JCT Newsletter October 2012

OCTOBER 2012

JCT NEWS

THE JCT CONTRACTS UPDATE FOR THE CONSTRUCTION PROFESSIONAL

JCT’S MAJOR PROJECT CONSTRUCTION CONTRACT IS THE AMMUNITION BEHIND CANNON PLACE Building a complex project over a mainline and underground station in central London?

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station layout, and fire strategy had to be strictly followed. The station was to remain open for the entire project period and every activity was carefully planned to ensure that the station was safe from harm and passenger journeys were not delayed.

Cannon Place is a £214m 50,000m2 office space built above Cannon Street mainline and underground station in the City of London.

Site work commenced on 3 September 2007 and was completed on 5 September 2011.

Built on a 68m by 87m site, it is a striking and complex structure featuring two 21m deep cantilevered wings.

The site itself presented a number of design, planning and regulatory challenges. Sitting within the zone of protected views of St Paul’s Cathedral, the total height of the building was restricted to 51.3m. Coupled with Network Rail’s requirement that at least 5.1m space above the mainline running tracks must be maintained, this left just 32m within which an eight floor structure had to be housed to make the project commercially viable.

Meticulous and careful planning was required on this project to ensure that construction work was able to commence and continue with minimal disturbance to commuters and passengers using the rail services below. Around 60,000 people a day use the underground and mainline services running through Cannon Street. Before construction could even begin however there were several complex issues to overcome.

One section of the brief, as part of the client’s partnership with Network Rail and London Underground, was to improve the station itself, including new accommodation for the underground, better disabled access and a new ticket hall. This meant that at each stage the Network Rail approval process for design, construction method, security, changes to

The site was also constrained by further factors: on the north side, it was not possible to lay any foundations because of the location of the shallow underground railway tunnels.

The original Victorian viaduct remains over much of the site and the southern half of the site is a scheduled ancient monument, protecting the remains of a Roman Governor’s palace. Permission from English Heritage therefore had to be gained for any excavations and for determining the location of the foundations.

Due to the design and construction restraints, integration of these two elements was the only practical way to proceed with the project.

JCT’s Major Project Construction Contract

Cannon Place

was chosen for this project as it is suitable for projects using a design and build process of procurement, which places overall design and construction responsibility with the main contractor. The contract relies on the client and contractor, along with the various contributing Continues on page 2

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Chairman’s Letter

Challenge, Support and Celebrate: JCT’s Student Essay Competition Rewards the Next Generation of Construction Professionals

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A Vision for the Future of Construction: Supply Chain Management and Integration Richard Hope

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Time at Large Andrew Batty - Pinsent Masons LLP

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The Pivotal Role of Procurement in the War Against Waste Richard Buckingham - WRAP

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JCT News Flash Find out the latest on JCT services and products.

OCTOBER 2012

JCT NEWS 2 >>

teams, being experienced in procuring and executing complex projects. It is flexible to allow the parties to incorporate their own contractual procedures, and is suited to the collaboration needed between the teams to allow the logistics of the project to be successfully formulated.

In terms of design, the project was very much a reflection of its constraints. The use of the two 21m cantilevered wings to balance the north side with the facade deep-transfer structures of the south removes the need for the construction of columns in impossible areas above the underground platforms, and enables full use of the development space and floorto-ceiling heights. The structure, whilst dynamic and contemporary, reflects the roots of its Victorian railway structure by exposing the structural frame through the use of a fully glazed curtain wall.

The north and south facades are made of 67.5m trusses which are supported by six (three on each side) cantilevered ‘X-frames’ on the east and west facades.

The load of these is distributed to the foundations on four 12m x 14m x 1.3m wide composite steel and concrete plate structures. The north and south facades also feature diagonal ties that hold the 21m beams supporting the north and south office strips.

Internally, each floor is divided into five strips – three 21m deep strips separated by two 12m strips. The 21m accommodation areas are 67.5m long and can be planned to suit the requirements of future tenants without adding further columns. The centre of each 12m strip houses an atrium which allows natural light through the heart of the structure,

CANNON PLACE – QUICK FACTS Cost: £214m Size: 50,000m2 Location: Cannon Street, London Project start: 3 September 2007 Project Completion: 5 September 2011

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and each atrium contains six passenger lifts.

Construction of Cannon Place took place following the formulation of a 38-stage structural analysis which set out in detail the construction methodologies, the use of temporary structures and the design of the permanent works structure. The analysis was carried out as part of the collaboration exercise between the design and construction teams, so at each stage all contributing parties were fully integrated into the process. Several parties needed to take ownership of a particular element of the project and would be working on solutions to the same problem before coming together to resolve it as an integrated team. This meant careful management and a significant level of planning was required across the teams to ensure that there were no gaps or overlap.

The principal challenge of the construction phase was manifested in working around the live rail station and ensuring the safety of the public and compliance with various site requirements. The only storage areas for material were below the station itself, which not only led to limitations on general working space, but also site storage, space for temporary works and location of the foundations and lifting operations.

In the demolition phase, ‘islands’ surrounded by fire-rated hoardings were erected to allow demolition within certain exclusion zones. The islands prevented the public from access to the demolition works or lifting operations. This allowed the team to maximise the amount of work that could be carried out in the day and reduced the amount of night-time working and track possessions.

In erecting the cantilevers for example, weekend and night-time track possessions were granted in cycles across the station’s seven platforms, so in one week platforms 0-4 would be available and platforms 5-7 the following week, and so on. This was repeated until the cantilevers on each side were completed.

A balanced system of construction had to be maintained, so that a cantilever could not be more than two floors higher than the opposite end.

With a project such as this, involving multiple specialists, complex design and construction elements, constraints led by compliance, the continued use of a live railway which must be maintained throughout, foundations including an ancient Roman structure and an original Victorian viaduct, and limited use of construction space and storage facilities, success can only be achieved by combining water-tight planning, effective management and skilled individuals and teams working collaboratively.

Fundamentally the contract chosen must allow for flexibility to make full use of the experience and expertise of the parties, and the integration of design and construction in a collaborative environment. Once again the JCT Major Project Construction Contract proves to be the form of choice for highly experienced project teams building highend projects.

Front page image source: www.flickr.com - location:unknown

Project team: Client: Hines

Main contractor and lead designer: Laing O’Rourke

Architect, structural and building services engineer: Foggo Associates Temporary stage analysis and temporary works design: Robert Bird Group

Steelwork and temporary works design: Watson Steel Structures Ltd

Piling, concrete works and temporary works design: Expanded Piling and Expanded Structures Demolition, enabling works and temporary works design: McGee Group Enabling works development and temporary works design: Tony Gee and Partners

Strand jack supply and operation: Faggiolli

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Peter Hibberd

Chairman’s Letter

CONFIDENCE It is generally recognised that until growth returns our economic problems will remain. There is truth in that point of view but solving one’s economic problems alone would be somewhat pyrrhic in nature if we did not raise our wellbeing and happiness. This is something to which I alluded to in my letter in the April 2010 edition of JCT News. Sadly very little seems to have changed since then: things may even have got worse.

In order to address the problem of growth in the construction industry and the wider economy there must be a vision of what it is we want to achieve and the confidence to work towards it. To speak of having a vision sounds airy fairy but it isn’t – we all dream as to what we would like to see happen. In fact I would argue a vision is essential because it becomes a reference point. On the other hand confidence would not be described as airy fairy but it is nevertheless a rather nebulous concept yet one that is essential.

Over the past few years confidence in many things that we have often taken for granted has been shattered or at best fading quickly. Parts of the banking system and the financial regulatory authorities have failed in a spectacular manner, some banks and bankers have performed unconscionably, and sovereign debt has wreaked havoc.

The bedrock of economic growth has been maimed.

Furthermore swathes of politicians have over many years been acting without proper regard to either their own rules or the public. It is not just the expenses issue but it encompasses wider issues of policy. Add to this the media, the distortion of factual reporting and the hacking scandal and one sees clearly why general confidence has ebbed away.

DATES FOR YOUR DIARY

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NOVEMBER 2012

JCT POVEY LECTURE Central London This year’s lecture entitled ‘At the Crossroads - a wasted generation or inspired talent. The power to choose.’ will be given by Paul Drechsler, Chairman and Chief Executive of Wates Group.

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NOVEMBER 2012

Confidence is key to our long term success and until it is regained there is little hope, possibly no hope of seeing any appropriate forms of growth. Impulse buying with no regard for the future (spend rather than leave money in a ‘dodgy’ financial institution), crime and activity in the black economy may possibly all rise. So how do we regain the confidence needed to get the economy moving in an appropriate way? Sadly, this is not an easy question to answer but it is clear that our established institutions (or more often the personnel within them) are in need of review. Systems are only ever as good as the people that operate them. Genuine respect and trust in others need to be re-established. Without such changes we can only have a bleak future with very little collaborative working; something that is especially important to the construction industry.

Let us hope that the recent events of shareholders voting down director’s bonuses and some top level resignations are the turning point and that new leadership will emerge.

Sir Mervyn King’s comment that economic recovery is at least five years away means that the sooner we see leadership that establishes confidence the better. The economy needs to be on sound ground (much sounder than at present), however painful that might be to achieve because as I said earlier it is the bedrock. (The bedrock in much the same way as a JCT contract is to those who build but something we often take for granted.) But we also need business leaders to identify opportunities and to provide and communicate a new found confidence as to what their respective industries can offer.

Peter Hibberd Chairman of JCT

SBCC ANNUAL UPDATE CONFERENCE IET Teacher Building, 14 St Enoch Square, Glasgow Peter Hibberd, JCT Chairman, will give a talk entitled ‘BIM its impact on procurement and standard forms of contract’ at this conference.

The main themes of this year’s conference are procurement and BIM considering the current challenges and benefits of both for the construction

sector, together with the annual update on the contracts, the legislative position and contract administration.

For further information, please contact Deborah Mays, info@sbcconline.com, Tel 0131 2217507. For the full programme: www.sbcconline.com.

OCTOBER 2012

JCT NEWS 4

CHALLENGE, SUPPORT AND CELEBRATE: JCT’S STUDENT ESSAY COMPETITION REWARDS THE NEXT GENERATION OF CONSTRUCTION PROFESSIONALS Education has been a major theme for JCT throughout 2012. Since launching our Education and Training Initiative we have introduced our Academic Box Set package, which includes digital and hard copy versions of the entire suite of JCT documents. In June we launched our first major non-contract product for the education sector – JCT Contracts Discovery, an education and learning module for education and training providers, independent tutors and inhouse training teams to give students a comprehensive understanding of JCT contracts. The module has gained support throughout the industry, with the College of Estate Management (CEM) announcing that they will be adopting the module for use on their undergraduate courses from next year.

However one of the key objectives of the Education and Training Initiative was to provide direct support to construction students and to shine the spotlight on the construction professionals of the future. In addition, an important factor for JCT was being able to engage with a student audience and highlight the important role that construction contracts will have throughout their careers. JCT’s Student Essay Competition is the result of this aim.

Running from February to June, the competition was open to any student studying a degree, professional qualification, vocational course, trade apprenticeship or any other construction related programme. Entrants, who registered via the JCT website, had a choice of two topics on which to write a 2,500 word essay: “A vision for the future of construction” or “The future of construction contract management in the digital age”. The first topic was designed to provide students with a broad palette from which to shape their essay, and they were able to focus on

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The Judges discuss the winning essays, with Rebecca Evans (Construction News), Tony Bingham (3 Paper Buildings, Temple) and Jamie White (CITB-Construction Skills)

a particular element of the construction industry in their answer. The focus of these entries varied widely and included answers on sustainability, BIM, supply chain management, and globalisation.

The second option asked students to consider construction contracts much more specifically, and answers here also included the integration of BIM and a focus on partnering.

With over 80 registered entrants, the judging of the competition took place on 13th June. Having entrants filtered down to 11 ‘finalists’ the job of the judges was to consider each essay according to criteria which included originality, imagination, creative writing skills and clarity of thought.

The judging panel comprised a crosssection of construction industry experts, representing education, training and skills, law, and the media. Chaired by JCT chair Professor Peter Hibberd, the panel included Dr Ann Heywood (CEM principal), Mark Farrar (chief executive of CITB-Construction Skills), Tony Bingham (barrister and arbitrator at 3 Paper Buildings, Temple and Building magazine columnist), and Rebecca Evans (editor,

Construction News). The judges were sent manuscripts to consider before the judging day, and reviewed each essay blind, without prior knowledge of the student or institution.

The competition awards comprised an ‘overall winner’ prize of £1,000 and an additional £1,000-a-year scholarship to study on a construction related course at the College of Estate Management, a ‘winner’ prize of £1,000 and a ‘runnerup’ prize of £250. The judges decided to award the overall winner prize, one winner prize and three runner-up prizes to the following students: Overall Winner Richard Hope, Nottingham Trent University “A vision for the future of construction: supply chain management and integration” The judges said of Richard’s essay: “A very good piece of work, the most original of all the entries, rooted in industry practice, which provides a practical perspective and application beyond its academic context.”

5 Winner Carly Barrow, Birmingham School of Architecture “BIM: a double-edged sword” Commenting on Carly’s essay, the judges said: “A well written, well structured and highly topical essay. The writer presents her arguments clearly which makes for an interesting and thought provoking read.”

Runners-up Laurie Brooks Gillies, Leeds Metropolitan University “A vision for the future of construction” Cerianne Thorneycroft, Birmingham City University “The future of construction contract management in the digital age” Kerron Miller, College of Estate Management “A vision for the future of construction” The judges said of the runner-up entries: “These are all very strong entries and worthy prize winners. A topical and compelling range of subjects including sustainability and BIM. Well structured and well written on the whole, missing out on the top prizes because of the strength of the winning essays in terms of originality, clarity and focus of argument.”

All of the above winning essays can be downloaded and read in full at www.jctltd.co.uk/studentcompetition-2012.aspx Following the competition judging process, a special awards ceremony took place as part of JCT’s annual Construction Industry Parliamentary Reception, held at the House of Commons on the 12th July. The winners and runners-up, along with representatives of their institutions, were invited to receive certificates and take part in the event, which focused on the importance of education within the construction industry.

JCT chair Peter Hibberd (centre) chairs the judging session, with Dr Ann Heywood (CEM) and JCT chief executive Neil Gower

Recognising the work and achievements of the prize winners was a key part of the event and the setting provided an excellent opportunity for the students to meet with industry experts, professionals and their future colleagues and peers.

Hosted by Kwasi Kwarteng, MP for Spelthorne, the reception included presentations from competition judges Mark Farrar and Dr Ann Heywood. Mark Farrar spoke to attendees about training and skills within the industry whilst paying tribute to the work that JCT is doing in this area. Dr Ann Heywood highlighted the work that CEM is currently doing with JCT. The two organisations recently signed a co-operation agreement for the future development of courses to meet the needs of the industry. In addition to the adoption of the JCT Contracts Discovery education module, CEM have been a key supporter of the essay competition with the addition of the overall winner’s scholarship prize.

The reception was well received, with delegates keen to support JCT’s work in promoting the importance of construction contract education, and take the opportunity to reflect on the work of the students and the positive

steps the industry is making in this area.

Commenting on Twitter, Rebecca Evans, editor of Construction News and JCT essay competition judge said: “Really enjoyed meeting the students too inspiring to see talented and ambitious professionals of the future”.

Competition judge Tony Bingham also praised the competition as a whole, commenting in Building magazine: “Well done JCT for creating some debate and awarding some handsome prizes.”

Education and training will continue to be an important focus moving forward. JCT has already engaged with participating education institutions in this year’s competition to establish a format for the competition for future years. In addition to the competition, the JCT Contracts Discovery education module will continue to be promoted to colleges and universities offering construction related courses for adoption within their programmes. JCT would like to thank all those students who entered essays for this year’s competition and, in particular, congratulate the winners and runners-up and wish them the best for their future construction careers.

OCTOBER 2012

JCT NEWS 6

OVERALL WINNER – JCT ESSAY COMPETITION 2012 A VISION FOR THE FUTURE OF CONSTRUCTION: SUPPLY CHAIN MANAGEMENT AND INTEGRATION RICHARD HOPE – NOTTINGHAM TRENT UNIVERSITY

1.0 – Introduction 1.1 – Why Supply Chain Management?

Richard Hope

Supply chain management is extremely current due to its success in other industries and therefore considered to be the future of construction by some academics.

According to Constructing Excellence (2004), products and services provided by external businesses typically account for 80% of the total cost of projects, this means that main contractors have an ever-expanding supply chain as more packages are let to subcontractors rather than being done in-house. The Latham and Egan reports highlighted the requirement of outsourcing causing more emphasis on developing relationships within supply chains; as a result an explosion of research has gone in to SCM. However, as Briscoe and Dainty (2005, p.319) discussed, the construction industry ‘remains characterised by adversarial practices and disjointed supply relationships’ so where are we going wrong?

This essay discusses whether SCM is the future of the construction industry or whether its traditional roots will restrict its ability to improve.

chain and develop integration by establishing trust, reducing the distance between firms by improving communications, engaging early collaborative engagement and finally by alignment of systems and processes (Ross, 2011). This is best represented using a diagram:

1.2 – Supply Chain Management – What is it?

Supply chain management is considered an ‘umbrella term’ encapsulating topics such as partnering and lean manufacturing (Kelly et al., 2002, p.202). This could be considered a contributing factor to why this subject is still shrouded in confusion. To make this intangible subject more understandable a sound definition of supply chain management is required (Lambert et al., See Pryke, 2009, p.183): ‘Supply Chain Management is the integration of key business processes from end user through to original suppliers that provide products, services, and information that add value for customers and other stakeholders.’

Therefore if you are in the construction industry either as a client, main contractor or any other service provider you are in a supply chain. The idea of supply chain management is to take those organisations in a supply

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Figure 1 - SCM Contractual Links Figure 1 shows that although the contractual relationship remains the same as in a traditional supply chain, there is transferring of information and knowledge that wouldn’t be present traditionally. This is supply chain integration.

This means the client and the main contractor build relationships with multiple tier suppliers and act as a unified team to give the client better value (Davis and Love, 2010). All the knowledge gained is then contained within the supply chain and is transferable to the next

7 project with the client (Khalfan and McDermott, 2007). Pryke (2009) explains, members of the supply chain are continually linking and disconnecting depending on the project function to be performed.

1.3 – Background of Supply Chain Management Supply chain management had been in use before the recent hype in the construction industry. According to Womack et al. (1990) the SCM way of thinking originated from attempts to understand the phenomenal success of the Japanese automotive industry in the 1970’s and 1980’s. In the Western automotive industry the main objective was ‘obtaining the necessary goods and services at the lowest price possible’ (Maylor, 2005, p.297).

Rather than looking at the short-term needs of the business, the Japanese manufacturing industry invested trust and time into long-term relationships (Cox, 1999).

What these relationships created was ‘lean thinking’, allowing the Japanese manufacturing industry ‘much higher level performance of the supply chain – shorter development times for new products, much lower levels of inventory and higher levels of quality’ (Maylor, 2005, p.297).

This model has been replicated by the Western manufacturers, not just in the production of cars but also in supermarket retailing (Cox, 1999 and Kelly et al., 2002). Pryke, (2009, p.7) makes the point that ‘SCM is inextricably linked with partnering but whether partnering creates the need for SCM or vice versa is a debatable point’. However, due to the reoccurring problems of adversarial behaviour

involved with partnering a requirement for SCM was created (Pryke, 2009).

1.4 – Why Supply Chain Management in Construction?

The construction sector is renowned for being traditional and lagging behind in areas such as IT and discrimination; supply chain management is no exception (CBPP, 1998, see Kelly et al, 2002). The construction industry’s reaction to the idea of supply chain management was slow and perhaps even reluctant (Love et al, 2004). This is understandable, during the 80’s and early 90’s the construction industry was concentrating on surviving a recession, creating happy relations with already ‘adversarial contractual relationships’ (Love et al, p.43, 2004) was the least of construction professionals’ concerns.

As pointed out by Khalfan and McDermott (2007) the drive to change and promotion of innovation in the construction sector was provided by government-supported reports by Egan and Latham. The Egan report produced Movement for Innovation (M4I), which helped companies find innovative ways to procure. What the Egan report (see Khalfan and McDermott, 2007, p.4) proposed was that ‘continuous service, product improvement and company profitability can only be achieved through innovation.’

Latham’s 1994 report was more focussed on the relationships that we have with supply chain promoting the importance of good communication and information sharing (Briscoe and Dainty, 2005). The reports conducted by Egan and Latham were influential and resulted in the release of new initiatives such as building down barriers and ProCure21 (Khalfan and McDermott, 2007). This

urged the construction industry to take on supply chain management to be able to fit in to the innovative procurement approaches of the UK’s biggest client the public sector.

Supply chain management has become more popular due to implementation of SCM orientated contracts. The ‘JCT – Constructing Excellence’ contract has a document that supports ‘collaborative working’ and the formation of ‘integrated teams within the supply chain’ to eradicate waste and deliver a project successfully (see King, 2011, p.9). Elements of SCM are visible through other contracts such as the NEC, in fact the first clause in this contract, 10.1, requests acting ‘in the spirit of mutual trust and cooperation’ (NEC3 Option B, 2005, p.3) - screaming out the Latham ideologies.

However, it has to be recognised, after the considerable exposure since the Latham and Egan reports, 18 years later the industry still hasn’t fully established a strong SCM ethic. It is questionable at this point if SCM has a place in the future of construction.

To read Richard’s essay in full, please go to: www.jctltd.co.uk/studentcompetition-2012.aspx Richard’s essay continues with the following headings: 2.0 – Key Issue 2.1 – Integration vs. Fragmentation 2.2 – Win-Win? 2.3 – Supply Chain Management and Subcontractors 3.0 – Conclusion 3.1 – Is Supply Chain Management The Future of Construction

OCTOBER 2012

JCT NEWS 8

TIME AT LARGE ANDREW BATTY – SOLICITOR, PINSENT MASONS LLP

THE CONCEPT OF TIME AT LARGE Time is most commonly ‘at large’ in construction projects as a consequence of the ‘prevention principle,’ which dictates that no party may require another to comply with a contractual obligation in circumstances in which that party has itself prevented such compliance.

In the context of time obligations, this means that an employer cannot continue to insist that a contractor meets the original contractual date for completion in circumstances in which the employer has prevented the contractor from carrying out its works in time to meet that date.

Normally, such prevention is dealt with by explicit contractual extension of time (“EoT”) provisions. However, where prevention is not dealt with by the contract, or is not dealt with by the employer in accordance with the contract, time is said to be ‘at large’ and the contractor’s obligation to meet the contractual date for completion may be replaced by an obligation to complete its works within a reasonable time.

WHEN IS TIME ‘AT LARGE’?

Time may be said to be ‘at large’ where:1. there is no contract.

2. there is a contract but it does not specify a completion date.

3. there is a contract with a completion date and delay has been caused by the employer but there is no power under the contract by which the time to complete may be extended.

4. there is a contract with a completion date and a power by which the time to complete may be extended, delay has been caused by the employer but the power to extend time cannot be or has not been put properly into effect.

It is the fourth circumstance which gives rise to most difficulty in the application of the principle and which raises the most issues in practice.

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FAILURE TO OPERATE CONTRACTUAL EXTENSION OF TIME PROVISIONS Employer decisions which are ‘open to review’ Most standard form building and engineering contracts, including the JCT form, contain express EoT provisions which require a contractor to follow a specific procedure and to prove its entitlements in order to be awarded an EoT. Generally, an EoT may only be claimed in circumstances in which delay was caused by either: (a) the employer; or (b) other factors for which the parties expressly agreed that the contractor was not responsible (e.g. force majeure, strikes and exceptionally inclement weather). The JCT Standard Building Contract, 2005 edition, Revision 2 2009 (JCT SBC05) and JCT Standard Building Contract, 2011 edition (JCT SBC11) define “delay by the employer” as: “any impediment, prevention or default, whether by act or omission, by the Employer, the Architect/Contract Administrator, the Quantity Surveyor or any of the Employer’s Persons, except to the extent caused or contributed to by any default, whether by act or omission, of the Contractor or of any of the Contractor’s Persons” (clause 2.29.6 in the With Quantities contract (SBC05/Q), clause 2.29.7 in SBC11/Q, clause 2.29.5 in the Without Quantities contract (SBC05/XQ) and clause 2.29.6 (SBC11/XQ).

Standard form contracts almost always provide that disputes concerning EoT awards may be referred to some form of tribunal (e.g. an adjudicator) which has the power to correct errors in the operation of these provisions and to amend awards as appropriate (in other words, EoT awards are not final and binding at an interim stage and, in the case of most JCT forms, will not become binding at final account stage until 28 days following issue of the Final Certificate). In case of any dispute in these circumstances, the courts will prefer to reconsider the contractor’s

EoT claim and award a reasonable EoT, rather than declaring time at large.

Consequently, it would be unusual for time to be set ‘at large’ in circumstances in which the parties have contracted on a standard form, such as the JCT. Nevertheless, such circumstances could exist: for example where parties have agreed to amend, remove or limit the contractual mechanisms for dispute resolution or EoTs at the point of contract negotiation/formation.

Therefore, any amendments to standard forms should be carefully considered and drafted.

Employer decisions which are ‘final and binding’ If an employer has caused delay to a contractor, has granted an EoT award which is unreasonable (or has refused to grant any award at all) and that decision is stated to be ‘final and binding,’ the courts will not open up the decision.

Instead, the courts will seek to do justice to the contractor by looking very closely at the employer’s decision to see whether it is valid or whether it can be declared a nullity. If so, time will be set ‘at large’ and the contractor’s obligation will be to complete within a reasonable time.

An EoT decision may be declared a nullity if, for example: the employer fails to follow the correct contractual procedure (e.g. makes the decision too early/too late or allows it to be made by the wrong party); the decision was based on an employer’s failure to take account of matters relevant to its decision or an employer taking account of matters which were irrelevant; or there was inappropriate collusion or interference in the decision.

COMPLETION DATES – WHAT DIFFERENCE DOES IT MAKE? Assessment using extension of time provisions In these circumstances, a tribunal will make an assessment on the basis of the contractual EoT provisions and the original decision (or lack thereof) will be reviewed in accordance with the

REUTERS/Darren Staples

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dispute resolution and any other relevant provisions in the contract.

The tribunal will generally use the contractor’s original programme and add to it the effect of the causes of delay which the parties have agreed to be at the employer’s risk. In many cases this will involve an as-planned impacted analysis which will generally result in an award for the contractor which does not exclude any period in which the contractor was in culpable delay.

In this scenario it is the contractor which bears the burden of proving its entitlements.

Assessment where time is ‘at large’ In contrast, where time is at large, the contractual machinery has fallen away and a tribunal will first need to determine which party bears the risk of each cause of delay. This determination will be made on the basis of common law and without reference to any express contractual provisions.

Only then will the tribunal look at the effects of the employer’s delay and use this to arrive at a date by which it would have been reasonable for the contractor to complete in the circumstances which actually existed at the time.

In this scenario, the burden is effectively

on the employer to prove that the time actually taken by the contractor is excessive and resulted from breaches of the contractor’s obligations to perform its works.

CONCLUSION EoT provisions are of vital importance to all parties to a contract, since if an EoT is granted (or if time is set at large), this will operate wholly or partially as a defence to a claim for liquidated damages for failure to meet the original contractual completion date. It should be noted, however, that if time is at large and the contractor works too slowly, the employer may still be able to recover damages at common law for late completion.

Lessons for contractors Contractors should ensure that they are aware of, and follow, the correct contractual procedures governing applications for extensions of time. If the awards which they receive in response to their applications are unreasonable, or if an employer acts in a manner which is not in accordance with its contractual obligations, the contractor’s first resort should always be to the dispute resolution mechanisms contained in the contract.

Whichever basis upon which a contractor intends to challenge an employer’s

EoT assessment however, it should continue to perform its works as quickly as reasonably possible. No matter how unreasonable the conduct of the employer, the contractor will not have ‘as long as it likes’ to complete its works.

Lessons for employers Employers should remember that EoT provisions exist just as much to protect contractors from the consequences of non-culpable delay, as to present employers with an opportunity to recover compensation from contractors for late completion.

Just like contractors, they must ensure that they examine the contractual provisions governing extensions of time carefully and operate the assessment and notification procedure correctly. In the event that an EoT decision is challenged by a contractor, it will not be sufficient for the employer to rely on any contract terms which state that their decisions on such matters are ‘final and binding’. Any decision which falls outside the procedure (even if only on a ‘technicality’) runs the risk of being held to be a nullity, with the result that time is set ‘at large’ and the employer is no longer entitled to hold the contractor to the contractual completion date or to levy liquidated damages for late completion.

OCTOBER 2012

JCT NEWS 10

THE PIVOTAL ROLE OF PROCUREMENT IN THE WAR AGAINST WASTE RICHARD BUCKINGHAM – HEAD OF CONSTRUCTION AND REFURBISHMENT, WRAP

One of the most effective weapons the construction industry can use to prevent and reduce waste is an ability to embed sustainability clauses within procurement documents. Stipulating sustainability clauses in tenders, contracts and project specifications gives clients and contractors an effective and measurable goal when it comes to reducing waste.

WRAP (Waste & Resources Action Programme) has worked with the construction industry for many years to help tackle waste. WRAP has engaged with every link in this industry’s diverse supply chain to help curb waste arising in building and civil engineering work. The organisation designed and developed a dedicated voluntary agreement to unite industry in a single endeavour – Halving Waste to Landfill.

Halving Waste to Landfill was created to help curtail the amount of construction, demolition and excavation waste sent to landfill by half by 2012, against the 2008 benchmark. Since its launch in winter 2008 more than 800 companies of all sizes have become signatories. All are taking action individually to reduce waste within their own business and through the supply chain, and thereby contribute towards this shared industry goal.

Over the last four years WRAP has produced a wealth of assistance to help in this quest. These include Designing out Waste tools and guidance for architects and civil engineers, Site Waste Management Plan templates, numerous case studies on a range of best practices and many other tailored tools, advice and support. All are freely available on the WRAP website. Of all this assistance, one resource has proven to be the silver bullet against waste – using procurement requirements in contracts to reduce waste to landfill. Be it building or civil engineering,

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setting project procurement requirements for good practice in waste reduction and recovery cannot be underestimated.

WRAP has produced simple guidance and template wording for setting effective waste requirements within a range of procurement documents. By supporting signatories to embed good practice waste to landfill requirements within their contractual documents using this guidance, WRAP helped influence projects with a construction value of over £43 billion during Halving Waste to Landfill.

For clients and contractors, WRAP produced Construction Procurement Guidance. This provides advice on how to help your supply chain take action on waste at each project stage.

It includes setting questions during the pre-qualification process to help ensure your supply chain is aware of the need to tackle waste, and is capable of doing so.

It contains model requirements for use in tender and appointment documents to formalise responsibility for achieving project waste targets.

The current model procurement wording covers waste reduction, waste recovery and the greater use of recovered materials at all stages of a project – policy, preparation and design, pre-construction, construction, use and post-completion.

The Halving Waste to Landfill commitment concludes in December 2012, and WRAP is working with governments and an industry consultation group to consider the best way forward following its completion.

We will of course be liaising with industry and signatories on potential options and next steps. The agreed outcome will aim to build on the significant progress delivered so far under Halving Waste to Landfill, and will broaden focus to include resource efficient construction, which WRAP first outlined in its latest Business Plan.

For this to be effective on a wide scale it is naturally important to outline what ‘resource efficiency’ means, particularly in relation to construction.

In general resource efficiency means reducing the environmental impact of the consumption and production of goods and services over their full life cycle.

WRAP further qualifies this definition in relation to construction as making the best use of materials, water and energy over the lifecycle of built assets to minimise embodied and operational carbon.

Resource efficiency is achieved by using resources at their highest potential throughout the lifecycle – in product manufacture, design, construction, operation, refurbishment, and at end of life. Embedding resource efficiency within procurement documents, in tenders, in contracts and in project specifications could help address these concerns across the entire supply chain.

WRAP is pleased to be working with the Joint Contracts Tribunal, the key industry body producing standardised forms of construction contracts, guidance notes and other documentation for use by the construction industry. WRAP has a history of working with JCT, notably on its guidance note Building a sustainable future together. We will continue to work closely with JCT to ensure that procurement remains the precision tool it is.

For WRAP UK construction procurement guidance please go to: www.wrap.org. uk/content/procurement-guidance

NEW FROM JCT CONTRACTS TENDERING PRACTICE NOTE 2012 The Tendering Practice Note 2012 is a guidance document which covers the selective tendering process, including single-stage, two-stage, and competitive dialogue procedures, as well as the process of pre-qualification.

It is designed to reflect current best practice and provide general guidance, taking into account developments in the use of quality criteria in the tender assessment, the increased use of electronic tendering, and in relation to the public sector, the key areas where EU public procurement rules impact on the tendering process.

To find out more visit: www.jctltd.co.uk/product/tendering-practice-note AVAILABLE NOW FROM YOUR LOCAL JCT STOCKIST

ISBN: 9780414025615 PRICE: £12.99

JCT CONTRACTS DISCOVERY: THE EDUCATION AND LEARNING MODULE FROM THE JOINT CONTRACTS TRIBUNAL JCT Contracts Discovery is an education and learning module designed specifically for those studying or teaching JCT Contracts and JCT contractual procedures.

JCT Contracts Discovery: • Explains the major elements of the JCT suite of contracts • Goes through how JCT Contracts are set up and implemented • Looks at the various roles of individuals including contractors, employers, sub-contractors and contract administrators within the contract process • Discusses how JCT provisions deal with administrative matters, such as payment, control of the works, and control of time

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OCTOBER 2012

JCT NEWS FLASH

YOUR UPDATE ON JCT SERVICES AND PRODUCTS JCT CONTRACTS 2011 EDITION AVAILABLE FROM YOUR STOCKIST

The new edition of JCT Contracts – JCT 2011 – which covers the new payment legislation and other updates was published in September 2011.

The new Construction Act came into force on 1 October 2011 in England and Wales.

The JCT 2005 suite will remain available until the end of 2012 and it is labelled to show they no longer comply with the current legislation.

The new Construction Act came into force on 1 November 2011 in Scotland.

Users in Scotland should refer to www.sbcconline.com regarding the SBCC 2011 suite.

In Northern Ireland, the new Construction Act is anticipated to come into force in October 2012. When it comes into force, users should use the JCT 2011 suite. For copies of the Northern Ireland Adaptation Schedules for the JCT 2011 suite, please contact the Royal Society of Ulster Architects at www.rsua. org.uk or call 028 9032 3760.

MAKE YOUR TRANSITION TO JCT 2011 WITH JCT TRACKED CHANGE DOCUMENTS For information please go to www.jctltd.co.uk/tracked-change.aspx

JCT CONTRACTS COMPLETE WORKS JCT 2011 Complete Works (ISBN: 978-0-414-04793-8) comprises a full set of JCT documents, in JCT branded binders, for your library or office.

JCT CONTRACTS ACADEMIC BOX SET JCT Contracts Academic Box Set (ISBN: 978-0-414-02261-4) includes: • the complete set of JCT Contracts • the JCT Contracts Digital Service • invitation to become a member of the JCT Education and Training Provider Group

The Academic Box Set is a limited offer and is only available to recognised bodies whose primary purpose is the provision of education and training.

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MAKE SURE YOU RECEIVE EVERY ISSUE OF THE JCT NEWS

Please register at www.jctltd.co.uk/news-update.aspx to join the JCT News mailing list.

JCT NEW RULES OF MEASUREMENT UPDATE The RICS New Rules of Measurement: Detailed Measurement for Building Works (‘NRM2’) has been published to replace the Standard Method of Measurement for Building Works (‘SMM7’) from 1 January 2013. NRM2 should be used instead of SMM7 for all contracts and sub-contracts entered into on or after that date. If users wish to use NRM2 instead of SMM7 in contracts and sub-contracts entered into in advance of that date, they may of course do so.

To download a free copy of the JCT New Rules of Measurement Update (August 2012), please go to www. jctltd.co.uk/new-rules-measurement.aspx.

JCT NAMED SPECIALIST UPDATE This Update (February 2012) contains optional provisions for the Standard Building Contract 2011 to enable the Employer to name individual specialists as domestic sub-contractors for identified part(s) of the Works.

To download a free copy of the JCT Named Specialist Update, please go to www.jctltd.co.uk/namedspecialist-update.aspx.

JCT PUBLIC SECTOR SUPPLEMENT JCT has issued a Public Sector Supplement which can be used in conjunction with the JCT contracts 2011 Edition in the procurement of public sector projects.

The Supplement includes the following features: • Provisions to ensure alignment with the Government’s Fair Payment Guidelines.

• A model clause authorising disclosures by public sector clients in accordance with the Freedom of Information Act 2000 and the Government’s Transparency Policy.

• Reference to any agreed Building Information Modelling protocol.

To download a free PDF copy of the Public Sector Supplement, please go to: www.jctltd.co.uk/public-sector.aspx.

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