Contract Administration Flashcards
What are the main principles that deem the minor works contract a suitable form of contract?
The front cover states 4 reasons for the appropriateness of the contract:
1. Simple in character 2. Designed by or on behalf of Employer 3. Employer provides drawings and/or specification 4. Architect/CA administers the contract
When is the minor works contract not a suitable form of contract?
- Where BoQ’s are required
- Where provisions govern work carried out by Named Specialists
- Where Detailed control procedures are needed.
- Also not suitable where the works are of a complex nature.
What are the Roles of the CA under the minor works contract?
Roles include:
- Issuing payment certs
- Valuing any variations or any work instructed in
respect of provisional sums
- Giving any extension to the time
- Certifying practical completion
What are Liquidated Damages (LD’s)?
Pre-determined genuine pre-estimate of client’s loss.
How would you advise your client on LD’s?
It would have to be calculated using a formula, any random sum without substantiation may be considered by law as a penalty and this would not benefit the client in the long term.
What would happen if the LD’s stated nil and what would you advise your client if they wanted to do this?
It would not be wise to state nil as this means that even if the contractor delays the client cannot charge for liquidated damages. This also means there is less incentive for the contractor to complete on time.
What process needs to be undertaken that needs to happen to allow LD’s to be claimed?
To allow liquidated damages to be claimed, the contractor must be delayed beyond the completion date, the CA must issue a non-completion certificate and the client issues a pay less notice.
What is the process in relation to a late payment notice?
Late Payment Notice, JCT states that any late payments accrue a simple interest of 5% above the Bank of England rate. This can be dealt with between the contract. Less than £5000 debts can be dealt with in the small claims court, or adjudication could resolve in main contract. The construction act also includes provisions to promptly receive payment. The debt controllers tend to give companies a push to make payment within a specific time frame before legal action is taken.
So if LADs were then due, how were these calculated?
They a pre-determined genuine estimate of loss to the client in the event the contractor does not complete on time. On my project at John Adams Hall, where a bedroom could not be occupied, it was calculated by establishing the cost of putting a student in a hotel overnight.
What happens if the contractor doesn’t think the LADS in the contract are appropriate to the client’s loss but the contract has already been signed?
Then LD’s apply, they should not have signed up to the contract as these were already identified in the contract particulars. This should have been raised before the signing of the contract.
How would LADS be deducted from the contract?
LD’s are deducted by the Client issuing pay less notice to the contractor but only once a certificate of non-completion has been issued.
How do you assess whether an extension of time is valid?
I follow best practice using the RICS Guidance note on Extensions of Time. Under the JCT contract, the contractor must submit his notice for extension of time as soon as it is reasonably apparent that there is a delay. He must ensure that he makes reference to the amount of time required and mention the Relevant Event that has materially caused a delay. I then use the construction programme and assess the relevant event claim and also compare whether the works undertaken to date match the works that were meant to be undertaken. I then assess whether the delay has had an impact on the critical path. If there is an affect, I assess how much impact that has by dissecting the contract between the stages and state how many weeks need to be adjusted if they were out of the contractors control. I would then issue a certification if I felt it was due to the contractor.
Talk me through the Extension of Time process? How did you determine the contractor’s application for Loss and Expense was fair and reasonable?
So, the contractor submitted his extension of time application to adjust the completion date. I requested for all substantial information to show what caused delay and how it affected the critical path. The contractor also confirmed the relevant event which caused the delay in line with the programme. I reviewed the construction programme and identified where the critical path was. I established that the additional stonework added additional lead time preventing the scaffold from being struck. I issued an extension of time certificate to adjust the completion date extending the liability to request liquidated damages.
The requested for justification based on the contractors tendered rates for loss and expense caused by the relevant matter – Issue of variations.
So if you did not grant extension of time in your project what happened at the end of the project?
If the Extension of Time was not granted, I could issue a Certificate of Non Completion which entitles the Client to claim for liquidated damages.
How did you determine that the contractor was in delay? How and when did you determine the sectional completion was likely to be missed?.
Contractor confirmed in the progress meeting that they were behind schedule and it was clear from my regular site visits and comparing the progress with works undertaken on site.
How do you assess and recommend extension of time?
Request information from the contractor, however the contractor is supposed to submit the claim, confirming the amount of time they think is due to them, confirming the relevant event under their claim. The CA then has 12 weeks to make the decision and assess whether the claim is warranted/justified and make an assessment themselves.
