Fuentes agrícolas

The requirements and objectives of the Employer will be the pri- mary factors driving contract selection. For most projects, the selection of procurement route to meet the Employer’s needs will limit the available choices of standard form to be considered. In most situations, procurement and contract selection will be con- sidered simultaneously.

The decision about which form of contract to use for a project will be based upon the following factors:

1 The nature of the client – Answers to the following questions may be pertinent to contract selection:

(i) Are clients private individuals or organizations or public bodies?

(ii) Are clients regular/frequent developers or is a one-off project envisaged?

(iv) How knowledgeable are clients about the processes of construction and development?

(v) What past experience of construction have clients had, and how does their experience prejudice the use of the various alternative procurement and contract choices? 2 The risk attitude of the client – What risks are individual clients

prepared to take in relation to the associated rewards avail- able? This will depend to some extent on the nature of the client. Public clients may tend to be more averse to risk than private clients. The nature of development may also affect risk attitude – clients engaging in speculative commercial develop- ments may be prepared to take greater risks with regard to the construction cost of a project in order to receive the benefits associated with achieving earlier completion.

3 The procurement method adopted – Some of the standard forms of construction contract are written for use in connec- tion with specific procurement strategies while others (for example, ECC) are flexible. The source of design, whether generated by the Employer or contractor, will also affect the choice of contract.

4 The client’s priorities in terms of time, cost and quality – The balance of requirements will affect the choice of contract.

If clients want cost certainty prior to agreeing a contract, then a lump sum form of contract is appropriate. This approach requires Employers either to allow sufficient time for their con- sultants to complete the design prior to a contract being agreed or to adopt a design and build approach. The first option will generally increase the overall development time, whereas the design and build approach may mean a reduction in quality.

If time is of the essence, then either a management contract, a prime cost contract or an approximate quantities contract may be appropriate, depending on the other decision factors. None of these forms of contract offer cost certainty.

Where quality is the main priority, the use of a design and build contract will probably be inappropriate.

5 The size of the project – The various types of JCT contract suit- able for different sizes of project have been discussed above. 6 The type of documentation being used – Although contract

selection will normally drive the requirement for contract documentation.

7 The type of project – Answers to the following questions will affect the decision on form of contract:

(i) Is the project engineering or building based? (ii) How complex is the project?

(iii) Does the project involve specialist installations or con- struction techniques?

In advising on contract strategy, it is important for surveyors to remain impartial. In many situations, the benefits – for example, higher fees – may be greater under one contract strategy than another. This must not influence the advice given. The recom- mended contract should be that which offers the greatest value to a client. Conversely, it may be necessary in some situations to advise clients that, although they have been offered a service by, for example, a design and build contractor that purports to offer the best solution to their needs, this may not be the case. Of course, it is in the design and build contractor’s interest to sell his service. It is often the case that a bad experience in using a particular form of contract can prejudice both a client and a consultant against using or recommending that form again. Problems and difficulties can occur under any form of contract, and it is prob- able that the problem is not down to the contract but is caused by some other factor. Bad experience should not necessarily preclude the use of a standard form of contract on future projects.

A strategy for selection

The wide range of available standard contract options makes the use of decision-making techniques advisable to ensure that rational selections are made. The experienced practitioner will often develop an intuitive skill in selecting an appropriate form of contract. However, for the inexperienced, a more formal approach to selection is often helpful. Indeed, where a client requires a detailed account of the reasons behind a recommended contract strategy, it is sometimes helpful to adopt a formal approach to explaining a particular rationale.

The criteria for decision-making will generally flow from the requirements of the Employer, and to ensure effective decision- making it is essential to define these criteria. There will be a dif- ference between the wants and needs of an Employer. While it is

not unreasonable for an Employer to want the best of all worlds in terms of low cost, low risk, short programme, high quality, cost cer- tainty, etc., it is not usually possible for procurement and contract strategy to provide this. It is therefore necessary to identify Employer needs. This can be done by prioritizing those wants that are essential to the Employer. Having established this hierarchy of needs, it should be possible, in conjunction with the other decision-making criteria, such as the size and complexity of the project, to identify the contract strategy that is most suitable for each given situation. An approach similar to that described in Chapter 2 in connection with procurement is appropriate.

The selection of a contract form will normally involve identifying the most appropriate family of contracts, selecting the individual form of contract to be used, and identifying the appropriate support documentation required. This chapter has briefly described the nature of the different families of contracts together with the main forms within the JCT family of contracts. This should help in direct- ing the surveyor to an appropriate form for a given situation. However, it will be essential for the surveyor to analyse in detail the provisions within that form prior to making a recommendation. The aspects of the form which do not match the requirements of the project should be identified. If these are minor points, then the form of contract may still be suitable, perhaps with some minor amendment or addition (but note that any changes to standard forms of contract should be made by legal experts and preferably be limited to minor changes – see comment on p. 2. If the issues are major, an alternative contract strategy should be considered. Despite the wide choice of standard contracts available, it is unlikely that any contract will exactly match all the requirements of a project; therefore, sensible compromise will often be necessary. In giving advice on contract selection, surveyors should clarify the reasons for their recommendations, together with the condi- tions that must be observed in consequence of the selection. Too many projects suffer as a result of the requirements pertaining to the use of a particular contract not being met. For example, if a project is being undertaken on the basis of a JCT Standard Building Contract without Quantities, the contract envisages that the design should be practically complete prior to the contract being agreed. However, in practice it is not uncommon to witness a lump sum contract being awarded when much of the design is incomplete. This can create risk for Employers, and is unnecessary

in view of the numerous alternative methods of procurement and forms of contract that are designed to be used in situations where the work is to start before the design is complete.

References

1. MURDOCH, J. and HUGHES, W., Construction Contracts Law and

Management (London: E & FN Spon 1992), p. 15.

2. CHAPPELL, D., Which Form of Building Contract? (London: Archi- tecture Design and Technology Press, 1991), p. 62.

3. LATHAM, Sir Michael, Constructing the Team (London: HMSO, 1994). 4. DAVIS, LANGDON and EVEREST, Contracts in Use: A Survey of

Building Contracts in Use During 2001 (London: RICS, 2003).

5. op. cit.

Bibliography

1. CHAPPELL, D., Which Form of Building Contract? (London: Architecture Design and Technology Press, 1991).

2. JCT, Practice Note 20: Deciding on the Appropriate Form of JCT Main

Contract (London: RIBA Publications Ltd, 1993).

3. JCT, Practice Note 7: Standard Form of Building Contract for Use with

Bills of Approximate Quantities (London: RIBA Publications Ltd, 1987).

4. ASHWORTH, A., Contractual Procedures in the Construction Industry, 2nd edition (Essex: Longman Scientific and Technical, 1991).

5. MURDOCH, J. and HUGHES, W., Construction Contracts Law and

Management (London: E & FN Spon, 1992).

6. PIKE, A., Practical Building Forms and Agreements (London: E & FN Spon, 1993).

After a client has selected an appropriate procurement strategy for his building project, the next stage will be a review of how best to obtain the resources that will be necessary for him to have the work carried out. In most instances, client organizations will have limited skills and resources relating to construction work and they will have to rely on others to provide the necessary services, expert- ize and resources, e.g., designers, engineers, surveyors and con- tractors. The client will therefore need to identify and contact suitable personnel or organizations to assist him with his project, and agree with them the scope and nature of their work or the resources to be supplied and the basis of payment. This will be achieved through a process of tendering. Tendering is an import- ant stage of the building project, as the decisions taken at this point will help to determine the quality and calibre of people and organizations involved in the building process and the price to be paid for their services.

Over a period of time a number of publications have been issued to help clients with the tendering process. For nearly 35 years the National Joint Consultative Committee for Building (NJCC) pub- lished a number of highly regarded codes of procedure relating to tendering practices.1_{However, in the late 1990s the NJCC was dis-}

banded and its advisory role was assumed by the Construction Industry Board (CIB) who produced its own tendering guidelines.2

Despite the existence of these newer guidelines, many client organ- izations still adhere to the original NJCC codes of procedure and, when the Joint Contracts Tribunal (JCT) produced its own practice note on tendering,3 _{it acknowledged the inclusion of substantial}

material originally produced by the NJCC.

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