Work has not started on site.

The client says that they may want to have a specialist fit-out contractor and lighting engineer for the recording studio, but that they wont know for sure until the contract has proceeded (so they can assess the budget and the programme). These two items have already been identified albeit very loosely in the initial budget as a prime cost sum and day works rates respectively. The client wants to know if there will be any difference accommodating these two items if he uses the Intermediate Contract (IC) instead of the Standard Form(SF). (He seems to prefer the SF; his wife, the IC)

Both the JCT Intermediate Building Contract (IC) and the JCT Standard Building Contract (SBC) are suitable for projects procured via the traditional or conventional method. However, If Mr and Mrs Davies intend to have a specialist fit-out contractor and lighting engineer for the recording studio, The JCT (IC) will not be appropriate. Although it is designed for the fairly detailed contract provisions, it is not suitable where complex building service installations or other specialist work needed (JCT, 2016a). Thus, I will recommend Mr and Mrs Davies to use The JCT (SBC), which allows detailed contract provisions. In addition, it offers the full control of the project from the design process through the construction process till completion as well as enables the client to have full involvement in every single stage of the project from the very first design and quality specification (JCT, 2016c).

One week later, Mr and Mrs Davies reveal that funds have not become available due to the non-sale of their business and premises in Old Street. Thus, the initial budget is way higher than their available funds and so they will put off work to the garage, outhouses, and landscaping, etc until the following year -splitting the work into two phases. The initial phase of the work still cost 1.2million but the costs need to be very carefully managed. The total cost budget was 2.5million. The initial estimate at Stage 2-3 -had been around 3 million total.

What are the implications for you, the project, the contract? Consider in terms of professional services, business management and legal liabilities.

The client doesnt have the funds available to tackle the whole of the work immediately This is not the most desirable situation for my firm. However, in such condition, splitting up the project into two phases will be better for me than postponing the project until the funds are available (it is not known when/if the funds will be available).

Splitting the works into phases will enable the initial phase of the work to be finalised and approved until the funds for the second phase will be available. However, because the circumstances specific to the project is unclear, this should be dealt with administering a project programme to ensure compliance to the timescales included within the employers requirements.

In addition, having a clear statement of the required duties set out in the articles of agreement between the lead consultant, the client and the contractor will help eliminate misunderstandings.

However, this decision will bring along extra tasks for me including adjustment of the initial Project Execution Plan, cost, and budget calculations etc. Most importantly, my duties in the contract will change. If these are not noted carefully, I might be hold responsible for the delays to the project. Thus, before any work or fee can be agreed, it is important that we establish the new project details and services to be provided as well as identify associated terms and conditions.

I should consider the budget, scope and design of the building to see plans are realistically achievable within available funds and keep a watching brief on this prior to receipt of tenders.

Provision of a contract is as important as monitoring the progress and vital to the successful realisation of a design project. Choosing the appropriate form of building contract ensures that the parties are very clear of their obligations and liabilities and the risks that they are accepting. It needs to be negotiated, modified, and adapted to the conditions and risks assessed and presented.

Thus, I will write Mr and Mrs Davies to advise them that the project can be completed in two phases but requires a sound work management plan. The purpose is to ensure that spending follows a plan, supports business objectives, stays within present limits, and does not exceed available funds.In addition, I will explain the differences this decision will bring to project and tell them preparation of a new contract will be necessary to define the scope and the duration of the work and my responsibilities clearly.

In addition, a cost management plan is needed immediately.

The contractor also needs to be notified. He might not accept continue under such conditions. If they already have a contract with the client, they have rights to sue them as the scope of the work changed.

We can either continue with the same contract or treat them as two separate contracts. This might bring advantages to the project as only for the first phase the contractor can be selected by normal means and the second phase can be negotiated either with the same firm or a different one, depending on performance of the first contactor. In such circumstance, the contractor will make sure the work is of the required standard and is completed on time, as they might want to continue on the project (Smith, 1986).