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Geoff Wright, Hammerson's director of project management

Firm prices with clamp on claims

THE NOVATION technique employed by Hammerson to generate guaranteed maximum prices has the additional benefit from the client's point of view of restricting the scope for contractors' claims.

This leads to the question of how variations are dealt with.

The answer is that routine working up of the design from outline to detail is all part of the GMP risk undertaken by the contractor.

Every works package contractor is expected to make allowance in his price for the further details that emerge in the course of developing the design.

As Geoff Wright puts it: 'If we as client decide to put in three more shop units as against the 20 specified originally, then we accept that as an extra.

'But if it is detailing a toilet in a shop unit which is shown on the 1:200 drawing as toilets with a specification to be produced as the design evolves, that is deemed to have been priced.

'So the contractor must take responsibility for variations cased by the working up of the design without client intervention.

'But in the case of changes in the design concept after the overall design has been priced, then extra sums of money will be due to the contractor.

'This is how we obtain prices we consider to be value for money. You could describe our approach as a variation on the previous idea of the client obtaining a firm price contract.'

Hammerson's current development portfolio reflects the recent upswing in construction activity.

The company has £600 million or £700 million worth of work starting in the UK within the next 12 months.

More than half of this construction workload is accounted for by the Oracle at Reading, the Bull Ring at Birmingham and Brent Cross phase two in north-west London.