Case Study Key Issue 2

Question 1

48. With overlapping of works, how did that work for insurances, who would take risk of the site?

Answer 1

a. Ideally there would be a principal contractor who would take the risk of the works, and be responsible for all site matters. However, the risk still remains that both would be under separate contracts to complete different work

Question 2

49. Why would you not go with management contracting?

Answer 2

Doesn’t offer cost or programme certainty, until all packages are let, so is therefore risky, and me or the client did not have the experience or expertise to facilitate this.

Question 3

50. Can you explain what happens when a relevant event occurs?

Answer 3

a. The contractor should first use his best endeavours to prevent the delay, or provide any information about the delay.
b. In this case deferment of possession by the client is the relevant event.
c. When the impact of the delay is known and calculated and agreed by parties, the CA shall give a fair extension of time of the works.

Question 4

51. What was the cost associated with the acceleration works and how did the contractor arrive at this figure? Did it push above cost limit?

Answer 4

a. Direct Contractor costs, consequential loss and expense and allowance for preparing the quotation
b. It didn’t, as the acceleration cost was £12k, with a remaining contingency at the time of £25k

Question 5

52. What options may be considered to achieve acceleration?

Answer 5

a. Overlapping of trades/work packages where possible.
b. Additional hours
c. Betterment of critical path items.
d. Delivery of critical materials sooner.
e. Additional site presence and site managers
f. Design/scope changes

Question 6

53. How did you advise on acceleration?

Answer 6

a. I advised the client to proceed with obtaining an acceleration quotation with the stipulation to the contractor this must reflect retainment of the PC date. While warning of the risk to cost limit. Following agreement and negotiation with the contractor I advised the client of the costs and advised them to proceed. I then drafted and issued a CAI.

Question 7

54. How do you calculate acceleration?

Answer 7

a. It was calculated by adding up the additional staff and trained professionals needed on site, by working out the time they would be there against the rate they commanded. As well as some small additional plant hire such as an additional scissor-lift. Including OH&P.
b. In this case it also included some costs associated with loss and expense due to the deferment of possession
c. Cost of preparing the quotation

Question 8

55. Is acceleration mentioned in the contract?

Answer 8

a. Acceleration isn’t mentioned in the ICD, however I am aware It is mentioned in the JCT D&B contract.
b. It was agreed the contractor would take on the risk for acceleration, and a new agreement in the variation was drawn up to do this, as there is no mention of it in the contract.
c. Under contract law the parties can come to an agreement which can be drawn up and entered into, I therefore advised my client that their internal legal team should be consulted with to input into the instruction. It put the contract in the position it was in initially, and the PC remained the same.
d. Agreed on a quantum meruit basis

Question 9

56. If completion was not met by the accelerated date, could the client claim LAD’s against the contractor?

Answer 9

a. Yes as it has been agreed that the practical completion date has remained the same. The contract has been varied and changed to keep the PC date but increase the contract sum, so LAD’s can still be applied past the PC date.

Question 10

57. Under the CDM regs, if there is more than one contractor on site, what appointments are required?

Answer 10

a. Appointment of a principal contractor. The Contractor with control over the construction phase , appointed to plan manage and monitor H&S.

Question 11

58. How would you implement revised design in the project?

Answer 11

a. Through instruction of a variation to update the design documents and drawings.

Question 12

59. Option 3 – acceleration – how did you assess this cost against the current contract rates? how did you assess the additional staff costs and how did you verify value for money? How much was the additional cost for acceleration?

Answer 12

a. I assessed the rates against the contractors preliminary rates in the contract for management and OH&P, for specialised labour there were no existing rates in the CSA, therefore I made an assessment off previous and recent in house cost data, from different sources including this contractor, ensuring cohesiveness.

Question 13

60. What options were considered to accelerate the works?

Answer 13

a. I advised the team that works can be re-sequenced, that additional hours can be worked by workmen, employ more gangs, change working methods. While advising that some of these options may lead to lower productivity.

Question 14

61. How does deferment of possession work under JCT?

Answer 14

a. Employer can defer possession for a period not exceeding 6 weeks from relevant DoP. DoP is treated as a relevant event under JCT, so therefore the PC date can be amended, entitlement to time. The contractor is also able to claim loss and expense for consequential loss.

Question 15

62. Is there such a thing as a deferment of possession certificate?

Answer 15

a. There is no such thing as a certificate, but it is a notice/letter which can be classed as a certificate.

Question 16

63. How does acceleration work under JCT?

Answer 16

a. The contractor is required by the client to provide and acceleration proposal/quotation, which must be provided within 21 days, the quotation remains open for 7 days. This is then reviewed and can be accepted, to meet the PC date. This is not applicable to all JCT contracts though.

Question 17

64. How long can you defer possession for?

Answer 17

a. Up to 6 weeks

Question 18

65. What would you have done differently if you could go back, or change any of the options?

Answer 18

a. The solutions worked well and the project met the clients requirements due to the advice given and choices made, so I wouldn’t change how things were done as it was successful. However there may be room for improvement, such as earlier stage VE pre contractor involvement.

Question 19

What was the build up to the additional 55k total end construction cost over and above the budget?

Answer 19

Scope change and inflation, and the rest is post contract variations, for example fire linings.

Question 20

What potential heads of claim for loss and expense could the contractor have raised if an EOT had been granted?

Answer 20

Prolongation/disruption

Question 21

What did you advise your client are the main risks with acceleration?

Answer 21

Increases risk to cost limit, rushed works leads to poor design quality

Question 22

How did you assess the time impact?

Answer 22

With the help of the Project Manager on the scheme, i reviewed the critical path and the revised proposal by the contractor to shorten the critical path