Loss and/or expense under JCT standard form contracts - Building Contract Claims - page 262

named sub-contractors in IFC 98 is not a subject for this topic 563 . Briefly, the
contractor is obliged to employ as sub-contractors persons or firms who are
named, either in the contract documents or in an instruction from the
architect for the expenditure of a provisional sum, to carry out specified
parcels of work. The naming process involves the use of a standard form of
invitation to tender, tender and articles of agreement (Form NAM/T) and
standard conditions of sub-contract incorporated into the sub-contract by
reference (Form NAM/SC), together with an optional form of Employer/
Sub-Contractor Agreement (ESA/1) similar in effect to Form NSC/W under
JCT 98.
In contrast to the position regarding nominated sub-contractors under
JCT 98, named sub-contractors under IFC 98 become effectively 'domestic'
sub-contractors to the main contractor. Once the naming procedure has
been completed the architect generally speaking has no further involvement
with the administration of the sub-contract. He does not direct the main
contractor as to the payments to be made to the named sub-contractors and
he is not required to certify practical completion of their work. Matters such
as extensions of time for the sub-contractor and settlement of his account are
matters between the sub-contractor and the main contractor and neither the
architect nor the quantity surveyor under the main contract will be
involved.
However, the architect may become involved and may be required to
issue instructions if things go badly wrong. In certain circumstances the
main contractor may be entitled to reimbursement of any direct loss and/or
expense arising from the effect of such instructions on the regular progress
of the works. Those circumstances are:
(1) If a sub-contractor is named in the contract documents but the main
contractor finds that he is unable in the event to enter into a sub-contract
with the named firm (perhaps because the firm withdraws or no longer
exists or because of some inconsistency between the sub-contract par-
ticulars and the main contract) the main contractor is to notify the
architect specifying the reason. If the architect is satisfied that the reason
is valid he may issue an instruction to
. change the particulars of the proposed sub-contract so as to remove
the problem, or
. omit the work from the contract altogether, in which case the em-
ployer may have the work carried out under a separate contract, or
. omit the work from the contract documents and substitute a
provisional sum, which would then entitle him to name another
sub-contractor.
Instructions issued under the first two options are to be regarded as
variation instructions, therefore entitling the contractor to an extension
of time if the works are delayed and to direct loss and/or expense
563 Readers are referred to Neil F. Jones and Simon Baylis, JCT Intermediate Form of Building Contract ,
3rd edition, 1999, Blackwell Publishing; David Chappell and Vincent Powell-Smith, JCT Intermediate
Form of Contract - A Practical Guide , 3rd edition 1998, Blackwell Publishing.