Contract administration Flashcards
What is nomination?
- Selection of a particular subcontractor to carry out works, manufacture or supply of materials.
- This provides the architect and client with greater control of material choice and thereby quality.
- It is often used when there are long lead-in times with the employer placing orders prior to the Main
Contract award which reduces potential delays on site. - The Main Contractor is relieved of liability of design and compliance with the performance spec in
addition to subcontractor delays in respect of the works that have been nominated.
Do nominated subcontractors get paid separately?
- Nominated Contractors are normally paid via the Main Contract with sums identified separately.
Can the contractor object to a nominated subcontractor?
- Any objections must be made during the tender period.
- There are specific exclusions and grounds for an objection for example if they have found out the
subcontractor is having financial difficulties and may be going insolvent
If there are problems with the design, after Novation of the architect,
who would be responsible?
- 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. - Disputes may arise where it becomes unclear when problems have arisen, either prior to the transfer of
services or afterwards.
What is the difference between Novation and Assignment?
- Novation is a mechanism whereby one party can transfer all its obligations under a contract and all
benefits arising from that contract to a third party. - Assignment is where contractual benefits are assigned however contractual burdens cannot be
transferred under assignment.
What is set-off?
- Set off are any monies owed to the employer by the contractor which are deducted against any
payments due to the contractor.
Describe differences between Statutory Provisions and Contract
Provisions?
- Statutory provisions are set out by law & must be complied with.
- Contract provisions relate to the contract in question & therefore only apply to a specific project
What are domestic subcontractors?
- This is a standard appointment of a Subcontractor by the Main Contractor
What are named subcontractors?
- Clients provide the Main Contractor with a choice of named Sub Contractors for a portion of the
works. - Once appointed they become a domestic subcontractor in terms of the conditions of contract.
- Additional names may be added if approved by all parties.
- This allows the client a level of control over the quality of the works packages and in some cases cost.
After valuation and certificate are issued, the client advised that they
don’t have sufficient funding to make the payment. What would you
do?
- Once the certificate has been issued to the contractor, the client is contractually obliged to honour
payment of the certificate and cannot withhold money without a valid reason. - If this were the case, I would contact the client and contractor ASAP to arrange some form of
payment. It may be the case that the client has insufficient funds available in time for the final date for
payment and it may be possible to defer payment by 1-2 days. - Failing this or if the contractor is unwilling to delay the payment, the client would need to find finance
the payment through other funds to honour the certificate.
What items do you include for on a valuation?
- Items would include:
- 1) Prelims.
- 2) Measured Works.
- 3) Materials on / off site.
- 4) Variations.
- 5) Claims.
- 6) Retention.
- 7) Previous payments.
If an instruction was issued during the contract which involved the
fabrication of a substantial amount of materials off site would you pay
for them as off site materials within the valuation?
- There is no obligation on the client to pay for materials off site if this is not identified in the contract.
- However in the scenario where the client wishes to pay for them, I would ultimately check with the
client before paying or rejecting them
How would you deal with the urgent Verbal Instructions?
- If the instruction affects the critical path or programme in general I would review the instruction with
the contractor administrator, client & contractor. - If the instruction is valid under the contract I would ensure this is converted into a formal written
instruction as soon as possible.
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 including the Scope, Specification, Drawings, Contractors Proposals along with any
insurances.
Could an e-mail constitute a contract document?
- Yes providing there is offer, acceptance, intention to create legal relations and the responding email
does not vary the conditions, a contract will be created.
What is your opinion of Oral Contracts?
- Whilst they are legally binding the difficulty lies in proving the specific terms and conditions of the
agreement. - It is for this reason why the HGCRA only applies to written contracts.
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.
What is the difference between an information requirement schedule
& an information release schedule?
- The information required schedule asks the Contractor to provide dates when design information is
required. - The information release schedule informs the Contractor when the design information will be available
What is Frustration?
- Frustration occurs when any event or circumstances beyond control of both parties changes the
contractual obligations or makes it impossible or illegal to fulfil their contractual obligations. The
happening of such events automatically discharges contract.
How is a contract under hand different from a deed?
- A Deed is signed by a witness & traditionally authenticated by a seal.
- The limitation period of under hand is 6 years whereas a deed is 12 years.
What is the defects liability period?
- The defects liability period is the duration at the end of the contract, usually 52 weeks after the
Substantial Completion Certificate has been issued whereby the contractor undertakes to rectify any
defects that arise within the structure at the contractors expense, providing they were due to materials
& workmanship not being in accordance with the contract. - In the event that the contractor failed to rectify any defects the employer may employ another
contractor to carry out the works & recover the cost of doing so from the Main Contractor. - The retention money retained may be used to cover the costs of making good.
What is your understanding of latent defects and what contractual
issues are associated with them?
- Latent defects are defects which are not readily identifiable upon inspection & only come to fruition
some time after building completion and may take many years to become identifiable. - A claim in contract can only be brought about within the limitation period of the contract, 6 or 12 years
depending on whether the contract was executed as a deed or underhand.
What should the architect do if they are discovered?
- The Architect should issue an instruction as necessary to instruct the contractor what to do if they are
identified. - This can include telling them to comply with a third party who is examining or opening up the works to
identify the defect.
If the works or materials are not in accordance with the Contract what
options does the Architect have available to them?
The architect may:-
o Instruct the contractor to remove all defective work, materials and goods at their own expense
and time.
o They can notify in writing that they can remain with an appropriate deduction being made
from the contract sum.
o Issue instructions for variations that are necessary as a result of the work. If they are necessary
there should be no additional costs or extension of time given.
o Instruct the contractor to open up and test further work to determine the extent of any noncompliance.