This is a common concern for many contractors. In the JBCC terms, we refer to these circumstances as events which cause an adjustment to the contract value. Furthermore, b how do you eventually include these amounts in your payment certificates? In response the standard form construction contracts all provide a mechanism for the Contractor to vary its price making an adjustment to the contract value and the time within which he is to provide the work in the light of the changes requested by the Client. Some clients are so focussed on their right to change their mind that they often forget the contractual consequences.
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This is a common concern for many contractors. In the JBCC terms, we refer to these circumstances as events which cause an adjustment to the contract value. Furthermore, b how do you eventually include these amounts in your payment certificates? In response the standard form construction contracts all provide a mechanism for the Contractor to vary its price making an adjustment to the contract value and the time within which he is to provide the work in the light of the changes requested by the Client.
Some clients are so focussed on their right to change their mind that they often forget the contractual consequences. Yes Mr. Client, we can move this plug-point for you… but please remember to pay us and adjust the value for the additional expense we incurred.
The contract sum and contract value. The contract sum is the amount tendered by the contractor and accepted by the employer. This amount is never varied or adjusted and stays fixed, to allow us to have some benchmark from where we can measure variance difference between planned vs actual value.
This amount varies and is adjusted in respect of certain defined categories of circumstances. The following adjustments are all in terms of an obligation placed on the principal agent, in other words, the principal agent shall make the following adjustments:. Any additional expense and loss the contractor may suffer, due to no fault of his own, will be covered in the JBCC contract under one of these headings.
Contractors must find comfort in the fact that they should not suffer losses as a result of circumstances placed beyond their risk in terms of the contract. And yet, so many of them do? The next question is, how do an adjustment find its way into the payment certificate?
The contractor performs the work and would like to claim it in the next certificate. Or, there is a delay for which you can claim an extension of time, how and when is the compensation or time-related preliminary adjustment added to your payment certificate? Last example — You incur standing time and want to include those expenses in the certificate. The first road is the recovery statement. The principal agent must, according to clause 27, issue a recovery statement with each payment certificate.
This recovery statement sets out amounts due by one party to the other and lists the various amounts that can be included. The second road is automatic contract adjustments in terms of your contract value and the amount certified.
This must be a reasonable estimate of work done including adjustments as per clause The 3 rd road turns into the previous and is reserved for time claims with adjustment and cost claims. Below is an easy illustration of the 3 pathways.
Any loss and expense imaginable, that is not your risk under the contract, can be claimed by means of these pathways. If you have any specific questions or unique circumstances you would like some clarity on, feel free to ask your question to our team of experts at info lerouxconsulting. Delay and disruption in construction contracts, 4th Ed. Sweet and Maxwell publishing, London. Kindly note that our posts on social media do not constitute professional advice and the comments, opinions and conclusions drawn from this post must be evaluated and implemented with discretion by our readers at their own risk.
JBCC Rescue! Follow Follow. By Kobus le Roux This is a common concern for many contractors. Adjustments as a result of Contract Instructions for additional work: When a contract instruction is issued for additional work, clause As an example, earthworks are usually measured provisionally. Once the actual quantities of work are established, it shall replace the provisional values and it shall constitute an adjustment to the contract value. It must specifically be identified as provisional to be subject to re-measurement.
Adjustment for the payment of items by the Contractor which is not necessarily his responsibility: Where the contractor made payment for items not included in the priced document. These must be made in accordance with an instruction or by the approval of the principal agent. These are charges by authorities in terms of clause 2.
Adjustments for additional expense and loss due to no fault of the contractor: The ghost clause I call it the ghost clause because contractors never notice it for some reason.
It allows for compensation of any expense or loss that was not provided for or required in terms of the contract sum. Think standing time claims. Clause Allowance is omitted, and actual values replace them. This includes a prorated adjustment for profit and attendance on these allowed amounts. Adjustments for preliminary amounts: this happens in accordance with the method selected and is split between time-related, fixed and value related components.
Adjustments due to compensatory interest; this is an automatic adjustment and calculation should certification be late. It is not optional, and the PA is under an obligation to include it in the certificate for payment.
Adjustments due to default interest: this is an automatic adjustment and calculation should the employer fail to pay on time. It is not optional, and the PA is under an obligation to include it in the certificate for payment! Adjustments due to damages: Should the contractor have a right to recover damages in case of a breach by the employer, clause Subscribe to receive my monthly articles. Thank you for Subscribing. You will shortly receive a confirmation email and link.
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JBCC rescue – How to get paid for change instructions and variations on your project
Published by: Cliffe Dekker Hofmeyr on 13 May We look at a situation where washing your hands and sterilising surfaces may not be enough. COVID and the consequential lockdown period in South Africa are unprecedented circumstances which no party to any construction contract has ever had to deal with, until now. The construction sector and the work performed, in general, was not regarded as an essential service, being the only types of services capable of being rendered during the initial and extended Alert Level 5 national lockdown. This led to the suspension of the works for most construction projects throughout the country, invariably causing delay to completion of projects.
Your JBCC Contract: COVID-19 and other curse words
The three agreements are supported by a set of standard forms that simplify the administration of the contract. In addition to being a legal document the content has been structured as a checklist to administer the execution of the works and to minimise potential disagreement — to effectively use expensive man-hours of all the role players in a building project The Agreement is signed between the employer and the contractor — in conjunction with the Contract Data in which all contract variables are recorded, initially by the employer to solicit offers from contractors, and completed by the contractor and submitted as the form of tender. For state contracts a separate form of tender in the CIDB format will have to be completed. The contractor specialist agent must highlight the subcontract performance criteria. The Agreement is dived into seven sections comprising 22 clauses. Adjudication is an accelerated form of dispute resolution in which the adjudicator determines a dispute as an expert and not as an arbitrator.