CONTRACT SPECIFICS & PERFORMANCE SECURITY

Question 1

What are the outputs you’d expect from an EA/CA?

Answer 1

Issuing instructions.
Co-ordinating the review of information prepared by the contractor.
Managing change control procedures.
Reviewing the progress of the works and preparing reports for the client.
Validating or certifying payments.
Considering claims.
Arranging handover.
Certifying practical completion.

Question 2

What is included in the Contract Particulars?

Answer 2

The contract sum.
The retention percentage.
The interim payment period.
The details of the adjudicator / arbitrator or appointing body.
Third party rights and collateral warranties.
The contract base date.
The completion date (or sectional completion dates).
Details of key personnel.
The date for possession.

Question 3

What were the changes from 2011 to 2016 JCT contracts?

Answer 3

CDM to PD
Payment - Construction Act
All risk insurance
Performance Bonds or PGC
Intro of interim valuation date
Must submit a notice of delay

Question 4

What are fluctuations? And the options?

Answer 4

Fluctuations provisions in construction contracts for inflation

Opt A - Tax and Insurances
Opt B - Opt A + Labour & Materials
Opt C - using specific indices

Question 5

What is a retention bond?

Answer 5

Retention bonds are typically ‘on demand’ to provide the employer with recourse
equivalent to cash retention.
Typically the employer is only able to call on an amount that would otherwise have
been held by the employer in cash retention.

Question 6

What is a off site material bond?

Answer 6

Payments made for goods that are held by a contractor off site before they are required for a project

Question 7

What is a collateral warranty?

Answer 7

Collateral warranties are agreements which are associated with another ‘primary’ contract.

They provide for a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract.

Question 8

Explain the JCT design and build contract payment alternatives?

Answer 8

Alternative A - Stage Payments

Alternative B - Interim Valuations

Question 9

What happens if the Employer fails to pay?

Answer 9

Interest chargeable

Grounds for termination by the Contractor

Question 10

How would you deal with an application for payment for materials off-site?

Answer 10

Would need to be a Listed Item
Vesting certificate – proof that ownership will transfer to the employer on payment
Materials should be clearly labelled as for the site and set apart from other materials
Insurance until material arrives on site.

Question 11

What are step-in rights in relation to collateral warranties?

Answer 11

Such step-in rights usually materialise on the default or insolvency of the developer and allow the principal stakeholder to step into the shoes of the developer

Question 12

Standard form of CW?

Answer 12

JCT standard CW but client uses their own

Question 13

What are Specified Perils?

Answer 13

Disasters: fire, lightning, explosion, storm, flood,

Question 14

What is the Joint Fire Code?

Answer 14

Provides guidance on fire safety on site – precautions and safe working practices.
Examples of content:
 Emergency procedures
 Portable fire extinguishers
 Hot works

Question 15

What is the process of an advance payment bond?

How its taken out? What must be provided? How to certify and reduce the bond in IVs?

Answer 15

Contractor must provide proof of bond

In place if there is a problem or contractor does not provide proof of what the bond was for

Question 16

What is contractors design portion?

Answer 16

ANSWER

Question 17

Explain the difference between
Partial Possession
Sectional Completion
Practical Completion

Answer 17

ANSWER

Question 18

Would you recommend Letter of Intent?

Answer 18

A letter of intent could be used should a contractor become insolvent and continuing works on site was imperative… in order to get works going again, a LOI could be used with the subcontractor to continue on site whilst the contract is being agreed/negotiated

Question 19

What is Joint Names Policy?

Answer 19

A joint names policy is type of insurance often required by construction contracts. The policy is typically held jointly by the employer and the contractor

Question 20

Why is P.I particularly important on D&B?

Answer 20

Important as the Contractor will be undertaking design activities amongst others

Question 21

What are Third Party Rights?

Answer 21

A third party named in the contract will be able to enforce a term of the contract that they could not enforce otherwise