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Last edited 03 Dec 2020
How progress is agreed in construction
Agreeing how much progress has been made at various stages or a construction project ensures the main parties to the contract are aware of how the programme is proceeding, it can assist in calculating payments due, and it can help identify potential difficulties and avoid delays and disputes.
There are a number of ways in which progress can be assessed and reported.
- The start date, completion date and the date the programme was prepared.
- Dates and durations allocated to specific tasks.
- A critical path.
- Tasks which can only be carried out after other tasks have been completed.
- Tasks which can be carried out simultaneously.
- 'Float' within tasks that are not on the critical path (that is, delays that can be incurred without affecting the critical path).
- The need for specific resources such as plant, services or materials and their lead time.
Contracts may require that the contractor provides a master programme for the construction of the works, but again, as this is produced after the execution of the contract, it does not impose any obligation on the contractor beyond those obligations already imposed by the contract documents.
Some contracts (such as the New Engineering Contract) may include key dates by which specific milestones or conditions must be met, and the contractor may have a duty to give early warning of anything that may delay the works. The contractor may also be under an obligation to proceed ‘regularly and diligently’ with the works.
- Receive progress reports from the contractor (the contractor may also hold progress meetings with sub-contractors and suppliers prior to the construction progress meeting).
- Receive progress reports from the consultant team.
- Receive cost reports from the cost consultant.
- Receive records of sub-contractors and labour on site.
- Receive progress photos.
The Housing Grants, Construction and Regeneration Act stipulates that interim or stage payments are due to any party to a construction contract that has a duration of more than 45 days. Therefore, almost all constructions contain provisions for interim payments.
Contracts should also include clauses that detail:
- The valuation method for payments.
- Criteria under which interim payments will be made.
- Payment timings.
- Administrative rules to which those undertaking the valuation should adhere.
The basis of the valuing interim payments will vary depending on the terms of the contract, but may include:
- Activity schedules assessed in terms of percentage achieved or completion of each activity.
- Milestones reached on a pre-agreed programme.
- Measurement against a bill of quantities.
- Stage payments against calendar dates.
Where key performance indicators are to be used on a project, it is important that they are identified in tender documentation and that the regular provision of the information required to assess them is a requirement of the contract. This may be of particular importance where the contract stipulates that the contractor will be rewarded or penalised based on their performance relative to certain indicators.
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