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RICS has released new guidance for quantity surveyors and other The construction standards 'black book' is a set of guidance notes which. its quantity surveying and construction standards (The Black Book) and New Rules of For the same reasons that the RICS have a Black Book, the Society of Chartered. Surveyors Ireland .. Drawn information e.g. PDF. Part 10 Rics Retention Dwl Black Book - Download as PDF File .pdf), Text File . txt) or read online. RICS guideline notes.


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The 'Black Book' is a suite of guidance notes that define good technical standards for quantity surveying and construction professionals. These standards are essential development tools for younger professionals working through their APC and useful guides to best practice for more. Tendering strategies. RICS guidance note, UK. 1st edition. Acknowledgments. RICS would like to thank the following for their contribution to this guidance note. This is part of the RICS QS and construction standards (the 'Black Book'). Please be aware that this guidance note contains some material which is in the.

The employer deducts retention following appropriate notice to the management contractor. Retention is then applied in each assessment for payment to the sum price for work done to date and not to any other sums , in excess of the retention free amount Options C to F use gross payments to sub- contractors so that retention is not duplicated. This separately identifies the retention for the management contractor and each works contractor. Details of the retention requirements are to be completed in the Contract Particulars. Only half of the retention is deducted for the works, or section of the works, where practical completion has been achieved but a Certificate of Making Good Defects has not been issued. If it is not the intention to deduct retention, then nil or zero should be entered. It is recommended that payment clauses are reviewed where the contractor has not corrected notified defects.

It then focuses on how the standard forms of contract deal with the issue. A list of the contracts reviewed is included within the table of contents. This paper reviews methods and limits of deduction, inclusion of the retention amount to be included within the contract, release and set off against sums held. The guidance note concludes with a review of common issues including areas such as commonly occurring problems; financing; insolvency, and defects rectification.

Guidance is given for each of the main groups of contracts and the forms in most regular use within those groups, under the following headings, which map to the Assessment of Professional Competence APC: Copyright in all or part of this publication rests with RICS.

No part of this work may be reproduced or used in any form or by any means including graphic, electronic, or mechanical, including photocopying, recording, taping or Web distribution, without the written permission of the Royal Institution of Chartered Surveyors or in line with the rules of an existing license.

Although members are not required to follow the recommendations contained in the note, they should take into account the following points. When an allegation of professional negligence is made against a surveyor, a court or tribunal may take account of the contents of any relevant guidance notes published by RICS in deciding whether or not the member had acted with reasonable competence.

In the opinion of RICS, a member conforming to the practices recommended in this note should have at least a partial defence to an allegation of negligence if they have followed those practices. However, members have the responsibility of deciding when it is inappropriate to follow the guidance. It is for each surveyor to decide on the appropriate procedure to follow in any professional task.

However, where members do not comply with the practice recommended in this note, they should do so only for a good reason. In the event of a legal dispute, a court or tribunal may require them to explain why they decided not to adopt the recommended practice. Also, if members have not followed this guidance, and their actions are questioned in an RICS disciplinary case, they will be asked to explain the actions they did take and this may be taken into account by the Panel.

In addition, guidance notes are relevant to professional competence in that each member should be up to date and should have knowledge of guidance notes within a reasonable time of their coming into effect. Document status defined RICS produces a range of standards products. These have been defined in the table below. This document is a guidance note. The guidance note then focuses on how the standard forms of contract deal with the issue.

This guidance note concludes with a review of common issues including areas such as commonly occurring problems; financing; insolvency, and defects rectification. It is advisable to check the contract on the ability to do this, and the relevant notices that should be given to the incumbent contractor prior to appointing others to undertake the works. It is generally applied to the value of the contract works, including variations and changes, not just to the contract sum.

Sometimes contracts will place a cap on the maximum level of retention that can be deducted. Other limits or caps may be set as to the maximum amount of retention that may be deducted from payments. Some contracts also contain retention free amounts and therefore the contractor can be paid up to a certain sum prior to the retention being deducted. Retention bonds are an alternative and these are considered elsewhere within this guidance note.

The remainder is released when the rectification period or defects liability period has expired and the relevant certification under the contract has been issued to confirm this. It is advisable to check the details of the individual contracts as release is slightly different in each.

The release of retention is different if there is sectional completion, partial possession or the like under the contract. The majority of contracts allow for partial release of the retention at each sectional completion but the final release will vary between contracts. The final portion may be released either at the expiry of the defects liability period for each section or the expiry of the defects liability period for the works as a whole.

Sub-contractors should review contracts to determine when the release is triggered. This has provisions which forbid payments under a contract being dependent on performance under another, so the payment of subcontract retentions cannot be linked to, e. The contract should be reviewed for the effect upon retention in the event that the contract is terminated. Generally, clauses regarding the release of retention cease to apply in the event of termination but this may vary dependent on the reason for termination and the conditions of contract.

It should be noted that simple interest will become due for the late release of retention monies, once contractual prerequisites have been completed.

There are examples of suitable retention bonds in the contracts reviewed within this guidance note. Bonds are generally set to the standard levels of retention which would otherwise be contained in the contract. The contracts reviewed in this guidance note contain retention bonds appropriate to use with the same form of contract. It is recognised that there is opposition from contractors and sub-contractors to the use of retention in many areas as there is a view that this impacts upon cash flow.

There has been movement from clients and employers, particularly in the public sector, to support this. Other versions of the JCT contracts have been reviewed and brief comments are also noted. It is important to check the particular wording in a contract, especially when older or amended versions of the contract are being used. The Standard Building Contract Without Quantities has been used in the preparation of this guidance note.

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Standard Building Contract Details of the retention requirements are to be completed in the contract particulars. The contract has the facility to enter the requirement for a retention bond and the contract particulars should be amended to indicate whether this is applicable to the particular contract. The percentage of retention can also be entered in the particulars. In the event that this is left blank, the default retention level is three per cent. If it is not the intention to deduct retention then nil or zero should be entered.

Within the definitions section of the contract, there is no further detail on retention other than a direction to the relevant contract conditions and the contract particulars.

It should be noted that the contract does have provisions for advanced payment but this is not included in further detail in this guidance note. The contract states that amounts to be included in interim notices shall be subject to the deduction of retention as noted elsewhere within the contract.

The sum is noted as being retained by the employer. It is recommended that appropriate notice be given for this prior to deduction. The final notice process is also detailed but there is no retention deduction included within this.

In computing the value to be included in any notice, the value is split into two sections; the value which is subject to the deduction of retention and that which is not. It is advisable to review the contract to understand which items fall into each category but generally, value of works executed and material on and off site are subject to retention deduction.

The employer deducts retention. The contract states the following: Unless the employer is a local authority, the contractor may request that the employer place the retention monies in a separate bank account to comply with the above statement. The employer benefits from interest earned on this account.

If a retention bond is selected for the contract, retention is not deducted but the contract administrator or QS still prepares a statement of the retention that would have been deducted from the interim notice.

The bond is to be as per the format set out in the contract and should state the maximum aggregate sum and the expiry date.

Conflict_avoidance_and_dispute_resolution_in_construction_1st_edition_PGguidance_2012.pdf

These are also to be inserted in the contract particulars. If the bond is not provided or maintained, retention is deducted from interim notices thereafter as calculated in the aforementioned statement. Once delivered, retention is no longer deducted from interim notices and is therefore released to the contractor. If the retention that would have been deducted exceeds the aggregate sum stated in the bond then the contractor can either have the bond value increased or the excess retention will be deducted from the interim notice.

However, it 10 RETENTION should be noted that retention bonds and performance bonds are generally required for different purposes in that a performance bond will provide surety for non performance in general rather than failure to rectify defects.

Only half of the retention is deducted for the works, or section of the works, where practical completion has been achieved but a Certificate of Making Good Defects has not been issued. It is therefore important to understand the value of each section of works in order to accurately calculate the level of retention to be deducted, or for adjustments to the bond value.

Once the Certificate of Making Good Defects is issued, no retention is held from the following notice. Refer to the relevant contract clause regarding the final notice. The standard wording for the retention bond is contained within the schedules of the contract. The significant variances are: Details of the retention requirements are to be completed in the Contract Particulars. Retention is stated as the amount to be paid rather than the amount to be withheld, i.

There is a default value of percentage of work to be paid of 95 per cent if the contract is left blank.

Part 10 Rics Retention Dwl Black Book

There is a requirement to state in the Contract Particulars the amount to be paid once Practical Completion has been certified. As an example, this would be entered into the contract as There is a default value of percentage of work to be paid of If the intention is not to deduct retention, then per cent should be entered.

The contract states that amounts to be included in interim notices shall be subject to the percentage of total value of work. At Practical Completion, a revised percentage is applied as stated in the Contract Particulars. All works are subject to the percentage adjustments prior to and after Practical Completion but before final notice.

The final notice process is also detailed, once the Certificate of Making Good Defects is issued, but obviously there is no retention deduction included within this. It should also be noted that the defect rectification period is only three months in this contract unless otherwise stated in the Contract Particulars.

The following points are noted: There is a requirement to state in the Contract Particulars the amount to be paid once Practical Completion, for the whole of the works or a section, has been certified. At Practical Completion a revised percentage is applied as stated in the Contract Particulars.

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In ascertaining the value to be included in any notice, the value is split into two sections; the value which is subject to the deduction of retention and that which is not. The employer should then within five days give written notice to the contractor of the payment to be made. However, this may be subject to adjustment by a withholding notice, which must be issued five days prior to the final date for payment. Where the employer is not a local authority: The final notice process is also detailed, once the notice of making good is issued, but obviously there is no retention deduction included within this.

It should also be noted that the defect rectification period is only six months in this contract unless otherwise stated in the Contract Particulars.

However, there are two methods of establishing the gross valuation and the option selected should be entered in the contract particulars; Alternative A is selected for payment by stages and Alternative B for periodic payments. It is advisable to review the contract to understand which items fall into each category in terms of retention deduction.

It should be noted that there is no provision for advance payment within the contract. If it is not the intention to deduct retention, then nil or zero should be entered. Retention bonds are referred to in the contract but only in respect of the works contractors rather than the management contractor. There is also further direction to the other clauses within the contract.

In any notice the amounts due are as follows: It is advisable to read the contract for further detail on this. Details of this percentage are entered into the Contract Particulars but the default percentage, if left blank, is 97 per cent. This separately identifies the retention for the management contractor and each works contractor. Where the works contractor has provided a bond, the retention stated is the amount that would have been held in the absence of such bond and no retention is deducted.

The employer deducts retention following appropriate notice to the management contractor. Unless the employer is a local authority, the management contractor, or the works contractor through him, may request that the employer place the retention monies in a separate bank account to comply with the above statement.

The release of monies related to the maximum percentage applied to the construction period fee is released like the other retention but is released after Practical Completion dependent on a comparison between the final prime cost and the project cost plan.

Refer to the contract for further details of this mechanism. Management Works Contract Details of the retention requirements are to be completed in the works Contract Particulars. The contract has the facility to enter the requirement for a retention bond and the Contract Particulars should be amended to indicate whether this is applicable to the particular contract.

The contract states that amounts to be included in interim notices shall be subject to the deduction of retention as noted elsewhere within the contract and also reference to the Management Building Contract. Appropriate notice shall be given for this prior to deduction.

The retention is noted to be deducted and retained by the employer rather than the management contractor. This is deducted at the rate in the works Contract Particulars unless the works, or a section of the works, have reached Practical Completion.

Only half of the retention is deducted for the works or section of the works where practical completion has been achieved, or deemed to have been achieved under the management building contract, but a Certificate of Making Good Defects has not been issued. It is therefore important to understand the value of each section of works in order to accurately calculate the level of retention to be deducted. If the Management Contractor: If there are defects, they would be notified by the management contractor to the works contractor.

Retention is retained until those defects are made good. If a retention bond is selected for the contract, retention is not deducted.

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Prior to the date of commencement of the works, the works contractor provides the bond to the management contractor but in favour of the employer.

These are also to be inserted in the works Contract Particulars. If the bond is not provided or maintained, retention is deducted from interim notices thereafter. Once delivered, retention is no longer deducted from interim notices and is therefore released to the works contractor. If the retention that would have been deducted exceeds the aggregate sum stated in the bond then the works contractor can either have this increased or the excess retention will be deducted from the interim notice.

However, it should be noted that retention bonds and performance bonds are generally required for different purposes in that a performance bond will provide surety for non performance in general rather than failure to rectify defects.

As well as retention provision, the ECC has provision to retain 25 per cent of any sums due until such time as the contractor submits a programme for acceptance if a programme is not 14 RETENTION referenced within the contract data. For the purposes of this guidance note, this has not been classed as retention and therefore is not included in any further detail.

In order for this clause to be included within the contract the option clause should clearly be identified in section 1 of part 1 of the contract data.

As previously explained, retention is deducted as security for the employer and an incentive for the contractor to complete the works. The employer may enter a retention free amount in the contract data. The principles covered may, however, also be applied to costs in use.

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This guidance note introduces the subject of damages for delay to completion by looking at the general principles including areas such as law; reasons for introduction within a contract; amounts of damages, and how sums are deducted, certified or released. The guidance note then focuses on how the standard forms of contract deal with damages. A list of the contracts reviewed is included within the table of contents.

For liquidated damages this includes how amounts are inserted in the contract and how this is to be deducted or certified. This guidance note introduces the subject by looking at the general principles of retention, including areas such as law; reasons for introduction within a contract; levels of retention, and how amounts are deducted, certified or released. The guidance note then focuses on how the standard forms of contract deal with the issue.

The guidance note reviews methods and limits of deduction, inclusion of the retention amount to be included within the contract, release and set off against sums held.

This guidance note concludes with a review of common issues including areas such as commonly occurring problems; financing; insolvency, and defects rectification.

Guidance is given for each of the main groups of contracts and the forms in most regular use within those groups, under the following headings, which map to the Assessment of Professional Competence APC: This guidance note summarises what is meant by conflict avoidance and dispute resolution.

It identifies the key issues that all surveyors should understand in respect of these distinct substantive areas. It cannot cover every issue or every technique for avoiding disputes, nor can it cover the wide-ranging issues that relate to dispute resolution, the applicable rules or strategies that might be adopted.

Guidance is given in respect of conflict avoidance processes and dispute resolution techniques that are encountered within the industry under the following headings, which follow the Assessment of Professional Competence APC: General principles Level 1: Knowing , Practical application Level 2: Doing , Practical considerations Level 3: This information paper summarises what is meant by the construction sectors before going on to review the various roles for the chartered quantity surveyor within the UK construction industry.

This first edition guidance note discusses construction procurement routes and the development of a procurement strategy. The guidance aims to help professionals choose an appropriate route, setting out their advantages and disadvantages.

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This first edition guidance note reviews security and performance documents normally associated with a construction project, noting the main types of document, the parties to them, their purpose and general terms.

This first edition guidance note reviews termination of contract, corporate recovery and insolvency primarily from the perspective of a chartered surveyor with a commensurate level of specialism. It also deals with the main issues encountered in and associated with a construction project.

Generally, the guidance note advises on the issues and also suggests when further specialist assistance may be required either legally or technically. This first edition guidance provides a summary of the purpose and process of both cost analysis and construction project benchmarking. The purpose of this guidance note is to ensure consistent practice, delivered in a professional manner that is in line with internationally recognised guidance.

This first edition guidance note introduces surveyors and other professionals to the subjects of capital allowances and land remediation relief in a UK context. Aimed at construction professionals who manage defective construction work or those who have to address the consequences when it occurs. This publication provides best practice guidance on cash flow forecasting for project and cost managers in all world regions. This global guidance note outlines a practical framework for quantity surveyors on how to calculate embodied carbon emissions associated with their projects.

The guidance note supersedes the RICS information paper Methodology to calculate embodied carbon of materials, 1st edition which was aimed at a UK audience. This 1st edition guidance note summarises what tendering is and how tendering processes are used to establish a contract price. It also reviews different types of tendering and negotiation strategies and their advantages and disadvantages.

It seeks to enhance the knowledge and understanding of the tendering and negotiation processes involved in procurement. Download the Chinese translation of Cost analysis and benchmarking.

This guidance note discusses the various types of construction contract that are available for use in the UK. It also discusses the factors to consider when choosing the most appropriate construction contract for a particular project. In the meantime, this guidance note is available on isurv for information purposes only. Delays occur on most construction projects, and always have done. At some point during a project, particular parts of the works, or the works as a whole, will not progress as quickly as planned, with the risk that the contractual completion date will not be met.

This guidance note covers: This 1st edition guidance note sets out the principles of cost reporting from the perspective of the quantity surveyor to the client during construction. This guidance note explains the purpose of cost reporting, the factors affecting outturn cost and explores the different formats and types of cost report. This guidance note has been developed to support the work of chartered surveyors who assess risks and provide technical advice to those who provide third-party finance on real estate developments: The aim of this guidance note is to provide a reference point for professionals on the discipline of risk management.

This guidance note provides details of the general principles of risk management and provides practical applications and considerations for successful implementation. The ascertainment of loss and expense is a set of tasks that endeavour to calculate as precisely as possible, and in accordance with the contract, the additional costs or losses incurred by one party directly due to a default of the other. Most construction contracts require interim payments to be paid to the contractor.

This is to relieve the contractor of the burden of financing the whole of the works until completion; works which may take many months or years to complete.

This guidance note is effective from 12 November This guidance note summarises what a final account is and how they are used to establish a final adjustment to the contract price.

The practical issues of how to prepare a final account in accordance with the contract and the process of cooperation between the parties and negotiation will also be discussed. This 1st edition guidance note is effective from 14 March The role of a commercial manager, and the commercial management functions performed, play a critical part in the commercial and financial success of a construction project or of any other business.

This UK guidance note outlines the role of commercial management in construction, providing a framework of guidance covering the most common tasks that a commercial manager will perform on a construction project.

This 1st edition guidance note is effective from 21 June Published May This research compares the two of the most popular mainstream cost management systems in the world promoting construction cost management consultants to better understand complex client needs. This 1st edition guidance note — which comes into effect on 1 May — introduces the concepts of value management and value engineering as they relate to construction projects and to the role of chartered surveyors, who have a key role to play in helping manage value across the project.

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Value management and value engineering are both concerned with increasing the ratio between benefit outputs and the cost or effort inputs required, but are often separated in terms of their timing and their scale.

But value is also a relative concept, and one of the roles of project management, supply chain procurement and overall procurement is to manage these imbalances so that the project as a whole provides value to the client. You are here: Home Document downloads RICS standards and guidance portal QS and construction standards Document downloads - QS and construction standards Available downloads E-tendering E-tendering provides a framework where both clients and tenderers can reduce their costs, remove unnecessary administration and streamline the overall tendering process.

E-tendering, 2nd edition File type: PDF Size: E-tendering, 1st edition October - December File type: Electronic document management, 1st edition October June File type: Construction insurance ARCHIVED Best practice for property professionals regarding construction insurance in relation to construction projects - from the initial development stage, through to completion.

Construction insurance, 1st edition File type: Valuing change File type: Acceleration This guidance summarises what is meant by 'acceleration' in the construction industry, how, in practice, acceleration can be achieved and how it can be valued.

Acceleration File type: Defining completion of construction works This guidance note is intended to summarise the principal features of completion of construction works under a variety of construction contracts.

Defining completion of construction works File type: Cash flow forecasting - UK This guidance note summarises what cash flow forecasting is, how to produce a useful forecast and how to then use the forecast to assess progress on site as well as other issues, and to assist both employers and contractors to analyse actual expenditure against forecast expenditure.

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Cash flow forecasting - UK File type: Cost analysis and benchmarking - UK This guidance note summarises the purpose and process of both cost analysis and construction project benchmarking. Cost analysis and benchmarking File type: Damages for delay to completion ARCHIVED This guidance note introduces the subject of damages for delay to completion by looking at the general principles including areas such as law; reasons for introduction within a contract; amounts of damages, and how sums are deducted, certified or released.

Damages for delay to completion, 1st edition File type: