18. CA Flashcards
What is the difference between forecast defined cost and actual defined cost?
Clause 63.1 states actual Defined Cost of the work already done, and forecast Defined Cost of the work not yet done.
There is a dividing date, which is now used in NEC4, which is the date the Project Manager gives an instruction to change the Scope.
Extra notes & example… the majority of CEs will be based upon forecast Defined Cost. This protects the Client when they believe the Contractor may have gone a lot slower than they needed to do. If the client/PM believes a reasonable forecast was six days and the Contractor took ten days, the client/PM could still assess it based on six days.
What is NEC Option C? How is the Contractor paid on an Option C?
Target cost contract
Paid defined cost plus fee
Talk about the NEC Option A payment provisions.
Items in the Activity Schedule are only paid once complete. This is the same for Change.
What is the pain/gain mechanism?
There is a target, built up from the activity schedule. CEs move the target.
At the end of the project, total cost is then compared to the target.
The difference is a Saving/Overspend. This is shared between the Employer and the Contractor. The % split is stated in the Contract Data Part 1. HS2 is not 50/50, it’s based on a matrix.
This is Gain/Pain. It is an incentivised arrangement.
Name some contractual provisions.
payment terms
party obligations
secondary clauses (e.g. bonds)
insurances
What are the responsibilities of the contract administrator?
Chairing meetings, giving instructions and good record keeping. The contract administrator must act in a manner that is independent, impartial, and fair.
This relates to (ROC Rule 1), acting with integrity.
Name examples of the secondary clauses.
X1 Price adjustment for inflation
X4 PCG
X5 Sectional Completion
X6 Bonus for Early Completion
X7 Delay Damages
X13 Performance Bond
X16 Retention
X20 KPIs
What are the Y1, Y2 & Y3 secondary clauses?
Y(UK)1 – Project Bank Account
Y(UK)2 – The HGCRA 1996
Y(UK)3 – The Contracts (Rights of Third Parties) Act 1999
Who adds the Z clauses?
These are additional clauses, added by the client (or Contractor if Employer). Advised to keep to a minimum as not not affect other clauses.
Who fills in the Subcontract Data Part 1? What does it contain?
Client / Employer
General Information, e.g. period for reply
Scope (SO IMPORTANT IT IS CLEAR)
Specifications
Site Information e.g. site boundaries
Adjudicator
Who fills in the Subcontract Data Part 2? What does it contain?
Subcontractor
General information e.g. fee percentage, price, list of sub subs.
Why is it important scope is clear?
To avoid ambiguities in scope / task.
If any ambiguities, the Employer will have to compensate the Subcontractor for any ambiguities in scope.
Also to avoid dispute.
How long have you got to raise a CE? And PM to respond?
Timeframes are what’s in the contract, but on HS2…
Clause 60.1 is the CE.
- Clause 61.3 Contractor to notify a CE within 8 weeks (MWCC) or 6 weeks (S/C) of becoming aware of the event. If not, he is not entitled to a change in the prices, the completion date or a key date (time). The scenario where this doesn’t apply is if the PM should have notified the event under 14.3 (giving an instruction).
- Clause 61.4 PM responds within 4 weeks (1 week standard form) and asks for a quote.
If no response from PM, Contractor notifies non-response. If another 4 weeks pass (2 weeks standard form), the CE is deemed accepted.
How long have you got to issue a quotation after the PM instructs for it?
Timeframes are what’s in the contract, but on HS2…
62.3 - Contractor submits quotation within 4 weeks of being instructed to do so (3 weeks standard form).
PM replies within 4 weeks
(2 weeks standard form). Also 4 weeks for any revised quotations.
62.6 - If no response from PM, Contractor notifies non-response. If another 4 weeks pass (2 weeks standard form) the QTE is deemed accepted.
Why is it important to raise EWNs? (Referral)
If you don’t, you are not giving the client the opportunity to help with its mitigation.
Both parties have a responsibility to work collaboratively to raise EWNs and mitigate risk (RRMs).
Clause 61.5 - Client notifies failure to submit EWN when he instructs him to submit a quotation.
Clause 63.5 - If a timely EWN would have provided an opportunity to identify a more efficient method of resolving the issues, then the Client will only assess and pay the Contractor for that method, as if he had given the EWN. The significance is that it could be assessed at a lower value, so less recoverability.
