The Aqua Group Guide to Procurement, Tendering & Contract Administration Edited and updated by
Mark Hackett, lan Robinson & Gary Statham Davis Langdon LLP
.,. Blackwell '-b Publishing
DAVIS LANGOON
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Contents
Foreword by Rob Smith, Davis Lmgd(l/1 LLP Introduction
Part I Briefing the Building Team
1 The Building Team Introduction Parties to a building contract and their supporting teClms
Rights, duties and responsibilities The employer The architect/contract administrator The quantity surveyor The status of named consultants Unnamed consultants with delega ted powers The project manager The planning supervisor The principal contractor Sub-contractors Thederk of works
Statutory requirements TheCDM Regulations
Avoiding disputes Communications
2 Assessing the Needs The structu re The brief The initial programme
xvi xviii
1
3 3 3 4 4 5 5 5 5 6 6 7 8 8 8 9
10 11
12
12 12 14
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VI Contents
TIle appointment 16 Appoin tment documents 17 Collateral warranties 17
Part 11 Available Procurement Methods 19
3 Principles of Procu rement 21
Simple theory - complex practice 21 The eternal triangle 21 Other considerations 25
The Construction (Design and Management) Regulations 1994 25 Risk 26 AccolUltability
Making the contract Type of contract Selection of the contractor - the tendering procedure Establishing p rice and time
The dynamics of tendering
4 Bas ic Concepts Economic use of resources
Labour Materials Plant Capital
Contractor's contribution to design and contract p rogramme Prod uction cost savings Continuity Risk and accountability
Accountability Summary
5 Accountability l3ackgrolUld The modern concept of pu blic accolUltability Contract documentation Proper price Dispensing with competition Inflation Value for money Summary
26 26 26 27 28 28
30 31 31 32 32 32 32 33 34 35 36 36
38 38 39 40 40 40 41 41 42
Contents
6 Value and Risk Management Value management
Value articulation and project definition Optimisation of benefits and costs Learning lessons and performance optimisation
Risk management Risk must be managed Nothing ventured nothing gained Understanding the project
Risk management strategies Allocating management actions Value and risk are complementary
Similarities in the processes The integrated process
7 Fixed Price and Cost Reimbursement Fixed price Cost reimbursement Application to contract elements Fluctuations Target cost contracts Use
The employer's position The contractor's position
Programme Summary
8 Fixed Price Contracts JCT flXed price contracts
The Standard Building Contract Design and Build Contract Major Project Construction Contract Intermediate Building Contract Minor Works Building Contract
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Advantages and disadvantages of fixed price contracts Advantages Disadvantages
, Cost Reimbursement Contracts Thefec The Prime Cost building contract
Characteristics of the form
vu
43 43 44
45 45 46 47 48 48 50 51
52 52 53
57
58 58 59 59 60
60
60 61 62 62
64
64 66 66 67
68 69 70 70 70
71 71 72 72
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VI11 Contents
Advantages and disadvantages 72 Advantages 73 Disadvantages 73
Budget and cost control 73 Administering the contract 74 Procedure for keeping prime costs 75
Labour resources 76 Materials 76 Plant 77
Credits 77 Sub-letting 77
Defective work 78 Cost control 78 Final account 78
10 Target Cost Contracts 79 Guarantc'Cd maximum price contracts 82 Competition 82 Contract 82 Advantages and disadvantages 83 U,e 83
11 Management and Construction Management Contracts 84
Payment and cost control 84 Selection and appoinhnent of the contractor 86 Contract conditions 87 Contract adm inistration 88
Professional advisers 89 Advantages and disadvantages 89
Advantages 89 Disadvantages 90
Construction Management 91 Use 92 Programme 92
12 Design and Build Contracts 94 The Contract 95 Where to use design and build (and when not to do so) 97 Managing the design process 98 Novation 99
Evaluation of submissions 99
Post-contract administration 100 Financial administration 100
a
Contellts ox
Programme 101 Advantages and disadvantages 102
Advantages 102 Disadvantages 102
13 Continui ty Contracts 104 Seria l contracting 104
Purpose and use 105 Operation 106
Continuation contracts 107 Purpose and use 108 Operation 108
Term contracts 110 Purpose and use 110 JCT Measured Term Contract 110 Operation III
I. Partnering 113
A definition 114 When to adopt a partnering approach 115 The agreement 116 JCf Framework Agreement 116 The partnering workshop 11 7 The benefits 117 The risks 118 Future of partncring 119
Part III Prepari ng for and Inviting Tenders 121
15 Procedu re from Brief to Tender 123 Initial brief 123
Developing the brief 123 Feasibility stage 124 Sketch scheme 124 Costs 125
Procurement 126 Detail design 127 Programming 128
Design team meetings 129 DraWings 129 Specifications 130 Bills of quantities 130 Specialist sub-contractors and suppliers 131
,
Quality assurance Obtaining tenders
COlltellts
16 Pre-Contract Cost Control Cost control Reporting Establishing a budget Approximate estimates
Preliminary estimate Element lmit quantities estimate Approximate quantities estima te Accurate quanti ties estimate
Cost plan Substructure Superstructure Internal finishes Fittings and furnishings Services External works Developmen t of the cost plan
Li Fe cycle costing Cash flow
17 Drawings and Schedules The role of drawings and documents Quality
Quality manuals Quality procedure codes Quality review
Types, sizes and layout of drawings Size Layout and revision Scale
Nature and sequence of drawing production Drawings for SBe contracts Drawings for design and build or management contracts Design intent information
Computer aided design D rawing file formats and translation
Project extranets Contents of drawings
Survey plan Site plan, layout and drainage
132 133
134 134 134 136 136 137 137 138 139 139 140 140 142 143 143 149 150 151 152
154 154 155 156 156 157 158 158 159 159 161 161 162 163 164 165 165 168 168 169
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COlltmts xi
General arrangement 169 Elevations of all parts of the building 171 Descriptive sections 171 Ceiling plans at ail floor levels 171 Construction details (scale 1 :20 and 1:10) 172 Large-scale details (scale 1:10 and 1:15) 172
Schedules 173 Drawings and schedules for records 174
18 Specifications 179 The use of specifications 179
Prescriptive specifications 180 Performance specifications 180 Descriptive specifications 181
Specification writing 181 Decide on format 181 Collect infonnation 182 Input information 183 Check and test 183 Ocliver 184
The specification as a contract document 185
19 Bills of Quantities 191 Tender and contract document 191 The wider role 192 Basic information 192
Preliminaries 192 Preambles 194 Measured works 194
Formats 194
20 Sub-contractors 201 Sub-contractors 201 Specialist sub-contractors 201 Design by the sub-contractor 202 The SBC and sub-<ontract agreements 203
SBC provisions under the main contract 204
21 Obtaining Tenders 205 Introduction 205 Tender list 206 Preliminary enquiry 207 Tender documents and invitation 208
xii
Tender period Tender compliance Late tenders Opening tenders
Contents
Examination and adjushnent of the priced document Negotiated reduction of a tender Notification of results Tender analysis
Pa rt IV Contract Administration
22 Placing the Contract Preparing and signing the contract documents
Sectional completion Contractor's designed portion Executing the contract
Performance bonds and parent company guarantees Collateral warranties Third party rights Issue of documents lnsurances
23 Rights, Duties and Liabilities under the SBC Introduction
llle employer The architect/contract administrator The quantity surveyor The plaIUUng supervisor The clerk of works The person-m-charge
Conclusion
24 Meetings Initial meeting
Introductions Factors affecting the carrying out of the works Programme Sub-contractors and suppliers Lines of communication Financial matters
Procedure to be followed at subsequent meetings Contractor's meetings Employer's meetings
209 209 209 210 210 211 211 212
213
215 215 216 217
219 219 220 220 220
222
227 227 227 240 243 244
244 245 245
246 246 247 247 248 249 249 249
251 253 253
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X>V Contents
Value added tax 300 Valuation and certificate forms 300
2. Completion, Defects and the Final Account 305 Practical completion 305 Partial possession 308 Possession of the building 309 Defects and making good 309 Final aCcOlmt 310
Adjustment of the contract sum 311 Practical considerations 313
Final certificate 314
30 Delays and Disputes 318 Introduction 318 Delays caused by the contractor 319 Delays caused by employers or their representatives 31. Delays caused by events outside the control of either party 320
Force majeure 321 Exceptionally adverse weather conditions 322
SBC procedure in the event of delay 322 Best endeavours 322 Notification of delay 323 New completion dates 323 Final adjustment 324 Duties and dl.>(:isions 325
Reimbursement of loss and/or expense under the SBC 326 Liquidated damages 327 Disputes and dispute resolution 328
Mediation 32. Adjudication 32. Arbitration 334 Litigation 336
31 Insolvency 339 Introduction 33.
Insolvency practitioners 33. Liquidation 340 Receivership 341 Administration 341
After the Enterprise Act 2002 342 Voluntary arrangements and compositions 343 Debentures 344
Conte/lts
procedure upon the insolvency of the contractor TheSBC provisions Early wamingsigns and precautionary measures Completion of the works Completion documentation Sub-contractors
Bonds Final accounts The procedure upon the insolvency of the contractor
32 Capital Allowances Introduction
Index
Eligibility for capital allowances The worth of capital allowances
Tax deductions for property refurbishment schemes Capital or revenue? Incidental capital expenditure Deferred rcvenueexpenditu re Action summary
Energy saving plant and machinery Key features Key exclusions How to claim ECAs Qualifying products and items
Pre-contract planning to optirnisccapital allowances Some questions and answers
xv
344 345 346 348 350 351 352 352 35-1
357 357
358 358 359 359 360 360 361 362 362 363 364 364 365 365
367
Index
Page numbers in italics refcr 10 figures
'account owner' (ri~k management), 51
accountabili ty, 26, 38-42 accuralcquantiticseslimate, 138-9 'action owner' (risk management), 51 additional work, sce vari.1tioni> adjudication,329-34 adjustments 10 contract sum, 31 1-13 adjustments 10 fmal account, 309-10 administration (insolvency), 341-3 Agrement Certificates, 263 annot.lled bills of quantities, 195 antiquities on site, delays caust.od by. 298, 313,
321,327 appointments, 16- 18 approximate quantiti~ I:!:;limatc, 138-9 arbitration, 33-1 - 6 Arbit ration Act 1996,335 archaeological finds, delays caused by, 298,
313,321,327 architects
appointment, 16-18 instructions, 279-83 rights, duties& r~ponsibililies,5,
240-43 site duties, 257-60
'arrangement for a composition of debts', .3-13-4
artieltos of agr('('ment, 215-16 dtosign & build contr,lcts, 95-6
'as-built' dr,lwings, 174,262, 309
benefits capital allowances, 365 optimi<;ation,45
'best endeavour..', 322-3 'best value', 40-42 bill of quantities, 130-31. 182, 191-5, ]96-200 bonds, performance, 219-20, 225, 349, 352 BPF, see British Property Federation bricks, tests, 263 brief, 12, H, 123-6, see also Employer's
Requirements British Airports Authority
framcwork,lgreements, I 14 project extranei, 167
British Property Federation (BPF) form of consultancy agreement, 17 warranty agreements, 18,220
British Standards, 263 SS EN iSO 41 57: 1999, 156,159 SS EN 1505457:1999, 158 BS EN ISO 'XXlO, 132 SS EN rS09001 :2000, 156
budget control, Sf?e also cost control cost reimbur..emcnt contracts, 73
budgetsctting. 136 building control insIX'Ctions, 260 building control officers, directions from,
260-61 building log-book, 309 Building Regulations 2000
building log-book, 309 inspections, 260
368 IlIdex
building services operation & maintenance information,
309 spare parts, 309
building team, 3-8 busint'ss rescue, 344-5
CAD (computer-aided design), 155, 163-5 capital alluwances, 357-66 Capital Allowances Act 2001. 357, 358, 362,
363,366 cash flow, 32, 152-3, see a/so insolvency CDM94, see Construction (Design and
Management) Regulations 1994 cor (contractor's desi~,'ned portion),
see contractor's designed portion Cj·rtifiCl.lte ofCompletioll of Making Good
D.frcts, 308, 316 Certificate of Practical Completiol/, 305, 315 change:.. St'l'designchanges; variations CHI' (combined heal & power), ser combined
hcat& power CIB, see Construction industry I30drd C1C, see Construction industry Counci l CIMA I{ (Construction Industry Model
Arbitration Rules), 335 CIS, see Construction Industry Scheme CIS (Construction Industry Scheme),
employer as contractor, 296 Civil Procedure Rules, 336 cladding. tests, 263 classification (documentation), 159 clerk of works
daily diary, 26] - 2 instructions, 281 project reports, 262, 277 responsibilities, 69 rights, duties & responsibilities, 8, 244,
258-9 Co-ordinated Project Information (CPI), 130 codes of pr.lciice, 263
Code 0[ Pmc/ice for ti,e Se/ectiOlI of Maill COlltractors, 205
Code of Procedure for Sillgle Sta~e Se!t>ctil,.. Tmdering, 205
Considerate Constructors Scheme, 26-1--5
loilll Code of Practice 011 Ihe Pro/retial' from Fire 0fColls/fllctioll Sites and Buildillgs U/ldergolllg RI'IIOVIltiol', 269-70
'collaborative working', 114 colla teral warranties, 17-18, 220 combined heat & power (CHP), 364-5
CHl'Quality Assur.lnce Programme (CHI'QA),365
'commercial' settlements, 314
communication dispute avoidance, 10-11 electronic, 165-7, 183,263 fire precautions, 272 health & S<lfety, 268 information relca:.e schedule, 248-9 instructions, 279-83 lines of communication, 259
Companies Act 1985/89,343 competition
dbpensing with, 40-41 in target cost contracts, 82
completion, 305-17 completion certificate, 305-6, 315 completion dates
practical completion, 306 revision, 323-5
completion works, 349-52 componcnb
economics of sil.e, 32 ownership, 347-8 payments for, 298-9 samples, 263 standards, 263
compulsory liquidation, 34{)
computer·aided d~ign (CAD), 155, ]6]-5
concrete, tests, 263 Considerate Constructors Scheme, 264-5 Construction Act. see Housing Grants,
Construction and Regeneration Act 1996
Construction Confedera tion Considerate Constructors Scheme,
2~-5
Joint Fire Code, 269-70 Stmrdard Method of M(-'llsuremellt of Ruildi/lg
Works (SMM7), 66
index 369
Construction (lJcsign and Management) Regulations 1994 (COM94), 9-10,25- 6
rue prec,1utions, 269 health & safely, 265 planning supervisor, 6-7
Construction (Design and Management) Regulations 1994 (COM9-l), Amendment 2000, 9
Corutruction (Health, Safety and Welfare) Regulations 1996,9,269
Construction Industry Board (erB) Codeof Practice for ti,e Selectiml of Mai11
Contractors, 205 Considerate Constructors Scheme, 264-5
Construction IndustryColUlcil (erC) Guide to Quality BaSt.'d Selcctio11 of
Consultants, 17 warranty agrcements, 18, 220
Construction lndustry Model Arbitr<1tion Rules (ClMAR), 335
Construction Industry Scheme (CIS), employer as contractor, 2%
construction management contracts, 84-93 Construction Specifications Institute,
Masterformat, 182 construction team, 4 consul tants
appointments, 16- 18 rights, duties & responsibilities, 5-6 site visits, 260
contingency sum, 288 continuation contracts, 107- 9 continuity contracts, 104-12 continuity of activity, 34-5 contract (s)
completion work;;, 349-50 forms of contract, 26-7
scleo::tion, 30-37 professional appointments, 16-18 sub-contracts, 201-4, st'e alS{! sub
contractors tendering procedure, sec tendering
contract administration capital allowances, 357-66 completion, defects and the final account,
305-17
cost reimbursement contracts, 74 delays & disputes, 318- 38 insolvency, 339-56 instructions, 279-83 interim payments, 291-304 management & construction management
contracts, 88- 9 mcetings, 246- 56 placing the contract, 215-26 rights, duties & responsibilities under the
SBC,227- 45 site duties, 257-78 variations & post-contract cost control,
284-90 contract administrator
instructions, 279-81 rights, duties & responsibilities, 5, 7,
240-·!3 contract price, 36-7 contract sum
adjustments to final account, 310- 13 non-competitive con tracts, 40- 41 value added tax, 300 variations, 251, 288 - 9
'Contract Sum Analysis', 96 contractors
approved,206- 7 caused by contractor, 322-3 contribution to design & programming,
32- 3, see also contractor's df..>signed portion (COP)
cost management, 33-4 daywork records, 287-8 delays caused by, 318-19, 322-3, st'e a/St.)
liquidated damages financial difficulties, 343-4, 345-6 health & safety resporuibilitics, 265-8 interim payments, 296-7 meetings, 253 reimbursement for employer caused
delays, 325-6 responsibility for sub-contractors, 67 rights, duties & responsibilities, 7-8, 96,
233-9 selection, Sf'e tendering site records, 262
370 Index
contractors (cout'd) sub· letting, 77 terminalion of 'employment'. 307-8, 346,
349 contractor's designed portion (CDP),66.
217-19,221 CDI' Analysis, 217 design & build contracts, 95 drawing & information, 307 sub-contractors' design. 203
Contractor's Proposals contractor's desih·m.-d portion (CDP), 217 Design and Build Contract (DB), 96
Contracts (Rights of Third Parlies) Act 1999, 18,220
Coord inated Projfft lnformation (Cri), 66 cost (s), 31-2, see also prime costs (PC); value
management estimates, 125-6 fixed price versus cost reimbursement
contracts,57- 63 materials, 32, 76, 77 optimisation, 33-4,45
cost control cost reimbursement contracts, 73, 78 management & construction management
contracts, 84- 6 post-contract, 288- 9, 290 pre-<:ontract, 134- 53
coslelements, 140- 50 cost fluctuations, 59- 60, 66, 68
cost limits, 136, 288- 9 guaranteed maximum price contracts, 82,
83,86 cost planning, 33, 139-51 'cost plus' contracts, 59 cost reimbursement contracts, 71-8
versus fixed price contracts, 58-63 COSI reporting, 134-6 County Court Rules, 336 CPI (Co-ordinated Project Information), 66,
130 cn.-'ditors, 341,344
daily diary, 261 data exchange format, 165
datl-' of completion practic.ll completion, 306 revision, 323-5
dayworks, 285, 287-8 DB (Design and Bui ld Contract), see Joint
Contracts Tribunal, Design and Build Contract
DBFO (design, build, finance and operal(') schemes,97
debentures,341,J.H defective work
allowance for in cost reimbursement contracts, 78
making good, 306-7, 308, 309-10 defcrrl-d rcvt'nuc expenditure, 360-61 delays
caused by contractor, 318-19, 5N' also liquidated damages
caused by employer, 318,319-20, 326
'neutr.ll events', 320-22 reimbursements to contr.lctor, 326-7 SBC procedure, 322-5
descriptive specifications, 181 design and build contracts, 94-103, s..t' alS<.1
Joint Contracts Tribunal. Dcsignand Build Contract (DB)
drawings, 162-3 design, build, finance and operate (DBFO)
schemes, 97 design changes, 159, see also variations design documentation
drawings, 154-78 pre~ontract, 129-30
design intent information, 163-4 desih'l1 process, set also contractor's designed
portion (COP) costing alternative designs, ]5(}-51 Desib'l1 and Build Contract (DB), 98 dl'Sign changl'S, 159 detaik-d dl'Sign, 127-8 outiincdcsign, 124-5
design team, 3-4 inIorm.ltion release schedule, 248-9 pre-contract meetings, 129 site r('Cords, 262
llldcx 371
detailed design descriptive specifications, 1 81
design process, 127-8 sub-contractors design, 202-3
detaile~.:t materials and workmanship specifications, 180
development control approval, 124-5, 127-8 dispute avoidance, 10-11 d ispute resolution, 328-36 document codes, 156- 7 documentation
bills of quantities, 191- 5, 196- 200 completion works, 350- 51 contract, 40, 21 5- 19, 220- 22 from contractor at completion, 307 drawings, 154-78 management of, 156-7, 159, 164,166,184 specifications, 179-90 tender, 208-9
drawings, 154-78 pre-contract, 129-30
duties,4- R,227- 45
ECA (Enhanced Capital Allowances) scheme, 362- 5
EDI (Electronic Data Interchange) Agreements, 167
Egan, John, report Rethinkillg COlls/ructioll,
30 Electronic Data In terchange (EDI)
Agreements, 167 element unit quantities estima te, 137- 8 elemental bills of quantities, 195 emergency plans & procedures, 268, 272
employers delays caused by,318, 319- 20, 325- 6 health & safety responsibilities, 265
insolvency, 354 meetings, 253 requirements, 96, 98, 217, see also initial
brief rights, duties & responsibi li ties,4- 5,
227-32
Employers' Liability (Compulsory insurance) Regulations 1989, 222
Employer's Requirements, 96, 98, 217
energy saving plant & machinery, capita I allowances, 362- 5
Energy TechnologyCriter ia List, 362, 363 Energy Technology Product List, 362, 363 engineering works, design responsibility, 33 Enhanced Capital Allowances (ECAs)
scheme, 362-5 Enterprise Acl 2002, 339, 341,342 environmental health officer inspections,
261 estimates, 136- 9 European Construction Institu te, Partnerillg
ill fhe Public Sector, 115
Eu ropean Union, procuremen t rules, 207 exceptional weather conditions, 322 execution of contract, 219 expenses (contractor's)
adjustments to final account, 309, 312- 13
reimbursement for employer caust'CI delays, 326
extension of time, 322-5
for employer caused delays, 318, 320, 326 for 'neutral events', 321
external cladding, tests, 263 extranels, 165- 7
FA (Framework Agreement), 116-17 faults, making good, 306- 7, 308, 309-10 feasibility Slage, 124 Federation of Civil Engineering Contractors,
Daywork Schedrlle, n fee;
architects',16- 17 management & construction management
contracts, 85, 87 final account, 310- 14
cost reimbursement contracts, 78 inwlvency adjustmen ts, 352- 4, 355- 6
final certificate, 314, 317
Financc Act 2001 /03, capital allowances, 362,
363 financial administration, 249- 51, see also
accountability; cost control iX-sign and Build Contract (DB), 100-101 managemcnt & construction management
contracts, 86
------------~----~-~ .. ~.~~~---,. ............................. ~
372 Index
finan cial reviews, 289, 290 Fire and Ci vil Defence Authority,
inspections, 261
fire~fjghting equipment, 271 fire precautions, 269- 72 fire prevention, 270
Fire Protection Association,Joitlt Fire Code, 269-70
'firm price' contracts, 59- 60 fitling-oul works, capital allowances, 359,
365-6 fixed price contracts, 64-70
versus cost reimbursement, 58-63
fixed price variations, 289 force majeure, 321-2 forms of agreement, 17 fossils (antiquities) on site, delays caused by,
298,313,321,327 Framework Agreement (FA), 116- 17
'gain-share pain-share' contracts, 79 groS5 valuation, 297 gUilranteed maximum price contracts, 82,
83 management & construction management
contracts, 86 guarantc'es, 219-20 Guide 10 Qlllllity Based Selectiml ojGmsultal1/s,
17
'hand-over' mc'(-'ting, 309 hazards, health & safety, 265-1:\ health and safety, 9-10, 265-8
responsibilities, 25 Hcalthand Safety at Work ete. Act 1974
(HASAW),265
I icalthand Safety at Work H.egulations 1999, 9
Health ,1I1d Safety Commission, 9
Ilealth and Safety Executive, health & safety policy document, 265
health and sa.fety file, 10, 174 handover,309
I-Iealth and Safety Inspectorate (I ISI),
il15pection.'i,261 hotel allowance, 358, 359
Housing Grants, Construction and Regeneration Act 1996
dispute resolution, 328 interim paynll'nts, 291
HSI (Health and Safety Inspectorate), inspections, 261
IC (Intermediate Building Contract), 27, 68- 9
incidental capital expenditure, 360 incomplete work, 306, 348-52 industrial buildings allowances, 357,358,
359 inflation, 41
information rcle,l5e schedule, 248-9 initial brief, 12, 14, 123- 6
initial meeting, 246- 51 in.iti,ll programme, 14, l!i
insolvency, 339-44 contractor's, 344- 54
employer's, 354 In50lvency Act 1986
administration, 341, 3-l-2 insolvency practitioners, 340 receivership, 341 voluntaryarrangements,343
insolvency practitioners, 339-40, 344 inspections, site, 258 - 61 instructions, 279- 83
to suppliers, 249 insurance, 222-4
at practical completion, 307, 309 risk management, 35 for terrorism, 223- 4, 312
integrated risk & value management,53, 54-6
interest payments, 295 interim certificates, 297- 9, 301,304,307
issue of, 294 interim payments, 291-304 interim valuations, 294, 302 Intermediate Building Contract (IC), 27,
68-9 lS04157:1999, 156, 159
ISO 5457:1999, 158 ISO 9001 :2000, 156
-
Index 373
/oilll Code of Practice 011 the Protectioll from Fire ojColIstmc/ioll Sites alld Buildings U"dergoing Rellom/io", 269-70
Joint Contracts Tribunal
•
Construction lndustry Model Arbitration Rules (ClMA R), 335
Con!!truction Management Contract, 87 Design ilnd Build Contract (DB), 66-7, 95-7
interim payments, 293 fixed price contracts, 64-70 form.!> of contract, 27 Framework Agreement (FA), 116- 17 Intermediate Building Contrilct (lC), 27,
68-9 Major Project Construction Contract (MP),
67-8,95 Management Building Contract, 87 Measured Term Contract, 110-12 Minor Works Building Contract (MW),
69-70 Practice Note 6 Maill COII/ract Tendering,
205 Prime COl>t Building Contract (2005), 58,
72-3 Standard Building Contract (SBC)' 4, 8, 27,
66,192,193 architects' instructions, 279-81 certificates& payments, 293-7 contractor'sdesigned portion, 217-19 contr.lctor's programme, 248 delays, 318-28 dispute procedures, 329, 334, 337 drawings, 161-2 insolvency provisions, 344-54 insur.lnce, 222-4 issue of documents, 220- 22 parti.ll possession, 308-9 practical completion, 305-8 preparing & signing, 215-19 Private With Quantities 1998 Edition
OCT9'),8 rights, duties & liabilities, 227-45 rights of third parties, 18 section.ll completion, 216-17 specifications as contract documents,
)90
sub-contracts, 202-4 third party rights, 220 variation .. , 284-90 warranty agreements, 220
/0111/ rire Code, 269-70 'joint names policy', 223 JCT, see Joint Contracts Tribuna l
key performance indicators (KPls), 114
laboratory tests, 263 labour costs, 31-2
cost reimbursement contracts, 76 Lath.lm, Michac\
Carls/mc/illg till' TI'allI, 30 Tmslillg Ihe Tt'alll, 47
LD, see liquidated damages legislation
Arbitration Act 1996,335 Building Regulations 2000, 260, 309 Capital Allowances Act 2001, 357,358, 362,
363,366 Companies Act 1985/89,343 Construction (Design and Management)
Regulations 1994 (CDM94),9-1O, 25- 6
fire precautions, 269 health & S<1fety, 265 planning supervii>Or, 6-7
Construction (Design and Management) Regulations 1994 (CDM94), Amendment 2000, 9
Construction (Health Safety and Welfare) Regulations 1996,9,269
Contracts (Rights of Third Parties) Act 1999,18,220
Employers' Liability (Compulsory Insurance) Rel:,'lJlations 1989, 222
Enterprise Act 2002,339, 341, 342 Health and Safety at Work etc. Act 1974
(HASAW),265 Health and Safety at Work Regulations
1999,9 Housing Grants, Construction and
Regeneration Act 1996
•
374 Index
legislation (collt'd)
dbpute resolution, 328 interim payments, 291
[nsolvt!ncy Act 1986 administration, 341, 342 insolwncy praclitionl'Ts, 340 receivership, 341 VO!untMY arrangements, 3-13
Management of Health and S,lfcty at Work Regulations 1999, 9
Safety Representati\es and Safety Committees Regulations 1977,265
Sale ofGcxxis Act 1979, 348 Scheme for Construction Contracts
(England and Wales) Regulntions 1998,291
dispute resolution,329-34 life cyclt" costing, 151 lines of communication, 259 liquidated damages (LD)
contractor liability, 319, 323, 327-8 deductions from payments, 296, 306,
3U>!~9
liquidation,340-41 'listed items',ownership. 347,348 litigation, 336-7 local authority, site inspections, 260-61 locational bills of quantities. 195 losses (conlr,lclor's)
adjustments to final account 309, 313 reimbursement for employer cau:st.-d
delays, 326 lump sum premium, 350-52
maintenancc manua Is, 309 m,lintenancc work
taxation, 359-62 term contracts, 110-12
Major Project Construction Contract (M r), 67-8,95
project documentation, 163 making good defects, 306-7, 308, 309-10 'management action' (risk management), 51
Management Building Contract, 87-S management contracts, 84-93
drawings, 162-3
Management of Ilealth and Safety at Work Regulations 1999,9
masonry, tests, 263 Ma~terformat, 182, IS3 Masterspec, 183 makrials
acquisition in cost reimbursement contracts, 76, n
costs & availability, 32 delivery dates, 2-1S interim payments for, 298- 9 ownership, 347-8 samples, 263 standards, 263
means of escape, 270-71 Measured Term Contract, 110-12 measured works, bil ls of quantities, 194 mediation, 329 meetings, 246-56 method statements, deviation from, 260
Minor Works Contract (MW), 27, 69-70 MP (Major Project Construction Contract),
67-8,95 MW (Minor Works Contract), 27, 69-70
'named' sub-contractors, 68, 201 National Building Specification (NBS), 183 National Health Service p rocurement, 114 National Joint Consultative Committee for
Building (NJCe), Code of Procrdurt
for SillK'e Stagr SelectiVt' Tend(7ing, 205
NBS(National Building Specification), 183 NEC (New Engineering Contract), 27 negotiatl-d contracts, 40-41 'neutral evcnts', 318, 320-21 New Enginl't'ring Contract (NEC), 27 NJCC (National Joint Consultative
Committee for Building),Codroj Procrourr for Sillgle Stage SeIn:tiVf' Tendering, 205
'nominee',3+I non-competi live contr .1cts, 40-41
non-completion certi ficate, 306 non-completion of work, 306, 348-52 notice of adjudication, 330
Tlldel' 375
notification of delay, 323 Notification of RroisiOll to Compld/oll Date, 323,
338 novation, 98-9
Odean Theatres case (1971),360 Official Referees, 336 'open book' approach, 58 operating manuals, 309 outline design, 124-5 Olltlitlt' Plan afWork, RlBA, 12, 13 ownership of materials, 3-17-8
package COnIT.lcts, 84-5, 88-9, 91 dr.1Wings fo r, 162-3
parent company guarantees, 219-20, 226 partial possession, 216, 308-9 partnering. 113-20 payments
adjuShnents for defective work, 310 adjuShnents to contract sum, 31 1-13 cost reimbun.cment contracts, 78 deductions for liquidated damages, 2%,
306,308-9 dc<;ign & build contracts, 96-7 final account, 310-14 insol"cncy adjuShncnts, 352-4, 355-6 interim,291-3(}4 reimbursement for cmployer caused
delays, 320, 326 PC (primc costs), see prime cosl!. performance bonds, 219-20, 225 perfonnance uptimisation, 45-6 performance requiremenb, 130 perfonnance specifications, 180-81 pcrson-in-charge, rights, dutie; &
responsibilitk'S,245 I'FI (PriV.,te Financl' Lnitiati,'e), 97, 163 photogr.lphic rccords, 262 pl.lnningsuJX·rvisor, rights, duties &
responsibilitics, 6-7, 244 plans, S('(' drawings; programme plant, SRI! also building services c~ts, cost reimbursement contracts, 77 economics of siJ:e, 32 health & safety, 267-8
plant and macruneryc.lpital allowances, 357, 358-9,366
possession of the building, 306, 308-9 possession of the site
access delays, 322 compll'lion of work, 306
practical completion, 305-8 preambles (bills of quantities), 194 preferential creditors, 341, 344 preliminary enquiry (tendering), 207-8 preliminary estimate, 137 prcscripti\especifications,l80 Prime Cost building contract, 72-3 prime costs (PC)
allowance for defective wurk, 78 reconciliation, 78 record keeping, 75-7
principal contractor, rights, duties & r~ponsibilitie;, 7-8
Priv.lte Fin.lnce Initiative (p1:1), 97, 16-1 privity of contract, 18 procurt'ment
accountability,38-42 basic concepts, 30-37 continuity contracts, 103-12 cost reimbursement contr.lcts, 57-63,
71-8 design & build contracts, 94-102 fIXed price contracts, 57-63, 64-70 management & construction management
contracts, S-l-93 partnering, 11}-20 principle;, 21-9 target COl>t contracts, 79-83 value& risk management, 43-56
production costs, 33- 4 productivity, 33-4 programme
contractor's pro\'isiun of, 248 desigo & build contracts, 101 example, 254 initial, 14, 15 managl'men t & construction management
contracts, 92 pre-contract clement, 128-9 progn'Ss chL'(:king, 262
376 Index
progress ceports, contractor's, 252 project brlet 12, 14, 123- 6 project extraneis, 165-7 project inform.1tion, sel' documentation project managers, 88
pre-contractelemcllt, 129 rights, duties & responsibilities, 6
'project partnering', 115 project review, value management, 45- 6 project value
opportunities to increase, 48- 9, 52 value management, 43- 6
proprietary systems, 33, 97 provisiona 1 sums, in bill of quantities, 193-4 public sector procurement, 38, 39, 42, 97, 1 1.t
quality assurance, 132 dC'Sign documentation, 155-8
quality m.muals, 156 quality procedure codes, 156-7 quality review, 157- 8 quantity surveyor, scr also v.1iuations
record keeping for cost reimbursement contracts, 75- 7
rights, duties & responsibilities, 5, 243- 4
receivership, 341 records
dayworks, 287- 8 photographic, 262 ,rime costs, 75- 7 sitediary,261
rectification period, 306, 308 refurbishment work
capital allowances, 366 tilxation, 359- 62
repair work tilxation, 359- 62 term contracts, 110- 12
reports architects',260 clerk of works, 261 - 2, 277- 8 site inspt.-'<:tions, 261
research and development allowances, 358 responsibilities, 4-8, 227-45
accowltability -,38-42
responsibility code, 157 retention fund, 32, 292
cost reimbursement <:ontracts, 78 retention amounts, 297- 8, 299-300, 307
RlBA Publishing appointments, 17 architects' instru<:tions, 282-3 Certificate of Completion of Making Good
Defects, 310, ]16 Certificate of Practical Completion, 305, 315 Final Certificate, 31 4, 317
Notification of Revision to Completion Date, 323,338
Out/ille Plan of Work, 12
RICS, see Royal Institution of Chartered Surveyors
rights, 4-8, 227-45
risk management, 26, 35-6, 46- 53, 54-6 fixed price versus cost reimbursement
contracts, 60-62
health & safety, 265 'Romalpa' dausc, 348
Royallnstitution of Chartered Surveyors appointments, 17 Schedule of Basic Plant Charges, 77 Standard Method of Measurement of Building
Works (SMM7), 66 valuation forms, 301
Rules of the Supreme Court, 336
safety committee, 265 Safety Representatives and Safety
Committees Regulations 1977, 265
Sale of Goods Act 1979, 348 samples, testing, 263 SBC, see Joint Contracts Tribunal, Standard
BuildingContract (SBC) scale, drawings, 158- 9,159-61 Se/ledllle of Ra sic Plant Cimrges, 77 schedules, 173- 4,175- 8
defects, 309- 10 Scheme for Construction Contracts (Englilnd
and Wales) Regula tions 1998, 291
dispute resolution, 329-34 'scheme of arran.,sement', 343- 4 se<:tional completion, 216-17, 308
IlIdex 377
secured Cfl'CIitOrs, 34 1,344 serial contracting. HH-7 services con~ultants, site visits, 260 SFA/99 (Standard Form of Agreement),
updated 2(J()4, 258 'sh.lroo risk events', 318 shrinkagcs, making good, 306-7, 308, 309-10 site access delays, 322 site closure, 347-8 site diary, 261 site inspections, 258-61
checklist, 273-6 site management teamS,S5, SS site meetings, 251-3, 255- 6 si te records,261-2 si te safety, see health and safety site visits, 257-60 sketch .scheme, 12-l-S SMM7R (Standard Method of Measurement
of Building Works), 192, 193 Sp.1CC parts, building services, 309 specialist sub-contr.lCtors, 131, 201-2 Speci.1list suppliers, 131 specifications, 179-90
pre-contract, 130 St.lndard Form of Agreement (SFA /99,
updated 2CKH), 258 Stalldard Method of Measurement of Building
• Works (SMM7R), 192, 193 statement of retention, 301, JO]
statuscooe, 157 statutory duti .... , 25-6 statutory requirements, 8- 10 storage, drawings, 159 'strategic partnering', 115 sub-contractors, 201-4
design by, 203 issue of instructions to, 2-l9 meetings, 253 'named',68-9 ownership of materials, 3-\7-8 payments, 2%-7, 300 required construction periods, 248 rights, duti~ & responsibilitics, 8, 67, 203 specialist, 131 tender & contract documentation, 66
termination of contractor's 'employment', 351-2
sub-<:ontractor's d<.'Signed portion, 203 sub-letting, 77 supervision of work, 258-9 suppliers
issue of instructions to, 249 meetings, 253 spedalist, 131
suspension of work, 308 sustainable water use products, capital
al1owanc .... ,363
target cost contracts, 60, 79-S3 taxation, capital allowances, 357-66 TCC (Technology and Construction Court),
334,336 technical shf..'Ct colk'Ction, 183 Technology and Construction Court (TeC),
33-1, 336 tendering
bills of qu.mtitics, 191-200 continuation contracts, 108-9 contractor selection, 27-9, 30-37, 40- -l1,
206-7 Design and Build Contract (DB), 99- 100 management & construction
management contracts, 86-7, 89 design & build contracts, 99-100 drawings & schedules, 154-7S management & construction management
contracts, 86-7, S9 obtaining tenders, 205-12 pre-<:ontract cost control, 134-53 pre-tender process, 123-32,123-33 procedure,27-9,205-12 serial contracting, 106 specifications, 179-90 sub-con tractors,201--l tenn contracts, 111-12
tenn contracts, 110-12 tennsof appointment, consultants, 17 terrorism, 321
insurance for, 223-4, 312 tests, materials & components, 263 third party rights, 18,220
..
378 Index
time 'allarge', 322 transference of risk, SO-51 'turnkey' conlTacts, 94
Unified Classification for the Construction lndustry (Unic1ass), 159, 181-7
in bill of quantities, 194-5 unsecured creciilof5, 341, 344
Valuation Rules, 285 valuation";
cost reimbursement contracts, 78 design & build contracts, 100 final account, 313 interim payments, 293-4, 296, 297, 298
forms, 300-301 ,302 management & construction management
contracts,89 variations, 193, 19.1, 285, 286
•
value added tax, 300 value drivers, 44-5 value engineering, 44-6 'value for money',40-41, 40-42 value management, 43-6, see also cost
control variations, 284-90
adjustments to con tract sum, 31 1-12 valuation, 193,194,285,286
voluntary arrangements (insolvl'l1cy), 343-4
voluntary liquidation, 340
warranties, collateral, 17-18, 220
Water Technology List, 363 water use products, sustainable, capital
allowances, 363
weather conditions, delays caused by, 322 whole life costing, 151
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