ASSOCIATIONS
Principal agents make or
break building projects
Successful completion of building projects largely depends on the
competence of the principal agent – and it is essential that this key role
player is properly equipped to handle this vital role, says Uwe Putlitz.
C
EO of the Joint Building
Contracts Committee (JBCC) Uwe
Putlitz, says poor principal
agency functioning is increasingly causing
disputes and disruptions in South African
building projects. In many cases, the
appointed agent does not have the
necessary experience and is erroneously
appointed, he feels.
“There is no specialised training
course or recognised qualification that a
principal agent must complete. But to
properly fulfil his or her duties, the agent
must at the very least have a bachelor’s
degree in architecture, building science,
engineering, or quantity surveying. It is
also necessary for the agent to have
professional registration with a statutory
body such as the South African Council
for the Project and Construction
Management Professions [SACPCMP].”
The training is vital – and so is the
personality traits of the principal agent.
“This is not a job for the meek and mild,
nor the disorganised. Effective principal
agents should be able to deal with all
involved with the contract authoritatively
and methodically. Contract
administration requires the management
of a vast amount information in a manner
where it can be retrieved and monitored
at short notice, using the appropriate
technological aids to suit the nature of
a project.”
Putlitz says today’s principal agent’s
role is complex and a far cry from the
‘employer’s agent’ of old.
“Building contracts traditionally
included an employer’s agent to
administer the execution of the works by
the contractor and subcontractors. This
agent was usually the consulting engineer
or architect who designed the works.
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JULY 2018
RESIDENTIAL // COMMERCIAL // INDUSTRIAL
“However, recently the execution function
has been separated from the design
function by the emergence of a ‘principal
consultant’ to coordinate the numerous
disciplines involved in modern buildings,
and the ‘principal agent’ (or ‘contract
administrator’ in some standard form
contracts) to administer and manage the
construction phase. In some standard
form contracts, this person is referred to
as the ‘project manager’ whose duties may
be limited to the execution phase or include
the pre- and post- construction phases.”
In a 2006 English court case
(Scheldebouw BV versus St James
Homes), it was held that the principal
agent has, in the first place, an agency
function to execute instructions from the
employer and, secondly, a decision-
making function when the employer and
contractor may have opposing interests.
“The principal agent must act
proactively to avoid potential disputes.
This requires regular monitoring of the
execution of the works, liaison with all
stakeholders, and dealing with all claims
competently and within the time
constraints of the standard form contract
used. Here, the second professional
obligation of the principal agent as laid
down in court comes to the fore when
the employer may have expectations
not provided for in the contract
documentation.
“The execution of any building project
requires team work, good communication
and competent administration apart from
the construction skills. Should any
dispute arise, and the project records are
incomplete or not easily accessible, it will
be more difficult, time consuming and
expensive to resolve such issues,”
Putlitz concludes.
In carrying out the agency function, the principal
agent must ensure that:
1. The parties to the contract have complied
with legal and tender formalities;
2. The construction team have timeously been
issued with all relevant construction
information;
3. The construction team are working at the
required pace to complete the project by the
specified date;
4. The construction team are achieving specified
quality standards;
5. The construction team is paid fairly - and on
time - for work correctly completed;
6. Non-compliant aspects of the works are
promptly dealt with as they arise;
7. Potential claims for a revision of the date for
practical completion is handled timeously;
8. Potential claims for an adjustment of the
contract value is also promptly dealt with; and
9. The project is concluded as specified, all
administrative and other compliance
certificates are recorded, and all parties are
paid what they are due.
Training on the Principal Building Agreement and
Nominated / Selected Subcontract Agreement for
the second semester of 2018 will take place on the
following dates:
• 15 August: Garden Court, East London
• 16 August: The Beach Hotel, Marine Drive, Port
Elizabeth
• 5 September: The Country Club Johannesburg,
Auckland Park
• 12 September: Sports Science Institute of
South Africa, Cape Town
• 3 October: Bytes Conference Centre, Halfway
Gardens, Midrand
• 14 November: 18 Burlington B&B and
Conference Venue, Durban
For more information, contact Allison Kuhn
on: +27 (0) 11 482 3102, email:
[email protected] or visit: www.jbcc.co.za.