Commercial Flashcards
(19 cards)
What types of insurances are required on the projects you manage?
- Professional Services Insurance
- Public Liability Insurance
- Death or Injury to Employees
What are some different types of NEC contracts?
Professional Services Contract - typically used by consultants
Engineering and Construction Contract - more often used by contractors
Framework Contract
Alliance Contract
What are the advantages and disadvantages of the different NEC contract options and when would one be used vs another?
Option A - Used when there is well defined scope from the client. All the risk is placed on the contractor therefore the price is typically higher to reflect this. Payment is made upon completion of an activity
Option E - Used when there is poorly defined scope from the client. Lowest risk to the contractor but fewer opportunities to make profit as payment applications made monthly based on hourly rate cards and expenses incurred.
Option C - Scope is better defined than Option E but less than Option A. Option make use of mutual pain/gain to incentivise both Client and Contractor to perform.
What are the different options for an NEC PSC?
Option A - Priced with activity schedule i.e. lump sum*
Option B - Priced with bill of quantities
Option C - Target with activity schedule*
Option D - Target with bill of quantities
Option E - Cost reimbursable***
Option F - Management contract
What are the differences between NEC3 and NEC4
NEC4 isn’t too different from NEC3 and builds on its good parts, so still makes use of CEs and EWNs
Employer now known as Client
Introduced Contractor Proposals which enables me as a Consultant side PM to propose positive changes in scope.
NEC4 has a more definitive list of risks that sit with either the Client or the Contractor
How did you manage change on your projects?
Risks and changes identified through weekly team meetings.
Risks added to the Risk/Early Warning Register
Following review by the Client, submission of a Compensation Event
How did you manage project costs and how did you stick to budget?
I monitored teamsheet bookings on a weekly to monthly basis depending on the intensity of activity. I provided the project team with regular updates on the time budgeted for vs the time spent. I asked the project team to flag whether they thought more time was required. This was an Option E contract so I notified an EWN/CE for the additional costs.
What is the difference between gross profit and net profit?
Gross profit is revenue vs cost of goods sold i.e. consultant’s time
Net profit is gross profit minus expenses i.e mileage, train travel
What factors go into a person’s charge rate?
Cost of employment
Overheads e.g. office space
Contingency
Expenses
Profit
Need to be competitive
What are the different types of procurement mechanism and what was your project won through?
Different types include:
Traditional
Design and Build
Construction Management
Lincs and EA project TBC
What is the current employer’s National Insurance contribution
Recently raised by 2.2% to 15%
What are the typical components of an NEC contract
Core Clauses e.g.
- Consultant responsibilities
- Payment terms
- CEs
- Liabilities and insurance
Option Clauses - A, C, E
Dispute resolution
- W1 used when Housing Grants, Construction & Regeneration Act 1996 does not apply
- W2 used when it does
Secondary Option Clauses - XY&Z Clauses
- X2 changes in law
- X20 KPIs
- Z clauses are project specific additions or changes to existing clauses
Schedule of Costs
- People
- Subcontractors
- Charges
- Insurances
Contract Data
- Part 1 provided by Client - clauses chosen
- Part 2 provided by Consultant
What is a contract and why do we need one?
A legally binding agreement between two parties. A contract is required to set out the scope of works and the terms by which the scope of works will be delivered.
What is a force majure?
a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a
war, strike, riot, crime, epidemic or sudden legal changes prevents one or both parties from fulfilling their obligations under the contract
What counts as a compensation event?
- Instructions to change the service (unless this results from accepting a defect, or from a change requested by the contractor).
- Failure to provide access.
- Failure of the client to provide equipment, plant or materials.
- An instruction to halt, or delay the works.
- Work done by others.
- Conditions that could not reasonably have been foreseen.
- Exceptionally adverse weather (beyond one in ten year frequency).
- Force majeure (such as an epidemic or an ‘act of God’).
- EW not necessary for CE
What is the purpose of a clause 31 and clause 32 programme
Clause 31 - produced at the start of contract and forms a baseline programme to understand how changes have effected progress.
Clause 32 - revised programme at regular intervals to track progress, provide transparency and help manage the project
What are the key clauses in your contract
Payment, compensation events, indemnity and insurance, liability, rights to data, programme, scope, specification, prices
What would you consider a commercial success and how would you achieve it
- The project returns a profit
- The project is completed without any health & safety incidents or near misses.
- The project has enhanced Mott MacDonald’s relationship with the Client.
- The project has maintained programme
- The project is completed in a sustainable way
- The project has enhanced Mott MacDonald’s reputation with the Public.
How were you able to maximise profits
Where appropriate I used the resource of staff whose charge rates were more favourable.
I was clear in my communication with the client of how costs had been accumulated to minimise the risk of non-recoverable costs.
Similarly, I managed project budgets as close to estimate as possible to minimise the risk of non-recoverable costs.
