Level 3 Flashcards
What is an advanced payment bond?
A surety product that protects money being advanced to a contractor at the start of the project.
What type of bond is an advanced payment bond?
On-demand bond
Why did you not do this under a letter of intent?
The value of the advanced payment bond was £2.5m as it was to order steel. This was viewed as high risk to be simply provided within a LOI.
Why choose an advanced payment bond?
- Facilitates material order before work started
- Protects the client in terms of insolvency
- Money is guaranteed by a surety that has met underwriting scrutiny
- Steel will be cut and delivered months from the order is placed and helps the initial cashflow
Can you explain how an advanced payment bond works?
- Bond put in place at the start of the contract
- Customer pays in advance
- Customer deducts their advanced payment from valuations until full balance has been attributed to the contract.
- Things go wrong customer can claim their advanced payment from the Surety provider less deductions for products or services that have been delivered and deducted from the advance payment sum.
Why was the contractor unaware of the repayments?
The contractor had assumed there were different payment terms and ultimately I believe they did not read the contract or understand it when it was agreed.
What risks were there with changing the payment dates?
- Risk that if they didn’t the contractor would default
- Negative cashflow might mean programme issues
- Payment can be made when valuations are higher.
- Overall payback period (6 months remained)
Why were they unable to complete TWS on time?
- Late procurement of the racking system
- Ultimately delayed testing and commissioning
- Unable to use warehouse solely for racking
What do you need to get liquidated damages?
- Non completion Notice
- Notice employer may require of payment of or withhold LAD’s (before due date of final payment)
- Notice demanding payment of or withhold LAD’s (5 days before final payment)
What was the change control procedure in the PEP?
- Changes needed to come to PM team
- PM would review programme implications
- QS would review cost implications
- External consultation included
- Explained to the client and agreed before decision.
What lessons did you learn on Pixham Lane?
- Some design periods were too ambitious
- Fees and accurate budgeting
- Over attendance at meetings
- Same client, learnt time length of internal processes and approval procedure
- Unclear sustainability strategy from the client / funder
How did you establish a scope of services for the Interior Designer?
- Review of current layout and recommendations
- Areas of design
- Outline expected drawings (developed with architect)
- Meeting and presentation allowance
- Finishes and FF&E schedule to allow costing
- Requirements post-tender and during construction
Key Differences between single stage and negotiated tender?
- No competitive tender period on full design
- Faster start on site
- Negotiation period instead of tender return
- Design continuity throughout, not stopping for the tender period
What is an appointment?
Client formally engages the consultant to carry out services in compliance with the terms within the appointment.
What is a Standard of Care?
- Degree of care / caution a professional must exercise when undertaking its services
- Designer has to provide ‘reasonable skill and care’
