Contract Administration

Question 1

Talk me through procedure you’ve followed for making payment in a contract.

Question 2

On project London, you mention the contractor wanted to remove the damages. In practice how did you advise your client on the risks?

Answer 2

• Provision must state NIL or ‘n/a’ within the particulars
• Amending the contract to remove the provision entirely

Question 3

If the damages provision was left blank, how would that impact the contract?

Answer 3

• The contract assumes unliquidated damages apply
• Unliquidated damages are damages payable for breach, but the amount is not pre-agreed
• Compensation is at large
• The amount of compensation is to be determined after the breach occurs by a court
• Employer will have to prove actual loss incurred

Question 4

What are the pitfalls of unliquidated damages?

Answer 4

• It can be harder to prove losses incurred

Question 5

What are the advantages of unliquidated damages?

Answer 5

• it allows for recovery of losses which may have been impossible to foresee
• or to estimate with any certainty before the breach.

Question 6

What are the advantages of liquidated damages?

Answer 6

• Do not require proof of loss after the event/ or prove actua; damage
• simply deducted by the employer under contractual mechanisms in the contract
• agreed in advanced and stated in the contract

Question 7

In your role as project QS how did you contribute to an assessment of an extension of time claim?

Answer 7

• Refer to the contract and tender documents to see if genuine change occurred
• Ascertain the direct loss and/or expense
• Feed these responses back to the CA

Question 8

As a QS what responsibilities do you have as a QS which relates to the completion of a project?

Answer 8

• Settling the final account
• Releasing half retention

Question 9

What is the purpose of retention?

Answer 9

• Provides the client with some security that the contractor will return to correct any defects during the retification period

Question 10

Why is retention taken incrementally?

Answer 10

• Not taken in a lump sum at the beginning of the project as it may impact contractors cash flow,
• also if the contract sum is adjusted retention is over/ under-valued

Question 11

Level 1 - Final account

What are the time-bars under the JCT to settle the project final account?

Answer 11

• Depends on standard form
• Traditional - not later than 3-months after information supplied by the contractor (which should not arrive any later than 6-months after issue of practical completion certificate.)
• D&B - not later than 2-months after information supplied by the contractor (which should not arrive any later than 3-months after issue of practical completion certificate.)

Question 12

What provision does the CA refer to - to form their opinion on EOT?

Answer 12

• Relevant Events

Question 13

What mechanisms within the JCT is used for assessing any costs relating to the contractors EOT claim

Answer 13

• Relevant Matters
• Loss & expense

Question 14

As CA what methods are there to assess delay?

Answer 14

• Overview of the facts (cause and extent of delay)
• Planned v actual progess (as built)
• Critical path analyses

Question 15

What is the process of an EOT claim?

Answer 15

• The Contractor will notify the CA of delay
• CA can then request further information from the contractor
• CA should refer to the relevant events to ensure the claim is eligible
• In principle the CA assess whether or not the delay has had an effect on contractual completion date and what that effect is.
• Response is due as reasonably practicable, but within 12-weeks of receipt of ‘required particulars’ (request information)

Question 16

Level 1 - Loss and Expense

What are the timescales for ascertaining Loss and Expense?

Answer 16

• 28 days from receipt of initial assessment
• 14 days of any update

Question 17

What are the timescales for ascertaining Loss and Expense at final account?

Answer 17

• no later than 3-months after receiving information from contractor
• Contractor has 6-months to provide assessment
• If the 6-month period expires, the CA must notify the contractor they have 1-month to provide the information
• If the contractor fails, the CA shall make assessment on the information in their possession

Question 18

What are the timescales for issuing final certificate?

Answer 18

• Within 28 days of expiry of the rectification period

Question 19

Level 1 - EOT

How long do you have to ascertain a EOT claim?

Answer 19

• Within 12-weeks of receiving particulars
• Within 12-weeks of PC