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(AP) - APC Project Management > Not used > Flashcards

Not used Flashcards

1
Q

What is assignment?

A

When the benefit of a contract is transferred from one party to another, but the burden of the contract remains with the original party to the contract

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2
Q

What is a bond and what type of bonds are available?

A

An arrangement where a contractual duty owed by one party to another is backed by a third party. Types include:

  • Performance bond (protects against contractor default, typically 10% of contract sum)
  • Retention bond
  • Off-site materials bond
  • Advance payment bond
  • Tender bond
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3
Q

When would you use a JCT Major Project Construction Contract?

A
  • D&B procurement route
  • Lump-sum
  • Large-scale construction projects
  • Employers who regularly procure large-scale construction work
  • Contractors with experience and ability to take greater risk
  • Sectional completion
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4
Q

What is partial possession?

A
  • Contract may allow the employer to take partial possession of part of the works before they have formally completed
  • Contractor must give consent
  • Not agreed in advance
  • Completion deemed to have occurred for that section
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5
Q

What are the main features of the NEC contracts?

A
  • No reference to QS in contract
  • PM assumes full responsibility on behalf of the employer
  • PM controls time and cost as an administrative function
  • PM updates the risk register and issues instructions
  • Programme is a contract document
  • Requirement for parties to give early warnings
  • Changes managed via Compensation Events
  • No provisional sums
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6
Q

What are the 6 main options NEC3 EEC?

A

Option A: Priced contract with activity schedule
Option B: Priced contract with bill of quantities
Option C: Target contract with activity schedule
Option D: Target contract with bill of quantities
Option E: Cost reimbursable contract
Option F: Management contract

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7
Q

What are the key features of NEC EEC Option A: Priced contract with activity schedule?

A
  • Financial risk borne by the contractor
  • Lump sum contract
  • Project usually well defined at tender
  • Payment on completion of defined activities (no partial payments)
  • Suitable for traditional or design & build
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8
Q

What are the key features of NEC EEC Option B: Priced contract with bill of quantities?

A
  • Price risk borne by the contractor
  • Project usually well defined at tender
  • Payment on % completion of BoQ
  • Suitable for traditional or design & build
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9
Q

What are the key features of NEC EEC Option C: Target contract with activity schedule?

A
  • Financial risk shared between client and contractor in agreed proportion
  • Target cost agreed between parties - contractor’s estimate of ‘defined cost’ plus a fee
  • Target costs is set by the activity schedule
  • Target moves if there are Compensation Events
  • Pain / Gain mechanism for sharing risk
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10
Q

What are the key features of NEC EEC Option D: Target contract with bill of quantities?

A
  • Financial risk shared between client and contractor in agreed proportion
  • Target cost agreed between parties - contractor’s estimate of ‘defined cost’ plus a fee
  • Target costs is set by BoQ
  • Target moves if there are Compensation Events
  • Pain / Gain mechanism for sharing risk
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11
Q

What are the key features of NEC EEC Option E: Cost reimbursable contract?

A
  • Employer largely takes financial risk
  • Contractor reimbursed for actual costs plus a pre-agreed OH&P %
  • Might be used where nature / scope of work cannot be defined at the outset (e.g. emergency work)
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12
Q

What are the key features of NEC EEC Option F: Management contract?

A
  • Reimbursable contract, employer largely takes financial risk
  • Works are designed/constructed by multiple sub-contractors who are contracted to a management contractor
  • MC is responsible for the work and is paid a fee - cost that it pays the works contractors plus an additional fee
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13
Q

Rank the NEC contract options from highest to lowest financial risk for the employer?

A

Option E: Cost reimbursable contract
Option F: Management contract
Option D: Target contract with bill of quantities
Option C: Target contract with activity schedule
Option B: Priced contract with bill of quantities
Option A: Priced contract with activity schedule

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14
Q

Rank the NEC contract options from highest to lowest financial risk for the contractor?

A

Option A: Priced contract with activity schedule
Option B: Priced contract with bill of quantities
Option D: Target contract with bill of quantities
Option C: Target contract with activity schedule
Option F: Management contract
Option E: Cost reimbursable contract

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15
Q

What are the Secondary Options under NEC3 EEC?

A

Secondary option clauses include payment and risk-related options:

W1, W2 clauses - Dispute resolution

X1 - X20 clauses - pre-defined options (e.g. X5 - Sectional Completion, X13 - Performance Bond)

Y(UK)1 - Y(UK)3 - options dealing with national legislation

Z clauses - contract amendments

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16
Q

In NEC how can the completion date be changed?

A
  • Acceleration (forward)

- Compensation Event (back)

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17
Q

In NEC what is the difference between Planned Completion and the completion date?

A

Planned completion - date that the contractor plans to finish

Completion date - the date in the contract, or date changed as a result of Compensation Events

The duration between Planned Completion and completion date is called terminal float, and it is owned by the contractor (i.e. cannot be used to mitigate the effect of a compensation event)

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18
Q

What are the key responsibilities of the Project Manager under an NEC contract?

A
  • Duty to manage the contract on behalf of the employer
  • Issues all instructions, notifications and communications required under the contract
  • Only person who can change the Scope
  • Monitors execution of the project and ensures all parties adhere to conditions of contract
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19
Q

What are the key responsibilities of the Supervisor under an NEC contract?

A
  • Ensures the contractor’s compliance with the Works Information
  • Raises defect notices
  • Can issue instructions to inspect/search for a defect
20
Q

What NEC X clauses are you aware of or have you used on a project?

A
  • X5: Sectional Completion
  • X7: Delay damages
  • X8 - Undertakings to Others (Collateral Warranties)
  • X15 - Liability for design - reduces to Reasonable Skill and care
  • X22 - Early Contractor Involvement (Stage 1 and 2)
21
Q

What are the core clauses of an NEC contract?

A
  • General
  • Contractor’s main responsibilities
  • Time
  • Testing and Defects
  • Payment
  • Compensation Events
  • Title
  • Risks and Insurance
  • Termination
22
Q

What are some key changes in NEC4?

A
  • New ECI X Option
  • Deemed acceptance of programme
  • Gender neutral language
  • ‘Dividing Date’ rule for assessing CEs
  • X15 Option for design liability
23
Q

What is Opening Up in JCT? What is the equivalent in NEC?

A
  • Exposing potential defects
  • Called ‘Inspections’ under NEC and instructed by the Supervisor
  • If defect found, Contractor pays. If no Defect, the Employer pays.
24
Q

What is the design acceptance process in NEC?

A
  • Design responsibility and acceptance specified in the Scope
  • Contractor submits design for acceptance by PM
  • PM returns A/B/C status
  • If PM rejects design the reason must be stated in contract or contractor is entitled to a CE
  • Acceptance of the contractor’s design doesn’t change its design liability
25
Q

What is a Letter of Intent and what are the different types of LoI?

A

Document expressing an intention to enter into a contract at a future date. Superseded by a formal contract.

  • Letter of comfort (assurance that obligation will ultimately be met)
  • Consent to spend (up to certain value while contract is being drafted)
  • Recognition of contract
26
Q

What should be included in a Letter of Intent?

A

Must have three essential elements of a contract: acceptance, intention and consideration.

  • Acceptance of contractor’s offer and definition of the project
  • Reference to tender docs
  • Agreed contract sum
  • Instruction to proceed & date
  • Site possession date
  • Form of contract, including warranties, bonds, etc.
  • Terms for cancelling LoI
  • Insurance
  • Dispute resolution
  • LDs to be applied for late completion
27
Q

How are contracts executed and what is the difference between them?

A

Under seal

  • Signed by both parties, witnessed & made clear it is executed as a deed
  • Limits liability for a claim for 12 years
  • Requires two directors listed on Companies House, or Director and Company Secretary
  • Full construction project with potential for latent defects to occur

Under hand

  • Just signed by both parties (simple contract)
  • Limits liability for a claim to 6 years
  • Requires any one person given authority by a director
  • Simpler projects or for temporary elements of projects, such as a large scaffold/temporary works scheme
28
Q

What is a Framework Agreement?

A
  • List of contractors selected by the client after a formal tendering procedure
  • Reduces tendering timescales for clients who are continuously commissioning construction work
  • Client can invite tenders on a call-off basis
29
Q

What are the advantages of Framework Agreements?

A
  • Preferential rates for long-term delivery arrangement
  • Reduction in procurement timeframes (call-off contracts)
  • Suppliers are able to mobilise quicker
  • Collaborative
  • Parallel working
30
Q

What are the disadvantages of Framework Agreements?

A
  • Doesn’t always deliver value for money
  • Consultants / contractors become complacent
  • Narrows the opportunities to other contractors, may reduce input of fresh ideas
31
Q

What is Partnering?

A
  • Collaborative management approach
  • Collaborative design
  • Openness and trust between parties
  • Build working relationships
  • Risk is spread between parties
32
Q

What are the key features of Partnering?

A
  • One-off or long-term relationship (framework agreement)
  • Trust between parties
  • Incentives for regular work
  • Higher administrative burden, restricts to larger projects
  • Procedures to ensure continuous improvement
  • Contracts on a cost-reimbursement, target cost or open book
33
Q

What are the advantages of Partnering?

A
  • Programme can be shortened due to prior understanding of the client and requirements
  • Conflict is reduced
  • Improved communication
  • Mutual objectives
  • Pooling of resources
  • Encourages innovation
  • Better value for client
  • Improved buildability (early contractor involvement)
  • Good predictability of costs
  • Stability and better confidence
34
Q

What are some contract types suitable for Partnering?

A
  • JCT Constructing Excellence
  • JCT Framework Agreement - strategic partnering contract
  • NEC 3 Framework Contract - strategic partnering contract
  • NEC 3 EEC Option X12 - partnering contract but doesn’t create a multi-party contract
35
Q

Under HGCR Act 1996 what are the payment terms that must be covered by contract?

A
  • Interim payments due 7 days after end of 28-day period (assessment date)
  • Final date for payment 14 days after due date
  • Interim certificate due 5 days after due date / if not issued a default notice issued and final payment postponed
  • Payless notice served within 7 days of final payment date (5 for JCT)
  • Final payment due 30 days after final certificate issued
36
Q

What are the New Rules of Measurement (NRM)?

A
  • Suite of 3 documents outlining measurement rules
  • Provide consistent approach and best practice
  • Assist QS in providing effective and accurate cost advice by acting as a checklist
  • NRM1 - Order of cost planning for building works
  • NRM2 - Detailed measurement of buildings works
  • NRM3 - Order of cost and measurement of Maintenance Works
37
Q

What is included in a payment certificate?

A
  • Date
  • Date of certification
  • Date of valuation
  • Contract date
  • Client details
  • Contractor details
  • Contract administrator details
  • Site address
  • Total contract sum
  • Payment due
  • Gross value
  • Less retention
  • Less previously certified
  • Amount due (ex VAT)
  • Director’s signature
38
Q

What are the payment timescales for the NEC3 contract?

A

Assessment date - Contractor to submit interim application not less than 7 days before due date (work valued up to due date)

+7 days (Assessment Date) - Due Date for payment

+5 days (Due Date) - Interim certificate issue

+14 days (Due Date) - Final date for payment

-7 days (Final Payment Date) - Pay less notice issued

39
Q

What are the payment timescales for the JCT D&B 2016 contract?

A

Contractor to submit interim payment application any time up to Interim valuation date (either agreed in contract or one month intervals after possession of the site).

Due date for payment is +7 days from the IVD

+5 days (Due Date) - Payment Notice issued by employer (if fail to issue the contractor’s IPA prevails)

+14 days (Due Date) - Final date for payment

-5 days (Final Payment Date) - Pay less notice issued

40
Q

What are some of the key points in the Housing Grant, Construction and Regeneration Act 1996 (HGRCA, or Construction Act)?

A
  • All contracts should provide a payment mechanism stipulating when/how/final date for payment
  • Payer must give early communication of amount to be paid
  • No withholding of sums without withholding notice, stipulating what is to be withheld and why
  • Payee may suspend performance where sum is due and not paid in full by final date of payment
  • Provides statutory right to refer disputes to adjudication
41
Q

What changes were brought in with the HGCRA 2009?

A
  • Includes all construction contracts, even if not in writing
  • Parties are free to agree amounts for payments and the intervals
  • No withholding of sums without pay less notice instead of withholding notice, stipulating the basis on which they have built up the sum to be paid
  • Prohibits payment clauses whereby payment is linked to payments under separate contract (pay when certified)
42
Q

Under NEC, what is Defined Cost?

A
  • Used in Option C and D (Target Cost)
  • The costs permitted under the Contract that are incurred/expended by the Contractor
  • Assessed by the Project Manager
  • Contractor reimbursed for Defined Costs, agreed fee, minus Disallowed Costs - this is the Price of Work Done to Date
43
Q

What are Disallowed Costs in NEC?

A

Costs Project Manager has decided are:

(1) not justified by the Contractor’s accounts and record;
(2) shouldn’t have been paid to a subcontractor in the first place; or
(3) were incurred because the Contractor did not follow the acceptance or procurement procedures laid down in the Works information or didn’t give an early warning notice as required

44
Q

What is the Schedule of Cost Components?

A

The set list of categories of Defined Costs that form the total of the prices. These are:

  1. People
  2. Equipment
  3. Plant and materials
  4. Charges
  5. Manufacture
  6. Design
  7. Insurance
45
Q

What are the steps involved in change management?

A
  • Access: identify what is needed to convert outputs to benefits
  • Prepare: Create a vision and gain support (stakeholder management), establish governance, roles to support change
  • Plan: Incorporate change into programmes, plans and schedules - communication management plan and risk management plan
  • Implement: Communicate the benefit of the change, remove obstacles to change, coordinate activities that enact the change (BAU to new state)
  • Sustain: stabilise new state, benefits realisation
46
Q

What legislation governs an EIA? What are the steps?

A

Environmental Impact Assessment Regulations

  • Screening
  • Scoping
  • Prepare Assessment
  • Submission
  • Decision

(AP) - APC Project Management (25 decks)

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