Case Study

Question 1

Did we know the clients budget?

Answer 1

No but we have a longstanding good relationship with the client so we understood their budget concerns although not the actual number

Question 2

How did I produce the estimate for termination at will?

Answer 2

Undertook an assessment of the works completed to date, subcontractor and Atkins prelims, any materials ordered which included the DNO. Also factored in cost for making good and demobilising from site.

Question 2

Project end of control period - Due to this, there was no option for the client to gain additional funding if the project exceeded the budget – can they usually get more budget?

Answer 2

Potentially yes and especially if this at the beginning of the control period. Projects at the end are always the ones more impacted, If they over overspend at beginning, more likelihood of uses spare budget

Question 3

Possessions that had been secured for commissioning – were these E&P possessions?

Answer 3

They can just book new possessions.

Question 4

Terminating under the target?

Answer 4

Works were only 50% complete, would not get full gain share, could be dealt with as proportional OR works are not completed to gain share not used.

Question 5

What did the costs for demoblisation include?

Answer 5

Cost to remove excavator, telehandler and welfare units from the site and the cost to transport them back to site again after the demob period.

Question 6

What industry news stories did I read about inflation increases and materials shortages?

Answer 6

• Communicated within business.
• The impact of the war in Ukraine resulted in significant energy price increases which had an impact on the cost of production of materials
• This conflict also led to materials shortages, with key electrical components
• Ukraine war intensifies already turbulent market previously effected by covid and Brexit.
• High inflation.

Question 7

How did I instruct the subcontractor?

Answer 7

Delegated authority, to provide a quote in line with a proposed instruction.

Question 8

How did I assess the delay for the DNO cubicle?

Answer 8

Additional prelims for both the contractor and subcontractor, in line with the programme extension.

Question 9

The delay meant that the contract completion date was extended by four weeks. What types of float are there?

Answer 9

Terminal float which is owned by the contractor. Client risk and therefore this change could not use it.

Question 10

How was the ongoing management for the reduced prelims captured to the client?

Question 11

Why did I present the options before proceeding

Answer 11

Authority to sign off in line the companys governance procedures

Question 12

Client care – keeping the client informed at each stage? Did I inform them weekly of the additional cost increase while demoblised? How was I tracking the costs?

Question 13

How were my effective contract management and commercial skillset were crucial in delivering successful outcomes?

Answer 13

Working on behalf of the contractor, my commercial skills ensured that the contractor maintained profitability.

Question 14

Would you say the project had a successful outcome?

Answer 14

No, I meant from a commercial management perspective to the contractor.

Question 15

How did I maximise contractual opportunities under the contractual entitlement and ensured that the contractor maintained profitability throughout the review of each key issue option.

Question 16

How did I consider the risk expose would be managed for termination options?

Question 17

Understanding of termination? Pros and cons?

Question 18

How is termination dealt with under NEC

Answer 18

Section 9 of the contract, there is a termination table which details the reasons (22), procedure (1-4) and amount due (1-4) for each terminating party.

Question 19

What would undertaking a Quantitative Cost Risk Analysis with the client achieve?

Question 20

Was the relationship with the subcontractor bad if I wanted to improve relationships?

Question 21

Did we have a risk budget?

Answer 21

Yes 20k contingency but all risks were pass through.

Question 22

Why were works not suspended?

Question 23

Process of termination under NR12?

Answer 23

• I would follow the contract, different types
• In this instance I was considering termination at will, where the employer with 30 days’ notice to the contractor can terminate the employment of the Contractor
• Can terminate for contractor or employer default, 7 days notice must be given to terminate employment
• The contract outlines rights, how the works will be valued and payment after termination
• E.g., the employer may complete the works himself or employ another contractor to do so

Question 24

How did you ask the subcontractor for a quote?

Answer 24

Request for quotation in similar format to a proposed instruction under NEC.

Question 25

Am I advising the internal team about termination or the client?

Answer 25

Internal only, worst case scenario to demonstrate costs but not to propose as an option to client.

Question 26

Key issue 1 - Price the 3 options

Question 27

Key issue 2 – Price the 3 options

Question 28

What clause did they instruct demob?

Question 29

When its demob – what is the risk?

Question 30

I state termination at will is not in standard form such as NEC ECC.

Answer 30

When I wrote this, I was thinking of NEC4 where it is not in the core clauses but is included in X clause – X11. I am also aware following further review that under NEC3 the employer can terminate for any reason under 90.2.

Question 31

RICS guidance?

Answer 31

Guidance Note - Termination of contract, corporate recovery and insolvency, has a checklist for termination of contract

Question 32

How is each comp I have listed demonstrated in my case study?

Question 33

How is ethics demonstrated in my case study?

Answer 33

I would not advise on the QCRA, I would get a risk manager to do this, used wider business procurement experts – linking to rule 2.

Question 34

Full demob – what’s the cost implications in the interim period before full termination?

Question 35

Will the next project be direct award to us?

Question 36

How much work are we promised under framework? How many suppliers are on it?

Question 37

Did the project ever progress to reach a solution? The resolution here seems to be to simply walk away with the works unfinished?

Question 38

How did you ensure you were providing value for money to NR?

Question 39

Demob on site: any impact on future service offering?

Question 40

How is the base of a DNO constructed?

Question 41

You raised an EWN to NR following a delay…was this not an issue at this point and therefore a change?

Question 42

Should you have assumptions in a contract?

Question 43

How is, what was traditionally know as plant, described under NEC?

Question 44

How did/would you deal with the subcontractor upon termination?

Question 45

What are the termination clauses in the contract?

Question 46

Issue delay of DNO cubicle - How did you know it was NR risk?

Question 47

How was the DNO identified as delayed?

Question 48

Buried service - Why did you issue an early warning for the buried service?

Question 49

Is there a contractual requirement for an EWN on your contract?

Question 50

How does a Target Cost contract work?

Question 51

What was the Pain/Gain on your contract?

Question 52

How are they assessed? FEE ITEMS, DISALLOWED COST

Question 53

How do you know what is payable?

Question 54

How would you assess change on a Target Cost?

Question 55

Awarded under framework - Be prepared to answer questions on this. Pros and cons of direct award, how it is facilitated, what situations would it be used etc

Question 56

Client and subcontractor contract - Be prepared to answer questions around the two different types of contract and how they interact

Question 57

Why didn’t you issue the early warning?

Question 58

What did it the EWN include?

Question 59

Steel pipe client risk and variation - Why was it, what did the contract say and how did you come to this conclusion?

Question 60

Why was there an increased lead time for the DNO cubicle, were you involved in the procurement of this?

Question 61

To clarify, You’ve said you were seconded to the contractor, but then speak about drafting and issuing an EWN for the PM?

Question 62

If answer is, contractor PM, ask If that’s the terminology used in the contract?

Question 63

What did you include in your costing of the termination option?

Question 64

How do you think the ground investigations could have been better arranged to reduce the risk of this pipes late discovery? Trial holes undertaken in base location?

Question 65

Was there an option to extend into a different financial period and secure additional funding to allow a change in design? Could this not have been justified to funding providers? Avoided contract being terminated?

Question 66

What was the final resolution? Is the project finished? Was the excavation for the base left with the pipe exposed?

Question 67

Upon final demobilisation, how did you ensure that the contractor was fairly reimbursed?

Question 68

This was a target cost contract, how would pain gain have been managed upon termination?

Question 69

Why was termination your first step - Looking for EWN meetings, risk reviews and mitigation suggestions.

Question 70

You note that The DNO cubicle was bespoke based on the contractor’s design - produced under a separate contract, if the contract was terminated who would have ownership of the design?

Question 71

You have noted in you conclusion that identifying buried services as a risk before contract would of helped, but have also noted this was am assigned client risk with an allowance already attributed, could you expand on this please

Question 72

What would you need to show to demonstrate DNO delivery?

Question 73

Where did the DNO actually end up?