Contract Administration Flashcards
What are interim valuations?
Components of a valuation:
* Works executed
o Preliminaries
o Works executed by contractor
* Variations / changes
* Expenditure of provisional sums
* Adjustment of prime cost sums
* Site materials / materials on site
* Materials and goods off-site
* Contractor’s design fees
* Loss and expense
* Costs and expenses relating to the contractor’s right of suspension
* OH&P Adjustments for:
* Advance/advanced payments
* Works not properly executed
* Fluctuations
* Errors in setting out
* Retention
* Amounts previously paid
Give me two differences between CA and EA?
Contract Administrator acts as a neutral party
EA acts on behalf of the employer and has no duty to act fairly between the two
Tell me the process of issuing a practical completion certificate?
A practical completion certificate is issued ones the works are practically complete, meaning the employer may take over the possession of the site and use the building for its intended purpose with safety and convenience.
What are LDs? And how are they calculated?
Liquidated damages area a genuine pre estimate of loss suffered by the employer because of late completion of the works. The damages are inserted into the contract prior to signing by both parties.
Is there a limit in the JCT of LDs?
No, however they cannot be seen to be a penalty, they have to be a genuine and realistic assessment of loss.
How can you calculate LDs?
The employer should calculate the LDs, it is not to be done by consultants.
However I can advise that they can comprise:
Loss of rent or other income
Professional fees
Expected costs incurred by other parties
Legal costs
What are the principles of deducting LDs?
A non-completion certificate has to be issued.
The contractor is notified that LDs are likely to be deducted
A pay less notice is servedby the client
What is the implication of inserting “nil” or £0 in the section against the damage clause?
The consequence of this can be that the contractors liability for damages is zero.
Blank means the client would still be able to deduct damages but would need to do so through the courts.
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 seperately?
Nominated contractors are normally paid via the Mani Contractor 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 or going insolvent
If there are problem 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 the 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 the differences between Statutory Provisions and Contract Provisions?
- Statutory provisions are set out by law & must be compiled 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 domestic subcontractors 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 the cost.
After valuation and certificate are issued, the client advised that they dont have sufficient funding to make the payment. What would you do?
- once the certificate for payment 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 of 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 for the payment through other funds to honour the certificate.
What items do you include for on a valuation?
Items would include:
- Prelims
- Measured Works
- Materials on/off site
- Variations
- Claims
- Retention
- 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 urgent verbal instructions?
- If the instruction affects the program or critical path in general I would review the instruction with the contract 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 D&B project, the documentation to be included would be the Employers Requirements including the Scope, Specification, Drawings, Contractors Proposals along with ant insurances.
