Contract Administration Flashcards
How does the NEC permit payment by milestones/ stages?
The contractor must group in his tender his activities by groups of activities which from milestones
At each assessment date the PM assess the level of completion of each group
Payment is certified only when all activities of the group have been fully completed with no scope for partial payments
Under what conditions can the activity schedule be changed?
3 reasons:
Compensation events
Changes in planned method of working
Acceptance of quotation for acceleration
What are the difficulties of assessing interim valuations with an activity schedule (option A)
Schedule does not describe the works to be done, this is in works information therefore a need to cross reference to see what works are required for activities to be completed
Contractor re-sequences work to meet completion date, activity schedule needs to be revised so works and methods include each activity combatively with programme
The PM can reject the revised SoA if the contractor takes advantage of this to disproportionally load activities
Name some compensation events clause 60.1
Access to site
Adverse weather
PM instructs to stop work
Change to scope
What is a compensation event?
Events which, if they do not arise from the fault of the contractors, entitle the contractor to be compensated for effective on Prices, Key Dates, and Completion date
19 listed in 60.1
What are Early Warning Notices under NEC and their purpose?
Notices given by PM or contractor for any matter which could have an impact on cost, completion date, key dates or performance of works in use
Purpose is to give the parties sufficient time to consider options to prevent or mitigate the issue and find a solution collaboratively
How are Early Warnings dealt with?
PM and contractor have duties to give each other early warnings for inclusion in the risk register as soon as they become aware:
Increase total prices
Delay completion
Delay meeting a key date or impair works performance
PM is to record all EWNs in a risk register
A risk reduction meet in case be called by anyone to review EWNs and work out solutions
As EWNs are resolved they are moved from register
What input have you given into EWNs on projects you have worked on?
Checked contractors estimated costs
Attended risk register meetings and chaired them
How are inconsistencies dealt with under the NEC?
Under clause 17 they are awarded in favour to the party who did not provide the works information
The PM issues a instruction to vary works info which is a CE
How is the contractors design dealt with?
Clause 21- contractor must obtain acceptance from the supervisor and PM but remain liable for any failure in design
No provision for notation as the NEC considers it is against good management
How does NEC deal with time and programme?
Employer sets the access dates for areas of the works, starting date, keys dates and completion date
If contractor fails to meet completions date delay damages apply if option X7 was selected
PM must issue notice of completion within a week of completion
Programme must be regularly updated to show effects of EWs
What are the requirements of the programme under NEC?
Clause 31.2
Dates stated in contract data
Dates when contractor intends to meet requirements
Method statements
Order and timings
Float, time risk allowances
Health and safety requirements
Site access dates
How is completion defined under NEC?
All works have been completed as described in drawings and specs
Contractor has done all the works required for the employer so others can do there work
All notified defects have been rectified
PM has one week to certify completion
What is acceleration clause 36?
Where the completion date and key dates are advanced for an agreed price. Delays and damages apply from the revised date
What is an early completion bonus clause X6?
Where the contractor receives a bonus proportional to the number of days they completed the works in advance of the completion date, the original completion date being unchanged
What are the party roles in NEC?
Project Manager employers organisation or external consultant
PM represents the client having full authority to make decisions
Designers prepare the work info not named in NEC
Supervisor checks the works are carried out as in contract
No QS in NEC
Differences between NEC and JCT?
NEC is concise and written in plain English, more optional clauses compared to JCT.
NEC can be used within civil engineering aswell as building projects, JCT is just used for building projects
NEC can be adopted o a number of bespoke contract strategies due to various options whereas JCT has standard set of clauses
Advantages of NEC
Clarity, ordinary language and flow charts support users
Act as stimulus to good management, provisional EW meetings and assesment of CE’s
Disadvantages of NEC
Often only considered to be used for civil engineering projects
Limited exposure to the market so not fully tried and tested with case law
What is bespoke contract?
Contract conditions drafted specifically for a particular project
What is nomination?
Selection of a particular subcontractor to carry out works
What is a provisional sum?
Sum of money included in contract for work that cannot be fully designed and costed at the time of tender or contract sum agreement
What are the main suites of contracts?
JCT
NEC 3&4
ECC
ICE
FIDIC
What does JCT stand for?
Joint Contracts Tribunal
What does NEC stand for?
New Engineering Contract
What does ECC stand for?
Engineering and Construction Contract
What does FIDIC stand for?
Federation internationale des ingenieurs civils
What does ICE stand for?
Institute of Civil Engineers
Whats the difference between NEC 3 and NEC 4
NEC 4 has 2 new contracts: Alliance Contract, Design and Build
Terminology has changed : Works info is now Scope, Risk Register is EW
What the Contract data required in NEC
Part 1- provided by client
Part 2- provided by tenderer
What are the payment options in NEC ECC
Option A
Option B
Option C
Option D
Option E
Option F
Explain Option A
Priced Contract with Activity schedule- lump sum contract, contractor is intitled to be paid for completed activities
Explain Option B
Priced Contract with BoQ- remeasurement based on BoQ contractor is intitled to be paid for quantity of work completed by reference to BoQ rates
Explain Option C
Target cost Activity Schedule- cost plus contract subject to pain/ gain share
Explain Option D
Target Cost BoQ- Cost plus contract subject to pain/gain share built up from BoQ
Explain Option E and F
E- Re-embursible - early start required
F- Management- contractor is paid cost of subcontractors and fee
