Contract Administration

Question 1

What is final account?

Answer 1

This is prepared at the end of the works, adjusting the sum set out in the contract to take account of any variations, provisional sums, loss and expense. The account confirms the final payment required under the contract but is frequently the source of disputes between the parties.

Question 2

What is another contract you have worked with?

Answer 2

Homeowner Contract (with Consultant) 2015 Edition for use in Scotland

Building Contract for a homeowner/occupier who has appointed a consultant to oversee the work.
Is simplified for domestic clients - less formal, plain language.
Excluded from Constuct Act - Adjudication does appply.
Lump sum, interim payments or single on completion.
Suitable for smaller domestic projects.

Question 3

What are the main duties of a CA under an SBCC Minor Works Contract?

Answer 3

The CA administers the contract by issuing instructions, certifying interim and final payments, assessing variations, granting extensions of time, and issuing Practical Completion and Final Certificates. They also chair meetings, record progress, and ensure communication and documentation are maintained in accordance with the contract conditions.

Question 4

What is the purpose of issuing contract instructions, and when should they be used?

Answer 4

Contract Instructions are used to direct changes in design, materials, sequence, or other matters under the contract. They ensure variations are properly authorised and recorded, maintaining a clear audit trail. They should only be issued by the CA or authorised representative and must not be retrospective.

Question 5

What is the difference between Practical Completion and Final Completion?

Answer 5

At Practical Completion, works are sufficiently complete for occupation or use — minor snagging may remain. Final Completion occurs after the Rectification Period, once all notified defects are rectified, and the CA issues the Final Certificate, settling the account and releasing retention.

Question 6

What is the purpose of retention, and how is it managed under the SBCC Minor Works form?

Answer 6

Typically 3–5%, retention is deducted from interim payments — half released at Practical Completion and the remainder after the Rectification Period. It incentivises completion and protects the employer against defective work.

Question 7

Talk us through the variation you agreed on the boundary wall project?

Answer 7

This was in relation to additional sections of take down and rebuild.
This was highlighted to be on site at a section where established buddleia was being removed.
Agree the wall required take down and rebuild in that area following removal of this.
Measured on site, used tender rates, agreed cost with Contractor.
Presented information to the client, approved.
Issued written Contract Instructions. (included scope, spec (as per tender), date of agreement, cost)

Question 8

What are the interim payment timescales for a SBCC minor works contract

Answer 8

The contract’s Interim Valuation Date determines the cycle, typically on a monthly basis, with the first IVD not more than one month after the commencement date.
The due date for each interim payment is 7 days after the IVD.
The CA must issue an interim certificate within 5 days of the due date.
Final Payment Date: Payment must be made within 14 days of the due date.

Question 9

What is meant by procurement?

Answer 9

The overall process of acquiring construction work or services.

Question 10

What are the main procurement methods?

Answer 10

Traditional.
Design and build.
Management contracting.
Construction management.

Question 11

What is traditional procurement?

Answer 11

The design is completed by the clients design team before competitive tenders are invited and a main contractor is employed to build what the designers have specified.
This can be remeasureable or lump sum.

Question 12

What is meant by lump sum?

Answer 12

A contractor is appointed for a fixed sum and with a set time period.

Question 13

What should be considered for traditional procurement?

Answer 13

The route depends on full and complete design information which can be time consuming to prepare.
Full design might not be achievable and can lead to contractors design portions and inclusion of provisional sums. Can compromise output cost and time certainty.

Question 14

What is design and build procurement?

Answer 14

The contractor is responsible for both the design and construction of a project.
Includes employers requirements.
The employer employs an agent to administer the conditions.

Question 15

What is management contracting?

Answer 15

A management contractor is employed to contribute their expertise to the design and to manage construction with a management fee being paid to them.

Question 16

What is construction management?

Answer 16

The employer places a direct contract with each of the trade contractors and utilises the expertise of a construction manager who acts as a consultant to co ordinate the contracts.

Question 17

What are dayworks

Answer 17

Dayworks are the costs for labour, materials, and plant for work that cannot be valued through the contract’s normal pricing methods.
Work that is urgent and too complex to price upfront.
The work is documented on daywork sheets, which must be authorized by the client’s team to be paid for.

Question 18

When is a SBCC minor works contract used?

Answer 18

The work is simple in character;
The work is designed by or on behalf of the Employer;
The Employer is to provide drawings and/or a specification and/or work schedules to define adequately the quantity and quality of the work; and
where an Architect/Contract Administrator or Quantity Surveyor, if appointed, is to administer the conditions.

Ca be used by both private and local authority employers.

Not suitable where detailed control procedures are needed or the work is to be staged.

Question 19

What is nomination?

Answer 19

Selection of particular subcontractor to carry out works, supply or manufacture of materials?

Question 20

What is a NEC Contract?

Answer 20

New Engineering Contract can be used within building and civil engineering projects.

Question 21

What is frustration?

Answer 21

The automatic termination of a contract if an unforeseen event makes performance impossible, illegal, or fundamentally different from the original agreement.

Question 22

What are the main parts of a minor works contract?

Answer 22

Recitals
Articles
Contract particulars
Conditions
Schedules

Question 23

Talk us through the claim for additional prelims for the external fabric repair project?

Answer 23

Bavelaw Gardens. External fabric repairs, included roofing, rendering, insulation upgrading.
Minor works contract.
Contractor submitted a written notification including the reasons, impact assessment, call outs, managers etc.
The work was weather dependent. There was a number of named storms over the contract.
The asbestos although took time, did not affect the progress on site as the works proceeded elsewhere, the PC was not involved in arranging of chasing the asbestos so wasn’t valid.
Agreed reasonable but reduced their claim, this was accepted.

Question 24

How did you negotiate the final account at Northumberland Street?

Answer 24

Prepared and reviewed relevant information. Contract instructions, financial statements.
Complex project – best to meet in person.
Methodically worked way through all info and agreed outstanding queries.
Remained professional, and listened to the PC.
Used rules of measurement as much as possible.

Question 25

What is a relevant event vs a relevant matter?

Answer 25

Relevant event: Caused by the client or neutral event. Entitles claim for an extension of time, does not necessarily entitle a contractor to claim for loss and expense. Relevant matter: Cause by the client that materially effects the progress of works. Enabled direct claim for loss and expense. Does not necessarily entitle claim for extension of time as may not always delay the completion date.

Question 26

What are liquidated damages?

Answer 26

Predetermined damages based on genuine pre-estimate loss of a client if the completion date is not met. – loss of rent, income.

Question 27

What steps would you take if a contract was terminated due to Contractor insolvency? Standard

Answer 27

Review the Contract. Verify insolvency Notify employer Employer terminate contract Instruct site be made safe and secure Record works + materials. Valuation up to termination. Stop payments Review any warranties and insurances. Prepare for completion of the works.

Question 28

What are fluctuations?

Answer 28

Fluctuations are contractual mechanisms that allow the Contract Sum to be adjusted after the contract is signed, to reflect changes in the cost of labour, materials, or taxes that occur during the project.

Question 29

What are collateral warranties

Answer 29

Collateral warranties are supporting contracts where a contractor, consultant, or sub-contractor grants contractual rights to a third part, like a funder, purchaser or tenant who isn't a party to the construction contract. They allow the third party to sue for breach of contract if they suffer loss due to defects or non-performance.

Question 30

What is partial possession on a SBCC standard form of contract?

Answer 30

Before Practical Completion with the consent of the contractor the employer can take partial possession of a site. The 'Relevant Part' is deemed to have practical completion at that 'Relevant Date'. Half of the retention for that part must be release. The rectification period for that part start. Liquidated damages reduced proportionally. The client is responsible for insurance of that part.

Question 31

What is early use on a SBCC standard form of contract?

Answer 31

The Contractor may consent in writing for the client to use or occupy part of the site before practical completion - maybe for storage. Before consent the Contractor must notify their insurers.

Question 32

What is sectional completion on a SBCC standard form of contract?

Answer 32

Different completion dates for different sections of the work. Half of the retention for that part must be release. The rectification period for that part starts. Liquidated damages reduced proportionally. The client is responsible for insurance of that part.

Question 33

What is a certificate of non completion on a SBCC standard form of contract?

Answer 33

This gives formal written notice to the Contractor that they have failed to complete the works by the completion date. Where the contract provides for sectional completion, separate Certificate of Non Completion must be issued for each section. The Client may then deducts liquidated and ascertained damages from payments. These require a pay less notice setting out the basis of the calculation.

Question 34

What is assignation?

Answer 34

In an SBCC (Scottish Building Contract Committee) standard form of contract, assignation is the Scottish law term for the transfer of a party's rights or benefits under the contract to a third party.

Question 35

How is assignation different to collateral warranties?

Answer 35

Assignation is the transfer of a contract's benefit from one party to another, while a collateral warranty creates a new contractual link between the original party and a third party who wasn't in the original agreement. The key difference is that assignation transfers existing rights from an existing contract, whereas a collateral warranty establishes a new contract between parties that were previously unconnected.

Question 36

What are the limitations of the SBCC Minor Works Contract?

Answer 36

It is not suitable for large or complex projects that require strict oversight. As the control procedures are not as detailed as the Standard Building Contract. Not suitable where the project is to be completed in stages with sectional completion. It is more vague on claims like extension of time in that it does include relevant event. It does not allow for sectional completion, early use or partial possession.

Question 37

What would your advice be to a client who receives you interim payment certificate but wishes to make deductions from the payment due.

Answer 37

Pay less notices, 5 days before final payment date, include justified deductions

Question 38

What do you understand non completion to be in a construction contract? Does non completion include reasons where the contractor was not at fault for missing the completion date

Answer 38

This gives formal written notice to the Contractor that they have failed to complete the works by the completion date. No if the Contractor is not at fault, they are entitled to claim for an extension of time.

Question 39

When issuing the practical completion certificate under the SBCC MW contract, what does this trigger.

Answer 39

The triggers the release of half the retention money held. The start of the Rectification period. Responsibility and insurance for the site back to the client / occupier.

Question 40

What would you typically expect to find in an interim valuation.

Answer 40

Prelims. Works completed. Materials on site. Variations. Less retention. Less previous. Amount due.