CA

Question 1

What are the payment terms under the JCT Contract

Answer 1

The contractor can make an application for payment any time up until 7 days before the due date and the Final Date for Payment is 14 days following the due date

Question 2

What is the standard End of Defects period under the JCT Intermediate contract

Answer 2

3 months unless stated otherwise

Question 3

What is are the different insurance provisions within a JCT contract?

Answer 3

• 5.4A…
• 5.4B…
• 5.4C…

Question 4

What is the benefit of a joint insurance policy?

Answer 4

The benefit of a joint names contract to the property owner is that they have control of the insurance and will be notified if the cover is cancelled during the work.

Question 5

What are Liquidated Damages?

Answer 5

Liquidated damages (“LDs”) are pre-determined sums that become payable upon a breach of contract.

Question 6

How do you assess Extensions of Time in a JCT Minor Works Contract?

Answer 6

The contract administrator finish

Question 7

How do you assess Extensions of Time in a JCT Intermediate Contract?

Answer 7

see relevant events section of contract

Question 8

How do you assess Extensions of Time in a JCT Standard Contract?

Answer 8

Assess the contractor’s reasoning against the the list of Relevant Events under the JCT Standard Building Contract 2016

Question 9

What is are the differences between relevant matters and relevant events?

Answer 9

A relevant matter entitles the contractor to claim direct loss or expense.

A relevant event entitles the contractor to an extension of time.

Question 10

What are the effects of practical completion on a contract?

Answer 10

• Possession…
• Insurance…
• Retention…
• Defect period begins…
• No (more) Liquidated Damages

Question 11

What is the role of the Contract Administrator?

Answer 11

The CA is employed by the client to administer the contract on his behalf as an agent, however he must always act with impartiality and integrity. Duties include formulating the contract, issuing instructions, raising certificates, carrying out site inspections, assessing EOT claims.

Question 12

What are the differences between an application for payment and a valuation?

Question 13

What are the payment procedures under the JCT Minor Works Contract?

Question 14

What are the payment procedures under the JCT Intermediate Contract?

Question 15

What are the payment procedures under the JCT Standard Contract?

Question 16

What are the differences between the JCT MWBC and the JCT IC?

Answer 16

IC has Sectional completion.

IC has Early possession.

IC has relevant events.

IC has named subcontractors.

IC has advance payment.

Question 17

What are the differences between the JCT IC and the JCT SC?

Question 18

What should you consider when advising on a procurement route?

Answer 18

The client’s budget, level of quality required, time available and willingness to take on risk.

Question 19

What factors affect procurement choice?

Answer 19

Time, quality and cost are often the main factors. However risk is becoming a major concern. Other considerations include complexity, type of client, specialist input and controllable variation.

Question 20

What is traditional procurement?

Answer 20

With this approach the client appoints consultants for design, cost control and contract administration. The contractor is responsible for carrying out the works.

Question 21

What are the advantages and disadvantages of traditional procurement?

Answer 21

Advantages:
• Control of quality
• No built in contractor risk premium
• Client knows lump sum cost
• There is a contractual date for completion
• Change is relatively easy.

Disadvantages:
• Commitment to the lump sum price is often undermined by client changes
• All design risks lie with client
• High pre-contract design fees
• Long design period.

Question 22

What is design and build procurement?

Answer 22

With this approach the tender documents outlining the employers requirements are prepared by consultants employed by the client. It is the responsibility of the contractor to carry out the design and the work.

Question 23

What are the advantages and disadvantages of D&B?

Answer 23

Advantages:
• Cost and contract dates are secured early on
• Time can be saved by starting the construction works whilst the design is completed
• All risks lie with the contractor
• Main contractor provides single point of responsibility for design and build.

Disadvantages:
• Project becomes price driven at the expense of quality
• Contractor assumes higher risk and this is reflected in the price
• Changes can be expensive and give rise to EOT

Question 24

How can the two stage Design & Build procurement route work in practice?

Answer 24

It can significantly reduce the tender period and the some of the design period ran concurrently with the construction period. It also allows you to make use of the expertise of the contractor to highlight buildability issues early on in the process and it gets there buy into the design.

Question 25

What is management contracting?

Answer 25

A design team prepares project drawings and a specification. A management contractor is selected by a process of tender and interview. His role is literally to manage the execution of the works. The contractors are usually appointed by the MC with all the works to be done undertaken in ‘packages’

Question 26

What are the advantages and disadvantages of Management Contracting?

Answer 26

Advantages:
• Quick method of procuring a main contractor.
• Flexible as design can extend into the construction period.
• Programme and cost plan agreed by design team.
• The employer can stop the work before proceeding to construction for a fee.

Disadvantages:
• Risk of market inflation if delays.
• The final cost is not known until contract is complete.
• Very close cost control is required.
• Method requires high level of client involvement.

Question 27

What is construction management?

Answer 27

In this method a construction manager joins the design team early in the project acting as an agent, not a principal. The CM is appointed based on a negotiated fee. The CM’s role is simply to supervise and plan the works. Each work package contractor has a separate contract with the client and is paid directly by the client.

Question 28

What are the advantages and disadvantages of Construction Management?

Answer 28

Advantages:
• Maximum overlap with design and construction
• Quality can be assured
• Expertise of CM fully utilized.

Disadvantages:
• Client has no commitment from the contractors on overall price
• Client takes all the risk
• Total price not known until well into the programme.

Question 29

What is the OJEU Process?

Answer 29

Public sector procurement is subject to EU rules and UK regulations, which are intended to promote fair competition. For public sector works and services above a certain cost threshold, a notice must be placed in the Supplement to the Official Journal of the European Union (OJEU).

Question 30

What ere the thresholds of the OJEU?

Answer 30

Type Supplies/Services Works
Central Government £100k £3.9m
Other Public Sector £150k £3.9m
Small Lots £64k £810k

Question 31

What are the types of OJEU tender procedure?

Answer 31

Restricted – expressions of interest are invited and the most suitable are invited to submit a tender

Open – Anyone can submit a tender

Negotiated – the contract is negotiated with at least 3 tenderers. Use of this procedure is subject to justifications

Competitive Dialogue – following the OJEU notice and selection process, the authority enters in dialogue with potential bidders to develop one or more suitable solutions.

Question 32

What are the timescales involved in the OJEU process?

Answer 32

PIN: Between 52 days and 12 months before contract notice

Open: Tender period – 52 days

Restricted: Requests to participate / PQQ – 37 days. Tender period – 40 days. Alcatel standstill period – 10 days. Contract award – within 48 days of contract award

Competitive Dialogue / Negotiated: Requests to participate / PQQ – 37 days

Question 33

What was the Latham Report about?

Answer 33

The Latham Report, titled Constructing the Team, was an influential report written by Sir Michael Latham, published in July 1994. Latham was commissioned by the United Kingdom government and industry organisations to review procurement and contractual arrangements in the UK construction industry, aiming to tackle controversial issues facing the industry during a period of lapse in growth as a whole.
Latham identified industry inefficiencies, condemning existing industry practices as ‘adversarial’, ‘ineffective’, ‘fragmented’, ‘incapable of delivering for its clients’ and ‘lacking respect for its employees’.

Question 34

What were the recommendations of the Latham Report?

Answer 34

a. The government should commit itself to being a best practice client.

b. The private sector should get together to establish a construction clients forum.

c. The CIC should issue a guide to briefing for clients.

d. The DoE should publish a simply worded construction strategy code of practice.

e. A checklist of design responsibilities should be prepared.

f. The use of co-ordinated project information should be a contractual requirement.

g. The responsibilities for building services design should be clearly defined.

h. A set of basic principles is required on which modern contract should be based.

i. A complete family of interlocking contractual documents is required.

j. A target should be set for 33% of government funded projects starting over the next four years to use the New Engineering Contract.

k. The role and duties of project managers requires to be more clearly defined.

l. The DoE should develop quality registers of approved contractors, sub-contractors and consultants.

m. Guidance should be issued on rationalising tender list arrangements and on partnering.

n. The specific efforts of BS5750 in the construction process requires further investigation.

o. Adjudication should be the normal form of dispute resolution

Question 35

What is the Egan report about?

Answer 35

Rethinking Construction is the name of the report produced by Sir John Egan’s Construction Task Force published in 1998. The report identified a number of key drivers for change: committed leadership, a focus on the customer, integrated processes and teams, a quality driven agenda, and commitment to people.

Question 36

What were the affects of the Latham Report and subsequent reports?

Answer 36

the NEC contracts were produced which Latham felt met the majority of his recommendations and by NEC3 he felt they met them all. Other standard forms have also been amended to take consideration of his recommendations.

Question 37

5. Can you briefly explain the key principals of a construction contract?

Answer 37

A formal agreement which sets out who does what for how much, how it should be done, and allocates the risk.
The key elements of a construction contract include:

The obligations of parties and others:
• The works, supplies (goods), services, material, matters or things to be carried out or supplied.
• The payment – how much is to be paid, how and when it is to be paid.
• The time within which the contract is to be performed
• Quality requirements and/or standards which must be met
• Requirements on the contractor/employer to hold and maintain appropriate insurance

Provides procedures to vary the contract – instructions, variations extensions.

Provides procedures to manage dispute and disagreement.

Details what happens in the event that the contractor fails to comply with its contractual obligations (in whole or in part). (Delay, defective work, non completion)

Question 38

Name three factors that are necessary for a contract to be formed?

Answer 38

Offer.

Acceptance.

Consideration.

Question 39

Can you list out typical documents that make up a building contract and the purpose for each?

Answer 39

a. The building contract - This is a legal document, usually in standard form. It sets out the roles, rights and responsibilities of the employer and the contractor.

b. The specification:
i. Prelims - Preliminaries are activities or costs that are not necessarily linked to the building work. They are costs associated with administration, setting up and Statutory Authorities regulations and fees.
ii. Preambles – Quality of materials and workmanship.
iii. Works - The technical requirement to complete, execute and/or perform every little task or material being incorporated in the construction project. It specifies common standards, deviations accepted, materials accepted and the required testing for all materials. Specific referencing to construction standards and codes.
iv. The drawings/plans – Drawings detailing the works to be undertaken referring to and to be read in conjunction with the specification to gain a full understanding of the works.

c. Priced schedule of work/bill of quants - Breakdown of all items being incorporated in the construction project. This is usually the base of the application for payment.

d. Pre Construction Information Pack – Details of all the health and safety, security, welfare, access considerations that need to be taken into account. The response to which should be the contractors construction phase health and safety plan.

Question 40

What is the difference between preambles and preliminaries.

Answer 40

Prelims detail non construction related works that the contractor needs to cost and preambles detail the quality requirements for materials and workmanship.

Question 41

During your APC you will have to justify your choice of contract, what were the ‘determining factors’ of your chosen contract?

Question 42

Explain the difference between single stage and two stage tendering.

Answer 42

Single Stage – Go to tender with completed consultants design and specification. Contractor prices the bill of quants, schedule of work or performance spec. Benefits include greater cost and programme certainty, reduced cost due to competitive tender, clear allocation of risk.

Two Stage - The first stage tender is based on a partially developed consultant’s design (prelims, provisional sums, demolitions, earthworks, schedule of rates etc.). The contractor selected at the first stage is then able to assist with the final development of the design and tender documents used to obtain tenders for the construction works. The second stage can either be tendered or negotiated to arrive at a contract sum. Benefits include contractors input and buy in to the design, collaborative working relationship.

Question 43

What certificates are issued under JCT contracts?

Answer 43

Interim Payment Certificates (if all goes well and following applications for payment).

Sectional Completion Certificate.

Practical Completion Certificate.

Certificate of Non-Completion.

Extension of Time Certificate.

Certificate for Making Good Defects.

Final Certificate.

Question 44

What figures would you expect to be detailed on a payment certificate?

Answer 44

• The contract sum
• The gross valuation
• Less the retention
• Less the total amount previously certified
• Net amount for payment (in figures and words).

Question 45

What must the CA do if you wish to withhold payment to a contractor?

Answer 45

Section 111 of the Housing Grant Construction and Regeneration Act 1996 - A party to the contract may not withhold payment after the final date for payment of a sum is due unless they have given an effective notice of their intention to do so. The notice needs to clearly state the amount withheld and the grounds for doing so. (Often referred to as a withholding notice or payless notice).

Question 46

With regards to XX project, did you or someone else in the firm sign the interim certificate?

Answer 46

All certificates were drafted by me, checked by a senior surveyor and then checked and signed by a by a Director.

Question 47

With regards to XX project, did you have a retention?

Answer 47

Yes on the projects that I have worked on the retention was 5% with 2.5% released at practical completion. Although I am aware these levels can be altered and are 3% and 1.5% on the Standard Building Contract.

Question 48

On XX project, how did you decide whether PC had been achieved?/ When can you certify practical completion?

Answer 48

When the works are substantially completed and free of latent defects other than those that can be ignored as minor or trivial.

Complete health and safety file has been issued in draft.

The client’s ability to take possession and make beneficial use of the building has a significant bearing on PC.

Question 49

What are the consequences of issuing the PC certificate?

Answer 49

Rectification period begins.

The retention often reduces as detailed in the contract.

Responsibility for insuring the premises passes back to the client.

Final account is then prepared.

Question 50

What happens after the rectification period ends?

Answer 50

Ensuring enough time is allowed for the contractor to rectify any defects identified a joint snagging inspection should be undertaken by the CA and Contractor.

The contractor should rectify any defects and then a second inspection should be undertaken to confirm this.

Then a certificate of making good defects and a final payment certificate should be issued for the retention.

The contractor will then issue this to the client with his final invoice.

Question 51

What is the difference between partial possession and sectional completion?

Answer 51

Sectional completion is written into the contract and can therefore have liquidated damages associated with it.

Partial possession is when the client takes over part of the site that has been substantially completed with the contractor’s consent (which cannot be unreasonably withheld).

Both involve the client taking exclusive possession of that area of the site.

The CA will either issue a sectional completion certificate or a notice to confirm the partial possession.

This will mean that the defects liability period begins for that area and responsibility for insuring the area passes to the client.

With partial possession the liquidated damages is reduced on a pro rata a basis.

Question 52

What insurance would a contractor require before commencing works on site?

Answer 52

Professional Indemnity, Public Liability and Employers Liability. Further insurance depends on the contract used and the options chosen.

In JCT:
• Option A - the contractor takes out a joint names policy for all risks insurance with cover for the full reinstatement value.
• Option B – the employer takes out a joint names policy for all risks insurance with cover for the full reinstatement value.
• Option C - the employer takes out and maintains insurance in respect of the existing structures and their contents and a joint names policy for all risks insurance with cover for the full reinstatement value.

Question 53

What do you know about collateral warranties?

Answer 53

A collateral warranty is an agreement which gives a third party rights collateral to rights in an existing contract entered into by two separate parties.

It forms a contract between one of the parties to the underlying contract and a third party with an interest in the performance of that contract.

Question 54

Under JCT IC, what collateral warranties may a principal contractor provide?

Answer 54

It is usual for a principal contractor to provide collateral warranties for subcontractors they intend to use that will have an element of design responsibility.

Also under IC / SBC, the contract requests for collateral warranties to be provided by the contractor to the purchasers, tenants, funders as well as the employer.

Question 55

In XX project, did you get any warranties for the works?

Answer 55

Yes, we got warranties from the sub contractors with design input making the client a party to the contract between contractor and sub contractor and a warranty from the contractor enabling the landlord to be given rights under the construction contract.

We had a risk workshop in the feasibility stage and produced a risk register. We then maintained that risk register throughout the project. The register identified the risk, scored it based on likelihood and severity, described the mitigating actions to be taken and apportioned ownership for that risk.

Question 56

What is your role of contract administrator / project manager?

Answer 56

The CA is employed by the client to administer the contract on his behalf as an agent, however he must always act with impartiality and integrity. Duties include formulating the contract, issuing instructions, raising certificates, carrying out site inspections, assessing EOT claims.

A project manager is the person who has the overall responsibility for the successful initiation, planning, execution and closure of a project. This includes resource planning, risk management, quality control, managing teams and providing appropriate documentation.

Question 57

What might you do if a contractor makes an error in his tender?

Answer 57

There are two alternatives – the tenderer must stick by their price or withdraw, or they are given the opportunity to amend the price.

Question 58

What helps a CA manage meetings?

Answer 58

Issuing an agenda prior to the meeting so all attendees can prepare properly, allow each member of the member an opportunity to express their point of view, controlling when and how long people can speak, ensuring all points are covered thoroughly and resolutions are confirmed, ensure minutes are taken and reflected upon.

Question 59

26. What does delay mean in JCT

Answer 59

All delays are either:

• Caused by the Contractor
• Caused by the Employer
• Caused by events outside either parties control (neutral events)

Only delays caused by the employer and their representatives or a neutral event are recognised as a relevant event in SBC which may give rise to an extension of time.

However, SBC requires contractor to give written notice to the CA whenever it becomes reasonably apparent that the progress of works or any section of works is likely to be delayed irrespective of cause.

Where the contractor is responsible, a Non-Completion Certificate should be issued. If the contract provides for liquidated and ascertained damages (“LADs”) then provided the employer has notified the contractor that it intends to levy LADs it can claim them from the contractor. Often the employer deducts the LADs from sums otherwise due to the contractor. That is ok, provided a withholding notice or pay less notice (as appropriate) has been served in time

Where the employer is responsible and one of the Relevant Events listed in the contract has occurred, an extension of time should be granted and a later date for the Completion Date should be fixed. This means that the employer is not entitled to claim LADs. However it does not automatically mean the contractor is entitled to loss and expense. To claim loss and expense the contractor must show that a Relevant Matter has occurred. Remember not all Relevant Events are Relevant Matters. The contractor also has to prove the loss and expense that he has suffered.

Question 60

Provide some examples where the contractor would not be liable if they exceed the programme.

Answer 60

Under JCT contracts an extension of time is only allowed for Relevant Events. In the Standard Building Contract 2011 the Relevant Events are listed at clause 2.29.

Caused by Employer

• Instructions for the opening up and or testing of any work materials or goods unless that testing or opening up shows that the works materials or goods are not in accordance with the contract.
• Instructions in regard to the expenditure of undefined provisional sums.
• Instructions regarding antiquities.
• Deferment of the giving of possession of site or any section by the employer
• Instructions relating to a variation, except for those where a section 2 quotation has been accepted.
• Execution of work for which a approximate quantity is included in the contract bills which is not a reasonably accurate forecast of the quantity of the works required.
• Instruction in regard to discrepancies in the contract documents
• Instructions in relation to the postponement of work
• Suspension by the contractor of the performance of his obligations as a result of the employers failure to pay a due amount in full.
• Any impediment, prevention or default, whether by act or omission, by the Employer or any of the Employer’s Persons, except to the extent caused or contributed to by any default, whether by act or omission, of the Contractor or of any of the Contractor’s Persons.

Neutral Events

• A Statutory Undertaker executing or failing to execute work in pursuance of its statutory obligations in relation to the Works
• Exceptionally adverse weather conditions
• Loss or damage caused by fire, lightening, explosion, storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft and other aerial devices or articles dropped therefrom, riot or civil commotion.
• Strikes
• Civil commotion or terrorism
• Instructions relating to the discovery of fossils, antiquities, or other items of interest and value found on site.
• Exercise of UK government of any statutory power which directly affects the execution of the works.
• Force Majeure

Question 61

What is the procedure for an extension of time?

Answer 61

When it becomes apparent that completion of the works or section of the works is likely to be delayed the contractor is required to provide written notice to the CA of the pertinent conditions/events that are causing the delay.

The contractor must confirm those events that they believe to be relevant, the expected effects and the expected delay.

The CA must decide whether the notified event is a relevant event and if the delay has been caused by this relevant event.

Whether an extension of time is granted or not the CA must notify the contractor of their decision as soon as is reasonably practicable and within 12 weeks of receipt of the notice.

If an extension of time is warranted then the CA has to fix a later completion date and notify the contractor in accordingly in writing.

Question 62

What are the key differences between between the CA and PD role?

Question 63

What is the base date?

Question 64

What are relevant events under JCT?

Question 65

What does “Time at Large” mean?

Question 66

What are non liquidated damages?

Question 67

What are the 3 overarching roles of the CA?

Answer 67

Monitor quality/progress, financial matters, chair meetings.

Question 68

How can a contract be brought to an end?

Answer 68

By mutual agreement.

Termination at will.

Termination for breach.

Failure to pay by the employer.

Insolvency of employer or contractor.

Question 69

What is the base date?

What is the purpose of the base date?

Answer 69

In a JCT contract, it is typically 10 days prior to the date of the tender return deadline.

t’s purpose is to aid parties assess inflation and market changes from that date to the point of contract execution.

Question 70

Who does the defect rectification period benefit and how?

Answer 70

Both parties:

The contractor: Allows them to carry out remedial works themselves rather than pay whoever the employer appoints (who may not be as economical an option).

The employer: They will not need to hire another contractor or tender the works out.