T7. CONTRACT ADMINISTRATION

Question 1

What is triggered by the issue of Practical Completion?

Answer 1

• Client taking possession
• Start of the final account process
• Partial release of retention
• Commencement of defects liability period
• Cessation of further liability for delay damages
• Risk of loss or damage to the works passes to the client, terminating further requirement for the contractor to insure/secure works.

Question 2

What is the ‘de minimis’ principle?

Answer 2

Relates to very minor items which would not affect the client taking possession of the works.

Question 3

What is the role of a Contract Administrator on JCT ICD?

Answer 3

• Administers the contract on behalf of the Employer, including issuing instructions, certifying payments, and assessing claims.

Question 4

What is the role of a Employers Agent on JCT D&B?

Answer 4

• Acts on behalf of the Employer, performing contract administration, issuing instructions, certifying payments, and making contractual decisions.

Question 5

What is the role of a Project Manager on NEC forms?

Answer 5

• Administers the NEC contract, assessing payments, managing change, and ensuring compliance with contract terms.

Question 6

What is the name of the CA on FIDIC contracts?

Answer 6

• The Engineer

Question 7

What are the payment provisions on JCT D&B forms?

Answer 7

Payments follow the 14-day cycle:
* Contractor submits interim AFP before Due Date (valued up to Due Date).
* EA issues Interim Payment Notice within 5 days after Due Date.
* Final Date for Payment is 14 days after Due Date (subject to agreement).
* Pay Less Notice 5 days before the Final Date for Payment.

Question 8

What are the payment provisions on JCT ICD forms?

Answer 8

Payments follow the 21-day cycle:
* Contractor submits an interim AFP ≥7 days before Due Date.
* CA issues Interim Certificate within 5 days after Due Date.
* Final Date for Payment is 14 days after Due Date (subject to agreement).
* Pay Less Notice 5 days before the Final Date for Payment.

Question 9

Under a JCT ICD & D&B, what happens if the contractor does not submit an application?

Answer 9

The contract is silent, but:
* The CA/EA should instruct the QS to prepare a valuation to avoid the AFP later becoming a Payment Notice.
* The EA is obligated to issue a Payment Notice.

Question 10

Under NEC Payment Provisions, what happens if the Contractor does not submit a programme?

Answer 10

• If no programme is identified in the Contract Data, 25% of the PWDD is retained until a programme is submitted and accepted.

Question 10

What are the payment provisions on NEC forms?

Answer 10

Payments follow the 21-day cycle:
* Contractor submits an application before each assessment date.
* PM certifies payment within 1 week of the assessment date (Due Date).
* Final Date for Payment is 21 days after the assessment date (subject to agreement).
* Pay Less Notice 7 days before the Final Date for Payment.

Question 11

Under NEC Payment Provisions, what happens if the Contractor does not submit an application?

Answer 11

The PM assesses the amount due, which is the lesser of:
* The amount the PM assesses as due at the assessment date.
* The amount due at the previous assessment date.

Question 12

How does the Construction Act affect construction contracts?

Answer 12

• Defines construction contracts.
• Provides a framework for payment and dispute resolution.
• Establishes adjudication as a mandatory dispute resolution mechanism.

Question 13

How does the Scheme for Construction Contracts affect construction contracts?

Answer 13

• Provides fallback provisions where contracts do not comply with the Construction Act, particularly for payment and adjudication.

Question 14

What are the payment provisions under the Scheme for Construction Contracts?

Answer 14

Payments follow a 24-day cycle:
* Works are valued up to the End of the Relevant Period.
* The Due Date is 7 days thereafter.
* Interim Certificate issued within 5 days after Due Date.
* Final Date for Payment is 17 days after Due Date.
* Pay Less Notice 7 days before the Final Date for Payment.

Question 15

On Project MaxFax Refurbishment, what did you do to prepare for the valuation process before works commenced?

Answer 15

On Project MaxFax I assumed a dual CA/QS role.
* Reviewed contract provisions and amendments to understand project-specific requirements.
* Agreed on the application for payment format with the contractor.
* Prepared a schedule of payment dates with project stakeholders.

Question 16

On Project MaxFax Refurbishment, what process did you follow to undertake the valuations?

Answer 16

1. Reviewed the contractor’s interim AFP and conducted a desk check.
2. Arranged a site inspection and met with the contractor’s QS.
3. Assessed completed works and materials on site, taking notes and photographs.
4. Determined sums to be included in the gross valuation.
5. Adjusted for retention and previous payments to calculate the net valuation.
6. Issued my assessment with reasons for adjustments.
7. Obtained written agreement from the contractor’s QS.
8. Performed a final arithmetic check.
9. Drafted and issued the Payment Certificate.

Question 17

On Project MaxFax Refurbishment, how did you ensure the correct amount of retention was withheld?

Answer 17

• I checked the executed contract to ensure the correct percentage of the gross valuation was retained.

Question 18

How did you issue a certificate of non-completion on Project Autoclave?

Answer 18

• The contractor failed to achieve completion by the Completion Date.
• I informed both the Employer and Contractor of my intent to issue a Non-Completion Certificate.
• I advised that the certificate would be automatically cancelled if the completion date was revised.
• If Practical Completion was not achieved by the revised date, a further certificate would be required.

Question 19

What are the implications of issuing a certificate of non-completion?

Answer 19

• It is a condition precedent for deducting liquidated damages (LDs).

Question 20

On Project Autoclave, how did you assess the delay and establish the EOT as valid?

Answer 20

• Reviewed the contractor’s claim and relevant contract conditions, particularly Relevant Events.
• Identified the delay as a result of a variation, making it a valid claim.
• Assessed the delay using the original and impact programme.
• Reviewed the EOT award at project completion but found no need for further revision.

Question 21

How did you grant an extension of time on Project Autoclave?

Answer 21

• Reviewed the contractor’s claim and relevant contract conditions, particularly Relevant Events.
• Identified the delay as a result of a variation, making it a valid claim.
• Assessed the delay using the original and impact programme.
• Reviewed the EOT award at project completion but found no need for further revision.

Question 22

On Project Elective Hub, how did you ensure compliance with the NEC change control procedures?

Answer 22

• I ensured my assessments of Compensation Event Quotations (CEQs) were completed within the contract’s time constraints (2 weeks).

Question 23

What are the timeframes prescribed in the contract for assessing the CE’s?

Answer 23

1. Notification of CE – ASAP
2. PM decides if CE is valid – 1 week
3. Contractor submits quotation – 3 weeks
4. PM responds (accept/reject) – 2 weeks
5. Contractor submits revised quote (if required) – 3 weeks
6. CE is implemented – Upon PM’s acceptance

Question 24

What are the timeframes prescribed in the contract for assessing a Proposed Instruction?

Answer 24

1. PM issues a Proposed Instruction (PI) – No set timeframe 2. Contractor submits quotation – 3 weeks (unless agreed otherwise) 3. PM reviews quotation – 2 weeks 4. Confirms PI as an instruction, making it a CE, or 5. Cancels PI (no change occurs). 6. Instruction issued (if proceeding) – Immediately upon decision 6. CE process follows standard timeline – As per CE procedure

Question 25

On RHCH Elective Hub, you state you followed NEC compensation event procedures, was this your responsibility?

Answer 25

*Although it was the PM's contractual duty to comply with CE timeframes, it was my responsibility to assess the CEQ in accordance with relevant timeframes so that did not breach.

Question 26

On RHCH Elective Hub, how was the cost impact of the compensation event assessed?

Answer 26

63.1 - The change to the Prices is assessed as the effect of the compensation event upon: * the actual Defined Cost of the work done by the dividing date, * the forecast Defined Cost of the work not done by the dividing date and * the resulting Fee. The Project Manager and the Contractor may also agree rates or lump sums to assess the change to the Prices