What are the minimum expectations of the Contract Practice competency?
- Understand various forms of contract and the change control procedures they contain
- Apply knowledge to project specific levels whilst being aware of the implications and obligations of the parties involved
- Provide advise on the effect of change control procedures and the documentation and procedure at the various stages of a contract
What takes precedence under a JCT D&B - ER’s or CP’s?
ER’s take precedence
Where there are discrepancies under the ER’s. and CP’s clarify, this overwrites the discrepancy. E.g. ER’s state gold taps but ER drawings show brass and the CP’s reflect brass, then the CP’s set the requirement
What types of change are there? When can they occur?
- Can be initiated by client or contractor
- Due to personal preference, change in business neeed
- May be a change due to the desgn (e,g, D&B), buldability / availability of resources within the programme or due to requirements relating to post-project such as safety
May occur pre-contract, near end of concept design or during tender stages with amendments to documetns
Post-contract
What is a variation?
- Alteration or modification in the design
- Imposition by the employer of any obligations or restrictions post-contract
In D&B referred to as variations
How do NEC contracts deal with change?
- Referred to as Compensation events which are events that occur that are the Employers risk
- Deal with Cost & Time together
- Require an Early Warning Notice when due a cost increase or delay in completion / meeting a specific requirement
What are the valuation rules under contracts you have worked on?
- Where works are of a similar character, nature and quantity (within 10%). Value using rates from priced documents
- Similar character but a change in quantity or conditions, value using rates form priced documents with an additional fair allowance
- Where not similar in character, work valued at fair rates
- / 5. Where approximate quantities, depends on the similarity to approximate quantities tendered (as above)
What is the process for change management that should be followed?
Set out on contracts in Section 3.
On NGH (D&B):
’- Oral instruction
- Requires contractor to confirm terms in writing in 7 days
- Client to confirm within 7 days (or takes effect from the expiration of the 7 days
- Intsruction applies
If no confirmation received from client, can be confirmed retrospectively before the final due date
Name some changes that may occur
- Scope changes
- Value engineering exercise
- Specified items may become unavailable
- Discrepancies in contract documents found
- Change in market conditions
What would you review when a change has been identified?
- Review the reason for the change e.g. who is proposing the che change
- Review the impact
- What would happen if the change did not happen
- Review the impact of late instructions to change e.g. EoT / CE
What do you know about FIDIC contracts?
International Federation for Consulting Engineers
- Employer instructs variations
- Claim is a variation
- Internationally used
- Engineer acts as CA
- Red book - Employer designed
- Yellow book - Contractor designed
What are the valuation rules for a Standard Building Contract?
- Similar charater, quantity & conditions - priced rates
- Similar character, different conditions / quantity - priiced document + fair allowance
- Not similar - priced at fair rates, open to interpretation
- Approx quantities where reasonably simialr - priced rates
- Approx quantities where not similar - fair & reasonable rates
What is a fair and reasonable rate?
Not case law, open to interpretation
Should be considered in reflection that there is no market competition
What is change under a SBC?
Variation!
Alteration of design, quality or quantity of works
Imposition by employer of any obligations or restrictions
What is change under a D&B?
Change!
Changes to ER’s
Imposition by employer of any obligations / restrictions to working e.g. access / limited working hours
What are the valuation rules of a D&B contract?
- Allowances include for addition / omission of relevant design work
- Valuations that are similar - CSA. Valuations that are not - fair & reasonable
- Omissions are to be taken in accordance with the price in the CSA
- Valuations should include for site admin, facilities and temporary works
How are changes valued under NEC?
Compensation events
- Assessed based on defined costs of works already done and the forecast costs + contractor fee
- Under B there are specific CE’s including inaccurate quantities, items that are more than 0.5% of prices at contract sum that constitute change
How are changes valued under FIDIC?
Valued by Engineer
- Contractor prepares proposals
- Rates are adjusted if the quantity varies by more than 10% from the BoQ or changes in the unit cost is more than 1%
- VE opportunities follow the same rules- contractor shares any savings made
What are star rates?
Used where contract rates are not applicable
