JCT Design And Build - Lump Sum - Client Omissions

JCT Contracts
1

Hi

I have recently picked up a project half way through and it is a JCT Design and Build 2016 lump sum contract where the client has omitted a number of items in the CSA and requires the relevant savings, are we obligated to give back the OHP relating to those items as well? Unfortunately in the CSA provided by the company has shown the percentage and OHP for each item.

Many thanks,

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2

Welcome to the community.

Just to be clear, any such omission should have been instructed as a Change* under clause 3.9.

Valuation of that Change would normally follow the Valuation Rules for Measurable Work and in particular clauses 5.4.1, 5.4.3 and 5.4.4, whereas:

  • the omission of work set out in the CSA is valued in accordance with the values set out therein;

  • allowances should be made for the (reduced) provision of site administration, site facilities and temporary works; and

  • allowance should be made for the omission of the relevant design work, if applicable.

You would therefore deduct the sums stated in the CSA for the omitted work and any reasonable savings regarding i) design, ii) site administration, iii) site facilities and iv) temporary works.

Now, the above would not normally be included in your OHP - certainly not in the profit and neither in the company’s overheads which should reflect your head office overheads and not “site overheads”. Therefore, you are not obliged to give back the respective OHP - unless it forms part of the CSA - but you would have to give back a sum in relation to the above 4 items.

You need to be careful because the omission of any work or obligation through such instruction constitutes a Relevant Omission to which the Employer can attribute a reduction in time when deciding extensions of time.

You also need to check the Schedule of Amendments for any modification of the above provisions. I hope this helps.

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