Lecture 1A-4

3/12/2015 ESDEP LECTURE NOTE [WG1A]
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ESDEP WG 1A:
STEEL CONSTRUCTION:
ECONOMIC & COMMERCIAL FACTORS
Lecture 1A.4: The European Building

Market
OBJECTIVE/SCOPE
To explain both the need and the difficulty of harmonising construction in Europe in accordance with the Single European Act.
PREREQUISITES
None.
RELATED LECTURES
None.
SUMMARY
Construction in Europe is a complex and important industry. At present legal, regulatory and contractual frameworks vary significantly throughout the
European Community. There are also considerable differences in procurement methods. The framework and timetable for harmonisation is presented,
highlighting the importance of the Construction Products Directive. The role and development of the Eurocodes, European Standards and the CE
mark are summarised. The future implications and development of harmonisation are postulated. Annex A provides a summary of current practice in
some Member States.
http://www.fgg.unilj.si/~/pmoze/ESDEP/master/wg01a/l0400.htm#sec_8 1/43
1. INTRODUCTION
European construction is an extremely complex industry encompassing a wide range of activities and professions. It is also the largest employer in the
European Community, employing 6,6% of the active population and accounting for 9,1% of gross domestic product (GDP) in 1985, when the last
survey was conducted.
Major groups within the industry include public authorities such as local government or town planning authorities, and private clients, contractors,
specialist subcontractors, design and technical service professionals, consultants, building product manufacturers and specialists in the financial
sector dealing with construction and property.
The ways in which these groups operate and the controls and procedures they use vary considerably throughout the European Community, according
to a comprehensive study commissioned by the Commission of European Communities (CEC) [1]. The study was originally instigated in response to
a resolution calling for the standardisation of contracts and controls in the construction industry and the harmonisation of responsibility and standards
governing aftersales guarantees on housing; subsequently it was extended to encompass all building construction.
It has been widely recognised that construction presents the greatest challenge to European harmonisation. The Commission decided to tackle this
most difficult task first. Successful harmonisation of the construction industry would be a major step towards the objectives of the Single European
Act, which calls for a Unified European Market by the end of 1992. A special terminology has developed for harmonisation. Words are given specific
meanings that may have legal significance. For this reason a glossary of terms is given in Annex A.
2. CURRENT SITUATION
The report of the study examined the Construction Industry across Europe and found that most Member States were in favour of harmonised controls
and procedures [1]. Many also wished to see more precise definitions of the responsibilities and liabilities of the participating parties.
The report found that there was wide support for more measures to protect the buyer of the final product through an insurance scheme. This is
consistent with the objectives of the Single European Act, which are not just confined to the establishment of a free market for the trading of goods
and services, but also to improve consumer protection, health, safety and the environment throughout the Community.
Information sheets containing details of the present methods of procurement, form of contracts, controls and responsibilities used in the various
Member States are given in Annex B. For these methods to be successfully harmonised the report listed 14 "elements" which should be considered in
any common Community rules [1]. These elements included:
1. Definition of the role of the client and the task of the engineer,
2. Specific liability
3. Insurance (for professional liability)
4. Qualification of contractors,
5. Design codes and specifications
6. External inspections
7. Acceptance criteria
8. Contractual documents
9. Tenders
The Community already recognises the professional qualifications of its members under the Treaty of Rome. However, there is much diversity
between Member States in the length of university courses and the amount of practical experience required to become a professional engineer. The
requirements for architects, on the other hand, are less diverse and they may be the first profession to be fully harmonised within the Construction
Industry.
3. LEGISLATIVE FRAMEWORK AND TIMETABLE FOR HARMONISATION

The European Parliament is at the top of the legislative framework. It debates all legislation and has the power to amend or add further details to the
proposed action. A typical proposal passes through the following stages:
1. One of the 25 Directorates General of the Commission (CEC), or a subdivision of it responsible for the particular area of policy, e.g. DG III
responsible for the Internal Market and Industrial Affairs, will draw up the measures required to implement the proposed action.
2. The Council of Ministers agrees the proposal, often only by a majority vote.
3. The European Parliament debates the proposed legislation.
4. After the inclusion of any amendments or additions resulting from the debate, the Council of Ministers agrees the legislation.
5. The Commission then implements the legislation through directives, which are then adopted by each Member State through legislation in their
national parliaments and associated regulations, recommendations, guidelines or standards. This ensures that the autonomy of individual
Member States is not threatened.
The way the Commission implements the removal of technical barriers to trade was dealt with by the European Parliament under the New Approach
or "Nouvelle Approach" Resolution. It was conceived to accelerate the completion of the Single European Market and consists of a framework of
directives that cover general principles only. This approach allows each Member State the freedom to use their own design and manufacturing
traditions and skills which have often been developed from centuries of use.
The most fundamental directive affecting the Construction Industry is the Construction Products Directive. It was conceived under the New Approach
Resolution and applies to construction products for permanent use in building or civil engineering works. A product is deemed fit for use and may
carry the CE mark if it complies with the Directive.
The Directive is implemented by relying on the product's conformity with harmonised standards or, in the absence of such a standard, with European
Technical Approvals (ETA) as proof of compliance with its essential requirements.
The harmonised standards and guidelines to establish European Technical Approvals are initiated as a mandate to CEN from the Commission's
Standing Committee on Construction (SCC). They may be accompanied by interpretive documents to assist in the preparation of standards. It is at this
stage that the first detailed technical requirements are considered. The preparation of harmonised standards is undertaken by the European Committee
for Standardisation (CEN). It produces standards through the following structure:
Mandates for standards preparation are issued by the Commission of the European Communities (CEC) to the European Committee for
Standardisation (CEN). The CEN Technical Board (responsible for controlling the standards programme and includes delegations from the CEN
members, i.e. the natural standards organisations, establishes Technical Committees (TC's) (formed to prepare standards and includes representatives
from the CEN members with relevant technical expertise) and Technical Working Groups (TWG's) (formed to undertake specific short term tasks for
the committee and may include representatives from product manufacturers, trade associations and standards authorities).
The timetable for the harmonisation process and the key legal steps are summarised in Table 1.
4. THE ROLE AND DEVELOPMENT OF THE EUROCODES

The Eurocodes and their associated European Standards provide a framework for the implementation of the Construction Products Directive and the
award of the CE mark. This is the reason for their urgent introduction and their ENV status.
They will only be given full EN status after a period of trial use in Member States and incorporation of comments through the Technical Committee.
The timetable for the issue of the Eurocodes as EN is not yet established but it is likely that the principal Eurocodes will achieve EN status during the
period 19951998.
The framework of European Standards will take a similar time to implement. In the interim, Provisional Guides are available as Annexes to the main
Eurocodes, e.g. Annex T to Eurocode 3: Fabrication of Structural Steelwork Provisional Guide.
During the ENV phase, it is intended that the Eurocodes are implemented in Member States by National Application Documents. These documents
provide national values of partial safety factors and also incorporate any specific material requirements. For example:
In the UK the requirements for providing minimum ties to ensure adequate structural integrity and resistance to accidental damage are
maintained.
In France, there are certain clarifications on the detailed application of rules for calculating the semirigid action of connections.
The Eurocodes present best available European design practice. They offer the opportunity of superseding and improving upon traditional practices.
They should therefore improve the overall economy of construction as well as offering more consistent safety and reliability.
5. THE CE MARK
The CE mark may be used on products that comply with European Standards, or in the absence of such standards, European Technical Approvals as
demonstration of compliance with the Construction Products Directive (CPD). The objective behind this approach is to ensure compatibility between
design, execution procedures and products. In the transitional stages before the full harmonisation of standards, certain technical specifications which
are recognised by the Community may also provide compliance. In exceptional cases, certification of conformity by an approved body or a
declaration of conformity by the manufacturer (provided certain conditions are met involving approved bodies during the testing) is acceptable.
The use of the CE mark implies compliance with the essential requirements of the CPD which relate to:
1. mechanical resistance and stability

2. safety in case of fire
3. health, hygiene and the environment
4. safety in use
5. protection against noise
6. energy economy and heat retention
The use of the CE mark is not a guarantee of performance, only of minimum acceptable compliance with the essential requirements listed above.
Compared to other marks of quality it may well be a levelling down to a lowest acceptable, safe quality. Other marks of quality, particularly those
relating to performance beyond the essential requirements are therefore likely to remain in operation throughout Europe. However the situation is
intended to be sufficiently transparent for the individual purchaser to be able to weigh up quality versus price for a particular product or structure.
6. THE FUTURE FOR CONSTRUCTION IN THE UNIFIED EUROPEAN MARKET

The emphasis on quality, even the lowest acceptable quality implied by the CE mark, gives greater priority to the wishes of both the building owner
and his tenant. For the designer and constructor it is likely to lead to the development of minimum guarantees and associated provisions for damages.
Differential insurance premiums may develop, favouring more reputable contractors and offering tangible benefit from quality. For the owner there
will be responsibilities for `fair play' towards both his contractors during construction and his tenants during the service life of the building.
Harmonised standards imply larger potential markets and greater opportunities for economies of scale. Trade should be simpler with reduced
certification, documentation and administration. Minimum standards imply better consumer protection which should lead to greater consumer
confidence; this should act as a direct stimulus to investment.
Of course the greater formality of harmonised, regulated construction is likely to create some problems, especially for small and medium enterprises.
Generally, the cost of entry into steelwork construction will increase because of the need to be conversant with the details of European legislation
prior to trading. To the benefit of the owner and tenant it will be more difficult to cut corners either in product standards or in safety in execution.
There could be a concern that the introduction of harmonised construction may lead to a reduction in the range and individuality of construction. In
reality all the regulations are so general in nature that they are unlikely to inhibit individuality or innovation in any way. What may happen is that the
establishment of a common design base makes it easier to export and import forms of construction. Thus the only individual forms of construction at
risk are those which are inherently uneconomic and deserve to become extinct from commercial pressures.
7. CONCLUDING SUMMARY
European construction in a complex and important industry, accounting for 9% of Europe's GDP.
Harmonisation of European construction is an important but difficult part of the establishment of the Unified European Market.
Currently there are significant differences in technical, legal, regulatory and contractual frameworks between Member States.
The Single European Act in 1987 and the implementation of the Construction Products Directive in 1991 were important steps in the creation of
the Unified European Market, notionally to be established by December 1992.
The Eurocodes and their associated European Standards provide the framework for the implementation of the CPD and the award of the CE
mark.
A harmonised construction market is expected to improve minimum standards of quality and assist the transfer of best construction practice
throughout Europe.
REFERENCES
[1] Mathurin, C. Controls, Contracts, Responsibilities and Insurance in Construction in the European Community, Commission of the European
Communities, 1988.
Date Event Objective/Outcome
1957 Treaty of Rome EEC Established.
26.07.71 Public Works Directive Coordination of procedures for the award of public works
contract.
07.05.85 New Approach to Technical Harmonisation and Standards Proposals to accelerate the completion of the Single European
Market.
10.07.85 Architects Directive Mutual recognition of qualifications.
01.07.87 Single European Act Removal of internal barriers to trade. Majority voting
introduced.
01.10.88 Resolution calling for Standardisation in the Construction Standardisation of contracts and controls. Harmonisation of
Industry responsibility and standards governing guarantees.
21.12.88 Construction Products Directive Removal of technical barriers to trade.
(CPD) Essential requirements to establish fitness for use.
12.07.89 Safety at Work Directive Encourage improvement in health and safety at work.
18.07.89 Public Works Directive Amendment to 1971 Directive.
21.10.89 Testing and Certification Regulations & Approved Bodies.
27.07.91 CPD in force Implemented by Member States.
31.12.92 Deadline for Unified European Market
TABLE 1 Timetable for harmonisation
ANNEX A: QUESTIONNAIRE BUILDING PROCUREMENT IN EUROPE

Represented here are the following countries:
Austria
Belgium
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Spain
Sweden
United Kingdom
AUSTRIA
1. INTRODUCTION
Technical Standards are generally complete and coherent. Requirements for certification and quality marks sometimes could cause expensive
implications.
There is a good framework for planning and controlling the maintenance of structures during their lifetime.
2. CONTROLS
Town planning regulations are tightly controlled. Obtaining planning permission can sometimes delay construction for a long time.
National technical building standards, e.g. ONORM and other rules and guidelines prepared by such organisations as OIAV, OSTV in some cases are
established by federal law.
There are different building laws "Bauordnungen" in the Austrian Federal Countries and some Towns covering administrative regulations and
execution of construction. In those laws, there are additional directives for certain types of construction such as schools, warehouses, car parks,
theatres, etc. and for some actions, e.g. fire.
In addition to compulsory special rules for energy supply, environmental protection, technical and mechanical services and installations, there are
industrial guidelines which only have to be followed when contractually agreed.
Where materials and components are not generally used, special federal country government approval or test marks are required. In addition, formal
quality assurance is necessary for some materials and components that are incorporated into permanent works. Government approval, test marks and
quality assurance have to be executed by authorised organisations such as technical institutes, consulting engineers, etc.
3. CONTRACTS
3. General
Public sector contracts always adopt specified standard forms. In the private sector modifications to those standard forms are usual. The principal
standard form is regulated in ONORM A 2050 and consecutive standards. Multistoreybuildings relate to the LBH "Leistungsbeschreibung
Hochbau".
Prequalification is only adopted for large, complex or unusual projects in order to check the capability and craftsmanship of contractors. It is used in
conjunction with the restricted tender procedures.
2. Forms of Contract
(a) Unit Price Contract
Unit price contracts require a description of works with detailed technical specifications and a bill of quantities. Fixed quantities are defined for all
items on the bill.
(b) Lump Sum Contract
Lump sum contracts require a general description of the works with a programme of execution. This type of contract is used in order to find the best
technical, economic and functional solution.
4. MAIN METHODS OF PROCUREMENT

Separation of Design and Construction is usual
(a) Individual Contracting
The client places separate contracts with the designer and several package contractors, in order to separate design and construction responsibilities.
(b) General Contracting
(i) Design and construction arranged separately by the client. The general contractor is responsible for the execution of the total scope of work and
undertakes the main parts of the work itself. He also places individual packages to subcontractors. Detailed design is sometimes the responsibility of
the general contractor.
(ii) 'Design and Build' construction: the general contractor takes responsibility for the complete design and construction. He places several individual
package contracts with subcontractors and carries out the main part of the work himself.
(c) Management Contracting
The management contractor undertakes responsibility for all design and execution works, but does not do any work directly. The work is carried out
by a series of contractors who are contractually bound to the management contractor.
The most popular forms in Austria are (a) and (b i).
5. RESPONSIBILITIES
There are general clear divisions of responsibilities.
The client is responsible for contract award, taking over the works when they are completed and payments.
The architect or the masterbuilding ("Baumeister") is responsible for predesign, detailed design and drawings, obtaining planning permission,
defining bills of quantities, tendering and site management including architectural and technical supervision. He has the principal responsibility for
quality, safety and compliance with the law.
Consulting engineers are responsible for the technical input in their specialised fields, such as structural design, etc. The responsibilities cover detailed
design, drawings, tendering and supervision.
The contractor is responsible to the client for carrying out the work, warranties, maintaining programme and for some aspects of detailed design and
shop drawings.
6. INSURANCE AND GUARANTEES

It is not general practice to insure against damage during execution. However, architects and consulting engineers are constrained to carry professional
insurance.
Generally, the client is offered a guarantee on the completion of the works for three to five years. Grave defects can be asserted in thirty five years.
7. FUTURE IMPROVEMENTS
Unification of different building laws should be the main target for Austria.
BELGIUM
1. INTRODUCTION
Technical Standards are generally complete and coherent. However, requirements for certification and quality marks are sometimes requested.
Specifications are not always updated as frequently as is desirable.
2. CONTROLS
The procedure of obtaining building permits can sometimes delay construction for a long period of time.
National building standards, e.g. NBN, EN, ENV, and guidelines prepared by such organisations as CSTC, Technical Agreement (Union Belge pour
l'Agrement technique dans la Construction) have to be respected.
For some buildings, special requirements in relation with workers safety have to be respected.
Testing by regional Authorities can be required in some cases (Charpy, welding tests ...).
3. CONTRACTS
1. Public Sector
Public sector contracts always adopt specified standard forms, e.g. "Cahier special des charges" (Special conditions of contract).
There are 5 methods of tendering:
 open tender: the contract is awarded to the contractor offering the lowest price. Any contractor certified for the type of construction
work concerned may tender.
 limited tender: same procedure as open tender, however, reserved for a limited number of selected contractors.
 general call for tender: the contract is awarded to the best bid in terms of price, technical solution proposed and financial soundness of
the contractor.
 restricted call for tender: same procedure as the general call for tender, however, reserved for a limited number of contractors.
 by mutual agreement: the contract is awarded to a contractor who is asked to submit a bid. This procedure is only used in a limited
number of cases and remains an exception.
2. Private Sector
In the private sector the principal standard form is the "Cahier des charges" (conditions of contract).
3. Forms of contract
Unit price contracts require a description of works with detailed technical specifications and a bill of quantities. Fixed prices are defined for all items
on the bill. The risk on quantities is with the client.
Lump sum contracts require a general description of the works with a programme of construction. The risk on quantities is with the contractor. This
type of contract is normally used for 'turnkey' projects by general contractors in order to find the best technical, economic and functional solution.

The client places separate contracts with the designer and several package contractors. Design and construction responsibilities are separate.
Usually the contracts are lump sum and fixed price.
The general contractor takes responsibility for the complete design and construction. He places several individual package contracts with
subcontractors and carries out the main part of the work himself.
(c) Project Manager Contracting
The Project Manager undertakes responsibility for all design and construction works, but does not do any work directly. The work is carried out by a
series of contractors who are contractually bound to the project manager who is acting on behalf of the client. Sometimes, these contracts are on a
percentage of global cost.
The most popular forms of contract are (a) and (b).
5. LIABILITIES
5. Contractors
(a) Liability Before Acceptance ("reception")
All contractors are subject to the principles of contractual liability in ordinary law.
Example: completion of execution within the contractual deadline.
(b) Liability After Acceptance
The contractor is liable for:
Decennial liability
Civil code provides for a special liability of 10 years (for stability aspects only).
This liability is public policy which means that it is forbidden to attenuate it by conventional clauses.
 Socalled latent defects considered minor which are not discovered at the time of acceptance. The defects listed in this category are those which do
not affect the stability of a building or of a construction.
This liability if not public policy.
Conditions for liability are:
 a contract referring to the "gros oeuvre" must exist.
 a serious defect affecting the solidity or the stability of a building must be pointed out.
5. Architects
Architects are subject to liability under ordinary law applicable to contractors as well as to decennial liability.
They are not liable for tasks assigned to a specialised design office (design and planning which is outside their normal qualification) except for the
incorporation of these designs into the entire plan.
5. Sharing out of liabilities
The architect is the project leader, in charge of designing the building. In principle, any design defect is, therefore, the exclusive liability of the
architect.
The contractor is responsible for any defects which stem from the implementation of the plans drafted by the architect, or defects linked with the
execution of the construction project.
4. Subcontracting
Architects and contractors are solely liable to the contracting authority for any errors made by their subcontractors.
Subcontractors are only liable to the contracting authority if a contractual relationship exists between them.

Architects and contractors ordinarily subscribe to an insurance policy designed to cover their commitments in connection with the decennial liability.
Furthermore, the contractors are required to subscribe to a civil liability insurance covering "company risks".
In the case of construction projects carried out on behalf of the State and for the majority of important construction projects, the contracting authority
specifies in its tender that two additional policies have to be subscribed:
 An "all risks at the work site" insurance policy covering any risks inherent in a construction site. It includes:
 financial compensation for damages incurred to insured property
 civil liability towards third parties
 proximity disturbances, i.e. any damage incurred by adjacent buildings
This insurance takes effect at the beginning of execution and ends when the building is occupied or with the provisional acceptance.
It is ordinarily subscribed by the general contractor on his behalf and on behalf of the subcontractors. However, it may also be subscribed by the
contracting authority or the developer.
 Socalled "liability insurance and inspections" guaranteeing compensation for damage to the building which occurs within the tenyear period
following acceptance of the building irrespective of the subscriber of the policy (contractor, subcontractors, architects, engineers, contracting
authorities).
The guarantee of the liability insurance and inspections may be implemented only on the condition that the construction work which is the object of
the guarantees is submitted for inspection to an independent body the SECO Bureau which is in charge of inspecting design and execution of
works.
FINLAND
1. INTRODUCTION
Contractual methods have been long established, but their relative importance is changing. Construction management agreements are becoming more
popular and system unit procurement is being introduced as a method of procurement.
In product approval, a change of policy is taking place. Rules that demanded an approval by one specific body are being abolished in preparation for
the European Economic Space Agreement. This is most notably the case in electric appliances but also elsewhere.
2. CONTROLS
Every building needs a building permit admitted by the local authorities before it can be built. The local authorities check that the building is designed
in accordance with the valid technical and city planning regulations. Hierarchically the highest level of regulation is incorporated into the Building
Law and Byelaw, which cover both the technical and city planning rules.
The technical regulations are given in the National Building Code, which the Ministry of the Environment issues. The Building Code includes two
kinds of regulations: requirements that are compulsory and guidelines, which present one approved solution to a specific problem In practice, the
guidelines are semicompulsory because it may be difficult to persuade the local authorities to approve a solution not presented in the guidelines
although they have the right to do so if the solution satisfies the compulsory requirements.
Several ministries and National Boards (e.g. the National Board for Housing) have their own technical rules governing special types of buildings
(housing, hotels, etc.). These rules, however, are being abolished and all technical regulations will be presented in the National Building Code.
The guidelines in the Building Code do not give guidance to all problems that arise in building. In these cases it is customary to refer to
recommendations issued by various industrial organisations or to standards issued by SFS, the Finnish Standards' Organisation.
The local authorities can also make local rules additional to the national regulations. The local rules mostly cover subjects related to city planning: the
architecture of buildings, the size of building site, sewage treatment, fire protection, etc. City plans have lagged behind in many major cities, which
has been an obstacle to building in these areas.
The Building Code specifies standards (SFSstandards) for several products that have to be met before a product can be approved. Such materials are,
for instance, heat insulation and fire protection materials. The guidelines also specify quality control systems for steel, concrete and glued timber
structures. The producer has to be accepted and inspected by a special quality control organisation (TLT for steel structures) or the satisfactory quality
has to be proved by quality control documents in every single case.
3. CONTRACTS
The standard form used in most contracts is the Contract Agreement (RT 1610193) prepared by the Association of Employers of Finland together
with several other organisations. This form is used together with General Contract Conditions (YSE 1983) prepared by the same organisations.

(a) Traditional Contracting
Design and building are separated in this form of procurement. The client has separate agreements with architects, engineers and contractors. The
main contractor is responsible for carrying out the actual building work, procurement of labour and materials and for coordinating the work of sub
contractors and material suppliers. The subcontractors can have their contracts either directly with the client or with the main contractor.
This form of contracting is the most widely used at the moment, but it is losing ground both to management contracting and system unit procurement.
In traditional contracting, the contractor is payed either on a lump sum or unit price basis. Unit price contracts are often used in industrial buildings
and repair works, where the full extent of work is not exactly known when the contract agreement is signed.
(b) Management Contracting
In this form of contracting, the client has an agreement with the management contactor who is responsible for coordinating the design of the project
and for coordinating the actual construction work, which is carried out by subcontractors. The subcontractors are contractually bound to the
management contractor.
The management contractor is usually paid on a cost plus fee basis.
(c) Design and Build
The contractor is responsible both for the design and construction of the building.
The contractor may also enlarge his responsibilities to the procurement of the building site and marketing of the building, in which case he becomes a
developer. This is often the case in office buildings and housing projects.
(d) System Unit Procurement
The disadvantage of traditional methods of procurement, where the work is carried out according to detailed plans prepared by the client and his
consultants, is that they do not fully utilise the building component producers' and subcontractors' knowhow in developing the most costeffective
solutions for a specific building project. A new form of procurement called "System Unit Procurement" has been developed to overcome this
disadvantage. In this form of procurement the client gives functional specifications for the building units to be procured and the material supplier or
subcontractor is responsible for the design and erection of the unit.
5. RESPONSIBILITIES
See items 4 and 6.

Unless the documents state otherwise, the contractor is obliged to take out a fire insurance that covers the building materials, supplies and components
that can be damaged by fire.
He is also obliged to given the client a guarantee for fulfilling the contract and refunding advance payments. If not stated otherwise, the guarantee is
10% of the contract sum during the building operations and 2% during the guarantee period.
The guarantee period is one year if not stated otherwise in the documents. The contractor is, after the guarantee period, still responsible for such
defects, omissions, inconveniences or incomplete work that the client could not reasonably notice during the handingover inspection or guarantee
period. This responsibility terminates 10 years after the handingover inspection. There is a tendency for the courts of law to include an increasing
amount of defects within this extended period of guarantee.
The law or the General Contract Conditions for Consultants (KSE 1983) do not require a professional insurance for the architects and engineers. It is
common practice for them to take a voluntary professional insurance.
The upper limit of the damages a consultant may have to pay for professional omissions is equal to the consultants fee, if not stated otherwise in the
contract documents. His responsibility covers the same periods of time according to the same principles as those of the contractors.
FRANCE
1. INTRODUCTION
All buildings are subject to standards, technical instructions, standardised technical documents, professional rules of application, or any other statutory
tests which enable all the building clauses to be defined.
2. INSPECTIONS
The construction of new buildings is subject to a building license being obtained, which is issued today by the mayor of the district* where the project
is located. The license application must contain a description of the project (purpose, number of M2 ...) as well as the main architectural aspects (type
of structure, architectural concept ...).
After obtaining the licence, the main building contractor draws up a user file on the technical specifications and the drawings of the operation. In this
context the materials are chosen according to:
 standards for the products, e.g. steel sections
 technical instructions or standardised technical documents (DTU) for building systems, e.g. curtain wall elevations, matching sheet with trapezoidal
corrugations for flat floors and ceilings
 particular specifications for certain types of building (energy, buildings with public access)
 regional requirements for certain products, e.g. thatched roofing, bricks, etc.
For all publicsector contracts (Government, communes, departments and regions) there is a "publicsector contracts code" giving the statutory
reference texts, for example the computational regulations.
Certification (or label adoption) is not very widespread in France, except for certain products and industries (e.g. nuclear power stations).
3. CONTRACT
1. General
(a) Publicsector Contract
All publicsector contracts are subject to a "publicsector contracts code". Furthermore, certain managements or national enterprises (SNCF*, EDF**)
have issued their own technical specifications and material inspection procedures (stipulation of approved suppliers, administrative documents,
quality assurance procedure, qualifying firms).
The opening up of the European market means that today foreign firms are able to tender for this type of contract, which was often not possible
before.
(b) Private Contract
There is a "private contracts code" which defines relations between customers and firms. The clauses of the contract are drawn up by the main
building contractor in agreement with the building owner. It is possible to issue only one call to tender to a limited number of firms, but it is also
possible to negotiate with only one firm (a socalled order "by private contract".
2. Form of Contract
Contracts usually include price review clauses defined by official formulae and indices. It is possible, however, to come across contracts with firm,
nonrenewable prices. This is true for small, shortterm sites.
4. MAIN METHODS OF OBTAINING CONTRACTS

There are mainly three types of contract entered into:
4. General Firm
A firm commits itself to the building price and deadline. It is responsible for the whole site, subcontracts certain works to other firms and ensures co
ordination throughout.
It is an easy solution for the end customer and the architect because they only have dealings with a single manager. In return, this gives the firm
considerable power in negotiating with subcontractors for certain technical and economic choices and enables him in the end to increase his margin
through negotiation with subcontractors. This type of contract corresponds to "turnkey" contracts.
4. Contract in Separate Lots
The building owner and architect define lots of works for which they issue separate calls to tender to firms. This formula means that the most
advantageous prices can often by obtained for each lot. It requires in return great coordination on the site, which the architects are not always able to
ensure since there are a number of managers.
There are formulae which limit the number of lots and, therefore, the number of firms.
Moreover, general building firms are increasingly involved in property development. They buy land on which they construct a building for a
customer. This formula generally gives them better margins.
5. RESPONSIBILITIES
As a rule, responsibilities are clearly defined.
The building owner, who is often the building's customer, is responsible for paying the firms and the main building contractor (architect + BBT*). He
generally calls on an inspection office (e.g. Veritas, Socotec) for the technical aspects to check that the building complies with regulations.
There are different types of tasks for the architect, but he is generally responsible for choosing and followingup technical solutions. He chooses a
BBT* who is responsible for the calculation of the works, the technical design (electricity, fluids, etc.).
Finally, firms are responsible for performance on the site. They are responsible for assembly in compliance with the rules and often for implementing
the site plans (a task which can be devolved to the architect in some cases).
6. INSURANCE AND GUARANTEE

In general, the customer is insured for damage during building. In addition, the architect and the BBT* underwrite insurance covering risks associated
with the design of the work.
One specifically French detail is the existence of the "tenyear" guarantee affecting certain parts of the building. This guarantee period is the result of
a law voted in 1978. The various guarantee periods are, therefore, as follows (as from the date of acceptance of the works to the end of building):
 two years for parts which come under the design and completion of the building (e.g. paper wall covering)
 ten years for the entire framework and functions of use of the building (roofing, floors)
 thirty years for parts which involve people's safety (balconies, structural elements)
This is a socalled "public liability" guarantee.
Furthermore, there is a oneyear guarantee after acceptance of the works on the entire building called a flawless completion guarantee. In fact, the
situation is a complex one because the tenyear guarantee affects both the assembly firms and the manufacturers of the materials.
In the event of disputes, the guarantees can be transferred from the firm to the manufacturer. Manufacturers of products may, therefore, be responsible
for the use of their own product.
7. FUTURE CHANGES
The future enactment of the European Construction Products Directive will change guarantee and manufacturers' liability criteria.
In this instance, it is possible that the architects may be obliged to have a more technical vision of the use of materials because their responsibility will
be more heavily involved.
Finally, problems of maintenance, life cycle and demolition of future buildings will have to be considered when building, which will bring about
changes in building techniques.
GERMANY
1. INTRODUCTION
Technical standards are generally complete and coherent. However, requirements for certification and quality marks sometimes have expensive
implications. Specifications are not always updated as frequently as is desirable.
There is a good framework for planning and controlling the maintenance of structures during their life.
2. CONTROLS
Town planning regulations are tightly controlled. Obtaining planning permission can sometimes delay construction for a long period of time.
National technical building standards, e.g. DIN, and other rules and guidelines prepared by such organisations as DASt, DAf, StB, IfBT, Argebau and
STLB are established by government edict.
There are also state building laws covering administrative regulations and execution of construction. There are additional directives for certain types
of construction such as schools, warehouses, garages, assembly halls, etc.
In addition to compulsory special rules for energy supply, environmental protection, technical and mechanical services and installations, there are
industrial guidelines, e.g. AGI, VDI, ISO, which only have to be followed when contractually agreed.
Where materials and components are not generally used special government approval or test marks are required. In addition, formal quality assurance
is necessary for some materials and components that are incorporated into permanent works. Materials and components that require test marks or
quality assurance are listed in relevant government regulations. Government approval, test marks and quality assurance have to be executed by
authorised organisations such as technical institutes or acknowledged academic experts.
3. CONTRACTS
2. General
Public sector contracts always adopt specified standard forms. In the private sector modifications to these standard forms are possible. The principal
standard form is the "Verdingungsordnung fur Bauleistungen" (VOB). Part A defines the procedures prior to award of contract. Parts B and C provide
general conditions of contract and the technical requirements for construction.
Prequalification procedures are only adopted for large, complex or unusual projects in order to check the capability and craftsmanship of contractors.
They are used in conjunction with tender procedures.
Unit price contracts require a description of works with detailed technical specifications and a bill of quantities. Fixed prices are defined
for all items on the bill. The risk on quantities is with the client.
Lump sum contracts require a general description of the works with a programme of construction. The risk on quantities is with the
contractor. This type of contract is normally used for 'turnkey' projects by general contracts in order to find the best technical, economic
and functional solution.
4. METHODS OF PROCUREMENT
Here the client places separate contracts with the designer and several package contractors. Design and construction responsibilities are
separate.
Usually these contracts are lump sum and fixed price.
(i) Design and construction are arranged separately by the client. The general contractor is responsible for the execution of the total scope
of work and undertakes th main parts of the work. He also places individual packages to subcontractors. Detailed design is often the
responsibility of the general contractor.
(ii) 'Design and build' construction
Here, the general contractor takes responsibility for the complete design and construction. He places several individual package contracts
with subcontractors and carries out the main part of the work himself. The main field of application is for industrial buildings.
The management contractor undertakes responsibility for all design and construction works, but does not do any work directly. The work
is carried out by a series of contractors who are contractually bound to the management contractor who is fulfilling the role of the client.
Sometimes these contracts are on a cost plus fee basis.
The most popular forms of contract are (a) and (bi).
5. RESPONSIBILITIES
The architect is responsible for predesign, detailed design and drawings, obtaining planning permission, defining bills of quantities,
tendering and site management including architectural and technical supervision. He has the principal responsibility for quality, safety
and compliance with the law.
Engineers are responsible for the technical input in their specialised fields, such as structural design, services, etc. The responsibilities
cover detailed design, drawings, tendering and supervision.
The contractor is responsible to the client for carrying out the work, warranties, maintaining programme and for some aspects of detailed
design and shop drawings. Subcontractors have the same responsibilities as the contractor.

It is not general practice to insure against damage during construction.
Architects are required to carry professional insurance. The contractors are required to carry insurance for responsibilities under civil law.
Generally, the client is offered a two year guarantee on the completion of the works. This is regarded as being too advantageous to the
contractors and offering insufficient protection to the client.
Means are being sought to make contractors more responsible.
More emphasis will be given to providing a practical education for designers and builders. Specifications are becoming more practical
and comprehensible.
It is likely that the law will be changed imposing more responsibility on the contractor in the case of defects after construction.
More research is intended on the behaviour of buildings during their service lives so that shortcomings in construction that lead to
subsequent malfunction of the building can be identified. The outcome of this work will be transmitted primarily to the contractors to
improve the effective quality of construction.
GREECE
1. INTRODUCTION
National technical codes are not generally complete for all kinds of structures, leading to the use of foreign ones, e.g. DIN, etc. Some of
them are not always updated as frequently as is desirable.
2. CONTROLS
There are strict planning regulations for all kinds of areas (towns, villages, seasides, etc.).
There are also additional directives for certain types of structures such as schools, warehouses, garages, industrial buildings, hospitals,
hotels, etc.
It is always necessary for all types of construction to obtain permission from public authorities.
The whole design of structures is covered by compulsory national technical codes (or in some cases by foreign ones, e.g. DIN). In
addition, there are also guidelines which only have to be followed when contractually agreed.
Formal quality assurance is necessary for some materials that are incorporated into permanent works. All the test marks or quality
assurance required have to be executed by authorised organisations.
3. CONTRACTS
Public sector contracts adopt specified standard forms, while in the private sector any different type of form is possible. The forms of
contract are as follows:
Unit price contracts require a description of works with detailed technical specifications and a bill of quantities. Fixed prices are defined
for all items on the bill. The risk on quantities is with the client.
Lump sum contracts require a general description of the works with a programme of construction. The risk on quantities is with the
contractor.
This type of contract is normally used for 'turnkey' projects by general contractors in order to find the best technical, economic and
functional solution.

Here the client places separate contracts with the designer and several package contractors. Design and construction responsibilities are
separate.
Usually these contracts are lump sum and fixed price.
(i) Design and construction are arranged separately by the client. The general contractor is responsible for the execution of the total scope
of work and undertakes the main parts of the work. He also places individual packages to subcontractors. Detailed design is often the
responsibility of the general contractor.
(ii) 'Design and build' construction
Here the general contractor takes responsibility for the complete design and construction. He places several individual package contracts
with subcontractors and carries out the main part of the work himself.
The management contractor undertakes responsibility for all design and construction works, but does not do any work directly. The work
is carried out by a series of contractors who are contractually bound to the management contractor, who is fulfilling the role of the client.
The most popular forms of contract in the private or in public sector are (a) and (bi).
5. RESPONSIBILITIES
The architect is responsible for predesign, detailed design and drawings, obtaining planning permission according to the laws, defining
bills of quantities, tendering and site management including architectural and technical supervision. He has the principal responsibility for
quality, safety and compliance with the law.
Engineers are responsible for the technical input in their specialised fields, such as structural design, etc. The responsibilities cover
detailed design, drawings, tendering and supervision.
The contractor is responsible to the client for carrying out the work, warranties, maintaining programme and for some aspects of detailed
design and shop drawings. Subcontractors have the same responsibilities as the contractor.

There are no legal requirements, but in order to insure against damage during construction, the client can buy a professional insurance for
a two year period.
Generally, the client is offered a short period (one to five years) guarantee on the completion of the works.
Means are being sought to make contractors generally more responsible.
IRELAND
1. INTRODUCTION
The construction industry in Ireland is effectively divided into three sectors, with contractors tending to specialise in one of these:
(a) Civil engineering construction mostly projects funded by central government in the areas of roads, bridges, water supply, sewerage,
etc.
(b) General building construction mostly private developments, with exceptions such as schools and hospitals. On local authority or
government projects, there is an increasing tendency for developers to construct and lease back.
(c) Housing construction largely speculative. Local authority involvement has been severely curtailed in recent years.
2. CONTROL
Planning is governed by a succession of Planning Acts and Planning Regulations issued thereunder. These require local authorities to
prepare and adopt development plans. Most developments require the formal permission of the planning authorities.
Building Regulations (1991) were issued under the Building Control Act (1990) under which the large local authorities were invested
with the power of Building Control Authorities, with powers of inspection and enforcement. These authorities are also Fire Authorities.
Certain aspects relating to the nature of and responsibility for, Certificates of Compliance with the Building Regulations are still under
discussion between Building Control Authorities and the professional bodies representing consulting engineers and architects.
Health and safety is governed by the Health, Safety and Welfare at Work Act (1989) and EC safety directives embodied in the Safety,
Health and Welfare at Work Regulations (1993). These require employers to carry out an analysis of hazards in the workplace, and
include for casual, temporary as well as permanent employees. Previous legislation on health and safety related in the main to industrial
employment, the principal acts being the Factories Act (1955) and Safety in Industry Act (1980) under which regulations such as The
Construction (Safety, Health and Welfare) Regulations (1975) were enacted. These remain in force.
Design and materials are governed by standards issued by the National Standards Authority of Ireland (NSAI). Where NSAI do not
provide a standard, British Standards (BS) or International Standards (ISO) are frequently substituted. NSAI have responsibility for the
issue of Eurocodes and associated National Application Documents in Ireland.
3. CONTRACTS
(a) RIAI Contract conditions 1989 with quantities/
without quantities
Used in conjunction with:
 Subcontract conditions issued by the Construction Industry Federation for use in conjunction with the RIAI conditions of contract
 Quantities measured in accordance with SMM6 (1976), SMM7 (1988) and PCMI.
(b) GDLA Contract conditions 1982 with quantities/
without quantities
 Subcontract conditions issued by the Construction Industry Federation for use in conjunction with the GDLA conditions of contract
 Quantities measured in accordance with SMM6, SMM7 and POMI.
(c) IEI Conditions of contract 1980
 ICE subcontract conditions

 Quantities measured in accordance with CESMM2 or CESMM3.
also
RISI Short Form Contract for minor works.
Abbreviations
RIAI Royal Institution of Architects of Ireland.
GDLA Government department and local authorities.
IEI Institution of Engineers of Ireland.
ICE Institution of Civil Engineers (UK).
SMM6 Standard Method of measurement of Building Works, Sixth Edition (1979)
SMM7 Standard Method of Measurement of Building Works, Seventh Edition (1988).
Royal Institution of Chartered Surveyors and Building Employers Federation (UK).
CESMM2 Civil Engineering Standard Method of Measurement, Third Edition (1985)
CESMM3 Civil Engineering Standard Method of Measurement, Third Edition (1992).
Institution of Civil Engineers and Federation of Civil Engineering Contractors (UK).
POMI Principles of Measurement (International).
Royal Institute of Chartered Surveyors (UK).

(a) Negotiated tendering
(b) Open tendering
(c) Selective list
The IEI form of contract nearly always entails open tendering. Selected tendering is frequently adopted with RIAI and GDLA contract
conditions. The selected list typically extends to 6 to 8 firms, and sometimes entails prequalification.
5. RESPONSIBILITIES
The various forms of contract are broadly similar in regard to responsibilities placed on the parties to the tender with the exception of
'Design and Build'.
In building contracts, the architect is generally responsible for development of the design brief, for obtaining permissions, for managing
the design through its stages, for site supervision and budgetary control. To assist in the discharge of these responsibilities the architect
will usually recommend to the client the appointment of civil or structural engineers, service engineers and quantity surveyors, reporting
to the architect.
In civil engineering contracts, the engineer has primary responsibility for all aspects of design, site supervision and budgetary control.
In both types of contract, the main responsibility for safety during execution lies with the contractor.
6. INSURANCES AND GUARANTEES

(a) Employees liability insurance
(b) Public liability insurance
(c) Allrisk insurance
(d) Nonnegligence insurance
(e) Contract guarantee bonds
7. FUTURE DEVELOPMENTS
(a) Introduction of Eurocodes into design practice.
(b) Implementation of EC safety legislation, e.g. the Construction Sites Directive 1992, placing responsibilities for Health and Safety on
engineering and architectural consultants as well as on the contractor.
(c) Resolution of outstanding issues relating to Certificates of Compliance with the Building Regulations.
(d) Greater prevalence of 'Design and Build'.
ITALY
1. INTRODUCTION
Technical standards are generally complete and coherent. There are problems about quality marks of many products: this depends on the
fact that in Italy CE marks are not yet adopted and there is no law about the "Quality Mark".
Frameworks for controlling and planning the maintenance of structures are adopted for some of the largest companies only, such as State
Railways and State Highways.
2. CONTROLS
Town planning regulations are not often tightly controlled especially in the south of Italy.
Quality marks are not yet defined by law but many products have a proper quality mark.
Obtaining planning permission is difficult.
National building standards, e.g. UNI, and other rules and guidelines prepared by different organisations such as CAR, are established by
government edict.
There are some other building laws covering administrative regulations and execution of construction. There are additional directives for
certain types of construction such as schools, hospitals, garages, etc.
Where materials and components are not generally used, special government approval is required. In addition, formal quality assurance is
necessary for some materials and components that are incorporated into permanent works.
Government approval, test marks and quality assurance have to be executed by authorised organisations such as technical institutes.
3. General
Public sector contracts always adopt specified standard forms. In the private sector modifications are frequent. The principal standard form is the
"Capitolato generale e speciale per l'appalto dei Lavori pubblici". The first part defines procedures prior to the award of the contract. The second and
third parts provide general conditions of contract and technical requirements for construction.
The weak point of many contracts concerns the requirements for drawings and the description of the scope of work which are often imprecise. This
lack of precision causes claims, delays, etc.
Prequalification procedures are widely adopted. In Italy there is a specific "Builders List" "Albo Nazionale dei Costruttori" where the companies
are included in relation to their capability to undertake in different works, such as reinforced concrete, earth movements, buildings, etc. and in relation
to their financial means.
Unit price contracts require a description of works with detailed technical specifications and a rough bill of quantities. The risk on quantities is with
the client. Programme of execution is required.
Lump sum contracts require a description of works with detailed technical specifications. A programme of execution is also required. The risk on
quantities is with the contractor.
(c) A variant of the second type is the lump sum contract related to a bill of quantities with unit prices. Variations required by the client are regulated
in conformity to unit fixed prices: otherwise the risk on quantities is with the contractor.

The client places separate contacts with the designers and several package contractors. Design and construction responsibilities are separated
There are unit prices and lump sum contracts, depending on the scope of works.
(i) Design and Construction Arranged Separately by the Client
The general contractor is responsible for the execution of the total scope of work and undertakes the main parts of the works himself. He also places
individual packages to subcontractors. Workshop design is often the responsibility of the contractor.
(ii) 'Design and Build' Construction
The general contractor takes responsibility for the complete design and construction. He places several individual package contracts with sub
contractors and carries out the main part of the work himself. This is the main field of application of industrial buildings.
(iii) Management Contracting
Rarely used in Italy
The most popular forms of contract are (a) and (bi)
4. RESPONSIBILITIES
Italian laws and regulations give a clear division of responsibilities. Problems arise with the instructions for a complete, finished work. Often, in fact,
drawings and specifications are incomplete and not detailed enough; this causes, as mentioned before, controversies among the parties and delays.
The client is responsible for the contract award, tendering, taking over the works when they are completed, and payments.
The architect is responsible for predesign, detailed design and architectural drawings, obtaining planning permission, architectural and technical
supervision, quality, compliance with the law relating to his role (architectural).
The clerk of works, often an engineer, has the responsibility for the site management and the erection of the building according to the approved
drawings, the control of the bill of quantities, the control of the programme, safety and compliance with the law relating to his role.
The engineers are responsible for the technical inputs in their specialised fields, such as structural design, services, etc.
The contractor is responsible to the client for carrying out the work, warranties, maintaining the programme, and for shop drawings. The contractor is
responsible to the client for the subcontractors.

Contractors are required to be insured against damage during the construction and for responsibilities under civil law.
Architects and engineers are not required to carry professional insurance (if not carried by the contractor).
The contractor must offer a guarantee valid for ten years as far as serious defects of the construction are concerned.
6. FUTURE DEVELOPMENTS
Many changes are foreseen and requested in the future, as outlined below:
 Drawings and specifications must be ready " for construction" at the time of the award, in order to avoid claims and disputes during execution and
further delays and damages.
 Architects and engineers must be insured against damages.
 For public works, an independent surveyor dedicated to the control of quality and the bill of quantities is strongly required.
LUXEMBOURG
1. CONTROLS
Apart from building permits, administrative approvals for building products are not required in Luxembourg. As Luxembourg has no building
standards, reference is normally made to Euronorms (EN) and Eurocodes or to the standards of neighbouring countries. Quality certificates from an
acknowledged foreign testing institute are often requested.
2. CONTRACTS
Pubic sector contracts always adopt specific standard forms. In the private sector modifications to these standard forms are possible. The German
standard form "Verdingungsordnung fur Bauleistungen" is commonly used as a basis for contracts.
Usually contracts are awarded in the form of unit price contracts. Lump sum contracts are rather an exception.

In public works, individual contracting is the rule. The private sector may use general contacting as a method of procurement.
4. RESPONSIBILITIES
The architect and the engineer are responsible for the design and the bill of quantities.
The contractor is responsible for the executed work or the delivered equipment according to specifications, drawings and bill of quantities.

In addition to the insurance for responsibility under civil law, major contracts are executed under an allrisks insurance, covering damage during
construction.
Guarantees are at two levels, a twoyear guarantee for secondary work and a tenyear guarantee for the structural part of buildings.
SPAIN
1. Controls
1. Planning and Approvals
The seventeen autonomous communities (comunidad autonoma) or regional governments, not the State, have ultimate responsibility for planning and
control of construction. The powers are exercised by the local authorities (ayuntamientos), of which there are some 8000 grouped into fiftytwo
provinces. The responsibilities were set out in Law 19 of 2 May 1975.
All local authorities of over 50,000 inhabitants have to produce a structure plan (plan general), which is approved by the planning commission of the
autonomous communities. All urban areas each have a more detailed town plan (plan parcial), which is approved by the local authority as and when
new areas are developed.
Each local authority grants building permits but does not exercise direct technical control. Control of building regulations and initial control in the
light of the structure plan and town plan are exercised entirely by the architect via the local college of architects.
The building permit (licencia de construccion) is a legal requirement before construction can begin, and is required before gas, water and electricity
connection can be made. It is only given when the developer or client presents the project documents together with a permit (visado) issued by the
college of architects.
As well as checking from the point of view of urban planning, the local authority also verifies where appropriate that fire regulations, health
regulations, or other specific local regulations are satisfied, particularly for public buildings.
At the end of construction, the architect signs the acceptance certificate, which must be stamped by the college of architects after the client has paid
the architect's fees in full to the college. The certificate is then submitted to the local authority for the occupation licence (licencia de apertura).
1. Standards and Regulations
Building regulations in Spain are passed principally by the national government, but since 1980 the autonomous communities also have the power to
do so.
The legislation has been divided since 1977 explicitly into two classes:
· The basic norms (normas basicas de la edificacion) (NBEs) which are the only obligatory standards.
· The technical norms (normas technologicas de la edificacion) (NTEs) which are advisory but not obligatory.
An index to the legislation on building, the Indice de Disposiciones Relacionadas con la Edificacion (latest edition 1987), is published by MOPU.
The DirectorateGeneral of Architecture and Building Technology of MOPU produces or approves codes of practice (Soluciones Homologadas de
Edificacion) (SHEs) whose use guarantees meeting the minimum requirements of the NBEs.
Product standards in Spain, for all industries, are set by the Spanish Association for the Normalisation of Certification (Asociacion Espanol de
Normalisacion y Certificacion) (AENOR).
There is, in general, no legal requirement to use approved products, and no import restriction on products which do not meet or are not approved to
UNE standards.
Testing for certification of suppliers and product approval is carried out by approved laboratories. In 1986 a new accreditation system for laboratories
was set up as Red Espanola de Laboratorios de Ensayo (RELE).
1. Contract Forms
In the private sector there are no regulated procurement practices or standard contract forms. The public sector, on the other hand, is regulated
tightly, as in other Napoleonic Code countries.
Basic principles of contracts are laid down in the Civil Code and the Commercial Code. The drafting of each contract is a matter for the parties
involved. There are no standard forms.
· Fixed price lump sum contract (por ajuste alzado global y precio cerrado). This formula is used rarely except for single family housing.
· Unitary quantities contract (por precio determinado en funcion de la unidad y cantidad). This is the most common form of contract.
· Management contract (por administracion). This is used rarely.
Public contracts are regulated by:
· The Law of State Contracts (Ley de Contratos del Estado).
· The General Regulations for State Contracts (Regulacion General de Contratos del Estado).
· The General Administrative Clauses (Pliego de Clausulas Administrativas Generales) (PCAG)
The autonomous communities have the power to pass their own public procurement legislation, but have followed the State legislation.
Public contracts are normally based on a fixed price, subject to cost escalation formulae which are laid down in considerable detail in the
regulations.
2. PROCUREMENT PROCEDURES
2. Private Sector Procurement
The selection of a contractor by a private developer may often by influenced by the complex interrelationships of Spanish business.
2. Public Procurement
Further new legislation will need to be introduced to adopt the new EC directives on public procurement. The existing EC directives were
incorporated in decree 2528/1986. Existing procedures are set out in the legislation on State contracts described in the previous section.
The existing legislation (as modified in 1986) specifies three types of tendering procedure as follows:
· Subasta (auction) in which the tender documents include a fully priced bill of quantities.
· Concurso (competition) in which the bill of quantities is unpriced or not included, and the contract is awarded to the 'most advantageous offer'.
· Contratacion directa (negotiation) in which the price is negotiated directly with a candidate selected on general technical criteria.
1. Responsibilities
4. Architects Responsibilities
The architect is totally responsible for ground investigations, design and site supervision and advises on the appointment of a contractor.
4. Technical Architects Responsibilities
A technical architect is normally responsible for the bills of quantities, cost estimates, detailed budgets and control of payments in the architect's
service.
1. Insurance and Guarantees
The Spanish Civil Code adopted a simple approach to construction liability, similar to the Napoleonic Code. The code is based on the following two
basic principles.
· Tenyear strict liability for serious defects.
· Responsibility shared between the main contractor and two independent professionals acting in a personal capacity the architect and the technical
architect, or aparejador.
Both architects and technical architects have public liability insurance arranged through their colleges.
There is no obligation to carry insurance cover, and some professionals who are not in independent practice or have low workloads do not bother to
insure.
SWEDEN
1. INTRODUCTION
The Swedish contractual situation within the building sector is standardised and well established between the various parties. In 1992 a new general
regulation, called AB 92, was established (the former was AB 72).
There is a good framework for planning and maintenance of buildings during their lifetime.
2. CONTROLS
Planning regulations are tightly controlled by state and municipalities. Obtaining planning permission can sometimes delay construction for a very
long period of time.
Examples of various Swedish buildingregulations and codes are "Boverkets nybyggnadsregler" (regulations and general recommendations), BBK
(concrete structures), BSK (steel structures), etc.
There are also state building laws covering administrative regulations and execution of construction. There are also additional laws and directives for
certain types of constructions and installations.
There is a strong movement in Sweden to give the industry a higher degree of responsibility for its products and works.
In addition to compulsory special regulations for energy supply, environmental protection and mechanical services and installations, there are also
industrial guidelines.
Where materials and components are not generally tested and used special government approval or test marks are required. In addition, formal quality
assurance is necessary for some materials and components that are incorporated into permanent construction. Materials and components that require
test marks or quality assurance are listed in relevant government regulations. Testing and approvals have to be executed by authorised bodies.
3. CONTRACTS
2. General
Public sector contracts always adopt specified standard forms according to the new "AB 92" (general regulations for contractual works). The principal
standard form is the "AB 92".
Prequalification procedures are seldom used for projects in order to check capability and craftsmanship of contractors. They are now used in
conjunction with restricted tender procedures and their use will increase in the next few years.
(a) Lump Sum Contract
The parties agree on a fixed lump sum for the contractual work. If the extent of the work does not change, the price is fixed. The fixed
price can be subjected to price adjustment.
This type of contract is normally used in turnkey and general contracting.
(b) Unit Price Contract
Unit price contracts require a description of the works with technical specifications and a bill of quantities. Fixed prices are given by the
contractor for all items on the bill. The quantities given by the client are estimates. The final cost is determined when the work is
completed. This is a normal contract form in road projects.
(c) Costplus Contract
The contractor is paid in accordance with his actual costs.
3. Methods of Procurement
(a) Divided Contract
Here the client places separate contracts with the designer and several package contractors. Design and construction responsibilities are separate.
Contracts are lump sum and fixed price with or without price adjustment.
(i) Design and construction is arranged separately by the client. The general contractor is responsible for the execution of the total scope of work and
undertakes the main parts of the work himself. He also places individual packages to subcontractors. Detailed design is often the responsibility of the
general contractor.
(ii) 'Design and Build' Construction
Here, the general contractor takes total responsibility for the complete design and construction. He places several individual package contracts with
subcontractors and carries out the main part of the work himself.
(iii) 'Design, Build and Operate' Construction
This is an extension of 'Design and Build' Construction where the contractor is also responsible for the management of the finished building.
The contractor takes responsibility for all design and construction works, but does not do any work directly. The work is carried out by a series of
contractors who are contractually bound to the main contractor, who fulfils the role of the client. Sometimes these contracts are on a cost plus fee
basis.
4. RESPONSIBILITIES
There are generally clear divisions of responsibilities. The client is responsible for contract award, taking over as the works are completed, and
payments.
Engineers are responsible for the technical input in their specialised fields such as structural design. The responsibilities cover detailed design,
drawings, tendering and supervision by the rule of "YOKEL 72".
The contractor is responsible to the client for carrying out the work, warranties, maintaining programme and some aspects of detailed design and shop
drawings. Subcontractors have equal responsibilities.

Sometimes contractors insure against damage during construction, e.g. "Contractors all risk".
Generally, the client is offered a twoyear guarantee on completion of the work. It is under discussion to establish an eightyear responsibility
assurance for contracts, which is expected to increase contract costs by 12%.
Means are being sought to make contractors more responsible, see above.
More emphasis will be given to providing a practical education for designers and builders.
UNITED KINGDOM
1. INTRODUCTION
The market is well developed with suitable technical standards available. There are various routes used for building procurement depending on the
size and type of building and the client preference. In the particular case of steel frames, responsibility for frame design and the detail design of
connections is often split between different organisations. A Consulting Engineer is often employed for the frame design, including selection of
sections, while the Fabricator will normally detail design the connections to resist the loads provided by the Designer. There are, therefore, separate
contracts involved for the different operations. An increasing number of jobs are carried out through the "Design & Build" method where
responsibility for the whole rests with one organisation. Some subcontracting is normal.
2. CONTROLS
In addition to the overall requirement to obtain planning permission for the whole works, it is necessary to satisfy the Building Regulations. These
regulations are administered by the local authority where the building is to be built. For structural frames, this work will involve a check of the
calculations to ensure the regulations have been satisfied. This is normally achieved by conforming to the appropriate European or national standard
but exceptionally, the Building Control Officer can accept alternatives.
For products for which the codes are not appropriate, test results verified by the British Board of Agreement or other reputable independent bodies,
such as Universities, will usually be accepted.
3. CONTRACTS
Most structural steelwork is carried out as a subcontract to the main or management contractor. The form of contract is usually JCT 80, although
many variants are used. Where the steelwork is measured, as opposed to a lump sum arrangement, then the measurement will usually be to SMM7
(RICS Standard Method of Measurement 7th edition).
One of the problems in the industry is the lack of a standard approach and contract. Care must be taken to understand the legal and technical
requirements of each contract. The publication of the "National Structural Steelwork Specification" assists this process.

The three main procurement routes are:
4. Traditional
In this method, the building is designed by the client's professional team who then select a main contractor who organises the work and appoints his
Subcontractors. The subcontractors may be preselected and nominated by the Design Team.
4. Management Contracting
In this arrangement, a Management Contractor is appointed by the client in the early phases of the work. He works alongside the Design Team and
advises on the practical aspects of the design as well as ensuring this work proceeds to programme. He also appoints and manages the work of the
various Subcontractors.
The specialist Subcontractors, of which the Steelwork Supplier is one, are responsible for the detail design, fabrication and erection of the various
work packages.
The steel subcontract includes the frame and secondary members and, depending on the type of work, the cladding, floors, hand railing, etc.
3. On Site Design and Build
The client provides, with professional assistance, an outline scheme and a performance specification. The remainder of the design and its construction
are then put out to competitive tender.
It is the job of each tendering contractor to manage the work. The structural steel frame is usually provided by a subcontractor as before but with the
additional responsibility for the frame design in addition to the normal detail design, fabrication and erection.
5. RESPONSIBILITIES
The professional team, involving architects, engineers, quality surveyors are responsible for producing the overall design of the building, How far
they proceed with the detail design depends on the form of contract being employed and the types of specialist subcontractors.
The main or management contractor is responsible for organising the work on site, safely and to programme, and for coordinating the various
subcontractors. He is responsible to the client for their work.

There are statutory insurance requirements such as Public Liability to cover damage and injury to personnel. The completed work is subject to a
contractual maintenance period, often of 12 months. After that, responsibilities are covered by the law.
Guarantees of performance, particularly corrosion of some components, are sometimes requested but are not normal.
The major improvements are likely to come from a less adversarial approach to construction. This change is inhibited by the litigatious attitude of
Contractors and
Subcontractors at present, and the temptation to increase profits through claims.
A greater understanding by Designers and Quantity Surveyors of modern construction and fabrication techniques would assist.
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3/12/2015 ESDEP LECTURE NOTE [WG1A]

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ECONOMIC & COMMERCIAL FACTORS

Lecture 1A.4: The European Building

3. LEGISLATIVE FRAMEWORK AND TIMETABLE FOR HARMONISATION

4. THE ROLE AND DEVELOPMENT OF THE EUROCODES

1. mechanical resistance and stability

6. THE FUTURE FOR CONSTRUCTION IN THE UNIFIED EUROPEAN MARKET

Date Event Objective/Outcome

1957 Treaty of Rome EEC Established.

10.07.85 Architects Directive Mutual recognition of qualifications.

21.12.88 Construction Products Directive Removal of technical barriers to trade.

(CPD) Essential requirements to establish fitness for use.

18.07.89 Public Works Directive Amendment to 1971 Directive.

21.10.89 Testing and Certification Regulations & Approved Bodies.

27.07.91 CPD in force Implemented by Member States.

31.12.92 Deadline for Unified European Market

TABLE 1 ­ Timetable for harmonisation

ANNEX A: QUESTIONNAIRE ­ BUILDING PROCUREMENT IN EUROPE

(a) Unit Price Contract

(b) Lump Sum Contract

4. MAIN METHODS OF PROCUREMENT

(a) Individual Contracting

(b) General Contracting

(c) Management Contracting

The most popular forms in Austria are (a) and (b i).

6. INSURANCE AND GUARANTEES

There are 5 methods of tendering:

(a) Unit Price Contract

(b) Lump Sum Contract

4. MAIN METHODS OF PROCUREMENT

(b) General Contracting

Usually the contracts are lump sum and fixed price.

(c) Project Manager Contracting

The most popular forms of contract are (a) and (b).

(a) Liability Before Acceptance ("reception")

Example: completion of execution within the contractual deadline.

(b) Liability After Acceptance

The contractor is liable for:

This liability if not public policy.

Conditions for liability are:

 a contract referring to the "gros oeuvre" must exist.

5. Sharing out of liabilities

6. INSURANCE AND GUARANTEES

 financial compensation for damages incurred to insured property

 civil liability towards third parties

 proximity disturbances, i.e. any damage incurred by adjacent buildings

4. MAIN METHODS OF PROCUREMENT

(b) Management Contracting

The management contractor is usually paid on a cost plus fee basis.

(c) Design and Build

(d) System Unit Procurement

6. INSURANCE AND GUARANTEES

 standards for the products, e.g. steel sections

(a) Public­sector Contract

(b) Private Contract

4. MAIN METHODS OF OBTAINING CONTRACTS

4. Contract in Separate Lots

6. INSURANCE AND GUARANTEE

This is a so­called "public liability" guarantee.

(a) Unit Price Contract

(b) Lump Sum Contract

(b) General Contracting

Usually these contracts are lump sum and fixed price.

TABLE 1 Timetable for harmonisation

ANNEX A: QUESTIONNAIRE BUILDING PROCUREMENT IN EUROPE

(a) Publicsector Contract

This is a socalled "public liability" guarantee.

(b) GDLA Contract conditions 1982 with quantities/

RISI Short Form Contract for minor works.

RIAI Royal Institution of Architects of Ireland.

GDLA Government department and local authorities.

IEI Institution of Engineers of Ireland.

ICE Institution of Civil Engineers (UK).

SMM6 Standard Method of measurement of Building Works, Sixth Edition (1979)

SMM7 Standard Method of Measurement of Building Works, Seventh Edition (1988).

CESMM2 Civil Engineering Standard Method of Measurement, Third Edition (1985)

CESMM3 Civil Engineering Standard Method of Measurement, Third Edition (1992).

POMI Principles of Measurement (International).

(c) Allrisk insurance

(d) Nonnegligence insurance

· Tenyear strict liability for serious defects.

This type of contract is normally used in turnkey and general contracting.