Completion: Last minute winner or own goal?
15/07/24
Newsletter #15:
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Completion is the goal for all Parties in a contract. It signifies a job well done, the required Scope has been delivered, and everyone can celebrate a job well done. But what is actually involved, and what are challenges? Let’s break it down:
What is Completion?
How do you know when Completion is achieved?
What happens after Completion?
Don’t have time to read all the way, here is the Summary:
Summary:
Completion is defined under 11.2(2) and should be thoroughly read and understood
Completion requirements should be detailed in the Scope and shown clearly for tracking of progress
Several triggers occur at Completion, e.g. retention release and Defect liability
Completion is a hard line which shifts liability back to the Client
What’s your experience with Completion?
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What is Completion?
Completion is the term used by NEC to define when the requirements of the contract have been met and both parties have gained what they set out to do, i.e. deliver a project.
NEC defines Completion as:
Clause 11.2(2) - Completion is when the Contractor has
done all the work which the Scope states is to be done by the Completion Date and
corrected notified Defects which would have prevented the Client from using the works or Others from doing their work.
This all seems fairly straight forward, but note the Italics and Capitals, there’s more definition required to truly understand when Completion is achieved. Let’s discuss definitions:
Remember that that italics identified in the Contract Data!
11.2(16) - Scope is information which
specifies and describes the works or
states any constraints on how the Contractor Provides the Works
and is either
in the documents which the Contract Data states it is in or
in an instruction given in accordance with the contract.
11.2(3) - The Completion Date is the completion date unless changed in accordance with the contract.
11.2(6) - A Defect is
a part of the works which is not in accordance with the Scope or
a part of the works designed by the Contractor which is not in accordance with the applicable law or the Contractor’s design which the Project Manager has accepted.
11.2(12) Others are people or organisations who are not the Client, the Project Manager, the Supervisor, the Adjudicator or a member of the Dispute Avoidance Board, the Contractor or any employee, Subcontractor or supplier of the Contractor.
How do you know when Completion is achieved?
To know when Completion has been achieved simply means to ensure that Clause 11.2(2) has been fulfilled in its entirety. I.e. the Contractor has done all the work required and there’s no Defects that would hinder the Client.
But this isn’t always clear, it relies on the Scope being easy to ready, structured in such a way that enables the Project Manager to ‘tick off’ Scope as its delivered, and thus easily check whether the Scope has been completed in its entirety.
The issues with Completion arise when the contract is not clear and with Completion looming closer, the Contractor and Project Manager need to figure out what is actually required.
The Scope should include a section in the contract regarding Completion and clearly convey a list of requirements. This won’t supersede other requirements but will supplement and provide a list for guidance.
Elements which should be included in a Completion list include:
Provision of records to be provided (e.g. permits, licences, logs)
Submission of as-built information for acceptance
Health and Safety files
Operation and Maintenance manuals
Digital records, what and where
Requirements for the Project Manager to review and accept submissions
Ultimately, Completion is where all Parties, as well as the Supervisor and Project Manager should agree what has been done and what is left. Thus agreeing a reducing list of requirements on the run up to Completion.
What happens after Completion?
The challenge with Completion is that finance and liability triggers are started. Such as:
50% of retention is released (if you have retention under X16)
Defects must be corrected before the end of the defect correction period
The period between Completion and the defects date begins (thus limiting the duration where further Defects can be notified
Access needs to be arranged for correcting Defects (no longer the Contractors site)
Once the Defect Certificate has been issued (after Completion), a final assessment is made and final payment is made.
These triggers mean that liability shifts closer to the Client. The Contractor has done what they were contracted to do, and any further updates or changes going forward will be the Clients risk, remember instruction can still be given after Completion, but before the Defects Certificate.
The learning here is that Completion is a hard line in the sand where the Project Manager will certify the Contractor is finished. If this is done in error, without proper due diligence, then the Client could be left holding several issues!
Our top tips:
Draft the scope thoroughly and clearly
Full team to meet regularly on the run up to the last 20% of the project
A checklist of requirements should be detailed to reflect the needs of the contract, enabling them to be ‘ticked off’ as items are completed.
Prompt and detailed discussions and records should be kept by everyone involved.
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Reading Recommendations
To understand more about how to prepare and manage an NEC contract, the following guidance documents are available.
NEC4 Preparing an Engineering and Construction Contract