Measured Term Contracts
MEASURED TERM CONTRACTS
Construction Partnering With Economy And Transparency
1. A contract in which a Contractor is appointed for a pre-determined period of time to carry out any construction work which the Employer may require during that period (normally 3 years). The period may be extended.
2. The Contractor’s appointment is decided on quality and the price by competitive tender. The tenderers offer discount against a predetermined published Schedule of Rates compiled, for example, by the Property Services Agency (PSA).
3. Each contractor tenders by quoting percentage additions or deductions against the published Schedule of Rates for work (orders) in specified price bands (e.g. zero to £1,000, £1000-£10,000, £10,000- £50,000 etc.).
The successful contractor receives the value of the measured work against each individual order, adjusted by his tender percentages.
4. This means the Client can accurately predict the cost of each order without recourse to individual tendering.
5. The rates cover refurbishment and repairs as well as alterations and new building work and can be used for quite large projects, as well as very small maintenance jobs.
6. The rates applied to the measured work include Preliminaries costs.
7. By correctly analysing the tenders in relation to the likely workload, it is possible to determine which tender is the most competitive.
8. The ”˜Standard Form of Measured Term Contract’ issued by the Joint Contracts Tribunal covers the items normally found in a Building Contract such as Contractual Obligations, Terms of Payment, Contract Periods, Health and Safety, Insurances, Control of Work and the like.
9. When the Employer requires to have work carried out under the contract, an order is issued by the Employer to the Contractor. This will contain a description of the work and a commencement and completion date. The Contract also allows for orders to be given a priority rating.
An example of how this might operate is as follows:-
Priority rating 1 – work to commence within 1 day
Priority rating 2 – work to commence within 7 days
Priority rating 3 – etc.
10. Before an order is issued, the Employer may request the Quantity Surveyor to prepare an estimate of the cost of the work, and this is strongly recommended.
11. The Quantity Surveyor and Contractor measure and agree the value of work as it progresses. Accounts must be submitted within a stated period of time.
12. The PSA Schedule of Rates is updated by the BCIS on a monthly and/or yearly basis, according to fluctuations in labour, material and plant costs. The rates for all work carried out under any order are fixed by the BCIS updating index applying at the date of that order.
13. Because the rates are predetermined by competitive tender, building works on each order can commence without the delay of a tender period, or without completion of full detailed design and the value of each order is auditable.
14. Also the Client need not show numerous prospective tender’s around each job and explain the peculiarities of his property and processes repeatedly to new contractors, as the MTC contractor is familiar with the Clients site(s).
If you would like to know more talk to Hannah Ellison or John Okey on 01925 654158