Cian Dillon Brennan explains Practical Completion in construction contracts: the project end date that triggers liquidated damages if missed. Contractors must submit a signed Practical Completion Certificate to recover half their retained security. Critical-path delays push the PC date; non-critical ones don't.
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Hey, so super quick video and pod for you today. So if you don't know what practical completion is, or you kind of know what it is and you want to know a little bit more, just check out this training. It's 3 or 4 minutes long. It'll give you everything you need to know about understanding practical completion, how it impacts a construction project. So if you don't know who I am, my name is Cian Dillon Brennan. I'm CEO of Quantum Contract Solutions. The reason we make these videos is so many construction companies going out of business, losing money hand over fist just because they don't understand what's in the contract. And we don't want you to be one of those. If you get some value, please subscribe and like, and I'll chat to you soon. Enjoy. Okay, so this one's gonna be a relatively quick one, and it's to do with practical completion. Okay, so if we go back to our original slide, which details out where we are, what's going on. So you've finished the pre-award stage, you got a tender, you negotiated, you awarded a contract, you signed it, you gave some security, Okay, so we know what security is now. Then you went and got on and did the works, and then now we're coming up to finishing the job. Now, the thing is really important— practical completion, also referred to as PC, is the end date of the contract. We're gonna talk about a thing called liquidated damages, which is basically every day after practical completion that you finish, you have to pay the client a certain amount of money. Okay, so that practical completion date is really important. So when we're looking here and you're completing the works, right, you were always looking at that practical completion date. And the construction program is detailing what happens. So if we get delayed here today, it's going to push out the practical completion date. Now, it's not always linear, okay? A term that I'd like you to remember is called critical path. So on the construction program, there's some things that if you delay, it's called— it's on critical path, which pushes out the practical completion date. Sometimes you can be delayed in another area that doesn't actually push out the PC date. So that's the thing to remember. However, If you've been delayed, as far as we're concerned, you've been delayed. That's the way we want it to be contractually. So that practical completion date is fixed and firm in the contract. It states what it's going to be in the contract. And in order to reach PC, to reach practical completion, you have to get a practical completion certificate signed by you and signed by them. Everyone has agreed that you are complete. So that's what needs to happen. Typically, there is a form in the contract that represents this practical completion certificate. Oftentimes our clients are like, our Oftentimes our clients, the contractor, will often say, the company won't give me PC. And we're like, well, did you fill out the form in the contract and follow what the contract says about how you submit PC? And they're like, no. I was like, well, do that first, and then if they don't do it, then, then, then you might be in trouble. Then come talk to us. But you got to follow the procedure in the contract. So in the contract, it'll say you need to do certain steps to reach PC, and essentially it's just filling out this form, getting both parties to sign it. That's what needs to happen. Now When you hit PC, right, once it's signed and you haven't gone over, you're, you're all good to go, right? Hasn't moved forward, or if it's moved forward, you've done so by getting a variation or extension of time, right? That's getting approved for your delays and variations and change orders. We'll talk about that terminology in a little bit. Okay, so, um, now that you've finished your PC, you should get half of your security back. Okay. And that's really what practical completion is. It's like a moment in time that you need to understand where it is. And once you understand the whole process around this whole flowchart, it makes your life a lot easier to visualize it in your head. Okay.
