JGM Commercial News
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JGM asks “Can rail projects beat recession?” for Construction News
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]]>Hants Web Award 2008
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JGM Commercial Ltd are proud to be nominated for the HantsWeb Award 2008 for the small business section. If you like this website why not vote for JGM Commercial using the available link to add your support.]]>NEC3 Compensation Events
http://www.jgmcommercial.com/news/index.php?entry=entry080328-185455
To ensure the NEC3 remains flexible, simple with clarity core clauses were used as the basis for six main options with varying risk allocation and reflecting modern procurement practice:
Option A (priced contract with activity schedule); Option B (priced contract with bill of quantities); Option C (target contract with activity schedule); Option D (target contract with bill of quantities); Option E (cost reimbursable contract); and Option F (management contract)
The difference in contracts will be explained in another paper but with the core clauses remaining the same throughout the contracts this paper shows greater interest in Early Warning procedures (clause 16) and Compensation Events (clause 60).
An Early Warning is to be notified (in writing) to the Project Manager from the Contractor of a relevant matter which could increase the total cost or delay to the completion date or affect the performance of the finished works.
It is then a requirement of the contract for the Contractor and the Project Manager to attend an Early Warning meeting if either party requests it for which others can be invited, with the purpose of the attendees to discuss how the problem might be avoided or reduced and on what action is to be taken.
The aim of this approach is to avoid disputes with both parties co-operating at an early stage of an issue identified by either party working together to find a resolution in the most efficient manner.
This change of approach to the usual allows for Contractors to receive compensation (where applicable) for addressing issues as early as possible and allowing the Project Manager to assist in resolution of the issue allowing both to better prepare their cash-flow.
To ensure that it is in the interest of the contractor to work in this manner should an Early Warning not be produced by the Contractor for an issue they were aware of and subsequently an event arises, the Project Manager assesses the event as though they were able to identify a more efficient manner of resolution and the Contractor will only be paid for that economic method of completing the event.
Should an event occur that entitles the contractor to more time and/or money, then this is known as a Compensation Event which arises from a request of the Project Manager.
The Compensation Event notified by the Project Manager asks the Contractor to provide a quotation which the Contractor can vary either the price or the programme if applicable
Should the Project Manager disagree with the proposed versions then the Project Manager can ask for the Contractor to revise the price or the programme or both as long as the reasons for this request are explained.
To ensure a Contractor is entitled to a change in the prices or programme, they must notify the Project Manager within eight weeks of becoming aware of the event unless the Project Manager should have notified the event to the Contractor.
Therefore in the letter of the law, if a Contractor does not notify in the eight week period set aside in the contract any breach of contract, any time, or financial recovery could be lost.
The big arguing points within this clause are when does the Contractor become aware, when should a Project Manager notify the event and who should be made aware, and this will remain unclear until many more cases have been won or lost within the courts.
Therefore to remain eligible to recover the money or the time that a Contractor feels it is entitled to first and foremost in the mind should be; Who is the Project Manager, Have I sent that Early Warning / Compensation Event yet!
Address: 73 Teg Down Meads, Winchester, Hampshire. SO22 5NG J.G.M. Commercial Limited Registration Number: 5188065 www.JGMcommercial.com Disclaimer: This document is for general guidance and research purposes only, and does not purport to give professional advice.
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JGM Commercial intend to maintain regular bulletins regarding news and information within the construction industry to assist both staff and visitors alike.
This is a free service that we hope will keep you in touch with the current on goings within the industry, and we look forward to your comments and your contact details.
Should you wish us to include any articles please provide us with your full details so that we can reference it accordingly on this site. Please note, the JGM logo will be installed on the page should we add it to the news page.
To get regular updates please enter your Email address, name and company into the Newsletter section on the right of this page. Or subscribe to one of our feeds. ]]>JGM joins the FSB
http://www.jgmcommercial.com/news/index.php?entry=entry080124-162519
FSB is the UK's leading lobbying and benefits group for small businesses, and JGM is delighted to have become a member.
]]>Compulsory Purchase
http://www.jgmcommercial.com/news/index.php?entry=entry070825-150331
*Airport expansions *Housing developments *Electricity pylons and cables *Flood defence works *Sewer, water or gas pipe schemes *Rail or road building projects Different compulsory purchase or statutory powers are needed to implement the above schemes.
For example, water pipes are laid under statutory rights under the Water Industry Act 1991 and a road bypass will have its own compulsory purchase order through the Acquisition of Land Act 1981. In all cases, the owners and occupiers of the properties to be acquired or affected by the scheme will be served Notices, with differing expiry times. All the schemes provide compensation to owners and occupiers directly affected by the scheme.
What to do if you’re served with a Notice. If you get a request from an authority to survey your land, ask for details of the scheme – it may only be an option.
If you receive a compulsory purchase order to purchase your land or a statutory notice to lay pipes or cables, It’s up to you to tell the authority how their scheme will affect you. For example, how will it affect the enjoyment of your property? Can you still access the other end of the garden? How much did you spend on the new drive?
Ask for ‘accommodation works’. These can help limit the effects of schemes on your property. For example, an underpass to access severed land or adding extra trees to lessen traffic noise. Above all, act as soon as possible. Contact JGM Commercial Limited who can offer advice. What compensation is available and how do I claim it?
Compensation is paid to reflect the losses and disturbance caused by a compulsory purchase or statutory scheme on an owner or occupier’s property.Compensation is based on the owner or occupier being returned to a position no worse or better off, than if the scheme had not happened. The losses must be unavoidable and directly as a result of the scheme.Compensation may either be a range of payments or accommodation works (works to lessen the effect of the scheme or both).
It’s up to the claimant to prove any losses to claim for compensation. In the majority of cases, the acquiring authority may offer an advance payment of compensation depending on the rights or the land taken. People whose property suffers a loss in value due to the operation of a nearby scheme, may also be able to claim compensation.Who pays for the surveyor / advice or help you receive?In most cases, the acquiring or statutory authority – for example the Highways Agency or Water Company – will pay your surveyor’s reasonable fees based on a valid claim.
Their fee is reimbursed as part of any compensation paid out.How JGM Commercial can help you JGM Commercial Limited offers clear, impartial advice on the issues raised here.
Disclaimer:This document is for general guidance and research purposes only, and does not purport to give professional advice. ]]>Letters of Intent – not worth the paper it’s written on
http://www.jgmcommercial.com/news/index.php?entry=entry070628-143040
Nobody likes to wrangle over the detail of a contract, especially when there’s work to be done. The need to get works swiftly under way, coupled with the well-meaning intention to agree a full contract later, makes the letter of intent a tempting prospect and, when used properly, a useful tool.
However, once parties have agreed a letter of intent, the need to agree a full contract is often forgotten or put to one side. This is when letters of intent can have a number of unintended, and unwelcome,consequences. The potential pitfalls of letters of intent should, by now, be well known to employers and contractors.
The absence of a clear and comprehensive contract often leads to disputes over the scope of work and claims for further payment. Subcontractors may feel safer when engaged under a letter of intent as where extra payment was claimed,such a party could seek it either under the letter, under the full contract for the reasonable costs of the work carried out (if the contract had been issued and signed). However, subcontractors must beware, as the use of a letter of intent may jeopardise the right to adjudicate and thus make the pursuit of claims under the letter, whether meritorious or otherwise, more difficult.
A letter of intent will often be headed ‘subject to contract’ and state the intention of the parties to enter into a full contract. However if a dispute arises before the full contract is entered into it is likely that the letter of intent would fall foul of section 107 of the Construction Act, which states that contracts to which adjudication provisions apply must be wholly in writing. Therefore an adjudicator would not have jurisdiction, and any award decided would not hold up in court as the letter of intent would fall foul of section 107 of the act if all of its express terms were not recorded in writing.
Typically, letters of intent are issued as a temporary measure, pending the agreement of a full and binding contract so for contractual advice contact JGM Commercial Limited for assistance.
Disclaimer:This document is for general guidance and research purposes only, and does not purport to give professional advice. ]]>Part L - Conservation of Fuel and Power.
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Part L of the Building Regulations imposes the requirement on building work that: "Reasonable provision shall be made for the conservation of fuel and power in buildings by: a.limiting heat gains and losses: i.through thermal elements and other parts of the building fabric; and ii.from pipes, ducts and vessels used for space heating, space cooling and hot water services; b.providing and commissioning energy efficient fixed building services with effective controls; c.providing to the owner sufficient information about the building, the fixed building services and their maintenance requirements so that the building can be operated in such a manner as to use no more fuel and power than is reasonable in the circumstances.
"Why has Part L been introduced? Part L has been introduced in order to reduce greenhouse gas emissions as part of the government’s strategy to address global warming. Does it apply to me?If your firm installs lighting systems or electric heating systems or the associated electrical controls in offices or factories in England and Wales, Part L will apply to you.
What should Electrical Contractors do? Electrical contractors that want to self-certify that their work complies with the Building Regulations should consider becoming a 'Competent Person'. What is a 'Competent Person'? A Competent Person is a firm that has been independently assessed and certificated by an approved Competent Person Scheme as competent to self-certify that its work complies with the Building Regulations.What are the benefits of becoming a Competent Person? Competent Persons save on the time, trouble and costs associated with the submitting of building notices to, and having their work inspected by, Building Control. What are the requirements of the ECA's Electrical Energy Efficiency Scheme?
To become registered as a Competent Person under the ECA’s Electrical Energy Efficiency Scheme, a firm must be able to demonstrate both its technical competence and its ability to work in compliance with Part L.To demonstrate technical competence the firm must have a satisfactory assessment against the requirements of the Electrotechnical Assessment Scheme (EAS), or an equivalent. To demonstrate compliance with Part L, the firm must employ at least one individual who is qualified to work as that firm’s Energy Supervisor. What is an Energy Supervisor?A firm seeking Competent Person status is required to have at least one individual - an Energy Supervisor who will be responsible for: *Ensuring that the electrical requirements for energy conservation are complied with *Providing sufficient information to enable the building operator to minimise fuel and power consumption
Link to ECA website for full information on Part L www.partl.co.uk
Disclaimer:This document is for general guidance and research purposes only, and does not purport to give professional advice. ]]>NEW CIS LAW – Coming into force April 07
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Contractors and sub-contractors need to take steps to prepare for the new CIS. There are serious risks for contractors of losing gross payment status by failing to comply with the new and more stringent compliance tests. Sub-contractors need to register with HMRC to avoid suffering tax deduction at the new higher rate of30%. Existing contracts and terms and conditions may need to be amended to take into account the new CIS rules, for example contractors may wish to include express provisions requiring sub-contractors to be registered with HM Revenue and Customs (HMRC).
More significant, though, is HMRC's hidden re-categorisation agenda. HMRC have always believed that many of those treated as self-employed CIS sub-contractors are in fact employees, and that contractors should be operating PAYE on payments made to them rather than the CIS deduction. If sub-contractors are successfully re categorised as employees, HMRC can seek arrears of PAYE and NICs with interest and penalties; in one recent case a contractor company with 15 sub-contractors was asked to pay £150,000 in PAYE arrears.
The new CIS will significantly increase the chances of successful recategorisation by HMRC. Monthly CIS returns will alert HMRC to sub-contractors who have been paid by the same contractor for prolonged periods of time and the electronic database will help HMRC to mount enquiries. To avoid penalties for incorrect employment status declarations, and to resist HMRC re-categorisation initiatives, contractors need to be able to demonstrate that they have considered employment status and discussed it with their sub-contractors. HMRC apply a matrix of different tests, and there is now an entire HMRC manual devoted to Employment Status. HMRC’s approach may also be different from that of the Employment Tribunal, since tax law does not recognise the concept of workers and HMRC is not bound by decisions of the Employment Tribunal. Contractors should take steps now to review the employment status of sub-contractors and ensure that terms and conditions have been updated to reflect current procedures and practice.
Disclaimer:This document is for general guidance and research purposes only, and does not purport to give professional advice. Please check the date at the top of the article; the Workplace Law Network retains historic articles for general research. ]]>
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