Management and Administration - Contracts

Contracts

RIBA Members are expected to conduct their practice of architecture in accordance with all relevant legal requirements (such as business, tax, discrimination, disability and employment law), without it being necessary to mention specific legislation in either the Code or guidance notes. A breach of the law, as evidenced by a finding by a recognised court or tribunal, may be considered as evidence against a member, should a complaint about his or her professional conduct be made.

Building Contract administration with JCT www.jctltd.co.uk

A contract is a vital document as it is a legally-binding commitment between the builder and the client to deliver the project. The architect administers this contract impartially between both parties (client and contractor), although the architect’s fees are generally paid by the client. The architect will then be responsible for ensuring that the contract documentation is appropriate (there are many different types of contract) and accurate and all items under the contract, such as variations and certificates, are properly signed and issued. He or she will carry out periodic site visits to monitor progress. The architect will make a professional judgment regarding the required frequency of these visits, unless an alternative programme of visits has been agreed with the client.

The day-to-day supervision of the build itself will be the responsibility of the contractor, who is also responsible for ensuring that the structure is built in compliance with the building contract, the planning permission, Building Regulations and Health and Safety requirements.

Procurement Contracts

Procurement is a term which describes the activities undertaken by a client or employer who is seeking to bring about the construction or refurbishment of a building.

It is a mechanism which provides a solution to the question: "how do I get my project built?"

On most projects, clients (usually through their advisers or in-house teams) will start the procurement process by devising a project strategy. The strategy entails weighing up the benefits, risks and budget constraints of a project to determine what the most appropriate procurement method is, and what contractual arrangements will be required. With every project, the client’s concerns focus on time, cost and quality (or performance) in relation to both the design and construction of the building.

The client’s policies, resources, organisational structure, and preferred contractual arrangements will all need to be taken into account in choosing the right procurement method for their project.

Understanding risk is essential, as although each procurement method follows a well-established set of rules and procedures, there are risks associated with choosing any particular route.

Successful procurement relies on all parties involved in the project complying with their respective obligations, and identifying and dealing with risk appropriately from the outset.

JCT’s contracts are designed specifically for the different procurement methods used by the construction industry.

There are four main procurement methods.

-          Traditional/Conventional

-          Design and Build

-          Management

-          Integrated

Traditional/Conventional

The traditional or conventional procurement method has been a standard practice in the construction industry for 150 years, following the emergence of general contracting firms and independent client consultants. There are two main features of the traditional method:

1. The design process is separate from the construction (although JCT contracts provide for design of specific parts of the works to be carried out by the contractor)
2. Full documentation (i.e. drawings, work schedules, bills of quantities) must be supplied by the client before the contractor can be invited to tender for carrying out the work.

Design and Build

Design and Build procurement works on the basis that the main contractor is responsible for undertaking both the design and construction work on a project, for an agreed lump-sum price.
Design and build projects can vary depending on the extent of the contractor’s design responsibility and how much initial design is included in the employer’s requirements. Nevertheless, the level of design responsibility and input from the contractor is much greater on design and build projects than a traditional contract with a contractor’s designed portion.
Adequate time must be allowed to prepare the employer’s requirements (the employer usually appoints consultants to facilitate this), as well as time for the contractor to prepare their proposal and tender price. It is vital that the proposal matches all of the employer’s requirements before any contract is entered into.
The employer has control over any design elements of the project that are included in their requirements, but once the contract is let responsibility over design passes to the contractor, so the employer has no direct control over the contractor’s detailed design.
The contractor can carry out the design in a number of ways. Often they will appoint their own consultants or use their own in-house team. It is also common practice for the contractor to take on the employer's consultants and continue to use them to complete the detailed design under what is known as a novation agreement.

Management

Management procurement is a method where construction work is completed using a series of separate works or trade contracts which the main contractor is responsible for managing. The contractor does not actually do the physical work, but is paid a sum for managing the project through the various works packages.
The employer starts by appointing consultants and a contract administrator to prepare drawings, a project specification and cost plan. The employer has control over design throughout the project through their professional team. The contractor is appointed by negotiaiton or tender, and interview. The works packages are usually let by competitive tender.
It is beneficial for the proposed contractor to be involved as early as possible as they will provide expertise in terms of buildability and programming of the works packages.

Integrated

Integrated procurement, sometimes known as collaborative procurement or partnering, is intended to focus the participants of a project on the mutual objectives of delivering a project on time, to budget and to quality. It is about working as a team, regardless of organisation or location, to meet a client's needs.
JCT's range of partnering documents set the standard for collaborative contract working. Partnering is a principle that can be applied to most JCT contracts and provision is made for this in our Non-Binding Partnering Charter (PC/N).