When would you use JCT & NEC Contracts?
- Both suites provide a variety of options to suit client requirements
- Consider procurement route, scale & size of project, payment method, quantification, design and the client approach
NEC Contract if: - Collaborative approach
- Limited experience; plain english
JCT Contract if: - Previous experience with JCT
- Prepared set of amendments
Name some differences between the two if you were advising a client on what to use as a proposed form?
PALM:
- Programme - unamended JCT not contractual whereas it is in a NEC
- Admin - JCT is administered by the CA/EA whereas in NEC the Project Manager
- Language - JCT contracts use complex legal jargon whereas, NEC plain English
- Money & Time - JCT has relevant events & relevant matters whereas NEC together in compensation events
Can you name the types of NEC Contracts?
- Option A: Priced Contract with activity schedule
- Option B: Priced Contract with BoQ
- Option C: Target Contract with activity schedule
- Option D: Target Contract with BoQ
- Option E: Cost reimbursable Contract
- Option F: Management Contract
Can you name the contract within the JCT suite?
- Minor Works
- Intermediate Building Contract
- Standard Building Contract
- Design & Build Contract
- Major Projects Construction Contract
Describe the layout of JCT?
Articles of agreement:
- Recitals
- Articles
- Contract particulars
- Attestation
Conditions:
- Section 1: Definitions and Interpretations
- Section 2: Carrying out the works
- Section 3: Control of the works
- Section 4: Payment
- Section 5: Change
- Section 6: Injury, Damage and Insurance
- Section 7: Assignment, third party rights and collateral warranties
- Section 8: Termination
- Section 9: Settlement of Disputes
Schedules:
- Contractors design submission procedure
- Supplemental provisions
- Insurance Options
- Code of practise
- Third Party rights
- Form of Bonds
- Fluctuation Options
How do you pick which contract to use?
- Consider the project specific requirements
- Procurement Route
- Scale of the project
- Method of payment / quantification
- The design of the project
- Clients drivers / approach (Time/Cost/Quality/Risk)
When would you use JCT Standard Building Contract?
- SBC used for Traditional procurement route
- Where detailed contractual provisions are required
- ‘with quantities’ and ‘without quantities’ both fixed price lump sum
- ‘with approximate quantities’ is remeasurement
When would you use an Intermediate contract?
- Used for traditional procurement route
- Used to bridge the gap between Standard and Minor works contract
- Less lengthy contract terms than standards, more detailed than minor
- Fixed Price Lump Sum
- Intermediate with CDP is available
When would you use Minor Works Contract?
- Minor works contract is for Traditional procurement route
- Used for smaller, lower value, basic construction works where detailed contract provisions not required
- Not suitable where project is complex enough to require bills of quantities, detailed control procedures, or provisions to govern work carried out by named specialists
- Fixed Price Lump Sum
Whats the difference between minor works and intermediate?
What’s the difference between intermediate and standard building contract?
SBC has 3% retention
ICD has 5% retention
ICD has no provision for third party rights
ICD has no provision for retention bonds
When would you use JCT Design and Build Contract?
- Design and Build Procurement Route
- Client wants Contract to take design and construction responsibility
- Used where detailed contractual provisions are required - project can vary in size/scale
- Fixed price lump sum
Name some contractual mechanisms within the D&B contract?
- 2.3 Date of Possession; Contract Particulars; date when site is given to the contractor, begin construction and proceed to complete on it before completion date - can be sectional completion
- 4.7 Payment - 4.7.1 Method of Payment - Periodically in accordance with Alternative B (clause 4.13)
- 4.7.2 - Interim Payments - Interim Valuation Dates; one month after the Date of Possession
Do you have Collateral warranties in a D&B contract?
Yes
What are Collateral Warranties?
- Create a contractual link between the employer and a third party which would not be there otherwise.
- For the benefit of those parties that may otherwise have no recourse, if one party defaults
- I would advice the Client to request CW’s for all subcontractors who have any design responsibility, for example; the facade, steelwork, roof
Who may want a collateral warranty?
- Employer with sub-contractors who have design responsibility
- Third party with a financial interest in the project but is not protected by the contract e.g. funding institutions/ future purchasers
How are defects addressed in JCT contract?
- Under JCT contract the employer can issue a Schedule of Defect - up to 14 days after the rectification period
- Contractor must return at no cost to the employer and rectify the defects - unless otherwise instructed
- If agreed that the contractor will not return, reasonable adjustment can be made to CSA
- Once defects are rectified a ‘notice of completion of making good’ will be issued by the CA/EA
What is a change called in a JCT Design and Build Contract?
- A change
What constitutes a change in JCT SBC?
- Alteration or modification of the design, quality, or quantity or the works
- Employer imposed additional or altered obligations or restrictions e.g. access to the site, limitations on working space
What is a change called in a JCT Standard Building Contract?
- A variation
What are the valuation rules?
There are a variety of valuation rules, the main ones are:
- Using rates within the priced document (CSA) - when works are of a similar ‘character’ to the contract documents
- Value at fair rates and prices - when works are not of a similar nature
- Dayworks - when works cannot be properly valued by measurement
- Changes to the CDP works -
What are dayworks?
NRM2 defines dayworks as - ‘the method of valuing work on the basis of time spent by the contractors workpeople, the materials used and the plant employed’.
What happens at practical completion?
- Certificate of practical completion is issued
- Release of 50% retention
- Defects liability period begins
- Ends contractors liability for LD’s
- O&M are handed over
- H&S file handed over
- As built drawings are issued by the contractor
- Client takes possession & responsibility for insuring the site
What is sectional completion?
- Pre-planned and defined sections of work which allow different completion dates for each section.
- Follows same procedure as PC for the whole job apart from some items will remain outstanding
