Civil Engineering Reference
In-Depth Information
the construction of the works in return for a lump sum price. The contractor may
appoint his own design team though often their appointments will initially have been
made with the employer and then novated to the contractor.
A third common type of procurement route is that of 'management' which can be
one of, or a combination of, management contracting, construction management and
'design and manage'. Under management contracting, the overall design of the works
is the responsibility of the employer's design team. The employer appoints a man-
agement contractor who is responsible for managing the carrying out of the works
by works contractors appointed by the management contractor under a number of
works contracts for the various packages comprised in the works. The management
contractor manages the overall process. Normally the management contracting route
is used to allow a contract to be let where design is at an early stage so that design
and construction can proceed in parallel along with the procurement of the works
packages as and when appropriate in accordance with the programme. On the other
hand, this usually means a loss of cost certainty for the employer, as even though the
works packages will be procured competitively, the final prices will become known
only after contract commencement. Under construction management, the employer
appoints a design team and a construction manager. Unlike a management contrac-
tor, a construction manager does not appoint the contractors who actually carry out
the works; instead those contractors (known as trade contractors) are appointed by
the employer. The management of the construction process is performed by the con-
struction manager on the employer's behalf. Under 'design and manage' procurement,
the management contractor is not only responsible for managing the works packages
butalsoforthedesignteam.
1.4.2 Lump sum contracts
A lump sum contract is a contract in which the contractor agrees with the employer to
carry out the building works for a pre-agreed price. he price is subject to adjustment
only in certain limited circumstances specified in the contract, such as variations,
employer default and other events (if any) which are expressly stated in the con-
tract as being an employer risk, expenditure of provisional sums and (if applicable)
inflation-related fluctuations in costs. The characteristics of a lump sum contract can
apply to both design and build and traditional contracts. A contract using bills of
quantities will be a lump sum contract if the bills are fully measured at the time the
contract is entered into.
1.4.3 Measurement contracts
In this type of contract the sum payable by the employer to the contractor is deter-
mined by measuring the work done on completion of the project and by applying
quantities to agreed rates or some other form of valuation. An example is a contract
based on bills of approximate quantities, where the quantities cannot be accurately
measured in advance of the contract being entered into.
