by John Eaton, MA PhD Dip Arch RIBA MCIArb FRSA. When is a building complete? What is the difference between Completion and Practical Completion. Most construction professionals, if asked would suggest an answer and it is probable that they would be wrong. The completion of building work is problematic and it is noteworthy that Keating1 prefaces a discussion of this topic with the observation that “Practical Completion is perhaps easier to recognize than to define.”
Such a state of affairs is plainly unacceptable. It should be possible to establish a better common understanding. It is in the interest of the construction industry that there are practical definitions that are commonly understood and may be applied with confidence. My long-range objectives are to propose a clear definition of what completion entails and to suggest a framework for how it may be achieved with greater certainty.
In the course of a long career both as a practicing architect and expert witness, I have been invited to give my opinions in a large number of disputes that have arisen concerning both the completion and the non-completion of building projects. While the problems that arise in this area are always particular to the individual project certain common problems emerge and these fall along a broad spectrum. At one end is the incomplete building that is certified as being complete and at the other, the building which though complete, is argued to be incomplete. Issues arising at the two extremes are common and persistent.
Where a building is not complete and a contract administrator is over-generous and grants completion with either significant amounts of work outstanding or defects in that work then there is risk to both the building owner and the professional concerned. Over payment may occur and, in the event of the insolvency of the contractor it will prove very difficult to set matters right. Conversely, where a building is compete, subjective evaluations of the quality of the work executed can be manipulated by Employers (often by cynically pressurising their professional agents), to avoid conceding that the building work is satisfactory and therefore not complete - this has obvious advantages for the developer in difficult market conditions. The building process often extends over a very long period from the inception of the work to the completion of a building and a development ordered in a favourable financial climate may well be finished is a less favourable climate. If the building can be held to be incomplete this can shield the developer from making payments, releasing retentions and paying charges on empty properties. Again, the professionals involved can be severely compromised and placed at risk where, all too often, their professional indemnity insurances will be regarded as a potential source of compensation
Architect as contact administrator
My concern here is to open up and discuss certain underlying problems that contribute to the disputes that arise. These are broadly twofold. On the one hand there is a lack of understanding shared by clients, their professional agents and building contractors as to what the completion of a building actually involves and, on the other, the competencies of those that administer contracts for building work are inadequate. Often these two types of problem go hand in glove with lack of knowledge, ambiguity and uncertainty leading to error and disagreement.
In what follows the focus of my remarks tends toward the architect acting as contract administrator as this is my particular area of expertise. Having said that, I consider that most of the ground that I cover will apply in equal measure to other professionals when undertaking the duties involved in administering building contracts.
The language used to describe the completion of construction projects is problematic. There is no clear consensus of what completion entails and many of the printed form contracts are content to speak about completion but give no clear definition of what this means. It is almost as if there is a tacit understanding that construction professionals share a common knowledge of this key concept which, though inadequately expressed, is nonetheless understood and forms part of the accepted lingua franca of their industry. To compound this, standard forms of specification are drawn up to define the quality of the work undertaken and often do not provide objective guidance as to the quality of the work. In many cases the contract documentation incorporates reference to standards that are used globally and not selectively to inform the judgements which contract administrators make as to completeness and quality. Too often the key decisions that are made about the completion of the work reduce to the subjective experience of what practitioners consider to be acceptable and what they do not. This, in my experience, is fertile ground for misunderstanding and dispute.
It is a helpful point of departure to consider an important distinction and source of difficulty that is found in most printed form building contracts. This is the convention that there are seemingly two forms of completion. There is both Practical Completion and there is Completion. This, in my view, is unfortunate and an obvious source of confusion. There exists a common misunderstanding that somehow wrapped up in this distinction is the notion that Practical Completion is in some sense a preliminary stage on the journey to the actual or final completion of the work. Many entertain the view that Practical Completion is a sort of nearly but not-quite completion and the defects liability period that follows Practical Completion being a long-stop or period of grace during which incomplete work may be mopped up and contractual loose ends tidied up. This view is dangerous and quite wrong. The completion of the building work and all that goes with it such as the production of the supporting documentation required under the terms of most building contracts must be complete in toto at Practical Completion.
Defects liability periods are periods when the completed work is effectively on trial and if work is incomplete before this period starts then it defeats the object - this period is the time during which defects latent at Practical Completion may emerge and are remedied as a condition precedent to the contract being discharged. It is not a period in which to complete unfinished work.
This being the case, it would be far better if the term Practical Completion were to disappear altogether and replaced with the simpler term Completion. This would helpful if it served no other purpose than to reinforce the idea the completion meant what it said. Clearly there is a distinction between the completion of the work and the discharge of the contract and to reflect this, I consider that the terms completion and contract completion should be used. Many printed form add to this confusion when they identify the Contract Completion date with the date of Practical Completion. In my view this is both confusing and unnecessary - a simpler use of words would serve with far greater clarity.
The law is clear is to what constitutes completion The leading case of Jarvis & Sons -v- Westminster Corporation  1 W.L.R, (Jarvis) is clear in that if there is any significant omission or defect to the Works that affects the functionality of the development at the time that completion is sought then the work incomplete and should not be so certified. Thus, if a building project exhibits any such omission or defect then it should simply fall at the first hurdle. In addition, and following Jarvis, Practically Complete means what it says – the building project must be complete in all respects and free from anything other than de minimis defects. It therefore follows by definition, that any and all defects at completion must be either latent defects or patent defects classified as de minimis.
Thus, I suggest a three part test –
1 All the work contemplated under the building contract inclusive of the required documentation must be finished.
2 Where items of work are not complete they must be de minimis in character.
3 The quality of the work must conform to the standards required under the building contract
This, I consider, provides a clear template for what is necessary to establish whether a building is complete or not.
In the first place, if any significant part of the work is incomplete or has not been commissioned and documented then Completion cannot be certified – the building is simply not complete. A growing importance is now placed on documentation and demonstrations of compliance form an important element of the completion of the work. Many contractors are poor at providing this information and the contract administrator is placed in a powerful position to ensure that the information is provided. Many are not sufficiently robust in demanding the production of the information and many disputes would be avoided if they were so
The recognition that only relatively very minor defects may be tolerated is pragmatic. There may be issues concerning minor or alleged defects that would unreasonably hold up the hand over and beneficial use of a building. In such cases where occupation can sensibly take place, the withholding of certification would be unreasonable and unfair.
The third part is more problematic. It involves an assessment of the standard of the work, and may be seen as an assessment of what de minimis means. Various bodies within the industry have addressed these problems and give sensible guidance. However, these standards are often not sufficiently understood nor, in most cases are they incorporated into most sets of contract documents. This problem is further compounded where the architect or designer does not write the contract specification. It is often the case that quantity surveyors write contract specifications independently of the designer. In my experience, this often results in an inadequate document. This is nothing to do with the general competence of quantity surveyors but more to do with the need for the designer to ensure that what is designed is properly described and follows the design intentions. The designer is best placed to do this and less likely to errors of omission and lack of detail.
Race against time
To return to our major and long term objectives, a general and common cause of the problems that arise is the fact that the completion of the building work comes to a sharp focus in the final stages of the construction programme where there is often a race against time to complete the work on the appointed date. Most building contracts include a damages clause for non-completion and there is, understandably a great incentive the finish the work on time. The role of the professional administering the building contract is to make inspections in advance of the completion date and to issue lists of outstanding and unsatisfactory work or, as it is commonly known, “snagging”. While the most building contracts are silent as to the process of snagging and the production of snagging lists, the process is common practice within the UK construction industry. Contracts are silent concerning many common practices that construction professionals habitually adopt in order to give their dealings practical effect and, snagging is one such procedure. The recording and reporting of unfinished work and of defects is and important part of the duties of the contract administrator.
However, as this process tends to be concentrated at the time that the construction work is nearing completion many problems which could have been picked up at an earlier stage are overlooked during the construction work.
I suggest that appropriate inspections should be made not merely toward the end but systematically throughout the construction of a building. In order to manage the administration of the building contract as effectively as possible I argue that the contract administrator needs to be more actively engaged in the building process, to undertake the management of the contract in greater depth and to possess a range of skills greater than those commonly found within the construction professions.
While the Contactor is properly charged with the management of the work, the contract administrator from whatever profession has pivotal managerial role which is different and parallel to that of the Contractor. The RIBA Plan of Work (in what follows reference is made, for the sake of brevity, to "The Plan") is a convenient staring point for a discussion of these parallel activities. The Plan has for fifty years served as a well established model for the process of designing and managing building projects and for administering building contracts. The Plan which was originally developed in 1963 has been recently revised.
The latest version, dating from 2013 is a reorganisation of the original model and follows in most important respects the intention and ordering of the original. The central purpose of which is to provide a model, in work stages, for the design and implementation of building projects from their inception to their completion. It is noteworthy that the construction phase, Stage 5 (formerly stage K) receives comparatively little emphasis in certain influential guides to working with and implementing the objectives of the Plan. Part of the difficulty emerges from the relative importance that the construction phase is given in comparison the other activities typically undertaken by the design team. The importance of stage 5, in my experience is seriously underestimated. A useful way to think of its relative importance is to consider the constituent parts of the Plan geographically. By way of example, the list of the States of the USA will give no clue as their size. It is only when we consider them by some other measure that we see that Texas is by far the largest and much larger than a state such as New Hampshire. I consider that this metaphor applies in equal measure to Stage 5.
Perhaps the most comprehensive guide to the Plan, the RIBA Architect's Job Book,2 devotes less than 15% of its content to the management of the activities and procedures which take place while the building is being constructed. This is not an arbitrary criticism but an indication of the emphasis that consultants, and architects in particular, have given to the construction process. I consider this to be a fundamental deficiency. The consultant, as the administrator of construction contracts, is placed in a pivotal position and by definition, an active position. It is not sufficient to think that once the building contract is let the construction process, apart from some tedious paperwork and attendance at monthly site meetings, is predominantly the concern and responsibility of the builder.
The problems associated with the completion of building projects are common and many would be avoided if greater attention was been given to importance of the construction process as a whole. This does not mean throwing the Plan over but improving it in the construction phase. By doing so not only could improvement be made in achieving the timely completion of the work but improvements could also be gained in build quality and cost control.
It would be misguided to consider the Plan does not do what its original authors set out to do. Since its introduction in the mid-1960’s it has provided the architect in particular with a practical blueprint for the organisation of most small to medium sized projects and it conforms, in important respects, to the commonly held expectations of the client, the professional team and the contractor. However, the Plan to has serious limitations and these limitations stem not from what it includes but more from what it does not include. In the face of increasing complexity the development of a more structured approach to the management of the contract during construction is, I consider, long overdue.
The Plan divides the project life cycle of architectural projects into discrete stages from the inception of the project to its completion. The Plan anticipates that the stages will be progressive and consecutive. The completion of each stage is considered as sort of leap frogging where each completed stage “will have the objective of launching the next.”
The stages of the Plan are fleshed out with sets of check lists for the range of typical functions which are expected to be undertaken within each stage. The system indicates what is to be done but it does not say how it is to be done. How things are to be done is assumed or implicit. The system may thus fairly be described as static and prescriptive. This classical model has two major characteristics. The implementation of the system is (literally) from the ground upwards i.e. it is a “bottom up” system; and, it is a simple with progress toward the project goals being marked by a sequential progression from one stage to the next.
The Plan is sometimes thought of as providing a similar model to the production line in industrial manufacturing where each stage is assumed to follow its predecessor smoothly and exactly. This may seem on its face to be a reasonable comparison, and certainly the idea of reducing the range of complex issues that a building project will generate to the sort of model which is on all fours with the building of a motor car, is very seductive. A building is after all a product, all that goes into assembling that product is rightly be described as a process and the production line model is commonly regarded as the most efficient process.
Construction as making a prototype
However, when we consider the comparison between the construction process and the industrial production line more closely, a fundamental problem soon arises. Understanding that the motor car assembly line only performs as it does after prototype models have been carefully tested and problems eliminated enables us to see that the construction model is more closely allied to these preliminary processes - in many important respects design problems for the construction industry belong to the same family as prototype designs in product manufacturing or indeed, for the development of many other generically related systems. Thus, constructing a building can be usefully thought of as making a prototype and it is a fair bet that problems will emerge in the making.
The Plan is a classical model, and its implementation will give rise to a number of tendencies. The classical system has the following characteristics -
1) Nothing is done in the succeeding stage until all is done in the preceding stage.
2) Consequent upon 1), trivial problems tend to be discovered in the succeeding stages and serious problems will often not be uncovered until it is often too late to do anything fundamental about them.
3) Late changes are likely to occur during production.
4) Late changes are likely to prove expensive as the cost to change tends to increase as a function of the time already spent on the project
5) No opportunities exist within the system for feed back and feed forward.
In addition, there are a number of other serious conditions and issues which we should consider as important influences on a design based system and which the Plan neither recognises nor accommodates. Among these are -
1) We are not very good at producing a complex solution perfectly at the first attempt. We are however, very good at making repeated improvements to an imperfect one.
2) Those facilitating the design are not placed in a flexible environment where they can easily manage change during the process.
These problems lead us to a search for a heuristic system that will be appropriate to the tasks being undertaken and tolerant to adaptation and modification.
It is a commonly held view among those that practice architecture that the Plan functions well as a basic framework for the project life cycle but is seldom rigorously followed. The fact that the process of design development is carried out often throughout the construction phase is, it is argued, symptomatic of the nature of complex environments where systems if they are not appropriately structured either become chaotic or re-organise until they become stable once more. In practice, it will be argued that the construction life cycle is often subject to a far more subtle development processes to achieve the objectives of the design and further, these objectives are often achieved in ways not prescribed in documents such as the Plan. Thus, in many cases, instead of recognising the fundamental characteristics of design realisation, problems are not solved in a flexible and adaptable environment but are treated as conflicts. An expansion of this problem is part of a much larger canvas - I am able here merely to advertise its importance.
The focus of our discussion is the range of activities which take place in Plan Stage 5 and the contractual management of the construction process. It is clear that one cannot propose an exact formula or scheme for the organisation of all the things that should take place within this period. There is, as such, no proper scheme. There are, as I hope to show, advantages in extending the scope of the sorts of things that can beneficially achieved in an advanced and better structured framework for Stage 5. Our particular gaze is cast upon the completion of the work but I consider that this is not the only benefit to be gained. The opening up and expansion of Stage 5 reflects the need for a sub-system within the overall domain of the Plan. Such an expansion can usefully be seen as the definition of a system in its own right
The importance of stage 5 is particularly relevant when viewed from the perspective of the Employer. The relative lack of emphasis given in the Plan to construction arises from the particular focus on the activities of the design consultants. To architects in particular, the majority of the their work is complete before the building work commences. To the Employer however the primary focus is with the end result and here, the completion of the work is of paramount importance. But it is not however completion per se. The Employer wants a project that is not only completed on time, but to a satisfactory standard, and on budget. I propose that the structuring of stage 5 should provide a system which will improve the likelihood of these objectives being achieved.
There exists strong arguments for an approach to Stage 5 that is not static but dynamic. It is useful to take as a starting point for such a system the recommendations of the RIBA Architect's Job Book (2008). Here, we find a range of checklists for the information which is needed at the outset of the construction of the project, the available information and the information required is defined and, when required by the form of contract being used, the contractor's programme is established as a benchmark for measuring the progress of the work.
Activity planning The activities which the contract administrator is required to perform are -
? Confirming the programme and procedure for site visits
? Confirming the programme and procedure for site visits and briefing the site inspection staff of their duties and procedures to be followed.
? Preparing an inspection plan which identifies when site visits should be made and when checks can be made on tests which the contractor is obliged to make.
? Keeping records of site visits and the results of tests witnessed or reported.
? Inspecting the contractor's progress measure against the programme and making general inspections of goods and materials delivered to the site.
? Checking the quality of the Contractor's work
On their face, these activities may be thought to be a comparatively few and there is little that is missing apart from, crucially, guidance as to how to do it. We see what is to be done but not how it is to be done. If undertaken systematically and rigorously the proper organisation of these activities form the basis for the management of the construction contract which, we argue, can be dynamic and integrative. Our primary interest is the completion of the work and, establishing an integrated framework to achieve this objective I argue can not only improve the chances of the completion being achieved but also, concurrently, give greater security to the other main Employer objectives of cost and quality.
To enhance the success of these primary Employer objectives, I consider Stage 5 should be organised in greater depth and in such a way as to ensure that the architect, or contract administrator is more actively involved in defining the management process. Far closer detail is needed in order to have better control over the process. This will certainly involves an earlier involvement with the Contractor than many are accustomed to and this involvement, I argue, should start before the Contractor sets to work. It also involves the architect (and other construction professionals) acquiring a greater range of managerial skills than most are equipped for by their education and training.
The introduction of a system of systematically organising and completing sub-sections of work throughout the building process has the advantage, of providing an objective basis for checking progress and quality. This, if operated intelligently, can contribute greatly to the prevention of the type of dispute that arises where the adequacy of the work in the earlier sections can affect the completion of the later parts. It also provides a mechanism for establishing extensions of time as delaying events occur.
While the later parts of the completion of the work will always tend to be the principal focus of completion problems, the system can be operated to take out at least one very significant and persistent cause.
The Plan as it is currently constituted is largely static and prescriptive - it offers few insights as to how objectives can be introduced into the management of the construction work to minimise problems. Characteristically there is little emphasis on the mportance of the programme and how it can be adapted to better suit the needs of the contract between the Employer and the Contractor. The contractor's programme is the critical starting point. It should, in the first instant, be thoroughly examined to establish whether it is realistic. While the production of a programme is the responsibility of the contractor it is in many cases little more than inspired guesswork and is accepted at face value. Often it does not reflect a well-tailored plan to deliver the project on time. The contractor's programme is in essence a prediction. The more carefully it is prepared the more reliable it will be and in considering the contractor's programme, I consider that it should be structured to provide key milestones giving rise to a number of what may usefully be regarded as sub-completions throughout the construction process. By this mechanism it is possible to ensure that the critical stages of the construction have been completed satisfactorily and on time.
The assessment of the build quality is a further major cause of disputes affecting the completion of the work. The assessment of build quality is generally considered to be covered in the contract specification. Many contract specifications follow national and international classifications for describing the constituent parts of the work. Here, individual parts are divided up into elements and each element is described in two main ways : descriptions of the standards required of the materials to be used and descriptions of the standards of workmanship necessary to install or build the particular elements. The introduction of objective tests for the assessment of the completed work is a major problem. Many specifications are drawn up with an optimistic blanket coverage referring to British and European standards and the like which often have little relevance to the work being undertaken. This becomes painfully apparent when disputes arise as, in many cases, the looseness of this practice can work against the practitioner.
The introduction of a model for Plan Stage 5 which divides the Stage into a number of simple sections has a number of advantages. Appropriate tests can be carried out successively and key parts of the construction can be approved before the next part commences. In effect, a number of staged completions of constituent parts of the work can implemented.
Common Construction Manual
The construction process generally follows a fairly predictable pattern - this being sub-structure, superstructure and finishes and in that order. I consider that, with a degree of refinement, the major activities can be ordered into what I propose to call the Common Construction Model (CCM). I suggest this model with caution as it is clear that there will be no model that will be appropriate to all circumstances in much the same way at there is no one key that will open all locks. However, sufficient family resemblances are present across a wide range of types of construction projects to enable a reasonably reliable and robust common framework to be imposed. It is perhaps helpful to think of this as managerial or organisational scaffolding. It is also clear that as each project will (apart from obvious repetitions, such as house types), be different then part of the skill of those organising the management of the work is to design and operate within a framework which is more likely to avoid problems than to cause them.
I propose a basic structure for the contractual organisation and management of Stage 5 in eight parts as follows
Part 1 - Groundwork
Part 2 - Building shell Part 3 - First fix
Part 4 - Internal finish
Part 5 - Second fix
Part 6 - Finishing trades
Part 7 - External works
Part 8 - Commissioning
A central feature of each part is that each part the work executed should be checked and certified as being completed. Thus, completion of each part is not merely completion per se but completion that satisfies an agreed standard of workmanship. The advantages of working in this way, with individual completions of the parts of the work is that not only is the programme monitored carefully and quality controlled but payment may be geared to the completion of each part. So, instead of interim payments being made, for example, on the Contractor's claim and an independent assessemnt of cost on say, a monthly basis, the certification of the completion of a pre-identified part could automatically trigger a pre-approved payment.
The incentive to the Contractor are, is consider, obvious. This proposal is linear and modular and perhaps of greatest benefit to the smaller and medium sized project. More complex projects will demand an approach which may well be non-linear. However, they will, I argue, still be characteristically modular and, as such, the modules will be capable of the same sort of completion regime albeit in a more sophisticated form.
The common construction model outlined above has to be fleshed out and the certification as to cist and quality has to be agreed in advance. The implementation of such a framework would require a significant restructuring of many of the accepted contract management models and current thinking by the relevant parties involved in the construction process It is also clear that much more resource and time will be needed to understand and plan the management of the construction process for each project than is customary. From a professional point of view this will have a bearing on the fees that are charged and, it is suggested, a long overdue restructuring the level of fees appropriate to each Stage of the Plan.
Thus, to structure Stage 5 in this way would involve a number of changes in attitude and practice. The commitment to an enhanced and systematic framework for managing the contract would involve the consultants and the contractor working together much more closely than at present and this has to be achieved without compromising the underlying legal framework of the contract which is, in essence an agreement between two parties - the Employer and the Contractor. The failure to manage construction project effectively often results in employers, contractors and consultants becoming bogged down in non-productive and often acrimonious arguments, and against this background I consider that a constructive reappraisal of accepted practice is long overdue.
It might be argued by the cynical among construction professionals that a system such as the model proposed is a nice theoretical idea but it would never work in practice. The simple fact is that many mainstream volume house builders are already operating similar systems and have been doing so for a considerable time. The cost of construction disputes can be prodigious. The time, energy and resources they are expended is often out of all proportion to what is in dispute and I have often been struck by the thought, while retained to give advice in contractual disputes, that if the energy expended on the dispute had been channelled into the building project it would have represented time and money well spent. It is a glaring statement of the obvious that time is money and in any complex system the primary objective for all parties is not to waste money. If a building contract remains in an incomplete state it is important to understand that there are costs to both the Employer and the Contractor. Put simply, neither party to the contract gains from delay. The Employer cannot make his investment begin to pay and the Contractor's profit is eroded by any delay and the compounding problem of damages which are a direct consequence of not completing on time. Thus, to return to main objects of this paper, the completion of projects will be helped in the first instant, if those responsible for the management of the building contract have a clear understanding of what completion actually means. And here, it is important to grasp something that is, in essence, not complicated at all. Completion means what it says. It means complete in all material and contractual respects. The aim of building contracts is to deliver up a building to the building owner of an appropriate quality, on time and on budget.
To achieve these ends many present approaches to contract management would, in my view, benefit from the introduction of a comparatively simple management structure which, if implemented during the construction stage, would define and provide a blueprint the construction process that could be followed with clarity and greater reliability. The modularization of the construction phase would enable completions to be achieved in well-defined and successive activity groups. To achieve this, completion has to move away from being an end-game activity. It has to become part of an active, integrated and successive process operated systematically throughout the construction of buildings.
1, These conditions are largely to be found in Keating on Construction Contracts (eighth edition) Sweet & Maxwell, London 2006 19-113 p. 774).
1, Architect’s Job Book 2008, London RIBA Publishing
When the parties to a construction contact are unable to agree, litigation, arbitration or adjudication may be unavoidable. In this event, it is often necessary to have expert opinion in order to support or defend a claim. Dr Eaton is an experienced construction industry expert witness. He regularly acts in the capacity of expert witness in construction disputes and has appeared on numerous occasions at court proceedings, construction arbitrations and construction adjudications.
He is trained and experienced in the preparation of expert reports and is used to meeting with other experts to narrow the issues in dispute. His experience and training extends to giving evidence at court and at other tribunals.
He can be contacted at:
Natural House Stoughton LaneStoughton
Leicester LE2 2FH
T: 0116 271 8776 F: 0116 271 5443