Contract Administration Flashcards

Question

What must the CA do with materials on or off site?

Answer 1

Consider them during interim valuations and check for invoices or physical existence

Answer 2

For small, simple projects typically under £250,000 in value

Answer 3

Sign written terms of engagement detailing services and fees

Answer 4

With quantities (Q), without quantities (XQ), and with approximate quantities (AQ) ## Footnote Each version is designed to meet the needs of both private and public sectors.

Answer 5

Sign a set of written terms of engagement or appointment ## Footnote This document details the services to be provided, the fee basis, and the firm’s complaints handling procedure.

Answer 6

The firm rather than the individual surveyor ## Footnote This helps avoid complications related to personal liability.

Answer 7

It is a complex area of practice requiring specialist tax advice ## Footnote The contractor must confirm VAT rates to the CA and employer, and zero-rated work may apply.

Answer 8

Construction, engineering, and infrastructure projects ## Footnote It promotes collaboration, flexibility, and proactive project management.

Answer 9

Public sector projects, projects requiring collaboration, projects with complex risk management, design and build projects, and projects needing clear communication ## Footnote NEC is popular for government-funded projects and encourages teamwork.

Answer 10

* ECC (Engineering and Construction Contract) * ECSC (Short Contract) * ECSS (Subcontract) * PSC (Professional Services Contract) * TSC (Term Service Contract) ## Footnote Each type is tailored to specific project needs.

Answer 11

UK construction projects, especially in the building sector ## Footnote It provides a suite of standard forms of contract tailored to different project types.

Answer 12

Traditional building projects, design and build projects, private sector projects, projects with standard risk allocation, and projects needing simplicity or specificity ## Footnote JCT contracts have well-established clauses for liability and delays.

Answer 13

* JCT Standard Building Contract * JCT Design and Build Contract * JCT Intermediate Contract * JCT Minor Works Contract * JCT Homeowner Contract ## Footnote Each type serves different project sizes and complexities.

Answer 14

The Contractor may be entitled to an extension of time but not to additional preliminaries costs ## Footnote Delay determination is by the Contract Administrator.

Answer 15

A lump sum paid to the contractor to assist with cashflow and provide security ## Footnote It is typically secured by a bond and equals the amount of peak cash flow.

Answer 16

* JCT Intermediate Building Contract 2016 (with Contractor's Design Portion) * JCT Minor Works Building Contract 2016 (with Contractor's Design Portion) * JCT Design and Building * Management Building Contract 2016 * Measured Term Contract 2016 ## Footnote None

Answer 17

* Suitable for large-scale or complex projects * The employer appoints a management contractor who coordinates the construction process * The works are divided into packages carried out by different works contractors ## Footnote None

Answer 18

* When early start on site is needed before full design completion * When the employer wants direct control over works contractors * When flexibility in procurement and programming is essential ## Footnote None

Answer 19

* Designed for maintenance and minor works over a period of time * Ideal for repetitive work or maintenance services over a defined term (e.g., 1–5 years) * Commonly used by local authorities, housing associations, and facilities managers ## Footnote None

Answer 20

* Based on a schedule of rates rather than a lump sum * Employer issues individual instructions (works orders) * Allows for varying types and volumes of work over time ## Footnote None

Answer 21

* Employer: Issues works orders and manages the contract * Contractor: Carries out work as instructed * Contract Administrator: Oversees the contract and ensures compliance ## Footnote None

Answer 22

* Based on measured quantities from the schedule of rates * Payments are made following completion of each works order ## Footnote None

Answer 23

* For ongoing maintenance, repairs, or small-scale improvements * When the scope of work is not fully defined upfront * When cost control and flexibility are important ## Footnote None

Answer 24

* Minor works is less detailed and prescriptive * Intermediate contract includes sectional completion provisions * Intermediate contract better sets out individual responsibilities ## Footnote None

Answer 25

* Domestic subcontractor is chosen by the contractor * Nominated subcontractor is chosen by the employer * Contractor has limited control over nominated subcontractor ## Footnote None

Answer 26

* Limited control over selection and terms * Potential claims for loss or expense due to performance issues * Contractor may not be liable for design issues or delays caused by the nominated subcontractor ## Footnote None

Answer 27

* Interim payment certificate * Practical completion certificate * Certificate of making good defects * Final Payment Certificate * Extension of time certificate * Non-completion certificate * Sectional completion certificate * Final Certificate ## Footnote None

Answer 28

* Administering and managing the contract * Dealing with payment provisions and assessing contractor's valuation * Carrying out inspections for certification * Issuing contract instructions * Certifying sectional and/or practical completion * Agreeing the final account ## Footnote None

Answer 29

* Acts as the employer's representative under JCT Design & Build * Issues instructions, notices, and certificates under the contract ## Footnote None

Answer 30

* Contract administrator is more impartial * Employer's agent acts on behalf of the employer * Employer's agent has less impartiality compared to contract administrator ## Footnote None

Answer 31

generally only permitted if those materials are designated as “Listed Items” in the contract. If materials are not listed, the contractor cannot claim payment for them while they are stored off-site unless specific contractual provisions are made.

Answer 32

To allow payment for off-site materials safely, the contract should include: 1. Listed Items Schedule – identifying specific materials eligible for off-site payment. 2. Vesting Certificate – confirming title has passed to the Employer. 3. Insurance Evidence – showing materials are insured against loss/damage. 4. Clear Labelling and Separation – materials must be marked and stored separately. 5. Advance Payment Bond – optional, to secure Employer’s payment [2].

Answer 33

The Contractor must submit all documents necessary for adjusting the Contract Sum within 6 months of the Practical Completion Certificate or the last Section Completion Certificate. Once the contractor’s documents are received, the Architect/Contract Administrator must issue a Final Account Statement within 3 months If the contractor fails to submit within 6 months, the Architect/CA may issue a 1-month notice requiring submission. If the contractor still fails to respond, the Architect/CA (or Quantity Surveyor) can prepare the Final Statement based on available information The Final Certificate must be issued within 2 months of the latest of: End of the Rectification Period Issue of the Certificate of Making Good Date the Final Account Statement is sent to the contractor

Answer 34

The Final Certificate must be issued within 2 months of the latest of: - End of the Rectification Period -Issue of the Certificate of Making Good -Date the Final Account Statement is sent to the contractor

Answer 35

It is less fromal under D&B contract, with no strict timeline for final account submission. The SBC has a defined process with timelines (6 months then 3 months, followed by 2 months for the final certificate)

Answer 36

=7,5,5 1. The contractor is required to make an Interim Payment Application 7 days before each Interim Valuation Date/Due Date 2.Employer/ CA must issue a Payment Notice no later than 5 days after the Due Date 3. The Final Date for Payment is 14 days after the Due Date 4. If the employer wishes to issue a Pay Less Notice, they must do so no later than 5 days before the Final Date for Payment.

Answer 37

An EOT is an adjustment of the completion date. The contractor is eligible for an EoT if a relevant event occurs. The CA must notify the contractor if their decision as soon as reasonably practicable OR within 12 weeks of receiving the notice.

Answer 38

An event that causes a delay in the completion of the works, either caused by the employer or neither party. examples: - exceptionally adverse weather - civil commotion -variations instructed by the employer - delay in giving posession of the site -delay in receiving necessary information

Answer 39

-Traditional (lump sum, two-stage) - Design & Build - Construction Management (client holds contracts) - Management Contracting (MC holds contracts) - Measurement Contract - Patrtnering PPI

Answer 40

to identify the best way of achieving the objectives of the client.

Answer 41

Contract Works Insurance (All Risks) * Covers physical damage to the works during construction. * Includes materials, plant, and temporary works. * Can be arranged by either the contractor or employer, depending on the contract. * Often referred to as “Works Insurance”. 2. Public Liability Insurance * Covers injury or damage to third parties or their property. * Typically held by the contractor. * Required throughout the construction period. 3. Employer’s Liability Insurance * Covers injury or illness to the contractor’s employees. * Legally required under UK law. * Usually held by the contractor. 4. Professional Indemnity Insurance * Covers design-related errors or omissions. * Essential in Design and Build contracts or where consultants are involved. * Typically held by designers, architects, or contractors with design responsibility. 5. Product Liability Insurance * Covers defects in materials or products supplied. * May be required if the contractor supplies equipment or systems. 6. Existing Structures Insurance * Covers damage to existing buildings on site. * Usually arranged by the employer, especially in refurbishment projects. 7. Non-Negligence Insurance (6.5.1 Insurance) * Covers damage to adjacent properties caused by the works, not due to negligence. * Often required in urban or sensitive locations. * Typically arranged by the employer.

Answer 42

1. Project particulars (parties) 2. Scope of works (detailed description, reference to drawings, specifications & employer's requirements) 3. Contract particulars 4. Contract sum and payment terms (interim payments, retention, final account, valuation procedures, payment schedules) 5. Programme and completion (start and end dates, key milestones, extension of time provisions and liquidated damages for delay 6. Design responsibility 7. Instructions & variations processes 8. Quality and standards (compliance with building regulations, BS and specifications, testing, inspection and defects liability) 9. H&S (obligations under CDM regs) 10. Insurance & Bonds (public liability, employer's liability, contract works insurance, performance bonds or parent company guarantees) 11. Termination and suspension 12. Dispute resolution (often includes a notice of adjudication procedure) 13. Contract documents (forms of agreement, conditions of contract, drawings and specifications, bills of quantities or schedules of rates)

Answer 43

Sectional completion: - is planned and defined from the outset. Written into the contract. - Works are divided into sections with their own completion dates, LADs, possession & handover - Common in phased developments (schools, hospitals, housing schemes) Partial completion: - Not planned from the start, isn't written into the contract - Contractor offers part of the works as complete, employer agrees to take possession - No separate completion date or LADs unless agreed. - Often used when the employer wants early access to part of the site, may require agreement on adjustment of insurances, liability and access

Answer 44

- It is an insurance policy, a requirement for the contractor to take out a bond (typically 10% of the construction value), - if the contractor defaults or goes insolvent (fails to meet their contractual obligations), the bond payer pays out to the client which is used to secure the site & stabilise the works. - Issued by a third party

Answer 45

In a JCT contract, force majeure refers to unforeseeable events beyond the control of the parties that prevent the contractor from fulfilling their obligations — particularly completing the works on time. it is listed as a Relevant Event under which the contractor may claim an extension of time.

Answer 46

there are four key elements required to make a binding contract and surveyors must be aware of these: offer, acceptance, consideration, and an intent to create legal relations.

Answer 47

- JCT – Joint Contracts Tribunal – project complexity, value, sectional completion etc. - ICE – Institute of civil engineer’s – civil engineering - FIDIC- International Federation of Consulting Engineers – international parties - NEC – New Engineering Contract- promotes collaboration and project management

Answer 48

“ I would refer to the Guide to selecting the appropriate JCT main contract” - a standard building contract is appropriate for larger or more complex works, including specialist work or building services, that are procured by the traditional route. - Intermediate contracts are meanwhile appropriate for simpler construction projects that require all the recognised trades but no specialist works. - Minor Works contracts are for small, simple projects, that don’t require ant specialist works, nominated subcontractors or sectional completion.

Answer 49

1. Open tendering -advertised publicly, anyone can tender 2. Selective tendering – pre-approved list of contractors invited, based on prequalification or past performance 3. Negotiated Tendering - direct negotiation, often used for specialist or complex projects 4. Two-stage tendering- early contractor involvement, price and scope negotiated during second stage 5. Framework tendering – framework agreement, efficient for repetitive works

Answer 50

- Undertaking site inspections (works progress, quality and workmanship against contract documentation), the CA needs to check work only for the purpose of certification. - Dealing with payment provisions, assessing the contractor’s sum, issuing payment certificates - Issuing contract instructions - certifying practical completion - agreeing the final account

Answer 51

- Variations must be issued in writing by the CA. if an instruction is given orally, the contractor must confirm in writing within 7 days.

Answer 52

Valuing a variation is based on contract rates (if available) fair valuation of no applicable rates exist (comparison to similar projects, use of cost index information i.e. BCIS), dayworks rates for certain types of works, consideration of preliminary costs etc.

Answer 53

A contract instruction should include: instruction number, date of issue, project details, description of instruction, location of works, reason for instruction, impact on programme & impact on cost.

Answer 54

- Under JCT contractors, the CA should notify the contractor of their decision as soon as reasonably practicable or within 12 weeks of the notice.

Answer 55

- The contractor’s notice must include: the cause of the delay, whether the cause is a relevant event, an estimate of the delay to completion. - The contractor is obliged to provide a notice (in writing) ‘as and when it becomes reasonably apparent’ which tends to mean within a maximum of 5 working days.

Answer 56

1. Interim payment certificate 2. Practical completion certificate 3. Certificate of making good defects 4. Final Payment Certificate 5. Extension of time certificate 6. Non-completion certificate 7. Sectional completion certificate 8. Final Certificate

Answer 57

Key Features * Measured Work Basis: ○ Each job is priced using a schedule of rates or bills of quantities. ○ Contractor is paid for actual measured work done, not a lump sum. * Term Agreement: ○ Covers a fixed period rather than a single project. ○ Allows flexibility for multiple small works without separate contracts. * Instructions: ○ Employer issues work orders during the term. ○ Contractor executes works under agreed conditions. * Payment: ○ Based on measured quantities and agreed rates. * Risk Allocation: ○ Similar to other JCT forms but tailored for ongoing works rather than one-off projects.

Answer 58

✅ Nominated Subcontractor * Selection: Chosen by the employer (client) and formally nominated to the main contractor. * Contractual Relationship: ○ The subcontractor signs a subcontract with the main contractor, but the employer influences the choice. * Implications: ○ The main contractor is responsible for managing the subcontractor’s work, but risks can be complicated because the contractor didn’t choose them. * Common Use: ○ Specialist trades or suppliers specified by the client (e.g., lifts, M&E systems). ✅ Named Subcontractor * Selection: Listed in the tender documents as preferred or recommended by the employer. * Contractual Relationship: ○ The main contractor chooses whether to use them and enters into a normal subcontract. * Implications: ○ Greater flexibility for the contractor; less employer control than nomination. * Common Use: ○ When the client wants influence but not full responsibility for selection. Key Difference * Nominated: Employer directs the choice → contractor has less say. * Named: Employer suggests → contractor decides. Recent changes in the JCT 2024 suite have significantly affected the use of named and nominated subcontractors: - The use of nominated subcontractors has been discontinued. - JCT contracts no longer include standard provisions for nomination. This reflects industry practice and risk allocation trends: contractors remain fully responsible for subcontractor performance, even if the employer influences selection.

Answer 59

Recent changes in the JCT 2024 suite have significantly affected the use of named and nominated subcontractors: - The use of nominated subcontractors has been discontinued. - JCT contracts no longer include standard provisions for nomination. This reflects industry practice and risk allocation trends: contractors remain fully responsible for subcontractor performance, even if the employer influences selection.

Answer 60

A Prime Cost Sum (PC Sum) is an allowance included in a construction contract for the supply of specific items or materials, where the exact cost is not known at the time of tender. It covers the net cost of the item only, excluding installation and associated overheads. ✅ Key Characteristics Purpose: - Used for items like sanitary ware, kitchen units, or specialist fittings where the client wants flexibility in final selection. What It Includes: - The estimated cost of the item(s) supplied by a nominated supplier. What It Excludes: - Contractor’s overheads, profit, and installation costs (these are added separately). Adjustment: - If the actual cost differs from the PC Sum, the contract sum is adjusted accordingly. ✅ Difference from Provisional Sum Prime Cost Sum: For supply of goods only. Provisional Sum: For work or services where scope is uncertain.

Answer 61

* A provisional sum is an allowance in the contract for work that cannot be fully detailed or priced at the time of tender, because its scope is uncertain. It covers labour, materials and associated costs for the work. Actual cost is determined later when the scope becomes clear. * A Prime Cost Sum is an allowance for the supply of specific items that the client will select later. It covers material costs only, not installation. The contractor adds a fixed percentage for overheads and profit.

Answer 62

The difference between defined and undefined provisional sums relates to how much detail is provided about the work included in the allowance: * With a defined PSUM, The scope of work is described clearly enough for the contractor to understand what is involved and price related preliminaries (e.g., labour, plant, overheads). - Contractor can make reasonable allowances for time, resources, and site setup. - With an undefined PSUM, The scope of work is not described in sufficient detail, so the contractor cannot reasonably predict what is required. - Contractor cannot price preliminaries accurately; adjustments will be made later when details are known.

Answer 63

* provisional sums have a lower risk level than an undefined sum. The scope was clearly described, so the contractor could allow for prelims, overheads and programming. * Undefined provisional sums have a greater exposure to cost overruns, programme delays, and claims for additional preliminaries and a Higher likelihood of disputes over what was included in the original allowance.

Answer 64

* It occurs when the contractual completion date becomes unenforceable because the employer (or client) has lost the right to impose liquidated damages for delay. * Essentially, the contractor is no longer bound by the original completion date and only needs to finish the works within a reasonable time. Common causes: * No valid extension of time mechanism in the contract. * Employer causes delays but fails to grant extensions. * Contract provisions for time become void (e.g., due to breach or ambiguity). Disputes often arise over what constitutes “reasonable time.”

Answer 65

The legal framework for contract administration in UK construction projects is based on a combination of common law principles, statutory regulations, and standard-form contracts. Common Law : * English contract law governs how contracts are formed, interpreted, and enforced. * Key principles: offer, acceptance, consideration, and intention to create legal relations. Statutory Law: * Includes legislation such as: ○ Housing Grants, Construction and Regeneration Act 1996 (payment and adjudication rules). ○ Building Safety Act 2022 (post-Grenfell safety requirements). ○ Procurement Act 2023 (public sector procurement rules). Case Law : Judicial decisions shape interpretation of contract clauses and dispute outcomes. Surveyor's appointment is covered under separate terms of engagement/ appointment document ( professional services contract). - Also governed by English Contract Law principles.

Answer 66

Decision usually within 28 days of referral (can be extended by agreement). This speed prevents delays in payment and project progress. Under the Construction Act 1996, any party to the contract has a right to refer a dispute to adjudication at any time. Process: - Notice of Adjudication served by the referring party. - Adjudicator appointed (by agreement or nominating body). - Referral document submitted with evidence. - Adjudicator reviews submissions and issues decision. Decision is temporarily binding: - Must be complied with immediately. - Can later be challenged in court or arbitration.

Answer 67

It is an implied duty under UK law (Supply of Goods and Services Act 1982 and common law). Requires a professional to perform their work to the "standard expected of a reasonably competent person in that profession". If a surveyor or contractor fails to meet this standard, they may be liable for professional negligence. Example: - A building surveyor must identify obvious structural defects during an inspection. - Missing a major defect that a competent surveyor would reasonably detect could breach this duty.

Answer 68

To prove professional negligence, the following must be established: 1. Duty of Care The professional owed a duty to the client (usually through a contract or implied by the relationship). 2. Breach of Duty - The professional did not meet the standard of reasonable skill and care expected of a competent practitioner in that field. 3. Causation - The breach directly caused the client’s loss or damage. 4. Loss - The client suffered a measurable financial or physical loss as a result.

Answer 69

Under JCT Contracts you’re obligated to provide notice “as and when it becomes reasonably apparent” rather than during a prescribed time frame. This is the standard drafting of the JCT and tends to mean within a maximum of five working days. Whether an extension of time is granted or not the CA must notify the contractor of their decision as soon as is reasonably practicable and within 12 weeks of receipt of the notice. * Under JCT 2024, the employer (or contract administrator) must assess and notify its decision within 8 weeks of receiving the contractor’s notice. * They can request further information within 14 days of the claim being made.

Answer 70

The term “exceptionally adverse weather” is commonly used in UK construction contracts (including JCT) but it is not precisely defined in the contract itself. Instead, its interpretation relies on industry practice and case law: * Weather conditions that are significantly worse than the norm for the location and time of year, based on historical averages. * It goes beyond ordinary seasonal variations and includes events that are rare or extreme. * Typically measured against long-term meteorological data (often 10–30 years) for the site’s region. If conditions exceed the statistical average for that period and location, they may be deemed “exceptionally adverse.”

Answer 71

Examples of Relevant Matters (JCT Standard Building Contract clauses 4.20–4.21) 1. Failure to give possession of the site on time. 2. Architect/Contract Administrator instructions that cause disruption or additional cost (e.g., variations). 3. Suspension of work due to the employer’s default. 4. Discrepancies or divergences in contract documents that require correction. 5. Late provision of information by the employer or their team. 6. Employer’s impediment or prevention of regular progress. 7. Compliance with statutory requirements where the employer bears responsibility.

Answer 72

Under the JCT suite of contracts, the Certificate of Making Good Defects (issued after the contractor has rectified defects during the Rectification Period) triggers several important consequences: 1. End of Contractor’s Obligation for Defects * Confirms that all notified defects have been made good. * The contractor’s responsibility for defects under the contract effectively ends (except latent defects or those arising later under common law). 2. Release of Retention * The remaining retention (usually 50% held after Practical Completion) becomes due for payment to the contractor. * This is often the final payment under the contract. 3. Final Account Settlement * The certificate allows the Final Certificate to be issued, which concludes the contract financially. * After the Final Certificate, the employer’s ability to make further claims is severely limited (subject to contractual and statutory rights). 4. End of Rectification Period * Marks the formal close of the Rectification Period (often 6–12 months after Practical Completion). * No further scheduled inspections for defects under the contract.

Answer 73

A latent defect is a fault in the works that is not discoverable by reasonable inspection at the time of completion but appears later. * The contractor’s obligations under the contract usually end after the Final Certificate, so latent defects are not covered by the normal rectification process. * However, the employer can still pursue remedies under common law (breach of contract or negligence) within the statutory limitation period: * 6 years for simple contracts. * 12 years for contracts executed as a deed. Practical Steps * Investigate and document the defect. * Seek expert opinion to confirm it was due to defective design, workmanship, or materials. * Notify the contractor or designer (if still within limitation period). * Consider alternative dispute resolution before litigation.

Answer 74

A collateral warranty is a promise given by a contractor, subcontractor, or designer to a third party (such as a funder, tenant, or purchaser) that they will perform their duties under the main contract with reasonable skill and care. It creates a direct contractual link between the warrantor and the beneficiary.

Answer 75

Privity of contract is a legal principle that means only the parties to a contract have rights and obligations under it. In other words: * If you are not a party to the contract, you cannot enforce its terms or be bound by them. * This prevents third parties from suing or being sued based on that contract. To give third parties rights, mechanisms like: * Collateral Warranties * Third Party Rights under the Contracts (Rights of Third Parties) Act 1999 are used.

Answer 76

* Third Party Rights refer to legal rights granted to someone who is not a party to the original contract, allowing them to enforce certain terms of that contract. * Normally, under privity of contract, only the contracting parties have rights and obligations. Third Party Rights overcome this by using the Contracts (Rights of Third Parties) Act 1999 or similar provisions. * Rights must be expressly stated in the contract. * Does not impose obligations on the third party—only gives them enforcement rights.

Answer 77

Assignation (Assignment in English law) * Definition: Transfer of rights under a contract from one party (assignor) to another (assignee). * Key Points: ○ Only rights (benefits) can be assigned, not obligations. ○ Consent of the other original party is not usually required, but notice must be given. ○ Common in construction: assigning the right to receive payment or warranties. Novation * Definition: Substitution of a new contract or party for an old one, transferring both rights and obligations. * Key Points: ○ Requires consent of all parties (original and new). ○ Creates a new contract; the old one is discharged. ○ Common in design-and-build projects when a consultant’s appointment is novated to the contractor.

Answer 78

In the JCT Intermediate Building Contract (ICD), the provisions for Contractor’s Design Portion (CDP) are primarily covered in: * Section 2 – Definitions and Interpretation, where CDP is defined. * Section 3 – Contractor’s obligations, which sets out the contractor’s responsibilities for design and compliance. Schedule 1 – Contractor’s Designed Portion, which details the scope, requirements, and procedures for CDP items. The CDP clauses specify: - The parts of the works the contractor must design. - Submission and approval procedures for design documents. - Liability for design and fitness for purpose. - insurance requirements for design responsibility.

Answer 79

The longest sequence of dependent tasks in a project that determines the shortest possible duration to complete the project. Why it matters: Any delay in a task on the critical path will directly delay the entire project because there is no slack (or float) in these tasks.

Answer 80

For an Extension of Time (EOT) request under the JCT Intermediate Building Contract (IBC), the relevant sections and clauses are primarily located in Section 2 (Carrying out the Works): 1. Clause 2.19 – Notice of Delay ○ The contractor must give written notice to the Architect/Contract Administrator whenever the works are delayed or likely to be delayed. ○ The notice should state the cause of delay and any information reasonably necessary for assessment. [contract-c...ltants.com] 2. Clause 2.20 – Relevant Events ○ Lists the events that entitle the contractor to an EOT (e.g., variations, exceptionally adverse weather, force majeure, delays by statutory undertakers, employer’s instructions, failure to give possession of site). [liongate.build] 3. Clause 2.21 – Assessment of Extension ○ The Architect/Contract Administrator must assess whether completion is delayed due to a Relevant Event and grant a fair and reasonable extension of time. [contract-c...ltants.com] 4. Clause 2.22 – Further Information ○ The contractor must provide any additional details reasonably required for the assessment of EOT. [contract-c...ltants.com]

Answer 81

Sections and Coverage: 1. Articles of Agreement Sets out the parties, project details, contract sum, and key dates. Includes declarations about collaborative working and compliance with Building Regulations. 2. Recitals Describes the background of the contract, including design responsibility and documents forming the contract. 3.Contract Particulars Provides project-specific details such as insurance options, liquidated damages, and principal designer/contractor appointments. 4.Attestation Signature section for formal execution of the contract.

Answer 82

Conditions (Main Body) These are divided into thematic sections: Section 1 – Definitions - Defines key terms used throughout the contract. Section 2 – Carrying Out the Works - Covers obligations for workmanship, compliance, and instructions. Includes Extension of Time (EOT) provisions and Relevant Events. Section 3 – Control of the Works - Deals with possession of the site, progress, and completion. Section 4 – Payment - Sets out payment procedures, notices, and final account rules. Section 5 – Loss and Expense - Governs claims for additional costs due to delays or disruptions. Section 6 – Injury, Damage and Insurance - Details indemnity and insurance requirements. Section 7 – Termination - Specifies grounds and procedures for ending the contract. Section 8 – Dispute Resolution - Provides mechanisms for adjudication, arbitration, or litigation.

Answer 83

For a Loss and Expense (L&E) request under the JCT Intermediate Building Contract (IBC), the relevant sections and clauses are mainly in Section 5 – Loss and Expense of the Conditions: Clause 5.2 – Contractor’s Entitlement - States that if the regular progress of the works is materially affected by a Relevant Matter, the contractor is entitled to reimbursement of direct loss and expense incurred. [newmanor.com] Clause 5.3 – Notice of Likely Loss and Expense - The contractor must notify the Employer/Contract Administrator as soon as the effect becomes reasonably apparent, detailing: - The cause (Relevant Matter). - The likely nature and extent of the loss and expense. [contract-c...ltants.com] Clause 5.4 – Provision of Information - The contractor must provide information reasonably necessary to enable the Contract Administrator to ascertain the amount due. This includes substantiating records (e.g., time sheets, cost breakdowns). [newmanor.com] Clause 5.5 – Ongoing Updates - Requires the contractor to update the assessment and provide further details until the total amount can be determined. RELEVANT MATTERS are listed in Section 2 (Carrying out the Works) and include: Variations. Employer’s instructions. Discrepancies in contract documents. Delay in giving possession of site. Works by statutory undertakers. Other employer-related impediments.

Answer 84

Option A - Contractor arranges Joint Names All Risks insurance for the works only (typically for new build). Option B - Employer arranges Joint Names All Risks insurance for the works only (new build scenario). Option C - Employer arranges Joint Names insurance for both the works and the existing structure (used for refurbishment/extension projects).

Answer 85

Essential Information: 1. Title and Reference - Clearly state it is a “Contract Instruction” and include a unique reference number. 2. Date of Issue - The date the instruction is given. 3. Project Details - Project name, site address, and contract reference. 4. Parties - Name of the contractor and the issuing party (Architect/Contract Administrator). 5. Description of Instruction - Detailed description of what is required (e.g., variation, design change, compliance requirement). - Include drawings, specifications, or sketches if relevant. 6. Reason for Instruction - State why the instruction is issued (e.g., design change, statutory compliance, correction of defect). 7. Timing - Indicate when the work should start and any deadlines. 8. Impact on Programme - Note if the instruction may affect the completion date or requires an Extension of Time assessment. 9. Impact on Cost - State if the instruction is a variation that may affect the contract sum (and that valuation will follow). 10. Signatory - Signature and designation of the person issuing the instruction.

Answer 86

1. Contract Philosophy - NEC: Focuses on collaboration and proactive management. It uses plain English and promotes early warning systems to manage risks. - JCT: More traditional and legalistic, with detailed clauses and a reactive approach to disputes. 2. Language and Style - NEC: Written in simple, clear language to reduce ambiguity. - JCT: Uses formal legal language, which can be harder for non-lawyers to interpret. 3. Risk Management - NEC: Encourages early warning notices and risk registers to deal with issues before they escalate. - JCT: Risks are allocated in a more traditional way, and issues are often addressed after they arise. 4. Structure - NEC: Modular system (e.g., NEC4 ECC, PSC, TSC) with options for pricing and risk allocation. - JCT: Different forms for different procurement routes (e.g., Design & Build, Standard Building Contract), but less modular. 5. Payment Mechanisms - NEC: Uses activity schedules or bill of quantities, with emphasis on regular assessments. - JCT: Typically uses interim valuations based on work done. 6. Dispute Resolution - NEC: Promotes dispute avoidance through collaboration and early warnings. - JCT: Provides traditional mechanisms like adjudication, arbitration, or litigation. 7. Flexibility - NEC: Highly flexible and adaptable for different project types. - JCT: More prescriptive and suited to conventional building projects.

Answer 87

1. NEC Approach - NEC contracts (e.g., NEC4 ECC) use a collaborative and transparent cost management system. - They rely on Defined Cost and Schedule of Cost Components rather than provisional or prime cost sums. - If work is uncertain, it’s usually handled through compensation events or risk allowances, not PC sums. 2. JCT Approach - JCT contracts often include Prime Cost Sums and Provisional Sums for items where the exact cost or scope is unknown at tender stage. - These sums allow flexibility for later selection of suppliers or materials. 3. Why NEC avoids PC sums - NEC aims to reduce ambiguity and disputes by avoiding lump sums for undefined work. - Instead, NEC encourages early warning and agreement on changes through its change management process. - Unlike JCT, NEC does not include a specific clause for provisional sums. - NEC aims to avoid ambiguity by requiring work to be clearly defined at the outset or managed through its change control process.

Answer 88

If work cannot be fully defined at tender stage, NEC uses: - Compensation Events: When scope changes or new work is instructed, the cost and time impact are assessed and agreed. - Risk Allowances: Contractors can include allowances for risks in their pricing, which are managed collaboratively. - Options for Pricing: NEC allows activity schedules, bills of quantities, or target cost arrangements to handle uncertainty.

Answer 89

JCT 2024 modernises the suite to reflect: 1. Digitalisation (emails, e-signatures) 2. Collaboration and sustainability 3. Building Safety Act compliance 4. Clearer risk allocation and liability caps 5. New relevant events for pandemic and statutory changes 6. 2024: Adopted gender-neutral language throughout Collaborative Working: - 2016: Collaborative working was an optional supplemental provision. - 2024: Now a mandatory article (Article 3) requiring parties to act co-operatively, in good faith, and in a spirit of trust and respect. This aligns with the Construction Playbook’s emphasis on collaboration. Sustainability & Environmental Considerations: - 2016: Sustainability was an optional supplemental provision. - 2024: Incorporated into the main contract (Clause 2.1.5), encouraging contractors to propose cost-effective environmental improvements to reduce environmental impact. Building Safety Act Compliance: - 2016: No reference to new building safety regime. - 2024: Integrates dutyholder requirements for higher-risk residential buildings and clearer language around statutory compliance following the Building Safety Act 2022.

Contract Administration Flashcards

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