CONTRACT

ADMINISTRATION AND SITE

MANAGEMENT Meade Health Centre Extension

“If we are to extend throughout the construction industry the improvements

in performance that are already being achieved by the best, we must begin by defining the integrated project process.”

Sir John Egan

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Executive Summary

Scope/ purpose

1. The purpose of this report is to advise the client on a suitable contract for the project in

relation to the project brief and to offer information on the procedures outlined in the

contract. It will also explain why standardized forms of contract are most suitable to

administer for most types of construction work. (4)

2. The report begins with a comparison of suitable contract types. Fixed price agreements are

analysed and prove to be more appropriate than variable forms. (4)

2.1 The Recommendation falls upon the IC11 as most suitable contract, due to greater

flexibility to the MW11 and less complexity of the SBC11. (5)

2.2 Responsibility appears to lie more with the contractor with this contract type.

However all contracts and not without risk, and the ones affecting the site are

highlighted to be particular and speculative, mainly involving adverse weather

conditions and damage. The risks also shown to lie with the Employer, who risked

damage to business and loss of earnings. (6)

3 Statutory Approvals where found to be a requirement for all building projects and the

necessary approval from various bodies (planning, BC) would have to be granted before and

during the construction phase. (6)

3.1 Compliance would also have to be met by following procedures outlined in the

regulations and the contract. (7)

3.2 The approval process for the project involved issuing plans to the Planning

Department and complying with any conditions made on the proposal. Building

Control would also make routine visits during certain milestones of the construction

process to ensure all requirements are being met. (8)

4 The Scope of the Contract Administrator concluded to be both desk and site based. The

limitations revealed they have limited control over time extensions and suspension of time,

and the role is tied into the contract until completion. (9)

5 Different sources of health and safety equipment (health and safety policy, risk

assessments.) are also required to be submitted and distributed by the CA to the relevant

parties. (10)

5.1 Timing and schedule of information showed ways the CA could monitor progress by

using forecasting and a program of works, and how allowances in time could be

made if there are any risk areas to be expected. (11)

5.2 All late and missing information was also found to have repercussions on the CA and

employer, resulting in damages and claims served by the contractor. (11)

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6 Revision into the interim application showed how it is used to release payment when set

milestones are achieved by the contractor. (12)

6.1 The findings also showed the process in which the final sum is achieved, by

calculating the stage payments and variations, including any retention held by the

employer or added costs from the contractor. (13)

7 Delays were also found to cause breaches of the contract. If the breach is caused by the

employer, it was found that the contractor had a contractual right to sue for damages, or

terminate a contract if the breach was extreme. (14)

Conclusion

8 The report ends with an evaluation of each of the subjects discussed and a summary of why

methods where chosen, including the benefits of using these processes instead of the

alternatives. Emphasis is also made on the practicality of using standard forms of contract,

and why taking the time to choose the most appropriate procurement strategy can benefit

the client and other parties. (14-15)

The appendices contain some of the forms for tendering, meeting compliance (F10, risk assessment,

data sheets) and the certificates used for interim and final payments. (18-25)

Recommendations

Traditional procurement route and standardised contract.

JCT Intermediate Building Contract with Quantities.

Lump Sum form of contract.

Monthly interim payment schedule with retention.

Project Considerations

Special provisions may have to be made as the extension is part of a health care facility. This

could invoke the need for certain tendering procedures (one, two stage) and may require

the use of certain recommended contractors.

Sources of information used during the design and construction phases (drawings, BIM etc.)

should also be made in consideration for the in-house FM team, to benefit maintenance for

the proposed building.

Considerations may also have to be made due to the condition of the site and ground. This

may involve provisions for risks surrounding the foundations in poor soil or the high water

table, and any environmental issues or possible contamination are dealt with accordingly.

Provisions should also be made for possible issues concerning access/egress from the site

around school and rush hours, and any disturbances to the neighbouring primary school are

considered during the design stage

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Contents

1 Introduction……………………………………………………………..4

2 Contract Type……………………………………………………………4

2.1 JCT Fixed Price Contracts…………………..………………….5

2.2 Contractual Risks…………………………………………………..6

3 Statutory Approvals……………………………….………………….6

3.1 Compliance …………………………………………………..………7

3.2 The Approval Process…………………………………………….8

4 The Contract Administrator…………….…...………..………….9

5 Health and Safety Information…………….…….…………….10

5.1 Timing and Schedule of Information…………………….11

5.2 Late or missing information …………………………………11

6 Interim Application……………………………………………….…12

6.1 Valuations…………………………….……………...…….………..13

6.2 Total Sum………………………….……………………….………...13

7 Delays.…………………………………………………………….……...14

8 Conclusion……………….………………………………………………14

9 References………………………………………………………………15

Appendices………………………………………17

Fig.1 Form of Tender………………………….18

Fig.2 F10 Form……………………………………19

Fig.3 Schedule of Works…………….……...20

Fig.4 Risk Assessment………………………..21

Fig.5 Safety Data Sheet……………………...22

Fig.6 Planning Application………………….23

Fig.7 Interim Certificate……………………..24

Fig.8 Final Certificate………………………….25

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1. Introduction

‘Procurement’ is the term used to describe the relationships formed between clients, consultants

and contractors, and the procedures followed that enable a project to be executed in a safe and

efficient manner. With modern construction there is now a common formality that most projects

follow a standard form of contract. The purpose of these contracts is to distinguish the legal

responsibilities of each of the parties and their obligations under the contract.

The most common forms of building contracts are within the Joint Contracts Tribunal (JCT11). The

JCT are a collection of traditional and more complex contracts which are familiar to most

contractors. Most of these contracts also come with the option of using the contract with or without

completed designs, which allow the contractor to have a different amount of input into the design

stage if the client requires this assistance.

Choosing the right contract will depend on the contents of the documents and selection will be

made to the type that will offer the most strategic approach. Once the contract has been chosen,

companies can be welcomed to tender for the proposed project (Fig.1).

2. Contract Type

With traditional procurement methods, “The client

accepts that consultants are appointed for design,

cost control, and contract administration, and that

the contractor is responsible for carrying out the

works.” Clamp, Cox, Lupton and Udom (2012, p.33)

Cost reimbursable contracts allow for immediate

starts on site and are [… ideal for coping with

emergencies.] However, the risk lays nearly all on

the client under this contract, and there is little

incentive for the contractor to perform. Hackett,

Robinson and Statham (2007, p.72)

They also state, “Since fixed price contracts are

considered suitable for most circumstances there

should be cogent reasons for recommending to a

client the use of a cost reimbursement project.”

Fixed price contracts account for the majority of

building contracts and are considered the most

effective method of offering, [incentive for the

contractor to manage the work effectively and … to

complete the work as quickly as possible to

maximise his profit.] Unit rate contracts could be

considered for their nature of covering high risk

projects, but would require unnecessary admin on

the client’s behalf and the need for a bill of

quantities would have to be used to calculate

costs. Hackett, Robinson and Statham (2007, p.70)

Cost reimbursable - The contractor is reimbursed the

cost of the project plus an added fee for overheads

and profit.

Used when risks cannot be quantified, when it is

impossible to define or quantify works, innovative or

complex projects, and for emergency and rescue

works.

Target cost – The client and contractor agree on a

probable cost for completion of work. The difference

between actual and target costs are split between the

two.

Used when the client wants involvement, if the project

is complex and there are major unquantifiable risks,

and if there is a poor definition of works at the tender

stage.

Unit rate – The client will pay a fixed sum (based on a

bill of quantities) for each completed unit of work.

Used for public sector civils contracts, for high risk

contracts where other contracts are unsuitable, when

variations are likely to be in quantities, and as a

common language between different organisations.

Lump sum – Where a single ‘lump sum’ price is agreed

for the project and payments are released on a time or

staged based rota.

Used for small projects, when the client wants little

involvement, when the design is complete at the

tender stage, and when designs are unlikely to change.

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A lump sum contract appears to be most suitable as the client is guaranteed a final price and agreed

completion date at the tender stage. The contract is easier to administer and also suits projects with

complete designs for a client that would require very little, if any, design flexibility after construction

commences. One of the main risks of this contract is the quality may drop if the contractor is intent

with keeping the costs down, but can be counteracted by ensuring a reliable contractor is employed

for the project.

2.1 JCT Fixed Priced Contracts

The SBC11 is the most comprehensive and familiar form of

JCT contract. However, this contract is used particularly in

large value works and is considered ‘longwinded’ in

comparison to the IC11.

The MW contracts are also the simplest JCT form available

but considered unsuitable if the extension project is part of

a larger development, as it is often used for simple building

work of a ‘one-off’ nature. Also, Clamp, Cox, Lupton and

Udom (2012, p.167) state, [The Minor Works Agreement

has featured in a surprising number of court cases, often

due to use beyond its intended limits …]

The IC11 is intended for use as a traditional procurement

route, where the contractor is required to perform the

works shown in the contract documents for the specified

contract sum (with quantities providing the most accurate

final price), and to complete the works by the date agreed

in the contract. It would also be better for budgeting and insuring for any of the risks with the site,

being of a more complex content and now allowing for an un-capped payment limit (within reason).

The specification of works will be outlined more exclusively under this contract than the MW11 and

without the complexity of administering the comprehensive SBC11. It is only intended for work of a

simple content and involves using, […normal recognised basic trades.] without using specialist

services. However, the IC11 provides provisions for partial completion and setting separate

commencement/ completion dates, which would be useful if the extension was to be completed as

part of the larger development under one contract. Ashworth (2012, p.70)

Comparison with SBC11

Version without contractor design

Provisions for named subcontractors

No schedule 2 quotations

Only one fluctuations option

No CDP design submission procedure

No third party rights

Default retention deduction is 5%, not 3% Lupton, S. (2014, p.5)

Comparison with MWD11

More extensive design provisions

Professional indemnity insurance clause

Provisions/ more detailed requirements for named sub-contractors

Ability to defer possession

Partial possession and sectional completion provisions

Collateral warranties may be required.

Standard Building Contract (SBC)

With quantities

With approximate quantities

Without quantities

Design and Build Contract (DB)

Intermediate Building Contract (IC)

With quantities

With approximate quantities

Intermediate Building Contract with

Design (ICD)

Minor Works Contract (MW)

Minor Works Contract with Design

(MWD)

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2.2 Contractual Risks

Latham, M states, “no construction

project is risk free. Risk can be managed,

minimised, shared, transferred or

accepted. It cannot be ignored.” Risks can

be put down to poor processes and

relationships between parties. Bad

communication, late administration,

poor supervision and delays in payment

can all add time and increase the costs of

the project.

The high water table, access/egress from

the main road, damage to existing

building and construction nuances

caused to the school where all considered to be factors

that may affect the construction process and would

have to be managed accordingly. Risk management is an important part of the contract, as it

outlines which elements of the project each of the parties are responsible and liable for. Ashworth

(2012, p.190) mentions risks should be allocated based on “The ability of the party to manage the

risk.” although it is not uncommon for the contractor to accept more responsibility to obtain the

work. PCW.co.uk outlines the risks as:

Particular risks Fundamental risks Speculative risk Other contractual risks

Fire

Weather

Subsidence

Collapse

Vibration damage

Government policies on tax, labour etc.

Health and safety law updates

Malicious damage

War damage

Poor ground conditions

Adverse weather

Shortages on labour and materials

Delays

Disputes

Cost overruns or revenue leakage

Poor end result, quality failures

Damage to business

Loss of property

Loss of bargaining power

3. Statutory Approvals

Statutory approvals are the necessary approvals needed from various Local Authority bodies before

work can commence. Approval is needed from planning permission, in which guidelines and

conditions must be met for the proposed building, and building control. The design must also comply

with the Building Regulations. Issued by the Department for Communities and Local Government,

these regulations apply to most new buildings, as well as alterations on existing ones.

Part A: Structural safety Part H: Drainage and waste disposal

Part B: Fire safety Part J: Heat producing appliances

Part C: Resistance to contaminants and moisture Part K: Protection from falling

Part D: Toxic substances Part L: Conservation of fuel and power

Part E: Resistance to sound Part M: Access to and use of buildings

Part F: Ventilation Part N: Glazing safety

Part G: Sanitation, hot water safety and water efficiency Part P: Electrical safety

Sourced from: http://www.gpmfirst.com/

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Though all are necessary, there is particular importance with parts A and B regarding the existing

building and fire safety of the health centre. Parts C, H, L and M will also be important in relation to

the site location and conditions. Hackett, Robinson and Statham (2007, p.9) also mention the CDM

Regulations, [… place duties on parties to plan,

co-ordinate and manage health and safety

throughout all stages of construction.]

Designingbuildings.co.uk lists other statutory

requirements which may include:

Advertisement consent – It may be

required to notify local areas (school,

current health facility) about the

proposed construction and what

implication it will have for them.

Environmental impact assessment – To

gain approval from the environmental

agency.

Hazardous substances consent – An

appraisal to use or remove hazardous

substances.

3.1 Compliance

Gov.uk states, […the core commitment for effective compliance is demonstrated as a clear and

unambiguous approach to the law.] Regulatory compliance is the process in which the parties

comply with the laws and Building Regulations relevant to the project. The parties are also to abide

by the clauses stated in the contract and take out the necessary insurances for the project areas they

are responsible for.

The appointed CDM Regulator and HSE will assist the

client on how to comply with the law. For projects

lasting longer than 30 days/ 500 person days, the HSE

(1996, p.20) states the “HSE should be notified in

writing before construction work starts.” by submitting

an F10 form (Fig.2).

Other forms prepared for site may include a schedule of

works (Fig.3) to ensure processes comply with the law,

risk assessments (Fig.4) and safety data sheets of

hazardous materials (Fig.5). Representing bodies

(building control, Local Authority) can also assist the

client on the necessary requirements if they are unsure

of the procedures.

Sourced from: http://www.planningportal.gov.uk/

Sourced from: http://www.mondaq.com/

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3.2 The Approval Process

All planning applications are submitted to the Local Authority Planning Department (fig.6). Local

Authority procedures are outlined in the Building Regulations and cover both pre-site and on-site

activities. Planningportal.co.uk also states that, “If a local authority believes that your building work

contravenes the Building Regulations, they may serve you with an enforcement notice requiring you

to alter or remove work which contravenes the regulations.”

Local Authority - applications are:

Full Plans Application

Building Notice – When plans are not completed at this stage. (For smaller works)

A Regularisation Application – For previously unauthorized works.

Building Control - will also make routine inspections to check:

The foundation excavation, before foundations are laid

The foundation itself, before infill

The damp proof course, at installation level

Any concrete works, before they are covered

.

The application is submitted and charges are paid for the application process to begin.

The Local Authority will Check the plans and notify any relevant authorities, within 5 weeks of

submission

Providing all plans comply with Building

Regulations, The client will receive notice

that they have been approved.

Conditional approval may also be issued, which

means the client will have to make modifications

to the design or be more thorough with their

proposal before approval is granted.

After approval, the notice is valid for up to 3 years for the date of deposition of the plans.

Once construction commences, the Local Authority will also carry out site inspections at certain

stages of the project. (Foundations, damp proof, etc.)

If requested, a certificate of completion is granted once the project is built, providing that the

Local Authority is satisfied with the work.

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4. The Contract Administrator

“The responsibilities of the Contract Administrator will be defined by the form of building contract

and the professional appointment under which the CA is appointed.” Northwood (2011, p.9)

The CA is appointed by the employer and their role begins when a contract is in place between the

client and contractor. Unless the contract makes a decision final, their decisions on the project can

be challenged by the contractor through dispute resolution, if they disagree with any aspects of the

design.

Scope/ responsibilities

Initial familiarisation “It is the CA’s duty to administer the project in such a way that the correct contractual procedures and good administrative practices are followed, and that the life of the building contract from inception to completion is accurately and completely recorded.” Northwood (2011, p.11)

Building contract conditions, to become familiar with the requirements and obligations

Specialist sub-contract documents

Specifications of works/bill of quantities or similar

drawings

The appointment agreement for other consultants.

General administration Where the JCT contract provides for a named CA that person will have a specific roll, duties and rights. It is important that the CA complies with the clauses in the contract.

Ensure the provision of information

Supply documents, drawings and setting out, etc.

Provide or give additional information when required

Financial matters:

Consider and certify the amount of interim payments to be made by the Employer to the Contractor.

Advise the QS on when to release the interim payments.

Send the adjusted contract sum calculations to the client.

Supervision

Approve the quality of materials, workmanship etc.

Instruct the Contractor

Consent to the removal of unfixed materials onsite ‘in writing’

Make a fair and reasonable extension of time for completion of the Works or Section (clause 2.19)

Site inspections It is advisable for site inspections to be undertaken to ensure that the CA’s responsibilities are effectively discharged. The frequency of site inspections can will vary from project to project and broadly be determined by:

The complexity of the project

The calibre of the contractor and site personnel

progress of works

Predetermined stages (if applicable).

The value of works The inspection should include:

Basic information (time, weather, site members, instructions issued.)

Progress review

Quality reviews

A check on materials being used

An evaluation of health and safety on site highlighting any risk areas

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Meetings Meetings with the CA present will involve office based and informal meetings on site. These would cover matters such as:

Progress to date

Forecasts

Any problems, delays

Contract instructions

Health and safety aspects

Q & A between members

The CA must act personally to the client and not delegate the task to a sub-agent. They also have the

power to issue instructions on discrepancies between contract documents under clause 2.13 and

variations under clause 3.11. However, under the IC11, they do not have the power to issue

extensions in time alone, which must be decided between all parties before allowance is granted.

Regarding alterations Murdoch and Hughes (2008, p.250) state, “Unless the contract administrator

acts within the terms of a variations clause, there is no power to change what was originally agreed.”

Also, [As a general principle, neither the employer nor the contract administrator has any legal right

to suspend work…] and must see it through to completion once construction commences.

5. Health and Safety Information

Hackett, Robinson and Statham (2007, p.265) state, [Under clause 2.9 the contract administrator is

responsible for supplying sufficiently ‘accurate dimensioned drawings’ and for determining levels…]

of the site. They are also to supply the Contractor with all the necessary information and instructions

on how to approach the works, and provide enough time to complete them. The contractor must

comply with every instruction issued by the CA, provided it is valid and relevant with the contract.

Pre-construction information is also provided to the client containing information on the tenderers

for the project.

A health and safety policy is also created for the site.

They mention, “the essential ingredients for a good

policy statement are:

A statement of the employer’s general policy

with regard to health and safety

Details of the organisational/ managerial

hierarchy for carrying out the policy

Details of the practical arrangements for carrying

out the policy

The name of the person in authority who is

responsible for fulfilling the policy”

Including general safety, the statement should also

include site maps, safety procedures, mobilization

instructions and emergency procedures. Other

information provided may also include COSHH and risk

assessments for plant and materials, including

maintenance, testing and PPE requirements for staff.

Sourced from: http://www.arinite.co.uk/

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5.1 Timing and Schedule of information

Geoff Powell 2012, p.260), states “time is the root of almost all construction problems, claims and

disputes; being late usually costs the employer or contractor, or both, a lot of money.” Poor

organisation, slow contract administration, poor contract instructions, delays and the weather can

all affect the timing of the project. The CA is responsible for monitoring the progress to ensure the

contract is completed on time and notifying the client of any delays at the earliest opportunity.

Progress is monitored by:

program of works

contractors program

Valuing part of the works to determine a completion time

IT programs to forecast timescales

The CA should review the contractors program regularly to correspond with where progress is up to,

making changes to match the current completion date. The program should include:

A bar chart showing the sequence and duration of activities (Gantt chart)

Float

The critical path

Health and safety requirements

Important dates

A resources program for each activity

Time risk allowances

The CA is responsible for arranging meetings to review the progress of work against the construction

program at site progress meetings. Most contracts will schedule these on a monthly basis and are

there to highlight any issues or delays that may affect progress. Powell (2102 p.281) states members

discuss “Where delays are predicted” including any amendments that have to be made and the

“Likelihood of meeting key dates”.

5.2 Late or missing information

Designingbuildings.co.uk states, “Many claims are also based on delays of or missing schedules,

drawings and specifications from the design team to the contractor after construction has begun.”

Missing documentation can result in the CA being in breach of the law, which can lead to

prosecution and damages, where the contractor may make a claim against being issued late

information (Usually settled by additional payment.)

Sourced from: http://www.smartdraw.com/

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Claims are a symptom of inefficiency and can be made by the contractor and client. Most claims will

be of common law and Chappell (2012, p.104) also states, “Common law claims can only be granted

to the precise loss and expense suffered.” Meaning that an almost exact sum needs to be calculated

and proven to be considered as a claim. A breach against contractual claims can be more serious. If

the CA is failing to progress with work without reasonable cause, the contractor could claim for

damages and under clause 8.4.1 could even request for termination from the project.

6. Interim application

An interim payment (Fig.7) is set up to provide a cash flow to the contractor at set intervals during

the course of the project. The procedure is designed to pay partial sums to the contractor in relation

to the amount of work they have completed, so they are able to fund the next section of work. The

contractor applies for this via an interim application, which will be evaluated by the client’s QS to

arrive at an appropriate sum for the stages and overall works. The Construction Act 1996 outlines

the requirements for interim applications:

Contractors are entitled to payments in instalments for any project lasting longer than 45

days.

The contract should contain a process for determining the payment sum and dates of

payments.

To give adequate notice for any late payments and the circumstances for doing so.

The right for the contractor to suspend the work if the payment has been stopped without

notice.

Hackett, Robinson and Statham (2007, p.293) state, provided these minimum requirements for the

construction act are met, the interim payment can follow any of these documents:

Payments made at regular intervals – follows a payment schedule, usually monthly, until

the project is complete.

Payment and work completion milestones – are when payment is released when the

project reaches a particular stage of completion.

Payments by detailed valuations – the valuations for determining the interim payment will

take all building elements into account, including delays, risks, defects, price fluctuations

Monthly payments in relation to percentage left of final sum

Sourced from: http://insideurope.eu/

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6.1 Valuations

The purpose of the valuations are to ensure that the project runs smoothly and the contractor is

suitably paid for each stage of the works. Hackett, Robinson and Statham (2007, p.296) mention the

valuation will be a detailed set of documents that covers all the work covered since the last

valuation. These documents include:

The works package

Variations and additional costs incurred

Time extensions and any delays in progress, including the causes

Set up costs and running costs of facilities and machinery

Details of special or manufactured goods

Details of goods paid for up front

Acceleration costs to speed up the work progress

Provisional sums

Designingbuildings.co.uk also states, “Although the payments are in stages, an interim valuation is

for all the work completed. It is calculated by subtracting each valuation from the last. The resulting

total and retention figure are then included in the interim certificate issued to the client for payment

by the CA.”

6.2 Total sum

The employer is obligated to pay the contractor an agreed sum. The total sum is the calculation of all

costs expended by the client. More often than not, the contract sum will differ from the final

payable amount as the IC11 may also contain VAT, provisional sums or approximate quantities to

cover the cost of the work.

Retention is used as an incentive for the contractor to stay true to their agreement and remediate

any outstanding defects. The IC deals with retention under clause 4.9 allowing for half of the retainer

is released at the ‘make good’ stage, and the other half once the final certificate is released.

Payments (with retention) Payments (without retention) Variations

Total value of works

Total value of materials (on and off site)

Ownership certificates

Opening up and testing costs

Loss and/ or expense

Statutory obligations

Provisional sum insurance

Insurance premiums

Fluctuation payments

Additions/ omissions/ substitutions of elements

Alterations of materials

Removal/ redelivery of materials damaged on site

“The contract administrator varies the design.” Goldfayl (2002 p.161)

Certificates can also be used to release the retention monies at different stages:

On final payment of works

On the issue of a certificate of practical completion

If the employ takes possession of part of the works

On issue of the architects certificate on making good defects

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Once the contractor has completed the works, they will supply all relevant documents to the CA, as a

final account, within 6 months of completion. The employer’s QS will then prepare an adjusted sum

and return a statement to the contractor within 3 months. The final certificate (Fig.8) is released

with payment not later than 2 months after the end of the remediation period and once the defects

certificate has been issued.

7. Delays

Refusal to give possession to site, non-payment of sums

due, and withholding or refusing payment certificates

could all cause delays which could cost the contractor

time and money. If the employer is guilty of causing

hindrance to the contractor, they may claim for damages

against the employer. Out-law.com states, “To succeed

in a claim contractual for damages, a party must

establish:

that there has been a breach of contract;

that it has suffered loss;

There is a causal connection between the breach and the losses that party wants to recover.”

A contract may also have a ‘liquidated damages’ clause which uses a pre-estimate of any loss that

may incur and acts as a subsidy, rather than a penalty designed to limit a breach. This tends to be

drafted in the client’s favour, but advantages are relayed onto the contractor if the client breaches

the contract.

If the employer is has no intent on paying or performing, under clause 8.9.1, the [… contractor has

the reciprocal right to terminate its own employment …]. In this instance the contractor will

complete all necessary works up to termination date, paid accordingly and be allowed to leave the

site without dispute. (IC11 p. 120)

8. Conclusion

The first task was to select a suitable contract for the proposed extension. It was found that a lump

sum form of payment under an IC11 contract would be suitable by offering a common, familiar

contract that evenly distributed the risks between client and contractor. Using this contract with

quantities would also allow the client to obtain a more exact final sum and more official completion

date from tendering companies, and which would bind them by contract into achieving these

figures.

Also covered was the potential risks and approvals necessary when undertaking the project, and

where there was a particular concern with the site location and ground conditions. It was found that

risks lie with all projects and the best process of dealing with these risks was to approach them

before building work commenced and by establishing preparations for if they appear. Compliance

was also found to be followed most appropriately with the assistance of the correct professions (CA,

CDMC, etc.) and by obtaining advice on procedures from the regulatory bodies.

The contractor can also benefit from:

Early use and partial

possession

Key dates and stage

completion

Subcontractors

Specific expenses paid to

contractor for events out of

their control,

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The importance of the CA was brought to attention, highlighting the scope and responsibilities both

desk and site based. There was a particular importance with the timing and distribution of

information with this role, as the implications of late or missing documentation was found to result

in damages and claims brought upon the CA if this caused hindrance to the project. The CA was also

proven to have limitations of control, being tied into the contract as with the other parties, and

served with the duty to perform until completion.

The interim payment under lump sum contracts was also found to be a series of payments for the

contractors work. With the project being set for 14 weeks, it would be most suitable to stage these

payments on a monthly basis and is also a common formality with lump sum agreements. Delays in

payment or performance on the CA’s behalf where also found to be best avoided, as failing to follow

the agreement as stated would leave the employer at risk to damages from the contractor, who (in

extreme cases) could terminate their employment.

Overall, it became clear that the standardised forms of these contracts, though complex and

confusing at times, have proven to be a familiar, tried and tested method for procuring construction

projects to benefit all parties appropriately, as well as offering a clear and defined approach for

settling disputes when they may arise. Procurement is about applying procedures to maximise

efficiency, and by achieving the most appropriate route, the client can hope to achieve the best

time, cost and value for money expected from the project.

Word Count - 3509

9. References

Arinite Health and Safety [online] Available at: http://www.arinite.co.uk/health-safety-

services/health-safety-policy/ [Accessed: 11/1/2016]

Ashworth, A. 2012) ‘Contractual Procedures in the Construction Industry’ 6th Edition, Essex: Pearson

Education Ltd

Chappell, D. (2012) ‘Understanding JCT Building Contracts’ 9th Edition, Oxon: Routledge

Clamp, Cox, Lupton and Udom (2012) ‘Which Contract?’ 5th Edition, London: RIBA Publishing

Designing Buildings [online] Available at:

http://www.designingbuildings.co.uk/wiki/Contract_claims_in_construction [Accessed: 28/12/2015]

Designing Buildings [online] Available at:

http://www.designingbuildings.co.uk/wiki/Interim_valuation [Accessed: 28/12/2015]

Designing Buildings [online] Available at:

http://www.designingbuildings.co.uk/wiki/Statutory_approvals_for_buildings [Accessed:

28/12/2015]

Egan, J (1998) ‘Rethinking Construction’ London: Department of Trade and Industry

GpmFirst [online] Available at: http://www.gpmfirst.com/books/rules-project-risk-

management/organisation [Accessed: 11/1/2016]

Goldfayl, G. (2010) ‘Construction Contract Administration’ 2nd Edition, Sydney: Deakin University

Press

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CONTRACT ADMINISTRATION AND SITE MANAGEMENT

Hackett, Robinson and Statham (2007) ‘The Aqua Group Guide to Procurement, Tendering &

Contract Administration’ 4th Edition, Oxford: Blackwell Publishing

Health and Safety Executive (2000) ‘Health and Safety in Construction’ London: Crown Copyright

Health and Safety Executive (2011) ‘How your business can achieve compliance with competition law

Guidance’ London: Crown Copyright

Inside Europe [online] Available at: http://insideurope.eu/taxonomy/term/134 [Accessed:

11/1/2016]

Latham, M. (1994) ‘Constructing the Team’ London: Crown Copyright

Lupton, S. (2014) ‘Guide to IC11’ 2nd edition, London: RIBA Publishing

Mondaq [online] Available at:

http://www.mondaq.com/x/143546/Price+Fixing/Competition+Law+Compliance [Accessed:

12/1/2016]

Murdoch and Hughes (2008) ‘Construction Contracts Law and Management’ 4th Edition, Oxon: Taylor

Francis

Northwood, T. (2011) ‘Contract Administration, 1st Edition, Guidance Note’ Coventry: Royal Institute

of Chartered Surveyors RICS

PCW Network [online] Available at: http://www.pwc.co.uk/governance-risk-

compliance/insights/grc-11-contract-risk.html [Accessed: 11/1/2016]

Pinsent Masons [online] Available at http://www.out-law.com/en/topics/projects--

construction/construction-contracts/liquidated-damages/ [Accessed: 01/1/2016]

Planning Portal [online] Available at:

http://www.planningportal.gov.uk/buildingregulations/howtogetapproval/howtogetapproval/

[Accessed: 12/1/2016]

Planning Portal [online] Available at:

http://www.planningportal.gov.uk/buildingregulations/approveddocuments/ [Accessed: 12/1/2016]

Powell, G (2012) ‘Construction Contract Preparation and Management’ Hampshire: Palgrave

Macmillan

Smart Draw [online] Available at: http://www.smartdraw.com/gantt-chart/examples/construction-

schedule-gantt-chart/ [Accessed: 12/1/2016]

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Appendices

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(Fig.1) Example Form of Tender

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(Fig.2) Example F10 Form

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(Fig.3) Example Schedule of Works

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(Fig.4) Example Risk Assessment

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(Fig.5) Example Safety Data Sheet

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(Fig.6) Example Planning Application

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CONTRACT ADMINISTRATION AND SITE MANAGEMENT

(Fig 7) Interim Certificate

INTERIM CERTIFICATE -----------------------------------------------------------------------

Certificate Nr: IC01 Issue Date: 4 April 2016 Surveyor Ltd

Final date for payment: 13 July 2016 Our Reference: 0012343210 Tel: X Fax: X

Works: Extension www.surveyors.ac.uk

Situated At: Meadeston Health Centre, Liverpool

Contract Administrator: Surveyor Ltd Employer: Meadeston NHT Contractor: A Contracts Ltd

Address: Surveyor address Address: Address Address: Address

This Certificate indicates that an interim/ Progress Payment is due under the terms of the Contract

Value of work executed and of materials and goods on site £ 150,000.00

Less retention in accordance with the Conditions of Contract £ 7,500.00

Sub Total £ 142,500.00

Less total amount stated as due in Interim Certificates previously

issued up to and including Interim Certificate Nr £ 0.00

Amount Due: (exclusive of VAT) £ 142,500.00

VAT calculated at the rate notified by Contractor £ 28,500.00

Amount Due: (Inclusive of VAT) £ 171,000.00

I/We hereby certify that the amount for payment by the Employer to the Contractor on this

Certificate is (in words)

One Hundred and Seventy One Thousand Pounds and Zero Pence

Signed: Surveyor Ltd.

Notes: Note: The issue of this certificate is not for and shall not me taken as showing that any work

or materials or goods or workmanship is or are accepted as conforming to description or

being in accordance with the contract

Distribution x

Employer X

Contractor X

File X

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(Fig.8) Final Certificate

FINAL CERTIFICATE -----------------------------------------------------------------------

Certificate Nr: Final Issue Date: 12 June 2016 Surveyor Ltd

Final date for payment: 13 July 2016 Our Reference: 0012343210 Tel: X Fax: X

Works: Extension www.surveyors.ac.uk

Situated At: Meadeston Health Centre, Liverpool

Contract Administrator: Surveyor Ltd Employer: Meadeston NHT Contractor: A Contracts Ltd

Address: Surveyor address Address: Address Address: Address

This Final Certificate is issued under the terms of the above mentioned Contract:

A The Contract Sum adjusted as necessary is £ 174,500.00

B The total amount perviously certified for payment to the Contractor is £ 171,000.00

C The difference between the bove-stated amounts is £ 3,500.00

VAT calculated at the rate notified by the Contractor £ 700.00

Amount due: £ 4,200.00

I/We hereby certify the sum of (in words)

Four Thousand and Two Hundred Pounds and Zero Pence

Inclusive of VAT

as a balance due to the Contractor from the Employer

Signed: Surveyor Ltd.

For Contract Administrator

Notes: Note: The issue of this certificate is not for and shall not me taken as showing that any work

or materials or goods or workmanship is or are accepted as conforming to description or

being in accordance with the contract

Distribution x

Employer X

Contractor X

File X