In our last instalment we looked at engaging consultants, the tender process and some key issues regarding construction contracts. In this article we review the final issues before a building project commences and then the broader project.
Before work starts
You will probably need a consultant to overview matters and to be there for the School, as the project is built. A good project manager can be invaluable. Make sure you secure a project manager with proven experience.
Modern commercial building contracts often have a third party Superintendent. This person independently assesses claims for extensions of time or variations and approves or rejects those claims. Generally that decision is contractually binding on both the builder and the School. Superintendents can have a dual role of assessor/certifier and as agent for the School. This can be a tricky balancing act for a Superintendent so choose carefully and make sure everyone clearly knows what the role involves before the project starts.
If you are going to have a Superintendent, get a good one and make sure they are not part of the design team because if they were previously involved they won’t be truly independent and objective and that can cause problems and costly disputes.
In addition to a Superintendent you will certainly need to have a person to specifically represent the School when it comes to the project. This person is often called the Principal’s Representative. It is best to have one person throughout the project so that they are familiar with all aspects of the work.
Safety on the building site is the responsibility of the builder as a matter of law. In addition, you need to make sure that the builder and any person who comes on to the site to do work has appropriate police clearances. These requirements should be included in the building contract.
All building projects will have defects. A big statement, I know, but it is true. You will never avoid defects but what is important is that there is a robust system in the contract for dealing with defects and getting them fixed quickly and efficiently.
The Superintendent has a role to play here but also the School’s consultants will be vital in ensuring that quality is maintained and defects are dealt with properly.
Getting the job done quickly and efficiently can involve the use of “carrots or sticks” or both.
You will probably want contractual provisions entitling you to specific damages if the builder runs late but you might consider offering a “bonus for early completion”. Take legal advice on these things so that you can make sure the building contract makes provision for “carrots and sticks”.
Hopefully you end up with a project that is well built, was delivered on time and within budget. Even if you do, there are still a few bits of housekeeping needed at the end of the project.
You need to ensure you have all Certificates of Compliance for power, gas and water.
There will be a post handover Defects Liability Period and during that time you want to be sure that all defects have been recorded and actioned.
Usually at handover, a part of the bank guarantee security provided by the builder will be released. Then at the end of the Defects Liability period when all defects have been finalised, the balance of the security is returned to the builder. Take advice before returning any security to the builder as that is a moment of key leverage to compel contractual compliance by the builder.
Not all building projects are large. Sometimes you will need to get a plumber out to clear a blocked drain or perhaps a builder to repair a classroom that has been damaged or needs a minor renovation.
Even small jobs should be properly documented. A formal written contract should be considered. It may not always be needed and smaller forms of contract can be used where the nature of the job is minor. Take advice. Don’t just accept a vague quote that does not identify the works and hope for the best! You want to be sure everyone is clear on things like:
- The scope of the work
- How the price might change if there is a change of scope
- When the work is to be done
A word about design by committee
Stakeholder management is vital when it comes to building projects in schools. There are so many vested and sometimes competing interests – for example the Board, teaching staff, maintenance teams, parents, the architect, students and so on. Making sure all of these stakeholders are heard in the pre-construction design phase is challenging but this process cannot be ignored if you want a happy and productive outcome.
Just be aware that giving a committee the job of designing building work is fraught with risk. A project committee may be necessary but it should be small and expertly chaired. In the end it is important that you assemble a design team that you can trust and rely on so that your project is a success.
After the project has been completed and the dust has settled, don’t forget to reflect on lessons learned so that you will be able to benefit from them on the next building project. A post opening day debrief might be in order!
Written by Michael Hutton, Partner, Lynch Meyer LawyersLynch Meyer Lawyers are school specialists.If you require assistance with preparing or advise on building contracts and project management, please phone Michael Hutton, Partner on 08 8236 7612.