Case Study Flashcards
1
Q
Why was Option C chosen for this project?
A
- The contract was awarded under the AMP6 Framework Agreement which uses an amended NEC3 ECC standard form of contract (either main Option A, C or E)
- Additionally, I was not involved in the procurement of the project
- However, I can appreciate why main Option C was chosen for this project given
o The detailed design was within the contractor’s scope to undertake and so a BoQ could not be produced and thus main Option D used
o The scope of work was not developed enough to enable use of a lump sum type contract (Option A and B) where the Contractor would have to price significant risk (i.e. state of existing equipment)
o Therefore, in these circumstances the client is happy to share the financial risk with the Contractor via a pain/ gain share mechanism as opposed to paying a premium for cost certainty
o Additionally, the nature of the work (MEICA) is technically complex
2
Q
What were the Z-Clause amendments for this project
A
- There were no Z clause amendments, only framework amendments to the NEC3 ECC conditions of contract which include amendments to timescales, deemed acceptances and CEs for example
3
Q
How was the project tendered to ensure best value was achieved?
A
- The project was directly awarded to a Construction Delivery Partner under the AMP6 Framework Agreement
- Given the CDP has previous experience of delivering MECIA type work
- The CDP was required to tender for the Framework Agreement which ensures value for money is achieved
- Additionally, a pre-tender estimate is produced which is used to benchmark the Contractors price and facilitate in negotiations
- Additionally, the CDP is also required to produce an Activity Schedule enabling further analysis of their price
4
Q
How does the form of contract vary from the standard NEC3 or 4 contract at that time?
A
- Main differences include amendments to:
o time scales,
o deemed acceptances
o Defects (i.e. don’t pay for correction of Defects at all)
o Take over (i.e. use doesn’t constitute)
o Compensation Events removed (i.e. physical conditions, weather and take over before completion)
5
Q
What was the role of the PM on the project in relation to this issue?
A
- First and foremost, the PM action of assessment of CEs was delegated to the QS-
To act impartially and as stated in the contract (10.1) - With that in mind, provide input into the CE assessments
- To take receipt of the commercial advice on contractual procedures and implement recommendations at the various stages by
o issuing instructions from revised quotations
o communicating/notifying the Project Manager’s assessment - Taking receipt of the cost reports and ensuring there is enough sanction
6
Q
Why were there so many revised quotations for the CE?
A
- There were 3 revised quotations instructed
o The first was instructed given the Contractor had used the wrong Accepted Programme and there was scope to implement the CE via an accepted quotation
o The second was instructed as the Contractor had not addressed other comments e.g. activity durations but progress was made during meetings and so there was still scope to implement the CE via an accepted quotation
o The third was instructed after the £681k quotation as the Escalation requirements came into play and it needed to be demonstrable to senior management those efforts at a project level to resolve the dispute had been made by giving the contractor an opportunity to provide a revised quotation in light of the meetings convened
7
Q
What was the escalation process?
A
- After the numerous meetings with the contractor and presentation of the Project Manager’s assessment of the CE in attempts to resolve the dispute at a project level
- Including a review by the Managing QS from both Parties which did not resolve the matter
- The Project Manager notify his assessment via a General Communication
- The CDP then issued a GC in response requesting for the dispute to be referred to the first stage of the Escalation process
- Following which I had to produce a report for the Integrated Delivery Team
- During the course of meetings convened by the Integrated Delivery Team the CDP submitted the actual cost/ retrospective assessment of the CE which disrupted the Escalation process
8
Q
Why did you feel this issue required legal counsel?
A
- Given the contractor was now relying upon case law to support a revised position
- I acknowledged that this matter had grown outside my area of expertise
- Additionally, it was also evident that the matter had grown outside the scope of the Escalation process to resolve
- Therefore, legal counsel was required to provide advice on how the matter should be handled
9
Q
What was your interaction with this particular part of the issue
A
- I was responsible for
o arranging a meeting with the client’s external legal team
o providing information in relation to the matter to the legal consultant
o Leading the meeting with the external legal consultant
o Seeking agreement to pursue alternative advice to provide assurance
o Drafting questions for the KC barrister
10
Q
What was the cost to the client for all the input from you and the PM on the project? Was this covered off in your fees?
A
- Both the Project Manager and myself are staff members of the client organisation and so there were no fees involved in relation to our input into this matter
11
Q
Explain your understanding of the Healthy Buildings case noted in this case study
A
- In summary the client, NI Housing Executive, instructed a change to the scope of asbestos surveys being carried out the by the consultant, Healthy Buildings
- The Consultant notified a CE and
- After the work has been completed, the client requested quotations
- The quotations provided by the consultant were rejected by the client who assessed the CE as zero
- The client then asked to see the consultants actual cost records but the consultant refused
- The issue went to adjudication and later to court
- The court held that the CE should be assessed based on actual cost where the contractual provisions for assessing the CE had not been followed and the relevant works completed
12
Q
On the initial quotation, why did you believe that option 2 was a viable solution without your intervention or assessment?
A
- For clarity Option 2 would involve myself producing the Project Manager’s assessment with the Project Manager
13
Q
What was the risk of instructing a revised quotation?
A
- The risks associated with instructing a revised quotation at this point were low
- However, risks include:
o Delay in resolution of the CE – creating some uncertainty
o Distracting the contractor from delivery of the work
o Increased costs with managing the revised quotation
o It could also strain relationships if the Contractor believes their quotation is fair (however wasn’t using correct Accepted Programme) and
o With hindsight, the potential risk of the contractor seeking reimbursement of their actual cost causing more disruption and effort to resolve the CE
14
Q
What were the ‘failure to address other comments’ by the contractor?
A
- Mainly the more subjective matters such as:
o Activity durations used in the impact programme assessment and the logic
o Assessment of risk allowances e.g. further design works
o Assessment of design time
o Inconsistencies with durations in the impacted programme and that included in the quantum assessment i.e. labour/ install discrepancy
15
Q
What did you do to assess the quotations to ensure they were competently submitted in terms of cost?
A
- Ensured quotations were assessed in accordance with contractual provisions such as
o In accordance with the SCC
o Fees were applied correctly and correct percentage was used
o Framework rates used where applicable (e.g. design)
o Risk allowances met the bar of having a significant chance of occurring (e.g. further design works) - Ensured
o All equipment listed was needed and related to the instructed works by liaising with PM and Supervisor
o All plant and materials listed needed and related to the instructed works by reviewing drawings and liaising with the PM and Supervisor (i.e. drawing showed only 1 actuated valve, 2 had been priced)
o Ensuring subcontract quotations were obtained together with scope to ensure no cross over or duplication and kit framework rates were used where applicable
