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Qualification - Pearson BTEC Level 5 HND in Construction and The Built Environment
Unit Name - Contracts and Management
Unit Level - Level 5
Unit Number - Unit 23
Unit code - H/615/1409
Unit Credit - 15
Assignment Title - Contracts & Management
Learning Outcome 1: Discuss the requirements for a contract in meeting stakeholders' interests
Answer: This outcome requires an in-depth discussion of the essential elements that a robust contract must possess to effectively balance and protect the diverse interests of all stakeholders involved in a construction project. This includes identifying key stakeholders such as the client, contractor, subcontractors, suppliers, designers, funders, and end-users. The discussion should cover how contractual clauses address their respective expectations regarding scope of work, quality standards, timelines, budget, risk allocation, payment terms, intellectual property, and dispute resolution mechanisms. Furthermore, it should emphasize the importance of clear, unambiguous language, enforceability, and the ability of the contract to foster collaboration and manage potential conflicts, ensuring that the contractual framework provides a mutually beneficial and legally sound basis for the project's execution.
Learning Outcome 2: Determine the criteria for the selection of a contract
Answer: This outcome focuses on the systematic process of evaluating and choosing the most appropriate contract type for a given construction project. Learners need to identify and explain various criteria that influence this decision. These criteria typically include the project's complexity and scope definition (e.g., well-defined vs. uncertain), the desired level of risk allocation between parties (e.g., client or contractor taking more risk), the project's budget and funding structure (e.g., fixed price vs. cost-reimbursable), the desired project timeline and delivery expectations (e.g., accelerated schedule vs. traditional), and specific legal or regulatory compliance requirements. Other factors like the client's experience, market conditions, and the relationship between the parties may also influence the selection. A thorough understanding of how these criteria interrelate is essential for making an informed and effective contract choice.
Learning Outcome 3: Analyse different types of contract and their application to the built environment
Answer: This outcome requires a comprehensive analysis of various standard contract forms commonly used in the built environment sector, detailing their characteristics, advantages, disadvantages, and suitability for different project scenarios. This analysis should include, but not be limited to, Lump Sum (Fixed Price) Contracts, Cost-Plus Contracts (with or without a guaranteed maximum price), Time and Materials Contracts, Unit Price Contracts, Design-Build Contracts, and Integrated Project Delivery (IPD) Contracts. For each type, learners should discuss when and why it is typically applied, how risk is distributed, payment mechanisms, and the level of client involvement, providing practical examples of their application in real-world construction projects, from small-scale renovations to large infrastructure developments.
Learning Outcome 4: Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions.
Answer: This culminating outcome challenges learners to apply their knowledge by selecting a suitable contract form for a hypothetical or given construction project and then detailing its key terms and conditions. The selection process should be justified based on the criteria discussed in Learning Outcome 2 and the analysis of contract types from Learning Outcome 3. When preparing the contract, learners must specify crucial terms and conditions, including but not limited to, the detailed scope of work, project timeline and milestones, payment schedule and methods, provisions for variations and change orders, risk allocation and insurance requirements, procedures for dispute resolution (e.g., mediation, arbitration), warranties and defects liability periods, and conditions for termination. This requires a practical understanding of how contractual clauses translate into project obligations and protections for all parties.
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Introduction
The successful management of a project relies upon ensuring that work is undertaken in accordance with the terms of the contract that exists between client and contractor. In construction, a contract is the legally binding agreement between the client (who wants a project built) and the main contractor (who is responsible for constructing the project). Time, quality and costs are covered by such contracts to ensure that a client receives a project that has been specified by their designer to a budget and at an agreed handover date for completion.
The overall aim of this unit is to provide students with a working knowledge of contracts, so they can manage a project team in accordance with the agreed terms and conditions of the contract. The principle person responsible for this is often the quantity surveyor and it is their responsibility to ensure compliance with the conditions of the contract.
On successful completion of this unit students will be in a position to run and administer a project using the contract terms and conditions that have been agreed between a client and the main contractor. In addition, students will have the fundamental knowledge and skills to progress on to a higher level of study.
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Essential Content
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LO1 Discuss the requirements for a contract in meeting stakeholders' interests
Clients' requirements:
Statement of need, scope of services, responsibility for the design, design undertaken by an external architect, design to be undertaken by the contractor, liability for the design, professional indemnity for the design, performance bond, parent company guarantee, level of risk, the use of Building Information Modelling, strategic brief, required performance specification, procurement route, liability for overruns and delays, liability for cost overspends, level of quality required for the project, constraints on project duration, managing budgets and financial constraints to avoid overspends.
Public body requirements:
Level 2 Building Information Modelling, value for money (e.g. the Public Contracts Regulations 2015 or a local international agreement), local council purchasing strategy, pre-qualification questionnaires, compliance with equality legislation, Health & Safety and accident rates for main contractors, environmental management considerations, fair work practices, price benchmarking and cost targeting, engaged serial supply chain, efficiency and elimination of waste (e.g. a Buy Local scheme), Government International trade agreement, Private Finance Initiative 2 (PF2) and Public Private Partnerships (PPP).
LO2 Determine the criteria for the selection of a contract
Selection factors:
Time in terms of a quick start and shorter completion date; cost in terms of the financial size of the undertaking; quality; the level of risk to be apportioned across all stakeholders; client and main contractor balance of risk; fixed price or variable price; will the contactor be undertaking the design; warranties and guarantees for workmanship and materials specification; basis of contract sum and payment options (e.g. phased, monthly); employers control over sub- contractors, nominated or named; lump sum or re-measured costs against a schedule of rates.
Type of work to be undertaken:
Maintenance or capital works, size, value and complexity of the project to be undertaken; knowledge and expertise of the employer or client; location, within UK or internationally, European location.
LO3 Analyse different types of contract and their application to the built environment
The Joints Contracts Tribunal Suite of Contracts:
Traditional: JCT Standard Building Contract 2011 (the 'with Quantities' and 'without Quantities' versions), JCT Intermediate Building Contract 2011, JCT Minor Works Building Contract 2011
Traditional (re-measured): JCT Standard Building Contract 2011 (the 'with Approximate Quantities' version), JCT Measured Term Contract 2011
Design and Build: JCT Design and Build Contract 2011, JCT Major Project Construction Contract 2011
Construction Management: JCT Construction Management Appointment 2011, JCT Management Building Contract 2011
Partnering: JCT-Constructing Excellence Contract 2011, PPC2000 (2013 edition).
The New Engineering Contract suite:
New Engineering Contract (NEC3) and Engineering Construction Contract (ECC) and options A to F.
International Federation of Consulting Engineers Contract Suite (FIDIC):
Conditions of Contract for Works of Civil Engineering Construction: The Red Book (1987)
Conditions of Contract for Electrical and Mechanical Works, including Erection on Site: The Yellow Book (1987)
Conditions of Contract for Design-Build and Turnkey: The Orange Book (1995).
Other types of contract:
ICC Minor Works Version 2011, GC/Works series.
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LO4 Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions
Contract documents:
Distinction between contract and non-contract documents; articles of agreement; conditions of and appendices to the different forms of contract; forms of contract used (construction and civil engineering projects); understand construction contracts in terms of supply chain management; supply chain management, nominated, named and other sub-contractors; suppliers, nominated and named sub-contractors; contract conditions; tendering arrangements; information requirements; main contract implications; forms and agreement; other sub-contractors; contract conditions; domestic; directly employed; tendering criteria.
Quality:
Materials; goods; standards of workmanship; specification; statutory obligations; methods of working; testing; defects and removal of defective work; quality assurance; other clauses of the contract, certificate of making good defects.
Specific conditions:
Articles of agreement; payment terms; variations; insurances; contractors' main responsibilities; testing and defects; architects/engineer instructions; risks.
Time:
Limitation of liability; possession; extensions of time; extensions and delays to contract period.
Costs:
Loss and expense; performance damages; performance bonds; retention; bonus for early completion; termination; price adjustments.
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Pass
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Merit
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Distinction
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LO1 Discuss the requirements for a contract in meeting stakeholders' interests
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D1 Critically evaluate the contractual requirements for a public body in compliance with legislation
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P1 Explore the contractual requirements of a project for a private client
P2 Explain the contractual requirements for a public body for an infrastructure project
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M1 Contrast the contractual requirements of a public and a private stakeholder for a major project
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LO2 Determine the criteria for the selection of a contract
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D2 Evaluate a project in terms of risk for all stakeholders
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P3 Assess how time, cost and quality affect the selection of a contract
P4 Evaluate the ways in which time and quality affect the cost of a project
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M2 Analyse a project in terms of the selection criteria for a contract that satisfies the requirements of a client
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LO3 Analyse different types of contract and their application to the built environment
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P5 Analyse the factors that influence the selection of a contract used to control and manage a project
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M3 Compare forms of standard contracts in terms of meeting a balanced risk
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LO3 and LO4
D3 Justify the selection of a contract in meeting the
strategic values of a client
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LO4 Select and prepare an appropriate form of contract for a specific project, specifying the terms and conditions.
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P6 Revise a standard contract in meeting the requirements of a client
P7 Present the rationale for defining selected terms and conditions in the preparation of a contract
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M4 Compare the terms and conditions of similar contracts in meeting clients' requirements
M5 Discuss how collaboration between contractors and sub- contractors influence contractual arrangements
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