Contract Practice Flashcards
(112 cards)
1
Q
Could you please outline some fundamental aspects of the JCT document Deciding on the appropriate JCT contract 2016 ?
A
This document addresses procurement strategies, Differing types of contract, Design and Build contracts and Traditional contracts.
2
Q
Could you please outline some key fundamental elements of the JCT tendering practise note 2017?
A
This document covers the tender process as a whole relevant to JCT contracts covering items such as:
- Initial Enquiries (PQQ)
- Invitation to Tender and Tender Process
- Assessment and Award.
3
Q
What is a form of tender
A
It is a formal acknowledgement that the tenderer understands and accepts the terms of conditions of the tender documents and any other requirements that are stipulated.
4
Q
What is included within a form of tender?
A
- Latest return time and date.
- Date, name and address.
- The period of time that is allocated for the works, or an actual completion date if required.
5
Q
What is included within an invitation to Tender?
A
- A letter of invitation to tender.
- The form of tender.
Preliminaries. - The form of contract.
- Design Drawings (ER’s)
6
Q
Could you please outline some of the sections with a JCT contract?
A
Contract Particulars, Conditions of contract, articles of agreement.
7
Q
What are the common amendments within a JCT building contract?
A
- Retention amount (3 - 5%)
- Retention Period (6 months to 12 months)
8
Q
How does the JCT tendering practise document assist you with tendering practise?
A
It provides me with the JCT’s expectations relevant to the documentation to form part of a tender process such as a PQQ.
9
Q
What is the difference between a PQQ and an EOI?
A
EOI is a document about the tendering party that is prepared by themselves.
A PQQ is a questionnaire that the deign team compiles relevant to the project which the contractor is required to answer.
10
Q
What other contract forms are you aware of?
A
NEC
11
Q
Why do you only have working experience with the JCT form of contract?
A
The JCT contract is very standard within the construction industry and the particular sector I work within. I have never been involved with a complex engineering project and have not used the NEC contract.
12
Q
What does NEC stand for?
A
New Engineering Contract
13
Q
What does JCT stand for?
A
Joint Contract Tribunal.
14
Q
Can you please outline the differences between minor works, Intermediate and Design and Build Contract?
A
Minor works - Generally used for up to a limit of £250k
Intermediate - Allows sectional completion, more detailed than a minor works contract.
Design and Build - Most detailed, transfer of design risk from client to contractor.
15
Q
For what scope of work have you used a minor works contract?
A
A light touch toilet refurbishment.
16
Q
What is the key difference between a minor work and intermediate contract?
A
The intermediate form of contract allows works to be complete in sections.
17
Q
When are NEC contracts typically used?
A
Infrastructure projects, public work
18
Q
Please name some key elements of an NEC contract?
A
- Defined role of a Project Manager.
- Programme included within the contract documents.
19
Q
What process do you go through when selecting a contract?
A
I will review my clients key objectives relevant to cost, programme and quality and select the form of contract best suited to meet their requirements.
20
Q
Which element of time, quality and cost are most important?
A
They are all important and I aim to manage all of these effectively in my role of project manager. My clients key objectives would dictate the “most” important of these.
21
Q
How does the choice of contract influence cost , time and quality?
A
Different forms of contract have different provisions within them to best manage these elements. For example a D&B contract allows for a transfer of design risk thus minimising the likelihood of post contract change thus reducing cost risk.
22
Q
What do you mean by nature of the works relevant to contract selection?
A
This would mean any specific client objectives which would dictate any pressures around areas such as programme for example.
23
Q
What key elements of scope would you assess when choosing the correct form of contract?
A
Scope of work that would increase cost thus discounting the minor works or intermediate forms.
Also scope relevant to design and quality as this may dictate between D&B and traditional.
24
Q
How do you know a type of contract is appropriate?
A
-Scope
- Complexity
- Clients risk appetite
- Value
- Level of design to be undertaken
25
Who's responsibility is it to collate the contract documents?
The responsibility of collating the contract documents would sit with both the clients QS. These would then be reviewed and packaged into the contract by the clients legal advisor.
26
Where are LD's included within a JCT construction contract?
- Clause 4.6.1 in the JCT D&B contract.
- LD amount is within the contract particulars
27
What are Liquidated Damages?
They are pre-determined damages set at the time that a contract is entered into, based on a calculation of the actual loss the client is likely to incur if the contractor fails to meet the completion date.
28
Why are LD's important in a contract?
They provide importance to the contractor in order to achieve the practical completion date within the contract.
29
Why is it of benefit for the level of LD's to be agreed prior to the tender documents being issued?
It allows the contractor to factor this into their tender return and provide comment if the LD's are too high. Including them in the contract allows the client to keep the contractor in competition and factor their acceptance (or otherwise) into the tender analysis.
30
What would you have done if the LD's were not agreed prior to the tender being issued?
I would include the LD level as a tender addendum or agree this as part of the contract negotiation with the contractor.
31
Are you aware of the process of claiming damages? Do you have experience in this?
I have never claimed damages against a contractor.
A certificate of non-completion must be issued at PC. The client is then to issue a pay less notice to the contractor.
32
How would damages typically be claimed in a construction project?
By a pay less notice.
33
How would you calculate actual loss?
Loss of rental income, leasing costs, marketing costs etc.
34
Would you calculate the LD's on behalf of the client?
No, the clientwould.
35
Could any delay trigger LD's?
No, this must be delay which the contractor is at fault for i.e. not a relevant event or matter.
36
What is a relevant event
A relevant event is a specific events or circumstances that may impact the progress, completion, or cost of a construction project. This may be a variation, adverse weather or national strikes.
37
What is a relevant matter?
A matter for which the client is responsible that materially affects the progress of the works. I.e. not allowing possession of the site.
38
What sort of delays to practical completion would trigger LD's?
Failure in appropriately commissioning the M&E system so they need to re-commission.
39
What would you do if a contractor was not willing to agree to the proposed LD's?
I would review the position with the client and ask the QS to negotiate with the contractor to agree a revised position as long as this wasn't to the detriment of my client.
40
What do you typically do during the initial briefing stages?
Arrange meeting with the client and other key stakeholders in order to inform the project brief.
41
How did you review the differing contract options available to your client?
I understand my clients key objectives and then assess the contract options based on my knowledge and JCT deciding on appropriate contract document to choose a contract to best suite.
42
Why did you need sectional completions to take place in your Cat B fit out at 25 Golden Square?
To allow the comms room to complete early for the clients IT team to access.
43
What is the difference between partial possession and Early use?
Early use - risk remains with the contractor.
Partial Possession - risk passes to the client.
44
Do the other forms of contract not allow for sectional completion? Why else did you consider the intermediate form of contract?
They do, the intermediate was considered as the works were of a small size.
45
How did you determine that the value of the project was too large for the intermediate form of contract?
I did not determine this, I met with my clients legal advisor and explained the scope and value of the works. They were not comfortable proceeding with a intermediate contract given the scope of works.
46
Could you please explain how the design and build form of contract facilitates a transfer of risk and why this would benefit your client?
- Contractor accepts the employer's requirements and issues contractors proposals
- Contractor takes the risk of developing the design and any disrepencies between design and intent.
47
Why would the design being altered by the contractor be of concern to your client on this project?
The client was undertaking a fit-out for their new London head office and therefore quality was important to them. I explained to the client that the professional team had developed the design to a suitable standard that the contractor would not be able to divert away from the robust employer's requirements.
48
Why was the traditional form of contract considered?
The traditional for of contract would allow the client control over the development of the design throughout the construction period. Given their quality aspirations, this was appealing to the client.
49
Why did you feel that the traditional form of contract would lead to increased post contract change?
During the design process we were not permitted access by the tenant to survey the space and we did not have access to extensive basebuild information. It was felt that there was a risk that their could be differences between the expected condition of the floor and the actual condition of the floor. With a traditional form of contract this Coordiantion risk would sit with the client.
50
What form did you present your contract selection advise to your client?
I presented this in a powerpoint to my client.
51
Why was the D&B contract selected by your client at Golden Square?
The transfer of risk was important given the lack of basebuild information available and limited access to site provided by the previous tenant. The client wished to minimise their exposure to post contract price increases.
52
What is the role of employer's agent?
They act on behalf of the employer in all matters, unless the employer states expressly in writing otherwise. The employer's agent also administers the building contract on behalf of the client.
53
What is the difference between employer's agent and contract administrator?
Employer's agent is solely on D&B projects. The employer's agent acts on behalf of the client on all matters whereas CA does not.
54
How do you determine your clients key drivers?
At the project outset, i will hold regular meetings with my client to understand their aspirations for the space aswell as any time limitations or quality aims.
55
Can value be dictated by the selection of contract form?
Not directly however contracts such as the D&B may minimise the clients post contract cost risk due to the transfer of risk between client and contractor.
56
Why does a traditional contract allow for greater design control?
It is the responsibility of the clients team to develop the design to construction issue therefore limiting any change from the ER's within the contract to the construction issue drawings.
57
How did you manage your clients concerns over quality with a design and build contract?
The design was developed to RIBA stage 4 prior to tender which includes for detail around material finishes etc. I also ensured that the contractor ensured that samples of finishes were supplied as well as mock-ups of any contentious details.
58
What is the D&B transfer of risk?
The D&B transfer of risk is when the contractor takes responsibility for the development of the design post contract signature.
59
How does the transfer of risk relate to greater cost certainty?
The contractor has responsibility for the development of the design and therefore the responsibility for any changes, e.g. services layouts, that result from this. Lux levels within a M&E specification.
60
Why was your 95 QVS roof layout required to change during the Stage 3 design period?
This was following feedback received from the planning application which we had submitted.
61
How did you ensure that the terrace was fully accessible?
- Lighting
- Level Access
- Automatic Door
- The design was progressed in accordance with Approved Document M.
62
How did you 95 QVS structural re-design factored into your programme? Did this create delay?
The requirement for re-design did cause delay to the project. The design was paused whilst this structural element was re-worked.
63
How was this novation managed and formed under the JCT D&B contract?
The requirement for novation was included at tender stage. Prior to finalising the contract, novation agreements were agreed between the contractor and consultant. This then formed an appendix to the building contract.
64
Why would the novation of your structural engineer help with the stage 5 design?
The structural engineer would be responsible for developing the stage 5 design on behalf of the contractor. Their existing knowledge of the design logic previously would help their accurate development of the design.
65
Could this not have been managed under the construction monitoring role?
The monitoring role would check the design by the contractor and approve / comment on drawings however a novation would de-risk programme given their would be a lower chance of the design by the novated consultant be rejected / needing re-design.
66
What is the difference between a PCSA and LOI?
A PCSA is part of the JCT suite of contracts whereas an LOI is drafted by the clients legal advisor
67
When would a pay less notice be issued?
by the employer, has to be 5 days prior to the payment date.
68
What is Insurance option A?
- New Builds
- Take out by contractor
- Employer covered by policy also.
69
What is insurance option B?
- New Build
- Taken out by the employer
- Joint names policy
- Contractor covered also
- Only applies to loss or damage due to specified peril
69
What is insurance Option C?
- Change to 2016 contracts.
- Existing structures
- Bespoke insurance option
- Insurance of works and existing structures by "other means"
70
When would you use a management contract?
- Complex works packages
- Early contractor input on large / complex works
71
What is a management contract?
- Contractor appointed early in design process.
- Works are then undertaken by specific sub-contractors
- Larger Projects
72
Other than Covid 19, what is another example of Force Majeure
- Natural Disaster
73
What consists force majeure?
- Unforeseen
- Caused by party external to the contract
- Must result in the contract works not being able to be complete.
74
What are the standard levels of retention in JCT contracts?
- MW - 5%
- Intermediate - 5%
D&B - 3%
Trad - 3%
75
What is a waiver of subrogation?
- an insured waives the right of their insurance carrier to seek compensation against a negligent third party.
76
What is the defects period for a minor works contract?
3 months
77
What are the alternative A and B payment options?
A - stage payments
B- Periodic (works progress on site
78
When does an employer's agents role start?
Following appointment by the client.
79
How did you ensure the contractor were in agreement with the requirements of practical completion?
Include in employer's requirements
80
What is a waiver of subrogation?
When an insured waives the right of their insurer to claim compensation against a negligent third party.
81
How do you name sub-contractors?
- Receive shortlist of sub-contractors from Client.
- Include list in tender documents
- Contrator accomodates within tender returns.
- Included within JCT contract
82
What is included within a collateral warranty?
- Assignees
- Beneficiaries
- Level of PII
83
What is included within a novation agreement?
- Parties of agreement
- Employer releases their rights on consultant
- Contractor to pay fees
84
What element of the contract relates to quality?
- Good workmanship and materials
85
What should a consultant have visibility of prior to signing a novation agreement?
- Building contract
- Novation agreement
86
What is the difference between a relevant event and a relevant matter?
Relevant event - extension of time
Relevant matter - Loss and expense, no extension
87
What is an example of a relevant matter?
- Discrepancies in contract documents
88
What act relates to third party rights?
Contract rights of third parties act 1999
89
What would typically be included within a novated consultants scope of service?
- Completion of Stage 5 details / drawings
- Attendance at sub-contractor workshops
- Collation of O&M information / as-builts
90
What are the recitals within a JCT contract?
- Nature types of works
- Documents included in contract
- Confirmation of CIS relevance
91
What are the articles included within a JCT contract?
- Identifies Principal Designer
- Identifies principal contractor
- Makes reference to adjudication and arbitration in the event of a dispute
92
What is the difference between signing a contract by Deed or under hand?
Deed
- 12 years liability
- 2 signatures and / or witness
Under Hand
- 6 years liability
93
What are some of the usual appendices to a JCT contract?
- Asbestos statement
- Pre construction information
- Planning consent
- PC Checklist
94
What are the preambles within a contract?
Explanation of the contract, procurement route, description of the works
95
what elements of the contractor refer to quality?
- Refers to british stndards.
- Good waorkmanship and materials
96
What is a consequential loss?
- Damages that are proven to have occured to the failure of one party to meet a contractual obligation
97
What is the difference between novation and assignment?
- Novation transfers your rights and obligations under a contract.
- Assignemnt transfers only your rights and benefits.
98
How does a retention bond work?
- Bond in place at contract commencement.
- Value of the bond increases in-line with retention that would be held on each valuation.
- Valuation paid in full
- 50% value of the bond reduced at PC
- Final 50% at the end of the defect rectification period.
99
How does an advance payment bond work?
- Assists with early procurement of materials i.e. high start up costs by the contractor.
- Value of the advance payment deducted from valuations to level advance payment.
100
What is the new JCT family of contracts being released?
JCT target cost contract.
101
How is a direct order managed under the JCT contract?
- Free issued to the contractor and either instructed post contract to install or allowed for within the contract.
- Schedule of condition of procured material prior to free issuing
102
How do you manage noise during a construction project?
- Accordance with fit-out guide
- Meetings with tenants, proactive.
- OOH allowances in contract.
103
What is included within a consultants collateral warranty?
- Assingments
- Obligations - not specifying deliterious materials
- Professional Indemnity Insurance
- Confirmation no outstandings fees / claims with the client.
104
What is included within a sub-contractor collateral warranty?
- Assignments
- Standard of care
- Specification of materials
- Professional Indemnity insurance
105
What is the purpose of a sub-contractor warranty?
- Create a direct contractual link between the client and sub-contractor
- Provides client recourse if any negligence by the sub-contractor occurs
106
When should a client have a collateral warranty with a sub-contractor?
- If they have design responsibility post contract.
107
Could you please name some sections within the D&B contract?
- Articles
- Recitals
- Contract particulars
- Conditions of Contract
- Payment provisions
108
Could you please name some items included within the contract particulars?
- Confirmation of retention percentage
- Retention duration
- Any sections within the contract
- Payment timescales
- Level of LD's
109
What is the base date used for?
Calculating inflation
110
What documents are included within the RICS black book?
- Employer's Agent: Design and Build
- Tendering Strategies
- E-Tendering
111
What is the RICS black book?
- A collection of technical practice documents which covers all processes throughout the construction project life cycle.
