Contract administration Flashcards
Warley Hill, Office refurbWhat was the risk of the work proceeding before you had agreed the price to your client?
By proceeding without a cost, it presented a risk of the client being a higher rate. The client would have been able to reject the works if the contractor had provided a price for them beofer hand that was unreasonable. By instructing the works without a price, the contractor has more control over the negotiation.
Warley Hill, Office refurbHow did you quantify the risk of proceeding wihtout costs?
The main risk was the client was going to be overcharged for the works, this needed to be compared against the benefit of completing the works while the scaffold was up, potential prolongation costs and complaints from residents. To quantify I explained that the risk of being over charged was relatively low as some similar items had already been included in the tender by the contractor. Meaning they could be used as a SoR. The cost of potential prolongation costs was greater than the potential for being over charged.
Warley Hill, Office refurbWhat advice did you give to your client about the risk of completing works without confirming the costs?
I advised the client that completing the works while scaffold was erected for the roof and windows presented a greater economy of scale than the risk of being over charged presented. I also removed any mainteance works identfied that did not require a scaffold to be completed. Further reducing the risk of being overcharged.
Warley Hill, Office refurbWhy could the works not be priced beofre the works were started?
The works could have been priced before they were started, but this could have caused for the scaffold to be erected for longer than originally programmed. Presenting a risk of an extension of time claim to the client. The client also wanted to avoid complaints from residents. I explained the risk of proceeding without prices, but the client wished to proceed to avoid the EOT and resident complaints.
Warley Hill, Office refurb?What records did you or the contractor keep of the variations?
The initial variations were instructed and quantified from a condition report carried out from the scaffold. The areas and quantities were recorded on drawings. I was able to check the quantities of works completed during my site inspections, I then recorded them in my site inspection reports. This allowed me to be sure my client was paying the correct amount for works received.
Wigston Close, Structural worksWere the instructions from the client relevant events or relevant matters?
The client requested that the works were instructed 1 week from the completion of the programme. The works were not of a similar nature as those already included within the programme. As this was a late instruction that the contractor could not have accounted for the works in their programme. This a relevant event of a late instruction from the contractor.
Wigston Close, Structural worksHow long did the contract extension need to be to contractually require an additional interim payment?
The Housing Grant, Construction and Regenergation act entitles contractors for interim payments if a project exceeds 45 days. The interim agreement in the contract was montly. The extension of time took the works past the original completion date and the next interim certificate date.
Wigston Close, Structual worksWhy if the contractor would have had to price for the additional works would he had been able to claim loss and expense?
The late instruction fo the worsk were a relevant event under the contract. This entitles the contractor to additional loss and expense that they may have encountered. In this case the prolongation costs of the contract included primarily of site management and security.
Wigston Close, Structural worksDid you discuss the possibility of the additional work with the contractor?
I had discussed the additional works with the contractor at the beginning of the programme. Including suggesting the cotnractor should price them to the client. However, the additional work items nto caused by the car impact and therefore were not part of the insurance claim. The client was adamanet they did not want the works to be completed in conjunction wtih other worsk until very late in the programme.
Talk me through your experience of assessing and recommending entitlement for extension of time?
I recently assessed a contractors extension of time claim for a delay of over 2 months. The contractor claimed that all of the instructions/variations issued over the contract had caused delay. I reviewed the instructions he referred to against the programmes he issued and the records of works he provided. I categorised the instructions into ones that I would provide EOT’s and those that I would not. I then asked for the extension/delay to be quantified against each of the varitations.
How have you advised a contractor on their contractual obligations?
During my case study project, the contractor installed doors that were not FD30S door sets. I advised that under the contract and the M&W documentation that they were required to install FD30S door sets.
How have you advised a client on their contractural obligations?
On SBHG, the client had been witholding payment of certificates as they did did not have proof of 100% completion of properties. I advised, that the contractor is entitled to monthly payments under the contract and if the client witheld payment they would be obliged to pay interest on the payments and the contractor could suspend works.
How have you outlined and recommended to a client the proposed contract preliminaries?
I have developed and proposed contract preliminaries using the NBS software. I will then present them to the client for review. I have specifically adivsed on a rate of liquidated damages for a door replacement programme in a peoples home. I advised that the rate should be equivalent to the weekly rent of a room not being occupied.
How have you assessed the quantum of a contractors claim?
I have assessed a contractors claim for additional preliminaries on a window programme by asking them to break down the cost. They provided time spent. From my review it determined that they had been allocated more time to management roles than that had been spent. I asked them to provide time sheets to prove their time or I woudl reduce their claim.
What are the contractual provisions in the JCT MW for extension of time?
Clause 2.8 is related to EOTIf works going to be delayed Contractor shall notify CAIf beyond contractors control i.e. variations, or not a deafult of contractor CA shall award appropriate EOTIf EOT gratned EOT cert shall be issued and all parties should be notified accordingly.If deafult of contractor, suppliers or materials for works the contractor will not be granted EOT.
What are liquidated damages?
This is the calculated loss that the employer will incur if the project is delayed beyond the contract completed date. This may be things such as rent or lack of occupation costs.
Why are liquidated damages determined during the procurement stage of a project?
This allows the contractor to determine the risk of the project overunning to their projects and determine the duration of the project appropriately.
Why are a contractors loss and expense rates not determined at procurement stage?
They are more wide ranging, depends at the stage of the project delay and harder to determine
What are the methods can be used to analyse delays to a project?
Overview of the factsComparing actual and planned progressCritical path analysisFocused method analysis
Wigston Close, Structrural worksWhat method of EOT assessment did you use?
Overview of the factsThe delay was related to a late submission of variations from the clientSimple and straightforward analysis of time required to complete decorations.
Where could you find guidance on EOT in constructino projects?
RICS Professional Guidance NoteExtension of time Nov 2014
What is the role of the contract administrator?
A professional appointed by the employer to admiister the contract between the employer and the contractor.
What are the responsibilities of the contract administrtor?
Chairing meeting, Inspecting works, giving instructions, variations or change orders, determining applications for extension of time, authorising payment to the contractor, certifying the date of completion, settling the adjusted contract sum
What were building regulations relevant to the change of use at Caulfield Court?
A-Lintel to new bathroom door - structural engineerB-Front door and filled entrance doorway - fd30sE-Installation of suspended ceiling - 42db airbourne 60 db impactF- Extractor Fans - 60l/sG- All water fittings J-Boiler self certfiedL-InsulationM-Width of doorways 900mm clear openingP-Electrical safety self certified
Caulfield CourtWhy were the provisions within the contract not suitable for sealing up the doorway?
Removal of ceiling revealed raised ceiling levelBlockwork quantities did not account for the raised ceilingPlasterboard partition above ceiling level needed to be blocked up to maintain 60min fire resistance
Caulfield Court,How did you instruct the additional works required to seal up the door way at Caulfield Court?
Omitted existing worksAdd in costs and works related to the more comprehensive sealing required
What are the provsions within the JCT MW for interim payments and certifactes?
Clause 4.3Due date is 7 days after interim valuation dateCertificate within 5 days of the due dateFinal date for payment is 14 days from its due date
Wigston Close, Structural worksWhy did you not identify the decoration works as part of your original scope of works?
The works of the project were related to the rebuilding of the structure of the building after car impact. Before works began, the client instructed a demolition asbestos survey to be completed, which damaged the entire property. The decoration works identified were not able to be claimed for from the insurance policy and the client made the decision late in the project to include them.
What is a relevant event?
Reasons why a completion date of a project may be adjusted under JCT forms of contract.
Can you please give examples of relevant events.
VaritaionsInstructionsSuspensionDeferment of possion of the siteSuspensionWorks by staturoty undertakersExceptionally adverse weatherTerrorismCivil Commotion
What is the difference bteween a JCT Intermediate and Minor works contract?
MW - up to £250,000 , IM - up to £1milMW used for simple works, IM more complicated and potential named subcontractor/ specialist worksBoth require client specification and drawings, IM will often include a bill of quantities as wellIM includes provisions for collabortive working, advanced payment, bonds and collateral warranties
Warley Hill, Office refurbWhy did the variation works not have prices before they began?
Client requested a reduction in works due to budget and to complete external works while scaffold was erectedPrices could not be agreed before works were completed as project had already begun and there was a risk of going past the completion date.There were no relevant items in the orignial schedule to develop costs
Where can you find guidance on negotating a final account?
RICS Professional Guidance NoteFinal Account procedures 2015
Which type of contracts are you aware of and have you worked with?
JCT Intermediate with or without CDPJCT MW with or without CDPJCT Dseign and buildJCT MTC
Which JCT contracts are you most familiar with?
JCT Minor works with CDPJCT MTC
What are the limitations of the JCT MW?
No relevant matters or events listedClauses are wooly and collaborative which is fine if nothing goes wrongThe project should last no more than 12 monthsWork is designed by or on behalf of employerNO CNC, contract left wanting
What alternative form of contract would you consider and what factors would make the alternative more suitable?
The JCT, intermediate form of contract.This contrac type is more detailed and has more extensive control procedures than the Minor Works Building Contract, but it is less detailed than the Standard Building Contract. It can be appropraite for projects that are procured via both the traditional or procurment route and can be used by both private and public employees.
What document would you refer to assist in advising on the most suitbale form of contract?
RICS Appropriate Contract Selection 1st EdDeciding on the appropraite JCT contract 2016
What information is included in the RICS guidance note on Cotnract Administration?
It includes general information on the role of the CA and their appointment.It also includes roles and responsibilites of the contract administrator to the contract and employer.
What happens if you do not issue a payment certificate?
Contractor could raise a payment notice for the full amount of the payment notice?
What could you do to stop the entire contractor payment notice being applied for?
Serve a pay less notice 5 days before the final date for payment setting out the reasons for the deduction.
What is the difference of a preamble and preliminaries?
Preamble - is an explanatio of the document and a background of the project, including relevant parties etc.Preliminaries provide a description of the project including circumstances, sub-contracting, completion procedures, approvals etc and can set out contractural mechanisms, tender mechanisms or work sections. Basically, costs contractor will incur which do not form part of hte actual works package.
What are the pre-contract services a CA could undertake?
advising on procurement, preparation of the tender package, tender reviewing and reporting, preparation of the specification, appointing and managing a design team, pre-contract negotiations, preparation of contract, advising on contract options.
In a JCT what is the timescale for payment?
Interim valuation date is set in contractDue date is 7 days thereafterFinal date of payment is 14 days following due dateIf payless it must be 5 days prior to final payment date21 days total
A Contractor submits a loss an expense claim to you for a period of 12 weeks for an EOT you granted. He has worked out a monthly rate for the contract prelims and multiplied it by 12. Is this a fair way to calculate L&E? If not, what would you expect to see?
No, contract prelims are irrelevant. Contractor to submit breakdown of actual L&E, costs incurred, time spent with various sub-contractors, additional plant hire etc. CA can request evidence to support the claim.
What do you have to do with the delay notice?
Nothing contractual, review it and file it, notify the Client.
What happens at PC?
Client becomes responsible for buildinghalf of retention releasedrectification period commencesH&S file agreed Depending on contract- PC cert issued.
Explain the ADR’s?
AdjudicationArbitrationMediationLitigationNegotation
What are the differences of insurance provisions between the JCT minor works and intermediate?
MINOR WORKS- allows for 5.4a (“joint name” with contractor on insurance policy) 5.4b (“joint names” for new works and exising structure) and 5.4c (oinsure by other means)INTERMEDIATE A Contractor all risks, B Employer to take out all risks for the works, C required Employer to take out and maintain (a) insurance for exising and (b) all risk insurance for the works.
What is the EOT timescales in a minor works?
There isnt one. The minor works is not really efficient for dealing with EOT’s and thus another form would have been more suited.
What is the EOT timescales in a intermediate form?
12 weeks
What contract documentation would you expect to find on a project procured traditionally under the JCT Intermediate Form of Contract?
Preambles/preliminariesJCT intermedaite form of contractSpecfication of worksDrawings/designsPricing document/ pre-contract minutes/ insurances/ accreditations
What is included in a traditional contract?
The contract document itself, prelims, preambles, schedule of work, bills of quantity, drawings, design details, specifications, dispute resolution
What are the different tender processes?
Single Stage – Tender is issued to several contractors, the pack includes all the detail required to provide a cost. The preferred tender is selected and discussions can start.Two Stage – First stage is the same as single stage. The contractor will be chosen to provide input into the design or a specific part of the design to help build a specification. This package then goes out to tender again and may include that original contractor. The downside is that it often reduces competition and some contractors will refuse as you already have a relationship with the original contractor.Negotiated – similar to single stage but you only go to one contractor and aim to negotiate the cost down to a fair amount but there is no competition.
What RIBA stage would you go out to 2 stage/1 stage
Single stage – go out to tender at Stage 4 which is technical design.Two stage – go out to tender at stage 2 or 3 which is concept design or spatial coordination.
What is novation?
The transfer of contractual rights and obligations from one party to another.
What is assignment?
The assignor transfers rights, property or other benefits to the assignee.
What is a collateral warranty?
Agreements associated with one primary contact which can be transferred or extended to a third party who is not part of the original contract.
What is a performance bond?
A contractual bond that guarantees the completion of a project. If the contractor does not complete the project, the bond guarantees against financial loss to the client for a specified amount which is usually 10% of the contract value.
What is a concurrent delay?
Where there are multiple delays all occurring at the same time but for different reasons.
What types of contracts are there?
Lump Sum, Measurement and Cost Reimbursement, D&B, Management
What are the key elements of a contract executed under deed?
The contracts are executed under seal, signed by the parties, witnessed and stipulated that it is under deed.
What are the key requirements for a contract to be made binding?
Offer, Consideration, Acceptance, competence and legal intention
How do you ensure that the project is kept on track
I chair regular meetings with the site manager and if required, the client. At this meeting, I will discuss the current status of the project to ensure that it is on track both in terms of timing and finance. Before I chair these meetings, I will review the most recent payment certificate as well as the variations that were applied for, I will then make a note of how much work has been carried out based on the programme of works provided by the contractor. I will then inform the client of the next payment application that is expected as well as what works should be completed by then so that they have an idea of the amount of money they need to make available.
How do you assess liquidated damages?
Liquidated damages are a pre-determined estimate for the likely costs that will be incurred by the client if the project over runs such as rent payments or income lost etc. They cannot be a penalty.
How do you assess Extension of Time?
This is determined by the amount a project critical path is delayed by a relevant event such as the client failing to provide access or providing delayed instructions or constant variations. The EoT claim is reviewed to determine how the contractor has justified it and I then review this and site notes/emails to determine if the contractor made reasonable efforts to avoid the delay or if the delay was down to their own performances. Where they have cited adverse weather, I will take an average of the last 10 years from met office to determine if the weather at the time of the event was to be unexpected or not.
How would you calculate loss and expense incurred?
I would review the contractors claim and review the preliminaries to determine what costs are genuine as a result of the extension, for example, it is unreasonable for the contractor to give a blanket average cost of the preliminaries as items such as scaffolding costs or skips or washroom facilities etc may not have been required at the end when the delay was added. These costs are then combined to create my own idea of what the costs should be and usually, I will discuss this with the contractor so that a fair settlement can be made for the genuine costs incurred by the delay.
What is required to issue practical completion
The majority of the works must be completed bar de-minis work. The building must be functional and safe to use. There must not be substantial defects, if there are, you should not submit PC.
What are the provisions within the JCT minor works for vartiations?
Provision 3.6Can issue variations to the works without invalidating contract, exluding inf they affect CDPIf possible price should be agreed before the worksIf not relevant items from existing contract be applied to make fair an reasonable judgement
What is an EOT?
An EOT is a contractural mechanism to move the contracted completion date back under a relevant event.
What is a retention?
Retentino is a percentage of the contract sum, that is agreed at tender stage, which is held back to ensure performance over the contract and the rectification period. Typically, 5% and 2.5% released at PC.
What is the difference between a relevant event and a relevant matter?
A relevant matter is a matter that the client is repsonsible for affecting the progress of the project and hte contractor will be able to claim loss and expense. A relevant event is a event is caused by the client or neutral event where the contractor will claim for an extension of time.
What expereince do you have chairing meetings?
I have chaired meetings acting as contract administrator through various projects. This includes pre-start meetings, progress meetings, and lessons learnt meetings. I will develop a meeting agenda before any meetings to ensure all key disucssion points are addressed. I will also develop minutes and issue as promptly as possible to ensure all acitonable items are can be addressed.
What types of projects have you completed administrative tasks for?
Primiarly with my client base I have acted as contract administrator for refurbishment and mainteance works.Recently I have been acting as contract adminitrator for the reinstatement of a fire damaged flat in Enfield. Where I have acted as contract administrator both pre and post contract.
Caulfield Court Workshop ConversionCan you describe the Caulfield Court Workshop Conversion project in more detail?
This project was to convert a mainteance workshop into a C2 supported living unit. The contract was procured under the JCT minor works with CDP and tendered using the single stage method. Due to the use class change, a planning application was made and building control approval was sought through an approved inspector.Key parts of works included full electrial and mechanical fit out, structural opening to form door, installation of suspended ceiling and full bathroom fit out.
Caulfield Court Workshop ConversionWhat was the nature of the variation you instructed?
Within the schedule of works there was an allowance for blocking aup an existing door way with block work and an intumescent packer.During works we found that above the ceiling level the opening was formed of plasterboard and would not meet building regulations part B.I instructed the contractor compelte the blocking up of the door way up to the floor slab with blockwork and intumescent packer.
Caulfield Court Workshop ConversionWhat was the vlaue of the contract?
Approximately £55K.
Caulfield Court Workshop ConversionHow did you ensure that the contractor provided a price for additional works before issuing the contract instruction?
I discussed the variation to the works while on site with the contractor and outlined what was required. I requested that he provided a quote as soon as possible to allow for works to proceed. In this instance he provided the quote the same day, and I checked it against a similar item within the schedule and instructed.
Caulfield Court Workshop ConversionWhat method did you use to instruct the variation?
Once a price had been agreed, I issued a formal contract instruction under the contract.This included a specific detail of the works requried including quantities. My instruction also included the agreed value of the instruction and its affect on teh contract sum.
