Contract administration

Question 1

(1) What is the role of the Contract Administrator?

Answer 1

The Contract Administrator manages the contract between the employer and building contractor. The role commences when the contract is in place.

pre-contract services are often included in instructions which rely on advise on the method of procurement, calculation of liquidated damages and deciding on the appropriate type of building contract.

Question 2

(1) Can you give some typical activities for the Contract Administrator?

Answer 2

1. Chairing meetings
2. Ascertaining that the works are in accordance with the contract documents
3. Giving instructions, including variations or change orders
4. Determining any applications for extensions of time for the contractor
5. Authorising interim payments to the contractor
6. certifying the date of completion
7. Setting the adjusted contract sum

Question 3

(2) What are the responsibilities of the Contract Administrator

Answer 3

Information
- Ensure provision of information
- Supply documents
Financial matters
- Certify interim payments
- Consider: Interim valuations
- Send computations of the adjusted contract sum

Supervision
Approve quality of materials
instruct the contractor, may or may not require a variation
Make a fair and reasonable extension of time

Misc
Undertake the role of CDM Coordinator by default
Give notice identifying default by the Contractor
Direct the contractor for the integration of the design portions

Question 4

(1) Can you explain interim valuations

Answer 4

Interim valuations are required for most contracts due to the Housing, Grants, Construction and Regeneration act of 1996. These must be carried out with the contractual provisions.

JCT Intermediate contract (unamended)

Due date 7 days after the interim valuation date
5 days after due date (fixed by HGCR) = CA issues payment certificate
Final date for payment = 14 days after due date

Total payment cycle = 21 days (prescribed period)

QS to be named in the contract - only obliged to carry out interim valuations whenever the Contract Administrator considers him or her necessary to amount to be stated in an interim certificate (or prepare a valuation where a application for payment has not been submitted).

JCT minor works contract / JCT D&B Contract (unamended)

Due date - Contractor’s interim application for payment
5 days after due date (fixed by HGCR) = CA issues payment certificate.
Final date for payment = 14 days after payment.

Total payment cycle = 14 days (prescribed period)

Amendments recommended as there is no stipulation for an interim valuation date (BY QS).

If the CA does not issue the payment certificate within 5 days after the due date, the Contractor’s payment application will become their payment notice.

Question 5

(1) What happens if the Employer fails to pay?

Answer 5

Simple interest is applied for the period between final date for payment and once the payment is made. Interest Rate is set within the contract definitions.

Question 6

(1) What is a payment certificate

Answer 6

A certificate which certifies the gross value of work executed, less any retention, less previous amounts previously certified, to give a net amount for payment within the period.

Question 7

(2) Explain the process of issuing a payment certificate

Answer 7

1. Receive the Contractor’s interim application for payment. Review this before the site meeting
2. Meet the contractor’s QS on site.
3. Inspect the works on site to ascertain works are in accordance with the contract, and the basis of the valuation (quantities, % complete etc). Ascertain any additional substantiation that may be required
4. Produce photographic record and take notes.
5. Record adjustments made to the contractor’s interim application for payment, give reasons. Agree with QS

The Payment Certificate

Gross valuation
Adjustments (retention)
= Net valuation
Less previously paid
= Net balance due.

Question 8

(1) What are the main elements of a valuation / what do you expect to
be included in a valuation?

Answer 8

Preliminaries
Measured work
Variations
Materials on site
Materials off site
Loss and expense
Retention

Question 9

(2) Explain the process of issuing the completion certificate

Question 10

(1) What is a provisional sum

Answer 10

A sum of money included within the contract to cover the cost of something that cannot be entirely foreseen / costed / detailed accurately at the time of tender invitation.

‘Defined’ or ‘Undefined’

Defined -

Question 11

(1) what is the difference between a provisional sum and a PC sum?

Question 12

(2) How would a variation be administered under a JCT contract?

Question 13

(2) How did you administer the provisional sum / variation under the JCT contract

Question 14

(2) Can you explain the change control procedure

Question 15

(1) What is an extension of time

Question 16

Warwick Avenue MW Contract 2016 with contractor’s design (2) How did you enable the extension of time

Question 17

Warwick Avenue JCT minor works with contractor’s design (3) How did you explain the Contractor is entitled to an extension of time?

Question 18

Warwick Avenue JCT minor works with contractor’s design (3) How did you assess the extension of time and ten day extension?

Question 19

Warwick Avenue JCT minor works with contractor’s design (3) How did you value the variation?

Question 20

(1) What is loss and expense?

Question 22

Beauchamp - (3) What point would practical completion have been reached as per the contract?

Question 23

Beauchamp (3) What were the Client’s insurance obligations, why did they have insurance obligations?

Question 24

(1) What is a rectification period?

Question 25

(1) What is a statutory liability period?

Question 26

(1) What is executed as deed / overhand?

Question 27

(1) How can a provisional sum be expended?

Question 28

(1) How are provisional sums dealt with in the final account?

Question 29

(1) What are the risks associated with provisional sums?

Question 30

(1) What is a A) Defined Provisional Sum and B) Undefined provisional sum?

Question 31

(1) What if the actual work does not closely resemble the provisional
sum?

Question 32

(1) If the works/materials/goods are not in accordance what options
does the CA have and what are the consequences of each?

Question 33

(1) What if the workmanship is not in accordance with the contract?

Question 34

(1) When issuing instructions for further opening up and testing to
determine the extent of non-compliance what sort of things should
the CA consider?

Question 35

(1) What needs to be in place for you to include payments for
materials on site?

Answer 35

The materials should be for the works, adequately protected, delivered to
programme and in a reasonable quantity

Question 36

(1) What are contract mechanisms?

Question 37

(1) What needs to be in place for you to include payments for
materials off site?

Answer 37

Proof that ownership will transfer to the employer on payment (vesting certificate)
Insurance until materials arrive at site
Materials are clearly labelled as for the site and set apart from other materials
A materials off site bond has been provided if required