Subscribe By Kobus le Roux This is a common concern for many contractors. In the JBCC terms, we refer to these circumstances as events which cause an adjustment to the contract value. Furthermore, b how do you eventually include these amounts in your payment certificates? In response the standard form construction contracts all provide a mechanism for the Contractor to vary its price making an adjustment to the contract value and the time within which he is to provide the work in the light of the changes requested by the Client. Some clients are so focussed on their right to change their mind that they often forget the contractual consequences. Yes Mr.
|Published (Last):||18 November 2007|
|PDF File Size:||6.46 Mb|
|ePub File Size:||3.14 Mb|
|Price:||Free* [*Free Regsitration Required]|
Subscribe By Kobus le Roux This is a common concern for many contractors. In the JBCC terms, we refer to these circumstances as events which cause an adjustment to the contract value. Furthermore, b how do you eventually include these amounts in your payment certificates? In response the standard form construction contracts all provide a mechanism for the Contractor to vary its price making an adjustment to the contract value and the time within which he is to provide the work in the light of the changes requested by the Client.
Some clients are so focussed on their right to change their mind that they often forget the contractual consequences. Yes Mr. Client, we can move this plug-point for you… but please remember to pay us and adjust the value for the additional expense we incurred. The contract sum and contract value. The contract sum is the amount tendered by the contractor and accepted by the employer.
This amount is never varied or adjusted and stays fixed, to allow us to have some benchmark from where we can measure variance difference between planned vs actual value. This amount varies and is adjusted in respect of certain defined categories of circumstances. Adjustments as a result of Contract Instructions for additional work: When a contract instruction is issued for additional work, clause As an example, earthworks are usually measured provisionally.
Once the actual quantities of work are established, it shall replace the provisional values and it shall constitute an adjustment to the contract value. It must specifically be identified as provisional to be subject to re-measurement. Adjustment for the payment of items by the Contractor which is not necessarily his responsibility: Where the contractor made payment for items not included in the priced document.
These must be made in accordance with an instruction or by the approval of the principal agent. These are charges by authorities in terms of clause 2. Adjustments for additional expense and loss due to no fault of the contractor: The ghost clause I call it the ghost clause because contractors never notice it for some reason. It allows for compensation of any expense or loss that was not provided for or required in terms of the contract sum.
Think standing time claims. The following adjustments are all in terms of an obligation placed on the principal agent, in other words, the principal agent shall make the following adjustments: Adjustments for prime cost amounts, provisional sums and budgetary allowance items. Clause Allowance is omitted, and actual values replace them.
This includes a prorated adjustment for profit and attendance on these allowed amounts. Adjustments for preliminary amounts: this happens in accordance with the method selected and is split between time-related, fixed and value related components. Adjustments for escalation: as per the chosen CPA method and only if applicable in terms of the contract data; Adjustments for any rectification of errors or discrepancies.
Adjustments due to compensatory interest; this is an automatic adjustment and calculation should certification be late. It is not optional, and the PA is under an obligation to include it in the certificate for payment. Adjustments due to default interest: this is an automatic adjustment and calculation should the employer fail to pay on time. It is not optional, and the PA is under an obligation to include it in the certificate for payment!
Adjustments due to damages: Should the contractor have a right to recover damages in case of a breach by the employer, clause Any additional expense and loss the contractor may suffer, due to no fault of his own, will be covered in the JBCC contract under one of these headings.
Contractors must find comfort in the fact that they should not suffer losses as a result of circumstances placed beyond their risk in terms of the contract. And yet, so many of them do? The next question is, how do an adjustment find its way into the payment certificate?
The contractor performs the work and would like to claim it in the next certificate. Or, there is a delay for which you can claim an extension of time, how and when is the compensation or time-related preliminary adjustment added to your payment certificate?
Last example — You incur standing time and want to include those expenses in the certificate. The first road is the recovery statement. The principal agent must, according to clause 27, issue a recovery statement with each payment certificate. This recovery statement sets out amounts due by one party to the other and lists the various amounts that can be included. The second road is automatic contract adjustments in terms of your contract value and the amount certified.
This must be a reasonable estimate of work done including adjustments as per clause The 3rd road turns into the previous and is reserved for time claims with adjustment and cost claims. Below is an easy illustration of the 3 pathways. Any loss and expense imaginable, that is not your risk under the contract, can be claimed by means of these pathways.
If you have any specific questions or unique circumstances you would like some clarity on, feel free to ask your question to our team of experts at info lerouxconsulting. Delay and disruption in construction contracts, 4th Ed. Sweet and Maxwell publishing, London.
JBCC Suite of Contracts
The contractor specialist agent must highlight the subcontract performance criteria. The Agreement is dived into seven sections comprising 22 clauses. The State after having fully implemented the May Agreements and Contract Data for Organs of State, will also make use of this form of dispute resolution. Some form of collateral will be required by the provider of the guarantee. This is restricted to the payment of money on demand. The guarantee is restricted to the payment of money on demand. These items include penalties and interest.
JBCC rescue – How to get paid for change instructions and variations on your project
JBCC CONTRACT EXPLAINED