Focus Items Flashcards
(25 cards)
How do you value Preliminaries?
Split into time related preliminaries and fixed related preliminaries.
Include any site constraints and identify the works required for them and value these.
Could consider creating a preliminaries book.
What topics does the JCT Tendering Practice note cover?
Introduction - The introduction covers the a general overview of the document and the different types of tendering under a selective tendering process.
The Preliminary Enquiry - Time for responses to an enquiry letter and formation of the PQQ.
The ITT - How to formulate the tender documents, length of tendering, tender submissions and compliance.
Assessment and Award - Assessment on criteria other than costs, post tender discussions, recommendation and award.
What is tendering?
Tendering is the process of inviting bids from suppliers or contractors to carry out work.
What premiums would you expect to pay in a Two Stage tender process?
The PCSA itself.
Lack of competitiveness in the first stage.
Risk premiums in the second stage.
Preliminaries and overheads as there is longer engagement with the contractor.
On Focus Apartments, you provided a recommendation to the Client following a PQQ process. Can you tell me how you advised on the scoring criteria for the PQQ returns?
The contractors were requested to provide relevant experience, audited financial accounts, management staff, health and safety information.
I then applied a score weighting to these elements, such as 2.5, and scored them out of 10.
I then multiplied their score by the weighting and added these together to give them a total score.
What are Alternative 1 and Alternative 2 in the JCT?
Alternative 1 - The tenderer is informed of the errors and given the choice to either confirm or withdraw their tender. This method aligns with contract law principles, allowing the contractor to decide whether to proceed despite the errors.
Alternative 2 - The tenderer is informed of the errors and given the option to correct genuine errors (such as arithmetic mistakes). If the corrected tender sum exceeds the next lowest bid, the tender is set aside, and the next lowest bid is considered instead.
How do you approach the analysis of preliminaries costs to ensure they are appropriate for the project’s scope and duration?
I would review the project scope and understand the specific requirements, site conditions and the complexity to determine the necessary preliminary expenses.
I would request that the contractor breakdowns their preliminary activates, identifying which items were time related or fixed.
I would also compare the preliminaries cost to benchmark data for similar projects in both scope and site similarities.
Additionally, I could breakdown these costs to a percentage and weekly rate.
How do you manage the quality of design in a Design & Build Contract?
Novation.
If there are specific elements the client is worried about, these could be taken to a greater level of design to ensure the standard of desired quality is achieved.
Ensure that the ER’s are robust.
When the stage 5 drawings are produced by the contractor, the design team could grade these with A, B, C.
The stage 5 drawings could be reviewed by the novated design team consultant, but a information barrier would need to be put in place between the two teams (novated, client side).
How do you differentiate between a provisional sum and a prime cost sum, and what are the financial control implications of each?
A provisional sum is a cost for an item which is either defined or undefined in the contract.
A prime cost sum is the cost for materials or subcontracted work where the supplier is nominated by the client.
Provisional sums are paid based on the actual work incurred, whereas prime cost sum is the actual cost of the materials provided by the supplier via invoices.
How would you create a cashflow forecast?
I would need to have access to the construction programme and contract sum analysis and identify when packages would be bought and split out the values accordingly.
Obtaining drawdown schedules from specialist subcontractors and professional consultants can also assist when populating the cashflow.
What are the valuation rules under JCT Forms of Contract?
There are three rules for measurable work:-
If it is of a similar character, quantity and in the same conditions as existing work, then the bill rates should be used.
If it is of a similar character, but different quantity or conditions, the bill rates should be used as a basis but a fair allowance should be made to take account of the difference.
If it is not of a similar character, fair rates and prices should be used.
What are the common heads of claim in loss and expense?
Prolongation.
Thickening of preliminaries.
Disruption causing plant or labour to be underemployed.
Increases in labour or material costs during the period of delay.
Head office overheads.
Loss of profit.
Finance charges.
Acceleration costs.
Claim preparation costs.
What are the fluctuation options under a JCT?
Option A - contributions, such as levies and taxed.
Option B - Labour and material cost fluctuations, including tax changes.
Option C - A formula based on cost indices
What are the three methods of valuation under a JCT?
Agreement between the parties.
A Schedule 2 quotation.
The Quantity Surveyors valuation.
What is a Relevant Event and Relevant Matter and how do they impact the project?
A Relevant Event causes a delay to the completion date and entitles the contractor to an extension of time,
Examples of a Relevant Event are,
Adverse weather
Force Majeure
Delay in giving the contractor possession
Terrorism
A Relevant Matter is when the client causes a delay which materially effects the progress of the works and entitles the contractor to cost.
Examples are,
Variations caused by the client
Delays in receiving instructions from the client
Delay in giving the contractor possession
Discrepancies in contract documents
What are the fluctuation options under a JCT?
Option A - taxes, levies, statutory contributions
Option B - materials, labour
Option C - formula based adjustment
What types of LOI are there?
Pure Letter of Intent - These express an intention to enter into a formal contract but do not create any legally binding obligations.
Interim Contract - These allow works to commence whilst whilst the full contract is being finalised.
Conditional Contracts - These remain in place unless replaced by a main contract.
What is the difference between a LOI and a PCSA?
Letter of Intent (LOI):
- Expresses an intention to enter into a formal contract later.
- Allows a contractor to begin work before the main contract is signed.
- May or may not be legally binding, depending on its wording.
Pre-Construction Services Agreement (PCSA):
- A formal contract used in two-stage tendering to engage a contractor before the main contract.
- Covers design input, buildability advice, and cost planning.
- Provides a structured scope of services separate from the main contract.
What are the insurance options under a JCT?
Option A - The Contractor takes out joint names all risk policy covering the works
Option B - The Employer takes out joint names all risk policy covering the works
Option C - The Employer takes out joint names all risk policy covering the works and the existing structure
What takes precedent over the ER’s and CP’s in a Design and Build?
In a standard Design and Build the CP’s would take precedent, however this may be amended out for the ER’s to take over.
What are some types of bonds in a JCT?
Performance bond - A gurantee that the contractor will perform their obligations unde the contract
Advance payment bond - Used when the employer makes an advance payment to the contractor (for mobilisation or off-site materials)
Retention bond - Replaces the need for the employer to retain part of the payment as security
What do you do if there are discrepancies between the ER’s and CP’s?
Follow the contract and it’s amendments.
Ensure that the CP’s are followed forward and have an open discussion with the client and contractor to see if variations need to be raised.
What are Collateral Warranties used for and how do they work?
They create a direct contractual link between a party involved in the project and a third party beneficiary.
It allows the beneficiary to bring a contractual claim directly against the warrantor.
I.e, if a sub-contractors work has defects after the defects rectification period, the client can bring a claim against the sub-contractor.
What are the various types of notices under a JCT Design and Build?
Commencement Notice.
Payment Notice.
Extension of Time Notice.
Defects Notice.
Loss and Expense Notice.
Practical Completion Notice.
