Contract Admin/Practice 2025

Question 1

What is needed for a contract to be formed?

Answer 1

Capacity
Intent
Offer
Consideration
Acceptance
Legality

Question 2

Can you give an overview of the structure of the NEC?

Answer 2

Core Clause - payment, CE’s, insurances, time

Main Options;
- Option A Priced with Activity Schedule
- Option B Priced with BoQ
- Option C Target With Activity Schedule
- Option D Target with BoQ
- Option E - Cost Reimbursable
- Option F - Management Contract

W Clauses (Dispute Clauses - W1, 2 & 3)
X Clauses (performance bond, PCG, sectional completion, retention, LAD’s)
Y Clauses (National Legislation)
Z Clauses (bespoke amendments)

Question 3

Can you name some of the contracts in the JCT Suite of contracts?

Answer 3

• Standard Building Contract.
• Design & Build.
• Intermediate.
• Minor Works.
• PCSA.
• Major Projects Agreement.
• Measured Term.
• Framework Agreement.

Question 4

What types of pricing options are there?

Answer 4

• Lump sum - fixed price agreed at the start.
• Target Cost - a price is agreed, then at the end of the project the under spend or overspend is shared between client and contractor.
• Cost plus - Contractor paid actual cost they have incurred plus and agreed percentage for OH&P.
• Cost Reimbursable - A schedule of rates is agreed, then at the end of each month the contractor will measure what they have incurred.
• Guaranteed/ Agreed Maximum Price - Fixed price where the contractor takes risk on overspend and savings.

Question 5

Can you identify some differences between NEC and JCT?

Answer 5

• Different terms for individuals.
• Time and cost included in changes under NEC.
• Programme is a contractual document in NEC.
• NEC has timescales on change control procedures.

Question 6

What are the payment timelines under PPC2000?

Answer 6

• Contractor submits an application at the end of the month.
• Client rep mus issue a payment notice and backup within 5 days of this.
• Client must issue a pay less notice no later than 5 days before the final date for payment
• The final due date for payment is 20 days from receipt of the contractors application.

Question 7

What are the different types of subcontractor?

Answer 7

Domestic - selected through competitive tender.

Named - client provides a list for the main contractor to use for competitive tender.

Nominated - Proposed by the client and must be used.

Question 8

What are LAD’s?

Answer 8

Damages inserted into the contract that the client can claim in the event of non-completion by the contractor.

Question 9

How does the structure of JCT contracts differ to NEC?

Answer 9

Under JCT everything forms part of the standard contract whereas under NEC there are core and optional clauses so there is the ability to adapt the standard contract without making amendments.

Question 10

How do CE’s under NEC differ to variations under JCT?

Answer 10

• Time and cost are both dealt with under CE’s.
• Under JCT this is split between variations, EoT and loss and expense.
• Timescales to agree CE’s under NEC

Question 11

What is Novation?

Answer 11

Transfer of rights and obligations under an existing contract, for example under a D&B contract the design team is novated from the client to the contractor.

Question 12

What is a Collateral Warranty?

Answer 12

A document which creates a contractual link between two parties under an existing contract where one does not already exist, for example between client and a subcontractor.

Allows the client to claim from subcontractors in event of a breach.

Question 13

What is a Letter of Intent?

Answer 13

A non-binding letter which outlines an agreement in principle prior to the contract being executed.

Question 14

What are the different types of Letter of Intent?

Answer 14

Comfort Letter - provides contractor comfort
Consent to Spend - allows contractor ability to place orders
Recognition of Contract - all terms have been agreed however awaiting final signing of contract

Question 15

How would you select the most appropriate form of contract for a project?

Answer 15

• Clients’ experience in construction and if any experience with any suite of contract
• Then assess the complexity of the scheme
• Attitude to time, cost and quality
• Attitude to risk

Question 16

Can you outline the payment process and timescales under a JCT D&B?

Answer 16

21 day process in total starting with contractor submitting their application.

Due date is 7 days after this.

14 days from due date is final date for payment.

Payment notice should be issued no later than 5 days from the due date.

Pay less notice should be issued no later than 5 days before final date for payment.

Question 17

What forms of performance security exist for a client?

Answer 17

• Performance Bond
• Parent Company Guarantee

Question 18

What is a Performance Bond?

Answer 18

Contractor takes out for a sum of money and in the event of a default the client can claim this money.

There are two types; on demand and default.

Question 19

What is a Parent Company Guarantee?

Answer 19

A PCG is in the event of a company defaulting, their Parent Company then because responsible for fulfilling their obligations under the contract.

Question 20

What is the duration of a PCG?

Answer 20

Dependant on how the contract was signed;
Underhand - 6 years
Deed - 12 years

Question 21

When does a Performance Bond end?

Answer 21

At the end of the defect liability period - once the certificate of making good has been issued.

Question 22

Different types of insurance under a construction contract?

Answer 22

Construction Works Insurance
Professional Indemnity
Public Liability
Employers Liability

Question 23

Who takes out the Construction Works Insurance under JCT.

Answer 23

Option A - New build - Contractor
Option B - New Build - Employer
Option C - Works to or extensions to existing buildings - Employer

Question 24

What is the benefit of a joint names policy?

Answer 24

Both parties are protected - so If a contractor makes claim against employer and they are not named then the employer is not protected so they are liable for the outcome of the claim. Avoids subrogation.

Question 25

What would you check if a Contractor makes a claim for materials off site?

Answer 25

Check if they are listed within the contract.

Question 26

How would you check materials off site?

Answer 26

- Make sure they are listed within the contract - Visit the location they are stored. - Ensure they are protected and in a good condition ready to be taken to site. - Labelled with client name and address of the project.

Question 27

What is a vesting certificate?

Answer 27

A certificate which transfers ownership from one party to another.

Question 28

What is a retention of title clause?

Answer 28

A clause on a vesting certificate which states if the supplier is not paid for the materials then they retain ownership of them.

Question 29

When would you pay for materials on site?

Answer 29

Only when they are on site within a reasonable timescale and ready for install in line with the programme.

Question 30

What is the process for processing an application once received from the contractor under JCT?

Answer 30

7 days from this date is the due date. 14 days after the due date is the final date for payment. no later than 5 days after the due date CA must issue payment notice or pay less notice no later than 5 days before final date for payment.

Question 31

Who administers the contract under D&B?

Answer 31

Employers Agent

Question 32

Is the QS listed under D&B?

Answer 32

No, therefore cannot issue certificates only recommendations.

Question 33

What is the different between an Employers Agent and Contract Administrator?

Answer 33

EA is responsible for administering the contract under a D&B contract whereas CA administers traditional contracts. EA is acting as or on behalf of the client.

Question 34

What is retention?

Answer 34

A percentage of money that is withheld from payments made to the contractor to ensure they rectify defects.

Question 35

When is retention released?

Answer 35

50% at Practical Completion and the remainder is released at the end of the DLP.

Question 36

How can a contractor claim an EoT?

Answer 36

Must raise notice of the delay as soon as it becomes apparent, detailing reasons, relevant event and likely delay.

Question 37

What is the time period for assessing an EoT under JCT?

Answer 37

8 weeks.

Question 38

Can you list the Relevant Events under JCT?

Answer 38

1. Variations 2. Instructions 3. Deferment of possession of the site 4. Suspension 5. Works by statutory undertakers 6. Exceptionally adverse weather 7. Civil commotion 8. Terrorism and strikes 9. Any impediment, prevention, or default by the employer

Question 39

What is the standard period the client can defer possession of the site?

Answer 39

6 weeks.

Question 40

Can you list the Relevant Matters under JCT?

Answer 40

1. Variations 2. Instructions 2. Any impediment, prevention, or default by the employer

Question 41

What is loss and expense?

Answer 41

Loss to the Contractor due to a Relevant Matter caused by the Employer.

Question 42

Difference between Sectional Completion and Partial Possession?

Answer 42

- Sectional Completion are sections to be completed by certain days listed within the. - Partial Possession is a clause to allow the employer to request possession however contractor can reasonably refuse.

Question 43

What is a Relevant Matter?

Answer 43

A relevant matter is a matter which the client is responsible which materially affects the progress of the works. This may enable the contractor to claim direct loss and / or expense that has been incurred.

Question 44

What is a Relevant Event?

Answer 44

A relevant event is an event that causes a delay to the completion date, which is caused by the client, or is a neutral event not caused by either party, and could entitle the contractor to an extension of time

Question 45

How would you approach a situation with a client who wanted to include amendments to a contract?

Answer 45

I cannot advise on amendments as it is outside my professional expertise. I would advise a Client to seek professional legal advice.

Question 46

What are some of the typical amendments you may see in contract documents?

Answer 46

- Loss of profit - not accepting any claims - Payment terms amended - Notices issued electronically - Covid-19 clause

Question 47

Can you provide an example of a challenging contract amendment negotiation you handled and how you resolved it?

Answer 47

HMP Kirkham - Under PPC200 Contractor bears all risk so they would not accept - I advised MoJ seek legal advice - A risk sharing mechanism was agreed and added via an amendment

Question 48

Can you explain a time you've had to advise your client on the use of LAD's? How were these made up?

Answer 48

BMBC asked for what damages to include for a kitchen refurb project at Birkwood Primary School. I advised; - Client must provide the rate - Must be a genuine pre-estimate - Ultimately value was based on cost of outsourcing hot school meals

Question 49

What happens at sectional completion?

Answer 49

- Sectional Completion Certificate issued - Client takes partial possession of the section - Half retention for that section released - Insurances switch from contractor to client for that element

Question 50

How do you apportion risk under NEC ECC Option C?

Answer 50

Option C is a target cost contract therefore risk on underspend or overspend is shared between Client and Contractor via a pain gain mechanism as per an agreed percentage in the contract.

Question 51

Can you identify 3 X clauses under the NEC4 suite?

Answer 51

- Sectional Completion - Liquidated Damages - Retention

Question 52

What are the key duties of an Employer’s Agent under a JCT Design and Build contract?

Answer 52

1. Issuing Instructions 2. Quality Inspections 3. Progress Meetings 4. Reporting 5. Contract Administration 6. Defects Management 7. Documentation: Preparing and maintaining project control documentation, such as the project execution plan. 8. Insurance Verification

Question 53

How do you certify sectional/practical completion?

Answer 53

Building control must be signed off and the PC or SC certificate must be issued.

Question 54

What happens at practical completion?

Answer 54

- Half retention released - Client's opportunity to levy LAD's ceases - Insurance switches from Contractor to Client - Defects liability period begins

Question 55

What is contained in JCT regarding sectional completion?

Answer 55

- Sectional completion dates - Section sums - Section LAD's - Retention provisions

Question 56

How are monies in liquidated damages recovered?

Answer 56

Recovered through a pay less notice issued by the client.

Question 57

How is a pay less notice issued?

Answer 57

- Issued by the client - Client must be able to demonstrate why pay less notice is issued

Question 58

Please can you advise if you are aware of the JCT 2024 updates and what changes have been introduced?

Answer 58

D&B introduced on 17 April 2024 Updates include: - Adopting gender neutral language - Building Regulations Principal Contract and BR Principal Designer now named in contract - EoT review timescales reduced from 12 to 8 weeks - New relevant event added for epidemics - Collaborative working and sustainability now added as contract conditions (previously supplemental provisions) - New provision for electronic signatures Minor Works launched in 15 May 2024

Question 59

What are unliquidated damages?

Answer 59

When no sum for liquidated damages is mentioned within the contract

Question 60

On HMP Moorland you advised all risk sat with the Contractor and these should be shared, which risks did you advise the client to take on?

Answer 60

Risks which would cost the client an unreasonable amount for the contractor to hold such as: - disruption due to prison activities - unforeseen ground conditions

Question 61

How does PPC2000 compare to JCT?

Answer 61

- Based on both JCT and NEC so some similarities to both - Shorter than both so seen as simple to administer - Different terms for individuals and variations - Change control process similar to NEC

Question 62

In the case of a significant delay, are LAD's paid for the full duration?

Answer 62

Typically there would be a cap on liabilities included within a contract as contractors would rarely sign up to indefinite damages.

Question 63

What did you advise on the Birkwood Primary School Classroom Extension project?

Answer 63

The client required additional classroom capacity by the start of the new academic year, however the overall programme would not allow for this as some works ran into the start of the academic year. I advised they could utilise sectional completion and take partial possession of the number of classrooms required, with the remainder of classrooms and external works to follow.

Question 64

What did you advise on the HMP Moorland project?

Answer 64

After reviewing the contract with the Client Rep, I found the contractors claim that they bared all risk under the contract and the risk register had to contractual stipulation to transfer risk. As a result the client sought legal advise and amended the contract to include a risk schedule to allow the transfer of risk. I ultimately asked the contractor to provide a cost to bare each individual risk and then advised the client which of these I felt was better value for them to take on.

Question 65

How did you deal with the disagreement on HMP Moorland?

Answer 65

The contractor had failed to include for some of the surveys that were required in error and they had claimed for the cost of these surveys as well as the staff costs for the extended period of time. I advised the client they were within their rights to not pay the additional costs however, the contractor has incurred additional costs. The client accepted to pay the cost of the surveys as it was a genuine error but asked me to negotiate any resulting costs.