...last week (or things you should now understand) • Structure of the JCT Standard Building Contract With Quantities (SBC/Q) 2011 • Purpose of each part of JCT SBC/Q 2011 • Required contents of the Contract Documents • Employer’s obligations JCT SBC/Q 2011 • Contractor’s obligations under JCT SBC/Q 2011 • The contractual role of the Employer’s “agents;” who they are; and the Employer’s liability arising from their action (or inaction). • Clerk of Works’ Directions D39PZ: Procurement and Contracts 1
Unit 7: Contract Administration: Instructing & Certifying D39PZ: Procurement and Contracts 2
• Contract Administrator’s role • Contract Administrator’s instructions • Instructions vs. Variations • Certification • Certificates governing money • Certificates noting events (or non-events) • Key events in project progression D39PZ: Procurement and Contracts 3
CA’s role • The CA applies (“administers”) the contract to the project • The CA issues formal documents (Clause 1.8), which serve a contractual purpose, e.g.: tell others to do / not do something update documents to reflect a change in the agreement tell others to make payments signify key events make judgments about progress, completion, breach • These formal documents comprise: Instructions; Variations; Notices; and Certificates D39PZ: Procurement and Contracts 4
CA’s role • To direct the Contractor in the completion of the Works e.g. identifying and responding to work “not in accordance” • To stimulate payment from Employer to Contractor e.g. by regular issue of Interim Certificates • To denote achievement (or otherwise) of a planned event e.g. does the CA think the Works are “practically complete?” D39PZ: Procurement and Contracts 5
• Contract Administrator’s role • Contract Administrator’s instructions • Instructions vs. Variations • Certification • Certificates governing money • Certificates noting events (or non-events) • Key events in project progression D39PZ: Procurement and Contracts 6
CA’s instructions • Traditionally called “Architect’s instructions” (or “A.I.s”) Now that any suitable organisation can adopt the Contract Administrator role, instructions are also called “Contract Administrator’s instructions” • The purpose of an instruction is to direct the Contractor’s work. An instruction may: require site practice to be changed require the Contractor to correct its mistakes vary the definition of the Works - i.e. issue a “Variation” (‘Variation’ is an alteration of the Contract Document) • To achieve this, Contract Administrator’s Instructions are issued by the CA to Employer (Clause 1.8) D39PZ: Procurement and Contracts 7
CA’s powers to instruct • The CA can only issue instructions where allowed by JCT SBC/Q 2011 • All instructions must be in writing (cl. 3.12.1) Verbal instructions must be confirmed in writing within 7 days, or Contractor’s written acceptance of a verbal instruction becomes a CA’s instruction if a CA’s instruction is not issued within 7 days of the Contractor’s acceptance D39PZ: Procurement and Contracts 8
CA’s powers to instruct • A Variation is required cl. 3.14 • The Works are to be postponed cl. 3.15 • A Provisional Sum is to be spent cl. 3.16 • Inspection of the Works is required cl. 3.17 • Work not in accordance must be corrected cl. 3.18 • Workmanship not in accordance must be corrected cl. 3.19 • The work is otherwise not satisfactory cl. 3.20 • A person is to be excluded from the site cl. 3.21 • Antiquities have been discovered cl. 3.22 D39PZ: Procurement and Contracts 9
Contractor’s right to query instructions • The Contractor has the right to “reasonably object” to an instruction if: the Contractor believes the CA cannot issue it, or has done so in error it would change the working conditions as given in clause cl. 5.1.2 under which the Works are to be completed (cl. 3.10.1) • The Contractor can ask the CA to prove that it has the right to issue the instruction (cl. 3.13) The CA must notify Contractor of the SBC/Q provision that empowers the instruction “forthwith” D39PZ: Procurement and Contracts 10
CA’s instruction D39PZ: Procurement and Contracts 11
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• Contract Administrator’s role • Contract Administrator’s instructions • Instructions vs. Variations • Certification • Certificates governing money • Certificates noting events (or non-events) • Key events in project progression D39PZ: Procurement and Contracts 14
CA’s instructions vs. Variations • The distinction between an instruction and a Variation is critical . • Some, but not all, CA instructions are also Variations Variations change the Contract Documents Variations, therefore, update the express agreement between Employer and Contractor. • Variations – clause 5.1.1 and 5.1.2 D39PZ: Procurement and Contracts 15
CA’s instructions vs. Variations • A Variation results in a change to the Works or the conditions in which the Works are to be completed • Such instructions create an opportunity for the Contractor to recover the cost of this change work or change in the manner by which the work must be completed • Variations are generally required because: Employer changes makes a design change during the construction phase of the work If a mistake or omission is discovered in the Contract Documents Overcome unforeseen problems D39PZ: Procurement and Contracts 16
CA’s instructions vs. Variations • An instruction is used to communicate a Variation to the Contractor • Therefore, all Variations are formally documented as instructions but not all instructions are variations • Can the Contract Administrator issue an instruction requiring a Variation after the issue of the Practical Completion Certificate? Clause 2.38 allows the Contract Administrator to issue Instructions for the rectification of materials and workmanship defects but is unclear on the rectification of design defects D39PZ: Procurement and Contracts 17
• Contract Administrator’s role • Contract Administrator’s instructions • Instructions vs. Variations • Certification • Certificates governing money • Certificates noting events (or non-events) • Key events in project progression D39PZ: Procurement and Contracts 18
Duties of certifiers • The certifier (i.e. CA) is a named individual or firm • The CA brings specific professional expertise to the situation • The CA cannot, therefore, sublet their role • The CA is an agent of the Employer The CA must act fairly, independently, and honestly • In its certifying role, the CA issues certain Certificates in response to events A Certificate is not the same as an instruction D39PZ: Procurement and Contracts 19
Requirements of a certificate • Certificates document achievement or occurrence of key events in a project • Certificates must: leave no doubt as to their content and consequences be issued when required by the Contract be issued in accordance with the procedure defined by the Contract be issued by the correct party be issued to the correct party • The CA must issue the Contractor all Certificates at the same time as they are being sent to the Employer ( cl. 1.8 ). D39PZ: Procurement and Contracts 20
• Contract Administrator’s role • Contract Administrator’s instructions • Instructions vs. Variations • Certification • Certificates governing money • Certificates noting events (or non-events) • Key events in project progression D39PZ: Procurement and Contracts 21
Interim Certificates • Create a payment mechanism that allows the Contractor to be paid for the Works as they progress There is no equivalent under common law It is therefore important that SBC/Q is properly executed • Issued by CA regularly as the Works are being constructed • Oblige the Employer to pay the Contractor for Works completed in the last valuation period • Interim Certificates are the mechanism used to regulate the timing of interim payments (frequency of issue defined in Contract Particulars. Default is one Interim Certificate every month. Governed by Clause 4.9.1) The amount of such interim or instalment payments (governed by Cl. 4.9.2). D39PZ: Procurement and Contracts 22
Interim Certificates • Interim certificates are issued in accordance with clause 4.9.1, leading to payments to the Contractor as valued by the Quantity Surveyor under clauses 4.9.2, 4.10.2, 4.12. 4.13 and/or as applied for by the Contractor under Clause 4.11.1 • The Contract Sum often requires to be changed during the progress of the Works Cl. 4.4 governs how this is done The current Contract Sum is defined in each Interim Certificate • Cl. 4.12.1 obliges the Employer to pay the Contractor the amount stated as due on each Interim Certificate within 14 days from its due date. D39PZ: Procurement and Contracts 23
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