Contract Admin Flashcards

Question

What is Novation?

Answer 1

Rights and obligation from one contract are transferred from one party to another

Answer 2

* Prelims. * Measured works. * Variations * Materials on site * Retention * Previous payments

Answer 3

Yes, as long as there is an offer, acceptance and intention to create legal relations and the responding email does not vary the conditions; a contract will be created.

Answer 4

- Clerk of works is responsible to ensure the works are carried out to the required quality standards specified in the projects design. - They act independently with a focus on safeguarding the clients interest.

Answer 5

If the contractor fails to complete the works by the agreed completion date. The client may deduct liquidated damages for loss from the payments due to the contractor. Providing that an appropriate notice has been issued (a pay less notice) setting out the basis of the calculation. Not later than 5 days before the final date of payment a pay less notice is given detailing the sum that has been calculated. They must be calculated as a geuinine loss If they are not genuine, they may be considered a penalty by the courts and so will be unenforceable

Answer 6

This causes delay to the completion date - entitles the contractors to an extension of time. Often caused by the client or by a neutral event, such as: - Variations - Exceptional adverse weather conditions. - National strikes. - Force major (War or Pandemic) - Delaying giving the contractor possesion of the site.

Answer 7

Relevant matter is where the client is responsible for effecting the progress of works. This entitles contractors to claim for loss and expense. * Failure to give the contractor access to the site. * Variations. * Delays in receiving instructions.

Answer 8

- The Housing Grants, Construction and Regeneration Act - This stipulates that interim or stage payments are due to any party to a construction contract that has a duration of more than 45 days. - Therefore, almost all constructions contain provisions for interim payments.

Answer 9

Naming subcontractors allows the client to influence the selection of sub-contractors whilst leaving responsibility for their performance with the main contractor. Note: Nominated sub-contractors (Nominated by the client) JCT no longer include the provision for a nominated sub-contractor.

Answer 10

Clause 5.4A (not suitable for new build) - The contractor takes out insurance and each Party is covered under the policy. Clause 5.4B - The employer arranges cover for the Works and for the existing structure. Clause 5.4C - Each party arranges their bespoke insurance.

Answer 11

I issued the interim, penultimate and final payment certificates. - Interim payment certificates were issued no later than 5 days after the due date. Interim valuation date was defined in the contract; 7 days following this is the due date and interim payment certificates were issued as per the terms of the contract. - Penultimate payment certificate was issued at the end of works together with practical completion certificate. - Final payment certificate was issued at the end of the rectification period together with a certificate of making good.

Answer 12

Sectional completion differs from partial possession in that it is pre-planned and defined in the contract documents.

Answer 13

- Difficulties with logistics on site when different sections are in the possession of different parties. - The protection of completed sections from ongoing work. - The provision of appropriate insurance at all times for all sections. - The adoption of appropriate health and safety measures to deal with risks resulting from occupation of areas adjacent to, or only accessible through ongoing construction works. - The provision of appropriate security measures. The consequences of sectional completion are that - Half of the retention is released for that section. - The Rectification Period begins for that section, - The contractor’s responsibility for insuring the works (if applicable) ends for that section. - The contractor’s liability for liquidated damages ends for that section. - The employer is now responsible for any damages to the works for that section.

Answer 14

- Contract - Preliminaries: Contractor can cost against - Welfare /Scaffolding - Preambles: General description of the works inc. working hours, roles and responsibilities of all involved, insurance, workmanship (Appropriately skilled and experienced for the type and quality of work.) - Form of tender - Priced schedule of works

Answer 15

Procurement is the strategy of obtaining the service such as which construction contract is chosen for a particular project. The contract is the terms by which the works will be undertaken.

Answer 16

- To receive interim payment (not paid at the end). - Receive notification on any money withheld (pay less notice). - Suspend performance for non-payment. - Disqualified the paid when paid (sub-contractor didn’t have to be paid until the main contractor was paid). - Right to adjudication

Answer 17

Contractual relationship between parties where there would otherwise not have been. Employer may wish to have collateral warranty with sub-contractors if the main contractor goes into liquidation, they will still have contractual links with the subcontractor.

Answer 18

Where the contract obligations are passed from one party to another. Usually when the contractor goes into liquidation and cannot fulfil the contract obligations.

Answer 19

Relevant Event under JCT Compensation event under NEC. An event that has financial impact on a project due to change in work that wasn’t initially agreed.

Answer 20

- Financial statement detailing a breakdown of the final contract sum including payments made and any changes including contract instructions. - Information is issued by the contractor no later than 6 months after issue of PC. - Contract Administrator issues final account no later than 3 months upon receiving all information. - Release final statement /account 28 days following. - If after 6 months contractor hasn’t provided – CA must give 1 month notice to supply the info. - CA to provide final account based on information they have if not received. - If this final account is then disputed alternate dispute resolution would need to be addressed.

Answer 21

- Mediation - Adjudication - Arbitration The appointing body is named within the contract for arbitration and adjudication. (RICS) In situations where there is a disagreement over the appointment of an arbitrator or adjudicator the appointing body (RICS) will make the appointment on behalf of the parties.

Answer 22

Valuations involved assessing the value of the finished work and any variations from the initial contract. This process required understanding the contract, maintaining records of the progress of work, and being thorough in inspections.

Answer 23

In preparing payment certificates, I check completed work against the contractor's application for payment. After confirming the work met the contract standards, I would issue a certificate indicating the percentage of work completed and the corresponding payment value.

Answer 24

One of the challenges was managing contract variations due to changes in the project scope. I overcame this by clear communication and negotiation with parties involved and ensuring that all changes were appropriately documented and approved.

Answer 25

- I considered the works were short in duration with a straightforward construction. - I also referred to the JCT decision tree when making the decisions.

Answer 26

Contract Administrator and Principle Designer

Answer 27

- The CA role activated once the contract was in place. - Although I prepared the contract and tendered the works which formed part of the instruction pre-contract.

Answer 28

- Pre-construction Information - Preliminaries (description of the project /does not form part of the works describes methods of works) - Schedule of works /pricing document - Design drawings - Asbestos R&D survey - Tender return form (formal acknowledgment)

Answer 29

- The works were tendered using a selective tendering method. - The client had an approved list of contractors they used. - The contractors submitted their bids within the specified deadline. - I then evaluated each tender on criteria such as quality and price. - Approved contractors were based on previous track record with works quality assessed regularly.

Answer 30

Open tendering - Open tendering allows anyone to submit a tender. - Generally, an advert will be placed giving notice that the contract is being tendered. - Open tendering has been criticised for attracting tenders from large numbers of contractors of who may be entirely unsuitable for the contract and as a result it can waste a great deal of time, effort and money. - However, open tendering offers the greatest competition. Selective tendering - Selective tendering only allows suppliers to submit tenders by invitation. - A list of contractors is prepared that are known by their track record to be suitable for a contract of the size, nature and complexity required. - Consultants /Experienced clients may maintain ‘approved’ lists of contractors and regularly review performance to assess whether suppliers should remain on the list. - Selective tendering can give clients greater confidence that their requirements will be satisfied and should reduce the wasted effort that can be involved in open tendering. Negotiated tendering. - Negotiating tendering involves negotiating with a single contractor. - Usually, the contractor is known by the client or consultant. - The CA then facilitates negotiations by agreeing the contract terms, pricing and project scope.

Answer 31

- Valuation dates are fixed within the contract terms. - Usually 4 weeks from the commencement of works and 4 weeks thereafter. - I attended progress meetings on site every 2 weeks; the frequency of site visits was listed in the terms of appointment.

Answer 32

JCT Minor Works 2016 The works were short in duration and simple in nature. General refurb; floor coverings, bathroom, kitchen, fencing, windows.

Answer 33

Relocation of the loft hatch to the staff room area. Additional fencing to the garden.

Answer 34

I first ensured that I fully understood the changes needed. I discussed the potential impact on cost and time with the client before formally communicating these changes to the contractor. I requested a cost from the contractor. Checked the costs were reasonable before sending to the client. Issued a Contract Instruction to formalise the change to the contracted works.

Answer 35

To formally instruct the contractor to carry out the additional works at an agreed price and timescale, therefore varying the existing contract.

Answer 36

- This would have been considered a relevant event; so technically yes. - However, the variation was instructed during the early stages of the construction phase and the contractor worked this into the programme so no extension of time was requested. - I monitored this as part of my progress inspections.

Answer 37

No, the works were completed on time with no extension of time required.

Answer 38

I reviewed other tenders and determined the costs were reasonable against previously tendered schemes of a similar nature.

Answer 39

While checking the contractor's costs, some of the key details considered from the previously tendered schemes included: - Labor costs - Material costs - Complexity of the tasks - Time required for completion of these tasks.

Answer 40

I liaised with the contractor to revise their programme of works to include the new tasks.

Answer 41

Issuing a Contract Instruction formalised the variations and instructed the contractor to proceed with the works. It served as a record of agreed changes and kept all parties on the same page.

Answer 42

As the Contract Administrator my duty was to administer the contract between the employer and contractor. My responsibilities included: - Overseeing each phase of the project, from the contract agreement to the completion of the work. - This involved agreeing on a timeline with the parties. - Managing correspondence. - Monitoring the progress of the project. - Issuing certificates (payment certificates, extension of time and practical completion.)

Answer 43

- I referred to the JCT Decision tree. - The works were considered relatively simple in nature with no specialist sub-contractor required and an element of design from the contractor

Answer 44

- I assessed the implications of the request in terms of cost and time. - I liaised with the contractor to understand the impact it would have on the existing schedule and budget. - I issued a Variation detailing the additional works, their impact on the contract price and completion date.

Answer 45

The principal designer provided the full design and specification of the new roof which was included in the tender pack.

Answer 46

- No, it was a relatively small project. - The contractors who tendered the works measured their own quantities from the drawings I provided and schedule of works referring to replacing the whole roof covering.

Answer 47

No, through using the JCT Decision tree it was clear that the Minor Works Contract was the appropriate contract to use. The client did not want to use a D&B contract as they wanted more control over the design /costs.

Answer 48

- The contractor discussed this with me during a site visit. - I advised the contractor to make a formal request in writing. - I then reviewed their request and advised the client that the contractor was entitled to the extension of time for the additional works because it constituted as a variation under the contract.

Answer 49

- I considered the time of year and location. - The works were being carried out between November and January in the UK. - I checked the dates provided by the contractor against the Met Office using the location-based Downtime Report.

Answer 50

The report compares location specific weather conditions against long-term averages. I identified the weather conditions did not fall outside of what was considered ‘normal’ for the location and time of year. I advised the contractor their claim for exceptionally adverse weather would not be certified. From this, I determined the weather was not exceptionally adverse and therefore did not grant the extension of time on this basis.

Answer 51

- I understand that strong winds and rain can prevent work at height. - However, the contractor should have made allowances for weather conditions taking into consideration the time of year the works were undertaken and the nature of works.

Answer 52

- When I determined the weather conditions were not exceptionally adverse based on the met office data. I communicated this with the contractor. - I pointed out that these are typical weather conditions that should have been accounted for in their initial project planning and therefore did not warrant an extension of time.

Answer 53

Section 2; Clause 2.8 – Extension of time. However, the term “exceptionally adverse weather conditions” is not defined therefore it is up to the CA to determine whether the criteria is met.

Answer 54

- Yes, the variation to the scope of works enabled the client to claim for loss and expense. - The progress of works were materially affected by a ‘relevant matter’ for variations.

Answer 55

- No, adverse weather conditions is a ‘relevant event’ that would not have been caused by the client or contractor. - The contractor would have been entitled to an extension of time in this instance.

Answer 56

I advised the client that the contractor was entitled to the extension of time for the additional works because it constituted as a variation under the contract. The contractor could not have planned for these works and therefore it was fair that they were given additional time to complete them.

Answer 57

The extension of time was granted for the end of January – the Christmas shut down period was included within the contract programme. In this event, the contractor would be entitled to costs over the Christmas period for prelims (site cabins & scaffold hire). The extension of time would also consider the non-working days over the Christmas period.

Answer 58

Because it was fair and reasonable to do so.

Answer 59

Yes this included: - Additional hire of the scaffolding - Additional hire of site cabins.

Answer 60

- I checked these costs against the initial tendered rates. - I then advised the client of the cost implications relating to the EoT and variation. - This was agreed by the client and I subsequently issued a 2 week extension of time certificate and contract instruction.

Answer 61

In the first instance, I asked the contractor how long they would anticipate the works to take. The contractor suggested 2 weeks which I considered to be a fair and reasonable when compared to other schemes of a similar nature and reviewing the duration.

Answer 62

I would have requested a breakdown to evidence this and review the programme and reasoning behind the 4 weeks. If I did not consider this to be acceptable, I would have advised as such and granted 2 weeks.

Answer 63

NEC refer to this as a ‘Compensation Event’ Compensation events are the opportunity for the Contractor to claim additional cost/time for something that has occurred that was not their risk under the contract.

Answer 64

No, I issued an extension of time certificate which adjusted the completion date.

Answer 65

If the contractor failed to complete the works by the completion date that was last agreed. The certificate of non-completion gives the contractor formal written notice that they have failed to complete the works by the agreed completion date. This entitles the employer to claim for liquidated damages. NOTE: JCT Minor Works do not require the certification of non-completion although it could be considered best practice to issue one anyway.

Answer 66

The contractor isn’t required to submit their application under the JCT Minor works contract (or Standard Building Contract). If no application is received, I would visit the site and check what work has been carried out, either by measurement or by visual inspection. It is the contract administrator duty to undertake a valuation and submit the payment notice within the prescribed time frames from the interim valuation date. Failure to submit a notice results in the Contractor’s Application becoming due for payment. If no application has been submitted, the Contractor may at any time apply for payment by issuing a payment notice substantiated by the basis on which the sums have been calculated.

Answer 67

The JCT Design and Build contract. It is the Contractor's obligation to apply for payment, as the due date commences either seven days from the receipt of application (if application is later than the interim valuation date) or seven days from the interim valuation date. Without an application, the due date and subsequent time frame does not become triggered, therefore there’s no obligation on the Employers Agent to prepare a payment notice in line with the contract.

Answer 68

A change to the works scope that is instructed by the CA on behalf of the Employer.

Answer 69

- I reviewed all expenditure thoroughly and calculated any adjustments to the contract sum throughout the scheme through a working account which included variations. - I deducted the contingency figure and any provisional sums. - This then determined the amount of the final payment and reduced the retention from 5% to 2.5% due to practical completion. - I then issued the penultimate payment certificate together with practical completion certificate. Note: - The final certificate can be disputed within 28 days. - Dispute resolution procedures may then be necessary to resolve the dispute. - If the client intends to pay a different amount from that shown on the certificate, they must give notice to the contractor of the amount they intend to pay and the basis for its calculation a 'pay less notice' - Housing Grants, Construction and Regeneration Act.

Answer 70

The contractor at Old Greaves Town Lane disputed the final account figure. I requested their breakdown and identified they had not included for the retention figure of 2.5% at practical completion.

Answer 71

- Signifies that the project is complete and fit for its intended purpose. - Minor defects /snags that do not prevent the intended use of the building. - Rectification period begins (6-12 months).

Answer 72

The rectification period (6-12 months).

Answer 73

The payment certificate issued together with the practical completion certificate.

Answer 74

Sum of money retained by the employer to ensure the contractor performs /completes the requirements under the contract. Retention is a percentage (often 5%) of the amount certified as due to the contractor that is retained by the client. The purpose of retention is to ensure the contractor properly completes the works required under the contract. Half of the amount retained is released on certification of practical completion and the remainder is released upon certification of making good defects.

Answer 75

- I inspected the site and viewed the works on an item-by-item basis. - I was satisfied that the works had been completed in accordance with the building contract. - I issued the Practical Completion certificate. - This allowed the client to take possession of and to use a building. - The issue of this certificate then activated the rectification period.

Answer 76

- During this period, the client reports any defects that arise to the contract administrator who decides whether they are defects (works that are not in accordance with the contract), or whether they are maintenance issues. - If the contract administrator considers they are defects, then they may issue instructions to the contractor to make them good within a reasonable time. Note: it is the contractor's responsibility to identify and rectify defects, not the client's.

Answer 77

RICS Tendering Strategies Guidance Notes (1st Edition)

Answer 78

JCT Intermediate Building Contract 2016 The works comprised of 2no. residential refurbs on the fylde coast. I used the JCT Intermediate Building Contract 2016 to allow for sectional completion of each unit.

Answer 79

I acted as Contract Administrator for the Bournemouth Road project, I was responsible for: - overseeing the agreement's terms between the client and the contractor - monitoring the project's progress - managing any changes to the contract.

Answer 80

The contractor claimed this was for material cost increases for the kitchen.

Answer 81

2 properties - 6 weeks each.

Answer 82

The contractor was initially upset but after explaining that no fluctuation provision applied under the contract they accepted it.

Answer 83

These are optional contractual provisions designed to deal with the effects of inflation and changes in costs.

Answer 84

The risk was relatively low taking into consideration the nature of the works and the short duration. Minor works & intermediate contracts only allow for Option A (changes to contribution, levy, and tax fluctuations, which occur after the Base Date)

Answer 85

Fluctuations Options A, B & C for D&B contracts. Minor Works /Intermediate Building Contracts only allow for Option A as they are small scale, short duration and the risk is deemed low. Can be added into contract particulars. Option A - contribution to tax payable as an employer (statutory changes) which occur after the Base Date. Option B - additionally covers labour and materials costs. Option C - formula adjustment using the Formula Rules.

Answer 86

The tender return figure are often inflated to allow for risk of fluctuation.

Answer 87

The Base Date is the date of the tender. This means that the risk of inflation between the tender and contract lies with the supplying party.

Answer 88

The employer only pays the actual cost incurred rather than the contractor’s estimate of increased costs - allowed for in their tender.

Answer 89

The starting point is whether the proposed terms and conditions allow for any price increases and if not, the parties should consider how it can be best addressed. If the works are being procured by way of a standard form contract and it is agreed that the contract’s fluctuations provisions apply, it must be made clear by making an entry in the Contract Particulars.

Answer 90

Unforseeable cicumstances such as: - Natural disasters (fire, storms, floods) - Governmental actions (war, invasion, strikes) - Pandemics (Covid 19)

Answer 91

The war in Ukraine is not a war that the UK is directly involved in, so it remains to be seen if the effects on trade with the UK are held by the courts to come within the common law meaning of force majeure

Answer 92

Termination is unlikely to be an option if the contractor has made what has become a bad bargain and the contract itself does not provide for such a remedy in the relevant circumstances. It is also a risky strategy because if the terminating party gets it wrong and unlawfully terminates, then it runs the risk of a claim being made against it for breach of contract.

Answer 93

JCT contracts are to be modernised this year (2024). - They will use of gender-neutral language - Allow for the use of electronic signatures

Answer 94

Interim valuation date is 7 days prior to the due date stipulated in the contract. Payment certificate is issued 5 days following the due date. Final date for payment is 14 days from the due date.

Answer 95

Yes, the launch of the JCT 24. Design and Build Contract 2024 released on the 17 April 2024.

Answer 96

Modernising – The adoption of gender-neutral language. Legislative Changes - Updates in relation to the Building Safety Act (new Part 2A of the Building Regulations). Allow contracts be sent and signed electronically. Extensions of time to cover epidemics.

Answer 97

To design the central valley gutter detail. There was limited access to view the gutter during the design phase. A provisional sum was included in the tender for replacement. I included a performance standards in the contract documents to ensure the gutters were watertight, guaranteed and designed in accordance with BS 12056. Once the scaffold was erected and the roof had been stripped - I met with the contractor on site to discuss design options and the contractor provided their design.

Answer 98

- Re coating the existing metal valley gutter (maintainence) - Re lining the existing metal guttter with a Plygene gutter line system (restore and preserve performance) - Replacement of valley gutter (considering rainwater capacities under Part H & BS 12056) I advised the client of time and cost implications and advised the gutters could be re lined with a Plygene gutter system to restore and preserve performance.

Answer 99

Providing new uPVC gutters to the eaves. The client initially didn’t want to replace the gutters but towards the end of the scheme decided they wanted them replacing as the condition (fading) stood out more once the roof covering was replaced. I considered the short lead in period for the gutters, dismantling the pallet racking for access and installation (via a scissor lift to provide a working platform / area cordoned off)

Answer 100

The payment process is defined by the contract. The due date is defined in the contract. 7 days before the due date the contractor would issue there interim valuation. I then arrange a site inspection to cross reference the contractors valuation with the works complete. I prepare the payment certificate which is submitted 5 days following the due date. The payment then becomes due 14 days from the due date.

Answer 101

A performance bond is a means of insuring an employer against the risk of a contractor defaulting on any of its obligations (through insolvency or otherwise.) The employer has the right to use the bond to complete the contracted works.

Answer 102

Relevant Event list updated to include Epidemics Gender-Neutral Language Increased provisions for electronic communications Statutory Requirements - Appointment of PC & PC under CDM - Appointment of PC & PD under Building Regs - Includes Part 2a Building Regs updates Collaborative Working - Supports Collaborative working behavior - Now mandatory not just best practice /Moved to the main body of the contract.

Answer 103

Recitals: Contract Sum /Parties to the contract Section 1: Definitions Section 2: Carrying out the Works - Commencement and completion - Contractors obligations - Materials & Workmanship - EoT - Liquidated damages - Practical Completion - Defects Section 3: Control of the Works - Variations - CDM Regulations Section 4: Payment - Interim Payment Dates - Fluctuation provisions - Relevant Matters (IC) Section 5: Insurance Section 6: Termination Section 7: Disputes (Mediation, Adjudication, Arbitration)

Answer 104

Section 2: Carrying out the Works

Answer 105

Intermediate Building Contract: Section 4: Payment (Clause 4.17 Relevant Matters) Not listed in Minor Works

Answer 106

Minor Works doesn’t reference Relevant Events. Extensions of time are based on ‘reasons beyond the control of the contractor’ Clause 2.8: Relates to Extensions of time. If it becomes apparent that the works will not be completed the contractor must notify the CA of ‘any’ delay – they are not required to explain the reasons of the delay but this is good practice so the CA can make a reasonable assessment of appropriate measures.

Answer 107

There is no date fixed for completing the building works. Or, the times and dates agreed no longer apply usually where there is no provision for extension of time.

Answer 108

- To keep the employer informed and prevent disputes. - This formally amends the contract date. - This prevents the employer claiming liquidated damages for reasons outside the contractors control.

Answer 109

Relevant Matters aren’t specified in the MW contract. Section 3 (control of the works) - Clause 3.6: Variations. States that: Variations are to include the amount of any ‘Direct Loss and /or Expense’ consequent to the variation. The CA is to determine loss /expense relating to the variation on a fair and reasonable basis using relevant prices in the contract spec /work schedule.

Answer 110

Where sufficient information isn’t provided to cost that item at the time of the tender. Provisional Sums cover the cost of works that ‘cant be accurately priced or measured at the time of tender’. Defined: Contractor has enough information to allow time and cost. Un Defined: Contractor doesn’t have enough information to allow time and cost.

Answer 111

Under Clause 3.6 for Variations. Variations are to include the amount of any ‘Direct Loss and /or Expense’ consequent to the variation. I take into consideration those events listed as Relevant Matters in the Intermediate Building Contract.

Answer 112

Faults in the work due to - Materials - Goods or - Workmanship That are not in accordance with the contract.

Answer 113

- Section 4: Payment Further information found in: Intermediate Building Contract: Schedule 4 Minor Works: Schedule 2

Answer 114

The contract was a fixed price contract with no fluctuation provisions due to the limited duration of the project (8 weeks) and therefore low risk. This would usually be applicable for projects of a duration longer than 12months. The JCT Intermediate Building Contract (and MW) limits fluctuations to contribution, levy and tax changes which is optional. Any fluctuations were payable by the contractor from the base date.

Answer 115

Construction contract in excess of 45 days in duration is entitled to interim or stage payments. A contract must comprise: - Offer - Acceptance - Consideration - Intent to create legal relations

Answer 116

These contracts are intended for works of simple nature (not complex service installations) regardless of value or duration.

Answer 117

This is an optional provision for changes in statute following the base date. There is an option to add a % which is unlikely to be in excess of 10%. Schedule 2 of the contract details this provision.

Answer 118

This is for price adjustments specified in the contract conditions. Details of price changes are issued monthly.

Answer 119

- The date of the tender return. - The Contract Sum is calculated at the agreed Base Date. - The risk of inflation between the tender and contract execution lies with the supplying party.

Answer 120

This can include: - Construction companies - Local authorities - Businesses that regularly carry out or commission construction work.

Answer 121

Retention is about risk management. A sum of money withheld from the payments to mitigate the risk of the projects not completing to the required standard. Retention is a ‘safeguard’ against defects which may develop for which the contractor may fail to remedy.

Answer 122

Retention money is held by the employer in trust for the benefit of the contractor. The contractor can request for the employer to place the money in a ‘separate labelled account’. The employer would benefit from any interest on the account. If the employer didn’t pay the retention this would be disputed under the Housing Grants Construction and Regeneration Act to recover retentions.

Answer 123

1 month following the commencement date. Valuations are then no greater than monthly intervals (or whatever is set in the contract).

Answer 124

Section 4 of the contract (Clause 4.4 (MW) & Clause 4.11 (IC)) gives the contractor the right to make an application for payment that they consider due. It is the responsibility of the CA to determine the value of the interim payment.

Answer 125

Valuations include for materials deleviered to site but not yet fixed. Materials must be intended for the works, reasonable in quantity and safely secured.

Answer 126

There is no provision under the JCT Minor Works for payment for off-site materials and goods. They can be included in other contracts if the conditions are set out in the contract. (contractor responsible for storage costs) The employer will usually request a vesting certificate from the supplier or sub-contractor. This would usually be for large items that would be a significant cost for the contractor to pay up front for.

Answer 127

A method of securing off-site materials. Typically these provide: - Confirmation that the goods stored off-site vest in the purchaser - That the goods will be insured to their full value for the benefit of the purchaser and - Materials are stored separately and marked to identify ownership. A common view is that vesting certificates amount to nothing more than promises which, in the case of insolvency, may not be enforceable.

Answer 128

- Interim payment certificates at monthly intervals (£0.00) - Final payment certificate releasing the remaining retention. - Certificate of making good

Answer 129

The risk of rightful ownership should the contractor use the materials on another project. This would usually be covered by Consumer Rights Act. If the contractor became insolvent the supplier may have the rightful ownership of unfixed goods if not paid.

Answer 130

Minor Works: 3 months unless stated otherwise in the contract. Intermediate: 6 months unless stated otherwise in the contract.

Answer 131

Under Section 3 (control of the works) Clause 3.4.

Answer 132

If instructions are given orally they will have no effect until the CA confirms in writing. No, under the contract Section 3 (control of the works) Clause 3.5.

Answer 133

The CA must not issue a contract instruction that affects the CDP without the Contractors consent.

Answer 134

If the contractor unreasonably delays or fails to comply within 7 days of the notice requiring compliance. The employer may employ and pay another person to execute the work for that instruction. The contractor would be liable for all additional costs incurred by the employer in connection with the employment and an appropriate deduction made from the contract sum. This would be a breach of contract under Clause 3.5 (minor works).

Answer 135

The Extension of Time was granted for the variation of works that were instructed towards the end of the contract period. This was fair and reasonable. I authorised this by issuing an Extension of Time certificate to formally adjust the completion date.

Answer 136

This was based on the weather expected for the location and time of year (January). Exceptionally Adverse Weather would be considered a Relevant Event and therefore the contractor would be entitled to an extension of time under Clause 2.8 Minor Works. Relevant Events are listed under Clause 2.20 in the JCT Intermediate Building Contract includes ‘adverse weather conditions'. Without the inclusion of this term, exceptionally adverse weather conditions would be at the contractor's risk.

Answer 137

Section 3: Clause 3.7

Answer 138

I requested this from the contractor to substantiate their claim.

Answer 139

Where the employer requests to take possession of the site prior to completion (not planned like sectional completion). Contractor must give consent and there must be a written agreement between the employer and contractor. CA to issue statement to the contractor to the extent of the relevant part in possession and date. PC should not be issued where there are outstanding items known to the CA (unless agreed otheriwise). - Contractors obligation to insure the works will cease. - Liquidated damages are reduced for that portion of works.

Answer 140

This allows the client to influence the selection of sub-contractors whilst leaving responsibility for their performance with the main contractor. - The client names a subcontractors that would be acceptable to them in the tender documents. - When tendering for the main contract, the main contractor makes allowances for mark up, attendance and programme in relation to the subcontract package. - Once appointed under the contract; the main contractor has 21 days to enter into an Intermediate Named Sub-Contractors Agreement. - The main contractors assumes responsibility for the subcontractor’s performance. - In effect the named sub-contractor becomes a domestic subcontractor, they are paid by the main contractor and the main contractor is responsible for their works.

Answer 141

- Agreeing of client brief, budget and design. - Establish procurement/tendering route - Prepare tender documents including selection process - Recommend contractor to client - Agree building contract.

Answer 142

- Chair pre-start meeting - Administer terms of building contract - Inspect quality of workmanship on a regular basis - Chair monthly progress meetings - Carry out interim valuations of work - Issuing contract administrators instructions/handling variations in work. - Assessing and awarding of any claims for loss&expense and extensions of time - Issuing of practical completion/final account.

Answer 143

'Basis for which sum is calculated'. Often this will be the spreadsheet with the schedule of works with a percentage completion next to each item. The amount paid for each item will be set against what the contractor has tendered for forming the agreed contract sum.

Answer 144

Under the Construction Act, the Contractor can suspend work. Contractor will be eligible for an extension, and for additional costs for suspension and re-commencement.

Answer 145

A performance bond is a means of insuring a client against the risk of a contractor failing to fulfil contractual obligations. Performance bonds can also be required from other parties to a construction contract.

Answer 146

The tenderer should be given details of the errors and afforded the opportunity of confirming or withdrawing the tender.

Answer 147

Pros: - Early appointment of contractor with contractor input on design. - Design risk on the contractor so if the project costs increase due to changes in the design the contractor is liable. Cons: - If the employer requirements are open to interpretation, the contractor may choose the cheapest route. This can mean that quality may be compromised. - There is also the risk that any design changes will have cost and time implications.

Answer 148

- The chosen contract - Drawings - Specification - Preliminaries - Schedule of Work - Employers requirements (if MWD or ICD)

Answer 149

Yes, with a letter of intent. However, Very contentious if things go wrong. Letter should be limited in scope to encourage contractor to enter into full contract.

Answer 150

- Secure the site, including materials. - Ensure the site is safe. - Terminate Employment of the Contractor under the Building Contract (Section 6 in MW11). - Verify condition and quality of works eg. highlight any defective or incomplete work. - Notify all parties including the client, project team and any third parties (eg. funder/lender/occupier) of the Contractor's insolvency. The next stage will be to decide whether to finish the building/works. - Prepare a recovery plan. - Agree procurement route for compeltion of remainder of the works. - Establish remaining scope of works and a programme. - Assess cost to complete the project. - Highlight risks - be dependent on works already completed by original contractor. - Tender works and appoint new contractor to complete the remaining works.

Answer 151

If the client agrees to make an advance payment to the contractor, (for example where the contractor incurs significant start up and procurement costs before construction begins). The bond is released as materials are installed by the contractor which protect the employer if the contractor suddenly going bust or dissapearing. This will normally be an on-demand bond.

Answer 152

- Release of half of retention to Contractor - Ownership of the site passes to the Employer. - Contractor's insurances of the works cease and client's Building Insurance needs to be in place. - Contractor no longer liable for LAD's - Rectification period begins.

Answer 153

- Keys - H&S File - As-built drawings - O&M Manuals - All warranties in place - Building Control sign off

Answer 154

Procurement - The strategy of obtaining the services (building contractor) - Reviewing the clients requirements. Tendering: - The bidding process, to obtain a price - How a contractor is actually appointed.

Answer 155

Obtaining a competitive price for the whole of the construction works. Invitation to tender documents are issued to a number of competing contractors who are all given the chance to bid for the project based on identical tender documentation. This is usually done at RIBA Stage 4 so that the tendering contractors receive the most detailed information to base their bid on. - Advantage: Most competitive price - Disadvantage: Design risk on the client / No contractor involvement may lead to Provisional Sums.

Answer 156

This involves a first-stage tender enquiry being issued to bidding contractors at RIBA Stage 2 or 3. Rather than requesting a bid for constructing the entire project (which is still in the process of being designed), the preferred contractor is chosen on the basis of the quality of their bid, the quality of their team and their preliminaries price and overhead and profits allowances. The preferred contractor then joins the design team on a consultancy basis to complete the design, usually to RIBA Stage 4, before presenting a bid for the works at this stage. - Benefit: Quick start on site as tendering and design can be overlapped. - Disadvantage: Cost due to lack of competitiveness in the second stage.

Answer 157

A negotiated tender is a single-stage tender with a single contractor who returns with an initial price. This is then negotiated with the client’s professional team - Benefit: The speed with which a price can be obtained for the works. - Disadvantage: The competitive advantage of a formal bidding process is compromised.

Answer 158

Modernising and Streamlining: Gender neutral language Includes serving notices by email Extensions of Time: New and amended clauses relating to epidemics Legislative Changes: Included BSA Duty Holders under Part 2a. Collaboration: Additional article 3 added which details collaborative working. Sustainability: New clause encouraging contractor to suggest economically viable amendments to the works for environmental/sustainable improvements.

Answer 159

Employers Agent is defined in the JCT Design and Build Contract. Different to the CA as the obligation is to act exclusively for the employer.

Answer 160

The Joint Fire Code covers all stages of design, procurement and construction. The objective is for fire prevention on construction sites. Generally it applies to contracts with a value of more than £2.5million, but it can also apply to lower value contracts which are considered to be high risk or which form part of larger projects.

Answer 161

Designed for large /complex construction projects where detailed contract provisions are needed

Answer 162

I undertook CA duties - My firm was appointed as the CA in the contract. The corporate entity is responsible if any decisions are challenged rather than the individual (recommended in the RICS guidance)

Answer 163

+ confirming the terms and conditions of appointment in writing + detailing the services to be provided + confirming the basis of fees to be charged for those services + identifying that a complaints handling procedure exists. The appointment also includes details of the people likely to be involved in the delivery of the CA services outlined in the appointment.

Answer 164

The employer makes the adjustments when paying the contractor – notifying them by means of a pay less notice. Note: The CA must not adjust the valuation of works

Contract Admin Flashcards

(189 cards)