Contract Administration Flashcards
What is Nomination?
- The selection of a particular sub-contractor 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 where there ae 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 specification in addition to sub-contractor delays in respect of the works having been nominated.
Do nominated sub-contractors get paid separately?
- Nominated sub-contractors are normally paid via the main contract, with sums identified separately.
Can the main contractor object to a nominated sub-contractor?
- Any objection must be made during the tender period.
- There are specific exclusions and grounds for an objection, for example if they have found out the sub-contractor is having financial difficulties and may be going insolvent.
If there are any 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 and would be signed off by all parties.
- The contractor would then become responsible for the architect and 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 to the contractor.
Describe differences between Statutory Provisions and Contract Provisions.
- Statutory Provisions are set out by law and must be complied with.
- Contract Provisions relate to the contract in particular, and therefore only apply to a specific project.
What are domestic sub-contractors?
This is a standard appointment of a sub-contractor by the main contractor.
What are named sub-contractors?
- Clients provide the main contractor with a choice of named sub-contractors for a portion of the works.
- Once appointed they become a domestic sub-contractor 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 is issued to the contractor, the client is contractually obliged to honour payment of the certificate amount and cannot withhold money without a valid reason.
- If this were the case, I would contact the client and the 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 for a couple of days.
- Failing this, or if the contractor is unwilling to delay the payment, the client would need to find finance through other means 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 for 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.
- A further option would be for issue of a Vesting Certificate which transfers ownership of said materials to the client upon payment.
How would you deal with urgent Verbal Instructions?
- If the instruction affects the critical path or programme in general I would review the instruction with the CA, Client and 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 email 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.
