Learning Outcome 3: Analyse different types of contract and their application to the built environment Learning Outcome 4: Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions. Introduction The successful management of a project relies upon ensuring that work is undertaken in accordance with the terms of the contract that exists between client and contractor. In construction, a contract is the legally binding agreement between the client (who wants a project built

Unit Credit – 15

Assignment Title – Contracts & Management

Learning Outcome 1: Discuss the requirements for a contract in meeting stakeholders’ interests

Learning Outcome 2: Determine the criteria for the selection of a contract

Learning Outcome 3: Analyse different types of contract and their application to the built environment

Learning Outcome 4: Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions.

Introduction

The successful management of a project relies upon ensuring that work is undertaken in accordance with the terms of the contract that exists between client and contractor. In construction, a contract is the legally binding agreement between the client (who wants a project built) and the main contractor (who is responsible for constructing the project). Time, quality and costs are covered by such contracts to ensure that a client receives a project that has been specified by their designer to a budget and at an agreed handover date for completion.

The overall aim of this unit is to provide students with a working knowledge of contracts, so they can manage a project team in accordance with the agreed terms and conditions of the contract. The principle person responsible for this is often the quantity surveyor and it is their responsibility to ensure compliance with the conditions of the contract.

On successful completion of this unit students will be in a position to run and administer a project using the contract terms and conditions that have been agreed between a client and the main contractor. In addition, students will have the fundamental knowledge and skills to progress on to a higher level of study.

Essential Content

LO1 Discuss the requirements for a contract in meeting stakeholders’ interests

Clients’ requirements:
Statement of need, scope of services, responsibility for the design, design undertaken by an external architect, design to be undertaken by the contractor, liability for the design, professional indemnity for the design, performance bond, parent company guarantee, level of risk, the use of Building Information Modelling, strategic brief, required performance specification, procurement route, liability for overruns and delays, liability for cost overspends, level of quality required for the project, constraints on project duration, managing budgets and financial constraints to avoid overspends.

Public body requirements:
Level 2 Building Information Modelling, value for money (e.g. the Public Contracts Regulations 2015 or a local international agreement), local council purchasing strategy, pre-qualification questionnaires, compliance with equality legislation, Health & Safety and accident rates for main contractors, environmental management considerations, fair work practices, price benchmarking and cost targeting, engaged serial supply chain, efficiency and elimination of waste (e.g. a Buy Local scheme), Government International trade agreement, Private Finance Initiative 2 (PF2) and Public Private Partnerships (PPP).

LO2 Determine the criteria for the selection of a contract

Selection factors:
Time in terms of a quick start and shorter completion date; cost in terms of the financial size of the undertaking; quality; the level of risk to be apportioned across all stakeholders; client and main contractor balance of risk; fixed price or variable price; will the contactor be undertaking the design; warranties and guarantees for workmanship and materials specification; basis of contract sum and payment options (e.g. phased, monthly); employers control over sub- contractors, nominated or named; lump sum or re-measured costs against a schedule of rates.

Type of work to be undertaken:
Maintenance or capital works, size, value and complexity of the project to be undertaken; knowledge and expertise of the employer or client; location, within UK or internationally, European location.

LO3 Analyse different types of contract and their application to the built environment

The Joints Contracts Tribunal Suite of Contracts:
Traditional: JCT Standard Building Contract 2011 (the ‘with Quantities’ and ‘without Quantities’ versions), JCT Intermediate Building Contract 2011, JCT Minor Works Building Contract 2011
Traditional (re-measured): JCT Standard Building Contract 2011 (the ‘with Approximate Quantities’ version), JCT Measured Term Contract 2011
Design and Build: JCT Design and Build Contract 2011, JCT Major Project Construction Contract 2011
Construction Management: JCT Construction Management Appointment 2011, JCT Management Building Contract 2011
Partnering: JCT-Constructing Excellence Contract 2011, PPC2000 (2013 edition).

The New Engineering Contract suite:
New Engineering Contract (NEC3) and Engineering Construction Contract (ECC) and options A to F.

International Federation of Consulting Engineers Contract Suite (FIDIC):
Conditions of Contract for Works of Civil Engineering Construction: The Red Book (1987)
Conditions of Contract for Electrical and Mechanical Works, including Erection on Site: The Yellow Book (1987)
Conditions of Contract for Design-Build and Turnkey: The Orange Book (1995).

Other types of contract:
ICC Minor Works Version 2011, GC/Works series.

LO4 Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions

Contract documents:
Distinction between contract and non-contract documents; articles of agreement; conditions of and appendices to the different forms of contract; forms of contract used (construction and civil engineering projects); understand construction contracts in terms of supply chain management; supply chain management, nominated, named and other sub-contractors; suppliers, nominated and named sub-contractors; contract conditions; tendering arrangements; information requirements; main contract implications; forms and agreement; other sub-contractors; contract conditions; domestic; directly employed; tendering criteria.

Quality:
Materials; goods; standards of workmanship; specification; statutory obligations; methods of working; testing; defects and removal of defective work; quality assurance; other clauses of the contract, certificate of making good defects.

Specific conditions:
Articles of agreement; payment terms; variations; insurances; contractors’ main responsibilities; testing and defects; architects/engineer instructions; risks.

Time:
Limitation of liability; possession; extensions of time; extensions and delays to contract period.

Costs:
Loss and expense; performance damages; performance bonds; retention; bonus for early completion; termination; price adjustments.

 

Pass	Merit	Distinction
LO1 Discuss the requirements for a contract in meeting stakeholders’ interests		D1 Critically evaluate the contractual requirements for a public body in compliance with legislation
P1 Explore the contractual requirements of a project for a private client P2 Explain the contractual requirements for a public body for an infrastructure project	M1 Contrast the contractual requirements of a public and a private stakeholder for a major project
LO2 Determine the criteria for the selection of a contract		D2 Evaluate a project in terms of risk for all stakeholders
P3 Assess how time, cost and quality affect the selection of a contract P4 Evaluate the ways in which time and quality affect the cost of a project	M2 Analyse a project in terms of the selection criteria for a contract that satisfies the requirements of a client
LO3 Analyse different types of contract and their application to the built environment
P5 Analyse the factors that influence the selection of a contract used to control and manage a project	M3 Compare forms of standard contracts in terms of meeting a balanced risk	LO3 and LO4 D3 Justify the selection of a contract in meeting the strategic values of a client
LO4 Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions.
P6 Revise a standard contract in meeting the requirements of a client P7 Present the rationale for defining selected terms and conditions in the preparation of a contract	M4 Compare the terms and conditions of similar contracts in meeting clients’ requirements M5 Discuss how collaboration between contractors and sub- contractors influence contractual arrangements