Report on Providing NEC3 Contractual and Legal Advice for Newtown University Halls of Residence Buil

Your task will be to prepare a report (2000 words) to a client offering NEC3 contractual, legal, and appropriate case law advice as to problems identified in the assignment brief as a whole, and advise as to how the client should proceed in relation to the problems outlined in the question.

Newtown University is refurbishing and extending its student accommodation facilities with the construction of a new separate halls of residence building. The University has a constrained budget and timescale.

You have recently joined an established small practice as a Consultant Project Manager which offers project management and legal/contractual advice together with an expert witness/mediation service.

On 8th November 2021, you receive a telephone call from the Estates Officer of Newtown University. Clearly concerned, the Estates Officer relates a number of problems – some contractual, some legal and some relating to the design and construction progress of the Halls of Residence project.

The Estates Officer explains the following problems on his telephone call:

The project is already behind Dollar’s draft master programme. While the sub-structure is now under construction and nearly complete, Newtown University is having difficulty in getting a clear indication from their Project Manager or from the Contractor as to when the project is scheduled to be completed. This is made more complicated by the fact that although the invitation to tender said that the client required a 49 week construction period, Dollar qualified its tender stating that a 52 week construction period would be more realistic for the project. Dollar Construction Ltd also appears to have used up all the float time in the draft master programme and moved away from the master programme sequence in order to accommodate weather related issues and an Antiquities find during the sub-structure excavation and construction. The Estates Officer has pointed out that although delay damages might be claimable, the Project Manager has vaguely indicated that there are likely circumstances for a possible extensions of time because of:-

Weather related issues.

Recent discovery of Antiquities.

A major Newtown University proposed change to the scheme amending the external cladding and installing a dry sprinkler system throughout the Halls of Residence Building in order to provide a more secure fire resistant environment for the students.

Late issue of some of the drawings for the superstructure construction.

The Estates Officer has also raised a number of concerns about the contract documentation, namely that:-

The Alpha Design and Project Management Partnership has been engaged on the RIBA standard conditions of engagement and contracts have also been formally signed with them and all the other consultants. There has been however, merely a letter of intent between Newtown University and Dollar Construction Ltd in which Newtown University asked Dollar Construction Ltd to start work pending the final agreement and signing of the contract. Dollar Construction Ltd agreed to commence the enabling works and sub-structure construction on 22nd September 2021 which were detailed and formed the basis for the scope of work to be undertaken under this letter of intent. The letter stated that all the NEC3 contractual terms would apply to the enabling works and the sub-structure construction, although no mention was made in the letter of the valuation and payment mechanisms to be applied, and no financial cap was stated.

Scenario For The Halls of Residence Building

The letter of intent mentioned that many of the articles of agreement comprising the recitals, articles and contract particulars had been agreed, but that matters relating to the formal contract completion date, the execution of the deed and particulars like liquidated damages, the retention percentage and the name of the Adjudicator still remain to be agreed at the time that the letter of intent was issued. The contract documentation which had been prepared by Newtown University’s solicitor was tabled on 26th October 2021, but Dollar Construction Ltd refused to sign it.

It appears also that there is now a disagreement about the basis of payment of the Contractor. The Estates Officer wants to understand the mechanism for determining “PWDD”.

The tender documentation made it clear that Newtown University require a default performance bond to the value of 10% of the contract sum from Dollar Construction Ltd which Alpha Design and Project Management Partnership was required to arrange. The Estates Officer thinks that Alpha Design and Project Management Partnership has failed to arrange for the Main Contractor to provide such a performance bond, despite the fact that it had a duty in its terms of engagement to arrange to do so.

Dollar Construction Ltd has informed Alpha Design and Project Management Partnership that there appear to be a number of errors in the works and site information.

Also, there are concerns that the contractor’s design of the lift installation appears to be inadequate and sub-par.

The Estates Officer explains that as a result of recent visits to the construction site, he has become concerned about a number of quality and workmanship issues, because Dollar Construction Ltd does not appear now to have a Site Manager in-charge on the site at all times. He has the impression that Dollar Construction Ltd has recently started another new project nearby, and that the Site Agent/Manager is now managing both projects, proportioning his time between them.

Your task, is to prepare a report (2000 words) to the Estates Officer of Newtown University offering NEC3 contractual, legal, and appropriate case law advice as to problems identified in the assignment brief as a whole, and advise as to how the University should proceed in relation to the problems outlined above.

To develop an awareness of the legal and procedural nature of working with standard contract forms.

To understand the administrative and legal aspects and requirements of construction contracts including the financial control of construction projects.

To understand the role and legal responsibilities of the Project Manager/Contracts

 

Administrator in administering a construction contract both domestically and internationally.