JBCC Support

JBCC Support2019-08-06T14:05:39+02:00

JBCC SUPPORT DOCUMENTATION

ADDITIONAL WORK2019-08-06T13:59:11+02:00

ADDITIONAL WORK

The scope of work is defined in the tender documents on which the agreement is signed. All JBCC® agreementsinclude a contract instruction clause to permit the principal agent to formally issue instructions to the contractor. Every building project is unique and issues must be resolved as they occur. The contract instruction clause in JBCC® agreements specifically excludes changes in scope! Also, no contract instructions can be issued after practical completion except to remedy defects

Where additional work is required (beyond the scope of the tender) the parties must agree to proceed… Such work will generally require amendment to the programme and result in additional costs. Consider:

– What is the progress of the works in terms of the programme when additional work is proposed?
– Is the contractor’s work on programme?
– Is the contractor’s work of the specified quality?

If the contractor is on programme and work is good = additional work may be a low risk instruction; if the contractor is behind schedule and/or the quality is poor instructing additional work will be a high risk decision, all delays and potential penalty charges fall away – and the likelihood of completing the enlarged project within the revised parameters is small. The same applies to ‘acceleration’

Complete the existing project – instruct the additional work as a separate project!

See: 6.1P-17.1.2; 6.1N-17.1.2; 5.0P-17.1.1; 5.0N-17.1.1; 5.1M-14.1.2; 4.0M-6.2.1

ADJUDICATION2019-08-06T14:00:26+02:00

ADJUDICATION

May be defined as an accelerated and cost effective form of dispute resolution that, unlike other means of resolving disputes involving a third party intermediary, the outcome is a decision by a third party which is binding on the parties in dispute and is final unless and until reviewed by either arbitration of litigation.

Adjudication is not arbitration or litigation

See: 6.1P-30.6; 6.1N-30.6; 5.0P-40.2; 5.0N-40.2; 4.1M-40.5

AGENT2019-08-06T14:03:54+02:00

An entity appointed by the employer to deal with specific aspects of the works with full authority and obligation to act – including the architect, engineer, project manager, quantity surveyor and others appropriate to the execution of the works. In a Design + Build Agreement these agents are appointed by/work for the contractor

See: 6.1P-6.0; 5.0P-5.0; 4.1P-5.0; 6.1N-6.0; 5.0N-5.0; 4.1N-5.0; 5.1M-5.0 & 6.0; 4.0M-6.0; 3.1M-6.0

AGREEMENT2019-08-06T14:20:24+02:00

Is a binding legal document signed by the employer and the contractor describing the obligations and rights or each party – time limits for performance, payment conditions, and procedures to suspend or terminate the agreement, as well as steps to resolve disputes during the contract period (without involving lawyers!)

The JBCC® publishes three agreements:-

JBCC® Principal Building Agreement – for all projects
JBCC® N/S Subcontract Agreement – used in conjunction with the PBA
JBCC® Minor Works Agreement – for small projects by emerging contractors

ALTERNATIVE DISPUTE RESOLUTION (ADR)2019-08-06T14:02:25+02:00

Procedures are generally included in Building and Construction involving industry experts rather than legal practitioners to find a speedy, cost effective and ‘private’ solution. The options include:

MEDIATION: Now favoured
EXPERT DETERMINATION: not common in South Africa
ADJUDICATION: competent, but not final
ARBITRATION: Binding determination, lengthy and expensive
Then LITIGATION: very lengthy and very expensive

FIDIC for large complex projects favours the appointment of a two/three person Dispute Avoidance Board (DAB) of experts on a retainer to avoid disputes by regularly reviewing the design and execution processes – could also be used with JBCC® agreements by agreement of the parties

ARBITRATION2019-08-06T14:21:29+02:00

Is the hearing and determination of a dispute by an impartial referee selected or agreed upon by the parties concerned. In South Africa arbitration is favoured as an alternative to litigation in resolving conflicts and disputes. The attraction is that a settlement can be reached out of the courts, which are presided over by judges and magistrates appointed by the State, and the more flexible nature of the process. However, while arbitration is usually a quicker process than litigation it can still be costly, as the parties jointly appoint the arbitrator and are therefore liable for paying the arbitrator’s fees, the cost of the venue as well as the cost of the recording and transcription of the proceedings and findings. The duration of proceedings will be as long as the parties choose to make it, although typically it will be shorter than the court proceedings for a similar case.

See: 6.1P-30.7; 5.0P-40.2.2; 4.1P-40.2.2; 6.1N-30.7; 5.0N-40.2.2; 4.1N-40.2.2; 5.1M-22.5; 4.0M-18.2; 3.1M-18.2;

ARCHITECT2019-08-06T14:22:43+02:00

Term not used in JBCC® agreements – the architect must have a specified tertiary qualification and be admitted to a statutory regulatory body to be allowed to practice. The employer (client) defines the services required for a particular project that may include finding a suitable site, compiling the brief, exploring various design solutions, compiling documentation for statutory approvals, tendering, construction and operation of the facility. The architect may be the appointed as the principal agent, but not necessarily so.

BREACH OF CONTRACT2019-08-06T14:49:02+02:00

Simplistically where one party to a agreement does not carry out a particular obligation in terms of the agreement – remedies include that the innocent party may terminate the agreement and claim for damages

Note: ‘Tardy performance’ does not necessarily constitute a breach of contract unless it can be proven where ‘time is of the essence’ in the contract wording

BUDGETARY ALLOWANCE2019-08-06T14:23:57+02:00

An amount included in the contract sum for work intended for execution by the (sub)contractor, the extent of which is identified but not detailed

BUILDERS’ HOLIDAY PERIOD2019-08-06T14:25:10+02:00

Traditionally defined as a month holiday over the Christmas period – currently applicable in some provinces only. At tender stage the contractor must complete in the Contract Data the anticipated holiday periods during the construction period of a project to allow the principal agent to fairly assess possible extension of time claims later

See: 6.1P[CD]-19/20/24; 6.1N[CD]-19/20/24; 5.1M[CD]-15/17/18

CD (CONTRACT DATA)2019-08-06T14:26:12+02:00

The document listing the contract variables
Applicable in JBCC 2014 & 2007 editions

CERTIFICATE2019-08-06T14:26:50+02:00

SA Concise Oxford Dictionary: A certificate is an official document attesting or recording a particular fact or event, a level of achievement or fulfilment of a legal requirement – in JBCC® agreements only the principal agent is authorised by the employer to issue certificates of (stages of) completion and of payment due to the contractor – that are binding on the employer. If the employer disagrees with a certificate – the obligation to the contractor must be honoured, and the disagreement resolved outside the building agreement (PROCSA agreement between the client and an (principal) agent)

Note: By signing a payment certificate the principal agent binds the employer to make payment of the amount stated by the due date to the contractor = thus a payment certificate is regarded as a liquid document in law

See: 6.1; N-6.1; 5.1M; 5.0P; -5.0 N; 4.0M; 4.1P; 4.1N; 3.1M

CERTIFICATE – PAYMENT2019-08-06T14:30:20+02:00

Two types of ‘payment certificates’ are issued by the principal agent to the contractor – an interim payment certificate regularly every month (or other agreed interval) until a single final payment certificate is issued after the final account has been agreed

Interim payment certificates must include money due to all n/s subcontractors listed in a schedule for payment by the contractor

Should the contractor fail to make payment to a n/s subcontractor the employer may instruct the principal agent to issue a ‘direct’ payment certificate to a subcontractor

See: 6.1P-25.0; 5.0P-31.0; 4.1P-31.0; 5.1M-19.0; 4.0M-13.0; 3.1M-13.0

CERTIFICATE – COMPLETION2019-08-06T14:28:03+02:00

Terminology not used in JBCC® agreements. The principal agent must concurrently with the issue of the Certificate of Practical Completion issue a list for completion describing defects to be remedied before the Certificate of Final Completion can be issued by the principal agent

See: 6.1P-21.0; 5.0P-26.2.2; 5.1M-16.1; 4.0M-10.1

CERTIFICATE OF FINAL COMPLETION2019-08-06T14:28:45+02:00

A certificate issued by the principal agent to the contractor with a copy to the employer stating the date on which final completion of the works, or of a section thereof, was achieved – The contractor’s obligations have been fulfilled; the final account must be agreed and be paid. The contractor remains liable for defects arising from the quality of his work for five years from the date of final completion – longer if a defect has occurred during this period

See: 6.1P-21.6.2; 5.0P-26.3.1; 5.1M-16.2.2; 4.0M-10.3.1

CERTIFICATE OF INTERIM COMPLETION2019-08-06T14:29:18+02:00

A certificate issued by the contractor to each n/s subcontractor with a copy to the principal agent/agents stating the date on which the subcontract works was substantially complete – to the extent that work by other subcontractors / the contractor to achieve practical completion can follow. The subcontractor remains liable for defects arising from the quality of his work for five years from the date of final completion – longer if a defect has occurred during this period

See: 6.1N-18.0; 5.0N-23.0; 4.1N-23.0

CERTIFICATE OF PRACTICAL COMPLETION2019-08-06T14:30:58+02:00

A certificate issued by the principal agent to the contractor with a copy to the employer stating the date on which practical completion of the works, or of a section thereof, was achieved

See: 6.1P-19.3.3-19.7; 5.0P-24.7-10; 4.1M-24.0

CLAIM – (SUB)CONTRACT2019-08-06T14:34:24+02:00

A (sub)contractor must give notice of a potential (time or money) claim – or loose the opportunity to claim – during the construction process when he (ought to) become aware thereof to prevent claims accumulating until the final account stage when their validity may be more difficult/impossible to assess

See: 6.1P-26.5; 5.0P-32.6; 6.1N-26.5; 5.0N-32.5

CLAIM FOR ADDITIONAL TIME2019-08-06T14:33:29+02:00

The principal agent must administer the agreement etc including the revision of the date for practical completionand the adjustment of the contract value – without interference from the employer – who should be kept in the loop as matter of courtesy. The contractor must submit a detailed claim for all relevant events – assuming these are interlinked and could possibly not be identified individually sooner – and that the principal agent assess the whole claim in terms of time and money against the effect on the programme as a whole – with reasons why some items may be accepted, rejected, or amended… in a manner easily understood by a lay person

See: 6.1P-23.0; 5.0P-29.0; 4.1M-29.0

CLAIM for additional TIME

JBCC® introduced the concept of ‘adverse weather’ from the 2007 editions as a means of fair compensation for the contractor (and subcontractors) where the project has been delayed due to such conditions … The contractor should apply for to the principal agent with a motivation describing the stage of the project – the effect on the works by rain / wind etc by trade – and the effect on the programme as a whole – including additional costs that subcontractorsmay have incurred and protective measures

See: 6.1P-23.1.1; 5.0P-29.1.1; 4.1M-29.0

CLAIM FOR ADDITIONAL WORK2019-08-06T14:35:04+02:00

Where additional work is required (beyond the scope of the tender) the parties must agree to proceed …. Such work will generally require amendment to the programme and result in additional costs. Consider:

– What is the progress of the works when additional work is proposed?
– Is the work on programme?
– Is the contractor’s work of the specified quality?

See: 6.1P-23.2.12 / 17.1.2; 5.0P-29.2.10 / 17.1.1; 6.1P-26.2 / 26.5; 5.0P-32.2 / 32.5

CLAIM FOR TIME – MWA2019-08-06T14:35:47+02:00

The principal agent will have to review the entire original (or approved revised) programme = and compare it to actual progress compared – referenced to the critical path and the date for practical completion; this should result in a number of (working) days extension (to be) granted = revised date for practical completion

Any subsequent claims for revision of the date for practical completion must be processed in the same manner

Where the JBCC® MWA is used the details of the revised date for practical completion must be recorded in the contract minutes, no other correspondence is required

See: 5.1M-17.0; 4.0M-11.0; 3.1M-11.0

CLAIMS FOR TIME PLUS MONEY2019-08-06T14:36:37+02:00

The (sub)contractor must follow the steps in clauses – giving notice of an event (series of events) that are likely to cause a delay and/or incur additional costs (the 20 working day period is critical, if the procedure s and the time periods are not followed, the claim is forfeited. The (sub)contractor must describe the event – show how this event has/will influence the programme / critical path = show calculation of additional working days + resources required (additional manpower and/or equipment to be hired)(within forty working days when you can quantify the claim) and describe what steps you have taken to prevent/mitigate such delay/additional costs

The principal agent must within 15 working days accept/reduce/reject such claim – if rejected, declare a disagreement i.t.o. the Dispute Clause

See: 6.1P-23.0+26.0; 5.0P-29.0+ 32.0; 4.1P-29.0+32.0; 6.1N-23.0+26.0; 5.0N-29.0+ 32.0; 4.1N-29.0+32.0; 5.1M-20.0; 4.0M-14.0; 3.1M-14.0

COMMENCEMENT DATE (Organs of State/Public Sector)2019-08-06T14:38:04+02:00

The date that the agreement, made in terms of the Form of Offer and Acceptance, comes into effect

See: Contract Data – Public Sector; 6.1P; 5.1M

COMMON LAW2019-08-06T14:39:02+02:00

Is that portion of (South African) Law which has evolved from amongst others, the Roman-Dutch Law, and that is not (South African) Statute Law based on judicial decisions rather than on legislative decrees

COMPLETION – FINAL2019-08-06T14:40:01+02:00

The principal agent (and other agents) must guide the (sub)contractors to achieve the specified quality of workmanship/finish.

The (sub)contractors must advise the principal agent when the works are ready for inspection;

The principal agentagents must inspect the works within five (5) working days of notice from the contractor and issue either:

  1. A list for final completion listing all outstanding defects to be rectified for final completion to be certified;
  2. Certificate of Final Completion where all defects have been attended to satisfactorily – to the contractor with a copy to the employer stating the date on which final completion of the works, or of a section thereof, was achieved

The contractor’s obligations have been fulfilled; the final account must be agreed and be paid. The contractorremains liable for defects arising from the quality of his work for five years from the date of final completion – longer if a defect has occurred during this period (Prescription = 3 years from the date a defect is notified)

See: 6.1P-21.0; 5.0P-26.0; 4.1P-26.0; 6.1N-21.0; 5.0N-26.0; 4.1N-26.0; 5.1M-16.0; 4.0M-10.0; 3.1M-10.0

COMPLETION – INTERIM2019-08-06T14:41:01+02:00

The state of completion where the n/s subcontract works, or a section thereof, is substantially complete as certified by the contractor

See: 6.1N-18.0; 5.0N-23.0; 4.1N-23.0

COMPLETION – PRACTICAL2019-08-06T14:42:08+02:00

The principal agent (and other agents) must guide the (sub)contractors to achieve the specified quality of workmanship/finish.

The (sub)contractors must advise the principal agent when the works are ready for inspection;

The principal agentagents must inspect the works within the period stated in the [CD] of such notice and issue either:-

Note: Inspections can be time-consuming not to mention the compilation and issue of the list for practical completionafter the event / updating the list later

  • list for practical completion listing all outstanding defects to be rectified for practical completion to be certified; or …
  • Certificate of Practical Completion where all defects have been attended to satisfactorily – to the contractor with a copy to the employer stating the date on which practical completion of the works, or of a sectionthereof, was achieved
  • And a list for completion of items to be rectified and items to be completed before final completion can be certified

At practical completion …

  1. The contractor’s obligations have been substantially fulfilled to the extent that the employer can use the facility for the intended purpose …
  2. The employer may occupy the works from the date of practical completion – BUT the employer can only occupy the works once an ‘Occupation Certificate’ has been issued by the local authority (statutory not contractual obligation);
  3. Possession of the site is relinquished to the employer;
  4. The principal agent can only issue contract instructions to remedy defects – NOT for additional work!
  5. No (further) penalties can be imposed;
  6. The insurance changes from ‘works risk’ to ‘building owners’
  7. Securities are adjusted: the Guarantee for Construction (variable) is reduces from 6 to 4% of the contract sum
  8. The Guarantee for Construction (fixed) reduces form 10 to 3% of the contract sum

See: 6.1P-19.0; 5.0P-24.0; 4.1P-24.0; 6.1N-19.0; 5.0N-24.0; 4.1N-24.0; 5.1M-15.0; 4.0M-9.0; 3.1M-9.0

COMPLETION – SECTIONAL2019-08-06T14:42:43+02:00

The same criteria described for interim / practical / final completion apply for each section. The Certificate of Final Completion of the works includes the last section

Interim payment is made for the works as a whole, not per section

See: 6.1P-20.0; 5.0P-28.0; 4.1P-28.0

COMPLETION – WORKS2019-08-06T14:43:15+02:00

Only applicable in editions PBA 4.1 and PBA 5.0

See: 5.0P-25.0; 4.1P-25.0

COMPLIANCE CERTIFICATES2019-08-06T14:31:40+02:00

Statutory compliance certificates, including, for example, “roof trusses” must be designed and signed by a professional engineer, and certificates from manufacturers of materials used in the manufacture the trusses, for example “connectors” etc complying with the various regulations may be required

CONSTITUENTS2019-08-06T14:45:26+02:00

The JBCC® has no owners or shareholders.

The JBCC® is a Not for Profit Company funded from sale of documents it publishes and from training courses presented to the industry.

The constituents are delegates representing the building and construction industry including owners, developers, professional consultants and principal and specialist subcontractors serving on committees of the JBCC® who contribute to and approve the content of JBCC® publications

The constituents are:
– Association of Construction Project Managers
– Association of South African Quantity Surveyors
– Consulting Engineers South Africa
– Institute of Landscape Architecture in South Africa (from 2015)
– Master Builders South Africa
– South African Black Technical and Allied Careers Organisation
– South African Institute of Architects
– South African Property Owners Association
– Specialist Engineering Contractors Committee

CONSTRUCTION EQUIPMENT2019-08-06T14:46:20+02:00

Equipment and/or plant provided by or belonging to the contractor and/or the subcontractor used during the construction period

See: Definitions (new 2014)

CONSTRUCTION INFORMATION2019-08-06T14:47:10+02:00

All information issued by the principal agent and/or agents including the contract documents, specifications, drawings, schedules, notices and contract instructions required for the execution of the works

See: Definitions (new 2014); 6.1P-12.1.14

CONSTRUCTION INFORMATION

All information issued by the principal agent and/or agents including the contract documents, specifications, drawings, schedules, notices and contract instructions required for the execution of the works.

See: Definitions (new 2014)

CONSTRUCTION PERIOD (Organs of State/Public Sector)2019-08-06T14:48:19+02:00

The period, expressed in months, commencing on the commencement date and ending on the date of practical completion, which period includes Saturdays, Sundays, proclaimed public holidays and recorded annual builders holiday periods

See: Contract Data – Public Sector; 6.1P; 5.1M

CONSTRUCTION PERIOD (Private Sector)2019-08-06T14:47:45+02:00

The period commencing on the intended date [CD] of possession of the site by the contractor and ending on the date of practical completion

See: Definitions; 6.1P-12.17; 5.0P-15.3

CONTRACT – LUMP SUM2019-08-06T14:51:17+02:00

In common law the employer agrees to pay the contractor an all inclusive “lump sum’ price for specified works… on completion of the work. In practice the parties ‘contract out of common law’ to agree an amount to be paid as the works proceeds. The contract sum may be calculated by the contractor based on drawings and a specification, or be based on a Bill of Quantities provided by the employer (compiled by the quantity surveyor). The contract sum may be varied by the issue of contract instructions by the principal agent in instruction from the employer to add/omit/alter work

CONTRACT – NON VARIATION CLAUSE2019-08-06T14:37:17+02:00

A contract comes into being by the consent of the parties – and the parties can end or vary an agreement by consent. All JBCC® agreements contain a ‘non variation’ provision on the signature page – variations only become binding on the parties if signed by the parties and attached to the agreement

CONTRACT – OFFER AND ACCEPTANCE2019-08-06T14:52:53+02:00

Acceptance of an offer concludes an agreement between the parties and brings a contract into existence … for specified performance, cost and time to be accepted within a given time period without variation. An offer must be accepted by the person who initiated the tender. Details are varied by either party constitute a counter offer. The principal agent is generally responsible for the preparation of tender documents and managing the process. The principal agent is not automatically empowered to enter into/sign a contract on behalf of the employer – if required – a letter of authority must be provided by the employer

See: 6.1P-3.1; 5.0P-2.0; 4.1P-2.0; 6.1N-3.1; 5.0N-2.0; 4.1N-2.0; 5.1M-3.1, 4.0M-1.8; 3.1M-1.8

CONTRACT – ORAL2019-08-06T14:49:46+02:00

“A verbal contract is not worth the paper it is written on”   SA Law does not require a building contract to be in writing – a document recording what has been agreed between the parties is so much easier to enforce – particularly where a breach of contract occurs …

CONTRACT – SUBCONTRACT2019-08-06T14:50:15+02:00

An agreement between the contractor and the (n/s) or (domestic) subcontractor. A subcontract agreement is wholly dependent for its continued existence on the principal agreement between the employer and the contractor – if the principal agreement is terminated each subcontract agreement is ‘automatically’ terminated

See: 6.1N; 5.1M

CONTRACT – TERMINATION2019-08-06T14:50:45+02:00

Contracts come to an end by performance of all obligations in terms of the agreement; the parties may mutually agree to terminate an agreement and agree outstanding payment or similar obligations); or an agreement may be terminated by one party who no longer wishes (is able) to perform obligations in terms of the contract. Another ‘party’ (surety) may complete outstanding obligations in terms of the original agreement – with the agreement of the other party! A new contracting party may agree to complete the outstanding obligations but not necessarily in terms of the original agreement

See: 6.1P-29.0; 5.0P-36.0-39.0; 4.1P-36.0-39.0; 6.1N-29.0; 5.0N-36.0-39.0; 4.1N-36.0-39.0; 5.1M-21.0; 4.0M-15.0-17.0; 3.1M-15.0-17.0

CONTRACT DATA2019-08-06T14:54:19+02:00

The document listing the contract variables

CONTRACT DOCUMENTS2019-08-06T14:55:27+02:00

The document listing the contract variables

CONTRACT INSTRUCTION2019-08-06T14:56:10+02:00

A written instruction issued by or under the authority of the principal agent to the contractor, which may include drawings and other construction information. Note: in the subcontract agreement the contractor iss a ‘contractor’s instruction’ to each/a subcontractor

See: Definitions; 6.1P-17.1; 5.0P-17.0; 4.1P-17.0; 5.1M-14.0; 4.0M-6.2; 3.1M-3.2

CONTRACT INSTRUCTION

The principal agent under authority from the employer issues a contract instruction to the contractor which may include drawings and other construction information

See: 6.1P-17.0; 5.0P-17.0; 5.1M-15.0; 4.0M- 6.2

CONTRACT MINUTES2019-08-06T14:57:00+02:00

A comprehensive set of minutes prepared by the principal agent in which all pertinent contractual information that arises at meetings is progressively recorded

CONTRACT SUM2019-08-06T15:31:00+02:00

The accepted tender amount, including tax (VAT), not subject to adjustment [CD]. The contract sum has been defined as ‘including tax(VAT)’ as this is total cost to the employer

CONTRACT VALUE2019-08-06T15:31:32+02:00

A monetary value initially equal to the contract sum that is subject to adjustment in terms of the agreement. Adjustments to the contract value shown on the Payment Certificate in cell B6 – the principal agent must ensure that such expenditure is authorised by the employer before issuing consequent contract instruction(s)

CONTRACTOR2019-08-06T15:32:10+02:00

The ‘other party’ contracting with the employer for the execution of the works

CONTRACTOR’S REPRESENTATIVE2019-08-06T15:34:38+02:00

Terminology not used in 2014 JBCC® agreements – a competent person working in the employ of the contractor appointed in terms of the Construction Regulations authorised to receive and implement contract instructions etc

CONTRACTOR’S INSTRUCTION2019-08-06T15:36:29+02:00

The contractor issues a contractor’s instruction to each/all subcontractors – usually based on a contract instruction issued by or under the authority of the principal agent to the contractor, which may include (subcontract) drawings and other (subcontract) construction information

See: 6.1N-17.0; 5.0N-17.0; 4.1N-17.0

CPAP2019-08-06T15:42:07+02:00

Contract Price Adjustments Provisions must be stated in the PBA/NSSA tender documentation and the [CD]. More than one system may apply. The calculations can become quite complex if done manually. Various suitable software packages are available.

The Contract Price Adjustment Provision (CPAP) formula uses indices published monthly by the Statics SA to calculate the fluctuations in cost of materials and/or labour for a number of work groups but does not cater for (international) currency fluctuations

CURRENCY FLUCTUATIONS2019-08-06T15:43:00+02:00

The CPAP indices do not cater for currency fluctuations International currency transactions should be dealt with using a letter of credit issued by a local bank in favour of the bank of the supplier in another country to ‘freeze’ the rate of exchange … works both ways, and provides certainty of costs

DAMAGES2019-08-06T15:47:13+02:00

Terminology not defined in JBCC® agreements – ‘damages’ is an amount of money that puts an injured party into the same position had no loss been sustained or expense incurred (referred to as ‘liquidated damages’ in English law) …

  1. The employer may be entitled to damages where the contractor has repudiated an agreement;
  2. Damages do not apply between employer and contractor (other than on repudiation) – the employer may recover stated penalties where the works has been delayed
  3. The contractor may be entitled to damages where (a) subcontractor(s) have caused delays and /or other expense;
  4. subcontractor may be entitled to damages where the contractor has caused delays and /or other expense to the subcontractor;
  5. Damages must be proven

Note: A penalty is a fixed amount (calculated based on the anticipated expense or loss) that can not be increased, but can reduced or not applied by the employer provided the amount is stated in the tender documents – penalties can not be introduced into an existing agreement

DAYS – CALENDAR2019-08-06T15:43:53+02:00

Twenty four (24) hour days commencing at midnight (00:00) which include Saturdays, Sundays, proclaimed public holidays and recorded annual builders’ holiday periods [CD]. Financial calculations are always in calendar days

DAYS – WORKING2019-08-06T15:49:14+02:00

Calendar days which exclude Saturdays, Sundays, proclaimed public holidays and recorded annual builders’ holiday periods [CD] Generally performance is measured in working days

DEFECT – LATENT2019-08-06T16:31:36+02:00

defect that a reasonable inspection of the works by the principal agent and/or agents would not have revealed

DEFECT – PATENT2019-08-06T16:33:00+02:00

A latent defect that a reasonable inspection of the works by the principal agent and/or agents would not have revealed… that has become obvious/evident

DELAYS2019-08-06T15:44:47+02:00

The (sub)contractor may be in breach of contract / delaying the (subcontract) works:-
By not proceeding with the subcontract) works with due diligence, skill etc;

See: 6.1P-12.2.17; 5.0P-15.3; 4.1P-15.3; 5.1M-11.2.6; 4.0M-7.1.2; 3.1M-7.1.2 &- 6.1N-12.2.17; 5.0N-15.3; 4.1N-15.3

DESIGN2019-08-06T15:45:32+02:00

Generally in JBCC® agreements the employer appoints agents to carry out the design – the contractor is not responsible for design / design coordination.

A n/s subcontractor may be appointed for a particular product / design application. . Such subcontractor indemnifies the contractor for any design responsibility and consequential losses.

Where the contractor is responsible for design, a separate “design + build’ or ‘turnkey’ agreement must be signed to deal with the risk and other obligations

See: 6.1P-7.1; 5.0P-4.1; 6.1N-7.2; 5.0N-4.2

DESIGN – BY (SUB)CONTRACTOR2019-08-06T16:34:35+02:00

Where the (principalagent is not the author of a design by a (subcontractor, such a design must be scrutinised for obvious errors, possibly rejected but never “approved” (agents must not accept responsibility for design by another entity – may not be competent in that field – not covered by PI Insurance)

Note: Use the FORM OF INDENITY published by the SA Institute of Architects between the designer and the employer, the contractor assumes no responsibility

DIRECT CONTRACTOR2019-08-06T15:33:24+02:00

An entity appointed under separate agreement by the employer to do work on site (as part of the works) prior to practical completion [CD] Note that the employer is responsible for payment to a direct contractor, insurance of the direct contractor’s works, and where a direct contractor (or nominated subcontractors) cause a delay to the works;

The contractor remains responsible for Health and Safety issues on the site/works

See: Definitions; 6.1P-16.0; 5.0P-22.0; 4.1P-22.0; 5.1M-13.0; 4.0M-8.0; 3.1M-8.0

DIRECT CONTRACTOR

An entity appointed under separate agreement by the employer to do work on site prior to practical completion [CD]

DIRECT CONTRACTOR

The employer may appoint a direct contractor (using the JBCC Minor Works Agreement) but remains responsible for payments / default of a direct contractor and insurance of the direct contractor’s work outside the works risk insurance;

The principal agent must issue a contract instruction to the contractor to allow access to a direct contractor and provide other support and record such activities in the regular contract minutes;

The contractor is responsible for the actions of a direct contractor in terms of the law, and must make allowance in the programme, provide access to the works, and allow the use of construction equipment (in terms of the programme)– but is not responsible for the coordination of the work of a direct contractor or its quality

EMPLOYER – DELAYS2019-08-06T16:36:16+02:00

Be in breach of the agreement / delaying the works:

  1. Failure or delay in giving possession of the site;
  2. Failure or delay in issuing construction information;
  3. Failure or delay in appointing/ approving subcontractors;
  4. Failure or delay in appointing (another) principal agent / other agents;
  5. Failure or delay to supply free issue or other materials and goods.

Note that the employer is responsible for the actions of appointed agents;

Note that the employer is responsible where direct contractors, or nominated subcontractors cause a delay to the works;

The contractor may be entitled to a revision of the date for practical completion and/or and adjustment of the contract value – and possibly damages

EMPLOYER INTERFERING2019-08-06T16:38:36+02:00

“The employer shall not interfere with or prevent the principal agent or any agent from exercising fair and reasonable judgement… etc

This clause prevents the employer instructing the principal agent to only certify ‘x’ in a payment certificate when the contractor is due ‘x’+’y’ …

The contractor may terminate the agreement forthwith under such circumstances

See: 6.1P-29.14.3; 5.0P-5.6 & 38.1.3

FINAL ACCOUNT2019-08-06T16:46:53+02:00

The document prepared by the principal agent that reflects the final contract value of the works at final completionor termination.

The principal agent has ninety (90) calendar days from the date of practical completion to resolve and agree the final account (private sector application). The final payment can only be made after the Certificate of Final Completion has been issued

The principal agent must issue regular (monthly) Payment Certificates until the final payment certificate is issued – these could be in a nil amount whilst the final account is being resolved – the contractor may owe the employer money

The same applies in public sector applications. This period includes time for the principal agent to liaise with the employer before issuing the final account to the contractor. The principal agent must concurrently produce a reconciliation of the amount VAT due/recovered

See: 6.1P-26.10; 5.0P-34.0; 4.1P-34.0; 6.1N-26.1; 5.0N-34.0; 4.1N-34.0; 5.1M-20.7; 4.0P-13.10; 3.1P-13.10

FINAL COMPLETION2019-08-06T16:40:59+02:00

The stage of completion of the works as certified by the principal agent as being free of defects.

The issue of the Certificate of Final Completion by the principal agent to the contractor and the employer is important because: –

  1. The contractor’s contractual obligations have been fulfilled;
  2. The Contract Works Insurance policy lapses
  3. The contractor’s public liability in relation to the works ceases
  4. The value of the Guarantee for Construction (variable) reduces to 2% of the contract sum until the final payment
  5. All subcontractor’s guarantees, warranties or indemnities are deemed to be ceded to the employer
  6. The balance of the contractor’s latent defects liability period is determined
  7. The final payment certificate can now be issued
  8. The contractor remains responsible for defects to the works for the duration of the Latent Defects Liability Period = five (5) years from the (certified) date of Final Completion – subject to prescription should he be notified of a defect within this period

Sectional completion, if required, must be described in the [CD] at tender stage – the same practical completioncriteria apply per section

Note: the principal agent must ensure that the contractor’s obligations have been fully met before the issue of a Certificate of Final Completion – if issued prematurely the employer may have a right to act against the principal agent

See: 6.1P-21.6-12; 5.0P-26.0; 4.1P- 26.0; 6.1N-21.6-12; 5.0N-26.0; 4.1N-26; 5.1M-20.7; 4.0M-10.0; 3.1M-10.0

FINAL PAYMENT CERTIFICATE2019-08-06T16:47:56+02:00

The issue of the Certificate of Practical Completion by the principal agent to the contractor and the employer is crucial because:

  1. The contractor’s obligations have been substantially fulfilled to the extent that the employer can use the facility for the intended purpose …
  2. The principal agent can not issue further contract instructions except to resolve items on the List for Completion;
  3. The employer may occupy the works from the date of practical completion – BUT the employer can only occupy the works once an ‘Occupation Certificate’ has been issued by the local authority (statutory not contractual obligation);
  4. Possession of the site is relinquished to the employer;
  5. The contractor’s lien, if applicable, is relinquished;
  6. The insurance obligations change from ‘works risk’ to ‘building insurance’;
  7. The security provisions change to suit the reduced risk of the parties;
  8. No (further) penalties can be imposed – where the (revised) date for practical completion is not achieved, the contractor may be liable for penalties [CD] at the discretion of the employer in the PBA/MWA

Sectional completion, if required, must be described in the [CD] at tender stage – the same practical completioncriteria apply per section

Note: the principal agent must ensure that the contractor’s obligations have been fully met before the issue of a Certificate of Practical Completion – if issued prematurely the employer may have a right to act against the principal agent

See: Definitions; 6.1P-25.13; 5.0P-34.0; 4.1P-34.0; 6.1N-25.13; 5.0N-34.0; 4.1N-34.0; 5.1M-20.7; 4.0P-13-10-17; 3.1P-13.10-17

FORCE MAJEURE2019-08-06T16:49:03+02:00

Is an exceptional event or circumstance that:

  • could not have been reasonably foreseen, and/or
  • is beyond the control of the parties, and/or
  • could not reasonably have been avoided or overcome

Such an event may include but is not limited to:

  1. Acts of war (declared or not), invasion, and hostile acts of foreign enemies
  2. Insurrection, rebellion, revolution, military or usurped power, war (whether declared or not), terrorism
  3. Civil commotion, disorder, riots, strike, lockout by persons other than the contractor’s employees or his subcontractors
  4. Sonic shock waves caused by aircraft or other aerial devices, and ionising or radioactive contamination
  5. Explosive materials, except where attributable to the contractor’s use of such technology

Natural catastrophes including earthquakes, floods, hurricanes, or volcanic activity

FORMS2019-08-06T16:49:55+02:00

For use in conjunction with JBCC® agreements may be downloaded free from the JBCC website in .pdf format, or be purchased in electronic format by following the eJBCC link including site [possession, payment and completion certificates and guarantee forms

FREE ISSUE2019-08-06T16:50:36+02:00

Materials and goods provided at no cost to the contractor by the employer for inclusion in the works whether stored on or off the site or in transit [CD]

GUARANTEES2019-08-06T16:51:39+02:00
  1. The terms ‘guarantee’ and ‘security’ are used in JBCC® agreements, essentially with the same meaning – traditionally in South Africa the term ‘guarantee’ has been used compared to ‘security’ in international contract forms
  2. SA Concise Oxford Dictionary: Security: A thing deposited or pledged as guarantee of fulfillment of an undertaking or repayment of a loan forfeited in case of default.

Securities… broadly fall in two categories:

  • ‘on demand’ ‘unconditional’ guarantees that bind the issuer as primary obligor (sometimes referred to as a ‘call bond’)
  • ‘conditional or surety-ship’ type guarantees under which the issuer is accessory to the obligations of the contractor

English Law held that an ‘unconditional on demand bond’ is autonomous of the main agreement – thus the contractorcan not obtain an interdict preventing the employer demanding payment – except in the case of fraud

INSURANCES2019-08-06T16:54:21+02:00

Preferably be effected by the employer – if the goods are stolen (or etc?) the employer gets the money to replace them … and instructs via the contract procedures to purchase the items lost … may require a new guarantee etc

  1. Only deal with a broker experienced in the construction industry
  2. Only deal with an insurer experienced in the construction industry
  3. “Insurance” is not a ‘do it yourself’ activity
  4. Insist on ‘project based’ insurance that remains in force until completion – avoid an annual policy that can lapse or be cancelled at any time
  5. Note: ‘load shedding’ is not an insurable risk – some insurers offer interruption of utility services (electricity, water, gas) policy

Note: In State Contracts the contractor insures the project in terms of the specification, cost to the project

INTEREST2019-08-06T16:55:05+02:00

The bank rate applicable from time to time to registered banks borrowing money from the Central or Reserve Bank of the country [CD]. The ruling bank rate on the first calendar day of each month shall be used in calculating the interest due for such month

INTEREST – DEFAULT2019-08-06T16:37:17+02:00

Late payment of an issued Payment Certificate by the employer entitles the contractor to default interest compounded monthly until payment has been made – Edition 6.1: Repo rate + 6%pa ||Edition 5.0: Repo rate x 160%

See: 6.1P-25.4.4; 5.0P-31.11; 5.1M-19.7; 4.0M-13.13

LETTER OF INTENT2019-08-06T16:56:20+02:00

Written by the employer to notify the contractor of the intention to appoint him – not binding, no commitment or legal obligations!

Note – to be avoided in practice, may create false expectations for the contractor / may also apply between contractor and subcontractor

LIEN2019-08-06T16:57:08+02:00

Arises naturally in law. SA Concise Oxford Dictionary: A right (of the contractorto retain possession of property belonging to another (the site/the works) until a debt is discharged (the employer has paid all monies lawfully due)

No paperwork is required to ‘create’ a lien

LIQUID DOCUMENT2019-08-06T16:57:57+02:00

Payment Certificate  issued by the principal agent on authority from the employer enabling the contractor to obtain a court order to enforce payment from the employer – also applies to a n/s subcontract advice in favour of a subcontractor, issued by the contractor. Where a creditor possesses a liquid document, in which in which the debtor acknowledges or is in law deemed to have acknowledged his indebtedness to the creditor in a fixed and determinate sum of money – the creditor may apply to court for provisional sentence for recovery of money due to him without his having to resort to litigation

LIST FOR COMPLETION2019-08-06T17:00:58+02:00

Must be issued by the principal agent where practical completion has been certified, listing defects and/or outstanding work to be completed… before final completion can be achieved

LIST FOR FINAL COMPLETION2019-08-06T17:06:08+02:00

(The list for completion updated/added to) issued by the principal agent to record ‘latent defects’ that have become patent during the latent defects liability period. The principal agent has an obligation to be fair to the parties to the agreement – the employer and the contractor

The principal agent must compile the three ‘lists for completion’ to be “exhaustive” – that cannot be added to at will. An exception is where the employer has taken occupation and something has gone wrong that could not have been identified earlier :a leak or similar, that must obviously be attended to

See: 6.1P-21.0; 5.0P-26; 4.1P-26; 6.1N-21.7; 5.0N-26; 4.1N-26; 5.1M-16.2.1; 4.0M-10.1-4; 3.1M-10.1-4

LIST FOR INTERIM COMPLETION2019-08-06T17:07:19+02:00

Issued by the contractor after the inspection of the n/s subcontract works for interim completion, where interim completion has not been certified, listing outstanding work and/or defects to be completed to achieve interim completion

LIST FOR PRACTICAL COMPLETION2019-08-06T17:08:05+02:00

Issued by the contractor after the inspection of the n/s subcontract works for interim completion, where interim completion has not been certified, listing outstanding work and/or defects to be completed to achieve interim completion

MATERIALS – PAYMENT2019-08-06T17:09:51+02:00

For unfixed materials and goods on site/the works or in transit remains an unresolved issue – particularly where a project is financed by a bank = who generally will not pay for any unfixed materials – Beware: this may result in a disparity between the principal agent‘s Payment Certificate and the bank valuation – must be defined in the tender documents – influences the contractor’s cash flow:

The 2014 JBCC® agreements deal with (non)payment of unfixed materials [CD];

Edition 5.0P-31.6 states ‘shall be included’ subject to 4+1 qualifications … this does not state ‘paid for by the contractor‘. A Guarantee for Advance Payment may be used where goods are stored off site;

The appropriate interpretation of ‘Prompt Payment Legislation’ introduced by the CIDB in 2015 is yet to be clarified (June 2015)

MATERIALS OWNERSHIP2019-08-06T17:10:57+02:00

JBCC® agreements provide that materials and goods supplied to the contractor or a subcontractor, become property of the employer when their value has been included in an interim Payment Certificate – and payment has been made (to the contractor) – and may not be removed without the written permission of the principal agent

Note:McKenzie’s Law of Building and Engineering Contracts and Arbitration; Ramsden, PA; Juta’& Co 2014; Page 39-41]           Technically is this is a ‘vesting clause’ in compliance with SA law where ownership is deemed to pass by fictitious (constitutum possesorium) delivery.

Note: The contractor cannot pass ownership of materials and goods he does not own … the supplier may have reserved ownership until the purchase price has been paid in full! Where a private sector project is financed by a bank payment unfixed materials and goods is generally not paid by the bank;

Note: In State contracts unfixed materials and goods are excluded from an interim payment certificate

See: 6.1P-25; 5P-31.7

MEDIATION2019-08-06T17:11:38+02:00

Is a facilitative process where a mediator assists the parties to come to an acceptable solution/decision – that is a relatively low cost and speedy solution with minimal paperwork, set up quickly to be resolved in a (portion of a) day

MINOR WORKS AGREEMENT2019-08-06T17:15:23+02:00
  1. The MWA is for small simple works, often carried out by an emerging contractor … who may have limited administrative support … generally for jobs less than 9 months in duration and under one million ZA Rand. If any specialist work is required such ‘contractor’ must be appointed as a direct contractor by the employer … using ‘another’ JBCC® MWA form
  2. In the MWA the employer is responsible for all building related insurances;
    The contractor remains responsible for statutory insurances for vehicles, staff, etc
  3. Works may be described in drawings and/or Bills of Quantities
  4. Securities should be provided, possibly withholding a retention
  5. Claims for time / money: The MWA does not have a time restriction to claim / adjudicate a claim (as in the PBA) to keep it simple and not penalise a contractor

See: 5.1M-2.3; 9.0; 17.0; 20.0; 4.0M-2.0; 11.0; 13.0; 3.1M-2.0; 11.0; 13.0

NOTICE2019-08-06T17:16:17+02:00

A communication issued by either party, the principal agent and/or agents to the other party or any agent, to, inter alia, record an event, requests for outstanding construction information and/or where suspension and/or resumption of the works, or termination of a JBCC® agreement is contemplated

OTHER COUNTRIES2019-08-06T17:18:15+02:00

The parties may agree to use ‘applicable’ JBCC® agreements outside South Africa. Some variables may have to be adjusted to suit local conditions – tax rates, the applicable law, dispute resolution options etc

PARTY2019-08-06T17:32:31+02:00

The employer or the contractor and “parties” shall refer to both of them

PAYMENT – CERTIFICATE2019-08-06T17:33:37+02:00

Issued at regular agreed intervals [CD] by the principal agent to the parties certifying the amount due and payable in terms of the JBCC® Payment Certificate format

See: 6.1P-25.0; 5.0P-31.0; 4.1P-31.0 5.1M-19.0; 4.0M-13.0

PAYMENT – TO SUBCONTRACTORS2019-08-06T17:31:42+02:00

Described in the PBA: The contractor shall pay all subcontractors within seven (7) calendar days of the due date for payment by the employer [CD];

Described in the NSSA: The contractor shall pay the subcontractor the amount certified in an issued n/s subcontract payment advice within twenty one (21) calendar days of the date for issue of the Payment Certificate including default interest [NSSA-CD]

See: 6.1P-25.11; 6.1N-25.7

PAYMENT CYCLE2019-08-06T17:35:35+02:00

Described in the preliminaries – to determine the date when:

  1. The subcontractor must submit a regular payment claim to the contractor;
  2. The contractor must submit a regular payment claim to the (PQS) principal agent;
  3. The principal agent must issue the Payment Certificate and a Recovery Statement to the employer and the contractor – who must issue a tax invoice in the format prescribed by SARS to receive payment … and to deal with VAT reconciliations to the employer, and n/s subcontract Payment Notification to each subcontractor(and relevant calculations);
  4. The employer must pay the contractor by the specified date (within fourteen (14) calendar days of the issue of the Payment Certificate);
  5. The contractor must issue to each subcontractor (with calculations) a n/s subcontract Payment Advice and pay each subcontractor by the specified date (within seven (7) calendar days of payment to the contractor);

* The principal agent may issue a Payment Certificate in favour of a subcontractor where the contractor has not paid an amount due = only by exception, on request, with consent of the employer

* Where the employer has made partial or no payment by the due date or where the principal agent has not issued a Payment Certificate by the due date, where, after notice to rectify such default, the contractor may exercise his lienwhere not waived / call up the security / give notice of suspension (and of termination, if no payment is received), or the contractor may apply for provisional sentence on a liquid document

* Where a creditor possesses a liquid document, in which in which the debtor acknowledges or is in law deemed to have acknowledged his indebtedness to the creditor in a fixed and determinate sum of money – the creditor can apply to court for provisional sentence for the recovery of money due to him without his having to resort to court

PAYMENT INTERIM2019-08-06T17:34:51+02:00

Is regular payment to the contractor without being absolutely accurate … it should be a reasonable valuation of work completed (and materials, if they are to be paid before being fixed i.t.o. the agreement).

The principal agent can make adjustments in a subsequent payment certificate e.g. if work is subsequently condemned / broken down. The value of work completed will be reduced

See: 6.1P-25.2; 5.0P-31.1; 4.1P-31.1; 5.1M-19.2; 4.0M-13.3.2; 3.1M-13.3.2

PRACTICAL COMPLETION2019-08-06T17:36:44+02:00

The stage of completion certified by the principal agent where the works or a section thereof has been completed free of patent defects and can be used for the intended purpose [CD] other than minor defects noted in the list for completion

PRACTICAL COMPLETION

Applies when the employer takes possession of the site/works.

Note: Access to the site/works by a direct contractor in terms of a contract instruction issued by the principal agentto the contractor does not constitute ‘practical completion’

At interim completionsubcontractor hands over as built drawings and warranties for n/s subcontract workscompleted;

At practical completion:-

  1. Principal agent compiles ‘operating manual’ to forward to the employer;
  2. Occupation certificate = employer’s (agents) responsibility;
  3. Possession of the site is relinquished to the employer;
  4. Contract Works Insurance policy reduces until final completion;
  5. Employer’s building owner’s insurance commences;
  6. Public Liability Insurance remains in force until final completion;
  7. No further contract instructions issued except to rectify defects;
  8. Contractor’s liability for penalties ceases;
  9. Guarantee for Construction (fixed) expires, work certified to 97.5%;
  10. Guarantee for Construction (variable)–reduced to 4% contract;
  11. Principal agent commences and completes the final account within ninety (90) calendar days of the date for practical completion;

Note: As Built Drawings in compliance with the Construction Regulations: (where due to changes instructed by the employer, covered by additional fees)

See: 6.1P-19.0; 5.0P-24.0; 5.0M-15.0; 4.0M-9.0

PRIME COST AMOUNT2019-08-06T17:37:25+02:00

Included in the contract sum for the delivered cost of materials and goods obtained from a supplier as instructed by the principal agent

PRINCIPAL AGENT2019-08-06T17:38:07+02:00

An agent [CD] appointed by the employer with full authority and obligation to act in terms of a JBCC® agreement (PBA or MWA) to deal with specific aspects of the works. The architect and other professional consultants must be qualified and registered professional persons, There is no such requirement for the principal agent. The principal agent should have good knowledge and experience in the all aspects of construction, be a competent manager and administrator, and be able to lead and motivate the whole project team

See: 6.1P-6.1; 5.0M-5.1; 5.0P-5.1; 4.0M-6.1.1

PRINCIPAL BUILDING AGREEMENT2019-08-06T17:38:50+02:00

The contract published by the JBCC® between the employer and the contractor. The PBA is used in conjunction with the JBCC® N/S Subcontract Agreement for the appointment of subcontractors – the clause numbers are synchronised

PROGRAMME2019-08-06T17:39:47+02:00

Is an essential administration tool but not a contract document.

The principal agent may point out to the contractor that without a programme the “revision of the date for practical completion” clause can not be applied and hence the contractor is at risk that penalties will be imposed from the contractual date for practical completion until the actual date of practical completion.

The principal agent may not interfere with the contractor’s programme

Revisions to the programme must be identified when the date for practical completion is revised

See: 6.1P-12.2.6 and 23.5; 5.0P-15.6 and 29.6

PROVISIONAL SUM2019-08-06T17:41:24+02:00

An amount included in the contract sum for the supply and installation of work by a subcontractor

PURCHASE2019-08-06T17:40:45+02:00

JBCC® agreements in hard copy format from local offices of the Association of Quantity Surveyors; Consulting Engineers South Africa, Master Builders South Africa, SAIAT, provincial offices of the South African Institute of Architects, or follow the link on www.jbcc.co.za to eJBCC. The cost of contract documents should be included in the Bill of Quantities

RECOVERY STATEMENT2019-08-06T17:42:29+02:00

Must be prepared and issued in conjunction with each Payment Certificate by the principal agent using JBCC® Recovery Statement format to keep track of financial transactions between the employer and the contractor on a “before tax” basis as tax (where applicable) is dealt with in the Payment Certificate. Documentation substantiating the amounts due must accompany the recovery statement.

If the principal agent fails to issue a recovery statement this is not a reason for suspension or termination – but there is case law that this may constitute a breach of contract by the employer who is responsible for the actions of his appointed agents!

RETENTION2019-08-06T17:43:11+02:00

A form of security selected by the (sub)contractor as a payment reduction to make good defective work by the (sub)contractor (usually 10% of the (sub)contract sum until 5% of the (sub)contract sum is reached) from the value certified in a Payment Certificate ;

  1. Retention money that is held by the employer (contractor) reduces the contractor’s cash flow; no interest is paid;
  2. The amount of retention money withheld is seldom sufficient to remedy a significant defect;
  3. Generally half the retention amount is released on practical completion, and the remainder on payment of the (sub)contract) final account;
  4. Retention ‘belongs’ to the employer (in English law) until ‘released’ in a payment certificate
SCAFFOLDING2019-08-06T17:44:03+02:00

General attendance of n/s subcontractors for pricing by the contractor must be in accordance with the n/s agreementand included in the preliminaries clauses. ‘Notwithstanding this provision, general attendance shall be deemed to include for the contractor to provide free of charge to any n/s subcontractor such scaffolding as may be reasonably required by such n/s subcontractor for the execution of the relevant n/s subcontract works’

The contractor thus has the opportunity to cost the provision of scaffolding and other construction equipment to ‘specialist’ subcontractors without further charge to the subcontractor. However if a subcontractor requires the use of construction equipment for a longer period than allowed for in the programme due to his own poor performance, expense and loss so incurred by the contractor may be recovered from the subcontractor

SCOPE2019-08-06T17:44:43+02:00

The clause dealing with contract instructions states… provided that such contract instructions shall not substantially change the scope of the works.

The principal agent and the parties should agree what constitutes a change of scope in terms of the project – and agree the scope / cost / timing implications (the revised date for practical completion, adjustment of the contract valuepenalties) etc before making such a decision. The principal agent cannot unilaterally issue such a contract instruction

See: 6.1P-17.1.1./17.1.2; 5.0P- 17.1.1/17.1.2

SECTION2019-08-06T17:45:27+02:00

An identified portion of the works for which practical completion is required by a date earlier than that required for the works as a whole [CD]

SETTING OUT2019-08-06T17:46:03+02:00

Setting Out – by the contractor who remains responsible for correct setting out (notwithstanding checking by others except where incorrect information was provided) and for the protection of undocumented services, relics or other features that may be uncovered – in terms of information provided by the principal agent.

The principal agent may supplement a JBCC® Site Possession Certificate with a site plan and (dated) photographs of the site / boundaries / damaged items … to avoid possible claims from neighbours!

The contractor must immediately give notice to the principal agent on uncovering undocumented services, relics, historical artefacts and/or possibly human bones are found = this may be the basis of a claim for the revision of the date for practical completion and/or an adjustment of the contract value

SIGNED CONTRACT DOCUMENTS2019-08-06T17:46:46+02:00

Are retained by the party [CD]. It is good practice to provide the other party, the principal agent and possibly the financier, where applicable, with a copy – preferably all documents bound into a single book – then each page does not have to be initialled by the parties

STATE2019-08-06T17:47:31+02:00

SA Oxford Dictionary: State: the civil government of a country – used to describe building work where the government is the employer

The State must comply with certain legislation including but not limited to:

The Public Finance Management Act 1999 (Act 1/1999), The Prescribed Rate of Interest Act, Act No 55/1975);

Other requirements that differ from the private sector:

– The principal agent has limited authority to act as an agent of the employer
– The State does not insure buildings > additional cost to a project
– The State requires contractors to provide a Guarantee for Construction
– The State does not provide a Guarantee for Payment
– The State generally does not recognise n/s subcontractors = all ‘domestic’
– ‘Construction Period, expressed in months form the date of the letter of ‘appointment’ (not refer to dates to give possession of site/ intended date for practical completion
– DLP now 90 calendar days;
– LDLP now 5 years from practical completion
– mora interest, 9%pa (2014-08-01) (Prescribed Rate of Interest Act (Act No 55/1975);
– Final Account – completed within 120 Calendar-Days incl ‘time’ for employer scrutiny

STATUTORY COMPLIANCE2019-08-06T17:48:46+02:00

Required by all parties and agents. Regulations are not listed in the agreement or the preliminaries – users must familiarise themselves with the current edition of such regulations applicable to the works

SUBCONTRACT AGREEMENT2019-08-06T17:50:30+02:00

Completed JBCC® NSSA Contract Data, between the contractor and the subcontractor used in conjunction with the JBCC® Principal Building Agreement

SUBCONTRACTOR2019-08-06T17:51:21+02:00

Defined in terms of the JBCC® Principal Building Agreement and the JBCC® N/S Subcontract Agreement as a nominated or a selected subcontractor appointed in terms of the N/S Subcontract Agreement by the contractor in compliance with a contract instruction for the supply and installation of work for which a provisional sum has been included in the contract sum [PBA-CD]

The N/S Subcontract Agreement in two clauses requires a subcontractor to cooperate with other subcontractors, the contractor and direct contractors engaged on the works – and allow other contractor’s access to the subcontract works where applicable.

subcontractor may recover expense and loss caused by other contractors

NOTE: The public sector prefers to deal with the principal contractor only – technically all subcontractors become ‘domestic subcontractors’, and by exception a ‘nominated subcontractor’

Note: The appointment of a nominated or selected subcontractor does not apply in the JBCC® MWA – where only “domestic” subcontractors of his choice are appointed by the contractor – he remains responsible for their performance’ and payment

See: 6.1P-14.0 & 15.0; 5.0P-20.0 & 21.0; 6.1N-14.0 & 15.0; 5.0N-20.0 & 21.0

SUSPENSION2019-08-06T17:51:57+02:00

(New in 2014 editions)

The contractor may suspend the works where the employer has failed to:-

  1. Provide and maintain a Guarantee for Payment – if stipulated in the [CD];
  2. Effect insurances – if stipulated in the [CD];
  3. Make payment in full by the due date [CD];
  4. Appoint another agent;
  5. Or where an agent has failed to act in terms of the agreement;
  6. Or where the principal agent has failed to issue a Payment Certificate

Note: There is no provision for the employer to suspend the works – this may be required where non compliance with Health & Safety specifications occurs… then issue a contract instruction = non compliance with the law

See: 6.1P-28.0; 6.1N-28.0; 5.0P-31.15; 5.0N-31.15

TENANT INSTALLATION2019-08-06T17:53:59+02:00

No separate JBCC® agreement exists at this stage for this purpose, the PBA may be used, possibly in conjunction with the NSSA

TERMINATION BY CONTRACTOR2019-08-06T17:54:36+02:00

Termination of contractor of a JBCC® agreement – the employer remains in default after notice to remedy a default by not:-

  1. Giving possession of the site by the specified date [CD]
  2. Providing a Guarantee for Payment if specified [CD];
  3. Effecting insurances if specified [CD];
  4. Allowing any agent to exercise independent judgement;
  5. Appointing another agent, if required;
  6. Paying an amount due timeously;
  7. or where the principal agent fails to issue a Payment Certificate [CD]

The contractor must follow the procedures defined (time bars) in the clauses

Where the JBCC® agreement is terminated the contractor must:

  1. Give notice to each subcontractor of termination of the NSSA;
  2. Cease all work on site – except to relinquish a safe site t.o H&S Act;
  3. Remove all construction equipment, and on instruction any surplus material;
  4. The guarantees for construction end, the (advance) payment guarantees remain in force until outstanding payments have been made; Thereafter the original security form(s) shall be returned to the employer within ten (10) working days
  5. The latent defects liability period for the completed works ends;
  • The principal agent competes the status report – within 20 working days
  • The principal agent completes the final account – within 90 working days

See: 6.1P-29.14; 5.0P-38.1; 4.1P-38.1; 5.1M-21.8; 4.0M-16.1; 3.1M-16.1

TERMINATION BY EMPLOYER2019-08-06T17:56:03+02:00

Termination by employer of a JBCC® agreement – the contractor remains in default after notice to remedy a default by not:-

  1. Proceeding with the works;
  2. Executing a contract instruction;
  3. Providing a Guarantee for Construction, if specified [CD];
  4. Effecting insurances if specified [CD];

The employer must follow procedures defined (time bars) in the clauses, and may:

  1. Use materials on site;
  2. Use construction equipment (?)
  3. Employ others
  4. Apply the penalty, if specified in the tender documents
  5. Recover damages

Where the JBCC® agreement is terminated:

The latent defects liability period for the completed works ends (5) years from the date of termination;

The employer has the right of recovery against the contractor, where applicable, [CD] from the:

  • Guarantee for Construction (variable) – until the final payment has been made; or
  • Guarantee for Construction (fixed) – until the date of practical completion or from the payment reduction until the final payment is made
  • Guarantee for Advance Payment – until the outstanding balance has been repaid to the employer;

Thereafter the original security form(s) shall be returned to the contractor within ten (10) working days

See: 6.1P-29.1; 5.0P-38.1; 4.1P-38.1; 5.1M-21.8; 4.0M-16.1; 3.1M-16.1

VALUATION2019-08-06T17:56:26+02:00

Generally prepared by the quantity surveyor and/or the principal agent of work satisfactorily completed by the contractor for inclusion in an interim (final) Payment Certificate Note – only the principal agent can issue a payment certificate (or completion certificates) – it is essential that the amount certified is ‘realistic’ and does not include defective work – not too much, but not to little!

WORKS2019-08-06T17:57:02+02:00

The extent of work to be executed by the contractor described in the contract documents and contract instructions, which includes free issue, and materials and goods. Work or installations to be executed by direct contractors and others responsible to the employer are excluded [CD]. Similarly n/s subcontract works apply to an aspect of the works only

WORKS COMPLETION2019-08-06T17:57:36+02:00

The Concept of ‘works completion’ was introduced in the 2005 and 2007 editions of JBCC® PBA and NSSA agreements – after practical completion (occupation by the employer) to allow the contractor to complete outstanding items within 20 working days, or forfeit compensatory interest … etc, the only ‘punishment’ for non compliance

* Not successful – discontinued in the 2014 Edition of JBCC® agreements

See: 5.0P-25.0; 5.0N-25.0; 4.1P-25.0; 4.2N-25.0

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