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A New Construction Contract for the 21st Century

SERIES ARTICLE

By Keith Pickavance

London, UK
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Background

This article is the first in a series about the first new construction contract to be published by the Chartered Institute of Building in 142 years.

In 1871, the Society of Builders (the predecessor of the CIOB) and the Royal Institute of British Architects published the first standard form of a building contract for general use in the UK.  In that form, it was anticipated that any drawings produced would be prepared using paper and pencil and the sparse principles of time management were that the Contractor had control of the Works and the Owner had the risk of delay.

By way of example, Clause 15 of the 1871 form states:

“The contractors are to complete the whole of the works …within ______calendar months after the commencement of the same, unless the works be delayed by reason of any inclement weather, or causes not under the contractors control, or in case of combination of workmen, or strikes, or lock-out affecting any of the building trades, for which due allowance shall be made by the architect, and the contractors shall complete the works within such time as the architect shall consider to be reasonable, and shall from time to time in writing appoint….”

With a few bells and whistles added, this is the formula still adopted by most standard forms of contract available around the world today.  AIA, FIDIC, NEC3, AS4000, JCT2011 are all based upon the principle that the Employer carries the risk, the Contractor has all the tools to manage and control risk, but in the event that the Contractor doesn’t use them to manage the Employer’s risk, the Contractor is to be given more time and more money, intuitively assessed by the contract administrator, on the basis of information provided by the Contractor in support of its claim.

One other consistency, between previous attempts to manage time is that for the last 100 years or so these construction contracts have generally been based upon getting the Contractor to devise a schedule, or programme at the beginning of the job (in the form of a target) against which a failure to achieve the target can be measured, and then reporting against any divergence in the hope that improvement could be made in response to threats and/or financial encouragement. This is at the root of the problems with time management. Historical reporting of failure to achieve a notional fixed target is not an effective way to manage time on complex projects in which, inevitably, the target does not remain fixed.

More…

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Editor’s note: This article launches a series of articles by Keith Pickavance about the CIOB’s new contract for complex construction projects. For information about the new contract, visit http://www.ciob.org.uk/CPC..

About the Author

keith-pickavanceflag-ukKeith Pickavance

Keith Pickavance first qualified as an architect in 1972 and then in 1978 obtained a law degree. After 20 years as an architect in private practice the last 10 years of which also involved construction management, dispute resolution and expert witness services, in 1993 he joined an American company specialising in forensic services and delay analysis. In 1996 he set up on his own again specialising in delay analysis and time management in London and Hong Kong. That practice was acquired by Hill International in 2006, an international construction management and claims consultancy with which he is now appointed an Executive Consultant.  He is  a Past President of the Chartered Institute of Building and has led the CIOB’s time management initiative since its inception in 2007.  Keith is the author of Delay and Disruption in Construction Contracts (4th ed., 2010, Sweet and Maxwell) and numerous other books and articles on delay related issues.   Contact [email protected]