Coherence with other documents
Management / building project control
Minutes / supervision notes
The contractor’ quality assurance handbook
Follow-up – and keeping the time plan
Payment / construction accounting
Operation and maintenance
During the construction phase it is important to keep track of whatever changes may occur in contract conditions.
As a starting point, contract work will be carried out as agreed in the contract. In case it should prove necessary to change the contract conditions, it is required to draw up an additional contract, stating agreed alterations – Cf. AB92 section14, subs.2 / Ab 18 § 25 subsection 4.
As a minimum it is required that the agreement is entered in the minutes from the site meeting. However, it is better to fill in an agreement form – can be downloaded from The Danish Construction Association (Dansk byggeri).
In connection with the agreement on extra work the client can demand supplementary security from the contractor. The contractor is entitle to know before giving his price for the extra work so he is able to include the cost for the security in the price re. AB 92 § 14 / AB 18 § 25. Be aware that the reduction of the security goes from the contract sum including extra work even though the client hasn’t ask for extra security when the work was agreed on /done.
In cases where the contract is extended by the inclusion of extra works the contractor may, however, demand an increase of the clients’ security – if the remuneration for all extra works – excepting those already paid for – exceeds 50 % of one month’s average payment as agreed in the initial contract – cf AB92 section14 / AB 18 § 10
The contractor takes care of registrations, applies for permits, asks for inspection and procures certificates – all in relation to the execution of the agreed work. The contractor also covers whatever costs this may accrue.
The contractor bears the risk for all work until it is handed over. He is also responsible for maintenance of work done until handing over. Hence, it is important that the contractor takes out an insurance covering his contract area against accidental damages such as, theft, wanton destruction and weather impact – areas not covered by the client’s insurance against fire and storm.
The client’s payment obligations appears from AB92, § 22 / AB18 § 36.
Payments are made on the basis of interim payments – any deviations from this method of payment shall appear in the tender documents.
According to AB 92 the contractor is entitled to get paid once a month for work performed, according to AB 18 twice a month.
Work must be carried out in accordance with the agreed time schedule and the contractor is only entitled to extensions of time limits in case of delay of the work as described AB 92 , §24 / AB18 § 39. Sanctions in the case of delays will be compensation in accordance with Danish legislation or – if agreed on penalties.
In case of disputes during construction it is important to secure and gather evidence. This may take place by requesting an inspection and survey by experts of the work in question. In this case one of the parties forwards a petition for inspection by
experts and survey to the Building and Construction Arbitration Board in Copenhagen. The rules applying to inspection and survey by experts are outlined AB 92, sections 45 and 46. /AB 18 § 66
Disputes in cases where AB 92 / AB 18 is a part of the agreement are heard by the Arbitration Board. Be aware of the “Dispute treating system” in AB 18 chapter J.
Decisions made by the Arbitration Board are irrevocable.
In case AB 92 is not applicable, legal action shall be taken through the court of law.
The script concept derives from film production. The script describes every single scene of action (process) down to the last detail. The script is prepared because film production is very costly and nothing must fail.
The same applies to construction work and this is the reason why it is an advantage to use the same tool in this context.
Construction/renovation of a building involves a number of construction processes. Knowledge about the content and the interrelationship of these processes are essential conditions in order to be able to carry out rational construction and at the same time achieve tight management and good quality assurance throughout the building process.
A script is worked out with the purpose of familiarizing with the construction processes and thereby achieve a systematic overview aimed at a successful completion of work in own production.
As an example one could select two processes in own production and make a breakdown into the activities involved in the selected processes. Subsequently, the individual activities are systematically scrutinized and script notes are made – possibly in a systematic list.
The connections to preceding and succeeding activities are noted down. Notes, indicating necessary check points as well as tools and accessories (material catalogues) to be used during construction, are entered. Such notes could refer to scaffolding, crane, form work, barricading, waste containers etc. A materials catalogue listing all necessary materials is also worked out as well as risk assessment of individual activities.
A short description of coherence between individual documents:
- Check points form the basis for quality assurance such as delivery and process control.
- The process diagram forms the basis for the detailed time schedule of own production.
- Risk assessments forms the basis for a plan of action.
- Systematic knowledge about the construction processes forms the basis for building site arrangement and financial control
The main contractor (The individual trade contractor, the turnkey contractor) needs to work out the drawings determined for the construction work.
- Building site arrangement plan, where changes will occur as the construction progresses through different stages
- Erection plans for elements and a matching delivery plan
- Casting plan indicating casting segments – design of casting joints
- Bending lists
- Sketches, elucidating and explaining work implementation – possibly in 3D.
- Interim constructions
Based on the outputs jointly defined and by the parties involved in the building project and described in the contract, it is the project manager’s task to manage the building process in accordance with:
- The contractual agreement
- The agreed time framework
- The agreed tender sum + funds allocated for contingencies, winter provisions etc.
- The agreed quality assurance corresponding to quality as documented in the tender documents
- The agreed building site conditions and current requirements concerning safety at the building site etc.
In order to ensure a satisfactory content when meetings are held, it is recommended to arrange meetings with an agenda based on experience and send to participants well in advance of the actual meeting.
- Starting up meeting/project examination meeting
- Site meeting
- Safety meeting
In order to secure the project implementation in accordance with the above mentioned steps, the following meetings should be held during the course of the building project.
- Project examination meeting (kick-off). After contracting/before upstart
- Starting-up meeting/mobilization meeting. Immediately before start
- Site meetings. Normally once a week
- Safety meetings. Normally once every second week
- Meeting for handing over of work. After notice of completion – before occupation
- 1 year inspection. 1 year after handing over.
- 5 years inspection. 5 years after handing over
In addition to the above mentioned meetings, the project manager and the trade supervision may call meetings, as and when needed, in order to clarify matters related to: details in solutions, financial aspects, time planning and follow-up on quality assurance and safety etc.
In order to secure that agreements made at meetings are legally binding for the parties involved it is required to take minutes and to approve such minutes. This procedure may require approval by signatures and shall be duly dated.
Objections raised concerning the minutes may be oral in the next meeting, or in writing, before the next meeting, but attention should be drawn to the fact that written objections may cause conflict.
An agreement may be verbal but in case it is not honoured, it may be difficult to prove for lack of documentation.
Minutes and a signed agreement facilitate follow-up and provides a higher degree of security.
The optimal starting point for quality assurance is that quality is well documented in the tender documents in such a way that the following is agreed when contracting:
- Project examination meetings (kick-off meeting)
- The contractor’s quality assurance handbook
- Adequate specifications of material quality and workmanship in the building component specifications
- Demands for necessary preparations in connection with the execution of work
- The contractor’s own control (tender control plan in the work specification)
- Demands for documentation of the contractor’s delivery control, process control and final control
- Demands concerning documentation for operation and maintenance, including operational manuals
- An account of contractor’s conditions with respect to trade supervision
- Handover + 1- and 5 years inspections.
A good draft agreement for quality assurance during tender and contracting facilitates the implementation of quality by project management.
The contractor works out a subject-oriented quality assurance handbook based on the company’s quality assurance handbook and quality demands in the tender documents. The handbook contains a description of procedures and systems to be used for quality assurance and project management.
Additional information The Danish Construction Association (Dansk
The client defines his quality demands in the tender documents in the form of tender control plans. During the starting up phase, and based on these plans, the contractor works out his own control plans for delivery control, process control and final control. These plans are filled in during the building project and are handed in at handover.
In order to ensure that the client gets the desired quality, the designer works out a supervision plan showing the extent of supervision of the contractor’s workmanship and also showing the extent of general supervision of the construction work.
The plan is worked out by the designer during the design phase. Supervision shall be conducted in areas where the risk of failure is eminent.
For more information
The Danish Construction Association (Dansk
In a successful building project the keywords are: Planning and management.
The following issues should be considered when planning and managing a building project (may vary in accordance with the size and type of project in question):
- The framework of the contracted tender time schedule must be enforced
- Basically, the time schedule shall be realistic – incorporating planned inclement weather days
- It may be an advantage to include all trades in the detailed implementation planning (this could be done through workshops in connection with the start-up meeting)
- Time-crucial deliveries shall be attuned with the detailed plan
- Running update/status on forthcoming work, supplies and issues that might disturb the planned work should be carried out and recorded in the minutes of the weekly site meetings
- Follow up may be carried out using 1 and 5 week plans respectively.
In principle, the payment for building and construction work may be carried out as follows – cf AB92 § 22 /Ab 18 § 36 :
Subs 1: Monthly (AB 92)/ twice a month (AB 18) interim payment /certificates.
Subs 2: Instalments plan
The principle of monthly interim payment certificates is as follows: By the end of each month (AB92) / twice a month (AB 18), the contractor and the client calculate the total value of work carried out at the site. This amount is deducted the value of work already carried out and paid for. The difference corresponds to the value of the work carried out during the month in question. Payment is carried out as agreed in the contract.
In case of overdue payment, the client is bound to pay interest as from the day the interim certificate was received until the day of actual payment. This mode of payment is the most commonly used – not only between client and contractor but also between contractor and his sub-contractor(s).
The principle of an installments plan is as follows: The value of characteristic parts of the building is calculated – for example ‘basement completed’, ‘roof on building’, ‘building heated’ or the like. An installments plan could also be a plan where monthly payments are calculated on the basis of the initial time schedule.
Financial follow-up is one of the most important tasks of the project manager. In most cases, the project manager is required to account for the financial position of the project once a month, and the company will form an estimate of his ability to document company finances, which ultimately may have influence on his own payment (payment by results). It is therefore important to build up a system with the purpose of recording actual production costs and compare these costs with the calculated costs.
In this way it is possible to check whether the budget corresponds to actual costs, which reflects the current financial position and allows for a calculation of the final financial result of the building project in question.
The project manager must always be in a position to tell whether the calculated contribution margin is realistic – and if not, explain why.
The financial follow-up on a building project is an ongoing process because, in addition to the above mentioned, there is a constant flow of extra works resulting in additional income and thereby an increase in the contract sum and production costs. Unexpected costs may occur and expenditure to cover these must be entered in the follow-up schedule without delay.
In turnkey contracts it is the duty of the turnkey contractor to work out operation and maintenance manuals.
In main and individual trade contracts, the contractors hand over the material to the consultants who in turn will work out the manuals based on the received material.