Document Questions Flashcards
What is the HGCRA?
Housing Grants Regeneration Act 1996 (HGRCA)
What is the Construction Act?
Was born following the Egan and Latham reports to prevent adverse and ambiguous terms in construction contracts to :
Introduction intended to ensure payments made promptly, included:
The right to be paid in interim, periodic or stage payments.
The right to be informed of the amount due, or any amounts to be withheld.
The right to suspend performance for non-payment.
The right to adjudication.
Disallowing pay when paid clauses.
What is the Local Democracy, Economic Development and Construction Act 2009?
Due dates Pay-when-certified clause Payment notices Default payment notices Pay less notices Changes to suspension of the works
What is the Scheme for Construction Contracts?
When construction contracts do not comply with the Housing Grants, Construction and Regeneration Act.
What are the options within NEC?
Option A: Priced contract with activity schedule.
Option B: Priced contract with bill of quantities.
Option C: Target contract with activity schedule.
Option D: Target contract with bill of quantities.
Option E: Cost reimbursable contract.
Option F: Management contract.
Option G: Term contract (for the appointment of a consultant based on a priced schedule of tasks).
What are the sections within the JCT?
Articles CPs Section 1 - Definitions Section 2 - Carrying out the Works Section 3 - Control of the Works Section 4 - Payment Section 5 - Changes Section 6 - injury, damage and insurance Section 7 - assignment, third party rights and collateral warranties; Section 8 - termination; Section 9 - settlement of disputes. Schedules
Name some Relevant Events?
- Variations
- Instructions
- Deferment of possession
- Antiquities
- Suspension due to non-payment
- Any impediment, prevention or default by the Employer
- Work, or failure by, statutory undertaker
- Exceptionally adverse weather
- Loss or damage caused by Specified Perils
- Civil commotion / terrorism
- Strike, lock-out
- Exercise of statutory power by UK Government
- Delay in receipt of any necessary permission or approval of any statutory body
- Force majeure
Name some Relevant Matters?
- Variations
- Instructions
Postponement of work
Instructions on Provisional Sums
Opening up for inspections or testing (unless work is defective)
Errors, discrepancies and divergences - Antiquities
- Impediment, prevention or default by the Employer
What is the difference between NEC3 and NEC4?
TBC
What are the payment provisions in the Construction Act?
Claim for Payment
+ 5 days = Payment Notice
+ 17 days (from IV Date) = Payment Date
- 7 days from payment date = Pay Less Notice
How does the NEC deal with prelims?
These are not explicitly mentioned in the NEC but should be included in your price to deliver the works
What are Z clauses?
Z clauses can be used and inserted into NEC contracts to allow the parties to agree additional terms and conditions, in order to cater for specific needs relating to a project and the terms of its delivery
Why did you propose a PCG over a Performance Bond?
Lovell had financially strong parent company who would be capable of completing the work should Lovell default or go insolvent
Saving for my client
Less requirements to prove this like there would be with a conditional Performance Bond
Why did your advise your client to use JCT over other forms of contract and how did you advise this?
In a formal report (section incl in my Procurement Route)
Familiarity Tried and tested Common in the sector Experience with client Contractors understand Risk allocation to the Contractor more
What constitutes a construction contract?
A large section in the Construction Act but in summary it is
The construction, alteration, repair, maintenance, extension or demolition of buildings or structures.
What are the key differences between the NEC / JCT?
Project Manager Works Information (ERs) Compensation Events (time/money) Time Constraints on CE's C.Es are both time and cost No Prov Sums Programme is a contractual document EWNs No Schedule of Rates NEC is a lot more collaborative NEC dispute resolution is different NEC does not reference other clauses like the JCT
What should be considered when selecting a contract?
Procurement Strategy Time Cost Quality Risk Complexity Type of project Experience
What are the types of contract? JCT
SBC with and excl quants D&B Intermediate Minor Works Management Building Contract
What documents are included when preparing the contract documentation?
Article of agreement and conditions of contract, for completing as a simple contract (or as a deed). ER's CP's Contract Particulars Contract Amendments Working drawings. Pricing Document Post Tender Queries Specifications. Programme H&S Docs
Name some forms of security for the client included in the contract?
Bonds Collateral Warranties PCG Insurances LDs Retention Rectification Period
What is a PGC?
Guarantee provided by the contractor’s ultimate parent company to answer for the debt or default of the contractor.
What did you advise your client on PCG vs Performance Bonds?
PCG - parent company liable for all losses. Bonds usually limited to 10% of the contract sum.
PCG - no cost
PCG – can last for limitation period. Bond usually expires at PC
PC has responsibility to complete the works under the Contract
Ultimately client legal team decision
What is Employer’s Liability Insurance?
Insurance cover against claims from employee’s injuries or illness whether they are
caused on or off-site.
Mandatory, minimum of £5 million
Labour-only sub-contractors are counted as Employees
What is Public Liability Insurance?
Personal injury or death, or loss or damage to property of third parties
Includes bona fide sub-contractors
What are the JCT insurance options?
Option A – All Risks Insurance of the works by the Contractor
Option B – All Risks Insurance of the works by the Employer
Option C (existing buildings)
What is All Risks Insurance?
Cover against physical loss or damage to works executed and Site Materials.
Excludes:
Wear/tear/deterioration
Defects in design or workmanship
War
Excepted Risks (radioactivity, pressure waves, terrorism)
Inventory losses not traceable to an identified event
What are Liquidated Damages?
Genuine predetermined estimate of the clients financial losses if the contractor fails to meet completion date including:
- Fees
- Site ownership
- Prelims
- Loss of rental / profit
- Interest on loans
Would you calculate liquidated damages?
As a QS I wouldn’t calculate LD’s, the clients finance team should calculate the impacts of the contractor being late to deliver the works
What is a bond?
Surety (bank/insurer/bondsmen) promises to make payment to the employer should the contractor default on his obligations
Where are collateral warranties commonly used?
Sub-contractors undertaking design.
Piling, lifts, frame, windows,
What is a Performance Bond? Benefits and negatives?
Protects the client for non performance of the main contractor provided by a bank or bondsman
+
Financial recuperation
Incentive for the Contractor
- Difficult process if conditional
10% of the value may not be enough
Name some types of bonds?
Retention Advance Payment Performance Materials on Site Tender
What type of bond can you have in terms of their requirements?
On demand - can be called upon without much evidence or substantiation (Contractors unlikely to agree)
Conditional - evidence must be provided by Client which can be lengthy, costly and difficult to prove
What’s in the Articles of Agreement?
Recitals Contract Particulars Attestation Contractors Obligations Contract Sum EA ER's and CPs PD Principal Contractor Adjudication Arbitration Legal Proceedings
What are the Schedules?
Schedule 1 - Design Submissions Procedure Schedule 2 - Supplemental Provisions Schedule 3 - Insurance Options Schedule 4 - Code of Practice Schedule 5 - TPR Schedule 6 - Forms of Bonds Schedule 7 - JCT Fluctuations Opt A
What are the sections of the contract?
1 - Definitions 2 - Carrying out the Works 3 - Control of the Works 4 - Payment 5 - Changes 6 - Injury, Damage and Insurance 7 - Assignment, PBs and Guarantees, TPR and CWa 8 - Termination 9- Settlement of Disputes
What is the structure of the contract?
Recitals Articles of Agreement CPs Conditions of the Contract Schedules
What is the risk of PCGs?
If parent company goes bust, there is no recourse for the client
What are the heads of claim for L&E?
Prolongation (site overheads, prelims) Disruption Increase in Labour Acceleration Material cost
Why are bonds difficult to obtain?
Due to Brexit and COVID there has been increased contractor insolvency which serve to push the price of obtaining bonds making them harder to obtain.
What cost increase have you seen due to fire prevention and the types?
Tyvec Cavity Trays Sprinkers over 11m Fire rated walls / doors Fire preventive core / stairs
£5/m2
