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RICS APC PM > COMPETENCY KEY POINTS > Flashcards

COMPETENCY KEY POINTS Flashcards

1
Q

Parent Company Guarantee is?

A

Guarantee given by contractors ultimate or intermediate holding company in favor of employer to secure performance obligations under the contract.

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2
Q

When might you seek a PCG?

A

PCGs are commonly used by employers to give them protection in the event of contractor default.

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3
Q

Why PCG over performance bond?

A

Performance bond usually has time and financial cap. PCG may not.

Although benefit of any caps or limits in the building contract will apply.

PCG usually free to employer. Performance Bond cost added to contract sum and cost dependent on stability.

PCG enforces contractual obligations. PB only indemnifies for loss.

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4
Q

Standard forms of PCG?

A

No industry-standard form for PCG.
Parent companies should ensure same rights, obligations and limitations apply as contractor has under the main contract.

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5
Q

Can a PCG be requested from a contractor to employer?

A

Yes, this might occur if the employer is an SPV - gives security to the contractor that the parent company will pay in event of insolvency.

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6
Q

Sectional completion under JCT is defined where?

A

Clause

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7
Q

Sectional damages contained in contract particulars under JCT SBC & D&B

A

2.32.2 in SBC
2.29.2 in D&B

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8
Q

Sectional sums set out in contract particulars under JCT SBC & D&B

A

2.37 in SBC
2.34 in D&B

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9
Q

Sections should be outlined where in JCT ?

A

Sixth recital and contract particulars in SBC
Fifth recital and contract particulars in D&B

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10
Q

Key documents to be provided under sectional completion are and are set out where?

A

As built information and health and safety file information.
2.40 and 3.23 in SBC
2.37 and 3.16 in D&B

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11
Q

Sectional Completion Certificate is defined where in JCT?

A

2.30.2 in SBC
2.27.2 in D&B

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12
Q

SBC color and D&B color cover

A

SBC is Blue and Yellow
D&B is Pink and Yellow

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13
Q

Types of cashflow

A

organisational cash flow - measures company expenditure and is linked to strategic planning.

project cash flow - maps expenditure for a project.

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14
Q

Why is an accurate project cash flow important?

A

A predicted drawdown schedule may be required for developer to obtain financing agreements.

There may be consequences for not aligning with the drawdown schedule such as additional interest.

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15
Q

Relevant guidance notes to cashflow?

A

Cash flow forecasting GN

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16
Q

What is a procurement strategy?

A

It is the plan for how the construction works for the project will be secured.

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17
Q

Key considerations for the procurement strategy?

A

The clients objectives in respect of:

Time
(programme duration, start on site)

Cost
(cost fixity prior to entering contract)

Quality & control
(do they wish to retain design control)

Risk
(sole point of responsibility for design and construction? happy to manage trade contracts directly?)

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18
Q

Key content of procurement strategy

A

Project status and overview
Client objectives
Outline procurement options
Outline tendering strategies applicable
Outline suitable contracts for procurement options
Outline commercial considerations

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19
Q

Where have you given advice on procurement strategies

A

For office development - D&B for base build and traditional for fitout

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20
Q

Construction act 1996 states what in relation to interim payments?

A

Projects longer than 45 days would entitle a contractor to interim payments.

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21
Q

Tell me about interim payment process

A

Contractor makes application for payment 7 days before end of period.

Valuation of works carried out (usually by QS) in support of advice for CA to issue a payment certificate.

Payment certificate issued 7 days after application for payment.

Employer has a further 14 days to make payment.

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22
Q

What if client disagrees with payment certificate

A

If client intends to pay different amount they must give notice to the contractor of the amount they intend to pay and the basis for its calculation.

This is known as a ‘pay less notice’

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23
Q

Value of a payment certificate is calculated and shown on certificate how?

A

Value will be:
Value of work completed
Less amounts paid to date
Less retention
= Total due for payment

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24
Q

Pertinent timescales for CA and payment certs under construction act 1996.

A

In JCT contracts, a Payment Notice must be issued no later than five days after the ‘due date’.

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25
Q

Guidance notes applicable to payment cycles and certs?

A

Interim valuations and payment GN

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26
Q

Construction act 96 was amended by what act in respect of payments?

A

amended in October 2011, by the Local Democracy, Economic Development and Construction Act 2009

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27
Q

Tell me some consequences of late payment

A

Contractor may suspend works or
Contractor may charge interest on late payments

28
Q

Where would payment provisions under the JCT be found?

A

Section 4.

29
Q

Interim payment certificates under JCT are found?

A

4.7 in D&B
4.8 and 4.9 in SBC

30
Q

What might be included in an Invitation To Tender (ITT)

A

Letter of invitation to tender.
Form of tender.
Preliminaries
Form of contract, contract conditions
Employer’s information requirements
Tender pricing document
Drawing schedule
Design drawings
Instructions to tenderers explaining the tender process.
The timescales
feedback processes

31
Q

What comes before an ITT?

A

A PQQ (pre qualification questionnaire)
Ultimately clients decision if undertaken but RICS guidance note recommends it is.

32
Q

What is PAS91

A

Developed by the British Standards Institute (BSI)

Question set - recommended common minimum standard for construction procurement. endorsed by government

33
Q

What might a PQQ contain?

A

Company details
Insurance cover.
Financial information (recent accounts).
Relevant experience.
Information about technical and professional ability.
Information about capability and capacity.
Policies - H&S, qualtiy assurance, environmental and sustainability

34
Q

Retention of title is?

A

allows supplier to retain ownership until specified conditions are met, for example, until payment has been made.

35
Q

Other examples of retention of title clauses?

A

upon delivery
upon payment
upon use

36
Q

Where are materials off site set out in the JCT contract?

A

SBC- 2.22
D&B - 2.25

37
Q

Relevant clauses to MOS in JCT SBC

A

2.22 - Materials and goods off site
4.15 - Listed items

38
Q

Ownership of materials point in JCT

A

For off site materials, title in any listed items will pass once their value has been included in an interim payment.

39
Q

Listed Items – Clause 4.15

A

Listed pre-agreed items to be included in interim payments for payment off-site.

Listed Items will include the value of such materials and once paid, ownership passes to the Employer.

40
Q

Undefined prov sum

A

Is a prov sum with minimal information - if instructed, the contractor could be due time and expense.

41
Q

Defined prov sum

A

Is a provisional sum with a relative amount of information, which the contractor is deemed to have allowed for in their programme and preliminaries, i.e. they cannot be given EOT or prelim extension for works.

42
Q

Relevant case law to prov sums and omission of work?

A

AMEC Building Ltd v Cadmus Investment Company (1996)
Ruled that Cadmus was entitled to Loss and Expense on omitted prov sum fitout work. Therefore, parties may wish to amend contract to allow employer to award prov sum work to other parties.

43
Q

New Rules of Measurement prov sum requirements?

A

The nature and construction of the work.

How & where the work is fixed to building and interface with other work.

A quantity or quantities that indicate the scope and extent of the work.

Any specific limitations and the like.

44
Q

Tell me an alternative to vesting for offsite materials

A

advance payment bond

45
Q

What are key CA responsibilities?

A

chairing meetings

periodically inspecting the works

giving instructions, including variation or change orders

determining any applications for extensions of time

Authorising interim payments to the contractor

certifying the date of completion

settling the adjusted contract sum (final account).

46
Q

Can a contractor refuse an instruction?

A

Contractor has the right to ‘reasonably object’ to an instruction. This may result in a dispute and the dispute resolution procedures of the contract will then come into force.

47
Q

When might an Instruction be raised by the CA

A

To vary works
To postpone works.
To remedy workmanship, goods or materials not in accordance.
To sanction a variation made by the contractor.
In relation to the expenditure of provisional sums.
To open up work for inspection.
To carry out tests.
To exclude persons from the site.

48
Q

How can one measure if practical completion is ready?

A

It is a very complex topic however the ‘De Minimis’ principle can be used - i.e. that only very MINOR defects are evident in the works.

49
Q

Key clauses under JCT for practical completion

A

2.40 - provision of as built drawings’ where applicable

3.23 provision of information for the health and safety file.

50
Q

JCT defines practical completion as?

A

Under the JCT Standard Building Contract (SBC) and the Design and Build Contract (DB) practical completion is not defined.

51
Q

Relevant case law to Practical Completion

A

Mears Limited v Costplan Services (South East) Limited 2019

52
Q

Practical completion is?

A

Confirms the completion of construction works on a project, although there is no precise legal definition of the phrase.

Generally, it is the point at which a building project is complete, save for minor defects.

53
Q

Talk me through the defects reporting period and actions

A

Client identifies any defects that arise in the works to the contract administrator

CA decides if they are defects (works not in accordance with the contract) or if maintenance issues.

If the contract administrator considers that they are defects, then they may issue instructions to the contractor to make good the defects within a reasonable time.

54
Q

If sections are used in contract in relation to defects

A

Seperate certificate of making good required for each.

May occur at different times.

55
Q

If sections are used in contract in relation to defects

A

Seperate certificate of making good required for each.

May occur at different times.

56
Q

Contractor not completing defects in reasonable timescale?

A

If given opportunity and fails to do so within a reasonable time - potential breach of contract.

Others can be employed to rectify the defects, and the cost of such works deducted from the contractor’s retention.

57
Q

What are the classes of defects?

A

Patent defect - one which is evidently from works not in accordance or poor workmanship.

Latent defect - one which is not clear during DLP and takes time to arise.

58
Q

Tell me some difficulties surrounding practical completion

A

DLP is not a chance to correct problems apparent at practical completion, it is a period where contractor may be recalled to rectify defects.

Both the contractor and the client can be keen to issue the certificate (so that the building can be handed over) but defects may be evident. Issuing certificate could render the contract administrator liable for problems that this causes, for example in the calculation of liquidated damages.

If contract administrator is pressured to certify practical completion they might consider informing the client in writing of potential problems of doing so and obtaining written consent from the client to certify practical completion and obtaining agreement from the contractor that they will complete the works and rectify any defects.

59
Q

Timescales for dealing with change in JCT

A

Not uncommon for a change control process to be added to the contract documents which would set out timescales for assessment and instruction of change.

60
Q

Where is change defined in the SBC (standard building contract)

A

Clause 5.1

61
Q

Approved document M is?

A

Access to and use of buildings.

Building regulation in England to ensure that people are able to access and use buildings and their facilities.

62
Q

Approved document M is?

A

Information Manager ensures that the right data, in the right format is delivered at the right time.

63
Q

Information manager is (BIM?)

A

Information Manager ensures that the right data, in the right format is delivered at the right time.

64
Q

Sectional completion and damages / retention

A

Damages relevant to section should be set out in the particulars.
Retention sum should also be set out.

65
Q

Tell me some considerations for sectional completion

A

Logistics for other sections needs to be well considered.
Employer will need to insure the space, but contractor must have works insurance for other sections.
Re-entry arrangements will be required for outstanding tasks such as completion of site wide commissioning.
Adequate security measures should be in place.

66
Q

Specifics to sectional completion at contract outset?

A

Extent of each section must be clearly defined and liquidated damages, and the amount of retention that will be released must be specified for each section

67
Q

Sectional completion different to partial possession how

A

Sectional completion differs from partial possession in that it is pre-planned and defined in the contract documents.

RICS APC PM (25 decks)

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