‘Person-in-charge’

5.4 In order that its responsibility is carried out properly, the contractor is required to ensure that ‘a suitably qualified representative is on Site during the Works to answer queries and receive instructions on its behalf’ (cl 1.3). What constitutes ‘suitably qualified’ would depend on the nature and scale of the project, i.e. the representative should be sufficiently qualified to fulfil their role competently and in accordance with the contract. The contracts do not require that the person is present ‘at all times’ (as in the JCT’s SBC11), and it may be that something less than full-time presence would be acceptable, provided that they are present at all material times, and that they make arrangements for dealing with queries or receiving instructions during short absences. There is no requirement in the Contract Conditions to have the person named, but it would be good practice to establish the identity of the person at the pre-start meeting, and to make sure this is recorded in writing.

Responsibility for subcontractors

5.5 The contractor is also fully responsible for the quality of work of all subcontractors (cl 1.7), whether these are its own domestic subcontractors or those selected by the client under the required specialists optional clauses (cl A7.1.3 CBC; or A5.1.3 DBC). As there are no provisions in the RIBA Building Contracts for the client to directly engage other firms, any persons on the site during the works would be under the direct supervision and responsibly of the contractor. If the client made any special arrangements with the contractor, outside of the contract, to allow its directly engaged persons on site, then this would cause confusion as to who is responsible for their performance, including in relation to quality of work, progress and health and safety, unless a detailed agreement regarding these matters is drawn up.

Information to be provided by the contract administrator

5.10 In most projects the information in the contract documents is not sufficient to construct the works; a certain amount of detailed information (e.g. schedules of finishes) is often outstanding, and it is usual for the contractor to be provided with this information during the course of the work. The RIBA Building Contracts – unlike, for example, the JCT’s MW11 (cl 2·4) – do not contain an express obligation to provide further information. However, they do place a general duty on the contract administrator to issue instructions (cl 5.1), which would include instructions regarding detailed aspects of the works. In any case, such an obligation is likely to be implied with respect to all work that is not listed as a part to be designed by the contractor. It is difficult to see how a contractor could successfully achieve completion in the absence of a duty requiring that instructions, information, plans, drawings etc. are issued in good time, so the obligation is likely to arise under an implied duty to co-operate. The contract administrator should therefore assume that it should provide the contractor will all key information, the only exceptions being in relation to contractor-designed items and, possibly, very small items, where it may be that the contractor could be expected to determine these for itself (see Wells v Army & Navy Cooperative Society Ltd, also para. 3.13, and National Museums and Galleries on Merseyside (Trustees of) v AEW Architects and Designers Ltd).

5.11 The time by which information should be supplied is whenever the contractor needs it, given the overall progress on site and the date for completion. The contractor’s programme might have been required to set out dates for information to be provided, in which case this would be a guide, but it would not be conclusive. As with other issues concerning timing, it would be sensible to have this as an ongoing agenda item at progress meetings.

Information to be provided by the contractor

5.12 If optional clause A2 is selected, the contractor is required to provide information regarding its developing design, as set out in the Contract Details (item U in CBC, item R in DBC). The clause states:

This is a very useful provision to include, as it is essential that the contract administrator is able to monitor that the design meets the client’s requirements, as set out in the contract documents, and to co-ordinate it with the rest of the project.

5.13 The RIBA Building Contracts do not include a detailed procedure for submissions (e.g. format, response, comments or resubmission), such as that set out in Schedule 1 to SBC11. The administrator could, however, use the power under clause 5.4.7 to instruct that further or revised documents are provided. More importantly, the contracts do not include an equivalent clause to SBC11 Schedule 1:8·3, which states that:

5.14 If an RIBA Building Contract is to be used for a project where there are significant contractor design elements, then it may be wise to consider including some provisions regarding submission. Failing that, when making comments it might be sensible to remind the contractor of its obligation to ensure that the design is in accordance with the client’s specification (cl A2.1.3).

Inspection

5.16 On most projects the contract administrator will inspect the works at regular intervals. The RIBA Building Contracts do not place a duty on the contract administrator to do this, although they do give the contract administrator the power to visit the site and inspect the works (cl 5.3.1 and 5.3.2). Note that the reference in the guidance notes to the contract administrator’s ‘duty’ to visit and inspect is incorrect. However the contract administrator’s obligations to the client will, almost always, include a duty to inspect. Normally this would be an express duty under the terms of appointment, but in some circumstances it could also be implied: clearly, when the contract administrator is required under the contract to form an opinion on various matters – including being satisfied with the standard of work and materials prior to issuing a payment certificate – then it is essential that some form of inspection takes place. However, it is important to note that the duty is owed to the client, and not to the contractor. For example, a contractor cannot blame a contract administrator for failing to draw its attention to defective work.

5.17 Furthermore, a contract administrator will not necessarily be liable to the client for negligent inspection if a defect in a contractor’s work is not identified. The question in every case is whether the contract administrator exhibited the degree of skill that an ordinary competent professional would exhibit in the same circumstances. Generally, the extent and frequency of inspections must enable the contract administrator to be in a position to properly certify that the construction work has been carried out in accordance with the contract (Jameson v Simon). The case of McGlinn v Waltham Contractors Ltd sets out some useful advice on the appropriate standard of inspection.

Testing and defective work

5.18 As noted at the beginning of this chapter, it is entirely the contractor’s responsibility to ensure that the work is completed in accordance with the contract. The contract administrator is, however, given various discretionary powers that may be useful if it is concerned that the contractor does not appear to be fulfilling this primary obligation.

5.19 First, the contract administrator may issue instructions requiring any work to be uncovered, inspected and/or tested for compliance (cl 5.3.3, 5.4.3, and cl 5.7 in CBC or clause 5.5 in DBC). If the work proves to be defective, the contractor will bear the cost of the complying with the instruction and the correction of the defects (cl 5.7.1 or cl 5.5.1). If the work complies with the contract, the client will bear the cost of the complying with the instruction (cl 5.7.2 or cl 5.5.2). Generally, therefore, the contract administrator would only issue such an instruction if there was a serious concern, or if the failure of the element in question would be crucial to the project or extremely difficult to correct later. Failure to issue any instructions would not in any circumstances lessen the contractor’s responsibility, no matter how difficult or expensive it might be to correct the problem later.

5.20 Second, whether or not the defective work has been tested, the contract administrator has power to instruct that it is removed (cl 5.4.3). Alternatively, the contract administrator may accept work that does not accord with the contract ‘and adjust the Contract Price accordingly’ (cl 5.8 in CBC, or cl 5.5.3 in DBC). Care should be taken when doing this. The contract administrator should obtain the client’s agreement, and a value should be proposed and agreed (see para. 6.12). Although an instruction is not required (unlike in JCT contracts), it would be advisable for the contract administrator to confirm the acceptance and deduction in writing.

Delivery of instructions

5.24 All instructions are required to be in writing, and the contractor is required to comply with them immediately (cl 5.5 in CBC, or cl 5.6 in DBC). If the contract administrator gives an instruction orally, the contract requires that it is confirmed in writing ‘promptly’ (cl 5.6.1/cl 5.7.1). If the contract administrator does not confirm the instruction, the contractor ‘shall issue a written record of the oral instruction to the Architect/Contract Administrator’ (cl 5.6.2/cl 5.7.2). Clause 5.6.3/5.7.3 then states ‘Except where clause 5.6.4/5.7.4 applies, a written record under clause 5.6.2/5.7.2 shall be the record of the Architect/Contract Administrator’s instruction unless the Architect/Contract Administrator amends it in writing within 5 days of receiving it’.

5.25 Ideally, contract administrators should avoid giving oral instructions, except in cases of emergency. If they cannot be avoided, it should not be difficult to confirm an instruction promptly using electronic communications. Remember that a simple email would constitute an instruction in writing; there is no need (although it may be good practice) to issue it in any special format.

5.26 The contracts (cl 5.6.2 in CBC and cl 5.7.2 in DBC) refer to the common practice whereby the contractor issues a ‘written record of the oral instruction’ (often termed a ‘confirmation of verbal instruction’ or ‘CVI’). Many contract administrators are comfortable with having the contractor confirm what they have said, but if this system is used, the contract administrator must be very vigilant and check that a contractor’s confirmation exactly reflects what was intended. In a busy office with a constant stream of emails, it is easy to misread one, and an inaccurate confirmation will become the contractual record after five days.

5.27 If the contract administrator would prefer to avoid this situation, it can instruct that oral instructions do not take effect until confirmed by the contract administrator in writing (cl 5.6.4 in CBC, cl 5.7.4 in DBC). The contractor is still required to send the written record under clause 5.6.2/6.7.2.

5.28 In the first system for dealing with oral instructions, it appears that the instruction is intended to take effect immediately; although the contracts do not say this, clauses 5.6.2 and 5.6.3 of CBC and clauses 5.7.2 and 5.7.3 of DBC refer to a record of an instruction, as if it is already effective – it simply needs to be recorded. However, under the second system, an oral instruction would be of no effect until confirmed by the contract administrator. Although this system would prevent inaccurate CVIs slipping through the net, there is a danger that an instruction could get overlooked entirely. The choice of which system to use is a matter of personal preference for the contract administrator. It can be decided after the contract is entered into, but the decision should be made early on in the project, ideally at the pre-contract meeting, as otherwise there could be confusion if an emergency unexpectedly arises.

Procedure following an instruction

5.29 In CBC, the contractor is given the power to notify the contract administrator, within seven days of receiving an instruction, if it believes the instruction is not in accordance with the contract or that implementing it would have adverse health and safety implications or would adversely affect any part of the works designed by the contractor (cl 5.9). (It is suggested that, in order to discharge its duty of care, the contractor should notify the contract administrator if any of these situations arise; this duty would apply to both contracts.) The contract administrator may then, on receipt of the notification, modify, amend, withdraw or confirm the instruction, and the contractor shall comply accordingly (cl 5.10).

5.30 In both contracts, if the contractor fails to comply with an instruction, the contract administrator may issue the contractor with a seven-day notice to comply (cl 5.11 in CBC, cl 5.8 in DBC), and if the contractor fails to comply with the notice, the client may engage others to undertake the instruction (cl 5.11.1/cl 5.8.1); this works in a very similar way to the notice to comply provisions in JCT contracts. As with the JCT notice, if the contract administrator has serious concerns that the contractor may refuse to comply (e.g. because it has already expressed that intention at a meeting) then it would be possible for it to issue the instruction and the compliance notice together. In addition to giving the client this right, the contracts require the contractor to co-operate with the new contractors (cl 5.11.2/cl 5.8.2) and to allow them access to the site (cl 5.11.3/cl 5.8.3), and the contractor is to be responsible for all costs and expenses incurred by the client (cl 5.11.4/cl 5.8.4).

5.31 Where a change to works instruction is issued, the contractor is required to calculate and submit details to the contract administrator of its effect on the contract price and date for completion (cl 5.12 CBC, 5.9 DBC). This must be done within 10 days of receiving the instruction. The contract administrator and contractor should aim to agree the appropriate revision of time and/or additional payment promptly, otherwise the contract administrator determines the appropriate amount (cl 5.13 CBC, 5.10 DBC).

Consequences of practical completion

5.38 The consequences of practical completion are as follows:

• liquidated damages will cease (cl 10.1);
• half the withheld retention is released (cl 7.4 CBC, cl 7.2 DBC);
• the defects fixing period commences (cl 10.2);
• the contractor remedies defects identified during the defects fixing period (cl 10.3.1;
• there is no requirement for the contract administrator to give notification of defects);
• the client allows the contractor reasonable access to remedy defects (cl 2.1.3);
• due dates change from monthly to two-monthly (cl 7.1, CBC only).

5.39 These consequences are important and therefore the contract administrator should take great care to ensure the defined level of completeness has been reached before certifying practical completion. Issuing the certificate with work outstanding places considerable additional risk on the client: the key areas being that there is no longer the sanction of liquidated damages to encourage the contractor to finish promptly, and the client holds only half the retention sum as security against any hidden defects. In addition, matters such as insurance of the works and health and safety will need to be resolved, and there are practical issues to do with managing the programming and payment for the outstanding work. The contracts have no provisions to cover these aspects as it assumes that the work will be finished, with the exception of defects that appear during the defects fixing period (see para. 5.46).

Use/occupation before practical completion

5.40 If the works have not reached practical completion, but the client wishes to use them, the contracts contain two provisions that may be of help to the client. The first is clause 9.17, which states that the client may request to use part of the works or a section of the works for ‘storage or other purposes’. In theory at least, the clause places no limits on what form the use might take. The contractor must grant permission, but only if the use does not interfere with the carrying out of the works. If the contractor agrees, it would be wise for the contract administrator to confirm this in writing, so that later this use cannot be raised as a reason for claiming a revision of time or additional payment. Practical completion is not certified and therefore none of the above consequences apply, although the contracts state that the client becomes responsible for the insurance implications of such use (cl 9.17).

5.41 The second provision allows the client to request to ‘take over’ (as opposed to ‘use’) any part or parts of the works or a section of the works before the contract administrator certifies practical completion (cl 9.18). As above, the contractor must grant permission, but only if the use does not interfere with the carrying out of the works. If the contractor agrees, the contract administrator must issue a notice clearly identifying the areas to be taken over and the date of takeover (cl 9.18.1). The contracts then state (cl 9.18.2):

5.42 Although it is not entirely clear, the reference to the part or section being ‘viewed as having achieved Practical Completion’ suggests that (a) the works to that part or section should be complete before takeover and (b) all the consequences of practical completion are intended to be triggered by the taking over, not just the defects fixing period. For example, although there is no specific reference to any reduction in liquidated damages, it would seem reasonable for some reduction to be made; this could be calculated on the basis of the proportion of the value of the completed works to the contract price. A similar reduction could be applied to the withheld retention. In order to avoid any doubt, the parties would be wise to agree the consequences in advance of the takeover, and the contract administrator to confirm them in the takeover notice.

5.43 There can be situations where the client is anxious to occupy part or possibly the whole of the works before any parts are sufficiently complete to be taken over under clause 9.18. Rather than viewing the work as having reached practical completion when it has not, it would be better if the parties make an ad hoc agreement as to what the arrangement will be. A suggestion was put forward in the ‘Practice’ section of the RIBA Journal (February 1992) which has frequently proved useful in practice: in return for being allowed to occupy the premises, the client agrees not to claim liquidated damages during the period of occupation. Practical completion obviously cannot be certified, and the defects fixing period will not commence, nor will there be any release of retention money, until the work is complete. Health and safety will need to be given careful consideration, and matters of insuring the works will need to be settled with the insurers.

5.44 Because such an arrangement would be outside the terms of the contract, it should be covered by a properly drafted agreement that is signed by both parties. (The cases of Skanska v Anglo-Amsterdam Corporation and Impresa Castelli SpA v Cola Holdings Ltd illustrate the importance of drafting a clear agreement.) It may also be sensible to agree that, in the event that the contractor still fails to achieve practical completion by the end of an agreed period, liquidated damages would begin to run again, possibly at a reduced rate. In most circumstances this arrangement would be of benefit to both parties, and is certainly preferable to issuing a heavily qualified takeover notice, or a certificate of practical completion, listing numerous incomplete items of work.

Non-completion

5.45 If the contractor fails to achieve practical completion of the works by the date for completion, the client may deduct liquidated damages at the agreed rate (cl 10.1). There is no need for the contract administrator to have issued any certificate, although it would normally write to the client advising it of the position.