Detailed Analysis of Construction Contracts in Civil Engineering

This assignment analyzes construction contracts, covering contract types like lump sum, cost-plus, and schedule of rates, as well as contract terms such as variations, prime costs, and provisional sums. It examines the essential components of a building contract, including parties involved, scope of work, project costs, schedule, and authority. The assignment identifies potential breaches of contract, such as failure to pay, failure to allow site access, and poor workmanship. It also explores key contract documents like statement of work, contract agreement forms, and bill of quantities. Furthermore, the assignment includes a sample contract for building a house, detailing contract parties, incorporated documents, completion time, financing, and contract price. Finally, the assignment provides a breakdown of trade areas, gross value, and net value, along with monthly progress claims, illustrating the financial aspects of a construction project.

Assessment 3
Name,
Student number
Unit number
Assignment number
LA018068, Assessment 3, CPCCBC4003A, Ed 7 1
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February 2018

Question 1
Contract types:
Lump sum contract – this contract involves fixed price of all related construction
activities. It is only preferred when clear scope of work is defined with defined
schedule.
Lump sum subject to rise and fall – this is a contract with fixed price but the specific
items are subject to rise and fall to allow increases and decreases in the cost factors
to enable sharing of the cost between the builders and clients.
Cost plus a percentage – the contract involves payment of the costs, purchases or
any expenses which are directly generated from the construction activities. Usually
have specific information on pre-negotiated amount1.
Project management – is a contract signed to deal with management of the specific
items of the related project.
Schedule of rates – is a contract which is prepared in relation to the contract
drawings and specification for the materials and rates.
Sub-contract – this is a contract entered between the main contractor and another
contractor. The other contractor (sub contractor) is able to carry some specific works
meant for the main contractor.
Question 2
.
Contract terms:
Variation – this is simply an alteration to the scope of work and may include
addition, subtraction or omission of some entities in the contract and work scope.
Prime cost item – this is the set budget for an item. It is usually the budget set for
purchasing or carrying out specific tasks.
Provisional sum – it is an estimated sum in the builder’s contract specifying the
estimated sum to complete some task. It is provided where the builder is unable to
provide the exact sum for the work required2.
Extension of time – this is the additional time provided once the initial time for
completing the specific tasks elapses.
Liquidated damages – this is the cost of damages which the contractor is able to pay
the client for breach of contract such as failure to honour practical completion of
project.
Possession of the site-this is a state under which the contractor is given exclusive
ownership of site until practical completion and handover are done.
Cooling off period – these are five business days provided to the client to review or
change his r her mind on the details of building contract.
1 Kate Manuel, M. Contract Types: A Legal Overview. (Washington, DC:
Congressional Research Service, Library of Congress, 2012). 102
2 Hugh, Brooks, and P Anderson Joseph. Encyclopedia of Building and Construction Terms: The
Language of the Construction Industry and Directory of Resources. (Newport Beach, CA: HBA
publications, 2017) 59-83
2 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

Defects liability period – is the timeline set aside after the construction of a structure
whereby the contractor can return to site to rectify any defects. It is usually 12
months.
Retention – this the amount which is deducted from the payment claims filed by the
contractor and held until the completion of work is done. Usually 5% of the total
contract sum.
Progress claims – this is the request of payment of partial work which has been done
by the contractor.
Question 3
Full Name, Address, and Signatures of Both Parties- building contracts are usually between
real parties and they are required to provide their clear information. The contract is usually a
commitment where it is biding to the parties who have signed it3.
Scope of work – the contract must be able to provide the details of what need to be done and
to what level it should be done. This section includes the services to be provided, material
description, their quality, grade, schedule of work and all details relating to the building
construction.
Project costs and payment terms – this section is able to offer the monetary compensation
which will be provided once the work is done. It is able to provide the duration under which
the compensation will be done and terms and conditions which payment should be requested.
Schedule of work – this part of the contract provides the duration of work. It has the start date
and completion dates. In addition, the schedule of work shows when specific activities should
be completed to avoid delays.
Authority – these are the personnel who are responsible in making decisions on the building
construction. Different people have different roles and their responsibilities and decisions
they can make are stated in this section.
Question 4
a.
1. Adding scope of work apart from what is stated in the contract documents. This is
where the client is not willing to pay for the additional scope which is included while
executing the works
2. Failure to honour payment agreement. This is when the client fails to honour the
provisional payment agreement as stated on the contract documents4.
3. Failure for the builder to allow access to the site may lead to breach of site ownership
under the contract and may lead to termination of the contract.
.
b.
3 Federal Publication Seminars., & National Contract Management Association (U.S.). Contract types.
(United States: Federal Publication Seminars, 2010) 39-52
4 Derek, Jeter, and Mantell Paul. The Contract.(New York, NY: Jeter Children's, Simon & Schuster
Books for Young Readers, 2014) 23-89
LA018068, Assessment 3, CPCCBC4003A, Ed 7 3
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February2018

1. Poor work executed at the beginning of the work. Failure to follow the work scope
and standards may lead to contract breach.
2. Abandoning the site, which may lead to delays, is a breach of contract which may
lead to contract termination.
3. Employing others to carry out the work without agreement with the client is a breach
of contract and may lead to termination of the contract.
Question 5
Statement of work – this is a document having the scope of work and useful during bidding
process and construction stage. It has the amount of work to be done.
Contract agreement forms – these documents shows that the different parties have an
agreement and contract.
General conditions of contract – this document has the obligations on the execution of work
for each party.
Special conditions – is an extension of the contract general conditions. Has special
instructions which are needed on the contract.
Bill of Quantities (BoQ) – it is a document composing of trades and materials with their
costs.
Drawings – these are documents having the job to be done. Should be latest and be received
by the contractor before the work commences.
Construction schedule – is a document showing the timeline the different activities should be
completed. It also shows the progress of work at different period.
List of common types of insurances – these are documents having the insurances taken to
cover different risks in the construction process.
Shop drawings – these are drawings, diagrams, illustrations and schedules provided to aid the
completion of work.
Question 6
CONTRACT TO BUILD A HOUSE AT ST. JAMES STREET
I. Contract Parties
Now comes Jameson Construction Inl. of 10890 and Claire Mayweather of 23090 to
hereby agree to build a house on property located at St. James street plot 2451 and legally
described as JCB-0078-2018.
II. Contract Documents
The terms of this contract include all the documents specifically listed below, and
constitute the entire terms of the agreement between the parties. The terms of this contract
shall prevail over any conflicting provision in the documents incorporated by reference.
1. Architectural Plans and Drawings dated 17/11/2017with number 40 of pages is
hereby incorporated into this document.
2. Specifications dated 10/12/2017 with number of 22 pages is hereby incorporated
into this document.
4 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

3. Schedule of Allowance Items dated 23/01/2018 with number 15 of pages is hereby
incorporated into this document.
4. The Bill of Quantities dated 29/1/2018 with number 28 of pages is hereby incorporated
into this document.
Completion Time
Assuming all conditions are satisfied and weather permits, the work to be performed
under the contract shall be substantially completed no later than 26 weeks after the work
commences. The work shall commence within 18 days after the permits necessary to start
work have been issued, the buyer has supplied the builder with a written notice of financing
as described in paragraph V. Financing, and the buyer shall have supplied the builder with a
correct statement of the recorded legal title of the property and the buyer’s interest in the
property.
Any time lost by reason of changes to the contract or changes in plans by the buyer,
other acts of the buyer, strikes, weather conditions not reasonably anticipated, or any other
condition not within the builder’s control shall be added to the specified time for completion.
For any delays which are not the builder’s responsibility, the contract price shall increase by
any increase in the builder’s costs caused by the delay.
A claim for an increase in time for the performance of the contract, or an increase in
the contract cost shall be made within 7 days after the builder first recognizes the condition
giving rise to the claim.
V. Financing
This contract is contingent upon the buyer obtaining a construction loan in the amount
of $275,000.00 dollars. All fees and expenses of obtaining a loan shall be borne by the buyer.
The builder is not required to begin construction until the buyer provides the builder with
written notice from the lender confirming the loan.
VI. Contract Price
CONTRACT: FIXED PRICE CONTRACT
The buyer agrees to pay a total price of $275,000.00 dollars to the builder for
construction of the house, and the builder agrees to provide all the labor, materials,
equipment, tools, and other services necessary to construct the house.
Upon the signing of this contract, the buyer agrees to pay $27,500.00 dollars to the
builder as a deposit. The buyer will make the 7 interim payments.
The buyer agrees to make a final payment in the amount of $12,000.00 within days of
the buyer’s final inspection and acceptance of the property. The buyer is not entitled to
possession until after final payment.
Note: the contract can be handwritten but MUST be well presented and legible i.e. easily
read, understood and present your business in a good light.
LA018068, Assessment 3, CPCCBC4003A, Ed 7 5
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February2018

Question 7(10 marks)
A.
TRADE AREA GROSS
VALUE
($)
VALUE OF
MARGIN
AND GST ($)
NET VALUE
($)
% OF
CONTRACT
SUM
Preliminaries 25000 3000 22000 8
Excavator 5000 600 4400 0.16
Concreter 19000 2280 16720 6.08
Bricklayer 24000 2880 21120 7.68
Carpenter 43000 5160 37840 13.76
Joiner 15000 1800 13200 4.8
Doors and
Windows
26000 3120 22880 8.32
Roofer 16000 1920 14080 5.12
Linings/
Insulation
20000 2400 17600 6.4
Electrician
(Provisional Sum)
24000 2880 21120 7.68
Plumber and
Drainer
(Provisional sum)
24000 2880 21120 7.68
Tiler 12000 1440 10560 3.84
Painter 10000 1200 8800 3.2
Landscaper
(Provisional sum)
12000 1440 10560 3.84
CONTRACT
SUM
275000 33000 242000 88
6 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

B.
MONTHLY PROGRESS CLAIMS
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…001 FOR MONTH/YEAR 02/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 8,750.00
Add own works completed excavator 5,000.00
Add conreter works completed works 11,400.00
Add bricklayer work 4,800.00
Add doors and windows completed work 2,600.00
Add linings/insulation completed work 1,000.00
Add electrician completed work 2,400.00
Total claim amount 35,950.00
Deduct 10% retention amount 3,595.00
Claim amount for payment 32,355.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…002 FOR MONTH/YEAR 03/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
LA018068, Assessment 3, CPCCBC4003A, Ed 7 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February2018

Add preliminary amount 2,500.00
Add own works completed excavator 0.00
Add conreter works completed works 7,600.00
Add bricklayer work 12,000.00
Add carpenter works 12,900.00
Add doors and windows completed work 13,000.00
Add linings/insulation completed work 0.00
Add electrician completed work 1,920.00
Add plumber and drainer 4,320.00
Total claim amount 54,240.00
Deduct 10% retention amount 5,424.00
Claim amount for payment 48,816.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date…
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…003 FOR MONTH/YEAR 04/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 3,750.00
Add own works completed excavator 0.00
Add conreter works completed works 0.00
Add bricklayer work 0.00
Add carpenter works 17,200.00
Add doors and windows completed work 5,200.00
Add roofer work 11,200.00
Add linings/insulation completed work 1,000.00
Add electrician completed work 2,400.00
Add plumber and drainer 0.00
8 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

Total claim amount 40,750.00
Deduct 10% retention amount 4,075.00
Claim amount for payment 36,675.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…004 FOR MONTH/YEAR 05/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 3,750.00
Add own works completed excavator 0.00
Add conreter works completed works 0.00
Add bricklayer work 0.00
Add carpenter works 0.00
Add joiner works 3,000.00
Add doors and windows completed work 5,200.00
Add roofer work 4,000.00
Add linings/insulation completed work 10,000.00
Add electrician completed work 7,680.00
Add plumber and drainer 10,080.00
Add tiler completed work 1,800.00
Total claim amount 45,510.00
Deduct remaining retention amount 656.00
Claim amount for payment 44,854.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
LA018068, Assessment 3, CPCCBC4003A, Ed 7 9
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February2018

PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…005 FOR MONTH/YEAR 06/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 3,750.00
Add own works completed excavator 0.00
Add conreter works completed works 0.00
Add bricklayer work 0.00
Add carpenter works 0.00
Add joiner works 4,500.00
Add doors and windows completed work 0.00
Add roofer work 800.00
Add linings/insulation completed work 8,000.00
Add electrician completed work 3,600.00
Add plumber and drainer 3,600.00
Add tiler completed work 4,200.00
Add painters completed work 3,000.00
Total claim amount 31,450.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…006 FOR MONTH/YEAR 07/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 1,250.00
Add own works completed excavator 0.00
Add conreter works completed works 0.00
Add bricklayer work 0.00
Add carpenter works 0.00
10 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

Add joiner works 6,750.00
Add doors and windows completed work 0.00
Add roofer work 0.00
Add linings/insulation completed work 0.00
Add electrician completed work 2,400.00
Add plumber and drainer 2,400.00
Add tiler completed work 6,000.00
Add painters completed work 4,500.00
Add landscapers sum 1,200.00
Total claim amount 24,500.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
PROJECT TITLE CONTRACT
NO……………
Monthly progress claim No…007 FOR MONTH/YEAR 08/2018
CONTRACTOR NAME
PAYMENT AMOUNT
Completed Works $
Add preliminary amount 1,250.00
Add own works completed excavator 0.00
Add conreter works completed works 0.00
Add bricklayer work 0.00
Add carpenter works 0.00
Add joiner works 750.00
Add doors and windows completed work 0.00
Add roofer work 0.00
Add linings/insulation completed work 0.00
Add electrician completed work 3,600.00
Add plumber and drainer 3,600.00
Add tiler completed work 0.00
Add painters completed work 1,500.00
Add landscapers sum 10,800.00
Total claim amount 21,500.00
Add 5% retention amount 6,875.00
LA018068, Assessment 3, CPCCBC4003A, Ed 7 11
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February2018

Claim amount for payment 28,375.00
Certified……………… Submitted by…………….
Title/Position…………. Title/Position…………….
Date…………………… Date……………………..
References
Brooks, Hugh, and J.P Anderson. Encyclopedia of Building and Construction Terms: The
Language of the Construction Industry and Directory of Resources. (Newport Beach, CA:
HBA publications, 2017).
Federal Publication Seminars., & National Contract Management Association (U.S.).
Contract types. (United States: Federal Publication Seminars, 2010).
Jeter, Derek, and Paul Mantell. The Contract.(New York, NY: Jeter Children's, Simon &
Schuster Books for Young Readers, 2014).
Manuel, Kate M. Contract Types: A Legal Overview. (Washington, DC: Congressional
Research Service, Library of Congress, 2012).
12 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW)Version 4, February 2018

LA018068, Assessment 3, CPCCBC4003A, Ed 7 13
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February 2018

14 LA018068, Assessment 3, CPCCBC4003A, Ed 7
© New South Wales Technical and Further Education Commission, 2018(TAFE NSW), Version 4, February 2018