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EM Contract Admin > 09 Claims > Flashcards

09 Claims Flashcards

1
Q

What is an extension of time?

A

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2
Q

Do all delays give rise to an extension of time?

A

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3
Q

As CA, what is the process in assessing if a contractor is due an extension of time?

A

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4
Q

What are relevant events?

A

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5
Q

List some typical relevant events.

A
  1. Variations
  2. Failure to provide information
  3. Discrepancies in the contract documents
  4. Delay in giving the contractor possession of the site
  5. Exceptionally adverse weather
  6. Force majeure (events beyond the reasonable control of a party, such as a war or epidemic)
  7. Loss from a Specified Peril as listed in the contract (e.g. flood, earthquake etc.)
  8. Civil commotion or terrorism
  9. Opening up works (unless the inspection shows that the works are not in accordance with the contract)
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6
Q

How would you establish what constitutes exceptionally adverse weather?

A

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7
Q

Do relevant events incur cost?

A

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8
Q

What is loss and expense?

A

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9
Q

How would you go about assessing a claim for loss and expense?

A

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10
Q

What are relevant matters?

A

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11
Q

What is the difference between a relevant event and a relevant matter?

A

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12
Q

List some typical relevant matters.

A
  1. Variations
  2. Delay in giving the contractor possession of the site
  3. Opening up works (unless the inspection shows that the works are not in accordance with the contract)
  4. Discrepancies in the contract documents
  5. Any impediment of the Contractor caused by the Employer, CA or QS, whether by an act or omission, except to the extent caused or contributed by any default
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13
Q

Who is responsible for establishing claims for extensions of time and loss and expense?

A

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14
Q

How would you go about establishing how long an extension of time to grant a contractor?

A

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15
Q

How are extensions of time and loss and expense dealt with under NEC forms of contract?

A

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16
Q

Would you expect to see a claim for loss and expense from the contractor at the end of an NEC contract and why?

A

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17
Q

Can you use BQ rates to calculate a claim for loss and expense?

A

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18
Q

When would you use Hudson?s or Emden’s formula in calculating a claim?

A

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19
Q

If you were assessing a claim for loss and expense, what would be the impact of concurrent events?

A

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20
Q

If a contractor came to you with a claim for loss and expense, would you automatically review it or would you talk to anyone first?

A

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21
Q

On a project where there is a valid claim for loss and expense, but where you have not agreed a final figure with the contractor, how would you deal with including monies in an interim valuation?

A

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22
Q

A contractor has received an instruction for the expenditure of a defined provisional sum. The contractor has applied for a consequential extension of time. What would your response be and why?

A

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23
Q

Would you include a loss and expense claim on a valuation if you knew an extension of time was due to be issued?

A

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24
Q

In an interim valuation, would you hold retention on payment for loss and expense?

A

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25
Q

What is a compensation event and how does it work?

A
  • Compensation events are a single assessment that deals with the entire effect on an event on time and money within an NEC contract
  • Tend to be those events that impact on the completion date or contract value but are not the contractor’s fault (e.g. events caused by the client or neutral events such as exceptionally adverse weather)
26
Q

Name some typical compensation events.

A

The contract limits compensation events to those, and only those, identified in the contract (set out in clause 60.1) and are typically:

  1. Instruction to change the service (unless this results from a defect or from a change requested by the contractor)
  2. Failure to provide access
  3. Failure of the client to provide equipment, plant or materials
  4. An instruction to halt or delay the works
  5. Work done by others
  6. Conditions that could not reasonably have been foreseen
  7. Exceptionally adverse weather (beyond one in ten year frequency)
  8. Force majeure (e.g. an epidemic or an ‘act of God’)
27
Q

What are the timescales associated with compensation events?

A
  1. 8 weeks - contractor must notify the PM within 8 weeks of becoming aware of a compensation event (unless the PM should have given notification)
  2. 1 week - PM has 1 week to agree whether he considers it to be a compensation event
  3. 3 weeks - Contractor has 3 weeks from the PM’s notification of a compensation event to provide a quotation (including any delays)
  4. 2 weeks - PM has 2 weeks to reply to the quotation either accepting, rejecting, notifying he will be making his own assessment or instructing to submit a revised quotation
28
Q

What are the implications if the contractor does not submit notification of a compensation event within the timeframe stated in the contract?

A

No change to the Prices, Completion Date or Key Date would be allowed

29
Q

What are the implications if the PM does not respond to the contractor’s notification of a compensation event within the timeframe stated in the contract?

A

The Contractor can notify the PM of his failure, to which he then has to respond within 2 weeks of this notification otherwise the event is deemed a compensation event

30
Q

What are the implications if the PM does not respond to the contractor’s quotation of a compensation event within the timeframe stated in the contract?

A

The Contractor can notify the PM of his failure, to which he then has to respond within 2 weeks of this notification otherwise the quotation is deemed as accepted

31
Q

How long has the contractor got to submit a revised quotation for a compensation event if the PM has requested it?

A

3 weeks

32
Q

How do the timeframes associated with compensation events differ under the NEC EC Short Contract?

A
  • The 3 weeks for a contractor to provide a quotation is only 2 weeks in NEC Short Contract
  • There is also no allowance for the Contractor to notify the Employer (not PM under Short Contract) of his failure to respond to notifications under NEC Short Contract
33
Q

What happens if the value of a compensation event cannot be agreed prior to the work being carried out?

A

PM can make their own assessment and works must then be implemented

34
Q

What is an early warning notice and what is its purpose?

A
  • An early warning notice is a notice that either party can issue which gives early warning of anything that may delay the works or increase the cost
  • The notice must be issued as soon as either party becomes aware of such circumstances and an early warning meeting should be held to discuss how to avoid/mitigate the impact to the project
35
Q

What are the ramifications if the contractor fails to issue a warning that subsequently leads to a compensation event?

A

If the Contractor fails to give early warning within 8 weeks of becoming aware of the event, they will not be entitled to a change of Price, Completion Date or Key Date, unless the PM should have notified the event to the Contractor but did not

36
Q

How is the assessment made as to whether a contractor should have given an early warning notice?

A

Judgment of whether the Contractor should have been aware of the event is likely to come down to whether and when it would have been reasonable to expect an experienced Contractor to be aware of the event

37
Q

Describe the procedure, including the forms and timescales used, of the early warning notice / compensation event mechanism.

A
  1. Early Warning Notice - issued by either PM or Contractor within 8 weeks of becoming aware
  2. Notice of Compensation Event - issued by Contractor within 8 weeks of becoming aware
  3. Response to Notice of Compensation Event - issued by PM within 1 week of Contractor’s notice
  4. Compensation Event Quotation - issued by Contractor within 3 weeks of PM’s response (2 weeks under ECSC)
  5. Compensation Event Quotation Response - issued by PM within 2 weeks of Contractor’s quotation
38
Q

What is a global claim?

A

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39
Q

What is the main problem with global claims?

A

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40
Q

How would you deal with global claim?

A

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41
Q

What is meant by the term ‘acceleration’?

A

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42
Q

What is the process for agreeing acceleration on a project?

A

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43
Q

How might a contractor calculate the cost of acceleration?

A

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44
Q

How would you undertake a valuation where the contractor has extension of time but needs to accelerate?

A

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45
Q

How would you deal with fluctuations or inflation in a claim?

A

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46
Q

What notice must the contractor give in respect of delays in a contract with which you are familiar?

A

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47
Q

On a project using the NEC form of contract, the client wants to instruct some additional works. The contractor believes this will affect the completion date. How does the contractor go about claiming an extension?

A

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48
Q

A contract is in delay and the CA believes the contractor is entitled to an extension of time. However, the employer must have the project finished on time. What advice would you give the employer?

A

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49
Q

On a project using a JCT contract, the contractor has experienced two days of exceptionally adverse weather, but he does not think at that time that it will affect the completion date. What does the contract require him to do?

A

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50
Q

A contractor claims a two-week EoT due to adverse weather and a one-week EoT at the same time due to late information. Both claims are justified. What is the likely EoT he will be granted and will he be entitled to loss and expense?

A

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51
Q

Under the JCT Standard Form, a contractor has been granted an EoT and is entitled to claim any associated LaE. The contractor submits his claim to you and asks you to assess it for inclusion in the next valuation. What would you do?

A

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52
Q

The contractor on your project has made a large and, in your opinion, unrealistic claim for loss and expense. How would you deal with this in a cost report?

A

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53
Q

What happens if the contractor has not finished the works by the contract completion date if no extensions of time have been granted?

A

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EM Contract Admin (21 decks)

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