Cotract Procedures

Assessment 3 Contracting Procedures

In my role as an advisor I am required to submit a report regarding the procedures of the JCT standard form of building contract 1998 (private edition with quantities) that my client has decided to use. Following are an explanation of the various aspects of the form.

Explanation of procedures relating to payment

The JCT form of building contract is like most forms of contract used throughout the UK allowing for variations during the project. It is sometimes misunderstood as to what amounts to a variation, as it must fall within the definition of a variation or recovering the costs for it will be very hard. Within JCT98 the clause 13.1 tries to define a variation, it states a variation occurs when the actual work to be carried out changes, or where the circumstances in which the work is to be carried out changes. The architect may issue instructions needing a variation but all these must be in writing in pursuance of clause 4.3 as the quantity surveyor cannot measure and value the work without the written instruction �clause 13.4’.

The valuation of the variations and provisional sum work covered by approximate quantity fall under two headings. The first one stating that within 21 days of receipt of an architects instruction and commencement of the work, for which an approx quantity is included in the contract bills, a price statement must be prepared. This price statement should include things such as direct loss; expense costs or costs due to where the work cannot be completed by any altered/revised completion date. Once this is done the QS liaises with the architect and must let us, the contractor, know whether the price statement is accepted, if this is so then it shall be added to or deducted from the contract sum.

If it is not accepted in its entirety or in part we the contractor must be given the reasons for its rejection along with the amended price. We then have 14 days to make a statement of acceptance, if we do not make a statement within this time period it will be deemed that it has been accepted at the revised sum.

The second heading states the valuation of the variation is made by the QS in accordance with clauses 13.5.1 to 13.5.7. The rules of measuring variations are the same principles used for the preparation of the contract bills (clause 13.5.3.1). If any lump sum or percentage amendments have been made in the contract bills then these adjustments must also be adjusted in the variation account. If the varied work cannot be measured or valued properly then we the contractor should be paid on a day work basis. The documents to refer to are the schedule (definition of prime costs of day work carried out under a building contract) by the Royal Institute of chartered surveyors and the Building Clients Confederation.

Interim Certificates

These equal cash flow and are described as the life-blood of the construction industry. These certificates are issued by the architect, with the maximum intervals of these certificates to be issued is stated in the contract. The certificate states

• Amount due to the contractor from the client

• To