Civil Engineering Sample Paper on Contractual Issues

Contractual Issues

A construction contract is of high importance in any construction work involving several parties. In the execution of their duties, each party is expected to respect boundaries placed by the contract conditions and to abide by set rules and regulations. A common cause of strife between the contract teams is reported to be communication challenges (Tupper, 2013). This may lead to various issues, even though the different parties may be acting in accordance with the contract conditions. In the second phase of our project, several issues arise, and miscommunication can be cited as the main cause of most of them (Robertson, 2001).

First, according to the Architect, who is the superintendent in this case, there is an issue of poor plumbing, about which he communicated four days ago. There has been no response from the contractor, neither has there been any change in the works. According to the general conditions of contract, the superintendent is allowed to give oral direction (Committee OB/3, 2001). However, the conditions also specify that even in situations where an oral direction has been given, it should be followed up with a written direction. In case of defective work, there is to be a grace period of 8 days from the day the written directive is given (Committee OB/3, 2001). In this case, the architect is therefore not authorized to make any intervening decisions until he confirms that the contractor has made no move to correct the defect 8 days after a written directive is given.

On the same issue, the contractor is held responsible for the poor quality work and the superintendent is indemnified of any costs associated with the corrective procedures involved. This is because under the contract conditions, the contractor gives a warranty concerning the quality of work, with assurance that all those employed are highly qualified at their tasks (Committee OB/3, 2001). In addition to this, since the quality of work is not to be debatable, the contractor also assures the superintendent that the work done would be of high quality, in accordance with the design specifications and the superintendent’s directives. Consequently, doing a poor work results in a breach of contract and any resultant losses must be borne by the contractor (Committee OB/3, 2001).

Since the defect in the plumbing does not qualify delay in the date of practical completion, the contractor has no right to an extension of time. At the same time, plumbing is a defect which cannot be considered small as it can prevent occupancy of the construction work. Consequently, the wall cannot be repaired within the defects liability period, it has to be done early enough. Any corrective measures must therefore be carried out within the remaining time to ensure that the work does not go beyond the date of practical completion.

A construction contract involves several documents which must be presented before the beginning of the actual works. The architect reports of a missing program chart while the contractor reports of late drawings. For the program chart to be completed, the contractor needs to consider all the aspects of the contract including drawings. When the architect allows the contractor to begin work without providing a schedule, he places himself at the risk of dealing with incomplete or delayed works (Robertson, 2000).

On the issue about thin plastering, the architect gave a directive 10 days ago to the contractor. The architect’s request is yet to be carried out. In this case, the architect has a right to involve a third party in handling the defects since it has been more than 8 days from the day of notification (Committee OB/ 3, 2001). However, he has to inform the contractor first of his intention to bring in a third party due to the contractor’s failure to comply with acceptable quality standards.

Since the error in plastering did not come about due to the architect’s mistakes, the contractor is expected to bear any additional costs that may arise due to the mistake. This includes the cost of engaging a third party to handle the rectification. On the other hand, if confirmation is made that the used thickness is adequate as the contractor hypothesizes, then the reduction in cost will be refundable to the principal and will thus be deducted from the total contract sum.

Like in the plumbing error scenario, any directive given by the architect in lieu of the plastering does not warrant an extension of time. Any measures to be undertaken must therefore be carried out within the stated time frame for practical completion. The compromised quality of work also exempts the architect from financial obligations resulting from any corrective measures.

On his part, the contractor should have known the conditions of the contract prior to beginning his work. According to AS 4000 1997, any contract sum forwarded is not subject to change in case the quantities of material used are different from those stated in the bill of quantities (Committee OB/3, 2001). It is therefore clear that the contractor may not be in a position to be paid for any extra work performed, or for unforeseeable corrective measures that did not come about as a result of carrying out the architect’s directives. Any extra costs incurred will therefore be carried by the contractor himself.

In the general contract conditions, it is clearly stated that in carrying out any work, all laws must be satisfied (Committee OB/3, 2001). Since building the staircase led to the violation of some quality laws, it has to be corrected. The cost however, should not be borne by the contractor since he had carried out the directives of the architect, even though he was aware of the possible impacts of building the staircase and communicated the same to the architect verbally. The architect gave no response and the construction therefore went on as earlier planned. This makes the architect liable for any resultant costs. The contractor however, is not entitled to other compensations besides the extra cost of re-construction, neither is he entitled to a time extension.

In case compliance with a given direction causes the incurrence of more cost like in the case of the staircase, or if the resultant inconsistency is not the contractor’s fault, the extra cost is to be added to the contract sum as it is borne by the superintendent (Committee OB/3).

Even though the contractor is entitled to a compensation of the extra costs, he may risk facing imposed limits on recoverable costs especially since there are many issues requiring correction (Tupper, 2013). He also faces the risk of resource depletion since the initial contract sum cannot be recalculated and the communication strains that are clearly visible may not allow for immediate recovery of funds. The contractor acted in accordance with the contract conditions stated as he warrants the principal that he would carry out any directives given by the architect promptly.

From the contractor’s point of view, initial direction was followed even though it was flawed. This was due to a previous change in design that resulted in an instruction to demolish part of the work. In contrast to the staircase issue, this was a case of non-compliance with directives. The contractor promises to deliver quality work in accordance with the design specifications forwarded by the architect hence failure to this results in a breach of contract (Committee OB/3, 2001). Since the initial design had no faults but was only changed to make work easier for the contractor, any resultant increase in cost must be borne by the contractor himself. However, had the contractor consulted the architect on the same prior to design modification, a common ground could have been reached hence reduction in extra costs. At the same time, the contractor’s mistakes do not give a qualification for an extension of time.

Also, before embarking on any work, the contractor is supposed to examine and assess the contents of the contract carefully (Committee OB/3, 2001). This includes drawings. He should confirm that there are no discrepancies in the information available prior to commencing the work. Consequently, by beginning the work without some drawings, he exposed himself to the risk of financial liability (NASBP, 2014). This risk catches up with him in the building of the wall. The signed contract indicates the exact location of the ground floor as well as other site characteristics. Consequently, the contractor must produce a work that either matches the specified quality or is of better quality than the specified at no extra cost. In this alteration, of positioning, no quality improvement is achieved hence the contractor is liable for any extra costs incurred in correcting the positioning.

In addition to this, it is imperative that the program of works be submitted by the contractor at least 7 days before the day of commencement of the contract. This is to give the superintendent sufficient notice for the preparation of the required information. Since the contractor is yet to submit the program of works, the architect cannot be held responsible for the late ground floor drawings which led to the erection of the brick wall at the wrong position. The costs for the subsequent works should therefore be handled by the contractor. Also, the contractor has to carry out the demolishing works as well as building the new wall within the stipulated time frame since his mistakes do not warrant a time extension. Neither can this work be done post practical completion. The risk of completion failure is taken by the contractor since he requires adequate time to accomplish the additional tasks (NASBP, 2014).

The contractor placed a request for some information concerning a glass conservatory three weeks ago but is yet to receive the required drawings even though the construction of the conservatory is becoming critical. In accordance with the general contract conditions, any request for information from the superintendent, in this case the architect, should be placed within reasonable time allowance. The architect is however, not obliged to give the required information until a time when he deems reasonable (Committee OB/3, 2001).

From the facts at hand, the notice was given with sufficient time allowance yet the architect has not responded to the request placed. Consequently, the contractor has to wait for the direction given by the architect. In case complying with the given direction results in any financial losses, these will be added to the contract sum payable to the contractor. The contractor is also entitled to a time extension should the architect’s direction result in a delay (Committee OB/3, 2001).

Before a sub-contractor is brought onto a project, there should be proof of their competence and they must be approved by the superintendent. It is therefore presumable that all the sub-contractors on site were approved by the architect. Also, the sub-contractors must carry out all their responsibilities in compliance with the directions of the architect.

The piles set on the wrong location by the sub-contractor’s Engineer must be removed and set on the right location. All the costs incurred in doing this are to be borne by the responsible party. However, the work was originally to be undertaken by the contractor’s Engineer and the sub-contractor only handled it on a verbal request. It is stated in the contract conditions that any communication by the contractor should be written (Tupper, 2013). The sub-contractor can then cite miscommunication from the contractor as the reason for the wrong positioning. This would make the contractor responsible and he would then have to cater for any additional costs that arise (Elenberg, 2000).

Again, since any mistakes carried out by the contractor and his employees do not warrant any delays, the correction must be carried out within the stipulated time prior to the practical completion date. The current positioning of the piles portrays poor quality work since it is not in compliance with the architect’s directions.

Since the sub-contractor is to act in compliance with the architect’s directions, he is first answerable to the architect. The use of cheaper light switches under the approval of the architect is an example of the application of this chain of authority. The main contractor is also answerable to the architect and must follow the architect’s directions. Thus, once the architect approved the use of cheaper light switches, the contractor is relieved of the responsibility to produce good quality work with respect to the switches. The cost saved is deducted from the contract sum and refunded to the principal.

Although the architect approves the use of cheaper light switches, which are more likely to be of lower quality, the responsibility of producing quality work lies with the contractor and he may be held responsible for any defects that may arise. The contractor therefore risks being blamed for poor quality work, which he has no direct control over. He is therefore justified in demanding that the cheaper light switches be removed. In addition, the removal and subsequent replacement of the light switches may result in time wastage hence the contractor risks failing to complete his work prior to the stipulated practical completion date. There is however no allowable time extension since the delay would lack a qualifying reason.

Finally, the sub-contractor is requested to provide the quality certificates for the fill used in the driveway in accordance with the documentation requirements of the contract. The certificate should however be submitted prior to using the material in question hence it is already late in submission (NASBP, 2014). In addition, the sub-contractor risks being held responsible for poor quality work as well as also for the use of low quality material should the certificate be lacking. He will therefore have to incur any extra costs that arise due to his omission. He also risks being laid off  by the architect as he admits that he is inexperienced since the contract conditions provide for this (Committee OB/3, 2001).

Conclusion

The contractor is responsible for most of the quality issues in a construction project. It is therefore imperative that he handles every situation in such a way as to reduce the risk of producing poor quality work. Any extra costs that may be incurred in the course of the project due to the contractor’s negligence, or due to any other reason that is not attributable to the architect’s actions are directed to the contractor. Only reasonable delays are awarded time extensions. In this case, a reasonable delay is one which is not caused by the contractor’s team.

REFERENCES

Committee OB/3. (2001). AS 4000 – 1997 General conditions of contract. Standards Australia

Elenberg, I., (2000). The human side to building disputes. The Arbitrator Vol. 6

NASBP. (2014). What small and emerging contractors need to know: Introduction to contraction risks and contracting practices. [Power Point Slides] Retrieved from http://www.suretylearn.org

Robertson, A., (2001). A practical guide to effective contract management. IES Conference

Tupper, D., (2013). Managing risks in constructions. Blakes, Cassel & Graydon LLP