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Programmes in Construction Contracts

View profile for Derryn Rolfe
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The JCT standard forms of building contracts have a very simplistic approach to programmes: there’s a start date and an end date, and that’s it. How the contractor wants to do thing in between is up to them provided that they “regularly and diligently” execute the works. If the project over-runs there are damages, whether liquidated or at large, but it’s down to the contractor to programme the works.

Engineering contracts tend to be at the other end of the scale, with a more Employer-controlled approach; for example the IChemE model forms include an Approved Programme – approved by the project manager and not able to be changed without further, written approval. The Approved Programme can include key dates with damages payable for not meeting those.

The NEC is somewhere in the middle, with an Accepted Programme, including key dates, but there is no provisions at to what the contractor must do if the programme is not accepted, only what happens if the project manager doesn’t respond. A non-accepted programme reaches an impasse, which is hardly useful to either party.

The differences arise from the different commercial backgrounds of the contracts themselves. IChemE contracts, rooted in the process industries, take account of the commercial imperatives of the world of manufacturing, whether it is for a wholly-new facility or an extension to an existing product line. Market demands require that testing and operational deadlines are achieved without fail to deliver the product, whereas property developments either for commercial or residential clients tend to have more flexibility in exactly how a project is delivered, provided it reaches overall completion on time.

When might the engineering approach be needed for a building project? Key dates, milestones and damages for failure to meet them can be important in a range of sectors. It might be having a show home or student flat open for viewings, or it might be having a warehouse ready for fitting-out with mechanical handling systems, or might be the arrival of data centre equipment that simply can’t be left out in the weather to await a floor being laid. Each project needs to be considered carefully before the contract is sent out with tender documents so that the potential contactors can evaluate their obligations, risks and associated costs.  And in that lies the downside: the contactors will price for the risk of not meeting key dates, so if there is no actual need for them it’s better not to impose them.

For more information, please get in touch as our Construction and Engineering team are happy to help.