and property (such as fire, storm, water, collapse, subsidence, vibration, etc.) Contract conditions often make it a contractual obligation to take out insurance cover against these risks.

The second category is 'fundamental risk'. This includes external factors such as: damage due to war, nuclear pollution and supersonic bangs; government policy on taxes, labour, safety or other laws; malicious damage; and industrial disputes. Such incidents are all the subject of statutory liability and no insurance cover is normally available or needed.

The third category, often referred to as 'speculative risk', is something which can be apportioned in advance as decided by the parties to the contract. This may include losses in time and money, which result from unexpected ground conditions, exceptionally adverse weather, unforeseeable shortages of labour or materials, and other similar matters beyond the control of the contractor.

There are also risks of losses of time and money due to: delays and disputes (possession of site, late supply of information, inefficient execution of work, etc.); poor direction, supervision or communication; delays in payment; and delay in resolving disputes.
 

== ''The balance of risk for Design and Build, Traditional Lump Sum and Management forms of contract. '' ==
 ==
*''Design and Built''

There is a single point of responsibility with the contractor for both the design of the project and the operations on site. As such, most of the risk lies with the contractor, especially as the contract is let on a lump sum basis. However, risk is increasingly transferred back to the employer as more preparatory design work is carried out before the contract is let.
*''Traditional Contracts'' 

With traditional lump sum contracts, the intention is that there should be a fair balance of risk between the parties. As the diagram shows, the employer is responsible for the design and the contractor for the operations on site (although this is complicated when nominated sub-contractors and suppliers are included). The balance can be adjusted as required, but the greater the risk assigned to the contractor, the higher the tender figure is likely to be. The risk to the employer is lessened by the contract being let on a lump sum basis, although this will rise if fluctuations are included. 

 
*Management Contracting

Under management contracting the balance of risk is most onerous with the employer. Due to separate works contracts being let, the employer may develop the design during construction. Hence there is no certainty about cost or time. However, most of the risk of delays and defects are associated with the responsibility for the works contract. In some cases the management contractor may absorb this risk and put up the price of the contract, although this may compromise his desired position of impartiality. 

== '' '' ==

[[Category:Articles_needing_more_work]]

Responsibility for building design

2014-01-05T12:27:18Z

Xela: Created page with " = RESPONSIBILITY FOR DESIGN = == Design duties in law == === Standard of liability === *A guarantee of ‘fitness for purpose’ will fairly readily be implied into a design ..."

= RESPONSIBILITY FOR DESIGN =

== Design duties in law ==

=== Standard of liability ===
*A guarantee of ‘fitness for purpose’ will fairly readily be implied into a design and build package deal contract
*Under such a contract the contractor will be strictly liable to the client for any defect resulting from an error of design
*If the design has not been carried out in-house by the main contractor, but has been subcontracted to either an architect or a specialist sub-contractor, the main contractor will seek to pass liability down the line to the actual designer
*This can only be done if the designer’s liability on the sub-contract is at the same level as the contractor’s liability on the main contract
*While it may be easy for a court to imply the higher standard of obligation into a package deal contract, this cannot override any contrary express terms
*It should be noted that both JCT CD 98 and JCT CDPS 98 make it clear that the main contractor’s liability goes no further than that which would be incurred by an architect or other appropriate professional designer holding himself as competent to take on work for such design
*For traditional contracts, the court is highly unlikely to hold the main contractor responsible for a defect resulting from the nominated sub-contractor’s design
*It is very important for the employer to ensure that the sub-contractor undertakes direct design responsibility by entering into a collateral warranty

=== Duration of liability ===
*The architect remains under a continuing responsibility beyond the signing of the contract to see that the design will work
*This obligation probably lasts through to the issue of the final certificate

=== Techniques and materials ===
*Where an architect specifies materials, there will be no implied warranty from the contractor that the materials used will be fit for their purpose
*Therefore it is important for the architect to ensure the suitability of any new product to be specified
*It would be sensible to obtain some collateral warranty from the supplier as to the product’s performance if possible

=== ===

=== Compliance with statutory requirements ===
*A designer impliedly undertakes only to use professional skill and reasonable care and does not warrant that the design will not contravene any relevant legal principle, however
*Where traditional contracts are used responsibility for a building which contravenes the law will usually fall upon the designer rather than the builder
*JCT 98 Clause 6.1.1: the contractor is generally responsible for ensuring that all statutory rules are complied with, but
*JCT 98 Clause 6.1.5: a contractor who has merely worked in accordance with the contract drawings or bills is protected from that liability
*This is subject top the proviso that upon discovering any discrepancy between these documents and the legal requirements, the contractor immediately notifies the contract administrator
*JCT CD 98 Clause 6: gives no such protection – the contractor must bear any cost involved in making the work comply with the law, even when the employer’s requirements are at fault
 
== Legal responsibility for design ==

=== Architect ===
*The overall responsibility for the design of the project will usually be borne by the architect if there is one
*An architect cannot delegate any part of the design work
*An architect who lacks the ability or expertise to carry out part of a design job has three choices:
#To refuse the commission altogether
#To persuade the employer to employ a specialist for that part of the work
#To employ and pay for a specialist personally, knowing that any liability for defective design can then be passed along the chain of contracts
*The complexity of construction technology has meant that the employer frequently gives the architect the authority to delegate specified parts of the design and it may even be implied from the circumstances of the case
*In recommending the appointment of a particular specialist architects owe their clients the usual duty to use reasonable skill and care
*They will not automatically be responsible for the defaults of the people they recommend but if their recommendations are negligent they may become liable for their clients’ losses
*When appointing a specialist, he architect’s responsibility will normally be confined to directing and co-ordinating the expert’s work
*However, if a problem arises the architect is not entitled to rely blindly on the expert on matters which should have been apparent to him, but must warn the client

=== Contractor ===
*Under normal circumstances the contractor’s responsibility is merely to build in strict accordance with the designer’s specification
*However, contractors and sub-contractors tend to take on a measure of design responsibility in the following ways:
*Where the contract documents do not give sufficiently fine detail – this may become a workmanship issue, but a contractor who uses initiative in such circumstances instead of seeking an architect’s instruction will incur responsibility for any defects that ensue
*Contractors and sub-contractors are often asked their opinion – if such advice is given a duty of care arises
*A term is often implied into contracts requiring the contractor to warn the employer of any defects in design
*Where contractor, sub-contractors or suppliers are required to produce drawing for the architect’s approval, any matters of design that are included may be a source of liability – this is despite the possibility that the architect may also be liable
*Apart from these hidden forms of liability there are certain situations in which a contractor specifically undertakes responsibility for design as well as construction
*JCT 98 Clause 42: performance specified work makes provision for the contractor to assume some design responsibility for part of the work
*Specification has two aspects:
#The decision about the required performance
#The way in which the performance will be achieved
*In performance specified work the contractor undertakes the second part

=== Sub-contractor ===
*The direct warranty agreement NSC/C which is entered into between the nominated sub-contractor and the employer does not warrant that the sub-contract works will be fit for purpose, but merely that the sub-contractor will exercise reasonable skill and care
*JCT 98Clause 35.21 provides that the main contractor shall not be responsible to the employer for anything contained in NSC/C

[[Category:Articles_needing_more_work]]

ARB code of conduct

2014-01-05T12:21:10Z

Xela: Created page with " == Codes of Professional Conduct == *Codes are devised in the interest of clients and less directly in the interests of its members through the maintenance of the status of the..."

== Codes of Professional Conduct ==
*Codes are devised in the interest of clients and less directly in the interests of its members through the maintenance of the status of the profession in the eyes of society
*The integrity of purpose of the codes and the impartiality of their enforcement is crucial to the public's perception of the profession
*The requirements of the codes change and evolve in response to changing circumstances and attitudes and emerging economic, political and social pressures
*They have to reflect the attitudes of the members and the consequences of legislation and litigation, and expectations of an increasingly sophisticated clientele
*Architects in the UK are subject to the CODE of Professional conduct and Practice of the Architect's Registration Board
*In addition architects can choose to join other professional bodies such as the RIBA and become subject to their codes
*Failure to comply with the ARB code could result in the removal of the person's name from the register, terminating the person's right to use the title 'architect', and possibly leading to the person's loss of livelihood
*Failure to comply with the institution's code may lead to suspension or loss of membership, but provided that the person is not in breach of the ARB code, the right to practise under the title of 'architect' remains
*The extent to which a person feels that it is necessary to take up and retain the right to title or to continue institutional membership is a matter for the commercial and professional judgement of the individual

== ARB Code of Professional Conduct and Practice ==
*Consists of an Introduction, twelve Standards, and Guidance notes

== The Introduction ==
*The architect is expected to act competently and with integrity in carrying out professional work
*Although a particular course of conduct is not mentioned in the code, it does not mean that it could not lead to disciplinary proceedings: there is a need to have regard to the spirit of the code

Cases of criminal convictions that could be materially relevant to an architect's fitness to practise, if:
*It constitutes an offence under the Architects Act 1996 or other legislation directly affecting architects
*It arises directly out of his professional activities
*It results in a sentence of imprisonment, whether suspended or not
*It constitutes an offence or dishonesty
*It is otherwise of a nature which calls into question the architect's integrity

If the architect's duty as an employee conflicts with the architect's duty under the code, the primacy of the code is stressed and it emphasises that in the last resort, the architect must withdraw from the work

== The Standards ==
*'''Standard 1''': Architects should at all times act with integrity and avoid any actions which are inconsistent with their professional obligations
*'''Standard 2''': Architect's should only undertake professional work for which they are able to provide adequate professional, financial and technical competence and resources
*'''Standard 3''': Architects should only promote their professional services in a truthful and responsible manner
*'''Standard 4''': Architects should carry out their professional work faithfully and conscientiously and with due regard to any relevant technical and professional standards
*'''Standard 5''': In carrying out or agreeing to carry out professional work architects should pay due regard to the interests or anyone who may reasonably be expected to use or enjoy the products of his work
*'''Standard 6''': Architects should maintain their professional service and competence in areas relevant to their professional work and discharge the requirements of any engagement with commensurate knowledge and attention
*'''Standard 7''': Architects should preserve the security of monies entrusted to his care in the course of their practice or business
*'''Standard 8''': Architects should not undertake professional work without adequate and appropriate professional indemnity cover
*'''Standard 9''': Architects should ensure that their personal and professional finances are managed prudently
*'''Standard 10''': architects should promote the Standards set out in this Code
*'''Standard 11''': Architects should organise and manage their professional work responsibly and with regard to the interests of their clients
*'''Standard 12''': Architect should deal with disputes or complaints concerning their professional work or that of their practice or business promptly and appropriately

== RIBA Code of Conduct ==
*Latest version came into effect in April 1997
*Consists of: a Preface, three Principles, Standard of Professional Performance, and Member's Rules for Clients' Accounts

== Preface ==
*Objectives of the RIBA: 'the advancement of architecture and the promotion of the acquirement of knowledge of the Arts and Sciences connected therewith'
*Objectives of the Code of Professional Conduct: 'the promotion of the standard of professional conduct, or self-discipline, required of Members of the Royal Institute in the interests of the public'
*Members are required to act in the spirit of the code as well as its precise terms
*In meeting their obligations under the code, members are expected to have due regard to the need to conserve and enhance the quality of the environment, its natural resources and cultural heritage
*A member found in breach of the code is liable to reprimand, suspension or expulsion

== The Principles ==
*'''Principle 1''': A member shall faithfully carry out his duties applying his knowledge and experience with efficiency and loyalty towards his client or employer, and being mindful of the interests of those who may be expected to use or enjoy the product of his work
*'''Principle 2''': A member shall, at all times, avoid any action or situation which is inconsistent with his professional obligations or which is likely to raise doubts about his integrity
*'''Principle 3''': A member shall in every circumstance conduct himself in a manner which respects the legitimate rights and interests of others

== Standard of Professional Performance ==
*Devised as a level of competence which the RIBA requires its members and their practices to uphold in the interests of clients and the reputation of the profession
*Its primary objective is to offer advice to its members who may find themselves in difficulty

It is supported by eight undertakings concerning the carrying out of work honestly, competently, diligently, and expeditiously in accordance with the time scale and agreed cost limits
*The fulfilment of CPD obligations
*When employing other members, the allowance of time for them to fulfil their CPD obligations
*The operation of a formal internal client's complaints procedure
*The arrangement of appropriately qualified persons to run offices and to administer contracts during periods of absence
*The taking of appropriate advice when needed
*The sole practitioners establishment of contacts with other members
*Proper regard for the experience and capability of staff when delegating responsibility
*The need to ensure that untrue claims to experience are not made and that commissions are not accepted without the necessary skills and experience being available

Feasibility studies for construction projects

2014-01-05T12:02:30Z

Xela:

Feasibility studies do not involve 'design' as such. They are preliminary studies whose purpose is to:
*Establish whether the project is viable.
*Assist in the development of the strategic brief.
*Aid in the identification of feasible options.

Feasibility studies might consider:
*Planning issues.
*Potential for requiring an environmental impact assessment.
*Other legal / statutory approvals.
*Analysis of the budget relative to client requirements.
*Assessment of the potential to re-use existing facilities or to do nothing.
*Assessment of any site information provided by the client.
*Site appraisals, including geotechnical studies.
*Considering different solutions to accessing potential sites.
*Analysis of accommodation that might be included or excluded.
*Assessment of the possible juxtaposition of accommodation.
*Advice for the client on operation and maintenance considerations.
*Stacking diagrams.
*Appraisal of servicing strategies.
*Programme considerations.

For detailed descriptions of the tasks performed during the feasibility stage see the free work plans:
*Traditional contract: feasibility studies.
*Design and build: feasibility studies.
*Public project: feasibility studies.
*Construction management: feasibility studies.
*Management contract: feasibility studies.

 

= Feasibility and the Client =

You should recommend to a client that a feasibility should be carried under the following circumstances:

*''To find out whether what the client wants is feasible to build''
*''A wide range of issues should be investigated relating to the proposed development''
*''The information discovered should be presented in a structured way so that client can decide whether or not to proceed ''
*''Various consultants and statutory authorities may be considered when carrying out the study ''
*''I would recommend to the client that one should be carried out when project is large and/or complex, or where there is some doubt or controversy regarding the type of development''
*''Formal feasibility studies may not be necessary for small or straightforward projects''

= Topics of consideration when Producing a Feasibility study =

*'''''Site location and access''''' - ascertain whether it is possible to link the site to the road system, it is near any areas of outstanding natural beauty or interfere with any watercourses?
*'''''Uses of adjoining land''''' - is the use compatible with surrounding uses?
*'''''Easements and restrictive covenants''''' - can restrict development
*'''''Planning issues''''' - is there a LDP or SP that dictates the nature of the development? Are the uses permitted? Is it in an Enterprise Zone or Simplified Planning Zone?
*'''''Geological issues''''' - as reclaimed land, is it stable? Will the development require excessive foundations? Is there contamination?
*'''''Services''''' - can the existing services be extended, relocated or upgraded?
*'''''Grants''''' - are any available? 
*'''''Design possibilities''''' '''- '''is a satisfactory arrangement on site possible for such a tight site?
*'''''Cost '''''- What is the outline budget? 
*'''''Specification''''' - What level is required?
*'''''Programme '''''- What is the time scale?
*'''''Procurement routes '''''- Which are appropriate for this type of development?

 

Find out more

=== Related articles on Designing Buildings Wiki ===
*Briefing documents.
*Business case.
*Concept design.
*Development appraisal.
*Environmental Impact Assessment.
*Options review report.
*Planning permission.
*Programme.
*Site appraisals.
*Site information.
*Statutory approvals.
*Strategic brief.

=== External references ===
*[http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/Feasibility_Study_Template.doc OGC public sector feasibility study template.]

[[Category:Design]]
[[Category:Property_development]]
[[Category:Cost_/_business_planning]]

Party Wall Act

2014-01-05T11:45:36Z

Xela:

The [http://www.legislation.gov.uk/ukpga/1996/40/contents Party Wall etc. Act] establishes a procedure for carrying out work to walls, boundary walls, party structures (such as floors) and excavations within 3 or 6 metres of a neighbouring building or structure (depending on the depth of the hole or of the proposed foundations).

The Act requires that anyone carrying out such works must give notice of their intentions to adjoining owners. It is best to discuss the works in person with adjoining owners before serving them with a formal written notice.

The formal notice should include:
*The date of the notice.
*The name and address of the owners of the building that will be worked on (including joint owners).
*The address of the building that will be worked on.
*A description of the proposed works.
*When it is proposed that the works will start (which must be at least two months after the date of the notice, or one month for excavations or building up against or astride the boundary line).

If the adjoining owner does not agree to the proposed works, or if changes to the proposed works cannot be agreed, or if they do not respond within 14 days, a dispute is deemed to have arisen. An agreed surveyor should then be appointed to make an impartial award. Alternatively, both parties can appoint a surveyor and they will select a third surveyor who will be appointed if they cannot reach agreement. There is no definition of who can be a surveyor, but it should not be the same person that will supervise the works.

The award will set out the works that can be carried out, who will pay the fees for the preparation of the award and inspection of the works to ensure that they comply with the works, and who will pay for the works. If the work is solely for the benefit of the building owner, then they will usually be required to pay the fees and the cost of the works.

Parties have 14 days to appeal to the county court if they disagree with the award.

If the adjoining owner does not co-operate, the building owner can appoint a surveyor on their behalf.

The Act allows access to the adjoining property for the purposes of carrying out the works whether the adjoining owner gives permission or not, however they must be given 14 days notice.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Appointment.
*Planning permission.
*Statutory approvals.
*Statutory authorities.
*Trespass.

=== External references ===
*[http://www.communities.gov.uk/publications/planningandbuilding/partywall Department for Communities and Local Government guidance on party walls].
*[http://www.legislation.gov.uk/ukpga/1996/40/contents The Act in full.]

= The Party Wall Act 1996 =
*Sets out procedure for serving Notices for the following works:
*Building along the line of junction of the boundary which is not currently built on other than to the extent of a boundary wall (not being the wall of the building)
*Carrying out works to a party structure/party wall/party fence wall, such as underpinning, demolishing and rebuilding, raising, removing chimney breasts, cutting in to install beams, injecting a damp-proof course, columns, etc.
*Excavating or excavating to construct new foundations within 3 metres of an adjoining building and to a greater depth than the foundations of that adjoining building or structure
*If one is excavating or excavating to construct foundations within 6 metres of an adjoining building or structure and to a depth that would intersect a 45° line drawn downwards from the next door's footings.

== Definitions ==

Party Wall
*Section 20a: A wall which forms part of a building and stands on lands of different owners to a greater extent that the projection of any artificially formed support on which the wall rests
*Section 20b: So much of a wall, not being a wall referred to in Section 20a above, as separates buildings belonging to different owners

Party Structure
*Party wall, party floor, partition or other structure separating buildings or parts of buildings approached solely by separate staircases or separate entrances

Part Fence wall
*A wall which does not form part of a building but stands astride the boundary

== Notices ==

Known as a Party Structure Notice, Line of junction notice, or a Foundation Notice

Must state:
*The name and address of the building owner
*The nature and particulars or the proposed works
*The date on which the proposed works will begin

A Foundation Notice must be accompanied by plans and sections showing:
*The site and depth of any excavation the building owner proposes to make
*If he proposes to erect a building or structure on the site

A Line of Junction Notice must describe the intended wall

Time scale
*A Party Structure Notice must be served at least two months before the works are due to start
*A Foundation Notice and Line of Junction Notice must be served at least one month before
*Works cannot start if an award is yet to be agreed
*Notices must re-served after 12 months if an award has not been agreed within this time
*An adjoining owner has fourteen days to dissent or consent, otherwise he will be deemed to have dissented by default
*Thereafter a dispute arises and surveyors must be appointed to settle the matter by an award

== Surveyors ==
*The parties can agree the appointment of one surveyor: 'agreed surveyor'
*The adjoining owner can appoint their own surveyor
*The two surveyors must then appoint a third surveyor who will adjudicate
*If an adjoining owner fails to respond to the notice, the building owner can appoint a survey for the adjoining owner
*No specific qualification is needed by the surveyor, but knowledge and expertise necessary
*The surveyor's duty to in his award to determine the right for the works to be carried out, the time and manner of executing this work and any other matter arising out of or incidental to the dispute, including the costs of making the award
*Most important aspect of the award is the Schedule of Condition taken of the adjoining property or land

== The Award ==
*Once the award is agreed, it is published to the owners who have fourteen days in which to appeal against the award in the County Court if they feel it has been made improperly
*The surveyors decide who pays the fees for agreeing the award and any other costs arising from it
*It is normally the building owner who bears the cost because the works will be for his benefit
*If there are works which are necessary on account of defect or want of repair, then the costs will be apportioned

== The Building Owner's Rights ==
*A building owner has the right to enter the land of the adjoining owner for the purpose of executing any works under the Act
*This could include the erection of scaffolding
*If an adjoining owner fails to give access, then he would be guilty of an offence
*If a building owner proposes to reduce the height of a party wall or party fence to no less than 2 metres an adjoining owner can serve a counter-notice and insist that the wall is left at a greater height but the adjoining owner must bear the cost of this
*The Act permits the building owner to chase into an adjoining owner's wall to install a flashing or other weatherproofing of a wall erected against the adjoining owner's wall
*In the event of damage, the adjoining owner can either insist that the building owner make good that damage, or can request payment in lieu, with the amount determined by the surveyors
*The building owner is responsible for making good or paying for the damage, not the contractor
*The building owner must take all reasonable measures to minimise any inconvenience to the adjoining owner
*Where the adjoining owner may be vulnerable if the building owner does not honour his obligations, he can request security for expenses

[[Category:Construction_management]]
[[Category:Other_legislation]]
[[Category:Property_law]]
[[Category:Property_development]]

Management contractor

2014-01-05T08:03:17Z

Xela:

NB for a detailed description of the sequence of tasks necessary on a management contract, see the free work plan: management contract: outline work plan.

----

Management contracting is a procurement route in which the works are constructed by a number of different works contractors who are contracted to a management contractor. The management contractor is generally appointed by the client early in the design process so that their experience can be used to improve the cost and buildability of proposals as they develop, as well as to advise on packaging (and the risks of interfaces). It also enables some works contracts to be tendered earlier than others, and sometimes, even before the design is completed (for example piling might commence whilst the detailed design of above ground works continues). This can shorten the time taken to complete the project, but does mean that there will be price uncertainty until the design is complete and all contracts have been let.

Management contracting differs from construction management in that management contractors contract works contractors direct, whereas construction managers only manage the trade contracts, the contracts are placed by the client. In legal terms the management contractor is acting as a principal whereas the construction manager is acting as an agent. This means that on a management contract, the client only has one contract to administer (whereas with construction management there can be many contracts for the client to administer), but they might want warranties from the works contractors so that they can make a direct claim against them, for example, if the management contractor becomes insolvent.

The agreement between client and management contractor is likely to cover both pre-construction and construction activities, with a notice to proceed between the two, before which works contracts cannot be let. Collateral warranties are also likely to be required (for example for purchasers, tenants or funders). In addition the client is likely to define the works contract terms and any requirement for works contract warranties.

There is a body of opinion that believes that if a management contractor operating on a cost plus fee arrangement pursues a works contractor in court for non-performance, the management contractor is unable to prove loss and damages. This is because the loss is simply passed on to the client, and so it is the client that has incurred the damage. This has increased the tendency for clients to require direct warranties from each works contractor.

A management contractor might be reimbursed on the basis of fixed or variable costs (the works contract costs) plus either a percentage fee, a fixed fee, or on a target-cost basis. The terms of the appointment must be clear about what is to be provided by the management contractor (such as the provision of site facilities) and whether activities constitute pre-construction or construction services.

The services of a management contractor might include:
*Advising on the development of the brief (if appointed at this stage).
*Advising on appointments (such as site inspectors).
*Advising on the feasibility, interfaces, buildability, cost and programming of the design.
*Advising on statutory approvals.
*Defining key performance indicators for works contractors.
*Advising on the need for mock ups, samples, tests and inspections.
*Acting as the principal contractor.
*Cost planning and cost control.
*Preparing a construction programme and defining methods of working on site.
*Advising on the packaging of production information.
*Tendering works contracts.
*Consenting to sub-contracting of work by works contractors.
*Arranging for site accommodation, welfare facilities, fences, hoardings, roads and walkways, drainage, power and water supply.
*Co-ordinating setting out.
*Arranging labour for certain site activities (such as cleaning).
*Managing site inspectors.
*Co-ordinating the release of information.
*Managing and co-ordinating works contracts, including acting as contract administrator, carrying out inspections, issuing instructions and certificates etc.
*Co-ordinating the work of statutory undertakers.
*Witnessing tests and co-ordinating commissioning.
*Collating as-built information, building owner's manual, building users handbook, project handbook, health and safety file, pre-construction information, site waste management plan and construction phase plan.
*Monitoring key performance indicators.
*Managing the site.
*Chairing site progress meetings and preparing progress reports for the client.

A decision needs to be made as to whether the client wishes to retain the services of both an independent cost consultant and a management contractor or to transfer cost planning, reporting and cost control as a service to be provided by the management contractor. A judgement has to be made on the competence and experience of the management contractor's proposed quantity surveying and cost estimating team and whether the client has a competent individual to police the financial aspects of the management contractor’s consultancy agreement. Sometimes, cost consultants who were appointed prior to the concept stage, advising on budgets and design concepts, have been retained because they have the confidence of the design team and client.

The most important aspect of selecting the management contractor is the quality and cost of the project management team they put forward. The team leader, the financial manager and the planner are crucial throughout the process as is the field production manager during the construction stage. The management contractor's staff costs during construction are likely to be between 5% and 7% of construction costs, but the quality and effectiveness of staff could easily change the financial outcome of entire project by 10%.

A mock meeting with consultants and the proposed management contractor's senior project team members can be an effective means of discovering how a team performs under pressure. Obviously this should only be done when the candidates have been whittled down to two or three. This technique often produces a unanimous verdict in terms of selection.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Collateral warranties.
*Construction manager.
*Contract.
*Contract administrator.
*Free work plan: management contract: outline work plan.
*Key performance indicators.
*Open-book accounting.
*Procurement route.
*Tender.
*Trade contractor.
*Two-stage tender.
*Works contractor.

== General ==
*Client engages the management contractor to participate in the project at an early stage, contribute construction expertise to the design and manage the construction
*The management contractor is not employed for the undertaking of the works
*Management contracting is a procurement method of 100% sub-contracting
*The opportunity for the contractor to become part of the design team arises not from the contract structure, but from early appointment and the pattern of liability outlined in the contract terms
*These seek to establish the management contractor's participation on a level that can be equated to a professional consultant, and the management contractor's risk is reduced as such
*The aim is to distribute the contractual risk associated with construction entirely between the client and the works contractors
*The standard form of management contract distinguishes the pre-construction stage form that of construction to give the employer the opportunity of terminating the relationship after design stage

== Use of Management Contracting ==

Circumstance where a management contract should be used:
*The employer wishes the design to be carried out by an independent architect and design team

''(Management contracting is offered as an alternative to D&B)''
*There is a need for early completion

''(However, fast-track construction with too much overlapping of design and construction causes severe problems of communication, and therefore information needs to be very carefully co-ordinated. Management contracting is designed to avoid these problems)''
*The project is fairly large
*The project requirements are complex
*The project entails changing employer's requirements during the building period

''(Allow changes should be avoided, the fact that work is let in packages allows the freezing of design decisions to be left to a later stage)''
*The employer requiring early completion wants the maximum possible competition in respect of price for the building works

''(As works packages are let separately, the lowest price for each package can be chosen. However, as the works contractors are only invited to tender for a package start-up costs will be multiplied)''

== Characteristics of JCT MC 98 ==

=== Schedules ===

1st Schedule - description of the project

2nd Schedule - definition of 'prime cost'
*MC 98 is not a lump sum project
*The amount paid to the management contractor is the prime cost of all work done under the contract plus the management contractor's fee
*There is no contract sum, but there is a Contract Cost Plan, prepared by the QS
*However, the management contractor has no responsibility if the prime cost of the project exceeds the contract cost plan

3rd Schedule - service provided by management contractor
*Pre-construction period: advisory role in relation to breakdown of work packages and assistance in negotiations
*Construction period: programming and planning, monitoring off-site preparation work, instituting effective cost control techniques, labour relations and site management

4th Schedule - list of project drawings

5th Schedule - site facilities and services

 

=== Conditions of contract ===
*Variations to the works contract are allowed under the contract in a similar way to JCT 98
*A 'project change' allows the employer to change the scope of the work: allows for changes after the appointment of the management contractor, but not after the works contracts have been let

== Risk in Management Contracting ==
*The kind of project regarded as most suitable for a management contract involves a degree of commercial risk
*If an experience and competent general contractor tendered for a general contract for such a project, here would be a significant premium on the price to absorb the risk
*Many users or management contracts are developers, clients who are well placed to absorb risk

 

=== Money ===
*The contract is a cost reimbursement contract
*Cost are certified by the contract administrator and payment is made on interim certificates which apportion money between works contractors
*The management fee is also apportioned and included in the interim certificates
*If a works contractor claims from the management contractor as a result of a default by another works contractor, the management contractor is committed to pursuing the recovery from the defaulting works contractor
*If this is not possible, the employer has to make up the shortfall

 

=== Completion ===
*At no stage is there a legal requirement for the employer to proceed either with the project of with the particular management contractor

 

=== Default by employer or management contractor ===
*The employer may at any time determine the employment of the management contractor

 

=== Default by works contractors ===
*If a management contractor has a right to be reimbursed by the employer for all losses, he suffers no loss, and so how can the works contractor be liable for more than nominal damages?
*JCT 98 works contract conditions state that a works contractor shall not raise this 'no loss' arguments against the management contractor

 

=== Time ===
*Management contracting is designed to encourage overlap
*Acceleration clause: there is a preliminary instruction from the contract administrator, an opportunity for the management contractor to object, withdraw or modify the instruction.
*After acceptance the management contractor has to inform the contract administrator of the amount of money required by the works contractor in order to achieve the new completion date
*The contract administrator must then confirm that the employer is willing to pay the price
*The clause can be brought into effect to cancel a previously granted extension of time
*The employer can only recover liquidated damages from the management contractor to the extent that the management contractor can recover them from the works contractor

 

=== Quality ===
*No independent liability can be attached to the management contractor for any defects in workmanship and materials on the basis that it is the works contractors who are the parties responsible for the completion of the works

[[Category:Construction_techniques]]
[[Category:Products_/_components]]
[[Category:Appointments]]
[[Category:Procurement]]

Land law

2014-01-05T07:56:11Z

Xela: Created page with " = LAND LAW = == Land Law and Conveyancing == *Land law is concerned with the rights of a landowner in or over his own land and the rights (or 'interests') that others may have..."

= LAND LAW =

== Land Law and Conveyancing ==
*Land law is concerned with the rights of a landowner in or over his own land and the rights (or 'interests') that others may have over that land
*Law of conveyancing is concerned with the mechanics of the creation and transfer of rights in and over land, usually, but not necessarily, pursuant to a contract between a seller and a purchaser

== Unregistered Land ==
*All land in England and Wales must be registered consequent on transfer of ownership and in time unregistered conveyancing will disappear
*Most equitable interests (other persons' right in the land) are registrable as land charges under the Land Charges Act 1972

== Registered Land ==
*Over 90% of titles are registered
*The actual title is registered. Eliminating the need for title deeds
*Details of many (but not all) interests affecting the land will appear on the Register against the land itself, not against the name of the landowner at the time the encumbrance was created
*Transfer of the land is effected by registering the purchaser as the new 'registered proprietor'

An intending purchaser of registered land should:
*Inspect the Register
*Inspect the land itself, because certain rights such as easements, squatters' rights, local land charges etc may not appear on the Register
*An architect should find out from the client what adverse rights affect the client's property
*Irrespective of whether the land is registered or unregistered, there are Local Land Charges which are regulated by the Local Land Charges Act 1975 and registered separately in a register kept by all local authorities. These include:
*Preservation instructions as to ancient monuments
*Lists of buildings of special architectural or historic interest
*Planning restrictions
*Drainage schemes
*Charges under the Public Health and Highways Acts

== The Extent and Meaning of 'Land' and Intrusions upon it ==

'Land in English law includes not only the soil but also:
*Any buildings, parts of buildings, or similar structures
*Anything permanently attached to the soil
*Rights under the land
*Rights above the land to such a height as is necessary for the ordinary use and enjoyment of the land and the structures upon it
*Easements

Trespass
*Any unjustifiable intrusion by one person upon the land in the possession of another is trespass - a 'tort'
*It is likewise a trespass to place anything on or in the land in the possession of another
*The trespass does not have to involve damage to the plaintiff's property to be actionable as a tort
*If construction work is likely to necessitate an incursion on to neighbouring land, the client must come to an arrangement with the landowner, usually in the form of a contractual licence
*If a permanent incursion is contemplated, it may be better to negotiate an easement
*In the absence of any easements, restrictive covenants or other binding agreements, a person is generally free to build anywhere on his land, subject to planning issues
*However, the development may give rise to a claim by a neighbour in 'nuisance' where there is an unjustifiable interference with the neighbouring landowner's use and enjoyment of his own land through excessive dust or noise
*If a landowner has an easement over adjacent land any interference with it by the owner of the burdened land will not constitute a trespass but will be a nuisance, but only if it prevents the practical and substantial enjoyment of the easement

Licences
*A neighbour may give another person permission to use his land by means of a 'contractual licence'
*A licence is permission to do something that would otherwise be unlawful
*A bare licence is permission to enter the land given gratuitously without any counter-benefit to the landowner giving permission
*It is revocable at any time by the licensor, and on such revocation, the licensee becomes a trespasser, although he is entitle a reasonable time to enable him to leave the land
*A contractual licence is granted for some counter-benefit, usually a fee
*Whether it can be revoked depends upon the contract

Boundaries
*A boundary has been defined as the imaginary line that marks the confines or line of division or two contiguous parcels of land
*Boundaries are fixed by: proven acts or the respective owners, statutes or order of authorities having jurisdiction, or by legal presumption

== Easements ==
*Easements are the rights that one owner of land may acquire owner the land of another
*There must be a dominant and a servient tenement
*The easement must benefit the dominant tenement to which t will become attached
*The two tenements must not be owned and occupied by the same person
*The easement must be 'capable of forming the subject matter of a grant', that is, of being created by deed ie sufficiently well defined, certain and limited in scope so as to qualify as an easement
*There are well-established categorise of easement, but new rights can become recognized as being capable of being granted
*Against this, certain rights cannot exist as easements: a right to a view; o privacy; to a general flow of air; to have the property protected from the weather; and a general right to light (as opposed to a right through a defined aperture)
*Positive easement: enables the dominant owner to do some act upon the servient tenement
*Negative easement: allows the dominant owner to prevent the servient owner from doing something on his land

Easements may be acquired by:
*'''Express grant or reservation''': a landowner may by deed or written contract expressly grants an easement over his land in favour of a neighbouring landowner, or expressly reserves to himself an easement
*'''Implied reservation''': when the parties to a transaction concerning land have not expressly mentioned easements reserved to burden the part sold. There are two situations where the easements will be treated as if they were deliberately reserved for the benefit of the land retained - easements of necessity (an easement without which the vendor's retained land cannot be used at all), or an easement in the common intention of the parties (an easement that both parties accept should exist)
*'''Implied grant''': similar to above, but when no easements are expressly granted to the purchaser for the benefit of the land sold
*'''Prescription''': long use without force, secrecy or permission can give rise to an easement. Use for 20 years is normally accepted

Extinguishment of Easements
*Apart from an express release by deed, the most important method of extinguishing an easement is when the dominant and servient tenement come into the same ownership and possession

Types of Easement
*'''Rights of way''': may be restricted in frequency and type of use
*'''Rights of support''': the right of support for land by other land has been distinguished from an easement, but it is possible for one building to acquire an easement for support against another after a period of 20 years
*'''Rights of light''': rendered of secondary importance by daylighting regulation under planning controls, and is only in respect of some definite opening and as necessary for 'ordinary purposes'. A Local Land Charge can be registered indicating the presence of a theoretical wall of stated dimension in such a position as to prevent an adjoining owner from claiming an absolute right of light after 20 years of uninterrupted use

== Restrictive Covenants ==
*A restrictive covenant is a binding obligation that restricts an owner of servient land in his use and enjoyment of that land
*Typical examples of restrictive covenants: not to build above a given height or in a given place; restricting the user of the land to given purposes
*It is in substance negative
*It is made between the covenantor (the person who is making the promise and whose land is burdened) and the coventantee (the person who can enforce the promise)
*That the parties intend the burden of the covenantto run with the covenantor's land so as to bind it not only to the covenantor but also his successors in title
*It is an equitable interest in land and therefore requires registration as a land charge in unregistered land or is protected by registering a notice on the Register of Title for registered land
*Architects should obtain from their clients confirmation from their clients that there are no restrictive covenants applying to the site that could affect the proposed design and use of the building or whether a building can be constructed at all
*Power is given to the Lands Tribunal under the Law of Property Act 1969 for the discharge or modification or any covenant if the Tribunal is satisfied that:
*changes in the neighbourhood make the covenant obsolete;
*or that the restriction does now not secure practical advantages of substantial value to the person entitles to its benefit;
*or is contrary to public policy

== Landlord and Tenant - Repair Covenants ==
*Architects are frequently asked to prepare a 'schedule of dilapidations' at the start or end of a lease
*This is used as the basis of assessing the extent of the repairing obligations of the parties under the lease
*The architect should find out the terms of the lease so that he is clear which portions of the building come within the repair covenant
*When a landlord and tenant cannot agree about the extent of the damage or the extent of the responsibility for making them good, there dispute may have to be resolved in the courts, in which case the schedule of dilapidations becomes evidence

== Surveys of Property to be Purchased ==
*Architects are often asked to inspect property for clients who intent to purchase it or take a lease
*It is important to note that if defects are not observed and noted, the architect may be held negligent
*It is often wise to open up and inspect hidden portions of the building
*If this is not dome, he limitations of the investigation should be clearly pointed out to the client

== Mortgages ==
*The alteration to property will alter the value of the mortgagee's (lender's) security
*For this reason most mortgages contain covenants requiring the borrower to obtain consent to any proposed works
*The architect should ask the client if the property is mortagaged and request him to obtain any consents

General Contracting

2014-01-05T07:46:36Z

Xela: Created page with " == General == *Designers, on behalf of the employer, produce the documents *The contractor agrees to produce what has been specified in the documents *The contractor should be ..."

== General ==
*Designers, on behalf of the employer, produce the documents
*The contractor agrees to produce what has been specified in the documents
*The contractor should be invited to price a complete set of documents that describe the proposed building fully - if design is only partially complete, general contracting begins to break down, as there will be a high demand for communication and information which is difficult to manage
*The contractor has no responsibility for design
*The contractor's offer of price is based on the bill of quantities, a document that itemises and quantifies every aspect of the work
*The bill also forms an important mechanism for controlling costs as the project progresses
*Therefore the QS has a central role
*Structural and services engineers provide specialised services that are co-ordinated by the architect

== Use of General Contracting ==

Typical circumstances in which general contracting is used:
*The employer has caused the design to be prepared and for the purposes of the building contract takes responsibility for it
*The employer's designer is sufficiently experienced to co-ordinate and lead the design team and to manage the interface between design and production
*The design is substantially complete when the contractor is selected

''(A fully measured bill can only be prepared from a complete design: a bill of approximate quantities can be used for an incomplete design. The contract then becomes a re-measurement contract: the work is specified in approximate measure for the purposes of tendering and after execution is measured again for the purposes of payment. There is also a without quantities version of JCT 98)''
*An independent quantity surveyor will be used to plan and control the financial aspects of the project
*The contractor is selected on the basis of the contractor's estimate and carries the risk that the estimate may be wrong

''(If firm quantities are used, the work is not re-measured and the contractor is paid on the basis of'' the quantities in the bill, unless the work has been subject to a variation)
*The employer reserves the right to select sub-contractors for certain parts of the work

''(A contractor will be paid whatever nominated sub-contract work costs: such work falls into the category of prime cost or cost reimbursement. Therefore, the risks for the contractor are different to hose associated with the employment of domestic sub-contractors, where the contractor pays them from within the contract price)''
*'Prime Cost Sums', including employer-selected sub-contracts, do not form the major proportion of the contract sum

''(If a large proportion of the work is in prime cost sums, the contract will be unsuitable because the contractor is reduced to a co-ordinator and accountant and the clauses do not reflect that role)''
*The employer's agents feel that it is important to use an acceptable negotiated form to ensure a fair an familiar distribution of risk
*The employer makes no explicit choice and the advisors do not raise the issue

== Basic Characteristics ==

=== Design and Workmanship ===
*The design must be documented in order for the contractor to be able to tender for the work, but it will not cover everything
*Many detailed aspects are within the skill and knowledge of the contractor
*There are also many factors which are not documented simply because no-one thought of them before site work started
*In these cases it is essential for the contractor to seek clarification: a contractor who makes assumptions will incur design liability for these choices and will be exposed as he will probably not carry PI insurance for such decisions

=== Contractor's Obligations ===
*The contractor undertakes to do the work described in the documents
*It is rare that the contractor is placed under an obligation of fitness for purpose
*Certain items specified as such in the bills have to be done to the reasonable satisfaction of the architect

=== Nominated Sub-contracting ===
*A mechanism for ensuring that the contractor employs sub-contractors of adequate standing
*Without nomination, contractors would use high calibre sub-contractors when tendering to keep the bid price high, but on winning may re-negotiate to find the cheapest sub-contractor
*One abuse of nomination is to relieve the architect of the burden of having to detail the design and specification fully

=== Variations ===
*There are detailed provisions for valuing the financial effect of variations and are based upon the contractors' original price: the contractor should be paid according to what would have been included in the bills had the contractor known about the varied work at the time of tendering
*Only in exceptional circumstances should the basis of payment be total cost reimbursement
*Variations allow the design team to refine the design, but are often abused by client making arbitrary changes: this leaves the client exposed to contractor claims

=== Payment ===
*The contractor will typically be paid in instalments
*Interim certificates, issued by contract administrator, state how much is due to the contractor
*A small amount is retained by the employer on each interim certificate in a retention fund to cover the employer in case of the contractor's insolvency and encourages the contractor to remedy any defects after completion

=== Completion ===
*When the work is substantial complete, a certificate of practical completion is issued
*A defects liability period, usually of twelve months, then commences, during which time the contractor has the right to remedy any defects that become apparent in the building

=== Extensions of time and liquidated damages ===
*The contract period may be extended for various specific reasons
*Such an extension will relieve the contractor of liability for liquidated damages

=== Fluctuations ===
*A financial provision related to changes in the market prices of the contractor's resources
*In periods of high inflation it is more economical for the employer to absorb the risk of price rises, in which case the fluctuation clauses are used

== Risk in General Contracting ==

=== Money ===
*The employer is entitled to expect the building to be completed on time
*Failure to achieve this will render the contractor liable to pay liquidated damages
*The employer should ensure that all contractors and sub-contractors are backed up by financial guarantees and bonds, otherwise the liquidated damages may be worthless
*The primary element of the tender price is the cost of labour and materials plus office overheads
*Premiums are added onto this which reflect the market situation and the level of risk associated with the project
*The allocation of certain items of risk to the contractor will greatly affect the contract sum

=== Default ===
*The risk of default lies with the contractor as all work must comply with the contract documents
*The contractor is responsible for every person on site, whether directly employed, a domestic sub-contractor or a nominated sub-contractor
*There is a danger that a contract can result in the employer having no recourse when a nominated sub-contractor fails to perform.
*If a nominated sub-contractor causes delay, the contractor can claim an extension of time and will not have to pay liquidated damages, therefore the contractor will have suffered not loss.
*Having suffered no loss, the contractor cannot sue the nominated sub-contractor
*Unless there is a direct agreement between the employer and the nominated sub-contractor there is no route for the defaulting sub-contractor to be penalised
*This underlines the importance of strictly following the procedures for the nomination of sub-contractors
*Since general contracting does not provoke fundamental questions about risk it is rarely priced for and if contracts are amended, it can lead to bankruptcies

=== Completion ===
*The contractor has a right to complete the works
*The employer has the power to determine the contract if the if the contractor fails to make regular and diligent progress, suspends the works or becomes insolvent
*A contractor has the right to suspend the contract if the employer obstructs the issue of certificates, continually suspends the work or becomes insolvent

=== Time ===
*General contracts are very specific about time
*Certain types of delay are permitted, provided that specific events are identified in a clause which entitled the contractor to an extension of time
*They include some items that do not entitle the contractor to loss and expense

=== Quality ===
*General contracting is ideal for documented control systems
*The client can pre-define the contractor's targets and have a legal recourse in the event of them not being achieved

Contract Law

2014-01-05T07:40:52Z

Xela: Created page with " = CONTRACT LAW = == What is a contract? == *Bilateral contract: contains a set of promises that each party has made to the other ''(X promises to build Y a house and Y promise..."

= CONTRACT LAW =

== What is a contract? ==
*Bilateral contract: contains a set of promises that each party has made to the other ''(X promises to build Y a house and Y promises to pay X for doing it)''
*Unilateral contract: only one party will make a promise to do something if the other party actually does something stipulated by the former ''(X promises to pay Y $100 if Y completes and returns a questionnaire)''

== Types of contracts ==
*Under hand: evidenced in writing - liability limitation period six years
*Under seal: deed - liability limitation period twelve years

== Is there a contract? ==
*Was there an intention of the partied to create legal relations?
*Was there an agreement between the parties?
*Was there a consideration?

== Agreement ==

=== Offer ===
*A promise made by the offer or which matures into a contract when accepted by the other party
*An 'invitation to treat' does not turn into a contract - it is merely a stage in negotiations, inviting the other party to make an offer

=== Letters of Intent ===
*The effect depends on the wording
*Does not usually give rise to any contractual rights or obligations
*It states that there will or may be a contract in the future, and hence is treated as indicating that there is no such contract at present
*Where a court is prepared to interpret a letter of intent as creating a contract, it will then have to decide on its precise scope

=== ===

=== Acceptance ===
*Must be certain and unambiguous: can be by word (written or oral) or by conduct, which must be made known to the offeror
*A counter-offer is not an acceptance as it varies the terms and destroys the original offer, which it rejects
*The counter-offer itself will have to be accepted by the initial offeror

=== Retrospective acceptance ===
*Where a formal contract is not signed until after work has commenced, does the contract govern work which is done in the interim period?
*If the contract does not apply, the work will be paid for on a quantum meruit basis
*Other rights and duties of the parties will be governed by whatever terms the court implies into the circumstance
*A court may imply a tem for retroactive effect of the contract

== Terms of contract ==

=== Express terms ===
*With written contracts, read the documents evidencing the contract to ascertain the express terms

=== ===

=== Implied terms ===
*Terms implied by statute ''(Sale of goods and Services Act 1982: carry out the service with reasonable skill and care, within a reasonable time, if not fixed by contract, and for a reasonable charge, if not fixed by contract)''
*Terms implied by custom
*Terms implied by court

== Performance and Breach ==

=== The right to sue on partial performance ===
*A party must perform was he is contracted to do
*Non-performance of some part will disentitle the partial performer to payment
*Except when the party has 'substantially performed' his obligations whereby he is entitled to the contract sum subject only to a counter-claim for those parts remaining un-performed

=== Remedies against the incomplete performer ===
*Either incomplete performance gives the other party, who has so far performed his obligations as they fall due, a right to damages to put him in the position he would have been in had the contract been performed
*Or he can hold himself absolved from any further performance of his obligations, when there is:
#Breach of contractual condition
#Repudiatory breach (if the breach goes to the route of the contract)
#Renunciation (if one party does not intend to continue to perform)

== Privity of contract ==
*For there to be a contract, consideration must have been provided
*Those who are privy to the consideration are said to be in privity of contract
*A person who is not party to a contract cannot gain any benefit by suing on it, nor can he suffer any detriment by being sued on it

== The Contracts (Rights of Third Parties) Act 1999 ==
*Has radically affected the doctrine of privity of contract
*It grants a third party the right to enforce a term of a contract which has been made for his benefit
*Not only positive rights but also defensive rights
*The third party must be expressly identified in the contract
*It does not grant the right to enforce the whole contract
*Enforcement by the third party is subject to all other terms of the contract, therefore terms can be inserted to exclude any intention to create enforceable third party rights

[[Category:Articles_needing_more_work]]

JCT 98 Contract Insurances

2014-01-05T07:39:17Z

Xela: Created page with " = CONTRACT INSURANCES = == Relevant Provisions in Main Contract == *Clause 20 - Injury to persons and property and indemnity to employer *Clause 21 - Insurance against injury ..."

= CONTRACT INSURANCES =

== Relevant Provisions in Main Contract ==
*Clause 20 - Injury to persons and property and indemnity to employer
*Clause 21 - Insurance against injury to persons and property
*Clause 22 - Insurance of the works
*Clause 22A - Erection of new buildings - all risks insurance of the works by the contractor
*Clause 22B - Erection of new buildings - all risks insurance of the works by the employer
*Clause 22C - Insurance of existing structures - works in or extensions to existing structures
*Clause 22D - Insurance for employer's loss of liquidated damages
*Clause 22FC - Joint Fire Code compliance

== Clause 20 - Injury to persons and property and indemnity to employer ==
*contractor to indemnify the employer for
*any expense, liability, loss, claims or proceedings
*arising by virtue of statute or common law
*in respect of death or personal injury caused by the carrying out of the works
*except as a result of negligence of the employer
*or of any person for whom the employer is responsible
*duty to indemnify the employer also covers damage to property (property owned by third parties, parts of contract works for which certificate of practical completion has been issued, and exiting property owned by the employer)
*but only when damage was due to negligence, breach of statutory duty, omission or default by the contractor, or those for whom he is responsible
*not caused by specific perils (fire, lightening, explosion, storm, tempest, flood, burst pipes, earthquake, aircraft and riot)
*contractor can recover from any third party at fault

== Clause 21 - Insurance against injury to persons and property ==
*insurance to be taken out and maintained by the contractor for indemnities given under Clause 20 to the employer
*contractor does not take responsibility for a sub-contractor maintaining its insurance, but will need to ensure that the sub-contractor carries such a policy under the relevant sub-contract
*contract administrator can instruct the contractor to take out and maintain an additional joint names policy to indemnify the employer both against strict liability to third parties and against any damage caused to the employer's own property resulting from collapse, subsidence, heave, vibration, withdrawal of support, lowering or ground water etc.

== Clause 22 - Insurance of the works ==
*insurance to remain in force until the issue of certificate of practical completion or determination of the contractor's employment

== Clause 22A - Erection of new buildings - all risks insurance of the works by the contractor ==

Requirement
*contractor to take out and maintain a joint names policy for all risks insurance
*providing cover against physical loss or damage to work executed and site materials

Exclusions
*damage to property arising from wear and tear, obsolescence, deterioration
*work carried out as a result of design defects
*professional negligence risk - insured separately
*fitness for purpose risk

Failure of contractor to take out policy
*employer can take out his own policy and set off the costs against monies due to the contractor

Payment of insurance proceeds
*contractor authorises the insurers to pay all insurance proceeds to employer
*employer has to pay monies (less professional fees) to the contractor by instalments
*issued under architects' certificates at interim certificate periods

Partial completion
*employer takes responsibility of the works taken back

Site materials
*all unfixed and goods delivered to, placed on, or adjacent to the works and intended for incorporation in them

== Clause 22B - Erection of new buildings - all risks insurance of the works by the employer ==

Requirement
*employer to take out and maintain a joint names policy for all risks insurance
*providing cover against physical loss or damage to work executed and site materials

Exclusions
*as above

Failure of employer to take out policy
*contractor can take out his own policy and increase the contract sum by the amount of premiums he has to pay.

Payment of insurance proceeds
*no requirement
*restoration of any loss or damage is treated as a variation

== Clause 22C - Insurance of existing structures - insurance of works in or extensions to existing structures ==
*for contract works, employer to take out a joint names policy and protect all sub-contractors
*for existing structures, employer to only insure against specific perils
*insure existing structures and their contents if owned by him, or for which he is responsible

== Clause 22D - Insurance for employer's loss of liquidated damages ==
*employer to inform the contractor whether he should obtain a quote to insure the employer's potential loss of liquidated damages
*only in respect of damage by an specific peril - contractor will be entitled to extension of time, but employer will not be able to claim liquidated damages

== Clause 22FC - Joint Fire Code compliance ==
*employer and contractor to comply with the Joint Code of Practice on the Protection from fire of Construction Sites and Buildings Undergoing Renovation if stated in the appendix
*contractors obliged to rectify breaches of the code if drawn to their attention by the contract works insurer
*contractors liable to the employer if a breach causes damage to the works

== Sub-Contractors ==
*required to observe, perform and comply with the provisions or the main contract
*indemnify the contractor against breaches by them of specific provisions in the main contract
*required to carry and maintain insurance to cover its liabilities in respect of personal injury or death ensuing from work carried out by it

 
== CONTRACT INSURANCE UNDER JCT 98 WITH CONTRACTOR'S DESIGN ==

== General ==
*contractor to carry out not only duties and obligations of a building contractor, but also obligations as a designer

== Contract Works Insurance ==
*similar to JCT 98

== Professional Indemnity Insurance: Design and Construct ==
*under clause 2.5.1 , the liability of the contractor as a designer is limited to the liability of an architect (reasonable skill and care, not fit for purpose)
*this liability can be covered by a Contractor's Design and Construct PI policy
*ensure that the design and build contractor carries PI cover as Clause 22 imposes no requirement

 
== CONTRACT WORKS INSURANCE POLICY ==

== Damage to Works ==
*the indemnity may be the repair, reinstatement or replacement of any property lost or damaged, or a monetary payment of the same amount
*the insured will be the employer and the main contractor, and possible sub-contractors
*loss or damage are covered, subject to a number of exceptions
*the property insured is described in the policy schedule
*the loss or damage must occur during the currency of the policy
*the cover only applies to the contract site

== Cover ==
*usually arranged on an annual basis by a contractor, thus covering all contracts
*possible for cover to be arrange on a single contract basis but more expensive

== Extensions to the policy ==

Transit
*anywhere within the territorial limits
*excludes sea and air transit (heavier risk)
*excludes motor vehicles (insures under motor vehicle policy)
*excludes employees tools (too many small claims)

Principals
*means the employer to comply with the contract condition that the policy should be in joint names

Architects', Surveyors' and Consulting Engineers' fees
*incurred in the reinstatement of the property insured consequent on its loss or damage

Removal of debris
*removing debris
*transportation to dumping ground
*dismantling or demolishing
*shoring up or propping of the portions or property lost or damaged

Off-site storage
*materials and goods whilst not on the site but intended for inclusion in any contract works covered by the policy

== Exceptions to the policy ==

Excess
*means of encouraging the contractor to take care and of
*eliminating small claims

Post-completion risks
*contract works policy to cover risks of loss or damage during construction: once contract completed, risk of damage passes over to employer
*cover ceases at practical completion, except to the extent that it is necessary to cover the contractor's liability under the defect liability clause

Existing Structure
*contract works policy to cover risks of loss or damage to contract works, but not to employer's existing property
*if the employer's existing property is damaged then the employer will only have legal redress against the contractor if he can prove negligence
*the employer may have already insured the risk under existing insurance arrangements
*or may effect special cover under clause21.2.1 against the specific risks of collapse, subsidence, vibration, weakening or removal of support, or lowering of ground water

Other exceptions
*motor vehicles, vessels and crafts
*breakdown and explosion of construction plant
*trade risks: defective materials or workmanship, normal wear and tear
*professional negligence risks: design defects
*confiscation by government
*losses due to unexplained disappearances
*contract penalties for delay, non-completion or consequential loss or damage
*cessation of work: failure to take precautions to protect the property
*testing and commissioning

== General Conditions ==
*reasonable precautions
*disclosure of material facts
*adjustment of the premium
*contribution - if there is another policy, the policy will not pay until the first policy has been exhausted
*cancellation - insurer's, but not the insured, have the right to cancel

== Claims Conditions ==
*notify insurer within three months of any events that may give rise to a claim
*refrain from repairs until the insurer has had time to inspect
*notify and assist the police in case of theft, loss or wilful damage to property

== CLAIMS ==
*dealt with by loss adjusters

== OTHER LIABILITIES ==

== Employers and Public ==
*Contractors' Liability Insurance covers Employer's Liability, Public Liability, Product Liability or Completed Works cover in respect of injury to third parties or damage to their property, as required by JCT 98
*Excludes Professional Liabilities (covered elsewhere)

== Clause 21.2.1 ==
*insurance to be arranged in the name of the employer
*to protect him in respect of his legal liability for damage to adjacent or surrounding property
*which is caused other than by the negligence of the contractor or his sub-contractors (employer already protected against negligence under clause 20.2)

 
== LATENT DEFECTS (DECENNIAL) INSURANCE ==

== General ==
*ten-year non-cancellable policy
*to indemnify the insured against the cost of repairing defects in the design, material or construction of the building which were not discovered until after the building had been completed
*once a building passes to the owner, he insures it under a fire and perils policy
*the cost of rectifying latent defects is not covered by a fire and perils policy
*underwriters will only accept risk if satisfied by design - technical control undertaken by specialists, who issue a certificate of (qualified) acceptance

== The Insured ==
*any person who acquires the freehold or leasehold interest in the premises during the period of insurance therefore subsequent owners/tenants can be insured

== What the policy covers ==

Inherent defects
*if there is no physical damage but an inherent defect in the structure is threatening its stability the policy will cover the cost
*damage to premises caused by subsidence, heave or slip of land is not covered unless it arises from an inherent defect in the foundations
*discovery of an inherent defect does not in itself constitute a claim since there must be damage or threat of collapse

Policy exceptions
*damage arising from fire and the perils normally insurable under a fire policy
*damage arising from alterations, modifications or additions during the period of insurance
*damage caused by or contributed to by inadequate maintenance
*damage exceeded from any process for which the building was not designed
*faulty or inadequate weatherproofing unless requested at the outset

== Period of Insurance ==
*ten-year policy starts from the date of practical completion
*but issued at the start of construction to enable compliance with Technical Control
*policy contains no cancellation cause

Maintenance Period
*contract works policy is extended to give cover during the maintenance (defects liability) period
*risk of duplication of cover during that period
*if during that period damage occurs that is covered by both policies, decennial policy will only pay in excess of the amount payable under contract works policy

== Sum Insured ==
*a full value sum is total estimated cost of re-building the premises, including provision for professional fees and removal of debris
*a first loss sum is lower that the full value when the risk of a total loss may be low

== Premium affected by: ==
*type of building and intended usage
*design and type of construction
*foundations and site (soil) conditions
*project location
*amount of excess and indexation
*basis of cover (full value or first loss)

Construction manager

2014-01-05T07:31:03Z

Xela:

Construction management is a procurement route in which the works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager.

Construction management differs from management contracting, in that management contractors place contracts with works contractors (equivalent to trade contractors in construction management) direct, whereas construction managers only manage the trade contracts, the contracts are placed by the client. Construction managers are effectively acting as a consultant to the client, the client takes the risk for the trade contractors' performance. In legal terms the management contractor is acting as a principal whereas the construction manager is acting as an agent.

As the client is required to place and administer the trade contracts (of which there may be a large number) and perhaps to accept price uncertainty, construction management is only appropriate for experienced clients.

The construction manager is generally appointed early in the design process so that their experience can be used to improve the cost and buildability of proposals as they develop, as well as to advise on packaging, the risks of interfaces between packages, and the selection of trade contractors. Construction manager's are often appointed at the end of the concept design stage.

Appointing a construction manager enables some trade packages to be tendered earlier than others, and sometimes, even before the design is completed. For example piling might commence whilst the detailed design of above ground works continues. This can shorten the time taken to complete the project, however it means that there will be price uncertainty until the design is complete and all contracts have been let.

The services provided by a construction manager might include:
*Advising on the development of the brief (if appointed at this stage).
*Advising on the procurement route.
*Advising on appointments (such as site inspectors).
*Advising on the feasibility, interfaces, buildability, cost and programming of the design.
*Advising on statutory approvals.
*Defining key performance indicators for trade contractors.
*Advising on the need for mock ups, samples, tests and inspections.
*Acting as the principal contractor.
*Cost planning and cost control.
*Preparing a construction programme and defining methods of working on site.
*Identifying potential trade contracts.
*Tendering trade contracts.
*Consenting to sub-contracting of work by trade contractors.
*Arranging for site accommodation, welfare facilities, fences, hoardings, roads and walkways, drainage, power and water supply.
*Co-ordinating setting out.
*Arranging labour for certain site activities (such as cleaning).
*Managing site inspectors.
*Co-ordinating the release of information.
*Managing and co-ordinating trade contracts, including acting as contract administrator, carrying out or co-ordinating inspections, issuing instructions and certificates etc.
*Co-ordinating the work of statutory undertakers.
*Witnessing tests and co-ordinating commissioning.
*Collating as-built information, building owner's manual, building user's handbook, project handbook, health and safety file, pre-construction information and construction phase plan.
*Monitoring key performance indicators.
*Managing the site.
*Chairing site progress meetings and preparing progress reports for the client.

Construction managers are likely to be paid based on reimbursable costs (such as site facilities, staff costs, statutory fees, offices and so on) and a management fee, comprising pre-construction and construction fees, which may be fixed, or calculated based on an agreed formula. It is important to establish what is included in the construction manager's price (for example insurance requirements or payment of statutory fees) and to agree the limit of the construction manager's delegated authority in issuing instructions which affect the cost of the project.

As a construction manager performs a consultancy and management role (unlike a traditional contractor) their appointment may be on similar terms to the consultant team. They may be required to hold professional indemnity insurance and to provide collateral warranties for tenants, purchasers or funders, and collaborative working with the consultant team will be vital to the success of the project.

As construction managers tend to be appointed early in the project, their appointment is unlikely to include a completion date.

NB The Privy Council granted the Chartered Institute of Building (CIOB) the power to award the title of Chartered Construction Manager in 2013. The new title will be available from March 2014. The title ‘Chartered Builder’ has been used by CIOB Members and Fellows since gaining the Royal Charter in 1980, the addition of the title Chartered Construction Manager reflects the increasing significance of the role and is considered to be a more relevant description for many CIOB members.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

For detailed descriptions of the tasks performed on a construction management project see the construction management: outline work plan.
*Appointment.
*CIOB.
*Collaborative practices.
*Collateral warranties.
*Construction management: outline work plan.
*Contractor.
*Key performance indicators.
*Management contractor.
*Pre-Construction Services Agreement.
*Principal contractor.
*Procurement route.
*Professional indemnity insurance.
*Subcontractor.
*Trade contractor.
*Traditional contractor.
*Warranties.

 

== General ==
*The employer places a direct contract with each of the specialist trade contractors
*To co-ordinate these contracts, the employer utilises the expertise of a construction manager who acts as a consultant
*Overcomes the problem of management contracted where there is no direct link between the employer and the trade contractors

== Use of Construction Management Contracts ==

Circumstances where construction management contracts are suitable:
*The employer is familiar with construction and knows some or all of the professional team

''(The employer must take an active role in the management of the project)''
*The risks associated with the project are dominated by timeliness and cost

''(The need for speed may compromise decisions about cost. Fast project require decisive project team members and a responsive client)''
*The project is technologically complex involving diverse technologies and sub-systems

''(Complex projects need to be managed with dynamic and flexible working relationships. Construction Management is equally suited to technically simple projects)''
*The employer wants to make minor variations to requirements as the project proceeds

''(Changes can be accommodated during the process before individual packages are let)''
*There is scope for separating responsibility for design from responsibility for management of the project

''(Where design is not an overriding feature of the project, the problem of co-ordination ceases to be a design problem and becomes a pure management problem)''
*The employer requires an early start on site

''(If the project must generate an income at the earliest possible opportunity, the employer cannot afford the luxury of having a comprehensive design statement translated into a sophisticated architectural concept)''
*The price needs to be competitive, but value for money is more important that simply securing the least possible cost

''(To compete successfully in the market, business premises must be attractive, integrated with their surroundings, flexible and timely)''

== Characteristics of Construction Management Contracts ==

=== Impact of Construction Management Philosophy on Contracts ===
*The employer contracts directly with the trade contractors and the co-ordinator of the construction work has no contractual responsibility for their performance
*When the time comes to work up the initial proposals into detailed packages, it is sensible that the construction manager takes a more dominant role and the architect remains a consultant
*Design co-ordination remains the responsibility of the design manager
*The proposed JCT contract will include many clauses with alternatives to ensure flexibility
*The appointment of the construction manager removes the supervisory and management responsibility from the architect
*However an inherent problem of separation of design from construction is who signs certificates: usually both designer and construction manager play a central role in certification

=== ===

=== Typical Contractual Provisions ===
*The construction manager has the responsibility for co-ordinating the different work packages and therefore must be named in the contract between the client and the trade contractor
*All instructions come through the construction manager
*Since many of the trade contractors will be for specialist work, there needs to be some provision for the trade contractor's liability for design
*The interaction between various trade contractors is critical
*A clause is needed to make it the responsibility of the contractor to warn the construction manager of potential problems before starting work
*It is quite common for work to be let on a performance specification basis
*In most projects, each package is signed off as it is completed, and the defects liability period runs until the whole project is completed

== Risk in Construction Management ==

The apportionment of risk is substantially the same as management contracting

=== ===

=== Time ===
*The obligations as to time are entirely related to the construction manager's programme
*Too ambitious a programme will result in inflated tenders and too conservative will result in a slow project
*The risk of delay lies entirely with the defaulting trade contractor, therefore they are required to have guarantees

=== Money ===
*The direct contract between employer and trade contractor ensures prompt payment, which should improve performance ands minimise cost of finance to the trade contractor
*It also means that there is confidence in the contract sum

=== Default ===
*The design liability is no different to that undertaken by sub-contractors in traditional procurement methods
*There is no need for collateral warranties, except to benefit third parties, such as funders

=== Completion ===
*Each trade contractor is not only obliges to complete the works, but has a right to do so
*Although the employer is obliged to complete each active work package, there is no obligation to finish the entire project
*The employer's risk is thus reduced without a corresponding increases in the risk to individual contractors

=== Quality ===

The extent to which the employer is protected from having to accept inferior work depends on the adequacy of the architect's description and specification of the works to be carried out

[[Category:Articles_needing_more_work]]
[[Category:Construction_management]]
[[Category:Construction_techniques]]
[[Category:Products_/_components]]
[[Category:Appointments]]
[[Category:Procurement]]
[[Category:Roles_/_services]]

Certification under JCT 98

2014-01-05T07:25:40Z

Xela: Created page with " = CERTIFICATES = == The duties, roles and contractual responsibilities during construction stage of: == *The Quantity Surveyor *The Clerk of Works *The Person-in-Charge === ..."

= CERTIFICATES =

== The duties, roles and contractual responsibilities during construction stage of: ==
*The Quantity Surveyor
*The Clerk of Works
*The Person-in-Charge

=== Are as follows: ===

=== Quantity Surveyor ===

Role
*''To ensure that the correct amount is paid to the contractor at the correct time''

Duties
*''Valuations of Variations, Interim Valuations, final adjustment of Contract Sum''

Contractual responsibilities:
*Valuation of Variations

''Either:''
#''Clause 13.4.1.2A2: within 21 days of receipt of a Price Statement the Quantity Surveyor, after consultation with the Architect, shall notify the Contractor in writing either the Price Statement is accepted or not ''
#''Clause 13.4.2.1A4: where the Price Statement has not been accepted the Quantity Surveyor shall include in his notification to the Contractor the reasons for not having accepted the Price Statement and supply an amended Price Statement which is acceptable to the Quantity Surveyor after consultation with the architect''

''Or''
#''Clause 13.4.1.2B: the Valuation shall be made by the Quantity Surveyor''
*Interim Certificate
#''Clause 30.1.2.1: interim valuation shall be made by the Quantity Surveyor whenever the Architect considers them to be necessary for the purpose of ascertaining the amount to be stated as due in an interim certificate''
#''Clause 30.4A.1: the Architect shall at the date of each interim certificate prepare, or instruct the Quantity Surveyor to prepare, a statement specifying what deduction in respect of the Contractor's Retention and of the Nominated Sub-Contract retention for each Nominated Sub-contractor would have been made in arriving at the amount stated as due in such Interim Certificate''
*Final Adjustment of Contract sum
#''Clause 30.6.1.2: Not later than 3 months after receipt by the Architect or by the Quantity Surveyor of the documents necessary for the purposes of the adjustment of the Contract Sum, the Quantity Surveyor shall prepare a statement of all adjustments to be made to the Contract Sum ''

=== ===

=== Clerk of Works ===

Duty
*''To act solely as inspector on behalf of the Employer under the directions of the Architect''

Responsibilities
*''Instructions given to the Contractor by the Clerk of Works are only empowered if confirmed by the Architect within 2 days - Clause 12''

=== ===

=== Person in charge ===

Role
*''Site foreman''

Duties
*''Ensuring that Health and Safety procedures are adhered to''
*''Security on site''
*''Keeping record of adverse weather''
*''Keeping day working sheets''

Contractual responsibility
*''Clause 10: The contractor shall constantly keep on site a competent person-in-charge and any instruction given to him by the Architect shall be deemed to have been issued to the contractor''

Describe the architect’s duties and responsibilities to inspect and certify works during the contract, up to and including the issue of the Final Certificate. Describe the procedures you would follow in discharging these duties. (8)

=== Inspection ===
*''Duty to inspect but not supervise''
*''Inspections should take place at critical points during construction:''
#''before the work is covered up''
#''before issuing any certificate to ensure that the work has been properly executed ''

=== ===

=== Certify ===

Interim Certificates
*''Clause 30.1.1.1: issue interim certificates stating the amount due to the contractor from the employer specifying to what the amount relates and the basis on which the payment was calculated''
*''Clause 30.2.1.1: included within the interim certificate should be the total value of the work properly executed by the contractor''

Certificate of Practical Completion
*''Clause 17.1 when in the opinion of the Architect practical completion of the works is achieved, the contractor has sufficiently complied with H&S requirements, and the Contractor has supplied as-built drawings for performance specified works, he shall issue a certificate to that effect''
*''The Defects Liability Period then begins''
*''The Architect prepares a schedule of defects (any defects, shrinkages, or other faults due to materials or workmanship not in accordance with the contract) which appear within this period, which he delivers to the contractor not later than 14 days after the expiration of the Defects Liability Period''

Failure to Complete
*''Clause 24.1 if the Contractor fails to complete the works by the Completion Date, then the Architect shall issue a certificate to that effect''

Certificate of Making Good Defects
*''Clause 17.4 when in the opinion of the architect any defects, shrinkages or other faults which he may have required to be made good shall have been made good, he shall issue a certificate to that effect''

Final Certificate
*''Clause30.8.1 the Architect shall issue the Final Certificate not later than 2 months after whichever of the following occurs last:''
#''The end of the Defects Liability Period''
#''The date of issue of the Certificate of Making Good Defects''
#''The date on which the Architect sent the Contractor a statement of all adjustments made to the Contract Sum''
*''The Final Certificate shall state the sum of the amounts already stated as due in the interim certificates, the adjusted Contract Sum, and to what the amount relates''
*''The difference, if any, shall be expressed as a balance due to the Contractor from the Employer or vice versa''

[[Category:Articles_needing_more_work]]

Architects' registration

2014-01-05T07:10:57Z

Xela: Created page with " = ARCHITECTS' REGISTRATION = == Architect's Registration Act 1931 and amending Acts of 1938 == *Provided for the setting up of a register of architects to protecting the use o..."

= ARCHITECTS' REGISTRATION =

== Architect's Registration Act 1931 and amending Acts of 1938 ==
*Provided for the setting up of a register of architects to protecting the use of the title 'architect'
*But does not prevent others from carrying on the practice of architecture
*Provides for the maintenance of proper standards of professional conduct
*Provides for limited financial assistance for some students
*Funded by an annual fee of those on the register

== Architects Act 1997 repealed the Architect's Registration Act 1931 and 1938 ==
*Replaced the large former Architect's Registration Council with the small Architect's Registration Board, consisting of seven members elected by persons on the register and eight persons appointed by the Privy Council in consultation with the Secretary of State
*The Act makes registered people ineligible from being appointed persons, therefore there must always be a lay majority on the board
*The Act makes provision for a Statutory Professional Conduct Committee which is responsible for disciplinary matters

== Eligibility for registration ==
*Persons are eligible for registration if they hold such qualifications and have gained such experience as the Board may prescribe or if they have an equivalent standard of competence
*The existing Joint ARCUK/RIBA Validation arrangements continue to operate and admission to the register follows the well-established procedures of certified success in recognised examinations at levels 1, 2 and 3
*As courses in architecture increasingly adopt modular structures and the subjects of study become more diversified it is likely that the board's involvement in validation will increase in order to enable it to meet its statutory obligations as the profession evolves and changes
*An application fee and an annual retention fee is payable for registration
*It is an offence to become registered or attempt to become registered by making false or fraudulent representations or declarations
*It is also an offence for an unregistered person to practise or carry on a business under the title containing the word 'architect'

== Removal from register ==

A person's name can be removed from the register permanently or up to a period of two years if:
*the Professional conduct Committee makes a disciplinary order, or if
*the person fails to notify the registrar of a change of address, or if
*the person fails to pay the annual retention fee

Disciplinary Orders may be made in the event of a registered person being found guilty of:
*Unacceptable professional conduct (in relation to the Code of Professional Conduct and Practice), or
*Serious incompetence, or
*A criminal offence relevant to the fitness of the person to practise as an architect

[[Category:Articles_needing_more_work]]

Architects liability

2014-01-05T07:08:58Z

Xela: Created page with " = ARCHITECTS' LIABILITY = == Different sources of liability == An architect may be liable to his client for: *Breach of contract *Through the tort of negligence, or *Under st..."

= ARCHITECTS' LIABILITY =

== Different sources of liability ==

An architect may be liable to his client for:
*Breach of contract
*Through the tort of negligence, or
*Under statute

The question of professional liability can be approached under the following headings:
*A minimum standard of reasonable care is to be exercised in the discharge of professional duties carried out under the contract
*A higher duty to achieve particular results, comparable with the duty generally placed upon a builder, may be contracted for
*Duties under the law of tort to third parties may also be owed to a client concurrent with a contractual duty
*A more specialist duty may be owed in tort when giving advice whether to a client or to a third party
*Additional duties may be imposed by statutes

== Contractual Duty of Care ==
*An architect has a duty to use reasonable skill and care in the course of his employment
*An architect will be tested against the conduct of other architects
*The courts recognise that failure is not conclusive evidence of breach of duty: ‘The surgeon does not warrant that he will cure the patient, nor does the solicitor warrant that he will win the case’

== Contractual duty of result ==
*An architect can under the express terms of his contract take on the responsibility to ensure that the end product will perform as required
*This is much more onerous and it is difficult to get PII for it
*Such a duty is most likely to arise in design and build contracts where the architect is employed by the contractor, who generally has a duty to achieve a certain result
*If the architect involvement is either as part of a package deal to design, supply and erect an end product, or to design something to comply with stated performance criteria then he may be obliged to ensure that the finished article is fit for purpose

== Concurrent duties in tort and contract ==
*A contracting party might choose to rely on tort because it may extend the time within which legal action has to be started

== Duties in tort to clients and third parties ==

''Murphy v Brentwood District Council 1990''
*Severely limited the remedies available to third parties by restricting the losses which can be recovered in tort
*Recoverable losses are now limited to personal injury and physical damage to property
*Pure economic loss cannot be recovered including reduction in the value of property as a result of damage
*No duty owed in tort to protect building owners/occupiers from the cost of repairing defects in their buildings or financial losses incurred by reason of remedial works
*However, if a building has defects that threaten the safety of passers-by, the owner may be able to claim the cost of repairing or demolishing the building so as to make it safe
*Also, if damage to the building causes damage to other property of the claimant, costs can be recovered in respect of the other property
*As a result, subsequent owners have relied upon collateral warranties
*Contracts (Rights of Third Parties) Act however, confers rights to enforce contractual terms on perties who are not party to that contract

== Duty in tort to clients and third parties when giving advice ==

''Hedley Byrne & Co. Ltd v Heller & Partners Ltd''
*The professional may owe a duty when giving advice to avoid causing economic loss to third parties who rely upon that advice

== Liability for breach of contract ==
*The architect’s promises are both express and implied

Express terms
*Incorporated by the use of standard forms of appointment
*Made orally or in correspondence

Implied terms
*Implied by the Supply of Goods and Services Act 1982 to use reasonable skill and care, and
*In the absence of express terms as to time, to carry out the work within a reasonable time
*The court can also imply terms into a contract if they are necessary to make it work nd were contemplated by the parties at the time they made the contract

== Breach of Contract ==
*If an architect does not do what he undertook to do, in the absence of defence, he will have committed a breach of contract which makes him liable to the person who engaged him
*Liability will be measured in damages as a sum of money
*That sum may wipe out the architects fees, but is not limited to that amount
*The extent to which the architect is liable may be limited by a limitation clause
*Liability for breach of contract includes liability for consequential loss in so far as those losses are of a reasonably foreseeable type

== The scope of the duty of care owed to the client in contract ==
*There are few aspects of an architect’s work for which he cannot in principle be held liable to his client if he does not take reasonable care

Site investigation
*If the job of ascertaining the nature of the site is beyond the architect, then he should advise the client to engage a specialist

Design
*An architect may be liable to his client if errors or omission are made in the drawings or specifications
*Clients may rely upon failure to comply with Codes of Practice, BRE recommendations and British Standards. Failure to follow such guidance is unlikely itself to establish liability, but may persuade the court that there has been negligence

== ==

The Architect’s duty of care when issuing Interim Certificates:

*''Duty to use reasonable skill and care''
*''Duty to act impartially - the architect would be liable to the client in contract for over-payment and the contractor could sue in the tort of negligence for under-payment ''
*''Clause 30.1.1: issue interim certificates stating the amount due to the contractor from the employer specifying to what the amount relates and the basis on which the payment was calculated''
*''Clause 30.2.1.1: the total value of the work properly executed by the contractor - the architect should carry out an inspection before issuing an interim certificate to ascertain this''

The Architect’s duty when visiting site:

*''Duty to visit the visit in accordance with what has been set out in his form of appointment''
*''Duty to inspect, but not supervise''
*''Inspections should be carried out at appropriate points during the construction (eg before something is about to be covered up) rather than periodically''
*''Duty of skill and care to employer to detect defects but failure of detection will not amount to negligence''
*''Duty to warn the contractor if he is making a mistake, but not dictate the method of construction''
*''Duty to warn the contractor if he is breaking statutory obligations, particularly CDM''

Errors have been discovered in the steel subcontractor’s fabrication drawings after they have been commented on by the Architect. The errors have involved the re-fabrication of a number of steel members causing delays to the contract.

When writing a letter to the contractor in response to a notification of delay you should make you role as an Architect and state clear what the Architect's duty is, for example in relation to shop/fabrication drawings, these notes could be pointed :

*''The Architect is responsible for the co-ordination of sub-contractor's design but not for the design itself''
*''If the design is beyond the reasonable skill of an architect, he cannot be held responsible for it''
*''The Architect may have a system of commenting on a drawing with a scale of A, B or C, where A signifies 'good - progress to manufacture', B 'okay' and C 'poor'''
*'''A' is only used rarely, and with extreme caution''
*''Even if 'A' is used, it is still only a comment and not an approval''
*''Check with Structural Engineer as to cause of the error''
*''The contractor is responsible for the design of sub-contract works, and must seek any damages form him directly(assuming the sub-contractor is not nominated)''
*''An error in sub-contract design work does not constitute a Relevant Event (unless the sub-contractor was nominated) and therefore does not give rise to an Extension of Time''
*''An error in sub-contract design work does not constitute a Matter and therefore the Contractor is not entitled to Loss and/or Expense ''

Architect's Collateral Warranties

2014-01-05T07:03:09Z

Xela: Created page with " = ARCHITECTS' COLLATERAL WARRANTIES = == The obligation to provide collateral warranties == *There is no legal duty on anyone to agree the terms of or to enter into a collater..."

= ARCHITECTS' COLLATERAL WARRANTIES =

== The obligation to provide collateral warranties ==
*There is no legal duty on anyone to agree the terms of or to enter into a collateral warranty in favour of a third party
*If collateral warranties are required, the employer is well advised to ensure that there is a binding obligation imposed by the terms of the consultancy agreement with the architect to grant collateral warranties
*SFA/99 defines a ‘third party agreement’ as: ‘an agreement between the architect and a third party existing in parallel with the agreement between the architect and the client’
*Clause 5.6 states that if the architect is involved in extra work or incurs extra expense he is entitled to additional fees calculated on a time basis
*Clause 7.5 states that ‘where the client has notified, prior to the signing of this agreement, that he will require the architect to enter into an agreement with a third party, the terms of which and the names or categories of other parties who will sign similar agreements are set out in annex to this agreement’
*Clause 7.6 states that ‘for the avoidance of doubt, nothing in this agreement shall confer on any third party any benefit or the right to enforce any term in this agreement’

The client will want collateral warranties in favour of:
*Any person providing finance
*Any future purchaser of the project
*Any tenant of the project
*If the nature of the profit-sharing or other arrangements for the project require, freeholders or borough councils or other third parties who may have a loss if the project is negligently designed or constructed

But architects should not accept open-ended provisions which raise the prospect of their being required to enter into collateral warranties with, say, 60 tenants

Enforceability of obligation
*Will courts order the architect to enter into the collateral warranty, or
*Will they suggest that damages for breach of the contractual obligation undertaken by the architect is adequate remedy for the client?

The latter is most widely held, and for this reason, powers of attorney are frequently inserted into tailor-made consultancy agreements in addition to the basic obligation to provide the collateral warranty, which authorises the client to execute the collateral warranty on behalf of the architect if the architect in breach of contract, fails to execute it himself

== The terms of collateral warranties: CoWa/P&T ==

'''Clause 1: The Warranty'''
*Consultants generally warrant that they will exercise reasonable skill and care in the performance of their duties
*Consultants do no guarantee results
*The warranty relates to the duties under the consultancy agreement

'''Clause 1(a): The Exclusion of Economic and Consequential Loss '''

‘The firm shall be liable for the reasonable costs of repair, renewal and/or reinstatement of any part or parts of the development to the extent that:
*the purchaser/tenant incurs such costs and/or
*the purchaser/tenant is or becomes liable either directly or by way of financial contribution for such cost

The firm shall not be liable for other losses incurred by the purchaser/tenant’

*If this limitation on the basic warranty did not appear, then the architect would be liable to the purchaser/tenant for the damages for breach of contract assessed in accordance with the normal rules
*According to the BPF, for clients who wish to extend the consultant’s responsibility to cover economic and consequential loss and can persuade the consultants to provide adequate insurance cover should delete the last sentence and replace it with: ‘The firm shall in addition be liable for other losses incurred by the purchaser/tenant provided that such additional liability to the firm shall not exceed £x in respect of each breach of the firm’s warranty’

'''Clause 1(b):’The Contribution Clause’'''
*To ensure that if there is a latent defect in the building and the purchaser/tenant wants to sue, his recovery against the architect is assessed on the assumption that the architect is only liable for his ‘share’ or the contribution to the loss
*Even if the purchaser/tenant is unable to recover from the contractor who may have also contributed to the loss either because the contractor has not given a collateral warranty or because the contractor is insolvent

'''Clause 1(c): ‘Defences of Liability’'''
*To ensure that if, for example, the consultancy agreement contains a limitation on the architect’s liability for negligence, that limitation is also imported into the collateral warranty

'''Clause 1(d): ‘Independent Enquiry’'''
*To prevent a contribution claim by the architect arising from the involvement of an independent surveyor to carry out any independent enquiry by the purchaser/tenant in the development

'''Clause 5: ‘Copyright’'''
*Obliges the architect to give the purchaser/tenant as wide-ranging licence to copy and use the documents for any purpose related to the premises
*The licence extends to the copying and use of documents for an extension ,but not a right to reproduce the design for an extension

'''Clause 6: ‘Professional Indemnity Insurance’'''
*The architect should check that his PII corresponds to the obligation in the collateral warranty, but the obligation is largely academic because:
*The obligation is too uncertain to be enforceable since it is qualified with the proviso: ‘provided always that such insurance is available at commercially reasonable rates’, and
*There is no effective sanction for a breach by the architect of his obligation to maintain PII
*Most PII policies contain a specific endorsement about collateral warranties stipulating the number which may be given and the terms which are insured

'''Clause 7: ‘Assignment’'''
*Blanks are included so that the agreement can prohibit assignment altogether or the number of assignments can be restricted
*Two or three assignments are usually permitted
*An assignment does not create new rights
*It extinguishes the assignor’s rights and, from the date of assignment, give the assignee the rights which the assignor would otherwise have had
*It does not mean that the limitation period starts again

'''Clause 9: ‘Limitation’'''
*‘No action or proceedings for any breach of this agreement shall be commenced against the firm after the expiry of x years from the date of practical completion’
*Usually six years for agreements under hand and twelve years if executed as a deed (under seal)

== CoWa/F ==
*Confers on the funders ‘step-in’ rights entitling the funder to ‘take over’ the appointment and to receive prior notice of termination of the appointment
*Clause 5 entitles the funder to serve notice on the architect upon termination of the finance agreement
*Clause 6 requires the architect to give notice to funder before terminating the appointment for breach by the developer
*Clause 7 requires the funder to accept liability for fees payable to the architect

[[Category:Articles_needing_more_work]]

Architect's appointment

2014-01-05T07:00:18Z

Xela: Protected "Architects Appointment": unfinished ([edit=author] (indefinite))

= ARCHITECTS' APPOINTMENT =

== The appointment ==

When considering an offer of appointment, an architect must:
*Be satisfied that the client has the authority and resources to commission the work
*Appreciate the background to the proposal and understand its scope
*Be aware of any other consultants who have been or are likely to be associated with the project
*Be satisfied that he has the experience and competence to undertake the work
*Be satisfied that the office has the necessary finance, staff, and other resources
*Be satisfied that the proposal will not conflict with any relevant codes of professional conduct, other commissions and commitments in the office and the policy of the practice

The architect must consider his position in relation to any other architect who may have been involved in the same scheme:
*An employer can offer the commission to whomever he wishes to obtain alternative schemes
*However the architect must ensure that he acts fairly in his dealings with other architect
*An architect who is approached by a potential client in connection with a project with which another architect has already been concerned has a duty to inform the other architect of his involvement

== Agreement of appointment ==
*The authority of the architect is strictly limited to the terms of his appointment
*The form of services can be varied with changing circumstance during the work, but it is essential that these changes are formally confirmed in amendments to the form of agreement
*Where a commission arises out of a recognised competition, the competition conditions usually form the conditions of the appointment
*The form of the appointment should be signed by both parties, witnessed and dated, each keeping a copy
*The architect's contract of engagement is usually personal to him: he cannot delegate his duties completely, but he is under no obligation to carry out all of the work personally
*May be made by either an informal exchange of letters (frequent, but not recommended) or an exchange of a formal memorandum or agreement, in each case supported by appropriate supplementary material such as conditions of engagement
*Various institutions publish standard forms of agreement and their use is strongly recommended

Where a standard form is not used, it is suggested that the following matters should be clearly identified in any exchange of letters:
*The date of the agreement
*The name and address of the employer
*The name and address of the architect
*The title and address of the project
*The formal agreement to the appointment of the architect
*The basis of remuneration for the architect and the arrangements for payment
*The form and scope of services to be provided by the architect
*The appointment procedure for a quantity surveyor, other consultants and the clerk of works as appropriate
*The procedure to be followed in the event of the architect's incapacity
*The procedure for the termination of the agreement
*The procedure for resolving disputes between parties
*The name of an agreed adjudicator or the agreed nominator of an adjudicator

== Termination ==
*The contract of engagement between the architect and the client may be terminated by either party at reasonable notice
*In the event of termination, any outstanding fees for work properly carried out become due to the architect
*In the event of death or the incapacity of the architect, it is usually held that the client is entitled to the use of the drawings to complete the work, provided payment has been made
*The death of either party generally dissolves the contract, but it is usually possible for a thirds party to assume responsibility for the completion of the contract
*In the event of termination on the ground of bankruptcy or liquidation, the contract can be continued if both parties wish to do so and the receiver agrees
*The Scheme for Construction Contracts and the standard forms of appointment make provision for the suspension of work in the event of non-payment of fees

== Standard Forms of Agreement for the Appointment of an Architect ==

Forms of Agreement introduced in 1999:
*Standard Form of Agreement for the Appointment of an Architect (SFA/99)
*Condition of Engagement for the Appointment of an Architect (CE/99)
*Employer's Requirements Supplement (Design and Build) for use with SFA/99 or CE/99 (DB1/99)
*Contractor's Proposals Supplement (Design and Build) for use with SFA/99 (DB2/99)
*Form of Appointment as Planning Supervisor (PS/99)
*Form of Appointment as Sub-Consultant (SC/99)
*Form of Appointment as Project Manager (PM/99)
*Small works Conditions (SM/99)

The Forms
*SFA/99 is suitable for use where the architect provides service for a fully building project of any size or complexity and can be used where other professional services are provided
*CE/99 and SM/99 are devised for use with letters of appointment for projects which are not regarded as being large enough to justify the full documentation of SFA/99
*DB1/99 and DB2/99 include replacement Service Supplements or use where the 'consultant switch' is envisaged
*Where the architect is commissioned as both architect and planning supervisor, it is strongly recommended that the two appointments should be clearly separated: as 'designer' the architect should draw the client's attention to PS/99

== RIBA Plan of Work 1999 ==
*A revised version of the original Plan of Work was produced with the intention of forming a closer relationship between the schedules of service and the Plan of Work

'''Traditional terminology Plan of Work terminology Revised 1999 terminology'''

Briefing A Inception A Appraisal

B Feasibility B Strategic Briefing

Design C Outline Design C Outline Proposals

D Scheme Design D Detailed Proposals

E Detail Design E Final Proposals

Working Drawings F Production Information F Production Information

F1

F2

G Bills of Quantity G Tender Documentation

H Tender Action H Tender Action

Contract J Project Planning J Mobilisation

K Operation on Site K Construction to Practical Completion

L Completion L After Practical Completion

M Feedback

== SFA/99 ==

'''Recitals''' make provision for:
*Date of the agreement
*Details of the client and the architect
*Title or description of the project and its address

'''Articles of Agreement''' make reference to:
*Date
*Conditions
*Schedules
*English or Scottish Law
*Settlement of disputes

Optional provisions for:
*Limitation of the time during which action or proceedings may be opened
*Limitation of the amount of liability
*Limitation of the amount of PI insurance

'''Schedule 1''': Project Description could refer to:
*Phasing or sectional completion
*Special submissions and negotiations
*Site information (ownership, boundaries, easements etc.)
*Health and Safety matters provided by client
*Organisational or operational matters
*Accommodation, space and use requirements
*Cost limits
*Key dates and programme requirements
*Initial brief if it exists

'''Schedule 2''': Services, Revised Plan of Work Stages, other activities - offers four options which have to be selected by deleting those which are not required:
*Perform the services as designer, design leader, lead consultant, during pre-Construction and Construction Work stages OR
*Perform the Service for the Work Stages indicated below (i.e. Plan of Work Stages)
*Make visits to the Works at the anticipated frequency indicated below
*Perform any other service identified below

'''Schedule 3''': Fees and Expenses – parties have to agree on:
*Method for calculating fees for normal services in relation to the services described in Schedule 2 and percentage or lump sums involved

Provision is made for:
*Annual review of certain lump-sum figures and time charges
*Additional fees
*A fixed interest rate on late payments
*Expenses and disbursements
*Mileage rates
*In-house printing costs
*Hourly rates or other bases for different categories of staff
*Instalment payments

Client should be reminded that the architect’s fees are:
*Nett and do not include VAT
*VAT is chargeable at the current rate regardless of the VAT status of the building

'''Schedule 4''': Other Appointments
*Provides for the names and addresses of other consultants

'''Services Supplement''': Design and Management

Architect's Design Services
*Uses the revised form of the Plan of Work to detail the possible services of the architect in relation to each of the stages offering options for:
*Alternative A, where the architect provides cost advice, and
*Alternative B, where the architect provides information to enable the QS to provide cost advise

Architect's Management Services
*Groups and details the services under three headings which can be offered singly or in combination to suit the particular procurement arrangement

The architect can be appointed as:
*Design leader and/or
*Lead consultant and/or
*Lead consultant and contract administrator

'''Conditions'''

== Speculative work and tendering for architectural services ==
*Speculative work in which the architect undertakes work at risk on the basis that payment will only be made in the event of the work proceeding is now widespread
*Competitive fee tendering has also become commonplace

The extent to which an architect is prepared to undertake speculative work must depend upon many factors such as:
*The policy of the practice
*The architect’s knowledge of the potential client
*The nature of the proposed project
*The likelihood of its success
*The architect’s existing commitments
*The capacity of the office now and in the foreseeable future
*The possible income and profit from the commission if it proceeds
*The extent of competition for the work

Regardless of these conditions:
*It is important that there should be an agreement between the architect and the client defining the extent of service and the commitment of the client to the architect in the event of the project proceeding
*In the event of the project proceeding, it is usual for the architect to be reimbursed for the initial work
*It is important that the practice should budget for non-fee-earning speculative work, fixing a limit to the amount it does

== Appointments required by statute ==
*Statutory duties may be specified in detail as part of the schedule of services, or
*Reference may be made to the relevant statute
*It has to be recognised by both client and architect that statutory duties are non-negotiable
*If the architect cannot or is not allowed to comply, he must withdraw, advising the client of the reasons for termination of the appointment

[[Category:Articles_needing_more_work]]
[[Category:Appointments]]

Architect's appointment

2014-01-05T06:59:44Z

Xela: Created page with " = ARCHITECTS' APPOINTMENT = == The appointment == When considering an offer of appointment, an architect must: *Be satisfied that the client has the authority and resources t..."

Appointment of an adjudicator under JCT 98

2014-01-05T06:47:26Z

Xela:

The process of appointment of an adjudicator under JCT provision.

''Pursuant on article 5:''
*''Clause 41A.1: either party may refer any dispute to adjudication''
*''Clause 41A.2: The adjudicator shall either be an individual agreed by both parties, or an individual to be nominated by the person named in the Appendix, provided that:''
*''Clause 41A.2.1: no adjudicator shall be agreed or nominated who will not execute the JCT standard agreement for appointment on an adjudicator, and''
*''Clause 41A.2.2: where either party has given notice of his intention to refer a dispute to adjudication then:''
*''any agreement by the parties must be reached with the object of securing the appointment of the adjudicator within 7 days of the notice''
*''any application to the nominator must be made with the object of securing the appointment of the adjudicator within 7 days of the notice''
*''once agreed or nominated, the parties shall execute with the adjudicator the JCT adjudication agreement''

 

The particulars to be provided with the referral documents ''should include:''
 
*''Particulars of the dispute''
*''A summary of the contentions on which the referring party relies''
*''A statement of the relief or remedy that is sought''
*''Any material the referring party wishes the adjudicator to consider''
*''Referral documents should be copied to the other party''

 '' ''

[[Category:Articles_needing_more_work]]

Appointment of an adjudicator under JCT 98

2014-01-05T06:42:47Z

Xela: Protected "Appointment of an adjudicator under JCT provision": unfinished ([edit=author] (indefinite))

The process of appointment of an adjudicator under JCT provision. 

''Pursuant on article 5:''
*''Clause 41A.1: either party may refer any dispute to adjudication''
*''Clause 41A.2: The adjudicator shall either be an individual agreed by both parties, or an individual to be nominated by the person named in the Appendix, provided that:''
*''Clause 41A.2.1: no adjudicator shall be agreed or nominated who will not execute the JCT standard agreement for appointment on an adjudicator, and''
*''Clause 41A.2.2: where either party has given notice of his intention to refer a dispute to adjudication then:''
*''any agreement by the parties must be reached with the object of securing the appointment of the adjudicator within 7 days of the notice''
*''any application to the nominator must be made with the object of securing the appointment of the adjudicator within 7 days of the notice''
*''once agreed or nominated, the parties shall execute with the adjudicator the JCT adjudication agreement''

 

The particulars to be provided with the referral documents ''should include:''
*''Particulars of the dispute''
*''A summary of the contentions on which the referring party relies''
*''A statement of the relief or remedy that is sought''
*''Any material the referring party wishes the adjudicator to consider''
*''Referral documents should be copied to the other party''

''How are the costs dealt with under the terms of adjudication? ''
 
*''Clause 41A.5: The parties shall meet their own costs of the adjudication except that the adjudicator may direct as to who should pay the cost of any test or opening up if required''
*''Clause 41A.5.8.3: Where an expert has been appointed by the adjudicator, the parties shall be jointly and severally responsible for the fees and expenses. In his decision, the adjudicator shall direct as to who should pay the fees and expenses or the proportion in which the fees and expenses are to be shared''
*''Clause 41A.6.1: The adjudicator in his decision shall state how payment of his fee and reasonable expenses is to be apportioned between the parties. In default of such statement, the parties shall share the cost equally''
''Clause 41A.6.2: The parties shall be jointly and severally liable to the adjudicator for his fee and reasonable expenses''

[[Category:Articles_needing_more_work]]

Appointment of an adjudicator under JCT 98

2014-01-05T06:39:22Z

Xela: Created page with " The process of appointment of an adjudicator under JCT provision. ''Pursuant on article 5:'' *''Clause 41A.1: either party may refer any dispute to adjudication'' *''Cla..."

Adjudication in construction contracts

2014-01-05T06:27:49Z

Xela:

Adjudication is a contractual or statutory procedure for swift interim dispute resolution. Adjudication is provided by a third party adjudicator selected by the parties to the dispute. Adjuducation is often is subject to a strict timetable and may be based purely on documentary submissions (see for example [http://www.neccontract.com/ NEC Engineering and Construction Contract], option W2).

Adjudicators can adopt an inquisitorial role which may involve taking the initiative in ascertaining facts and law.

Adjudication decisions are binding unless and until they are revised by arbitration or litigation. There is no right of appeal and limited right to resist enforcement. Award of legal costs is at the discretion of the adjudicator unless this is excluded by the terms of the contract.

If parties to a construction contract do not agree an adjudication procedure, then one is imposed by statute (see the [http://www.legislation.gov.uk/ukpga/1996/53/part/II Housing Grants, Construction and Regeneration Act 1996 Part II Section 108] and the [http://www.legislation.gov.uk/ukpga/2009/20/part/8 Local Democracy, Economic Development and Construction Act 2009 Part 8], which took effect in England and Wales in October 2011 and in Scotland in November 2011). Contractual adjudication procedures must comply with [http://www.legislation.gov.uk/ukpga/1996/53/part/II Section 108 of the Housing Grants, Construction and Regeneration Act].

The adjudicator is either named in the contract, agreed by the parties or appointed by a nominating body, usually named in the contract (see for example, the [http://www.tecsa.org.uk/ Technology and Construction Solicitors Association (TeSCA)] which has developed its own Adjudication Rules (now version 3.1). If the parties do not agree procedural rules which comply with the Housing Grants, Construction and Regeneration Act then the Act imposes the rules set out in the [http://www.adjudication.co.uk/legislation/scheme.htm Scheme for Construction Contracts].

 

= ADJUDICATION =

== What is adjudication? ==
*A binding summary interim decision making process by an independent third party
*''“The construction industry operates on a rhythm of monthly interim payments intended to be about right, followed by a final more precise adjustment after projects are over. It is at least plausible that prompt adjudication, followed by later arbitration or litigation, stands a better chance of serving the dispute resolution needs of the industry, since it mirrors the contract administration process itself."'' McGaw
*Traditionally the architect or engineer had performed this function of adjudicator, or “first tier dispute settler” or “third-party neutral”
*Latham envisaged that the adjudicator would be named in the contract, appointed at the outset of the project and called in when necessary with some familiarity with the project. This requirement has not been incorporated into the Act.

== How is adjudication incorporated into a contract? ==
*Contract itself defines the adjudication provisions in compliance with the Housing Grant, construction and Regeneration Act, 1996
*Contract incorporates adjudication rules such as those be the Technology and construction Courts Solicitors Association (TecSA), and the Construction Industry Council Model Adjudication Procedure (CICMAP)
*If neither of the above, the Scheme for Construction Contracts applies

== Section 108 of the Act ==

Section 108 - key adjudication provisions
*The requirements for adjudication that all construction contracts should provide for
*If the contract does not comply with these requirements, then the statutory scheme will apply
*A party to a construction contract will thereby be able to refer any dispute arising under the contract for adjudication under either the contractual scheme or the statutory scheme

Section 108 (2) - stipulates that the contractual scheme for adjudication should
*Enable a party to give notice at any time of his intention to refer a dispute to adjudication
*Provide a timetable with the object of securing the appointment of an adjudicator and referral of the dispute to him within 7 days of such notice
*Require the adjudicator to reach a decision within 28 days of referral or such longer period as agreed by the parties, or by up to 14 days with the consent of the party by whom the dispute was referred
*Impose a duty on the adjudicator to act impartially and
*Enable the adjudicator to take initiative in ascertaining the facts and law
*(The adjudicator is not required to act judicially when applying the law, nor is there any obligation upon him to reach the right answer)
*Provide that the decision of the adjudicator is binding unless and until the dispute is finally determined by legal proceedings, by arbitration or by agreement
*Provide that the adjudicator is not liable for anything done or omitted in the discharge of his functions unless in bad faith

== The government Scheme ==

Notice
*The party seeking adjudication serves written notice on every other party to the contract
*This briefly sets out the nature of the dispute and the relief sought
*A copy is sent to the adjudicator of nominating body

Appointment
*Selection of an adjudicator by a body must be communicated to the parties within five days of referral
*The selected adjudicator has two days to decide whether he is willing to act
*This person must not be an employee of a party to the dispute
*Once appointed, the referring party must serve notice on the adjudicator, accompanied by copies of all documents on which that party intends to rely
*Copies of this notice and documents are sent to all other parties in the dispute

Related Disputes - provision of a 'joinder'
*The adjudicator may decide more than one dispute arising out of one contract, and/or
*May decide related issues arising under different contracts

Objection to adjudicator
*The objection of a party to the appointment of a particular person as adjudicator will not invalidate the appointment or decision of the adjudicator

Powers of adjudicator
*To open up, revise and review certificates unless the contract provides that they are final and conclusive
*To decide and order payment of sums due under the contract
*To decide whether interest should be paid

== Enforcing an adjudicator's decision ==

*The success or failure of adjudication is thought to depend upon the enforcement issue
*The decision of an adjudicator is said to be binding but no provision is made for its enforcement
*When the legislation was implemented, there were real unresolved issues as to how an adjudicator's decision could be enforced
*The Scheme proposes that Adjudication should be brought within the scope of section 41 and section 42 of the Arbitration Act, which provide for the giving and enforcement of peremptory orders, or
*A party may enforce a decision by an application for a summary judgement

== Shortcomings of Adjudication ==

No Contract
*It is not clear how it is envisaged that 'no contract' arguments will be resolved because, unlike arbitration, the adjudicator has no power to rule on his own jurisdiction

No dispute - two means of objection
*That the claim is being considered and has not been rejected and that therefore there is no dispute
*That the contract provides for the architect's or engineer's decision to be final and therefore not open to challenge

No limit to the timing and number of references
*One party may spend months preparing his case before referring it to adjudication, leaving the receiving party to respond within 28 days

Costs
*There is no provision for the award of costs against the losing party or in the case of unmeritorious claims

Future challenges to adjudication
*The will probably concern the validity of the adjudicators decision
*Confusion relating to appointment
*28-day time limit - the courts will support a decision even if it is wrong
*An unfair decision
*A late decision
*If an adjudicator were to agree to decide matters, which were not strictly referred to him

== ==

Find out more

=== Related Articles on Designing Buildings Wiki ===
*Alternative dispute resolution.
*Alternative Dispute Resolution legislation.
*Arbitration.
*Breach of contract.
*Causes of construction disputes.
*Conciliation
*Contract claims.
*Contract conditions.
*Dispute resolution board.
*Mediation.
*The Housing Grants, Construction and Regeneration Act.
*The Scheme for Construction Contracts.

=== External references ===
*[http://www.neccontract.com NEC contract].
*[http://www.nec-adjudicators.org NEC adjudicators].
*[http://www.aica-adjudication.co.uk Association of Independent Construction Adjudicators].
*[http://www.ciarb.org/dispute-resolution/dispute-resolution-contract-clauses Tiered ADR].
*PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guide to the Appointment of][http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Consultants][http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf and][http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Contractors]P383.
*University of the West of England: [http://www.bne.uwe.ac.uk/flic/construction_site/6069/section1.htm Adjudication and Other Forms of Alternative Dispute Resolution].
*[http://www.tecsa.org.uk/ Technology and Construction Solicitors Association (TeSCA).]

[[Category:Articles_needing_more_work]]
[[Category:Contracts_/_payment]]
[[Category:Construction_management]]
[[Category:Contracts_/_payment]]
[[Category:Other_legislation]]

Contract documents for construction

2014-01-02T03:52:38Z

Xela:

On a traditional, fully-designed project, the contract documents may include:
*Articles of agreement and conditions of contract, for completing as a simple contract (or as a deed).
*Contract drawings.
*Bills of quantities.
*Specifications.
*Schedules of work.
*Perhaps an information release schedule. Consultants can be reluctant to produce information release schedules because of concerns about being held to the dates on the schedule (even where the progress of construction does not require information when the information release schedule proposes it). Failure to keep to the dates set out in the information release schedule may then be a matter for which the contractor can claim an extension of time and loss and /or expense.
*A schedule of tender adjustments or clarifications negotiated and agreed after the receipt of tenders and prior to the signing of the contract.
*The requirement for the contractor to provide a performance bond and to obtain collateral warranties from any specialist sub-contractors or suppliers.

Both client and contractor should engross the contract by witnessed signatures prior to commencement of work. In practice the administrative effort of collating all necessary paperwork can be overtaken by the desire to begin construction. In such circumstances it becomes harder to sort out any disputes as to the content. There have been cases where the courts have had to interpret an implied contract when the contract has remained unsigned.

On design and build projects, the contract documents may comprise:
*The articles of agreement and conditions of contract.
*The employer's requirements.
*The contractor's proposals.
*The contract sum analysis.
*Possibly bills of quantities (for some or all of the design).

 

 

 

= CONTRACT DOCUMENTS =

{| border="1" cellspacing="0" cellpadding="0"
|-
| |
 

| |
'''With Quantities'''

| |
'''With Approx Quantities'''

| |
'''Without Quantities A'''

| |
'''Without Quantities B'''

| |
'''Contractor's Design Portion Supplement'''

|-
| |
''Articles of Agreement''

| |
CD

| |
CD

| |
CD

| |
CD

| |
 

|-
| |
''Conditions''

| |
CD

| |
CD

| |
CD

| |
CD

| |
 

|-
| |
''Appendix''

| |
CD

| |
CD

| |
CD

| |
CD

| |
 

|-
| colspan="6" |
 

|-
| |
Drawings

| |
CD

| |
CD

| |
CD

| |
CD

| |
 

|-
| |
Bills

| |
CD

| |
CD

| |
 

| |
 

| |
 

|-
| |
Priced Specification, or Priced Schedule

| |
 

| |
 

| |
CD

| |
 

| |
 

|-
| |
Specification

| |
 

| |
 

| |
 

| |
CD

| |
 

|-
| |
Contract Sum Analysis, or Schedule of Rates

| |
 

| |
 

| |
 

| |
R

| |
 

|-
| |
Priced Activity Schedule

(optional)

| |
R

| |
R

| |
R

| |
R

| |
 

|-
| |
Information Release Schedule

(optional)

| |
R

| |
R

| |
R

| |
R

| |
 

|-
| |
Employer's Requirements

| |
 

| |
 

| |
 

| |
 

| |
CD

|-
| |
Contractor's Proposals

| |
 

| |
 

| |
 

| |
 

| |
CD

|-
| |
Contractor's Designed Portion Analysis

| |
 

| |
 

| |
 

| |
 

| |
CD

|-
| |
'Listed Items' and related Bond

| |
cl 30.3

| |
cl 30.3

| |
cl 30.3

| |
cl 30.3

| |
 

|-
| |
Advance Payment Bond

(private only)

| |
cl 30.1.1.6

| |
cl 30.1.1.6

| |
cl 30.1.1.6

| |
cl 30.1.1.6

| |
 

|-
| |
Collateral Warranty

| |
 

| |
 

| |
 

| |
 

| |
 

|-
| |
Health and Safety Plan

| |
cl 8.1.3

| |
cl 8.1.3

| |
cl 8.1.3

| |
cl 8.1.3

| |
 

|-
| colspan="6" |
 

|-
| colspan="6" |
KEY

|-
| colspan="6" |
CD = termed 'Contract Document'

|-
| colspan="6" |
R = referred to in the recitals

|-
| colspan="6" |
cl = referred to in the conditions

|}

=== ===

=== Articles of Agreement ===
*Contain the attestation that must be signed by both parties and witnessed
*''Article 1'': The contractor undertakes to carry out and complete the works shown upon, descibed by, or referred to in the Contract Documents
*''Article 2'': The employer undertakes to pay the contractor the contract sum as adjusted in accordance with the conditions

=== ===

=== Contract Drawings ===
*Should be identified precisely with all revision numbers

=== ===

=== Contract Bills ===
*Must be prepared in accordance with the Standard Method of Measurement of Building Works, 7th Edition
*Normally prepared by the QS, but this does not reduce the architect's responsibility for them (see Co-ordinated Project Information)

 

=== Specification ===
*Should become a core document, as recommended by the CPI, either bound in as a section of the bills or as a separate document referred to in the bills
*The drawings and the bills should refer to clauses in the specification

=== ===

=== Activity Schedule ===
*Prepared and priced by the contractor prior to the contract being executed
*Each activity priced making up the Contract Sum (provisional and prime cost sums etc. excluded)
*If included is used to ascertain the value of work properly executed for certification purposed
*Useful where tender package consists of drawings and specification alone

=== ===

=== Information Release Schedule ===
*Should state what information the architect will release and the time of that release
*Enables the contractor to programme work more effectively, but if any information is provided later than stipulated, it is a relevant event in relation to an extension to time
*An adjustment to the completion date will mean a negotiated adjustment to the schedule

=== ===

=== Sectional Completion Supplement ===
*Allows for phased completion of the works
*Conditions are modified so that they operate independently with respect to each section
*Separate certificates of practical completion are required for each section, but only one final certificate

=== ===

=== Contractor's Designed Portion Supplement ===
*Provides for the contractor to design and construct a part of the works
*'''Employer's Requirements''' are sent out with the tender documents
*'''Contractor's Proposals''' and '''CDP Analysis'''.are returned with the tender
*An entry is required in the appendix stating the limit on contractor's liability for design

=== ===

=== Bonds ===
*Arranged by the contractor where required
*Advance Payment Bond, where advanced payment is to be made to the contractor
*Bond in respect of payment for off-site materials and/or goods ('''‘Listed Items’''')

=== ===

=== Collateral Warranty ===
*'''MCWa/F''' for use where a contractor is required to give a warranty to a company providing finance for building works
*'''MCWa/P&T''' for use where a contractor is required to give a warranty to a purchaser or tenant of the building works

=== ===

=== Health and Safety Plan ===
*Not a contract document and not referred to in the recitals
*Nevertheless a statutory obligation for the employer to have had one prepared and passed to the principle contractor under Regulation 15 of the CDM Regulations 1994
*Before construction work can begin, the contractor must have developed the plan to comply

=== ===

=== Health and Safety File ===
*Compiled by the planning supervisor
*Contractor must provide information for it and ensure that any sub-contractor also complies
*Architect must ensure that the contractor has sufficiently complied before issuing the Certificate of Practical Completion

 

== Use of Documents ==

=== Priority of Contract Documents ===
*Nothing contained in the Contract Bills shall override of modify the application or interpretation of that which is contained in the Articles of Agreement, the Conditions or the Appendix

 

=== Inconsistencies, errors or omissions ===
*Any error in the contract bills shall be corrected
*Not explicit, but normally be the responsibility of the employer and carried out by the QS
*Correction is treated as if it were a variation required by and architect’s instruction
*No express requirement to issue an instruction, but correction should be confirmed in writing
*Contractor is under an obligation to point out, but not to search for, any discrepancy or divergence within or between the contract documents
*If the contractor fails to point out any discrepancies that he has or should have noticed and the work has to be rebuilt as a result, he may lose the right to extra payment, extension of time and loss and expense

 

=== Custody and control of documents ===
*Contract drawings and contract bills remain in the custody of the architect or QS
*Contractor must be provided with one certified copies and two further copies
*All drawings that bear the name of the architect should be returned upon final payment
*At Practical Completion the contractor must provide copied of all drawings and information relating to performance specified work

== Sub-contract Documents ==

=== Domestic sub-contracts ===
*JCT Ltd does not currently publish a standard form of use with domestic sub-contractors, although one is published by the Construction Confederation (DOM/1, 1998)

 

=== Nominated sub-contracts ===
*JCT Ltd publishes five documents for use with the sub-contract provisions
*NSC/T: form of tender
*NSC/W: warranty entered into between the employer and the nominated sub-contractor
*NSC/N: standard form of ‘Nomination Instruction’ sent by the architect to the main contractor
*NSC/A: form of agreement between the main contractor and the nominated sub-contractor
*NSC/C: conditions of contract between the main contractor and the nominated sub-contractor

 

=== Nominated Suppliers ===
*JCT Ltd publishes a form of tender (TNS/1) and a warranty (TNS/2) for use with nominated suppliers
*Not in line with other JCT 98 documents

=== ===

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Bills of quantities.
*Contract.
*Contract conditions.
*Contractual documents (documents that might be referred to in construction contracts).
*Contractors proposals.
*Contract sum analysis.
*Employers requirements.
*Information release schedule.
*Performance bond.
*Procurement route.
*Schedules of work.
*Specifications.
*Tender.
*Tender documents.
*Warranties.

=== External references ===
*[http://www.publicarchitecture.co.uk/knowledge-base/publications/standard_forms%5B1%5D.pdf The London Government Taskforce provides a very useful guide to the different forms of contract in common usage and the circumstances under which they are appropriate.]

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