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“Bath Spa University has recently invested in new landmark residential and academic buildings. A cross-departmental approach to the planning, design and implementation of these projects – including input from staff and student users – was essential. was important to address the uncertainties of future usage requirements (pedagogical and pastoral), while at the same time ensuring certainty as to cost and the delivery timeframe.”
TRISTAN FOOT, UNIVERSITY SOLICITOR, BATH SPA UNIVERSITY
Time The risks are the operational, reputational, and fi nancial consequences that fl ow if the works are completed late. In the context of residential accommodation it includes potential costs, claims and adverse PR if commitments to students cannot be met. The mitigation tools include:
a pre-agreed programme identifying key milestones. These can be linked to formal progress meetings where the university has an input in the outcome, possibly resulting in a requirement for the developer to deploy additional resource to 'catch-up' with the agreed programme independent certifi cation of any extension to the timescales (eg if delay arises beyond the developer's control) with the certifi er having power to decide whether any extended period should run concurrently or consecutively a right to charge liquidated damages ('LADs') for each week's delay. (LADs must be a genuine pre-estimate of loss, not a penalty) as a last resort, failure to meet agreed milestones or insolvency should trigger termination or a right for the university to step-in after prior warning where physical completion is time sensitive – as with student accommodation – it may be preferable to include a mechanism for the parties to agree a
works, with a mechanism for concerns to be addressed ensuring the university has meaningful infl uence over certifi cation of practical completion of the works, including control over the extent of any permissible list of snagging items ensuring the developer has ongoing obligations to rectify defects during an initial (minimum) 12-month rectifi cation period, backed by a retention which the university can use if the developer defaults.
ABOUT THE AUTHORS
Jason Prosser (left) is a construction Wasbrough Vizards. Tim Smithers (right) is a consultant solicitor in the real estate team. Jason can be contacted on 0117 314 5237 or at
jprosser@vwv.co.uk. Tim can be contacted on 0117 314 5311 or at
tsmithers@vwv.co.uk.
deferral (eg by a year). Whilst this may seem a drastic provision, it may be a useful risk- management tool for both parties, limiting a potentially large LADs bill that would otherwise be refl ected in the contract price. The deferral decision needs to be taken suffi ciently early to avoid the university incurring marketing and management costs and making commitments to students or academic colleagues that may not be met.
Cost The risk is that the total cost exceeds the university's budget. The mitigation tools include:
using a detailed specifi cation to enable the contractor to commit to a fi xed price with minimal provisional sums enabling the university to require variations to the specifi cation without prohibitive additional cost ensuring tight control over the build programme to minimise additional cost that the university might incur if the project is delivered late – eg the cost of temporary alternative accommodation, or the loss of rental income from a sublet ing maximising the tax effi ciency of any payments structuring any funding deal to avoid excessive charges if there is a delay in drawing down funds ensuring that the university is able to comply with any funding draw down pre- conditions at the point contract payments are due to the developer.
From planning to implementation As the project evolves from the business case and risk analysis to negotiation with the prospective developer, it is important to engage the wider project team – estates, faculty, project management, legal and fi nance – in the preparation of detailed heads of terms. Time invested at this stage in reaching an agreed position with the developer on the key commercial, operational and legal issues, will lead to a more effi cient and cost-eff ective negotiation on the full legal documentation. UB
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