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Procurement Contract 2
Procurement Contract 2
Assignment
design changes, delay due weather conditions, delay due changes of supply chain,
defect due poorly specified materials may attract different remedies and
differences between the two approaches and for each of the scenario mentioned
Student ID Number =
2
Table of Contents
Background Research...............…..................................………………….…………...3
contract……………………………………………………………………………...…6
References………………………………………………………………………...….10
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BACKGROUND RESEARCH
acquiring newly built facilities. Customers who just need a building once or twice
often choose this method. Recent years have seen a decline in the traditional
This decline can be attributed to the fact that the adversarial nature of the current
cooperation, a disregard for the needs of customers, and a general inability to meet
2020).
Limitations should be taken into account when interpreting the results of this
study. Most of the information in this work is limited to the UK.The majority of the
data in this paper is restricted to the contractor point of view. A more well-rounded
view of the topic can be gained through a study that similarly examines data from
The aim of this research is to gain insight into how traditional and
collaborative contracting practices are administered in the building sector. The essay
compares and contrasts the various types of formations and structures of both
contracts.
Objectives:
i. compare the traditional and collaborative contracts in line with their formation
and structure.
ii. explain the differences between traditional contract and collaborative contracting
practice.
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build,' and 'employer designed,' has been the primary method for acquiring newly
built facilities in the United Kingdom from the early nineteenth century, when the
industrial revolution was in full swing (Bethany Scott, 2020). Customers who just
need a building once or twice often choose this method. To begin, the customer hires
experts to carry out a thorough design of the project and to draft the necessary tender
Next, competitive bids for the project's construction are solicited from contractors,
agreement. Traditional contracts typically do not require the contractor to design any
of the works (beyond any temporary works), although some may allow the contractor
to design certain aspects of the works (Denis-Smith, 2021). During the construction
phase, the client typically keeps the design consultants on retainer to provide any
further design information that may be needed, review any designs that may be
typically delegated to a single consultant (the architect, though this is not always the
case). For "conventional" projects in which design and construction are carried out in
distinct phases, a lump sum contract is the most typical form of construction contract
employed. Buyers with or without prior experience will find this method of
purchasing to be convenient. Since the contractor is not brought in until the design is
complete, they are unable to provide input on how to improve the buildability and
high-quality design at a fixed price. As the contractor bears the financial risk of
building, this style of contracting is seen as low-risk for the client. There might be
significant changes need to be made after the contractor has been engaged. This, in
addition to the fact that design and construction are typically handled by different
Management, 2019). The JCT (Joint Contracts Tribunal) Standard Building Contract,
building projects that is predicated on the idea that the owner and the participants can
both benefit from a more cooperative working relationship (Klakegg, Pollack and
foundation of confidence and cooperation between all parties involved throughout the
can each bring their own set of qualities and skills to a project, and it's not uncommon
for them to be rewarded in a single contract for working together (Willis and Alves,
2019).
The offshore oil and gas industry was the first to employ collaborative
strategies to speed up development and reduce the likelihood of costly delays. The
retail, medical, and banking industries all adopted equivalent paperwork. Reports
produced in the United Kingdom in the 1990s concluded that the prevalent adversarial
process, which prioritized individual firm gain, was damaging to the construction
contracts
manage a project from start to finish, particularly a civil engineering project, in order
to anticipate and avoid costly arguments. In contrast to the more "conventional" JCT,
which has been the industry standard in the United Kingdom for many years, the NEC
Management
The NEC and the JCT each recommend having an authoritative figure (a
behalf of the employer. The PM takes an active role, acting as a conduit between the
many stakeholders; the NEC's decision to kick things off with a clause encouraging
collaboration [Clause 10, NEC3] fosters a spirit of teamwork (El-Adaway, Vance and
Abotaleb, 2020). The NEC's risk register [Clause 11, NEC3] and compensation event
communication between all involved parties. The CA, on the other hand, is more
concerned with accounting and process than with actively leading the parties involved
dispute, taking into account both time and money to ensure that issues are resolved as
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soon as possible (Patterson, Specialist and Macdonald, 2009). The contractor's failure
to notify the PM within 8 weeks of a compensation event will result in the contractor's
appeal being denied. The parties to the contract now have a vested interest in
mitigating the risks they face within the stipulated time frame. In contrast, JCT treats
cost and time issues independently, and the contractor is required to notify the CA of
relevant events/matters but incurs no liability for failing to do so. [Section 2.4, JCT]
(Cunningham, 2018)
Compensation Event
occurrences are identified[Clause 16, NEC3] (Gould, 2007). Limiting the negative
them as quickly as possible. The JCT system uses a "pay later" model in which risks
are not settled before a certain time (Cunningham, 2014). Therefore, any
disagreements are settled through the contract's final account procedure [Clause 30,
JCT], where any necessary revisions to the contract total are settled and the final
process, the NEC's "pay as you go" provision may be preferable in order to reduce the
Rowlinson, 2013).
Dispute Resolution
All written agreements must detail a chosen method of resolving any potential
legal conflicts. The NEC, with the stated aim of promoting "mutual trust and
cooperation," advocates for the use of adjudication and then arbitration as their
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preferred dispute resolution mechanism (Mount, 2022). These procedures keep parties
out of court by having an experienced, neutral third party member evaluate the claims
made by the contractor and the PM and reach a mutually agreeable conclusion. In
most cases, this procedure is less time-consuming and costly than litigation, and it
also typically results in less dispute between the PM and contractor. However, the
arbitrator's decision is final and binding on both sides. In contrast, JCT favors
litigation, which can be advantageous if the case has a law focus because an
2020). However, litigation's unfavorable reputation for disrupting plans and harming
Force majeure
The term "force majeure" is used in the JCT forms without being defined. The
contracts (Salami, Ajayi and Oyegoke, 2021). Either party may cancel the contract for
force majeure under Clause 8.11.1 if the entirety of the unfinished works were halted
for more than two months. Force majeure was defined in Lebeaupin v. Crispin (1920)
"Relevant Matters," the NEC allows for "compensation events" (CEs) that entitle the
contractor to both time and money: in relation to events that prevent the contractor
from completing on time, both aspects (time and money) can be considered together.
termination by the employer, others by the contractor, and some allow termination by
either party (Nemr, 2017). However, there must be a legal basis for terminating the
contract, and the parties must follow the correct termination procedure (Arijeloye,
2017).
through the use of the more traditional construction contract. Construction projects
that use collaborative contracting are built on the premise that all parties involved,
from the owner to the contractors, can reap benefits from fostering a more amicable
working relationship. The structure and formation of JCT and NEC were dissected to
better comprehend the different methods used to administer the two separate
contracts. Significantly different from the JCT, the NEC stipulates and mandates the
Due to its thorough risk-sharing between Employer and Contractor, the JCT
contrary, the NEC is the preferred contract for government projects. Despite its
References
Bethany Scott (2020). Traditional Procurement vs Design & Build: Which One is
Better? [online] Urbanist Architecture - London Architects. Available at:
https://urbanistarchitecture.co.uk/traditional-vs-design-and-build/.
Bishop, D., Felstead, A., Fuller, A., Jewson, N., Unwin, L. and Kakavelakis, K.
(2009). Constructing learning: adversarial and collaborative working in the British
construction industry. Journal of Education and Work, 22(4), pp.243–260.
doi:10.1080/13639080903290355.
El-adaway, I.H., Vance, R.A. and Abotaleb, I.S. (2020). Understanding Extension of
Time under Different Standard Design-Build Forms of Contract. Journal of Legal
Affairs and Dispute Resolution in Engineering and Construction, 12(1), p.04519031.
doi:10.1061/(asce)la.1943-4170.0000331.
Idiake, J.E., Shittu, A.A., Anunobi, A.I. and Akanmu, W.P. (2015). A Comparative
Analysis of Traditional and Design & Build Methods of Procurement in the Nigerian
Construction Industry. International Journal of Construction Engineering and
Management, [online] 4(1), pp.1–12. Available at:
http://article.sapub.org/10.5923.j.ijcem.20150401.01.html [Accessed 9 Dec. 2022].
Mount, C. (2022). JCT v NEC: Which contract is right for your project? [online]
Charles Russell Speechlys. Available at:
https://www.charlesrussellspeechlys.com/en/news-and-insights/insights/constuction-
engineering-and-projects/2022/jct-v-nec-which-contract-is-right-for-your-project/.
Navas, J. (2020). What is a JCT Contract? Everything You Need to Know. [online]
Britton & Time Solicitors. Available at: https://brittontime.com/2020/10/26/what-is-a-
jct-contract-everything-you-need-to-know/.
Rose, A.T. and Patel, R.M. (2018). A critical analysis of risk factors for necrotizing
enterocolitis. Seminars in Fetal and Neonatal Medicine, 23(6), pp.374–379.
doi:10.1016/j.siny.2018.07.005.
Salami, B.A., Ajayi, S.O. and Oyegoke, A.S. (2021). Tackling the impacts of Covid-
19 on construction projects: an exploration of contractual dispute avoidance measures
adopted by construction firms. International Journal of Construction Management,
[online] pp.1–9. doi:10.1080/15623599.2021.1963561.