Contract Admin Flashcards
1
Q
What were the Main updates to the RIBA plan of works from 2013 to 2020 version?
A
???
2
Q
What if the client tells you the LDs are to be £100,000 per week?
A
Check that they do believe that they are a genuine pre-estimate of likely loss
Explain the dangers that they might be construed to be a penalty
3
Q
What if the liquidated damages are construed to be a penalty?
A
They will not be enforceable
The employer will have to sue for any actual direct loss that can be proved
4
Q
What are the benefits of liquidated damages to the contractor?
A
The contractor knows the consequences of delay from the outset
5
Q
What are extensions of time?
A
Adjusts the completion date and relieves the contractor’s liability to pay liquidated
damages for the period of the extension
6
Q
What are liquidated damages?
A
A genuine pre-estimate of the likely loss incurred by the employer should the
completion date not be met
7
Q
What must be in place before LDs can be deducted?
A
A non completion certificate
A withholding notice
8
Q
What if the employer actually suffered no loss / damage?
A
It doesn’t matter
They can still deduct the liquidated damages stated in the contract
9
Q
What are the benefits of being able to grant an extension of time?
A
It relieves the contractor’s liability for liquidated damages for a delay that they did
not cause
It enables another completion date to be set, which maintains the employer’s
ability to take liquidated damages if another delay occurs
10
Q
What happens when ‘time is at large’?
A
There is no set completion date
The contractor only has the obligation to complete the works in a ‘reasonable
time’
Liquidated damages cannot be claimed (no date to take them from)
The employer would have to try and prove that the contractor had not completed
in a reasonable time
11
Q
What is the procedure for claiming an extension of time?
A
As soon as it is reasonable apparent that a delay is or is likely to occur they
should write to the architect to notify them
This should identify the cause of the delay and if any of the causes are a
Relevant
Event, and give an indication of the extent of the likely delay
They should give any other further information requested by the architect
The architect must notify the contractor in writing of their decision
12
Q
What are the time periods related to granting extensions of time?
A
The architect has 12 weeks from notification to decide on an extension of time
If there is less than 12 weeks to PC, they should endeavour to decide before PC
The architect has up to 12 weeks after PC to review any previous EOTs
previously given or to award further EOTs
13
Q
What are Relevant Events?
A
The events that entitle the contractor to an extension of time
14
Q
What are the relevant events?
A
Suspension by the contractor for non-payment
The carrying out of work by statutory authorities
Impediment, prevention or default by the employer
Loss or damages occasioned by the Specified Perils (fire, flood etc)
Exceptionally adverse weather conditions
Strike or lock out
Civil commotion or terrorism
The exercise of any statutory power after the base date by the UK gov
Force majeure
Variations
Instructions
Execution of an approx quantity that is not a reasonably accurate forecast
Deferment of possession of the site
15
Q
If work is delayed due to two or more competing causes of delay,
one the fault of the contractor and one the fault of the employer, is
there an entitlement to an EOT/loss and expense?
A
No clear rule on which delay takes precedence where a number of delays occur
Each case has to be judged on its merits
Have to make efforts to identify all causes and effects
16
Q
Who owns programme float?
A
No clear rule – generally it belongs to the contractor
The contractor normally includes float in his programme to accommodate his risk
items and also provide time for correcting mistakes
Therefore the actual impact of the delay should be considered
17
Q
When there is a delay at the middle of the project, would you
consider the actual delay or the delay for the whole period?
A
The actual delay caused by the item in question.
It is not fair to offset against any float time the contractor may have built up
through good progress.
18
Q
What is the purpose of a valuation?
A
To provide advice to the certifier on value to allow them to issue their interim
certificate
19
Q
How is the Construction Act relevant?
A
It contains statutory requirements relating to interval and procedure for contracts
that have a duration of over 45 days
20
Q
What are the standard provisions under JCT?
A
The first interim certificate must be issued within one month of the date of
possession
The contractor can apply for payment no later than 7 days before the end of the
relevant period
An interim certificate should be issued 7 days after application – payment
becomes due
The employer has 14 days before the date for final payment
If they wish to withhold payment they have to issue a notice no later than 5 days
before the final date
An interim certificate must be issued within one month of practical completion
Interim certificates should be issued ‘as and when’ monies become due to the
contractor after PC
21
Q
What are the main elements of a valuation / what do you expect to
be included in a valuation?
A
Preliminaries Measured work Variations Materials on site Materials off site Loss and expense Retention
22
Q
What needs to be in place for you to include payments for
materials on site?
A
The materials should be for the works, adequately protected, delivered to
programme and in a reasonable quantity
23
Q
What needs to be in place for you to include payments for
materials off site?
A
Proof that ownership will transfer to the employer on payment (vesting certificate)
Insurance until materials arrive at site
Materials are clearly labelled as for the site and set apart from other materials
A materials off site bond has been provided if required
24
Q
What is a retention of title clause?
A
Where the sub contractor or supplier retains ownership of materials until they are
paid for them by the contractor
This is why vesting certificates are important – otherwise the employer may pay
for materials that are not owned by the contractor
Can lead to disputes in the event of insolvency
General wisdom is materials that have been incorporated in the works belong to
the employer BUT less clear if they haven’t
25
How do you evaluate interim valuations?
Go to site and conduct valuation
Check work done, materials on site, materials off site
Value preliminaries, agreed variations and any claims
Valuation amount is gross valuation, less retention, less previous payment.
Then send recommendation to A/CA.
26
When might advance payments be used?
This is dealt with under clause 4.8
It allows the contractor to receive lump sum payment in advance
The payments, values and dates should be set out in the contract particulars
They may be used where the contractor incurs high costs at the start of a project
E.g. items with long lead times or the need to purchase specialist plant for
manufacturing
JCT provides an advance payment bond to cover the employer financially
27
What are the disadvantages of advance payments?
May reduce the incentive of the contractor
Bad for the employer’s cashflow
Concerns over why the contractor can’t fund the expenditure – insolvency
worries
28
What would you do if the contractor claims for paint in their 1st
application for payment?
During the visit to site I would assess if they had actually done any painting
Would also consider if they were likely to in the near future – for materials on site
29
If a contractor’s work has been certified and paid in an interim
valuation, can it be devalued in a later certificate?
Payment in an interim certificate is a payment on account of the final sum
It is always open to the architect to certify a sum that is devalued in a later
certificate
30
What is retention?
It is a percentage of each interim certificate deducted and retained by the
employer from each interim payment to the contractor
31
What is the purpose of retention?
It provides an incentive for the contractor to complete the works promptly
It provides some financial cushion to the employer in the event of contractor
default
32
What items do not have retention taken on them?
```
Loss and/or expense amounts
Statutory fees and charges
Some additional insurance premiums
Opening up and testing costs
Fluctuations Options A and B
```
33
What should the client do with retention interest if requested by the contractor?
Place it in a separate bank account
Label the account as being held in trust
Provide the contractor with statements showing the payments and amount of
money
in there
This should ensure that the money is available to the contractor in event of
employer insolvency
34
Who gets the interest accruing on retention money?
The employer
35
When is the retention released to the contractor?
Half of the retention is released in the interim certificate after PC
The remaining retention is released in the final certificate – after the Certificate of
Making Good
36
When is the base date set?
Usually 10 days before the tender return date
37
What is the date for completion?
The date fixed and stated in the contract particulars
38
What is practical completion?
When the employer takes back possession of the works
39
What is the recourse if the contractor disagrees with the architect
that the works are not completed?
Adjudication
40
Can the PC certificate be rescinded once issued?
No
41
What is partial possession?
Where the employer requests and the contractor consents to the employer taking
possession of the works / part of the works before the date for practical /
sectional completion
42
What is the rectification period?
The contractor has an obligation to make good any defects, shrinkages or other
faults that arise during this period of time
43
How long is a rectification period?
The default position is 6 months
BUT it is common to amend this to 12 months – so the building is observed in all
seasons
44
How can the architect get the contractor to fix the defects that
arise during the rectification period?
No later than 14 days after the end of the Rectification Period the architect must
issue a written statement to the contractor detailed all of the defects that have
arisen and need to be made good
45
What is the certificate of making good?
Issued by the architect to certify that all of the defects that have been required to
be made good by the contractor have been so
What are the consequences of the issue of the certificate of making good?
The remaining retention is released
46
What is a non-completion certificate?
Issued by the architect to certify that the works / section have not been
completed by the relevant completion date
47
What are the consequences of a non-completion certificate?
The employer has the right to withhold liquidated damages, as long as a
withholding notice has been given
48
What are the three ways that benefits can be transferred under JCT
contracts?
Collateral warranties
Third party rights
Assignment
49
What are collateral warranties?
Create contractual relationships between parties where there would otherwise
not have been any. They are alongside another agreement
50
Where are collateral warranties used?
Due to the principle of privity of contract, the rights and obligations under a
contract can only be enforced by a party to that contract
Collateral warranties give remedies to parties that due to privity of contract would
not otherwise have them
51
Who might want a collateral warranty?
Any third party with a financial institution in a project but not party to the main
contract
E.g. funding institution, future tenants / purchasers
The employer may want a collateral warranty with key subcontractors or
suppliers, as if the main contractor were to go into liquidation they would have no
contractual link with them for redress in case of defective workmanship etc
52
What is novation and how does this differ from assignment?
A new contract that transfers the rights and obligations of one contractual party to
a new third party – assignment is only rights
Give a common example of assignment and novation
Assignment of the rights under a collateral warranty to a different tenant /
purchaser
Novation of the design team under a design and build contract
53
How does novation affect the employer’s rights?
They lose all contractual relations with the novated party and therefore the right
to take action for a breach
It is therefore common for there to be a collateral warranty between the employer
and novated party
54
What is a limitation clause?
Clauses that limit a party’s liability for loss
Give some examples
Limitation to a fixed sum
Limitation to the extent of PI insurance
Exclusion of consequential loss
Limitation to loss that can be recovered from a third party
Limitation to responsibility – net contribution clause
55
Why would you use CW instead of The Contracts (Rights of Third
Parties) Act?
```
The Contracts (Rights of Third Parties) Act 1999 is generally avoided due to its
openness. The CW is used mainly due to familiarity and security. The CW will
specifically define what rights and obligations are provided and to whom.
```
56
What is reasonable skill and care?
The ordinary skill and care expected of an ordinary competent man carrying out
that particular act
57
What are the main sources of guarantee that can be sought in
| construction?
Bond
| Parent company guarantee
58
What is a bond?
A surety bond is a guarantee from the surety in favour of the
employer/beneficiary that the contractual obligation of the principal will be
fulfilled. Effectively, bonds are agreements between three parties for the benefit
of one of them: the employer.
The bond only provides financial compensation up to a stated value. It does not
guarantee the completion of the works.
59
What is a guarantee?
A guarantee is the promise of a third party to honor the obligation of a party to a
contract should that party be unable or unwilling to do so (usually a guarantee is
limited to an obligation to pay a debt).
60
What is a parent company guarantee?
An arrangement where the contractual performance of one company in a
corporate group is underwritten by the other members of that corporate group.
This means that it must complete the works itself if it can or pay the financial
equivalent. It often extent until the end of the contractor’s liability for latent
defects.
61
Which is the most common type of bond in the construction industry?
Performance bond
62
What are the different forms of JCT contract and what are the value
limits applied to each contract?
Although some contracts have limits, such as the Minor Works which
recommends less than £100k for it use, I believe that this should not be used as
the factor in determining the contract used. Rather we should consider other
issues such clients appetite for risk, nature of works, size of project.
63
What are the two main types of insurance?
Liability and loss insurance
64
What is liability insurance?
Financial cover for the legal liabilities that the insured party owes to others
65
What is loss insurance?
Financial cover for losses that fall directly on the insured party
66
If the contractor fails to take out the insurance, what can the
Employer do?
The contractor has to provide documentary evidence that the insurance has been
taken out and the amount of premiums if requested
If they haven’t taken out the insurance the employer can take out insurance to
cover their liabilities and charge the contractor the premium
67
If the LAD's are left blank at the outset of the contract, can they be
amended later on if the project is not finished on time?
The employer loses the right to claim liquidated damages if the provision is left
blank & the contract is delivered late. The client may be able to amend the
provision through agreement with the contractor.
68
What is the difference between liquidated & unliquidated
| damages?
"Liquidated damages are a genuine pre-estimate of the loss incurred & are
therefore known & predicted at the outset of the contract & do not need to be
proven (provided not a penalty).
Unliquidated damages is actual loss incurred as a result of the breach & must be
proven (does not include consequential loss). May be more or less than LADs"
69
What factors do you consider when calculating LAD's?
When calculating LD’s must take into consideration the project type:
For public sector works;
1. notional interest on capital employed
2. additional supervision/ administration costs
3. additional accommodation costs
70
What is Letter of intent? what would be included within that?
"A letter of intent is a parties intention to enter into a contract with the other party
at some point in the future. A LOI should include
1) Scope
2) Duration / completion date
3) Value of works & payment terms
4) Termination clause
5) Law
6) How works to be reconciled with main contract
7) Lock out clause to prevent negotiations with others
8) Copyright"
71
What is quantum merit?
Reasonable payment for work done
72
What is the final account?
Detailed statement of all the adjustments to the contract sum and therefore the
total amount that the employer is liable to pay, together with the basis on which it
was calculated
73
When must the final certificate be issued?
Two months from the later of:
End of the Rectification Period
Issue of the Certificate of Making Good
When the architect gives the contractor a detailed statement (final account)
74
When are provisional sums to be used?
For items that cannot be fully defined at time of tender
75
What signs might be there that a Contractor had financial difficulty?
Industry rumours
Over-valued applications
Less labour on site
Slow progress of works
76
What could have been done to prevent contractor insolvency at tender stage?
Thoroughly check financial accounts.
| Check for front loading.
77
What is novation?
Novation is the transfer of services from one party to another. This can be found
within Design & Build Contracts, where the Clients design team has carried out
preliminary design work.
Upon appointment of the Contractor, the design team is transferred to the
Contractor.
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.
Once the design team has been novated there would be no contractual link or
responsibility between the Client & Architect. The only way this would be possible
would be via the use of a Collateral Warranty
78
What is nomination?
Selection of a particular subcontractor to carry out works, manufacture or supply
materials.
Provides Architect (and client) with greater control of choice and thereby quality.
Often used when there are long lead-in times - e.g. employer places order prior
to contract award which reduces potential delays on site.
(Not available in JCT MW)
79
Do nominated subcontractors get paid separately?
Normally paid via the main contract but sums identified separately.
80
Can the contractor object to a nominated subcontractor?
Must be done during the tender period. There are specific exclusions such as
they have found out the subcontractor is having financial difficulties and may be
going insolvent.
81
What are the risks associated with novation?
Risks associated with novation include the lack of control over the design
development.
The design team become part of the contractors team, and there is no longer a
duty to look after the employers best interests, monitor quality, or certify
payments to the contractor.
Alternatively, may be opportunity for future work & therefore may not work closely
& agree with all contractors decisions for fear of losing work from client.
Unlike D&B, contractor not involved early & thus loses ability to influence design
& buildability as design already commenced.
82
What is the difference between a Provisional Sum & a PC Sum?
PC Sum - works that relate to a nominated subcontractor or supplier, & usually
based on an existing quotation. Contractor given the opportunity to price
allowance for attendances & OHP.
Provisional Sum - Relates to an item of work which is known but cannot
accurately be defined & will therefore be subject to remeasure or dayworks
following the issue of a variation"
83
How do you deal with defective materials in a valuation?
Materials on site - allowable (wastage). Materials off site - not allowable.
Reduction in valuation of materials (80%)
84
What documents would be required in incorporating a Contractor
Design Portion Supplement into a project?
```
Within a Design & Build project, the documentation to be included would be the
Employers Requirements (Scope, Specification, Drawings), Contractors
Proposals, any insurances
```
85
What is the difference between NEC and JCT?
The main difference between the 2 forms is its usage - NEC can be used within
the building & civil engineering projects whereas JCT is specifically for building
projects. NEC can be adopted to a number of bespoke contract strategies due to
the various options available whereas JCT has a standard set of clauses.
86
What is tort?
Name given to body of law that creates & provides remedies for civil wrongs that
do not arise out of contract. Remedy in unliqudated damages (actual not
consequential loss)
87
How is a contract under hand different from a deed?
"A Deed is signed by a witness & traditionally authenticated by a seal. Imposes
greater legal obligations
Limitation period - Under Hand is 6 years, Deed is 12 years."
88
Latent Defects – describe what they are and contractual issues
associated?
Latent defects are defects which are not readily identifiable upon inspection &
only come to fruition some time after building completion & may take many years.
A claim in contract can only be brought about within the limitation period of the
contract (6 or 12 years). Otherwise, a claim may be brought in Tort for
negligence providing there has been actual damage & not economic loss.
89
If the architect thinks work is not in accordance what can they do?
They can issue AIs for the opening up and inspection of covered work, materials
or goods or the testing of work, materials, goods to determine if they are in
accordance
90
If the works/materials/goods are not in accordance what options
does the architect have and what are the consequences of each?
The architect has four options:
Instruct the contractor to remove all defective work, materials, goods at own
expense/time
Notify in writing that they can remain – an appropriate deduction should be made
from the contract sum
Issue instructions for variations that are necessary as a result of the work – if
they are necessary no costs or EOT should be given
Instruct the contractor to open up and test further work to determine the extent of
any non-compliance. No costs should be given, but if the work is in accordance
an EOT can be given
91
What is a defined provisional sum?
A sum included in the contract for work that has not been completely designed at
time of time but for which certain specified information can be given
92
What are the risks associated with provisional sums?
That the actual cost and time exceeds that allowed for in the provisional sum
because the nature of the item changes between tender and instruction
93
How can a provisional sum be expended?
The architect has to issue an AI for its expenditure
94
What does ‘JCT’ stand for?
Joint Contracts Tribunal
95
What does NEC stand for?
New Engineering Contract
96
Name the 9 sections of the JCT contract?
```
Definition and interpretation
Carrying out the works
Control of the works
Payment
Variations
Injury, damage and insurance
Assignment, Third Party Rights and collateral Warranties
Termination
Settlement of disputes
```
97
Name the main types of JCT contract
Minor works
Intermediate
Standard building contract
Design and Build
98
When would you use JCT Minor Works?
Projects that are short in duration, small and simple
RICS guidance is for a value up to £200,000 but it has to be simple in nature.
It is a short, easy to follow contract
It is a lump sum form; design should be completed prior to execution
Employer to provide specifications, drawings and /or schedule of works
Not suitable with bills of quantities
99
When would you use JCT Intermediate Contract?
Recommended for project that do not exceed one year’s duration
For projects that are simple in content, require only basic skills and trades and
where
services are not complex and where the works are already designed
100
When would you use JCT DB?
When the contractor is responsible for design and construction
Similar in complexity to the standard building contracts
The contactor’s proposals form the basis of the contract
There is no mention of an architect or QS
101
JCT Minor Works, Intermediate Form of Building Contract and D&B
Contract differences?
The minor works only has 7 sections of conditions instead of 9. Variations are
included with Control of the Works and there is no ‘assignment and collateral
warranties.
No mention of QS in minor works and D&B (but there is in IFC).
In MW, no provision for named sub-contractor, no provision for bonds and
collateral warranties, no advance payment.
Minor works has no provision for sectional completion or partial possession.
In minor work, there are no relevant events listed for extension of time; it is for
anything outside the contractor’s control. No details on loss and expenses.
The rectification period is 3 months for minor works; 6 months for the others.
The retention is 5% for Minor Works and Intermediate, 3% for others.
D&B is administrated by an employer’s agent rather than a contract
administrator.
In Minor and IFC, the contractor may be responsible for completing discrete part
of the design. In D&B, he is responsible for completing the overall design.
In D&B, the EA may request a quotation prior to instructing a change.
There is no fluctuation for labour and materials costs in MW and ICF.
Payments are made at regular intervals in MW and ICF. D&B gives the option of
stage payments (Alternative A).
In minor works, there is no option for the employer to take out a joint name all
risk
policy. Only option A and C.
No provision for third party rights in MW and IFC.
102
When pricing an EOT what would you include for and what rates?
When pricing an EOT I would include costs for prolongation of site cabins, site
utilities, welfare facilities, management staff, security, cleaners, inefficient use of
labour & plant resources, subcontractor mobilisation costs, head office (hudson),
finance charges & loss of profit
103
What are the key differences between NEC and JCT?
The NEC is concise and written in plain English.
There are a number of optional clauses reducing the need to amend contracts
compared to the JCT.
The PM is presented with options to deal with problems as soon as they become
apparent.
Provision of early warning procedure and risk register (pro-active). JCT is more
reactive.
Compensation events deal with issues affecting both cost and money. In JCT,
changes deals with money and loss and expenses deal with time.
Changes are based on quotations prior to commitment whenever possible.
Rolling final account. In JCT, agreement of costs can be left to the very end of
the project.
Cost of CE is calculated using schedule of actual costs rather than bill rates.
(JCT)
No QS or EA mentioned in NEC only Project Manager who takes on both roles.
104
What is the Construction Acts full name?
Housing Grants, Construction and Regeneration Act 1996 as modified by the
Local Democracy, Economic Development and Construction Act 2009.
105
What does the construction act do?
Provides a framework for fairer contracts and working relationships in
construction related activities. Only applies to construction contract (definition
includes decoration, survey, design work in connection to a building or
infrastructure but excludes plant for oil, gas, nuclear etc. and excludes off site
manufacture unless the contract includes installation)
106
What are the significant elements of the Construction Act?
Payment
Adjudication
Set off
Suspension
Give details of the payment provisions
Pay when paid and pay if paid clauses are banned (except in insolvency)
Contracts over 45 days must contain provisions for interim payments
Contracts must state a date for final payment
The amount and basis of each payment must be notified to the contractor after it
becomes due
Pay less notices must be issued before final date for payment
If these items are not included, the Scheme for Construction Contracts will fill the
gaps
Give details of the adjudication provisions
107
What is the Construction Industry Scheme?
Sets out how payments to subcontractors should be handled by contractors in
terms of tax arrangements
Payments to sub contractors must take account of their tax status, as determined
by HMRC
108
What sort of construction operations are covered under the CIS
Scheme?
Demolition and site clearance
Earth moving and foundations
Construction or alteration to permanent or temporary buildings
Installation of pipes, drains, sewers etc
Cleaning / fitting out work on buildings
Painting and decoration
109
What is design and build?
Where the contractor is responsible for the design, planning, organisation, control
and construction of the works to the employer’s requirements
The employer gives the tenderers the ‘Employer’s Requirements’ and the contractors
respond with the ‘Contractor’s Proposals’, which include the price for the works
110
What are the advantages of design and build?
Single point of responsibility for design and construction
Earlier commencement on site
Early price certainty
Benefit of contractor’s experience harnessed during design
111
What is novation?
A new contract that transfers the rights and obligations of one contractual party to a
new third party i.e. design rights and obligations of architect transferred to contractor
112
If the design team is novated, what should the client put in place?
A collateral warranty to the design team to give them remedies for breach of contract
113
What is management contracting?
A management contractor is employed to contribute their expertise to the design and
to manage construction and is paid a fee for doing so
114
What are Key Performance Indicators?
Enable all those involved in the construction supply chain to establish how they are
performing on a project
Allow organisations to benchmark their performance in those areas that are critical to
the success of projects
There are nationally recognised KPIs that you can measure and compare yourself
against
115
What is tendering?
Tendering is a method of obtaining the resources necessary to carry out the required
work
116
What are the main methods of choosing a contractor?
```
Open tendering
Selective tendering – single or two stage
Nomination / negotiation
Serial
Joint ventures
```
117
What is open tendering?
Indiscriminate request for tenders
Advert placed in local paper/technical press inviting contractors to apply for tender
docs
Gives characteristics of the work
Deposit usually required to discourage frivolous applications
118
What is selective tendering?
Restricts the number of tenderers by pre-selecting a limited number of contractors to
tender for the work
119
What are the two types of selective tendering?
Single stage
| Two stage
120
What is single stage tendering?
A structured process of receiving competitive tenders from a number of pre selected
capable contractors, who provide a lump sum for the works
Contractors pre-selected on say NJCC basis:
Established skill
Integrity
Responsibility
Proven competence and character
Size of work
No more than 6 on list. If pre-selection is done beforehand then tenders can be
selected on price alone.
Good contractors have the following: Recent experience, necessary skills, good
management and organisational structure, spare capacity, good financial standing.
121
What are the advantages of single stage tendering?
Ensures only capable and approved firms submit tenders
Tends to reduce the aggregate cost of tendering
Client gets a lump sum for the whole works
122
What is two stage tendering?
Separates the processes involved with selecting a contractor from the processes for
determining the price for the works
Used when it is desired to obtain the benefits of competition and have the advantage
of bringing a contractor into the planning of the project and gain an earlier
commencement
123
What are the advantages of two stage tendering?
Early involvement of the contractor
Encourages collaborative working
Potential for earlier start on site
Greater client involvement in selecting the supply chain
Contractor can help identify and manage risk
124
Why should you use 2 stage tendering?
Building is complex
Magnitude of work is unknown at time of contractor selection
Early completion is required
Design team would like to make use of contractors expertise on buildability issues.
125
What is negotiation / nomination?
Where the client has a preference for a particular firm
126
How does negotiation/nomination work?
There is no competition – likely to lead to a higher price
BUT client may think it is worth it for a quicker or better quality job
The contract sum is arrived at by a process of negotiation
One party usually prices a schedule of rates / bill which is used as a basis
127
What is a framework agreement?
A list of contractors selected by the client after a formal tendering procedure to work
over a long period of time
The contractor may have to wait his turn for a contract or tender repeatedly with the
same group of contractors
128
What is OJEU and what is it for?
Official Journal of the European Union
Public sector tendering
All contracts from the public sector above a certain financial threshold have to be
advertised across the EU
Also contracts that are say 49% private funded and 51% public must be published.
Use Open, Restricted and Negotiated, (Open, Selective and Nomination)
129
How would you put together a set of tender documents?
In accordance with JCT practice note 6. Include:
ITT (Invitation to tender letter)
Instruction to tenderers: Date and time for return, to whom, site visits, programme,
visit to architect to see drawings, errors, discrepancies, NJCC alternative 1,2.
Scoring matrix (quality/ price), confirmation of receipt
Conditions of proposed contract
Prelims, Pricing doc (SOR, BOQ)
Specification
Drawings
ERs
CPs
Pre-construction H&S information
Form of tender
Submission of bona fide tender
Return envelope
130
What information would the instructions to tenders contain?
```
Date for return
Address to return to
Site visit details
Programme length
Confirmation of receipt of documents
How tender should be submitted
```
131
What is the form of tender?
A pre printed formal statement in which the tenderer fills in the blank spaces
He provides his name, address and the sum of money for which he offers to carry
out the works
132
What are the employer’s requirements?
Sets out the client’s requirements e.g. function, size, accommodation, quality
Level of detail depends on how much design has been done prior to tender
Normally includes current state of planning permission
Should detail the level of design, structure and spec info to be provided by the
tenderers
133
What is electronic tendering?
All the forms, documents and drawings are uploaded onto a server
Tenderers are provided with all the info necessary to access and download
Safeguards have to be built in to prevent unauthorised amendment of the data
There must be a clear system of notifying parties of changes
134
How would you determine the duration of the tender period?
Depends on the procurement process and size of the project
If traditional with a BQ usually about a month to obtain info from sub contractors
BUT large complex schemes would be longer
If first stage of a two stage may be a short as 2-3 weeks as only prelims
If D&B likely to be 6-8 weeks due to the amount of design work needed
Better to give enough time to ensure contractors can price it correctly rather than
rush it and encourage contractors to price a high risk element into the tender
135
How does a contractor price day works in their tenders?
The QS will have included a lump sum for the particular daywork item
The contractor adds a % uplift and gives a total for the section
Competition is therefore based on the % uplift
136
How do you deal with qualifications within the tender?
Procedure should be outlined when you go out to tender – in the instructions
If they are unauthorised it might invalidate the tender – leading to disqualification
Possible to be authorised – if the tenderer raised a query with the QS – in which
case all other tenderers should have been notified and instructions on what to do
issued
137
What is included within a tender report?
```
List of tenders received
Initial tender return totals
Any qualifications identified
Post-tender adjustments
Revised tender sum
Issues to be resolved
Comparison of tender returns
Comparison with pre-tender estimate
Recommendation
```
138
What are dayworks?
Mechanism for valuing works not capable of being measured using the contract cost
components such as the Bill rates.
139
Who sets the Daywork rates?
1) RICS for Building.
| 2) The FCEC (Federation of Civil Engineering Contractors) for Civils"
140
What is the purpose of Dayworks?
1) Under ICE Dayworks are included as an in contract contingency for risks & design
growth that may arise
2) Practical to have a schedule rather than a lump sum as will facilitate pricing of
variations during contract
3) Avoid claims & disputes arising at a later date
4) Value a variation to the contract that cannot be done using any other contract
mechanism"
141
What items would I expect to be discussed at a Pre-contract meeting?
1) Project programme
2) Procurement & contract strategy
3) Dates for issue of design information
4) QS input in preparing tender documentation
5) Pricing document
6) Tender list
7) Risk register & how this will be dealt with under contract
8) Tender issue date"
What does the Employers Agent do? "Found under D&B forms of contract.
1) Monitors the progress & execution of the works
2) Administers the provisions of the contract
3) Ensure all parties carry out their contractual obligations
4) Not responsible for approving design
5) Impartiality
142
What would you do if you suspect the contractor submitting the
lowest tender was in financial difficulty?
1) Request company accounts for last 2 years
2) References from previous employers
3) Carry out Dunne & Bradstreet financial check
4) Ability to secure a bond for the project.
Otherwise next lowest contractor considered.
143
Which type of contracts are you aware of and have you worked with?
JCT Package
144
What is a relevant event?
An event that may impact upon the contract completion date and is generally caused by the client or a neutral event (such as weather)
145
When might an early warning notice be issued?
Under NEC Contract - when there's a potential increase in costs/delayed completion
146
What is a target cost contract?
Target Price Contracts are based on a cost reimbursable mechanism in which the contractor is reimbursed his costs (on an actual cost basis) subject to the application at the end of the project of a formula which allows the contractor to share any savings made and to contribute towards overspend.
147
What is a compensation event?
Compensation events are events which are usually not the fault of the contractor and change the cost of the work, or the time needed to complete it. As a result, the prices, key dates or the completion date may be reassessed, and in many cases the contractor will be entitled to more time or money.
148
Give an example of a situation where a contractor might be entitled to an extension of time?
Client variation such as a change of design
149
Is a contractor always entitled to loss and expense when they are granted an extension of time?
It is important to note that just because an employer risk delay event arises, that does not automatically give rise to a right to claim loss and expense. For example there are certain events for which an extension of time may be granted, without cost (“exceptionally adverse weather conditions” under the JCT suite being a prime example). It is therefore crucial to check your contract to ensure the cause of the delay entitles the contractor to recover any associated costs.
Further, the contractor will ordinarily still have to demonstrate an element of cause and effect before he will be entitled to recover his loss and expense, i.e. the employer risk delay event actually caused the contractor to incur the costs being claimed.
150
JCT contracts – which form(s) of contract are you most familiar with? I encourage assessors to ask this as a standard opening question to ensure that the questions that follow are based on your declared experience
Minor Works
| Minor works with contractors design
151
What are the limitations of the MW form of contract?
Doesn't allow sectional completion or named subcontractors
152
Give me some examples when the JCT Minor Works contract is most suitable.
Simple projects that are short in duration. RICS say projects below £100,000k
153
What document(s) would you refer to assist in advising on the most suitable form of contract.
JCT Decision Tree
154
What information is included in the RICS Guidance Note on Contract Administration?
Appointment of a contract administrator
| Responsibilities of a contract administrator
155
What are the timescales for payment under JCT contracts?
14 days
156
Explain how you dealt with interim valuations for the project.
Issued them in writing with costings
157
Did you agree with the valuations at each interim valuation?
yes
158
• How often were the interim valuations?
Monthly
159
Provide an example where you have advised on an extension of time.
William Stukeley - claim due to weather
160
Explain how you assessed an extension of time.
Judged it against actually lost time vs programme and whether delays were reasonable
161
What advice did you give in relation to loss and expense?
Loss and Expense can only be claimed if the contractor is delayed due to a relevant event that is the fault of the client. For example;
Failure to give the contractor possession of the site.
Failure to give the contractor access to and from the site.
Delays in receiving instructions.
Opening up works or testing works that then prove to have been carried out in accordance with the contract.
Discrepancies in the contract documents.
Disruption caused by works being carried out by the client.
Failure by the client to supply goods or materials.
Instructions relating to variations and expenditure of provisional sums.
Inaccurate forecasting of works described by approximate quantities.
Issues relating to CDM.
162
Fire Station, Gainsborough
| Why was there a twelve months rectification period?
To allow for seasonal defects, as per client request.
163
Fire Station, Gainsborough
| Why did you advise the client not to release any retention?
Spalling concrete not reaching expected lifespan.
164
Fire Station, Gainsborough
| Where you advised the client on the next steps re concrete defects, explain what that advice was.
To notify the contractor of the defect during the rectification period. Allow contractor to attend and provide plan of action.
165
Fire Station, Gainsborough
| How did you assess that works were completed satisfactorily for the retention monies to be released?
Once works had completed then retention released.
166
Name some of the items covered in the Contract Administration Guidance Note?
Role of the CA
CA responsibilities
Terms of Appointment
Design Responsibility
Covers the role of the CA under the JCT contract package
167
What does JCT stand for?
Joint Contracts Tribunal
168
When does the role of CA begin?
Technically once the building contract is in place between the employer and the contractor.
169
What tasks are generally required by the CA?
+ chairing meetings
+ periodically inspecting the works
+ giving instructions, including variation or change
orders
+ determining any applications for extensions of
time by the contractor
+ authorising interim payments to the contractor
+ certifying the date of completion
+ settling the adjusted contract sum (final
account).
170
The surveyor when acting as CA should
| comply with RICS rules and by-laws which include:
```
+ confirming the terms and conditions of
appointment in writing
+ detailing the services to be provided
+ confirming the basis of fees to be charged for
those services
+ identifying that a complaints handling procedure
exists.
The appointment
```
171
How many RICS Bye Laws are there?
```
10
1 - Application and Definitions
2 - Membership and Registration
3 - Designations
4 - Contributions to Funds
5 - Conduct
6 - Governing Council, Officers and Staff
7 - Subordinate Boards, committes and groups
8 - Procedure for general meetings
9 - Accounts and Audit
10 - General
```
172
Would there be an issue if you acted as CA directly for your employer?
Could be a conflict of interest and may not be impartial towards the contractor.
173
What would you record following a site visit as CA?
```
Date and time of inspection
Weather conditions
Number and type of operatives on site
Any instructions given
Progress of works
```
174
What are included in the CA guidance note appendix
Checklists for different contract phases.
175
When should you use JCT MW contract?
Simple works up to £100k
| Design work already completed
176
When would you use the JCT Intermediate contract?
For medium sized projects up to £500k.
Must provide spec
Allows for contractor designed portion
Can be used where work is carried out in sections.
177
When would you use the JCT standard building contract?
High value works above £500k
Works delivered in sections
High maintenance contract for the employer
Can be used where known specialists are to be used.
178
What variations did you negotiate for the Gainsborough FS drill yard?
There was an oil tank on site that the M&E team asked me to remove as part of the works, so we negotiated cost for this variation with the contractor.
179
What concrete specification did you use for Gainsborough FS?
Someone else designed the concrete bays.
| They were 250mm thick. Steel reinforcement at 16mm
180
When would you consider using the JCT intermediate project?
For larger projects that might require sectional completion or nominated contractors/specialists
181
What are lump sum contracts?
where the contract sum is determined before construction work is started.
182
What are measurement contracts?
where the contract sum is not finalised until after completion, but is assessed on
remeasurement to a previously agreed basi
183
What are cost reinbursement contracts?
where the sum is arrived at on the basis of prime (actual) costs of labour,
plant and materials, to which there is added an amount to cover overheads and profit.
184
How did you issue the payment certificate?
contractor issues iterim application not less than 7 days before due date (works valued up to due date)
Employer has 14 days to pay from due date
Issue interim certificate approving no later than 5 days after due date
Pay less notice must be issues no later than 5 days before final date for payment.
