Contract admin Flashcards
(100 cards)
1
Q
What’s the difference between Minor Works and Intermediate contracts?
A
MW:
- Simple buildings.
- 3 months rectification period.
IC:
- Moderate complexity.
- Clerk of Works.
- Sectional Completion.
2
Q
What documents are included within contract documents?
A
- Contract.
- SoW.
- Prelims.
- Preambles.
[- Drawings.]
[- Payment terms.]
3
Q
What is the purpose of prelims and preambles?
A
Prelims:
- Describes the nature of the works.
- Contract details [IVD, LD rate, rectification period, PC date].
Preambles:
- Explanation of the contract e.g. objectives, site information (address etc).
4
Q
Who are the parties on the contract?
A
- Employer.
- Contractor.
- Consultants.
5
Q
What are some key contract events?
A
- IVD.
- PC.
- Rectification period.
- Final Certificate [ends contractor’s obligations (except for latent defects)].
6
Q
What are collateral warranties?
A
An agreement where a third party is covered despite not being part of the original contract.
7
Q
What’s the difference between Sectional Completion and Partial Possession?
A
- Sectional Completion is pre-planned.
- Partial Possesion is not pre-planned.
8
Q
What information is provided within a CPP and what legislation states a CPP is required?
A
SHES.
- Site information.
- Hazards.
- Emergency procedures.
- Site rules.
- CDM Regulations 2015.
9
Q
Can you tell me some different types of procurement?
A
- Traditional (client team).
- Design and Build.
- Management contracting: manages design and works but doesn’t complete works directly (Quinn on Windsor Walk).
10
Q
What information goes into PCI?
A
SHED.
- Site information.
- Hazards.
- Emergency procedures.
- Drawings.
11
Q
Is the Contractor’s Design Portion optional?
A
Yes.
12
Q
What’s the alternative to including contractor’s design in a contract?
A
It could be designed entirely by the client’s side.
13
Q
What specification would be used for a project designed entirely by the client’s side?
A
Prescriptive specification.
14
Q
What information is included when appointing a consultant?
A
- Works.
- Costs.
- Timeline.
15
Q
What is a novation agreement?
A
When one party replaces another and takes on the rights and obligations.
[Substituted contract].
16
Q
What are the timelines for Interim Valuations?
A
Application for payment (valuation) by IVD > Interim Valuation Date > Due date (7 days after IVD) > Payment certificate (CA - within 5 days of due date)/Pay less notice (up to 5 days before final payment date) > Final payment date (14 days after due date).
17
Q
What is the base date?
A
Date from which fluctuations will apply i.e. inflation rises will be borne by contractor from this point. Typically date of tender returns.
18
Q
What is the process when a contractor submits an EOT claim?
A
1) EOT application received from contractor for delay stating Relevant Event.
2) Assessment by CA ‘as soon as reasonably practical’ is best practice (within 12 weeks of notice otherwise).
3) Accept/reject claim [Loss and expense claim based on prelims].
19
Q
What is the difference between a Relevant Event and Relevant Matter?
A
Relevant Event: EOT – caused by client or neutral event.
Relevant Matter: money (no time extension) – caused by client.
20
Q
What is the purpose of Loss and Expense?
A
To reimburse the contractor for loss suffered in continuing to work.
Client only required to pay for actual loss.
21
Q
a) When can an employer claim for Liquidated Damages?
b) Does the client need to suffer actual loss to be abe to claim them?
A
a) When the contractor fails to meet the completion date.
b) No, if contractor misses completion date they can claim LDs.
22
Q
How are Liquidated Damages paid?
A
- Payment from contractor
or - Deducted from money due to contractor.
[Contractor required to pay rate pre-determined in the contract. Calculated as actual loss e.g. loss of rent.]
23
Q
What is time at large?
A
No PC date. Contractor no longer bound to complete works by a specific date.
24
Q
Gray’s Inn Road, London: a) What is Practical Completion?
b) What rule of thumb guide is there on whether to issue PC if snags are outstanding?
A
a) Works in the contract are substantially complete.
b) It won’t impact occupation.
25
Gray's Inn Road, London: What is the process for Practical Completion?
- Inspection - works substantially complete or snagging list.
- Documents: Test certificates, O&M manuals, BCA sign off, H&S file.
- Issue PC certificate.
26
Gray's Inn Road, London: What five things are triggered at Practical Completion?
- Rectification period (3 months MW, 6 months Intermediate).
- Retention [half released].
- LDs can't be claimed by client.
- Insurance passes to client.
- Client takes possession of site.
27
What must be issued for Liquidated Damages to apply?
Non-Completion Certificate (not required for Minor Works contracts but good practice).
[No set timeline to issue - as soon as practicable]
28
What action must you take for a contractor who has to pay Liquidated Damages?
Tell contractor to pay LDs amount stated in the contract [for the period of delay].
29
Who has responsibility for a property in early use/possession?
Liability remains with the contractor (unlike partial possession where risk moves onto the client).
30
What is retention?
Money held back from the contractor as insurance.
31
Explain the process of retention getting released?
- Inspection for PC.
- If works are substantially complete PC is issued.
- Half retention released.
- Second half released after Making Good Certificate issued.
32
When do you require snagging to be complete by?
- Works to be substantially complete.
- Shouldn't impact occupation [rule of thumb].
- All by the Making Good Certificate date.
33
What is a final account?
- Document stating the final cost of the contract.
- States how much the employer pays the contractor.
[Includes variations, loss and expense, provisional sums etc.]
34
When must a contractor provide all necessary information to the CA once works are complete?
Within 6 months of PC date.
35
When must a CA issue the final account?
- JCT: no deadline.
- Best practice: within 3 months of receiving all information.
36
When must a CA issue the final certificate?
Within 28 days of issuing:
- Making Good Defects Certificate to contractor.
[Final account must be agreed as well]
37
What is the preferred dispute resolution under a JCT contract?
Mediation > adjudication > arbitration/litigation.
38
What legislation is there for construction contracts?
Construction Contracts Act 2002.
39
What are some provisions within the HGCR (Housing, Grants Construction and Regeneration Act 1996)?
- Interim Payments [contractors have right to be paid in stages].
- Adjudication [any party has right to this].
[- Payment Notices [must be issued].
- Suspend work for non-payment.]
40
What forms of construction warranty are there?
- Collateral (extend duty of care to third-party).
- Structural (latent defects).
[- Self-build (structural defects in new builds).]
41
What forms of sub-contract are there?
- Lump sum.
- D&B.
- T&M [time and materials].
42
How can you deal with issues with works if conversations didn't work?
ADR: Mediation, arbitration, adjudication.
43
When is a Letter of Intent requested?
Tight timelines [begin designs while contract negotiated].
44
What are the risks with a Letter of Intent?
- No detailed brief.
- Legally binding so can cause disputes.
45
What is a performance bond?
- Financial compensation if the contractor fails to meet contractual obligations.
- Guarantee by third-party surety i.e. insurance company.
- Typically 10% of contract value.
46
What is an advanced payment bond?
Client can recover money if contractor fails to deliver after receiving advance payment [recovered via the bond].
[If contractor pays out for fire exit doors up front and wants paying for these in the next interim payment certificate but goes bust then there's no recourse to claim that money back without an advanced payment bond]
47
What are the grounds for termination of a contract from the client or contractor?
- CDM breach.
- Corruption.
48
What would you do if you deemed the contractor’s programme to be unacceptable?
Tell them why it's unacceptable and request a revised programme (there may be contract provisions they need to meet).
49
What is a vesting certificate?
Proof that the client has paid for items that have been bought but haven't been installed on the project yet.
If contractor goes bust there is proof that those items belong to the client.
[Transfer certificate]
[Materials are typically off-site].
50
Where would you find provisions in respect of the LDs rate, insurance matters, payment terms, rectification period, whether the cost is a fixed lump sum tender etc?
- Contract.
- Prelims.
51
How were you appointed at Windsor Walk/Old Broad Street?
- Sent fee quote.
- Competitive single stage tender.
- Lump sum fee proposal.
- Appointed - sent terms of engagement to client.
52
What's the difference between Minor Works and Intermediate contracts?
- Sectional Completion.
- Clerk of Works.
- Rectification period: MW - 3 months, IC - 6 months.
- MW simple projects.
- IC moderate complexity.
53
How do you select which contract to use?
- Complexity.
- Contractor's Design.
- Procurement route.
[- JCT guide.]
54
What collateral warranties were in place at Windsor Walk?
No warranties.
- 20 year guarantee for flat roof liquid repairs.
55
How did you deal with payments and variations?
Payments:
- Application for payment from contractor.
- Valuation.
- Interim payment.
Variations:
- Agree works with contractor.
- Time estimate.
- Formally issue to contractor [variation order].
56
Does the contractor have to accept the variation?
No.
57
What if a contractor refuses to undertake the variation works?
- Check the contract to assess contractor obligations.
- Could hire third party to complete variation and deduct the cost from the contractor's payments (if contract allows this).
58
How did you value the variations?
- Quote from contractor [could get additional quote from another contractor].
- BCIS.
- Previous jobs.
59
How did you ensure competitive/good value costs?
- BCIS.
- Previous jobs.
- Quote from another contractor [if I wanted].
60
What tighter controls does an Intermediate contract allow for that a MW contract doesn’t?
- Variations need formal documents.
- Reports and progress updates [stricter requirements].
61
Prior to granting Practical Completion what items should be received?
- O&Ms.
- H&S file.
- Building regs sign off.
- Test certificates.
- Drawings.
[- Warranties and guarantees.]
62
What are liquidated damages?
Compensation for the client when a contractor doesn’t achieve the completion date.
63
How would you usually undertake a monthly valuation?
- Receive contractor's valuation.
- Inspect site with contactor and allocate percentages to each element.
- Issue payment certificate to client.
64
What are the limitation periods for contracts executed under hand and under seal?
Under hand: 6 years.
Under seal (deed): 12 years.
65
When must an F10 be submitted and who by?
- Prior to works commencing.
- The client, but they may delegate this to the Principal Designer (CDM).
66
What is the difference between the final account and a final certificate?
- Final account: final cost of the contract - amount employer owes the contractor.
[variations, provisional sums, Loss and Expense].
- Final certificate: confirmation that the contract is complete.
[ends contractor's obligations (except for latent defects)].
67
How did the contractor claim EOT and Loss and Expenses when you used a Minor Works contract?
- There is an EOT provision in the contract.
- I included a Loss and Expense provision as a contract amendment [contractor's prelims rate].
68
What is the significance of an interim valuation date in a construction contract?
- It’s the date when work is valued and payment is made to the contractor around that date.
- Determines when the contractor submits application for payment (must be submitted by the IVD - CA would issue payment cert based on their valuation if no application for payment was made).
[Regular payments ensures good cash flow]
69
Under a JCT Minor Works or Intermediate Contract, when must the contract administrator carry out an interim valuation?
- On the IVD.
[- Due date: 7 days after IVD.]
- These timeframes ensure compliance with HGCR [Housing Grants, Construction and Regeneration Act 1996 (Construction Act)].
70
What is the purpose of an EOT?
Protects the contractor from liquidated damages for late completion.
71
What is an NEC contract?
When is this most used?
- New Engineering Contract.
- Used mainly for engineering projects.
72
On Windsor Walk you say you advised the client of the significance of Practical Completion and its impact on them. What was the impact on the client?
- Half retention release to contractor.
- Start of rectification period.
- Transfer insurance [client has to arrange with insurer].
- Review costs before agreeing final account [final account agreed after rectification period to include all costs].
73
How is sectional completion dealt with on the project in terms of what was included in the contract?
- Include it in contract [not a standard clause - have to opt in].
Include key events for each separate section:
- PC dates and EOT.
- Rectification period etc.
- Retention release.
- LDs.
- Insurance transfer.
[- Each phase of works is treated separately - separate certificates and timelines as if they were separate projects (excluding Interim Valuations/payment certs and Final Account - treated as one project)]
74
What different types of tenders are there?
SON.
- Selective (contractors selected to provide tender).
- Open (anyone can tender).
- Negotiated (one contractor - price negotiated with client).
75
Note: Contract admin - Windsor Walk.
- Project.
- £243k.
- Requested LDs amount from contractor to include in prelims.
- Contractor claimed for liquid roof repairs but was in the spec.
- Advised how project completion affected client - retention release, prepare final account, insurance transfer.
76
Note: Contract admin - Old Broad Street.
- Project.
- £186k.
- No CD required.
- IC used for provisions such as EOT and Loss and Expense.
77
What's in the recitals of a JCT contract?
- Parties on the contract.
- Payment terms (e.g. lump sum price).
- Description of works.
78
What's in the contract particulars of a JCT contract?
- Parties on the contract.
- Payment terms.
- ADR.
79
What is included in the Form of Tender?
- Tender sum.
- How long sum valid for.
- Signatures.
- Declaration of Compliance.
80
What is included in the Invitation to Tender?
- Scope of Works.
- Building details (size, location, type).
- Tender return date.
81
What are the changes in JCT contract from the 2016 suite to the new 2024?
- PD (BSA) and PC [named within the contract - people doing these roles].
- Gender neutral language.
- Electronic issue of notices.
82
What's the difference between a sub-consultant and co-consultant?
- Sub-consultant: appointed by lead consultant (CA).
- Co-consultant: appointed direct by the client (SE on Windsor Walk).
83
What if a contractor providing a collateral warranty goes bust? What is the recourse?
- No recourse.
- Need run-off cover or performance bond.
[- Can sue another party if there was joint liability.]
[- Latent defects insurance (structural warranty).]
84
What's on a Practical Completion form?
- Issue date.
- PC date.
- Rectification period [expiry].
- CA details.
- Contractor details.
85
What's the benefits of traditional procurement vs D&B?
Traditional
- More control over design.
- Costs more accurate [tenders based on full design].
D&B
- Time [design and construction overlap].
- One party responsible [design and construction].
86
What are prolongation costs?
- Additional costs for extended time on-site [welfare, scaffolding].
- Prolongation = time-related costs.
- Loss and expense = wider disruption costs [wasted labour, inefficient working].
[Doesn't include wasted time not working as there's no running costs]
87
Is a Letter of Intent a contract?
Yes, sometimes referred to as an interim contract.
88
What are the timeframes for issuing an EOT after Practical Completion?
- No set timeframe.
- Best practice ASAP.
- Latest within 3 months.
89
What is the difference between a prime cost and provisional sum?
- Provisional sum: Defined in principle - exact scope/cost not confirmed.
- Prime cost: Cost of supplying materials.
[Provisonal sum includes labour cost whereas this is added on to prime costs]
90
What is the risk of partial possession to the employer?
- Insurance transfers to employer - potential gap in cover for partially possessed area while it's arranged with insurers.
- Responsibility transfers to employer for partially possessed area [damage can occur to this area].
[- LDs - no contract clause clarifying process [can be unclear i.e. how are LDs calculated?].]
91
Old Broad Street: What's the benefit of opting for sectional completion over partial possession?
- Sectional Completion: Clearly defined in contract (PC and EOT dates, rectification periods, LDs etc).
- Partial possession: Potential gaps in insurance upon transfer for partially possessed area.
92
What would you do if there were defects after the rectification period?
- 6 year/12 year contract limitation period [latent defects].
- Is contractor is still trading.
- Any collateral warranties.
93
Old Broad Street: How are the sums calculated for sectional completion for elements such as retention release and LDs?
Retention applied to each phase.
E.g. phase 1 value: £100k.
Retention 5%: £5k.
Retention release: £2.5k at sectional completion, £2.5k at Making Good Defects.
94
For sectional completion, would there be different contract limitation periods for the different sections?
Yes, limitation period typically triggered by PC so separate PC means separate limitation periods.
95
At Old Broad Street, you said one of the reasons you selected an Intermediate contract was because of additional provisions. What were these?
- EOT: Longer list of Relevant Event reasons.
- Loss and expense: Provision included in Intermediate contract but not MW.
96
Old Broad Street: How are EOTs dealt with under the Intermediate contract compared to Minor Works?
MW:
- Extension of Time provision only (no Relevant Event list) [less detailed].
- Gives CA more discretion [more risk of disputes].
IC:
- Relevant Events.
97
Old Broad Street: What are the notice requirements for EOT and Loss and Expense under IC?
Contractor must notify CA as soon as possible.
98
Old Broad Street: What risks does the client face if the contract chosen has inadequate provisions for EOT and Loss and Expense?
- Disputes.
- Uncertain completion dates.
- Claims for additional costs.
99
Gordon Grove: How did you manage the tender and contractual processes for the refurbishment project?
- Prepared tender documents [SoW, prelims, Materials and Workmanship].
- Tender analysis.
- Tender queries.
- Advised on contractor selection.
- Administered contract.
100
Windsow Walk: What advice did you provide to the client regarding liquidated damages and contractor claims?
- Including a figure avoids disputes.
- LDs typically weekly loss of rent.
- No variation as works included within the spec.
