All Flashcards
Why couldn’t you act for your neighbour?
As did not have the correct level of PII, I would not be providing my neighbour with high level of service, and would be putting both my neighbour and myself at risk.
What is a conflict of interest?
A conflict of interest is anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client. A conflict of interest can cast doubt on your integrity; it can also have a damaging effect on your firm and the profession as a whole.
what is NEBOSH and what is it purpose?
National Examination Board for Occupational Safety and Health.
Provides training and skill which are essential to help identity, manage and eliminate the risks within the workplace.
How do you prepare a RA?
I follow the HSE guidelines when preparing a Risk Assessment, which recommended the following steps;
1 Identify the hazards
2 Decide who might be harmed and how
3 Evaluate the risks and decide on precautions
4 Record your findings and implement them
5 Review your assessment and update if necessary.
What are the 5 methods of conflict avoidance?
1) Accommodating – agree with other party, not worth risking the relationship
2) Avoiding – stonewalling, pretend there is nothing wrong
3) Collaborating – coming together to find a solution
4) Compromising – Look for common ground, negotiate larger items, let go of smaller
5) Competing – see conflict in terms of winning and losing, argue my point
What is the difference between BREEAM and EPC?
BREEAM assessment evaluates the procurement, design, construction and operation of a development against a range of targets based on performance benchmarks.
It focuses on sustainable value across range of categories:
Energy Land use and ecology Water Health and wellbeing Pollution Transport Materials Waste Management
Each category focusses on the most influential factors, including reduced carbon emissions, low impact design, adaption to climate change, ecological value and biodiversity protection.
Developments are rated and certified on a scale of Unclassified (<30%), Pass (>30%), Good (>45%), Very Good (>55%), Excellent (>70%) and Outstanding (>85%).
An EPC contains:
information about a property’s energy use and typical energy costs
recommendations about how to reduce energy use and save money
An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.
Are there any other sorts of Certificates? (Display Energy Certificates for public buildings etc).
A Display Energy Certificate (DEC) is a measure of how much energy your building has consumed over the last 12 months and therefore reflects your building’s performance in operation. While the EPC and DEC documents look similar, they are in no way comparable and you should not expect a building’s DEC rating to match its EPC rating.
RIBA Work Stages – what are they 0-7?
Strategic definition’ is a stage referred to in the Royal Institute of British Architects (RIBA) for their 2013 Plan of Work. This plan comprises eight work stages, and introduces new terminology, and a new stage referencing system: 0 - Strategic definition. 1 - Preparation and brief. 2 - Concept design. 3 - Developed design. 4 - Technical design. 5 - Construction. 6 - Handover and close out. 7 - In use.
Define the role of PM
- Responsible for driving the successful completion of a project providing a link between the employer and the building contract, design team and other consultants.
- Usually appointed at Stage 0: Strategic Definition or Stage 1: Preparation and Brief and is involved in all further stages of the project to ensure that the project is delivered on time, within budget and to the desired quality.
Define the role of EA
The Employer’s Agent has a dual role acting impartially when making decisions regarding contract administration and also acts on behalf of the client whereas a Contract Administrator would have no link to the client, only the contract.
The term Employer’s Agent is only used in the JCT Design & Build contract, other JCT contracts refer to the Contract Administrator.
Define the role of the CA
The Contract Administrator is appointed by an employer to administer the contract between the employer and the contractor impartially.
Under the contract the CA will be responsible for issuing:
- Chairing meeting and inspecting the works
- Issuing Instructions
- Issuing Payment Certificates
- Determining claims from the contractor for Extensions of Time and Loss and Expense
- Practical Completion
- Making Good Defects Certificate
- Agreeing Adjusted contract Sum and issuing Final Certificate (Payment)
What is a framework
A framework agreement is where suppliers are asked to tender to provide services over a fixed length agreement. The services are then called off the framework as and when required rather than carrying out a new tender process each time. Members of the framework will typically provide fixed rates of OH&P and prelims or for consultants their fee as a % of construction value. Mini tender process can also be carried out on each individual project to ascertain best value for the client.
Why is a framework used
Provides compliance with OJEU procurement rules, reduces procurement timescales. Reduces risk and the need for a learning curve each time. Better price
What might be included in a client brief?
A description of the client
1. A description of the client’s brand, culture and organisation.
2. A description of the client’s vision, mission and objectives.
3. A description of the client’s priorities and the criteria that will be used to measure success.
4. Organisational structure and decision making processes.
5. Changes to the client that the project will bring about.
6. Interfaces with other projects.
7. Client policies that may be applicable to the project (for example; transport policy, energy policy, natural ventilation policy, sustainability policy).
8. Client preferences for the project (for example; image, use of local materials, use of landscape, etc.), and quality expectations (including health and safety, sustainability and design quality).
9. A description of the principles that will be adopted in the development of the design.
Site information
1. Building surveys.
2. Site surveys.
3. Information about ground conditions.
4. The location and capacity of utilities.
5. Access and other constraints.
6. Legislative constraints.
7. Existing planning consents.
Spatial requirements
1. Schedules of accommodation, areas and special requirements.
2. Schedules of users (including external users), their numbers, departments, functions, organisational structure and operational characteristics.
3. Spatial policies (for example, open plan or cellular offices, daylighting requirements, temperature ranges and acoustic standards).
4. Required adjacencies, groupings and separations.
5. Zoning.
6. Circulation guidelines and identification of major circulation flows.
7. Phasing.
Technical requirements
1. Structural strategy (columns and gridlines to be adopted, special loads, floor-to-ceiling heights).
2. Servicing requirements, including specialist requirements.
3. Comfort conditions and level of user control.
4. Acoustic requirements.
5. Equipment requirements.
6. Specialist requirements for furniture, finishes, fixtures and fittings.
7. Information and communications technology (ICT) requirements.
8. Requirements for specialist processes and plant.
9. Fire compartments.
10. Maintenance and cleaning requirements.
11. Likelihood of future change (for example, staff numbers) and flexibility required.
12. Sustainability objectives and energy use targets.
13. Safety and security requirements.
14. Resilience to potential hazards or threats.
15. Waste and water management.
16. Pollution control.
17. Flexibility and future uses.
18. Durability and lifespan.
19. Other performance requirements.
20. Benchmarking information.
Component requirements
1. Long-lead items.
2. Potential requirement for specialist design or specialist contractors design.
3. Cladding strategy and materials selection procedures.
Project requirements and other issues
1. Planning requirements.
2. Outcome of any consultation processes.
3. Budget.
4. Project programme and key milestones.
5. Known risks.
6. Targets for post occupancy evaluation outcomes and other performance targets.
Tell me how you advised on the procurement of the consultant team
I advised on the scope of services they would need to carry out. At the time we had some of this in house and that was part of our framework agreement. The process now is to speak to the contracting body and understand their procurement requirements. One client uses an e-tendering portal and we provide the scope and review the responses. Another client asks for three prices from consultant and looks to us to advise on the best tender return. The content of the “tender documents varies whether we are looking for low value survey work or an M&E consultant.
Tell me about your process for stakeholder management
This would depend on the size and complexity of the project and also how contentious the project has the potential to be. Belt and braces I would start by understanding from the client the potential stakeholders for the project and supplement this list with my own knowledge from other schemes. I would then carry out a political and stakeholder audit to establish their requirements, desires and potential issues with the project. I will record all this information in a stakeholder management plan and use a stake holder matrix to determine how to manage and communicate with each stakeholder. This is ensure that they are kept informed throughout the process and reduces the risk of the project underdelivering for any of the stakeholders. It can also reduce any potential objections to a planning application.
What goes into a feasibility report
Feedback on any surveys, site location and description, surrounding area, presence of other buildings, features, site topography, any watercourse, utility information, access arrangements, road connections, access to public transport
What items do you include on your development programmes
Design development, surveys, client review periods, funding deadlines, planning submission dates, tender process, construction period,
What is OJEU, what are the OJEU limits
Official journal of the European union. All public sector contracts (and private with certain funding streams e.g. Lottery) over certain threshold values must be posted to the journal. The threshold limits for central government are
£4,733,252 – Works contracts
£122,976 - Services
Timescales need to be considered as there are minimum timescales for responses that must be adhered to, needs to be considered in the contract
What advice did you give regarding modular construction
Advice around the construction process and logistics. Advice regarding payment for off site materials and how that would be managed. Advice on the potential finishes that were achievable and how the amount of work done off site can chance the look of the building internally and externally. Also the advantages and disadvantages, speed, cost (should be cheaper), end finish, future proofing, low flexibility for changes once on site.
What construction contracts are available to clients to use
JCT, FIDIC, NEC, ICE and there are various subcontracts within each depending on procurement strategy
What are the different procurement options, explain each
D&B, Traditional, Construction Management, Management Contractor, Cost Reimbursable, Target Cost
Explain two stage tendering, how is the contractor assessed at each stage
STAGE 1
The employer tenders the project on a competitive basis, but based on an incomplete design prepared by the employer’s design team, together with an outline price and programme for the works.
The tenderers submit a proposed construction programme, method statement, price for preliminaries and a percentage for overheads and profit during the life of the project.
The initial stage 1 tender may also include competitive tendering of some already defined work packages, plus a lump sum or cost reimbursable price for pre-construction services and design fees.
This stage concludes when the preferred contractor is appointed, either on the basis of the provisions of an identified contract, or a separate PCSA.
The contractor’s role under a PCSA is effectively a consultancy role, more similar in nature to a professional appointment.
STAGE 2
During the second stage, the successful tenderer, or preferred contractor, is in a form of extended contract negotiation with the employer. The negotiations run in parallel with the works which the contractor is carrying out under the PCSA. The process relies on a certain amount of cooperation between the parties to be successful. Typically, the type of issues on which the contractor will advise the employer will include the buildability of the design, based on his experience. The contractor will also be seeking to agree a programme and cost plan with the employer.
The contractor may also tender early and long-lead works packages, and together with the employer select certain specialist sub-contractors.
Tendering may be on an open-book basis to allow the employer to monitor and understand the contractor’s pricing.
Stage 2 concludes with agreement of a lump sum price for completion of the project and the terms of the building contract. Theoretically, the employer may appoint an entirely different contractor to carry out the construction works under the building contract. However in practice, the employer and stage 1 contractor will usually have worked closely together during the initial stage, enabling them to reach an agreement as to the price and terms of the contract. Given the contractor’s involvement in the development of the design, the building contract will generally be a design and build contract
What might be included in a pre-qualification exercise?
Financial information Legal issues Past experience of similar projects H&S record References Quality assurance policy. Environmental management policy. Equal opportunities policy. Insurances
What is included in an income statement?
The income statement consists of revenues and expenses along with the resulting net income or loss over a period of time due to earning activities. The income statement shows investors and management if the firm made money during the period reported.
Revenues might include fees or sales of materials or appreciation of assets.
Expenses could be debt, staff cost, rent, insurances, IT costs
What is your companies complaints handling procedure?
- Every complaint referred to the director responsible
- Encourage complainant to make their complaint in writing if previously verbal
- Director to respond in writing within 10 days to confirm our understanding. The client will be invited to make any further comments
- 21 days from receipt of further comments the director responsible will inform client of outcome of the investigation
- Provides Managing director details for further escalation if required
- If those procedures don’t settle dispute will agree to enter into mediation with Centre for dispute resolution of RICS mediation process
- Where can be resolved by any other means and in appropriate circumstances the complaint will be refer to the surveyors arbitration scheme operative by Chartered Institute of Arbitrators.
Explain the principles of client care and provide an example where you have put this into place?
Andy Knight -worked weekend to feed into his report to the procurement board
What are the 5 ethical standards?
Always Act with Integrity
Always provide a high standard of service
Treat others with Respect
Act in a way that promotes trust in the profession
Take Responsibility
Explain what Acting with Integrity means to you
Be honest and straightforward in all that you do. Consider how you actions could be viewed by other people. Not allowing conflicts of interest. Not accepting gifts that could be viewed as affecting your impartiality
Be honest and straightforward in all that you do. This is one of our five professional and ethical standards. This standard includes, but is not limited to, the following behaviours or actions:
Being trustworthy in all that you do.
Being open and transparent in the way you work. Sharing appropriate and necessary information with your clients and/or others to conduct business and doing so in a way so they can understand that information.
Respecting confidential information of your clients and potential clients.
Don’t divulge information to others unless it is appropriate to do so.
Not taking advantage of a client, a colleague, a third party or anyone to whom you owe a duty of care.
Not allowing bias, conflict of interest or the undue influence of others to override your professional or business judgements and obligations.
Making clear to all interested parties where a conflict of interest, or even a potential conflict of interest, arises between you or your employer and your client.
Not offering or accepting gifts, hospitality or services, which might suggest an improper obligation.
Acting consistently in the public interest when it comes to making decisions or providing advice.
What does always provide a high standard of service mean to you
Listening to clients and understanding what they need, ensuring that my scope reflects this and that I gave them realistic timescales and stick to them.
Be clear about what service your client wants and the service you are providing.
Act within your scope of competence. If it appears that services are required outside that scope then be prepared to do something about it, for example, make it known to your client, obtain expert input or consultation, or if it’s the case that you are unable to meet the service requirements, explain that you are not best placed to act for the client.
Be transparent about fees and any other costs or payments such as referral fees or commissions.
Communicate with your client in a way that will allow them to make informed decisions
If you use the services of others then ensure that you pay for those services within the timescale agreed.
Encourage your firm or the organisation you work for to put the fair treatment of clients at the centre of its business culture.
Example of high standard of service?
Client asked if we could provide clerk of work services which could be a good fee for the company, while we could attempt to carry it out, there are other companies out there that are better focused for carrying out this work and I offered to find a suitable candidate for the client.
What does Treat Others with Respect mean to you?
Always being courteous, polite and considerate to clients, potential clients and everyone else you come into contact with.
Never discriminate against anyone for whatever reason. Always ensure that issues of race, gender, sexual orientation, age, size, religion, country of origin or disability have no place in the way you deal with other people or do business.
As much as you are able, encourage the firm or organisation you work for to put the fair and respectful treatment of clients at the centre of its business culture.
What does take responsibility mean to you
Always act with skill, care and diligence.
If someone makes a complaint about something that you have done, then respond in an appropriate and professional manner and aim to resolve the matter to the satisfaction of the complainant as far as you can.
If you think something is not right, be prepared to question it and raise the matter as appropriate with your colleagues, within your firm or the organisation that you work for, with RICS or with any other appropriate body or organisation.
Why is the RICS valued so highly
The robust assessment process and ongoing CPD requirements give clients confidence that they are dealing with someone with a high level of competence and that they are trustworthy, ethical and will provide a high level of service.
Who is the RICS Chair
Paul Marcuse
What do you understand about alternative dispute resolution methods
A process for resolving disputes among parties in accordance with rule 7 of the RICS rules for firms.
These Alternative Dispute Resolution procedures are:
o Negotiation.
o Mediation.
o Conciliation.
o Adjudication.
o Arbitration.
software and how it can be used
Customer Relationship Management software records and monitors customer interactions so that the ways in which a company can interact with them can be made more efficient and effective
What systems do you use to manage design team input
Use the programme to set design timescales and milestones for issue, host design development meetings and provide clear actions following each meeting. Encourage collaboration between design team members. Ensure scope of service and appointment documents reflect the client’s requirements
Do you know what the Generally Accepted Accounting Principles (GAAP) relevant to the candidate’s geographical area
Generally Accepted Accounting Practice in the UK, is a regulatory body that establishes how accounts and financial reports should be prepared in the United Kingdom.
Explain the role of the Auditor
An auditor is one who is accredited with the right to assess, evaluate and validate the accuracy of commercial accounts of the parent organisation and one who guarantees the organisation’s compliance with tax regulations. Auditors evaluate the financial actions of the company that employs them and make certain of the smooth running of the organisation. Auditors are economic specialists who analyse commercial accounts for precision and scrupulousness. They are mostly employed by industries or autonomous establishments to execute internal and external audits.
Explain what International Accounting Standards (IAS) are
They constitute a standardised way of describing the company’s financial performance and position so that company financial statements are understandable and comparable across international boundaries
What are the different types of business plan
Operational Plan - This type of planning typically describes the day-to-day running of the company.
Strategic Planning – Big Picture, Long term, includes a high-level overview of the entire business
Tactical Planning - Tactical planning supports strategic planning. It includes tactics that the organization plans to use to achieve what’s outlined in the strategic plan
Contingency Planning - Contingency plans are made when something unexpected happens or when something needs to be changed
What are the key elements of a business plan
A business plan is a written document describing a company’s core business activities, objectives, and how they plan to achieve their goals. Would include executive summary, products and services, marketing strategy, market analysis, financial planning, and a budget.
Tell me about your company’s business plan
Summary of the past successes of the last year, summary of the current market position in particular the uncertainty relating to Brexit. 10 Objectives for the year ahead. Increase bank monitoring, nurture European operations Set up new sustainability and environmental working group.
Systems and procedures for managing client care
Having a complaints handling procedure, Getting feedback from every project. Ensuring that we don’t have conflicts of interest and where do they are handled efficiently and transparently
What might be included in a prelims document
Liquidated damages Details of existing buildings and utilities Length of contract Working hours Restrictions regarding the use of the site Completion date, possession date Rectification period Insurances
What is an RICS jurisdiction guide?
This provides relevant local market information associated with an RICS
international standard or RICS professional statement. This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material,
but rather information to support adoption and implementation of the standard or statement locally.
How do you become a RICS regulated firm?
Put in an application form, will require the following
• Offer professional services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services.
• Have at least 25% principals (a senior manager, partner or owner), who are qualified RICS professionals (MRICS, FRICS, AssocRICS).
• Agree to observe and comply with RICS Rules of Conduct for Firms, including working to RICS standards..
What do you know about Client Money fundamentals
I’ve read the client money professional statement
There are discrete and general client money accounts
General account requires a client ledger
Discrete account requires a cash book
RICS client money protection scheme sets out the client money protection provisions required by RICS regulated firm. RICS regulated firms must register with this
Objectives
- Client money must be kept safe
- Client money accounts used only for appropriate reasons
- RICS regulated firms must have the appropriate controls and procedures to safeguard client money
RICS regulated firm must
- Hold client money in a client money account which the firm has exclusive control over at Bank or Building Society regulated by relevant banking regulatory body
- Ensure account does not contain any money but client money
Or sums needed to replace client money removed in error
Not hold office money in the account unless it’s a receipt of mixed money where the office money is awaiting transfer
Account has to be name WT Partnership Client account. Client written in full. - Money has to be immediately available even at sacrifice of interest
- Where in interest account with penalties, penalties only to be taken with consent of client
- Confirm banking conditions with bank, agreed in writing that the client money cannot be used against any other company debt
- If client needs access to account then this has to be setup by them
Regular reconcilliations of money
Client needs to be informed of client money account information, firms procedures for handling client money, how unidentified amount are dealt with
What must firms do with regard to Bribery and Corruption
- not offer or accept, directly or indirectly, anything that could constitute a bribe
- have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed
- report any activity they are aware of that breaches anti-bribery and corruption laws o the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager
- act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption; in determining the appropriate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate
- retain information detailing how the firm has met the requirements of the professional statement.
What should firms do with regard to Bribery and Corruption
• prepare a written policy covering anti-bribery and corruption including a risk
assessment detailing the nature and impact of risk affecting the business – this policy
should be reviewed and updated periodically as appropriate
• have appropriate governance and systems controls in place, proportionate to the
type of work the firm does
• encourage transparency within the organisation by implementing a register including
but not limited to:
–– gifts
–– hospitality, entertainment and expenses
–– customer travel and hospitality
–– political contributions
–– charitable donations and sponsorships
–– potential conflicts of interest
• provide clear guidance for staff so that they understand their role in preventing
bribery and corruption and are aware that the following will not be tolerated:
–– so-called ‘facilitation payments’; although such payments may not be illegal in the
local country where the payment is made, no such payments should be made
without explicit authorisation from the head office
–– bribes
–– price-fixing to create a monopoly or cartel arrangement
–– failure to declare a conflict of interest
• appoint a contactable person within the company or local office to discuss
compliance and ethics matters; the largest regulated firms may decide to formally
appoint a local compliance and ethics champion, which is best practice for the
largest regulated firms; smaller firms may still elect to make such an appointment,
depending on resource implications
• publish a code of behaviour and provide this to staff
• carry out appropriate due diligence on third-party suppliers to ensure they are acting
appropriately; if present in local bribery and corruption legislation then in line with
their requirements.
What must RICS Member do in relation to bribery and corruption?
- not offer or accept, directly or indirectly, anything that could constitute a bribe
- ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement
- report any activity they are aware of that breaches applicable anti-bribery and
- corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
What should RICS Member do in relation to bribery and corruption?
• declare certain items to their employer, including but not limited to:
–– gifts
–– hospitality, entertainment and expenses
–– customer travel and hospitality
–– charitable donations and sponsorships
• attend relevant training provided by their employer or a regulator addressing bribery and corruption
• be familiar and act in compliance with their employer’s policy, process and code of behaviour relating to bribery and corruption
• if in a senior management position, take a leadership role in attempting to ensure that their employer has an appropriate regime in place for addressing bribery and corruption risks.
What must firms do with regard to Money Laundering?
not facilitate or be complicit in money laundering or terrorist financing activities
• have systems and training in place to comply with these laws, and ensure these are
followed
• report any suspicions of money laundering or terrorist financing activities to the
relevant authorities (as specified in local legislation); where there is no local legislation
the activity should be recorded and, if possible, reported to a senior manager
• evaluate and review periodically the risks that prospective and existing business
relationships present in terms of money laundering or terrorist financing offences
taking place
• ensure that their responses to the risks identified are appropriate, including
conducting appropriate checks on clients and customers
• use reliance only where there is an appropriate level of confidence in the quality of
the information provided by the third party – reliance should only be taken from third
parties with standards conforming to the legal requirements, that provide the obliged
market participant with a complete exchange of all legally required AML information
regarding the identified party and only by confirming the identity and verification
of identity of the client or counterparty in question; ultimate responsibility for the
assessment of risk and actions taken based on this remain with the member or regulated firm
• take appropriate measures to understand the client and the purpose of the transaction
• verify the identity of their client by undertaking basic identity checks
• record and retain information detailing how the firm has met the requirements of this professional statement.
What should firms do with regard to Money Laundering?
• have a written policy addressing money laundering and terrorist financing risks that
covers the following issues:
–– in high risk situations where enhanced due diligence is required, understanding the
source of funds in a transaction
–– identifying PEPs, PSCs and any potential breaches of sanctions
–– the process to be followed for customer due diligence
–– the situations in which simplified due diligence, standard/ordinary due diligence, or
enhanced due diligence will be appropriate (see 3.6)
• have appropriate governance and systems controls in place, proportionate to the
type of work the firm does
• provide appropriate, recurring training for staff, to ensure they are familiar with the
risks associated with money laundering and terrorist financing and the firm’s systems
to counter these risks
• keep reports of suspicion of money laundering and terrorist financing activity
confidential (for guidance surrounding whistleblowing see 3.11)
• identify the beneficial owner of a company/client involved within a transaction
• appoint a senior person to be responsible for ensuring anti-money laundering and
counter-terrorist financing policies are in place and complied with.
What must RICS Member do with regard to Money Laundering?
• not facilitate or be complicit in money laundering or terrorist financing activities
• report any suspicions of money laundering or terrorist financing activities to the
relevant authorities (as specified in local legislation); where there is no local legislation
the activity should be recorded and, if possible, reported to a senior manager.
Countering bribery, corruption, money laundering and terrorist financing
What should RICS Member do with regard to Money Laundering?
• keep abreast of current training/regulation offered to them either by their employer or
by a regulator addressing money laundering or terrorist financing
• comply with their employer’s policy and process relating to money laundering and
terrorist financing
• keep reports of suspicion of money laundering and terrorist financing activity
confidential
• if in a senior management position, take a leadership role in attempting to ensure that
their employer has an appropriate regime in place for addressing money laundering
and terrorist financing risks.
Techniques for avoiding money laundering?
Know your client (KYC) or customer due
diligence (CDD) requirements
Rules of Conduct Members
3 Ethical behaviour
Members shall at all times act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with their professional obligations.
4 Competence
Members shall carry out their professional work with due skill, care and diligence and with proper regard for the technical standards expected of them.
5 Service
Members shall carry out their professional work in a timely manner and with proper regard for standards of service and customer care expected of them.
6 Continuing Professional Development (CPD)
Members shall comply with RICS’ requirements in respect of continuing professional development.
7 Solvency
Members shall ensure that their personal and professional finances are managed appropriately.
8 Information to RICS
Members shall submit in a timely manner such information, and in such form, as the Standards and Regulation Board may reasonably require.
9 Cooperation
Members shall cooperate fully with RICS staff and any person appointed by the Standards and Regulation Board.
Rules of Conduct Firms?
3 Professional behaviour
A Firm shall at all times act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with its professional obligations.
4 Competence
A Firm shall carry out its professional work with due skill, care and diligence and with proper regard for the technical standards expected of it.
5 Service
A Firm shall carry out its professional work with expedition and with proper
regard for standards of service and customer care expected of it.
6 Training and Continuing Professional Development (CPD)
A Firm shall have in place the necessary procedures to ensure that all its
staff are properly trained and competent to do their work.
7 Complaints handling
A Firm shall operate a complaints-handling procedure and maintain a
complaints log. The complaints-handling procedure must include an
Alternative Dispute Resolution (ADR) mechanism that is approved by the
Standards and Regulation Board.
8 Clients’ money
A Firm shall preserve the security of clients’ money entrusted to its care in the course of its practice or business.
9 Indemnity
A firm shall ensure that all previous and current professional work is covered by adequate and appropriate indemnity cover which meets standards approved by the Standards and Regulation Board.
What do you know about Conflicts of Interest?
Every RICS member working independently or within
a non-regulated firm or within a regulated firm must:
(a) identify and manage Conflicts of Interest in
accordance with this professional statement and
(b) keep records of the decisions made in relation to
whether to accept (and where relevant, to continue)
individual professional assignments, the obtaining of
Informed Consent, and any measures taken to avoid
Conflicts of Interest arising.
Every RICS regulated firm must have in place
effective systems and controls appropriate to the size and complexity of their business to enable them to ensure that the firm and its employees are able to manage their compliance with this professional statement.
RICS members working independently or within nonregulated firms and regulated firms must then consider their obligations under paragraph 1.1.
What did you consider when appraising other sites?
Location, ground reports, previous uses, proximity to public transport, access, contours, availability of services, shape of the site.
What is an alternative dispute resolution mechanism?
An alternative to Litigation. Options are Mediation, adjudication, conciliation, arbitration, expert witness.
What must you do if you receive a complaint?
May need to inform PII insurer
Send complainant a copy of the CHP
Best way to avoid complaints?
Clear scope, understanding the client’s objectives, good communication throughout the project so issues can be nipped in the bud before they become and issue. Allocating adequate resources to a project
What are RICS terms of engagement, what do you issue to a client
Terms of engagement set out the basic facts of your instruction so that there is no confusion about what you have been asked to do. They also define the scope and depth of the service you will provide, and in doing so set boundaries to your liability. Terms of Engagement must be simple, clear and comprehensive
Surveying safely highlights
Individuals are responsible for knowing and understanding
the health and safety risks appropriate to the tasks they
undertake. This knowledge may be gained through:
• appropriate training
• keeping up to date with relevant information and
• personal experience
which all contribute to ongoing competence. Individuals
within an RICS-regulated firm are obliged to maintain
competence levels appropriate to their tasks.
‘Safe person’ concept - each individual assumes individual behavioural responsibility for their own, their colleagues’ and others’ health and safety while at work.
RICS-regulated firms are obliged to ensure the health, safety and welfare of people at work by providing, monitoring and maintaining: • a safe working environment • safe work equipment • safe systems of work and • competent staff
Organisational responsibilities include:
• selection: everyone having, or being capable of developing, the job skills and competence to meet the demands of their work activities
• training: including providing knowledge about the potential hazards in a working environment
• information: providing staff with information about the risks and control measures associated with their working environment. This information may be generic in nature or it may relate to specific sites
• equipment: providing staff with equipment that is suitable for the purposes for which it is intended, and everyone understanding its use and limitations
• safe systems of work: these ensure that work activities are undertaken safely
• instruction: individuals must receive clear instructions, and receive supervision and expert support where necessary, relating to: – the work activities required – the operation of any equipment and – appropriate safe systems of work.
• supervision: supporting staff with clearly defined lines of communication and
• personal protective equipment (PPE): providing individuals with appropriate personal protective equipment that meets appropriate specifications.
performance: being competent to perform their work safely (including understanding the limits of their competence (skills, knowledge and experience))
• control: being able and prepared to work within accepted or designated systems of work
• adaptability: being able to recognise and adapt to changing circumstances at all times
• vigilance: remaining vigilant, at all times, for their own safety and that of colleagues and others
• awareness: being able to recognise their own abilities and limitations and
• teamwork: being an effective member of a team.
Primary accountability for health and safety rests with those who face the practicalities of daily business. Their responsibilities include:
• accepting their individual obligations and personal role in addressing health and safety risk management and their responsibility to abide by corporate and legal requirements
• cooperation with their employer to minimise risk to the health and safety of themselves, their colleagues rics.org Effective from February 2019 RICS guidance note, global 5 and all others potentially affected by the activities they undertake and to assist their employees to comply with employer duties • sharing with others who may be affected by their work activities, health and safety matters, and in particular any risks to health and safety, and safe methods of working to minimise or eliminate the risks
• reporting, in good time where possible, any breaches of health and safety rules and regulations
• reporting, in good time, any actual, potential or perceived health and safety risks to those best placed to address them
• taking the time to address the management of health and safety within the area of their experience and competence and within the remit of their management responsibilities and
• maintaining adequate and appropriate competence in regard to health and safety matters associated with their activities at work.
Explain the risk assessment process
Simple guidance for risk assessment in regard to occupational health and safety is outlined in many publications, but can be summarised as:
1 identify the hazards
2 decide who might be harmed and how
3 evaluate the risks and decide on precautions
4 record the findings and implement them
5 review the assessment and update if necessary and
6 advise all those affected of the outcome of the assessment and methods of work, or other control measures necessary, to minimise or eliminate risk.
What is the hierarchy or risk control?
Elimination, substitution, Engineering Controls, Administrative Controls, PPE
What is contained in surveying safely?
Guidance to firms on what they should be doing to adequately manage risks to staff and the responsibilities of the individual to follow the health and safety procedures and processes. Introduces the concept of the safe person. Each individual assumes individual responsibility for their own, their colleagues and other’s health and safety. It gives guidance on how risks should be identified, assessed and mitigated and gives information on common risks that could affect the profession like asbestos, working at height, musculoskeletal disorders and RSI. It also gives firms advice on health monitoring of their staff so that appropriate controls can be put in place, asthma, allergies and pregnant women. Advice on visiting premises or sites
What needs to be in a CHP?
How the complaint will be handled, contact details for submitting a written complaint, timescales for response, details of an Alternative dispute resolution scheme (RICS Mediation Process), final process for redress if all else fails (chartered institute or arbitrators Dispute Resolution Services)
When could an appointment go ahead with a conflict of interest?
Where all parties affected provide their prior informed consent in writing. It is in the best interest of all affected parties to proceed despite the conflict of interest and it is not prohibited by law
Techniques used to avoid a conflict of interest
Information barriers, physical segregation, different teams in different offices
What are the new global professional and ethical standards?
A. There are five standards: • Act with integrity • Always provide a high standard of service • Act in a way that promotes trust in the profession • Treat others with respect • Take responsibility
Example of Act with integrity
Where tendering surveys no oversight from the client so I could recommend anyone and put my interest over the clients
Example of Always provide a high standard of service
At Portsmouth city council the client had a limited initial pot of money for fees to get to RIBA 2. Because of the cororna virus delay he was in danger of missing the survey windows for bats. We worked with him to fit the survey fees and get him the information he needed to go back for further funding. Woking, taking the groundworks out of our package. Parsloes finding another consultant due to timescales
Example of Act in a way that promotes trust in the profession
Not giving advice until spoken to the proper person
Example of Take responsibility
Missed action on meeting minutes to organise an openreach connection, admitted it to the client and made efforts to organise it so it could still be incorporated into the scheme.
Remedies in the contract for not providing a performance bond?
The Employer may deduct the sum equal to the value of the performance bond from the Contract Sum or the sums that would otherwise be due to the Contractor under this Contract, until the Contractor procures the execution and delivery.
How long does a contractor have to provide a performance bond/
14 days from the date of the contract
Remedies in the contract for not providing a PCG ?
Contract administrator can add a sum in the contract to be deducted if the PCG is not provided
What items are included in the articles of the JCT?
Performance bond, PCG, main contractor, adjudication, arbitration, contract sum, employers agent details
Main recitals of JCT?
Supplemental provisions: health and safety, acceleration quotation, collaborative working. Framework agreement, CIS, is client a contractor. References to the employer’s requirements and contractors proposals documents
What is an advance payment bond?
An Advance Payment Bond is a guarantee, supplied by the party receiving an advance payment, to the party advancing the payment. It provides that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled
What are listed items JCT
Materials that have been pre-agreed to be paid off site.
What is a contract?
A legally binding agreement (between two parties) to provide goods and services within a specified timeframe.
What is necessary to form a contract?
Offer Acceptance (or counter offer) Consideration Intention (to be legally bound) Capacity (to make agreement) (e.g. power of attorney on behalf of a company)
How is a contract executed?
- Under hand, signed by both parties, 6 year limitation period. Means that a party must bring about any claim for breach of contract within 6 years of the breach taking place. Any later and the claim will be time-barred.
- Under Seal (as a deed), signed and witnessed, 12 year limitation period. Valuable consideration not required,
What are common contract documents?
The Contract (with any amendments)
- Preliminaries
- Contract sum analysis/Pricing Schedule
- Drawings
- Specification
- Planning conditions/agreements
- Contractors Proposals
What are the main contract suites?
- JCT (Joint Contract Tribunal)
- NEC (New engineering contract)
- FIDIC (International federation of Consulting engineers)
- ICE (Institution of Civil Engineers)
How did you try to mitigate a delay on one of your projects?
Trowbridge – Planning and tender concurrently. Provided temporary electrics to the pitches
Why use standard forms of contract?
- They are cheaper than getting a bespoke contract drawn up
- Offer a level of familiarity between the parties
- Tried and tested contracts in court, therefore you should be able to predict the outcome in the courts.
Why wouldnt you use a bespoke contract?
- They are costly to produce and time consuming
- Contractors do not like them, as they regularly put alot of the risk onto the contractor
- They are not tried and tested like a standard form
What should you consider when selecting the contract?
- The criteria of the client
- The procurement method you are going to use
- Nature of the works
- Timings, are the works required to start quickly or do you have time to produce robust set of docs
What standard forms of contract do you know ?
- SBC 2011/2016
- Intermediate building contract 2011/2016
- Minor works Building contract 2011/2016
- Major Projects building contract 2011/2016
- Design and build contract 2011/2016
- Management Building contract 2011/2016
- Construction management contract 2011/2016
- Prime cost building contract 2011/2016
Can you name some NEC standard contract forms?
- Option A, Priced contract w/ Activity Schedule
- Option B, Priced contract w/ BoQ
- Option C, Target contract w/ Activity Schedule
- Option D, Target contract w/ BoQ
- Option E, Cost reimbursable
- Option F, Management contract
When is a JCT Minor Works contract NOT suitable?
- Complex projects
- Detailed control procedures
- Where there are named Sub-Contractors
Can you provide more information on the JCT Major project construction contract?
- Used on large , complex project by experienced clients
- They place most of the risk on the contractor
- Has sub-contract derivatives
- All derivatives/versions have a yellow and purple cover
Can you provide more information on the JCT Design and Build Contract 2011?
- They are used by all types of clients, create a single point of responsibility for the design and construction with the contractor
- Can be used on projects of all sizes
- Client must produce the Employers Requirements
- Has a sub-contract derivative broken into two parts: JCT DB11 Sub-contract Agreement, JCT DB11 Sub-contract Conditions
- All derivatives have a Yellow and pink cover
Can you provide more information on the JCT Management Building Contract?
- Used then a management contracting route is chosen
- Used by experienced clients who understand the construction costs
- No real cost certainty until all packages are let
- Works are completed by a number of ‘Works Contractors’ who are placed under a management works contract.
- Works Contractors are contracted to the Management Contractor
- Management Contractor is a fee earning professional onto the the final construction costs.
- All derivatives have a yellow and brown cover
Can you provide more information on the JCT Construction management contract?
- Used where a CM procurement route is chosen
- Used by experienced clients who understand the construction costs
- No real cost certainty until all packages are let
- Works are completed by a number of ‘Trade Contractors’, who are placed under a ‘Construction Management Trade Contract’.
- Trade contractors are contracted directly with the client
- The Construction Manager is only responsible for looking after the programme and construction.
- All derivatives have a Yellow and Brown cover.
Can you provide more information on the JCT Prime Cost Building Contract?
- Used on projects which require an early/quick start
- Usually on a cost plus basis, as the extent of the works are not known until the project is underway
- Has sub-contract forms
- All derivatives have a yellow and pink cover
Can you provide more information on the NEC Option A contract?
Priced Contract with an Activity Schedule
- For all types of clients, the balance of risk is mainly with the contractor
- It comes with/requires an activity schedule, containing a list of activities the contract expects is required to complete construction.
- Lump sum
Can you provide further information on the NEC Option B contract?
Priced Contract with a Bill of Quantities
- For all types of clients, the risk is mainly with the contractor
- Comes with a detailed BoQ, which can either be produced by the client or Contractor, which is a detailed statement of all the works that will be undertaken.
- Lump sum
Can you provide further information on NEC Option C contract?
The NEC Option C is a target cost contract with activity schedule where the out-turn financial risks are shared between the client and the contractor in an agreed proportion. … Defined Costs (actual costs) are assessed by the Project Manager during the course of the works by auditing the Contractor’s accounts. Subject to a pain/gain share mechanism
Can you provide further information on NEC Option D contract?
The NEC Option C is a target cost contract with BoQs where the out-turn financial risks are shared between the client and the contractor in an agreed proportion. Defined Costs (actual costs) are assessed by the Project Manager during the course of the works by auditing the Contractor’s accounts. Subject to a pain/gain share mechanism
Can you provide further information on NEC Option E contract?
Option E is a cost reimbursable contract in which the contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee. The financial risk involved is largely taken by the client.
What are the perceived problems with NEC3 Contracts?
- Very admin heavy
- Requires alot of expertise to operate effectively
- Focuses too much on Project Management
- Cost information in relation to compensation events can take a long time. PM regularly has to decide how to proceed based on a cost estimate from the QS, which then gets replaced by the actual costs.
What are the specialities with NEC?
- No Contract Administrator required, replaced by a Project Manager
- Compensation Events as opposed to variations, extensions of time, loss and expense etc.
What might a Compensation Event include?
- Variations
- Instructions to changes contracted services
- Failure to provide access
- Late issue of information from client
- Failure by client to supply materials
- Instruction to halt/delay works
- Conditions that can’t have been reasonably foreseen
- Exceptionally adverse weather
- Acts of god.
What is the process for a compensation event?
- Contractor must notify the project manager within 8 weeks of the event becoming apparent with an EARLY WARNING NOTICE, if not notified in this period then it will not be considered.
- PM has 1 week to review claim and respond
- Contractor has 3 weeks to provide quotation
- PM has 2 weeks to respond to quotation
- Final costs of works calculated on a cosy reimbursable basis
What is the Project Managers role under NEC contracts?
- Manage programme
- Operate early warning mechanism
- Issue instructions
- Issue outcomes for compensation events
- Determine when practical completion has been achieved
- Assess defects
What is the Contract Administrators/Employers Agent role under JCT?
- Issue instructions
- Certify payment
- Issue Extensions of time
- Consider all Variations, Loss and expense claims, interim applications
- Assess when practical completion has been achieved.
Who is the Employers Agent?
Typically used in Design and Build contracts, they are there to ensure the clients best interests are met.
What is the Main Contractor responsible for?
The construction of the project, through either direct labour or sub-contracted labour
Health and safety, if they are the principle contractor then CDM regs apply;
- Construction phase plan
- Prepare, develop and implement written site plans
- Provide welfare facilities
- Ensure all workers have site inductions
- Provide all relevant information required for H&S plan to the Principle Designer
What is Novation?
Where the contractual benefits and burdens of a contract are passed from one party to another.
Commonly used in Design and Build for Design Team. This extinguishes the existing contract
Is the contractor responsible for the Novated party’s design prior to Novation?
No, unless they state they have adopted the design.
What is Assignment?
Where the contractual benefits (but not burdens) of a contract are passed from one party to another. Such as the assignment of a collateral warranty from one tenant/operator to another.
When can Assignment take place
Any time, as it is a statutory right, however it can be limited within a contract
When can Assignment take place
Any time, as it is a statutory right, however it can be limited within a contract
Give an example of how Assignment can be restricted?
Restricting the assignment of a collateral warranty to one time only, without the written consent of the warranter.
What is the aim of Assignment?
They give the assignee the same rights as the assignor under the contract
What is a Collateral warranty?
A way of forming a direct contractual link between two parties which otherwise wouldn’t have a link, such as between a sub-contractor and a client.
What case law do you know that relates to Collateral Warranties?
Parkwood Leisure v Laing O’Rourke
It was found that Collateral Warranties can be considered to be a construction contract, and are therefore subject to the same provisions as the construction act
What Collateral Warranties do you know of?
- Collateral warranty for a Purchaser/Tenant
- Collateral warranty for an Employer
- Collateral warranty for a funder
What are third party rights?
- An alternative to Collateral Warranties
- They allow a third party to be written into a contract
Introduced as part of the Contracts (third party rights) act 1999.
What is the aim of Third Party Rights?
To give the Third party the benefits of the contract only, not the burdens. I.e Writing in the tenant as a the third party will ensure that they receive the contract benefits
What is a Letter of Intent?
- A document outlining an agreement between two parties, before a formal contract has been created
- Each letter of intent is different, with each being assessed based on it meaning
What can a Letter of intent be based on its wording?
An expression of the intention to enter into a contract at a future date, which doesn’t give rise to any legal obligation.
- An expression of the intention to enter into a contract at a future date, which does not exclude the right to recover costs on a quantum merit basis.
- The creation of a interim contract
- The creation of a legally binding contract, whereby the letter can be offered and accepted.
What can be included within a letter of intent?
- Spending caps
- Expiry dates
What is a title retention clause?
Where the good and services remain the property of the seller until a certain obligation is undertaken, i.e. payment.
What is a Performance Bond?
A form of financial Security, used to cover the client against the contractor failing to fulfil their contractual obligations.
What are the typical values of a Performance bond?
Typically work approximately 10% of the Contract Value to the client
What are the problems with bonds?
They will come at the clients cost.
What are the two types of bond?
- Default bond
- On demand bond
What is the difference between a Default Bond and an On demand bond?
- A default bond can be called in when the contractor defaults on their contractual obligations however the client will have to prove that the contractor has defaulted.
- An on demand bond can be called in at any time, without having to satisfy any of the pre-conditions.
What types of Bonds do you know of?
- Advanced payment bonds
- Retention bonds
- Materials off site bond
- Tender Bond
What is an Advanced Payment Bond?
A financial surety to the client that if an advanced payment is made, then the bond will pay out if the contractor defaults.
What is a Retention Bond?
A Bond taken out instead of taking retention from interim valuations, improving contractor cash flow. Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate that is retained by the client. The purpose of retention is to ensure the contractor properly completes the activities required of them under the contract. Half of the amount retained is released on certification of practical completion and the remainder is released upon certification of making good defects.
An alternative to retention is a retention bond, where the client agrees to pay the amounts which would otherwise have been held as retention, but instead a bond is provided to secure the amount that would have been retained. As with retention, the value of the bond will usually reduce after practical completion has been certified.
Why would you use a Retention Bond?
If a Contractor had poor cashflow, a retention bond means that no retention is taken from interim payments, improving cashflow.
What happens with variations to a Contract in relation to a retention bond?
The bond value will need to be updated to suit, or the additional retention can be deducted as usual from interim payments.
What if a Contractor doesn’t maintain a Retention bond? (or other bond)
Then the client is entitled to take the retention out the next interim application.
What is a Parent Company Guarantee?
A parent company guarantee is an alternative form of surety for the client, whereby a parent company to the subsidiary company will warrant the subsidiary’s companies work, and will remedy any breaches by the subsidiary company, by either stepping in to complete the works, paying damages etc.
What is Professional Indemnity Insurance?
A form of insurance that covers professional negligence
What is Employers Liability Insurance?
A form of insurance that covers the injury and death arising from business activities
What is Contractors All Risk Insurance?
A form of insurance that covers for subsequent loss or damage
What is Contractors All Risk Insurance?
A form of insurance that covers for subsequent loss or damage
What types of payment method are there?
- Stage Payments
- Milestone payments
- Payment based off activity schedule
- Third party certification
What are Stage Payments?
Whereby a predetermined amount is paid on a pre-determined date. They are time accurate but not necessarily value accurate.
What are Milestone Payments?
Whereby a value is paid when a certain Milestone is reached, i.e. completion of the footings. They are fairly time and value accurate.
What are Payments based on an Activity Schedule?
- Payments are made against activities that have been completed at pre-determined times.
- They are reasonably value and time accurate.
What is Third Party Certification?
- Traditional form of valuing the works complete to a certain date.
- Low form of predictability, but high accuracy of the value of works complete.
What is the real name for the construction act?
The housing Grants, Construction and Regeneration Act 1996
What is the name of the Act which amended the Construction Act?
The Local Democracy Economic Development Act 2009
What provisions did the Construction Act introduce?
- No paid when paid clauses
- The statutory right to adjudication
- The right to interim payments on contracts over 45 day duration
- The right to suspend performance
- The right to be informed of the amount due, and any amounts withheld.
What are the payment provisions under the construction act?
7 days from application date = due date
5 days after the due date = contractor can issue a default notice
17 days from due date = final date for payment
7 days prior to final date for payment = the last day a payless notice can be issued
Overall payment terms of 24 calendar days
What is a payless notice?
A notice which is issued stating how much less you intend to pay than the contractors application
Does a contractor have to issue a Default notice if they issue interim valuations?
No, the interim valuation becomes the default notice
What happens if the final date for payment is missed and no payment made?
Then the contractor is entitled to issue a 7 day notice of their intention to withdraw from site unless payment is received in full
What is a 7-day notice?
- A contractual notice which advises a party of another parties intention to withdraw from site until payment is made
- A notice for terminating a contract if a certain remedy of breach is not met.
What are the payment provisions under NEC?
- 21 day payment terms
- Payless notice to be issued 7 days prior to final date for payment
- Project manager must assess and certify the amount due within one week of the application.
What are the payment provisions under JCT
- 21 day payment terms
- Payless notice upto 5 days prior to final date for payment
What should be included within interim valuations?
- Measured works
- Dayworks
- Variations
- Fluctuations
- Loss and Expense
- Preliminaries
- Materials on/off site
- Provisional sums
- Prime cost sums
How can you secure payment for materials off site?
By providing a materials off site bond
What should you do when paying for materials off site?
Ensure a vesting certificate is issued for the materials, confirming your ownership
What should you do when paying for materials on site?
Get the materials clearly separated and marked as being under the client’s ownership
What are fluctuations?
A way of dealing with inflation over long period contracts. They allow for the contractor to be reimbursed for the inflation of specific items within the contract.
What are the three main types of Fluctuation Clauses?
- Changes to taxation
- Change in the cost of labour, transport and materials
- Change to office or administrative costs
How can fluctuation clauses be calculated?
- Calculated in real times, i.e. actual cost increases
- Or using a pricing index
What are the three types of fluctuations considered under JCT ?
a. Changes to statutory contributions, levies and taxes
b. Changes to labour, materials and statutory costs
c. Changes to statutory contributions, levies and taxes calculated by formula.
How do JCT Fluctuations clauses work with retention?
A and B do not have retention held, C does.
What is excluded from retention?
- Dayworks
- Loss and Expense
What is retention?
A percentage of the amount certified for payment, retained by the client as a financial incentive for the contractor to complete the works, and also return to rectify and defects which may appear.
What value is normally taken for Retention?
3 or 5%
When does retention get released?
Typically half at PC and half once the Rectification period and completion of making good certificate has been issued.
What can a contractor request to protect their retention money?
That it is held in a separate bank account, which they have regular access to regular updated statements.
What is the definition of ‘change’?
An alteration to:
- The Scope of works
- The design
- The quantity
- The quality
- The working conditions
- The sequence of works
or
The imposition of additional obligations on the contractor by the client.
What change cannot be undertaken without the contractors consent?
- Omission of work
- Changes to the fundamental nature of the work
- Work that is instructed after Practical Completion
Who instructs changes under JCT?
Contract administrator / Employers Agent
Who instructs change under NEC?
The project manager
How should change be valued under
JCT?
- Use the Method of Measurement used at tender.
- Firstly using bill rates/rates from the activity schedule.
- Pro-rata rates.
- Rates from first principles.
- Dayworks.
How should change be valued under NEC?
- Called a Compensation Event.
- An approximate price should be provided to the Project Manager, which they can base their decision on.
- The final price is calculated on a Cost Reimbursable basis, based off the actual cost for the Change.
What is the reason for a Compensation event under NEC?
To put the contractor back in the same position both financially and programme wise, prior to the variation occurring.
What is an Extension of Time?
An adjustment to the completion date, relieving the contractors liability to pay LADS for the period of additional time granted.
What is the process for submitting and granting an Extension of time?
- When the delay becomes reasonably apparent, the contractor gives written notice to the client identifying the delay.
- The client has 12 weeks to review and respond.
What is a relevant event?
An event that entitles a contractor to an extension of time
What can be considered as a relevant event?
• Variations.
• Exceptionally adverse weather.
• Delays in receiving possession.
• Force Majeure.
Loss from a specified Peril (such as flood)
• Terrorism/ civil commotion.
• Failure by the client to issue materials.
• Delays caused by a nominated sub-contractor.
• Changes to statutory requirements.
• Failure by the client to provide information.
Do Extensions of Time benefit the client?
Yes, as they set a new contractual completion date the contractor must adhere to, otherwise they will have liquidated damages levied against the contractor
What is a concurrent delay?
Where delays caused by both the contractor, client and unforeseeable events cause a delay.
How do you assess concurrent delay?
Each delay should be assessed on its merits, to determine the root cause of the delay
What is a relevant matter?
A delay caused by the client, entitling the contractor to an extension of time and loss and expense.
How is a relevant event different to a relevant matter?
- A Relevant event is any delay caused by the client or a neutral event.
- A Relevant matter is a delay typically caused by the client, which entitles the contractor to a claim for loss and expense.
What is loss and expense?
Usually associated with Extensions of Time/Relevant Matters, whereby the contractor is entitled to claim additional costs as the result of a delay.
What are the Loss and Expense heads of claim?
- Preliminaries
- Overheads
- Loss of Profit.
- Interest
- Finance Charges
When do most disputes in construction contracts occur?
When there are discrepancies between tender and contract drawings or the information is poor, creating too much ambiguity.
What types of dispute resolution are there?
- Negotiation
- Mediation
- Conciliation
- Adjudication
- Arbitration
- Litigation
- Expert Witness.
How does Mediation work?
An independent third party is appointed, with the intention of facilitating talks between he disputing parties, in aid of them reaching an amicable resolution without going legal.
How does conciliation work?
Same as mediation, however the conciliator will propose a settlement agreement at the end of proceedings.
How does adjudication work?
- Notice of intention to adjudicate is served from one party to another.
- Adjudicator must be appointed within 7 days of notice.
- Decision is made with 28 days (can be extended to 42)
- Confidential.
- Statutory right.
How does arbitration work?
- Third party arbitrator is appointed to decide on a dispute.
- Parties will attend a hearing, where the arbitrator will listen to both sides and make their decision on a dispute.
- Confidential.
What is Litigation?
The process of taking legal action, i.e. construction disputes will be taken to the Construction and Technology courts for settlement.
What is expert determination?
Where a third party expert in a field is appointed to make a decision on a specific dispute.
What is the Civil Procedure Rules 1998?
They introduced the Alternative Dispute Methods of Resolution, Mediation, Conciliation, Adjudication and Arbitration to try speed up the legal process, along with making it cheaper and easier to understand.
What is a named sub-contractor?
A Sub-contractor recommended by the client, which doesn’t have to be used by the contractor and also doesn’t impose any form of repercussions to the client if the contractor uses the named sub-contractor.
What is nominating a sub-contractor?
It allows the client to choose a particular sub-contractor, and impose them in the main contractor.
What are the issues of nominating a sub-contractor for a client?
It will leave them responsible for the nominated sub-contractors performance and price.
How do nominated sub-contractors work financially with regards to the main contractor?
They are on a prime cost sum, whereby the final value of the nominated contractors work is added to the contract sum, usually with an uplift for Overheads and profit for the main contractor.
What is Sectional Completion?
A similar method to Practical Completion, it is used on large project where the works can be broken down into sections, allowing the client to take possession of individual sections once they are complete.
What is practical completion?
Practical Completion is awarded when the works are considered to be ‘substantially complete’.
What are patent defects?
A patent defect is one that has been identified during the works or during the defect liability period
What are latent defects?
Latent defects are those which cannot be discovered by reasonable inspection; for example, problems with foundations which may not become apparent for several years after completion when settlement causes cracking in the building.
What happens when Practical Completion is awarded?
- Half Retention is released.
- Defects liability period commences.
- Client is responsible for insuring the site.
- Ends the Contractors liability to pay liquidated damages.
What is Partial Possession?
• Similar to Sectional Completion, however it is used when the client wants to take possession of a particular part of the site early. It is granted at the contractor’s discretion.
What happens when Partial Possession is awarded?
- Alleviates the contractor’s liability to pay LAD’s for that section partially taken over. Lads should decrease proportionally.
- Half Retention is released proportionally.
- End of defects period for that section commences.
- Client is responsible for insuring that part of the site.
When can it be used?
- Sectional Completion must be written into the contract.
* Each section will come with it own Sectional Completion date, retention and liquidated and ascertained damages.
What happens if Practical / Section Completion / Partial Possession is granted?
- Client becomes responsible for insuring the works.
- Half retention released.
- Alleviates contractors liability for LADS.
- Contractors Defect liability period commences.
Does the contractor have to accept partial possession?
No, but they cannot reasonably refuse.
What is the alternative to partial possession?
Use or occupy, whereby the client uses the area even though its still in the contractor possession.
What is a contractors design portion?
- Whereby the Contractor is required to design a portion of the works, as part of their contract.
- What is to be designed by the contractor should be made clear within the tender documents.
What is determination?
• Where both parties mutually agree to walk away from a contract.
What is a final account?
The final value of the works completed, inclusive of all adjustments to the contract sum.
How is the final account shown?
In the final certificate.
What is included within the final account
- Contract Sum.
- Variations.
- Provisional Sums.
- Prime Cost Sums.
- Retention.
- Loss and Expense.
- Contra Charges.
- Liquidated Damages.
- Payments to Nominated Sub-contractors.
- Fluctuations.
What is completion?
- When all works are completed, and the defects rectification period has ended and all defects have been made good.
- The Certificate of Making good should be issued.
What needs to happen if PC/SC is not achieved and the Client wants to levy liquidated damages?
Certificate of Non-completion needs to be issued as a pre-requisite.
When does the defects rectification period begin?
When PC/SC is achieved, and usually last 6 – 12 months.
What happens if defects are found?
- The Client notifies the CA, who will instruct the contractor to remedy the defects.
- At the end of the Defects rectification period, a schedule of defects will be issued to the contractor for remedy.
What are Liquidated Damages?
- An amount that can be levied by the client against the contractor if they fail to meet the contract practical/sectional completion dates.
- They must be a genuine pre-estimate of the client’s loss and are usually fixed daily/monthly sums.
