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APC 2025 > Contract Admin/Practice 2025 > Flashcards

Contract Admin/Practice 2025 Flashcards

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1
Q

What is needed for a contract to be formed?

A

Capacity
Intent
Offer
Consideration
Acceptance
Legality

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2
Q

Can you give an overview of the structure of the NEC?

A

Core Clause - payment, CE’s, insurances, time

Main Options;
- Option A Priced with Activity Schedule
- Option B Priced with BoQ
- Option C Target With Activity Schedule
- Option D Target with BoQ
- Option E - Cost Reimbursable
- Option F - Management Contract

W Clauses (Dispute Clauses - W1, 2 & 3)
X Clauses (performance bond, PCG, sectional completion, retention, LAD’s)
Y Clauses (National Legislation)
Z Clauses (bespoke amendments)

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3
Q

Can you name some of the contracts in the JCT Suite of contracts?

A
  • Standard Building Contract.
  • Design & Build.
  • Intermediate.
  • Minor Works.
  • PCSA.
  • Major Projects Agreement.
  • Measured Term.
  • Framework Agreement.
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4
Q

What types of pricing options are there?

A
  • Lump sum - fixed price agreed at the start.
  • Target Cost - a price is agreed, then at the end of the project the under spend or overspend is shared between client and contractor.
  • Cost plus - Contractor paid actual cost they have incurred plus and agreed percentage for OH&P.
  • Cost Reimbursable - A schedule of rates is agreed, then at the end of each month the contractor will measure what they have incurred.
  • Guaranteed/ Agreed Maximum Price - Fixed price where the contractor takes risk on overspend and savings.
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5
Q

Can you identify some differences between NEC and JCT?

A
  • Different terms for individuals.
  • Time and cost included in changes under NEC.
  • Programme is a contractual document in NEC.
  • NEC has timescales on change control procedures.
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6
Q

What are the payment timelines under PPC2000?

A
  • Contractor submits an application at the end of the month.
  • Client rep mus issue a payment notice and backup within 5 days of this.
  • Client must issue a pay less notice no later than 5 days before the final date for payment
  • The final due date for payment is 20 days from receipt of the contractors application.
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7
Q

What are the different types of subcontractor?

A

Domestic - selected through competitive tender.

Named - client provides a list for the main contractor to use for competitive tender.

Nominated - Proposed by the client and must be used.

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8
Q

What are LAD’s?

A

Damages inserted into the contract that the client can claim in the event of non-completion by the contractor.

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9
Q

How does the structure of JCT contracts differ to NEC?

A

Under JCT everything forms part of the standard contract whereas under NEC there are core and optional clauses so there is the ability to adapt the standard contract without making amendments.

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10
Q

How do CE’s under NEC differ to variations under JCT?

A
  • Time and cost are both dealt with under CE’s.
  • Under JCT this is split between variations, EoT and loss and expense.
  • Timescales to agree CE’s under NEC
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11
Q

What is Novation?

A

Transfer of rights and obligations under an existing contract, for example under a D&B contract the design team is novated from the client to the contractor.

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12
Q

What is a Collateral Warranty?

A

A document which creates a contractual link between two parties under an existing contract where one does not already exist, for example between client and a subcontractor.

Allows the client to claim from subcontractors in event of a breach.

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13
Q

What is a Letter of Intent?

A

A non-binding letter which outlines an agreement in principle prior to the contract being executed.

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14
Q

What are the different types of Letter of Intent?

A

Comfort Letter - provides contractor comfort
Consent to Spend - allows contractor ability to place orders
Recognition of Contract - all terms have been agreed however awaiting final signing of contract

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15
Q

How would you select the most appropriate form of contract for a project?

A
  • Clients’ experience in construction and if any experience with any suite of contract
  • Then assess the complexity of the scheme
  • Attitude to time, cost and quality
  • Attitude to risk
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16
Q

Can you outline the payment process and timescales under a JCT D&B?

A

21 day process in total starting with contractor submitting their application.

Due date is 7 days after this.

14 days from due date is final date for payment.

Payment notice should be issued no later than 5 days from the due date.

Pay less notice should be issued no later than 5 days before final date for payment.

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17
Q

What forms of performance security exist for a client?

A
  • Performance Bond
  • Parent Company Guarantee
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18
Q

What is a Performance Bond?

A

Contractor takes out for a sum of money and in the event of a default the client can claim this money.

There are two types; on demand and default.

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19
Q

What is a Parent Company Guarantee?

A

A PCG is in the event of a company defaulting, their Parent Company then because responsible for fulfilling their obligations under the contract.

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20
Q

What is the duration of a PCG?

A

Dependant on how the contract was signed;
Underhand - 6 years
Deed - 12 years

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21
Q

When does a Performance Bond end?

A

At the end of the defect liability period - once the certificate of making good has been issued.

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22
Q

Different types of insurance under a construction contract?

A

Construction Works Insurance
Professional Indemnity
Public Liability
Employers Liability

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23
Q

Who takes out the Construction Works Insurance under JCT.

A

Option A - New build - Contractor
Option B - New Build - Employer
Option C - Works to or extensions to existing buildings - Employer

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24
Q

What is the benefit of a joint names policy?

A

Both parties are protected - so If a contractor makes claim against employer and they are not named then the employer is not protected so they are liable for the outcome of the claim. Avoids subrogation.

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25
What would you check if a Contractor makes a claim for materials off site?
Check if they are listed within the contract.
26
How would you check materials off site?
- Make sure they are listed within the contract - Visit the location they are stored. - Ensure they are protected and in a good condition ready to be taken to site. - Labelled with client name and address of the project.
27
What is a vesting certificate?
A certificate which transfers ownership from one party to another.
28
What is a retention of title clause?
A clause on a vesting certificate which states if the supplier is not paid for the materials then they retain ownership of them.
29
When would you pay for materials on site?
Only when they are on site within a reasonable timescale and ready for install in line with the programme.
30
What is the process for processing an application once received from the contractor under JCT?
7 days from this date is the due date. 14 days after the due date is the final date for payment. no later than 5 days after the due date CA must issue payment notice or pay less notice no later than 5 days before final date for payment.
31
Who administers the contract under D&B?
Employers Agent
32
Is the QS listed under D&B?
No, therefore cannot issue certificates only recommendations.
33
What is the different between an Employers Agent and Contract Administrator?
EA is responsible for administering the contract under a D&B contract whereas CA administers traditional contracts. EA is acting as or on behalf of the client.
34
What is retention?
A percentage of money that is withheld from payments made to the contractor to ensure they rectify defects.
35
When is retention released?
50% at Practical Completion and the remainder is released at the end of the DLP.
36
How can a contractor claim an EoT?
Must raise notice of the delay as soon as it becomes apparent, detailing reasons, relevant event and likely delay.
37
What is the time period for assessing an EoT under JCT?
8 weeks.
38
Can you list the Relevant Events under JCT?
1. Variations 2. Instructions 3. Deferment of possession of the site 4. Suspension 5. Works by statutory undertakers 6. Exceptionally adverse weather 7. Civil commotion 8. Terrorism and strikes 9. Any impediment, prevention, or default by the employer
39
What is the standard period the client can defer possession of the site?
6 weeks.
40
Can you list the Relevant Matters under JCT?
1. Variations 2. Instructions 2. Any impediment, prevention, or default by the employer
41
What is loss and expense?
Loss to the Contractor due to a Relevant Matter caused by the Employer.
42
Difference between Sectional Completion and Partial Possession?
- Sectional Completion are sections to be completed by certain days listed within the. - Partial Possession is a clause to allow the employer to request possession however contractor can reasonably refuse.
43
What is a Relevant Matter?
A relevant matter is a matter which the client is responsible which materially affects the progress of the works. This may enable the contractor to claim direct loss and / or expense that has been incurred.
44
What is a Relevant Event?
A relevant event is an event that causes a delay to the completion date, which is caused by the client, or is a neutral event not caused by either party, and could entitle the contractor to an extension of time
45
How would you approach a situation with a client who wanted to include amendments to a contract?
I cannot advise on amendments as it is outside my professional expertise. I would advise a Client to seek professional legal advice.
46
What are some of the typical amendments you may see in contract documents?
- Loss of profit - not accepting any claims - Payment terms amended - Notices issued electronically - Covid-19 clause
47
Can you provide an example of a challenging contract amendment negotiation you handled and how you resolved it?
HMP Kirkham - Under PPC200 Contractor bears all risk so they would not accept - I advised MoJ seek legal advice - A risk sharing mechanism was agreed and added via an amendment
48
Can you explain a time you've had to advise your client on the use of LAD's? How were these made up?
BMBC asked for what damages to include for a kitchen refurb project at Birkwood Primary School. I advised; - Client must provide the rate - Must be a genuine pre-estimate - Ultimately value was based on cost of outsourcing hot school meals
49
What happens at sectional completion?
- Sectional Completion Certificate issued - Client takes partial possession of the section - Half retention for that section released - Insurances switch from contractor to client for that element
50
How do you apportion risk under NEC ECC Option C?
Option C is a target cost contract therefore risk on underspend or overspend is shared between Client and Contractor via a pain gain mechanism as per an agreed percentage in the contract.
51
Can you identify 3 X clauses under the NEC4 suite?
- Sectional Completion - Liquidated Damages - Retention
52
What are the key duties of an Employer’s Agent under a JCT Design and Build contract?
1. Issuing Instructions 2. Quality Inspections 3. Progress Meetings 4. Reporting 5. Contract Administration 6. Defects Management 7. Documentation: Preparing and maintaining project control documentation, such as the project execution plan. 8. Insurance Verification
53
How do you certify sectional/practical completion?
Building control must be signed off and the PC or SC certificate must be issued.
54
What happens at practical completion?
- Half retention released - Client's opportunity to levy LAD's ceases - Insurance switches from Contractor to Client - Defects liability period begins
55
What is contained in JCT regarding sectional completion?
- Sectional completion dates - Section sums - Section LAD's - Retention provisions
56
How are monies in liquidated damages recovered?
Recovered through a pay less notice issued by the client.
57
How is a pay less notice issued?
- Issued by the client - Client must be able to demonstrate why pay less notice is issued
58
Please can you advise if you are aware of the JCT 2024 updates and what changes have been introduced?
D&B introduced on 17 April 2024 Updates include: - Adopting gender neutral language - Building Regulations Principal Contract and BR Principal Designer now named in contract - EoT review timescales reduced from 12 to 8 weeks - New relevant event added for epidemics - Collaborative working and sustainability now added as contract conditions (previously supplemental provisions) - New provision for electronic signatures Minor Works launched in 15 May 2024
59
What are unliquidated damages?
When no sum for liquidated damages is mentioned within the contract
60
On HMP Moorland you advised all risk sat with the Contractor and these should be shared, which risks did you advise the client to take on?
Risks which would cost the client an unreasonable amount for the contractor to hold such as: - disruption due to prison activities - unforeseen ground conditions
61
How does PPC2000 compare to JCT?
- Based on both JCT and NEC so some similarities to both - Shorter than both so seen as simple to administer - Different terms for individuals and variations - Change control process similar to NEC
62
In the case of a significant delay, are LAD's paid for the full duration?
Typically there would be a cap on liabilities included within a contract as contractors would rarely sign up to indefinite damages.
63
What did you advise on the Birkwood Primary School Classroom Extension project?
The client required additional classroom capacity by the start of the new academic year, however the overall programme would not allow for this as some works ran into the start of the academic year. I advised they could utilise sectional completion and take partial possession of the number of classrooms required, with the remainder of classrooms and external works to follow.
64
What did you advise on the HMP Moorland project?
After reviewing the contract with the Client Rep, I found the contractors claim that they bared all risk under the contract and the risk register had to contractual stipulation to transfer risk. As a result the client sought legal advise and amended the contract to include a risk schedule to allow the transfer of risk. I ultimately asked the contractor to provide a cost to bare each individual risk and then advised the client which of these I felt was better value for them to take on.
65
How did you deal with the disagreement on HMP Moorland?
The contractor had failed to include for some of the surveys that were required in error and they had claimed for the cost of these surveys as well as the staff costs for the extended period of time. I advised the client they were within their rights to not pay the additional costs however, the contractor has incurred additional costs. The client accepted to pay the cost of the surveys as it was a genuine error but asked me to negotiate any resulting costs.

APC 2025 (20 decks)

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