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APC Project Management > 21 - Contract Administration > Flashcards

21 - Contract Administration Flashcards

1
Q

What are the timescales involed with an extension of time request on a standard JCT contract?

A

Contractor to issue EoT request when it reasonably apparent that works/section of works is likely to be delayed.

CA has 12-weeks from notification to decide on EoT.
If less that 12-weeks until PC, they should endeavour to decide beforehand

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2
Q

Does an instruction need to have an agreed value contained within it?

A

No

But the instruction must be clear what is, and is not included, and may propose method of valuation.

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3
Q

The contractor fails to complete the project by the completion date, what measures do the CA/EA take, and what are the consequences of this?

A

If contractors fault - Claim LD’s (often calculated on a daily or weekly rate)

Some contracts may require certificate of non-completion to be issued as a prequisite before claiming (LADs)

Some contracts allow for termination on breach of contract but continuation is best for both parties on a construction project i.e. delay looking for another contractor inconvenient, and difficult!

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4
Q

The CA/EA fails to issue a non-completion certificate on an over running project, what are the consequences of this?

A

If the contract stipulates that a certificate of non-completion is required as a prequisite to claiming LAD’s, the contractor may claim that procedures and notice periods set out in the contract have not been followed.

May not be entitled to then claim LADs

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5
Q

What is your understanding of a bespoke contract?

A

Contracts specially drafted to suit the specific requirements of a particular project

Commonly used for very simple supply agreements, where standard forms may be considered unnecessarily complex and inflexible.

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6
Q

What do you understand as the difference between a bespoke contract and a standard form contract?

A

Standard form of contract use standardised, non-negotiated provisions. Bespoke contracts are specially drafted to suit needs of specific projects.

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7
Q

What are your views on the advantages/disadvantages of a bespoke contract?

A

Advantage:
* Suited to the particular needs of a specific project

Disadvantage:
* Time and cost consuming to produce
* Time and cost consuming to resolve disputes
* Can result in ambiguity
* Less familiarity
* May not be equal in fairness to both parties
* Not supported by case law

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8
Q

What are your views on the advantages/disadvatnages of using a standard form of contract?

A

Advantages:
* familiarity. consistency.
* less time consuming
* Eliminate need to negotiate provisions
* reduced cost of custom contract

Disadvantages:
* May not be appropriate or specific to the project
* Legal jargon
*

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9
Q

Can you name 3 standard forms of contracts that can be used on a construction project?

A
  • JCT standard form of contract
  • NEC
  • FIDIC
  • ICE
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10
Q

What key function does a contract administrator perform on a construction project?

A

Appointed by the client, responsible for administering the terms of the contract

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11
Q

What guidance is there on contract administration?

A

RICS Guidance Note for contract administration - withdrawn (out of date)

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12
Q

What are the duties of a CA under JCT contracts?

A

Manage the contract and its terms

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13
Q

What is the final account?

A

The mechanism for calculating and agreeing/ settling the amount for final payment on completion of the work

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14
Q

What are the advantages of the JCT form of contract?

A
  • Standardisation & familiarity
  • Saves time
  • minimises transaction costs
  • allocates risk in a fair way
  • comprehensive
  • have provisions relating to dispute resolution
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15
Q

What are the qualities of the NEC form of contract?

A
  • Empthasis on collaboration between client and contractor
  • Written in plain and clear English - easy to understand and interpret
  • Focus on pro-active risk management
  • Flexible for whatever procurement route the client wants to take
  • Tries to minimise dispute
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16
Q

What changes were made to the last NEC form of contract?

A
  • Minor corrections to wording
  • Includes option to include clause regarding climate change requirements
  • clause included for using suppliers design
  • dispute resolution: amendment to clarify that adjudication timelines are in line with adjudicator
17
Q

When were changes last made to the NEC form of contract?

A

January 2023 (NEC4)

18
Q

When were changes last made to the NEC form of contract?

A

January 2023 (NEC4)

19
Q

What is the difference between relevent event, and relevent matter

A

Relevent event:- an event that causes a delay to the completion date, which is caused on or off site. Relevant events entitle the contractor to claim an extension of time (Event=EOT)

Relevent matter:-a matter for which the client is responsible that materially effects the progress of the works. This enables the contractor to claim direct loss and / or expense that has been incurred. (Matter=Money)

20
Q

Name 2 of the changes to the 2016 minor works contract?

A

Oral instructions - Instructions need to be in writing and where given orally confirmed in writing before taking effect.

New definition for interim valuation. 1st interim valuation date is not more than one month after the works commencement date, and at intervals of not more than one month

21
Q

If a non-completion certificate is not issued, what is the contractual effect?

A

May not be entitled to claim LADS dependant on contract.

22
Q

Do the duties of the CA under JCT contract include design?

A

No

23
Q

When authorising payment for goods or materials stored off site, what must you obtain to protect your client in the event of the contractor going bankrupt?

A

A vesting certificate certifying ownership of the goods, plant or materials on payment

24
Q

If you are concerned that a contractor is in financial difficulties, name 3 things as a CA you should do

A

Ensure that payment notices and pay less notices are served correctly and pay only what the contractor is entitled to under the contract

Start keeping clear records about the status of the works on the site and gather programme information so you have a better understanding of any issues with the works to help with any counterclaims or deductions

Check the contract terms, including any performance security which may respond to insolvency such as bonds and parent company guarantees

Check the status of any materials which have been paid for but which are not yet on-site

25
Q

What is all risks insurance?

A

Refers to a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit.

26
Q

What is the final account?

A

Conclusion of the contract sum, including all necessary adjustments.

Signifies agreed amount that the employer will pay the contractor

27
Q

What must the final account state

A

The amount of the final payment i

28
Q

When is it appropriate to pay for materials that are off-site?

A

For example, where the client wishes to ‘reserve’ key items in order to protect the programme i.e. where long-lead in times.

29
Q

Talk me through how you’ve been paid, or procedure you’ve followed for making payment in a contract?

A
  • Received contractor valuation submission (on the agreed date)
  • Review based on progress, and negotiate to agree payment value
  • On agreement, I issue and sign the payment cert - stating task order value, varied task order value, works to date, paid to date, agreed payment, and payment terms, and issue to contractor.
30
Q

Ibis House - talk me through how you issue a certificate of making good?

A

When satisfied that all the items on the schedule of defects were made good, I issued the certificate of making good defects

Including:
date of final inspection
date defects rectified
expressing contractor will have no further responsibility

Issue to client and contractor

31
Q

What insurance provisions are in the JCT and NEC standard forms of contract?

A

JCT main options for insuring works:
Option A: The contractor takes out and maintains joint names all risks insurance of the works for new buildings
Option B: The employer takes out and maintains the joint names all risks insurance of the works for new building
Option C: The only option referring to renovations and involving structures existing. This is where the employer takes out and maintains a joint names all risks insurance of the works and the policy also insures the existing structure and contents against specified perils.

32
Q

Who prepares the final account in the JCT form of contract

A

the intention is in that the contractor prepares final accounts for the employer to review.

The Architect/CA should issue the final account certificate

33
Q

What are the usual constituents of a final account?

A
  • Summary
  • measured work
  • variations
  • adjusted provisional sums
  • claims
  • fluctuations
  • total of previous payments made to the contractor
  • any delay damages
  • retention
  • fees
  • OH&P
  • original contract sum
  • final account sum
  • amount left to settle FA
34
Q

Who prepares the final account in the NEC4 form of contract?

A

the intention is in that the contractor prepares final accounts for the employer to review.

The Architect/CA should issue the final account certificate

35
Q

What additions may there be in a final account?

A
  • Variations
  • Fluctuations
  • Provisional sums
  • Statutory fees
  • Loss and expense
  • LADS
  • Retention release
36
Q

What is the purpose of the final account?

A

Determining final payment on completion of works
Marks the formal end of the financial relationship between the employer and the contractor

37
Q

What are the 4 elements of a valid contract?

A
  • Offer
  • Acceptance
  • Intent to create legal relations
  • Consideration
38
Q

What is common law?

A

Combines the passing of legislation but also the creation of precedents through case law

A body of unwritten laws based on legal precedents established by the courts

APC Project Management (23 decks)

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