Contract Admin Flashcards
What is the role of a Contract Administrator?
To administer the contract between the employer and the contractor.
CA to act honestly and independantly when making decisions.
When does the contract admin role begin?
The role of contract administrator does not commence until a building contract is in place between the employer and the contractor.
However, there is often arrangements in place between the client and CA to undertake pre-contract duties such as:
- Selection of the method of procurement.
- Deciding on the type of building contract.
What are the responsibilities of a Contract Administrator?
Administer the contract between the employer and the contractor.
The CA must act in a manner which is independent, impartial and fair when making decisions.
Completing multiple other administrative tasks such as:
- Managing changes to the contract such as variations.
- Undertaking routine inspections to inspect quality, progress and valuations.
- Issuing payment certificates /practical completion certificates.
Who can act as Contract Administrator?
Traditionally, the role was undertaken by an architect; the role can also be undertaken by:
- Building surveyors
- Quantity surveyors
- Management surveyors
- Engineers
You have said that you’ve read the RICS Contract Administration Guidance Note – can you tell me a bit about that?
- The guidance note was archived in May 2022.
- A new document will be issued in due course with new guidance based on case law.
- For example, the guidance note refers to the CDM 2007 regulations.
What are the key points of the RICS Contract Administration guidance note?
- Appointment of the Contract Administrator
- The roles and responsibilities of a Contract Administrator
- Focuses on JCT contracts: Minor Works, Intermediate and Standard Building Contracts
Is the RICS Contract Administration guidance note mandatory?
No, this is a guidance note and therefore considered best practice.
What are the different types of contracts you are aware of?
My experience with contract administration has been from administering the JCT suite of contracts. These are:
- Minor Works (+ with contractors design)
- Intermediate Building Contract (+ with contractors design)
- Standard Building Contract
- Design & Build
- Repair and Maintenance Contract
What do you consider when selecting which contract to use?
- I always refer to the JCT Decision tree.
- This enables me to make an informed decision on which form of contract to use.
- For example, If sectional completion is required or the appointment of a specialist named contractor. (JCT Intermediate Building Contract)
Are you aware of any other forms of contract? (other than JCT)
I am aware of the NEC contract suite but have not had any experience in administrating this.
What is the difference between JCT and NEC?
- NEC can be used for building & engineering projects whereas JCT is specifically for building projects.
- JCT contracts have been an industry standard for many years with clients and contractors often more familiar with this suite.
- The NEC contracts are thought to have been drafted using plain English that can be easily understood, with no legal jargon like the JCT.
What are the different types of procurement methods you are aware of?
- Traditional procurement
- Design and Build
- Management Procurement
Explain to me your understanding of Management Procurement?
- A design team prepares project drawings and a specification.
- A management contractor is appointed to manage the execution of the works.
- The contractor is appointed by the Management Contractor.
- Often used for complex projects made up of a number of packages.
- Management contractor contributes to the design process and is responsible for the project management and carrying out the works.
Advantages:
- Quick method of procuring a main contractor.
- Programme and cost plan agreed by design team.
Disadvantages:
- Method requires high level of client involvement.
Explain to me your understanding of Design & Build?
- Design and Build is where the contractor is responsible for both the design and construction phase.
- The tender documents are prepared by the consultant (employers agent) outlining the employers requirements.
- The contractor is responsible for the design and submits a contractors proposal.
Advantages:
- Time can be saved by starting the construction works whilst the design is completed.
- Design & construction risks lie with the contractor.
Disadvantages:
- Contractor assumes higher risk and this is reflected in the price.
Explain to me your understanding of Traditional Procurement?
- Traditional procurement is a single-stage process.
- The design is developed by a consultant on behalf of the client.
- The contractor is then appointed under a lump-sum construction contract and responsible for carrying out the works.
Advantages:
- Control of quality.
- Client knows lump sum cost.
- There is a contractual date for completion.
Disadvantages:
- Design risks lie with the client.
- Long design period.
What should you consider when advising on a procurement route?
- Time
- Cost
- Quality
Whats the difference between single stage and two-stage tendering?
Traditionally, tendering involves just one stage, in which a contractor is appointed to carry out all of the works required.
In Two-stage tendering, the contractor is initially appointed only to carry out some of the works required. Allows early appointment of a contractor whilst designs are being finalised for a second stage.
What’s the difference between patent & latent defect?
Patent defects
- Defects that can be discovered by reasonable inspection.
Latent defects
- Defects that cannot be discovered by reasonable inspection.
For example, problems with foundations which may not become apparent for several years after completion when settlement causes cracking in the building.
What is a tendering process?
- A tender process is when contractors are invited to bid to carry out specific construction work packages.
- A tender process begins with an invitation to tender.
- Contractors must submit bids within the specified deadline.
- Each tender is evaluated on criteria such as quality and price.
Why is tendering important?
Tendering helps all parties arrive at the best contractual terms that benefit all parties.
Whats is a Provisional sum?
Allowance for work that has not been defined in enough detail at the time of tender to be accurately priced.
Two forms of provisional sum:
Defined
- Described in sufficient detail for the contractor to provide time and cost (confirming floor colours)
Undefined
- Works are not described in sufficient detail for the contractor to provide time and cost (drainage repairs following CCTV survey).
What is a Prime Cost Sum?
- Allowance, for work provided by a sub-contractor nominated by the client
- The main contractor is entitled to add mark up and attendance costs to the allowance.
What are the insurance options in JCT?
Option A: Contractor all risk.
- The responsibility of the Contractor to arrange insurance for the entire project.
- Takes out joint names for all risks insurance of the works.
Option B: Employers insurance of works.
- The client takes on the responsibility of arranging insurance for the works.
- Provides employer with greater control /assurance over the insurance.
Option C: Joint names insurance.
- Contractor and the client named as joint insured parties.
- Simplifies claims handling.
How would you select the insurance option for a contract?
The choice between Options A, B & C depends on the project requirements, risk and the parties ability to secure appropriate insurance cover.
I ask the client to run this by there insurers.
What is Novation?
Rights and obligation from one contract are transferred from one party to another
What is included within the valuations?
- Prelims.
- Measured works.
- Variations
- Materials on site
- Retention
- Previous payments
Could an email constitute a contract document?
Yes, as long as there is an offer, acceptance and intention to create legal relations and the responding email does not vary the conditions; a contract will be created.
What’s a clerk of works?
- Clerk of works is responsible to ensure the works are carried out to the required quality standards specified in the projects design.
- They act independently with a focus on safeguarding the clients interest.
What are liquidated damages?
If the contractor fails to complete the works by the agreed completion date.
The client may deduct liquidated damages for loss from the payments due to the contractor.
Providing that an appropriate notice has been issued (a pay less notice) setting out the basis of the calculation. Not later than 5 days before the final date of payment a pay less notice is given detailing the sum that has been calculated.
What is a relevant event?
This causes delay to the completion date - entitles the contractors to an extension of time.
Often caused by the client or by a neutral event, such as:
- Variations
- Exceptional adverse weather conditions.
- National strikes.
- Force major (War or Pandemic)
- Delaying giving the contractor possesion of the site.
What is a relevant matter?
Relevant matter is where the client is responsible for effecting the progress of works. This entitles contractors to claim for loss and expense.
- Failure to give the contractor access to the site.
- Variations.
- Delays in receiving instructions.
What Legislation allows for payment under the contract?
- The Housing Grants, Construction and Regeneration Act
- This stipulates that interim or stage payments are due to any party to a construction contract that has a duration of more than 45 days.
- Therefore, almost all constructions contain provisions for interim payments.
What is a named sub-contractor?
Naming subcontractors allows the client to influence the selection of sub-contractors whilst leaving responsibility for their performance with the main contractor.
Note: Nominated sub-contractors (Nominated by the client) JCT no longer include the provision for a nominated sub-contractor.
What are insurance options for JCT Minor Works Contracts?
Clause 5.4A (not suitable for new build)
- The contractor takes out insurance and each Party is covered under the policy.
Clause 5.4B
- The employer arranges cover for the Works and for the existing structure.
Clause 5.4C
- Each party arranges their bespoke insurance.
At Matthew Flinders Way; You issued payment certificates, which and when?
I issued the interim, penultimate and final payment certificates.
- Interim payment certificates were issued no later than 5 days after the due date. Interim valuation date was defined in the contract; 7 days following this is the due date and interim payment certificates were issued as per the terms of the contract.
- Penultimate payment certificate was issued at the end of works together with practical completion certificate.
- Final payment certificate was issued at the end of the rectification period together with a certificate of making good.
How does sectional completion differ from partial possession?
Sectional completion differs from partial possession in that it is pre-planned and defined in the contract documents.
What needs to be considered with Sectional Completion?
- Difficulties with logistics on site when different sections are in the possession of different parties.
- The protection of completed sections from ongoing work.
- The provision of appropriate insurance at all times for all sections.
- The adoption of appropriate health and safety measures to deal with risks resulting from occupation of areas adjacent to, or only accessible through ongoing construction works.
- The provision of appropriate security measures.
The consequences of sectional completion are that
- Half of the retention is released for that section.
- The Rectification Period begins for that section,
- The contractor’s responsibility for insuring the works (if applicable) ends for that section.
- The contractor’s liability for liquidated damages ends for that section.
- The employer is now responsible for any damages to the works for that section.
What’s included within a contract document?
- Contract
- Preliminaries: Contractor can cost against - Welfare /Scaffolding
- Preambles: General description of the works inc. working hours, roles and responsibilities of all involved, insurance, workmanship (Appropriately skilled and experienced for the type and quality of work.)
- Form of tender
- Priced schedule of works
What is procurement? How does this differ from a contract?
Procurement is the process of which the project will be undertaken.
Contract is the terms by which the works will be undertaken.
What are the contractors rights under the Housing Grants Construction & Regeneration Act?
- To receive interim payment (not paid at the end).
- Receive notification on any money withheld (pay less notice).
- Suspend performance for non-payment.
- Disqualified the paid when paid (sub-contractor didn’t have to be paid until the main contractor was paid).
- Right to adjudication
What are collateral warranties?
Contractual relationship between parties where there would otherwise not have been.
Employer may wish to have collateral warranty with sub-contractors if the main contractor goes into liquidation, they will still have contractual links with the subcontractor.
What is novation?
Where the contract obligations are passed from one party to another.
Usually when the contractor goes into liquidation and cannot fulfil the contract obligations.
What is a compensation event?
An event that has financial impact on a project due to change in work that wasn’t initially agreed.
What is a Final account?
- Financial statement detailing a breakdown of the final contract sum including payments made and any changes including contract instructions.
- Information is issued by the contractor no later than 6 months after issue of PC.
- Contract Administrator issues final account no later than 3 months upon receiving all information.
- Release final statement /account 28 days following.
- If after 6 months contractor hasn’t provided – CA must give 1 month notice to supply the info.
- CA to provide final account based on information they have if not received.
- If this final account is then disputed alternate dispute resolution would need to be addressed.
What is the Alternate Dispute Resolution mechanisms in JCT?
- Mediation
- Adjudication
- Arbitration
The appointing body is named within the contract for arbitration and adjudication. (RICS)
In situations where there is a disagreement over the appointment of an arbitrator or adjudicator the appointing body (RICS) will make the appointment on behalf of the parties.
Can you elaborate on the process of undertaking valuations?
Valuations involved assessing the value of the finished work and any variations from the initial contract.
This process required understanding the contract, maintaining records of the progress of work, and being thorough in inspections.
What is the process of preparing payment certificates and how do you go about this?
In preparing payment certificates, I check completed work against the contractor’s application for payment.
After confirming the work met the contract standards, I would issue a certificate indicating the percentage of work completed and the corresponding payment value.
Could you mention any challenges faced during the project at Matthew Flinders Way?
One of the challenges was managing contract variations due to changes in the project scope.
I overcame this by clear communication and negotiation with parties involved and ensuring that all changes were appropriately documented and approved.
At Matthew Flinders Way; Why did you choose the JCT Minor Works 2016 contract for the scheme?
- I considered the works were short in duration with a straightforward construction.
- I also referred to the JCT decision tree when making the decisions.
What was your role on the Matthew Flinders Way project?
Contract Administrator and Principle Designer
