Contract and Procurement Moots Portfolio - Essay Example

CONTRACT AND PROCUREMENT MOOTS PORTFOLIO Contract and Procurement School Table of Contents 0 Issues that come up in the process of tender procurement (Moot Briefing A) 3 1.1. Scope 3 1.2. The guidelines of withdrawing a tender application 3 1.3. Fettering plaintiff’s claims 4 1.4. Written communication is essential 4 1.5. Conclusion 5 2.0 Issues that come up in the contract process (Moot Briefing B) 7 2.1. How phases of construction projects affect a contract 7 2.2. Articles and Particulars of Contracts 7 2.2.1 Articles 7 2.2.2 The Particulars of Contracts 8 2.3. The clauses involving Payment 8 2.4. Allocation of risk within a standard Form of Contract 9 3.0 Issues that arise from the dispute resolution procedures (Moot Briefing C) 11 3.1. The Nature of the issue 11 3.2. Dispute resolution requires specified time 11 3.3. The importance of written documentation in disputes 12 3.4. Issues arising from communication with regard to deadlines 12 3.5. Impartiality of judges 12 3.5. Conclusion 13 Reference 14 Contract and Procurement Moots Portfolio 1.0 Issues that come up in the process of tender procurement (Moot Briefing A) 1.1. Scope An organization or a person who participates in a tendering process normally is accorded a grace period whereby they are allowed to withdraw their tender application. However, the process of a withdrawing a tender can be financial drowning. The financial loss particularly happens to persons or organizations that seek to withdraw their tenders past the grace period. 1.2. The guidelines of withdrawing a tender application Procurement is a contractual process that involves the organization that offers the tenders and on the other side, there are organizations or persons who bid for the tender. The contracts are binding under the laws and they are recognized by courts of most countries. Seetahal (2010, 46) opines that before a tender is floated for bidding, the rules and regulations that will govern it, are prepared and established. During the pre-tendering stage, the rules set forth are legally bidding between the various parties. For instance, this is observed in the case of Ontario vs. Ron Engineering and Construction Eastern Ltd [1981] 119 DLR (3d) 267. From the Ontario vs. Ron Engineering and Construction Eastern Ltd [1981] 119 DLR (3d) 267 case, it is evident that the organization or person who offers the tender is not mandated by any law to offer refunds. The refunds are held particularly if the tenderer breaches the tender regulations (Great Britain 2008, 126). Kashiwagi (2011) concurs with the above mantra and adds that a tender process usually has an open period. During this period, the tenderers have the freedom to scrutinize the tender document, the contract and come up with their competitive bids. Furthermore, this period allows the contractor to withdraw their bids without suffering any financial repercussions (Holt, 2005). The tender documents are not contracts documents. They only serve as an application, where a contractor can admit or withdraw his bid. As it has been highlighted above, an organization or a person who is entering into a tendering process enjoys the freedom from paying financial damages because the tender requisition is open. This is expressly seen in the case of Blackpool Aero Club v Blackpool Borough Council [1990] 3 All ER 25 (Furmston and Powell-Smith 2012, pp. 15-16). 1.3. Fettering plaintiff’s claims The laws that are established for that specific procurement process guide a case taken before a court of law regarding any procurement process. Therefore, the judicial proceeding will seek to investigate whether the laws were followed or breached by all or one of the parties (Harris, 2003). If an organization or a person who applied for the tender is found to have acted within the biding laws of the procurement, then a judge is forced to declare for the defendant by declaring a judicial enactment to the plaintiff. To illustrate this scenario, the case of Transport Ltd v London Borough of Ealing [1999] COD 492 is used. The Appellate Court can grant an injunctive relief to the organization or persons who act within the limits of the procurement process. Bakers and Lavers (2005) further postulate that the company issuing out a tender will have violated the law if it seeks to be paid damages by the organization or persons who withdrew their applications after the injunctive relief has been granted. 1.4. Written communication is essential Communication, whether formal or informal is the backbone of any civilization. Therefore, it follows that any organization or persons who applied for a tender but wishes to withdraw their application must communicate their intentions with the organization that issued the said tender. Failing to communicate would be disastrous to the organization or persons who took part in the tender. A written communication is the most efficient, failure to which the persons or organization would be liable. The Law in the United Kingdom requires that an organization or persons that applied for a tender but wishes to withdraw their bids can do so in writing. In regards to this law, a court will scrutinize tender withdrawal cases brought before it by checking whether all the legal binding procedures of withdrawing a tender are followed to the latter. Ramsey (2007, 61) concur with the law by stating that a contractor must put his intention of withdrawing his application formally in writing. The tendering process is considered an expression of interests by organizations and persons. The issuer of the tender hold the exclusive right of awarding the successful bidder the tender they applied. In order for a bid to be deemed as successful, the bidder has to show that they have the expertise, knowledge, and experience of successfully satisfying the requirements of the tender. The awarding of the tender is done before the end of the tender period. The applicant of the tender can withdraw and reject the contract that is awarded to them by the client. The courts have to find reason by which the applicant withdrew his application (Chan, 2010, p. 234). To help the courts identify their reasons easily, it is prudent that a contractor puts their withdrawal in writing that will state objectively their withdrawal reasons. Such written form helps the court to easily pin point the exact cause of withdrawal. In the absence of a written communication expressing the withdrawal from the tender, a court may have to impose on the contractor, the financial loss incurred by the client (Kashiwagi, 2011). 1.5. Conclusion In conclusion, the process of tendering contains a series of steps, regulations, and laws. Both the client and the organization applying for the tender have a role to play. The client is required to give ample time for the contractor to substantially review the tender documents and come up with their offers. On the other hand, the contractor has to fill in the details required by the tender forms and submit the complete documents within the specified timeframe. However, circumstances may arise whereby; a contractor cannot fulfill his obligation as stated on the tender documents. The law has laid down the procedure of rejecting the contract or the withdrawal from a tender. As such, the contractor has to follow the procedure laid out by the law. For instance, the contractor has to put their withdrawal in form of writing. Failure to follow the laws of withdrawing from a tender will ultimately result into a costly financial burden imposed on to the contractor. 2.0 Issues that come up in the contract process (Moot Briefing B) 2.1. How phases of construction projects affect a contract Normally, a construction project is divided into several phases to allow for easy management, efficiency in planning and construction, and allow quality checks to be conducted on a systematic basis. There are many programs that exist, which help to manage the various phases of a construction project. For instance, the Gantt chart is used to show the different start and completion times of the various phases of a project. These dates are important as they determine when the payment owed to a contractor is due. Accordingly, the payment dates refers to the dates that the client should pay the contractor. Under the Construction Act of 2011, a contractor can cancel out a contract if the payment schedule is not followed. A completed construction project is a stage that is known as a practical completion stage. This stage means that all the stages that are involved in the construction process have been done and cleared. The client will inspect the finished project and report any defects. This stage is the defects liability period. Here, the contractor undertakes the repair of the areas that are pointed out by the client. 2.2. Articles and Particulars of Contracts 2.2.1 Articles The first article is the Article that is numbered 1. This article outlines the obligations of a contractor. The main obligation of a contractor is that, they should undertake and complete the works based on the contract documents. The second article, Article 2 outlines the contract sum, while the Articles 3 outlines the contract administrator, Article 4 the planning supervisor, Article 5 the quantity surveyor and Article 6 the principle contractor. Articles 7 to 9 outline the dispute resolutions, contract sum, and the basic principles respectively. 2.2.2 The Particulars of Contracts The contract document contains a number of clauses. These clauses represent a number of key issues of the contract. Firstly, the clauses provide definitions of the documents that are to be used in the contract, design proposals that the contractor has to adhere to, and the necessary requirements for an arbitration process in case of a misunderstanding between the client and the contractor. Secondly, the clauses also contain the details of the agreement that are signed between the client and the contractor. The agreement between the two involve the period the contractor will have possession of the site, what is to be done in case of postponement of site possession, the time of payments and the period for rectifying the defects. An insurance policy should be running in every construction site. In regards to this, the clauses contain the insurance of works and the professional indemnity insurance. The second section of the Particulars of a Contract concerns itself with Third Party Rights and Collateral Warranties. 2.3. The clauses involving Payment The Contract Act 2011 has some clauses that parties entering into a contract have to abide by. Under these clauses, payment issues are deliberated. These payments clauses outline the steps that are to be followed by the contractual parties and the contractors. It further establishes that if the contractor is not paid the full amount by the time agreed upon, they can go forward and produce the ‘Pay Less Notice’. The outstanding amount will thus be converted to the amount due. Under these payment clauses, the due date refers to the beginning of the counting of days from which the payment should be received. The ‘Final Date for Payment’ is different from the due date as it is the final date of receipt of payment. The major step that the construction Act seeks to balance between the client and the contractor is the question what amount should be paid out to the contractor for the works done. Ideally, there are three prescribed ways of deciding the amount due to be paid out to the contractor. The first method is the special contractor who sends out the payment notice. The second way is when a contractor sends out the payment notice. The third scenario is when the contractor fails to send the payment notice; the special contractor under these circumstances will produce his own. The JCT/SBCC 2011 Edition has clauses that resolve the issues associated with the late payments of sub-contractors. According to these clauses, the due date and any other dates should be delayed until the compliant Payment Notice has been produced. The clauses further states that a sub-contractor should be issued with their own Payment Notice if a contractor does not receive their Payment Notice within a period of five days after the due date. In some instances, the contractor may not be in agreement with the Payment Notice. In such cases, the Pay Less Notice is issued which represents a sum that should be due, together with the calculations on how the sum was arrived at. 2.4. Allocation of risk within a standard Form of Contract These clauses are substantial when a contractor examines the liabilities that they face concerning the defects, which will occur in the completed project. The ‘standard of work’ is a key consideration as it allows for the completion of works to a predetermined standard. To better illustrate these clauses, the case of Crown Estate Cоmissioners v John Mowlem (1994) is utilized as an illustration. The architect’s opinion was previously used as a certificate of approving the materials quality and workmanship of the contractor. But due to the case shown above, the standards of the JCT contracts were amended to those that were pre-determined and indicated in the contract document. Therefore, the architect would use the contract document as a guideline to establish the quality of the scope of work. 3.0 Issues that arise from the dispute resolution procedures (Moot Briefing C) 3.1. The Nature of the issue After a case has been considered in the courts, the judges can declare their judgment keeping in mind the contractual dispute, which then becomes an obligation on either of the parties concerned. In this regard, there are problems that arise from the procedure in the future. 3.2. Dispute resolution requires specified time The decisions of the courts regarding the issue normally become legally binding. According to Coulson and Coulson (2011, pp. 13-22) the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) “any person who is connected to the process of a contract is obligated to have an independent lawyer anytime that there is a dispute regarding an issue that had already been solved by a court of law regarding the said contract.” Mosey (2009, p. 281) postulates that the decision of the judge must be within five or six weeks. This time is ideal to stop any further disputes from arising. However, in the case of Fastrack Contractors Ltd V. Morrison Construction Ltd. and Another (2000) BLR 168, 75 Con LR 33 the judge decided to make a decision between the two parties without waiting for the required five to six weeks (Chappell, 2007, p. 243). This shows that the judges can at times make a verbal agreement between the two disputing parties to come up with the judicial judgment. Both parties must agree upon the time for judgment. Therefore, the judge comes up with a decision within the set time (Knowless, 2005). The decision given by the judge is usually legally binding on both parties in the dispute or until both parties can come to an agreement regarding the issue given by the judges. 3.3. The importance of written documentation in disputes Conception in Article 1 of Housing Grants Construction and Regeneration Act 1996 (HGCRA), needs that the rules that are given by the judges and the parties involved are made in writing. According to Knowless (2005), the courts have to have the concerns of both parties in writing and they should be signed. This is to ensure that no further issues will arise regarding the agreement that has been made between them. Additionally, Dannemann and Vogenauer (2013, p. 11) postulate that the presence of emails can be regarded as evidence that the parties have reached an agreeable resolution by providing guarantee. This principle was utilized in the case of Immingham Storage Co Ltd v Clear Plc [2011] EWCA Civ. 3.4. Issues arising from communication with regard to deadlines The case law started after Immingham Storage Company Ltd v Clear Plc [2011] EWCA Civ 89 gives the chance to clear the actual intention of the party in the dispute by the use of text messaging, emails, fax, and even Facebook. However, there are cases where both parties fail to agree on the authenticity of the time set through non- formal means of communication (Knowles, 2005). For instance, in the case where both parties have agreed to extend the deadline for dispute resolution by using text messages, the messages will have to be checked for their authenticity (Afroz et al. 2011, pp. 461-475). Due to this, the judges must therefore agree to state whether he parties agreed to have a deadline extension in spite of the written agreement. In case the law finds solid proof that the parties had agreed to have a deadline extension through non-formal means of communication, then it means that the decision has been made already. 3.5. Impartiality of judges The results of the judgment made by the judges are usually agreed upon by using them on the practical states. As postulated by Knowles (2005), the ruling is required to be neutral where both parties are concerned. Consistent with the presiding made in HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 (TCC) it is clear that the terms and conditions that are given by the judges can be changed based on proper logic (Salmon and Crook 2012, p. 144). However, dispute may arise where it is found that the judge’s decision was not made independently. Salmon and Crook (2012, p. 427) postulate that in the case of Fileturn Ltd v Royal Garden Hotel Ltd [2010] EWHC 1736 (TCC) the decision of the judge cannot be legally binding of the judge does not consider the concerns and the needs of one of the parties. Additionally, the decision of the judge cannot be followed if does not rely on the law principles of the country. According to Barden and Murphy (2010, p. 146), the judge must be fair to both the parties. If the judge is biased on one party, then it means that the judgment is also going to be biased on one side. In C&E Jacques Partnership) v Ensign Contractors Limited [2009] EWHC 3383 (TCC), the judge did not use the law of natural justices and so his decision was over-ruled by the courts (Atkinson 2010, para. 1-35: Vermeulen 2012, pp. 147-148). Therefore, the judge need to have no bias at all and follow the law as it is to make his judgment valid. 3.5. Conclusion To summarize, the courts will have to decide if the decision of the judge is in accordance to the laws of the country. If the judge makes a decision that is biased, then they are likely to ruin their reputation. It is hard for the judges to come up with conclusive results regarding the deadline extension discussed by the parties concerned. Reference Afroz, S., Brennan, M. and Greenstadt, R. 2012. “Detecting hoaxes, frauds, and deception in writing style online”. In Security and Privacy (SP), 2012 IEEE Symposium on: (pp. 461-475). IEEE. Atkinson, D. 2010. Atkinson Law. [Online] Available at: http://www.atkinson-law.com/library/article.php?id=440 (Accessed: 13 December 2014). Baker, E., and Lavers, A. 2005. Anthony breach of EU procurement regulations. 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Commonwealth Caribbean Criminal Practice and Procedure. 3rd ed. New-York: Routledges-Cavendish. Read More