PART ONE – 5 TRAPS FOR THE UNWARY ON JCT CONTRACTS

Date Posted: 9 August 2012.

THE CONTRACTOR’S PROGRAMME ON JCT CONTRACTS

The JCT standard form of contract 2011 requires at clause 2.9 that the Contractor provides a Master Programme.

The contract does not specify any particular requirments for the programme and there are no sanctions (similar to that in NEC3) in the event that the Contractor does not provide it in the specified timescale (as soon as possible after the execution of the contract).

It is, however, important to note that the Contract Particulars (at 1.9.1.2) provide an option for critical paths to be shown.

It is good practice for a Contractor to provide the Master Programme from the outset as a management tool for the carrying out of the works. Furthermore, a good properly prepared ‘as planned’ programme is a basis for impacting any delaying events that give rise to an entitlement for an extension of time persuant to clause 2.28.

Although there are no sanctions (similar to NEC3) it is clearly benficial for the Contractor to comply with the provisions in order to avoid unnecessary disputes and avoid any unnecessary payment for damages at a later date. It also enables the Contractor to comply with clause 2.9.2 which requires an amendment or revision of the programme to be issued taking account of any Architect’s or Adminstrator’s decision or agreement in respect to time.

Care should be taken in practice as most tender enquiries and contract documents do include specific requirements and often not only the format or requirements for the critical paths but also in respect to the software to be used in its production.


POSSESSION AND COMPLETION

The JCT standard form clearly makes provisions in the Contract Particulars for ‘Date for Completion of the Works’, ‘Dates of Possession of the Site’, ’Dates of Possessions of Sections’ ‘Deferment of Possession of the Site’, and ‘Deferment of Possession of Sections’.

In the event that possession is deferred the Contractor will be entitled to an extension of time (clause 2.29.3) and loss and/or expense (clause 4.23). If the deferred start is delayed beyond the period(s) stated in the Contract Particulars it would amount to a breach of contract.

The date for completion of the works is where appropriate adjusted pursuant to clause 2.26 ‘Adjustment of Completion Date’.

From a practical point of view it is far easier for a Contractor to demonstrate its entitlement to an extension of time if it has a properly prepared ‘as planned’ programme at the outset.

Making the Architect’s/Administrator’s life easier to fix a revised/extended completion date pursuant to clause 2.28 is without doubt achievable if the Contractor provides the appropriate ‘as planned’ programme revised with impacted delays and the requisite notices pursuant to clause 2.27.

Clearly, if the Contractor is culpable for delays it will be at risk of incurring a deduction for liquidated damages pursuant to clause 2.32, following its serving of a Non-Completion Certificate by the Architect/Contract Administrator under clause 2.31.

Often Practical Completion Certificates (clause 2.30) are held up due to alleged defects (snagging) which actually amount to incomplete Contract Works, or the failure of the Contractor in issuing documentation required by the contract, including as-built drawings, Contractor’s design documents and related information (clause 2.40) and CDM information (clause 3.23.4).

Failure by the Contractor to provide the requisite information and complete the tail end Contract Works can often prove expensive. Be careful if you are working on NEC contracts because the mechanisms for completion are very different to those in JCT contracts.


INFORMATION RELEASE SCHEDULES AND ACTIVITY SCHEDULES

Information Release Schedules

The JCT standard form of contract includes for the ‘Information Release Schedule’ and is referred to at the fifth recital. This is an optional provision and the schedule is intended to be prepared by the Architect/Administrator and should be sent out with the tender documents.

It is intended that the schedule will include the intended release of key information, the significant point being that if the information is released late, then it will be a relevant event in relation to an extension of time.

Activity Schedules

The JCT standard form of contract includes for the ‘Activity Schedule’ and is referred to at the second recital.

The priced activity schedule should be provided by the Contractor to the Employer together with the priced copy of the Bills of Quantities.

In the Activity Schedule each activity should be priced so that the sum of those prices equals the contract sum, excluding provisional sums and the value of work for which approximate quantities are included in the Contract Bills.

The Activity Schedule is seen as being helpful alongside Bills of Quantities if it saves time and, therefore, reduces Consultant’s fees when preparing interim certificates. From a Contractor’s point of view it may result in loss of accuracy of valuations which could give rise to undervaluing of the works.

In practice it is likely to be most useful for preparing valuations and interim certificates where the Contract Documents consist of drawing and specifications only.

The Activity Schedule must not be confused with that which is used with the NEC form of contract.

If you require assistance with any of the above issues, contact ramskill martin at any of our offices detailed below.

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Article by: Clive Ramskill