Cover Page

Contents

Preface

Introduction

1 The construction industry

1.1 Introduction

1.2 Industry structure

1.3 Industry culture

1.4 Construction industry reports

1.5 The Latham reports

1.6 The Egan reports

1.7 The National Audit Office Report

2 Construction contracts

2.1 Contracts and planning

2.2 Contracts in use

2.3 The Housing Grants, Construction and Regeneration Act 1996

2.4 JCT Contracts

2.5 ICE Conditions

2.6 The Engineering and Construction Contract (NEC)

2.7 ACA Standard Form of Contract for Project Partnering PPC2000

3 Procurement methods

3.1 Procurement criteria

3.2 The design process

3.3 Procurement options

3.4 Traditional procurement

3.5 Design and build

3.6 Management contracting

3.7 Construction management

3.8 The role of the project manager

3.9 Private finance initiative

3.10 Framework contracting

3.11 Prime contracting

3.12 Partnering

Part A: Planning

4 Management and organisation

4.1 Management principles

4.2 Leadership styles

4.3 Project teams

4.4 Team building

4.5 The size of construction firms

4.6 The characteristics of firms

4.7 The small firm

4.8 The medium-sized firm

4.9 A business unit approach in a medium–large firm

4.10 The large firm

5 Tendering procedures

5.1 Introduction

5.2 Competitive tendering

5.3 Establishing contract leads

5.4 Tender pre-qualification

5.5 The tendering process

5.6 Procedures for a traditional competitive tender

5.7 Procedures for a design and build tender

5.8 Traditional competitive tendering

5.9 Decision to tender

5.10 Pre-tender arrangements

5.11 The site visit report

5.12 Tender enquiries to subcontractors and suppliers

5.13 Build-up of the estimate

5.14 Pre-tender method statement

5.15 Preparation of pre-tender programme

5.16 Build-up of contract preliminaries

5.17 Management adjudication of the estimate

5.18 Analysis of tender performance

6 Managing the supply chain

6.1 Supply chain integration

6.2 Lean construction

6.3 Fast-track construction

6.4 Subcontractors

6.5 Types of subcontractor – traditional procurement

6.6 Types of subcontractor – management procurement

6.7 Work package procurement

6.8 Forms of subcontract

6.9 Construction Industry Scheme

7 Managing risk

7.1 Risk in construction

7.2 The Turnbull Report

7.3 Project risk

7.4 Risk management

7.5 Risk assessment

7.6 Client risk

7.7 Contractor risk

7.8 Tendering risk

7.9 Health and safety risk

7.10 Fire risk

8 The planning process

8.1 Introduction

8.2 Lead times

8.3 Work breakdown structure

8.4 Planning stages

8.5 Project planning

8.6 Pre-tender planning

8.7 Pre-contract planning

8.8 Contract planning

8.9 Planning a project

9 Programming techniques

9.1 Introduction

9.2 Bar charts and linked bar charts

9.3 Network analysis

9.4 Relationships between arrow diagrams, precedence diagrams and linked bar charts

9.5 Arrow diagrams

9.6 Precedence diagrams

9.7 Line of balance (elemental trend analysis)

9.8 Time-chainage diagrams

9.9 Accelerating the project

Part B: Programming

10 Developing construction sequences

10.1 The thought process

10.2 Programme considerations

10.3 Resource considerations

10.4 Achieving continuity of work

10.5 Sequence studies

11 Method statements

11.1 Introduction

11.2 Definition

11.3 Preparation of method statements

11.4 Pre-tender method statement

11.5 Construction method statements

11.6 Safety method statements

12 Planning for safety

12.1 Introduction

12.2 Definitions

12.3 Legal framework

12.4 Health and safety policy

12.5 Health and safety management

12.6 The safety of site operations

12.7 Risk assessment

12.8 Hazard and risk

12.9 Planning the work

12.10 The Construction (Design and Management) Regulations (CDM) 1994

12.11 The CDM Regulations 2007

12.12 Health and safety training

12.13 Measuring performance

12.14 Enforcement of legislation

12.15 Accidents and incidents

12.16 Human factors

13 Planning the project

13.1 Introduction

13.2 Planning procedures within a large organisation

13.3 Pre-contract planning

13.4 Pre-contract meetings

13.5 Placing orders for subcontractors and suppliers

13.6 Site layout planning

13.7 The master programme

13.8 The target programme

13.9 Subcontractor programmes

13.10 Procurement programmes

13.11 Requirement schedules

13.12 Contract planning

14 Planning cash flow

14.1 Introduction

14.2 Client’s cash flow

14.3 Contractor’s cash flow

14.4 Cash flow forecasting

14.5 Credit terms in construction

14.6 Forecasting contract value

14.7 Forecasting the contractor’s income

14.8 Movement of money

14.9 Working capital

14.10 Improving cash flow

14.11 Forecast value and cash flow example

Part C: Control

15 Project control procedures

15.1 Introduction

15.2 Control procedures within organisations

15.3 Definitions

15.4 Types of budgets

15.5 Preparing budgets

15.6 Contract budgets

15.7 Labour, plant and preliminaries budgets

15.8 Budget control procedures

15.9 Importance of site records

15.10 Meetings as part of the control process

15.11 Key performance indicators

16 Controlling time

16.1 Introduction

16.2 Time for completion

16.3 The contractor’s programme

16.4 Milestones

16.5 Early warning systems

16.6 Progress and delay

16.7 Progress recording

16.8 Delay and disruption

16.9 Extensions of time

16.10 The ‘as-planned’ programme

16.11 The ‘as-built’ programme

16.12 Delay analysis

16.13 Delay and Disruption Protocol

16.14 Delay analysis methodologies

16.15 Delay analysis in practice

16.16 Project acceleration

17 Controlling money

17.1 Introduction

17.2 Reporting procedures

17.3 Monthly cost-value reporting

17.4 CVR terminology

17.5 Cost–value reports

17.6 CVR case study

17.7 Interim valuations using S curves

18 Controlling resources

18.1 Introduction

18.2 Labour control

18.3 Materials control

18.4 Plant control

18.5 The control and coordination of subcontractors

Part D: Case Studies

19 City Road project

19.1 Project description

19.2 Project details

19.3 Site constraints

19.4 Tender stage

19.5 Pre-contract stage

19.6 Contract stage

20 Eastlands project

20.1 Project description

20.2 Project details

20.3 Construction details

20.4 Organisation structure of the developer/contractor

20.5 Project planning

20.6 Method statement – tower blocks A and B

21 Highway project

21.1 General description

21.2 Construction strategy

21.3 Method statement (simplified)

21.4 Clause 14 programme

Index

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Preface

The aims of the first edition have not changed. This is a book for students of construction-related professional and degree courses – construction management, building, quantity surveying and building surveying alike. Students of all these topics need a basic understanding of planning, procurement and programming at some time in their career development.

The text of the second edition was extensively rewritten and restructured to reflect changes in the construction industry, and this edition has been updated and extended to include new contracts, legislation and working practices.

In this edition, special emphasis has been placed on practical aspects of construction planning and programming. New chapters have been included dealing with construction sequences, method statements and planning for safety. Extensive guidance has been provided on the identification of hazards, the management of risk and the thought process required for the effective planning of construction projects. There is a new chapter dealing with delay and disruption and this includes an introduction to the theory and practice of delay analysis.

The book has been updated for changes in commonly used construction contracts including the 2005 versions of the JCT family and the NEC 3rd Edition. Important changes to the Construction (Design and Management) Regulations have also been included. A brand new case study has been introduced which includes new topics such as vertical access planning and materials handling. A new section on construction waste has been included which introduces the statutory requirement for Site Waste Management Plans.

Our special thanks go to the directors and staff of Countryside Properties PLC and Alfred McAlpine Special Projects for their permission to use case study material from their sites and to the Totty Construction Group who helped us so generously with the second edition. The invaluable assistance of our friend and former colleague Paul Hodgkinson is gratefully acknowledged. Paul has again produced the excellent diagrams and managed to keep track of the 224 figures now in the book!

Introduction

1

The construction industry

1.1 Introduction

The effective planning and control of construction projects requires the application of systematic and logical methods and tried and tested techniques aimed at ensuring successful project outcomes for the client, the contractor and all other project participants. Control is not possible without a plan, and without a programme there is no effective means of exercising control.

Successful projects cannot happen in a vacuum, however, and no one can effectively plan and control a construction project without understanding the culture and methodologies of the industry that organises and carries out the work as well as the impact of the various procurement strategies open to the client.

1.2 Industry structure

Construction is a large and complex industry comprising many types and sizes of organisations and a diverse range of professional and other representative bodies. Clients, professional practices, contractors and specialist firms all have their own ‘agenda’ and allegiances; Walker (2007) explains the complexities of the interrelationships that can occur in construction projects between clients and their professional advisors and between the contractors and specialists they engage to construct the project.

The annual output of the UK construction industry is approximately £114 billion, which represents almost 9% of gross domestic product. The industry is also a large employer with around 1.9 million people, of which 0.7 million are self-employed. Construction has a unique structure with a small number of very large firms carrying out the majority of its turnover. It also has a very large number of relatively small firms with few criteria limiting entry to the industry.

There is a wide disparity in the standards of competence across the industry: a largely semi-skilled and itinerant workforce and a generally low standard of education and qualifications in the managers employed in construction.

The Department for Business, Enterprise and Regulatory Reform (BERR) (2007) reports that the industry is made up of some 186 000 firms of which:

The very large contractors (1200+ employees) have considerable influence on the industry as they enjoy a large share of the construction market. Consequently, the Major Contractors Group (MCG) have lined up behind the Construction Skills Certification Scheme (CSCS) in order to help promote greater competence and attention to health and safety risks. CSCS is a voluntary registration scheme whereby trainees, workers, managers, supervisors, visiting professionals, etc., can obtain the relevant colour card which enables them to gain access to MCG sites. A health and safety awareness test must be passed in order to obtain the card.

The industry has a diverse range of suppliers as well as contractors, including manufacturers of materials and components, suppliers of quarry products and ready-mixed concrete, builders’ merchants and plant hire firms. Some of the industry’s suppliers are larger than the largest contractors working in the industry and they also have considerable influence on the way the industry operates.

Morton and Ross (2007) examine the structure of the industry in detail and discuss issues such as safety, efficiency, employment and industry practices.

1.3 Industry culture

The scale and diversity of the clients, contractors, professionals and others who are involved in construction is enormous. A contractor may be a small ‘sole trader’ with an annual turnover of £100 000 or a large public company with a yearly workload of £1 billion. A client could be a domestic householder, private sector corporation or government department. The project ‘architect’ could be a single practitioner, a local authority or a large public company.

This means that there is nothing ‘typical’ about the customs and practices in construction. There is, however, one common ‘cultural’ feature at all levels of the industry and that is the ‘project-based’ nature of the industry. The whole focus is on the project; the time, cost, quality, resources, problems and solutions are all geared to the project. This brings enormous pressures on project teams, however big or small they are, to ensure that the project is completed ‘on time, on budget and to the correct quality standards’. However, more or less every project has its own individuality and peculiarities depending on the site and location, the design and type of construction, the business arrangements between the parties and the hopes and expectations of all those involved; and this ‘one-off’ nature of construction creates additional pressures.

One of the big problems in construction is the extent to which the industry separates design from production to a far greater extent than in other industries. This particular feature of the industry is still common despite the deficiencies of traditional procurement and the benefits offered by newer and more flexible approaches.

The industry is a highly fragmented project-based industry and leadership in construction comes largely from clients and not from the contractors and specialists who carry out the work. In 1998, the Construction Clients’ Forum (now the Confederation of Construction Clients) established the Clients’ Charter which sets out the minimum standards in procurement expected by clients. By registering for the charter, clients commit themselves to establishing a modern business culture with their suppliers, steady improvement of standards measured against nationally accepted criteria and the exchange of best practice experience.

Consequently, it is the clients and their professional advisors who dictate the procurement methods used in the industry and it is the contractors who have to react to the latest ‘flavour of the month’ in the context of the organisation and management of the project.

1.4 Construction industry reports

In order to stimulate debate about construction industry practices and procedures, a number of well-known reports have been published over the years, including those shown in Table 1.1.

Several of the reports published prior to Latham and Egan raised similar criticisms about the customs and practices of the industry. Banwell even suggested that a common form of contract should be adopted for use on all construction projects.

These problems, and many others, have been recognised since World War II but despite identifying the problems and proposing solutions, most of the reports have had little influence on either government or the industry over the years.

Murray and Langford (2003) discuss these reports in detail and the extent to which government has tried to shape the performance and attitudes of the industry. Brief summaries of some of the more influential recent reports on the construction industry are given below.

Table 1.1 Construction industry reports.

ReportTitleYear
Simon ReportThe Placing and Management of Building Contracts1944
Emmerson ReportSurvey of Problems Before the Construction Industries1962
Banwell ReportThe Placing and Management of Contracts for Building and Civil Engineering Work1964
National Economic Development OfficeAction on Banwell1967
Tavistock ReportInterdependence and Uncertainty1966
Latham 1Interim Report – Trust and Monies1993
Latham 2Final Report – Constructing the Team1994
Levene Efficiency ScrutinyConstruction Procurement by Government1995
Egan Report 1Rethinking Construction1998
National Audit OfficeModernising Construction2001
Egan Report 2Accelerating Change2002
National Audit OfficeImproving Public Services through better construction2005

1.5 The Latham reports

‘Trust and Monies’

Perhaps the most influential of all the reports concerning the industry and its problems is ‘Constructing the Team’ written by Sir Michael Latham (1994) who was commissioned by both government and the industry to review the procurement and contractual arrangements in the UK construction industry.

Prior to final publication of his report in July 1994, Sir Michael produced an interim report in December 1993 called ‘Trust and Monies’. This report raised concerns about the extent of mistrust between professionals and contractors and between contractors and subcontractors in construction, and also flagged up the endemic culture of late and conditional payments operating in the industry. The prevailing atmosphere of mistrust and slow payments was reported to result in disharmony in project teams, poor standards of work and poor client satisfaction.

‘Constructing the Team’

‘Constructing the Team’ is better known as the ‘Latham Report’ and its purpose was to find ways to ‘reduce conflict and litigation and encourage the industry’s productivity and competitiveness’.

The specific terms of reference for the review were to consider:

The report took account of the structure of the industry and the need for fairness, accountability, quality and efficiency and paid particular regard to:

The report runs to some 130 pages and contains 30 main observations and recommendations, with the principal emphasis being on ‘teamwork’ in order to achieve ‘win-win’ solutions.

Latham noted several issues which influence the ability of the construction industry to respond effectively to its customers’ requirements, and these can be summarised briefly as:

Some of the main points made by Latham clearly have important consequences for the planning, production and control of construction and are therefore directly relevant to this book. These include:

One of the key issues considered by Latham was the productivity of the industry, and Latham clearly considered that this is linked to the quality of design preparation and information. Inefficiency creeps in where designs are incomplete or information given to the contractor is conflicting or too late to allow proper planning of production.

An issue of major importance is conflict in the industry both between clients and contractors and between contractors and their subcontractors. Latham suggested that considerable efficiencies can be gained by making changes in ‘procurement practice, contract conditions, tighter restrictions over set-off and the introduction of adjudicators as a normal procedure for settling disputes’. He also concluded that the ‘most effective form of contract in modern conditions should include:

and that ‘subcontractors should undertake that, in the spirit of teamwork, they will coordinate their activities effectively with each other, and thereby assist the achievement of the main contractor’s overall programme. They may need to price for such interface work.’

The conclusions of the review were clearly extensive and led to the formation of the Construction Industry Board (subsequently replaced by the Strategic Forum) and an extensive programme of initiatives including:

Some of the Latham recommendations were included in the Housing Grants, Construction and Regeneration Act 1996.

1.6 The Egan reports

‘Rethinking Construction’

‘Rethinking Construction’ was published in July 1998 (Construction Task Force 1998) and represents the work of a special task force which was set up by the government to identify the scope for improving quality and efficiency in construction. The task force was chaired by Sir John Egan, hence the popular title for the report – the Egan Report.

The Egan Report at 40 pages is certainly not as comprehensive as its predecessor, the Latham Report, but is no less searching and probably considerably more controversial. It contains many ‘home truths’ but may also be said to contain unfair criticisms, particularly with respect to comparisons with factory-based manufacturing industries, such as the motor industry.

Latham looked at designing an infrastructure for the industry aimed at removing the inefficiencies and inconsistencies, especially in terms of client briefing, better design management and more coherent project strategies. In ‘Rethinking Construction’, there is no industry ‘blueprint’ for change but the Construction Task Force, which produced the report, took the lead on a number of new initiatives including:

The Egan Report has probably had more publicity than the Latham Report and certainly there has been plenty of action as a result of the report, including the introduction of key performance indicators and demonstration projects exemplifying best practice.

The Egan Report undoubtedly recognises both the good and bad in construction and seeks to build on those aspects of the industry which are excellent in a worldwide context. However, on balance, the conclusion of the report is that the industry as a whole is underachieving and that there should be radical change in key areas of its performance. These include quality, productivity, cost and time certainty, and health and safety.

In the Executive Summary, the Egan Report makes the following observations:

The Egan Report identified five key drivers of change needed to set the agenda for the industry:

(1) Committed leadership
(2) A focus on the customer
(3) Integrated processes and teams
(4) A quality-driven agenda
(5) Commitment to people

Among the year-on-year targets proposed by Egan were:

One of the problems with the Egan Report is that the emphasis is placed on the ‘top-end’ of the industry, whereas Latham looked at the fundamental problems of the entire industry. So while Egan has led to the development of several good ideas and worthwhile aims, the concepts may take some time to filter down to the lower echelons of the industry.

‘Accelerating Change’

This report – the second Egan Report – presents the first year’s work of the Strategic Forum for Construction (2002), which replaced the now defunct Construction Industry Board that was set up following the Latham Report.

‘Accelerating Change’ identifies ways of increasing the pace of change following the recommendations in ‘Rethinking Construction’, reports on the progress made to date and sets out a strategic direction with targets. The report identifies three main drivers to accelerate change in construction and introduce a culture of continuous improvement in the industry:

The vision and aspirations set out in ‘Accelerating Change’ emphasise the need for collaboration between the whole supply team, including clients and manufacturers. The report represents a ‘manifesto for change’ for all involved in construction, including government, schools and further/higher education and professional bodies.

The strategic targets identified in ‘Accelerating Change’ include:

The report suggests six key steps that clients must consider when considering whether or not to build:

(1) Verification of need
(2) Assessment of options
(3) Develop procurement strategy
(4) Implement procurement strategy
(5) Project delivery
(6) Post-project review

The effectiveness of post-Egan initiatives is examined by Morton and Ross (2007).

1.7 The National Audit Office Report

‘Modernising Construction’

This 103-page report by the National Audit Office (2001) recognises that there are inefficiencies in the traditional methods of procuring and managing major projects and, especially, in the practice of awarding contracts on the basis of lowest price. The report suggests that this does not provide value for monies in terms of either initial costs or through-life and operational costs.

According to the report, 73% of construction projects carried out by government departments and agencies were overbudget and 70% were delivered late. It is also reported that a benchmarking study of 66 central government construction projects (total value of £500 million) carried out in 1999 showed that three-quarters of projects exceeded their budgets by up to 50% and two-thirds exceeded their original completion date by 63%.

The report suggests that a major contributory factor to this poor performance is the adversarial relationships that exist between construction firms, consultants and clients and between contractors, subcontractors and suppliers. It is further suggested that the entire supply chain must be integrated and that risk and value must be managed in order to improve buildability, reduce accidents and drive out waste.

‘Modernising Construction’ identifies that government departments and agencies have adopted three main strategies for ensuring more collaboration, integration and value for monies in the procurement of construction services, including:

The report emphasises the benefits of long-term collaborative relationships between clients and contractors (partnering). It is emphasised that partners should be appointed competitively and that a hands-off but eyes-on approach is needed. A key factor in the success of partnering is continuous improvement and open-book accounting where cost and efficiency gains are auditable through access to the contractor’s records.

References

Construction Task Force (1998) Rethinking Construction. Department of Trade and Industry.

Department for Business, Enterprise and Regulatory Reform (BERR) (2007) Construction Statistics Annual. The Stationery Office.

Latham, M., Sir (1994) Constructing the Team. HMSO.

Morton, R. & Ross, A. (2007) Construction UK: Introduction to the Industry. Blackwell Publishing.

Murray, M. & Langford, D. (2003) Construction Reports 1944–1998. Blackwell Publishing.

National Audit Office (2001) Modernising Construction. Report by the Comptroller and Auditor General HC 87. The Stationery Office.

Strategic Forum for Construction (2002) Accelerating Change. Rethinking Construction.

Walker, A. (2007) Project Management in Construction, 5th edn. Blackwell Publishing.

2

Construction contracts

2.1 Contracts and planning

A contract is a means of formalising the relationship between the contracting parties in which the rights and obligations of the parties are agreed and the balance of risk between the parties established. Formal contracts establish how administrative procedures and the serving of formal notices are to be conducted and they establish mechanisms for dealing with contract payments, delays, compensation and disputes. The choice of contract has an important bearing on the planning of a construction project for a number of reasons:

From a financial planning point of view, the form of contract is important because payment terms and payment periods are specified and the retention percentage is stated. During the project, the contract explains procedures for dealing with delay, how contract variations are to be dealt with and what entitlements the parties have to damages for delay.

A wide variety of contracts are used for construction projects, including a large number of standard forms. The best-known main ‘families’ of standard contracts are the JCT (Joint Contracts Tribunal), ICE (Institution of Civil Engineers) and the ECC (New Engineering Contract (NEC) Engineering and Construction Contract) families, which together produce a bewildering variety of contracts for use in different circumstances. Other ‘families’ of contracts include:

The Architects and Surveyors Institute (ACI), the Joint Council for Landscape Industries (JCLI), the Federation of Property Services, Defence Estates and NHS Estates are other producers of standard contracts.

2.2 Contracts in use

Every two years since 1985, the Royal Institution of Chartered Surveyors (RICS) has commissioned a survey to determine trends in the use of standard forms of contract and methods of procurement in construction. The survey is a representative sample of new build and refurbishment work carried out in the UK but it excludes civil engineering and routine maintenance work.

‘Contracts in use’ (RICS 2006) found that a standard form of contract was used on 92% of building projects (97% by value of contracts). JCT standard forms were by far the most popular, accounting for 71% of contracts by value. There appears to have been a marked increase in the uptake of the NEC Engineering and Construction Contract for building work (13% by value), which was heavily promoted by the Latham and Egan reports. It appears that the NEC is the most commonly used contract for civil engineering work in the UK and the NEC User Group (www.neccontract.co.uk) now has nearly 500 members. The NEC is also widely used in a number of countries abroad.

The RICS survey indicates that lump sum contracts are popular for smaller projects and that the use of drawings and specification dominates this market. Design and build predominates in the mid-sized project market but traditional bills of quantities have, surprisingly, enjoyed a resurgence in popularity. There has been a significant increase in the use of contracts on the basis of approximate quantities. For larger projects, construction management or some sort of design and build arrangement remains popular but management contracting is reported to be in terminal decline.

Design and build still represents over 40% of the market by value but partnering and target contracts have gained significantly in popularity. Since the last survey, it seems that formal partnering arrangements have gained in popularity and use of the ACA PPC2000 contract has sharply increased. Partnering appears to be most popular in the £2–20 million contract value range and approximately 24% of contracts between £10 and 20 million employed the PPC2000 contract. Figure 2.1 illustrates the relative popularity of different standard forms of contact for building work.

2.3 The Housing Grants, Construction and Regeneration Act 1996

Whilst not entirely devoted to construction, the so-called ‘construction act’ is recognised as an important landmark for the industry because it contains specific provisions that relate to the way the industry conducts its business. The ‘construction’ provisions included in the Act are generally credited to the efforts of Sir Michael Latham and others and they impose, for the first time, statutory requirements that relate to the way construction contracts are conducted.

The Act is in five parts and the Latham provisions are in Part II – Construction Contracts under Sections 104–117. This legislation applies to all construction contracts whether main or subcontracts and also to contracts for design or other professional services.

The Act confers certain statutory obligations and entitlements on parties to such construction contracts and where suitable clauses are not present in a contract, they are provided by regulations called the Scheme for Construction Contracts. The scheme represents the ‘back stop’ where perhaps standard conditions of contract are not employed or where contracts are entered into on the basis of an exchange of letters.

Figure 2.1

c02_image001.jpg

The issues covered by the act include:

Most standard forms of contract have been amended to bring them into line with the act. In particular, the JCT forms were changed to include the right of interest on late payments and the right to suspend work, subject to notice, if payment is not received on time.

2.4 JCT Contracts

JCT 2005 Standard Building Contract

The JCT 2005 Standard Building Contract With Quantities (SBC/Q) is a lump sum contract based on bills of quantities. A remeasurement contract is possible using either the Approximate Quantities (SBC/AQ) or Without Quantities (SBC/XQ) versions. The contract assumes separation of design and construction and the architect undertakes the roles of designer, client’s agent and contract administrator.

Partial contractor design is possible using the Contractor’s Designed Portion provisions of the contract, in which case the contractor provides an analysis of that part of the contract sum which relates to the contractor’s designed portion. Sectional completion provisions are available for completion of the work in phased sections (as opposed to partial handovers at the contractor’s discretion).

The architect or contract administrator determines extensions of time under this contract and certifies monthly payments normally on the basis of interim valuations by the client’s quantity surveyor who is named in the contract. Interim payments include materials on site and there are complex rules for the valuation of variations which are also paid as the work proceeds. Interest is payable on late payments.

Where the employer/architect wishes to exercise some control over the choice of specialist subcontractors for the project, a short list of named subcontractors may be included in the contract documents, but they can no longer be nominated. Consequently, the final choice of all subcontractors, whether named or otherwise, will be made by the main contractor.

The contractor is to provide a full-time competent person in charge and, when given possession of the site, is to commence the works and proceed regularly and diligently in order to complete on or before the completion date.

The contractor is to supply copies of his master programme but the programme does not impose any additional obligations on the contractor other than those determined by the contract documents. As the programme is not a contract document, failure to observe the programme is not a breach of contract. Under the contract, an information release schedule may be provided stating what information the architect will release and when (this is optional for the client).

In practice, even the best-laid plans rarely work out exactly but the only obligation to submit a revised programme under JCT 05 is where an extension of time is granted under the contract. The architect/contract administrator has no powers to require the contractor to accelerate the works but he may issue a notice of determination if the contractor persistently fails to progress satisfactorily in accordance with the intended programme.

JCT 2005 Intermediate Building Contract

This is a popular form of contract for work which is straightforward, where there are no complex services and where the design is to be carried out by, or on behalf of, the employer. Subcontractors can be named by the contract administrator. In most respects, the contractual provisions are similar to the JCT Standard Building Contract.

There is no contractual requirement for a programme under the contract and, therefore, where the contractor is required to produce a programme for the project, perhaps in a specified format, this should be stated in the bills of quantities, specification or preambles.

JCT 2005 Design and Build Contract

This contract is used for lump sum design and build contracts where the basis of the contract is employer’s requirements and contractor’s proposals. The contractor is to supply a contract sum analysis of his price. The employer’s agent is named in the contract but there is no named quantity surveyor.

Interim payments are based on the contractor’s application either at monthly intervals or on completion of prescribed stages of work. Materials on site are not included in interim valuations in circumstances where certificates are based on stage payments.

Unlike the Standard Building Contract, the Design and Build form contains no provision for a master programme. However, provision is made for determination of the contractor’s employment under the contract for failure to proceed regularly and diligently with the works.

It would therefore be prudent for the client’s advisors to have a copy of the contractor’s up-to-date programme so as to monitor performance. This could be provided for in the contract preliminaries or in the instructions to tenderers. Alternatively, a requirement for a programme could be included in the employer’s requirements which are incorporated in Article 4 of the articles of Agreement to the Conditions of Contract.

The contractor’s programme may well be an important document as payment in design and build may be linked either to construction stages or to activities on the programme.

JCT 2005 Major Project Contract

This relatively new standard form of contract represents a significant departure from conventional JCT thinking and contains a number of novel features more reminiscent of the NEC style of contracts. It is, for instance, written in a much shorter and simpler style and avoids the extensive procedural provisions associated with conventional JCT contracts.

As its name suggests, the Major Project Construction Contract is intended for use with experienced clients, contractors and subcontractors on large commercial projects where the client would otherwise wish to draft a bespoke contract or extensively amend an existing standard form. ‘Major Project’ is not defined, but it seems the intention is to exclude ‘run of the mill’ projects for inexperienced clients.

The contractor undertakes more risk and responsibility than under conventional JCT contracts and it is essential that the contractor is well versed in the principles and application of risk management. The contract assumes that the client will have in-house procedures and protocols dealing with day-to-day matters such as instructions, record keeping, delays, updating the programme and health and safety monitoring that will be familiar to the contractor. Such detailed procedures, familiar to users of the main JCT forms of contract, have been much simplified in the Major Project Construction Contract and a certain degree of reliance is placed on the contractor having worked for the client on previous projects.

Some of the key features of the contract include:

The Major Project Construction Contract has been drafted by a firm of consultants, rather than the JCT itself, under the direction of a steering group mainly representing the Construction Confederation and the British Property Federation. It is a much shorter form of contract than the JCT 2005 Design and Build Contract, which it is likely to replace in due course.

JCT 2005 Construction Management Agreement

Under this standard form, the contract is between the client and the construction manager who is effectively on the client’s team and is intended to manage the project on the client’s behalf. The client appoints a consultant team and consultant team leader and the construction manager has a limited role as client’s agent with limited powers to spend money. The construction manager has a contractual obligation to consult with the consultant team on relevant matters.

The works are carried out by trade contractors, directly engaged by the employer, under the Construction Management Trade Contract.

The construction manager’s obligations include: