14 - Contract Administration Flashcards
Why do you have predominate experience ewijt JCT MW ?
As I deal with similar sized projects, however I do have knowledge of the other forms of contract such as intermediate and standard building contract.
What other suites of contracts are available ?
NEC - NEC was first published in 1993 as the New Engineering Contract. It is a suite of construction contracts intended to promote partnering and collaboration between the contractor and client. It was developed as a reaction to other more traditional forms of construction contract which have been portrayed by some as adversarial.
FIDIC - International Federation of Consulting Engineers - FIDIC stands for ‘Fédération Internationale des Ingénieurs - Conseils’, which is best translated from French as The International Federation of Consulting Engineers.
What are the difference between jct and nec ?
JCT is adversial where as NEC is collaborative
NEC uses the contract programme as a contract document
Contract Administrator v Project manager
Relevant events / matter v compensation event (both time and money)
NEC does not allow for provisional sums
What is the role of a contract administer ?
A contract administrator manages contracts made between building contractors, employers, and clients. Their responsibility is to administer construction contracts, whereby they may act as project managers, engineers, consultants and client representative
You mention the RICS Guidance note son contract administration, can you expand on its contents please ?
Its now been withdrawn however it contains the Roles and responsibilities
appointment of the contract administrator
site inspections
meetings
You mention the RICS Guidance note on retention, can you expand on its contents please ?
Reasons for inclusions
General principals of release of retention
Alternatives - Bonds etc
Contract specific clauses
You mention the JCT practice note deciding on the appropriate jct contract, can you expand on its contents please ?
This is a document detailing the difference between the contracts. This document also includes a flow chart to help guide the decision.
What is a employers agent ?
The contract administer on a design and build contract
What does practical completion trigger ?
Practical Completion is a contractual term used in the Building Contract to signify the date on which a project is handed over to the client. The date triggers a number of contractual mechanisms including, releasing half of the retention, ending the contractor liability for liquidated damages, starting the rectification period.
What are the contents of the contract documents ?
Drawings, schedule of work, preliminaries, pre ambles, construction programme, the contracts, photo report, asbestos information etc
What is required for a contract under hand ?
Signed by director and a the company secretary, liability for 6 years.
What is required for a contract under deed ?
Signed by two directors and attached the common seal of company
At Kenton lodge can you discuss me through the payment timeline in relation to this amendment ?
The contractor agreed with my conclusion and amended the valuation and re issued the same day. My payment certificate was then compiled and issued in due course, in line wit the 5 days for intermin JCT MW payments from the due date.
What is the final account ? What are the timelines attached to this ?
The final account is the conclusion of the contract sum (including all necessary adjustments) and signifies the agreed amount that the employer will pay the contractor. It includes any works that are paid to the contractor through the main contract. The timeline is as follows :
Contractor submit valuation up to 28 days before the due date
CA assesses and issue Payment certificate within 5 days of due date
Employer can issue a pay less notice up to 5 days before final date for payment
Final date for payment is 14 days from due date
What is partial completion ? What contract did you run this under ?
The client may wish to take possession of part of a building or site, even if works are ongoing. This can be programmed within the original contract documents it the need can be foreseen through a requirement for sectional completion which is not allowed under JCT MW, but in the absence of such a provision many contracts offer the more open-ended option of partial possession.
The effect of partial possession is that:
Any part for which partial possession is given is deemed to have achieved practical completion.
Half of the retention for that part must be released.
The defects liability period begins for that part.
Liquidated damages reduce proportionally.
The client is responsible for that part and should insure it.
The contractor is not obliged to allow partial possession (although permission cannot be unreasonably withheld), and may not wish to if, for example, access routes are difficult to achieve, it would disrupt the works, or it would incur additional costs. There could also be additional difficulties if the occupants of the part that has been possessed disrupt the contractor, which could result in a claim for extension of time and/or loss and expense.
What stage of riba is the building regs ?
Stage 4 - Technical Design
What affect did COVID have on your jct contract ?
Potential delay - consideration of if relevant event or relevant matter
How would you review and extension of time ?
Assess the contractors claim - should be notified whenreasonbale apparent
Consider was this a relevant event
Assess the claim
Formally confirm the outcome
How would you formal define at extension of time ?
Via a formal letter to contractor and employer
What were your insurance revisions under the jct contract ? Joint names ?
JCT MW
- 4A (Work insurance by Contractor in joint names) - New dwelling
- 4B (Works and existing structures insurance by employer in joint names)
- 4 C (Works and existing structure insured by other means)
What would you look at when assessing contractors and sub consultants ?
Credit rating Reference Size Experience Availability Willingness H&S
Partial completion under jct mw ?
Not within the contract but an adhoc agreement can be made
What might you do as a contract administrator prior to the contract being signed ?
The role of contract administrator does not technically commence until a building contract is in place between the employer and the contractor; however, in practice the responsibilities of the CA will have commenced before the building contract exists. However, the contract administrator would normally draft the contract prior to a pre start meeting.
What are payment timescales under jct mw?
Interim
Interim Valuation date is 7 days before the due date. contractor can submit valuation application for payment prior to this.
CA has 5 days from due date to create payment certificate
Final date for payment is 14 days from due date
Employer has up to 5 days before due date to issue a pay less notice
Final
Contractor has 28 before due date to submit valuation
CA as 5 days from due date to create payment certificate
Final date for payment is 14 days from due date
Employer has up to 5 days before due date to issue a pay less notice
What happens if your contractor does not get paid. ?
The contractor has the ability to terminate the contract, however I would ensure to consider negotiations in the interim.
What are the differences newwten minor works and intermediate cjct contract ?
JCT Intermediate allows for
Named sub contractors
Sectional completion
• Have you ever used any other types of contract ?
NO BUT IM AWARE OF THE OTHER OCNTARCT UNDER jcT SUCH AS THE INTERMEDIATE CONTRACT WITH AHSD PROVISIONAL FOR SECTIONAL COMPLETION, ALSO AWARE OF THE NEC SUIT OF CONTRACT BUT HAVE NOT USED BEFORE, AIMEDED more and civil construction works.
What are the tother types of JCT Contracts ?
MW / with CD
Standard BC / with CD
Intermediate BC / with CD
Design and Build
Why did you choose a jct minor works contract ?
Works simple in nature
No requirement for sectional completion
No requirement for sub contractors design
What are the other suites of contracts available ?
NEC
FIDIC
What are the CA duties ?
A contract administrator manages contracts made between building contractors, employers, and clients. Their responsibility is to administer construction contracts, whereby they may act as project managers, engineers, consultants and client representatives.
What cerst can you issue under JCT MW contract ?
Contract variation, payment cert, cert of making good defects, cert of practical completion, non completion
What option do you have regarding a fixed completion date ?
Acceleration- see RICS guidance note
What happens if a tendering contractor included an obvious error ? What are the options ? Where would find this information ?
Alternative 1 = Details provided and the contractor has the choice to confirm or withdraw submission with no amendments
Alternative 2 - Details provided and opportunity to confirm or amend to correct the error.
Source - JCT Practice note - Tendering
Tell me about your tender analysis process and the recommendations you made to your client.
I reviewed the tender and created a spreadsheet to compare oall of the tender prices per item to highlight any provisional sums, high or low prices in comparison to tother submissions. I advised the client of the best price and consideration regarding start date, previous experience and highlighted prudent information.
What process did you follow when opening the tenders?
They were all opened in the presence of a colleague after the tender deadline.
When can a JCT MW contract eb terminated ?
Default by contractor
Default by employer
Insolvency
What are the types of procurement ?
General contracting;
Design and build;
Construction management; and.
Management contracting.
What are the types of tendering ?
Open Tendering. Selective Tendering. Serial Tendering. Framework Tendering. Single-stage and Two-stage Tendering. Public Procurement.
How would you calculate a contingency ?
I would refer to the number of provisional or unknown sums and any investigates items and calculate a suitable percentage to be added. This would not be visible to the contractor but between the CA and employer.
What insurance would you seek from a contractor prior to construction ?
All risks
PI
Public Liability
What is all risk insurance ?
“All risks” refers to a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit. For example, if an “all risk” homeowner’s policy does not expressly exclude flood coverage, then the house will be covered in the event of flood damage.
What if it is refused (ETO)
Time at large
What is time at large
An example includes when EOT has been declined by the client the completion date in not defined at ‘Time is at large’
What are the procurement options available ?
Traditional contract 86% Single-stage design and build 41% Two-stage design and build 39% Management contract 18% PFI 10%
What are the JCT MW insurance options ?
- 4A - Works insurance by Contractor in Joint names - Intended new building with no existing structure - contractor would take out all risk insurance
- 4B - Works and existing structure insurance by Employer in Joint names - Works to existing buildings - The existing structure together with its contents are insured in joint names against specified perils. Employer amend current insurance to cover the contractor
- 4C - Works and existing structure insurance by other means - Employer keeps there insurance and the contractors take out insurance for the works and damage to the structure
What are traditional procurement ?
Traditional procurement remains the most commonly-used method of procuring building works. It comprises a tripartite arrangement involving a client, consultants and contractor.
The traditional procurement route involves separating design from construction. The client first appoints consultants to design the project in detail and to ensure cost control and inspect the construction works as they proceed. Contractors are then invited to submit tenders for the construction of the project on a single-stage competitive basis.
What is design and build procurement ?
Design and build is a term describing a procurement route in which the main contractor is appointed to design and construct the works, as opposed to a traditional contract, where the client appoints consultants to design the development and then a contractor is appointed to construct the works.
The contractor is responsible for the design, planning, organisation, control and construction of the works to the employer’s requirements. The employer gives the tenderers the ‘Employer’s Requirements’ and the contractors respond with the ‘Contractor’s Proposals’, which include the price for the works.
Design and build can be seen as giving a single point of responsibility for delivering the entire project. Some clients, however, consider it is only appropriate for simple projects, where design quality is not the main consideration.
Who calculated the figure for liquidated damages ?
The client may wish to take possession of part of a building or site, even if works are ongoing. This can be programmed within the original contract documents it the need can be foreseen through a requirement for sectional completion which is not allowed
What is an insurance backed guarantee ?
An Insurance Backed Guarantee (IBG) is a guarantee given by a contractor to provide peace of mind in case the contractor has ceased trading. Contractors can offer guarantees for up to 25 years, but if the contractor was to close down then their guarantee would be worthless, hence the requirement for it to be backed by a third party insurer.
What is required to form a contract ?
Offer
Acceptance
Consideration
Intension to have Legal relations
What is a relevant matter ?
Relevant matters in construction contracts
Relevant matters are referred to in some construction contracts, such as JCT contracts. A relevant matter is a matter for which the client is responsible that materially affects the progress of the works. This may enable the contractor to claim direct loss and / or expense that has been incurred. Relevant matters might include:
Failure to give the contractor possession of the site.
Failure to give the contractor access to and from the site.
Delays in receiving instructions.
Opening up works or testing works that then prove to have been carried out in accordance with the contract.
Discrepancies in the contract documents.
Disruption caused by works being carried out by the client.
Failure by the client to supply goods or materials.
Instructions relating to variations and expenditure of provisional sums.
Inaccurate forecasting of works described by approximate quantities.
Issues relating to CDM.
Relevant matters should not be confused with relevant events. A relevant event is an event that causes a delay to the completion date, which is caused by the client, or is a neutral event not caused by either party. Relevant events entitle the contractor to claim an extension of time; that is for the completion date to be moved. A relevant event does not necessarily entitle the contractor to claim loss and expense. Similarly, a relevant matter need not necessarily result in a delay to the completion date, and so may not always entitle the contractor to an extension of time.
NEC contracts deal with these issues under the single heading ‘compensation events’. They do not treat compensation events as an allocation of blame, but rather an allocation of risk. Any risk that is not specifically identified as being attributed to the client is borne by the contractor.
The Society of Construction Law Delay and Disruption Protocol, 2nd edition, refers to an event or cause of delay or disruption which under the contract is at the risk and responsibility of the employer, as an ‘employer risk event’.
What is a relevant event ?
Delays on a project will have different contractual consequences depending on the cause of the delay:
Where a delay which impacts on the completion date is caused by the contractor (culpable delay), the contractor will be liable to pay liquidated and ascertained damages (LADs) to the client.
Where a delay which impacts the completion date is not caused by the contractor, it may be a ‘relevant event’, for which the contractor may be entitled to an extension of time and to claim loss and expense incurred as a direct result of the delay.
A relevant event may be caused by the client, or may be a neutral event such as exceptionally adverse weather. The contract should set out what constitutes a relevant event.
Relevant events may include:
Variations.
Exceptionally adverse weather.
Civil commotion or terrorism.
Failure to provide information
Delay on the part of a nominated sub-contractor.
Statutory undertaker’s work.
Delay in giving the contractor possession of the site.
Force majeure (events that are beyond the reasonable control of a party, such as a war or an epidemic).
Loss from a specified peril such as flood.
The supply of materials and goods by the client.
National strikes.
Changes in statutory requirements.
Delays in receiving permissions that the contractor has taken reasonable steps to avoid.
When it becomes reasonably apparent that there is a delay, or that there is likely to be a delay that could merit an extension of time, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was caused by a relevant event, then they may grant an extension of time and the completion date is adjusted.
Claims for extension of time can run alongside claims for loss and expense however, one need not necessarily lead to the other. The contractor is required to prevent or mitigate the delay and any resulting loss, even where the fault is not their own.
Mechanisms allowing extensions of time are not simply for the contractor’s benefit. If there was no such mechanism and a delay occurred which was not the contractor’s fault, then the contractor would no longer be required to complete the works by the completion date and would only then have to complete the works in a ‘reasonable’ time. The client would lose any right to liquidated damages.
NB: On NEC contracts, delays are dealt with slightly differently and are referred to as ‘compensation events’.
What item would normally be included in contractors design ?
Mechanical and Electrical
If the liquidated damages section is left blank what does this mean ?
They have not been agreed but can be claimed for in court.
Is there any provision in the contract for the inclusion of any negotiations ?
Yes, within the JCT MW contract both the client and the contractor have a represented nomination with regards to negotiation of disputes
Can you give me an example of items contained within a snagging list / rectification period ?
Broken tiles on the roof. Patchy paintwork, anywhere in or on the property. Insufficient loft insulation. Incomplete grouting in the bathroom. Poorly fitted skirting boards. No acid wash on outside brickwork.
Does the contractor have a right to access during the rectification period
Yes but should be pre agreed access etc
What is subcontractor design ?
when a sub contractor carries out take the liability for art of the design, normally a specialist items.
Why did you allow a 12 month rectification period?
To allow for full seasonal changes.
How was the principal contractor appointed? Under CDM.
A principal contractor must be appointed in writing by the client where a project involves more than one contractor.
What else could you use apart from BCIS for cost estimates?
Previous tender submission relative to the work
Did you undertake any pre-qual checks on the contractors?
PQQ, insurance, references, credit checks
Did all contractors provide a 17 week programme?
No, one was 15, one 22. However, price was the driving factor.
