Contract Administration L1-3

Question 1

WHAT IS A PRICED ACTIVITY SCHEDULE?

Answer 1

Relates to a programme where each activity is allocated a price, interim payments are made against completion of each activity.

Submitted during tender stage with a programme.

Simplifies the administration / monitoring process of the interim payments.

Client’s consultant must ensure this is not unduly front-loaded and reflects normal cash flow rates.

Found within JCT and NEC Contracts.

Question 2

WHAT IF A CLIENT WANTS LAD’S TO BE £20,000 PER WEEK?

Answer 2

Check the LAD amount requested is a genuine pre-estimate of financial loss, as it would need to be substantiated if exercised.

Explain a figure deemed unfair or not based on genuine financial loss, it is not enforceable.

The Employer would have to pursue the Main Contractor for actual loss substantiated via a formal dispute resolution procedure.

Question 3

WHAT ARE EXTENSIONS OF TIME?

Answer 3

Extension of Time adjusts the Practical Completion date, relieving the contractor’s liability to pay liquidated damages for the extended period.

Question 4

WHAT ARE LIQUIDATED DAMAGES?

Answer 4

Genuine pre-estimate of likely loss incurred by Employer should completion not be met.

Question 5

WHAT MUST BE IN PLACE BEFORE LIQUIDATED DAMAGES CAN BE DEDUCTED?

Answer 5

A non-completion certificate and a pay less notice.

Question 6

WHAT IS A PAY LESS NOTICE?

Answer 6

Also known as a Withholding notice, if the Employer intends to pay less than set out in the payment request, a Pay Less Notice setting out their calculation is required.

Question 7

WHAT IS THE EMPLOYER ACTUALLY SUFFERED NO LOSS OR DAMAGE?

Answer 7

It doesn’t matter, the damages can still be deducted at the value stated in the contract.

Question 8

WHAT ARE THE BENEFITS OF BEING ABLE TO GRANT AN EXTENSION OF TIME?

Answer 8

Relieves contractor of liability to pay LAD’s for a delay they did not cause, whilst enabling another PC date to be set, maintaining employer’s ability to deduct LAD’s if another delay occurs.

Contractor is required to maintain necessary H&S obligations and insurances to works completion.

Question 9

WHAT HAPPENS WHEN ‘TIME IS AT LARGE’?

Answer 9

No set completion date, contractor is to complete works in a ‘reasonable time’.

LAD’s cannot be claimed as there is no date to take them from.

The Employer is to prove the Contractor has not completed in ‘reasonable time’.

Question 10

WHAT ARE THE RELEVANT EVENTS?

Answer 10

13No. relevant events set out in JCT:

• Variations
• Instructions
• Approx. quantity not accurately specified
• Deferment of site possession
• Suspension by the contractor for non-payment
• Works required by Statutory Authorities
• Impediment or prevention by the Employer
• Loss or damages caused by Specified Perils
• Exceptionally adverse weather
• Strike or lock out
• Civil commotion or terrorism
• Exercise of any statutory power after the base date by UK gov.
• Force majeure

Question 11

WHAT ARE RELEVANT EVENTS IN A JCT CONTRACT?

Answer 11

Events which title the Contractor for an Extension of Time.

Question 12

WHAT ARE SPECIFIED PERILS UNDER THE JCT CONTRACT SUITE?

Answer 12

Fire
Lightning
Explosions
Storm
Flood
Earthquake
Riot and civil commotion

Question 13

WHAT IS FORCE MAJEURE?

Answer 13

French for superior force.

Dependant on contract provisions:

• Unforeseen changes to legislation
• Wars / Terrorism
• Fires
• Exceptionally adverse weather
• Civil unrest i.e. riots
• Strikes (other than by contractor or sub-contractor)
• Natrual catastrophes (flood, earthquake, volcano)
• Epidemic/pandemic

Considered a ‘Relevant Event’ allowing the Contractor to claim an EoT.

Disputes may arise when a contractor claims adverse weather as it is difficult to define.