Contract Admin Flashcards
What is the role of CA?
The role of a CA is to impartially administer the contract between the employer and the contractor.
What are the key tasks of a CA
Documentation
*Ensuring that project documentation is issued to the client.
Tender
*Inviting and processing tenders.
Contract Documents
*Preparing contract documents for execution.
Meetings & Report
Chairing construction progress meetings &Preparing and issuing construction progress reports (Meeting Minutes)
Instructions
*Issuing instructions such as variations, or relating to prime cost sums or making good defects.
Certificates
*Issuing certificates of practical completion, interim certificates, certificate of making good
Defects
defects and Final certificate.
What types of procurement route are you aware of?
- Single stage tendering
- Two stage tendering
- Design and build
- Framework agreements
What is the difference between a CA and an EA?
Employers agent is the role undertaken under design & Building contract .CA is traditionally procured contract.
CA = identified within the contract and is solely responsible for administering the contract for the employer. Role technically starts when the contact is signed.
EA = identified within the contract however acts on behalf of the employer in all matters.
What is required to have a contract?
- Offer
- Acceptance
- Consideration
- Intention
- Time
- capability
What are the parts of the contract?
*Agreement
The ‘articles of agreement’ setting out the core obligations/details of the parties involved
*Recitals
Recitals contextualize the agreement,
giving factual explanations for the basis of the contract.
recitals describe what is required and the events that have taken place.
*Articles
These set out what is agreed between the parties.
*Contract Particulars
This section sets out the aspects of the contract that are particular to the project to which the contract relates.
*Attestation
Act of signing &/or witnessing a legal document (Contract agreement / Execution) to formally execute the document
Under hand - disputes must proceed to court within 6 years
As a deed - disputes must proceed to court within 12 years
What are the difference between Minor Works and Intermediate contracts?
- More detailed procedures
- Relevant Events defined
- Collateral warranties
- Named sub-contractors
- Early possession
- Sectional completion
- Advance payment
- Bill of quantities
What can you tell me about Professional Indemnity insurance and JCT Minor Works?
As regards contractor’s professional indemnity insurance under MWD it has not been felt necessary to include such insurance in the published form because of the relatively low risks anticipated in respect of design under such a contract.
what if the contractor did not complete on time? What could you issue?
I could issue a Certificate of Non-Completion
Explain your process in completing the valuations?
I time the progress inspection with the interim valuation date. Therefore, the contractor provides me with their valuation in advance of the meeting.
Whilst on site I review the progress through visual inspection against the contractors valuation.
Where necessary I discuss costs with the contractor and request that they correct any inaccuracies.
What are the timescales for payment and what is it governed by?
The Housing Grants, Construction and Regeneration Act 1996 intended to ensure payments are made promptly throughout the supply chain and disputes are resolved swiftly.
Sets minimum requirements relating to adjudication and payment.
- The amount of each payment is based on the value of the work and other costs to which the contractor is entitled during the payment interval.
- 28 day payment cycles
- payment is due 7 days after each 28 day period (or 7 days after the contractor’s claim for payment if later).
- The paying party must give notice within 5 days of the due date, specifying the amount proposed to be paid and the basis on which it is calculated.
what do you do if the contractor doesn’t issue a interim valuation?
Irrespective of whether an interim application is submitted, I must carry out the valuation myself and issue a payment certificate no later that 5 days after the due date.
what is the due date on a payment certificate?
the due date falls 7 days after the interim valuation date or as per the contract
What do you need to issue if you don’t agree with the valuation?
A pay less notice.
what information is on a payment cert?
- Employer and Contract details,
- Site Address,
- description of the work,
- contract date
- contract sum
- valuation date
- issue date
- instalment no.
- gross valuation
- less amount previously certified
- less retention
- payment sum not due
how do you review contractor valuation?
I assess the application against the works carried out on site to date.
What happens once practical completion is served?
- Issued Penultimate Payment Certificate
- Release half the retention
- Contractor’s insurance period ceases and liability falls on employer.
- Employer can no longer claim liquidated damages.
- Rectification period commences.
What is the purpose of retention?
Protect both the employer and contractor..
The purpose of retention is to ensure that the contractor properly completes the activities required of them under the contract.
And ensures they return at the end of the defects period to repair any Latent defects.
how long is the rectification period? Why choose that length?
12 months this allows for any settlement due to seasonal changes.
difference between patent and latent defects?
Patent defects - visible or apparent defects.
Latent defects - defects caused by failure of design, workmanship or materials, which may not become apparent until many years after completion.
A defect which is not immediately apparent. Can be rectified under negligence claim under Defective Premises Act 1972. The time bar for which is set under the Limitations Act 1980.
whose responsibility is it to identify all defects?
The CA should identify defects following a final inspection. however, the contractor is ultimately responsible for ensuring all defects are identified and rectified.
What is a relevant event?
A relevant event is an event that is beyond the contractors control and cause either:
by the employer or their representatives (such as variations, deferment of site possession or inaccurate contract docs) or
a neutral even (such as civil commotion, terrorism, fire, storm, explosion etc.).
What is a relevant matter?
A relevant matter is a matter for which the client is responsible for that materially affects the progress of the works e.g.:
• Variations
• Failure to give the contractor possession of the site
• Failure to give the contractor access and egress from the site
• Delays in receiving instructions
• Discrepancies in the contract documents
• Disruption cause by works being carried out by client
• Instructions relating to variations and expenditure of provisional sums
• Issues relating to CDM
What’s the difference between a relevant event and a relevant matter?
A relevant event is an event that is beyond the contractors control and cause either by the employer or their representatives (such as variations, deferment of site possession or inaccurate contract docs) or a neutral event (such as civil commotion, terrorism). Relevant events entitle a contractor to claim an extension of time.
A relevant matter is a matter for which the client is responsible that materially effects the progress of the works (such as variations, failure to give possession or access, delay in instructions). This enables the contractor to claim loss and or expense that has been incurred.
You advised on LDs, how did you go about assessing those?
LDs are a pre-agreed sum by the parties to the contracts payable on breach by the contractor should the project not be completed on or before the completion date without prior agreement.
They are calculated on the basis of a genuine pre-estimated loss the employer would be subject to should they not be able to operated from the premises under construction / refurbishment . Cannot be a penalty must be realistic according to potential costs suffered.
When advising on a sum I took into account the following:
- loss of rent or other income
- additional professional fees
- costs imposed by other parties on the client e.g. costs by not having the building available - storage, rent of other premises
- fines from statutory bodies
What items would you have on a contract instruction?
- Employers details
- Contractors details
- project address
- description of the works
- contract date
- issue date
- items to be omitted
- items to be added
- contract sum
- value of previous instructions
- value of current instruction
- adjusted total
What is sectional completion?
Sectional completion is written into the contract and can therefore have liquidated damages associated with it.
What is partial possession
Partial possession is when the client takes over part of the site that has been substantially completed with the contractor’s consent (which cannot be unreasonably withheld).
What is a collateral Warranty
This document provides a contractual link with a third party to convey rights and obligations of the 3rd party where not otherwise would have existed
What is the difference between a guarantee and a warranty.
Guarantee is a promise that the product will last/perform in a specific period subject to certain requirements.
Warrenty hold manufacturer responsible for the repair.
What was the Latham report?
Addressed perceived problems with the construction industry - Constructing the Team
Using NEC contracts
Adjudication
What was the Egan report?
Rethinking Construction
What makes up a building contract?
a. The building contract - This is a legal document, usually in standard form. It sets out the roles, rights and responsibilities of the employer and the contractor.
b. The specification:
i. Prelims - Preliminaries are activities or costs that are not necessarily linked to the building work. They are costs associated with administration, setting up and Statutory Authorities regulations and fees.
ii. Preambles – Quality of materials and workmanship.
iii. Works - The technical requirement to complete, execute and/or perform every little task or material being incorporated in the construction project. It specifies common standards, deviations accepted, materials accepted and the required testing for all materials. Specific referencing to construction standards and codes.
iv. The drawings/plans – Drawings detailing the works to be undertaken referring to and to be read in conjunction with the specification to gain a full understanding of the works.
c. priced schedule of work/bill of quants - Breakdown of all items being incorporated in the construction project. This is usually the base of the application for payment.
d. Pre Construction Information Pack – Details of all the health and safety, security, welfare, access considerations that need to be taken into account. The response to which should be the contractors construction phase health and safety plan.
Difference between Preambles and prelims?
Prelims detail non construction related works that the contractor needs to cost and preambles detail the quality requirements for materials and workmanship.
Difference between single stage and two stage
Single Stage – Go to tender with completed consultants design and specification. Contractor prices the bill of quants, schedule of work or performance spec. Benefits include greater cost and programme certainty, reduced cost due to competitive tender, clear allocation of risk.
Two Stage - The first stage tender is based on a partially developed consultant’s design (prelims, prov sums, demolitions, earthworks, schedule of rates etc.). The contractor selected at the first stage is then able to assist with the final development of the design and tender documents used to obtain tenders for the construction works. The second stage can either be tendered or negotiated to arrive at a contract sum. Benefits include contractors input and buy in to the design, collaborative working relationship.
what happens when the rectification period ends?
Ensuring enough time is allowed for the contractor to rectify any defects identified a joint snagging inspection should be undertaken by the CA and Contractor. The contractor should rectify any defects
then a second inspection should be undertaken to confirm this.
Then a certificate of making good defects and a final payment certificate should be issued for the retention.
The contractor will then issue this to the client with his final invoice.
Concurrent delay?
Concurrent delay refers to the complex situation where more than one event occurs at the same time, but where not all of those events enable the contractor to claim an extension of time or to claim loss and expense.
Contractor, client & outside sources
What is a collateral warranty?
A contract under which a construction professional (the “provider”) promises a third party (the “beneficiary”) that it has complied with the requirements of its professional appointment. creates a contractual link between employer and sub contractors.
It enables the beneficiary to:
- step into a construction contract if the employer goes into liquidation.
- sue the provider for defects.
They are usually executed as deeds and enforceable for 12 years alter PC.
What are the advantages and disadvantages of collateral warranties?
- They are familiar to construction professionals and to their insurers
- More regularly tested in the Court and therefore, more certainty of their meaning
- More likely to be subjected to adjudication and payment provisions under the Housing Grants, Construction and Regeneration Act (1996)
- Can provide step-in rights e.g. where the employer steps in when a contractor becomes insolvent and has the job finished.
- Time consuming – a warranty is required for each separate party
- Expensive – the administrative costs required are significant and expensive suing to enforce
- Often needed after work has started and therefore, not signed
- Could be unenforceable in the absence of consideration if not properly executed e.g. signed; insolvency of a contractor
what is a bond?
Bonds are a means of protection against the non-performance of the contractor.
They are an undertaking by a bondsman or surety to make a payment to the client in the event of non-performance of the contractor. The cost of the bond is usually borne by the contractor, although this is likely to be reflected in the contractor’s tender price.
Bonds can be ‘on demand’ or ‘conditional’, with conditional bonds requiring that the client provides evidence that the contractor has not performed their obligations under the contract and that they have suffered a loss as a consequence.
What are the different type of bonds?
Performance bond
is commonly used as a means of insuring a client against the risk of a contractor failing to fulfil contractual obligations to the client, although they can also be required from other parties.
Performance bonds are typically set at 10% of the contract value. This compensation can enable the client to overcome difficulties that have been caused by non-performance of the contractor, such as, finding a new contractor to complete the works.
advance payment bond
If the client agrees to make an advance payment to the contractor, (for example where the contractor incurs significant start-up and procurement costs before construction begins), a bond may be required to secure the payment against default by the contractor. This will normally be an on-demand bond.
What’s included within a named-subcontractor agreement?
- contractual Parties
- nature of the works
- CA info
- Main contractual works
- Attestation
- information Requirements
- procurement and/or fabrication of material and goods
- collateral Warranties
What is the difference between a named-subcontractor and a nominated subcontractor?
Nominated sub-contractor
Sub-contractor is selected by the employer following the main contractor appointment they appointed nominated sub-contractor.
No provision within JCT
Grey area as Principal Contractor has no choice.
Named sub-contractor
Employer can influence sub-contractor selection by putting forward a list of contractors
Mini-tender tends to take place of sub-contractors
Main contractor is to instruct successful sub-contractor
Tell me about Standard building contract.
Standard Building Contract - Detailed to accommodate more significant works which involve high degree of specialist works - Provision for o Advance payment bonds o Retention bonds o Master programme o Arrangements for acceleration quotes
What guidance would you follow for tendering?
JCT tendering procedures
Is there any guidance you can refer to when undertaking Contract Administrative service
RICS Guidance note: Contract Administration
What are the key tasks of a CA?
- Inviting and processing tenders.
- Preparing contract documents for execution.
- Chairing construction progress meetings &*Preparing and issuing construction progress reports (Meeting Minutes)
- Issuing instructions such as variations, or relating to prime cost sums or making good defects.
- Issuing certificates of practical completion, interim certificates, certificate of making good
Defects
defects and Final certificate
.
What JCT Contracts are you aware of?
Minor Works Building Contract Intermediate Building Contract Standard Building Contract Design & Build Management contract
When would you use JCT MW?
Works simple in nature Simple (No Bills of Quantity)
no need for provisions set out in different contract types
When would you use JCT IM?
More complex works and when there is a requirement for more complex and detailed procedures or when sectional completion is needed.
What can be used to assist with selecting contracts.
*JCT Decision Tree.
What are the difference between Minor Works and Intermediate contracts?
- More detailed procedures
- Relevant Events defined
- Early possession
- Sectional completion
- When named sub-contractors are required
- Collateral warranties for Sub contractor with design responsibility
- Bill of quantities
- Advance payment
Who is responsible for valuations under the intermediate contract used?
- QS in the case of IC standard terms
* Can be undertaken by the CA
Other types of Contract?
New Engineering Contract
Recommended in the Latham Report (contructing the team)
Intended/designed to accommodate both engineering and construction & promote cooperative working.
The NEC contracts are used for:
- Stimulate good management.
- Used internationally
- Easy to understand
Interlocking
Produce an interlocking suite of contracts written
Clear and Simple
Be clear and simple, written in plain English, in the present tense and without legal terminology.
Variety
Be useable in a wide variety of situations from minor works to major projects.
Options
There are a number of options from A-G such as Priced Contract with activities schedule or Target Contract with Bill of Quantities
Issues
Key issues surround payments, compensation events, Dispute resolution.
What’s the difference between NEC and JCT?
JCT - No programme
NEC - Programme is the heart of the contract
JCT - lump sum contract with Provisional Sums
NEC - Based on target for D and C
JCT - 4 weekly interim payments
NEC - Can be set period related to programme
other contracts than NEC?
FIDIC - Fédération Internationale Des Ingénieurs-Conseils.
For international use
How did you decide whether PC had been achieved?/ When can you certify practical completion?
When the works are:
substantially completed
free of patent defects other than those that are minor or trivial.
Complete health and safety file has been issued in draft.
The client ability to take possession and make beneficial use of the building has a significant bearing on PC.
What are the consequences of issuing the PC certificate?
Issue certificate of practical completion means that the:
rectification period begins,
the retention often reduces as detailed in the contract
responsibility for insuring the premises passes back to the client.
Final account is then prepared.
What are the timescales for final account?
- contractor has 6 months after PC to prepare
* 3 months after that date CA to issue final account
What is required to have a contract?
- Offer
- Acceptance
- Consideration
- Time
- capacity
what happens when the rectification period ends?
Ensuring enough time is allowed for the contractor to rectify any defects identified a joint snagging inspection should be undertaken by the CA and Contractor. The contractor should rectify any defects
then a second inspection should be undertaken to confirm this.
Then a certificate of making good defects and a final payment certificate should be issued for the retention.
The contractor will then issue this to the client with his final invoice.
can you give me some examples of how a construction contract could be terminated.
Actions by the contractor - Solvency, Corruption
Actions by the employer - Solvency, Corruption
Breach of contract:
Contractor - abandoning site not undertaking work,
Employer - failure to make payment etc
Both - force majure, specific peril.
How should H&S issues be report on site?
RIDDOR - Reporting of Injuries, disease and dangerous occurrences regs.
What is the base date?
The base date sets the reference date
from which the conditions under which the tender was prepared are considered to have been known by the contractor
and so are properly reflected in their price.
10 days before the tender return date
How do you calculate if a employer is a Contractor for the purpose of CIS (Construction Industry Scheme)
you pay subcontractors for construction work
your business doesn’t do construction work but you spend an average of more than £1 million a year on construction in any 3-year period
what is the difference between 2011 and 2016 update?
The Payment Terms have been changed in support of the Construction Supply Chain Payment charter, designed to speed up payments throughout the supply chain. 2016 suite introduces a ‘Common Valuation Date which applies throughout the contractual chain. Due date in the main contract is 7 days after the IVD. The JCT Sub-contract due date is 12days and the sub-sub contract is 17days. Allowing contractors to be put into funds before paying out.
CDM 2015 regulations are now fully integrated into the 2016 versions and no need for an Amendment.
Insurance Provisions - JCT 2016 incorporates 3 options:
*Option A covers for new buildings and requires the contractor to take out a Joint Names Policy for All Risks Insurance of the Works incl profess fees (default rate is 15% if not stated); whereas
- Option B covers new buildings and requires the employer to take out the Joint Names Policy for all risks insurance for new works incl profess fees.
- Option C covers projects for altering or extending existing structures and requires the Employer to take out a Joint Names Policy for All Risks Insurance for the works and extending the policy for the Existing Structures (against specified perils) to include the contractor
These are same as JCT 2011. However JCT 2016 has the option to replace paragraph C1 of Sched 3 with a C1 Replacement Schedule, which may be more suitable to an employer who is a tenant.
How to value materials of site?
a ‘vesting certificate’ or ‘certificate of vesting’ may be required from the contractor (or sub-contractors or suppliers), certifying that ownership of the goods, plant or materials listed in a schedule will transfer from one party to the other upon payment and confirming that they will be will be properly identified, separately stored, insured and are free from encumbrances (such as retention of title).
Advance payment bond may be more appropriate.
What would you request or look for with regards to valuing materials off site?
valuing/paying for materials offsite will require certain information and checks to be provided.
Check the financial status of the contractor to assess the likelihood of insolvency.
The client should require proof that the property in the items is vested in the contractor before payment is made. This may include a vesting certificate (certifying that property has passed to the contractor and that the materials will be properly identified, stored and insured), and checking that the suppliers terms and conditions do not include a retention of title clause.
The items should be set aside, and clearly marked with the client’s details.
The materials should be ‘ready for incorporation’.
The client should require proof that the materials are insured against specified perils for the period they remain off site.
If the contractor is part of a larger group, then a guarantee might be required from the holding company.
An on-demand bond might be required up to the value of the off-site items, with the value of the bond reducing as deliveries to site are made.
The client might enter into a contract direct with the supplier.
Why did you use a IC for Spire Green?
As the contract sum was around £500,000 and therefore a minor works contract and as we were doing roof works, it was important that relevant events were defined.
What sections of the JCT contract discusses insurance provisions?
Section 5 in JCT minor works. Section 6 of JCT (Standard and Intermediate), Section 5 in JCT minor works
What are the 3 options for insurance in relation to the works and the existing structures?
Insurance Provisions - JCT 2016 incorporates 3 options:
*Option A covers for new buildings and requires the contractor to take out a Joint Names Policy for All Risks Insurance of the Works incl profess fees (default rate is 15% if not stated); whereas
- Option B covers new buildings and requires the employer to take out the Joint Names Policy for all risks insurance for new works incl profess fees.
- Option C covers projects for altering or extending existing structures and requires the Employer to take out a Joint Names Policy for All Risks Insurance for the works and extending the policy for the Existing Structures (against specified perils) to include the contractor
These are same as JCT 2011. However JCT 2016 has the option to replace paragraph C1 of Sched 3 with a C1 Replacement Schedule, which may be more suitable to an employer who is a tenant.
Explain your process in completing the valuations?
I time the progress inspection with the interim valuation date. Therefore, the contractor provides me with their valuation in advance of the meeting.
Whilst on site I review the progress through visual inspection against the contractors valuation.
Where necessary I discuss costs with the contractor and request that they correct any inaccuracies.
Note – if you do not respond to contractor’s valuation in stated period of time, when they submitted a payment notice, then contractor’s valuation becomes default and valid.
what information is on a payment cert?
- Employer and Contract details,
- Site Address,
- description of the work,
- contract date
- contract sum
- valuation date
- issue date
- instalment no.
- gross valuation
- less retention
- less amount previously certified
- payment sum now due
how do you review contractor valuation?
I assess the application against the works carried out on site to date.
Materials on site, Review Programme and works completed against it.
What happens once practical completion is served?
- Issued Penultimate Payment Certificate
- Release half the retention
- Contractor’s insurance period ceases and liability falls on employer.
- Employer can no longer claim liquidated damages.
- Rectification period commences.
What is the difference between a defined and undefined provisional sum?
A defined provisional sum - described in sufficient detail that the contractor is expected to have made allowances for them in their programming. E.g. defines amount of brickwork but the brick to be used has not been chosen.
An undefined provisional sum - less well described so the contractor cannot be expected to make an allowance for them in their programming, planning and pricing prelims. e.g. works required beneath an existing structure but the extent of the of the work required cannot be determined until the structure is removed and ground opened up.
How was the project procured?
Advantages and disadvantages of traditional procurement?
. Competive so cheaper
- Greater cost and programme certainty
- Clear allocation of risk
- Tailored to meet client requirements - ensures higher quality
- Most common - RIBA survey showed 86% used in 2012
- Cost and time risk fully with contractor. Quality risk by employer
- Longer and sequential process
- Design risk with client
- No contractors buildability input
- Variations can come at a cost
Advantages and disadvantages of Design & Build Procurement
Design & Build:
- No provision for CA. There is only employers agent. Design liability insurance required by Contractor. For simple projects where design quality is not the main consideration.
Advantages:
- Suitable for experienced and inexperienced clients
- Single point of contact and responsibility
- Contractors buildability input throughout (in design too)
- Early start on site, design & construction in parallel
- Relative cost certainty
Disadvantages:
- Quality can be compromised
- Less D&B contractors so less choice
- Less control on design for client
- Client may find it difficult to develop comprehensive brief
- Often more expensive than tadeonal contracts
What does procurement mean?
Acquisition of goods and services in line with requirements.
In a construction context, could be defined as the overall process of acquiring a building. The chosen procurement route should fit well with the client’s objectives.
What does tendering mean?
Process of establishing a price for the works.
What is the choice of procurement dependent on?
Time cost quality
Experience of the client
Apportionment of risk
Design responsibility
When you managed the Coach House Wilmslow, What certificates are issued during the role of acting as CA from start to finish?
Interim payment certificate Practical Completion Certificate of non completion Certificate of making good defects Final payment certificate
At the rectification period, what certificates would be issued?
Certificate of making good defects.
Final payment certificates.
How did you decide whether PC had been achieved?/ When can you certify practical completion?
When the works are:
substantially completed
free of patent defects other than those that are minor or trivial.
Complete health and safety file has been issued in draft.
The client ability to take possession and make beneficial use of the building has a significant bearing on PC.
For Spire Green Harlow, what was the cost up-lift roughly for the out of ours working?
it was £500 for the works. I asked for a full breakdown of the costs and also compared those to the original cost to ensure they were reasonable. I then spoke with the client and agreed this with them.
How did you ensure the contractor was competent to complete the scaffolding work?
- Registered with National Access & Scaffolding Confederation
- Design work to relevant British standards and in line with working at height regulations
Why did you use a IC for Spire Green?
As the contract sum was around £500,000 and therefore a minor works contract and as we were doing roof works, it was important that relevant events were defined.
What is an extension of time?
An additional period added on to the duration of the works.
What is an extension of time procedure needed in a construction contract?
The contractor must give notice to the CA, this will inform about the relevant event and the time predicted to be extended. CA review and provide cert.
What’s the difference between a relevant event and a relevant matter?
Relevent events allow an extension of time and is beyond the contractors control, matter is the employers fault will allow a claim for loss and expense
Event : justrified additional time
Matter : Justrifies additional payment
How did you manage your clients expectations with regards to this extension?
- Keep client in communication
- Make them aware of all possible delays and any costs
- Make them aware that delay could be extended
What relevant event was this?
Variations and exceptionally adverse weather
Why was this not a relevant matter?
It only intitiled the contractor to an extension and not loss and expense claim
* The contractor was not incurring any loss in this situation
List relevant events (13)
Variations. Exceptionally adverse weather. Any impediment by the employer Civil commotion Force majure Exceptionally adverse weather conditions works by statutory undertakers
List relevant matter (11)
Relevant matters might include:
Failure to give the contractor possession of the site.
Failure to give the contractor access to and from the site.
Failure by the client to supply goods or materials
Delays in providing instructions.
Discrepancies in the contract documents.
Disruption caused by works being carried out by the client.
Instructions relating to variations and expenditure of provisional sums
Inaccurate forecasting of works described by approximate quantities.
Issues relating to CDM
Opening up works or testing works that then prove to have been carried out in accordance with the contract.
What can a contractor claim with regards to the relevant events and relevant matters?.
Extension of Time
Loss & Expense
What is loss and expense?
- Loss the contractor has incurred due to delay that was the fault of the client
To claim loss and expense the contractor must show that a Relevant Matter has occurred.
- Contractor has to prove loss and expense
What is the process of claiming loss and expense?
- The contractor must give written notice of a claim as soon as it becomes reasonably apparent that the regular progress of the works is being materially affected.
- Detail relevant matter and estimated costs
- CA to review and approve
How did you determine that and extension of time request was fair and reasonable?
I compared works undertaken against works left within the programme.
*I analysed the critical path
What is a prolongation cost?
Prolongation costs are the additional costs that a contractor has incurred as a result of the completion of the works being delayed by the employer
How would this have differed if you had been using a minor works contract?
- No listed relevant events
- Up to CA
- I would still refer to the IC
Deferment of site.
Some contracts (such as the JCT intermediate Form of Building Contract) will entitle the client to defer giving the contractor possession of the site
period of up to six weeks unless a shorter period was stipulated in the contract particulars (it is probably unwise to reduce the period).
This provision enables the client to defer possession without being in breach of contract.
What happens if the contractor is not given possession on the correct date.
- Time is said to be at large.
- No completion date and LDs cannot be applied.
- Contractor only required to proceed regularly and diligently which is open to interpretation.
How does NEC deal with relevant events?
Compensation events
What other forms of Alternative dispute instead of mediation resolution do you know?
- Adjudication - third party adjudicator - in 28 days - binding (Section 108 of the Housing Grants, Construction and Regeneration Act.)
- Arbitration - private - third party arbitrator - not always fast
How would you have advised your client if it had there was a delay to the project?
- I would have advised my client that if the works were not completed on time the client would be welcome to claim for LDs as long as the contractor did not issue an extension of time claim with valid reasons. i.e relevant events stated.
What were the LDs for this project Spire Green?
- Set at £3000 / week to account for Charles River not being able to burn waste additional professional fees for site inspections
What is practical completion?
When the works detailed in the contract are complete within reasonable satisfaction of the CA.
What is a patent defect?
- A defect that is discovered from reasonable inspection
What are the contractual implications of practical completion?
- Releasing half of the retention
- Ending the contractor’s liability for liquidated damages
- Signifying the beginning of the rectification period
- Possession and insurance goes back to the employer
