JCT contracts suite

The Intermediate Building Contract comes in 2 forms:

• Intermediate Building Contract 2016 (IC); and
• Intermediate Building Contract with contractor's design 2016 (ICD).

Another popular form, the IC is used on a wide range of construction projects ranging in value. Although the JCT has not provided explicit guidance, the original intent was for projects up to £500,000, however, the RICS contracts in use survey (2010) indicates that as much as 56% of IC contracts were used for projects over £1 million. This form is, therefore, often used on much larger projects but again there is a risk of using this simpler form on large projects and the client should be informed of this.

This form is relatively sophisticated including many of the provisions seen in the JCT Standard Building Contract. These include provisions for named subcontractors (Schedule 2), loss and expense, bonds, sections, etc.

The 2011 and 2016 form includes collaborative working, sustainability, advance payment, bonds and collateral warranties, the 2011 previously introduced a new Schedule 5 'Supplemental Provisions' that reflects the principles of the Achieving Excellence in Construction (AEC). These supplemental provisions are incorporated via the Contract Particulars and practitioners need to give serious consideration as to whether to incorporate these provisions as they can mean substantial additional work for them and their client as well as the contractor. This in turn could affect project costs and the contract sum.

Contract selection

The Intermediate Building Contract is appropriate for construction works that:

• can be used on both private- and public-sector projects;
• are of reasonable-size and complexity but still relatively straight forward;
• are medium-size in terms of contract duration (in the region of 12 months is suggested by David Chappell in his guide to this contract);
• can be used with a framework agreement;
• where the design is provided by the employer. Where the contractor is to provide design then the employer is to provide employer's requirements stating his or her requirements for design and construction and where there is a need for a minimum level of professional indemnity insurance (e.g. substantive design works);
• the works value is in the region of £150,000 to £1 million;
• are to be administered by an architect/contract administrator (CA) and a quantity surveyor.

Where discrete design is required by the contractor (for example, some mechanical or electrical works) then the ICD can be used. This is not a Design and Build Contract.

Contract price

The Intermediate Building Contract is a lump sum contract based on drawings/specification/works schedules provided by the employer or his or her consultant. There is no re-measurement under this contract but where there is a bill of quantities or schedules of rates then this is used for valuing variations. There are valuation rules for variations (section 5) and provisions for loss and expense (section 4). If a price cannot be agreed on such extras, then the contract administrator can make a final decision on the matter and the contractor will have to accept this. If the contractor is unhappy with the contract administrator's decision then they will have to take the matter to dispute resolution (which would normally be adjudication).

Contract set-up

An Intermediate Building Contract should have a structure along the following lines:

Contract administration

As discussed some of the key requirements for successful JCT contract administration are established at the pre-contract stages of a project and these include:

• a complete design (vital for traditional contracts) or employer's requirements (for Design and Build Contracts);
• tender practices that establish a fair price for the construction of the works;
• a realistic contract period for the completion of the works; and
• an agreed contract document that is ready and executed before the start of the works.