Contract Administration (Level 1/2)

Question 1

Who is the contract administrator under the different JCT and NEC contract forms?

Answer 1

JCT
- Contract Administrator
- Can be any professional competent, QS, Architect, PM

NEC
- Must be the PM

Question 2

Who are the parties to an NEC contract?

Answer 2

Clause 11.2(11) The Parties are the Employer and the Contractor

Question 3

What are the general obligations of the Employer under a construction contract?

Answer 3

Provide the contractor with the facilities to complete the works in accordance with the contract and programme

Question 4

What are the general obligations of the Contractor?

Answer 4

Complete the specific work, in accordance with the agreed terms and specifications as well as the conditions required by the contract and statutory requirements

Question 5

What is the role of an NEC PM and the NEC Supervisor?

Answer 5

Project Manager - Full authority to make decisions, duty to be impartial
Supervisor - To check the works are carried out as prescribed within the contract

Question 6

What are the different pricing options under a NEC contract?

Answer 6

Option A - Priced Contract with Activity Schedule
Option B - Priced Contract with BoQ
Option C - Target Contract with Activity Schedule
Option D - Target Contract with BoQ
Option E - Cost Reimbursable
Option F - Management Contract
Option G - Term Contract

Question 7

Which NEC forms are remeasurable and which are reimbursable?

Answer 7

Remeasurable
Option B

Reimbursable
Option E

Question 8

What are the different certificates on a typical NEC contract?

Answer 8

Completion/Sectional Completion Certificate
Defects Certificate
Payment Certificate
Termination Certificate

Question 9

Flying Start Project - What was involved when you certified Completion on the scheme?

Answer 9

Completion is granted when the Subcontractor has
- Done all the work which the SWI states he is to do by the Subcontract Completion Date and
- Corrected notified Defects which would have prevented the Employer or the Contractor from using the subcontract works or Others from doing their work

I then issued a Completion Certificate

Question 10

Can you describe a project example of your involvement with dispute avoidance?

Answer 10

On Verulam Rd, I was involved in Negotiation, a form of ADR. The pre cast concrete supplier had raised CE’s totalling £300k. The CE’s were not moving forward and neither party could come to an agreement at project level, therefore we agreed for both our legal representatives to meet and review each CE and agree a FA Settlement. I was tasked with making notes and meeting minutes documenting the agreements, then by following up with the Final Account Statement.

Question 11

Difference between Novation & Assignment?

Answer 11

Novation - Mechanism which allows a party to transfer all of its contractual obligations to another party
Assignment - The same process, however contractual burdens cannot be transferred, only benefits

Question 12

Items to include on an AFP

Answer 12

Option C or E with Client, therefore CTD plus costs that will of been paid by the due date, plus the fee, minus disallowed, minus retention, minus previous payments

Question 13

Difference between JCT & NEC?

Answer 13

NEC can be used for building & civil engineering projects, whereas JCT is only for building
NEC can be adopted to bespoke contracts due to the options available, whereas JCT has a standard set of clauses

Question 14

What is fustration?

Answer 14

When an event beyond control of both parties makes it impossible or illegal to fulfil their contractual duties
The contract will automatically discharge

Question 15

Difference between Under Hand & Deed?

Answer 15

Limitation Period:
Underhand - 6 Years
Deed - 12 Years

Question 16

Latent Defects?

Answer 16

Defects that only come to fruition sometime after the completion, often when works are in operation
Claim can only be made if they occur within the limitation period

Question 17

What is a bespoke contract?

Answer 17

Contract conditions drafted specially for a project or framework

Question 18

Advantages and Disadvantages of the NEC?

Answer 18

+ Applicable to a variety of procurement strategies
+ Use minimal legal jargon, written in plain English
+ Include flow charts to support users
+ Act as good stimulus for ongoing management

• Often only used for Civil Engineering projects
• Less market exposure than JCT, thus less case law

Question 19

How is risk dealt with under NEC?

Answer 19

Risk Register should be produced and regularly updated
Should include risk description, mitigation measure and owner
Employers risks are listed in the CE’s, everything else is a Contractors risk

Question 20

How are ambiguities dealt with under NEC?

Answer 20

Under Clause 17, they are dealt with in favour of the person who didn’t write/provide the WI
Resolving an ambiguity is a CE - Clause 63.8

Question 21

How is Contractors Design dealt with under the NEC?

Answer 21

Under Clause 21 the Contractor must obtain acceptance from the Employer for their design, however still remain liable for any failures

Question 22

CE’s within the NEC?

Answer 22

19 Compensation Events:
Change of WI
Delayed/prevented access to site
Instruction to stop/not start work
Does not comply with period of reply
Does not provide something he is supposed to
Deal with a historic object
Withholds acceptance
Search for a defect
Physical Conditions
Adverse Weather
Employers Risks

Question 23

Difficulties of assessing interim valuations with an activity schedule?

Answer 23

The activity schedule must be broken down to reflect the works information and programme
Activities must only be paid when complete, no scope for % payments
It is therefore important to have a detailed activity schedule to ensure good cashflow

Question 24

Difference between Acceleration (Cl 36) and Early Completion Bonus (x6)?

Answer 24

Acceleration is where the completion date and key dates are advanced for an agreed price
Early completion bonus is where the Contractor receives a bonus proportional to the number of days earlier they completed