Contract Administration (L3) Flashcards
(116 cards)
1
Q
What are the main CA duties?
A
- Responsible for managing and overseeing the terms of the construction contract
- Contractual Control and Compliance
- Understanding the contract, and rights and obligations of parties
- Ensure compliance and adherence to contract terms - Issuing Instructions
- Instructions to the contractor
- Record keeping, detailed record of all instructions given - Monitoring Progress
- Regular site visits, monitor progress , monitor progress of works against schedule and identify issues early on
- Progress reports - Valuations and Certificates
- Valuation of works before issuing certificates
- Issuing interim payment certificates at agreed stages
- Final account, agree and settle - Variations and Changes
- Manage variations
- Cost control - Extensions of Time
- Assessing delays
- Granting EoT if applicable - Dispute Resolution
- Addressing disputes and resolve between parties
- Determining contractual breaches - Practical Completion
- Inspection for completion
- Issuing Practical Completion certificate - Defects and Rectification
- Snagging inspection before the completion and at End of Defects
- End of defects inspection
- Certificate of making good - Health and Safety
- Compliance, ensure contractor adheres to health and safety regulations
- Site safety audits, conduct or oversee - Communication and Coordination
- Liaison between parties and key communication link between stakeholders
- Coordination of consultants to ensure smooth workflow
2
Q
What is Building Regulations Part T? What does it cover?
A
3
Q
What skills might a CA have?
A
- Contractual knowledge
- Communication and negotiation
- Technical expertise, construction knowledge, and building practices
- Attention to detail
- Organisation skills
- Financial management, accounting and cost control
- IT and digital skills
- Health and safety awareness
- Ethical and professional standards
4
Q
What are the key differences in provisions between MW and Intermediate JCT?
A
- Scope and Complexity
Minor Works
- Small simple projects, requires limited design input
- Only includes provision for the employer to supply basic design
Intermediate
- More complex medium scaled projects which allows for some design responsibility on contractor
- Allows for use of specialist works and sub-contractors - Design Responsibility
Minor Works
- Usually the responsibility of the client to provide a basic design with little input from the contractor
Intermediate
- Provisions for contractors design portion of works if required
- Subcontractor and Specialist Work
Minor Works
- Works are generally undertaken by one main contractor with no provision for nominated subcontractors or specialists
Intermediate
- Detailed provisions for specialist sub-contractor works
- Allows for nominated subcontractors
- Contract Administration and Site Procedures
Minor Works
- Basic powers to issue instructions and manage payments
Intermediate
- Additional powers to issue instructions
- More detailed provisions for coordination
- Variations and Changes
Minor Works
- Simple provisions for variation to works
- Limited provisions for complex changes to scope or design
Intermediate
- Comprehensive provisions for variations and change orders
- Payment Provisions
Minor Works
- Simple payment mechanism, fewer payments and certificates
- Less frequent payment cycles
Intermediate
- More detailed payment provisions
- Regular valuation dates
- Procedures for calculating payments
- Health and Safety / CDM Regulations
Minor Works
- Simpler management needs
Intermediate
- More detailed, including compliance with CDM regulations
- Contractor may be required to coordinate CDM responsibilities
- Insurance and Liability
Minor Works
- Basic provisions on insurance and public liability
- Contractor required to provide all insurance
- Less complex risk allocation
Intermediate
- More detailed insurance provisions
- Handling risk, clearer allocation of risk between the employer and and contractor, in particular CDP
- Subcontractor works and specialists
- Programme and delay
Minor Works
- Basic, carrying out works by set completion date
Intermediate
- Milestone dates
- Sectional completion
- Extension of times due to variations, weather etc
- Termination
Minor Works
- Fewer grounds for terminating
Intermediate
- More detailed
- Employers right to complete works using other contractors
5
Q
What is the standard format of JCT Contracts?
A
- Agreement
- Employer and contractor details, company number, address
- Date of the agreement - Recitals
- Description of works, address
- Design portion
- Reference to specifications and pricing schedule / BoQ - Articles
- Contract Sum
- CA, Architect, QS, PD, PC
- Adjudication, Arbitration, Legal Proceedings - Contract Particulars
- Nominees
- Base Date
- Completion Date
- Liquidated Damages
- Defect Rectification Period
- Interim Payments
- Retention
- Insurance
- Adjudication and Arbitration Nominated Bodies - Attestation
- Execution
- Signed by Employer / Contractor - Conditions
- Definitions and Interpretation
- Carrying out the Works
- Control of the Works
- Payment
- Variations
- Injury Damage and Insurance
- Assignment, Performance Bonds and Guarantees and Collateral Warranties - Schedules
6
Q
What do you know about NEC?
A
- New Engineering Contract
- Used for larger infrastructure and engineering projects
- Easy to understand with less contractual jargon
- Promotes collaboration, flexibility and project management
- Differs by promoting proactive management of risk and encouraging corporation between parties to achieve project objectives
- Project manager undertakes the contract administration role
Key Features:
- Collaborative and Proactive Approach
- Early identification of risks - Flexibility
- Allows it to be tailored to various types of project - Clear Risk Allocation
- Provision for unforeseen circumstances and changes - Time and Cost Management
- Clear guidelines for managing time and cost - Dispute Resolution
Mechanisms for early dispute resolution, adjudication
7
Q
What are the timelines for Interim Payment under JCT?
A
- Due date for payment is 7 days after after the valuation date
- CA must issue interim payment certificate following valuation no later than 5 days after the due date
- Final date for payment is 14 days after the due date
- Final date for payment is 21 days after the Interim Valuation date
- Pay Less Notice to be issued at least 5 days before the final date for payment if applicable
8
Q
What are the impacts of issuing PC?
A
- CA considers works to be substantially complete
- Release of retention
- Beginning of End of Defects Liability Period
- Employer no longer entitled for LADs from the date the certificate is issued
- Insurances of the works passed back to the employer
- Triggers final account and payment
9
Q
Shipston Safeguarding - Why did you use an intermediate?
A
- Medium scaled works with a contract value of around £280k, including electrical and design works by sub contractors
- Has provisions for specialist sub-contractor works for access control
- Contractors design element for Electrical works to align with current school network
- Allowed for works to be split into sections for main entrance vehicle and pedestrian gates to be completed during the summer holidays, and remainder of the works around the perimeter during term time
10
Q
How did you go about reviewing the CDPs?
A
- Submitted proposals with tender returns
- Reviewed against drawings and employers requirements for the CPD works to ensure that the proposals adhered to the requirements
- Cross referenced against industry standards, and legal and regulatory compliance
- Reviewed with client IT team to ensure compatibility with existing hardware
- Evaluate design for constructability and practicality
- Conduct design review and provide comments / approval
11
Q
What things do you have on your agenda at progress meetings?
A
- Introductions / Apologies
- Previous Meeting Minutes
- Contractors Progress Report
- Health and Safety
- Contract Administrator Matters
- Statutory Approvals
- Key Risks
- RFIs
- Client Matters
- Any Other Business
- Date and Time of Next Meeting
- Meeting Schedule
12
Q
Shipston - What were the timelines for final payment?
A
- The due date for the final payment, 28 days after the EoD, or 28 days after the certificate of making good is issued
13
Q
Connexus - Why did you advise a Minor Works?
A
- Works were simple in nature
- Low in value
- Relatively quick programme of 3 weeks with no provision required for interim payments, with one payment for the works
- Approximately £50k in value
- All works being complete by the main contractor
- Flat refurbishment and kitchen installation
- No need for extensive design input
14
Q
EIA Landscaping - What things were considerations when choosing the contract?
A
- The value of works was approximately £600k across the playground areas
- Required specialist surface and ground work contractors, as well as electrical engineer works for access control features
- Required works to be completed with different start and completion dates, sectional completion provision
- Works were not simple in nature and did require multiple sub-contractors to undertake works
- Overall duration of project was 12 weeks
- Payments were made on interim valuation dates
15
Q
EIA Landscaping - How did you advise the client regarding the other impacts of choosing Intermediate, over other JCT options?
A
- Due to it being a traditional procurement route, the use of D&B was not required as the client had appointed Ridge to undertake the design and specification process
- The works were of medium scale, and complexity which Minor Works would not have been sufficient for, also the client required sectional completion with playground areas and football pitch works split to alleviate risk on start of term
- Intermediate allows for specialist sub contractor works such as ground workers, soft play installers, football pitch installers, M&E engineers for access control features
16
Q
Hal Green - Why did you advise a D&B?
A
- This was decided by previous surveyor on the project. I was assigned to the project during the construction phase
- No need for extensive pre-design by the client
- Faster project delivery, to aid quicker start on site for summer holiday works
- Less risk for the client in terms of project timescales and cost control as this would be the contractors responsibility
- Provided employers requirements for the tender pack
17
Q
Hall Green - How would your advice have changed if the relevant event had occurred?
A
- I would have undertaken my assessment of the extension of time application
- Review the timeframe in which the delays were incurred and cross referenced with my site inspection report for that period
- Understood the impact along the critical path of works and ascertain whether the claim for delay is reasonable
- Check weather verified weather channels such as Met Office for historic weather data in the area to determine exceptionally adverse weather conditions, I.e once in 10 years
- Contractor submitted 5 days during July due to rain
- I would have issued the extension of time, stating the new contract completion date and duration of extension onto the contract following approval from the client
18
Q
Hall Green - What advice would you give to your client about LADs?
A
- Must be a genuine pre estimate of potential losses incurred should the project not be completed within the contracted completion date
- Advised my client of their right to claim LADs,
- Client decided not to proceed with LADs and contractor allocated extra resource and utilised weekend working to complete works promptly
19
Q
If they had decided to proceed with LADs, how does that actually work in practice? What steps would you need to take?
A
- CA would need to issue a certificate of non completion
- Employer would need to notify the contractor before the date of final payment that he may withhold or deduct liquidated damages
- Notice would need to state the period between the completion date and the date of practical completion of the works or that section
- Deduct or withhold liquidated damages at the rate stated in contract particulars
- Document the delay, review the contractors response, assess the contractors justification of the delay, seek to use mediation to agree position should a dispute arise, if it does, enforce the claim, either deduction or raise a PO, in the case of non-payment, the client may need to pursue litigation or enforcement through court proceedings, in this case the client should seek legal advise
20
Q
What forms of contract are you aware of?
A
- JCT contracts, I have worked with
- NEC contracts, I am aware of but have no experience with
- FIDIC, internationally recognised contracts for large scale infrastructure projects. FIDIC Red Book, Yellow Book, Silver Book, Green Book
21
Q
What are the main differences between JCT MW/Intermediate/D&B?
A
Minors Works
- Used for smaller scale projects, simple in nature
- Usually one main contractor undertaking the works
- Relatively quick programme, usually one payment at the end of the works
- Generally lower in value compared to other contracts
- Specialist or named sub contractors or specialist works not required
- Limited design input required
- Usually employer provides design and specification of the works to be implemented by the contractor
Intermediate
- For medium scaled works more substantial than MW
- Lengthier programme than MW
- More detailed provisions for interim payments
- Provisions for design input from contractor through CDPs
- Provisions for splitting the works into sections
- More complex works than MW, and provisions for use of specialist sub contractors
- Higher in value than MW
- Provisions for employer to appoint a quality inspector, I.e Clerk of Works
Design and Build
- Contractor responsible for undertaking the design and construction process
- Design risk is removed for the employer
- Employers requirements set out the requirements to be met by the contractor
- Ideal for clients with less construction knowledge
- Allows for quicker construction and design stage
22
Q
What are the implications of sectional completion a contract? E.g insurances, access, valuation etc?
A
- Sectional completion will in effect sign off completion of that section of works
- The final payment and release of retention relating to the specific section will be released
- Defects liability period on this section begins
- Considered works are substantially complete and employer takes back possession
- Insurances related to this section back to employers responsibility
- Safe and clear access to be maintained by both the contractor to the respective completed areas and sections still in progress
- Valuation should be split so to release retention for sections completed and withhold for sections which are not complete
23
Q
Explain your role as a CA under a Traditional Minor Works contract?
A
- Manage the contract and ensure parties adhere to their contractual obligations
- Have a clear understanding of the contract and mechanisms in the contract
- Facilitate communications between stakeholders holders
- Negotiate and provide solutions in the case of any disagreements
- Undertake inspections and ensure the works are being constructed as per the contract
- Issue instructions and payment certificates following valuations as necessary
- Agree final account
- Issue completion / non completion certificates
- Cost control and keeping clear records of all instructions and key decisions
- Facilitate end of defects and issue certificate of making good
24
Q
What are LADs, when do they apply and how are they calculated?
A
- Liquidated ascertained damages
- Apply when the works are not complete within the contract completion where the contractor is not entitled to an extension of time and a certificate of non completion has been issued, the employer would also be required to issue a notice to the contractor at least 5 days prior to the final date of payment outlining their intention to withhold or deduct liquidated damages for the period in line with the contract
- Needs to be calculated by the employer and must be a genuine pre estimate of the potential losses incurred if the project is not completed within the contracted completion date
25
Extensions of time requests, how do you respond?
- Acknowledge the receipt of the extension of time claim within 14 days
- Assess the contractors justification and evidence provided and provide an outcome plan within 8 weeks, 12 weeks in 2016 suite
- Or best endeavours to have assessment complete ahead of the completion date
- The CA can request for further information to be provided to substantiate the claim within 14 days, which will extend the 12 week period
- Evaluate the Relevant Event, assess the duration of the delay, consider mitigation, issue decision, document the response, amend the programme, issue extension as necessary, advise other implications to the employer
26
What are the key agenda items on a pre start?
- Introductions
- Form of Contract
- Contract Sum
- Possession and Completion Date
- Project Duration
- Health and Safety / CDM Regulations
- Insurance
- Communication
- Site Setup / Compound
- Statutory Approvals
- Contract Administrator Matters
- Quality / Inspections
- Any Other Business
- Date and Time of Next Meeting
- Project Directory / Meeting Schedule
27
Can you amend a Standard Form of Contract?
- Yes, amendments can be made providing it’s clearly documented and agreed by all parties to the agreement
- The parties should seek legal advice in the event of any amendments
- The amendments should be clearly outlined within a schedule of amendments and signed
- Avoid use of legal jargon where possible to make clearly understandable in the case any disputes arise
- JCT is designed to comply with UK law, so it is very important to have any amendments approved by a legal representative
28
What are the main different suites of JCT contract are you aware of?
- JCT Traditional MW, IDC, SBC
- JCT Design and Build
- JCT Management Contracts
29
JCT Contract is administered by CA, what is the equivalent for NEC4?
- Project manager; more informal collaborative approach
30
What are collateral warranties and when are they used?
- Legal agreements that provide additional assurances regarding performance of the parties
- They are side agreements tied into the main contract to protect third parties not involved in the original contract
- Can be given by designers, consultants, sub-contractors
- Collateral warranties provide ongoing protection beyond the construction
- Collateral warranties are an agreement with 3rd parties such as lenders or investors who have an overarching interest in the project
- Allows them to have a legal contract with the designers and installers in the case of any defects or issues arising in the future
31
JCT - Usually 3 options for insurance, what are they?
Insurance Option A, B and C used to specify who is responsible for insuring the works during the construction phase
Insurance Option A
- All risks insurance taken out by the Contractor
- For new build projects, where work is not attached to an existing structure, where the contractor is best placed because they are in control of the site and when the employer doesn’t already have relevant property insurance, or when it’s simpler for the contractor to insure the works
Insurance Option B
- All risks insurance taken out by the employer
- Also for new builds where the employer has an existing project-wide insurance policy in place or prefers to arrange it themselves, often used by larger developers or public sector clients
Insurance Option C
- All risks insurance taken out by the contractor and employer
- For works to existing buildings or structures, including refurbishment, alterations
- Necessary where both the existing structure and the new works must be insured, common where the contractor cannot insure the existing structure, employer insures the existing, contractor insures the works
32
Main advantages and disadvantages of using D&B?
Advantages
- Design and construction responsibly passed onto contractor therefore less input required by the employer if this is the preference
- Quicker design and conduction timescales as the design stage is combined into the package for the contractor
- Cost certainty and less financial risk for the client as the works package is designed and cost managed by the contractor
- No need for extensive consulting services for the client, I.e quantity surveyor, project management teams
- Suitable for employers with less construction knowledge and provide employers requirements to be adhered to
- Flexibility for the contractor
Disadvantages
- Less control over the design and construction process as the contractor is responsible for this element
- For clients who have specific requirements and want more control over the design and implementation, this contract is not suitable
- Potential for low quality design and construction
- Less room for changes
- Increased risk for the contractor
- Costs higher due to risk
- Potential for disputes over design and build performance
33
What are the NRM 1, 2, and 3? / SMM7?
- New Rules for Measurement
- Rules and guidance documents by RICS to provide standardised approach to measurement and cost management for building works in the UK by RICS
- Common approach for preparation of Bill of Quantities
34
Why would producing bill of quantities be useful?
- Provides detailed and accurate pricing framework
- Facilitates tender review, all bids based on same scope of work
- Clarifies the scope, preventing scope creep
- Identify potential savings
- Aids PM and CA during valuations, measuring progress etc
- Legal and dispute resolution
35
How have you used a fluctuation clause in a JCT Contract? Explain how it’s used?
- Used to allow adjustments to the contract sum to account for changes in cost of materials, labour, or other expenses, inflation etc for long term contracts
- Option A - Fixed price contract
- Option B - Adjustments allowed for changes in material or labour
- Option C - Conctractor is paid for the actual cost of materials and labour
36
What are provisional sums for?
- Money set aside for works or services that cannot be precisely defined or fully detailed at the time of contract signing
37
Difference between defined and undefined provisional sums?
Defined
- Scope of work is known, but exact details not fully known
- Defined provisional sums should include an allowance in it for the works
- Less risk to the employer, costs are more predictable
Undefined
More uncertain amount, scope not defined at tender stage
- Contractor cannot accurately price the associated work or resources
- Higher risk for employers, final cost can vary significantly and greater cost uncertainty
38
Considering contractors, what sort of background checks may be appropriate?
- Financial accounts on public companies house, balance sheets, company financial status
- Previous case studies
- Experience and qualifications
- Previous track record
- Insurance checks
- Health and safety
- Tender submission and quality of return
39
What are the advantages and disadvantages of negotiation rather than competitive tendering?
Advantages
- Promotes collaboration, team working, and relationship building
- Allows for greater flexibility
- Problem solving and higher quality output from one contractor
- Quicker process
- Reduced conflicts
- Improved confidentiality
Disadvantages
- Less cost certainty and value for money as no tenders present to compare costs
- Potential for conflict of interests and unethical behaviour
- Potential for bias
- Limited innovation and ideas
- Difficulty in evaluating performance
40
What would you expect to be covered in contractor preliminaries?
- Site management
- Site access and set up / Security
- Site services and utilities
- Surveys and investigations
- Welfare
- Cleaning
- Document processing
- Insurance costs
- Bonds / Collateral warranties if applicable
- Permits and licences
41
When doing valuation, what are you looking for on site?
- Amount of works completed
- Materials on site
- Testing and commissioning of works
- Progress against programme
- Housekeeping and general cost items
- Security and health and safety on site
42
Explain materials on site / vesting certificate, when might one be required?
- Value materials on site, check specification to ensure in line with contract, check quantities, condition, storage, contractor must submit invoices for materials value
- Value materials stored off site, Vesting certificates are transferring of ownership to client for materials before incorporating into the works
43
What legal effect does issuing a certificate of practical completion have?
- Agreement of works substantially completed in line with the contract
- Right to claim LADs removed
- Release of retention and final payment
- Beginning of defects liability period
- Insurances transferred back to employer
44
Contractor goes into insolvency, how would you advise the client?
- Assess the contractual position, and advise the client of their right to terminate
- Undertake a valuation of all works to date and materials supplied
- Advise the client to seek legal advice on the insolvent contractor
- Confirm insurance position if Option A stipulated in contract for contractor responsible insurances
- Communication with stakeholders
45
What are the implications of issuing a practical completion cert under JCT?
- Accepting of the works being substantially completed in line with the contract
- Release of retention and final payment procedure
- Right to claim LADs removed
- Beginning of the End of Defects period
- Client takes back responsibility of the site and insurances
46
What are standard % used in a JCT contract for retention, during the works and at PC? Can these % be altered? Issue of having set at Zero?
- Standard retention during the construction phase is 5%, in some instances for larger projects can be 3% due to higher value of contract
- Retention at completion is halved, and remaining is released at the end of defects liability period
- Can be altered in line with the project value and agreed by both parties
- Risk of having set at Zero is the lack of incentive for the contractor to complete works as per the programme and quality standards expected, no financial safeguard for defects, difficulty in recovering costs for break, and financial risk
47
Managing latent defects and insurance claims - what is a latent defect, what is a patent defect - rules on latent defects under a traditional JCT contract?
- Defect period under JCT is usually 6 or 12 months, anything passed this is not typically covered by JCT
- Defects can however be covered through the use of warranties or specific clauses which extends the contractors responsibility beyond the DLP
- The contractor is generally covered by a construction insurance, which may include latent defects insurance, typically 6 to 12 years
- If insurances for latent defects not in place, the contractor may not be liable for the repairs
- Liability may depend on other factors like the Limitation Act 1980, which sets out times for bringing a claim, or any other legal avenues for breach of contract or negligence
Latent Defect
- Defect which is not apparent at the of completion and may become apparent after a period of time, generally works that are hidden or concealed
Patent Defect
- Defects which are apparent and identified at the time of completion
48
What standard forms of contract are you aware of?
- JCT Contracts, building projects predominantly in the Uk
- NEC, large scale engineering projects
- FIDIC, internationally used for large scale infrastructure projects
Yellow book, Green book, Red book, Silver book
49
What timescales are involved in an extension of time request on a standard JCT Contract?
Guidance: RICS Black Books Practice Information - Extensions of Time
- Contractor to submit notice to the client when it becomes reasonably apparent that the progress of the works is likely to be delayed
- CA must acknowledge receipt of the claim
- CA has 12 weeks in the 2016 suite, 8 weeks in the 2024 suite to assess and provide decision
- CA must request for any further information required within 2 weeks, which will extend the 12 period as such
50
When was the JCT Contract suite last updated?
- 2024
- 2016 can still be used and is available until March 2026
51
Tell me the key changes that were made to the JCT Contract suite in the 2024 update?
- CA timescales for review of extension of time claims reduced from 12 weeks to 8 weeks
- Further provisions for electronic communications and signing of contracts
- Gender Neutral language - Pronouns for diversity and inclusion of all
- Added relevant event for pandemic
- Added relevant event for statutory changes
- Introduction of Target Cost Contract
- Collaborative working requiring parties to work in a ‘co-operative and collaborative manner, in good faith and in the spirit of trust and respect’
- Changes in notification and negotiation of disputes
- BSA - Appointment of Principal Designer and Principal Contractor with reference to CDM and Building Regulations Part 2A
- Sustainable development a new clause, previously supplemental
- Contractors design liability limiting liability to “reasonable skill and care”, previously “fit for purpose”
52
How does JCT play alongside the construction playbook?
Construction playbook; UK government guidelines for public sector construction projects;
- JCT has specific clauses to compliment work alongside these guidelines
- Improves efficiency
- Sustainability
- Collaboration
53
What is the JCT Fluctuations HUB used for?
- Articles that cover fluctuations principal
- Training module that that provides overview on each fluctuation option
- Option A - Fixed price contract, allows for changes to contract sum in respect of changes to tax, levies and contributions
- Option B - Allows for changes to materials and labour costs
- Option C - Formula led adjustment to contract sum, JCT Formula Rules will apply depending on the type of work being carried out
54
What is a JCT Target Cost Contract?
- Introduced in latest JCT 2024 Contract Suite
- Parties agree a sum for the works and all design and specification to be based on this figure
- Any cost overruns are shared by the employer and contractor
Benefits
- Greater cost certainty
- Improved collaboration
- Incentive for efficiency
55
What is the difference between relevant event and relevant matter?
Relevant Event is a mechanism in the contract that which provides the contractor with the entitlement to apply for an extension of time to the contract, but not necessarily loss and expense
Includes
- Variations
- Exceptionally adverse weather conditions
- Delays due to statutory works and approvals
- Specified peril, I.e fire
- Deferment of giving possession
Relevant matter is a contextual mechanism which allows the contractor to claim for loss and expense, but no necessarily an extension of time
A matter which may justify delay, but does not automatically entitle the contractor to an extension of time
May be considered for an EoT, typically contractors responsibility
Includes
- Variations
- CA instruction for expenditure of a Provisional Sum for defined work
- Impediment, prevention or default by the employer
- Errors, inconsistencies between the contract documents
56
If a non-completion certificate is not issued, what is the contractual term?
- Time is at large
- Means there is no incentive for the contractor to mitigate the delays and promptly complete the works
- Contractor to use best endeavours to complete the works as soon as possible
- Also means the employer is not entitled to claim LADs until the certificate of non completion is issued
57
What do you know about variations under JCT?
- Changes to the contract requirements which may be additional time and cost onto the existing contract
58
What do you know about payments under JCT?
- Interim payment dates are outlined within the contract
- Due date is 7 days after the valuation date
- CA must issue a payment certificate within 5 days of the due date
- If no interim payment certificate is issued, then the contractors application becomes the payment notice
- Final date for payment is 14 days after the due date
- Pay less notice if applicable is to be issued by the employer no later than 5 days of the final date for payment
- Final payment is due 28 days after the certificate of making good is issued or the date the defects liability period ends, whichever is first
59
What do you know about delays under JCT?
Guidance RICS Black Book Practice Information - Assessing Extension of Time Applications
- The contractor must notify the CA as soon as it becomes reasonably apparent that the works are expected to be delayed
- Contractor must reference the delay in days/weeks and the period the delay had occurred with reference to any relevant event which has occurred or relevant matters to be taken into consideration
- CA must acknowledge the claim, and request any further information within 14 days from the contractor
- 8 week period to assess the claim, if any further information is required within the first 2 weeks, this time is extended, previously 12 weeks
- CA to use best endeavours to have decided prior to the completion date
- CA to notify the outcome of the assessment and provide decision to contractor, review any further responses and assess further
- Negotiate and avoid conflict, however LADs can be claimed if applicable and this can lead to litigation
60
What do you know about completion under JCT?
- Practical completion is the agreement that works have been substantially completed in line with the contract
- Beginning of the defects liability period
- Triggers final account and payment and release of half of the retention held during construction phase
- Client takes back responsibility of the site and insurances
- Right to claim LADs is removed
61
What mechanisms are used for certifying payment?
- Interim Payment Certificate
- Final Payment Certificate
62
What are the RICS guidance notes on CA?
- RICS Contract Administration Services - Scope of Work
RICS Black Books Practice Information
- Commercial management of construction
- Assessing extension of time claims
- Conflict Avoidance and Dispute Resolution
63
What are the RICS guidance on Interim Valuations?
RICS Black Book Practice Information - Interim Valuation and Payment
64
What are the RICS guidance notes on FA procedures?
RICS Black Book Practice Information - Final account procedures
- How to prepare final account
- Process of cooperation between the parties and negotiation
- How to prepare a statement of final account
- Final account should be ascertained within 3 months of receiving the required information from the contractor
65
Shipston - What were the dates for payment certs?
- Valuation date is usually last working day of each month, I.e 28th of the month
66
Shipston - How did you agree final account?
- Kept a clear record of all instructions and variations throughout the project
- Kept and up to date cost plan for the project throughout the construction phase
- Meeting with the contractor to run through to ensure figures align with them, negotiate settlement where required for certain elements
- Produce statement of final account, referencing the contract, the employer, the contractor, the contract value, value of change, adjusted final account sum, signature of both parties
- Agree with the client
- Issue final account statement and final payment certificate
67
Shipston - What was included in the final certificate of payment?
- Employer details
- Contractor details
- Description of works
- Form of contract
- Contract sum
- Gross valuation
- Minus previously certified
- Release retention / remaining retention
- Valuation sum
- Valuation sum in words
- Signature
68
What are the implications of issuing PC certificate?
- Confirmation and agreement that the works are substantially complete as per the contract
- Triggers final payment and release of half of retention
- Right to claim LADs removed
- Employer takes responsibility of site and insurances are transferred back
- Beginning of the defects liability period
69
Connexus - How were changes to specification incorporated?
- Notification to the contractor made with intention to make changes to the kitchen specification
- Details of the change proposed to the contractor
- Contractor priced the changed specification and advised of any programme implications, in this case none
- The cost was reviewed and accepted following review with the client
- Contract Instruction was prepared detailing the change and the additional cost added to the contract sum, stating the adjusted contract sum
- Contract Instruction was issued to the contractor and clearly documented
- Fed into the overall cost plan which was shared with the client
70
What are change controls?
- Requests for change of contracted works or specifications made by the employer with details of the change
71
What did you include in your instruction for variations?
- Date of the instruction
- Description of the variation referencing any agreements / correspondence
- Value of the variation
- Contract sum
- Value of previous variations
- Adjusted contract sum
- Signature
72
EIA External Landscaping - How did you advise your client on contract selection?
- I advised my client that JCT Intermediate Building Contract 2016 would be the most suitable based on their requirements
- The value of the project was around £600k
- The project would be considered a medium scale project
- Required specialist groundwork and surface contractors, also required M&E input for access control features
- The proposed programme was a total of 12 weeks with requirement for interim payments during construction phase
- Client required the works to be completed in sections, allowing for access to be handed over for the Section 1 - Demolition and Section 2 - Main Playground works in time for the start of term
73
EIA Landscaping - Why did you use intermediate?
- Allowed works to be split into sections
- Multiple contractors and ground works specialist for football pitch, and M&E works
- Considered medium scale not simple in nature with a value of approximately £600k
- Programme length of 12 weeks with provisions for interim payments during construction
74
How are sections dealt with in Intermediate Contracts?
- Sections are treated as separate works packages
- Differnet start date, completion date, sum for each section
- Clear plan to be provided showing sectional areas
- Consider the works in the section to be substantially complete in line with the contract
- If PC is issued for a particular section, the defects liability period for this section begins, LADs are no longer claimable on this section, this area is handed back to the client and insistences transferred back over, trigger for final payment for the section and release of 50% of the retention
- Valuations to be split, outlining the completion of specific sections and different retention amounts held for sections which are complete
- Contractor and client to allow for safe access to areas still in progress until the completion of all sections
75
What are the cost and programme implications of splitting the works?
- Overall programme can be expected to be extended in comparison to having all works done together due to completing areas one at a time
- Cost can be expected to be higher due to multiple visits for trades to visit site for each section, as opposed to all sections simultaneously
- Increased risk of delays due to coordination of works and extended programme tasks
76
Hall Green - How did you assess the EoT claim?
- Acknowledged the letter from the contractor stating a relevant event had occurred for ‘exceptionally adverse weather’ conditions for rain during one week in July
- I requested further information the contractor within a week of receiving the claim, for which there was no weather reports for evidence, and the contractor failed to provide this
- I undertook my assessment, checking my site inspection reports for the period in time being applied for, I also checked MET office weather reports for the time in question
- My conclusion was that although there was some some rain during the week, this would not be a relevant event of ‘exceptionally adverse’ weather conditions and as such provided the evidence gathered as well as the site inspection report and refused the claim for the extension of time
- This was issued to the client and contractor by post
- A certificate of non-completion was issued to the contractor, extra resource and weekend working conditions as utilised to ensure prompt completion of the project
- I advised my client of their right to claim LADs, for which they declined as the works were being completed over the following weekend
77
Hall Green - What is the wording in the contract in relation to weather delays?
- 2.20.8 Exceptionally adverse weather conditions
78
Hall Green EoT - What was the reason for rejecting the claim?
- I had determined that the relevant event for ‘exceptionally adverse weather conditions’ had not occurred following my assessment and checking site visit reports and MET Office historical weather reports
- Contractor failed to provide further information to substantiate their claim
79
Hall Green - What are the implications of issuing a non-completion certificate?
- Client would be entitled to make a claim for LADs
80
Talk me through how you’ve managed KPIs in a contract? I.e monthly penalties?
Queensbury New Build
- KPI was the safe working and site housekeeping during works within a SEMH school
- Access was limited and there was an increased risk of health and safety hazards
- As such KPIs were to ensure all areas were kept safe at all times, strict delivery times, banksmen guiding vehicles through live pedestrian zones
- These KPIs were monitored during site inspections and reported on in progress meetings
81
How have you measured performance requirements in a subcontract?
- Structured approach for quality inspections regularly during the works to manage and address any performance issues
82
Talk me through your experience with dispute avoidance?
- Ensure regular clear and effective communication throughout the project
- Take accurate records and minutes of key decisions and ensure transparency
- Promote collaboration and team working
- Set clear goals and objectives and assign responsibilities
- Early warning of issues and come to solution collectively
- Clear and detailed contract documents
83
Talk me through how you have dealt with completion and possession issues?
- Understand completion and possession terms by reviewing the contract terms
- Advise the client of the process for contractor taking possession of the site
- Advise the client to have insurances prepared for completion of the works and responsibility of the areas handed back to the client
84
Tell me about your involvement with issuing certificates?
- Issued certificates of payment within 5 days after the due date
- Issued practical completion certificates
- Issued non completion certificate
- Issued certificate of making good defects
85
Shipston - Why did you use Intermediate?
- Value of works £280k
- relatively complex works with M&E specialist works required for installation of access controlled vehicle and pedestrian gates
- Works split into sections to allow the front of site and gates to be completed first, and remainder of perimeter fencing to be completed after
86
Shipston - How did you utilise meeting minutes?
- Used to track actions and follow up with stakeholders for progress updates during the reporting period
- Used during the next meeting to address points raised in previous meeting
- Clear and detailed agreements kept on record for avoidance of disputes
- Used to keep stakeholders updated on meeting schedule and project directory
87
Shipston - What did you consider when assessing practical completion?
- Was the works substantially completed in line with the contract requirements
- Have works areas been cleared and cleaned and site made safe for employer to take back possession of the site
- Have the relevant H&S information and O&M, testing and commissioning, guarantee certifications been provided
- Have any defects which affect the functional and safe use of the works been rectified
- Advise client on the completion and notice for insurances to be put in place in preparation for completion
- Start of defects liability period, final payment trigger, release 50% of retention, entitlement for LADs removed
88
Talk me through your experience of resolving disputes / assessing and recommending extension of time / assessing recommendation for loss and expense?
- Resolving disputes - Priory Fire Doors - Facilitated discussions and negotiations with contractor and client due to lack of performance during first phase of works
- Assessing and recommending extension of time - Hall Green Windows Ph1 - Rejected contractors claim for a relevant event for ‘exceptionally adverse weather conditions’
Loss and expense - Hall Green Case Study - Cost for additional preliminaries for management and access for 2 week extension due to variation for concrete repair works
89
How have you outlined and recommended to a client the proposed contract preliminaries?
1. Understand the scope of the works and requirements; project type, duration, site conditions, contract type
2. Key elements of the preliminaries; site office, welfare, storage, temporary facilities, security, access arrangements
3. Utilities and services
4. Equipment and tools
5. Temporary works
6. Project goals, I.e sustainability
7. Site use and neighbours
8. Site investigations or monitoring requirements
90
How have you assess the quantum of a contractors claim?
1. Review the contract document and terms
2. Check the contractors claim and review evidence provided, request further evidence if required
3. Undertake my own due diligence and report check using tools available
4. Verify the causes of the claim
5. Determine if the claim is justifiable
6. Assess and very and damages or losses
7. Negotiation and settlement, agree on terms
91
Tell me about when you have provided reasoned advice on any specific matters of a contract?
Hall Green Case Study
- Reviewed contractors claim for an extension of time and loss and expense for variation for the concrete column repairs
- Advised my client after review of the contact that a relevant event and relevant matter had in fact taken place and assessment of the 2 weeks is justifiable for works involved along the critical path of the programme
92
Talk me through when you’ve led the selection of a form of contract for a project?
EIA Landscaping
- Considered the complexity of the works, the value and interim payment requirements, the duration of the project, the requirements for specialist sub contractor input for sports pitch surface and M&E works, the requirement of splitting works into sections
- Advised my client on the use of JCT Intermediate Building Contract to allow these provisions
93
When have you selected a form of sub-contract?
I haven’t
94
How would you evaluate the proposed contract amendment?
- Review the original clause within the contract and proposed change
- Determine the impact of the change to the client and the project and any associated risks and value offered to each party for the change
- Advised the client following my review
- Advise the client to seek legal advice should the practicality of the change be accepted
- Important to have a lawyer check over as standard contract terms are in line with the law in the UK and any changes to these clauses need legal review
95
Amendment to contract - How would you evaluate the implications?
- Determine whether the change poses any cost, programme, quality, health and safety, or logistical impacts
- Evaluate the risk to both parties for the change and advise accordingly
- Advise parties to seek legal advice on the contract changes prior to agreement
96
EIA Landscaping - How did you present advice to your client?
- Face to face meeting on site
- Followed up with email to provide minutes of the discussions and advise accordingly
97
What is the difference between sectional completion and partial possession?
Sectional completion
- Is a formal approach relates to sections outlined within the contract and agreed upon in the initial contract
- Sectional completion is issued when works in the contracted section are considered to be substantially complete in line with the contract
Partial possession
- Is a mechanism used to allow the employer possession of certain elements of the works during the works
- CA must clearly outline areas which are considered complete and adjust the valuation and payment provisions accordingly to release retention and commence defect liability period for that element of works only and response of areas and insurances handed back to the employer
98
EIA Landscaping Intermediate Contract - What mechanisms meant this form of contract was suitable?
- Provisions for splitting the works into sections
- 12 week period with provisions for interim payments and suitable for the scale of project as a medium scaled project
- Provisions for specialist and multiple contractor works taking place on site
99
EIA Landscaping - What were the cost and programme implications for splitting the works?
- Programme would be extended due to multiple areas of working with return visits for trades such as ground workers to undertake works to each section not running concurrently, added programme risk due to more complex sequencing of works
- Cost would be higher in companion to having works completed together due to multiple visits from labourers and sub contractors undertaking the works in sections as opposed to concurrently
- Additional cost for temporary works, site set up and management which are all time charge based
100
EIA Landscaping - How did you assess the LADs for each section?
- I didn’t
- This would be done by the employer, I advised them to provide a genuine pre estimate of potential losses incurred should each section of the works not be completed within the contracted sectional completion dates
101
Hall Green Ph1 - Why did you select D&B?
- I didn’t, another surveyor initiated the contract stage of this project and I later was appointed to oversee the construction phase
- Reason was due to the need to progress the works without the need for extensive design to allow works to be undertaken and completed during the summer
- D&B allowed for quicker design and construction phase as this would be the contractors responsibility with the use of employers requirements setting out the requirements for the project
102
When assessing extension of time, what do you need to consider?
- The timescales allowed within the JCT for reviewing and providing a decision on the claim. 8 weeks or best endeavours to have decided prior to completion date
- Review the contractors claim and reference to the contract clause for a relevant event, review evidence and documentation provided to substantiate the claim
- Request further information if required from the contractor within 2 weeks of receipt of the claim
- Undertake my own due diligence and review the periods stated within the claim and cross reference with project status, the impact of the relevant event on the critical path of the programme and whether the contractor is entitled to the extension
- Issue letter either rejecting or accepting with an extension of time stating the new completion date and duration of the extension
103
Hall Green Ph1 - How did you review weather and if this was a suitable claim?
- The relevant event relating to weather is worded as “exceptionally adverse weather conditions”
- Review the evidence submitted by the contractor, in this case the evidence was limited
- Review the period in question where the delays had occurred
- Check my site inspection reports during the time period stated
- Check MET office weather channel for historic data and retrieve weather conditions during the period stated
104
What is a relevant event?
- Relevant event is a contractual mechanism which entitles the contractor to a potential extension of time should any of the relevant events occur
Examples include
- Exceptionally adverse weather conditions
- Variations
- Instruction by CA to uncover construed elements for inspection, unless faults are found
- Specified peril, I.e fire / vandalism
- Pandemic
- Labourer strikes
- Works by statutory undertaker
- Deferment of giving possession
- Suspension by the contractor due to breaches of payment terms by the employer
- Force majeure
105
What is a relevant matter?
- Relevant matter is a contractual mechanism which entitles the contractor to a potential claim for loss and expense
- Usually direct issues relating to employer instructions or impediments or prevention by the employer
Examples include
- Variations
- Instruction by CA to uncover construed elements for inspection, unless faults are found
- Errors or discrepancies within contract documents
106
Hall Green Ph1 - What are the implications of a non-completion certificate?
- Employer is entitled to submit a claim for LADs from the date of non-completion certificate being issued
- Contractors continued liability of the site and insurances
- Final completion and final payment cannot go ahead until works are completed
- Contractor to bear the costs of additional preliminaries unless an EoT is granted
107
Hall Green P1 - What was the outcome of issuing a non-completion certificate and the completion of the project?
- Contractor allocated additional resource and weekend working to get the works completed promptly without further delay
- Client was advised of their right to claim for LADs but chose not to proceed as works were completed over the weekend
108
Talk me through when you’ve administered a contract?
Hall Green Case Study
- Assisted client with appropriate contract selection and preparation of the contract
- Managed and oversaw the contract and ensure parties fulfilled their contractual obligations
- Ensured communication channels were set up and I chaired pre start and progress meetings
- Undertook regular inspections to record progress and quality of the works
- Issued instructions during the project
- Issued interim payment certificates
- Assessed extension of time claim and issued the EoT
- Issued completion certificate
- Negotiated and agreed final account
- Undertook End of Defects and issued the certificate of making good
109
Talk me through how you’ve dealt with and managed change on a contract?
Hall Green Case Study
- Uncovered issues to concrete columns, variation agreed to add requirement and additional time and cost onto the contract
- Client wanted to change windows to sports hall low level to obscure glazing, raised a change order with the contractor and assessed the costs provided and issued a contract instruction following agreement with client
- Issued contract instruction
- Fed into cost plan and advised client of financial position following changes
110
Talk me through how you’ve been paid or procedure you’ve followed for maintaining payment in a contract?
Hall Green Case Study
- Issued interim payment certificate within 5 days of the due date as per the contract
- Advised client of their obligation to ensure the final date for payment is no longer than 14 days from the due date
111
Tell me how you’ve dealt with monthly payment assessment for subcontractors in accordance with the Construction Act?
I haven’t
112
Talk me through your experience of issuing final account certificates?
Hall Green Case Study
- Produced a statement of final account following meeting with contractor to agree the value
- Provided the certificate which outlined the parties, the form of contact, the date of the final account, original contract sum, agreed variations, adjusted final account figure, signature of parties
- Adjustments made for over or underpayments during the construction phase
113
Tell me how you’ve contractually managed the emergence of unforeseen issues during a construction project?
Hall Green Case Study
- Key issue 2, concrete defects to columns following strip out of sports hall windows
- Advised client in the first instance of the issues and prompt action was required
- Issued a change control to the contractor for the additional works required to rectify the issue uncovered
- Assessed the costs submitted by the contractor and issued a variation for the works
- Contractor submitted an extension of time application for the additional works instructed
- Following assessment of the delays incurred due to the uncovered works, I issued Extension of Time for each Section 2 (Sports Hall 1) and Section 2 (Sports Hall 2) by one week, overall extension by 2 weeks
-
114
Talk me through how you’ve issued instructions / dealt with payment provisions / managed variation procedures?
Hall Green Case Study
- Issued contract instruction for variations not part of the contracted works, I.e satin laminated glass, additional door installations, concrete repairs to columns
-
115
Talk me through how you’ve issued instructions / dealt with payment provisions / managed variation procedures?
Hall Green Case Study
- Issued contract instruction for variations not part of the contracted works, I.e satin laminated glass, additional door installations, concrete repairs to columns
- Ensured contractor submitted application for payment and valuation undertaken in line with the contract dates, interim payment certificates issued within 5 days of the due date and advised client of their obligation to adhere to the final date of payment within 14 days of the due date
- Kept accurate records of all agreements and instructions and fed into a project cost plan and variation tracker to be used for final account and client reporting
116
Talk me through your involvement with dispute avoidance?
- Clear and concise contract documentation
- Effective communication and coordination
- Record keeping and key documentation, minutes from progress meetings and issuing to wider team
- Remaining flexible and negotiating with parties when issues arise
- Clear goals and objectives with responsibilities outlined
- Variation and instruction management
