What happens at completion?

At completion the contractor hands the project over to the employer. Other than agreed (usually relatively minor items) the contractor is asserting that the works are finished and is liable for breach of contract if there are any works that are not finished or if there are any works that are not completed in accordance with the contract documents.

At completion, a number of significant documents are handed over from the contractor to the client. The contract administrator, acting on behalf of the client, needs to ensure first, that these documents are available, and second, that they are of the necessary quality. The documents may comprise the following:

• the documents for incorporation into the health and safety file;
• as built' drawings, together with all relevant specifications, and so on;
• the operation and maintenance manual, containing details of maintenance;
• schedules, operating instructions and manufacturers' details;
• warranties and guarantees from suppliers;
• copies of statutory authority approvals and consents; and
• testing and commissioning documentation.

To the extent that there are deficiencies in the work (such as unfinished work, frost damage, or materials, goods and workmanship not in accordance with standards), these should be carefully and diligently identified and catalogued by the contract administrator. All remedial and completion work should then be carried out within the specified time, under the direct supervision of nominated qualified and experienced personnel.

Bonds and insurances

Analysis of the consequences of the date of completion has traditionally focused on the employer's right to deduct liquidated damages; however, this problem can now largely be remedied by referral of the matter to adjudication. Unfortunately the same cannot be said for the impact on bonds and insurances.

If the date of practical completion certified by the contract administrator turns out to be incorrect, this will affect bonds and insurances. The contractor's obligation is usually to insure the works up to the date of practical completion, with insurance of the works thereafter the employer's obligation. However, questions and problems persist.

For example, what if a contractor claims that completion has been achieved, but the contract administrator denies this fact, and during this period of disagreement the property is damaged by fire? If an adjudicator, arbitrator or judge finds in favour of the contractor in this case, the property may be uninsured for this period if the insurance taken out by the employer commenced from the later date.

Similarly, if the employer makes a call against a bond (which expires on completion) immediately prior to the contract administrator certifying completion but an adjudicator subsequently revises the date of completion to a date before the call was made, the call against the bond will have been wrongly made and the money refundable with interest and any damages incurred.