Subcontractors

Sub affirmers1.0 IntroductionWikipedia (2009) be hireor as an individual or in many cases a business that signs a tighten to come pick or all of the obligations of an others contract. Other authors, Gerald N. Hill Kathleen T. Hill (2005) defined sub affirmer as a person or business which has a contract with a affirmer to provide roughly portion of the reverse or go on a project which the asserter has agree to per score.Generally, a jobor performs his work under a contract with a main contractor who is hired by the employer. In building construction, a main contractor usually hires a hire give awayor to perform a particular proposition task such as roofing, plumbing, electrical, cement work and plastering, as part of the overall project. Hence, if the main contractor does not throw for the subcontractor, therefore the subcontractor has the right to enforce a mechanics lien on the real property upon which the work was done to collect.There atomic number 18 ternary t ypes of subcontractor that is nominal subcontractor (Specialist subcontractor) domestic subcontractorNamed subcontractorNominated subcontractor is essentially selected or appointed by the employer for virtually specific full treatment. If the employer wants to nominate a subcontractor for an element of work, thereforece he will instruct the main contractor to use the nominate subcontractor through the architect. The element of work usually is the engineering package such as piling, structural frame or some ME services works. In this kind of subcontract, there is a rate contractual relationship between the employer and the subcontractor.On the other hand, domestic subcontractor is selected and appointed by the main contractor who is hired by the employer. The domestic subcontractor doesnt deal the direct contractual relationship with the employer but he contract with the main contractor. Domestic subcontractors usually work the part of work from the main contract and supply or fix the materials and goods. The employer will not entangle in the election of this kind of subcontractor and the main contractor take the responsibility of the subcontractor.The Named subcontractor is contractually same as the domestic subcontractor. However, the different between them is the employer states that which contractor is acceptable with forbidden take responsibility for their final selection and appointment.Chapter 2 Forms of hire2.0 Forms of incur2.1 Review the method of appointing specialist subcontractor JCT 98The JCT 1998 is the pre JCT Form which was used when selecting and choosing the subcontractor. There atomic number 18 two types of subcontractor in this form of Building Contract which atomic number 18 Nominated subcontractor and Domestic subcontractor. In the JCT Form, however the Employer, the couturier has the highest authority in making decision. Nominated subcontractor is essentially appointed by the Architect or the Employer when they need the sub contractor in some specific works. Daniel Atkinson (1999) defined nominating speech as sub-letting segments of the work allowing the Employer full intricacy in choosing the company early and using the subcontractors expertise for project or coordination.There are some reasons that the Employer nominated a subcontractor (Daniel Atkinson, 1999)The Employer can select any company that he likes to be his subcontractor without ground on the price.The subcontractors design expertise and his knowledge can be utilized due to he can be involved early.Since the specialist subcontractor involves, the contractor will not waste his time on some particular work which the contractile organ does not expert in it.The Employer can understand his responsibilities distinctly since the clear contractual liability is established.Delay in time can be prevented by the direct associates and involvements are established.According to the Jennie Price (1994), the procedure of nominating a subcontracto r under the Standard Form of JCT 1998, clause 35.4The Architect sends the both of invitation to pop the question in part 1 of the standard form of tender, NSC/T, and the relevant section of the employer/ nominated subcontractor arranging, NSC/W, together with the drawings/specification/bill of quantities which describe the work, to those companies the employer wishes to invite to tender.Then the tenderers complete the standard form of tender (part 2 of NSC/T) and the relevant sections of the warranty, NSC/W, and return both documents to the Architect.The Architect chooses the subcontractor, and arranges for the Employer to sign the selected subcontractors tender to plump for his approval of it, and to execute the warranty, NSC/W.The Architect nominates the subcontractor to the main contractor using the standard nomination instruction, NSC/N. He besides sends the main contractor a copy of the invitation to tender and the successful subcontractors tender, the drawings/specificat ion/bills of quantities on which the tender was based, and the executed warranty.After posed those documents, the main contractor has the right of reasonable objection to the selected tenderer within 7 days. If he does not object, he must reach agreement with the selected tenderer on the break outicular Conditions set out in Part 3 of NSC/T. These include the subcontract period, insurance details and the identity of the adjudicator and trustee stakeholder.When agreement on the Particular Conditions has been reached, the main contractor and subcontractor sign Part 3 of NSC/T, and execute the subcontract articles of agreement, NSC/A, which compound by reference the subcontract terminal figures NSC/C.The main contractor sends a copy of the signed NSC/T Part 3 and the executed NSC/A to the Architect for his records.2.2 Review the method of appointing specialist subcontractor JCT 05JCT 2005 Form of Building Contract (with quantities) has been updated, amended, merged and retired most of its important contracts. This form was set out in clear, understandable, and well-ordered for the user and it had simplified on wording such as change the word Determination to Termination. There is a little deviation between JCT 1998 and JCT 2005 regarding to the subcontracting. In this form of Building Contract, the nomination of subcontractor has been omitted.According to the Chappell D. (2007), there are a traffic circle of problems overturn between the main and subcontractor since a project is not ready for the subcontractor to deject his work on the anticipated date. Due to the delay of the commence work, the subcontractor may argue and claims for more than money. On the other hand, Ndekugri I. and Rycroft M. (2009) stated that JCT 1998 had extensive provisions on nominated subcontracting but due to the bad stupefy from the inherent pitfall of nomination of subcontracting and its complexity, the provision has been omitted in JCT 2005.There are three principles of app ointing a subcontractor under the JCT 2005 Form of Building ContractConsent to sub-contracting (article 3.7)According to this clause, main contractor cannot appoint or subcontract whole or any part of works to anybody without the Architects or the Contract decision makers consent. However, the Architect also cannot withhold or delay his consent unreasonably. If the Contractor insists to sub-letting his works to anyone without consent, then the employer entitles to terminate the Contractors contract under clause 8.4.1.4. Besides that, under the clause 3.7.2, the contractor cannot subcontract the design portion to anyone without the Employers consent.Lists in Contract Bills (Clause 3.8) at a lower place this clause, annexations of lists of subcontractor to work packages which are defined in the Contract Bills are required. Clause 3.8.2 has stated that the list of subcontractor must not less than three persons. Then the Architect has to choose among the three persons to be the subcont ractor. It is similar as pervious clause that the Architect cannot withhold or delay his consent unreasonably. If the Contractor fork outted the list which less than three persons, then eitherThe Employer and the Contractor shall by agreement add the names of other persons to make sure the list comprises not less than three persons orThe Contractor carries out the works by himself.Conditions of sub-contracting (Clause 3.9)The subcontract shall state the condition that upon the termination of the Contractor with any reason, then the employment of the subcontractor will be automatically terminated withal under the Clause 3.9.1. Besides that, the subcontract shall provide that subcontractor cannot remove the site materials which have been delivered to the works without the Contractors written consent except for use on the works. If the materials or goods have been pay by the Contractor, then they will live the Employers property and the subcontractor cannot deny it. On the other h and, if the Contractor has paid the subcontractor for any site materials before their value is included in the Interim Certificate, then the materials will become the Contractors property. Under the Clause 3.9.4, if the Contractor fails to make the payment to the subcontractor, then the Contractor shall pay simple interest to the subcontractor until the payment is made. Then according to the Clause 3.9.5, the Contractor could get the warranty from the subcontractor for his murder of works within 14 days of receipt of a written request by the Contractor.If the subcontract comply the three principles above, then the Architect could select and choose among the three persons in the list to be the domestic subcontractor.2.3 Review the method of appointing specialist subcontractor NEC 3 error correction code 05The NEC 3 error correction code 2005 is essentially used by Government for public works such as road, bridge etcetera In JCT Form, the Architect has the highest authority while th e abide motorbus has the highest authority in this NEC 3. He plays an important role in this Form of Building Contract especially in subcontracting. The Project coach-and-four is the person who approves the appointment of the subcontractor by the Contractor. In other words, the Project Manager dominates in the selection of subcontractor.Under the Clause 26.1, the Contractor still takes the responsibility to the works even though he had subcontracted the works to the Domestic subcontractor. Therefore, the Contractor must select the subcontractor carefully in case of the heedlessness of the subcontractor. However under the Clause 26.2, the subcontractor who has been proposed by the Contractor must be accepted by the Project Manager. If the Project Manager does not accept the subcontractor, then the Contractor cannot appoint such subcontractor.Under the Clause 26.3, the Contractor has to submit the proposed conditions of contract for every subcontract to the Project Manager for his acceptance and approval unless an NEC Contract is proposed. Besides that, if the Project Manager agreed that no submission is required then the Contractor is not need to submit it. This clause also stated that the reasons that the Project Manager does not accept the subcontractor who is proposed by the Contractor areThe subcontractor will not allow the Contractor to provide the works.The subcontractor does not include a statement that the parties to the subcontract shall act in a spirit of mutual trust and cooperation.Chapter 3 Reasons of why Nomination has been stop3.0 Reasons of why Nomination has been stoppedIn the opinion of Jennie Price (1999), the disadvantages toward the main contractor are some of the reasons that the nomination has been stopped. The Main Contractor will lose his right to choose his favorite subcontractor to stick out out the part of works. He would hard to communicate with the subcontractor who is nominated by the Employer thus cannot cooperate well. Sinc e the Main Contractor is forced to employ the subcontractor so he is unable to impose his own terms and conditions which are more commercially advantageous to him. Other than that, the Nominated Contractor is normally difficult to be managed and controlled since their direct link with the professional team and the Employer. They will not easily listen to the Main Contractor on the design works due to the works are their expertise.Since some of employer will repeat the business with the nominated subcontractor, then the said nominated subcontractor will monopoly in this industry. Other subcontractors will not have chance to receive the job and make them suffer in their incomes. On the other hand, quality of the works might be dropped due to some nominated subcontractors handle few projects in the same period. They cannot concentrate on a single project and make the quality of every works will be dropped.3.1 Advantages and Disadvantages toward the EmployerJennie Price (1999) agreed th at Nomination provides some advantages and disadvantages toward the Employer which are shown as belowAdvantages to the EmployerThe Employer is able to select the person whom he wishes to carry out the subcontract works.Through the warranty NSC/W, the Employer has the direct contractual link with the subcontractor. It can covers matters such as design or materials selection by the subcontractor.Disadvantages to the EmployerThe Employer has to take the risks and bear the responsibilities on the Nominated subcontractor due to his omission of works. If any defaults have been found, then the Employer should bear the extra costs.There are no rights against the main contractor in the event of defective design by the Nominated subcontractor.The Main Contractor entitles to claim accompaniment of Time if the progress of the main contract works is delayed by the Nominated subcontractor. Besides that, he could also claim for the Loss and Expenses due to the delay of works which is caused by th e subcontractor.Since the Main Contractor does not take any responsibility on the Nominated subcontractor, there may be lack of watchfulness of the progress of the works on site of the subcontractor.3.2 Opinion for the newly appointment procedure of subcontractorIn my opinion, the new specialist subcontractor/supplier appointment procedures are more complex to render the duties of the Architect / Project Manager / Quantity Surveyor. This is because the design teams have not direct contact with the subcontractor. All the instructions which are apt(p) by the design teams are passed through the Main Contractor. That might be appeared some mistake in the communication. By the way, the design team also cannot directly manage the subcontractor since the subcontractor only contract with the Main contractor.Chapter 4 Conclusion4.0 ConclusionAfter the research, we will know that the procedure of nomination in JCT Form 98 and the reasons for nomination under this Form. Then we know that no more nomination under JCT Form 05. We also get the three methods that appoint a specialist subcontractor in JCT Form 05. NEC 3 ECC 2005 is only for the government works and the Project Manager has the highest authority in this Form.As a conclusion, nomination provides some disadvantages to the Main contractor such as difficult to cooperate between them and the main contractor cannot impose his own terms and conditions to the subcontract. Besides that, the main contractor is usually hard to manage the nominated subcontractor because he has the direct link with the professional design team. Other than that, nomination will make the monopolies arise in the construction industry due to the repeat business between the nominated subcontractor and the Employer. Quality of the works is low since the subcontractor cannot concentrate on single project. The Employer needs to bear the risks and take the responsibilities on the nominated subcontractor. Hence, nomination has been stopped.Finally , in my opinion, there are a lot of benefits that nomination has been stopped since there were a lot of disadvantages.Chapter 5 ReferencesAtkinson D. (2009), Sub-Contracting. Online. Last accessed on twenty-fourth July 2009 available at http//www.atkinsonlaw.com/cases/CasesArticles/Articles/SubContracting.htmCHAPPELL, David (2007). Understanding JCT Standard Building Contracts viii Edition, Abingdon, Taylor Francis.Gerald N. Hill Kathleen T. Hill (2005), Subcontractor Online. Last accessed on 24th July 2009 available at http//legal-dictionary.thefreedictionary.com/SubcontractorNDEKUGRI I. and RYCROFT M. (2009). The JCT 05 Standard Building Contract Law and Administration Second Edition, Oxford, Butterworth-Heinemann.PRICE, Jennie (1999). Sub-contracting under the JCT Standard Forms of Building Contract, London, Macmillan Press LTDWikipedia (2009), Types of Subcontractor Online. Last accessed on 24th July 2009 available at http//en.wikipedia.org/wiki/SubcontractorTypes_of_subcontr actorBibliographyBarnes P. and Davies M (2008). Sub-contracting under The JCT 2005 Forms First Edition, Oxford, Blackwell.GERRARD, Robert (2005). NEC2 and NEC3 Compared. Great Britain, Bell Bain.ME Contractor Magazine (2005), what relegate of subbie are you. Online. Available at http//www.eca.co.uk/IndustryGuidance/CCandL/Download/WhatSortOfSubbieRU.pdf