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A NEW APPROACH TO THE

JCT DESIGN AND BUILD


CONTRACT
By the same author

A New Approach to the Standard Form of Building Contract (MPT, 1972,


The Construction Press Ltd, 1974)
A New Approach to the ICE Conditions of Contract, Volume 1 (The Con-
struction Press Ltd, 1975)
A New Approach to the ICE Conditions of Contract, Volume 2 (The Con-
struction Press Ltd, 1976)
A New Approach to the (FIDIC) International Civil Engineering Contract
(The Construction Press Ltd, 1979)

A New Approach to the (JCT) 1980 Standard Form of Building Contract


(The Construction Press Ltd,

A New Approach to the (JCT) 1980 Standard Form of Nominated Sub-


Contract (Construction Press, 1982)

A New Approach to the (DOM/1) Standard Form of Building Sub-Contract


(Construction Press, 1983)
A NEW APPROACH TO THE

JCT DESIGN AND


CONTRACT
Glyn P Jones
MSc ARICS MCIOB 149749

mmm
mm*
CONSTRUCTION PRESS
LONDON AND NEW YORK
CONTENTS

Preface vii

Chapter 1 The design and its life-cycle costs 1

Chapter 2 Choosing the right bid 7

Chapter 3 The risks involved 9

Chapter 4 A commentary on the clauses 13

Chapter 5 The reason for flowcharts 33

Chapter 6 Flowcharts 35
Construction Press
an imprint of: Longman
Group Limited
Longman House, Burnt Mill, Harlow,
Essex CM20 2JE, England .
Associated companies throughout the world

Published in the United States of America by


Longman Inc., New York

©GlynP Jones, 1984

All rights reserved; no part of this publication may be


reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical,
photocopying, recording., or otherwise, without the
prior written permission of the Publishers.

First published 1984

British Library Cataloguing in Publication Data


Jones, Glyn
A new approach to the JCT Design and Build
Contract.
1. Joint Contracts Tribunal. JCT Design
and Buiid Contract 2. Building — Contracts
and specifications — Great Britain
I. Title
692'.8 TH425
ISBNO-86095-904-X

Set in 1MB Press Roman and Univers by


Lonsdale Typesetting Services, Lancaster
PREFACE

It was only a matter of time before 'design and build' grew and came of age Of course, the ogre of overall unending liability will hover low over
in the UK. Contractors knew markets existed for the direct selling of their design/build contractors unless the client chooses to utilise the clause 2
construction wares. They knew packages or bids containing inclusive design facilities to grant certain reliefs where perhaps novel designs are invited.
services would appeal to many but no 'official' standard form of contract Otherwise the general fear of major mistakes may slow down the emergence
existed for those who wished to offer, or accept, design/build deals. of bright new British design/builders until the storm clouds surrounding
liability are driven away,
Now, the construction industry has what it wants - a JCT Contract
with a pedigree near perfect. Standard in form, rock-anchored into a long This form of contract should hasten the return of people's confidence in
lineage of ways and words familiar to the industry's practitioners, it has the buildings. It should encourage the marketing of buildings, offering clients
flexibility needed to satisfy and protect most kinds of client - from the a choice of product, price, quality, longevity, pay-back terms, and life-cycles;
one-off customer who knows not what he wants (exactly), to the Local enabling the construction industry to take more and more risks with a
Authority that does know, or the commercial client who has his own team greater degree of certainty that profits will be gained rather than losses
of conceptual designers needing their outlines developed into drawings, suffered.
details and specifications.
This book endeavours to clarify this Contract for practitioners, intro-
Fusing design and building technique together into a full parcel of services ducing also chapters on matters of design, bidding and risks. The manuscript
undoubtedly sharpens attitudes to riks, methods, time, cost, quality and and charts were all converted into print by Margaret Smith, who managed
warranties. Furthermore, it forces design/build bidders to compete on three it all in her usual inimitable way and I extend to her my thanks for such
fronts rather than one (price). Design and their design's life-cycle costs now excellence.
become part of the bid battle.
Glyn P Jones
Contractors, to succeed on the second and third front, need to tune in to King Faisal University
social trends, the tax world, the land of lease-back, and learn to play the Dammim
discount tables until they are as adept with present values of future pounds
March 1984
as they are with the future values of present ones; convincing clients their
design's package includes not only the most acceptable design/cost choice
but also the lowest life-cycle cost commitment.
THE DESIGN AND ITS LIFE-CYCLE COSTS

Introduction
The traditional procedure for clients wishing to buy new
buildings, or rehabilitate old ones, has been to select an In both the above cases, and in an;/ permutation be-
independent professional designer and to tell or discuss This may worry traditionalists who see all delicate tween the two, the JCT Standard Form of design/build
with him what he wants, what he can afford, and what designs being bludgeoned into oblivion by brash builders. contract accommodates the client's contractual require-
aesthetic standards he has in mind. The chosen architect However, many would argue the relatively free rein enjoyed ments and safeguards to a considerable extent his interests
in turn arranges for contractors to bid for the construction by designers under the conventional two step rules has which are to have, for a lump sum price, the kind of build-
of his design on the client's property. produced no appreciable increase in beautiful buildings. In ing he wants, built well, and completed when he wants i t .
any case there is no reason to prevent designers becoming
Tills distinct two part process has disadvantages well builders rather than builders becoming designers. The JCT contract does not prevent construction delays.
known to everyone concerned with the design production It does, however, reduce the chance of completion being
and procurement of buildings. The design/build contract delayed. Damages, prefixed by the client, will in the usual
The 'design-and-build' process provides differently for way arise unless certain stipulated events have caused the
In commercial fields the client may. to the designer's relief delay. The contract could quite easily have dispensed with
a one step way of procuring construction work by those or dismay, show no interest at all in aesthetic standards. His
who prefer the designer to be also the builder; they then these and other safeguards of the contractor by placing
sole concern may be to own a new factory or warehouse, fit these risks upon his shoulders, but a price would of course
can speak to one person about design, time, and price in for a certain purpose, built anywhere within a certain area
a composite way and invite bids composed of these three be paid by the client whether or not those risks mate-
in the fastest possible time at the lowest possible cost and rialised. The JCT reckoned when putting together their
unified elements. to last for twenty years. Furthermore, he may wish to have conditions that optimised risk-sharing would give the client
Construction work increasingly requires closer integra- little or nothing to do with it until it becomes ready for his the safest set of terms for the lowest initial cosl bids by non-
tion of specialisms whose designs and their execution must occupation. gambling bidders. These conditions do not therefore offer
interlock into ever tighter fits. This is generally acknow- On the other hand, the client may want a memorable clients risk-free arrangements.
ledged to be less easily achieved when a design team acts and monumental building. He may have very strong views
independently from the construction team. The risk-sharing to be found in all JCT contracts is
on aesthetics and the social amenities needed to partner his frequently attacked by contract commentators who have
Fusing the designer's and builder's minds together proposed project. He may already own land upon which to different views on tiie share to be carried by the client.
undoubtedly sharpens up attitudes to matters of risk, build; it may (at his cost) have been surveyed above and They would prefer io see most risks borne by the con-
technique, time, quality, cost and warranties. It forces the below ground; an approved design in outline or even in de- tractor.
designer to listen to the builder for they are one, acting and tail by his own, or a consultant, architect may be available;
thinking in unison, in their search for optimum solutions. a budget price fixed; specialists lined up to do ancillary Such a policy ignores its inevitable effect; the higher the
This frequently topples design choice from its usually work; a full specification may be to hand; an agent of the risk the higher the bids from non-gambling bidders. Shrewd
dominant and unassailable place. Design matters have to client may be engaged and ready to oversee the whole clients want to take certain risks for they know there lies

1
a chance of gain as well as loss. A client may prefer the If the client, or his adviser, adds together the initial where it is for a second year the original £100 will have
opportunity to carry the risk of inflation for in so doing building costs, future maintenance costs and running costs, grown to £121 and so on.
lie will benefit from lower initial bids and in his estimation then takes account of interest charges with inflation on the On the other hand, it can be seen from discount tables
bear a reasonable chance of low losses in honouring his sums concerned, a much clearer picture emerges in which that £100 in one year's time is future money whbh at 10%
commitments to pay cost increases. he questions whether to accept a higher initial bid for a interest has a present-day equivalent of £90.909 because
Loading the non-gambling contractor with 'speculative' design with lower future costs, or to take a lower initial bid that is the sum needed at 10% interest to amount to £100
risks offers him exclusive rights .to the certainty of either with higher future costs to be paid at some time other than in one year's time. Similarly £100 discounted for two years
a profit or loss. In the former case the client will have paid the present. at 10% has a present value of £82.644 and so on.
more for his building than it is worth and in the latter case In commercial constructions these considerations Compounding puts a future value now on a present sum
the contractor may at worst become insolvent or at least become even more important since differential taxes may of money. Discounting put a present value now on a future
become anxious to reduce his losses by cutting every corner apply or tax concessions may be there for the taking. sum of money.
he encounters. Grants or low interest loans may beckon the client to
consider carefully what he builds and where he builds it. Tables are also available to convert a known annual
These factors should influence budgets, designs and bids. future sum required at the end of every year of a building's
Competition
The design/build contractor must tune in carefully to the life into an equivalent present-day lump sum (Present Value
It is sometimes claimed that because design/build arrange- tax world, the land of lease-back, and the range of ways to of £ per annum Tables).
ments reduce the numbers competing they thereby reduce reduce a client's financial commitment in a building he may The above principles are all involved in assessing design/
competition. However, conventional tendering procedures only wish to have for a fraction of its eventual life-span". cost alternatives enabling the future expenditures of differ-
in the UK call for competition on one front only — namely, The marketing of building has hardly begun unless it can ing proposals to be compared upon an equal footing of
price, whereas design/build arrangements generate compe- offer clients a choice of product, price, pay-back terms and present values by discounting.
tition, to the client's advantage, on two if not three fronts: warranties on quality, longevity and recurring costs.
For example, if two design/build bids have widely
(i) Price (ii) Design (iii) Life-cycle costs (the The principles involved in life-cycle costing are tied differing design proposals the bids will also differ widely.
future user's costs). closely to time, interest payments or receipts, and inflation. Without closer examination of the submissions it is impos-
Contractors will readily accept defeat if their price is sible to say at a glance which bid is best. The cheaper bid
too high but will not easily continue to accept rejection on 'A' will lead to heavier maintenance costs sooner and will
grounds of inferior designs; nor will they be pleased if their Interest and inflation have only half the life-span of bid 'B'. However, the first
lowest bids are ignored in favour of higher initial cost bids Money must either incur interest charges if it is borrowed cost comparison (below) still shows bid 'A' to be better
which promise lower life-cycle costs. Losing bidders will or gain interest if it is saved. The sums of clients' monies than bid 'B'.
soon respond by improving their designs, making it harder involved in future maintenance, repairs or running costs
for inexperienced gambling cut-price contractors to enter This first cost comparison has obvious faults in that it
must therefore carry this burden of theirs from the moment assumes present pounds are the same as future ones; it also
the arena or gain any foothold at the expense of unsuspect- they are 'born'. From the day the designer conceives their
ing clients. The poor designer will tend to stay in the field ignores the points made earlier that any saving in initial cost
future those various cost sums must begin to accumulate or the time delay in spending money on maintenance etc
of 'build' only where his lower-than-cost bids will entice their interest. An account of every future pound to be
the unwary. should be reflected in the interest saved if that money was
spent must be drawn up and converted (discounted) hack borrowed, or the interest earned if that money wis invested
into its present-day value after allowing for its interest and
elsewhere. Thus, the second cost comparison (Table 1)
the effects of inflation. using a 5% rate of discount shows bid 'A 1 to be by far the
The design and its life-cycle costs
There are, as every schoolboy knows, tables available best.
The contractor's bid is only part of the picture. The advan-
(Compound Interest Tables) to show the future worth of This will not surprise entrepeneurs for they have known
tage of a low initial tender may be offset by a vision of
present money. There are also tables available (Discount for years it pays to delay all sums payable for as long as
high frequent maintenance and repair costs. A more com-
Tables) to show the present worth of future money. possible when the money is being borrowed (as it often is)
plex attractive design or layout may generate higher staff
running costs or may diminish the efficiency potential of It can be seen at a glance from compound interest tables and similarly so when the sums are owned since interest
a building. that £100 of present-day money will amount to £110 in would be received or profits would be earned by the money
one year's time at 10% interest. If the sum of £110 remains concerned.

2
The question — which discount rate should be used? — Table 1 shows that design/build bids must be carefully heating/cooling/lighting system 40% Less cost efficient in
depends upon the client's store of money, source of bor- composed and judiciously selected. The design/build running terms than bidder 'Y'. If bidder 'X' redesigned his
rowing and the uses he could otherwise put saved money to; philosophy is reputed to give the client greater certainty system to produce a per annum running cost of about
there is also the problem of inflation trends and taxation of receiving what he wants when he wants it but this will £22 000 instead of £25 000 he would once again be the
rates in the future. These pose difficulties for those who not lead to long-term client satisfaction unless the life-cycle lowest all-round bidder. The fact that 'X' had also an
may wrongly think discounting presents absolute answers. costs resulting from the chosen design are also introduced inferior roof needing replacement after thirty years was far
Discounting in principle and the rate chosen in practice are into the equation on a discounted basis. less cost significant since the sum involved would not arise
simply an open declaration of several assumptions — that for thirty years whereas his inferior heating scheme meant
Table 2 illustrates these points, showing also the strong annually paying more than the sum under bid 'Y'.
taking into account everything we know about the client's influence of regularly recurring (annual) sums cropping up
borrowing power, or profit potential, together with the over a long life-span. The net real interest rates (ie, net after tax, real — allow-
erosion in value expected — a figure of 5% compositely ing for inflation) used in cost comparing is important. Like
represents a fair allowance to be made on the capital It can be seen from Table 2 that bidder 'X' has put money values, rates are not static nor are they valid over
concerned. himself out of the running mainly because he proffered a long-term periods. Where the pace of inflation overtakes the
rate of interest payable the client's real rate of interest will
Table 1 Comparisons of proposals 'A' and 'B' become negative, meaning the investment of capital into
projects is more than worth while, particularly since the
Proposal 'A ' Initial bid £10 000 Estimated maintenance costs actual recurring amounts of the future running costs are
£2000 every 15 years likely (because of the high inflation) to increase sharply.
Life-span 30 years Clients may prefer to use a special rate or 'opportunity
cost' rate in bid comparisons, taking the cold view they
Proposal 'B' Initial bid £25 000 need not build at all if a comparison shows the proposed
Estimated maintenance costs £1 000 every 20 years project would unprofitably tie up monies that could be put
Life-span 60 years to better use in other activities. Thus the discount rate may
1st comparison (over 60 years) Bid Bid 2nd comparison (over 60 years) Bid Bid well be up to 5% higher than normal risk-free investment
'A' 'B' discounting monies @ 5% 'A' 'B' rates.
The client's life-cycle costs will include not only his
Initial cost 10000 25000 10000 25000 operating staff costs but also operating services (cleaning,
security, etc) and operating charges (rates, insurances,
962 water, etc). In this respect each bidder's design should be
The present value (PV) of ,. _ , vetted for efficiency in savings achievable by each design.
maintenance cost after 15 years 2000 nil
£2000 (15yrs> x 0.481 = For instance, the client may normally spend l-2!4%of his
after 20 years ,on , £1000 (20yrs> 377 user costs in the replacement or maintenance of furniture.
1 000
x 0.377 = Now if a bidder can show designs incorporating built-in
furniture at costs lower than the client's per annum charges,
remove and reconstruct after 30 years 12000 nil ,an , £12000 2772 taking into account a net real rate, ie after tax allowances
OOyrs) x 0.231 =
etc, then the bidder's bid concerned will come to the fore.
maintenance cost after 40 years 1 000 ,,ft , £1000 142 Bidders who can convince clients their particular designs
<4°yrs> x 0.142 = contain lower per annum recurring costs will score even
after 45 years ,._ , £2000 t 4 5 ^ more. For instance, interior cleaning costs will amount
2000 nil 222
generally to about 25-30% of all the user's future costs,
x 0.111 =
thus any design improvement in this area will show great
£ 26000 27000 £ 13956 25 519 savings. A carpeted floor design has an initial cost equal to
Table 2 Comparison of proposals 'X' and 'Y' acknowledge these trends in their proposals. If the un-
employment rate increases disproportionately in certain
Tender comparisons (over 60 years) Bid Bid
areas the design/build bidder may incorporate propositions
discounting rate = 5% 'X' 'Y' including special governmental concessions and financial
inducements to clients. If the economy moves into higher
Initial bids 1 000 000 1 200 000 Bank Rates the bidder's design and life-cycle cost calcula-
tions will reflect these monetary trends.
Design differences (user costs) (a) If any factor relied upon in the bid changes the con-
Heating/cooling/lighting system — Bid 'X' Bid 'Y' Difference tractor and client should react and reappraise the design/
estimated costs per annum : 25000 15 000 10000 cost picture, making suitable changes bearing in mind total
life-cycle costs can amount to many times the initial cost
(b) Planned maintenance concerned.
-estimated costs per annum : 8 000 5 000 3 000 There is generally an increasing tendency for labour
13000 costs to rise faster than material costs. Labour also plays a
discounted per annum payments over 60 yrs @ prominent and often irreducible part in the client's future
5% 1 8,929 = 246 077 costs. If such trends continue and we continue to demand
higher standards of comfort and cleanliness then the initial
(c) Remove and reconstruct roof capital cost is likely to shrink as a proportion of the total
covering after 30 years 12000 nil life-cycle cost. The amount of capital needed to be spent
discounted to present value @ 5% x 0.231 = 2772 to save future more expensive man-hours therefore calls
£ 1 248 849 1 200 000 for close correlation but it is not worth spending capital
indiscriminately simply in the blind pursuit of saving
1 future running costs. The rate of interest must appear in
only 40% of the total life-cycle cost, the remainder being The most obvious of these lies perhaps in production the picture when optimising designs, initial costs and future
40% spent on cleaning it and 20% on replacement. charges which may affect fuel and power. Climatic changes costs.
or trends towards colder winters/hotter summers would
On a broader scale the initial cost of a building may also,
influence his designs. Age distribution changes may also Design factors which influence life-cycle costs
as in the case above, amount to only 40% of the total life- require marginally higher or lower heating systems, average
cycle cost, the remainder being taken up by fuel costs temperature calculations, etc. Employment and income The design/build bidder is anxious to lower his 'free' design
(10%), maintenance and repairs (10%), insurances, rates, levels need to be observed, so too do consumption and costs and to raise his bid success rate; the client on the
water, etc (10%) and cleaning (30%). expenditure rates; population changes; production and other hand is anxious to receive lower bids for better
Thus the capital cost committed to acquiring an asset, distribution changes; political changes and marketing designs having lower life-cycle costs. Both have similar
techniques. objectives in keeping down initial costs. The bidder, to
though a smaller proportion of the whole life-cycle cost,
succeed, must economically propose efficient cheap build-
commits the client to further unavoidable future payments. Forecasting and 'market research are closely related. ings, aesthetically pleasing, and likely to last 30-60 years.
The design/build bidder who recognises this and regu- There are leading, coincidental, and lag indicators to He may also put forward alternatives to the Employer's
larly reminds himself to design accordingly and to present guide design/build bidders in the right directions. For Requirements within his Proposals, or different designs
his bid in a way that demonstrates this may succeed where instance, birth rates and geographical distributions are having different quality standards and different completion
others fail. leading indicators for (design/build) school and home dates. Furthermore, he must make certain he avoids design
bidders. Coincidental indicators include unemployment errors and omissions since the ogre of design liability under
Forecasting trends and life-cycle costs rates, retail index rates and crime rates. The 'Bank Rate' is clause 2 hovers over all his proposals whatever he does or
an important lag indicator. the Employer requires him to do. The consequences of
The design/build bidder, to be successful, needs to observe design errors or omissions may amount to enormous sums
and acknowledge within his designs changes or trends in These all provide a blurred picture of what is happening.
if, viewed over their long-term future, left unremedied to
social and economic fields. If crime rates against property increase designers must
affect adversely life-cycle costs.
These matters might weigh heavily to influence design A statement concerning life-cycle costs may also be - (a) Gross Floor Area
and in turn dictate life-cycle costs. The Employer's Re- made detailing:
This factor dictates both initial and recurring costs (clean-
quirements may however require bidders to innovatively ing, maintenance, etc). It includes circulation space. Lower
(a)maintenance cost limits (annual and intermittent)
move away from 'safe' designs, raising the risks of failure. circulation areas generally signify more economical designs
In such cases the increased risks will increase bids unless (b)operating cost limits:
but an ultimate 'open-plan' may prove unacceptable or
the increased risks are shared equally or carried altogether (i) cleaning
counter-productive.
by the Employer. (ii) caretaking/security
(iii) gardening Commercial clients solely interested in net or usable
Rather than be heavily involved in dictating designs the (iv) rates, water floor areas may be heavily influence^ in their choice or
Employer may prefer to stay at arm's length, stipulating in (v) insurances acceptance of bids if wide variations appear between gross
his 'Requirements' the barest bones of his needs in terms (vi) energy, fuel and net areas. For instance, if the gross floor area (GFA)
of quantity, quality and economy (see also Practice Note cost in the bid of bidder 'A1 equals £SOO m2 and contains
CD/1A). (c) Repair and renewal cost limits:
(i) roof coverings 25% circulation area the client's profitable space cost rises
(ii) external walls to (£800 x 1/0.75) £1067 m 2. If the bid of bidder 'B'
Quantity equalled £850 m2 but contained only 20% circulation space
(iii) windows, doors
The statement of quantity would include: (iv) interior floor finishes then the client would prefer bid B on the basis (£850 x
(v) interior walls, partitions 1/0.80) of £1062 m2 being a lower sam for the rentable
(a)Area of accommodation, detailing the purpose/s area.
(b)Any particular heights (factory clearances etc) (vi) ceilings
(c)Floor loadings (vii) heating/cooling equipment and hot water The initial cost per m2 wil! tend tc reduce as the GFA
(d)Particular insulations needed (sound/thermal etc) (viii) light/power equipment increases; wall to floor ratios will reduce; lift/stair area to
(e)Air change rates (dust levels, air conditioning re (ix) external works floor area ratios will reduce and in general bids expressed
quirements etc) The chosen Contractor could also be required to provide in terms of net floor area cost per m2 will fall as the floor
(f)Heating/hot water loads details of anticipated cash flow to correspond with his pro- area increases.
(g)Lighting needs gramme for construction to completion. In the case of housing bidders' comparative costs for
(h) Electrical loads/supplies (slngle/3 phase etc) (i) 2, 3 and 4 bedroom units will show ittractive reductions
External needs (car parks, loading facilities etc) (j) The above listed parameters though reasonably compre-
hensive hardly touch upon the building's appearance, shape, per m2 as the number of bedrooms increases and even
'Green' areas, paved areas. better cost savings if expressed per occupier.
colour, character and form; they are virtually all functional
Quality remarks collectively communicating the client's needs in Clients should therefore interpret figures given in
terms of size, purpose and general level of quality. Contractor's Proposals or bids with care, checking the
The statement of quality would include: bidder lias not gone too far in cutting down circulation
However, these initial and earliest remarks or decisions
(a)External elevation/roof description and life expec space or in proposing an unbalanced mix of 2, 3 and 4
concerning a building's size, purpose and general level of
tancy bedroom units ignoring the social, functional and aesthetic
quality have a pronounced effect upon the bid price for
(b)Internal finishes reasons for limiting cost savings.
they may well account for 80—90% of the total concerned.
(c)Windows, doors etc.
The most influential statement in setting cost concerns (b) Storey heights
Other elements (eg, stairs, lifts etc) may be included. size, ie, Gross Floor Area. Other factors will of course This factor mostly affects wall and partition costs with
influence the total, such as shape, location, inflation, their recurring maintenance costs but it also of course
Economy
market conditions and ground conditions, but none will affects energy expenditure. It may marginally influence
The statement concerning economy may even include a generally move the initial price to be paid quite as much stair and lift costs, and, by increasing loadings, affect
budget sum, ie, a figure establishing the limit of expendi- as 'area'. foundation costs.
ture set by the client. Clearly this will result in bids being
judged on the merits of their designs and quality standards There follows a brief appraisal of the more influential Various storey heights within one building pose annoy-
offered for the sum suggested or a figure below or close to of cost indicators which may be written into an 'Em- ing problems to designers, who may tend to smooth things
the budget set. ployer's Requirements1 or 'Contractor's Proposals'. out by choosing one all-purpose height less cost efficient
than a multiplicity of heights. Heights in factories, governed Bidders know the cost of enclosing buildings may equal 67.500
by production needs, clearly command careful considera- 25-30% of the bid total. Plans B and C are therefore 49%

10.000
j
1 68.75 m 'B'
tion to enable the client to flexibly change his production less cost efficient than Plan A in respect of the external wall ,
plans without raising the roof yet not spending sums element.
initially upon unnecessary height.
However, Plans B and C may lend themselves to more 155) + 30
economic division wall arrangements, circulation areas and d = - 0.159
(c) Square Index
structural cost decreases due to decreased spans but these 675
The most efficient plan shape of all lies in a circle but the gains must be weighed against the heavier expenditure in
best practical plan shape begins of course with the square. enclosing the space concerned. Although Plan B economically achieves the division of
The Square Index is a number indicating the extent to four areas by using only 30 metres of division wall the
which the perimeter of a particular building exceeds that Bidders may therefore be more inclined to 'square up'
buildings unless they can otherwise achieve cost savings 'poor' Index gained of 0.159 shows it obtained its division
of a building of the same area on plan which is a perfect at the expense of using more external wall than Plan A.
square. elsewhere by use of standard span components, etc.
n In the case of housing 'squaring up' will however have Optimising plan shapes and comparing their vertical
Square Index = the opposite effect where terraces are concerned for it will division density Indices can profitably lower bids and
increase the external portion of the wall enclosing the plan. lower future running costs to the satisfaction of both client
where P= perimeter and contractor.
a - area on plan (not the GFA). (d) Density of vertical division
The amount of enclosing walls, load-bearing walls and parti-
-«-------25.981---------».
tions within a building is cost significant. The 'density' of
such walls can be expressed in the form of an index which
takes account of the contribution made to the enclosure of
A rooms by the perimeter walls:
(675m2) s- r = 1.00
4x 25.981 Density of Vertical Division =-------^------

where p - perimeter length at each floor


L = length of partition walls A =
67.500- gross floor area.
B Certain shapes lend themselves to more economical
(675 m3) division of areas:

(2x 67.500) +(2 x 10.000) _ 25.981-


4XV675 "

0
,
o
C
(675m1)
\o
o
d o
.
p
6
CM

1
c ...
1.49
10.000
04X103324)+ 51.962 =
O /D
CHOOSING THE RIGHT BID

Introduction the contractor concerned is in terms of expertise and pre- 5. Punctuality record
Having earlier emphasised the importance of life-cycle costs vious experience of projects similar to the one proposed. Completion on time may be crucial to the client. In such
and the less important role played by initial costs it is clear cases great weight will be rightly given to a past record of
the client should not necessarily accept the lowest bid. Nor 2. Managerial resources punctuality. In this connection details of the companies'
indeed should he accept any bid at all if the designs pro- planning department, their use of CPM techniques, and
ferred commit him to irreducible and unavoidable excess This enquiry will examine staff qualifications, their ex-
perience, organisational structure and spans of control. their use of time control systems will teach the client much
expenditure into the long-term future. about the bidders' attitude to timely completion.
Particular information should be sought on the persons
A rational way of judging both bidders and their bids is (and their calibre) who would be made directly responsible
needed. for the proposed project. 6. Reputation for quality
The right questions here should disclose the sort of reputa-
Selecting bidders tion the contractor has, the work entrusted to him because
3. Financial resources
Only if the client selects the right sort of bidders In the of liis high standards and any involvement in arbitration or
Balance sheet information and the financial relationships litigation in respect of alleged defects. The latter must be
right numbers will he receive the 'right' bid. There is no
between a parent company and its subsidiaries may be viewed with great care particularly if the cases concerned
advantage at all in the client receiving a low bid from a
contractor who has insufficient experience, skills, integrity examined together with the rates of equity to loan capital involve projects the contractor did not design, since the
or competence to carry out the project. and amount of fixed interest loan capital assessed. Any line between faulty work and faulty design is frequently
imposition or managerial restrictions in force by the com- blurred.
Clients who regularly place construction contracts will pany's Bank should be investigated in greater detail.
have lists of "approved1 companies and need no information Having selected bidders he can rely upon the client must
to enable a choice of right bidders to be made. However, Performance bonds appear the answer to any financial
unease but the 'premium1 cost would of course be in- finally choose no more than about six and no less than
'one-off clients ought to select with great care their bidders about four of those to compete against one another. Effi-
by requiring them to provide informative details of: directly paid by the client.
cient non-gambling bidders will in normal times decline to
1, Technical experience participate in a design/build competition if more than six
2. Managerial resources 4. Safety record and industrial relations bidders are invited. They know the higher the number of
3, Financial resources These matters may appear of no concern to the client, bidders the lower will be the bid and if an 'open" competi-
4. Safety record and industrial relations however he does, in clause 25, take the risk that delays tion is allowed the lowest bid is quite likely to be below cost\
5, Punctuality record caused by any "local combination of workmen, strike or On the other hand, the lower the number of bidders
6. Reputation for quality. lock-out" may require an extension of time to be granted below about 4-6, the higher the winning bid.
by the client to the contractor. In any case no client
1. Technical experience should accept the bid of any contractor having a known If a considerable amount of design work is involved in
bad safety record resulting from inefficient safety manage- bidding the client may find few bidders prepared to risk the
Questions here should seek to discover how well equipped
ment.

7
chance of failure unless the odds are considerably reduced outstanding design or potentially low life-cycle costs, in Rating the life-cycle costs can be done arithmetically as
by a reduction in the number of bidders. When a low num- which case he can inform bidders of the particular weight- in the case of the initial price, awarding top marks to the
ber is decided upon the client then exposes himself further ings he proposes to employ in ranking their bids. Thus a design showing the lowest potential user costs, then ranking
if one bidder withdraws his bid or fails to submit one. In bidder such as 'C' in Table 3 knows he can still succeed in the others in a similar way.
such cases a Bid Bond may be called for from those few landing the job even though his price may be 10% above The remaining factors, technical expertise, managerial
participating to protect the client if a withdrawal occurs. the lowest. resources, etc, will be dealt with by awarding ratings out of
However, the cost of such bonds gets added to each bid,
Unless the client stipulates in the Employer's Require- 100 on each to the bidders concerned.
resulting in the client paying a fee for his own protection.
ments the relative importance of price, design, punctuality, On reviewing the bids in Table 3 it can be seen bidder 'C'
Ranking the bids etc, bidders will simply concentrate upon price, caring less has the best all-round bid so far as the client for this par-
for aesthetic matters and the client's crucial commitment ticular project is concerned since price was regarded as
The many attributes required of the bidder must be com- to pay for running the building for the next 30—60 years.
bined with the attributes of each bid and ranked in a secondary to future running costs and design (appearance)
systematic way before the client can choose the best bid. Assume the bids received in Table 3 amounted as fol- ranked third. These could of course easily be reversed to
lows: bring out a new winner.
Bidder's attributes Bid attributes
\. Technical experience 1. Price Design Bidder A = £1 000000 Bidder B = £1 The client may on reflection wonder why he cannot
2.Managerial resources 2. Life-cycle costs Speed 050 000 (ie, + 5%) Bidder C = £1 100 have the lowest prices of bidder 'A', the best design of
3.Financial resources 3. of construction 000 (ie, + 10%) Bidder D = £1 150 bidder 'B', the lower life-cycle costs of bidder 'C' and the
4.Safety and industrial 4. 000 (ie, + 15%). management, safety record, punctuality and quality of
relations record bidder 'D'. He may even go so far as to suggest bidder 'A'
Payment arrangements Bidder 'A' would be ranked at 100 because he has the
uses the Proposals of bidder 'B'. Apart from breaches of
5.Punctuality record 5. Construction techniques lowest bid; it follows bid 'B' would arithmetically be
copyright such a move would incur the wrath of all con-
6.Reputation for quality 6. ranked at 95,'C'at 90 and 'D'at85.
cerned (except perhaps 'A') and might result in a joint
Table 3 shows a way in which these attributes can be put Rating the design cannot similarly be arithmetically set. action to recover their substantial bid expenses from the
together and weighted by the client according to his needs. The client must subjectively select the 'best' design and client.
The client may wish to encourage, or hope to receive, an may rate this at 100, giving the others relative awards. The client should in any case bear in mind that, once the
Contract is entered into, clause 5.6 forbids him divulging
information to others and limits the use of the successful
Table 3 bidder's documents to the project concerned.
Finally, it should be realised the bidder may have sub-
Bid 'A ' Bid 'B' Bid 'C' Bid'D' ' mitted the lowest price by error! A close examination of
Factors Weigh ting Rating Result Rating Result Rating Result Rating Result each bidder's Contract Sum Analysis should therefore be
Price 20 100 20.00 95 19.00 90 18.00 85 17.00 made before any acceptance or rejection of bids is made.
Ideally a procedure should be incorporated into the
Design 15 90 13.50 100 15.00 85 12.75 95 14.25 invitations to bid dealing with the question of erroneous
Life-cycle costs 25 85 21.25 95 23.75 100 25.00 90 22.50
bids. These are particularly important under the design/
Technical experience 3 80 2.40 90 2.70 85 2,55 90 2.70 build arrangements where the structure of the Contract
Managerial resources 10 95 9.50 85 8.50 90 9.00 100 10.00 Sum Analysis is left to the parties and the application of
Financial resources 5 95 4.75 90 4.50 95 4.75 95 4.75
a formula to adjust cost fluctuations is based upon those
Safety record 3 100 3.00 75 2.25 100 3.00 100 3.00
figures to be found in the Analysis.
Punctuality 9 85 7.65 75 6.75 95 8.55 100 9.00
Industrial relations 3 80 2.40 80 2.40 90 2.70 95 2.85
Quality record 7 95 6.65 85 5.95 . 100 7.00 100 7.00
91.10 90.80 93.30 93.05
THE RISKS INVOLVED

Introduction of indemnity the Employer may specify in his Require- statistically stands to benefit from lower bids every time
Clients may wish to know what sort of risks they run under ments to cover these risks. The client should seek expert and sometimes to doubly gain if the risk he carries mani-
the JCT design/build Contract and require their advisers advice on these matters. The premiums (and any special fests itself only mildly, or not at all.
to inform them. There are four classes of risk identifiable survey fees) will form part of the price to be paid by the
Risks of interest to the parties include:
under the Contract: Employer (client).
(a)the risk of design faults
1.Fundamental 4, Speculative risks (b)the risk of bad ground conditions
2.Pure These risks are quite unlike the previous three categories (c)the risk of changes
3.Particular which if they occurred would cause loss only, no benefits (d)the risk of delay in completion and disruption to
4.Speculative regular progress
would accrue.
(e)the risk of defective work
1. Fundamental risks Speculative risks differently offer the certainty of either (f)the risk of inflation.
profit (benefit) or loss.
These include the risk of war, nuclear fall-out, and other
similar unlikely events. No insurances are required; the Both parties are (or should be) therefore interested in (a) The risk of design faults
government stands any reparation costs that might arise. taking these risks. The Employer takes, for instance, the
risk of exceptionally adverse weather delaying completion. The JCT have, in clause 2.5, marginally lowered the Con-
His potential benefit lies in lower bids; his potential loss lies tractor's liability from the standard normally to be expected
2. Pure risks of design/build contractors to a level expected of any archi-
in lost liquidated damages. The Contractor takes the risk
Damage to the Works by fire, lightning, storm, etc, is a of ordinary adverse weather delaying him. His potential tect or professional designer. The Employer may if he
'pure risk'. Insurances are required under clause 22. The benefit lies in the lap of the gods who may send down fair wishes go even further and limit the Contractor's liability to
premiums payable form part of the price to be paid by weather; his potential loss arises if his allowance within his a fixed ceiling excepting where dwellings are concerned.
the Employer (client). bid for bad weather is more than consumed by the weather Obviously any lowering of liability must not be con-
actually encountered. It can be seen the JCT has shared the sidered unless the potential risk can be accommodated and
3. Particular risks risks of weather between the parties granting them both the the resulting lower bid benefits are substantial! The details
These risks may arise from particular construction tech- certainty of either profit or loss; the more likely event of of clause 2 liabilities are discussed further in Chapter 4.
niques to be employed in executing the Works, such as ordinary adverse weather being carried by the Contractor.
piling., demolition or dewatering, which may unavoidably Other examples of risk sharing exist in the Contract. (b) The risk of bad ground conditions
cause damage to property other than the Works. However, commentators sometimes see' the arrangements The state of the site and its sub-strata are crucial to the
Insurances are to be "maintained" by the Contractor as one-sided bias against the Employer. Somehow they see Works and surroundings. The Employer must (clause 7)
under clause 21 for certain Particular Risks for an amount only the certainty of loss for the Employer whereas he define the boundaries but need do no more.
The Contractor must have satisfied himself on all aspects the regular rhythm and progress of the Contractor's work. None of the keywords, referred to above, have in the
of the site, including unforeseeable difficulties that may Changes also upset his arrangements to carry out his other Contract been defined. It has been left to the parties to
exist in the sub-surface and hydrological conditions. work not part of the Change Order itself. use the plain and literal meaning of the words "similar",
Bidders will not normally investigate the sub-strata. The JCT recognised the possibility of ordered changes "significantly", "site administration" . . . etc to arrive at
They expect the Employer to provide them with sub- coming at an inopportune time for the Contractor. It agreeable rates etc or fair allowances. If they fail to agree
strata surveys sufficient to base their bid upon, including arranged its Contract's terms (in clause 12) in such a way amongst themselves the Contract requires them to go to
the design of foundations, drainage, etc. If no such details as to allow the Contractor to review his rates and prices, to arbitration on the matters.
are made available they will qualify their bid to exclude charge the Employer accordingly, and to recover (under
underground work or will make assumptions concerning the clause 26) any loss and/or expense caused by the irregula- (d) The risks of delay in completion and disruption to
ground and base their bids accordingly. rity arising. Furthermore, the Contract allows the time loss regular progress
(under clause 25) to be added to the time for completion.
The Employer should therefore commission the neces- If the Employer wants completion 'at all costs' by a parti-
sary data and maybe a consultant Engineer's interpretation The money involved is (under clause 3) to be paid over cular date, he will not wish to accept the operation of
and presentation of that information concerned. to the Contractor as soon as it is in whole or in part ascer- clause 25 in its standard form. However, striking out the
Whether or not the data are sufficient and representative tained. clause, apart from putting up the price, might raise prob-
of the ground between boreholes for their purposes must The Employer can avoid the clause 26 payment of loss lems for the Employer if subsequently he was in some way
be a matter for decision by the bidders. The bidders will and/or expense in an 'open-ended' way by negotiating and the cause of delay to the Contractor.
also decide the ground's condition and its suitability for agreeing in writing a sum in advance for a change to be Clauses 25 and 26 recognise that both parties may bene-
construction purposes. They will decide for themselves how inclusive of any rate or price change together with the dis- fit from their contents and thus an optimum balance of
to deal with any groundwater, rock or sand, unless the ruption that may be caused. However, if no such agreement risk and price should ensue. The Employer concedes that
Employer's adviser particularly specifies otherwise. is possible then the Contract's terms must be adhered to. certain events ("Relevant Events") will justify an extension
The Employer's adviser will write into the subsoil survey Whenever a change or provisional sum instruction re- of time, also certain matters ("listed matters") are tojustify
a disclaimer stating the information is not guaranteed to reimbursement to the Contractor of any loss and/or expense
quires work not similar in character to, or significantly
match the conditions encountered nor is the information to arising due to material disruption to regular progress.
changes the quantity of, work originally laid down, or if
be taken as a warranty of the ground's suitability for any the work must be executed under dissimilar conditions to Not every reader of contracts sees any fairness towards
particular purpose. those prevailing prior to the change order or provisional the Employer in clauses 25 and 26. They appear not to
The Employer and his adviser or agent should also avoid sum order, then a review of the rates and prices for the consider fully the implications of the alternatives; that non-
giving any further or unintended assurances, written or oral, changed or provisional sum work is called for. garnbling contractors would raise their bids as their risks
inside or outside the Employer's Requirements in respect rise regardless of the possibility that no delay or disruption
The keywords "similar" and "significantly" in clause might ever occur.
of the subsoil's condition or suitability for any particular 12.5.1 are therefore crucial since they form the bench-
design. marks from whence the Contractor's entitlement to a new A claimed loss might in its simplest, form occur directly
Where factually correct data are provided the bidders rate or price is judged and allowances made whenever a and clearly from a clause 26 listed matter. But more com-
carry the risks of the ground's condition. However, if the change or provisional order brings about work of dissimilar plicated circumstances may arise involving a chain of events
facts in a subsoil survey given to bidders are found to be character to that originally envisaged or substantially initiated perhaps by an Employer's breach involving events
incorrect a question of negligence arises. The Contractor changes the conditions under which it is to be carried out at the Contractor's risk or breaches of the Contractor.
misled would seek compensation from the Employer, who Multiples causes and effects of overlapping or concurrent
or varies the quantity of work to a substantial extent.
would in turn seek recovery of the sum from the consultant events might generate intertwined liabilities difficult to
Clause 12.5.3 also provides for an allowance to be made unravel, or ascertain, for the Employer to verify.
who produced the erroneous report. His professional in- for any necessary additional sum for "site administration,
demnity policy would come into play in such circumstances. site facilities and temporary works". On the other hand, to Until the losses are "ascertained" the Contractor cannot
the Employer's advantage, any reduction of such facilities, receive their addition to the Contract Sum (clause 26.3) nor
temporary works or administration, entitles the Employer will he be entitled to their inclusion in "the next Interim
(c) The risk of changes
to an allowance for the savings that may be brought about Payment" unless a divisible part of the claimed loss can be
Changes and provisional sum instructions tend to disrupt by certain changes. ascertained (clause 3).

10
The word "ascertain" has the following plain meaning:
to make oneself certain
to establish as a certainty
to find out or learn for a certainty
to make sure of, get to know
to make certain, or definite; to decide, fix, limit.
Clearly, certainty is the keynote of the Contract's atti-
tude to loss and/or expense. The Employer may however
be presented with uncertain claims in which case he is
under no obligation to pay anything until it is established
(at least in part, see clause 3) as a certainty. The onus of
convincing the Employer of the claim's validity rests with
the Contractor (clause 26.1.1 & .2).
An Employer's agent may be capable of vetting such
matters but where substantial sums and difficult matters
are involved a professional quantity surveyor experienced
in such claims may be required to advise on the questions
raised,

(e) The risks arising from defective work


The Employer runs the risk that defects, shrinkages or
other faults, which are the Contractor's liability, may en-
title the Contractor to the Contract's (clause 16) rights to
enter and remain upon the Works to remedy them at a time
after Practical Completion when the Employer may have
expected to have his buildings to himself.
This risk can be curtailed if the Employer uses his rights
to have any work or materials not in accordance with the
Contract remedied straightaway rather than allow them to
accumulate at the project's end.

If) The risks of inflation


Tlie Employer may well seek the advice of a quantity
surveyor before deciding which clause of those available
(36, 37 or 38) should be utilised. The kind of project, its
time-scale, and future cost trends need to be considered
prior to adopting one or other of these clauses.
11
A COMMENTARY ON THE CLAUSES

Introduction on its own not precise and that the parties may for instance description or statement to be found in the Employer's
This chapter examines the contents of certain clauses and have agreed that the Contractor will be responsible for Requirements or Contractor's Proposals.
comments upon their function and working in conjunction gaining initial planning consents (Development Control Delineating where one party's or the other's design
with other clauses of the Contract. Requirements). This may therefore be said to be part of the obligations begin and end may however still prove to be
Contractor's "design" obligation. The Employer's Require- blurred in practice. Obviously the simplest arrangement
ments or Contractor's Proposals may on the other hand will in this respect prove best, where tie Contractor does
Clause 2 Contractor's obligations state the Contractor is not to do everything or decide every- absolutely everything, including gaining planning consents,
The heading is misleading. As can be seen from the sub- thing nor to choose the kind, quality, texture and colour of designing everything, deciding the suitability of the site
headings the clause deals not only with the "Contractor's every conceivable material, nor all of the goods, nor to set and its sub-strata.
obligations" but also with document status (2.2), dis- standards of the Works in every detail. There may therefore
be variable arrangements concerning matters of gaining Insofar as the design of the Works is the responsibility of
crepancies (2.4), and the treatment of errors within or the Contractor he carries the same liability to the Employer
between documents (2.3). Furthermore, an Employer's statutory consents or choosing things. Matters may be
further complicated where the Employer intends to partly as would an architect or engineer or other professional de-
obligation is also referred to within the clause, ie to give signer working in the conventional independent way. This
written notice of any discrepancy or divergences he may design in detail a particular element or to put forward his
outline design for the whole of the Works or if he provides requires the use of reasonable skill anc care by the Con-
find. The Employer must also make decisions in respect tractor in his design work but will not imply the resulting
of discrepancies and issue instructions to correct any his own soil reports or has himself gained outline planning
consent. The Employer cannot under this Contract nomi- Works will be fit for their intended purposes, In a conven-
divergence concerning site boundaries, tional design-and-build Contract where the Employer does
nate sub-contractors or suppliers of his own choosing but
However, the clause does principally set down two most he may reserve the right to judge certain standards by way not put forward his own choice of materials or goods or
important matters: of 'on-the-spot' inspections as and when the particular design but just takes what he is offered by the Contractor
work is carried out or when certain materials or goods are this would normally inipliedly promise aot only reasonable
1. The Contractor's obligation to carry out and com- skill and care in design but also the finished Works would
plete the Works delivered.
be fit for their purpose,
and 2. The Contractor's obligation in respect of any defect It is intended that any such diverse arrangements are
written into the Employer's Requirements or the Contrac- However, whenever the Employer in his Requirements
or insufficiency in the design. makes his intended purposes known to the Contractor
tor's Proposals. Whatever then remains to be done, other
The Contractor's dual obligation expressed firstly in than described or stated in either of these two documents, there will be grounds to claim a failure to use reasonable
Article 1 and in more detail in this clause is to carry out by way of design is by this clause 2 made the Contractor's skill and care if the design fails to enable these known
and complete the Works referred to in the Employer's responsibility. The Contractor has a duty therefore to do purposes to be achieved.
Requirements and Contractor's Proposals and for that pur- everything in the way of design necessary for the purpose The Contractor's liability for any Joss of use of the
pose to complete the design for the Works. The clause of carrying out and completing the Works so far as he is Works due to his design defects or for loss of the Em-
recognises the important word "design" used in Article 1 is not specifically relieved of that obligation by any particular ployer's profits or other consequential losses may in this

13
Contract be expressly limited by agreement between the Although everything written above indicates how im- policy of prompt, and almost full, regular payment to the
parties to a particular amount to be named in the Appen- portant the Employer's Requirements and Contractor's Contractor by the Employer of absolutely everything stated
dix 1. If such an amount is written into the Appendix, Proposals are in setting out obligations, statement CD 16 in the Conditions, on the dot, every month, can be avoided
putting a ceiling upon the Contractor's liability (thus clearly stipulates the contents of the Employer's Require- to a limited extent by the use of "Alternative A" in clause
indirectly lowering the Contract Sum), the arrangement ments or Contractor's Proposals or the Contract Sum 30 wherein predetermined stage payments of stipulated
will not relieve the Contractor of his unavoidable clause Analysis cannot override or modify any provisions in the amounts cumulatively recorded in Appendix 2 can be
6 obligation to comply with all Acts and statutory rules, Articles, Conditions or Appendices. written into the Requirements and/or Proposals after agree-
nor his separate clause 24.2 liability to pay or allow to ment by the parties, prior to entering into the Contract.
the Employer liquidated damages (also to be stated in Nothing contained in the Employer's

Appendix 1) for any failure to complete the construction


Requirements, Conlraclor's Proposals,
or the Contract Sum Analysis must
The objective of clauses 3, 15, 12.6 and 30 remains
by the Completion Date or any extended Date. override or modify the application or however to ensure the Contract Sum, together with any
interpretation of the Articles of Agree
ment, Conditions, or the Appendices
amounts to be added (or deducted) as laid down in the
Where the Contract involves work for or in connection CD 16 2.2 Conditions, is to be doled out to the Contractor in a strictly
with the provision of a dwelling or dwellings (new or rehab' regular way under either Alternative 'A' or 'B' as he pro-
including flats) the parties cannot rely on any arrangement Thus, although the Employer's Requirements or Con- ceeds towards practical completion. Many of the amounts
at all to restrict or exclude the Contractor's design liabili- tractor's Proposals may be specially drawn up to express to be added (eg, for clause 12 Changes or clause 26 losses)
ties. There are unavoidable and more onerous requirements the parties' intentions, if these intentions run against the are difficult to ascertain. It is this difficulty that clause 3
statutorily imposed by law under the Defective Premises Act Conditions etc as they stand then statement CD 16 will recognises. It permits partial ascertainments to be taken
(section 1(1)) which requires the Contractor additionally to render the words within the Employer's Requirements or into account by the Contractor in his computation of the
carry an absolute liability to see that any work of his for or Contractor's Proposals ineffective. If the Requirements and Interim Payment due to him from the Employer. This
in connection with the dwelling/s results in places fit for Proposals are united in placing an obligation upon the Con- partial ascertainment does not encompass guess-work or
habitation when completed. Furthermore, the duty is owed tractor, or granting him some special relief, in contradiction approximations. It means the ascertainmen; (establishing
not only to the Employer but to every purchaser and sub- to the Conditions, Articles, or Appendices then whatever is as a certainty) of parts of the whole concerned.
sequent purchasers of such dwellings. contained in the Conditions, Articles or Appendices will
prevail. The parties must therefore ensure CD 16 does not If the Contractor does not properly add or deduct part
If the Employer's Agent imposed Changes (see CD 42) or whole amounts in the computation of his Interim Pay-
negate their real intentions. They must also ensure correct
in design which resulted in defects, undetectable before- ment Applications the Employer is entitled to utilise CD
completion of the standard Articles and Appendices takes
hand by a reasonably competent Contractor, it may be 601, issuing a notice to the Contractor giving his reasons
place. If they wish to enter into non-standard arrangements
possible for the Contractor to use part of the Act (section for stating the Contractor's version of the total amount
CD 16 must be suitably altered.
1(2)) to seek relief from the responsibility imposed in this stated as due is not in accordance with the Contract.
way upon him. For example, the parties may intend to limit the Con- Simultaneously the Employer must pay the amount he
tractor's liability for the consequences of his design errors himself reckons is due.
The otherwise unavoidable Defective Premises Act's and may have written this into the Employer's Require-
section 1(1) can alternatively be replaced by an 'approved ments and/or Contractor's Proposals with an amount stated If the Employer does not recognise the Contractor's
scheme' of protection for the dweller, such as the NHBC as a limit to the liability. However, failure to enter this right to take into account ascertained amounts in part or
scheme which may be written into Appendix 1 whereby amount or the correct amount in the proper place in the in whole in his Interim Payment Applications the deprived
(under section 1(2) of the Act) there is arranged a parti- Appendix will result in CD 16 negating the non-standard Contractor must wrestle not only with the precise meaning
cular contract (eg, NHBC Agreement HB5) to be made arrangement as written in the Requirements or Proposals of the word "ascertained" in clause 3 but also with the
between the Employer or Contractor and each dwelling and in the absence of any sum written into the Appendix words "properly due" found in his safety net remedial
purchaser providing for a written warranty to build in an will open the Contractor to a no-limit liability. clause 28.1.1.
efficient and workmanlike manner, of proper materials, so
as to be fit for habitation. Where such a scheme is involved Clauses 3 and 15 Contract Sum — Interim Payments It is never easy to be absolutely right about anything
the Employer's Requirements should include its application other than the simplest of issues. Exactitude in making even
thus bringing clause 2.5.2 into play adding an obligation Clauses 3 and 15 when combined with clauses 12.6 and 30 final valuations is difficult; in Interim valuations their tern-
upon the parties to each do everything necessary for the are collectively concerned with prompt payment to the porariness and limited life lead practitioners inevitably to
scheme's documents to be issued. Contractor of monies as he progresses. The Contract's approximation. There are good reasons to do so for work is

14
in progress and incomplete, furthermore the words used in Most instructions are likely to arise from the Employer's
The Employer may emplov and pav
the Conditions though superficially clear often raise doubts, desire to change his original Requirements or to change other persons to execute any work
as for instance in the words "total value of the materials something the Contractor would, according to his Proposals, whatsoever necessary to give effect to an
expressly empowered instruction •
and goods delivered". Do the words "total value" here in- otherwise carry out. Clause 12 empowers the Employer
4-, 1.2
clude the Contractor's estimated costs of unloading, storage, to make such changes and defines (very widely) the term CD 65

wastage, breakages, etc? It seems some inexactitude is "Change" to include matters concerning imposed obliga-
unavoidable and inevitable in any Interim sums chosen for tions or restrictions on access to or use of the parts of the
if within 7 days aftef receipt of a
the purpose of setting a value at a particular moment during site, working space and hours, and the order of working. w
the progress of a project. It is the claiming of sums impro- However, clause 4 places a brake on the Employer freely notice from the Employer requ
compliance, the Contractor doe
ritten
ring s
perly due rather than marginally inexact sums that CD 601 and unreasonably making such particular changes if the comply not
CD 66 4.1.2
is aimed at. Contractor makes reasonable objection.
The Contractor must of course comply with any stipu- If an issued instruction is empowered, is in writing, and presents a possible safety net for the Employer if he can
lations written into the Requirements concerning any is not one the Contractor can object to under CD 63—64 or persuade the Contractor to freely make an agreement over
accompanying details to be provided to the Employer CD 190-192 then the Contractor must set to immediately the desired Change (before the work commences) in which
(see CD 642 or 683) with each Application for interim and comply. Questions concerning the time (extension) the sum agreed upon will be in full and final settlement,
payment. needed and any money (extra) involved if the instruction including any sum that may arise under clause 26.1 to .3,
is a Change are all secondary to the obligation to comply, also to include the rights under clause 26.4.
Clause 4 Employer's instructions although the Contractor is obliged to simultaneously give Prior financial agreements over Change orders are un-
written notice to the Employer under clause 25 if it is fortunately a rarity. There is a tradition in the construction
Practice Note CD/IB gives a list of clauses under which the immediately apparent his Works' progress will be delayed.
Employer is empowered to issue instructions (see page 6). industry of getting on with the work first and arguing its
No financial deal is necessary before the obligation to value later (sometimes years after). If the Employer wishes
This list is not comprehensive. Further rights are contained comply comes into force. Money matters in respect of
in the Conditions and these are laid out in the Flowcharts to avoid this he should stipulate in the Requirements what
Changes are taken care of under clause 12.4 wherein action is to follow the issuing of Change orders, bearing in
under CD 69. the parties may agree if they wish a 'lump sum' deal on mind of course that CD 16 will not allow any overriding of
Any instructions given by the Employer to the Con- the Change, otherwise they are obliged to settle any dif- the standard rules where the Requirements conflict. In any
tractor's person-in-charge are deemed to have been given to ferences using the detailed rules of valuation written into case the Employer may utilise his rights under clause 30.3.4
the Contractor. The person-in-charge must therefore ensure clause 12.5. to refuse payment of anything "not in accordance with this
he immediately complies with instructions of the Employer The word "forthwith", meaning immediately and with- Contract", stating as his'reasons that the words of clause 3
(or his Agent) provided the Conditions expressly empower out delay, should be read reasonably of course in each (CD 54—56) require the parties to establish the amount as
their issue. particular circumstance. (Eg, How soon could the required a certainty before it is to be taken into account in any
This strict obligation to respond immediately to all such resources be assembled and put to work? What statutory Interim Payment.
issued instructions has four safety devices available to the notices would have to be given or permits secured? What It is important to note that although under clause 12.1.1
Contractor: reorganisation or reconsideration of the Contractor's the Employer may, subject to the four rights of the Con-
original plans, programme, designs and arrangements would tractor to resist (referred to above), make wide-ranging
1.A right exists (in CD 69) to query the validity of any be needed?) A minor Change sought by the Employer may
instruction. changes in the design, quality or quantity of the Works,
have major repercussions on the Contractor's otherwise there are restrictions under clause 12.L .2 concerning any
2.A fight exists (in CD 73) to treat all unwritten in regular progress. The Employer must make due allowance
structions as invalid until they are put into writing. desired Changes in impositions previously entered in the
for these things before turning to CD 65/66. Requirements in respect of:
3.A right exists (in CD 63—64) to reasonably object to
a proposed Change in previously imposed obligations The Employer should also be wary of clauses 25 and 26.
The former pushes the completion date onwards and the .1 access to the site or use of any specific parts
or restrictions under clause 12.1.2. .2 limitations of working space -.3 limitations
4.A right exists (in CD 190—192) to reasonably refuse latter entitles the Contractor to recoup from the Employer
any direct loss and/or expense he may incur if his regular of working hours
an instruction involving an unreasonable Change in .4 the execution or completion of the work in any
the design of the Works. progress becomes materially affected. However, clause 12.4
specific order.

15
The Contractor must confirm in writing to
the Employer within 7 days if the Clause 5 Custody and supply of documents
Employer purports to issue an instruction The Contractor must comply with, and
otherwise than in writing The Employer should consider carefully prior to making give all notices required by. any Statu-

CD 77 4.3.2 the Contract whether upon completion the Contractor's tory Requirements

drawings, specifications and details used for the purposes


Clause 4 endeavours under CD 77 and CD 79 to cope of the Works will be sufficient for the Employer's future
with the difficult questions of purported, unwritten, un- needs in connection with the maintenance, alterations or with, the Building Regulation requirements, Construction
noticeable, or unintended Changes. It does so by giving the repairs of the building concerned. Regulation requirements, planning approvals, and any
Contractor a right to question their validity and requiring other relevant statutory requirements.
If the Employer considers other drawings and technical
both parties to put unwritten matters into writing. It even information should be produced detailing the Works 'as Furthermore, the Contractor must do so without any
recognises that despite such rules instructions may still be built' then such requirements should be specifically referred right to reimbursement of any unforeseen costs arising
given and carried out without them having been beforehand to in the Employer's Requirements and/or Contractor's unless a new or altered statutory regulation comes into
put through the proper paper work. In such cases CD 79 Proposals. force after the Date of Tender or unless certain planning
grants the Employer a discretionary right to confirm his requirements are involved in which case see CD 131 — 136.
approval retrospectively. He can do so at any time prior to This clause 5 makes no mention of any 'master' plan or
the Final Account and Statement becoming conclusive. programme being supplied to the Employer even though he
Clause 8 Materials goods and workmanship etc
is expected under clause 25 to operate complex provisions
I f neither Contractor nor Employer con
firm such an instruction in the manner
for considering and in appropriate cases granting extensions The Contractor should preconsider his promised standards,
and time stipulated bul nevertheless the of time to the Contractor. Furthermore, under clause 26 or the Employer's Requirements, of workmanship and
Contractor complies with an instruction
otherwise than in writing then the Em the Employer is required to make judgements on matters choices of materials or goods. They must be technically
ployer may confirm the same in writing;
CD 79 4.3.2.2
of loss and expense emanating from disruption to the Con- sound, commercially sensible, attainable, and at all times
tractor's regular progress. A 'master' programme would at procurable, otherwise the Contractor must gain the Em-
Failure to respond "forthwith" to an Employer's in- least outline the intended regular progress. ployer's consent in writing before being allowed to make
struction (which clears the four hurdles listed in the third Time, under clause 25, and money matters, under clause any changes in standards of workmanship or choices of
paragraph under this sub-heading) entitles the Employer 26, are not necessarily unified but they do frequently go materials or goods. The Contractor must also bear any
to employ others to carry out the particular ignored in- together. It is difficult to see how an Employer is to duti- costlier procurement cost and workmanship costs resulting
struction. If the Contractor more seriously defaults in fully make his judgements without (from the commence- from such changes.
ways described in clause 27 then the latter rights becomement) having in his hand the Contractor's bona fide master
operable rather than those in clause 4. The words "so far as procurable" are not defined. They
programme. The annotation following CD 84—88 refers grant relief to the Contractor from endeavouring to obtain
Difficulties for the Employer may arise especially further to this problem. the unobtainable. It is up to the Contractor to show the
towards the end of a project, particularly one which for Employer sound grounds for seeking the relief promised.
the Contractor has turned out to be unprofitable. The Clause 6 Statutory obligations, notices, fees and charges If satisfactory evidence shows certain materials or goods are
more Changes the Employer orders the less inclined the unobtainable the Employer may either sit back and await
Contractor will be to carry them out. The more work and The importance of the Contractor's overriding obligation, in the Contractor's suggested alternative or he may take the
administration the more loss the Contractor may foresee CD 103 to comply with, and give all notices required by, initiative by ordering a Change. The first course of action
and the more vigorously therefore he will pursue under any Statutory Requirements is irreducible and cannot be would be risk-free whereas in the latter he must accept
clause 12.5 an allowance for the "lateness" of Changes avoided. No matter what the Employer's Requirements that a formal valuation of his order would follow with its
on grounds the conditions under which the work is to specify, including his designs or Change orders, the Con- possible consequences of design changes and planning per-
be carried out have changed. He will under clause 12.5.3 tractor is to-ascertain for himself, and ensure compliance missions with the possibility of delays and disruptions to
seek an allowance for his extended administrative costs the Contractor's regular progress.
that go with the extra work and under clause 12.5.6 may
seek a fair valuation of design work, insurance premiums All workmanship materials and goods - specifically described in the Employer's - - described in the specifications referred to
and other costs not otherwise included for in the normal must so far as procurable be of the
standards: •
Requirements
CD 139 8.1 described in tbe Contractor's Proposals CD
in clause 5.3
CD 141 8.1
valuation of the Changes ordered. CD 138 8.1

140 8.1

16
If the Employer promptly and reasonably refuses his to instruct the Contractor to open up work done and/or tion and know he is the official receiver of "instructions'",
consent to any suggested substitution by the Contractor the to carry out tests upon that, or upon other work or any not notices.
question of lost time will not arise under clause 25. The materials or goods awaiting incorporation into the Works
Contractor, with requests for consent to make a substitu- The Contractor may delegate to his "person" additional
or in situ in the Works. This right cannot be interpreted and wider authority (subject to Head Office supervision
tion, may however give each time a notice under clause as an obligation upon the Employer to detect any of the
2S.4.10.1 and/or .2. Any delay by the Employer in giving and control) than simply to receive instructions. The
Contractor's faults, errors or omissions. However, if the "person" may be authorised to make agreements on the
his consent to a suggested substitution would give rise to Employer does order work etc to be opened up or tested
a further notice — this time under clause 25.4.6, followed values of Changes (under clause 12.4) and to agree with the
and the findings show the workmanship, materials and Employer the Final Account and Statement under clause
perhaps by a written application under clause 26.2.7 stating goods to be faultless then the Employer will be required
the Contractor was likely to incur loss and/or expense due 30.5. However, if the person is not authorised to make
to pay the Contractor his "cost" of opening up and/or agreements but nevertheless does so they may become
to Ms regular progress being affected materially by the testing, together with the "cost" of making good.
delay in receiving "consent". binding upon the Contractor if it appeared to the Employer
Difficult questions arise if faults are found which are not the person had authority to make such agreements.
The Employer may therefore be on a tight-rope. On the as extensive as the degree of or extent of opening up called If the Employer or his agent gives instructions in the
one hand he has a clear right to a reasonable time to judge for; or if the extent or nature of tests subsequently proved. form of sketches or drawings they may well constitute an
whether a preferred substitution is acceptable. On the other The mere fact that fault was found will of course justify the
hand he is not obliged to accept or "consent" to an un- instruction "in writing" if they clearly show in an instruc-
opening up but whether it can justify all of the opening up tive manner whatever the Employer wishes the Contractor
reasonable substitution. If he promptly and reasonably or testing demanded is difficult to judge. The line between
refuses his consent to a first suggested substitution the to do.
proper precautionary examinations and the unnecessary
clock must then be set to start again, granting the Employer baring of construction may be blurred in certain cases but The Employer's power to instruct does not extend to
a new reasonable time in which to judge the second sug- the benefit of removing doubt must be granted to the dictating the Contractor's speed, methods or sequence of
gested substitution and so forth, Obviously the Contractor Employer whenever reasonable doubt exists. working, unless the Contractor's ways and means do not
may persist in putting forth the cheapest substitute he can correspond with matters laid 'down in the documents
find until he gains the Employer's consent. However, pro- Clause 10 Person-in-charge referred to in CD 1, or if the Contractor is not constantly
vided the Employer reacts promptly to each and every using his best endeavours to prevent delay (see clause
substitution preferred the time lost by the Contractor in The person-in-charge, as the authorised representative of 25.3.4.1) in which case the Employer would be entitled to
eventually gaining the Employer's consent will not qualify the Contractor, is obliged to receive any instructions of the require everything reasonably possible to enable the Works
for an extension to the completion date under the provi- Employer. When any instruction has been delivered to the to proceed, under CD 438.
sions of clause 25 since the clause's words exclude time "person" it is deemed to have been given to the Contractor.
taken up by reasons within the Contractor's control. This applies only in the case of an "instruction". A notice,
such as one under clause 23.2 formally informing the Con- Clause 11 Access for Employer's Agent etc to the Works
This same principle would deny the Contractor's claim
for incurred loss under clause 26.2.7 since the "due time" tractor of a failure to complete in time, would have to be The right for the Agent and others to see the Works in
referred to there would be judged not from the first sug- delivered to the Contractor, not his "person". Similarly, a progress, and for the Agent (under clause 5.4) to see the
gested substitution but from the moment when the first notice under clause 27 specifying serious defaults or giving documents, and enter workshops etc where work is being
reasonably acceptable substitution was preferred. notice of determination would, to be valid, have to be prepared does not reduce in any way the Contractor's
Arbitration is under Article 5.2.1 operable immediately served upon the Contractor himself, not his "person". obligation to comply with all the requirements and stan-
on questions concerning the refusal of "consent" by the Clause 4 deals with the Employer's empowered notices, dards of the Contract.
Employer. the way in which they are to be issued, the Contractor's The nomination of an Agent or any replacement would
Clause 8 also grants the Employer discretionary rights rights to make reasonable objection, and so forth. The make that person an official receiver of any application,
person-in-charge must clearly understand his special posi- notice, request or statement of the Contractor. It would
also make the person an official giver of consents, instruc-
open up lor inspection any work
covered up
- arrange for any lest of any executed
work or of any materials or goods
carry out any test of any executed work
or of any materials or goods (whether
tions and notices, unless the Employer specifically cut
nstructions
CD KB 8,3 (whether or not already incorporated In or not already incorporated in the Works) down the person's authority by a written notice to the
the Works! CD 150 8.3
The Employer may issue
re quiring the Contractor to CD U9 8.3 Contractor. In the absence of any such written notice the
CD 147 8.3 Contractor would be entitled to (and must) assume the

17
Agent has full authority as granted to him under Article 3, The Employer may issue all manner and any number of Further difficulties may be encountered where lateness
to act for the Employer and to bind him. empowered Change orders up to the Contractor achieving has been caused by an interwoven set of circumstances in-
However, the Contractor should realise where the Agent Practical Completion, even if the Contractor has overrun volving faults or dilatoriness by the Employer, dilatoriness
is an architect or quantity surveyor that in their position as his time. The extra time that may be needed to execute on the Contractor's part, and factors outside either party's
Agent they are entitled to openly display their partiality. the work, causing the completion date as it then stands to control. In such involved circumstances the validity of
This may lead the Contractor to wonder just how he is to become unattainable, may be granted under clause 25.4.5.1 deductions made by the Employer for damages due to
profitably settle clause 12 valuations! (CD 414) but any similar time spent merely awaiting any delay is difficult to judge, particularly if any of the reasons
Change instruction should be separately awarded under for delay does not fall clearly under any of the clause 25
clause 25.4.6 (CD 419) provided the Contractor has applied Relevant Events.
Clause 12 Changes in the Employer's Requirements and
provisional sums in writing for the instruction in question. When a Change is ordered the Contract Sum Analysis
Whether or not such extensions of time may rightly be will be referred to in order to reckon up the Change's value.
awarded or indeed need be accepted once the Contractor Valuing Changes is (as stated in the commentary to clause
is in breach by overrunning time is a debatable matter. A 4) rarely swiftly achieved. Clause 3 combined with clause
great deal may depend upon whether the Contractor had, 12.6 (CD 199) anticipates both delay and difficulty. They
12.2 in accordance with CD 399, used "constantly his best permit partial payments and provide (in 12.5) a set of rules
endeavours" to prevent delay during the progress of the for making detailed valuations, provided the Contract Sum
There are restrictions upon and limits to Changes the Em- Works. If, for example, there is clear evidence of earlier Analysis is comprehensive enough.
ployer may order. Firstly, the Employer is not allowed to dilatoriness causing summer work to run into winter-time However, the simplified alternative clause 12.4 way is
effect a Change which is, or makes necessary, an unreason- an extension for exceptionally adverse weather arising in open to the parties rather than the slavish rules of clause
able alteration or modification in the design of the Works. the overrun period may be prejudiced. On the other hand, 12.5.
For example, an order to a Contractor, who specialises in an earlier lack of best endeavours may later give the Em-
standardised reinforced concrete buildings, changing the ployer the right to set a later Date under clause 25 due to Whichever way is chosen, as soon as any part of the
structural frame and cladding to steel may be reasonably Relevant Events arising later than they might otherwise amount involved has been "ascertained" then that sum,
refused. Arbitration is in any case available, to start imme- have done if only the Contractor had earlier done his duty when established as a certainty, shall be paid under clause
diately, to decide whether such a refusal should stand. under the Contract (CD 399) to prevent delays. 30.2A.1.2 or30.2E.l.l,less Retention.
Secondly, reasonable objections may be raised by the The greatest difficulty may arise under statement CD
Certain Contractors may refuse proferred extensions on
Contractor if instructions are issued to change any obliga- 198, where an allowance must be included for the addition
grounds the instructions issued in the overrun period have
tion or restriction previously imposed by the Employer (in or omission of the relevant design work.
set time at large and the liquidated damages clause has
the Requirements) in regard to access or use of parts of become inoperable. Resolving such contentions may require The valuation of Changes must be made
the site, limitations on space and hours, or changes in the expert legal advice. There may have been both necessary
previously specified order of working or completion. and unnecessary Changes ordered. There may have been in accordance with the provisions of
clause 12,5;
Thirdly, the Employer may not by Change order funda- instructions Issued at the same or different times as Change CD 196 12.4
mentally alter the character of the Contract to something orders. Provisional sum instructions issued may have been
quite different from that which the Contractor had bar- ones which could not have been given earlier and some I

gained over in the first place. provisional sum instructions may involve much more or
even less work than first envisaged when the sum was set.
However, the clause is quite open on the question of otherwise agreed; and

when the right to order Changes comes to an end. It is not If no agreement can be reached concerning extensions of CD 197 12,4
clear whether the Employer is entitled to issue instructions time and the deduction or payment of liquidated damages
1
for extra work or to omit work after the Contractor has then the Employer should set about proving the loss
passed the Date of Completion or any extension to it. actually suffered, due to any alleged late completion, rather such valuation must include a lowance
There are no restrictions on late orders; in any case the than rely upon getting predetermined clause 24 liquidated for the addition or omission of the
Contract would become unworkable if necessary orders had damages from the date alleged by the Employer to be the relevant design work

to cease once a particular date had passed. operative completion date through to Practical Completion. CD19B 12.4

18
The above principles (and problems) apply equally to not arise. Under the alternative clause 30.2B "the total breach. However, nowhere in the Contract, least of all in
the expenditure of provisional sums (if any) included in the value of materials and goods delivered to or adjacent the the definition clause 1.3, is the Employer given any test to
Employer's Requirements. Works" is to be separately summed up and virtually all paid apply in determining whether or not such completion has
for as the Works progress, excepting for a percentage Reten- been achieved. Annotation to assist the Employer is given
Clause 15 Unfixed materials and goods tion held back by the Employer. in the Flowcharts below statements CD 250/1-
Building materials, and to a lesser extent goods, are conven- Under clause 30.2B the Employer may in view of the The Employer in judging Practical Completion should
tionally to be found deposited all around a building whilst remarks above concerning the risks of 'retention of title' disregard the Date actually fixed and stated in the Appen-
under construction. A minority will at any one time have require prior proof of ownership by the Contractor of all dix by the parties for Completion, since the Contractor is
been paid for by the Contractor whilst the majority have or maybe the most important materials and goods, to be entitled to complete before then and the Employer is
not; a minority of suppliers will have retained title to their provided as part of the "details as may be stated in the obliged to extend the Date onwards if any Relevant Event
chattels whilst others have not; some of the chattels may Employer's Requirements" (clause 30.3.2) to accompany occurs to delay the Works' completion beyond the Date.
have complicated 'retention of title' clauses attached to each Application for Interim Payment. However, the task The Employer should therefore look at the Works with
them whilst others have the simplest form possible. of scrutinising the variously worded small print clauses of
one question in mind. Is everything virtually finished in a
each supplier and deciding whether or not the Contractor
Most of this commercial 'safety-netting' ceases to matter satisfactory way (apart from trifling matters) so that full
has the right to sell on or whether rights have been merely
once the materials or goods have become part of the Works beneficial occupation can take place" If the answer is
reserved against the proceeds of re-sale without a right
for then the title-holders are generally reckoned to have lost "Yes", the Employer must promptly write to the Con
to repossess, and so forth, may prove all too difficult,
their reserved rights since the chattels have lost their iden- tractor stating "The Works reached Practical Completion
uncertain and time-consuming.
tity (as materials etc) and have become a permanent part of on................................(Date)".
the Works. The JCT have in any case considered the whole ques-
tion of title retention and its risks. They appear to have Partial Possession
However, a few sellers may go a stage further by writing concluded the risks do not warrant the exclusion of the
into their supply contract clauses granting themselves rights, Contractor's conventional rights to interim payments for Statement CD 270 indicates the Employer may with the
when unpaid, to enter upon the site and to remove (sever) unfixed materials and goods. The JCT presumably see Contractor's consent take earlier possession of any part or
their goods even if they have become part of the Works. Employers benefiting from lower bids where bidders are parts of the Works. It is also thought possible (see Ref 2
None of this need concern the Employer unless the Con- promised a right to payments for on-site materials etc as para (2) p 330) a Contractor who is overrunning the Date
tractor becomes insolvent, and having no title or money has they proceed. Even 'better' bids may result if the Employer for completion may be entitled to a proportionate reduc-
unpaid sellers waving retention of title clauses over certain promises interim payments for off-site materials or goods. tion in the damages payable for his delay if any divisible
materials or goods. Even then, a retention of title clause If this is done the conditions set out in the Appendix must part or parts of the Works could be beneficially occupied
would not matter unless the Employer had already paid the be strictly observed to safeguard the Employer's rights to by the Employer, thus mitigating the loss from the delay.
Contractor earlier for those materials or goods; or, in the the paid for materials or goods in case of insolvency.
The Contractor must make good the
rarer cases of rights to sever, had paid the Contractor for defects, shrinkages and other faults
incorporating the particular materials or goods into the Clauses 16 and 17 Practical Completion, partial possession specified in the Schedule of Defects,
within a reasonable time after recept;
Works. and Defects Liability
CD 270 16.2 & 1M.2
The element of risk for the Employer should be put into
perspective. Firstly, no risk at all arises where there is no risk Practical Completion
If predetermined sectional completion is desired a spe-
of the Contractor becoming insolvent. Any alleged right to The Employer Is given the task of declaring in writing the cial supplemental agreement (similar to the one published
title or to repossess applies only to unfixed materials or Works have reached Practical Completion. If he fails to in 1975 by the JCT for use with their 1963 Contract)
goods. A slight further risk of claims extending to materials do so at the right time, or refuses to do so at all, he is in should be used setting out the various amounts of liqui-
or goods incorporated into the Works may also arise. The dated damages to be paid if the sections concerned are
degree of risk for the Employer depends therefore upon the delayed beyond their particular completion dates.
The Employer must, when the Works
financial strength of the Contractor. have reached Practical Completion,give
the Contractor a written statement to If under the standard provisions of clause 17 partial
Under clause 30.2A, where stage payments are arranged, that effect;
possession of the Works occurs with the Contractor's con-
separately identified payment for materials and goods does CD 250 16.1 sent the estimated value of the part taken is to be declared

19
within 7 days by the Contractor, since the Employer on The Employer must when any defects,
possession takes sole risk of Clause 22 Perils and the Con- shrinkages or other faults which he may
have required to be made good have been
tractor's insured risk is therefore reduced by the amount made good, issue a notice to that effect:
concerned for the part possessed. Obviously prior arrange- CD 275 16.4
ments by the Employer to insure Clause 22 Perils should damage which is
Employer under at the sole risk of the
occur before possession of any "part" goes ahead. nifying amongst other things the retention money balance applicable)- anc clause 226 or 22C (if
remaining with the Employer is to be released to the Con- CD 336 21.2.1.4

Defects Liability tractor. The notices do not put an end to the Contractor's
From possession onwards each relevant part is then treated liability for any other defects etc which may subsequently
damage arising from a nuclear risk or :
as if it was a miniature Works which has reached Practical materialise. war risk or sonic booms;

Completion. Defects (including design faults) arising from


the Contractor's failure under the Contract may appear, Clause 20 Injury to persons and property and Employer's
in which case CD 261 enables the Employer, whenever indemnity
he considers it timely, to instruct the Contractor to put This clause declares the indemnities provided by the Con- Obviously from clause 20 it can be seen there are areas
things right during the period called the "Defects Liability tractor to the Employer to be: of risk to be carried by the Employer. These areas should
Period". be covered by insurances arranged for the Employer by ex-
(i) for personal injuries to or the death of any person (n) perts in these matters in the field of construction insurance
The phrase .„ misleading since it implies the Contractor's damage to property when caused by negligence etc. following an appraisal of the other areas of risk to be car-
liability extends only for the Period stated whereas his liabi- ried by the Employer under whichever of the alternatives
lity runs on for years. What the "Period" does do is to set a of clause 22 is to be in operation.
time-scale during which the Contractor has the duty, right
and privilege to remedy any faults or defects appearing
during that Period. To formalise this the Employer must Clauses 21 and 22 Insurance against injury to persons and
issue as an instruction a schedule (list) of all faults and property, also insurance of the Works against Clause 22
defects etc, not later than 14 days after the Period expires. Perils
Thus a list showing all defects etc which appeared in the unless Construction insurance is complex. Clause 21.1-2 requires
any expense liability loss claim or pro-
Period will be drawn up. This list of matters is then reserved ceedings are due to any act or neglect of the Contractor to produce for inspection by the Employer
for the Contractor to remedy rather than the Employer the Employer or any person for whom the
Employer isfesponsible evidence of adequate insurances. The evidence produced
being allowed to instruct another party to do the work and CD 309 20,1 should therefore be examined by an expert in the field who
charge it to the Contractor. will predetermine for the Employer the insured minimum
However, the Employer may instead of having the faults The first indemnity does not however (see CD 309) cover sum to be stated in the Appendix 1 under statement
remedied instruct the Contractor to substitute other work cover injuries etc due to any act or neglect of the Employer CD 328, also the most suitable of the alternatives under
in its place as a better remedy and at the Employer's addi- or any person for whom the Employer is responsible. These clause 22, and the suitability of the insurances to be main-
tional expense, or, in the case of irremediable defects, to exemptions would include injuries etc arising from activities tained by the Contractor in joint names under clause 21.2.1
leave well alone. of the Employer under clauses 29 and 34 as well as injuries (see the detailed annotation on this under CD 331).
etc due to the other persons referred to in clauses 29.3 and The liability of the Contractor to indemnify the Em-
The Employer does not have to await the latter stages to 34.2. The Employer's Agent in his activities would also fall
gain rectification of unsatisfactory matters. Statement CD ployer runs on after Practical Completion for years (subject
into the exempt category. to the Statute of Limitations Act 1980). Thus there is a
146 enables him to instruct the Contractor at any time (the
earlier the better), during the progress of the Works, to The second indemnity is confined to claims arising out necessity to arrange insurance to cover this protracted
remove from the site or to rectify any work, materials or of negligence, omission or default on the part of the Con- liability.
goods not in accordance with the Contract. tractor or any sub-contractor or any servant or agent of
either, Excluded from the indemnity is any loss or damage Clause 23 Date of Possession, completion and postpone-
The procedures outlined above apply equally when the as may be at the sole risk of the Employer if either clause ment
Works as a whole are complete. Statement CD 275 (and CD 22B or 22C is operative,
277 in the case of a relevant part) is merely a milestone sig- The Employer should never lightly commit himself to give
in the Contract possession of the site to the Contractor by
a particular date. He must be certain possession can be

20
The Contractor must be given possession of
the site on the Date of Possession Clause 24 Damages for non-completion of the liquidated and ascertained sum provided he notifies
the Contractor in writing of his intentions before the issue
The Contractor must pay or allow to the of the Final Account and Statement. If partial possession of
Employer the whole or part of a sum
calculated at the rate stated in Appendix 1 the Works has under clause 17 taken place prior to the due
as liquidated and ascertained damages; Completion Date the Contractor may claim a reduction in
given in sufficient time for the Contractor to complete the CD 392 24.2.1
liquidated damages must follow. Problems may arise once
Works by any governing date. He must also ensure posses- the Date for Completion has passed if the Employer issues
sion of the entire site can be given from the date to be set Change or provisional sum instructions involving extra work
in the Appendix for possession through to the proposed for the period between the Completion
Date and the date of Practical Comple- to the Contractor. These and other difficulties are discussed
Date for Completion; if not, clause 12.1.2 describes restric- t io n;
further on p 18 (clause 12 earlier).
tions the Employer may in his Requirements impose upon
the Contractor in respect of confined access or restricted Clause 25 Extension of time
use of any specified parts of the site together with any
The Employer is by this clause given a convenient proce- This clause is based upon the premise (CD 399) the Con-
limitations on working space or any obligation flowing
dure to collect a predetermined amount as soon as the tractor strives constantly to prevent delay and to prevent
from the restrictions requiring execution or completion
Contractor fails to finish the Works by the predetermined any overrun of the Completion Date. If despite his best
of the work in any particular order.
Date for Completion or any extension of that Date. endeavours the Contractor finds the progress of the Works
The importance of being doubly certain of being able towards completion is being or is likely to be delayed
The damages will continue to be collected until Practical
to hand over the site upon the Date of Posssession becomes he must write to the Employer giving the cause. If any
Completion actually occurs. The predetermined amount
apparent if failure to comply occurs. The Employer may causal event is one he reckons is a Relevant Event (listed
must not be an exorbitant sum plucked from the air. It
then find: in clause 25.4) he must include this opinion in his written
must be "ascertained" as the amount genuinely reckoned
1-. a claim by the Contractor is made for damages due beforehand as the sum likely to be suffered as damages if notice to the Employer. All this must be done as soon as
to the breach of the term for possession delayed completion occurs. The Employer should therefore it become reasonably apparent to the Contractor that
calculate, liquidate, and ascertain his likely damages (pre- progress is, or is likely to be, delayed.
2.a statement by the Contractor that the Date of Com
pletion has become inoperative; that no right to serving his calculations) before entering such sums in the Thus we find the Contractor must be on his toes and
liquidated damages remains for the Employer; that Appendix. alert to every cause of delay, including his own faults. He
a new obligation arises for the Contractor to com The Employer must in writing give notice to the Con- must tell the Employer exactly what is going on unless he is
plete in a reasonable time in the circumstances tractor under CD 391 of any failure to complete by the either on time or ahead of it.
Completion Date (or extension to it), otherwise the Em- If the Contractor fails to constantly use his best endea-
3.an application by the Contractor to the Employer ployer's right to start taking his liquidated damages from vours to prevent delay the granting of an extension of time
under clause 26 to prepare the ground for the Con the Contractor cannot begin.
tractor to recoup any direct loss and/or expense for a later Relevant Event causing delay may be prejudiced.
he may incur due to his progress being materially For example, if dilatoriness in getting on with 'summer
affected by an order to postpone work. The Employer must issue a notice in
writing to the Contractor il the Con-
work' causes the Contractor to run into winter-time and
tractor fails to complete the construction into delay due to adverse weather then his earlier breach of
There have been doubts expressed over the effectiveness of the Works by the Completion Date
CD 399 would deny him the right to be awarded any exten-
in this situation of any order that may be given by the CD 391 24.1
sion of time. Furthermore, under CD 438 the Employer
Employer to the Contractor to suspend work as an antidote would be entitled to require a dilatory Contractor to do
to a failure to grant possession. There is however no reason Once the Employer under clause 16 (statement CD 250) something positive about it. The most reasonable thing to
to prevent the Employer in this predicament endeavouring issues (promptly) a written statement to say Practical do about it would be to accelerate or "proceed" at a pace
to gain a formal binding agreement with the Contractor Completion has been achieved then the rights to the pre-
to vary the Contract by the substitution of new start and determined damages immediately close down.
finish dates, keeping the liquidated damages clause effec- Statement CD 394 grants the Employer discretion whe-
The Contractor must use constantly his
best endeavours to prevent delay in the
tive, and settling any damages arising. ther to claim payment or to deduct the whole or just part progress of the Works, howsoever
caused

CD 399 25.3.4.1

21
Tfie Contractor must do all thai may
reasonably be required to the satisfac-
The Employer does not have to make his decision there Only when causes of delay are classed as Relevant Events
tion of the Employer to proceed with and then upon receipt of the information described above is the setting of a new Completion Date valid and only then
the Works
but (dependant upon the sufficiency of the details etc) if delay actually pushes work beyond the otherwise due
CD 438 25.3.4.2
must do so not later than 12 weeks later, or, if there is less Date. A Contractor who is well ahead of time may negate
than 12 weeks to go before the Completion Date, the the justification for any new Date.
sufficient to eliminate the effects of his lagging 'summer Employer must, if he is of the opinion that both 1 and 2
work1, thus avoiding the onset of winter, although the above are evident, fix a new Date for the Contractor to Relevant Events are therefore the key to the clause:
Employer should carefully ensure he clarifies that his re- work to and must do so no later than the Completion Date.
quirements are not to be misconstrued as an order under Force majeure
clause 12 or as a promise to pay any of the Contractor's If the Employer is not of the opinion that the matters
acceleration costs. All this may however prove difficult under 1 and 2 above are evident he is not required by the
without a programme of the Contractor having been made Contract to formally reject the case in any particular way
force majeure
available to the Employer under clause 5. but obviously should inform the Contractor of his views as
soon as his opinion is formed.
The Contractor is required by CD 403/4/5 to give in CD 408
25,4.1
writing full particulars and estimates of the extent (if any) Once one extension of time has been formally made it is
of delay beyond the due Completion Date, sorting out each open to the Employer to take into account the omission of This expression is terminology of the legal profession here
and every Relevant Event to give the Employer a clear work later causing savings in time, but only those occurring meant to cover delaying events unpredictable by the parties
picture of what is happening, has happened, or is likely to after the last extension granted. Thus a shortening of the and outside their contemplation when they made their
happen. The Contractor must also keep the picture up to time can occur but not so as to ever be unfair or unreason- Agreement. It follows that if an extremely unusual event
date. able nor to shorten time to a date before the original Date occurs but that event is already contained in the clause it
for Completion written into the Appndix 1. cannot be classed as a "force majeure" sines it was pre-
The Contractor must, if practicable in
such notice, or otherwise as soon as pos- A review of the whole question of time and Completion dicted by the parties when they made their Contract. For
sible after such notice give in writing must take place not later than 12 weeks after Practical instance, if an earthquake (ie, a Clause 22 Peril) destroyed
particulars ol the expected effects of
each and every Relevant Event; and Completion (see CD 455-461). part or the whole of the Works it would not be a "force
CD403 25.2.2.1 majeure" (as it might well be in other contracts), it would
Summarising, the Contractor is the watchman in charge be a Relevant Event (CD 410).
of time. He bears responsibility for raising the alarm as soon
as any time at all will be or has been lost, even if he himself If a totally unexpected and extremely unusual delaying
loses it. He must promptly provide the Employer with the event arises outside either party's control which cannot be
latest picture in clear form concerning the cause and effects slotted into clause 25 with its listed Relevant Events then
of the delay. legal advice should be sought if the effects are substantial,
particularly if clause 28.1.2.1 becomes applicable, and no
All the Employer has to do is to promptly, carefully and decision by the Employer under either clause should be
fairly judge whether on the information given to him he is taken until such advice has been received.
obliged to shift the Date for Completion onwards because
of a Relevant Event to allow more time to elapse before the Exceptionally adverse weather
CO 405
right to recover liquidated and ascertained damages for any
overrun comes into play. If the Employer lacks the infor- The operative words here are "exceptionally" and "ad-
Upon receipt of all this the Employer is obliged to give mation or if the information lacks evidence of a Relevant verse". There is nothing to restrict the extraordinary
the Contractor an extension of time which is fair and Event being the cause, or if an omission of work reduces conditions to the site of the Works. There is no right to
reasonable if; time rather than increases it, the Employer may (but is not grant any extension of time due to ordinary foul weather.
1. delay is attributable to a Relevant Event and 2. the bound to) inform the Contractor accordingly- Such action
delay is likely to cause the completion of the Works to will confirm the Employer has not failed to considerthe
overrun beyond the due Date. Contractor's notice and information which, if he did, would
be a breach.

22
If the Contractor is due to his own dilatoriness or fault clause 22B or 22C if operable would place the loss/damage commotion which causes loss or damage may rank as a CD
already in delay causing an overrun into winter-time, with risk upon the Employer's shoulders but the question of 410 Relevant Event.
its greater chance of or incidence of exceptionally adverse time would remain open. The words of CD 410 contain no
weather, the Employer faces a difficult problem. The words exception or proviso concerning negligence to disqualify If a strike affects one particular maker 'A' of standard
of CD 409 do not, as they well could, expressly debar the the Contractor from an extension. Such words do appear in goods but not another maker 'B' of the same goods the
Contractor from any award in such circumstances. How- clause 28.1.2.2 (CD 559) and their omission therefore from Employer may under CD 399 and CD 438 be entitled to
ever, it seems wrong to grant an extension of time where CD 410 must be deliberate and aimed at allowing exten- require the Contractor to go to maker 'B' even if that
earlier misdemeanours or lack of endeavour can be con- sions of time where "Perils" cause delay even if negligence source is more expensive and not to grant any extension
nected directly to the event. It would appear possible to on the part of the Contractor (or Ms sub-contractor) is unless the entire supply situation was affected by the strike.
utilise CD 399 to disqualify the Contractor from any evident. However, the position under CD 413 is quite different
award of time for exceptionally adverse weather which where a design team go on strike, nevertheless the words of
could have been avoided but for earlier dilatoriness. Where loss or damage occurs to the Contractor's (or his
CD 428 are strong ones and difficult to ignore.
sub-contractor's) own or hired temporary buildings or plant
More complex circumstances may arise in which differ- there are no words in CD 410 confining loss or damage to If a civil commotion affected trades under CD 411/2 or
ing Relevant Events are intertwined with CD 409 and with the Works (or unfixed materials or goods) in the way clause persons engaged under CD 413, causing the whole or sub-
delay caused by the Employer himself. In such cases the 22 intended. Thus, if a Contractor's tower crane suffers stantially the whole construction of the Works to be sus-
Employer should insist the Contractor, under CD 403/4/5, damage due to a Clause 22 "Peril" and delay ensues, it pended for a continuous period likely to exceed the length
openly lays out all the causes and their effects upon each would appear the Contractor is entitled to an extension of named in the Appendix 1, the Employer would be justified
other taking into account the various Events and other time. in vigorously employing CD 438, particularly in the light
causes, their effects, the Contractor's own dilatoriness, his of clause 28.1.2.3.
breach of CD 399, the faults of the Employer and their However, the separate obligation of the Contractor to
effects upon the matrix of matters. This "picture" to be "use constantly his best endeavours to prevent delay in the Compliance with Employer's instructions
produced by the Contractor should enable the Employer progress of the Works" stands as a limiting device for the
to form his own opinion in the way required of him under Employer faced with applications from a Contractor under
the Contract in matters of delay to the Works. clause 25 for more time where delays are basically of his
own making.
Clause 22 Penis
Civil commotion . . . strikes etc
Civil commotions are uncommon but strikes are not. A civil
loss or damage occasioned by a V one The delays arising from instructions listed in CD 414 are to
or more of the Clause 22 Perils be segregated by the Contractor from those (if any) arising
CD 410 25.4 3 civil commotion, local combination of under CD 415/6 and 417/8. Furthermore, any delay arising
workmen, strike or lock-out affecting
any of the trades employed upon the from simply awaiting such an instruction is to be segregated
Works; or and made under CD 419/20/21. Under provisional sum
The "Perils" that rank as Relevant Events are those listed in CD 411 25.4.4 claims care must be taken to make due allowance only for
clause 1.3 that cause any loss or damage. CD 410 des not the extra time, ie additional to that already envisaged by
restrict the loss or damage to work executed or to unfixed civil commotion, local combination of
workmen, strike or lock-out affecting
the Contractor for the work provisionally included at the
materials or goods. any of the trades engaged in the prepa bid stage.
ration, manufacture or transportation of
If loss or damage is caused to any work, temporary any of the goods or materials requited
for the Works
If instructions cause any serious suspension clause
buildings, plant, or unfixed materials etc by any reason CD 412 25.4.4 28.1.2.4 may loom before the Employer to give the Con-
unlisted in the definition under clause 1.3 (eg, vandalism, tractor a right to determine his own employment once the
theft) then the cause is not a Relevant Event under CD 410. civil commotion, local combination of
period of suspension named in Appendix 1 is equalled.
workmen, strike or lock-out affecting
Certain of the listed reasons which rank as a Relevant any persons engaged in the preparation Careful segregation of the causes of delay and tlieir
Event could occur due to the Contractor's (or his sub- oi the design of the Works
CD 413
effects is essential in view of the Contractor's rights to
contractor's) negligence (eg, fire, flood). In such cases 25.4.4
recoup loss and/or expense in certain cases, under clause

23
26, although it must be emphasised that time awards However, the risks for the Contractor in embarking upon to a breach of the Contractor's obligation to distantly
granted under clause 25 do not automatically open the such a course are extremely high where technical disagree- use his best endeavours to prevent delay in the progress
door to clause 26. ment exists. The uncertainty generally renders the right of the Works. This would also prejudice the Contractor's
The two clauses are quite capable of operating indepen- ineffectual. position under clause 26, although he could pursue loss
dently of one another but may on occasions be unified in Awaiting etc at common law.
matters of time and money. In the case of the discovery necessary instructions, decisions etc from the The Employer should, however, be wary if an applica-
of antiquities clause 34 clearly operates quite separately tion to recover loss etc is made promptly by the Contractor
even from clause 26, dealing within its own walls with the under CD 463 but no formal notification of delay is made
loss and/or expense arising from discoveries of objects of under CD 400 quoting CD 419 as a Relevant Event. Any
interest etc, requiring the Employer to declare what exten- serious breach of the Employer under clause 25.4.6 may
sion he awards so clarifying the questions to be answered bring clause 28.1.2.5 into play.
in ascertaining the loss.
including a statement CD 31;
Delayed permissions or approvals of any statutory body
Compliance with instructions to open up or test decision unde

delay in receipt of any necessary per-


compliance with the Employer's instruc- compliance with the Employer's instruc- mission or approval of any statutory
tions under statements CO 147/8 in tions under statements CD 147/9 and 150 body which the Contractor has taken
CD 420 25.4.6
regard to the opening up for inspection of in regard to the testing of any woik, all practicable steps to avoid or reduce
any work covered up (including making materials or goods (including making
CD 422 25.4.7
good in consequence of such opening up); good in consequence of such testing); CD
CD 415 25.4.5.2 417 25.4.5.3

The words in CD 422, requiring the Contractor to take all


practicable steps to avoid or reduce delay, link up with the
unless
words of CD 399 and possibly those of CD 438. If the
the inspection showed that the work, the test showed that the work, materials Contractor does not "constantly" pursue the statutory
materials or goods were not in
dance with this Contract
accor- or goods were not
this Contract
n accordance with
body he may lose his right to an extension of time. In any
The proviso in CD 421 is clearly crucial here. If delay is case the Contractor bears the risk of any loss and/or expense
CD416 25.4.5.2 CD 418 25.4.5.2
evident, and the requirements of the proviso have been met he may incur.
in full, the Contractor is clearly entitled not only to any
Statement CD 415 does not apply to work wrongfully due time extension but also (if application is made) to re- Work (not part of this Contract! by the Employer or others
covered up by the Contractor (eg, in contravention of coup under clause 26.2.7 any suffered loss and/or expense. employed or engaged by the Employer
the Building Regulations). The provisos in CD 416 and If on the other hand a dilatory Contractor in delay was
418 are crucial. The inspection or test may not really and further delayed by instructions, decisions, information etc This provision slots directly into clause 29 where the Em-
comprehensively show the work etc when exposed to view not being promptly issued by the Employer and the proviso ployer, in his Requirements, either has reserved rights to
is clearly to blame or at fault. Expert technical opinions CD 421 had not been complied with, the position is not at have work going on, or, with the Contractor's consent,
may be needed to determine whether or not, on balance, all clear. arranges for work not part of the Contract to go on.
the work is at fault and whether the extent of opening up If the Contractor inventively refuses an extension of
and/or testing was entirely necessary or justified. time preferred by the Employer, to cover the Employer's Ihe execution of work, not forming part
of this Contract, by the Employer him-
The time taken in such tasks may need to be partly con- own dilatoriness, the Contractor may (particularly where self as referred to in statement CD 593.
or failure to execute such work; or
sidered as qualifying for an extension of time. Furthermore, heavy liquidated damages are payable and high inflation CD 423
25.4.S.1

under clause 26 the Contractor may qualify for reimburse- is occurring) claim that time is "at large" due to the Em-
ment of loss and/or expense arising from unjustified ex- ployer's breach. The Contractor may also state clause 25 the execution of work, not forming part

posing or testing. cannot be operated without the Contractor's CD 421 of this Contract, by persons employed
or otherwise engaged by the Employer as
applications. referred to in statement CD 595, or
If serious suspension of work occurs due to a 'false failure to execute such work

alarm', inspection or test the Contractor may, under clause The words of CD 415 may rescue the Employer in that CD 424 25.4.3.1

28.1-2.7, claim entitlement to terminate his own employ. a failure to apply for necessary instructions could.amount

24
Under CD 400 the Contractor is obliged to notify the The important words in this provision are: essentials arising during the progress of the Works. The Con-
Employer of the likelihood of delay to the Works' progress tractor is under CD 399 expected to be on his toes and
due to failures under clause 29. If the Employer engages "labour which is essential" (CD 426) and
aware of shortages trends, and if necessary should buy in
others who cause delay he should be able to pass the "materials fuel or energy essential . . ." (CD 427)
materials etc ahead of time or reschedule tasks involving
damages down to the one causing the delay. The provision deals with the industrial difficulties essential labour to avoid or reduce delay. There is a difficult
If a separate application under clause 26.2.3.1 is pro- experienced in the recent past of fuel shortage, power line between the "best endeavours" of the Contractor
perly made the Contractor is entitled to recoup his loss cuts and restrictions in the supplies of energy essential which would not cost him any direct increase in expense
etc, and if a serious delaying breach occurs under clause to construction work. Any order imposed by the Govern- and those endeavours which would cost more. Neither CD
29 then clause 28.1.2.6 may be brought into play. ment to affect the availability of essential labour, materials, 399 nor CD 438 specifically mentions whether the Contrac-
fuel or energy, will, if causing delay in progress, be classed tor is expected to stand any unforeseen costs incurred in
as a Relevant Event. preventing delay or in ensuring his progress is maintained.
Failure or delay by the Employer in The supply of mate-
rials etc Where the Employer is not to blame the Employer certainly
Inabilities to secure essential labour materials or goods cannot be required to stand any sums arising under CD 399
or 438 unless he expressly agrees to do so.
the Contractor's inability for reasons
beyond his control to secure labour
essential to the proper carrying out of
There is a link between this provision and clause 8 under
the Works, which leasons the Contrac the words "so far as procurable". The Employer should be
tor could not reasonably Have foreseen
at the Date of Tender; or wary where the Contractor states certain essential materials
CD 428 25.4,10.1
have become unprocurable rather than difficult to obtain
The Employer may write into his Requirements, or there (see commentary on this under clause 8 earlier).
may be written into the Contractor's Proposals, an arrange-
ment whereby the Employer supplies certain materials or Statutory obligations by local authorities or undertakings
goods for the Works.
The Employer should in these circumstances ensure if
he purchases special materials etc, unobtainable elsewhere,
that the contract of supply covers the risk he runs in this The words "beyond his control" are crucial, so too are the
Contract, of an extension of time being required and words "could not reasonably have foreseen". Both phrases
liquidated damages lost, also loss and/or expense being must apply. Not only must the inability to secure essential
caused the Contractor due to his regular progress being labour, goods or materials be beyond the Contractor's
affected if the materials are awaited, and in serious cases control but also it must be a state of affairs he could not
clause 28.1.2.6 might be invoked to raise enormous liabi- reasonably have foreseen at the Date of Tender, which Date
lities. must be inserted in Appendix 1 by the parties.
This Date may be set before the day for handing in the
Government imposed restrictions
Tender. Any eventualities undeclared or not known of 10
Care should be taken in differentiating where a local autho-
days prior to the date for handing in the Tender may there-
rity or statutory undertaking is carrying out work "in
fore qualify, since from footnote (v) in the Appendix it
pursuance of its statutory obligations" or is otherwise
seems intended an inability foreseeable from 10 days before
carrying out non-statutory activities under contract with
the Tender Date until the Date of Tender would rank as
the Employer.
being unforeseeable. Obviously in such cases the Employer
may require the Contractor to negotiate and settle the In the former case their dilatoriness or failure to carry
financial effects with him before their signing of the Agree- out such obligations is to be considered under CD 430/1.
ment. In the latter case their dilatoriness or failure would fall
under CD 424 (clause 25.4.8.1) provided they were pro-
CD 399 and CD 438 may be utilised by the Employer perly employed under clause 29; if not, the Employer
if the Contractor complains of delay due to shortages of would "have no right to operate clause 25 at all and the

25