Administration of Construction Project Management - Assignment Example

CONTRACT ADMINISTRATION by Student’s Name Code + Name of Course Institution City/State Professor Date Table of Contents Question 1 Part A: Action 3 Consequences 5 Action of Reconciliation 6 Advice 6 Consequences 7 Course of Action 8 Advice 9 Contractual Consequences 10 Advice 11 Consequences 11 Response 12 Consequences 13 Reference List 14 Question 1 Part A: Action This is mainly a claim pertaining to the omission of items in contract documents as stated in the JCT IC 2011 Clause 4-9-4 construction management codes. In this clause, a contract agreement is expected to specify the list of items included in the agreement unless stated otherwise. In such situations, the contractor has apparently failed to notice the details in the agreement with regard to the standards set on the previously approved sample panel. According to the construction management codes, a contractor is often required to adhere to the agreed upon standards of construction in the sample panel. This is because, the sample panel signifies the overly recommended standard for the construction work at hand, failure to adhere to these standards more than usually call for a redo of the work. As the engineer, I would call the concerned parties and discuss the issue at hand. This will be achieved through the issue of instructions to the contractor in relation to the problem at hand. For instance, I would instruct the contractor to redo the work according to the previously approved standards in the sample panel. According to the UK construction contracts, a contractor is required by law to perform the recommended corrections within time duration of two weeks. Failure to comply with these instructions will essentially call for other alternative measures to be complied with. If the discussions fail to yield the perceived results, I will then vary the orders. To achieve this, in most cases, the engineer is obliged to employ another contractor to perform the same work. The cost of hiring of a new contractor is mostly deducted from the overall contract sum accorded to the first contractor mainly as a debt (Totterdill 2006). Part B Advice In cases where the contractor fails to comply be the recommended changes, the engineer is obliged to offer advice to the client. Thus in this case, if the contractor fails to comply, I would advise the client to take the matter through a dispute resolution process using any possible method. In this process, the most effective way would be to start with arbitration; Article 8 and clauses 9.3 to 9.8 posit that, to settle a dispute using arbitration and not the legal process will require an inclusion of these clause and article. Dispute resolution majorly advocates for the settlement of issues outside the law whereas including the parties involved in the matter. For instance, in this case, this process denotes the holding of discussions with the engineer and contractor to try to find a way of solving the issue at hand. There are however cases where the arbitration process may fail to bare the perceived results. This, more often than not normally pushes the parties concerned to take the issue through litigation. In most cases, the parties involved in the conflict might fail to effectively settle the matter, thus, as the engineer; I would advise the client to take the matter through litigation. This second step majorly denotes the use of law courts to settle the problem at hand. Considering that the contractor had previously obligated himself to a law abiding agreement, he is thus required by law to make the recommended changes in case the client sees fit. By refusing to corporate with the engineer and the client requirements, the contractor is breaching the contract and thus this may call for the need to incorporate court proceeding to resolve the issue (Ching and Winkel 2012). Consequences In most cases, the problem of omission of items in contract documents normally brings about a number of penalties with regard to the parties involved. This is because of the major inconveniences that may be caused by these problems. Overly, the major consequence following such omissions is the alteration in the period of completing the contract. When a contractor fails to perform the contract according to the initial agreed standards, he presents a challenge for the time duration assigned for the contract. An engineer may seemingly require the contractor to alter the overall design of the construction, these changes impact on the time period assigned for the contract and thus may inconvenience the parties involved. More often than not, the consulting engineer can refuse to sign the certificate of payment until the matter is resolved. This consequence mainly ties the work down and might lead to delays in work completion. In instances where the engineer fails to sign the certification form, the contractor is mainly inconvenienced in proceeding to other works and is mainly tied down to ensure that they fulfil their contract to the client. If the works are not yet complete, the engineer can order the contractor to go back to the beginning and restart the work as per the specification on the drawings. This consequence majorly impacts on the progress of the previous work done as it basically renders it of no use. Additionally, there is the risk of incurring extra cost. By varying the original contract, the client as well as the engineer presents a risk of incurring additional costs. In most cases, these costs incurred are normally covered by the contractor (Totterdill 2006). Question 2 Action of Reconciliation This is a claim pertaining to quantity. According to Clause 4-18 of the JCT IC 2011, it is essential to identify the relevance of making the changes desired by the client. Apparently, the client is not satisfied with the present construction work and thus requires a number of changes to be made on the structure of the kitchen. As the consulting contractor, I would first discuss the issue with the client and the engineer involved. This will be mainly to identify the client’s need to alter the layout and how these can be achieved to avoid destroying the other parts of the house. Essentially, this first course of action s vital as it provides the parties involved with an opportunity to assess the viability of the alterations desired. More often than not, what the client considers to be essential may not be easily achieved because of the structure of the construction. For instance, the building could be structured in such a way that any change made would require the alteration of the whole building. Thus, if this is the case, I would vary the orders for changing the kitchen layout then give new instructions to both parties. As a consulting contractor, it is essential to provide the client with adequate information and guidance with regard to their demands. In most cases, the change of the layouts of buildings may require certification from the state officials, thus, ensuring that the alterations are in line with the recommended state requirement will make certain that the client abides by the state requirements (Ching and Winkel 2012). Advice Changing the layout of an already existing construction usually comes with a number of challenges as well as considerations. I would advise the client to ensure that they consult with the state officials to ensure that the changes are in line with the law. Customarily, the state usually has a say in all the construction works that have to be done within its jurisdiction, any changes to be made, thus need to be in line with the state regulations regarding construction works. In addition to this, I would advise the client on the cost implications he is likely to incur in changing the current layout of the kitchen. As a consulting contractor, it is my obligation to ensure that the client is aware of all the possible costs that they are likely to incur following the changes they want to make. On the whole, construction works normally take up a considerable amount of money as well as time. The financial and also time constraints in the contract may be too much for the client or engineer to handle, thus, it is important to advice the client on these issues. Consequently, providing advice on the necessity of the works to be done is vital. This is because, despite the client’s desire to change the building layout, the timing with regard to the contract may not be appropriate. Advising the client on the need to prioritize the work to be done is fundamental as it will enable the client to schedule the work at an appropriate time (Totterdill 2006). Consequences In addition to providing feasible advice, it is also vital to consider the consequences involved in fulfilling the contract. Construction works majorly take up a lot of time and finances. Clients are often forced to compromise on time as the work might take long than the perceived duration. With regard to the work to be done, the client stands to face the risk of increasing the time limit for the completion of work. Changing the layout of an already existing building often requires a lot of time to ensure a perfect completion of the work. This is because; the work might call for the alteration of other adjacent structures. Essentially, time might be a limiting factor in this case. Furthermore, there is the consequence of increased payment due to changes in the bill of quantities (BOQs). Depending on the amount of work to be done, there may arise a number of complications as well as additional works. In this case, the client stands to face the challenge of incurring more costs to cater for these upcoming requirements. In relation to this, there is the aspect of changes in price for the required equipment to facilitate the work. In most cases, construction works are often began after a few days from the day of approval. This may be consequential in that, before and during the commencement of the works, other factors like price changes as well as workforce accessibility may contribute to additional costs and technicalities which will affect the work eventually (Ching and Winkel 2012). Question 3 Course of Action The payment of the contractor is usually implemented as per the certificate of payment from the engineer, and not as per the quotation he made to QS. According to Clause 4.6 of the JCT IC 2011, advance payments are not usually considered to apply if the employer is a local authority. Essentially, this means that, payment is and can only be made considering the amount of work which has been done by the contractor according to the contract agreement. More often than not, contract payments are normally made after the contractor has effectively fulfilled his part of the contract by ensuring that he has completed the work assigned in time. In such a case as to when the amount of money paid is considerable low as to the quotations previously made may mean that the contractor has failed to fulfil his part of the agreement. Thus, I would check the contract claims made by the contractor to ensure that they are valid and then call the parties involved in the dispute to discuss the issue. By engaging the parties involved in the dispute, I will be able to assess the root cause of the problem and thus be able to ascertain if the payments made are appropriate as to the amount of work done. In such cases, there is need to support the action taken with regard to the issue being handled. Thus, using the contact documents as the basis of reference for the claims, I will be able to act accordingly and offer a favourable solution to the problem as well as ensure that the solutions made are according to the law of contracts (Dykstra 2006). Advice Considering the legal nature of the issue at hand, it is essential to ensure that the client is protected by law as well as that the contractor and engineer act in accordance to the law. In this case, I would advise the client that he should not pay any extra money until the measurement of work has been done. Seeing that the contractor is demanding for more payment, it is vital to ascertain that the amount of money paid as well as being demanded is equivalent to the amount of work done. In most cases, clients have been considerably exploited and made to make extra payments for work that has not been completed effectively. Thus, advising the client not to make anymore payment will help to see to it that the client is not exploited. Additionally, it will help to ensure that the work given by the client has been completed before the payments are made. If the claims made by the contractor are found to be legit according to the contract agreement, I would then advice the client to avail another certificate of payment to the contractor. After certifying that the contractor’s claims are proper, I would advise the client to issue another certificate of payment that would foresee the completion of the work remaining. In cases where the claims made identify that the period of the contract has not been exceeded, then the contractor still has to perform the work and honour the certificate of contract before any further payments are made (Ching and Winkel 2012). Contractual Consequences Consequently, such claims for extra payment by contractors have been noted to lead to a number of consequences. Firstly is the consequence of contract termination. There are times when a contractor may choose to terminate the contract of work because of the client’s refusal to add the payment being demanded. This move can lead to a number of end results. For instance, if the contractor suspends the work without a court directive, he will be liable for his actions and thus, he will be required to compensate the client for any inconvenience caused. In addition to this, there is the risk of delaying the completion of the work under way. Contractors are often fond of stopping the work they are assigned when there are complications regarding payment fulfilment. These delays may lead to a number of consequences like failure to meet the time duration previously assigned for the work. This may be inconvenient for the client as they may be working to meet a deadline, thus by delaying the work, the contractor forces the client as well as the engineer involved to work under pressure to ensure that the deadline is met. In other times, the client may be forced to call for a restart of the work. When a contractor decides to terminate the contract, he basically leaves the work half finish this forces the client to source for another contractor who might be forced to redo the work, a redo is mostly necessitated in cases where the new contractor differs in his perspective of the work done by the previous contractor. This mainly leads to the need to extend the time for the contract as well as adding to the cost of completing the contract (Dikstra 2011). Question 4 Part A Advice This situation will basically lead to claims pertaining to delays, as specified in Clause 1-1 of the JCT IC 2011 it is essential to specify the date of completion of works in contract agreements. It is evident that the client has delayed the contractor thus making him extend the time duration for the contract as he will evidently have to begin late. If in the contract documents, the contractor is required to start work before payments are made, he may go ahead and begin the work provided the payment period is not beyond the period he is expecting the money. The contract document basically provides a guide for the client as well as the contractor on what they are expected to do with regard to the work at hand. If the client perceives a delay in payment for the commencement of the construction works, I would advise him to schedule the commencement of the work at a time that he is able to cater for the cost conveniently. Additionally, I will also notify the client on the penalties accompanying late payments. In as much as it is advisable for the client begin construction when all the payments are available, there may arise such situations as where the expected payment may be considerably delayed. During such cases, it is important for the client to arrange for a payment duration that does not exceed the period of expected payment since this may lead to additional incurred costs. Alternatively, I would advise the client to negotiate with the contractor so as to reach an agreement that is most favourable to them both (Ching and Winkel 2012). Consequences Since the interruption in payment may result in delay of the work, the contractor may claim additional time so that the works may be finished later than the scheduled period. This is a major consequence for the client especially if he desired for the work to be completed within a stipulated time period. Delay in payment ostensibly affects the contract duration. Essentially, payments determine the pace at which the construction work will be done. For instance, if the payments are made in time, the contractor is thus able to acquire the relevant equipment for the construction and hence, is able to work within the set time limit. Consequently, if the payments are delayed, the contractor is basically inconvenienced and is unable to acquire what is required to facilitate the project thus, causing delays in the completion of the work. Time duration when dealing with contract agreements is often considered to be a vital aspect. This is because, construction works if delayed, may lead to numerous inconveniencing situations for all the parties involved (Totterdill 2006). Part B Response This refers to Clause 6-4-1-2 and 6-5-1 of the JCT IC 2011 where a contractor is insured for any injuries to persons or property if they occur. The contractor should not commence any work until a valid policy is provided. This is because, generally, the contractor is mainly considered to be responsible for any damage, injury or loss of life in the site. Due to this condition, he should always ensure that he has an up to date policy. Without a valid policy, the contractor risks being charged with a number of legal issues when the workers suffer injuries or the property is damaged. It is thus recommendable for the contractor to withhold the work progress until he is provided by the policy with respect to insurance as well as injury to person and property (Ching and Winkel 2012). Advice The client should not allow the contractor to carry on with the work until he has all the required items stated in the contract documents as well as those stated in the ICE conditions. Normally, the client is required to restrain the contractor from carrying on with the work until he or she is provided with a valid insurance policy that covers the persons working with him against injury and also insuring the property. This is mainly so as to ensure that in case of any damages caused or injuries sustained, the contractor is not held responsible as well as ensuring that the relevant party caters for the damage and injuries. However, if the client still thinks the contractor is best suited for the job, he can negotiate with the contractor and allow him to go ahead and incur the cost of insurance on behalf of the contractor. This exception is mainly made in agreement between the contractor and the client. It essentially allows the client to deduct the cost incurred from the total contract sum (Dykstra 2011). Consequences The contractor is normally liable to what happens to the workforce when they are working on site. Therefore, failure to produce such a vital document is usually punishable by law as it indicates the legal responsibility that the contractor has towards the workforce on site. For that reason, the contractor may be sued in case something happens and will essentially be required to compensate the client for any inconvenience caused as a result of this. Reference List Ching, F, & Winkel, S 2012, Building codes illustrated: a guide to understanding the 2012 International Building Code, John Wiley & Sons Inc. Dykstra, A, 2011, Construction project management: a complete introduction, Kirshner Publishing Company, California. Totterdill, B, 2006, FIDIC user’s guide: a practical guide to the 1999 red and yellow books, Thomas Telford Publishing, London. Read More