Sargent's Solutions

Alan Sargent advises on the action you should take to protect your interests when a project starts growing larger than the original contract

Alan Sargent - image: HW
Alan Sargent - image: HW

I am a landscape contractor working on a major project that seems to expand out of my control. I do not want to fall out with the designer or client, but I am unable to work efficiently.

Your question was almost as long as I have room to answer, so I have condensed it into a statement. It is not unusual to find that a construction project becomes larger than planned. Extra works added to a contract are frequently a source of additional profit, especially when you already have the labour and equipment on site, so you can maintain your rates, which will have included the costs of starting work and clearing the site on completion.

But there are occasions when the client will have, or appears to have, waited until they see how good your work is before ordering additional works, perhaps to a different area of a garden, when you are carrying out the original contract. In other words, the original six weeks' work planned into your programme looks likely to be stretched to twelve or more.

They may then instruct the designer, who will produce new survey drawings, plans for approval and pricing — almost as they would prior to starting the original scheme. This all takes time. When problems begin to bite into the landscape contractor's profits, agreeing the contractual side of the extended works can be delayed. This does not allow for the fact that the landscaper may have other projects elsewhere with agreed start dates.

Equipment restrictions

The contractor may have expensive heavy equipment on hire and it may be difficult to extend the hire or justify to the designer/client the need for additional funds if you are still using the machine, albeit inefficiently, because you cannot complete grading works until the new work is started/incorporated.

You are therefore obliged to work in such a way that you risk losing control of your original works programme, your staff are unable to complete certain works because they will/may impact on the proposed new works and you cannot close off the site because you have to leave access through the original work to get to the new — all very frustrating.

Your weekly forecasts become meaningless due to these factors and you find yourself at the well-meaning mercy of a thus far satisfied client and happy designer. All the while your costs are escalating, with staff and equipment under employed.

Ultimately, however, you will have to take control of the situation. Make sure that your original contract is comprehensive inasmuch as the works are clearly scheduled and a weekly progress programme agreed.

Clearly state the reasons for such a programme — these may include your start dates for other schemes, the seasonal and weather factors that come into play, the availability of specialist staff and as many genuine facts as you deem necessary. These factors may also help to make up the client's mind when tendering — if they want you, they have to fit into your programme.

Extended projects

If you have included the above words in some form, they will come in very useful should you have an extended project. If it becomes necessary, you should gently point out the original agreement and, while you obviously welcome the additional works, they will have to be under a different contract with new terms and programme agreed.

In order to facilitate the designer and client, it should be a simple matter to arrange a clear halt to the original project, perhaps allowing access through the site for machinery and equipment. This hiatus will come at a cost, but the cost will be the client's, not yours. You should have, in your original quotation, a figure under the heading of "preliminaries", which are essentially the costs of setting up and leaving the site — as well as other items that are difficult to quantify and are usually shown as a sum that may be drawn against should it become necessary.

You are thus entitled to charge the client for leaving the site, returning to the site and any other costs involved in additional works in marrying the two schemes, which is how they should be treated, together.

Obviously, the client may wish to come to some agreement or to make an offer to mitigate your additional costs — they may not have been aware of the ramifications of ordering extra work, even thinking they were doing you a favour — and you can continue operating at less than full speed without detriment to your bank balance.

Warranty stipulations

Ensure that any warranty agreed under the original contract is not extended to include the new one. Once you have reached practical substantial completion on project number one, that should be the due time for payment for any retention or remedial work.

All additional works should be treated as a separate contract. There may be some crossover of warranties on certain products (such as electrical goods, irrigation systems, etc) that cannot be avoided, but in general terms the additional works are a fresh job — new contract, new mobilisation payment, new completion dates and warranties agreed in writing.

There is no reason why a smooth transition between the two projects cannot be made. Be open and honest with the client. They will respect your professionalism.

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