Contract Administration

Question 1

Which type of contracts are you aware of and have you worked with?

Answer 1

JCT MW / MWD (2016) and NEC4 FM Short Form

Question 2

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

Answer 2

JCT MW / MWD (2016)

Question 3

Give me some examples when the JCT Minor Works contract is most suitable.

Answer 3

Small scale projects or larger schemes that are relatively straightforward.

No requirement to name subcontractors

No requirement for collateral warranties

Question 4

Give me some examples of the limitations of this form of contract.

Answer 4

Require a professionally qualified person to act as the architect/CA to administer the terms.

Lump sum contracts - not BoQ

Unable to name subcontractors

Unsuitable on longer projects where provisions for fluctuations in materials and labour required.

Question 5

What alternative forms of contract would you consider and what factors would make the alternative more suitable?

Answer 5

JCT Intermediate Contract / with Contractors Design (JCT IC16 or ICD16).

• partial possession & sectional completion allowed
• Allows naming of subcontractors
• Allows collateral warranties

NEC4

• Early Warning Notices & Compensation Events
• Collaborative

Question 6

Outline some of the key differences between JCT and NEC contracts you use.

Question 7

Explain some of the different terminology used in JCT and NEC contracts.

Answer 7

Practical Completion (JCT) v Completion (NEC)
Relevant Event/Matter (JCT) v Compensation Event (NEC)

Question 8

What is a relevant event?

Answer 8

A relevant event is an event that causes a delay to the completion date.

This is caused by the client, or a neutral event not caused by either party.

An important thing to note is that the contract should set out what constitutes a relevant event on a project. Relevant events entitle the contractor to claim an extension of time so that the completion date can be moved and the project is still successful.

A relevant event does not necessarily entitle the contractor to claim loss and expense. However, to claim loss and expense, a relevant matter must have occurred.

Here are 5 examples of relevant events…

1. Exceptionally adverse weather.
2. Failure to provide information.
3. The supply of materials and goods by the client.
4. Delay in giving the contractor possession of the site.
   5 Force majeure.

Question 9

When might an early warning notice be issued?

Answer 9

Unforeseen ground conditions
Material delays or supply issues
Delays

Question 10

What is a target cost contract?

Question 11

What is a compensation event?

Question 12

Give an example of a situation where a contractor might be entitled to an extension of time?

Question 13

Is a contractor always entitled to loss and expense when they are granted an extension of time?

Question 14

What are the limitations of this form of contract? (i.e., one of the contracts you give in response to the opening question above)

Question 15

What document(s) would you refer to assist in advising on the most suitable form of contract.

Question 16

What information is included in the RICS Guidance Note on Contract Administration?

Question 17

What current challenges is Covid and/or Brexit bringing to Contract Administration?

Answer 17

Material shortages / labour shortages
Delays
Requests for extension of Time
Material cost increases

Question 18

What is a Relevant Matter?

Answer 18

A relevant matter is when the client is responsible for an event that materially affects the progress of the works. This enables the contractor to claim direct loss and/or expense that has been incurred.

However, a relevant matter does not always result in a delay to the completion date, which means it may not entitle the contractor to an extension of time.

Here are 5 examples of relevant matters…
1. Discrepancies in the contract documents.
2. Failure to give the contractor access to and from the site.
3. Delays in receiving instructions.
4. Disruption caused by works being carried out by the client.
5. Instructions relating to variations and expenditure of provisional sums.

Question 19

What is the difference between a Relevant Event and a Relevant Matter?

Answer 19

To summarise, a Relevant Event entitles the contractor to an extension of time and a Relevant Matter entitles the contractor to claim direct loss or expense.