Case Study Flashcards

1
Q

What’s the difference between an on demand bond and a conditional bond

A

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.

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2
Q

What fluctuation clause applies unless specifically deleted in a JCT

A

Option A

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3
Q

Explain fluctuation option A

A

Option A is for changes in relation to contributions, levies and taxes that the contractor has to pay

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4
Q

Explain fluctuation option B

A

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.

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5
Q

Explains fluctuation option C

A

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

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6
Q

What do the JCT formula rules rely on

A

The Price Adjustment Formula Indices (PAFI)

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7
Q

Who maintains the Price Adjustment Formula Indices (PAFI)

A

BCIS

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8
Q

Who else did you invite to tender for the first contract

A

Erith

John F Hunt

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9
Q

How are the responsibilities being transferred between the contracts

A

The Demo, groundwork’s and frame contract will be novated to the main contract.

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10
Q

How will you ensure that there aren’t any issues from the demo contract when being novated to the main works contract

A

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

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11
Q

What is the insurance option under the contract

A

Option C

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12
Q

How are the works being insured under the separate contracts.

A

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.

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13
Q

How have you mitigated the risk if defects are identified by the main works contractor relating to the demo, substructure and frame contract.

A

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.

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14
Q

What are the advantages of buildability

A

Better programming, sequencing and construction methods.

Improved quality

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15
Q

What conditions need to be met before payment of listed materials can be made

A

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

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16
Q

What does the vesting certificate need to confirm

A

That the materials will be:

Properly identified

Separately stored

Insured

Free from encumbrances.

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17
Q

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 ?

A

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.

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18
Q

Should you be paying for deposit advanced payments

A

No, should only be paying for materials once they have been manufactured

19
Q

What could you do to reduce the risk of the contractor negotiating a higher price for stage 2 in a PCSA

A

2nd stage can introduce competition into the sub-contracts

20
Q

When including inflation into a cost plan what indices do you need to take into account

A

TPI

CPI

21
Q

The Funder asked for a bespoke payment bond but one was never provided. How did this fit the funders requirements

A

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.

22
Q

What was the forecast overall value of BMY

A

£90m

23
Q

When preparing your Cost Plan what we’re the high level headings

A

Title page

Contents

Introduction

Exec summary

Detailed cost breakdown

List of assumptions and exclusions

Appendices (area schedule)

24
Q

What was included in your cost plan intro

A

Project description

When the cost plan was based

What info the cost report has been based on (I.e drawings and specs)

25
Q

What was the value of the steel rebar

A

£950k

26
Q

What was the value of the quotes for the advance payment bonds

A

95k (10% of rebar value)

27
Q

Price of the demo works

A

£500k

28
Q

What sort of pile was used and how much did each cost

A

750mm CFA piles

£3k per pile

29
Q

What was the rough rate for the concrete frame elements

A

Slab - £200/m3

Column and Beam - £250/ m3

Walls - £220m3

SPONS 2023

30
Q

Value of the piling and substructure work

A

£6m

31
Q

Price of the frame

A

£3m

32
Q

Can you proceed without planning.

What are the implications if you do

A

Can obtain retrospective planning consents

If declined have to rebuild what was there

If ignored can result in legal proceedings

33
Q

What would you advise the client does if the contractor becomes insolvent with regards to the advanced payment

A

Contact the supplier

Secure the materials and ensure they are kept in a safe place

Stop payments to contractor

34
Q

What are some alternative options to the advanced payment

A

Include fluctuations

Include defined provisional sums

35
Q

What’s a s73

A

Minor material amendment

36
Q

Explain the difference between an NMA, MMA and Material amendment

A

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.

37
Q

What sort of application was submitted for the proposed planning change

A

It was a material amendment and so a fresh application was submitted

38
Q

What’s a s96a

A

Non material amendment

39
Q

Is there a statutory description for what constitutes as an NMA, MMA OR material amendment?

A

No, it’s decided by the respective council

40
Q

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

A

Because the tenderers would not want to take the design and cost risk, knowing that there would be significant variations to come

41
Q

What’s a bond

A

A contractual duty backed up by a third party

42
Q

Why was an advanced payment bond considered over a material off site bond

A

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.

43
Q

What clause are advance payments in the contract

A

4.6

44
Q

Can the employer get the vesting cert directly from the supplier?

A

No, needs to be back to back with the contractor