Writing Specs. For Construction

Writing specifications for construction

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Peter J. Cox B.Sc. (Eng), A.C.G.L, M.LC.E., F.I.Struc1.E.

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This book is dedicated to untaught specification writers doing their best.

British Library Cataloguing in Publication Data Cox, Peter Writing Specifications for Construction I. Title 692.3

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ISBN 0-07-707803-9 Library of Congress Cataloging-in-Publication Data Cox, Peter Writing specifications for construction I Peter Cox. p_ c.m. Includes bibliographical references and index. ISBN 0-07-707803-9: I. Buildings - Specifications. 2. Specification writing. I. Title. TH425.C69 1993 692'.3-dc20

93-12838 CIP

Copyright © 1994 McGraw-Hili International (UK) Limited. All rights reserved. No part of this pulication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of McGraw-Hili International (UK) Limited. 1234 CUP 9654 Typeset by Computape (Pickering) Ltd, North Yorkshire and printed and bound in Great Britain at the University Press, Cambridge

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Contents

List of Figures and Tables Preface Part I

page

xv xvii

A background to specification writing

I

Scope of guide

3

Principles Differences in practice between North America and other countries General diversity of practice Readers to whom the guide is addressed Specification writing practice and technical knowledge

3 3 3 3 4

2

Who's who in design office specification writing

5

2.1 2.2 2.3 2.4 2.5 2.6 2.7

The Chief Specifier Who is the specification writer? The chief specification writer The project specification writer The document writer The specification writer and product selection Knowledge of a specification writer

5 5 5 6 6 6 7

3 Historical background to contract documentation

8

I 1.1

1.2 1.3

1.4 1.5

3.1 3.2 3.3 3.4 3.5 4

4.1 4.2 4.3 4.4

Evolution of contract documentation Conditions of Contract Bill of Quantities Specification systems References and bibliography

8 8 9 9 10

Terminology used in contract documentation

II

Introduction Parties Documents Finance

11 11 12 16 vii

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4.5 4.6 4.7 4.8

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Part 2 5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11

6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 7 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11

Programme Specification terms Abbreviations of organizations References and bibliography

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8.2 8.3 8.4 8.5

The Construction Documents

19

8.6

Contract documentation and Contracts

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Contract documentation Prequalification Documents Tendering Requirements Contract Documents Arrangement of written contract documentation Design and construction participants Construction contracts Basis of selection and award Basis of payment A personal view References and bibliography

21 22 22 23 27 27 29 36 37 38 39

9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10

Prequalification Documents and Tendering Requirements

40

Prequalification Invitation to Prequalify Prequalification Documents Letters to selected and unselected contractors Invitation to selected tenderers with no prequalification stage Tendering Requirements Introduction to Tender Documents Instructions to Tenderers Site Information and Employer's required construction sequences References and bibliography

40

40 41 41

42

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47 53

53

Form of Tender and supplements

54

Introduction Forms of Tender Supplements to Form of Tender Bill of Quantities Schedules of Activities Dayworks, provisional work, Prime Cost Sums and alternative work items Other schedules Additional information required from tenderers Remeasurement on site Coordination between bills and schedules and other Contract Documents References and bibliography

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8 Acceptance and Agreement 8.1 Procedures in accepting a Tender

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87

102

104

Conditions of Contract

105

Introduction Standard Conditions General Conditions Supplementary Conditions Special Conditions Coordination with the General Requirements Liquidated damages and bonuses Retention Examples of Schedules of Contract Data provided by the Employer References and bibliography

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10 Bonds and guarantees 10.1 Reasons for bonds 10.2 Definitions 10.3 Types of bond 10.4 Bond wordings 10.5 Joint ventures 10.6 Sources of bonds 10.7 Recourse and the cost of bonding

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Letter of Intent Letter of Acceptance Form of Agreement Importance of Tender and Acceptance/Agreement as Contract

Documents References and bibliography

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II 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.'0 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19

87 87 89

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Insurances

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Definitions Reasons to insure Contract Works insurance Construction plant and equipment insurance Public liability insurance Employer's liability insurance Professional indemnity insurance Existing surrounding property insurance Consequential financial losses insurance Liquidated damages insurance Political risks insurance Latent defects (or decennial) insurance Policy exclusions Contractual provisions JCT Standard Contract, 1980 Edition, with 198fr-91 amendments JCT Design and Construct Contract, 1981, with 1987 amendments JCT Management Contract, 1987 New Engineering Contract (NEC) Institution of Civil Engineers Conditions of Contract, 6th Edition (lCE6 Conditions)

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Contents

11.20 11.21

155

156

BPF Conditions FIDIC Conditions

158

12 The Specification 12.1 12.2 12.3 12.4 12.5 12.6 13

Reasons for specifications Required specification criteria Specification standards Specification writing in the United Kingdom Specification writing in North America and the developing countries References and bibliography

158

158

159

161

163

164

Changes to Tender and Contract Documents

165

13.1 Definitions 13.2 Advantages and disadvantages of changing contract documentation 13.3 Reasons for amendments 13.4 General criteria for changes to contract documentation 13.5 Addenda procedures 13.6 Addendum contents 13.7 Variation Order procedures 13.8 Pricing a Variation Order 13.9 Variation Order contents

Part 3

Specification writing and production techniques

14 Writing a specification section 14.1 Introduction 14.2 Technical content 14.3 Style and arrangement 14.4 Types of specification section 14.5 Reference standards 14.6 Submissions 14.7 Product selection 14.8 Specifying products from particular manufacturers 15 The Masterlist Definition Contract documentation covered by a Masterlist Masterlist sections Masterlist divisions/groups Basic criteria for an efficient Masterlist The principle of broadscope, mediumscope and narrowscope specification sections 15.7 Using a Masterlist for product data filing 15.8 Ideal arrangement of a Masterlist 15.9 Arrangement of project specifications 15.10 Standard UK Masterlists

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15.1 15.2 15.3 15.4 15.5 15.6

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15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24

Development of CAWS List of CAWS groups Designation of work sections Advantages and disadvantages of CAWS groups Product data filing for UK building works Development of the CSIICSC Masterformat List of CSIICSC Masterformat divisions Masterformat sections Advantages and disadvantages of CSIICSC Masterformat divisions Product data filing with CSIICSC Masterformat UK civil engineering Other associated classification systems International situation References and bibliography

16 Section Formats 16.1 16.2 16.3 16.4 16.5 16.6 16.7

Definition Prescriptive and performance Section Formats Advantages The three section parts Situation in the United Kingdom Position of variable and unchanging clauses Choice of source document for standard prescriptive Section Format

in this guide 16.8 Commentary on Part 1 clauses 16.9 Commentary on Part 2 clauses 16.10 Commentary on Part 3 clauses Appendix 16A.l 16A.2 16A.3 16A.4 16A.5 16A.6

Purpose of Section Format Definitions Functions of section parts Clause and paragraph arrangement Coordination Detailed description of Section Format

17 Specification Language 17.1 17.2 17.3 17.4

Introduction SQurces for Specification Language Standard Imperative mood Reference

Appendix 181

183

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185

185

Prescriptive Section Format Standard

Specification Language Standard

17A.l Basic requirements 17A.2 Vocabulary 17A.3 Spelling in UK English 17A.4 Abbreviations

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Contents

17A.5 17A.6 17A.7 17A.8 17A.9 17A.I 0 17A.II 17A.12 17A.13 17A.14

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Units Symbols Numerals Use of capitals Punctuation Grammar Sentence structure Streamlining Universality of good specification language References

18 Page Format 18.1 18.2 18.3 1804 18.5 18.6 18.7

Function Purpose of a standard Page Format Allocation of text into clauses, paragraphs and subparagraphs Recommended standard Page Format CSI Page Format CSC Page Format Reference

Appendix 18A.1 18A.2 18A.3 18AA 18A.5 18A.6 18A.7 18A.8 18A.9 18A.IO 18A.II 18A.12 18A.13 18A.14 18A.15 18A.16

Page Format Standard

Introduction Definitions Margins Page arrangement Section header Page footer Use of division titles instead of section titles Part designation Clause and paragraph designations End of section Schedules and tables Practices to avoid Typeface and spacing Checklist Other formats Example of Page Format Standard

19 Writing the General Requirements 19.1 Introduction 19.2 Relationship between the General Requirements and other documents outside the Specification 19.3 Coordinating with the Technical Specification 1904 Using CAWS for specification filing 19.5 Project particulars 19.6 Drawi',lgs prepared by the Design Team 19.7 The Site/existing buildings 19.8 Description of the Work 19.9 Use of Contract Documents

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19.10 19.11 19.12 19.13 19.14 19.15 19.16 19.17 19.18 19.19

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19.20 19.21 19.22 19.23 19.24 19.25 19.26 19.27 19.28 19.29 19.30 19.31 19.32 19.33 19.34

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Reference standards Definitions Submissions by the Contractor Management of the Works: general Management of the Works: control of time Management of the Works: control of cost Site engineering Standards of materials and workmanship Security, safety and protection Employer's specific limitations on method, sequence, timing and use

of site Employer's requirements for facilities, temporary works and services Commissioning Completion tasks/requirements Operation/maintenance of the completed construction Contractor's management and staff Contractor's site accommodation Contractor's services and facilities Contractor's mechanical plant Temporary works Work and materials by Employer Nominated subcontractors Nominated suppliers Work by statutory authorities Provisional sums and daywork References and bibliography

20 Performance Specifying 20.1 20.2 20.3 20.4 20.5 20.6 20.7 20.8 20.9 20.10 20.11 20.12 20.13 20.14 20.15 20.16 20.17 20.18 20.19 20.20 20.21

Introduction Complexity of performance specifications Origins of performance specifying in construction Determining the extent of the project to be performance based Level of performance specifying Innovation versus choice Two-stage tendering Similarity with prescriptive specifications Specifying attributes Ensuring a practicable proposal Arrangement of performance specifications for complete projects or systems Reference standards Design Team drawings Proposer's and Contractor's specifications Proposer's drawings Evaluating Proposer's and Contractor's proposals Submissions after Acceptance The performance specification Section Format Performance Section Format in ISO 6240 Checklist for the arrangement and preparation of information References and bibliography

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xiii

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xiv

Appendix 'I,

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Contents

20A.I 20A.2 20A.3 20A.4 21

21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 21.10

Performance Section Format Standard

Introduction Part I: General Part 2: Materials and products Part 3: Execution

284 284 284 286

The design office master specification

295

Introduction Advantages of a design office master specification Conclusions Setting up a design office master Information related to a design office master Arrangement of the design office master specification Maintaining a design office master specification Secondary masters Producing project specifications from a design office master Examples of UK commercial master specifications

295 295 295 296 297 297 298 299 299 300

22 Producing project specifications 22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 22.9 22.10 22.11 22.12 22.13

Responsibilities Initial decisions Use of a design office master Importance of beginning project specifications early Using project specification planning checklists Conversion of sections from non-standard formats First draft project specification Editing of a draft project specification Completing the final project specification Reviewing a design office master Summary Project specification planning checklists Reference

I

301 301 302 302 302 304 304 305 306 307 307 309 325

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23.1 Introduction 23.2 Functions of each document 23.3 Requirements for drawings in particular 23.4 Requirements for specifications in particular 23.5 Coordination 23.6 References and bibliography

24.1 24.2 24.3 24.4

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23 Coordinating drawings and specifications

24

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284

326 326 327 329 329 332

Using computers

333

Definitions The importance of using computers Use of specification writing standards Management of specification text

333 334 334 334

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24.5 Producing a project specifica~ion from a library of specification sections 24.6 Requirements for the majority of specification writers 24.7 Advanced software features 24.8 Software dedicated to a commercial master specification Index

List of Figures and Tables Figures 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8

Traditional contract Management contract Construction management contract Project management contract Design and manage contract Design and construct contract Design, manage and construct contract Direct labour

6.1 6.2 6.3 6.4

NJCC Preliminary Enquiry for Invitation to Tender BPF Preliminary Invitation to Tenderers, Schedule of Information NJCC Formal Invitation to Tender BPF Invitation to Tender

7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12

Tendering procedure: Form of Tender not a Contract Document Tendering procedure: Form of Tender as a Contract Document NJCC Form of Tender NEC Form of Tender ICE6 Form of Tender BPF Form of Tender FIDIC Form of Tender Example of a Bill of Quantities: Building. Example of a Bill of Quantities: Civil Engineering NEC Contract Data provided by the Contractor ICE6 Appendix to Form of Tender, Part 2 BPF Schedule of tender information

8.1 JCT Articles of Agreement 8.2 ICE6 Form of Agreement 8.3 BPF Form of Agreement 8.4 FIDIC Form of Agreement 9.1 JCT Appendix to Conditions 9.2 NEC Schedule of Contract Data provided by the Employer 9.3 ICE6 Appendix to Form of Tender, Part I 9.4 FIDIC Appendix to Form of Tender 10.1 Tender Bond (default wording) 10.2 Tender Bond (on demand wording with optional conditions)

335 335 338 339

341

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xvi

Contents

10.3 10.4 10.5 10.6 10.7 10.8

18.1 18A.1

Advance Payment Bond (default wording) Advance Payment Bond (on demand wording with optional conditions) Performance Bond (default wording) Performance Bond (on demand wording with optional conditions) Release of Retention Monies Bond (default wording) Release of Retention Monies Bond (on demand wording with optional con­ ditions)

Preface

Example of CSI Page Format

Example of Page Format Standard

20.1 Level of performance specifying 22.1 Design Team organization 22.2 Activities to produce a project specification Tables 5.1

Suggested arrangement of contract documentation

15.1 Provisional civil engineering Masterlist 16A.1

Summary of Prescriptive Section Format Standard

19.1 Comparison between CAWS General Requirements and UK Conditions of Contract 19.2 Comparison between Masterformat General Requirements and FIDIC Con­ ditions of Contract. 20.1 20A.1 20A.2

Comparison of ISO 6240 with the performance Section Format

Summary of performance Section Format Standard

List of Attributes

23.1 Project specification coordination checklist: typical pages

Like most specification writers, I began to write specifications with little help from anyone and the difficulties in producing good project specifications increased with the size and complexities of my projects. Eventually when all our design disciplines adopted some of the standards of the Construction Specifications Institute (CSI), the resulting increase in efficiency was dramatic. The CSI Manual of Practice included the standards we adopted and the basic principles of good specification writing. However, it was written primarily for projects in the United States. There is no doubt that a sister book for projects outside the United States would increase efficiency in producing specifi­ cations in many other countries. Writing this sister book was made more difficult owing to the lack of ISO, CEN or even BSI standards for the Masterlist, Section Format, Specification Language and Page Format. I have not included a proposed Masterlist for the whole of the construc­ tion industry because I did not find a definite enough consensus of opinion as to what it should be. Furthermore, specification writers are often obliged to use a particular Masterlist according to the type and location of the project. My proposed standards for Section Format, Specification Language and Page Format are as representative as possible of the views of leading specification writers. However, no amount of enquiry can achieve perfection and I would be pleased to receive comments on these proposed standards for future editions. I would like to thank the many people who contributed opinions in the early stages of this project. They include: • John Aherm • Robert Cawkwell • Brian Creamer • Huston Eubank • Kit Evans • Henry Gibson • Alan Gilbertson • Alex Hamilton • Richard Holyoak • Frank Howard • Tom Knott • Bruce Penny • Bernard Polack • Peter Ross • Geoffrey Simmons xvii

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Preface

Chris Sketchley Ian Walker

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Chapter 10 on 'Bonds and Guarantees' and Chapter lion 'Insurances' were written by Nigel Alington and Martin Howe respectively, both of Hogg Robinson Insurance Brokers Ltd, and Harry Harrison provided the historical background to Chapter 20 on 'Performance Specifying'. RIBA Publications on behalf of JCT, NJCC, Thomas Telford, British Property Federation and FIDIC all kindly gave permission to reproduce several of their standard forms. CSI gave permission to adapt passages from their Manual of Practice, including the Section Formats. The book could not have been prepared without the kind cooperation of CSI officers and permanent staff. I am particularly grateful to Walter F. Geisinger and wish him well in his retirement. A special thanks is required for Ian Trenowden who, with an experienced specifi­ cation writer's eye, edited the text to improve clarity. Finally, I would like to thank my family for putting up with a noisy printer during the small hours.

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Part 1 A background to specification writing

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Scope of guide ,"~I'"

1.1 Principles This guide is intended to cover construction specification writing principles internation­ ally with particularly reference to practice in the United Kingdom and many other countries influenced by UK and US construction documentation practice. Many of these principles are shared with those of the Construction Specifications Institute (CSI). CSI, although not an active participant in the development of this guide, supports the author's premise that many of CSI's principles of construction specification writing are universally valid.

1.2 Differences in practice between North America and other

countries

While the principles are similar, there are differences in practice between those of North America and other countries. The guide does not therefore cover practice for projects in the United States and Canada. Specification writers there should refer to the Manual of Practice published by the CSI in the United States and the Construction Specifications Canada (CSC) (Devis de Construction Canada) in Canada.

1.3 General diversity of practice As the principles of specification writing are universal, the guide is not written for any particular design discipline or project size. Because of much diversity in practice, the guide tends to give preference to those practices that are most common. However, where a minority practice has great advantages this is also included. Designers are frequently well educated in technical matters by colleges and their design office superiors. Education in the writing of contract documentation is however often neglected and hopefully the guide will assist to redress this imbalance. Acquiring knowledge of writing contract documentation should run in parallel with technical knowledge. This guide always assumes that a specification writer has design knowledge. While the subject of specification writing has been neglected, there is no intention to advocate a profession of construction specification writers who do not possess training in at least one of the construction design disciplines.

1.4 Readers to whom the guide is addressed This guide is intended to be an introduction to the student, give practical assistance to design office personnel taking up management of design project and a reference for experienced design personnel. 3

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A background to specification writing

1.5 Specification writing practice and technical knowledge ~"

It is important to note that, while this guide outlines recommended techniques and a philosophy for preparing and organizing written contract documentation, it does not contain the technical product or design information needed to develop and produce project specifications. That kind of technical knowledge and ability is gained through technical publications and education for each design discipline and experience in the design office and on site.

2

Who's who in design office specification writing

2.1

The Chief Specifier

Every design operation requires someone to be in charge. If a design office wishes to make a policy decision regarding choice of products or methods of construction, the person with the ultimate responsibility for that decision is the most senior designer in that design office. In a consultancy, that person may be termed the senior partner or senior director. If the design office is a department in a larger organization, this most senior designer may be termed the Chief Designer. To make a design choice is the most important stage of specifying. A designer responsible to the Chief Designer may have specified prestressed concrete hollow planks for spans of about 6 m. The designer may not have written the actual specification section stating how such planks should be manufactured and installed but that person is under the command of the Chief Designer. We conclude that the Chief Specifier in a design office is the Chief Designer for he or she has ultimate responsibility for design decisions. Similarly, if a Design Team has been engaged by an Employer for a project, it is the Design Leader who is the Project Specifier for that project. There should be no question of product selections being made by anyone outside the control of the Design Leader. This guide therefore takes the view that the Design Leader in a Design Team must be responsible for not only the Tender Drawings but all of the Tender Documents including the Specification. The Design Leader may delegate decisions regarding the Tender Documents to others such as design discipline heads and specification writers.

2.2 Who is the specification writer? In this guide, the person responsible for a design office master is the chief specification writer for that office (see Chapter 21). The person responsible for a project specification is the project specification writer (see Chapter 22). This writer is not necessarily the same person as the Design Leader.

2.3 The chief specification writer The chief specification writer will keep the design office master up to date. This will require collection and analysis of technical and product information. In a multi-discipli­ nary design office, the chief specification writer will probably require an assistant specification writer for each design discipline. In most offices, the specification writers will be part time with the rest of their time spent in design work. In larger design offices 5

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Who's who in design office specification writing 6

A background to specification writing

the chief specification writer may be full time and may have a librarian to organize the office product data. If there are no or inadequate national specification writing standards in the country of the design firm, the chief specification writer will need to determine the standards for the design office master and needs to work closely with the designers as it is their final design decisions that will be reflected in the master specification.

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2.4 The project specification writer The project specification writer mayor may not be the same person as the chief specification writer. In any case, the project specification writer should have the design office master at his or her disposal and will probably have assistant specification writers in each design discipline. However, not all design disciplines are often resident in the same design office or even in the same firm. The project specification writer then has the added responsibility of dealing not only with other project specification writers at the design office but also with the project specification writers from several firms. If there are no or inadequate national specification writing standards in the country of a project, the project specification writer will also have to determine the standards to be used for that project. Such an issue can be difficult to resolve as the master specifications of some of the design offices will require costly conversion before they can be used for a project specification. Because the ultimate responsibility for the Tender Documents lies with the Design Leader, the project specification writer has to work closely with the Design Leader and those authorized to make decisions regarding products and methods of construction. The project specification writer may also be a designer and/or authorized to make certain product selections. The overall responsibility of the Design Leader must, however, remain in all circumstances. These remarks apply regardless of whether or not the Design Team is within a single design firm or from several design firms.

2.5 The document writer Frequently, the project specification writer is not only responsible for the Specification, but also for producing the complete set of Tender Documents. Instead, the Tender Documents other than the Specification may be produced by the chief specification writer or the person producing the Bill of Quantities. For UK building projects, the latter would usually be a quantity surveyor. The Design Leader will decide who will produce these Tender Documents outside the Specification according to the expertise available within the design office. If necessary, the Design Leader will co-opt another person on to the Design Team from another firm to carry out the task. In this guide, the person writing Tender Documents other than the Specification is termed a document writer.

2.6 The specification writer and product selection The project specification writer should take a full part in product selection and may be assisted by a chief specification writer if the latter has already carried out the initial research. The final decision to use a product or method of construction should be made by the Design Leader because he or she is in charge of the Design Team and is the link between it and the Employer.

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The Design Leader may not have discussed the decision with the specification writer but will probably have discussed the product with its supplier. The only brief given to the specification writer would therefore be the decision to use a particular product or method of construction and the loan of a brochure from a manufacturer. If a design firm is large enough to employ a specification writer, it would be foolish for a Design Leader of a project to make all the product decisions without reference to that writer. After all, the specification writer is someone who knows the functions of the elements of construction, the products available and the manner in which they can be described in writing in order to give minimum difficulty. Another extreme is for the Design Leader to ignore materials and methods of construction altogether. The specification writer is thus left with plans and a building shape and otherwise very little information. One can criticize the Design Leader for not taking construction materials into account so that the design is little more than a sculpture rather than a working piece of construction. On the other hand, a basic design such as this can be a challenge to those with a knowledge of construction to make it constructible and function as intended.

2.7 Knowledge of a specification writer The knowledge of a specification writer should not be limited to specification writing practice as such. A technical knowledge of construction materials, products, systems and construction methods has to be excellent and preferable in many design disciplines. The specification writer also needs to know how a design project is man;lged, including the production of all documents including drawings, and finally, needs to be constantly aware that disputes regarding contract documents have serious legal consequences.

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Historical background to contract documentation

Historical background to contract documentation

Evolution of contract documentation

Contract documentation probably began many thousands of years ago as illustrated by Noah's specification for the ark. Presumably, documentation soon became expressed in both written and graphic form. It is, of course, only with the advent of a legal system that the Specification became supplemented by Forms of Agreement. The initial effort to standardize the organization of specifications grouped general information, usually at the front of the written Tender Documents. Subsequently the general information developed into the Conditions of Contract which became separate from the Specification. Recently, construction has become more complex. Consequently, both written and graphic contract documentation have become more detailed, requiring more specialists to produce them, but the documents, Form of Agreement, Conditions of Contract, Specification and Drawings have remained.

3.2 Conditions of Contract In the eighteen twenties, Conditions of Contract began to appear at the beginning of the Specification. The conditions varied from one consultant to another and tended to include rather more of general specification clauses than general conditions as we know them today. In 1870, the Royal Institution of British Architects (RIBA) and the London Builders Society produced a Form of Contract for use in London. In 1903, a Form of Contract was agreed between the RIBA, the Institute of Builders and the National Federation of Building Trades Employers (NFBTE) but did not obtain general acceptance. The 1909 RIBA Form of Contract was, however, more successful. The 1928 RIBA Form of Contract was not fully approved but the 1931 edition was fully accepted. At the same time, the Joint Contracts Tribunal (JCT) was formed. A local authority edition was brought out in 1937. The next edition was produced by the JCT in 1939 and came into use in 1945. Further editions followed in 1963 and 1980. Standard Conditions of Contract were first issued by the Institution of Civil Engi­ neers (ICE) in 1945 and revised in 1950, 1951, 1955 and 1973. The sixth edition was issued in June 1991. Also in 1991, the NEC Conditions were issued by the Institution of Civil Engineers. These were a family of conditions with several options to cover a wider range of circumstances than the ICE6 Conditions. In 1984, the Association of Consultant Architects (ACA) and the British Property Federation (BPF) brought out their Form of Building Agreement. The International

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Federation of Consulting Engineets (FIDIC) issued the first edition of Conditions of Contract for Works of Civil Engineering Construction in 1957. It was based upon the fourth edition of the ICE Conditions. A section for Dredging and Reclamation Works was added in 1969 and the fourth edition was issued in 1987.

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3.3 Bill of Quantities Bills of Quantities are arranged according to methods of measurement. Up until the seventeenth century the normal method of measurement was on the basis of the actual costs incurred by the builder, so there was no standard method in the modern sense. The origins of paying according to actual amounts of completed work probably arose in London in the building boom following the Great Fire. Various books were written in the seventeenth and eighteenth centuries giving guidance on measurement by authors such as William Leybourn, Stephen Primatt, Venturus Mandley and William Hawney. In 1774, Thomas Skaife proposed that Bills of Quantities should be prepared from designer's drawings rather than from completed work. This practice became established by the early nineteenth century. Methods of measurement, however, remained varied particularly between town and country, the former being more detailed. It was not until the second half of the nineteenth century that the practice of having a quantity surveyor for both the Employer and Contractor gave way to a single independent quantity surveyor. The establishment of the professional surveyor was further assisted by the foundation ofthe Institution ofSurveyors in 1868. It obtained its royal charter in 1881. In 1909, the Quantity Surveyor's Association published pamphlets setting out a method of measurement for three trades. The Surveyors Institution, the Quantity Surveyors' Association, the National Federation of Building Trades Employers of Great Britain and Ireland and the Institute of Builders produced the first edition of The Standard Method of Measurement in 1922. The second edition in 1927 was produced by the Surveyors Institution, the NFBTE and the Institute of Builders. The third edition in 1935 was produced by the Chartered Surveyor's Institution, the NFBTE and the Institute of Builders. The fourth and fifth editions produced in July 1948 and March 1963 were produced by the Royal Institution of Chartered Surveyors (RICS) and the NFBTE only. It was converted to metric in 1968. The sixth edition was produced by the same bodies in 1978. In June 1979, the RICS brought out the Principles of Measurement (International) (POMI) for international work. This method of measurement was based on the sixteen divisions of the CSI Masterformat. The seventh 1987 edition of The Standard Method of Measurement was prepared by the RICS and the Building Employers Confederation (BEC). The Institution of Civil Engineers have issued guidance on methods of measurement since a report published in 1933. The current guidance is the third edition of Civil Engineering Standard Method of Measurement (CESMM), published in 1991.

3.4 Specification systems 3.4.1

North America

In 1948, a group of specification writers in the United States founded the Construc­ tion Specifications Institute (CSI). CSI has about 130 chapters and 19000 members and its stated purposes are' ... the advancement of construction technology through communication, education, research, and service. CSI serves the interests of architects,

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engineers, specifiers, contractors, product manufacturers, and others in the construction industry'. In 1963, CSI and its Canadian counterpart, Construction Specifications Canada (Csq, worked together to develop, publish and implement standards of practice. As part of that effort the 16 division Masterlist of specification sections was first published in the United States and Canada in 1963. It is used for organizing construction specifications, construction cost estimates and as a system for filing technical data. It is accepted and used by a large and growing majority of the construction industry in North America. The US and Canadian 16 division Masterlist is now published jointly in a single document called 'Masterformat'. A close working relationship between CSI and CSC continues to exist, most often in the form of mutual development and publication of other technical and professional documents. In 1961, CSI published A Tentative Proposalfor a Manual ofPractice for Specification Writing Methods. This study eventually led to the publication of the first Manual of Practice in 1967. In addition to the 16 division Masterformat it included a system for organizing each section within a division into a standard three part section format and a recommended page format. Since 1967, the CSI Manual ofPractice has been revised and updated, first in 1975, again in 1980 and 1985, and recently in 1992. In 1992, CSI became an international institution with chapters proposed throughout the world.

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3.4.2 United Kingdom Specification writing standards in the United Kingdom did not exist until the Common Arrangement was published in 1987. This standard is discussed in Chapter 15 in this guide.

3.5 References and bibliography William Leybourne, A Platform for Purchasers, a Guide for Builders, and a Mate for Measurers, 1667 and 1685. Stephen Primatt, The City and Country Purchaser and Builder, 1667. Venturus Manley, Marrow of Measuring, 1668, 1682 and 1727. William Hawney, The Compleat Measurer or the Whole Art ofMeasuring, 1717 and 1727. Thomas Skaife, A Key to Civil Architecture, 1774. H.A. Close, The Evolution of the RIBA Form of Contract, NFBTE, 1952, London. F.M.L. Thompson, Chartered Surveyors, The Growth of a Profession, Routledge and Kegan Paul, 1968, London. Principles of Measurement (International) for Works of Construction, Royal Institution of Chartered Surveyors, June 1979, (POMI). London. Standard Form of Building Contract, Joint Contracts Tribunal, February 1980 (JCT Conditions). Malcolm Burrows, M Phil, ARies, Building Contracts 1750-1850, from 'Arbitration', August 1983. Form ofBuilding Agreement, Association of Consulting Architects and British Property Federation, 1984, London. Civil Engineering Standard Method of Measurement, Institution of Civil Engineers, 1991, (CESMM3). London. Standard Method of Measurement of Building Works, Royal Institution of Chartered Surveyors and Building Employers Confederation, 1988, (SMM 7). London. Conditions of Contract (International) for Works of Civil Engineering Construction, 4th Edition, Federation Internationale des Ingenieurs-Conseils, March 1989, (FIDIC Conditions). Lausanne, Switzerland. Conditions of Contract for Use in Connection with Works of Civil Engineering Construc­ tion, Institution of Civil Engineers, 1991, (ICE6 Conditions). London.

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Introduction

We must be near the situation where it is not possible to write anything about contract documentation for the whole construction industry because practically every construc­ tion body uses different terminology. Nevertheless, the principles of construction specification writing are universal and it is therefore quite absurd to publish many different editions of this guide which are all identical in principle. It is not the task of this guide to side with any particular body and so in matters of terminology we have tried to anticipate trends. One trend is that the diversity in terminology is increasing but another but not yet universal trend is that people and bodies are beginning to be termed according to their function. For example, in a civil engineering contract, the designer will usually be termed the Engineer. He or she meets the Contractor's Site Manager on site who is also an engineer. They both have very different functions. The Engineer could be a designer, manager, supervisor or an adjudicator between the Employer and Contractor or all four. The Contractor's engineer is probably supervising the construction. Contracts such as the New Engineering Contract and British Property Federation are beginning to recognize this concept of terming people/bodies according to their function. Another hopeful trend is that there is increasing cooperation between building and civil engineering which has hitherto been lacking in the United Kingdom and several other countries. This guide has therefore assumed that terminology of contract docu­ mentation will become more standard. It is, however, unlikely that this guide will correctly anticipate all terms that may become universally used in the future. Also, any set of Tender Documents has to be consistent in its terminology and that terminology will have to comply with the Standard Conditions of Contract chosen for the project unless Special Conditions to the contrary are included. In the following list of terms we have therefore given the Conditions of Contract or associated references in which they are quoted together with the alternative terms used' with other Standard Conditions of Contract. Terms in upper case are generally used throughout the guide.

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4.2 Parties • EMPLOYER (NJCC, JCT, NEC, ICE6, FIDIC, BPF Conditions): the person

or body that commissions the construction

Other terms not used: Promoter (ICE Notes)

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CLIENT'S REPRESENTATIVE (BPF): the person appointed by the Employer to liaise with the Design Team and Project Manager FEASIBILITY TEAM: the team responsible for the feasibility study DESIGN TEAM (BPF Manual): the team responsible for the production of the Tender Documents EMPLOYER'S DESIGNER (NEC Guidance Notes); the designer is often a Design Team of various design disciplines under the direction of a Design Leader DESIGN LEADER (BPF Manual); the person who coordinates the efforts of the Design Team. The whole of the design team is not necessarily within one firm. Other terms not used: Lead Designer, Design Manager PROJECT MANAGER (NEC): the person employed directly by the Employer to manage the construction. The Project Manager may be employed directly or engaged as a consultant and is normally also the Employer's Designer. A problem with this term is that a Project Manager of a single main contractor project may be thought of as a manager of several contractors in a management contract. Other terms not used: Architect/Supervising Officer (JCT), Engineer (ICE6), Client's Representative (BPF) SUPERVISOR (NEC, BPF). The Supervisor is either the same person as the Project Manager, works directly for him or her or is directly employed by the Employer. The Supervisor monitors the performance of the Contractor. It is the Contractor who is expected to supervise the Works according to most Conditions of Contract. Other terms not used: Engineer's Representative (ICE6, HDIC) ADJUDICATOR (NEC, BPF): the person who gives rulings on Employer­ Contractor disputes and is preferably a different person to the Project Manager. In the JCT, ICE6 and HDIC Conditions, the Architect or Engineer and their assistants combine the role of Designer, Project Manager, Supervisor and Adjudicator. Other terms not used: Architect/Engineer/Design Consultant/Supervising Officer CONTRACTOR (NJCC; JCT, NEC, ICE6, FIDIC, BPF Conditions); The firm that has contracted to construct the Works. SUBCONTRACTOR (NEC, BPF): Sub-contractor (lCE6, JCT): a firm that has a contract with the main Contractor to provide labour, materials or products. SUPPLIER (NEC, JCT): a person or firm supplying the Contractor with materials or products. ARBITRATOR (JCT, NEC, ICE6, HDIC, BPF Conditions); the Arbitrator is the person to whom the Employer and Contractor can refer their disputes to and be bound by the Arbitrator's decision. The Arbitrator cannot be the same person as the Project Manager.

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to the alternative definition of a request to selected tenderers to submit a tender based upon Tender Documents accompanying the Invitation. Other terms not used: Preliminary Invitation to Tender: NJCC uses this term instead of Invitation to Tenderers to differentiate it from the Formal Invita­ tion to Tenderers also used by NJCC to des,cribe Introduction to Tender Documents. BPF also uses this term. PREQUALIFICATION DOCUMENTS: Prequalification Documents exchanged between the Employer/Designer and potential tenderers prior to selection of list of tenderers. TENDER DOCUMENTS (JCT, NEC, BPF Manual): the documents sent to the selected tenderers to enable them to price the construction. In some NEC literature, these documents appear to be termed the Invitation to Tender. Other terms not used: Enquiry Documents (HDIC Tendering Procedures) TENDERING REQUIREMENTS (US Bidding Requirements). We have used this term when referring collectively to: • • • •

•

Introduction to Tender Documents Instructions to Tenderers Non-contractual information given to Tenderers. Blank Form of Tender and blank Bill of Quantities

In this guide, we have excluded the Form of Tender from this definition as that document can be a Contract Document while both the Introduction to Tender Documents and Instructions to Tenderers are not. Other terms not used: Invitation to Tender (BPF Manual). BPF's Invitation to Tender includes a large amount of information with several functions, e.g. Instructions to Tenderers and Site Information. INTRODUCTION TO TENDER DOCUMENTS: If all the Tender Docu­ ments are being sent to a tenderer, that tenderer would almost certainly have already agreed to tender. This document is therefore not really an invitation but merely introduces and lists the Tender Documents. The document is not a Contract Document as it does not include matters of concern after Acceptance ofa Tender. Other terms not used: • • •

•

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Formal Invitation to Tender (NJCC) Invitation to Tender (Form 5 in BPF Manual) Letter of Invitation to Tender (HDIC Tendering Procedures, HDIC Guide)

INSTRUCTIONS TO TENDERERS (ICE Procedures, HDIC Tendering Procedures). The term is self-explanatory but only covers procedures up to Acceptance of Tender. For that reason, it is not a Contract Document. Infonnation given to tenderers (lCE6 Conditions) (covered by CAWS Al2 and A35)

Other terms not used:

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• • •

Supplementary Information for Tenderers (BPF Manual includes this document within the Invitation to Tenderers package). Information data (FIDIC Tendering Procedures, HDIC Guide) Information available for tenderers (CSI)

Traditionally this document which is not normally a Contract Document includes the following:

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Most Site Infonnation affects the Contractor's costs and must be included in the Contract Documents and not included in this document. Other information such as directions to the site and availability of keys should be placed in Instructions to Tenderers. As Infonnation given to Tenderers is a Tender Document and not a Contract Document, the only infonnation in this document that should be included is preferences by the Employer, which are not mandatory. SITE INFORMATION (NEC Conditions, covered by CAWS AI2). This document traditionally includes soils and survey information. This document is quoted as a Contract Document in its own right in the NEC system. Such infonnation given to tenderers may affect their Tenders. If the information is incorrect, it would be unfair if the Contractor was not allowed to claim compensation. Site Information should therefore be included as a Contract Document or part of one and not discarded with the Tender Requirements at Acceptance. In the BPF system, Site Infonnation is included in 'Supplementary Infor­ mation for Tenderers' (BPF Manual) which is attached to the Invitation to Tender, which is not a Contract Document in the BPF Agreement. TENDER (JCT, NEC): the documents that have been completed by a tenderer and are then returned to the Employer for consideration. Other tenns not used: •

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FORM OF TENDER (NJCC; NEC, ICE6, FIDIC, BPF Conditions) The Appendix. The word Appendix on its own has little meaning. It is essential to say to what an Appendix is appended. Also, when completing an Appendix, it is essential to realize its function. It is often the Employer's Special Con­ ditions such as the programme requirements and/or information required by the Employer from the tenderers. It can be an attachment to the Conditions of Contract (JCT Conditions) or the Form of Tender (ICE6 Conditions). The BPF Manual appends an Appendix to the Invitation to Tender. If the Invitation to Tender is not a Contract Document, any Employer's Conditions attached to the Invitation must be repeated in a Contract Document. The NEC Conditions use the term Schedule of Contract Data which is properly divided into its constituent parts, i.e. data provided by the Employer and data submitted by the Contractor with a Tender. It should be noted that the two parts have very different functions. Other tenns used: Schedule of Contract Data (NEC) APPENDIX TO FORM OF TENDER (ICE Conditions): a list ofinfonnation required by the Employer from the tenderers to be included in a Tender

Terminology in contract documentation

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A background to specification writing

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Most Site Information affects the Contractor's costs and must be included in the Contract Documents and not included in this document. Other information such as directions to the site and availability of keys should be placed in Instructions to Tenderers. As Information given to Tenderers is a Tender Document and not a Contract Document, the only information in this document that should be included is preferences by the Employer, which are not mandatory. • SITE INFORMATION (NEC Conditions, covered by CAWS AI2). This document traditionally includes soils and survey information. This document is quoted as a Contract Document in its own right in the NEC system. Such information given to tenderers may affect their Tenders. If the information is incorrect, it would be unfair if the Contractor was not allowed to claim compensation. Site Information should therefore be included as a Contract Document or part of one and not discarded with the Tender Requirements at Acceptance. In the BPF system, Site Information is included in 'Supplementary Infor­ mation for Tenderers' (BPF Manual) which is attached to the Invitation to Tender, which is not a Contract Document in the BPF Agreement. • TENDER (JCT, NEC): the documents that have been completed by a tenderer and are then returned to the Employer for consideration. Other terms not used: •

• • •

Bid: US equivalent to Tender. This guide deals primarily with the written word and the word 'Bid' in UK English tends to be used to describe both verbal and written offers. Offer: another alternative to Tender not normally used in contract documentation for the same reason as Bid.

FORM OF TENDER (NJCC; NEC, ICE6, HDIC, BPF Conditions) The Appendix. The word Appendix on its own has little meaning. It is essential to say to what an Appendix is appended. Also, when completing an Appendix, it is essential to realize its function. It is often the Employer's Special Con­ ditions such as the programme requirements and/or information required by the Employer from the tenderers. It can be an attachment to the Conditions of Contract (JCT Conditions) or the Form of Tender (ICE6 Conditions). The BPF Manual appends an Appendix to the Invitation to Tender. If the Invitation to Tender is not a Contract Document, any Employer's Conditions attached to the Invitation must be repeated in a Contract Document. The NEC Conditions use the term Schedule of Contract Data which is properly divided into its constituent parts, i.e. data provided by the Employer and data submitted by the Contractor with a Tender. It should be noted that the two parts have very different functions. Other terms used: Schedule of Contract Data (NEC) • APPENDIX TO FORM OF TENDER (ICE Conditions): a list of information required by the Employer from the tenderers to be included in a Tender

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BILL OF QUANTITIES (NEC, ICE6, FIDIC Conditions). Civil engineers and designers using the HDIC Conditions use the term Bill of Quantities and UK building designers use the term Bills of Quantities. It is therefore difficult to choose one term or the other without being accused of bias towards a particular part of the UK construction industry. There is little advantage in using one term over the other as far as clarity is concerned. However, Schedule of Activities, Specification (although Specifications in the United States), Schedule of Rates and Schedule of Work are all singular. The term Bills of Quantities is therefore the odd term out. Other terms not used: Bills of Quantities (JCT, BPF Conditions) CONTRACT DOCUMENTS (JCT, NEC, ICE6, FIDIC, BPF Conditions). These are usually listed in one of such documents STANDARD CONDITIONS OF CONTRACT (NEC Guidance): Published Conditions of Contract

Other terms not used: Standard Articles of Agreement

GENERAL CONDITIONS OF CONTRACT: core clauses of a Standard Conditions of Contract SUPPLEMENTARY CONDITIONS OF CONTRACT: optional clauses in a Standard Conditions of Contract selected but not written by the Employer/ Design Team SPECIAL CONDITIONS OF CONTRACT (NEC, ICE6): conditions amended or added by the Employer/Design Team to the standard Conditions of Contract Appendix to Conditions of Contract. (JCT Conditions): a list of conditions required by the Employer for a particular project CONTRACT: the binding Agreement between the Employer and Contractor. With the inference that the Form of Agreement is the document that binds together all the Contract Documents. With the BPF Conditions the Form of Agreement is continuous with a following standard Conditions of Contract forming one document termed the Agreement. Other terms used: Agreement (BPF Conditions) LETTER OF ACCEPTANCE (CE Procedures, FIDIC): If an Employer accepts a Tender he or she is committed to that Tender whether or not that Acceptance is followed by a formal Agreement. Other terms not used: Written Acceptance (lCE6) FORM OF AGREEMENT (lCE6): the form signed by the Employer and Contractor referring to and binding the Contract Documents into a Contract. Other terms not used: Articles of Agreement (JCT Conditions) BOND: a contract for a party to pay a sum of money in specified circumstances, usuaIIy a default. The most common type of bond is the Performance Bond. SCHEDULE OF ACTIVITIES (BPF). The term Schedule of Activities emerged first and is therefore more familiar.

Other terms not used: Activities schedule (NEC)

SPECIFICATION (JCT without Bills, NEC, ICE6, FIDIC, BPF Conditions) Other terms not used: Specifications (CSI) DRAWINGS: Graphic Tender and Contract Documents. Do not use the term plans to describe all drawings, as they usually include sections, elevations and details. Works Information (NEC): a collective term used by NEC to potentially include:

15

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Terminology in contract documentation

A background to specification writing

• Description of works • Site area • Drawings • Specification

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4.6 Specification terms • MASTERLIST: abbreviation of 'Master list of numbers and titles of construc­ tion specification sections'. Examples are the BPIC Common Arrangement and the CSI Masterformat. Ideally, there should be related lists for measurement, product data, perform­ ance specifications for complete projects and technical information. • DIVISION. The master list of specification sections termed in this standard as the Masterlist is divided into divisions, each representing a number of related sections. These divisions form the basic framework of a project specification. Division titles and numbers are standard and do not change for particular projects. The division titles appear in the Table of Contents of the Tender Documents and should not be repeated in the specification headings. Section numbers should begin with the division number. Other terms not used except when specifically referring to CAWS: Group • SECTION: a portion ofa project specification covering one portion of the total work or requirements. Individual sections dealing with related items are grouped together under the standard divisions of the Masterlist. Sections are included in the Tender Documents as required. Sections of the General Requirements of the Masterlist should include administration, procedures and temporary facilities. Sections in the other divisions include specific requirements for units of work. Other terms not used: Work section (BPle) • TECHNICAL SPECIFICATION: the Specification other than the General Requirements • PART: group of related clauses in a specification section • CLAUSE: group of related paragraphs describing a particular requirement of a work item • GENERAL REQUIREMENTS (CSI, POMI). This is the general division of a Specification containing requirements applicable to all other divisions Other terms not used: Preliminaries (BPIC, PSA)

• ADDENDA: changes to Tender Documents after they have been sent to the tenderers and prior to Acceptance • VARIATION ORDER: Project Manager's order for alterations, additions and omissions to the Works Other terms not used: Change Order (USA)

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4.4 Finance • TENDER PRICE (NJCe) Other terms not used: Tender Amount (NEe), Tender Total (ICE6, FIDle), Total Tender Lump Sum (BPF Conditions) • CONTRACT SUM (JCT, NEC, BPF Conditions). The term Contract Sum has been used as the number of Conditions of Contract quoting the term are in the majority. Other terms not used: Contract Price (CE Proc., ICE6, FIDIC Conditions): • COMPENSATION EVENTS (NEe): event warranting compensation to the Contractor. • INTERIM CERTIFICATE/PAYMENT (JCT, ICE6, BPF Conditions). The term 'Stage payment' is used only when payment will not be made until certain activities have been completed by the Contractor. The term 'Monthly payment' is not used as payments are not necessarily monthly. • FINAL CERTIFICATE/PAYMENT (JCT, NEC, ICE6, BPF Conditions)

4.5 Programme • • • •

Starting date (NEe), Works Commencement Date (lCE6) Completion date (JCT, NEC Conditions), Date for Completion (JCT) Handover (NEe), Taking-over (BPF Conditions) DEFECTS CORRECTION PERIOD (NEC, ICE6). Correction is a stronger term than making good. The term Maintenance does not cover wear due to Employer's use and is therefore misleading. Other terms not used: Defects liability period (JCT, FIDle), Maintenance Period (BPF). • DEFECTS CORRECTION CERTIFICATE (NEC, ICE6 Conditions) Other terms not used: Certificate of making good defects (JCT), Defects liability certificate (FIDle) • COMPLETION (NEC, FIDle). The term 'Completion' has been used as it is simpler than the alternatives and the meaning can be understood by users of all Conditions of Contract. The Completion commences the Defects Correc­ tion Period. Completion infers that the Works are ready for use by the Employer. Other terms not used: Practical Completion (JCT Conditions), Substantial Completion (ICE6) • Contract Period (BPF Manual), Time for Completion (lCE6 Conditions) expressed in weeks

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• ISO: International Standards Organization • CEN: European Committee for Standardization • FIDIC: Federation Internationale des Ingenieurs-Conseils ".7.2 United Kingdom • • • • • • • • •

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JCT: Joint Contracts Tribunal NJCC: National Joint Consultative Committee for Building ICE: Institution of Civil Engineers BPF: British Property Federation BSI: British Standards Institution PSA: Property Services Agency RIBA: Royal Institution of British Architects RICS: Royal Institution of Chartered Surveyors BEF: Building Employer's Federation

17

18

A background to specification writing •

ACE: Association of Consulting Engineers

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Part 2

CSI: Construction Specifications Institute

4.7.4 Canada •

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The Construction Documents

CSC: Construction Specifications Canada

4.8 References and bibliography NJCC Code of Procedure for Single Stage Selective Tendering, 1977, London. JCT Standard Form ofContract with Quantities, Private Edition, 1980 (JCT Conditions). London. FIDIC Tendering Procedure, 1982, Lausanne, Switzerland. Manual of the BPF System, BPF, 1983 (BPF Manual). London. ACA Form ofBuilding Agreement, British Property Federation, 1984, (BPF Conditions). London. ICE Civil Engineering Procedure, Thomas Telford, 1986, (CE Procedure). London. Conditions of Contract (International) for Works of Civil Engineering Construction, FIDlC, 1987 (FIDIC Conditions). Lausanne, Switzerland. Guide to the use of FIDIC Conditions of Contract for Works of Civil Engineering Construction, FIDIC, 1989, (FIDIC Guide). Lausanne, Switzerland. Vincent Powell-Smith and David Chappell, A Building Contract Dictionary, Legal Studies and Services (Publishing) Ltd. 2nd Edition, 1990. London. ICE Conditions of Contract, 6th Edition, Thomas Telford, 1991, (lCE6 Conditions). London. The New Engineering Contract, Institution of Civil Engineers, Thomas Telford, 1993, (NEC Conditions). London.

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5 Contract documentation and Contracts

5.1

Contract documentation

5.1.1 Communication packages There will be a number of communications to and from various parties prior to construction. A typical but not exhaustive list of communications is as follows: Prequalification stage

• Invitation from Employer/Design Team to potential tenderers • Replies from potential tenderers • Prequalification Documents from Employer/Design Team to potential ten­ derers • Reply to Prequalification Documents from potential tenderers • Acceptance of list of tenderers by Employer Tender stage

• Tender Documents from Employer/Design Team to tenderers • Addenda to Tender Documents to tenderers • Tenders from tenderers to Employer/Design Team

'\ Acceptance and Agreement

• Acceptance of successful Tender by Employer • Signing of fonnal Agreement Post Acceptance procedures

• Submission by Contractor of further documents required under the Contract S.1.2 Types of information There are various types of infonnation contained in the above communication events. The core of some of the infonnation packages is the technical description of the construction required by the Employer. Other parts of the communications are proce­ dural and tend to be different for each communication. Some of these in tum are financial and some are not. 21

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The technical core of these packages consists of the Specification and drawings, It is included in the package sent to the tenderers selected by the Employer, which we have defined as the Tender Documents. The reply to this package is the Tender. This includes the Tender Price, but by reference includes the technical package because that is what the Tender Price is based upon. Upon Acceptance by the Employer, the documents on which the construction is to be based are the Contract Documents. These include the technical core as well as the Tender Price which becomes the Contract Sum and also the Acceptance and/or Agreement. The prequalification stage is principally procedural with no prices submitted. The Employer/Design Team and potential tenderers inform each other about themselves and the project. If there is no prequalification stage, some of this communication will occur in the tender stage. The most important financial communication is the Tender Price itself and its substantiation. This substantiation can be in the form of Bills of Quantities, Schedules of Activities and Schedules of Rates.

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5.1.3 Definition: contract documentation We will term the collective name of the documents in all these communications as contract documentation. Most of the documents contained within the communications have names established by the industry and the professional institutions in particular. In Part 2 of this guide we shall be discussing each document, its function and its relation­ ship with other documents. We shall be stressing the importance of each communication being both complete and without repetition. The principle of 'Say it once only' will be repeated many times throughout this guide. This requires a discipline for those prepar­ ing contract documentation to place the right information in the right document according to its function.

5.2 Prequalification Documents

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The purpose of the prequalification stage is to ensure that the tenderers will have the necessary constructional and financial ability to execute the Works. The Prequalifica­ tion Documents both give information to potential tenderers and request information from them.

5.3 Tendering Requirements Tendering Requirements state the procedures that all Tenderers have to follow in preparing and submitting their tenders. Good Tendering Requirements should be written in order to minimize the possibility of tenderers being disqualified because of technicalities. Even though they are not Contract Documents, the Tendering Require­ ments are often bound with them to make up the Tender Documents. The Tendering Requirements typically include the following: • Introduction to Tender Documents • Instructions to Tenderers • Tender Bond Form, if required • Form of Tender

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5.4 Contract Documents 5.4.1

Introduction

The Contract Documents define the materials and products and how they are installed together with all the management procedures. They contain all the documents necessary to define the Works for construction and are binding on both the Employer and Contractor. In this guide the term contract documentation includes all the following categories of documents: 1. Contract Documents listed as such in the Conditions of Contract, Form of

Agreement or Schedule of Contract Data provided by the Employer. These

include:

• Form of Tender completed by the Contractor (with ICE6, FIDIC but not JCT or BPF Conditions) • Supplements to completed Form of Tender • Bill of Quantities (with JCT, NEC, ICE6 and FIDIC Conditions) • Schedule of Activities (with NEC and BPF Conditions) • Appendix to Form of Tender completed by Contractor • Letter of Acceptance (with ICE6 and FIDIC, not JCT or BPF Conditions) • Form of Agreement (if required) • Conditions of Contract • Standard Conditions • General Conditions • Supplementary Conditions • Special Conditions for project • Appendix to Agreement or Conditions • Specification • Drawings • Addenda to Tender Documents for documents above 2. Documents not in the above list but referred to in the Conditions of Contract

but not in existence at the time of Acceptance are binding documents but are

not Contract Documents. These include:

• Bonds • Insurances • Certificates of Completion 3. Documents not referred to at all in the Conditions of Contract but in existence

at the time of the Acceptance/Agreement. These may be binding if agreed as

such. These include:

• • • • •

List of subcontractors Programme (if not in Schedule of Activities) Construction sequence Schedule of resources Schedule of Rates

4. Documents arising after Acceptance but not required by the Conditions of

Contract. Such documents are not Contract Documents but are binding. These

include:

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24 The construction documents

•

Contract modifications • Variation Orders • Site instructions • Method statements (if not given at Tender)

The term Contract Documents is usually restricted to those quoted in the Form of Agreement/Conditions of Contract/Schedule of Contract Data. Documents that are not termed Contract Documents by the body issuing the Conditions of Contract will be either binding if agreed as such by the Employer and Contractor or merely contract documentation if they are not binding. 5.4.2 Form of Tender There are two schools of thought as to whether or not the Form of Tender is part of the Tendering Requirements or is a Contract Document. For the ICE6 and FIDIC Conditions, the Form of Tender is a Contract Document and the Form of Agreement does not state the Contract Sum as it is assumed to be the Tender Price stated in the completed Form of Tender. For the JCT and BPF Conditions, the Form of Tender is not a Contract Document as it is superseded by the Form of Agreement which states the Contract Sum.

Contact documentation and contracts

2. Special Conditions are written specially for the project. See Chapter 9 in this guide. 5.4.6 Documents completed after Acceptance of Tender Some Contracts require the Employer and Contractor to both sign an Agreement that refers to the other Contract Documents. Some Standard Conditions include forms for bonds and certificates as Contract Documents. They are different from other forms required by the Tendering Requirements or the Conditions of Contract in that they are not completed by the Contractor until after Acceptance. The blank forms are sometimes bound with the Agreement and Conditions of Contract. For example, the Performance Bond form follows the Form of Agreement with the ICE6 Conditions. Examples of bonds and certificates are as follows: 1. Performance Bond. This provides financial protection for the Employer should the Contractor not complete the work in accordance with the Con­ tract Documents. 2. Certificates. The most common certificate is a Certificate of Insurance. Other certificates tend to be those for compliance with a specific standard. See Chapters to and II in this guide.

5.4.3 Supplements to Form of Tender UK and FIDIC Conditions usually specifically name one or more of the Bill of Quantities, Schedule of Activities or Schedule of Rates as a Contract Document. Non-financial Contractor's statements accompanying the completed Form of Tender are often attached to the Form of Agreement because otherwise they would have little point. 5.4.4 Letter of Acceptance and Form of Agreement

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l. Letter of Acceptance: written acceptance of a Tender by the Employer. It may be superseded by a formal Agreement. 2. Form of Agreement: the written document signed by the Employer and the Contractor which is the legal instrument binding the parties to the work. The Agreement defines the relationships and obligations existing between the Employer and Contractor. By reference it incorporates the other Contract Documents listed above.

5.4.7 Specification The Specification describes the required materials and products including their quality and workmanship. See Chapter 12 in this guide. 5.4.8 Drawings Drawings describe the Works graphically, including the materials, sizes, shapes, positions and connections. The degree of detail depends chiefly on whether or not the Contractor has design responsibilities. Drawings may also include schedules when they are not included in the Specification. See Chapter 23 in this guide. Note that Table 5.1 gives lists of drawings as documents outside the Specification. Some specifiers prefer to place such lists in the General Requirements.

See Chapter 8 in this guide. 5.4.9 Addenda to Tender Documents 5.4.5

Conditions of Contract

Conditions of Contract define the basic rights, responsibilities and relationships of the parties involved in the construction. Conditions of Contract can be classified as follows: I. Standard Conditions. Such Conditions are issued by a body recognized by the industry. They consist of General and Supplementary Conditions: • General Conditions: These are core clauses that are generally applicable to most projects. • Supplementary Conditions. These are optional clauses required for a par­ ticular project.

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25

26

Contact documentation and contracts

The construction documents Table 5.1. Suggested arrangement of contract documentation

5.5 Arrangement of written contract documentation

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00001 00002 00003 00005

The Tender Documents comprise all the written and graphical documents sent to tenderers for the purpose of tendering. These include both Tendering Requirements and documents that will become Contract Documents when completed by the Employer and Contractor. It is important to realize that the written Tender Documents include several docu­ ments and not merely the Specification. Any guide for the preparation of specifications would be seriously inadequate if it dealt with specifications alone as the Specification is only one document in a set of related documents. For example, the documents entitled Tendering Requirements and Conditions of Con­ tract are Tender Documents but are not part of the Specification: Usually, they are pre­ pared by the Design Team in close coordination with the Employer. For Design Team coordination and ease of use, it is best for document titles and their arrangement to be the same for every project. A suggested order for arranging the documents is shown in Table 5.1. Not all documents will be required for every project. For example, many projects will not require Prequalification Documents. Also, Standard Conditions of Contract are often bound with other documents such as the Agreement and there is yet no UK agree­ ment on the order of such bound documents for the whole construction industry. Table 5.1 expresses the view that all financial submissions by tenderers are in the same category termed 'Completed Forms of Tender'. The terms Tender Documents and Contract Documents are not used because in the United Kingdom the Form of Tender is not always a Contract Document.

Cover page Title page Table of contents Drawing lists and schedules (if not in General Requirements) List of drawings Schedules and tables Details

Prequalification 00010 Prequalification Documents Tendering requirements 00100 Introduction to Tender Documents 00100 Instructions to Tenderers 00120 Supplementary instructions 00130 Pre-tender meetings 00150 Tender security form 00200 Information given to tenderers· 00210 Non-contractual preliminary construction schedule 00220 Non-contractual site information 00230 Blank Form of Tender 00240 Blank Bi1I of Quantities 00250 Blank Schedule of Rates 00270 Schedule of Works Completed Forms of Tender 00300 Form of Tender 00400 Supplements to Forms of Tender 00410 Completed Bill of Quantities Schedule of Activities 00420 00430 Completed Schedule of Rates 00440 List of Subcontractors 00450 Tenderer's construction programme

5.6 Design and construction participants

Acceptance and Agreement 00500 Letter of Intent 00520 Letter of Acceptance 00550 Form of Agreement

5.6.1 Introduction

Conditions of Contract

00600 00601 00620 00650 00700 00710 00720 00730

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The number of participants depends on the complexity of a project. A very simple project may require a single Agreement between an Employer and Contractor. Most projects require a Design Team also, which usually provides a Project Manager to manage the project on site.

Standard Conditions General Conditions Supplementary Conditions Contract Data provided by Employer Special conditions Modifications to Standard Conditions Additional clauses Contract Data provided by Employer

5.6.2 Employer

Documents submitted to employer after Acceptance

00800 00820 00850

Bonds Insurance certificates Certificates of compliance with statutory requirements

It is the Employer who engages, makes an Agreement with and pays a Design Team and a Contractor to design and to construct the Works. The Employer may be an individual or an organization, in the private sector or in the public sector.

Addenda to Tender Documents 00900 General requirements (Part of Specification) 01000 (CAWS A) Site Information Geotechnical data Existing conditions Description of existing site Description of existing buildings Property survey Employer's restrictions on construction programme

5.6.3 Contractor The Contractor is the person or body that agrees with the Employer to construct the Works. For small projects, the Contractor may be a single organization but usually much of the work is subcontracted to specialist subcontractors. The Contractor retains the overall responsibility for the construction but specialist subcontractors and sup­ pliers may be nominated by the Employer.

Technical Specification 02000+ (CAWS Groups B-Z, CSI Divisions 2-16)

5.6.4 Client's Representative

• Preferably non-mandatory. Place mandatory requirements in the General Requirements.

The Employer may wish to appoint a consultant Client's Representative to manage the project on his or her behalf. The Client's Representative can then advise the Employer

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Contact documentation and contracts

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on which type of contract is required and which Design Team should be appointed. The Client's Representative may be responsible for some tasks usually carried out by the Design Team. The Client's Representative may also be a member of the Employer's staff appointed to liaise with a Design Leader.

5.7 Construction contracts 5.7.1

Type of contract

Types of contract in this section indicate the relationships between the parties partici­ pating in the construction rather than how the construction is measured or paid for.

5.6.5 Feasibility Team Before a Design Team has been appointed, an Employer may wish to have a feasibility study carried out. The team carrying out the study may include future members of the Design Team, but not necessarily so. It will also include financial advisors. 5.6.6 Design Team and Design Leader The Design Team usually consists of designers from several disciplines. This work needs to be coordinated by a Design Leader. The Design Leader will liaise with the Client's Representative to ensure the efficient exchange of information between the Employer and the Design Team. With building projects, the Design Team is often drawn from separate design consultants such as architects, quantity surveyors, structural engineers and building services engineers. The Design Leader is usually an architect. In the United Kingdom, the design consultants are usually appointed separately by the Employer but in many countries, the consultancy of the Design Leader employs the other consultants. With civil engineering projects, the Design Leader is, of course, a civil engineer, who usually works for a consulting engineering firm. The civil engineering firm may some­ times employ the services of other consultants such as landscape architects and interior designers.

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5.7.2 Traditional contract Contractual relationships between parties

With the traditional contract, the Employer appoints a single Contractor, who may be a Management Contractor subcontracting all the construction or may employ his or her own construction workers. The Contractor will enter into contracts with all sub­ contractors. Except where nominated by the Employer, the Contractor is free to choose the subcontractors. The Employer will have already appointed a Design Team co­ ordinated by a Design Leader. There is thus a contractual relationship between the Employer and Contractor and also between the Employer and one or more design organizations forming the Design Team. The Design Team does not have a contract with the Contractor in this type of contract. Figure 5.1 illustrates the contractual and organizational links in a traditional contract.

Feasibility Team Feasibility study contract

5.6.7 Project Manager

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This is the person appointed by the Employer to manage the construction. The Project Manager is not neces$arily a member of the Design Team. 5.6.8 Quantity Surveyor This is a professional surveyor specializing in measurement and valuation of construc­ tion. The Quantity Surveyor may be part of a Design Team preparing contract documen­ tation or advising a Contractor. In UK building projects, the Quantity Surveyor is the person appointed to prepare the Bill of Quantities and measure the construction on behalf of the Employer, and is specifically named in the JCT Conditions.

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Construction contract

Main Contractor

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Design Team

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5.6.9 Supervisor The Supervisor checks that the Contractor is constructing the project in accordance with the Contract Documents and is responsible to the Project Manager. Letters of Intent

5.6.10

Adjudicator Subsubcontractor

This is the person nominated by the Employer to handle disputes between the Employer and Contractor. The role has traditionally been combined with that of the Project Manager but the NEC Contracts allow for their separation.

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Feasibility Team

Selection of Contractor

This type of contract usually involves competitive tendering. In this process the Tender Documents are prepared by the Design Team for the Employer and made available to a number of tenderers suitably qualified to construct the project. Each tenderer deter­ mines the price for which the project can be built. These tenders are submitted to the Employer. After analysis of the various tenders by the Design Team, the Employer selects a Contractor, usually the lowest tenderer, to construct the project. The selected Contractor and the Employer enter into the Agreement formalizing their relationship and the obligations they have to each other. The Contractor then constructs the project in accordance with the Contract Documents.

Feasibility study contract Employer Design contract(s)

Construction contract

Design Team

Management of construction

The Project Manager's authority has to be accurately defined and explained in the Contract Documents. Some Standard Conditions merely refer to the Architect or Engineer. It is preferable if the Project Manager who is the actual person responsible for the construction is named either in the Contract Documents or in an attachment. The Project Manager may be the Design Leader or another person appointed by the Design Leader or by the Employer. The Project Manager is not necessarily resident on site but may have assistants who are. The Design Team and the Employer should communicate through the Project Manager to the Contractor. Any specification sections prepared by the Design Team must reflect this relationship. For example, only the Project Manager should be designated to receive the Contractor's submissions. Neither the Employer nor the Project Manager has a contractual relationship with suppliers, subcontractors or sub-subcontractors. Communication with these entities must always be through the Contractor. The project Specification should not be directed or addressed to subcontractors or to suppliers. It should also be noted that tenderers are not under contract to the Employer. Their only obligation is the Tender Bond. For this reason, Tendering Requirements are not designated as Contract Documents. The single contract is the most common method of construction contracting on less complex projects. It is usually the simplest to administer. With the centralization of responsibility, one Employer, one Contractor and one Construction Contract, there is reasonable assurance that the project will be completed on programme and without coordination problems. Even though the Contractor may divide the work into sub­ contracts, the Contractor remains responsible for all of the work needed to fulfil the Contract. The lines of responsibility to the Employer must be clearly defined.

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5.7.3 Management contract

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Figure 5.2 Management contract.

The Management Contractor has separate contracts with each of the works contract­ ors but usually the Employer has to approve each contract before Acceptance. Figure 5.2 illustrates the contractual and organizational links in a management contract. Selection of Management Contractor

The Management Contractor charges a fee which is usually a percentage of actual construction costs. Different management contractors may tender various percentage fees. It is, however, more usual that the Management Contractor is selected because of his or her reputation. Management of construction

This is done by the Management Contractor in the usual way. The Design Team should remain responsible for the adequacy for the Specification, even though some product decisions may be influenced by the Management Contractor. As the Management Contractor will appoint a person to dispatch parts of the Specification to different construction contractors, it may be appropriate for that person to be defined as the Project Manager. Nevertheless, the Management Contractor will depend on the Design Team to advise on the acceptable quality of the work.

Contractual relationships

5.7.4 Construction management contract With management contracting, the Employer employs a single Management Con­ tractor. The Management Contractor is appointed before product selections have been finalized by the Design Team. The Contractor assists the Design Team to finalize the Contract Documents and is therefore part of the Design Team. The Design Team is directly appointed by the Employer.

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In such a contract, the Employer appoints a Construction Manager as an added participant in the process. The Construction Manager is employed by the Employer to oversee and administer the project. Usually the Construction Manager will not perform any of the construction work. However, a contractor can serve as Construction Manager and may perform portions of the construction. Construction Management

31

32

Contact documentation and contracts

The construction documents

Feasibility Team

Feasibility

Team

Feasibility study contract

Feasibility study contract

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Employer

Construction management Contract

Design contract(s)

Design contract(s)

Construction Contractors

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Design Team

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Construction contract

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Manager

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Organizational Contractual

Figure 5.3 Construction Management contract.

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5.7.5 Project Management Contract When construction management is extended to oversee the design and planning stages it is called project management. The project management technique has been utilized for both government and private sector projects. Large projects for construc­ tion overseas have been handled in this manner with particular success. Projects involving many buildings and significant site works often require this type of super­ vision and coordination to solve logistical and scheduling problems. Complex operations such as buildings for industrial and process engineering firms use project management to coordinate the work and reduce the time required for design and construction. Figure 5.4 illustrates the contractual and organizational links between the parties in a project management project.

The Employer has contracts with the Design Team, a Construction Manager and each construction contractor. The Design Team is occasionally appointed by the Construc­ tion Manager. The Construction Manager is part of the Design Team. Selection of Construction Manager

This is the same as for a Management Contractor. Selection of works contractors

Contractual relationships

The Construction Manager invites tenders and evaluates them and makes recommen­ dations to the Employer. Even though the Construction Manager is part of the Design Team and may assist in decision making, the remainder of the Design Team should ensure that the Specification is complete and technically correct.

The Employer has contracts with the Design Team, a Project Manager and a single main Contractor. Note that the Project Manager does not manage several construction contractors as with a construction management contract. Project Manager

Advantages and disadvantages

The Project Manager usually recommends the appointments of the Design Team and the Contractor to the Employer and fulfills the following functions:

Advantages

• If the Construction Manager defaults after commencement of construction, the works contracts are still binding.

•

• • • •

Disadvantages If the works contractor defaults, the Employer is primarily responsible.

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Such a Project Manager can be useful with very large projects when there may be a very large number of design and construction specialists requiring considerable coordi­ nation. Take care that the Project Manager does not administer the project with

Although used in the United States, this type ofcontract is not favoured in the United Kingdom or Middle East as Employers prefer to deal with a single party for the construction.

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Figure 5.4 Project management contract.

Contractual relationships

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includes acting as the Employer's Representative in evaluating tenders and awarding contracts for all, or various, parts of the project. The project may be fast track and the construction management function may also include some design services. Figure 5.3 illustrates the contractual and organizational links between the parties in a construction management project. This form of contract is rarely used in the United Kingdom.

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34

The construction documents

Contact documentation and contracts Feasibility Team

Feasibility Team Feasibility study contract

Outline design contract(s)

Feasibility study contract

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Design

Team

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Figure 5.5 Design and manage contract.

Figure 5.6 Design and construct contract. Feasibility Team

excessive bureaucracy. Take care also that project management is cost effective for any particular project. Contractual

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Employer Design, manage and construct contract

Design and construct contract

Such a contract suits those Employers who prefer to deal with one body only for both the design and construction. Usually, that body is a Contractor, who will employ a consultant Design Team if there is not an existing in-house design staff. If the Employer has had a long experience with a particular Contractor, it may be possible to success­ fully negotiate a design and construct contract with him or her. The principal problem if tenders are sought is the high cost of tendering. Each tenderer has to produce at least an outline design in order to obtain a construction cost. The cost of tendering is reduced if it is possible to use a standard building or one similar to another already constructed. Avoid using such a contract for small projects unless the tenderer's designers are known to have a proven record of competent design. Figure 5.6 illustrates the contractual and organizational links between the parties in a design and construct contract. Design, manage and construct contract

The difference between such a contract and design and construct is that the Employer first appoints a Design Team to prepare an outline design. The Employer can then

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Like design and construct, this type of contract has the advantage that the Employer deals with only one party. In this case, however, it is the Design Team and the Design Leader in particular who manage both the design and construction. This contract is suitable for small works only, as usually the Design Leader will not have the necessary contracting experience to manage the construction of complex works. Figure 5.5 illustrates the contractual and organizational links between the parties in a design and manage contract.

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Feasibility study contract

Subcontractors

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Figure 5.7 Design, manage and construct contract. obtain budget prices at an early stage in the selection of the Contractor. If the Employer wishes to negotiate with a single contractor, it must be reasonably certain that the final Contract Sum will be acceptable. If tender prices were obtained on the basis of the outline design, the Employer may be able to select a single Contractor with whom a price can be negotiated for the detailed design. Figure 5.7 illustrates the contractual and organizational links between the parties in a design, manage and construct contract. 5.7.9

Direct labour

Many large manufacturing firms have their own in-house design staff and have a number of contractors who are familiar with the firm's manufacturing processes. Some large contractors are also developers and so are both employers and contract­ ors. The Design Team may be in-house or consultants. There is, however, a tendency for

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Figure 5.8 Direct labour. the developer and contractor parts of the organization to be separate companies under a parent company. Figure 5.8 illustrates the contractual and organizational links between the parties for direct labour. 5.7.10 Construction subcontracts It is just as important for the Contractor to have a Contract with the subcontractors as it is with the Employer. In the subcontract documents between the Contractor and subcontractors, the Contractor will include much of the contract documentation received from the Employer and will require different Forms ofTender and Acceptance/ Agreement. Ii \

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5.8 Basis of selection and award 5.8.1 Introduction The evaluation and selection of contractors leading to the award of construction contracts is a vital part of the construction process. Competitive tendering is the method most often used. However, under some circumstances a contract is awarded by direct selection to a contractor chosen without competition. Following is a discussion of these two methods of selection and award.

Such a method of obtaining a contract requires a potential contractor who has the confidence of the Employer and Design Team because of previous contracts with the Employer or by examination of other constructed projects. The Design Team should take care that the Works are properly defined and should therefore produce a Schedule of Works or Bill of Quantities. This can be given to the potential contractor for pricing at commencement of the negotiation, as a guide for the production of a Schedule of Activities by the potential contractor or used as a comparison with the estimate. It is essential that the agreed Contract Documents include a Bill or Schedule which is sufficiently detailed so that interim payments and variations can be easily calculated.

5.9 Basis of payment 5.9.1

Introduction

There are several methods of determining and stating the project cost. These methods include measurement, lump sum and cost reimbursement. Each of these methods is discussed below. 5.9.2 Measurement If it has been decided that interim and final payments should be on the basis of measurement, it is usual for a Bill of Quantities to be issued with the Tender Documents. The Bill will divide the Works into a number of work items. Each work item will have a number and a description of work. After the description of work there are columns for quantities, units, rates and prices. The quantities and units are entered by the Design Team and the rates and prices by the tenderer. For small projects, a Bill prepared by the successful tenderer may be accepted instead. From the priced Bill, it is easy to calculate interim payments and variations. For items with quantities, it is easy to adjust their price by varying the quantities. This is particularly useful when the quantities are difficult to calculate prior to construction. Some forms of contract specifically state that the quantities in the Tender Documents are approximate and require remeasurement. Where the extent of the work is clear from the drawings, Schedule of Works, Specification and site inspection, a Schedule of Activities may be preferable to a Bill of Quantities. The Schedule includes only lump sum items and reduces measurement time on site. For Schedule of Rates contracts, the work is subdivided similarly but no quantities are given. The unit rates quoted by, the Contractor become the basis for negotiating prices for the actual work.

5.8.2 Competitive tendering This method tends to give a low price but gives little scope for innovation from the tenderers. All tenderers are given the same Tender Documents describing the project and the procedures for their selection. With large projects there may be a prequalification stage to obtain a list of suitably qualified tenderers. For government work, the lowest tender is usually accepted, but, in the private sector, Employers sometimes select a higher tender from a better qualified tenderer.

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5.9.3 Lump sum The simplest method of stating the cost is by a lump sum, in which case a single amount is tendered for completion of the entire contract. This potentially has the advantage to the Employer that the tendered amount is likely to be nearer to the final cost. There still has to be a procedure for calculating interim payments and variations. It is in the Employer's interest that such procedures are agreed prior to Acceptance. A lump sum method is therefore not as simple a method of measurement as it first appears.

37

38 The construction documents

Variations of this type of measurement in some countries are lump sum contracts with Bills of Quantities, with the lump sum having precedence over the Bills. 5.9.4

If a Contractor is reimbursed for actual costs, including head office overheads and profit, there is little risk oflosing money except for expenditure on work items that have been constructed contrary to the instructions of the Employer/Design Team. Because the Employer would not know the final Contract Sum until Completion, it is usual for the Contractor to quote a Target Cost and period of construction. If the final Contract Sum is less than the Target Cost, an incentive amount could be given to the Contractor. If the Target Cost is exceeded the profit could be reduced. Checking of reimbursed costs by the Project Manager does require time and therefore expenditure by the Employer.

5.10 A personal view 5.10.1

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Conclusions

The student and even the average designer could be confused by the differences between the various systems that lay down the content and arrangement of Tender and Contract Documents. Also, most designers are well aware that errors in construction documen­ tation can lead to avoidable claims and action against the Employer/Design Team. At the same time, it is necessary to have a reasonable range of systems to cater for the various types of contract, methods and measurement and means of monitoring the work. What is required but has not been achieved in the United Kingdom is a common agreed framework that permits the diversity that is necessary without allowing diversity that has no purpose other than to create confusion. In the meantime, in order to minimize the possibility of error, the document writer should for any particular project: 1. Follow the standard forms and procedures of the body issuing the Standard Conditions. 2. Preferably before tendering and certainly before execution of the Contract, ensure that it is clear which documents will form part of the Contract. 3. If standard forms and/or conditions need to be altered for a specific project, seek expert advice.

5.10.2 Recommendations for the UK construction industry Any recommendations must be tentative as some bodies may be loath to change practices to which they are accustomed. The recommendations are as follows: 1. Designate the Form of Tender as a Contract Document so that all attachments to the Form of Tender form part of the Contract. 2. Place any Schedule or Appendix that comprises data provided by the Employer so that it follows and is bound to the Conditions of Contract. Any item that is completed by the tenderer should be attached to the Form of Tender. 3. Place all technical information that could affect the construction within the Specification rather than in the Tendering Requirements. 4. Name the Specification and the Bill of Quantities or equivalent separately in the Agreement and Form of Tender.

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References and bibliography JCT Standard Form ofContract with Quantities, Private Edition, 1980 (JCT Conditions). FIDIC Tendering Procedure, 1982. Manual of the BPF System, British Property Federation, 1983 (BPF Manual). ACA Form ofBuilding Agreement, British Property Federation, 1984 (BPF Conditions). Civil Engineering Procedure, Thomas Telford, 1986 (CE Procedure). London. Conditions of Contract (International) for Works of Civil Engineering Construction, FIDIC, 1987 (FIDIC Conditions). Guide to the use of FIDIC Conditions of Contract for Works of Civil Engineering Construction, FIDIC, 1989. Conditions of Contract and Forms of Tender, Agreement and Bond for Use of Civil Engineering Construction, 6th Edition, Institution of Civil Engineers, 1991 (ICE6 Conditions). Which Form of Building Contract?, David Chappell, Architecture Design and Tech­ nology Press, 1991, London. The New Engineering Contract, Institution of Civil Engineers, 1993 (NEC Conditions). London.

39

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Prequalification documents and tendering requirements

41 II

6.3 Prequalification Documents

6 Prequalification Documents and Tendering Requirements

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6.3.1

General

This document enlarges on the information given in the Invitation to Prequalify, encloses prequalification forms and gives instructions regarding the completion and return of the Prequalification Documents. 6.3.2 Information given Items in this category are as follows:

6.1

Prequalification

If the project is large, complex or specialized it is an advantage to precede the Invitation to Tender with a prequalification stage. This saves time in the preparation and evalua­ tion of tenders from unsuitable tenderers.

6.2 Invitation to Prequallfy 6.2.1

General

The purpose of the Invitation to Prequalify is to attract qualified tenderers and to help prospective tenderers to decide whether or not to ask for the Prequalification Docu­ ments. The Invitation should be limited to information that will permit prospective tenderers to judge whether the work is within their constructional ability and financial capability and which will explain the prequalification procedures. The Invitation to Prequalify should always be in writing to ensure all prospective tenderers have the same information and is normally in the form of an advertisement in newspapers or technical publications.

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6.2.2 Inclusions

• Date • Title and reference of project • Name and address of Employer • Name, address, telephone number and facsimile number of the Client's Repre­ sentative (BPF), Design Leader or Agent, if any, issuing the Prequalification Documents • Location of Site with plan of Site • Brief description of project including the size and type of construction • Period of construction if already determined by the Employer • Statement stating whether or not a Tender Bond is required • Timetable for prequalification and tendering procedures • Procedures for completing and returning prequalification questionnaires • Type of Contract, e.g. measurement, lump sum, cost reimbursement, design and construct (all-in) • Name of Standard Conditions of Contract, if any, and principal features of Supplementary Conditions such as language and law of Contract, currency, escalation clauses, payment arrangements, advance payments • Details of work covered by nominated subcontractors or suppliers • Details of Performance Bond and other guarantees • Sources of financing for project and any conditions imposed by them • Standard of performance in broad terms • Obligations other than construction, e.g. training • Any other information that could assist prospective tenderers to decide whether or not to proceed with the prequalification and tendering procedures

The Invitation to Prequalify typically includes the following: • • • •

• • • • • • •

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Date Title and reference of project Name and address of Employer Name, address, telephone number and facsimile number of the Client's Repre­ sentative (BPF), Design Leader or Agent, if any, issuing the Prequalification Documents Location of Site with plan of Site Brief description of project, including the size and type of construction Period of construction if already determined by the Employer Statement stating whether or not a Tender Bond is required Timetable for prequalification and tendering procedures Procedures for obtaining prequalification questionnaires Any other information that could assist prospective tenderers to decide whether or not to request the Prequalification Documents

6.3.3

Information required

The information required from the prospective tenderers should include the following: • • • • • • •

Structure and organization Financial statement Joint venture information, if applicable Personnel resources Plant resources Current and past projects and experience in country of particular project Other information relative to particular project

6.4 Letters to selected and unselected contractors Inform those contractors selected from the list of tenderers of their selection. Confirm the intended date for issue of the Tender Documents.

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6.5 Invitation to selected tenderers with no prequalificoation stage

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I! PRELIMINARY ENQUIRY FOR INVITATION TO TENDER

Appendix A.1

In circumstances where an open tender is not legally required and wlbere the Employer has already approved the tenders for similar work, it may be po~sible to omit the prequalification stage. In such a case, the following items should be iincluded:

Appliceble where the Stenderd Form of Building Contrect is to be used

Dear Sirs,

• • • •

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Date Title and reference of project (BPF Form 4) Name and address of Employer (BPF Form 4) Name, address, telephone number and facsimile number of the Client's Repre­ sentative (BPF), Design Leader or Agent, if any, issuing the Tender Documents (BPF Form 4) Location of Site with plan of Site Brief description of project including the size and type of
• • •

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Heading I amlWe are authorised to prepare a preliminary list of tenderers for construction of the works described below. Your attention is drawn to the fact that apart from the alternative clauses to the Standard Form of Building Contract as detailed below under item j, further amendments to the Standard Form of Building Contract, if any are annexed hereto, will be incorporated in the tender documents. Will you please indicate whether you wish to be invited to submit a tender for these works on this basis. Your acceptance will imply your agreement to submit a wholly bona fide tender in accordance with the principles laid down in the 'Code of Procedure for Single Slage Selective Tendering', and not to divulge your tender price to any person or body before the time for submission oftenders. Once the contract has been let, I/we undertake to supply all tenderers with a list of lhe tender prices. Please state whether you would require any additional unbound copies of the bill(s) in addition to the two copies you would receive; a charge may be made for extra copies. You are requested to reply by .... Your inability to accept will in no way prejudice your opportunities for tendering for further work under my/our direction; neither will your inclusion in the preliminary list at this stage guarantee that you will subsequently receive a formal invitation to tender for these works.

Date when tenders are expected to be invited (BPF Foron 4) Date when order to commence expected to be given (BP'F Form 4)

Procedures for completing and returning Tender Documents Type of Contract, e.g. measurement, lump sum, cost reimbursement, design and construct (all-in) Name of Standard Conditions of Contract, if any, and pr-incipal features of Supplementary Conditions such as language and law of Contract, currency, escalation clauses, payment arrangements, advance paymen-ts Details of work covered by nominated subcontractors or sUlppliers Details of Performance Bond and other guarantees Sources of financing for project and any conditions imposed by them Standard of performance in broad terms Obligations othyr than construction, e.g. training Any other information that could assist prospective tenderers to decide whether or not to proceed with the tendering procedures.

Yours faithfully ... e b c d e f g h

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The National Joint Consultative Committee for Building (NJCC) has a standard form in a Code of Procedure for use with the JCT Conditions (Figuroe 6.1). Some bodies (e.g. BPF) recommend the inclusion of the value of work but tI.is is not universal practice. Under the BPF system, such an invitation is termed a Prelinninary Invitation as their (Formal) Invitation to Tender accompanies the Tender Documents. The Prelimi­ nary Invitation is a standard proforma, Form 4 (Fig. 6.2).

6.6 Tendering Requirements 6.6.1

Introduction

Before tenders may be received, prospective tenderers need specific information which will enable them to: • • •

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Comply with required tendering and awarding procedures Understand tendering and awarding requirements Submit tenders that will not be disqualified for technicalities

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Job ... Employer ... Architect/Conlract Adminislrator ... Quantity Surveyor ... Consultants ... Location olsite ... (Site plan enclosed) General description of work ... Approximate cost range £. .. to £ ... Nominated sub-contractors for major items ... Form of Contract: Clause 15·2 VAT clause of VAT agreement willlWili not [1] apply. Clause 19·1·2 willlWili not [1) apply. Clause 21·2·1 Insurance may be required/is not required [1[ Clause 22A122B/22C122D wi II/wiII not [1] apply. Clause 23·1·2 wili/will not [1] apply. Clauses 38, 39 or 40 willlWili not [1] apply. Clauses41·2·1/41·2·2 willlWili not [1] apply. Formula Adjustment Part I/Part II of Formula Rules is to apply. Percentage to be included under Clause 38·7 or 39·8 if applicable ... Examination and correction of priced bill(s) (Section 6 of the Code) Alternative l/Alternative 2 [1] will apply. The contract is to be under seal/under hand. 11/ Anticipated date for possesion . Period for completion of works . Approximate date for despatch of all tender documents ... Tender period ... weeks. Tender to remain open for ... weeks [2] Liquidated damages (if any), anticipated value £oo. per ... Details of Bond requirement if any. Particular conditions applying to the contract are ...

f11 Delete as appropriate, before issuing. 121

This period should be as short as possible.

Figure 6.1 NJCC Preliminary Enquiry for Invitation to Tender. (Source: NJCC).

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