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RICS APC - ERH > Black Books - All > Flashcards

Black Books - All Flashcards

1
Q

What are the pros & cons of subcontracting?

A 
Pros:
Using specialists
Flexible resources
Transfer of risks
Reduce cost of training & development

Cons:
Smaller businesses lack resources for training & development
Less control
Risk dumping

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2
Q

Types of subcontracting?

A

Nominated
Named
Labour only
Design consultants

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3
Q

Features of a subcontract?

A 
Agreement
Conditions
Particulars
Scope & Attendances
Technical documents
Security (Bonds / PCG)
Collateral Warranties
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4
Q

What is the difference between procurement & tendering?

A

Procurement is the overall process of obtaining goods and services including the strategy of how.

Tendering is the bidding process phase of procurement

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5
Q

Why are amendments included in a contract?

A
  • To reflect a project specific obligation (i.e. an agreement for lease)
  • To reflect the client’s business needs ( i.e. performance security)
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6
Q

Where does the Construction Act NOT apply?

A

Residential occupiers

Demolition of plant and machinery

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7
Q

What are the payment terms under a JCT subcontract & NEC subcontract?

A

JCT:
Application 7 d - Due Date - FDFP 14 d = 21 days

NEC4:
Application 14 d - Due Date - FDFP 14 d = 28 days

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8
Q

How do the notices in NEC4 differ between the standard contracts and subcontracts?

A

Standard - Main Contractor has 8 weeks

Subcontract - Subcontractor has 7 weeks

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9
Q

What are damages?

A
  • Time related prelims (often fixed LDs)
  • L&E from other s/c
  • Inflation costs
  • Costs due to retention held under MC
  • Loss of contribution to OH&P
  • Interest costs
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10
Q

What is included in a procurement strategy?

A
  • Exec summary
  • Contract details
  • MC works
  • s/c packages
  • Financial planning
  • Programme
  • Pre-qual
  • Tendering procedure
  • ITT
  • Assessment
  • Appointment
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11
Q

What are the signs of subcontractor insolvency?

A
  • Difficultly getting pricing from supply chain
  • Resignations / high t/o of staff
  • Requests for advance payments / reduced payment terms
  • Refusal to provide bonds / high premiums
  • Rumours of financial stability
  • Lack skilled labour
  • Inflated valuations / claims
  • Chasing payments
  • Payment for Materials off site
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12
Q

What are cashflows used for?

A
  1. Obtaining bank loans
  2. Progress monitoring
  3. Managing cash
  4. Forecasting business performance
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13
Q

Types of Valuations?

A
  1. Staged payments (payments at set times regardless of progress)
  2. Milestones
  3. Activity Schedule
  4. Valuation of works done.
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14
Q

What are the key impacts of the Construction Act?

A
  1. Right to interim payments
  2. Right to adjudicate
  3. No withholding payments unless payless notice issued
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15
Q

What are the considerations when collating a cashflow?

A
  1. Should retention be included
  2. Whole development or just contract
  3. Gross / net
  4. Monthly / cumulative / both
  5. Adjustments for easter / xmas breaks
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16
Q

Reasons for variances in cashflows?

A
  • Progress
  • adverse weather
  • site conditions
  • resequencing
  • materials off site
  • materials not delivered / labour shortages
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17
Q

Why might a contractor be ahead of forecast cashflow?

A
  • Front loading
  • Ahead on Programme
  • Re-sequenced works
  • Variations
  • Acceleration to finish earlier
  • Cashflow not accurate in first place
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18
Q

What are the different forms of procurement?

A
  • Lump sum
  • Remeasureable
  • D&B
  • Construction Management
  • Management contracting
  • Partnering
  • PFI
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19
Q

How does having a good knowledge of construction effect estimates?

A
  • Understanding how something is constructed can help to understand elements that need to be priced and/or check are included.
    i.e
    Joints between planks
    Impacts of off site fabrication
    Bathroom pods
20
Q

What is conflict avoidance?

A

Techniques used to prevent a dispute before it occurs:

  • Good management
  • Clear contract docs
  • Good project management
  • Good design management
  • Good payment practices
  • Record keeping & reporting regularly
21
Q

What are the 3 pillars of dispute resolution?

A
  • Negotiation
  • Conciliation & Mediation
  • Adjudicative processes
22
Q

What are the timescales for Adjudication?

A

7 days to appoint adjudicator from notice to adjudicate
28 days for decision
Decision is binding & enforceable in TCC (technology & construction court)

23
Q

Does Arbitration cover if a company is insolvent?

A

No - covered by Insolvency Act

24
Q

What is required for adjuducation?

A
  • Must be a dispute
  • Contract to refer to ‘at any time’
  • Adjudicator to be appointed within 7 days of notice
25
Q

When would you use an expert determination?

A
  • When Construction Act does not apply
  • If detailed within the contract
  • If parties agree to refer it to expert determination
26
Q

What levels of PI does the RICS recommend?

A

Up to £100k t/o = £250k cover in each and every
£101 - 200k t/o = £500k cover in e&e
£201k + t/o = £1m cover in e&e

27
Q

What types of surety are you aware of?

A
  • Performance Bond
  • Retention Bonds
  • Advance Payment Bond
  • Maintenance Bond
28
Q

What is the purpose of a surety bond?

A
  • Links parties to ensure privity to a contract i.e. third parties / non-contractural parties have some security:
  • Funders
  • End users / tenants
  • Consultants
29
Q

What is the difference between an On-demand bond and a Conditional bond?

A

On demand - advance payment / retention bond - can be paid on demand of beneficiary

Conditional bond - require proof that contractor has not performed their duties

30
Q

What is a ‘net contribution clause’?

A

Used in some collateral warranties to limit liability to such a sum that is fair and just.
i.e. If a joint default - each consultant is only liable for their part or equal parts (50% each) rather than each 100%.

31
Q

What would you include when collating benchmark data?

A
  • Project type
  • GIFA / NIA (same for all)
  • Contract sum
  • Base date
  • Location
  • Type of contract
32
Q

What are common difficulties with using benchmark data?

A
  • Can focus on just the ££ rather than what it represents
  • Need to review objectively - do any ‘skew’ data
  • How are risks allowed for
  • Are variations included
33
Q

What is the purpose of cost reporting?

A
  • Understand costs in a set period
  • Forecast final liabilities & profit
  • Costs can be estimated where not yet known
  • Risk allowances foreseen
  • If undertaken regularly allows a team to control outturn costs
34
Q

What is included in a cost report

A 
Prelims
subcontractors
consultants
stats
materials
risk allowance's
variations 
insurances
35
Q

What is the difference between liquidated and unliquidated damages

A

Liquidated - genuine pre-estimate / predefined sum (£/day , £/week)

Unliquidated - proven at time of loss & based on actual loss / costs incurred. Need to demonstrate reasonable mitigation

36
Q

What are the pros & cons of liquidated damages

A

Allows the contractor to plan for any potential delay risk in advance

Usually deducted regardless of actual loss

Need to issue non-completion certificate

If an EOT is then issued, any deduction must be reflected in the next interim certificate along with any interest due

37
Q

Where are damages noted in the JCT & NEC contracts?

A

JCT - Contract Particulars

NEC - Contract Data Part 1 & X clauses

38
Q

What is the completion of a project?

A

When all contractual obligations have been satisfied

39
Q

What happens on completion?

A
  • Client takes possession
  • Transfer of risk to client - any damage is clients responsibility
  • Liability for any delays / damages ends
  • Defects liability period starts
  • Release of retention monies
  • Insurances need to be in place by client
  • Bonds / Guarentees / payments due/ end.
40
Q

What are the pros & cons of traditional procurement?

A

Pros:
Competitive fairness
Design -led
Price certainty

Cons:
Can be slower
Attempts to speed up process and issue information before design completion can result in cost errors
No contractor input into design
Not ideal where full scope cannot be defined

41
Q

What are the pros and cons of D&B procurement?

A

Pros:

  • Quicker programme
  • Contractor input
  • Better value
  • Contractor takes risk
  • Single point of responsibility

Cons:

  • Not as competitive
  • Need to commit to concept design at early stage
  • bids can be difficult to compare
  • Quality may be compromised
42
Q

What is the difference between construction management and management contracting?

A

Construction management - Client employs a construction manager to oversee construction yet employs all the trades directly.

+ Can overlap design & construction
+ Changes in design can be accommodated later
+ Client employs s/c directly therefore better cashflow into supply chain
- Price and time certainty not known until last package let
- An informed and pro-active client is required
- close design management needed

Management contracting - Client employs a management contractor to oversee works but employs trades directly.

+ Can overlap design & construction
+ Changes in design can be accommodated later
+ Client employs s/c directly therefore better cashflow into supply chain
- Need good quality contractor - risk of being a post box
- May be gaps in packages that would usually be picked up by trade contractors / main contractor

43
Q

What is a Project execution plan (PEP)?

A

Includes:

  • Overview of project & objectives
  • Specific objectives
  • Proposed procurement route
  • Control mechanisms - admin / contractual / financial / reporting / changes / value / quality / H&S
  • Time schedule
  • Budget
  • Responsibilities
  • How will items be measured
  • Risks & Opportunities
43
Q

What is a Project execution plan (PEP)?

A

Includes:

  • Overview of project & objectives
  • Specific objectives
  • Proposed procurement route
  • Control mechanisms - admin / contractual / financial / reporting / changes / value / quality / H&S
  • Time schedule
  • Budget
  • Responsibilities
  • How will items be measured
  • Risks & Opportunities
44
Q

Are the black books mandatory

A

No, they are guidance notes that encourage best practice

45
Q

Can you name some of the black books?

A
  • Retention
  • Valuing change
  • EOT
  • Damages
  • CA & DR
  • Insurance
  • FAs

RICS APC - ERH (22 decks)

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