Tri 2 Exam Revision Flashcards
(33 cards)
What are the key contract admin activities?
- Ensuring compliance
- Subcontract letting & administration
- Managing variations, progress claims & disputes, accounting, invoicing and payment, ext. of time
- Cost control
Risk: Contract Price
Lump Sum or Rate contract
Risk: Quantities
Whether principal provides estimates of quantity
Risk: Latent Site
Eg; Soil Conditions
Risk: Site Possession
Giving access to a contractor on time
Risk: Practical Completion
Balance between benefit & cost of contract period
Risk: Delay
Risk of blowout vs Tender Price
Risk: Variation
Agreement on prices prior to changes
Risk: Security
Risk of Liability vs Tender price
Warranties
- An assurance that specific facts or conditions are true or will happen
- May be expressly set out in the contract
- A breech of warranty gives right to claim damages
Guarantees
- An undertaking that one party (guarantor) gives to a second party (beneficiary) to be responsible for the debts or defaults of a third party (guaranteed party) in respect of a transaction between the second and third parties (guaranteed obligations)
- A guarantee provides the beneficiary with security for the performance by the guaranteed party of the guaranteed obligations.
Security
- A party provides security under a contract as a financial pledge that it will perform its obligations under that contract.
- If the party defaults, it loses the amount pledged
- The contractor and the principal must provide security: time for provision if nothing stated, within 28 days after acceptance of tender
- Failure to do this within the time specified will result in a substantial breech of contract (cl.44)
Security - Bonds or Guarantees
A contract guarantee (security) in the form of cash, bonds or inscribed stock, interest bearing deposit etc is usually required to be given by the contractor in accordance with the terms of the contract for the purpose of ensuring the due andproper performance of the contract
Security - Retention
- Retention is a percentage of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client.
- The purpose of this is to ensure that the contractor properly completes the activities required of them under the contract
- Usually between 2.5%-10% of each progress payment
Builders Obligations
CL 10.1
Warranties
-Carry out works in proper an workmanlike and in accordance with plans and specifications
-Materials are good and suitable for purposes
-Carry out works in accordance with laws
-Will achieve completion by specified date
CL10.3 - 10.4
Payment Claims
-Builder will give to owner written progress claim
-Builder will gives to owner written financial claim
Owners Obligations
CL 11.1-11.4
Evidence of financial capacity to pay contract price
Within 14 days after signing the contract, owner provide written or other evidence
-Continuing obligation until completion
-To notify builder if owners capacity reduces
Cl 11.5-11.10
Obligation to pay:
-Contract price
-Deposit
Amounts due to withdrawal within cooling period (if any):
-Progress payments
-Interest on Outstanding Payments
Cl.11.14
-Owner must not obstruct, interfere or hinder builders carrying out of works and refrain from communicating directly to builders employees etc.
Contract Documents
- Legally enforceable requirements that become part of the contract when the agreement is signed
- Describes scope of work, establishes time frame, cost and provisions, sets obligations and relationships and minimises disputes
- Basis for cost, time, quality (price of works, schedule of works, etc)
- Basis for contract admin (variations, delays, progress payments)
- Basis for dispute resolution (breech of contract, error & discrepancies)
Tender Documents
- Instructions to Tenderers
- Tender Form
- Form of Agreement
- Conditions of Contract
- Drawings
- Specifications
- Addendum
Contract Documents
- Form of Agreement
- Conditions of Contract
- Drawings
- Specifications
- Addendum
- Change orders
Difference between Tender Documents & Contract Documents?
- Both are a form of agreement and include the conditions of the contract, drawings, specifications and addendum
- Tender documents are instructions to tenderers whereas contract documents include change orders
Quality
Cl.29.1 & 29.2
- Unless stated otherwise, contractor uses suitable new materials and tradesmen like workmanship
- If contract requires quality assurance: contractor must plan, establish & maintain quality system whilst ensuring superintendent has access quality system for monitoring & auditing
Defective Work
Cl.29.3 & 29.4
- Superintendent gives contractor written details, upon becoming aware of defective work
- Superintendent may direct contractor to remove material from site, demolish the work, reconstruct or not deliver to the site.
Latent Conditions
Cl. 25.1
- Physical conditions on site and near surround, which differ materially from those which should reasonably have been anticipated by a competent contractor at tender if:
- All written info made available
- All info for risk allocation obtainable by enquiries
- Site and its near surround had been inspected
Extention of Time: Qualifying cause of delay
- Default or act of superintendent, the principal or its consultants, agents or other contractors
- Other cause of delay other than breech or omission by contractor, industrial conditions or inclement weather occurring after the date for practical completion.
