Contract Admin Flashcards
What is a letter of intent?
A letter of intent is a document expressing an intention to enter into a contract at a future date but creates no contractual relationship until that future contract has been entered into.
They can be used as an interim arrangement to mobilise construction prior to a formal contract being executed.
What are FDIC based contracts?
International Federation of Consulting Engineers
what is the NEC suite?
New Engineering Contract
On NEC4 - allows for collaboration.
What are the Joint Contracts Tribunal (JCT) Suite of documents
The suite of contracts drafted by the Joint Contracts Tribunal (JCT) in England is adapted for Scottish law by the Scottish Building Contract Committee (SBCC)
‘JCT contract’, it is typically in reference to a standard building contract.
JCT contracts are usually made between an ’employer’ and a ‘contractor’ to facilitate the process of delivering a building project.
They set out:
- Relevant terms and conditions, including the obligations of the parties
- The costs involved and specification of the project. This allows all parties to see exactly what needs to be done, when it needs to be done, who needs to do the work and what the cost will be.
- Crucially, a JCT contract provides clarity on the roles and responsibilities of each party to try to ensure a smooth delivery of the project.
What are the different types of SBCC contract?
Minor works
design and build
standard
Measured Term
home owner
When would you use a minor works contract?
- where the work involved is simple in character;
- where the work is designed by or on behalf of the Employer;
- where the Employer is to provide drawings and/or a specification and/or work schedules to define adequately the quantity and quality of the work; and
- where an Architect/Contract Administrator or Quantity Surveyor, if appointed, is to administer the conditions.
When would you use a standard contract?
The Standard Building Contract continues to be published in three versions: With Quantities (Q), Without Quantities (XQ) and With Approximate Quantities (AQ).
Each continues to include the provisions designed to meet the needs of both private and public sectors.
The Contract is primarily appropriate for larger works where most of the works have already been designed and/or detailed by or on behalf of the Employer, where detailed contract provisions are required and where the Employer is to provide the Contractor both with drawings and with either bills of quantities (Q and AQ) or a specification or work schedules (XQ) to define the required quantity and quality of the work
When would you use design and build?
DB/Scot 2016 is primarily appropriate for larger works where the Employer has defined his requirements and where the Contractor is not only to carry out the works, but also to complete the design for them in accordance with those requirements.
It retains the provisions designed to meet the needs of both private and public sectors and allows for the works to be carried out in sections. For the purpose of contract administration, DB/Scot 2016 requires the appointment of an Employer’s Agent; that agent may be either an external consultant or an appropriate member of the Employer’s staff.
When would you use Measured Term?
- by Employers who have a regular flow of maintenance and minor works, including improvements, to be carried out by a single contractor over a specified period of time and under a single contract;
- where the work is to be instructed from time to time and measured and valued on the basis of an agreed schedule of rates; and
- where a Contract Administrator is to administer the conditions.
What is the Housing Grants, Construction and Regeneration Act 1996?
is intended to ensure that payments are made promptly throughout the supply chain and that disputes are resolved swiftly.
Provisions of the act include:
The right to be paid in interim, periodic or stage payments.
The right to be informed of the amount due, or any amounts to be withheld.
The right to suspend performance for non-payment.
The right to adjudication.
Disallowing pay when paid clauses.
The Act applies to all contracts for ‘construction operations’
Can you tell me the current changes to the SBCC JCT suite 2024
The SBCC will be release Scottish complaint documents over this year.
Changes aim to:
Modernise and Streamline
- gender neutral language
- flexibility of electronic notices
New contract
- JCT Target Cost Contract
Legislative Changes
- Changes to building regs, insolvency and payment provisions
Future Proofing
- provisions for collaborative working
- Sustainable development and environmental considerations
What are the key sections of a JCT minor works contract?
Agreement
- Contract agreement between the parties
Recitals
- background to the contract
Articles
- Contractors obligations
- Contract sum
- Role of the the architect/CA
- PD
-CA
Contract particulars
**Conditions
- Definitions
- Carrying out the works
- Control of works
- Payment
- Injury, Damage and insurance
- Termination
- Settlement of Disputes
What is an Interim valuation certificate?
Is a document that specified the amount due to a contractor for work that has been completed.
It is designed to maintain cash flow during a construction project
Allows under the Housing grants, construction and regeneration act 1996
would include:
1) Prelims
2) Measured Works
3) Materials on / off site
4) Variations
5) claims
6) retention
7) previous payments
What are the key dates in relation to interim payment under SBCC 2016
For Minor Works:
** Interim Valuation Date
- Specified in the contract particulars
- Usually one month after date of possession
- Contractor submits a payment application
- This can include all works completed to the interim valuation date, materials that have been ordered and any variations or changes to the work.
** Due Date
The due date is 7 days after the interim valuation date and triggers the payment cycle
** Interim Certificate
CA or arch must issue a interim certificate no later than 5 days after the due date. This document values the amount due to the contractor for work done and possibly materials bought on site
If no interim certificate or pay less notice is issued, the contractor may issue a payment notice in which case the client must pay the payment notice in full.
** Final Date for Payment
14 days from the due date
What happens if you do not agree with the contractors valuation?
If the CA disagrees with the contractors valuation in the payment application, they can issue a Pay Less Notice.
This must include the amount the CA considers due and the basis for how this was calculated.
Must be issued 5 days before the final date for payment
What happens if the CA doesn’t issue a payment application
Under minor works
- The CA must still issue a Interim certificate regardless.
- If they don’t, the contractor may issue a payment notice.
Under Design and Built
- A interim payment application is required.
- If it is not received by the valuation date, the due date will become 7 days after it is received.
What are the key components that should be included in a interim payment certificate
Details of the contract Sum
Value of the works completed to date
Previous payments
Current payment due
Any retention or deductions
What can be included in a contractors loss and expense?
Refers to additional costs incurred due to delays or disruptions caused by an employer related reason. can include:
Delay related costs (Prolongation)
Increased labour or material costs
Extended site overheads
** Not always entitled
- if other contractor delays are also present, there may no be no loss.
- must be regular progress of works being materially affected by relevant matter
What is the usual retention ?
Depends on contract particulars.
Usually a default of 5% until practical completion and 2.5% being until defect liability period has expired.
How can a sub-contractor be appointed under JCT?
3 ways
Domestic Sub-contractors
- Selected, Procured and awarded packages at the discretion of the contractor
Nominated Subcontractors
- These are pre-selected by the client and then imposed on the contractor.
- Provisions not included in some JCT as it is complicated of who is reponsible for their performance
Named Subcontractors:
- The names at lease 3 companies and the contractor chooses one.
- This avoids the client retaining responsibility for the sub-contractor and can hold the contractor responsible for any issues that arise from their work.
What is the base date in JCT?
Usually the date of the tender or priced offer
contract sum deemed to have been calculated at the base date
Any increase cost due to inflation after the base date would be borne by the contractor, not the client
How are Fluctuations dealt with under JCT?
They are dealt with through specific provisions that allow adjustments to the contract price
Option A
Deals with fluctuations to contributions, taxes and levies (statutory)
Option B
Additionally covers labour and material costs
Option C
Formula adjustment using the formula rules.
different work categories and exclusions
What is the date of commencement ?
Is the date when the contractor is required to start the work on site
Client must issue a Notice to Commence
Interim Valuation Date which triggers payment cycle in related to commencement date.
What happens if the client does not issue a notice to commence?
Must notify the client
