Service 07
Somebody has to hold your side of the contract
A JCT design and build contract assumes the employer has an employer’s agent acting for them, and it gives that person real authority: to instruct, to value, to certify payment and to certify practical completion. Where nobody holds the role properly, the contractor is left administering a contract that only one party is reading closely.
What you get
Employer's requirements reviewed or written
Contractor's proposals reconciled line by line
Contract instructions and change control
Interim valuation certification
Practical completion certificate
Final account agreed and closed
The problem
The appeal of design and build is that somebody else carries the design. The cost of it is that the only description of what you bought is a document you wrote before you knew what you wanted.
On a traditional contract the architect administers the agreement and the employer keeps a design team answering to them throughout. On design and build the design duty transfers to the contractor, and in most cases the consultants who prepared the employer’s requirements are novated across to work for the contractor instead. The people who wrote the description of your building now report to the party building it. That is a legitimate structure and it works, but it leaves the employer with nobody on their side of the table unless they appoint one.
What fills the gap is usually optimism. The developer assumes the quantity surveyor is administering the contract, or that the solicitor who drafted it is still watching it, or that the project manager has the authority to instruct. None of those are true unless the contract names them, because the powers in a construction contract belong to the role the contract creates, not to whoever happens to be in the meeting.
None of what follows requires anybody to behave badly. A contractor who prices the cheapest compliant answer is doing their job. The structure assumes an informed party on the employer’s side of the table, and it produces predictable outcomes when that assumption is wrong.
Loose wording priced at the cheapest compliant answer
Verbal instructions valued a year later by the party holding the records
Applications paid because nobody issued the notice
Practical completion certified early to keep a relationship comfortable
What we do
The role is administrative, commercial and contractual at once. Held properly it is the difference between a contract that is managed and one that is merely signed.
We read the employer’s requirements the way a contractor’s estimator reads them, and mark every clause that permits a cheaper answer than the one you intend. A requirement stating an outcome and a test is enforceable. One stating an aspiration is an option.
The contractor’s proposals reconciled against the requirements, document by document, each divergence accepted, corrected or priced. That sits alongside tendering and procurement, because the document and the price are one decision.
Instructions issued in writing and valued. Certification against work genuinely in place rather than against an application. Time and the cost of time assessed separately. The same discipline as cost control and variations, with authority to act on it.
Practical completion certified, the rectification period administered, the account closed. Where it does not settle it moves into final accounts and disputes with the record already built rather than reconstructed.
Three points inside that sequence are legal rather than commercial, and none of them are ours to assert. Which document prevails where requirements and proposals conflict. [VERIFY: the precedence provision between employer’s requirements and contractor’s proposals in the JCT design and build edition and amendment set in use.] The payment and notice timetable. [VERIFY: the payment notice and pay less notice periods under the Housing Grants, Construction and Regeneration Act as amended, and as modified by the contract in use.] And how far the agent must act fairly rather than purely as your representative when certifying. [VERIFY: the current position on the employer’s agent’s duty when certifying under JCT design and build, and how bespoke amendments affect it.]
Where the scheme is funded there is a second audience. A lender’s monitoring surveyor tests the same drawdown from the opposite direction, and a position certified properly each month survives that without drama. We never act on both sides of one scheme, so the monitoring surveyor is somebody else and our job is to make sure your position is the one that stands up.
The other risk
An empty role is a gap you can see. A role held badly looks covered, which is why it runs longer before anybody checks it. Five questions worth asking any candidate.
Where the agent and the contractor are comfortable, applications get certified close to what was applied for because querying them spoils the atmosphere. Nothing dishonest happens. You simply pay slightly ahead of value for two years.
Certification is a measurement exercise before it is an administrative one. An agent without commercial depth certifies what was claimed. We treat quantities and take-off as part of this role rather than as a separate service.
Certification, change assessment and reporting land in the same few days each month on every project at once. An agent carrying more than they can value properly certifies to the calendar rather than to the works.
Administering a contract is a different activity from advising on cost, and professional indemnity cover does not automatically extend from one to the other. Ask to see the schedule rather than a statement. Ours covers it, and we send it before an instruction begins.
An agent who also holds design fees, or who wants the contractor’s next invitation, has a reason to keep a finding quiet. We hold no design fees, no contractor relationships and no software licences, and we act for one side of a project only.
The person valuing the works each month should be the person certifying practical completion, because they already know what is left. Where those are two people, the certificate is signed by somebody relying on a summary rather than on the measurement.
What we produce
Each output is written to be handed to a board, a lender or a joint venture partner without a covering explanation.
Before signature. We read the requirements as a contractor would price them, and mark every place where the wording permits a cheaper answer than the one you have in mind. Performance descriptions that cannot be tested are the usual finding, because they read like a specification and function like an option.
A document by document reconciliation of the contractor's proposals against the employer's requirements, with every divergence listed and marked as accepted, priced or rejected. This is the paper that decides arguments two years later, and it takes days to produce and years to reconstruct.
Interim valuation certification against work genuinely in place, not against an application. Alongside it, a report that states the current forecast out-turn, the changes issued and their assessed value, and the items still open, so the position is visible before it is fixed.
Every instruction recorded, valued and answered in writing before the work proceeds where the programme allows it. Where it does not, the basis of valuation is stated in the instruction itself, so the conversation later is about the rate rather than about entitlement.
Certification of practical completion, the schedule of outstanding items, and administration of the rectification period through to the release of the balance of retention. Certifying early to keep the peace is the most expensive courtesy on a construction project.
The account assembled, tested and agreed, with the changes reconciled against what was instructed and what was built. Where it does not settle, the position is already documented well enough to argue.
Why developers call
The contract is executed, the contractor is on site, and the client wants a different specification in the apartments. Before tender that conversation involves several parties who want the work. After signature it involves one who already has it, and the price is set under the contract rather than by the market. Where that pattern is already running, our late design changes scenario describes what can still be recovered.
Work was instructed on site, verbally, by somebody who thought they had authority. Twelve months later it arrives as a claim, priced by the party that carried it out, supported by records that only one side holds. This is the most common way an employer's agent appointment pays for itself, and it is the subject of our variation claim exposure scenario.
The employer's requirements describe one standard of finish and the contractor's proposals describe another, and nobody reconciled them before signature. Whichever document prevails, somebody is paying for the difference. Our contract interpretation scenario deals with what happens once that argument has started.
Most of these arrive on housing and apartment schemes, which is the work we see most of. If that is your territory, our residential development page describes how the commercial position usually runs on those projects.
Questions
They do the same job under different contracts. On a traditional contract the role is usually called the contract administrator and is often held by the architect. On JCT design and build there is no architect administering the contract, because the design duty has moved to the contractor, so the role is called the employer's agent. The powers come from the contract itself rather than from the title, so what matters is what your particular contract says the agent may do.
Often they are the same appointment, and on the schemes we take they usually are. A quantity surveyor values and measures. An employer's agent also issues instructions, administers change, certifies payment and certifies practical completion. If your surveyor is not named in the contract as the agent, they have no authority to do any of that, and the contractor is entitled to ignore them on those points.
Before the employer's requirements are finalised, which is earlier than most developers expect. The requirements are the only description of what you are buying, and once the contract is signed they are very difficult to improve. Appointing after signature is still worth doing, but by then the commercial position is largely set and the work becomes defending it rather than shaping it.
Not on the same scheme, and not here. The employer's agent acts for the developer. The monitoring surveyor reports to the lender on whether the developer's position is sound. Those two duties conflict directly. We act for one side of a project only, and where both approach us about the same scheme we take the first instruction and decline the second.
That divergence is the single most expensive thing on a design and build contract, and it is usually discovered after completion rather than before signature. The contract sets out which document takes precedence, and that answer varies with the edition in use and with any amendments your solicitor has made. [VERIFY: the precedence provision in the specific JCT design and build edition and amendments Reltic works to.] The practical answer is to reconcile the two documents line by line before signature and to record every divergence as either accepted or corrected.
For a full appointment running from the employer's requirements through to the final account, the fee is usually a percentage of construction value. Where the instruction is a defined piece of work, for example reviewing the contractor's proposals against the requirements before signature, it is a fixed sum. The basis is agreed and written down before anything begins, with the exclusions stated rather than assumed. Where a scheme runs materially longer than the programme it was priced against, we say so at the time and agree the position, rather than raising it afterwards as an additional claim.
Related
The monthly cycle the role runs on, valued rather than processed.
The same measurement discipline where the contract does not name us to certify.
Closing the account on a record built during the works.
Insights
