Case Study Flashcards
What’s the difference between an on demand bond and a conditional bond
An on-demand bond means that the bondsman pays the amount of money set out in the bond immediately on demand, without any preconditions having to be met.
A conditional bond is where the bondsman is only liable if it has been established that there has been a breach of contract.
What fluctuation clause applies unless specifically deleted in a JCT
Option A
Explain fluctuation option A
Option A is for changes in relation to contributions, levies and taxes that the contractor has to pay
Explain fluctuation option B
Allows for any changes to the cost of materials, goods, electricity, fuels or labour. This is in addition to those items already covered by Option A.
Explains fluctuation option C
Option C is an alternative to Option B whereby the Contract Sum is adjusted in accordance with the JCT Formula Rules current at the Base Date
What do the JCT formula rules rely on
The Price Adjustment Formula Indices (PAFI)
Who maintains the Price Adjustment Formula Indices (PAFI)
BCIS
Who else did you invite to tender for the first contract
Erith
John F Hunt
How are the responsibilities being transferred between the contracts
The Demo, groundwork’s and frame contract will be novated to the main contract.
How will you ensure that there aren’t any issues from the demo contract when being novated to the main works contract
We will be obtaining as built drawings
Building control visits and reports
Ongoing design reports/ compliance statements from design team
A site surveyor from the preferred main works contractor to carry out their own independent review.
Obtaining a Contractor Warranty
What is the insurance option under the contract
Option C
How are the works being insured under the separate contracts.
Under option C the borrower will obtain the contract works policy in joint names with the contractor.
The policy will then be amended to include the new contractor in joint names.
How have you mitigated the risk if defects are identified by the main works contractor relating to the demo, substructure and frame contract.
There is a defects liability period of 12 months within the contract. We would deduct it from the second retention payment.
We have also advised the client to attribute a separate contingency budget.
What are the advantages of buildability
Better programming, sequencing and construction methods.
Improved quality
What conditions need to be met before payment of listed materials can be made
The listed item is in accordance with the contract
The Contractor has provided proof that the items are vested to the contractor
The Contractor has provided proof that the listed items are covered in full by insurance for loss or damage until delivered to site
There is clear identification of the employer as the person to who the order is held.
Identification that the materials are for the site
Each item is separately stored
An advanced payment bond has been obtained, if applicable
What does the vesting certificate need to confirm
That the materials will be:
Properly identified
Separately stored
Insured
Free from encumbrances.
You advise that you were involved from RIBA stage 2 but didn’t have enough time to wait for the planning decision. Did you still not have time to develop the design to stage 4 while you waited ?
This was a possibility but we had enough information to progress the demolition, substructure and frame works as they wouldn’t vary from the currently permitted Scheme.
I was involved towards the end of stage 2 almost stage 3.
Should you be paying for deposit advanced payments
No, should only be paying for materials once they have been manufactured
What could you do to reduce the risk of the contractor negotiating a higher price for stage 2 in a PCSA
2nd stage can introduce competition into the sub-contracts
When including inflation into a cost plan what indices do you need to take into account
TPI
CPI
The Funder asked for a bespoke payment bond but one was never provided. How did this fit the funders requirements
The Funder didn’t specify that they required an advance payment bond however when it was mentioned as a possibility they advised that it would need to be in a bespoke format agreed with them first.
What was the forecast overall value of BMY
£90m
When preparing your Cost Plan what we’re the high level headings
Title page
Contents
Introduction
Exec summary
Detailed cost breakdown
List of assumptions and exclusions
Appendices (area schedule)
What was included in your cost plan intro
Project description
When the cost plan was based
What info the cost report has been based on (I.e drawings and specs)
What was the value of the steel rebar
£950k
What was the value of the quotes for the advance payment bonds
95k (10% of rebar value)
Price of the demo works
£500k
What sort of pile was used and how much did each cost
750mm CFA piles
£3k per pile
What was the rough rate for the concrete frame elements
Slab - £200/m3
Column and Beam - £250/ m3
Walls - £220m3
SPONS 2023
Value of the piling and substructure work
£6m
Price of the frame
£3m
Can you proceed without planning.
What are the implications if you do
Can obtain retrospective planning consents
If declined have to rebuild what was there
If ignored can result in legal proceedings
What would you advise the client does if the contractor becomes insolvent with regards to the advanced payment
Contact the supplier
Secure the materials and ensure they are kept in a safe place
Stop payments to contractor
What are some alternative options to the advanced payment
Include fluctuations
Include defined provisional sums
What’s a s73
Minor material amendment
Explain the difference between an NMA, MMA and Material amendment
Non material amendments - no need for new planning. Conditions will stay the same
MMA - application to existing permissions which may vary or add conditions
Material amendment - requires submission of a new planning application.
What sort of application was submitted for the proposed planning change
It was a material amendment and so a fresh application was submitted
What’s a s96a
Non material amendment
Is there a statutory description for what constitutes as an NMA, MMA OR material amendment?
No, it’s decided by the respective council
If the demo substructure and frame elements were consistent between both apps then why couldn’t you just procure one D&B contract, start these works and accept there would be variations later if the application was approved
Because the tenderers would not want to take the design and cost risk, knowing that there would be significant variations to come
What’s a bond
A contractual duty backed up by a third party
Why was an advanced payment bond considered over a material off site bond
The contractor hadn’t bought the materials at the time of discussions.
The contractor didn’t want to buy the materials up front for cashflow purposes.
What clause are advance payments in the contract
4.6
Can the employer get the vesting cert directly from the supplier?
No, needs to be back to back with the contractor
