How to Survive during Construction
EKJN Architects LLP, Project Managers and Principal Designerss. Bryerton House, 129 High Street, Linlithgow, EH49 7EJ. ..Tel: 01506 847151

Like most chartered architects EKJN use the Standard Form of Building Contracts published by JCT/SBCC when administering construction projects. These are a suite of standardised construction contracts which come in various versions for use on large, medium and small projects.

They are, in effect, the rules of the game for clients and contractors, with the architect acting as the umpire.

Most of the administration of the contract will be done by the architect, but there are a few simple rules that the client and contractor need to bear in mind, to make sure we all come out as winners:

The Contractor’s Price:

The contractor’s price for the job is a FIXED price. This price is recorded in the contract alongside a list of the drawings that the contractor was given at the time of compiling his price. The price is NOT an ‘estimate’.

The drawings are not ‘draft’ designs. Both the price and the design are FIXED by the contract.

HOWEVER - Although the price is a called a ‘fixed price’ it is allowed to vary if the scope of the contractor’s work gets changed. If the architect tells the contractor to do something extra or different then the contractor is allowed to vary his price accordingly. Such changes are called VARIATIONS.

Variations:

The ARCHITECT holds control over what the builder is being asked to build AT ALL TIMES.

Variations are only valid if they are recorded in writing, are signed by the architect and are delivered to the contractor’s registered office.

Instructions given by the client to the site labourers will NOT count as variations because clients and labourers do not always anticipate the full implications of the changes they propose (eg cost, programme, and safety implications to name but three).

Work which the contractor decides to do without having received a valid instruction from the architect will NOT count as a valid variation, and will not be paid for.

The architect can give instructions verbally to the workers on site but such instructions are only valid if backed up by a formal written (and signed) variation which should be issued within 7 days.

If the clients want to vary some aspect of the work they must communicate with the architect first, who will advise them on the likely time/cost implications of the change and will then issue instructions to the contractor as appropriate. For effective project management this process should NEVER be short-circuited.

Properly written and signed variations issued by the architect are called Architect’s Instructions (or A.I.s for short). They are usually issued on bright orange paper so that they can’t be overlooked or mistaken.

Payments:

The architect holds control over the purse strings for the project.

Each month the architect will visit the site, assess the amount of work that has been correctly completed, compare this to the contractor’s price breakdown and then confirm the amount that the contractor is to be paid. This confirmation is called an INTERIM CERTIFICATE. The architect sends a signed copy of the Interim certificate to the client and the contractor so that they both know where they stand.

The client should only pay the contractor the sums of money that the architect authorises on ‘Interim Certificates’, no more, no less. The figures on the contractor’s invoice must match the figures on the architect’s Interim Certificate.

Under the rules of the game defined in the standard form of contract the builder never gets paid in advance under any circumstances. He should never get paid for work that is not yet undertaken. He should never get paid for work that is substandard.

The client should NEVER pay one of the contractor’s workmen direct under any circumstances.
The client should not bow to pressure from any of the construction team to part with any money unless it has been authorised by the architect on an Interim Certificate, not during the contract nor after the completion date, not EVER.

Inspect or supervise?

Periodic inspections by an architect will not turn an incompetent contractor into a competent one, and will not absolve the contractor of his responsibilities for providing good quality workmanship in accordance with the requirements of the contract.

An architect’s job is to undertake ‘periodic inspections’. This usually means visiting the site once a week to check progress, to answer any queries the contractor may have and to check for obvious signs of bad practice or poor workmanship. It is important to realise that the architect does not supervise the day-to-day activities of construction team – that role falls to the contractor.

A competent and conscientious contractor can be relied upon to pay attention to the architect’s drawings/specifications and to ask for clarification if anything is not clear.

Practical Completion:

At some point the construction work will be deemed to be ‘complete’- we hope!

This is termed PRACTICAL COMPLETION in the contract, but the term is not specifically defined. EKJN use the following definition:

The work is deemed to have reached Practical Completion when the building is complete for all practical purposes save for various minor items of incomplete or defective work, the completion or rectification of which will not hinder the occupants’ use or enjoyment of the building unreasonably.

If the builder has overrun the intended completion date without agreeing it with the architect first then the client is allowed to deduct a sum of money from the final bill for each week of overrun. It’s worth making sure that all the contractors, sub-contractors, labourers and suppliers are aware of this.

The defects rectification period:

After a project reaches Practical Completion the contract allows the client a period of time (6 months on small contracts, 12 months on large contracts) to report any defects. This is called the defects rectification period.

The contractor has a legal obligation to repair any defects that are found in this period. The architect will keep a rolling list of all the defects that have come to light.

During the defects rectification period the client is allowed to hang on to 2½% of the money, which only gets released when the architect issues the Final Certificate.

Final certificate:

When all the defects have been found and repaired and all the variations have been analysed and priced the architect will bring the whole process to a close by issuing a Final Certificate.

This doesn’t mean that the architect is guaranteeing the quality of work, it simply means that everything that needs to be done has been done, and the contractual procedures are at an end.

Common Problems During Construction

How to Keep Control of the Cost:

Don't add extra work. Obviously extra work results in extra expense.

Don't make numerous small changes to the work proposed. Contractors will often inflate their prices for small changes, partly because small changes are genuinely more expensive in terms of materials and labour and partly because there's less incentive (or opportunity) for them to seek truly comepetitive prices during the construction phase.

Don't disrupt regular progress on the site by making regular changes and/or putting obstacles in the way of the contractor’s progress. Disruption = delay = extra expense.

Don't assume that the contingency sum is available to spend on extra ‘bells and whistles’ in the building. The contingency fund is intended to cover the costs arising from gaps, errors, inconsistencies and omissions in the contract documents. Such gaps, errors, inconsistencies and omissions are inevitable however comprehensive the documents are, so spending the contingency fund on extra ‘bells and whistles’ will expose the client to potential cost over-runs.

The best way to keep the cost of a construction project down is to prepare a detailed set of drawings, specifications and quantities before the construction work starts and not to vary it at all.

Only the architect has the power to give valid instructions to the construction team. The architect is in a position to understand the wider implications of each variation to the design in terms of aesthetics, costs, contracts and programmes.

How to Avoid Delays in Progress

Don't Add extra work. Obviously extra work results in extra time being needed.

Don't make numerous small changes to the work proposed. Contractors will be entitled to extra time if regular progress is disrupted by un-planned changes. Good contractors will have all their materials pre-ordered and all their subcontracts set up within the first week or two of a contract. Small changes can therefore have big impacts.

Delays, extra time, damages and loss-and-expense.

If a delay is caused by variations instructed by the architect then the contractor is entitled to claim extra time. The contractor is also entitled to claim ‘loss and expenses’ to cover his extra overheads that relate to the extra programme time.

If a delay is caused by the contractor’s failure to manage the works efficiently then the contractor is not entitled to claim extra time. Under these circumstances any resultant overrun of the programme will allow the client to claim ‘liquidated and ascertained damages’ from the contractor. The figure for liquidated and ascertained damages is pre-agreed as a weekly rate and usually includes an allowance for the architect to cover the cost of the architect’s extra inspections that relate to the contractor’s delay.

If a delay is caused by ‘exceptionally inclement’ weather the contractor is entitled to claim extra time, but is not entitled to claim ‘loss and expense’ to cover his extra overheads.