by Roelf Nel (Director), Danica Nel de la Rey (Associate) and Carin van Wyk (Associate)
Interim Completion and Practical Completion are both defined terms in the JBCC Nominated Selected Subcontract Agreement (NSSA). In this article we will examine how the subcontract works are certified as substantially complete and explore the meaning, requirements for, and consequences of Interim Completion and Practical Completion in terms of the JBCC NSSA edition 5 and 6.
Practical Completion
The JBCC PBA and NSSA ed.5 defines Practical Completion as the stage of completion as certified by the principal agent where the works or a section thereof is substantially complete.
In ed.6, Practical Completion is defined as the stage of completion, as certified by the principal agent, where the works (or a section thereof):
- has been completed; and
- is free of patent defects other than minor defects, identified in the list for completion; and
- can effectively be used for the intended purpose (ed. 6).
This definition of practical completion provides for 3 requirements for the works to be certified as Practically complete. Practical completion cannot be achieved when there are patent defects in the works i.e. an observable fault apparent to the principal agent which will prevent the works being used for the intended purpose. The presence of minor defects which do not affect the practical occupation and use of the building will not prevent practical completion.
The definition of Practical completion refers to completion of the “works”. Works are defined as the extent of work, described in the construction information and contract instructions, to be executed in terms of the PBA, by the Contractor (ed.6). The works include the subcontract works.
The Principal agent certifies that the works are practically complete by issuing a Certificate of Practical Completion to the Contractor. The certificate of practical completion specifies the date on which practical completion of the works (or a section thereof) was achieved (ed.6).
Interim Completion
Interim Completion is defined as the stage of completion, as certified by the Contractor, where the subcontract works (or a section thereof)
- is substantially complete.
Substantially complete, is the point at which a subcontract works is complete, save for minor defects. Some construction practitioners describe this point as when the building project is “capable of beneficial occupation and use”.
The definition of Interim completion refers to the “Subcontract works”. Subcontract works is a defined as the extent of work, described in the subcontract agreement and contractors’ instructions, to be completed by the Subcontractor (ed.6).
Certifying Interim Completion in Terms of the NSSA
In terms of the NSSA, the Contractor has an obligation to issue a certificate of Interim Completion to the Subcontractor. The Certificate of Interim Completion is defined as a certificate issued by the Contractor to the Subcontractor stating the date on which interim completion of the subcontract works (or a section thereof) was achieved. The certificate shall be issued by the contractor to the subcontractor after the subcontract works have been inspected and the defects specified on the list for Interim Completion have been rectified and the listed subcontract work have been attended to.
In ed 5 the definition for Certificate of Interim Completion states that such certificate will not take precedence over the certificates of Practical completion, Works completion and Final Completion. This portion of the definition was removed in ed 6.
The Contractor does not issue a certificate of practical Completion, Works completion (ed 4 and 5), nor a Certificate of Final Completion of the subcontract works to the Subcontractor.
The NSSA agreement does however stipulate that the Contractor has an obligation to inform the Subcontractor where Practical completion (including deemed practical completion), Works Completion (ed 4 and 5 only) and/or Final Completion have been certified.
Therefore, the subcontract works are certified as substantially complete by means of a certificate of interim completion and not a certificate of practical completion. This means that in theory the Contractor should issue a certificate of interim completion prior to, or at the same time as the Contractor being issued with a certificate of Practical Completion.
Subcontractor’s Obligation to Hand Over Certificates, Manuals and Guarantees
Edition 5 of the NSSA specifies that on achievement of practical completion, the subcontractor shall hand over to the contractor all operating and instruction manuals, product guarantees and manufacturers’ instructions. The Subcontractor shall provide to the principal agent, all information for the preparation of the ‘as built’ documentation.
In terms of edition 6 of the NSSA, on achievement of interim completion, the subcontractor shall hand over to the contractor all operating and instruction manuals, product guarantees and manufacturers’ instructions and information for the preparation of the ‘as built’ documentation and applicable statutory, regulatory approval certificates.
Effect of Practical Completion in Relation to NSSA
Even though the Contractor does not issue a Certificate of Practical Completion to the Subcontractor, the Subcontractor still has certain obligations to fulfil in order for the works, which includes the subcontract works, to be certified as practically complete.
The contractor shall issue a list for practical completion, applicable to the subcontract works, to the subcontractor. The subcontractor shall complete the items on the list for practical completion and notify the contractor to inspect the subcontract works, until the certificate of practical completion is issued.
The consequences of achieving practical completion, as it relates to the subcontractor, are as follows:
- The subcontractor shall not be obliged to carry out any contractor’s instruction for additional work.
- The employer shall be entitled to possession of the works and the site subject to the contractor’s lien or right of continuing possession of the works (where this has not been waived).
- The Contractor delivers to the Principal Agent all information for the preparation of the ‘as built’ documentation, approval certificates, manuals, guarantees and manufacturers’ instructions. This will include the relevant documentation handed over by the Subcontractor to the Contractor at Interim Completion (ed 6) OR practical Completion (ed5).
Conclusion
The requirements for interim completion vary from project to project. In order to limit the subjectivity associated with achieving interim completion, the subcontractor should already at the tender stage establish the exact scope of the subcontract works and to agree upon the completion criteria with the main contractor. The completion process reflects the importance of making sure the n/s contract documents and programme is detailed, accurate and up to date and that all contract instructions are in writing.
The subcontract works are certified as substantially complete by means of a certificate of interim completion and not a certificate of practical completion. This being said, even though the Contractor does not issue a Certificate of Practical Completion to the subcontractor, the subcontractor still has certain obligations to fulfil in order for the works as a whole, which includes the subcontract works, to be certified as practically complete.
Recent Comments