Contract Admin SoE Q's

Question 1

What are the key responsibilities of a contract administrator under a JCT contract?

Answer 1

Role of the CA is to administer the contract.
They are also required to review valuations and issues the necessary certificates, review EoT claims, issue completion, non completion, sectional completion certificates.

Question 2

What are the key responsibilities of a contract administrator under a JCT contract?

Answer 2

Individual responsible for administering the construction contract
Contract administrator has to act honestly and reasonably and decisions are open to dispute under dispute resolution procedure
Issue instructions/variations
Certifies sums due
Assesses delays and grants time and cost relief
Issues extensions of time which it considers fair and reasonable
Issue payment certificates

Question 3

What are the timescales under the NEC contract?

Answer 3

Notification of Compensation Event – within 8 weeks of becoming aware of the event
Quotation – within three weeks of request
Reply to quotation – within two weeks of receiving quotation

Question 4

What are collateral warranties in Construction?

Answer 4

A formal contractual agreement which runs alongside another contractual agreement to create a contractual relationship between two parties where one would not otherwise exist

Question 5

Can you provide an example of how a collateral warranty could be used?

Answer 5

An employer may wish to have a direct contractual relationship with a certain subcontractor so that it can enforce the obligations of the contract, as a security measure if the contractor becomes insolvent or the main contract is terminated

Typically seen on D&B contracts.

Question 6

What is the Contracts (Rights of Third Parties) Act 1999?

Answer 6

Allows parties who are not a party to the contract to enforce certain terms as if they were a party to the contract

Must be named in the contract

Question 7

How does the role of a CA differ to that of an EA?

Answer 7

The roles are very similar, main differences being they are used on differing forms of contract.
They both administer the contract, but the EA performs all duties an employer usually would.
A CA is impartial.

Question 8

Can you name some of the different forms of JCT?

Answer 8

JCT D&B
JCT Intermediate
JCT Standard Building Contract
JCT Minor Works
JCT Major Works
JCT Management Contract
JCT Construction Management Contract

Question 9

Are you able to name some of the different forms of NEC?

Answer 9

• Option A Priced Contract with Activity Schedule
• Option B Priced Contract with Bill of Quantities
• Option C Target Cost with Activity Schedule
• Option D Target Cost with Bill of Quantities
• Option E Cost Reimbursable Contract
• Option F Management Contract

Question 10

Can you name any contract alternatives to JCT and NEC?

Answer 10

FIDIC (International Federation of Consulting Engineers)
ICE (Institution of Civil Engineers)

Question 11

Can you name some contractual mechanisms under the JCT contracts?

Answer 11

• Loss and Expense (Relevant Matter)
• Extension of Time (Relevant Event)
• Payment
• Instructions
• Practical Completion

Question 12

When is a contractor able to claim for loss and expense?

Answer 12

A contractor is able to claim loss and expense when there has been a material change on the project that is of fault of the employer. The aim is to put the contractor back in the same position had the material change not have occurred.

Question 13

What are the time periods associated with a loss and expense claim?

Answer 13

28 days from initial assessment and information, CA/QS issue ascertainment of L&E incurred. 14 days thereafter for each update

Question 14

What is a relevant matter?

Answer 14

A relevant matter gives rise to a loss and expense claim. This is due to a material change on a project.
Some examples may include lack of deferment of the site, instructions.

Question 15

What is a relevant event?

Answer 15

A relevant event gives rise to an extension of time. This extends the completion date of the project and means that liquidated damages are levied for the period.

Question 16

What are the time periods associated with an extension of time?

Answer 16

Typically 12 weeks.

Question 17

Can you elaborate on the JCT timeline for payment?

Answer 17

Typical JCT Timeline is 21 days, but can be changed through contract amendments
The contractor makes his application by the interim val date.
7 days following the interim date is the due date
5 days after the due date is the date the payment certificate is due
14 days following the due date is the final date for payment
5 days before the final date for payment is when the pay less notice would be due

Question 18

Do you understand how project variations are dealt with under NEC and how this differs to JCT?

Answer 18

Under NEC, time and cost are dealt with together, under a compensation event.

Question 19

What is a performance bond?

Answer 19

A performance bond is a type of surety that the client requests from a contractor for default on their contractual obligations.

Typically 10% of the contract value.

May be seen more frequently in a poor economic climate.

Question 20

What is a parent company guarantee and how does this differ to a performance bond?

Answer 20

A PCG is a form of surety that is provided by a parent company to one of their companies beneath them.

Question 21

What are the heads of claim for loss and expense?

Answer 21

Disruption
Prolongation
Finance Charges
Loss of Profit
Increase cost of materials

Question 22

What is ‘Sectional Completion’ and its impact in term of costs?

Answer 22

Sectional completion is stipulated within the contract particulars, with the dates for sectional completion highlighted. The parts of the works must be complete by the stated dates otherwise the client has the ability to claim LD’s.

In terms of cost, if the works are complete by the given date, then half retention for that area of the site will be released. Liquidated damages will also be reduced proportionally.

If the works are not complete by the stipulated dates, a non-completion certificate will be issued, and LD’s can be claimed.

Question 23

What is ‘on-demand bond’ and ‘conditional bond’?

Answer 23

An on demand bond is one which the client can claim on automatically, without having to prove that the contractor has defaulted on their contractual obligations.

Question 24

How did you assess if variations were valid under the Contract?

Answer 24

I reviewed the information provided by the contractor and determined if they were a relevant event or relevant matter under the contract.

Question 25

What contractual timescales were in place for issuing payment certificates?

Answer 25

5 days from the relevant due date

Question 26

What are the consequences when PC is issued?

Answer 26

50% retention is released (subject to the contract)
The 12 months defects period starts
The ability to impose Liquidated Damages is ceased

Question 27

What is sectional completion?

Answer 27

Employer takes possession of that element of the building
Same consequences apply only to that section
Must be expressly written into the contract

Question 28

How did you close off the contractor’s account?

Answer 28

To close off the contractors account on Project Zeta I requested a final account from the contractor.

I provided my judgement and assessment of the final account and negotiated any items with the contractor that I was in disagreement with.

We came to an agreement that both parties were happy with, leading to the account being closed.

Question 29

What is the difference between sectional completion and partial possession?

Answer 29

Sectional completion dates are stated within the contract, whereas partial possession is not.

Partial possession has to be in agreement with the contractor for the client to take possession.

Question 30

Under what contract is an Employer’s Agent party?

Answer 30

• JCT Design & Build 2016

Question 31

What are the pre and post contract duties of an Employer’s Agent?

Answer 31

Pre contract duties are as follows:
- Development of outline programme
- Produce pre tender estimate
- Develop the client’s brief
- Compile the ER’s
- Manage the tender process
- Prepare the contract

Post contract duties are as follows:
- Chair site meetings
- Review and approve design development
- Monitor project quality
- Monitor budget
- Manage the delivery
- Implement change control
- Issue certificates

Question 32

Can you talk me through your role at practical completion? What is required?

Answer 32

At practical completion I would be responsible for issuing the practical completion certificate.

I would also ensure that half retention is released.

I would agree the final account with the contractor.

If completion is not achieved by the stated dates, I would issue a non completion certificate.

Question 33

How did you adjust your payment certificates following the issue of the Certificate of Making Good Defects?

Answer 33

The remaining retention was released to the contractor following completion of the defects period.

Question 34

You mention you were responsible for agreeing variations and issuing EAI’s, is there anything else you were responsible for?

Answer 34

As there was sectional completion on the Lichfield Street project, I was responsible for issuing the sectional completion certificate.

Upon completion I was also responsible for issuing the completion certificate.

Question 35

As an Employer’s Agent, what would you have to issue if the work is not completed by the date stated within the contract?

Answer 35

• A non-completion certificate.