Contract administration Flashcards
1
Q
Warley Hill, Office refurbWhat was the risk of the work proceeding before you had agreed the price to your client?
A
By proceeding without a cost, it presented a risk of the client being a higher rate. The client would have been able to reject the works if the contractor had provided a price for them beofer hand that was unreasonable. By instructing the works without a price, the contractor has more control over the negotiation.
2
Q
Warley Hill, Office refurbHow did you quantify the risk of proceeding wihtout costs?
A
The main risk was the client was going to be overcharged for the works, this needed to be compared against the benefit of completing the works while the scaffold was up, potential prolongation costs and complaints from residents. To quantify I explained that the risk of being over charged was relatively low as some similar items had already been included in the tender by the contractor. Meaning they could be used as a SoR. The cost of potential prolongation costs was greater than the potential for being over charged.
3
Q
Warley Hill, Office refurbWhat advice did you give to your client about the risk of completing works without confirming the costs?
A
I advised the client that completing the works while scaffold was erected for the roof and windows presented a greater economy of scale than the risk of being over charged presented. I also removed any mainteance works identfied that did not require a scaffold to be completed. Further reducing the risk of being overcharged.
4
Q
Warley Hill, Office refurbWhy could the works not be priced beofre the works were started?
A
The works could have been priced before they were started, but this could have caused for the scaffold to be erected for longer than originally programmed. Presenting a risk of an extension of time claim to the client. The client also wanted to avoid complaints from residents. I explained the risk of proceeding without prices, but the client wished to proceed to avoid the EOT and resident complaints.
5
Q
Warley Hill, Office refurb?What records did you or the contractor keep of the variations?
A
The initial variations were instructed and quantified from a condition report carried out from the scaffold. The areas and quantities were recorded on drawings. I was able to check the quantities of works completed during my site inspections, I then recorded them in my site inspection reports. This allowed me to be sure my client was paying the correct amount for works received.
6
Q
Wigston Close, Structural worksWere the instructions from the client relevant events or relevant matters?
A
The client requested that the works were instructed 1 week from the completion of the programme. The works were not of a similar nature as those already included within the programme. As this was a late instruction that the contractor could not have accounted for the works in their programme. This a relevant event of a late instruction from the contractor.
7
Q
Wigston Close, Structural worksHow long did the contract extension need to be to contractually require an additional interim payment?
A
The Housing Grant, Construction and Regenergation act entitles contractors for interim payments if a project exceeds 45 days. The interim agreement in the contract was montly. The extension of time took the works past the original completion date and the next interim certificate date.
8
Q
Wigston Close, Structual worksWhy if the contractor would have had to price for the additional works would he had been able to claim loss and expense?
A
The late instruction fo the worsk were a relevant event under the contract. This entitles the contractor to additional loss and expense that they may have encountered. In this case the prolongation costs of the contract included primarily of site management and security.
9
Q
Wigston Close, Structural worksDid you discuss the possibility of the additional work with the contractor?
A
I had discussed the additional works with the contractor at the beginning of the programme. Including suggesting the cotnractor should price them to the client. However, the additional work items nto caused by the car impact and therefore were not part of the insurance claim. The client was adamanet they did not want the works to be completed in conjunction wtih other worsk until very late in the programme.
10
Q
Talk me through your experience of assessing and recommending entitlement for extension of time?
A
I recently assessed a contractors extension of time claim for a delay of over 2 months. The contractor claimed that all of the instructions/variations issued over the contract had caused delay. I reviewed the instructions he referred to against the programmes he issued and the records of works he provided. I categorised the instructions into ones that I would provide EOT’s and those that I would not. I then asked for the extension/delay to be quantified against each of the varitations.
11
Q
How have you advised a contractor on their contractual obligations?
A
During my case study project, the contractor installed doors that were not FD30S door sets. I advised that under the contract and the M&W documentation that they were required to install FD30S door sets.
12
Q
How have you advised a client on their contractural obligations?
A
On SBHG, the client had been witholding payment of certificates as they did did not have proof of 100% completion of properties. I advised, that the contractor is entitled to monthly payments under the contract and if the client witheld payment they would be obliged to pay interest on the payments and the contractor could suspend works.
13
Q
How have you outlined and recommended to a client the proposed contract preliminaries?
A
I have developed and proposed contract preliminaries using the NBS software. I will then present them to the client for review. I have specifically adivsed on a rate of liquidated damages for a door replacement programme in a peoples home. I advised that the rate should be equivalent to the weekly rent of a room not being occupied.
14
Q
How have you assessed the quantum of a contractors claim?
A
I have assessed a contractors claim for additional preliminaries on a window programme by asking them to break down the cost. They provided time spent. From my review it determined that they had been allocated more time to management roles than that had been spent. I asked them to provide time sheets to prove their time or I woudl reduce their claim.
15
Q
What are the contractual provisions in the JCT MW for extension of time?
A
Clause 2.8 is related to EOTIf works going to be delayed Contractor shall notify CAIf beyond contractors control i.e. variations, or not a deafult of contractor CA shall award appropriate EOTIf EOT gratned EOT cert shall be issued and all parties should be notified accordingly.If deafult of contractor, suppliers or materials for works the contractor will not be granted EOT.
16
Q
What are liquidated damages?
A
This is the calculated loss that the employer will incur if the project is delayed beyond the contract completed date. This may be things such as rent or lack of occupation costs.
17
Q
Why are liquidated damages determined during the procurement stage of a project?
A
This allows the contractor to determine the risk of the project overunning to their projects and determine the duration of the project appropriately.
18
Q
Why are a contractors loss and expense rates not determined at procurement stage?
A
They are more wide ranging, depends at the stage of the project delay and harder to determine
19
Q
What are the methods can be used to analyse delays to a project?
A
Overview of the factsComparing actual and planned progressCritical path analysisFocused method analysis
20
Q
Wigston Close, Structrural worksWhat method of EOT assessment did you use?
A
Overview of the factsThe delay was related to a late submission of variations from the clientSimple and straightforward analysis of time required to complete decorations.
21
Q
Where could you find guidance on EOT in constructino projects?
A
RICS Professional Guidance NoteExtension of time Nov 2014
22
Q
What is the role of the contract administrator?
A
A professional appointed by the employer to admiister the contract between the employer and the contractor.
23
Q
What are the responsibilities of the contract administrtor?
A
Chairing meeting, Inspecting works, giving instructions, variations or change orders, determining applications for extension of time, authorising payment to the contractor, certifying the date of completion, settling the adjusted contract sum
24
Q
What were building regulations relevant to the change of use at Caulfield Court?
A
A-Lintel to new bathroom door - structural engineerB-Front door and filled entrance doorway - fd30sE-Installation of suspended ceiling - 42db airbourne 60 db impactF- Extractor Fans - 60l/sG- All water fittings J-Boiler self certfiedL-InsulationM-Width of doorways 900mm clear openingP-Electrical safety self certified
25
Caulfield CourtWhy were the provisions within the contract not suitable for sealing up the doorway?
Removal of ceiling revealed raised ceiling levelBlockwork quantities did not account for the raised ceilingPlasterboard partition above ceiling level needed to be blocked up to maintain 60min fire resistance
26
Caulfield Court,How did you instruct the additional works required to seal up the door way at Caulfield Court?
Omitted existing worksAdd in costs and works related to the more comprehensive sealing required
27
What are the provsions within the JCT MW for interim payments and certifactes?
Clause 4.3Due date is 7 days after interim valuation dateCertificate within 5 days of the due dateFinal date for payment is 14 days from its due date
28
Wigston Close, Structural worksWhy did you not identify the decoration works as part of your original scope of works?
The works of the project were related to the rebuilding of the structure of the building after car impact. Before works began, the client instructed a demolition asbestos survey to be completed, which damaged the entire property. The decoration works identified were not able to be claimed for from the insurance policy and the client made the decision late in the project to include them.
29
What is a relevant event?
Reasons why a completion date of a project may be adjusted under JCT forms of contract.
30
Can you please give examples of relevant events.
VaritaionsInstructionsSuspensionDeferment of possion of the siteSuspensionWorks by staturoty undertakersExceptionally adverse weatherTerrorismCivil Commotion
31
What is the difference bteween a JCT Intermediate and Minor works contract?
MW - up to £250,000 , IM - up to £1milMW used for simple works, IM more complicated and potential named subcontractor/ specialist worksBoth require client specification and drawings, IM will often include a bill of quantities as wellIM includes provisions for collabortive working, advanced payment, bonds and collateral warranties
32
Warley Hill, Office refurbWhy did the variation works not have prices before they began?
Client requested a reduction in works due to budget and to complete external works while scaffold was erectedPrices could not be agreed before works were completed as project had already begun and there was a risk of going past the completion date.There were no relevant items in the orignial schedule to develop costs
33
Where can you find guidance on negotating a final account?
RICS Professional Guidance NoteFinal Account procedures 2015
34
Which type of contracts are you aware of and have you worked with?
JCT Intermediate with or without CDPJCT MW with or without CDPJCT Dseign and buildJCT MTC
35
Which JCT contracts are you most familiar with?
JCT Minor works with CDPJCT MTC
36
What are the limitations of the JCT MW?
No relevant matters or events listedClauses are wooly and collaborative which is fine if nothing goes wrongThe project should last no more than 12 monthsWork is designed by or on behalf of employerNO CNC, contract left wanting
37
What alternative form of contract would you consider and what factors would make the alternative more suitable?
The JCT, intermediate form of contract.This contrac type is more detailed and has more extensive control procedures than the Minor Works Building Contract, but it is less detailed than the Standard Building Contract. It can be appropraite for projects that are procured via both the traditional or procurment route and can be used by both private and public employees.
38
What document would you refer to assist in advising on the most suitbale form of contract?
RICS Appropriate Contract Selection 1st EdDeciding on the appropraite JCT contract 2016
39
What information is included in the RICS guidance note on Cotnract Administration?
It includes general information on the role of the CA and their appointment.It also includes roles and responsibilites of the contract administrator to the contract and employer.
40
What happens if you do not issue a payment certificate?
Contractor could raise a payment notice for the full amount of the payment notice?
41
What could you do to stop the entire contractor payment notice being applied for?
Serve a pay less notice 5 days before the final date for payment setting out the reasons for the deduction.
42
What is the difference of a preamble and preliminaries?
Preamble - is an explanatio of the document and a background of the project, including relevant parties etc.Preliminaries provide a description of the project including circumstances, sub-contracting, completion procedures, approvals etc and can set out contractural mechanisms, tender mechanisms or work sections. Basically, costs contractor will incur which do not form part of hte actual works package.
43
What are the pre-contract services a CA could undertake?
advising on procurement, preparation of the tender package, tender reviewing and reporting, preparation of the specification, appointing and managing a design team, pre-contract negotiations, preparation of contract, advising on contract options.
44
In a JCT what is the timescale for payment?
Interim valuation date is set in contractDue date is 7 days thereafterFinal date of payment is 14 days following due dateIf payless it must be 5 days prior to final payment date21 days total
45
A Contractor submits a loss an expense claim to you for a period of 12 weeks for an EOT you granted. He has worked out a monthly rate for the contract prelims and multiplied it by 12. Is this a fair way to calculate L&E? If not, what would you expect to see?
No, contract prelims are irrelevant. Contractor to submit breakdown of actual L&E, costs incurred, time spent with various sub-contractors, additional plant hire etc. CA can request evidence to support the claim.
46
What do you have to do with the delay notice?
Nothing contractual, review it and file it, notify the Client.
47
What happens at PC?
Client becomes responsible for buildinghalf of retention releasedrectification period commencesH&S file agreed Depending on contract- PC cert issued.
48
Explain the ADR's?
AdjudicationArbitrationMediationLitigationNegotation
49
What are the differences of insurance provisions between the JCT minor works and intermediate?
MINOR WORKS- allows for 5.4a ("joint name" with contractor on insurance policy) 5.4b ("joint names" for new works and exising structure) and 5.4c (oinsure by other means)INTERMEDIATE A Contractor all risks, B Employer to take out all risks for the works, C required Employer to take out and maintain (a) insurance for exising and (b) all risk insurance for the works.
50
What is the EOT timescales in a minor works?
There isnt one. The minor works is not really efficient for dealing with EOT's and thus another form would have been more suited.
51
What is the EOT timescales in a intermediate form?
12 weeks
52
What contract documentation would you expect to find on a project procured traditionally under the JCT Intermediate Form of Contract?
Preambles/preliminariesJCT intermedaite form of contractSpecfication of worksDrawings/designsPricing document/ pre-contract minutes/ insurances/ accreditations
53
What is included in a traditional contract?
The contract document itself, prelims, preambles, schedule of work, bills of quantity, drawings, design details, specifications, dispute resolution
54
What are the different tender processes?
Single Stage – Tender is issued to several contractors, the pack includes all the detail required to provide a cost. The preferred tender is selected and discussions can start.Two Stage – First stage is the same as single stage. The contractor will be chosen to provide input into the design or a specific part of the design to help build a specification. This package then goes out to tender again and may include that original contractor. The downside is that it often reduces competition and some contractors will refuse as you already have a relationship with the original contractor.Negotiated – similar to single stage but you only go to one contractor and aim to negotiate the cost down to a fair amount but there is no competition.
55
What RIBA stage would you go out to 2 stage/1 stage
Single stage – go out to tender at Stage 4 which is technical design.Two stage – go out to tender at stage 2 or 3 which is concept design or spatial coordination.
56
What is novation?
The transfer of contractual rights and obligations from one party to another.
57
What is assignment?
The assignor transfers rights, property or other benefits to the assignee.
58
What is a collateral warranty?
Agreements associated with one primary contact which can be transferred or extended to a third party who is not part of the original contract.
59
What is a performance bond?
A contractual bond that guarantees the completion of a project. If the contractor does not complete the project, the bond guarantees against financial loss to the client for a specified amount which is usually 10% of the contract value.
60
What is a concurrent delay?
Where there are multiple delays all occurring at the same time but for different reasons.
61
What types of contracts are there?
Lump Sum, Measurement and Cost Reimbursement, D&B, Management
62
What are the key elements of a contract executed under deed?
The contracts are executed under seal, signed by the parties, witnessed and stipulated that it is under deed.
63
What are the key requirements for a contract to be made binding?
Offer, Consideration, Acceptance, competence and legal intention
64
How do you ensure that the project is kept on track
I chair regular meetings with the site manager and if required, the client. At this meeting, I will discuss the current status of the project to ensure that it is on track both in terms of timing and finance. Before I chair these meetings, I will review the most recent payment certificate as well as the variations that were applied for, I will then make a note of how much work has been carried out based on the programme of works provided by the contractor. I will then inform the client of the next payment application that is expected as well as what works should be completed by then so that they have an idea of the amount of money they need to make available.
65
How do you assess liquidated damages?
Liquidated damages are a pre-determined estimate for the likely costs that will be incurred by the client if the project over runs such as rent payments or income lost etc. They cannot be a penalty.
66
How do you assess Extension of Time?
This is determined by the amount a project critical path is delayed by a relevant event such as the client failing to provide access or providing delayed instructions or constant variations. The EoT claim is reviewed to determine how the contractor has justified it and I then review this and site notes/emails to determine if the contractor made reasonable efforts to avoid the delay or if the delay was down to their own performances. Where they have cited adverse weather, I will take an average of the last 10 years from met office to determine if the weather at the time of the event was to be unexpected or not.
67
How would you calculate loss and expense incurred?
I would review the contractors claim and review the preliminaries to determine what costs are genuine as a result of the extension, for example, it is unreasonable for the contractor to give a blanket average cost of the preliminaries as items such as scaffolding costs or skips or washroom facilities etc may not have been required at the end when the delay was added. These costs are then combined to create my own idea of what the costs should be and usually, I will discuss this with the contractor so that a fair settlement can be made for the genuine costs incurred by the delay.
68
What is required to issue practical completion
The majority of the works must be completed bar de-minis work. The building must be functional and safe to use. There must not be substantial defects, if there are, you should not submit PC.
69
What are the provisions within the JCT minor works for vartiations?
Provision 3.6Can issue variations to the works without invalidating contract, exluding inf they affect CDPIf possible price should be agreed before the worksIf not relevant items from existing contract be applied to make fair an reasonable judgement
70
What is an EOT?
An EOT is a contractural mechanism to move the contracted completion date back under a relevant event.
71
What is a retention?
Retentino is a percentage of the contract sum, that is agreed at tender stage, which is held back to ensure performance over the contract and the rectification period. Typically, 5% and 2.5% released at PC.
72
What is the difference between a relevant event and a relevant matter?
A relevant matter is a matter that the client is repsonsible for affecting the progress of the project and hte contractor will be able to claim loss and expense. A relevant event is a event is caused by the client or neutral event where the contractor will claim for an extension of time.
73
What expereince do you have chairing meetings?
I have chaired meetings acting as contract administrator through various projects. This includes pre-start meetings, progress meetings, and lessons learnt meetings. I will develop a meeting agenda before any meetings to ensure all key disucssion points are addressed. I will also develop minutes and issue as promptly as possible to ensure all acitonable items are can be addressed.
74
What types of projects have you completed administrative tasks for?
Primiarly with my client base I have acted as contract administrator for refurbishment and mainteance works.Recently I have been acting as contract adminitrator for the reinstatement of a fire damaged flat in Enfield. Where I have acted as contract administrator both pre and post contract.
75
Caulfield Court Workshop ConversionCan you describe the Caulfield Court Workshop Conversion project in more detail?
This project was to convert a mainteance workshop into a C2 supported living unit. The contract was procured under the JCT minor works with CDP and tendered using the single stage method. Due to the use class change, a planning application was made and building control approval was sought through an approved inspector.Key parts of works included full electrial and mechanical fit out, structural opening to form door, installation of suspended ceiling and full bathroom fit out.
76
Caulfield Court Workshop ConversionWhat was the nature of the variation you instructed?
Within the schedule of works there was an allowance for blocking aup an existing door way with block work and an intumescent packer.During works we found that above the ceiling level the opening was formed of plasterboard and would not meet building regulations part B.I instructed the contractor compelte the blocking up of the door way up to the floor slab with blockwork and intumescent packer.
77
Caulfield Court Workshop ConversionWhat was the vlaue of the contract?
Approximately £55K.
78
Caulfield Court Workshop ConversionHow did you ensure that the contractor provided a price for additional works before issuing the contract instruction?
I discussed the variation to the works while on site with the contractor and outlined what was required. I requested that he provided a quote as soon as possible to allow for works to proceed. In this instance he provided the quote the same day, and I checked it against a similar item within the schedule and instructed.
79
Caulfield Court Workshop ConversionWhat method did you use to instruct the variation?
Once a price had been agreed, I issued a formal contract instruction under the contract.This included a specific detail of the works requried including quantities. My instruction also included the agreed value of the instruction and its affect on teh contract sum.
80
Caulfield Court Workshop ConversionHow did you ensure that the contractor complied with the contract provisions?
I completed weekly site inspections of the works. When I was there I checked the works against my specifiction.I was also checking the works against the programme to ensure that the works were going to be complete for the contracted completion date.
81
What experience do you have preparing valuations and issuing certificates against works completed?
I have completed variations and issued certificates across a varity of projects.Primiarly the valuation and certificate processes have been undert the terms in the JCT contracts. I establish the first valuation as set out int eh contract in the pre-start meeting. I will then complete a valuation inspection against works compelted and issue a certificate within 5 days of the interim payment date.
82
What processes have you implemented to ensure smooth running of a construction contract?
I complete pre-start meetings to establish team member roles, works, variation procedures and payment terms.During the project I attend site as much as the works require, issue site reports and keep clear kines of communicaiton with all stakeholderes.I ensure all variations and instructions are recorded. This helps me to avoid disputes and ensure a contract is compelted successfully.
83
Wigston Close Impact Damage RepairsWhat type of construction was the property?
Concrete floor slabCavity brickwork wallsSuspended timber joist upper floorConcrete roof tiles TImber double glazed windows
84
Wigston Close Impact Damage RepairsWhat type of contract was used?
JCT MW due to low cost and relative simplicity.
85
Wigston Close Impact Damage RepairsHow much was the initial contract value?
Approximatley £100k
86
Wigston Close Impact Damage RepairsWhat were teh variations that caused the initial completion date to be extended?
Before the project began the client isntructed for R&D asbestos surveys to be compelted. The surveys caused signifcant damage to floor coverings and decorations.I advised the client that we should consider completing the works as part of the project, but they were reluctant to, due ot them sitting outside of the insruance claim.The client then instructed one week before the end of the programme.
87
Wigston Close Impact Damage RepairsHow did you manage the extension of time certificate?
I scheduled up the works and asked the contractor to provide a cost and programme for compeltion.They advised for material and labour it would be an additional 2 weeks from completion.I was able to assess the facts with the contractor providing supporting information.I then issued an extension of time for an additional three weeks from the contracted completion date.
88
Wigston Close Impact Damage RepairsHow did you ensure that hte contractor was aware of the additional interim payment?
When I issued the EOT cert I included a covering email that another imterim valution date would now occur and that they would be entitled to a payment.
89
Warley Hill Office Conversion and RefurbWhat was the scope of the project?
To change an existing office into a C2 adaptable dwelling.To replace the existing windows with double glazed aluminimum units.To replace existing flat roof coverings and improve the ventilation.
90
Warley Hill Office Conversion & Refurbishment, BrentwoodWhat was the contract value?
Approximately £400k.
91
Warley Hill Office Conversion & Refurbishment, BrentwoodWhat type of contract was used for the project?
The JCT intermediate with contractors design portion was used.It was chosen as the contract sum was going to be above £200k, and there were going to be specialist sub contractors and more robust extension of time provisions were required.
92
Warley Hill Office Conversion & Refurbishment, BrentwoodWhy were there works where prices could not be agreed before teh works were completed?
During the project the client wanted to address more items at high level while scaffold was erect.There were a number of items that were completely new to project, such as addressing cracked brickwork above lintel.There was a risk that the client would suffer additional prolongation costs for the scaffold if works were delayed. Where possible I reduced the risk of increased cost by using scheduled items as rates where possible.
93
Warley Hill Office Conversion & Refurbishment, BrentwoodHow did you review the contractors final account?
The contractor provided their final account application.I reviewed the final account against my records to ensure that they alligned. Where works costs had not been agreed I requested for breakdowns of time and labour. Which allowed me negotiate a fair and reasonable account.
94
What is phased completion ?
Construction works can be planned as a series of stages or phases, rather than as one continuous process.This can be useful for clients where a complex sequence of events needs to be followed (such as on densely occupied or complex site), or where there are a number of distinct components to the works, particularly for clients who are seeking to maintain some level of business operation during construction and so wish to minimise disruption.In such cases, the project works can be divided into a series of smaller projects, spaced out over a period of months or even years.
95
What is sectional completion ?
Sectional completion refers to a provision within construction contracts allowing different completion dates for different sections of the works. This is common on large projects that are completed in sections, allowing the client to take possession of the completed parts whilst construction continues on others.
96
What are the risk associated with a client paying for items direct and outside of the contract ?
They would not be included within the contract, contract administrators inspection and have limited protection.
97
Can you please expand on what the role of a Contract Administrator is ?
A contract administrator manages contracts made between building contractors, employers, and clients. Their responsibility is to administer construction contracts, whereby they may act as project managers, engineers, consultants and client representatives
98
Can you expand on your knowledge of the JCT Intermediate contract ?
A JCT contract that allows for a number of addition in comparison to JCT MW including, clerk or works, sectional completion, partial possession, sectional completion, the use of bonds.
99
Can you expand on your knowledge of the JCT Standard Building Contract
The JCT SBC allows for additional to the intermediate contract such as:Employers representative, listed sub contractors, retention bonds, variation and acceleration quotations, third party rights.
100
What JCT contracts allow for a clerk of works ?
* JCT Standard building contract* JCT Intermediate Contract* Not JCT MW
101
What contract allow for sectional completion and named sub contractors ?
Intermediate and standard building contract
102
What are the main types of tendering ?
* Open* Selective* Negotiated* Serial* Framework
103
What is a traditional lump sum contract ?
A lump sum contract is the traditional means of procuring construction, and involves a single 'lump sum' price for all the works being agreed before the works begin. This means that the contractor is able to accurately price the works they are being asked to carry out.
104
What is a contract instruction and how would you deal with it ?
In simple terms, a contract variation occurs when the parties agree to do something differently from the way they originally agreed, whilst the remainder of the contract otherwise operates unchanged. Such an agreement, if valid, would amount to a variation of the existing contract.
105
What is traditional procurement ?
Traditional procurement remains the most commonly-used method of procuring building works. It comprises a tripartite arrangement involving a client, consultants and contractor.The traditional procurement route involves separating design from construction. The client first appoints consultants to design the project in detail and to ensure cost control and inspect the construction works as they proceed. Contractors are then invited to submit tenders for the construction of the project on a single-stage competitive basis.Included in the contractor’s responsibilities are workmanship, materials and work undertaken by suppliers and subcontractors. The contractor is not responsible for the design (other than temporary works), although some traditional contracts may provide for the contractor to design specific parts of the works (see key criteria below).Traditional procurement is typically undertaken under a lump sum contract. A single ‘lump sum’ price for all the works is agreed before the works begin, then stage payments are made as the works proceed. This is appropriate where the project is well defined when tenders are sought, and significant changes to requirements are unlikely. This allows the contractor to accurately price the works they are being asked to carry out.
106
What are the others available JCT Contracts ?
* Standard Building Contract;* Design & Build;* Intermediate Contract;* Intermediate Contract with Design;* Minor Works;* Minor Works with Design;* Major Projects (MP)* Framework, non-binding and binding;
107
What is a letter of intent ?
A letter of intent is a document outlining the understanding between two or more parties which they intend to formalize in a legally binding agreement. The concept is similar to a heads of agreement, term sheet or memorandum of understanding
108
What does the Housing, Grants Construction and Regeneration Act 1996 allow for within the contract ?
* the right to stage payments* the right to notice of the amount to be paid* the right to suspend work for non-payment* the right to take any dispute arising out of the contract to adjudication
109
Does the HGRCA apply to residential occupier ?
No, the HGCRA does not apply to residential occupiers. This is a 'Section 106 - Residential Occupier'
110
What are the types of specifications ?
* Specifications describe the products, materials, and work required by a construction contract. They do not include cost, quantity, or drawn information, and so need to be read alongside other information such as quantities, schedules, and drawings.* Specifications vary considerably depending on the stage to which the design has been developed, ranging from performance specifications (open specifications) that require further design work to be carried out, to prescriptive specifications (closed specifications) where the design is already complete.* Prescriptive specifications give the client much more certainty about the end product when making investment decisions (such as when they appoint the contractor), and place a greater burden on the designer to ensure proper installation rather than the contractor.* Typically, performance specifications are written on projects that are straight-forward, standard building types, whereas prescriptive specifications are written for more complex buildings, or buildings where the client has requirements that might not be familiar to contractors and where certainty regarding the exact nature of the completed development is more important to the client."
111
What are the types of procurement ?
* Traditional contract 86%* Single-stage design and build 41%* Two-stage design and build 39%* Management contract 18%* PFI 10%
112
Under JCT MW does the programme form part of the contract ?
No however the contract promotes the use of one for reference generally.
113
Under JCT what are included within the contract documents ?
* drawings;* specification;* work schedules;
114
What is the base date ?
Base date: the base date is usually set at around the time of return of tenders. base date' is a reference date from which changes in conditions can be assessed. "
115
Who normally retains the contract ?
The contract administrator
116
Does JCT MW make reference to a possession date ?
MW16 does not refer to the contractor being given ‘possession’ of the site, but states simply that ‘The Works may be commenced’ on the date stated in the contract
117
What are the ground for termination from the client ?
* Insolvency * CDM breaches* Corruption of the contractor* Contractor failing to proceed regally and diligently* Employer failing to pay amounts* Either party can terminate is the works are suspended for a period of more than one month due to neutral events
118
What are the grounds for termination from the contractor ?
* Insolvency * CDM breaches* Corruption of the contractor* Contractor failing to proceed regally and diligently* Employer failing to pay amounts* Either party can terminate is the works are suspended for a period of more than one month due to neutral events
119
Why is it important to define a completion date ?
The significance of having a completion date is that it provides a fixed point from which damages may be payable in the event of non-completion. Generally in construction contracts the damages are ‘liquidated’, and usually expressed as a rate per week of overrun.
120
What is the reason for an extension of time ?
One important reason for an extension of time clause is to preserve the employer’s right to liquidated damages in the event that the contractor fails to complete on time due wholly or in part to some action for which the employer is responsible
121
When must a contractor give written notice regarding an extension of time ?
Under MW16 the contractor must give written notice to the contract administrator ‘If it becomes apparent that the Works will not be completed by the Date for Completion’ (cl 2.7, or 2.8 in MWD16). The notice must be given regardless of the reason for the delay, i.e. whether it is caused by the employer, by a neutral event (such as bad weather) or by the contractor itself.
122
When would you issue a certificate of non completion ?
If the completion date is not achieved, under JCT MW the certificate is not required but this failure should be recorded and circulated to all.
123
Does JCT MW state a list of relevant events ?
For guidance on what might be considered to be beyond the contractor’s control, the contract administrator might have regard to those matters listed as ‘Relevant Events’ under SBC16, for example exceptionally adverse weather, the ‘Specified Perils’, strikes, failure to supply information, site access and indeed any difficulty in movement on or around site.
124
When should the CA respond to a contractor EOT claim ?
There are no time limits on when the contract administrator must respond to the contractor’s notice, but it is suggested that this should be done as soon as possible, in order to preserve the employer’s right to liquidated damages. The contract administrator should either fix a new completion date or notify the contractor that no extension of time is due. The contract administrator might call for information if this is necessary to make a fair and reasonable assessment, but this must never be considered as a delaying tactic.
125
Does MW allow for occupation of the site prior to completion ?
MW16 makes no provision for the employer to use or occupy the site or the works or anypart prior to practical completion. If arrangements for phased occupation have not been agreed in the contract documents, a situation may arise where the contractor has not completed by the date for completion but part of the works are complete or sufficiently complete to allow the employer to have beneficial use of those parts and the employer is anxious to occupy them. There is nothing in the contract that allows for this; therefore, a separate ad hoc agreement would have to be made.
126
What triggers practical completion ?
Under clause 2.9 (2.10 in MWD16) the contract administrator is obliged to certify the date at which, in the contract administrator’s opinion, works have reached practical completion and the contractor has complied sufficiently with clause 3.9 (its CDM obligations, for example the supply of information required for the health and safety file) and, in the case of MWD16, clause 2.1.3 (supply of CDP drawings). The date certified is the date when the last condition is fulfilled.it is implied that it will be a fair and reasonable exercise of professional judgment.However, it has been held that the contract administrator has a discretion to certify practical completion where there are very minor items of work left incomplete, on de minimis principles
127
What does practical completion trigger ?
* Start of the rectification period* release of half of the retention* Employer takes responsibility of the site * liability for liquidated damages ceas
128
How and where would you process liquidated damages ?
May deduct damages from the amount due under the next certificate or reclaim the sum as a debt Under MW16 the contract administrator is not required to certify non-completion, but it may be prudent to record the failure in a letter to both the employer and the contractor. Once the date for completion has passed, the contractor is said to be in ‘culpable delay’.The liquidated damages may either be recovered from the contractor as a debt or deducted from monies due (cl 2.8.2, or 2.9.2 in MW16). In both cases the following preconditions must have been met:• the contractor must have failed to complete the works by the completion date (cl 2.8.1,or 2.9.1 in MWD16);• the contract administrator must have fulfilled all duties with respect to the award of extensions of time.
129
What is culpable delay ?
Culpable delay (sometimes referred to as 'contractor delay') on the other hand is a delay that is entirely the fault of the contractor. Where the contractor is culpable for a delay, they have no entitlement to an extension of time or loss and expense.
130
Do liquidated damages need to be proven or estimated for a claim ?
It is no longer considered essential that the amount is calculated on the basis of a genuine pre-estimate of the loss likely to be suffered. Provided that the amount is not ‘out of all proportion’ to the likely losses, the damages will be recoverable without the need to prove the actual loss suffered, irrespective of whether the actual loss is significantly less or more than the recoverable sum. In other words, once the rate has been agreed, both parties are bound by it. Of course, for practical reasons, the rate should always be discussed with the employer before inclusion in the tender documents, and an amount that will provide adequate compensation included to cover, among other things, any additional professional fees that may be charged during this period. If ‘nil’ is inserted then this may preclude the employer from claiming any damages at all , whereas if the clause is left blank then the employer may still be able to claim general damages.
131
What notice would you need to submit if you are planning to recoup liquidated damages form a payment ?
Within a pay less notice
132
What is the process for issuing an extension of time if liquidated damages have been claimed ?
If an extension of time is given following the date for completion, the employer mustimmediately repay any liquidated damages recovered for the period up to the newcompletion date.
133
What are the key powers of the contract administrator JCT MW ?
* Agree variations* Issue a pay less notice on behalf of the client* issue certificates* certify practical completion making good defects
134
How should a main contractor appoint sub contractors ?
MW16 stipulates that ‘Where considered appropriate, the Contractor shall engage the sub-contractor using the JCT Short Form of Sub-Contract
135
Does the contractor have a right to access the site during the rectification period ?
Yes, but cannot force access. Although the right to return to site ceases at the end of the three-month period, the contractor’s liability for defective materials or workmanship continues throughout the statutory limitation period.
136
How long does the contract administrator have to notify the contractor of the existence defects ?
MW16 requires the contract administrator to notify the contractor of the existence of defects within 14 days of the end of the rectification period .Unlike SBC16, the form does not state that the contract administrator must issue a schedule of defects. It is suggested that it would be sufficient for the contract administrator to write to the contractor to inform it that defects had appeared, and of their general nature.The onus would then be on the contractor to identify and make good all defective work. Ifthe contract administrator prefers to issue a schedule, it might be wise to state that it isnot intended to be a comprehensive list, and that the contractor should make its owninspection. It would also be sensible to make the employer aware that the contractor mustbe allowed access, as to prevent this might result in the employer being unable to claimfor the costs of remedying the defective work
137
What does a valuation include ?
The value of the work properly executed and the value of materials and goods properly brought onto site
138
What is a payment notice ?
When the CA has not produced a payment certificate the contractor can produce a payment notice.
139
What are the insurance options under JCT MW ?
5.4A, 5.4B and 5.4C. Clause 5.4A is for use with new buildings, and is takenout by the contractor, 5.4B is for use with existing buildings where the policy will cover thenew works and existing structure, and is taken out by the employer, and 5.4C is usedwhere neither of these options is appropriate and the parties agree their own insurancearrangements (these are to be set out in the contract particulars).
140
How long should does each party have to provide evidence of there insurance in place ?
Both parties must be able to provide reasonable evidence within seven days of a request
141
If a contractor submitted an obvious error in there submission what would you do with a JCT contract ?
* Alternative 1 = Details provided and the contractor has the choice to confirm or withdraw submission with no amendments* Alternative 2 - Details provided and opportunity to confirm or amend to correct the error.* Source - JCT Practice note - Tendering"
142
Give me some examples of the requirements of the Housing Grants and Construction Regeneration Act 1996 .
* The right to be paid in interim, periodic or stage payments* The right to be informed of the amount due, or any amounts to be withheld* The right to suspend performance for non-payment* The right to adjudication
143
What 8 Conditions need to be met for a contract to be in place ?
* Offer by one party (tender)* Acceptance by the other party (tender return)* Consideration (price of the promise)* Intention to form a contract* Legality of contract* Capacity to make agreements* Consent* Possibility of Performance
144
What are the advantages of standard forms over bespoke contracts?
* Written by legal experts* Rights and obligations of each party are clearly set out to the required level of detail.* Risks should have been allocated equitably between parties* Parties should be familiar with the provisions in the form* Fewer unforeseen anomalies * The time and expense of preparing a fresh document for each occasion is avoided* Case law is built up over time – provides a good source of knowledge and clarity."
145
When pricing an Extension of Time, what would you include for and what rates?
* Include for costs of prolongation of site preliminaries – welfare facilities, utilities etc.* Facilities management staff, security, cleaners* Subcontractor mobilisation costs
146
How would you assess an adverse weather claim for EOT ?
* Need to be supported by historical weather data taking into account the time of year and region the project in question is located in.* The contractors claim should be based on data from a recognised independent source and the data would be compared to previous years to assess if the prolonged period is equivalent to the EOT."
147
Can you name some legislation in relation to contract administration ?
* Contracts (Rights of Third Parties) Act 1999* Housing Grants Construction and Regeneration Act 1996* CDM 2015
148
Why would a final certificate not be issued ?
If there is an ongoing dispute resolution process then a final certificate should not be issued, potential for a certificate of non completion dependent on contract.
149
What is a Rectification Period, and what is the process involved ?
If any defects are found within the Rectification Period, the CA will issue an instruction that notes a schedule of defects, which should be issued no later than 14 days after the expiry of the rectification period. The contractor should then return to rectify those identified defects at no cost to the employer. Once these works have been carried out the CA will issue a certificate of making good to document these works.
150
What clause within the Minor Works contract deals with Defects and Rectification Period?
Clause 2.11 deals with defects found within the Rectification Period, and clause 2.12 notes the requirement for a Certificate of Making Good Defects. The Rectification should be defined within the contract particulars
151
When would a Non-Completion Certificate be issued ?
A Non-Completion Certificate would be issued when works are not complete at the relevant completion date, and no Extension of Time has been issued. Liquidated damages cannot be claimed unless a Non-Completion Certificate has been issued
152
What is the difference between liquidated and un-liquidated damages?
* Liquidated damages are a genuine pre-estimate of loss. When used actual loss is irrelevant, and once set they can only be revised down. * Unliquidated damages are when the section in the contract particulars is left blank, and the loss must be calculated at the time and need to be proven
153
What clause within the JCT Minor Works contract deals with Liquidated Damages?
Clause 2.9 deals with liquidated damages. Amount of liquidated damages should be defined in the contract particulars
154
What clause within a Minor Works contract deals with Loss and Expense?
Loss and Expense is dealt with in clause 5.10, where details of when a contractor is entitled to loss and/or expense is detailed.
155
What is a Relevant Matter ?
A Relevant Matter is a matter for which the client is responsible that materially effects to progress of the works. May give rise to an contractor's claim for Loss and/or Expense. Might include:• Failure to give site possession• Failure to provide access to/from site• Delays in providing instructions• Discrepancy within contract documents• Disruption caused by works carried out by the client• Instructions relating to variations and expenditure of provisional sums• Issues relating to CDM
156
What is Retention ?
Retention is a sum deduced at each valuation (generally 5%) to provide the client with security that the contractor will return to correct any defects.
157
What clause within JCT Minor Works contract deals with Retention ?
The amount of retention is defined in the Contract Particulars, and then Clause 4.3 deals with Interim Payments
158
What does Practical Completion trigger ?
* End of contractor liability (termination of any liquidated damages)* Insurance handover* Handover of the premises* Beginning of the defects liability period* Retention releases, generally from 5% to 2.5%
159
What is a collateral warranty ?
A collateral warranty is a binding agreement which gives third parties contractual rights which are collateral to an underlying contract to which it is was not an original party.
160
Can you explain what the contract sum means ?
The Contract Sum is the agreed lump sum the client will pay the contractor for the work. This figure will quite often be subject to change (normally an increase) and this will then become the Final Account figure
161
What is a contract instruction and what should it contain ?
A contract instruction is an important legally binding document and may well be referred to in any disputes or legal action which may arise between the client and the contractor so it is essential that the CA ensures the format and content of the document is accurate and compliant with legal protocol The format should be as follows (in writing but can be verbal initially): Names of the parties involved Include the Project Name Specify the Date Provide an issue number Circulate to all necessary parties Quantify the financial implication The content of instructions will include the following: a Only what the contract states e.g. A Variation of the works Removal of work not in accordance with the contract Expenditure of Provisional Sums Opening up of the works for inspection/testing The content of instructions will include the following: a Only what the contract states e.g. Variation of the works Removal of work not in accordance with the contract Expenditure of Provisional Sums Opening up of the works for inspection/testing
162
What is a provisional sum ?
A provisional sum is a figure specified within the tender and contract documents which is included to fund an item which cannot be fully specified prior to work commencing for various reasons. An example would be an inclusion of £10,000 to cover provision of new foundations which cannot be specified due to the uncertainty of the ground conditions. The contractor will then be required to complete the work within that sum therefore the sum included should be adequate
163
What is an instruction under the contract? Can they be verbal ?
These are formal documents issued by the contract administrator to document ANY communication between the CA and the contractor. There are many standard instruction forms available for a CA to use. An instruction can range from a single page of A4 to detailed documentation including drawings and specifications if additional work is being instructed. The Architect/Contract Administrator may issue instructions and the Contractor shall forthwith comply with them. If instructions are given orally, they shall not have effect until the Architect/Contract Administrator confirms them in writing. There may be numerous instructions issued ensure you keep up to date with your records.
164
What is on an agenda for a pre-contract meeting ?
```A standard agenda for a pre contract meeting will cover issues including: • Health and safety • Access arrangements• Storage• Programme• Valuation and payment arrangements • Site progress meetings • Project insurance • Person in chargeable```
165
What is the certificate of making good defects ?
This certificate (and also the certificate on ˜Not making good) need to be completed by the contract administrator following rectification/failure to rectify defects and certifies their rectification or otherwise. These will either trigger the Final payment to the contractor or result in withholding money until they are rectified.
166
How do you assess liquidated damages ?
Liquidated damages are a pre-determined estimate for the likely costs that will be incurred by the client if the project over runs such as rent payments or income lost etc. They cannot be a penalty.
167
How do you assess unliquidated damages ?
These have to be proven losses incurred by breaching the contract and the amount is not pre-agreed. The amount is determined by the courts.
168
How do you assess Extension of Time?
This is determined by the amount a project critical path is delayed by a relevant event such as the client failing to provide access or providing delayed instructions or constant variations. The EoT claim is reviewed to determine how the contractor has justified it and I then review this and site notes/emails to determine if the contractor made reasonable efforts to avoid the delay or if the delay was down to their own performances. Where they have cited adverse weather, I will take an average of the last 10 years from met office to determine if the weather at the time of the event was to be unexpected or not.
169
How would you calculate loss and expense incurred ?
I would review the contractors claim and review the preliminaries to determine what costs are genuine as a result of the extension, for example, it is unreasonable for the contractor to give a blanket average cost of the preliminaries as items such as scaffolding costs or skips or washroom facilities etc may not have been required at the end when the delay was added. These costs are then combined to create my own idea of what the costs should be and usually, I will discuss this with the contractor so that a fair settlement can be made for the genuine costs incurred by the delay.
170
What is a prime cost ?
Where you have a specific cost for the purchase of materials but does not include the cost of installation.
171
How is CA different to a clerk of works ?
The clerk of works has no authority to make appointments or prepare and issue certificates. They can value the works though and will oversee the quality of the work on site making sure that plans are being followed.
172
What are the key elements of a contract executed under deed ?
The contracts are executed under seal, signed by the parties, witnessed and stipulated that it is under deed.
173
What is included in tender documents ?
* The relevant drawings* Schedule of works* Preliminaries* Preambles* Specific design detail* Bills of quantity
174
What is included in a traditional contract?
The contract document itself, prelims, preambles, schedule of work, bills of quantity, drawings, design details, specifications, dispute resolution
175
What RIBA stage would you go out to tender ?
Single stage – go out to tender at Stage 4 which is technical design.Two stage – go out to tender at stage 2 or 3 which is concept design or spatial coordination.
176
What is the difference between NEC and JCT ?
They are both standard forms of contract. JCT is designed for domestic projects whereas NEC is suitable for domestic and international. NEC came after the Latham report and aims to offer better clarity, flexibility and better management processes. In NEC, the contract is administered by a PM and in JCT, it is a CA. NEC requires and enables a more proactive and collaborative approach whereas JCT is aimed at focussing on liabilities and risk. NEC has early warning notices and compensation events rather than relevant events/matters
177
What is novation ?
The transfer of contractual rights and obligations from one party to another
178
What is a performance bond ?
A contractual bond that guarantees the completion of a project. If the contractor does not complete the project, the bond guarantees against financial loss to the client for a specified amount which is usually 10% of the contract value.
179
What is the difference between a CA and an EA ?
The key difference is that the Employers Agent will perform the contract administration on D&B contracts whereas the CA will perform the role on traditional contracts.
180
What is a contract ?
It is a written or verbal agreement between parties to carry out a service in exchange for some form of repayment.
181
What are the limitations with a letter of intent ?
The main disadvantages of letters of intent are as follows: They can become legally binding under certain circumstances when this was not the intention of the organizations. By agreeing to a letter of intent at an early stage in the process you may hinder your ability to negotiate a better deal late in the process.
182
What is a patent defect ?
A patent defect is identified during the rectification period as a result of reasonable inspection.
183
What is a latent defect ?
A latent defect exists before its discovery. It cannot be identified from reasonable inspections; hidden or concealed flaw.
184
What is an O and M file ?
The building owner's manual, or operation and maintenance manual (O&M manual), contains the information required for the operation, maintenance, decommissioning and demolition of a building. The building owner's manual is prepared by the contractor or the sub-contractor with additional information from the designers (in particular, the services engineer) and suppliers. It is a requirement that is generally defined in the preliminaries section of the tender documentation where its contents will be described, although there may be additional requirements regarding mechanical and electrical services in the mechanical and electrical specification. A draft version of the document should be provided for the client as part of the handover procedure prior to certifying practical completion. The final document is not usually available in full form until several months after practical completion, as commissioning information often needs to include summer and winter readings taken in the fully occupied building. The preliminaries may require several copies of the building owner's manual and might require an electronic version.The building owner's manual might include: A description of the main design principles. Details of the building's construction (such as finishes, cladding, doors and windows, roof construction, and so on).As-built drawings and specifications. Instructions for its operation and maintenance (including health and safety information and manufacturers' instructions for efficient and proper operation).An asset register of plant and equipment. Commissioning and testing results. Guarantees, warranties and certificates. Particular requirements for demolition, decommissioning and disposal.
185
Which is more common in the construction industry ? Collateral warranties v Third party rights ?
The construction industry is familiar with collateral warranties
186
When might an early warning notice be issued ?
When the contractor starts to experience a delay which might affect the project. Before they submit their EOT claim. Must be issued to the Employer including details of potential impact and cost.
187
What is a compensation event ?
The NEC equivalent of JCT LAD's
188
When might you use an NEC form ?
NEC is a family of contracts that help apply good project management principles and practices, and define legal relationships.The contracts are suitable for procuring a diverse range of works, services and supply, ranging from major framework projects through to minor works and the purchase of supplies and goods.
189
What are the standard retention rates in a JCT MW Contract ?
5% with 2.5% released at practical completion. On Standard Building Contract, these can be altered to 3% and 1.5% respectively.
190
What happens after the rectification period ends ?
A joint snagging inspection will be carried out with contractor and agent to identify what defects need to be repaired. Once the repairs are carried out, the CA will release the retention in the final payment application and the issue a certificate of making good defects. Contractor issues their final account.
191
What happens after issuing final certificate ?
Provides conclusive evidence that the quality and standard of work is to the satisfaction of agent and all adjustments have been taken to the sum and all loses/expenses are settled.
192
Under JCT IC, what collateral warranties may a principal contractor provide ?
Principal Contract provides collateral warranties for sub contractors they use that will have design responsibility. Under IC/SBC, the contract requests for collateral warranties to be provided by the contractor to the purchaser, tenants, funders and employer.
193
What is the procedure for an extension of time ?
The contractor must provide written notice as soon as it becomes apparent that the work will not complete on time. Notice must include the conditions causing the delay. CA must then decide if the condition is relevant event and whether an extension of time is granted. Must notify the contractor as soon as decision is made and within 12 weeks of receipt of notice. If the EOT is warranted, the CA has to fix a later completion date and notify the contractor.
194
Are you aware of any recent case law relating to extensions of time ?
Walter Lilly & Co V Mackay and DMW Developments. Judge held that where there have been concurrent delays under a JCT or similarly drafted contract, the contractor is entitled to an EOT for the period caused by relevant events
195
What is the implication of writing nil in the liquidated damages clause ?
Means there are no damages and the client is not entitled to deduct anything if the contract over runs
196
What information is included in Pre Construction Information ?
Project info/arrangementsHealth hazardsDesign hazardsSite layout, access etcThe regulations define pre-construction information as 'information in the client’s possession or which is reasonably obtainable by or on behalf of the client, which is relevant to the construction work and is of an appropriate level of detail and proportionate to the risks involved
197
How would you calculate a contingency ?
I would refer to the number of provisional or unknown sums and any investigates items and calculate a suitable percentage to be added. This would not be visible to the contractor but between the CA and employer.
198
Why would you allow a 12 month rectification period ?
To allow for full seasonal changes.
