Management contract: construction

During the construction stage, the management contractor takes possession of the site for the works to be carried out by the works contractors. The construction period may be different for each works contract and so certificates of practical completion will be issued for each one.

There are two different forms of contract operating during the construction phase:

• The contract between the client and the management contractor. The client may wish to appoint a contract administrator to administer this contract.
• The contracts between the management contractor and each works contractor. These contracts are administered by the management contractor.

[edit] Starting the work stage.

The management contractor arranges a handover meeting to take possession of the site. See article handover to contractor.

Before work on site proceeds, the client and the management contractor (in their role as as principal contractor) confirm that suitable welfare facilities have been provided, and the management contractor (in their role as principal contractor) confirms that a suitable construction phase plan has been prepared.

When appropriate, the management contractor issues notices for each works contractor to commence work on site along with instructions regarding the phasing and sequencing of works. The management contractor should keep works contractors informed about the progress of the project so they are able to plan their works in advance of receiving a notice to commence work.

[edit] Construction.

The management contractor manages, schedules, supervises , organises and co-ordinates the works contractors and preliminaries packages on a day-to-day basis. The management contractor is generally the principal contractor under the CDM regulations as well as having overall responsibility for site management and is responsible for welfare provisions, site clearance, waste disposal, site security and trade union issues.

The lead designer co-ordinates the preparation of any additional information required by the works contractors for construction.

The management contractor co-ordinates the issue of any additional information required by the works contractors and co-ordinates the review of design information prepared by the works contractors. NB the works contractors may be required to submit to the client's contract administrator information that is required by the clients consultant team. The client's contract administrator and the works contractors should agree an outline programme for the supply of this information during the mobilisation stage.

Where there are any proposed variations, procedures for their valuation are implemented (as described in the contract). The management contractor and the client's contract administrator assess any claims for extension of time or loss and/or expense with advice where appropriate from the consultant team.

The management contractor co-ordinates site inspections and issues instructions as required.

The management contractor issues regular payment notices to each works contractor. The notices must be issued within five days of the dates for payment set out in the contract. If they intend that the works contractors should be paid a different amount, they must issue a pay less notice giving the basis for the calculation of the amount that will be paid. The management contractor makes payments to the works contractors by the final date for payment.

The client's cost consultant prepares regular valuation statements relating to payments to the management contractor. The client's contract administrator issues interim certificates (payment notices) to the management contractor. If the client intends to pay a different amount from that shown on an interim certificate, they must issue a pay less notice giving the basis for the calculation of the amount that will be paid. NB Works contractors are entitled to be informed of the amount relating to their works that appears on the interim certificate.

The client makes payments to the management contractor by the final date for payment.

On large projects the management contractor holds a daily logistic meeting on site with works contractor foremen to organise, schedule and co-ordinate on-site shared services such as deliveries and offloading, hoists and craneage, scaffolding and safety issues, rubbish clearance etc.

The management contractor performs weekly checks on works contractor earned value and takes action if necessary.

The management contractor holds regular construction progress meetings with works contractors to discuss on and off site progress against the programme and to co-ordinate the release of information. It may sometimes be appropriate for these meetings to take place at the works contractors premises.

Construction progress reports are prepared for the client's contract administrator.

The management contractor holds regular construction progress meetings with the client's contract administrator and consultant team.

[edit] Preparing for occupation.

The client begins preparations for occupation of the development, including the preparation of an operational policy and migration strategy (see links for detailed guidance) setting out how they will manage the transition into and the operation of the new facility.

The client may have an 'occupation services contract' for delivering and installing equipment , fixtures and furniture (sometimes from other premises). This contract may also pick up small building changes that they considered would be costly if instructed under the main contract.

The client should ensure they have sufficient funds to release 50% of the retention (where the contract provides for retention) upon certification of practical completion for each works contract.

[edit] Inspections, commissioning and testing.

The management contractor agrees procedures for inspections, commissioning, testing and client training with the consultant team and client (representatives of the facilities management department).

If it has not already been done, the client appoints an in-house or outsourced engineering team to witness testing and commissioning and to take over the running of the services as soon as project (or sectional) completion is certified.

The services engineer co-ordinates procedures for inspections, commissioning, testing and client training in relation to building services. The management contractor co-ordinates procedures for inspections, commissioning, testing and client training in relation to other aspects of the building.

The works contractors rectify any defects that become apparent during commissioning, testing and inspection procedures.

[edit] Practical completion.

The management contractor prepares a draft building owner's manual and if required a building user's guide and the lead designer co-ordinates the preparation of the building log book. The principal designer completes the health and safety file.

The works contractors confirm to the management contractor that their works are complete.

The management contractor issues a certificate of practical completion and payment notice for each works contract as it is completed. If they intend to pay less than the amount on the certificate, the management contractor must give notice of the amount they intend to pay and the basis for its calculation. The management contractor makes payment by the final date for payment. This will include the release of 50% of the retention if applicable.

The management contractor should take steps to protect completed work from any ongoing work.

Once all of the works contracts are complete (or all of the works contracts in a section of the works) the management contractor arranges for final inspection of the works by the building control inspector (or approved inspector) and arranges for the issue of a building regulations completion certificate. NB Within 5 days of the completion of the building, the management contractor must notify building control that the works have been carried out in accordance with the specification submitted with the building emission rate (BER) calculations, or the changes that have been made (see emission rates for more information).

Once all of the works contracts are complete the client's contract administrator issues a certificate of practical completion for the project and interim certificate (payment notice).

The management contractor arranges a handover meeting to confirm that the works are complete and to handover the site to the client (see article handover to client).

The management contractor prepares and submits a construction stage report for the client. The client assesses the construction stage report, and gives instructions as necessary.