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RICS APC - QS > Contract administration (L1) > Flashcards

Contract administration (L1) Flashcards

1
Q

What standard forms of contract are you aware of?

A
  • NEC
  • JCT
  • FIDIC
  • IChemE
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2
Q

Can you name some contracts from the JCT suite of contracts?

A
  • JCT Standard Building Contract (with Qunats, Without Qunats or with Approx Quants versions)
  • JCT Intermediate Building Contract (with Contractor’s Design version)
  • JCT Minor Works Contract (with Contractor’s Design version)
  • JCT Design and Build Contract
  • JCT Major Project Construction Contract
  • JCT Management Building Contract
  • JCT Construction Management Contract

Contract families contain main and sub-contracts

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3
Q

Can you name some contracts from the NEC suite of contracts?

A
  • NEC Engineering and Construction Contract (ECC) - Main Options A-F
  • NEC Engineering and Construction Subcontract (ECS) - Main Options A-E
  • NEC Engineering and Construction Short Contract (ECSC) - Hybrid between Option A and Option B
  • NEC Engineering and Construction Short Subcontract (ECSS) - Hybrid between Option A and Option B
  • NEC Professional Services Contract (PSC) - Main Options A, C and E

Note: The client can include the requirement for the Contractor to be doing some element or all of the design by including such requirements within the scope/ works information. This avoids the need for a separate ‘design and build’ option within the NEC family of contracts.

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4
Q

What are the Main Option clauses under the NEC Engineering and Construction Contract?

A

There are 6:
- Main Option A: Priced contract with Activity Schedule
- Main Option B: Priced contract with Bills of Quantities
- Main Option C: Target contract with Activity Schedule
- Main Option D: Target contract with Bill of Quantities
- Main Option E: Cost reimbursable contract
- Main Option F: Management contract

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5
Q

Can you give me some examples of Secondary Option clauses under the NEC Engineering and Construction Contract?

A
  • X5: Sectional completion
  • X6: Bonus for early completion
  • X7: Delay Damages
  • X16: Retention
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6
Q

What are the core clauses of an NEC3 ECC contract?

A

1 - General
2 - The Contractor’s main responsibilities
3 - Time
4 - Testing and Defects
5 - Payment
6 - Compensation Events
7 - Title
8 - Risks and Insurance
9 - Termination

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7
Q

Describe the difference between statutory provisions and contract provisions?

A
  • Statutory provisions are set out by law
  • Contract provisions relate to the contract in questions and therefore only apply to a specific project
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8
Q

What is the difference between NEC and JCT?

A
  • The main difference between the 2 forms is its usage
  • NEC can be used for building and civil engineering projects whereas JCT is specifically for building projects
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9
Q

How is a contract under hand different from a deed?

A
  • A deed is signed by the parties and witnesses, whereas a simple contract under hand is signed just by the parties
  • The other main difference is the limitation period - simple contracts under hand have a limitation period of 6 years from when the breach occurred whereas a deed has 12 years
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10
Q

What is your understanding of a latent defect?

A
  • Latent defects are defects that are not readily identifiable upon inspection and only come to fruition some time after completion and may take some years to become identifiable
  • A claim in contract can only be brought within the limitation period from when the breach occurred which is 6 years if the contract is under hand and 12 years if the contract was executed as a deed
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11
Q

What are the main parts of the JCT contract?

A
  • Recitals
  • Articles
  • Contract particulars
  • Attestation
  • Conditions divided into 9 sections (7 for minor works)
  • Schedules
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12
Q

What are the sections of a JCT Standard Building Contract ?

A

Section 1- Definition and interpretation
Section 2 - Carrying out the works
Section 3- Control of the works
Section 4 - Payment
Section 5 - Variations
Section 6 - Injury, damage and insurance
Section 7 - Assignment, Thurs Party Rights and collateral Warranties
Section 8 - Termination
Section 9 - Settlement of disputes

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13
Q

What is set-off/ contra-charge?

A

Set off/ contra-charge are any monies owed to the employer by the contractor which are deducted against any payment due to the contractor

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14
Q

What are the role and responsibilities of the Project Manager under NEC?

A
  • Contract Data Part One identifies who the PM is
  • They play a key role in administering the contract on behalf of the client
  • Duty to act impartially and in accordance with the contract
  • Acceptance of submissions from the Contractor e.g. design and programme or if not accepting give reasons as to why
  • Giving instructions e,g. for additional work or to stop work
  • Replying to, notifying, assessing and implementing CEs
  • Responding to and notifying early warnings and updating the risk/ early warning register
  • Assessing the amount due at each assessment date
  • The Project Manager can also delegate their actions after notifying the Contractor
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15
Q

What are the main elements that could be issued to the Project Manager for acceptance under NEC4?

A
  • Design
  • Programme
  • Subcontractor and contract conditions
  • CE Quotations
  • Revised Activity Schedule (Option A only)
  • Additional Working Areas
  • Changes in Key Perons
  • Acceleration Quotations
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16
Q

What is the role of the quantity surveyor under the NEC?

A
  • The role of a QS is not specifically mentioned in the NEC
  • However, actions of the Project Manager can be delegated under clause 14.2
  • We issue a delegated authority matrix as a GC at the start of all projects setting out those actions of the Project Manager that are delegated to the Quantity Surveyor which includes for example:
  • Assessment of the amount due at each assessment date
  • Assessment of compensation events
17
Q

What is the difference between a contractual process and mechanism?

A
  • For example, the early warning PROCESS under an NEC contract is MECHANISM for managing potential risks to the project e.g. early warning notification, meeting, actions, mange
  • the payment PROCESS is a MECHANISM for the Contractor be paid e.g. application, assessment, certification, payment
18
Q

What are the different roles under JCT Standard Building Contract?

A
  • Architect/ Contract Administrator
  • Quantity Surveyor
  • Contractor
19
Q

What is the role and responsibilities of the quantity surveyor under the JCT standard building contract?

A

They help manage the financial aspect of a project including:
- Preparation of interim valuations
- Valuation of variations
- Assessment of Loss and Expense
- Final account preparation

20
Q

What is the role and responsibilities of the architect/ contract administrator under the JCT standard building contract?

A
  • They manage the contract and oversee execution of the works including:
  • Issuing instructions for Variations
  • Issuing of certificates such as interim, practical completion, making good defects certificate and final certificate
  • Instructing an inspection
  • Granting extension of time
  • Determination of Practical Completion
21
Q

What is the NEC Engineering and Construction Short Contract (ECSC)?

A
  • It is an alternative to NEC3 Engineering and Construction Contract and used when a project is relatively straight forward and low risk and thus does not require sophisticated management techniques
  • There is no main Option - it is a hybrid of ECC option A & B
  • There is no choice of secondary options although the equivalent of some are included by default into Contract Data (e.g. Delay Damages and Retention)
  • There is no Project Manager or Supervisor role, the works are managed by the Client
22
Q

What is a Price list under NEC Engineering and Construction Short Contract (ECSC)?

A
  • It is created by the client or contractor or jointly at tender stage
  • It can be a combination of ‘Lump sum’ items and ‘quantity’ related items hence why it is a hybrid between Option A and B
  • The ‘quantity’ related items will be remeasured
23
Q

What is a relevant even under JCT?

A
  • It is an event which if it occurs and causes delay entitles the Contractor to claim an extension of time; which involves a move to the Completion Date

Relevant events include:
- Variations
- Adverse weather (neutral event)
- Delay in giving contractor possession of the site
- Relevant events do not necessarily entitle the Contractor to claim loss and/ or expense. This is triggered by the occurrence of a relevant matter

24
Q

What is a relevant matter under JCT?

A
  • It is a matter which if it occurs and effect the progress of the works entitles the Contractor to claim loss and/ or expense that has been incurred

Relevant matters include:
- Delay in giving contractor possession of the site
- Variations
- Discrepancies

25
Q

What is a neutral event under JCT?

A
  • It is an event which causes a delay but is not the fault of either the Contractor or Client
  • If an neutral event occurs the Contractor is entitled time but not money
  • An example of a natural even is adverse weather or terrorism
26
Q

How is changed valued under JCT Standard Building Contract (without quants, without and approx. quants)?

A
  • The valuation rules reflect a sliding scale of options based on how closely the varied work resembles the work that is part of the Contract Documents
  • The valuation of change is typically done using the following approaches:
  • Agreed Rates/ Prices - If work is of similar character then valuation should be consistent with rates, prices and amounts in the Priced Document
  • Fair and Reasonable Valuation - If it is not similar then it should be valued at fair rates and prices which may involve negotiation
  • Daywork - If the work is difficult to quantify (e.g. repair of damage), it can be valued on a dayworks basis which will involve records of labour, plant and materials used in the operation
27
Q

What are the key differences between JCT Standard, Minor Works, Intermediate and D&B Contracts?

A
  • Minor works only has 7 sections of conditions instead of 9
  • No mention of QS in minor works and D&B unlike intermediate and standard contract
  • Minor works has not provision for sectional completion or partial possession
  • D&B is administered by Employers Agent as opposed to Contract Administrator
  • In minor works no relevant events listed for EOT instead referred to as ‘anything outside contractors control
28
Q

What is a payless notice?

A
  • It is a statutory tool under the HGCRA 1996/ LDEDCA 2009
  • It allows a payer (e.g. employer) to notify the payee (e.g. contractor) if their intention to pay less than the amount stated in a payment notice (issued by the Project Manager for example) or default payment notice (e.g., contractors payment application if payment notice not issued by Project Manager)
  • Must be served within the perscribed period before the final date for payment which is usually 7 days
29
Q

What should a payless notice contain?

A
  • The specified sum and
  • The basis on which the sum has been calculated

The timing of a payless notice is crucial

30
Q

When should a payless notice be served?

A

It must be served no later than the period prescribed by the construction act, which is usually 7 days before the final date for payment

31
Q

What is Practical Completion?

A

o Practical Completion is a term used to describe a milestone reached in building works that has various commercial consequences
o Despite no definition, PC is considered to be achieved when
 all construction work is complete,
 there are no apparent defects expect for those that are very minor and
 the building can be put to its intended use

32
Q

Can you outline the role and responsibilities of the contact administrator?

A

o The CA’s principle role is to administration the contract, supervise the works and provide sufficient design information (to allow the contractor to carry out and complete the works)
o Responsibilities include:
 Granting extension of time
 Issuing sectional/ practical completion certificates/ non-completion certificates
 Notifying defects
 Interim certificates and the final certificate
 Ascertaining the amount of loss and/ or expenses to be added to the contract sum
 Issuing variations

33
Q

What is sectional completion and how does this differ from Practical completion?

A

o Sectional Completion is completion of a pre-defined part of the works which once complete is taken over and used by the employer and
 any damages for that section cease
o Practical Completion refers to completion of the entire project or the whole of the works
 which under NEC triggers release of half of retention
 cessation of damages and
 start of the defects liability period

34
Q

How does this differ from partial possession?

A

o Sectional completion is pre-defined (in NEC in Contract Part One) whereas
o Partial position/ early take over is not pre-defined

35
Q

What key aspects did you learn from your course on the roles and responsibilities of the PM under NEC

A

o The Project Manager plays a key role in administering the contract on behalf of the Client and has numerous responsibilities including
 Acting impartially and as stated in the contract
 Responding to the Contractors submissions e.g. Cl 32 programme
 Issuing instruction such as changes to Scope
 Managing the compensation event process
 Managing the Early Warning process
 Assessing the amount due
 Issuing certificates such as Completion certificate

36
Q

What are the main differences between NEC3 and 4?

A
  • Gender neutral language
  • Revised terminology
    *Client changed from Employer
    *Scope changed from Works Information
  • New section called Quality Management
  • Value Engineering proposals shared through %
  • W3 Dispute Boards
  • Senior representatives prior to adjudication
  • New secondary option clauses e.g. X22 ECI

RICS APC - QS (33 decks)

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