ClockShark Blog

The often-forgotten obligations that get contractors into trouble

April 28, 2017

Do you understand the contractor’s obligations?

Contractors have certain responsibilities and it’s important the contractor (and their construction team) understands what these are. These obligations include:

  • Managing and supervising the project to ensure it is successful and:
    • Is completed on time, unless the project is delayed by causes that the contractor had no control over and reasons which the contractor couldn’t have been expected to allow for.
    • Meets the required quality standards.
    • Complies with the project specifications.
    • Complies with the local, state and national specifications.
    • Has no safety or environmental incidents and complies with all safety regulations as well as the client’s requirements outlined in the contract document.
    • Has no major industrial relations issues.
    • Meets all the contractual requirements in the contract document.
  • Ensuring they have adequate resources with the required skills to successfully complete the work in accordance with the construction schedule.
  • Protecting existing services and utility lines.
  • Not starting work before checking that all permits and approvals are in place.
  • Protecting surrounding property which could be impacted by the construction works.
  • Reviewing drawings issued for construction to ensure they have sufficient information to construct the section of works.
  • Planning, scheduling and coordinating the works, which includes coordinating their employees, plus managing their subcontractors and suppliers to ensure that all parties complete the project safely, to the required quality and on time. This management includes ensuring that they are aware of the construction schedule, rules, regulations, standards and specifications applicable to the project and that they comply with these.
  • Setting-out the works.
  • Notifying the client of unexpected problems and variations in a timely fashion.
  • Invoicing for the work completed. These invoices must be submitted in accordance with the contract terms and conditions with the required supporting documentation.
  • Ensuring that all the required insurances are in place.
  • Complying with the terms and conditions of the contract, including submitting all contractual deliverables.
  • When required, coordinating the work with the client’s ongoing operations as well as the client’s other contractors.
  • Communicating with the project’s stakeholders.
  • Paying their employees fairly and on time.
  • Not partaking in any illegal practices, which includes bribing of any officials or the client’s representatives.
  • When pricing the project, ensuring that they have understood the terms, conditions and the scope of the project and that they have diligently researched the project to ensure that they have allowed for the project conditions in their price. Where there are any ambiguities, or items in the pricing documentation which are unclear, then the contractor should query these before submitting their price, or should clarify what their price includes so that there are no mistakes. Errors in pricing the project remain solely the contractor’s responsibility.
  • Paying all their subcontractors and suppliers promptly and without withholding money for undue reasons, or for reasons that haven’t been communicated to them.
  • Notifying the client and the relevant authorities of serious accidents and injuries.
  • Ensuring there is an agreed construction schedule in place, which has linked activities, allows for all project restraints, which takes cognisance of the construction methodology and which is achievable. This schedule should be monitored and updated and any slippage should be addressed. The client’s obligations and deliverables which are required so the contractor can meet the construction schedule should be clearly shown on the schedule.
  • Taking every action to avoid disputes, or when disputes arise to resolve them amicably. Where disputes are unavoidable the dispute resolution procedures outlined in the contract should be followed.
  • Following instructions issued by the client, or their representatives, providing these instructions are lawful and in terms of the conditions of the contract.
  • Understanding the terms and the conditions of the contract.
  • Not stopping work for any reason, or cause, that isn’t outlined in the contract, or without following due contractual processes. It should be noted that work may be stopped for safety concerns.

Conclusion

Contractors must understand their obligations. Many projects fail because contractors, or their designated team, have failed to understand or fulfill their obligations.

Author: Paul Netscher

Paul Netscher is an experienced construction professional who managed over 120 projects in 6 countries over 28 years. Paul writes for the ClockShark blog and is the author of five books on construction project management.




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