BUSINESS AND TRAINING 9
Failing construction contracts ( Part 3 )
By
Uwe Putlitz
In the final instalment of Uwe Putlitz ’ s three-part series on failing construction contracts , he takes us through how to recognise whether a project is failing in its early stages .
How do you know if a contract is failing ? There are signs . Keep vigilant and watch out for these early warnings that things could not be going as well as you would like once construction has started .
Failing contracts – possible early warning signs after construction has commenced : Contractor : Starts the work ‘ ok ’ but then proceeds with less enthusiasm , availability of construction equipment and / or staff – has the contractor got ‘ sufficient working capital ’? Employer : Late provision of a payment guarantee and / or proof of insurance , first and second payments made on time without queries , subsequent claims queried Consultants : ‘ Errors ’ in construction documentation OH & SA agent : Non-compliance with OH & SA-CR 14 specification and / or implementation of H & S safety plan PA / CA : Notice to MC of non-compliance – potential breach of contract
Failing contracts – possible early warning signs noted during early progress meetings : Contractor : Falling behind the agreed programme ; ‘ many excuses ’; few / no ‘ notices of delay ’
Employer : Queries ( nit-picking ) contractor ' s standard of work ; queries all amounts claimed ; may request changes – specifications for savings ; scope changes Consultants : Poor quality of documentation ; contract and change management ( minutes ); issue instructions ; erratic attendance at site meetings OH & SA agent : Non-compliance with OH & SA-CR 14 specification and / or implementation of H & S safety plan PA / CA : Notice to MC of non-compliance – potential breach of contract
Failing contracts – possible early warning signs noted during subsequent progress meetings : Contractor : Serious contractor delays to the agreed programme ; ‘ many ( invalid ) excuses ’; insufficient staff , materials and / or equipment on site , or materials and / or staff removed from site Employer : Slow to make certified payments ; queries contractor ' s competence ? critical of ( specified ) quality ; queries payments ; may request changes to scope and / or specifications for ‘ savings ’ Consultants : Poor quality of documentation ; contract and change management ( minutes ); issue instructions ; erratic attendance at site meetings
Uwe Putlitz is a registered professional Architect and Construction Project Manager , a Fellow of the Royal Institute of Chartered Surveyors ( RICS ) and is a visiting lecturer at the School of Construction Economics and Management at the University of the Witwatersrand . Having recently retired as the Chief Executive Officer of the Joint Building Contracts Committee ( JBCC ) he specialises in the avoidance of construction disputes by way of lectures , technical articles dealing with aspects of contract administration for various industry publications arising from the use of Standardform Contracts including the Federation Internationale des Ingenieurs-Conseils ( FIDIC ), the General Conditions of Contract ( GCC ), the JBCC or the New Engineering Contract ( NEC ) to find an acceptable settlement without resorting to legal processes , where possible . More info : info @ buildstrat . co . za
May 2024 Volume 30 I Number 3 www . plumbingafrica . co . za