Contract Admin

Question 1

What is the role of the Employer’s Agent?

Answer 1

To act on behalf of the employer on all matters, unless the employer expressly states otherwise. It is important the employer allows the EA to do their role and does not interfere.

Question 2

What are the Employer’s Agent’s responsibilities under the JCT D&B contract?

Answer 2

To receive and issue:
1. Applications
2. Consents
3. Instructions
4. Notices
5. Requests or
6. Statements

Question 3

What contract would you typically see an EA?

Answer 3

JCT Design & Build

Question 4

What are the various notices an EA would issue?

Answer 4

1. Payment Notice.
2. Pay Less Notice.
3. Non-Completion Notice
4. Notice of Completion of Making Good
5. 2.29 Notice (withholding)

Question 5

What is the Contract Administrator?

Answer 5

Same as the Employer’s Agent but on JCT traditional contracts (minor works, intermediate etc).

Question 6

What roles does the Contract Administrator have?

Answer 6

Same as the Employer’s Agent.

Question 7

What contracts would you typically see a Contract Administrator?

Answer 7

JCT Minor Works, Intermediate, Traditional etc.

Question 8

What happens at Practical Completion?

Answer 8

1. When the works are substantially complete with minor defects only.
2. Employer is able to gain beneficial occupancy of the development.
3. Half retention is released.
4. Practical Completion Statement is issued.
5. Employer surrenders the right to apply LADs.
6. Employer takes back possession of the works and insurance responsibilities.

Question 9

What is the Notice of Completion of Making Good?

Answer 9

1. Design & Build Contract (Certificate of Making Good in JCT Standard).
2. When the defects, shrinkages or other faults in the works the employer has required to be made good have been made good.
3. Final retention is released.

Question 10

What is the Notice of Completion of Making Good? Does this alter depending on which contract is used?

Answer 10

1. JCT D&B = Notice of Completion of Making Good.
2. JCT Traditional = Certificate of Making Good.

Question 11

What are the payment timescales within JCT suite of contracts?

Answer 11

1. IVD = 1 month after DoP.
2. Due Date = 7 days after IVD.
3. Payment Notice = 5 days after Due Date.
4. FDFP = 14 days after Due Date.
5. Pay Less = 5 days before the final payment is due.

Question 12

What are the final account timescales in Design & Build?

Answer 12

1. Following PC statement issue, the contractor is to submit the final statement to the employer within 3 months.
2. If not, the employer gives notice of another 2 months to provide the final statement.
3. If still not received, the employer will issue their final statement ‘the relevant statement’.
4. Due Date for final payment will be the later of 1) rectification period 2) Notice of Completion of MG or 3) date of submission of final statement. 1 month after the relevant item.

Question 13

What are the final account timescales in JCT Intermediate contracts?

Answer 13

1. Following PC statement issue, the contractor is to submit the final statement to the employer within 6 months.
2. If not, the employer gives notice of another 1 months to provide the final statement.
3. Contract Administrator has 3 months to complete final account.
4. If still not received, the employer will issue their final statement ‘the relevant statement’.
5. Due Date for final payment will be the later of 1) rectification period 2) Notice of Completion of MG or 3) date of submission of final statement. 28 days after the relevant item.

Question 14

What are the final account timescales in JCT Minor Works?

Answer 14

1. Following PC statement issue, the contractor is to submit the final statement to the employer within 3 months (stated in the Contract Particulars so can be amended).
2. Due Date for final payment will be the later of 1) Notice of Completion of MG or 2) date of submission of final statement. 28 days after the relevant item.

Question 15

What are liquidated damages?

Answer 15

A genuine pre-estimate of likely loss incurred by the employer should the completion date not be met.

Question 16

If a client asked you to recommend a suitable LAD value, how would you respond?

Answer 16

I would request the client checks the LADs value are based on a genuine pre-estimate of likely loss and advise that this value is specific to the business and therefore I can not advise.

Question 17

What needs to be in place before LADs can be deducted?

Answer 17

1. A non-completion certificate / notice.
2. A withholding notice (2.29 notice).

Question 18

What are the JCT unamended rectification periods?

Answer 18

1. JCT D&B = 6 months.
2. JCT Minor Works = 3 months.
3. JCT Intermediate = 6 months.
4. JCT Standard = 6 months.

Question 19

What must a construction contract include?

Answer 19

1. Offer – a promise to enter into a contract on specific terms.
2. Acceptance – offeree must accept the offer.
3. Consideration – something of value must be exchanged.

Question 20

What is the difference between JCT and NEC suite of contracts?

Answer 20

JCT
‘Lawyer language’
Contract Amendments
Contract Administrator/EA
Final Account
Construction and Building Works
Variations / Loss & Expense
No programme included

NEC
Concise and written in plain English
Optional clauses
Project Manager
Rolling Final Account
Engineering, Construction & Building Works
Compensation Events
Programme included

Question 21

What is the difference between JCT and FIDIC?

Answer 21

FIDIC is primarily an engineering contract, with the engineer taking the role of the CA/EA.

Question 22

What are FIDIC contracts?

Answer 22

Stands for ‘International Federation of Engineers’. A standard form of international construction contract that are used in many jurisdictions and on all types of projects, mainly engineering and building works of relatively small value or small programme period.

Question 23

What certificates could you issue under D&B?

Answer 23

No certificates issued under D&B. That is for JCT Traditional contracts.
Under D&B, the following would be issued as notices:
1. Payment notice.
2. Non completion notice.
3. Pay less notice.
4. Notice of completion of making good.

Question 24

What is the process of issuing an EAI on D&B projects?

Answer 24

1. Contractor or EA notifies the party of the change.
2. The EA issues a Change Request Form.
3. Contractor responds within 14 days.
4. EA issues an instruction within 7 days.
5. Contractor can respond within 7 days if not complying with instruction.

Question 25

What is the process of issuing a CAI on JCT minor works projects?

Answer 25

Same as above but CAI instead of EAI.

Question 26

What is the process of design submittals under the JCT D&B contract?

Answer 26

1. Schedule 1 of the JCT D&B.
2. Contractor issues a design submittal (2 copies) in sufficient time for alterations.
3. The Employer within 14 days returns Status A, B or C.
4. If no response is received within 14 days, submittal is regarded as Status A.
5. If a Status B or C is provided, and the contractor disagrees with a comment made on the return, he has 7 days to notify the Employer, in which the Employer has 7 days to confirm or withdraw the comment.

Question 27

What does Status A, B or C mean?

Answer 27

1. Status A = the contractor shall carry out the works in accordance with that document.
2. Status B = the contractor may carry out the works in accordance with the document provided the employer’s comments are incorporated and updated schedule returned.
3. Status C = Decline. Contractor shall re-submit the submission or respond within 7 days.

Question 28

What is an Advance Payment?

Answer 28

1. Are a way to protect the payment of an advance to a contractor in construction projects. Provides financial protection for the employer.
2. Clause 4.6 of the Contract Particulars and template included in Schedule 6.
3. Includes a re-payment schedule in appendices.

Question 29

Have you used an Advance Payment Bond before? Provide an example.

Answer 29

1. Octagon
   a. Value = £850k.
   b. Expiry = 1) payment from Bondsman 2) last interim payment 3) XX date.

Question 30

What are the contractual mechanisms for Advance Payment to be made?

Answer 30

1. Bond in place.
2. Clause 4.6 stated in contract particulars.

Question 31

What is Practical Completion?

Answer 31

1. When the works are substantially complete with minor defects.
2. Employer can gain beneficial occupancy.
3. Half retention released.
4. Employer surrenders right to apply LADs.
5. Employer takes possession of site back and responsibility of insurance.

Question 32

What is Sectional Completion?

Answer 32

The completion and handover of the works to the employer in agreed stages.

Question 33

What is Partial Possession?

Answer 33

Where the employer requests, and the contractor consents to the employer taking possession of the works or part of the works before the date for practical or sectional completion.

Question 34

What is the difference between sectional completion and partial Possession?

Answer 34

Sectional completion is a contractual obligation to hand over the section at the stated date, partial possession relies on the contractor’s consent.