Contract Admin

Question 1

What are the duties of a contract administrator?

Answer 1

Role under JCT - traditional contracts - responsible for administering the contract & offering advice to client on instructions, claims, design, progress etc.

Question 2

Who undertakes a Contract administration role under NEC forms?

Answer 2

Project Manager.

Question 3

What current challenges is Covid and/or Brexit bringing to Contract Administration?

Answer 3

Forecasting risks & progress during Covid.
Brexit material impacts.
How covid is dealt with in contract - for delay and monetary claims.
Force majeure & fluctuations consideration.
Labour resources

Question 4

What is nomination?

Answer 4

Selection of a particular subcontractor to carry out works, manufacture or supply of materials.
This provides the client with greater control of material choice and thereby quality.

Question 5

Can the contractor object to a nominated subcontractor?

Answer 5

Any objections must be made during the tender period.
There are specific exclusions and grounds for an objection for example if they have found out the subcontractor is having financial difficulties and may be going insolvent.

Question 6

If there are problems with the design, after Novation of the architect, who would be responsible?

Answer 6

At the point of novation, the client would agree the level of design was satisfactory & would be signed off by all parties.
The contractor would then become responsible for the Architect & his design should any problems arise during construction.

Question 7

What is the difference between Novation and Assignment?

Answer 7

Assignment is where contractual benefits are assigned however contractual burdens cannot be transferred under assignment.

Question 8

What is set-off?

Answer 8

Set off are any monies owed to the employer by the contractor which are deducted against any payments due to the contractor.

Question 9

Describe differences between Statutory Provisions and Contract
Provisions?

Answer 9

Statutory provisions are set out by law & must be complied with.
Contract provisions relate to the contract in question & therefore only apply to a specific project.

Question 10

After valuation and certificate are issued, the client advised that they don’t have sufficient funding to make the payment. What would you do?

Answer 10

Once the certificate has been issued to the contractor, the client is contractually obliged to honour payment of the certificate and cannot withhold money without a valid reason.
If this were the case, I would contact the client and contractor ASAP to arrange some form of payment. It may be the case that the client has insufficient funds available in time for the final date for payment and it may be possible to defer payment by 1-2 days.
Failing this or if the contractor is unwilling to delay the payment, the client would need to find finance the payment through other funds to honour the certificate.

Question 11

What items do you include for on a valuation?

Answer 11

Items would include:
* 1) Prelims.
* 2) Measured Works.
* 3) Materials on / off site.
* 4) Variations.
* 5) Claims.
* 6) Retention.
* 7) Previous payments.

Question 12

If an instruction was issued during the contract which involved the
fabrication of a substantial amount of materials off site would you pay for them as off site materials within the valuation?

Answer 12

There is no obligation on the client to pay for materials off site if this is not identified in the contract.
I would clarify with the client whether they wanted to pay for them or not.

Question 13

Could an e-mail constitute a contract document?

Answer 13

Yes providing there is offer, acceptance, intention to create legal relations and the responding email does not vary the conditions, a contract will be created.

Question 14

What is the difference between NEC and JCT?

Answer 14

NEC can be used within the building & civil engineering projects whereas JCT is specifically for building projects.

Question 15

What is Frustration?

Answer 15

Frustration occurs when any event or circumstances beyond control of both parties changes the contractual obligations or makes it impossible or illegal to fulfil their contractual obligations. The happening of such events automatically discharges contract.

Question 16

How is a contract under hand different from a deed?

Answer 16

The limitation period of under hand is 6 years whereas a deed is 12 years.
A Deed is signed by a witness & traditionally authenticated by a seal.

Question 17

What is the defects liability period?

Answer 17

The defects liability period is the duration at the end of the contract, usually 52 weeks, whereby the contractor undertakes to rectify any defects.
In the event that the contractor failed to rectify any defects the employer may employ another contractor to carry out the works & recover the cost of doing so from the Main Contractor.
The retention money retained may be used to cover the costs of making good.

Question 18

If the works or materials are not in accordance with the Contract what options does the Architect have available to them?

Answer 18

Instruct the contractor to remove all defective work, materials and goods at their own expense and time.
They can notify in writing that they can remain with an appropriate deduction being made from the contract sum.

Question 19

What if the actual work does not closely resemble the provisional
sum?

Answer 19

If the description is not accurate it has to be amended.
This will be treated as a variation.
This will entitle the contractor to an extension of time and extra preliminaries if appropriate.

Question 20

What are the main suites of construction contracts?

Answer 20

JCT.
NEC 3 & 4.
ECC.
ICE.
FIDIC.

Question 21

What does ‘JCT’ stand for?

Answer 21

Joint Contracts Tribunal.

Question 22

What does NEC stand for?

Answer 22

New Engineering Contract.

Question 23

What does ECC stand for?

Answer 23

Engineering and Construction Contract.

Question 24

What does FIDIC stand for?

Answer 24

International Federation of Consulting Engineers.

Question 25

What does ICE stand for?

Answer 25

Institution of Civil Engineers.

Question 26

What are the main parts of the JCT contracts?

Answer 26

Agreement
Recitals.
Articles.
Contract Particulars.
Attestation.
Conditions divided into 9 sections (7 for minor works).
Schedules.

Question 27

Advantages of the JCT?

Answer 27

Advantages of the JCT Suite of Contracts:-
They are considered by many as the “industry standard,” therefore they offer familiarity.
They cover most forms of procurement and building types through the various impressive ancillary documents to support the main forms.
They are fair and reasonable and not loaded in favour of either party.

Question 28

Advantages of the NEC Contract?

Answer 28

They are applicable to a variety of procurement strategies,
They offer clarity and simplicity by using:-
Ordinary language (minimal legal jargon).
They include flow charts to support their users.
They act as a stimulus to good management through maintaining:-
Up-to-date programmes which are required to be clear and precise.
Provision of early warning procedures and risk registers.
They Embody key features of project partnering.
Assessment of Compensation events by applying a “rolling Final Account.”

Question 29

Disadvantages of the JCT Suite of Contracts?

Answer 29

Do not deal with time and cost up front.
They can be considered as unnecessarily long and unnecessarily complex.

Question 30

Disadvantages of the NEC Contract?

Answer 30

They have limited exposure to the market so they are therefore not fully tried and tested with supporting case law.
They are administrative heavy.

Question 31

What are the role of the parties in the NEC?

Answer 31

The Project Manager can be from the employer’s organisation or an external consultant.
The Project Manager represents the client and has full authority to make decisions, unless the employer has restricted his authority. The PM has the duty to be impartial and to apply the contract.
Designers prepare the work information and are not named in the NEC.
The supervisor is either from the employer’s organisation or an external consultant.
The supervisors role is to check that the works are carried out as described in the contract.
They have a similar role to the clerk of works with authority such as instructing searches or issuing defect certificates.

Question 32

What is the role of the quantity surveyor under the NEC?

Answer 32

The role of the QS is not mentioned in the contract.
The QS can adopt a supporting role to contractor and PM to agree cost of compensation events despite not being formally referenced.
Options B and D involve quantities and measurement.
Target costs under options C and D require an audit role in open book accounting in target contracts which the QS may be responsible for.

Question 33

How is risk management dealt with in the NEC?

Answer 33

A risk register should be produced as soon as possible and regularly updated this is defined in clause 11.2(14).
It should include the description of the risk and the mitigation measure, not the value or the owner.

Question 34

How are early warnings dealt with?

Answer 34

The PM and contractor have duties to give each other early warnings for inclusion in the risk register as soon as they become aware of an event that may:-
Increase the total of the prices.
Delay Completion.
Delay meeting a Key Date or impair the performance of the works in use.

Question 35

How are ambiguities and inconsistencies dealt with under the NEC?

Answer 35

Under clause 17 they are awarded in favour of the party who did not provide the works information.

Question 36

How does the NEC deal with time and programme?

Answer 36

The employer sets the access dates for areas of the works if applicable with the starting date, the key dates or milestones and completion date.
The contract duration is not stated, the contractor must complete the works on or before the stated date.
If the contractor fails to meet the completion date, delay damages apply if option X7 was selected.
The PM must issue the ‘notice of completion’ within a week of completion.
The programme is a contractual document.

Question 37

Do you know the difference between EA and CA?

Answer 37

CA - Party is specifically identified within the contract and is solely responsible for administering the contract.
EA - Specifically identified in the contract and acts on behalf of the employer in all matters. Effectively act as if they are the employer.

Question 37

What is the difference between acceleration (clause 36) and early
completion bonus (clause X6)?

Answer 37

Acceleration is where the completion date and key dates are advanced for an agreed price. Delays and damages apply from the revised date.
An early completion bonus is where the contractor receives a bonus proportional to the number of days they completed the works in advance of the completion date with the original completion date being unchanged

Question 38

What is practical completion?

Answer 38

Generally the point where the project is complete, except for minor defects that can be put right without disturbance to the employer.

Question 39

What are the payment mechanisms under the NEC?

Answer 39

In option A, the contractor is paid when an activity is complete; there is no mechanism for part payment of an activity or materials on site.
In option B, the Price for Work Done to Date (PWDD) is calculated via bill rates and lump sums.

Question 40

How does the NEC permit payment by milestones / stages?

Answer 40

The contractor must group in his tender his activities by groups of activities which will form the milestones.

Question 41

How are compensation events dealt with?

Answer 41

The Project Manager notifies the Compensation Event at the time of giving the instruction.
Or the contractor notifies the Project Manager of the CE but he must do so within 8 weeks of becoming aware otherwise they are not allowed compensation.
The contractor has 3 weeks to provide a quotation.
Within 2 weeks, the Project Manager can either request a revised quotation, or accept the quotation

Question 42

If there is a discrepancy between the employer’s requirements and contractor’s proposals which prevail?

Answer 42

The Contractor’s Proposals.

Question 43

When are NEC Compensation Events not time barred?

Answer 43

If it is a client / PM instructed item.
8 weeks the contractor has to notify.

Question 44

Who is responsible for administering certain building contracts?

Answer 44

NEC3 & NEC4 - Project Manager
JCT D&B 16 - Employer’s Agent
JCT Intermediate, Standard etc - Contract Administrator

Question 45

Please detail some key responsibiltiies of the CA under a JCT contract?

Answer 45

Determine EoT claims.
Determine loss and expense claims.
Issue practical completion certificates.
Certifying interim payments.
Issue the certificate of making good defects.
Notifying partial possession.

Question 46

Can you rescind practical completion once issues?

Answer 46

No, it remains final and binding.

Question 47

One PC has been issued, what are the consequences for employer and contractor?

Answer 47

50% retention released.
Defect rectification period starts.
Employer is required to take up insurance rights.
LD’s are levvied.

Question 48

What is a non-completion certificate?

Answer 48

Formal written notice that the contractor has failed to complete the works described in the contract by the completion date.

Question 49

What are the consequences of a non completion notice?

Answer 49

Triggers the right to claim LD’s.
Certificate of non completion submitted by CA.
Employer inform contractor that they intent to claim LD’s.
Employer must issue a pay less notice to claim LD’s.

Question 50

How is completion defrined under NEC3 and NEC4?

Answer 50

NEC3 - Done all the work the works information states he is to do by the completion date.
Corrected notified defects which would have stopped the employer from using the works.
NEC4 - Done all the work the scope states he is to do by the completion date.
Corrected notified defects which would have stopped the employer from using the works.

Question 51

Why might the EA instruct the contractor to open up the works which have been covered up?

Answer 51

If the EA suspects the work has not been completed ‘in a proper workmanlike manner’ or believe ‘materials, goods or works are not in accordance’ they can instruct the area for inspection.
Under clause 3.12 & 3.13.

Question 52

What is an EoT?

Answer 52

Allows the CA to adjust the completion date, therefore delaying the employers right to claim LD’s.
Where the delay is not the contractors fault.

Question 53

What is the procedure for claiming an EoT?

Answer 53

As soon as it becomes apparent, the contractor should notify the CA in writing.
The notification should detail the relevant event and indicate the extent of delay.

Question 54

What are the periods of time a CA has to respond to an EoT?

Answer 54

CA/EA must notify the contractor within 12 weeks and state whether it is accepted or not.

Question 55

Assuming the contractor demonstrates a relevant event, is the contractor due additional prelims?

Answer 55

No, the contractor would need to demonstrate a relevant matter in a loss & expense claim.

Question 56

L1 - What forms of contract and subcontracts are used in the industry?

Answer 56

JCT
NEC
FIDIC

Question 57

L1 - What are the responsibilities of the administrator?

Answer 57

Responsible for administering the contract.
Tender & contract docs
Interim vals
Loss & expense claims
EoT claims
Completion certificates
Non completion certificates

Question 58

L1 - Who decides when LD’s can be applied on a project?

Answer 58

The completion date is stated within the contract. If the work is not complete by the stated completion date then LD’s can be applied.
A non completion notice will need to be produced by the CA.

Question 59

L1 - What current challenges is Covid and/or Brexit bringing to Contract Admin?

Answer 59

Forecasting risks & progress during Covid.
Brexit material impacts.
How covid is dealt with in contract - for delay and monetary claims.
Force majeure & fluctuations consideration.
Labour resources

Question 60

L2 - Lichfield Street – explain the sectional completion process under the contract and how responsibilities change.

Answer 60

Sectional completion dates are outlined within the contract. At the given dates the employer takes responsibility for that area of the site and it is no longer under control of the contractor.

Question 61

L2 - Project Zeta – please explain the process of agreeing a final account.

Answer 61

The contractor provided their assessment of the final account which I proceeded to review and provide my comments. We came to an agreement that both parties were happy with.

Question 62

L2 - If you had a variation that you couldn’t immediately cost how would you deal with this when reporting?

Answer 62

I would include this within the anticipated variations until I had further information that would allow me to firm up the costing.

Question 63

L2 - How do you keep track on cost when instructions are issued?

Answer 63

I keep track of cost by producing financial statements. These show any variations or anticipated variations, displaying any variance to the clients budget.