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This is a checklist of items to consider at tender stage when reviewing the contract. Although long, it is not
exhaustive and is intended to reflect those terms and conditions which are most likely to have the greatest
impact on the cost of completing the project.
Specific Risks: Time
1.
Is the programme realistic for the works as defined and all provisional works packages?
2.
Are there contractually binding target/ interim dates?
3.
Are the possession and completion dates clear and unconditional?
4.
Do you need to get al programme revisions approved?
5.
If the works are divided into sections, are these sequential or to be completed in parallel?1
6.
Are the sections clearly defined?
7.
Can you claim extensions of time for events outside your control such as employer instructions,
weather?
8.
Can you claim loss and expense for events outside your control which delay the works?
9.
Can you claim lost productivity for events outside your control which disrupt the works?
10. Are LADs set at a reasonable level and subject to an overall cap on the total amount deductible?2
11. If the project was delayed by 4 weeks, would the LADs deducted totally eliminate your profit margin
for the project?
12. If the project duration is long, does the contract permit price fluctuations e.g. for energy price spikes?
13. Can the employer ask you to accelerate the completion of the work and, if so, is the mechanism for
being paid additional costs clear?
Specific Risks: Cost
14. Is the employer financially secure?
15. Does the employer have a reputation for paying on time? Has it signed the Fair Payment Charter?
16. Is the project being funded and if so, are the funders financially secure?
17. Is there a separate trust account for (a) the retention, and/or (b) all payments
18. Is the retention per cent acceptable?
19. What is the period between certification of instalments and the final date for payment? Does it match
your subcontractor payment expectations/periods?
20. Are there any advance payments?
21. Is set-off allowed between payments and/or between other projects with the same employer?
22. Is the procedure for changing the price due to instructions, risk events etc. robust and workable?
23. Is the percentage of the price represented by provisional sums acceptable?
24. Can the employer omit works and, if so, how would this affect your profit margin?
Author
Sarah Fox of 500 Words Ltd developed this checklist. She is a speaker and trainer who cuts through the
complexities of construction law.
She has simplified this checklist into a four point analysis to evaluate contracts from those which are good to
go and those which are disasters waiting to happen. She runs workshops to teach you how to review your
contracts and avoid them becoming speed bumps in the contract process.
She is also author of the 500-Word Contract.
To find out how Sarah can transform your technical training, contact her via: 07767 342747 or by email:
sarah@500words.co.uk
Footnotes
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If sequential then ensure the date for commencement of later sections is linked to completion of the earlier sections, and is not fixed.
If there are no LADs then your liability for cost arising from delayed completion is unlimited. LADs act as a cap on your liability and should be
included.
The employer should provide drawings, bills, employers requirements, scope of works, specification, pre-construction plan. As a contractor
you may need to prepare some of the contractors proposals, contract sum analysis, detailed specification, schedule of rates, cost pl an and
activity schedule.
If not, then the cost and time for ground conditions are at the contractors expense. Note you cannot rely on employer surveys.
You should always read the contract, but where you are not familiar it is sensible to ask a lawyer to interpret your obligations to avoid
breaching them.
Any licence for material should be restricted to this project.
These documents can take significant legal and management time to agree and administer.
Documents executed as a deed give a 12 year liability for breaches of the contract; otherwise the limit is 6 years.