TASK 1
Explain to the board of directors of Bradford College the events that would take place in order to reach an agreement on a contract for the above project. Advise them of the responsibilities of themselves and others in respect to the proposed contract.
Since the client is not knowledgeable, to say the least does not have a construction background, normally in this situation, an independent agent is acquired for assistance on behalf of the client, mainly to tackle issues that may pop up from the inception stage of the project right through to the completion. He will advise the client on the procedures undertaken and how everything is been carried out.
The architect and the design team together with the main contractor along with any specialists involved will meet with the client and the clients’ agent to produce a specification for the project, and also state any issues he may have at this stage, for example certain techniques being implemented or about the utilising of a certain type of materials. When these issues arise, it will be discussed amongst the design team, who will in turn try to come up with ideal solutions. A number of meetings may need to take place as issues more urgent than others may take centre stage and be the reason for the meeting and other issues may need to be resolved at a later time due to the fact that more information needs to be retrieved from the relevant parties amongst the design team. The main information which need be circulated amongst the design team are usually drawings and specifications, health and safety information which will initially become part of the pre construction health & safety plan. The pre contract document with all the vital sums, which state the various costings of the project must also be provided for the client for assessment to see whether he has any disputes or queries which can be discussed. Planning information must also be discussed at this pre contract meeting to ensure that all provisions are in place for the project to be carried out and that no problems stand in the way with regard lack of planning.
One of the key factors to a successful project is good communication, and how well the design team and the construction team liaise with one another. This is traditionally achieved by holding meetings whether it be on site or not. This is to ensure that all concerns and issues, queries and problems are raised and dealt with. The agenda for the meeting highlights the issues which are to be discussed which acts as a guideline so that no issues are missed. Minutes are produced from these meetings to highlight who was in attendance and what the outcome of the meeting was looking at what main issues were discussed, what problems occurred and what actions have been taken or require to be taken in order to resolve matters. This just acts as a record to show when issues were initially raised safe guarding some parties from persecution later on in the project, basically covering one’s back as they say.
Technology has improved, various types of communication are available for all the participating parties to utilize this and keep in touch. Nowadays when issues arise, it does not have to wait until a meeting day to be resolved, just with the touch of a button parties can have even a tele-link to resolve matters, a simple telephone communication can have matters resolved in minutes. Modern technologies such e mails which allow important pieces of information to be sent instantly such as scale construction drawings and details, photographs etc. This may even be sufficient to solve the problem discarding the need for a meeting to be held, speeding up the process and saving time and money in effect. Intranets can also be created when more than just two parties are involved so that important information can be sent to all the relevant parties. The way in which this information is shared speeds up the communication by informing all the relevant parties instantly. This is also a good method to use if parties involved are located quite some distance apart for instance if parties are based abroad with issues needing to be resolved and so methods of communication like this prove more economical than arranging meetings involving air travel, accommodation and other expenses. This intranet (network) can even put limitations on whom the information is sent to and also give certain parties more control over the information exchanged. For example Structural engineers and architects have the authority to amend drawings whereas other people who are linked on the network will be limited to only viewing the material and not being able to alter it. Another form of communication is live video conferencing which can be shared via an intranet to a number of parties, and is proving to be an economical and cost effective method of resolving issues amongst parties and is the reason why it is becoming one of the most popular forms of communication.
There are many professionals involved in a contract from the client and his aids such as the architect and QS. Other professionals such as the structural engineer, site management team, site manager, clerk of works and the CDM regulators. The functional & contractual relationships between these individuals in the construction team change depending upon what procurement method is chosen for the project. As we have chosen to use the traditional method of procurement it is the client who is in direct relations with the consultants in one hand and the contractor in the other.
As the traditional form of procurement has been chosen the client understands that consultants need to be appointed for design, contract administration and consultants who can control cost. It is the job of the contractor to then carry out the building works. The responsibility of the actual building work comes down to the workers them selves and the materials which have been used. This also includes any subcontractors which are used.
The client may express who he wishes to use in the contract which is referred to as named, nominated or pre-selected. When issues like this occur it may be that the contractor still takes all the responsibility of the work which the contractor (requested to use by the client) or it maybe that the contractor only retains a certain amount of the responsibility. If this is so it is important that collateral warranty is between the client & the sub-contractor.
We the contractor has been chosen through competitive tendering and was successful in winning the contract. The contract was acquired through a two stage tender and once we were successful, it was decided that the lump sum approach was to be had and this was only done by producing a full set of documents. The design of the project is to be done by consultants however the contractor may still have some obligations regarding design. This method of procurement is selected because the client can, by appointing his own consultant, ultimately keep control of his project, over the quality of the whole job and also the design. This method of procurement ensures a certainty about cost as it is calculated before the job even though some costs are changed during the project. The contractor is only responsible for carrying out the works and relies on information and instructions from consultants such as the architect. If there is a delay in this information being passed on then there maybe a risk of claims occurring as contractors may be left out of pocket due to delays on the consultant’s behalf.
The contract liabilities of each of the main parties depend on the terms stated in the contract which was produced. An ‘Implied’ contract is one where a proportion of the terms are not put down in words and so a offer and acceptance does not necessarily need to be put down in words or expressed orally. There are two forms of an implied contract, one being where it is a contract which is implied in fact. This is one in which the circumstances show that both parties have reached an agreement although it has not been expressed in words or orally. A simple example of this is by going to the dentist for a checkup. By going for this checkup you agree to pay a fair enough price for this service, If once you have had the checkup and then refuse to pay then the patient has breached a contract which is implied in fact.
The other form is a contract implied by law as it is not in fact a contract but rather a means by which the court can resolve a situation whereby a party would unjustly be increased in wealth if they were not required to compensate the other party. An example of this is where a joiner accidentally installs a new gate in the garden of the wrong house but the owner of the house knew that his neighbor was having a new gate fitted the night before and when he woke the next morning and saw that he was fitting the gate in his garden, he said nothing as he was pleased by this mistake and so when the joiner delivers the bill he refuses to pay it. The man liable to pay if it could be proven that the he knew the gate was being installed by mistake, therefore the court would make him pay but if it could not be proven, he would not be held liable.
Consideration which is also known as ‘the price of a promise’ in which it is the idea that both parties bring something to the agreement meaning both parties take some type of benefit or detriment. An example of this is one party which is in debt to the other, agrees to pay part of the debt in exchange for being released from the full amount.
The obligations and liabilities will be set out in the contract (JCT). The contractor’s obligations will be to complete the design of works to be carried out and complete the construction of the work in accordance with contract documents.
The client’s (Employer) obligation will be to pay the contractor at the times stated in the contract and in the same manner specified in the conditions. This is known as the contract sum
It shall also be stated what the limit of liability is for the contractor for the loss of use etc. It shall also state what the rate is for liquidated damages. The contractor shall also state rectifications periods which is in months from the date of completion.
The method of payment will also be stated in the contract whereby it will state when; periodically the contractor shall be paid.
The contractor will also state the maximum liability that they are willing to accept and it shall be stated in pounds and shall be an aggregate limit on liability. The term maximum liability is in respect of each breach which is committed
Collateral warranties from sub-contractors are when warranties are needed from the sub contractor and this is set out in a separate document. They are signed and dated and have a reference number
The CDM co-coordinator shall be appointed by the employer. The CDM planning period will be specified in the contract particulars. The minimum amount of time is referred to in the CDM regulations.
The main contractor will prepare the construction phase plan and comply with CDM regulations. The contract documents will comprise of the agreement and the conditions which have bee mentioned above. This will also contain the employer’s requirements along with the contract proposals and the contract sum analysis.
Drawings, details and specifications of materials, goods and workmanship will also be prepared by the contractor which will all be in relation to design of works.
Task 2
Explain the Influence that the professional bodies, trade associations and statutory bodies will have on the contract for this project.
CIC Construction Industry Council
The Construction Industry Council are a single voice for professionals in the sector. They are in the construction industry to ensure design quality they measure the design and quality of the buildings. If the building does not meet the requirements in the design or quality aspect the Chief Executive will be responsible and explain to the council. This can have an influence on the project because if the building design or quality does not meet the needs by the council changes will have to be made and this can make the completion date of the project to move and cause delays.
Trade union
Trade union is a labour union. They are there to reach usually goals like protecting the honor of its trade and improving the safety standards and helping them gain a higher pay. The trade union can have a huge influence on a construction project has if their demands are not met they can protest against this delaying the construction project. Also if the working conditions are not right for them they can protest against this too. This can have a huge effect on the project making it occur loss has targets will not be met and work will slow down or even will have to take days off to sort the matter out making it even harder for the project to be a success.
County council
The county council will have effect on the New Technology Building because it will have to meet the standards set by them for the safety of the students and people that are going to be using the building. If the New Technology Building does not comply with their standards then it will not be able to open until it does. The county council is also responsible for the services across the county for education, also for the public safety, libraries, waste management planning policy and trading standards. So they are bound to keep checking that the building is meeting their standard and health and safety rules. The New Technology Building will also have to meet building regulations rules so that the building get the approval from the council.
Approved Inspectors
There are many different inspectors that asses the build for the design and safety aspects. Design quality indicator is achieved by an inspector that assess the design quality at each stage of the construction process from the beginning through to the using the building. Inspectors are also qualified to undertake building control work. This however cannot cause that much of an influence if everything is done according to the rules but if it is not then this can have a major influence has work will need to be redone to the standards.
Sub-Contractor/Main Contractor
Sub-contractors and main contractor can influence the project by a vast amount if targets are not meet by them causing delays and loss. Also if the health and safety of the sub-contractor and main contractor is not meet they can make a claim on the insurance causing them to have a loss. Work is the main issue in a construction project and if required to finish on time to make the construction project a success and will also have to be completed to the standards required and to the taste of the client otherwise work will have to be redone making the completion date target not getting met.
Architect
Every project requires an architect for the design of the building has it is not possible to start construction work without a design of the building. So they can have a large effect on the project because the project will not be able to being if there is no design or nothing to go by for the building. Buildings can have a complex design so the work men will not be able to build without a structured procedure causing more delays for the project. The main factors which can influence the design process are the finance, the client’s needs the design, timing and estimated delivery of the project. The architect will have to know the financial limits for the project because if he does not then huge complications can occur causing client a parties involved to get money debts. Architect will know the possible amount it will cost to build the project building and can let the rough guide of the project.
In the case where a contract is unlawful and void, either because of statute, common law, on the grounds of public policy and illegal either by common law is known as an illegality.
Void contracts in common law are contracts such as that of one to throw out the jurisdiction of the courts. An example would be rules of a particular club which state that the rules of the club can be interpreted by the committee alone and that their decision is final.
An agreement about the future occupation of an ex employee is a clause which may be of an issue within the construction industry especially with all of the specialist contractors which are involved, each with their own technology and methods. Not only that contractors, subcontractors and suppliers all have their own contacts and agreements with one another. The risk that one could be given too much information including all the companies top secret knowledge. If the employee was to leave the company and start up on his own in the same field, then the remaining employees and members of the company are at risk.
A contractual agreement between the employer and employee before he is employed may be undertaken which could contain a covenant by which the employee when he leaves will not carry on with any business which competes with that of his employer. Such a covenant is limited to in area and also in duration
The employee must prove that he has a legal interest to protect before a covenant can be made. As mentioned earlier there is that of trade secrets and special secret processes. For example in the case of ‘Forster & sons Ltd v Suggett (1918)’ in which there was a restraint on a particular employee with the knowledge of a secret process in creating glass was upheld.
Also mentioned earlier is that of the protection of business connections. The influence that the ex employee may have influence over the employers customers in a way which might entice them away. Restraints have been put in place in such cases as that of the one between ‘Scorer v. Seymour Jones (1966), a case between a solicitors clerk, a milk rounds man and an estate agents clerk.
Once the employer has proved he has a legally protected interest he must also prove that the restraint is no wider than is needed as so to protect his trade knowledge and also his business connections.
There are three main factors to consider, that being the extent of the cover. If the extent of the cover goes beyond the tasks and activities which were asked of the ex employee which he did not perform during his tenor then this would be considered as unreasonable.
The length of the covenant also needs to be decided and proven. The length of the restraint needs to be seen as reasonable. For example a solicitors clerk was was given a lifetime restraint (Fitch v. Dewes (1921) but in the case between an employer and employee in the case between Drapers v. Reynolds (1956) where by the employer of a credit drapery firm tried to put a 5 year restraint on an ex employee who wanted to start a business in the same field of work. This 5 year restraint was seen as unreasonable.
Task 3
In order to prevent possible problems with the contract at a pre-contract stage consider the implications programming in relation to the project being completed ahead of time or late.
It is vital that the correct programme is created for the project as the client may have grounds to opt for penalty clauses to be part of the contract. For example a store retailer enters a contract with a contractor, and the contractor has put timescales in the contract for the completion, and due the this the client here who is the store retailer has made arrangements for the opening of the shop, acquisition of staff, goods deliveries together with advertisements and the lot for a specific date and the structure was not ready at the agreed date, the client will be loosing money, and for this reason alone it is advisable to insert clauses to obtain expenses, to recover money he will have been making if the shop were to be up and running.
On the other hand the timescales given by the builder if proved to be incorrect in the way that the project was completed in half the time, it then raises questions into whether the pricing of the job which the builder provided to the client was incorrect. An example would be that the price included for 20 weeks brickwork for one man and instead it was completed in ten. The client would question whether he is paying too much for the job and instead at worst case it should be half the price to what was initially agreed. An investigation maybe undertaken by the client to assess this anomaly. The contractor may respond by stating that 2 men were stationed on the job instead of one as so that they could compete the job quicker to be able to attend another job. And so the price submitted can be justified as he had to pay two brick layers instead of one and so the cost was correct.
Disagreements between one another if not able to be sorted then there are routes for each party to take to seek justice and compensation as detailed below
Adjudication – is one method whereby an impartial third party adjudicator decides the issues between the two parties and the ways to resolve them. This method is quick and one of the cheapest forms of resolving a dispute and is certainly quicker and less expensive than other forms such as arbitration and litigation. ‘Section 108 of the Housing grants, Construction and regeneration act 1996’ gives the right to almost all parties involved in construction contracts to take any dispute under the contract to adjudication. As it has been designed to be a very simple process it is not even necessary for you to acquire professional assistance although it is best to so if it involves very complicated and technical issues.
The simple steps to adjudication are to firstly send a notice to the other parties of the contract explaining that you are referring a dispute to adjudication and that adjudicator must be appointed and that you will refer this dispute to the adjudicator.
Usually, the steps in starting adjudication are to send a notice advising
The other parties to the construction contract that you intend to refer a
Dispute to adjudication, to appoint an adjudicator and to refer the dispute
To the adjudicator.
The adjudicators decision is usually upheld by the courts so if you were receive a notice of adjudication against you then it is important that you make sure that you get your side of the case across to the adjudicator
Arbitration – is a form of ADR (Alternative Dispute resolution) and is a legal technique of resolving any disputes outside the courts. This is where the disputes are referred to arbitrators or arbitral tribunal. They decide upon a resolution by which both parties agree on. This form of settlement technique is where by a third party is referred the case and the decision that they make is legally binding for both parties.
Arbitration can be either voluntary or mandatory and can be either binding or not binding. Therefore the form of arbitration which is non binding is similar to that of mediation but the distinction between the two is that mediation involves trying to help the two parties find a middle ground whereas the arbitrator stays away from the settlement process but instead determines who the liability lies with and gives only a indication of the sum of the damages
Advantages of arbitration can be when highly technical and specialized issues are involved and so arbitrators can be appointed who have an in depth degree of expertise relevant to that of what is in question. Arbitration is often a lot quicker than litigation and is seen as a cheaper and more flexible method for businesses. Arbitration is kept confidential and the decisions are usually non public.
There are some disadvantages of arbitration such as sometimes you are required to pay fees for the arbitrators which for small cases involving little value can prove quite costly. Also the fact that there are limited routes for appeal which means it is not so simple to overturn a decision. Another disadvantage is that there might be more than one arbitrator and so if there is a panel of those juggling there work between each other resolving disputes amongst them selves etc can prove pretty length y and cause delays.
Other forms of alternative despute resolution includes mediation which is another form of settlement involving a third party. This is when a party seeks to resolve disputes under contract through mediation. This method involves the parties themselves resolving their issues with the help of a mediator rather than a third party deciding the resolution.
Task 4
Consider the influences including the activities of parties and organizations, which could affect the cost of the project at the pre-contract, tender and final account stages and how this could impact on the quality of the finished project.
In order for a construction project to be successful, various factors need to be addressed, some of these factors are, good organization, proper control measures, in depth planning and also resources such as finance, materials and labor, specialist equipment and plant and even the space available for the project for the construction team to set out. It all depends on how you utilize these requirements to the levels that the development requires, for it to be successful in terms of generating higher levels of profit and also satisfying the customer which could then lead to repeat business and good reputation by oral tradition.
Plant and machinery, which is required in various forms through out the project is one of the main factors of any development. It must be stated in the early stages what type of plant and machinery is required and also when required. This is done so that it can be planned for these to be brought in at the time of need. Perfect planning and organizing is required here to have an effective impact, as it must be decided what plant and machinery are to be hired or purchased, looking at whether it is more viable to purchase plant and machinery and also comparing them to the hire rates.
The issue of hire needs to be looked at carefully. To be cost efficient you must look at when you will actually require the items of plant, how long you will need it for and what other items of equipment and more importantly larger items of plant, so that you make sure enough room on site is available for what is required. If you acquire plant on hire and you don’t use for a number of weeks, you are losing money and in effect losing money on the job. There are endless amounts of different types of plant and equipment available, ranging from lump hammer’s, vacuum cleaners and steel cutting discs to 65ft boom cherry pickers and excavator’s, and so on.
The management team usually put certain measures in place to monitor the hire and purchase of plant and machinery, these are utilization forms which the site team will comply with accordingly. This form relates to use and other aspects such as maintenance. Contractors are not restricting the site team in any way as if they were to have to obtain permis