Contract Administration Guide

CONTRACT
ADMINISTRATION AND SITE
MANAGEMENT
Meade Health Centre Extension
“If we are to extend throughout the construction industry the improvements
in performance that are already being achieved by the best, we must begin
by defining the integrated project process.”
Sir John Egan

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CONTRACT ADMINISTRATION AND SITE MANAGEMENT
Executive Summary
Scope/ purpose
1. The purpose of this report is to advise the client on a suitable contract for the project in
relation to the project brief and to offer information on the procedures outlined in the
contract. It will also explain why standardized forms of contract are most suitable to
administer for most types of construction work. (4)
2. The report begins with a comparison of suitable contract types. Fixed price agreements are
analysed and prove to be more appropriate than variable forms. (4)
2.1 The Recommendation falls upon the IC11 as most suitable contract, due to greater
flexibility to the MW11 and less complexity of the SBC11. (5)
2.2 Responsibility appears to lie more with the contractor with this contract type.
However all contracts and not without risk, and the ones affecting the site are
highlighted to be particular and speculative, mainly involving adverse weather
conditions and damage. The risks also shown to lie with the Employer, who risked
damage to business and loss of earnings. (6)
3 Statutory Approvals where found to be a requirement for all building projects and the
necessary approval from various bodies (planning, BC) would have to be granted before and
during the construction phase. (6)
3.1 Compliance would also have to be met by following procedures outlined in the
regulations and the contract. (7)
3.2 The approval process for the project involved issuing plans to the Planning
Department and complying with any conditions made on the proposal. Building
Control would also make routine visits during certain milestones of the construction
process to ensure all requirements are being met. (8)
4 The Scope of the Contract Administrator concluded to be both desk and site based. The
limitations revealed they have limited control over time extensions and suspension of time,
and the role is tied into the contract until completion. (9)
5 Different sources of health and safety equipment (health and safety policy, risk
assessments.) are also required to be submitted and distributed by the CA to the relevant
parties. (10)
5.1 Timing and schedule of information showed ways the CA could monitor progress by
using forecasting and a program of works, and how allowances in time could be
made if there are any risk areas to be expected. (11)
5.2 All late and missing information was also found to have repercussions on the CA and
employer, resulting in damages and claims served by the contractor. (11)

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6 Revision into the interim application showed how it is used to release payment when set
milestones are achieved by the contractor. (12)
6.1 The findings also showed the process in which the final sum is achieved, by
calculating the stage payments and variations, including any retention held by the
employer or added costs from the contractor. (13)
7 Delays were also found to cause breaches of the contract. If the breach is caused by the
employer, it was found that the contractor had a contractual right to sue for damages, or
terminate a contract if the breach was extreme. (14)
Conclusion
8 The report ends with an evaluation of each of the subjects discussed and a summary of why
methods where chosen, including the benefits of using these processes instead of the
alternatives. Emphasis is also made on the practicality of using standard forms of contract,
and why taking the time to choose the most appropriate procurement strategy can benefit
the client and other parties. (14-15)
The appendices contain some of the forms for tendering, meeting compliance (F10, risk assessment,
data sheets) and the certificates used for interim and final payments. (18-25)
Recommendations
 Traditional procurement route and standardised contract.
 JCT Intermediate Building Contract with Quantities.
 Lump Sum form of contract.
 Monthly interim payment schedule with retention.
Project Considerations
 Special provisions may have to be made as the extension is part of a health care facility. This
could invoke the need for certain tendering procedures (one, two stage) and may require
the use of certain recommended contractors.
 Sources of information used during the design and construction phases (drawings, BIM etc.)
should also be made in consideration for the in-house FM team, to benefit maintenance for
the proposed building.
 Considerations may also have to be made due to the condition of the site and ground. This
may involve provisions for risks surrounding the foundations in poor soil or the high water
table, and any environmental issues or possible contamination are dealt with accordingly.
 Provisions should also be made for possible issues concerning access/egress from the site
around school and rush hours, and any disturbances to the neighbouring primary school are
considered during the design stage

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Contents
1 Introduction……………………………………………………………..4
2 Contract Type……………………………………………………………4
2.1 JCT Fixed Price Contracts…………………..………………….5
2.2 Contractual Risks…………………………………………………..6
3 Statutory Approvals……………………………….………………….6
3.1 Compliance …………………………………………………..………7
3.2 The Approval Process…………………………………………….8
4 The Contract Administrator…………….…...………..………….9
5 Health and Safety Information…………….…….…………….10
5.1 Timing and Schedule of Information…………………….11
5.2 Late or missing information …………………………………11
6 Interim Application……………………………………………….…12
6.1 Valuations…………………………….……………...…….………..13
6.2 Total Sum………………………….……………………….………...13
7 Delays.…………………………………………………………….……...14
8 Conclusion……………….………………………………………………14
9 References………………………………………………………………15
Appendices………………………………………17
Fig.1 Form of Tender………………………….18
Fig.2 F10 Form……………………………………19
Fig.3 Schedule of Works…………….……...20
Fig.4 Risk Assessment………………………..21
Fig.5 Safety Data Sheet……………………...22
Fig.6 Planning Application………………….23
Fig.7 Interim Certificate……………………..24
Fig.8 Final Certificate………………………….25

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1. Introduction
‘Procurement’ is the term used to describe the relationships formed between clients, consultants
and contractors, and the procedures followed that enable a project to be executed in a safe and
efficient manner. With modern construction there is now a common formality that most projects
follow a standard form of contract. The purpose of these contracts is to distinguish the legal
responsibilities of each of the parties and their obligations under the contract.
The most common forms of building contracts are within the Joint Contracts Tribunal (JCT11). The
JCT are a collection of traditional and more complex contracts which are familiar to most
contractors. Most of these contracts also come with the option of using the contract with or without
completed designs, which allow the contractor to have a different amount of input into the design
stage if the client requires this assistance.
Choosing the right contract will depend on the contents of the documents and selection will be
made to the type that will offer the most strategic approach. Once the contract has been chosen,
companies can be welcomed to tender for the proposed project (Fig.1).
2. Contract Type
With traditional procurement methods, “The client
accepts that consultants are appointed for design,
cost control, and contract administration, and that
the contractor is responsible for carrying out the
works.” Clamp, Cox, Lupton and Udom (2012, p.33)
Cost reimbursable contracts allow for immediate
starts on site and are [… ideal for coping with
emergencies.] However, the risk lays nearly all on
the client under this contract, and there is little
incentive for the contractor to perform. Hackett,
Robinson and Statham (2007, p.72)
They also state, “Since fixed price contracts are
considered suitable for most circumstances there
should be cogent reasons for recommending to a
client the use of a cost reimbursement project.”
Fixed price contracts account for the majority of
building contracts and are considered the most
effective method of offering, [incentive for the
contractor to manage the work effectively and … to
complete the work as quickly as possible to
maximise his profit.] Unit rate contracts could be
considered for their nature of covering high risk
projects, but would require unnecessary admin on
the client’s behalf and the need for a bill of
quantities would have to be used to calculate
costs. Hackett, Robinson and Statham (2007, p.70)
Cost reimbursable - The contractor is reimbursed the
cost of the project plus an added fee for overheads
and profit.
Used when risks cannot be quantified, when it is
impossible to define or quantify works, innovative or
complex projects, and for emergency and rescue
works.
Target cost – The client and contractor agree on a
probable cost for completion of work. The difference
between actual and target costs are split between the
two.
Used when the client wants involvement, if the project
is complex and there are major unquantifiable risks,
and if there is a poor definition of works at the tender
stage.
Unit rate – The client will pay a fixed sum (based on a
bill of quantities) for each completed unit of work.
Used for public sector civils contracts, for high risk
contracts where other contracts are unsuitable, when
variations are likely to be in quantities, and as a
common language between different organisations.
Lump sum – Where a single ‘lump sum’ price is agreed
for the project and payments are released on a time or
staged based rota.
Used for small projects, when the client wants little
involvement, when the design is complete at the
tender stage, and when designs are unlikely to change.

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A lump sum contract appears to be most suitable as the client is guaranteed a final price and agreed
completion date at the tender stage. The contract is easier to administer and also suits projects with
complete designs for a client that would require very little, if any, design flexibility after construction
commences. One of the main risks of this contract is the quality may drop if the contractor is intent
with keeping the costs down, but can be counteracted by ensuring a reliable contractor is employed
for the project.
2.1 JCT Fixed Priced Contracts
The SBC11 is the most comprehensive and familiar form of
JCT contract. However, this contract is used particularly in
large value works and is considered ‘longwinded’ in
comparison to the IC11.
The MW contracts are also the simplest JCT form available
but considered unsuitable if the extension project is part of
a larger development, as it is often used for simple building
work of a ‘one-off’ nature. Also, Clamp, Cox, Lupton and
Udom (2012, p.167) state, [The Minor Works Agreement
has featured in a surprising number of court cases, often
due to use beyond its intended limits …]
The IC11 is intended for use as a traditional procurement
route, where the contractor is required to perform the
works shown in the contract documents for the specified
contract sum (with quantities providing the most accurate
final price), and to complete the works by the date agreed
in the contract. It would also be better for budgeting and insuring for any of the risks with the site,
being of a more complex content and now allowing for an un-capped payment limit (within reason).
The specification of works will be outlined more exclusively under this contract than the MW11 and
without the complexity of administering the comprehensive SBC11. It is only intended for work of a
simple content and involves using, […normal recognised basic trades.] without using specialist
services. However, the IC11 provides provisions for partial completion and setting separate
commencement/ completion dates, which would be useful if the extension was to be completed as
part of the larger development under one contract. Ashworth (2012, p.70)
Comparison with SBC11
 Version without contractor design
 Provisions for named subcontractors
 No schedule 2 quotations
 Only one fluctuations option
 No CDP design submission procedure
 No third party rights
 Default retention deduction is 5%, not 3%
Lupton, S. (2014, p.5)
Comparison with MWD11
 More extensive design provisions
 Professional indemnity insurance clause
 Provisions/ more detailed requirements
for named sub-contractors
 Ability to defer possession
 Partial possession and sectional
completion provisions
 Collateral warranties may be required.
Standard Building Contract (SBC)
 With quantities
 With approximate quantities
 Without quantities
Design and Build Contract (DB)
Intermediate Building Contract (IC)
 With quantities
 With approximate quantities
Intermediate Building Contract with
Design (ICD)
Minor Works Contract (MW)
Minor Works Contract with Design
(MWD)

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2.2 Contractual Risks
Latham, M states, “no construction
project is risk free. Risk can be managed,
minimised, shared, transferred or
accepted. It cannot be ignored.” Risks can
be put down to poor processes and
relationships between parties. Bad
communication, late administration,
poor supervision and delays in payment
can all add time and increase the costs of
the project.
The high water table, access/egress from
the main road, damage to existing
building and construction nuances
caused to the school where all considered to be factors
that may affect the construction process and would
have to be managed accordingly. Risk management is an important part of the contract, as it
outlines which elements of the project each of the parties are responsible and liable for. Ashworth
(2012, p.190) mentions risks should be allocated based on “The ability of the party to manage the
risk.” although it is not uncommon for the contractor to accept more responsibility to obtain the
work. PCW.co.uk outlines the risks as:
Particular risks Fundamental risks Speculative risk Other contractual risks
 Fire
 Weather
 Subsidence
 Collapse
 Vibration
damage
 Government
policies on tax,
labour etc.
 Health and safety
law updates
 Malicious
damage
 War damage
 Poor ground
conditions
 Adverse weather
 Shortages on
labour and
materials
 Delays
 Disputes
 Cost overruns or
revenue leakage
 Poor end result,
quality failures
 Damage to business
 Loss of property
 Loss of bargaining
power
3. Statutory Approvals
Statutory approvals are the necessary approvals needed from various Local Authority bodies before
work can commence. Approval is needed from planning permission, in which guidelines and
conditions must be met for the proposed building, and building control. The design must also comply
with the Building Regulations. Issued by the Department for Communities and Local Government,
these regulations apply to most new buildings, as well as alterations on existing ones.
Part A: Structural safety Part H: Drainage and waste disposal
Part B: Fire safety Part J: Heat producing appliances
Part C: Resistance to contaminants and moisture Part K: Protection from falling
Part D: Toxic substances Part L: Conservation of fuel and power
Part E: Resistance to sound Part M: Access to and use of buildings
Part F: Ventilation Part N: Glazing safety
Part G: Sanitation, hot water safety and water efficiency Part P: Electrical safety
Sourced from: http://www.gpmfirst.com/

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Though all are necessary, there is particular importance with parts A and B regarding the existing
building and fire safety of the health centre. Parts C, H, L and M will also be important in relation to
the site location and conditions. Hackett, Robinson and Statham (2007, p.9) also mention the CDM
Regulations, [… place duties on parties to plan,
co-ordinate and manage health and safety
throughout all stages of construction.]
Designingbuildings.co.uk lists other statutory
requirements which may include:
 Advertisement consent – It may be
required to notify local areas (school,
current health facility) about the
proposed construction and what
implication it will have for them.
 Environmental impact assessment – To
gain approval from the environmental
agency.
 Hazardous substances consent – An
appraisal to use or remove hazardous
substances.
3.1 Compliance
Gov.uk states, […the core commitment for effective compliance is demonstrated as a clear and
unambiguous approach to the law.] Regulatory compliance is the process in which the parties
comply with the laws and Building Regulations relevant to the project. The parties are also to abide
by the clauses stated in the contract and take out the necessary insurances for the project areas they
are responsible for.
The appointed CDM Regulator and HSE will assist the
client on how to comply with the law. For projects
lasting longer than 30 days/ 500 person days, the HSE
(1996, p.20) states the “HSE should be notified in
writing before construction work starts.” by submitting
an F10 form (Fig.2).
Other forms prepared for site may include a schedule of
works (Fig.3) to ensure processes comply with the law,
risk assessments (Fig.4) and safety data sheets of
hazardous materials (Fig.5). Representing bodies
(building control, Local Authority) can also assist the
client on the necessary requirements if they are unsure
of the procedures.
Sourced from: http://www.planningportal.gov.uk/
Sourced from: http://www.mondaq.com/

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3.2 The Approval Process
All planning applications are submitted to the Local Authority Planning Department (fig.6). Local
Authority procedures are outlined in the Building Regulations and cover both pre-site and on-site
activities. Planningportal.co.uk also states that, “If a local authority believes that your building work
contravenes the Building Regulations, they may serve you with an enforcement notice requiring you
to alter or remove work which contravenes the regulations.”
Local Authority - applications are:
 Full Plans Application
 Building Notice – When plans are not completed at this stage. (For smaller works)
 A Regularisation Application – For previously unauthorized works.
Building Control - will also make routine inspections to check:
 The foundation excavation, before foundations are laid
 The foundation itself, before infill
 The damp proof course, at installation level
 Any concrete works, before they are covered
.
The application is submitted and charges are paid for the application process to begin.
The Local Authority will Check the plans and notify any relevant authorities, within 5 weeks of
submission
Providing all plans comply with Building
Regulations, The client will receive notice
that they have been approved.
Conditional approval may also be issued, which
means the client will have to make modifications
to the design or be more thorough with their
proposal before approval is granted.
After approval, the notice is valid for up to 3 years for the date of deposition of the plans.
Once construction commences, the Local Authority will also carry out site inspections at certain
stages of the project. (Foundations, damp proof, etc.)
If requested, a certificate of completion is granted once the project is built, providing that the
Local Authority is satisfied with the work.

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4. The Contract Administrator
“The responsibilities of the Contract Administrator will be defined by the form of building contract
and the professional appointment under which the CA is appointed.” Northwood (2011, p.9)
The CA is appointed by the employer and their role begins when a contract is in place between the
client and contractor. Unless the contract makes a decision final, their decisions on the project can
be challenged by the contractor through dispute resolution, if they disagree with any aspects of the
design.
Scope/ responsibilities
Initial familiarisation
“It is the CA’s duty to administer the project in
such a way that the correct contractual
procedures and good administrative practices
are followed, and that the life of the building
contract from inception to completion is
accurately and completely recorded.”
Northwood (2011, p.11)
 Building contract conditions, to become familiar
with the requirements and obligations
 Specialist sub-contract documents
 Specifications of works/bill of quantities or similar
 drawings
 The appointment agreement for other consultants.
General administration
Where the JCT contract provides for a named
CA that person will have a specific roll, duties
and rights. It is important that the CA complies
with the clauses in the contract.
 Ensure the provision of information
 Supply documents, drawings and setting out, etc.
 Provide or give additional information when
required
Financial matters:
 Consider and certify the amount of interim
payments to be made by the Employer to the
Contractor.
 Advise the QS on when to release the interim
payments.
 Send the adjusted contract sum calculations to the
client.
Supervision
 Approve the quality of materials, workmanship etc.
 Instruct the Contractor
 Consent to the removal of unfixed materials onsite
‘in writing’
 Make a fair and reasonable extension of time for
completion of the Works or Section (clause 2.19)
Site inspections
It is advisable for site inspections to be
undertaken to ensure that the CA’s
responsibilities are effectively discharged. The
frequency of site inspections can will vary from
project to project and broadly be determined
by:
 The complexity of the project
 The calibre of the contractor and site personnel
 progress of works
 Predetermined stages (if applicable).
 The value of works
The inspection should include:
 Basic information (time, weather, site members,
instructions issued.)
 Progress review
 Quality reviews
 A check on materials being used
 An evaluation of health and safety on site
highlighting any risk areas

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Meetings
Meetings with the CA present will involve office
based and informal meetings on site. These
would cover matters such as:
 Progress to date
 Forecasts
 Any problems, delays
 Contract instructions
 Health and safety aspects
 Q & A between members
The CA must act personally to the client and not delegate the task to a sub-agent. They also have the
power to issue instructions on discrepancies between contract documents under clause 2.13 and
variations under clause 3.11. However, under the IC11, they do not have the power to issue
extensions in time alone, which must be decided between all parties before allowance is granted.
Regarding alterations Murdoch and Hughes (2008, p.250) state, “Unless the contract administrator
acts within the terms of a variations clause, there is no power to change what was originally agreed.”
Also, [As a general principle, neither the employer nor the contract administrator has any legal right
to suspend work…] and must see it through to completion once construction commences.
5. Health and Safety Information
Hackett, Robinson and Statham (2007, p.265) state, [Under clause 2.9 the contract administrator is
responsible for supplying sufficiently ‘accurate dimensioned drawings’ and for determining levels…]
of the site. They are also to supply the Contractor with all the necessary information and instructions
on how to approach the works, and provide enough time to complete them. The contractor must
comply with every instruction issued by the CA, provided it is valid and relevant with the contract.
Pre-construction information is also provided to the client containing information on the tenderers
for the project.
A health and safety policy is also created for the site.
They mention, “the essential ingredients for a good
policy statement are:
 A statement of the employer’s general policy
with regard to health and safety
 Details of the organisational/ managerial
hierarchy for carrying out the policy
 Details of the practical arrangements for carrying
out the policy
 The name of the person in authority who is
responsible for fulfilling the policy”
Including general safety, the statement should also
include site maps, safety procedures, mobilization
instructions and emergency procedures. Other
information provided may also include COSHH and risk
assessments for plant and materials, including
maintenance, testing and PPE requirements for staff.
Sourced from: http://www.arinite.co.uk/

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5.1 Timing and Schedule of information
Geoff Powell 2012, p.260), states “time is the root of almost all construction problems, claims and
disputes; being late usually costs the employer or contractor, or both, a lot of money.” Poor
organisation, slow contract administration, poor contract instructions, delays and the weather can
all affect the timing of the project. The CA is responsible for monitoring the progress to ensure the
contract is completed on time and notifying the client of any delays at the earliest opportunity.
Progress is monitored by:
 program of works
 contractors program
 Valuing part of the works to determine a completion time
 IT programs to forecast timescales
The CA should review the contractors program regularly to correspond with where progress is up to,
making changes to match the current completion date. The program should include:
 A bar chart showing the sequence and duration of activities (Gantt chart)
 Float
 The critical path
 Health and safety requirements
 Important dates
 A resources program for each activity
 Time risk allowances
The CA is responsible for arranging meetings to review the progress of work against the construction
program at site progress meetings. Most contracts will schedule these on a monthly basis and are
there to highlight any issues or delays that may affect progress. Powell (2102 p.281) states members
discuss “Where delays are predicted” including any amendments that have to be made and the
“Likelihood of meeting key dates”.
5.2 Late or missing information
Designingbuildings.co.uk states, “Many claims are also based on delays of or missing schedules,
drawings and specifications from the design team to the contractor after construction has begun.”
Missing documentation can result in the CA being in breach of the law, which can lead to
prosecution and damages, where the contractor may make a claim against being issued late
information (Usually settled by additional payment.)
Sourced from: http://www.smartdraw.com/

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Claims are a symptom of inefficiency and can be made by the contractor and client. Most claims will
be of common law and Chappell (2012, p.104) also states, “Common law claims can only be granted
to the precise loss and expense suffered.” Meaning that an almost exact sum needs to be calculated
and proven to be considered as a claim. A breach against contractual claims can be more serious. If
the CA is failing to progress with work without reasonable cause, the contractor could claim for
damages and under clause 8.4.1 could even request for termination from the project.
6. Interim application
An interim payment (Fig.7) is set up to provide a cash flow to the contractor at set intervals during
the course of the project. The procedure is designed to pay partial sums to the contractor in relation
to the amount of work they have completed, so they are able to fund the next section of work. The
contractor applies for this via an interim application, which will be evaluated by the client’s QS to
arrive at an appropriate sum for the stages and overall works. The Construction Act 1996 outlines
the requirements for interim applications:
 Contractors are entitled to payments in instalments for any project lasting longer than 45
days.
 The contract should contain a process for determining the payment sum and dates of
payments.
 To give adequate notice for any late payments and the circumstances for doing so.
 The right for the contractor to suspend the work if the payment has been stopped without
notice.
Hackett, Robinson and Statham (2007, p.293) state, provided these minimum requirements for the
construction act are met, the interim payment can follow any of these documents:
 Payments made at regular intervals – follows a payment schedule, usually monthly, until
the project is complete.
 Payment and work completion milestones – are when payment is released when the
project reaches a particular stage of completion.
 Payments by detailed valuations – the valuations for determining the interim payment will
take all building elements into account, including delays, risks, defects, price fluctuations
 Monthly payments in relation to percentage left of final sum Sourced from: http://insideurope.eu/

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6.1 Valuations
The purpose of the valuations are to ensure that the project runs smoothly and the contractor is
suitably paid for each stage of the works. Hackett, Robinson and Statham (2007, p.296) mention the
valuation will be a detailed set of documents that covers all the work covered since the last
valuation. These documents include:
 The works package
 Variations and additional costs incurred
 Time extensions and any delays in progress, including the causes
 Set up costs and running costs of facilities and machinery
 Details of special or manufactured goods
 Details of goods paid for up front
 Acceleration costs to speed up the work progress
Provisional sums
Designingbuildings.co.uk also states, “Although the payments are in stages, an interim valuation is
for all the work completed. It is calculated by subtracting each valuation from the last. The resulting
total and retention figure are then included in the interim certificate issued to the client for payment
by the CA.”
6.2 Total sum
The employer is obligated to pay the contractor an agreed sum. The total sum is the calculation of all
costs expended by the client. More often than not, the contract sum will differ from the final
payable amount as the IC11 may also contain VAT, provisional sums or approximate quantities to
cover the cost of the work.
Retention is used as an incentive for the contractor to stay true to their agreement and remediate
any outstanding defects. The IC deals with retention under clause 4.9 allowing for half of the retainer
is released at the ‘make good’ stage, and the other half once the final certificate is released.
Payments (with retention) Payments (without retention) Variations
 Total value of works
 Total value of
materials (on and off
site)
 Ownership certificates
 Opening up and testing
costs
 Loss and/ or expense
 Statutory obligations
 Provisional sum insurance
 Insurance premiums
 Fluctuation payments
 Additions/ omissions/
substitutions of elements
 Alterations of materials
 Removal/ redelivery of
materials damaged on site
 “The contract administrator
varies the design.” Goldfayl
(2002 p.161)
Certificates can also be used to release the retention monies at different stages:
 On final payment of works
 On the issue of a certificate of practical completion
 If the employ takes possession of part of the works
 On issue of the architects certificate on making good defects

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Once the contractor has completed the works, they will supply all relevant documents to the CA, as a
final account, within 6 months of completion. The employer’s QS will then prepare an adjusted sum
and return a statement to the contractor within 3 months. The final certificate (Fig.8) is released
with payment not later than 2 months after the end of the remediation period and once the defects
certificate has been issued.
7. Delays
Refusal to give possession to site, non-payment of sums
due, and withholding or refusing payment certificates
could all cause delays which could cost the contractor
time and money. If the employer is guilty of causing
hindrance to the contractor, they may claim for damages
against the employer. Out-law.com states, “To succeed
in a claim contractual for damages, a party must
establish:
 that there has been a breach of contract;
 that it has suffered loss;
 There is a causal connection between the breach and the losses that party wants to recover.”
A contract may also have a ‘liquidated damages’ clause which uses a pre-estimate of any loss that
may incur and acts as a subsidy, rather than a penalty designed to limit a breach. This tends to be
drafted in the client’s favour, but advantages are relayed onto the contractor if the client breaches
the contract.
If the employer is has no intent on paying or performing, under clause 8.9.1, the [… contractor has
the reciprocal right to terminate its own employment …]. In this instance the contractor will
complete all necessary works up to termination date, paid accordingly and be allowed to leave the
site without dispute. (IC11 p. 120)
8. Conclusion
The first task was to select a suitable contract for the proposed extension. It was found that a lump
sum form of payment under an IC11 contract would be suitable by offering a common, familiar
contract that evenly distributed the risks between client and contractor. Using this contract with
quantities would also allow the client to obtain a more exact final sum and more official completion
date from tendering companies, and which would bind them by contract into achieving these
figures.
Also covered was the potential risks and approvals necessary when undertaking the project, and
where there was a particular concern with the site location and ground conditions. It was found that
risks lie with all projects and the best process of dealing with these risks was to approach them
before building work commenced and by establishing preparations for if they appear. Compliance
was also found to be followed most appropriately with the assistance of the correct professions (CA,
CDMC, etc.) and by obtaining advice on procedures from the regulatory bodies.
The contractor can also benefit from:
 Early use and partial
possession
 Key dates and stage
completion
 Subcontractors
 Specific expenses paid to
contractor for events out of
their control,

15 | P a g e
The importance of the CA was brought to attention, highlighting the scope and responsibilities both
desk and site based. There was a particular importance with the timing and distribution of
information with this role, as the implications of late or missing documentation was found to result
in damages and claims brought upon the CA if this caused hindrance to the project. The CA was also
proven to have limitations of control, being tied into the contract as with the other parties, and
served with the duty to perform until completion.
The interim payment under lump sum contracts was also found to be a series of payments for the
contractors work. With the project being set for 14 weeks, it would be most suitable to stage these
payments on a monthly basis and is also a common formality with lump sum agreements. Delays in
payment or performance on the CA’s behalf where also found to be best avoided, as failing to follow
the agreement as stated would leave the employer at risk to damages from the contractor, who (in
extreme cases) could terminate their employment.
Overall, it became clear that the standardised forms of these contracts, though complex and
confusing at times, have proven to be a familiar, tried and tested method for procuring construction
projects to benefit all parties appropriately, as well as offering a clear and defined approach for
settling disputes when they may arise. Procurement is about applying procedures to maximise
efficiency, and by achieving the most appropriate route, the client can hope to achieve the best
time, cost and value for money expected from the project.
Word Count - 3509
9. References
Arinite Health and Safety [online] Available at: http://www.arinite.co.uk/health-safety-
services/health-safety-policy/ [Accessed: 11/1/2016]
Ashworth, A. 2012) ‘Contractual Procedures in the Construction Industry’ 6th
Edition, Essex: Pearson
Education Ltd
Chappell, D. (2012) ‘Understanding JCT Building Contracts’ 9th
Edition, Oxon: Routledge
Clamp, Cox, Lupton and Udom (2012) ‘Which Contract?’ 5th
Edition, London: RIBA Publishing
Designing Buildings [online] Available at:
http://www.designingbuildings.co.uk/wiki/Contract_claims_in_construction [Accessed: 28/12/2015]
http://www.designingbuildings.co.uk/wiki/Interim_valuation [Accessed: 28/12/2015]
http://www.designingbuildings.co.uk/wiki/Statutory_approvals_for_buildings [Accessed:
28/12/2015]
Egan, J (1998) ‘Rethinking Construction’ London: Department of Trade and Industry
GpmFirst [online] Available at: http://www.gpmfirst.com/books/rules-project-risk-
management/organisation [Accessed: 11/1/2016]
Goldfayl, G. (2010) ‘Construction Contract Administration’ 2nd
Edition, Sydney: Deakin University
Press

16 | P a g e
Hackett, Robinson and Statham (2007) ‘The Aqua Group Guide to Procurement, Tendering &
Contract Administration’ 4th
Edition, Oxford: Blackwell Publishing
Health and Safety Executive (2000) ‘Health and Safety in Construction’ London: Crown Copyright
Health and Safety Executive (2011) ‘How your business can achieve compliance with competition law
Guidance’ London: Crown Copyright
Inside Europe [online] Available at: http://insideurope.eu/taxonomy/term/134 [Accessed:
11/1/2016]
Latham, M. (1994) ‘Constructing the Team’ London: Crown Copyright
Lupton, S. (2014) ‘Guide to IC11’ 2nd
edition, London: RIBA Publishing
Mondaq [online] Available at:
http://www.mondaq.com/x/143546/Price+Fixing/Competition+Law+Compliance [Accessed:
12/1/2016]
Murdoch and Hughes (2008) ‘Construction Contracts Law and Management’ 4th
Edition, Oxon: Taylor
Francis
Northwood, T. (2011) ‘Contract Administration, 1st
Edition, Guidance Note’ Coventry: Royal Institute
of Chartered Surveyors RICS
PCW Network [online] Available at: http://www.pwc.co.uk/governance-risk-
compliance/insights/grc-11-contract-risk.html [Accessed: 11/1/2016]
Pinsent Masons [online] Available at http://www.out-law.com/en/topics/projects--
construction/construction-contracts/liquidated-damages/ [Accessed: 01/1/2016]
Planning Portal [online] Available at:
http://www.planningportal.gov.uk/buildingregulations/howtogetapproval/howtogetapproval/
[Accessed: 12/1/2016]
Planning Portal [online] Available at:
http://www.planningportal.gov.uk/buildingregulations/approveddocuments/ [Accessed: 12/1/2016]
Powell, G (2012) ‘Construction Contract Preparation and Management’ Hampshire: Palgrave
Macmillan
Smart Draw [online] Available at: http://www.smartdraw.com/gantt-chart/examples/construction-
schedule-gantt-chart/ [Accessed: 12/1/2016]

17 | P a g e
Appendices

18 | P a g e
(Fig.1) Example Form of Tender

19 | P a g e
(Fig.2) Example F10 Form

20 | P a g e
(Fig.3) Example Schedule of Works

21 | P a g e
(Fig.4) Example Risk Assessment

22 | P a g e
(Fig.5) Example Safety Data Sheet

23 | P a g e
(Fig.6) Example Planning Application

24 | P a g e
(Fig 7) Interim Certificate
INTERIM CERTIFICATE -----------------------------------------------------------------------
Certificate Nr: IC01 Issue Date: 4 April 2016 Surveyor Ltd
Final date for payment: 13 July 2016 Our Reference: 0012343210 Tel: X Fax: X
Works: Extension www.surveyors.ac.uk
Situated At: Meadeston Health Centre, Liverpool
Contract Administrator: Surveyor Ltd Employer: Meadeston NHT Contractor: A Contracts Ltd
Address: Surveyor address Address: Address Address: Address
This Certificate indicates that an interim/ Progress Payment is due under the terms of the Contract
Value of work executed and of materials and goods on site £ 150,000.00
Less retention in accordance with the Conditions of Contract £ 7,500.00
Sub Total £ 142,500.00
Less total amount stated as due in Interim Certificates previously
issued up to and including Interim Certificate Nr £ 0.00
Amount Due: (exclusive of VAT) £ 142,500.00
VAT calculated at the rate notified by Contractor £ 28,500.00
Amount Due: (Inclusive of VAT) £ 171,000.00
I/We hereby certify that the amount for payment by the Employer to the Contractor on this
Certificate is (in words)
One Hundred and Seventy One Thousand Pounds and Zero Pence
Signed: Surveyor Ltd.
Notes: Note: The issue of this certificate is not for and shall not me taken as showing that any work
or materials or goods or workmanship is or are accepted as conforming to description or
being in accordance with the contract
Distribution x
Employer X
Contractor X
File X

25 | P a g e
(Fig.8) Final Certificate
FINAL CERTIFICATE -----------------------------------------------------------------------
Certificate Nr: Final Issue Date: 12 June 2016 Surveyor Ltd
Final date for payment: 13 July 2016 Our Reference: 0012343210 Tel: X Fax: X
Works: Extension www.surveyors.ac.uk
Situated At: Meadeston Health Centre, Liverpool
Contract Administrator: Surveyor Ltd Employer: Meadeston NHT Contractor: A Contracts Ltd
Address: Surveyor address Address: Address Address: Address
This Final Certificate is issued under the terms of the above mentioned Contract:
A The Contract Sum adjusted as necessary is £ 174,500.00
B The total amount perviously certified for payment to the Contractor is £ 171,000.00
C The difference between the bove-stated amounts is £ 3,500.00
VAT calculated at the rate notified by the Contractor £ 700.00
Amount due: £ 4,200.00
I/We hereby certify the sum of (in words)
Four Thousand and Two Hundred Pounds and Zero Pence
Inclusive of VAT
as a balance due to the Contractor from the Employer
Signed: Surveyor Ltd.
For Contract Administrator
Notes: Note: The issue of this certificate is not for and shall not me taken as showing that any work
or materials or goods or workmanship is or are accepted as conforming to description or
being in accordance with the contract
Distribution x
Employer X
Contractor X
File X

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