Contract administration (L2)

Question 1

What is the legislation you refer to in relation to payment notices?

Answer 1

o Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Develop and Construction Act 2009

Question 2

Talk me through the process for CE administration on the Williamsgate project.

Answer 2

o Either party can notify a CE based on the occurrence of certain events
o Contractor must notify certain CEs within 8 weeks of becoming aware to avoid being time bared
o On receipt of a notified CE the PM has one week to respond
 If the PM believes in principle it is a CE the Contractor has three weeks to submit a quotation for the cost and/or time impact
o If the PM fails to reply within one week of the notified CE it will be deemed accepted (after 2 weeks of the Contractor serving notice) and the Contractor is to submit a quotation
o The PM replies to the quotation within 2 weeks
 Failure to do so will result in quotation being deemed as accepted (after 2 weeks of the Contractor serving notice)
o Quotations comprise a proposed change to the Prices and the Completion Date
o Once a quotation is accepted (including deemed acceptance) or the Project Manager notifies his own assessment of the CE the CE is implemented and is not revisited (unless it is referred to adjudication)

Question 3

What is the time period in which the Contractor is required to notify a CE?

Answer 3

o 8 weeks from becoming aware of the event (cl 61.3)
o Unless the event is one which the PM should have notified e.g. a change to the works information

Question 4

Tell me about one of the instructions you have issued,

Answer 4

o I have drafted corrections to Project Manager’s assumptions contained with CEs
o For example, on the Williamsgate project a CE contained an assumed end for the off-hire of pumps
o The assumption needed correcting to a later date and so
o I drafted the correction to this assumption and instruction for the hire of the pumps to continue
o I then managed this instruction which was a CE through to implementation

Question 5

What was the frequency of the payment certificates?

Answer 5

Monthly

Question 6

What would be the repercussions if the certificate was not issued timeously?

Answer 6

o Section 110B of the Housing Grants, Construction and Regeneration Act 1996 will apply such that
o If the Contractor had already made an application for payment that will become the default payment notice
o Where no application for payment has been made, the Contractor can give a payment a notice at any time
o The final date for payment will be postponed by the length of time between when the payment certificate should have been issued and the date when the Contractor gave its payment notice in default
o If the Employer intends to pay less than the Contractor’s notified sum, he must issue a pay less notice no later than 7 days before the final date for payment

Question 7

You mention completion, what sort of information do you expect to see to enable you to process the certificate?

Answer 7

o Any and all information referred to in the Works Information as being required for Completion to be considered as being achieved which usually includes documents such as:
 As-builts
 O&M manuals
 Health and Safety file
 Completion Test Report
 Commissioning Report
o As well as confirmation that there are no Defects that would prevent the Employer using the works or Others from doing their work

Question 8

What is the impact of Practical Completion on a project?

Answer 8

o Typically, half of retention is released
o Employer’s right to liquidated damages ceases
o The Defect liability period commences and
o Responsibility for the works passes to the Employer and thus insurance