NBS Contract Administrator

NBS Contract Administrator enables you to administer a construction contract by completing forms and certificates and tracking costs.

ReadMore on NBS Contract Administrator

Guide to IC05: Contract administrator's instructions

In this exclusive extract from Guide to IC05 we introduce contract administrator's instructions.

Only the contract administrator has the power to issue instructions. Sometimes the contract administrator may issue instructions (e.g. instructions requiring a variation under clause 3.11) but at other times the contract administrator shall issue instructions (e.g. instructions regarding discrepancies between Contract Documents under clause 2.13). The latter is an obligation. If the employer gives an instruction other than through the contract administrator this would not be effective under the contract. The contractor would be under no obligation to comply with any such instruction. If the contractor, however, does carry out the instruction, a court might decide either that there had been an agreed amendment to the contract, or that the instructed work is not part of the contract but a separate agreement between the contractor and the employer. The consequences of such an agreement would be difficult to sort out in practice and the employer would be very unwise to make such agreements or issue any instructions other than through the contract administrator.

Where the contract administrator acts outside his or her authority, the contractor would be under no obligation to comply with the instruction given. On the other hand, provided that the contract administrator is acting within the terms of the contract, the contractor must comply, even if the contract administrator's action is contrary to the express requirements or instructions of the employer.

Clause 3.8 states that all instructions must be in writing. The provisions make no reference to oral instructions, which would therefore be of no effect. The contractor would not be obliged to comply with any oral instruction and would be wise to request all instructions to be confirmed immediately in writing before taking action. If the contractor carries out a variation on the basis of an oral instruction only, then the contract administrator could later sanction the instruction in writing (cl 3.11) but the contractor would have taken a risk. The contract contains no provisions to cover the situation where the contractor confirms an oral instruction in writing; however, it might be wise to respond promptly reminding the contractor of the correct procedures under the contract.

All instructions must be given to the contractor, or the contractor's agent on site, even if the instructions relate to named sub-contractor's work. Instructions sent by fax or email would also be valid. In all cases, though, it should be remembered that it may be necessary to prove that an instruction has been received, and therefore sensible to send a hard copy by recorded delivery, or to record their receipt at a subsequent progress meeting. There is no special format required for instructions, but it is good practice to have a system of numbered instructions in a standard format, and it is often convenient to use the forms published by RlBA Publishing. An instruction in a letter would nevertheless be effective, even if the normal practice on that project was to use the printed forms, as long as the letter is quite clear. A drawing sent with a letter requiring it to be executed would constitute an instruction, but a drawing with no covering instruction may be ineffective.

Instructions in site meeting minutes may constitute a written instruction if issued by the contract administrator, but not if issued by the contractor, and only if the minutes are recorded as agreed at a subsequent meeting. It is possible that the instruction would not take effect until after the minutes were agreed, and it would depend on the circumstances whether the minutes were sufficiently clear to fall within the terms of the contract. It is therefore not good practice to rely on this method. Site instruction books should also be avoided. Signing an instruction in a book would constitute a written instruction under the terms of the contract, but there is no obligation to sign such books, and it may be prudent not to make quick decisions on site but to wait until all implications can be checked. With the possibility of faxed instructions the delay should be very short.

The contractor must comply with every instruction (see Figure 1 below) provided that it is valid, i.e. provided that it is in respect of a matter regarding which the contract administrator is empowered to issue instructions (cl 3.8). The contractor must 'forthwith' comply, which for practical purposes means as soon as is reasonably possible. There are two exceptions to this obligation; the contractor need not comply with a clause 5.1.2 instruction (access and use of the site, etc) to the extent that it makes a reasonable objection (cl 3.8, or 3.8.1 in ICD05), and the contractor need not comply where it believes that the instruction 'injuriously affects the efficacy' of the contractor's design (cl 3.8.2, ICD only).

Figure 1: Key matters about which the contract administrator is empowered to issue instructions

Clause/Schedule	Key matter
2.9	setting out
2.13	errors or inconsistencies
2.15.2	statutory requirement
2.30	making good defects
3.11	variations
3.12	postponement
3.13	expenditure of provisional sums
3.14	opening up and tests
3.16.1	removal of defective work
3.16.2	work not carried out in a proper and workmanlike manner
Schedule 2	named person as sub-contractors

If the contractor feels that a contract administrator's instruction might not be empowered by the contract, or requires clarification, then the contractor may ask the contract administrator to specify in writing the provisions of the contract under which the instruction is given, and the contract administrator must do this 'forthwith' (cl 3.10). (To avoid this happening, it is good practice to always name the clause under which the instruction is empowered.) The contractor must then either comply or issue a notice referring the disputed instruction to the decision of an adjudicator. If, however, the contractor chooses to accept the contract administrator's reply and complies with the instruction, then the employer is bound by the instruction. This would appear to be the case even if at a later stage it is established that the contract administrator had no authority under the contract.

Even if the contractor decides to query the instruction under clause 3.10, this does not relieve the contractor from the obligation to comply. Should the instruction be found to be valid the contractor would be liable for any delay caused by failing to comply as required by the contract. If the contractor does comply, but the instruction turns out to have been invalid, the contractor may be entitled to any losses incurred through compliance. The contractor would have to make a commercial decision regarding whether to comply or await the outcome, but the contract administrator would be wise to deal promptly with any such query.

If the contractor does not comply with a written instruction the employer may employ and pay others to carry out the work to the extent necessary to give effect to the instruction (cl 3.9). The contract administrator must have given written notice to the contractor requiring compliance with the instruction, and seven days must have elapsed after the contractor's receipt of the notice before the employer may bring in others. This suggests that some recorded form of delivery is desirable. Although there is no obligation to issue such notices, it would prudent to take swift action in order to protect the employer's interests. The employer is entitled to recover any additional costs from the contractor, i.e. the difference between what would have been paid to the contractor for the instructed work, and the costs actually incurred by the employer. These costs could include not only the carrying out of the instructed work but any special site provisions that would need to be made, including health and safety provisions, and any additional professional fees charged. Although it would be wise to obtain alternative estimates for all these costs wherever possible, if the work is needed urgently there would be no need to do so.

Extract from Guide to IC05 by Sarah Lupton, RIBA Publishing, June 2008

To order a copy of this book, please visit RIBA Bookshops.

Related information

NBS Contract Administrator – With so many forms and certificates to complete, and changing costs to track, administering a construction contract can be complicated and time consuming. We offer a solution: NBS Contract Administrator.
Buy JCT Contracts from RIBA Bookshops