Suggested Contract Control Procedure: Subject

SUGGESTED CONTRACT CONTROL PROCEDURE
Note: - to be used and adapted for any individuals Company QA procedure This is only suggested
SUBJECT CONTRACT MASTER FILE CONTRACT ORDER FORM NEW CONTRACT INSERTION CONTRACT INSURANCES CONTRACT ORDER RECORD CONTRACT PROFIT & LOSS ASSESSMENT CASH FLOW CONTROL INTERIM VALUATIONS DISTURBANCE TO REGULAR PROGRESS: EXTENSION OF TIME PRICING OF VARIATIONS DAYWORKS CONTROL INCREASED COSTS CONTROL AUTHORITY TO VARY THE WORK VERBAL INSTRUCTIONS TERMINAL SURVEYING & ADMINISTRATIVE WORK ACCOUNTS RENDITION PARTIAL POSSESSION OF THE WORKS RETENTION AGREEMENT OF FINAL ACCOUNT MAIN CONTRACTOR INSOLVENCY
M.C.McMillan MIIExE, TEL 01403 217037 or email macelec@mmcmillan.co.uk Suggested contract control procedure for
the Mechanical & Electrical industry Page 1 of 16
FINANCIAL CONTROL SURVEYING
CONTRACT MASTER FILE A contract Master File should be prepared for each Contract and held by Commercial Management. It should be kept in a safe, fireproof place. It should be referred to only at the point of storage. It should be locked away when not in use. CONTRACT ORDER FORM The Project Engineer should complete a standard Company form for each order. It should be vetted by Senior Commercial and Technical Management in accordance with practice. It should show the Clients Contract name and number (together with your in house contract reference number to be used for all further contract tracking). Responsibility for carrying out contract works is placed formally with Contract Management by the issue of a Contract Order Form and number. A Contract order should be raised for every separate contract irrespective of value. Work associated with an existing contract but for a different client (e.g. tenants work associated with an existing contract), should be given a different order number. A contract order number is raised only by permission of company management in accordance with Company procedures. The contract title and number must be stated on all relevant documents to assist identification and to ensure that costs and receipts are correctly allocated. Complete and New Contract Insertion and Contract Alterations Advice form, in order that the project is entered on to the computer control system. Note: If your contract is design-only, design-and-do or package deal the procedures may be slightly altered - check with company management for the exact procedure to be followed in these cases. Contract Insurance This specialist subject might be handled by Company Commercial Manager in liaison with the Company Insurance Manager / Director. Contract clauses dealing specifically with Insurance should have been brought to Commercial Managers attention at the tender stage. Check that the provisions of these clauses have been dealt with before you commit the Company to cost upon a job: CONTRACT Order Record This form will be initiated for every order. Analyse the accepted tender details under each of the headings on the form. Amend the analysis by a fresh entry every time an event occurs which makes an amendment necessary. The objective is an up-to-date overall assessment of final contract value and anticipated gross profit.
Events, which necessitate changes, must be registered immediately you have knowledge of them. The entry may be in pencil until firm information is to hand.
Register: Al1 variations and theyre known or anticipated value. Assessments of increased costs where applicable. Savings and losses in purchasing equipment, materials and sub- contracts. Savings and losses on labour expenditure. Value of day works. Loss & Expense. Recovery form claims. The form is used as the basis for computer insertions into the Companies financial control system on a New Contract Insertion and Contract Alterations Advice form. When it is found necessary to alter the percentage of gross profitability previously shown, Senior Management must approve the alteration before entry. CONTRACT PROFIT AND LOSS ASSESSMENT INTERIM FINANCIAL STATEMENT At regular intervals, as directed a financial statement should be produced. N.B. Al1 figures should be net. ANTICIPATED COSTS Costs booked to the agreed date of contract assessment This information is obtainable from the costing office, but care should be taken to ensure that all costs not yet booked are picked up also. Costs to come on orders placed This information is obtainable from the Buying Department. The assessment of costs to come Labour The Engineers should carry out an assessment of labour costs to complete the contract; this can be obtained either from performance charts or by a physical check on site, if the contract is nearing completion. Include increased costs.
Materials still to order This requires a careful assessment taking into account all existing stocks held on site, which will be used. Include increased costs. Sub-Contractors accounts For each sub-contractor make a separate reasonable assessment of the final account figure. Make due allowance for variations and dayworks and increased costs thus producing an anticipated final commitment. From this must be deducted all payments made on account. Due to the delay in costings reaching the ledger, a careful check should be made to ensure that these payments have been included in the costs booked to date, under item cost to come on orders placed. Commissioning costs defects liability as fitted Record Drawings, Manuals. In consultation with the Engineer make a reasonable assessment of the value of items, it should not necessarily reflect the figures included in the original tender. Sundry Costs These should include any conceivable items of cost, which have not been included in the previous sections of which it is desirable to show separately. Overheads A detailed assessment of site-costed overheads to complete the contract is required; this should include all factors that you include in the Site costings. Allowance must also be made for Buying Department etc. as applicable. Credits An allowance for credit on materials to be returned from site should be made. ANTICIPATED SELLING PRICE Original contract price This should be the Net selling price as extracted from the estimated summary sheet for the contract. Variations agreed The value of all the variations agreed and covered by Architects instructions should be included. Variations anticipated A financial assessment of all variations should be made in consultation with the Engineer, as and when they occur, in order that a running total of anticipated variations can be kept. Dayworks Include here only dayworks on which basic agreement has already been reached.
Increased costs This section will be split into two; those for company and those for sub-contractors each in turn being subdivided into agreed increased costs and anticipated increased costs. Other known factors effecting the sale in price This section is included in order to make provision for special factors that may occur on certain contracts, or for specific items that it is desirable to show separately. Agreed contractual claims Any contractual claims that have been agreed in principal and/or paid in part should be included. The value of these affects the anticipated gross profit/loss. It is suggested that this operation is carried out once every month but on certain contracts there may be considerations, which require a more regular re-appraisal in order to, maintain effective financial control. CASH FLOW CONTROL Adequate cash flow is the lifeblood of contracting. The objective is to ensure the job is cash covered at all times. This means that the total cost at the end of a month, including an assessment of the cost of overheads, must not be greater that the total cash received from the interim valuations to date. Pointers to an adverse cash flow situation are: Cost Balance Summary claiming efficiency percentage is below target. This should be maintained above 100% and desirably over 110%. (In known circumstances this may not be possible). Note: Claiming efficiency is gross claim value (less discount, less VAT), - compared with net cost (less VAT), plus anticipated gross profit, (less the Builders discount). Forecast of ultimate expenditure does not reconcile with the selling value. Your interim valuations are being reduced when paid. Certified Moneys are not paid by the due date. Company balance sheet, Prime cost balances of work in hand for the current year shows a negative value. Action to ensure satisfactory cash flow Build up a good working relationship with the P.Q.S. Agree the timing, format and method of submitting interim valuations at the outset. Never miss submitting a valuation. Advise the client of any increase anticipated in ultimate contract value as soon as it becomes evident. Ensure your sub-contractors submit their valuations to you in time. Ensure all interim valuations are submitted in time.
Ensure interim valuations include all anticipated costs to the date upon which payment of a valuation is due. Ensure the value of all claims for loss and expense is negotiated as they occur. Ensure the value of all variations is included in each valuation, including dayworks, increased costs of labour and materials when appropriate. Ensure variations are priced and agreed as they occur. Make reserves when necessary against variations. Register variations in writing to your client as they arise. Ensure the value of omissions adequately reimburses you for your costs in connection with them. Endeavour to agree each valuation prior to its formal submission and resolve disagreements immediately they arise. Where appropriate ensure that the value of sectional compilations is agreed promptly. Render part accounts whenever and as soon as possible. Measure jobs on Bills which are subject to remeasure as the work proceeds. Render contra-accounts to Builders and others as soon as the work concerned is complete. React immediately there is under certification of a valuation and resolve any difficulty at once. Ensure the retained value of the retention fund as stated in your contract is not exceeded. Ensure retention is held on the Net (not gross) value of a valuation. Ensure the retained sum is reduced, as the contract provides, when a certificate of practical completion is issued. (Usually it is reduced by 50%). Ensure the value of the penultimate valuation equals the anticipate final account value. Notify delay you suffer at site as it occurs. Quantify delay as it occurs. Seek extensions to the contract period immediately the need becomes evident, as the contract provides. Agree value of draft final account with P.Q.S before its formal submission. Ensure certificates of practical completion are sought and obtained immediately they are due. Notify the day beneficial use of any part of the work is given to the client.
Ensure snagging work is done promptly and Record Drawings and Manuals are completed and handed over promptly. Inform credit control of events and dates that effect cash release for example, sectional completion, beneficial use, issue of a certificate of practical completion. End of defects liability period. Monthly dates for receipt of interim payments. Inform credit control of the limit of the retention fund value, and dates when release of the first half is due; thus to obtain, as the contract provides: 1) a reduction in the sum retained 2) release of the remainder of the sum retained when the retention period expires. Ensure Credit Control have a program of key dates for each job. Ensure the creation of adequate reserves to cover all contingencies. Ensure contractual matters in dispute, which have financial implications, are speedily resolved to prevent them being used as an excuse to withhold payment. Matters in the foregoing list, which are not fully understood, should be discussed with the Commercial Manager. INTERIM VALUATIONS Careful preparation and agreement of valuations is vital to cash flow. Cash outflow in excess of income is financed only at considerable expense and represents a dead loss to the contract. In most contracts payment of the amount certified in an in interim valuation is not due to you until 14 days after certification by the Architect, and in practice usually 6 to 8 Weeks passes after submitting your certificate before you get your money on nominated work. Upon direct contracts you frequently have no knowledge of the pattern of payment to the Builder. You have to make your own arrangements with the Builder for payment and insist that this agreement is regularly honoured, otherwise payment can be greatly delayed. An approximate indication of interim valuation claiming efficiency is the company business sheet interim claim percentage. This should never drop below 100% and desirably should consistently exceed 110%. (See notes under Cash Flow Control). INTERIM VALUATION SUBMISSION STRATEGY Agree the dates for monthly interim valuation submissions for the whole contract with the Builder and the P.Q.S. Calculate the probable dates upon which you shall receive payment against each valuation. Price each interim valuation so that it covers the cost you anticipate will have been incurred by the day you receive payment.
Valuations at the beginning and end of a job should be rather more precise to pass muster than those in mid-contract. The strategy being that the mid-contract claims should finance poor cash flow, which is unavoidable on most contracts at the beginning and end of a job. Plan the gathering of interim valuation information, including that of your sub-contractors, in time to enable you to comply with the agreed submission dates. INFORMATION NEEDED FOR EACH VALUATION Priced valuations of: Equipment and materials delivered and in store. Equipment and materials in transit. Equipment and materials likely to be received. Equipment and materials held off site but paid for. Work prefabricated but not fixed. labour and materials. Work fixed. Labour and materials. Dayworks. Labour and materials. Work executed under variation orders. Labour and materials. Increased costs of materials and labour Establishment costs in the shop and at site. Omissions.
Priced valuations under each of the above headings from your subcontractors. Adjust their valuations if they appear to be under valued. Schedules for gathering information should be upon a standard format prepared specifically for the job. These should be designed to act as a prompt list so that no information is missed.
ASSESSING THE VALUE OF WORK EXECUTED First method Split the whole job into a number of stages, and award to each a value in money including labour, material, establishment charges and profit. At each valuation make an assessment of the percentage completion achieved of each stage. Using these percentages arrive at an overall value of work executed from the commencement of the contract to the date of the valuation. The method whilst involving a good deal of work at the onset of a contract effects a considerable saving on actual time spent on site when assessing valuations. The method is an approximation only, and requires experience to achieve accuracy. The method can be used to calculate interim performance of operatives either employed or subcontract. Each stage in addition to a monetary value is also awarded a value in hours. The percentage of work completed in each stage is multiplied by the target hours for that stage to compute performance time in hours spent against work executed. Second Method The whole of the work executed is physically measured and listed in a schedule, which is priced, item-byitem, upon basic rates plus establishment charges and profit for the contract. The work measured is marked
upon the drawings to ensure that the following months measuring commences where the previous months measuring ended. Great care is needed to prevent work being missed. Third Method This is a variation on the second method. Drawings at site are coloured with different crayons for each succeeding month to indicate those portions installed to date. Quantities are taken off and made into a schedule. The Schedule is priced as previously explained. Valuation of Unfixed Prefabricated Work Prefabrication may involve a considerable amount of cost and must not be ignored in preparing a valuation. It cannot properly be included in either work executed or materials on site as it contains a proportion of both. It should be separately stated in a valuation under work executed.
DISTURBANCE TO REGULAR PROGRESS:EXTENSION OF TIME If you suffer disturbance to regular progress, recovery of your loss and expense is a valid claim within most forms of Contract. It is also a valid reason for a claim for extension of the Contract period. Seek extensions of time immediately your entitlement becomes an apparent. Prompt action to notify is a requirement of most Contracts, which usually state Upon it becoming reasonably apparent that the progress of the work is delayed the Contractor should forthwith give written notice of the cause of the delay. State that you shall seek reimbursement for any loss and/or expense you suffer. If possible quantify your claim and submit this quickly. Claims under this heading if left to the end of a job becomes difficult to resolve. Consult with Commercial Management about the wording of letters, and the submission of claims. Examples of the causes of loss/expense are: Delay: Out of sequence working: These cause time related additional expenditure on overheads, labour, materials, transport, due to withdrawal from sites, return to sites, delay in release of tools and plant, delay in release of personnel, delay in payment of retention Moneys, interest you have to pay upon extra capital employed. Any other cause of loss or expense not envisaged by the Contract. Thoroughly understand those sub-contract clauses, which deal with extension to contract period, loss and/or expense, liquidated and ascertained damages. Discuss these with Commercial Management. Be aware that failure to properly seek extensions to the contract period at the proper time may result in claims being made against you for delay. These would probably be in the form of liquidated (time related) damages. Project Management should explain to all project staff concerned those contract clauses which deal with delay, extension of time, loss and expense, liquidated and ascertained damages, the procedures to be followed, and the importance of effective action at the proper time.
PRICING VARIATIONS INCLUDING ADDITIONAL AND OMITTED WORKS

A variation introduced at the planning stage before work is in progress may be priced at rates equivalent to the bill rates without loss to the Company, whereas a variation introduced after ordering is complete and the work is in progress can rarely be properly priced at these rates. An omission cannot, except in unusual circumstances, be priced at bill rates without incurring a loss.
Here is a prompt list of possible additional costs, which should be recovered. Consider: Management/Foreman time making the fresh instructions from the client and re-instructing imperatives and your sub-contractors in the varied work. Time and expense incurred through necessary additional supervision visits to the site. Shopping time and the cost of transport for operatives collecting urgent materials. Time lost through disturbance to regular progress of the work at site. Changes in the tools employed. Small lots purchases at higher prices, probably from local stockist. Restocking charges of unwanted materials. Transport for delivery of fresh materials. Transport for return of unwanted materials. Administrative paperwork due to the cancellations. Administrative paperwork involved in fresh purchases. Cost of additional surveying work: Although work may be omitted a reduction in the cost of overheads may not occur in whole or part. In this event the omission given should take full account of the situation, when original Bill rates will not apply. DAYWORKS CONTROL Daywork terms should be negotiated and written into the Contract. Daywork terms negotiated with your sub-contractors must be acceptable to your client before they are incorporated in orders you place with your sub-contractors. Daywork may only be commenced after you have a written instruction from whatever will authorise payment. Work should be undertaken at Daywork rates only if it is impossible to measure and price by any other means. It is preferable to quote lump sum prices for varied or additional work. Daywork sheets must be counter-signed by the clients representative as the work is done. They must be returned to the office weekly and immediately rendered. They must be included in interim valuations. The value must be agreed when rendered. On one of your Company standard Daywork Sheet, Sheet formats must be used unless it is otherwise agreed with the client. Ensuring all time and material used is booked. INCREASED COST CONTROL Increased costs must be recorded whether or not they are recoverable from the client. Engineering, Surveying and Commercial Management should decide the form of recording these. It should follow procedures. A format should be agreed with the P.Q.S. for rendering recoverable costs. Substantiating evidence is to be obtained before payment is authorised. Contracts entered into with your sub-contractors should stipulate how increased costs may be claimed. Increased costs must be rendered within each interim valuation, as the work proceeds. AUTHORITY TO VARY THE WORK Agree with the P.Q.S. and the Main Contractor the methods by which you are to be instructed to vary the work and those who have authority to instruct you. ,
Usually the Architect or his equivalent will have a standard procedure for instructions emanating from his desk, but there is often a lack of formal communication procedure agreed at site level. Investigate this situation at an early stage and introduce your Site Variations for use in appropriate cases. Confirm to the Architect, Main Contractor and your supervisory staff the arrangements agreed. VERBAL INSTRUCTIONS TO VARY THE WORK. SITE VARIATION ORDER BOOK A Site Variation Order book should be kept on every site to confirm verbal instruction you receive. The Project Engineer is responsible for arranging for the issue of the confirmation. A copy should go to the job surveyor or accountant. The order should state clearly the work that has to be done or omitted. The Project Engineer should tell the site foreman the names and status of those people from whom you are willing to accept verbal instructions. A signature should be obtained from the person giving the verbal instruction. If he refuses, no work should proceed until the Project Engineer has been informed of the circumstances and has made a ruling. It is important to realise that you are in a very weak position and may not be able to recover the cost if work is done upon unconfirmed instructions. Foremen should not be placed in the position of having to argue in cases of conflict. Foremen should be given written instructions, which they can show stating for example that Work may not be varied except upon the signed by persons receipt by the Company of written instructions signed by persons authorised to commit your client to the cost involved. You regret this is necessary because of losses you have suffered when you have been refused payment for work varied without a confirmation order. CHECK LIST OF TERMINAL SURVEYING AND ADMINISTRATION WORK Unnecessary cost is sometimes suffered and ill will is generated with the client because you sometimes fail to adequately manage terminal work. This checklist is given to help in the programming and control of this important part of the contract cycle. Cancel unwanted goods on order. Increase costs agreement. Variations value agreement. Dayworks value agreement. Redundant materials value for credit. Scrap value for credit. Invoices outstanding. Credits outstanding Sub-contractor account agreement. Draft Final Account preparation and agreement. Direct Works Final Account preparation and agreement. Contract period extension agreement. Loss and expense claims agreement. Retention fund release.
IMPORTANT:
Ensure the penultimate claim equals the anticipated Final Account value otherwise you must wait until the issue of the final certificate to get payment of the money that has slipped through the penultimate claim net. The final certificate money can take months, sometimes years, to collect. It is often held up for reasons completely outside your control. ACCOUNTS RENDITION The drafts of part and Final Accounts should be agreed with the P.Q.S. before formal submission. Engineers and Surveyors should work in close liaison to ensure that all work to be part accounted or final accounted is completed in all respects and has been tested, approved snagged, commissioned and is formally handed over when the account is submitted.
Sectional completion Upon larger contracts it is sometime agreed that the client for his beneficial use will take over work in sections. The client must then assume responsibility for insurance. The Architect should issue a Certificate of Practical Completion for each section taken over. There should be an appropriate reduction in the Retention Fund. (See notes of retention release management).
Partial possession of the Works by the Client Partial possession (which is not the same as sectional completion) is sometime requested. It is recommended that letters of agreement be exchanged. A sample draft letter follows. The client must assume responsibility for the insurance of the part taken over. Draft a format of a letter to be used when initiating a notification of your readiness to agree to partial possession of your work by the Employer (based upon JCT Contract Form). Copies of the letter to be given, as appropriate, to. The Main Contractor The Architect or Supervising Officer The Quantity Surveyor The Consulting Engineer Your Sub-contractor concerned PARTIAL POSSESSION OF THE WORKS BY THE EMPLOYER Services
Subject:
Contract for: Site
Dear Sir,
That part of the Contract works detailed in a Schedule below is ready for possession by the Employer, and you are willing, with the agreement of the Main Contractor for the Employer to take possession of the part upon the issue of a certificate by the Architect/Supervising Officer stating:a) his estimate of the approximate total value of the relevant part, in the manner provided by the contract, and b) the date upon which Practical Completion of the relevant part shall be deemed to have occurred and the Defects Liability Period shall be deemed to have commenced, and c) that proportion by reduced, and that which the Retention Fund will be
d)
from the date of Practical Completion you are released from responsibility for insuring the relevant part of the works, and that
from 8 a.m. upon the day agreed above the Employer will take sole responsibility for the risks and perils mentioned in the Contract.
e)
SCHEDULE Part 1. Description of the relevant part of the works. Part 2. An assessment of the approximate total value of the above part of the Works, valued as described in the Contract. Part 3. A schedule of defects, which you consider, you are liable within the Contract to make good during the Defects Liability Period applicable to the relevant part of the Works. Unless dissented from within 7 days this schedule of defects will be deemed to be the Schedule of Defects as defined in the Contract for the relevant part of the Works. RETENTION RELEASE MANAGEMENT Certificate of Practical Completion In most contracts the date upon which a Certificate of Practical Completion is issued settles the date of: The release of the first half (moneys) of the retention fund. The start of the period of Final Measurement (usually six months). The start of the Defects Liability Period (usually six months ). The start of the period during which the Architect must issue his Schedule of Defects (usually six months and fourteen days).
The need to closely monitor the completion of your work and to press for the two Certificates and the Schedule of Defects cannot be over-stressed. Your action towards the close of a job should be to ensure that: The Certificate of Practical completion is issued as soon as possible. The agreement of the Final Account is achieved within the period of Final Measurement. The Schedule of Defects is issued as soon as possible after the issue of the Certificate of Practical Completion. Defects are remedied as quickly as possible to enable you to press for the Certificate of Completion of making good defects to be issued, desirably within the defects liability period. Upon the expiration of the defects liability period or upon the issue of the Certificate of Completion of making Good defects, whichever is the latter, the Architect should certify the release to you of the residue sums retained. Upon the expiration of the Defects Liability Period or upon the issue of the Certificate of Completion of Making Good Defects, whichever is the later, the Architect should certify the release to you of the residue sums retained. AGREEMENT AND PAYMENT OF A FINAL ACCOUNT Historically, much cash remains uncollected at the end of a job because of your failure to achieve Final Account agreement within the period of final measurement. This should not be so. The fault is, all too often, your own. This important aspect of job management should receive concentrated attention during the final quarter of the contract period and should be uniquely programmed. As information becomes available the program should indicate anticipated dates of: Practical completion. First money Retention Fund release date. End of Period of Final measurement, release of balance of Retention Fund, and completion of Defects Liability Period. Agreement of disputed account items. Completion of snagging Credit control should be advised of these dates. It is frequently necessary for, and is an essential part of the work of, Senior Management to take an active role in the resolution of account disputes. Surveyors and Engineers in protecting the Companys interests can become entrenched, and may need assistance. Management should press for the issue of Certificates of Practical Completion and determination of the Defects Liability Period. Sometimes the issue of a final certificate may be withheld for reasons completely beyond your control. In these cases the matter must be referred to senior management and possibly to Director level so that highlevel discussions can take place to obtain your cash.
FINAL ACCOUNT PERFORMANCE NORMS. Here you suggested performance norms:M.C.McMillan MIIExE, TEL 01403 217037 or email macelec@mmcmillan.co.uk Suggested contract control procedure for
Retentions: Disputed sums:
Never more than 5% of W.I.P or 3% of Final Account value. Never more than 3% of Final Account value.
A disputed sum should never be out-standing: For more than 6 months. Average Interim Valuation. Claim, Efficiency not less than 105%. Maximum period within which interim cash is paid should be 5 weeks (or less) from date of P.Q.S. valuation. MAIN CONTRACTOR INSOLVENCY. ACTION TO BE TAKEN. This is all too common an occurrence in the present industrial climate, so Contract Management should be constantly alive to the danger. Tel tale signs are: Rumours in the trade. Rumours at site. Site progress slows down perceptibly. Slow payment of certified money.
Action prior to a bankruptcy Warn informer not to spread the rumour. Inform Company Secretary, Insurance Manager and Divisional Management immediately. Review site situation and prepare emergency plan of action as follows: Consider fixed and partly fixed work at first. Review stock levels and review security. Make plant and tools inventory. Ensure plant and tools are marked to identify them as your property. Ensure all loose tools, plant and materials are returned to your site stores daily. Ensure your goods are under lock and key. Lay down a contingency plan to clear site rapidly. An overnight or weekend clearance of site can frequently pay off. Cocoon delicate plant, which cannot be removed. Board up sections of installed work liable to vandalism. Apply pressure for cash outstanding. Senior Management should immediately take charge of this situation to assist Credit Control. Considerable pressure at the highest level is frequently needed to collect such. Usually Director to Director. Action when bankruptcy occurs Suspend delivery of all goods ordered but not delivered. Stop work at once. Remove as much loose tools, plant and materials as possible from site, including huts and compound. Lock up and protect everything not taken. Prepare an inventory.
Inform Architect and Main Contractor verbally and in writing at their registered offices that because of insolvency and the main contact being thus determined, the sub-contract is automatically determined. Say a statement of account will follow. Prepare a Statement of Account ; Include separate valuations of: Yours and sub-contractors work completed, certified and paid. Yours and your sub-contractors work completed, certified but not paid. Yours and your sub-contractors work completed, but not certified or paid. Unfixed materials certified and paid. Unfixed materials certified but not paid. Unfixed materials not certified or paid. Goods ordered for the job but not yet delivered, including the value of uniquely specified goods, which cannot be cancelled or restocked. Retention money paid. Retention money due but not paid. Contra charges for direct work done and not yet paid. Send a copy of the statement to the Architect, P.Q.S Quantity Surveyor, Consultant, Main Contractor, and Receiver or Liquidator appointed. Request that: No further payments are made to the Main Contractor on your behalf. Any sums due to you are paid direct to you. (There are provisions for this action in some contracts) Remind that retention money is held in a fiduciary capacity. Prepare a statement of protective work necessary to prevent that installed for deteriorating, and send it to the Architect, Consultant, and Main Contractor with an estimate of the cost. State that if the Employer requires the work to be done you would require direct payment from him. Warn of the consequences if the work is not done. Have a meeting with the Architect and Employer to discuss continuation of the work either as a sub-contractor to a new Main Contractor or by direct contract with the Employer. Advise the cost of doing this. The cost should include the value of materials and work done but not paid for under the determined sub-contract. A thorough understanding of the relevant Main Contract and Sub-Contract terms is essential. The above is suggested contract control procedure produced purely for guidance if you need any help in this matter please contact Malcolm C McMillan Tel:- 01403 217037

Suggested Contract Control Procedure: Subject

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Suggested Contract Control Procedure: Subject

Uploaded by

Copyright:

Available Formats

SUGGESTED CONTRACT CONTROL PROCEDURE

the Mechanical & Electrical industry Page 1 of 16

FINANCIAL CONTROL SURVEYING

the Mechanical & Electrical industry Page 2 of 17

the Mechanical & Electrical industry Page 3 of 16

the Mechanical & Electrical industry Page 4 of 17

the Mechanical & Electrical industry Page 5 of 17

the Mechanical & Electrical industry Page 6 of 17

the Mechanical & Electrical industry Page 7 of 17

the Mechanical & Electrical industry Page 8 of 17

PRICING VARIATIONS INCLUDING ADDITIONAL AND OMITTED WORKS

the Mechanical & Electrical industry Page 9 of 17

the Mechanical & Electrical industry Page 10 of 17

the Mechanical & Electrical industry Page 11 of 17

Contract for: Site

the Mechanical & Electrical industry Page 12 of 17

the Mechanical & Electrical industry Page 13 of 17

the Mechanical & Electrical industry Page 14 of 17

Retentions: Disputed sums:

the Mechanical & Electrical industry Page 15 of 17

the Mechanical & Electrical industry Page 16 of 17

You might also like