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Posted by Manny Singh

NEC Option A – A Comprehensive Overview

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NEC Option A: Priced Contract with Activity Schedule You’re working as either a Project Manager or Quantity Surveyor, with a leading developer, who often work under the NEC form of Contract. You’ve decided NEC Contract Option A is best suited to your project. With pre-construction commencing...
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Posted by Jon Williams

JCT Payment Terms

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In the latest iteration of the JCT suite of contracts (JCT16), there were three key changes from (JCT11). These changes were: The introduction of a Common Valuation Date or “IVD” Interim Valuation Date, which intends to align the cashflow throughout a project. The frequency of applicatio...
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Posted by Dean Suttling

Provisional Sum

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Provisional Sum - When and how should you use them? Provisional sums are perceived as difficult to manage, to understand and to execute. Should you only include them in the overall price as a last resort? Whilst they are appealing as lump sum items, Provisional Sums are in effect risk items wher...
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Posted by Jon Williams

Bill of Quantities

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Your essential guide to producing a Bill of Quantities A Bill of Quantities (BoQ / BQ) is a document prepared to allow the quantification and costing of construction works and may be prepared during several stages on a project for all of the works or a sample of the works. Typically, BoQs are pr...
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Posted by Jon Williams

JCT Insurance: A Breakdown

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Construction can be a highly complex and dangerous activity. Each construction project will have its own complex risks inherited from its design and surroundings. These risks may be to persons, being site operatives, visitors to site or members of the public, or risks to the actual construction work...
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Posted by Dean Suttling

NEC Option C – A Comprehensive Overview

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NEC Option C: Target Contract with Activity Schedule NEC Option C is a cost reimbursable contract set against a target contract price, more commonly known as the target cost. The NEC defines cost through its schedule of cost components (SoCC). There is also definition as to what is allowable and...
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Posted by Yashwant Tohooloo

JCT vs NEC: Which is best for your project?

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JCT and NEC contracts are standard form of contracts. Both contracts provide a variety of options that suit the needs and requirements of clients (employers). However, you do need to understand project requirements and the level of control required by the client when selecting a contract form and a ...
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Posted by Manny Singh

NEC Contract Options

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You’ve heard about the NEC Contract before (and no, we’re not talking about the big tin shed in Birmingham!) but you usually use the JCT. This article provides an overview on the NEC Contract options, advantages/disadvantages and whether it’s the best option for your upcoming project. About t...
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Posted by Paul Heming

Contract Acceptance by Commencement

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The Scenario We put forward the following scenario to Jason Farnell, Adjudicator and CEDR Accredited Mediator. I'm a Main Contractor working on a JCT Standard Building Contract (2016). I've agreed a price and programme with a Subcontractor following receipt of their quotation and having held a...
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Posted by Paul Heming

Management Contracting Procurement

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Management Contracting is a form of construction procurement where the Client for a project employs different Subcontractors directly. The Client has a Main Contractor in place that is responsible for managing the Subcontractors, but is not in contract with them in the same way as with traditional p...
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Posted by Paul Heming

The JCT and Pay Less Notice

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Payment in the construction industry has been a hot-topic for many years. Whether it’s payment between Employer and Main Contractor, or among Main Contractors and Subcontractors, the chance of a dispute remains higher in construction than it does in most industries. In response to this, the UK ...
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Posted by Paul Heming

Two Stage Tendering

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Two stage tendering, sometimes referred to as “negotiated tendering” or “two stage selective tendering”, is a unique construction procurement method because it takes place in two separate and clearly defined stages. In two stage tendering, the Contractor is involved to enhance buildabilit...
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Posted by Paul Heming

Loss and Expense and LADs in JCT Contracts

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The Scenario We put forward the following scenario to Jason Farnell, Adjudicator and CEDR Accredited Mediator. "I'm a Main Contractor working on an unamended JCT Design and Build Contract (2016). The project has achieved Practical Completion 8-weeks late owing to a variety of delays by various Su...
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Posted by Paul Heming

The JCT and Extensions of Time

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Most construction contracts will suffer some form of delay during its lifecycle. In all Joint Contracts Tribunal (JCT) form of contracts, a delay event is called a “Relevant Event” and the extension of time is defined as an “Adjustment of the Completion Date”. Whether during the design, t...
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Posted by Paul Heming

The JCT and Relevant Events

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The construction industry is full of jargon and it can be difficult to understand all the acronyms and terms used. It’s even more difficult when it comes to construction contracts. We’ve written this article to provide clarity on the term “Relevant Events” and what it means in Joint Contract...
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Posted by Paul Heming

Dealing with Errors, Divergencies and Discrepancies in Variations

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The scenario We put forward the following scenario to Jason Farnell, Adjudicator and CEDR Accredited Mediator. "I'm working on an amended JCT D & B Subcontract where we're contracted to clad the entire building envelope from Ground to Roof. An area of our scope had an inconsistency - part ...
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Posted by Paul Heming

NEC Contracts and Cash Flow Management

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"I'm a Main Contractor Tendering for a project where the Contract will be an NEC Option A Contract. We want to understand what the potential impacts of this Contract Type are in terms of Cash Flow and, the best management practices generally." That’s the scenario that we put forward to Jason ...
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Posted by Paul Heming

Design and Build Contracts – Increase your profit

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A Design and Build Contract is a contract where the Main Contractor offers to design and build a project for a price that includes both the design and construction. What I found striking throughout my career is the lack of contractual knowledge of even some of the most highly-skilled construction...
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Posted by Paul Heming

Can I claim for loss of profit in variations?

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The scenario: I’m working on an unamended JCT 2016 Building Contract with a £3m lump sum Contract Sum. The Employer is looking to amend an element of the works and has issued an instruction to omit a relatively large portion (approximately 10% in financial terms) of our scope of works. These ...
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Posted by Paul Heming

The client is late issuing their Notice to Commence works on site – what should I do?

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Ever wondered the best way to respond when your client is late issuing their Notice to Commence works on site? We’ve put together a real-life scenario where this happened and asked Jason Farnell, Adjudicator and CEDR Accredited Mediator, to provide actionable guidance on how you can best manage...
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Posted by Paul Heming

What happens when you are late issuing a Payment Notice?

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We've all felt that pang of dread when you realise you're late to issue a payment notice on time, and it's on a questionable subcontractor valuation that you need to issue a Pay Less notice. What are your options when that happens? Well, we put the following scenario to the experts at Commercial ...
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Posted by Paul Heming

Project Lifecycle – 12. Notices to Commence

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A Notice to Commence (NTC) is a formal communication from the Client to the Contractor stating the date the Contractor can begin work. The reason NTC’s are so important is they confirm the date when the contract performance starts and therefore, they're used to calculate the completion date and...
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Posted by Paul Heming

Project Lifecycle – 11. PCSA Agreements

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Pre-Construction Services Agreements (PCSAs) are used to appoint design and build Subcontractors to carry out services before entering into contract and tend to be used as part of a strategy to remove risk. PCSAs are generally advantageous as the early involvement of ‘Specialists’ can lead to...
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Posted by Christopher Barber

Stealth CDP

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The design element of a contract represents one of the best opportunities for a contractor to increase margins on a project. It also represents one of the riskiest areas where you can lose margin. Ever been hit by a Stealth CDP (Contractor’s Design Portion)? If you have, there’s a good chance yo...
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Posted by Paul Heming

Project Lifecycle – 6. Design Delay Claims

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Last week we discussed the various tools to use to make sure you can claim for time lost during the design period. I’m a firm believer that when you suffer delays in construction, the priority is to get an Extension of Time and following that, to recover the money associated. The question is - ...
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Posted by Paul Heming

Project lifecycle – 4. Understanding the contract

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Understanding the contract is of absolute importance to the success of your project. Do you know how many days you have to give notice of a variation? What do you do when there is a delay event – are there particular rules on this? Projects are not simple. Knowing how to act in difficult situat...
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Posted by Paul Heming

Project Lifecycle – 2. Programme Negotations

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Contract negotiation almost always involves compromise to achieve a document that is acceptable to all parties. Projects may succeed or fail as a direct result of the terms and conditions in the contract and the quality of the programme is no different. Successfully negotiating a favourable progr...
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Posted by Paul Heming

Project Lifecycle – 1. Order of Precedence

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What is Order of Precedence in Contracts? Construction Contracts are often very large and include lots of different Numbered Documents like the drawings, scope of works etc. To give these documents meaning and to rank their importance, many contracts include an ‘Order of Precedence’ Clause whic...
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Posted by Paul Heming

Payment Provisions: JCT Design & Build

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As is usual in JCT contracts there are two methods for determining payments, termed ‘stage’ and ‘periodic’ payments; both of which provide for monthly payments, the difference being in the method of determining what is to be paid.  The Contract Particulars giving the option for which paymen...
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Posted by Paul Heming

Payment Provisions – JCT Subcontracts

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The sub-contract is drafted with the intention that valuations regime under the sub-contract should be linked to the Main Contract application dates, commencing with the Interim Valuation Date immediately following the commencement of a sub-contractor’s work on site. The due date for payment is 12...
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Posted by Paul Heming

Sectional Contracts – Reading between the lines!

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CREDIT: Jason Farnell, Commercial Risk Management In the recent judgement in Vinci Construction UK Limited and Beumer Group UK Limited it was argued, under a contract which had been divided into sections, that the delay damages were ‘uncertain, inoperable and unenforceable’ and that therefore t...
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Posted by Paul Heming

Sectional Sub-Contracts – Reading between the lines!

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CREDIT: Jason Farnell, Commercial Risk Management In the recent judgement in Vinci Construction UK Limited and Beumer Group UK Limited it was argued, under a contract which had been divided into sections, that the delay damages were ‘uncertain, inoperable and unenforceable’ and that therefore t...
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Posted by Paul Heming

Design and Build – ‘He who decides, designs!’

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CREDIT: Jason Farnell, Commercial Risk Management In an un-amended JCT design and build contract, the Contractor’s obligation in respect of design is to ‘complete the design’, meaning that the Client will have prepared initial designs for the project which need to be finalised by the Contract...
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Posted by Paul Heming

Design and Build – You’re the specialist!

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CREDIT: Jason Farnell, Commercial Risk Management In an un-amended JCT design and build sub-contract, the specialist Contractor’s obligation in respect of design is to ‘complete the design’ for the sub-contract works, including the selection of the specification of materials if not described ...
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Posted by Paul Heming

Demolition Health And Safety Requirements

When working with demolition contractors, health and safety always takes paramount importance. Of course, this is the case when it comes to all types of construction, but there are specific requirements for demolition. The law states that structural alteration, dismantling, and demolition must be ca...
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Posted by Paul Heming

Deeds of Variation (DoV)

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CREDIT: Jason Farnell, Commercial Risk Management Those who can do, and those who can’t … compromise? Perhaps it is a feature of the London developer-led construction & property market, but it does seem to me to be prevalent - I am of course referring to the practice of entering into Deeds...
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Posted by Paul Heming

Redefining jurisdiction – don’t procrastinate

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CREDIT: Jason Farnell, Commercial Risk Management The recent High Court appeal judgement handed down by the Hon. Mr Justice Coulson in Mailbox (Birmingham) Ltd and Galliford Try Building Limited ([2017] EWHC1405) serves as a reminder about the structure and purpose of certain contract clauses; a wa...
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Posted by Paul Heming

Principal Designer Roles with respect to Temporary Works.

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The Construction Design and Management Regulations (CDM) are the primary regulations for managing the health, safety and welfare of construction projects. CDM applies to all building and construction work and includes new build, demolition, refurbishment, extensions, conversions, repair, decorati...
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Posted by Paul Heming

Extensions of Time – Nobody told me!

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At the beginning of a contract, when relationships are being formed and the excitement of a brand new project is enthusiastically being embraced by everyone involved, human nature will usually preclude any action that might otherwise disturb the bonhomie.  This might be understandable, but it is ce...
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Posted by Paul Heming

Retention… your money!

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It is quite extraordinary to think that despite the apparently universal disdain for it, the antiquated and out-moded practice of deduction of retention is still prevalent and endorsed by industry standard forms of contract.  In other words part of the value of the output of almost every company in...
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Posted by Paul Heming

Changes to JCT Design and Build

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JCT Design and Build Contract 2016 – What is new and how does it affect you? Plus ca change, plus ca la meme chose!  What has changed, nothing much!  The apportionment of risk between the Employer and the Contractor remains unchanged in the unamended, standard document and as always the imposi...
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Posted by Paul Heming

Manual Handling Update

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The HSE has revised guidance and produced a new toolkit to help organisations manage and mitigate against the risks associated with manual handling activities. Manual handling injuries are part of a wider group of musculoskeletal disorders (MSD’s) which covers injury, damage or disorder of the ...
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Posted by Paul Heming

Record Keeping – Who needs to? You do!

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In the competitive construction and property market only the best managed and administered companies will perform at the top end of the range of achievable margins: record keeping is a huge part of this. An industry-wide shortcoming is the maintenance of adequate records, despite the widespread a...
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Posted by Paul Heming

Payment terms – A Call to Action

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Good cash flow management is critical to the success of companies in every industry. In construction, where payment is typically received long after costs are incurred however, it is vital. Poor payment practices by larger construction firms can cause real damage to those further down the supply ...
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