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Lydia's APC > Blackbooks > Flashcards

Blackbooks Flashcards

1
Q

What is acceleration?

A

When the Employer wishes to bring Practical Completion forward, the Contractor may implement measures to do this such as increasing labour/ resources, introducing shifts etc

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2
Q

What are capital allowances?

A

They permit tax relief on capital expenditure. The main capital allowances are plant and machinery allowances, business premises renovation allowances, flat conversion allowances and research and development allowances

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3
Q

What are the two main types of cash flow forecast?

A
  • Company cash flow
  • Project cash flow
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4
Q

What is the purpose of a cash flow?

A

To ensure the employer has an accurate assessment of what needs to be paid to the Contractor and when and therefore their bank or funder is aware of monthly draw-downs

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5
Q

How did the Construction Act improve payment?

A
  • Statutory right to refer disputes to adjudication
  • Introduced right to periodic, interim or stage payments
  • Requiring contracts should provide a mechanism to determine what payments become due and when and a final date for payment
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6
Q

What is an S curve?

A

It represents the lower level of expenditure at the beginning of a project, increase in the middle and decrease again at the end of the project

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7
Q

What does change control mean?

A

Process that can lead to the alteration of the timescale, cost or scope of the project

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8
Q

What are the two principal categories of change?

A
  • Contractor change
  • Employer change
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9
Q

What are some reasons for change?

A
  • Employer
  • Ground conditions
  • Statutory requirement
  • Tender assumptions incorrect
  • Specified items unavailable
  • Discrepancies in Contract Docs
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10
Q

What is change defined as?

A

Alteration or modification of design, quality or quantity of the works

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11
Q

What is the difference between SBC and D&B in regards to changes?

A

In SBC, they’re known as variations whereas in D&B they’re known as changes

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12
Q

What does a commercial manager do?

A

Maximise the potential of a business in terms of profitability, manage and control internal processes and also external relationships. They monitor financial performance and manage risks.

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13
Q

What are the most common forms of procurement / payment mechanisms?

A
  • Lump sum contracts
  • Remeasurement contracts
  • Target sum contracts
  • Guaranteed maximum price
  • Cost reimbursable
  • Management contracts
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14
Q

What is a CVR?

A

Comparison of cost to date vs value to date

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15
Q

Name some forms of ADR

A
  • Adjudication
  • Mediation
  • Negotiation
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16
Q

What is the process of adjudication?

A

Any party can refer a dispute to adjudication at any time, by serving notice. An adjudicator should then be appointed in 7 days of the notice, and have 28 days to reach a decision.

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17
Q

What are collateral warranties?

A

They create a contractual link between a third party and a main party of the contract, so the third party can make a claim if they suffer loss, usually funders or purchasers/ tenants

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18
Q

What are third party rights?

A

A third party may enforce a term of a contract if the contract expressly provides if may do so, without a collateral warranty being in place.

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19
Q

What is the difference between an on demand and conditional bond?

A

On demand - do not need to prove there has been a breach
Conditional - Employer has to establish breach by the Contractor

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20
Q

What is a parent company guarantee?

A

Contract between a parent company and a third party beneficiary where the parent guarantees performance of one of its subsidiaries.

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21
Q

What is the difference between a performance bond and parent company guarantee?

A

Performance bond provides financial compensation in event of Contractor breach of obligations, whereas PCG is intended to guarantee obligations are performed.

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22
Q

What is cost analysis?

A

Full appraisal of costs involved in previously constructed buildings aimed at providing reliable information which will assist in accurately estimating costs of future buildings

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23
Q

What important factors need considering when completing cost analysis?

A

Location and time

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24
Q

What information is required for a cost analysis?

A
  • GIA / NIA
  • Number of storeys
  • Was there a basement
  • Number / type of functional units
  • Start on site and completion date
  • Type of procurement / contract used
  • Location
  • Base date
  • Contract sum
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25
Q

What is benchmarking?

A

Overall process of improvement aimed at providing better value for money for employers

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26
Q

What is the base date?

A

For lump sum contracts, it is usually 10 days before tender return whereas for projects where the price isn’t fixed, it is usually mid point of construction.

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27
Q

Where are the GIA, NIA, GEA defined?

A

RICS Code of Measuring Practice

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28
Q

What is a prime cost sum?

A

Financial adjustment of work where the extent is known but the specification has yet to be determined.

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29
Q

What does Practical Completion trigger?

A
  • Client can no longer levy LDs
  • Client must insure works
  • Commencement of Rectification Period
  • Release of retention
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30
Q

What is the difference between the EA, CA and PM?

A

EA - can be appointed at any time prior to entering in contract, acts on behalf of employer unless carrying out decision making or certification functions
CA - administers contract
PM - manages a team to develop and deliver a project for the employer, controls and manages communications, they are impartial in respect of the contract.

31
Q

What are some forms of E-Tendering?

A
  • Physical media e.g., CDs, DVDs
  • Email
  • Web based technology
32
Q

What does battle of the forms mean?

A

The contract terms last referred to will be the ones that apply

33
Q

When does the EA / CA need to respond to a delay notice from a Contractor by?

A

12 weeks from receiving the required particulars

34
Q

What are some methods of delay analysis?

A
  • As planned vs as built
  • Critical path analyses
35
Q

What are the 3 options in the JCT for calculating price adjustments (fluctuations)

A
  1. Construction, levy and tax fluctuations
  2. Labour and materials cost and tax
  3. Formula adjustment
36
Q

What is ICMS?

A
  • International cost management standard
  • Provides high level structure for classifying, defining, measuring, recording, analysing and presenting life cycle costs and carbon emissions associated with construction projects, to promote consistency and transparency.
37
Q

What is life cycle costing?

A

Economic evaluation method that takes account of all relevant costs over a time horizon (period of analyses).

38
Q

What is net present value?

A

Any future costs discounted back to present value using a discounting factor

39
Q

What is embodied carbon?

A

Total carbon emissions associated with the materials and products used, transport, construction, maintenance, repair and replacement.

40
Q

What is the difference between the QS and CA’s roles in interim valuations?

A

QS assesses value of work, CA certifies work and it is their responsibility to inform the QS of any adjustments required to their assessment.

41
Q

Under the HGCRA, how many days entitles a project to interim or stage payments?

A

45 days

42
Q

When must a pay less notice be issued?

A

No later than 5 days before the final date for payment

43
Q

What are the different types of payment mechanism?

A
  • Stage payments (or milestones)
  • Periodic payments
44
Q

What are the main components in a valuation?

A
  • Measured works
  • Prelims
  • OH&P
  • Risk
  • Materials on site
  • Materials off site
  • Provisional sums
  • Instructions
  • Loss and expense
45
Q

What is a retention bond?

A

Agreement between employer and third party surety that in return for the employer not holding retention, they will undertake to pay the employer the full amount of retention should the contractor fail to carry out works or remedy defects

46
Q

What does retention of title mean?

A

Sold and delivered goods remain the property of the seller until the buyer pays the purchase price in full, rather than when materials are delivered.

47
Q

What does the role of the independent monitoring surveyor involve?

A
  • Independent technical due diligence of a project
  • Assessing initial risks
  • Monitoring progress
  • Approving debt drawdown
48
Q

What is the independent monitoring surveyor’s role in the construction phase?

A
  • Review contractor’s report
  • Attend progress meeting
  • Review progress
  • Review spend against cashflow forecast
  • Prepare drawdown certificate
  • Prepare progress report
49
Q

What is the difference between LCC and WLC?

A

WLC has a broader scope, including client and user costs such as project financing, land, income and external costs.

50
Q

What are some benefits of LCC for Clients?

A
  • Encourages analysis of business needs
  • Costs of ownership of alternative options are evaluated over their whole life
  • Analysis of risks and costs of loss of functional performance due to failure or maintenance are included
  • Best value for money solution is adopted
51
Q

What are the different categories of cost included in an LCC analysis?

A
  • Construction costs
  • Maintenance costs
  • Operation costs
  • Occupancy costs
  • End of life costs
52
Q

What categories does WLC include that LCC doesn’t include?

A
  • Non-construction costs
  • Income
  • Externalities
53
Q

What is inflation?

A

Rise in the general price level, reflecting a decline in the purchasing power of money

54
Q

What is subcontracting?

A

The subletting by the main contractor to the subcontractor of the performance of some or all of the main contractor’s obligations under the main contract.

55
Q

What are some of the types of Subcontractors?

A
  • Nominated - selected by the Employer
  • Named - named in the contract, employed by main contractor
  • Domestic - selected and employed by the main contractor
56
Q

What is procurement?

A

Overall act of obtaining goods and services from external sources

57
Q

What is tendering?

A

The bidding process of obtaining a price and how the contractor is actually appointed

58
Q

What is single stage tendering?

A

Obtaining a price for the whole of construction works, usually done at RIBA Stage 4

59
Q

What is two stage tendering?

A

First stage tender enquiry documentation is issued to bidding contractors and the preferred contractor is selected to complete the design and present a price for the works

60
Q

What is a negotiated tender?

A

Single stage tender with a single contractor who returns a price for the works

61
Q

What is the purpose of a PQQ?

A
  • Ensure Contractor has relevant experience
  • Check Contractor’s health and safety record
  • Ensure they have the relevant financial standing
62
Q

What are some typical tender appendices?

A
  • PCI
  • Warranty / PB / PCG wording
  • Surveys
  • Planning information
  • Building control information
  • Party wall agreements
  • Risk register
63
Q

What is corporate recovery?

A

Process and actions taken to bring an ailing company back to full health

64
Q

What is insolvency of a party?

A

Where they do not have sufficient assets to cover its debts or are unable to pay its debt when they are due

65
Q

What are the different types of insolvency?

A
  • Corporate voluntary agreements
  • Administration
  • Winding up of the party / compulsory liquidation
  • Administrative receivership
  • Voluntary liquidation
66
Q

What is repudiation?

A

Where a party commits a breach of contract that is sufficiently serious that it allows the receiving party to terminate the contract with immediate effect

67
Q

What is frustration?

A

When neither party has defaulted but unforeseen circumstances prevent the contract from being performed

68
Q

What measures should be put in place in an insolvency / termination of contract situation?

A
  • Secure the site
  • Employ a security firm
  • Obtain legal advice
  • Ensure adequate insurance in place
  • Inspect the site, take photos, record progress
  • Make schedule of works to complete the works
  • Make schedule of materials on site
  • Advise on options for claims
  • Liaise with insolvency practitioner
  • Prepare and issue notional Final Account
69
Q

What is the difference between VE and VM?

A

VM usually takes place during earlier stages and this becomes VE once design and spec have been developed

70
Q

What are the different ways of valuing change under the Valuation Rules?

A
  • Using contract rates if work is of similar character
  • Using contract rates but adding fair allowance if similar but some change in conditions
  • Fair rates and prices
  • Dayworks
71
Q

What is changed defined as?

A

Alteration or modification of design, quantity or quality of the Works

72
Q

Who holds risk for errors in BoQ’s?

A

The Employer

73
Q
A

Lydia's APC (7 decks)

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