Civil Engineering nOVEMBER 2021 | Vol 29 No 10

20 November 2021 Civil Engineering original design intent is preserved and recorded, and … any changes go through a formal review process involving people who are competent and who understand the key features of the design ... [possibly] using building information modelling and related data management technology as a cloud-based repository of all project information from conception of a project to demolition”. The AoC, particularly if he/she is the CA, may find it difficult to acknowledge that one or more fellow consultants are the cause of delays or abortive work. If so, those involved must forthwith inform their respective professional indemnity (PI) insurers and the employer. Often the PI insurer will manage this process to limit the extent of a claim. 4. Changes initiated by the employer This does happen and may, at times, be unavoidable to secure a tenant or pur- chaser for the viability of a project. Employer-initiated changes should be avoided – they will almost certainly entitle the (sub)contractor to an EoT and probably with costs. The best way to avoid disputes and claims is to allow enough time to define the project in as much detail as possible, and to consider the choice of materials, products, building layout options or alternative construction methods no later than at the project inception stage. The formulation and assessment of such claims by the AoC should follow as soon as the time and cost implications can reliably be quantified while those involved can easily be contacted to verify events and/or attend inspections of the works. 5. Late, partial or non-payment of certified amounts All SfCs define payment procedures to be followed to avoid delay/interest claims and possible suspension by the (sub) contractor. The (sub)contractor should submit his/her regular payment claims in the stipulated format with supporting documentation by the contractual due dates. Similarly, the employer (or contractor as the employer of a subcon- tractor) must make payment by the con- tractual due dates. All SfCs also include a procedure to follow should the employer dispute a certified amount to give notice of a disagreement with reasons and pay the undisputed amount by the due date. The agreed balance must be paid in the next payment cycle, failing which the (sub)contractor may have a valid reason to declare a dispute. Payment procedures in SfCs are sometimes modified in the tender documentation to allow for an extended payment approval process in the employer’s organisation. By signing the contract, such contract modifications become binding. Sometimes contractors introduce a ‘pay when paid’ clause in subcontract documents. This problem has been discussed at numerous international and local conferences with the aim to outlaw this practice – sadly with limited success and no commitment. As the subcontrac- tor’s contract is with the contractor, the possible late or non-payment to the con- tractor falls outside the subcontractor’s contract and cannot be enforced unless the subcontractor has agreed thereto – buyer beware! The AoC must assess each payment event solely in terms of the SfC used. PAYMENT AND ADJUSTMENT OF PRELIMINARIES Only JBCC refers to Preliminaries (or ‘Preliminaries and General’ in older editions) in detail to include the contrac- tor’s costs to execute the (temporary) works separately from cost fluctuations referred to as Contract Price Adjustment Provisions in the JBCC SfC. FIDIC refers to ‘adjustment for changes in cost’ which deals primarily with cost fluctuations using published indices. GCC refers to ‘general items’ including site services and facilities “which are not considered as proportional to the cost of the permanent works”. NEC refers to ‘price adjustments’ recorded in (secondary) option X1 which deals primarily with cost fluctuations – recognised as a ‘compensation event’ – using published indices. Payment and Adjustment of Preliminaries, if applicable, must be recorded in the Contract Data in option ‘Z’. Only JBCC defines options for the payment and adjustment of Preliminaries, included in the bills of quantities as ‘Section C’ under ‘specific preliminaries’ requiring the (sub)contractor, as part of the tender, to choose his/her preferred ‘method for adjustment’ and ‘payment of Preliminaries’. Each category consists of an Option A or B. If no selection is made by the contractor, then Option A becomes the default provision, failing which preliminaries are deemed to be 7.5% of the contract sum spread equally over the construction period. Preliminaries fall into two categories – the actual material and labour costs stated in the priced document, and the contractor’s overhead costs. Such charges are seldom itemised in a manner to assist with the award of a claim. Q Q Payment Option A: Q Q An amount equal to the value of completed works pro rata to the value of Preliminaries in the contract sum Q Q For example: (VAT omitted to illustrate the principle – but added to the amount due) – Contract sum is $1 000 including Preliminaries, Contingencies and Cost Fluctuations – The net contract sum is $900 + $75 + $15 + $10 respectively – Work completed is $300 – Value of Preliminaries: $300 ÷ $900 x $75 = $25. Q Q Payment Option B: Q Q An amount agreed, comprising an initial establishment charge, a time-based (monthly) charge and a final disestablishment charge Q Q For example: (VAT omitted to illustrate the principle – but added to the amount due) – Contract sum is $1 000 including Preliminaries, Contingencies and Cost Fluctuations – The net contract sum is $900 + $75 + $15 + $10 respectively – The $75 Preliminaries comprise $20 + [$10] site [dis]establish- ment, leaving $45 time-based for the duration of the construction period – divided equally per month or allocated according to the complexity of the work per month, week or working day – Assuming the construction period is 9 months and the project is 30% complete – Preliminaries due include the establishment charge $20 + ($45 ÷ 9 = $5/month for 3 months) = $ 35.00 due