Contract Administration Flashcards
What is the payment process for JCT?
The Contractor may make an application for payment before the Interim Valuation Date
The Due Date falls 7 days after the Interim Valuation Date.
The CA must issue a payment certificate no later than 5 days after the Due Date, whether an application is received or not.
As standard, the Final Date for Payment is 14 days from the Due Date, although this can be amended in the Contract Particulars.
To what date is the value of works measured?
The Interim Valuation Date
Does the contractor need to make an application for payment?
No, the CA would still follow the payment process in either case.
Even if no money is due.
What if the CA intends to pay less than the payment application or a previous payment certificate?
They must issue a ‘pay less notice’ no later than 5 days before the Final Date for Payment.
What if the CA fails to issue the Interim Certificate for Payment?
If the contractor has made an application for payment, that becomes the payment notice.
If the contractor has not made an application for payment, they may after the last date for issue of the Interim Certificate for Payment give a payment notice detailing the sum they consider to be due and the basis upon which that is calculated.
The Final Date for Payment will then be postponed by the number of days after the last date for the issue of the Interim Certificate for Payment that the payment notice is given.
What are early warnings under NEC?
The Project Manager or Contractor should give an early warning as soon as they become aware of any matter which could increase costs, delay completion, delay meeting a key date or impair the functional performance.
What is the process under NEC for searching for and notifying defects?
The Supervisor may instruct the Contractor to search for a defect, detailing the reason for the search.
If a Supervisor finds a defect, he notifies the Contractor, and logs it on the defects register.
The Contractor must rectify the defect before the end of the defect correction period.
The Supervisor may then issue a defects certificate.
If the Contractor fails to correct the defect, the Employer is entitled to reclaim the cost of a third party correcting the defect.
What is the payment process for NEC3?
At the Assessment Date, the Contractor may submit a payment application.
The Project Manager assesses the amount due for work done to date and any additional amounts due.
The Project Manager certifies a payment within one week of each assessment date.
Each payment is to be made within three weeks of the assessment date or as dictated by the Contract.
Describe the Traditional Procurement route?
The employer engages a design team to design the works, and the employer engages a contractor to build the works.
Describe the Design & Build procurement route?
The employer engages a contractor to both design and build the works.
What is the key difference between the two routes?
Under traditional procurement, the design risk falls on the employer, under D&B the design risk falls on the contractor.
What is a cost reimbursable contract?
A contract in which the contractor is reimbursed the costs they occur in carrying out the works, plus an additional fee.
It is typically used where the nature or scope of the works are unclear or difficult to define and the risks are high.
The risk is heavily on the employer as the employer does not know the final cost at the outset.
What is necessary to form a legal contract?
Offer
Acceptance
Consideration
The contract must also be lawful, and the parties must be of sound mind and give genuine consent.
When should you use different JCT contracts?
Minor Works: Low complexity, minimal structural works. (Up to £250k.)
Intermediate: Medium complexity, some structural works. (Up to £1m)
Standard: High complexity with structural works. (Over £1m).
What is the difference between NEC contracts and JCT contracts?
The differences lies in the ethos around collaborative working, with mechanisms such as Early Warning Notices and a rolling Defects Register.
The NEC places greater emphasis on the programme than JCT, with an obligation to update it.
The payment terms are also different under the NEC, where a contractor is paid upon completion of an item within the program, rather than on a percentage basis.
