JCT contract selection considerations

Contract administrator role

Contract administration is a vast subject and the practitioner can get guidance from the numerous sources on the subject (see Further information). An experienced professional should always carry out contract administration and sufficient time must be set aside to perform this task.

It is suggested that some of the key requirements for successful JCT contract administration are established at the pre-contract stages of a project and these include:

1. a complete design (vital for JCT contracts) or employer's proposals (for design and build contracts);
2. tender practices that establish a fair price for the construction of the works;
3. a realistic contract period for the completion of the works; and
4. an agreed contract document that is ready and executed before the start of the works.

During the course of the works, regular, active and impartial administration is required by all JCT contracts. High standards of record keeping is required at all stages of a JCT contract and particularly if there is a dispute. Good contract administration should be practical, fair, and appropriate, and in accordance with the contract (this may include acting contrarily to the wishes of your paying client).

All the JCT contracts are complex documents and the contract clauses are often not easily understood. In this case, advice from a contract professional should be sought immediately. Delay and extensions of time issues are particularly complex under the JCT and advice should be sought on complex delay issues. It is worth noting that a critical path programme is not always required to resolve delay issues.

In the event of a complex dispute (whether on time or money), most contract administrators are probably only able to give initial advice and comment on the matter. It is also unlikely (and unfair to assume) that their fee includes the processing and analysis of such disputes. Time and money disputes/claims under the JCT contracts can be very complex and time consuming. If the matter cannot be resolved by negotiation then the matter must be passed to a specialist.

Computer-based contract administration systems are available, such as isurv contract administrator. Such systems already exist for the NEC suite.

CDM Regulations

The CDM Regulations will apply to most construction projects using a JCT contract and the principal designer ought to be identified in the JCT articles of agreement. In light of CDM Regulations 2015 coming into effect, JCT 2016 has included the changes previously issued as amendment sheets, which were released in March 2015.

The JCT requires you to identify a 'CDM Planning Period' in the contract particulars. The CDM Regulations require every client to allocate sufficient time to the contractor to carry out necessary CDM planning and preparation. This is likely to be several weeks on most projects.

Always seek specialist advice if there are any concerns on CDM.

Also see the isurv section CDM Regulations.

Private sector clients

The dominance of the JCT in the private sector, particularly with regard to building works*, is partially for historical reasons but it is also suggested that the JCT reflects private sector procurement concerns and the realities of private sector construction.

JCT contracts generally assume a lay client advised by construction professionals who provide at least some of the project design and who will also become the contract administrator. The client will have minimal input and the contract administrator will have wide discretion acting on behalf of the client on most contract matters. A keen price is important in the private sector but the JCT deliberately does not push all risk to the contractor to avoid the contractor pricing excessive risk and therefore resulting in higher tender prices.

* Building works in this context excludes civil engineering and the process industries where other contract forms are more common. JCT contracts are often used for mechanical and electrical (M&E) works where the work is in the private sector but M&E works do not fit well with the JCT contract particularly with regards to supply only, manufacturing and test and commissioning situations. There is a shortage of forms in this area but alternative forms may be the IMECHE forms, ICHEME forms and the NEC Supply Contract.

Public sector clients

Central government

Traditionally, public-sector clients used their own contract forms and not the JCT, even to the extent of using heavily amended, outmoded, contracts (e.g. GC/Works). There has, however, been considerable change in public sector procurement in the last 20 years resulting in the use of a wider variety of forms. Currently, there does seem to be more emphases on collaborative working and the use of non-traditional contracts such as the NEC suite (used for the UK Olympics), the ACA PPC2000 (used on many HM Prison projects) and the use of framework arrangements. The 2016 JCT incorporates and updates provisions from the JCT Public Sector Supplement relating to fair payment, transparency and BIM.

Local authorities

Local authorities often use the JCT suite. The JCT 1998 suite had separate local authority versions but these were subsumed into the 2011 edition and there are no local authority versions. Local authorities usually have in-house contract amendments and practitioners should always ask about these when dealing with such bodies. The current editions that could be used include the JCT Design and Build Contract 2016, JCT intermediate Building Contract 2016, JCT Minor Works Building Contract 2016 or the JCT Standard Form of Building Contract 2016, with Design, quantities or no quantities depending on how the project is to be administered.

Other public bodies

Other public and semi-public bodies (for example, housing authorities) use a wide variety of contracts depending on their procurement objectives and needs. Again, it is necessary to enquire about in-house forms (or in some cases in-house amendments for certain forms) with such clients.

Subcontractors

The JCT produces subcontracts that are contractually back-to-back with the main JCT forms. In practice, these subcontracts are often heavily amended or not used probably because contractors prefer to contract on their own in-house terms. This can cause difficult interface problems between main contractor and subcontractor and often leads to dispute. The current edition of the JCT Subcontract is the JCT Standard Building Sub-Contract Agreement (SBCSub/A) 2016; likewise, the Design and Build Subcontract is called the JCT Design and Build Sub-Contract Agreement (DBSub/A) 2016.

The JCT practice note Deciding on the appropriate JCT contract 2016 also provides guidance on subcontracts. A good basic guide to subcontract law is the book the Law and Management of Building Subcontracts by John McGuinness.