Contract Admin JB Flashcards
1
Q
What is a pay less notice ?
A
Contractoral mechanisms where an empoloyer can reduce the amount of the payment certicafte in refkection to the actual works completed.
Pay less notice NEC – 7 day before due date
Pay less notice JCT = 5days before due date
Issued by the employer - risk of damages if not valued correctly
2
Q
What is determination ?
A
E/ C apply for dterminations. In construction contracts, determination is a right that allows a party to end their obligations under the contract, while still allowing the contract to remain in place. Ends C obligations - collateral warrenties &third party rights still in place. Not planned - negative mechanism, when something has gone wrong.
3
Q
What is a performance bond?
A
A performance bond is a financial guarantee that a contractor will complete a project satisfactorily. May be required by E after finacial checks, third part insurance. Typically set at 10% of the contract sum. on demand/ conditiona; - requires prood - set out in prelims - bondsman
4
Q
What are liquidated damages? - Delay Damges in NEC
A
Pre determined rate by E by C - failure to meet completion . Not a penalty - worked out fairly - Hadley vs Baxendale. Court unlikely to rule LD unfair if both have entered knowing the consquences of delays. - Called
5
Q
What are unliquidated damages?
A
Damges not pre- agreed/LD not sufficient - E must prove
6
Q
What are latent defects?
A
Defects that are not yet known about or not discovered by reasonable inspection
7
Q
What are patent defects?
A
Defects discoverable by reasonable inspection
8
Q
What is the difference between novation & assignment ?
A
Novation replaces the original contract with a new one, with the same obligations but different parties. The original contract is extinguished, and the new contract is between the continuing party and the incoming party.
Novation transfers both the rights and obligations of the outgoing party to the incoming party, while assignment only transfers rights
Assignment - transfer of benefits only - does not need to be written in contract -
A collateral warranty can be transferred to a building’s tenant or purchaser during or after construction.
9
Q
What is a the difference between Collateral Warranties and Third Party Rights?
A
CW provide a contractural link to a named person not part of the orginal contract.- D&B design team to client
Third part rights allow a specified term in the contract to be enforced by a thrid party, not the whole contract - tenants of block of flats
10
Q
what is contract works insurance ?
A
covers builders work underway on site against fire/ flood - will be stated in prelims
11
Q
What are Retention Bonds?
A
Avoids retention recovery issues, retention paid into bond - indicated at tender stage - may help contractual relations
12
Q
What are the main types of tendering? - check this
A
Single Stage Competitive Tender - invitation to tender issued to multiple Cs, set time to return, analysis, select.
Two-Stage Tendering - used with time constraints / technical input required. First stage, RIBA 2-3, enquiry to Cs, returns, selected on quality of bid / prelim price, selected C joins design team to RIBA 4. Stage 2 - bid for con works, more like quotation.
Negotiated Tendering - single stage tender with single C, returns with cost, negotiated.
Open - anyone apply / Selective - selected list / Single contractor selection.
12
Q
what happens at completion ?
A
- release part of retention - amount in contract - start of defects date - end of contractors liability for delay damages - E insurances site. Increases cash flow as the bank pays out the retention so contractor gets paid but E keeps retention. So the employer gets to retain the money in case there’s defects, but the contractor gets paid in full
13
Q
What is a Project Bank Account?
A
Account used to recieve payments from E & C to pay C and suppliers. Benefits - security of payment, collaboration, protect against insolvency. Disadvantages - more time heavy, not common use.
14
Q
What is the difference between a contract and a deed?
A
A deed is a legal document that transfers, confirms, or validates an interest, right, or property. Deeds are often used in significant transactions, such as transferring property from one person to another.
Contract needs consideration - deed doesnt. Contract can be verbal - deed must be written. Deed must express it is a deed. deed must be witnessed
15
Q
what benefits might JCT contracts have over NEC?
A
Familiarity of use. More commonly used than NEC - No EW
16
Q
What is required to form a contract?
A
Offer, accpetance, consideration and intent to create legal relations
16
Q
What are the advantages / disadvantages of D&B?
A
=adv = early construction, cost certainty
dis = qualty - Contractor cutting corners - changes will have time and cost implications
17
Q
What are the advantages / disadvantages of traditional procurement?
A
Ads - cost certainty, quality,
Disads - time
18
Q
Are collateral warranties covered under the Con Act?
A
Yes - Parkwood Leisure v Laing O’Rourke - held warranty was meant to be treated as con contract. Therefore seek adjudication
19
Q
What is a letter of intent & who should write it?
A
Letter from E to C inforrming their intenstions to enter into a contracr . Should be written by E or solicitor as debatable if binding. Never surveyor.
20
Q
What is an advanced payment bond
A
Used when E makes an advanced payment to cover C’s costs for a particular part of the project
21
Q
What is a tender bond ?
A
entitles E to payment if substantial tendr costs & C withdraws tender
22
Q
What is a parent company guarantee?
A
A Guarantee provided by a holding company if contractor defaults on contract. Up to 12 years latent defect period
23
What can you use instead of collateral warranties/bonds or third party rights to protect the client against non performance of the contractor ?
KPIS's - targets set for certain performances or targets
24
What are step in rights ?
Allows a party of the contract to step-in to the role of another - e.g. client becomes insolvent and funder acts as client
25
What has been set out in the Government Construction Strategy 2025?
1 People - talented and diverse workforce, smart - advance tech, Sustainable - green construction, Growth - leads growth across the economy, Leadership from Construction Leadership Council . Endorses use of NEC
26
What are the public contract regs 2015?
Brought in by the EU still remains post brexit. Regulation. Regulation 72 - modifications of contracts during their term. Reg 73 - termination of contracts - if not included in the contract its implied
27
What was the ruling in Mears v Costplan 2019?
Mears leased flats being constructed - built 3% smaller then specified - costplan were the surveyor - Mears claimed for material breach of contract.That trifling defects cannot prevent PC or are grounds for termination
28
What happens to the Employers insurance during the works?
Halted or reviewed during construction
28
What would you do if you noticed you had over certified on an interim payment?
If invoice hadn't been raised - discussions with the contractor & adjust the PO. if it had issue a pay less notice - avoid carrying payment over to nect month incase of insolvency and losing money.
29
What are collateral warranties?
agreements that provide a direct contractual link from a party to the original contract to another (USALLY A THIRD PARTY) Required in D&B for anyone undertaking design work (usually the contractor)
A bank funds the construction of an office building. The contractor and subcontractors are engaged to perform the construction work, and the developer (employer) signs contracts with them. The bank, as a funder, may not have direct rights to enforce against the contractor if the work is defective, so a collateral warranty is issued. This gives the bank a direct line to claim against the contractor or subcontractors in the event of defects or non-performance, providing a safety net to ensure the project is properly completed and investment is protected.
30
What statutes will affect building contracts?
The Sale of Goods Act, the Supply of Goods and Services Act, The defective Premises Act, Unfair Contract Terms Act
31
What is PFI procurement?
Privately Financed Initiative. Govt Bodies employ private sector consortiums to design, build and operate buildings which are rented back to the Govt body. Prevent large initial expenditure.
32
The contractor submits a legitimate claim for extension of time, which will incur cost to the client. The client does not have any money to pay the contractor. What is your advice to both parties.
EWN - affecting cost & programme. RRM - Discuss mitigations, potential CE to amend work items and remove items = cost savings - if all that doesn't work - inform the client they are liable for the costs as the event is CE - Adjudication/ termination/repossession. requirement for contingency. (contingency's are recommended)
33
What is acceleration & how can this be achieved?
Increasing the rate of progress to complete a project earlier than forcast. Achieved by: extended working hours, increased resource, sequencing, temporary works - weather protection design changes. Can be costed lump sum, itemised or cost reimbursable
34
Name common parties to contracts.
Funders, employers, consultants, contractors, sub contractors
35
How long does a project need to be before the C is entitled to interim payments?
Under the Housing Grants and construction regeneration Act 1999 - 45 days
36
what are the requirements of the local democracy, economic development and construction act 2009
Requires payment notices containing how they achieved that value issued in 5 days of the due date. PLN - containing how that figure was achieved
37
When must the payment certificate be issued?
a max 5 days after due date JCT
a max 7 days after due date NEC
38
Discuss the process of interim payments.
review pricing doc, discuss with the PC - recieve C application for payement - undertake valuation inspection - correct & notify / issue / record - ECC - complete valuation certificate
39
What is subrogation ?
Substituting one person for another in relation to a claim. Insurer may act as the insured to pursue claims against a third party. Often waived in construction.
40
What is FIDIC?
French form of contracts not often used within the UK?
41
What are defined and undefined provisional sums?
Undefined = so little defined that the contractor cannot make allowences for them - may be entited to EoT - e.g. ground conditions beanth existing buildings unknown until demolition
defined - deigned in suffient detail the contractor is expectedto provide a cost and allow time for them - fit x of kitchen units - not decied on what units
42
What is a contractor's log book?
Records daiky activity on site such as - project - eather - temp - no of subs - equipement - deliveries - offficaks
43
What case law do you know surrounding float and what was the ruling?
Ascon vs McAlpine Construction - Each subcontractor is equally liable for delay and benefit of float. Allocation shoundnt be the gift of the main contractor
44
construction management vs management contracting?
Construction management - seperate works packages direct to the client, construction manager acts as Cli's agent. Increases speed - may lower prices.
Management contracting - seperate works packages through a management contractor. Increases speed / no cost certainty
45
Alternatives to novation in D&B
Contractor can employ a new design team or can directly employ the original designer
46
What is the Scheme for Construction Contracts?
part 1 -Adjudication provsions within the scheme replaces any written in the contract
part 2 - payement provsions
47
What is Non neg 3rd party liability insurance?
JCT 6.5.1 insurance. insurance for damage to other owners property caused by the works where no negligence has taken place
48
How would you resolve a latent defect when the defects date had expired?
(NO PATENT)
Determine if the defect was caused by poor workmanship & installed incorrectly - review construction information , design drawings and as builts. If yes invite the contractor to return and remedy the works - if they refuse, sue under breach of contract.
49
What do you do if you hear on the news your contractor has gone bust? - read more
Discuss with C, Ci &QS . Consider securing site to prevent any items being taken by the contractor.
50
. Your client wants you to sign PC but the electrical test certs haven't been completed. What do you do?
Advise, confirming in writing - you will not sign due to H&S concerns. Cli may choose to occupy anyway. Minor items are dine to overlook. decoration of BOH areas if okay with the client - Mears vs CostPlan (trifling defect does not prevent PC)
51
What are some differences between JCT &NEC ?
NEC - no provisional sums , (have a clause for unexpected ground conditions allowing for them to claim for time and monies- have to prove taht an experienced contractor would not have foeseen), Programme is contract doc. Compensation event and early warning - time and costs together, less detailed info on insurances, PM, adaptive, works information
JCT - provisional sums, contractor bares the risk of ground conditions(slient on the topic), programme is not contract doc but advisable, relevant event and matter, detailed information on insurances, CA, subtractive , employers requirement.
52
What is the difference between CA vs PM
53
What is the difference between the Engineering and construction short contract (ECSC) with the Engineering and Construction Contract (ECC)
- There is no PM or Supervisor in ECSC - management roles undertaken by the client
- ECSC does not include provisions for key dates or sectional completion
- the ECSC does not include a requirement for a quality management system
- ECSC ( contractor assess amount due - checked by client ) ECC (PM checks )
- ECSC has a shorter list of compensation events - shorter process
54
What are defined costs?
NEC - Changes between the options
- Used to assess CE in all options
Options (C, D,E and F) of the NEC ECC:
- A cost reimbursable contract (sometimes called a cost plus contract) is one in which the contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee.
- Options (C, D,E ) of the NEC ECC, describe the costs that can be recovered by the contractor as defined cost, where as costs that cannot be revovered are dissallowed cost(cost due to contractors inefficiency)
the defined cost includes payments due to subcontractors and the cost of components for other works (such as plant, equipment, people and so on), minus the disallowed cost.
- defined cost listed in Schedule of cost compents (SCC)
- So these options definied costs are used for Payement due and CE
Option A and B:
- defined costs stated in Short schedule of cost compents (SSCC)
55
What is a schedule of Cost Components ?
Shorter Schedule of cost components = Options A &B - assess CEs
Schedule of cost components = assess CE's and Payments for work due to date
- Categories for reimbursement of people working on site - 7 = people, equipment, plant/materials, charges, manufacture away from site, design and insurance
56
How do you write a NEC Contract ?
Bought conditions of a contract- hand draft conditions of contract. Part 1 and 2
57
What is Clause 10.1 in NEC contracts?
The E, C, PM, S shall act as stated in this contract and in a spirit of mutual trust and co-operation
58
What are Disallowed costs?
Cost not recoverable by C - e.g. resources not used
59
What year was NEC introduced?
1st edition was used in 1993, use recommended in the latham report
3rd edition 2005
4th 2017
60
What are the 9 core clauses of an NEC ECC Contract?
1 - general
2 - contractors main responsibilities
3 - Time
4 - defects
5 - payment
6 - CE
7- Title
8 - Insurances and liability
9 - termination
61
What are the main & secondary clauses?
W clause: disputes
W1 - HGCRA 1996 doesnt apply - has to be resfered to adjudication
W2 - hgcra does apply
W3 = NEC4 - Dispute Avoidance board
X clause = 29 of them - secondary optional clause
E.g price adjustment for inflation, change in law, parent company guarentee, sectional completion, delay damages, collateral warranties, performace bonds, retention, low performance damages, limit of liability, KPIs
X29 Climate Change - new NEC4
Yclauses = these are optional clauses enable the contract to be used alongside legislation,
UK specific:
Y1- Allows the client to require a Protect Bank Account
Y2 = HGCR Act 1996 applies - payement provisons apply
Y3- Third part rights - Contracts (Rights of third parties) Act 1999
Z clauses = bespoke Amendments - project specific needs
62
What forms the main part of an NEC contract
Contract Data Part 1 - by E - description, named Personel, dates, payment details, termination, data protection, CE, Disupte reoslution (adjudication/arbitration ), insurances
Contract Data Part 2 - by contractor
- Contractor details, key staff, fee %, LOCATION OF programme, Location of AS, tender price , details to be included in the risk register , working areas (offices ect ), subcontractor fee %
63
What is inclueded in the works information ?
Spec, planning info, H&S, Cost breakdown
64
Discuss the importance of the programme
CLause 31 - contractural requirement, pre and post contract activities, C to produce - if no P is produced then clause 50.3 allows for 25% of work done to date to be retained untill one is procuded and accespted.
-should be revised every 4 weeks
- PM acceptance within 2 weeks of submission
- revised programme to show actual progress
- effects of CE
65
Why might a PM not accept the PROGRAMME?
- does nt comply with the scope
- plans are not practical
- missing or incorrect information
66
what are the responsibilities of the contractor
CORE Clause 2 - complete works in accordance with the works information, provide access, obey instructions
67
What risk management strategies are there for NEC contracts?
Risk registers/ Early warning - are active tools
- Risk allocation (identifiy owneship), - through
List of compensation events
cost and time through choice of contract - payement process and programme.
Optional X clauses - X1 price adjustment for inflation
Risk Reduction Meeting/early warning meeting - condier proposals - NEC4 EWM is a requirement
68
What are CE?
- Clause 60.1 - 21 - nec4 - 19 - NEC33
1- PM changes work information
2- empliyer prevents access
3 - employers non provsion (missing requirement )
4 - PM instruction to stop/delay work
5 E/others not working to programme
6 - PM/supervisors delay in communication
7 - PM instruction for histoirc value
8 PM/Supervios change of decision
9 - PM witholds acceptance without a reason
10 - supervisor instructs contractor dearch for defect - no defcets
11- unecessary dealys for transport and instalation
12 - physical conditions on site (not weather) , experienced C would not have forseen
13 - weather outiside 10 year norm
14 - event identified as employer risk
15 - PM certify take over of part of works prior to completion
16- E witholds materials for transport and installation
17- PM notifies a corrections of assumptions stated in CE
18 - Employer breach of contract
19 - act preventing C completing works
69
What is the layout of ECC contracts?
Core Clauses, Main option clauses (w), Secondary Clauses (X,Y,Z) , Cost compenents, Contract Data (Part 1, 2)
70
What is Take Over in NEC?
Employer takes over part of site before completion - if not employer take over is 2 weeks post completion
71
What is float?
The concept of float (or 'slack') is used to describe the amount of time that an event or activity can be delayed without delaying the overall completion of the works. Float is calculated by subtracting the time necessary to perform a task from the time available to perform it.
Total = can be for indviual task or whole programme - whole programme first come first serve
Time Risk Allowance - allowed for by C used by C,
Terminal - period between planned completion & completion date (contractual )
72
What are the main differences between NEC 3 & 4?
New contract types:
- Design, Build and operate
- Alliance Contract
Language:
- gender neutral
- Change employer to client
Disupute avoidance
- W3 clause - a dipute avoidance board has been introduced
new x clauses:
- BIM clause (who owns/liable
- X29 - Climate Change
Payment:
- contractor is now required to submit an application for payment before the assessment date
Early contractpr involvement:
- contractor is appointed early stages to contribute to design and tender - can reduce costs
Rention:
Option for a retention bond instead if % value retained
73
Describe the change process in NEC contract.
- PM issues an instruction requesting a quote - C quote within 2 weeks - PM responds accepting/declining quote within 2 weeks.
- CE issued within 8 weeks, response within 1 week - if PM hasn't respond contractor notifies them of a failure - PM then has 2 weeks to respond - if no response CE IS accepted
- C supply Quote within 2 weeks - 2 weeks to respond to quote
74
Discuss the payment process in NEC3 ECC
Contractor submits application for payment on or before assessment date (7 days before due date )- 5 days after due date interim certificate issued, 14 days after due date is the date for final payment - 7 days before final date for payment a pay less notice can be issued
- total payment cycle 21 days
75
How do you define a defect ?
Clause 11.2(3)
a defect is part of the works not in accordance with the works information
76
What are the different NEC3 ECC Options?
Option A - Priced contract with an activity schedule (lump sum )
Option B - Priced contract with a Bill of Quantities' (lump sum )
Option C = Target cost with AS
Option D = Target cost with a BoQ
Option E = Cost reimbursable contract
Option F = Management Contract
77
What is an activity schedule ?
List of activities prepared by C he excepts to carry out to provide works information
- Total cost of all activities is E cost for works for Option A
- Option C target list of activities C expects to carry out to complete the works
78
Discuss the payment process in NEC3 CSC - construction short contract
Clause 50 - PM considers application for payment C submitted on / before assessment date. Assessment date = Due date for payment. PM confirms amount due. 3weeks till finl due date for payment (7 days pay less notice).
79
What principle does Option C&D share?
"Pain / gain".
80
In the NEC3 Construction Short Contract, what headings make up the contract data?
Contract Data, The Contractor's Offer, The Employer's Acceptance, Price List, Works Information, Site Information, Conditions of Contract.
81
What information is contained within the main contract data of a NEC3 CSC?
Employers informatiom (name, address, contact details), description of the works, dates, retention & defect correction info, adjudication info, limitations of liability, insurances, additional conditions.
82
How do you define completion in a NEC3 contract?
Clause 11.2 (1) - completion is when C has completed works infomation except for notified defcers not preveneting E using the site
83
What are defined costs in a NEC3 CSC?
Clause 11.2(5) - amount paid by C in provding works (ex tax) C can recover: employees, plant & materials, sub cons, equipment.
84
How are interim payments valued in a NEC3 CSC?
11.2(9) - Price for Work Done to Date = price for each lump sum in price list + mutliplying quantity C has completed. Clause 50 - C assesses amount due by assessment dat - applies to E for payment, amount due = PfWDD + other amounts e.g. taxes - retention. E can correct and notify C. Each payment to be made within 3weeks of assessment day, interest added for late payment.
85
In the NEC3 CSC, does the E have to act as PM & S?
Clause 11.4 - E after notifying C may delegate their duties.
86
What are the CE's under a NEC3 CSC? Clause 60.1
1. E instructs change to WI,
2. E prevents access,
3. E doesn't provide something required,
4. E instructs stop,
5. E doesn't work within WI conditions,
6. E doesn't reply to communications,
7. E changes decision,
8. E instructs C to search for defect - no defect,
9. C encounters physcial conditions on site (not weather), experienced C would not have expected,
10. Weather which prevents work for full day & = 1/7 of total working days,
11. E notifies correction to an assumption stated about a CE,
12. Event that stops C completing works which: unprevented, experience C thought small chance of occuring,
13. Difference in total quantity of work done and quantity stated in price list,
14. Loss or damage to works, plant / materials not C's fault and unprevented by reaonable action.
If C notifies E of potential CE - E has 1 week to instruct quotation or decline.
87
Explain the time barr. NEC
Clause 61.1 - Contractor has 8 weeks to notify for CE following event. If not he is not entitled to price/time
88
What CE's are not included within CSC?
Dealing with objects of value, withold acceptance with no reason,T&I causing delays, take-over part of works, non-provsion of material, breach of contract. ADDITIONAL - difference in total work done and quantity in price list.
89
What must a quotation for a CE include?
Changes to prices & completion date, within 3 weeks of instruction. If quote not received E makes assessment
90
How are the costs and time for CE's assessed?
Clause 63 - assessing for CEs. Using existing price list, Defined Cost, forcasting time required. Cost of preparing CE not included. Mistakes in quotations are not later corrected.
90
What are the requirements for insurance under NEC3 CSC?
Clause 82 - Insurance Table. C provides in joint names. Table includes: loss or damage of works / loss or damage to equipment, plant, materials / Cs liability for loss or damage to prop / liability of injury & death to C employees from contract.
91
What is the termination procedures under a NEC3 CSC?
Clause 90. Termination cert by either party stating reason. 8 reasons for termination:
1. If other party becomes insolvent,
92
E may terminate if:
2 Contractor substantially breached contract
3 Contractor substantially hindered employer
4 Contractor breaks H&S regs
5 Employer may terminate for any other reason
8 Unpreventable event substantially affected C's work for over 13 weeks
93
C may terminate if:
6 E not paid within 10 weeks of assessment date
7 E stops work for reason not C's fault and no instruction to restart within 8 weeks
94
What payment is required at termination in NEC3 CSC?
clause 92 - Amount due = assessed from normal payments + plant & materials + retention.
E terminates for reasons 1-4 amount due deducts forcast to complete works.
C terminates for 1,6,7 / E for 5 - amount due = 5% additional charge on top of the total price for works.
95
What is the Adjudication process in NEC3 CSC?
Clause 93.2 - Adjudicator identified in contract data / adjudicating nominating boday appoints adjudicator within 4days.
Con Act - Party may give notice to the other to adjudication at any time. Referal within 1week of notice.
96
What is included within a Risk Register / EWR?
EW no., date, description, actions to be taken to mitigate, by whom, open/closed.
97
What is included within an Activity Schedule?
No., description, budget, start time, duration. Completed by the MC.
98
In the NEC3 ECC Option E contract, what are direct & shared costs?
Direct = costs cleary specified for that project, e.g. labour, materials, plany, sub-con.
Shared = costs that might be spread across other projects e.g. admin, owned plant
99
What are disallowed costs?
Costs that often fall under defined costs but are not used: sub-cons undertaking work not in line with WI, resources not used, prep for adjudication.
100
What is the Risk Register?
Active toll - identifies risks & how to manage - ownership &actions to be taken - potentail cost &time
101
Describe the defects correction process in NEC3 CSC.
S40 - E may notify C of a defect. S41 - C to correct defects before completion date if notified or not. S may instruct for T&I / search for defect. C to notify defect to S as soon as found. PMI to contractor including S report to correct the defect.
102
Who are the key roles within NEC contracts and what are some of their responsibilities?
Employer = legal part only - provides instructions through PM - provide access to required areas to undertake the works/ pay the contractor with 3 weeks of assessment date or pay interest on late payments
PM - 10.1 - reply to communictaion - issue certificates and notices - assess amount due - decide on CE's
Supervior - appointed by the employer - 10.1 - issues certs to PM &C/ T&I ??/ SEARCH FOR DEFCETS - Defecr certificate
103
Who can issue EWN?
PM/ Contractor
104
When would you use an EWN?
. For anything that would affect time / cost / quality, recorded on risk register (NEC4 - EWR). Risk reduction meeting to follow, to mitigate its effects, record solution and actions to be taken.
105
What is the difference between the planned completion date and the completion date?
Completion date is agreed in the contract - may be amended by CE - Planned completion is contractors forcast completion
106
What can the programme be used for?
Assess future changes/ helps assess works completed for payments. PM accepts no liability for incorrect dates within the programme, Contractors risk
107
Once a CE quote has been accepted, can it be revised ?
No, the contractor is bound by the cost and extension of time given
108
How is acceleration instructed?
PM instruct C to provid a quote for acceleration - PM to inform the C of the revised completion date required. C doesnt carry risk of failing to meet proposed new contract date - employer may require warranty- higher price
109
How would you assess a CE for an extension of time?
- Determine if it is a CE or not.
- Assess the contractors quote - whether he is entitled to all, some or non of the additional time
- review the latest accepted programme - any float available?
- Comparing actual and planned progress, if the CE has already happened
- Critical path analysis - using software to assess the impact of delays to activities on the critical path
- Time impact analysis - impact on time from the date of proposed instruction, impacting the delay events onto the latest progarmme
110
How are fluctuations dealt with in NEC3?
Specific X clause - Price adjustment for inflation
111
How are changes valued in Option A / CSC?
by reference to the defined costs/ SoCC & FORCAST THEIR COSTS
112
Which Options used the full and shorter SOCC?
Options A&B = shorter, for assessing CEs
Options C,D&E = Full - for payment of defined costs & assessing CE's
113
Can the contractor suspended performance for non payment?
Not a written right to but yes under the Housing, Grants Construction and Regernation Act 1996
114
How do you keep record EW & CEs and share this with the relevant parties?
I record EW &CEs on a tracker. This is stored on an online data base which provides acceszs to specfic parties to view, inly able to be amended by myself
115
Name 5 JCT Contracts that may be used for building works ?
Minor Works Building Contract, Intermediate Building Contract, design and build contract, standard building contract , prime cost building contract
116
What are the different insurance options in JCT Intermediate contract?
Option A - contractor takes out insurance in joint names
Option B - E
to provide in joint names
Option C - other means
117
Why would you use JCT or NEC contracts?
Public sector = NEC
Size of project, familiarisation with contracts
118
What are some of the certificates used in JCT contracts?
Certificate of PC
making good
non completion
payement certs
final certs
119
What is the difference between a CA and PM in JCT.
- PM more site based - organisation of works
- CA - doesnt have to be site based - administers contract
120
What would you do if your client wanted to use a JCT contract?
seek appropriate training - refer to JCT GNs & Tendering practice Note
121
What is fluctuation and how is it delt with? - JCT
Costs changes - included with contract particulars
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When would the CA issue an Extension of Time certificate? -JCT
for a relevant event - exceptionally adverse weather
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When would a certificate of non completition be issued? - JCT
When the completion date has been exceeded but the works are not yet complete with no EoT . Allows for liquidated damages
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When is a certificate of making good issued? -JCT
At the end of the rectification period
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How long does the Contractor have to comply with CA instructions? - JCT
7 days - or employer may pay another contractor another contractor to undertake the works and recover the costs
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What are variations? - JCT
changes to the design, quality or quantities of works
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What is the Base Date? -JCT
date at which the tender was prepared - reference date - all conditions are known - litigation
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When would the Contractor receive additional costs?
- Any relevant matters - e.g. open up works proven wrong
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What is the Termination Process under JCT?
Certificate of termination sent to C - immediately ending rights and obligations. Proedures vary dependant on who terminates and for what reason. Check within the contract & JCT Guidance Note
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What are the differences between MW & Intermediate?
MW - no named sub cons, no PGC/clerk of works, no advance payements, no sectional completion
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What document do you issue RE & RM within?
Contract adminstartors instructions
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What is the difference between a CA (JCT) & PM (NEC)?
- Similar roles in administerating the contract/ payement. PM had more of a hands on role helping and allocate risk through early warning notices / risk reduction meeting and recording the risk register
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How would you assess the amount of time for a EoT?
- is it a Relevant event ? review the programme, how many days have been affect by the RE?
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Assessing Relevant Matter?
is it a RM ? cost breakdown, quotes, timesheets, signing in book
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What is included in a C's application for additional costs?
Project details, cost columns omit and add - applied to contract sum, description of work
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Payment process
Valuation date (set in contract)
- 7 days till due date ( 5 days after DD for payement cert ) - 14 days final date
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What are the sections of the JCT Intermediate Contract?
Recitals, Articles, Contract Particulars, Attestation, Conditions S1-Definitions, S2-Carrying out the works, S3-Control of the works, S4-Payment, S5-Variations, S6-Injury, Damage, & Insurance, S7-Assignment & CW, S8-Termination, S9-Settlement of disputes.
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Key features of JCT
National - most commonly used
different contracts for all lebls - broad spectrum
regongonised pro bodies - RICS/RIBA
Written by JCT council - representives from across the industry
old contract - lost of revisions and relevant case law
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What would you find on an EoT request?
What the event was, when it occured, additional time required, effect on completion date, any float available
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How does the CA assess RE & RM in MW?
No RE or RM in MW - at CAs disgression
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Who's responsibility is it to notify defects?
E/C - unless the employer employs this responsibility
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When is a Schedule of Ammendments used?
Ammend specific clauses with the contract
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Difference between MW with contractors design & Intermediate with CD?
MW has no mechanisms to set PI - intermediate does
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Difference between EA & CA?
EA also responsible to ensure compliance with clients requirements
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What is the default form of ADR in JCT?
Both parties consider mediation first - then adjudication
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What type of NEC contracts are there ?
NEC4: Alliance Contract
NEC4: Design Build and Operate Contract
NEC4: Dispute Resolution Service Contract
nec3/4: Engineering and Construction Contract
NEC3/4: Engineering and Construction Short Contract
NEC3/4: Engineering and Construction Short Subcontract
NEC3/4: Facilities Management Contract
NEC3/4: Facilities Management Short Contract
NEC3/4: Term Service Short Contract
NEC3/4: Term Service Subcontract
NEC3/4: Facilities Management Short Subcontract
NEC3/4: Facilities Management Subcontract
NEC3/4: Framework Contract
NEC4: Professional Service Contract
NEC3/4: Professional Service Short Contract
NEC3/4: Professional Service Subcontract
NEC3/4: Supply Contract
NEC3/4: Supply Short Contract
NEC3/4: Term Service Contract
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How does JCT Minor Works deal with Relevant E/RM ?
at the contract administrators digression.
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What is the supervisors roles under NEC ?
- Issue report outlining defects
- Defects certificate (JCT Certificate of making good)
- instruction to search for defects
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What are the payment options under NEC?
- Lump sum
- Cost reimbursable
- target cost
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What are the benefits and disadvantages of cost reimbursable
- Save on time due to not having to price for works - contractor sumits fee (% profit and premlims ect for bid)
- no cost certainity - may be more expensive than anticpetated
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What is target cost ?
Anything under or above the cost is split between the contractor and the employer - pain/ gain threshold
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what do when you are going away ?
do to the tight timescales of projects and the quick response time required if a contractor where to submit a CE - i would make sure i have someone to cover and adequately brief them
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How would you determine if something is a CE?
Refer to the contract 60.1 which lists them
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Who can issue a an employer notice?
- only an employer can issue a pay less notice. n construction, only an employer can issue a pay less notice.
Pay Less Notice (PLN) because it's their way of controlling cash flow and ensuring they only pay for work that's been done correctly.
A PLN is issued when an employer wants to pay less than the amount a contractor has claimed or the amount certified in a payment certificate.
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What is the legislation assiacted with payment provisons and when are contractors not legally entitled to payment by installments ?
Housing, grants, construction and regeneration act 1996- works less then 45days arnt legally required to payments by installments
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Why would you choose JCT over NEC?
JCT is well know and the client may be familiar with it. JCT is suited for employers who want to retain a greater level of control. Its still currently the most popular form of contract. NEC is admin heavy
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Why would you choose NEC over JCT?
Government/public body roles. NEC contracts are flexible and can be easily adapted to suit difference methods of procurement and different pricing structures and they are designed for use domestically in the UK and abroad. Less technical language and jargon. More collaborative 10.2 act in the sprit of mutual trust
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How does NEC and JCT deal with issues on site?
NEC - is proactive - deals with as it happens
JCT is reactive
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What is a relevant event ? JCT
A relevant event may be caused by the client, or may be a neutral event
Variations.
Exceptionally adverse weather.
Civil commotion or terrorism.
Failure to provide information
Delay on the part of a nominated sub-contractor.
Statutory undertaker’s work.
Delay in giving the contractor possession of the site.
Force majeure (events that are beyond the reasonable control of a party, such as a war or an epidemic).
Loss from a specified peril such as flood.
The supply of materials and goods by the client.
National strikes.
Changes in statutory requirements.
Delays in receiving permissions that the contractor has taken reasonable steps to avoid.
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How would you assess a claim for an extension of time ?
- review the claim say for example it was weather i would check.
- ask the contractor to submit evidence
review the critical path and check check the delay impacts it
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The works are internal and external and a delay occurs to the external works and the contactor claims an RE - EOT ? what do you do ?
I would review it, but i would check the if the external works are on the critical path and advise the contractor if they arnt to start the internals first.
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How does sectional completion and partial possession work?
Sectional completion is written into the contract. partial possession is by request of the client during the works.
- contractor does not have to grant partial possession
When that area is occupied
- % occupied of the retention is realised - so if half of the building is occupied half the retention is realised
- client has to get liability insurance for that area
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How would you decide how long your rectification period is ?
- If its external works, i would recommend 12 months to ensure it gets exposure to all seasons - can be shorter if its only minor internal works
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How is the amount of retention decided ?
By the project complexity not the the costs
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how long does the contractor have to rectify defects.
If the contract administrator considers they are defects, then they may issue instructions to the contractor to make them good within a reasonable time.
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Q. Describe the change process when the PM notifies a CE.
. PM CE notification - C instructed to submit quote (3 weeks) - C submit quote - PM response (2weeks). PM responses - revised quote / not going ahead / accept / own assessment.
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Describe the change process when the C notifies a CE.
C notifies PM (8weeks) - PM yes/no CE - Yes 1w, instruct C for quote. No response 2weeks = yes.
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What information is included within a CE?
Project info, issued by, CE number, has / is going to occur, effect T/C/Q, description, EW number, CE cl number.
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What information is included within a completition certificate?
Project info, Party details, address, description of works, contract date, date comp achieved, defects date & schedule, signatures
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What would be discussed and recorded at a EWM?
EW no, proposals considered, solution accepted, actions to be taken, signatures.
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What is recorded within an EW notice?
Project details, number, issued by, description, what will it effect - T/C/Q, urgency.
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who does a contract protect
Client and contractor
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What is the difference between planned completion and completion
Planned completion comes at the end of the contractor’s critical path and therefore moves if critical delays occur. The completion date can only be changed in accordance with the contract (see clause 11.2(3)) and can only be changed if the contract allows.
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what is contract administration
Contract administration is the process of managing the contract between a construction project's employer and contractor. It is a vital part of the construction process, ensuring that the project is implemented and runs smoothly.
A contract administrator's responsibilities include:
Managing the contract: Ensuring that all contractual terms are met by both parties
Coordinating tasks: Organizing contracts, monitoring construction work, and ensuring the flow of information
Managing design queries: Acting as a liaison between the construction and design teams, and ensuring that design requests are addressed promptly
Issuing certificates: Issuing certificates of making good defects, interim certificates, and certificates of completion
Handling claims: Handling claims for extra payment and extended timescales
Preparing contract documents: Preparing the contract documents and discussing contractual matters
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what the delay damages on a project ?
say how much they were calculated by i.e delay damages were £2000 a week on Doncaster
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what is an employers agent?
An employer's agent (EA) is a professional who acts as a liaison between a client and a contractor during a construction project. They represent the client's interests and ensure that the project is completed on time, within budget, and to the required quality standards.
- typically found on JCT design and Build
-NEC3 and NEC4 Engineering and Construction Contract (ECC)
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what are employers requirements
required on JCT D&B / traditional is there is a design portion of the work
They provide a description of the client's requirements, including; the specification for the building, the scope of services required from the contractor and an allocation of risk for unknown items - can be simple spec - or fully developed concept design and performance spec
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what is the difference between works information and Employers requirements ?
The NEC contract however simply states a contractor is to design the parts of the works which the Works Information states he is to design. The Works Information contains far more than Employer’s Requirements. There is guidance as to what the Works Information should contain and it is dangerous and bad practice to simply re-badge a JCT Employer’s Requirements document as an NEC Works Information document.
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Can you use a traditional contract if you want to the contract to an element of the design
yes contractor design portion can be used - usually M&E
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can NEC have contractors design portion ? - check
Yes - NEC ECC clause 21.1 states that
the contractor is responsible for designing the parts of a project that are specified in the works information or scope
.
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What was recommended in the latham report 1994 - what changes did it instigate ?
- Abolishment of pay when paid , construction act 1996
- In addition, the Scheme for Construction Contracts, which applies when construction contracts do not comply with the Housing Grants, Construction and Regeneration Act established the right to adjudication.
- Recommended the use of contracts
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What is the difference between prelims and preambles
Prelims (Preliminaries): These are the general project-specific details and requirements in a contract, covering items like site logistics, temporary works, insurances, health and safety, and project timelines. They deal with the administrative and procedural aspects of the project.
Preambles: These are introductory explanations included in contracts, specification or Bill of Quantities (BoQ). They clarify the assumptions, methods, or standards to be followed for interpreting the document, helping to ensure consistent understanding of the work scope.
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What is the difference between a PCI and prelims ?
PCI is part of the pre-tender process, providing information before a contract is signed.
Prelims are part of the formal contract, detailing requirements during the project’s execution.
PCI is also required by CDM 2015
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What is the difference between O&M and health and safety file?
The O&M Manual focuses on the operation and maintenance of the facility, while the Health and Safety File is concerned with managing risks for future construction or maintenance work. - the site will have only one H&S file but there may be mutilple O&M's
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can you hand over a wall as part of section completion/partial possession ?
yes - means contractor is no longer responsible for cleaning ect - good if its a long project
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