Building in schools – the correct order of things
Posted on May 19, 2021
In this first of two articles, construction lawyer Michael Hutton sets out the “do’s and don’ts” of a school construction project and all it entails!
Engaging consultants
If you are going to have building work carried out at your school, you will need to engage consultants to provide advice on and input into the project.
This might include architects, engineers, quantity surveyors and other related building professionals.
I have no doubt that your parent group will include a collection of consultants. You might prefer to use parents as consultants but I recommend you proceed with caution.
You need to make sure you get the right consultant for the job. Look for a consultant that has experience working on school projects. (There is no point in asking an engineer who specialises in designing bridges to design your science laboratory!) Make sure the consultant knows and understands your needs. Don’t be afraid to ‘ask around’ or ask the consultant for some referees with whom they have previously worked.
Contracts
When you engage a consultant, you should have a proper contract. Don’t settle for just a letter or proposal from the consultant because although that will tell you what the consultant is proposing to do and how much they want you to pay them, it is unlikely to properly cover important things like timing, change in scope and what happens down the track if you want to end the contract.
I suggest you get legal advice and make sure you have all consultant engagements covered by proper contracts. Remember “a stitch in time …”.
Once you have the consultants properly contracted you are going to need a building contract with your chosen builder.
There are a variety of different types of building contract. For example, there are design and construct, fixed price, cost plus and so on. You will need legal advice about which one best suits your needs and then you will need a lawyer to prepare the contract for you. If your builder is suggesting a particular form of contract, you should get legal advice before you sign it. Avoid using a form of contract drafted by anyone other than a lawyer.
Tendering
Usually a building project goes ‘out to tender’ and a number of selected builders are asked to submit their proposal to do the job. The tender process is best managed by consultants. You should get a construction lawyer to check the tender documentation before it goes out. That will avoid uncertainty as to what you are asking the builders to price up. A poorly documented tender process just wastes time and it can cause extra cost and disputes.
The form of contract that you are going to ask the successful tenderer to sign should be included in the tender documents. This will avoid arguments about risk allocation and price after the tender process has concluded and before the contract is signed.
Common contract provisions
Normally you will want some security from the builder. This is usually in the form of a bank guarantee that you can ‘cash in’ if the builder doesn’t keep its promises under the building contract.
You want your project to finish on time, of course. Good contracts will contain provisions about how, when and in what circumstances a builder will be entitled to extend the build time. Getting the right provisions is important so that risk is appropriately allocated between the School and the builder. You might also want to include a right to liquidated damages which allows the School to claim payment if the builder runs late.
Ideally, you will want the cost to build to be fixed and not subject to change however that may come at a cost. If you want the builder to take all of the risk on increased costs the builder will probably increase its price to take that risk into account. Taking on some of the risk of for example delay, where something about the site which no one knew about, causes the job to run over time, might just save you some money. Of course, if it turns out that there is an issue and you have taken the risk on that issue, you are going to need to have a contingency in your budget “just in case’.
Variations to the price of a building project can arise if there is a change of scope – for example if the design is changed on the fly. I suggest you avoid this sort of variation by finalising and committing to a design before you go to tender. Sometimes builders can suggest design changes that reduce the price of the work and that is great. If you want to encourage that, you might consider offering some sort of bonus for cost saving measures.
In the next addition Michael will outline the role of parties during the construction phase and dealing with defects and final certificates
