Experience Area E - Contract Administration & Observation Flashcards
Administrative processes are established and maintained for a standard construction contract.
How did this occur on Teal?
(CASE STUDY E3 ADMINISTRATIVE PROCESSES)
Teal used a standard construction contract in the form of NZS3910:2013. (Discussed in Ex. Area D)
Work occurred on site prior to the head contract being signed due to bank funding arrangements. To cover off this period a “preliminary award of works’ contract was in place. It referred to the terms&conditions in NZS3910:2013. This was important as it outlined which contract processes would be followed & that these were followed a standard construction contract format.
This ties in the Construction Contracts Act 2002, which outlines processes to follow with regards to payments and disputes.
Construction progress is systematically monitored and compliance with the contract provisions and budget ensured.
(this is 2-part) 1: Construction progress is systematically monitored - how did this occur on Teal.
(CASE STUDY E4 CONSTRUCTION OBSERVATION)
I was involved / led construction observation to meet the contractual obligations of Ashton Mitchell, and this also meets AMs requirements under the Building Act 2004 (14D - Role of a designer) Through this I was systematically monitoring the progression of construction against what had been included in the Architectural documentation, which formed part of the contract documents.
AM aren’t the only people involved in the monitoring of construction - Structural engineers, facade, civil, fire etc.
With regards to the construction progress being systematically monitored under Ex. E - the framework for this is set-up by what has been agreed upon between the principle and the contractor. In Teal case, this was fortnightly site meetings. With consultants invited as required. Alongside the site meetings, consultants may go out to site at times outside of these to observe (or inspect if they are producing a PS4) specific items at specific times.
Council inspections also occurred with the contractor managing this process. Aspec had a waiver for council inspections, with monthly audits occurring to review the documentation of progress and the collection of engineers reports.
Construction progress is systematically monitored and compliance with the contract provisions and budget ensured.
(this is 2-part) 2: Compliance with contract provisions and budget - how did this occur on Teal?.
(CASE STUDY E6 CLAIMS AND PAYMENTS)
Compliance with contract provision - ie: is the construction programme ahead/behind etc is managed at PCG meetings, and only spoken on loosely at site meetings. This makes sense as site meetings are to manage technical queries/day to day and you don’t want to bog down the site team and consultants with queries that don’t involve them.
The same with budget - discussed at PCG meetings, alongside Apsec raising potential variations earlier and then discussed or managed through the clients and contractor QS’s.
Progress claims, variations and extensions of time are evaluated and certified.
How was this process managed on Teal? Progress claims.
(CASE STUDY E6 CLAIMS AND PAYMENTS)
This was managed as per the NZS3910:2013 contractual requirements, and CCA 2002.
Managed between BBD (PQS) and Aspec. As far the processed followed, this was standard.
I didn’t include the schedule from Aspec which breaks down what the payment is for. An example of this is shown in a project I was involved in administering.
Generally, a progress claim will be served to the engineer to the contract. This is reviewed by the PQS and engineer to the contract (or rep). Deductions/amendment can be made within the time frames outlined in the contract.
For a progress claim to be valid it must include:
For the claim to be valid it needs to include:
be in writing;
contain sufficient details to identify the construction contract to which the payment relates;
identify the construction work and the relevant period to which the payment relates;
state a claimed amount and the due date for payment;
indicate the manner in which the payee calculated the claimed amount;
state that it is made under the Act; and
must be accompanied by a written notice (in the prescribed form) outlining the process for responding to the claim and explaining the consequences of not responding if payment of the claimed amount in full is not made by the due date for payment (see Form 1 in the Construction Contracts Regulations 2003)
Progress claims, variations and extensions of time are evaluated and certified.
How was this process managed on Teal? Variations?
(CASE STUDY E6 CLAIMS AND PAYMENTS)
Potential variations based off CANs were identified by Aspec and included in their monthly PCG report.
In my case study, I jump ahead a little to when variation is completed it is included as a line item in the monthly progress claim. There is an interim step which involves issuing Contract Instruction or ‘CI’ that instruct the Contractor to move ahead with works or not, or to provide a price. This process didn’t happen very regularly on Teal - much to the contractors frustration.
I think this was the case because the client was also the project manager, rather than an independent project manager. I’ve worked on other jobs with separate PMs who would capture all the CANs up each month and issue them under a version of Type A/B/C/D CI.
Progress claims, variations and extensions of time are evaluated and certified.
How was this process managed on Teal? EoT?
(CASE STUDY E5 PROBLEMS & ADVICE)
EoT - Check in with Guy about Teal and Covid.
EoT Ficino- claim would have been approved, but time related costs were not. Approval of EoT does not always mean that the Contractor gets extra monies (either costs or time related costs). Approval of EoT may mean that the Contractor does not have to pay liquidated damages if the these are applied under the contract.
Problems and uncertainties are resolved and advice provided
How was this process managed on Teal?
(CASE STUDY E5 PROBLEMS & ADVICE)
Contractor queries were issue via email (ATC), or phones or queries raised on site.
Responses where via CANs, phones calls and emails.
CIs should have been provided to collate all of this information under the contract. Refer Case Study - not done very well.
A mechanism is establish for regular progress reporting to the client on variations to the program, budget and quality.
How was this managed on Teal?
(E3 ADMINISTRATIVE PROCESSES)
Monthly PCG meetings - McP, Aspec, BBD, Bank present. Note common for design consultants not to be present at these.
Fortnightly Site Meetings: McP, Aspec, & requested consultants.
If this wasn’t a larger scale commercial project, you’re not going to have separate site meetings and PCG meetings. Instead, you’re more likely to have a site meeting once a fortnight, which doubles as the PCG (although not called that). For Teal, PCG discussed program and budget at length, site meetings didn’t. Small projects, the site meeting will include this, maybe every second one.
Defects are identified and rectification by the contractor is monitored.
This hasn’t occurred on Teal yet - Merfield Street ECE example.
(CASE STUDY E7 DEFECTS AND COMPLETION)
Defecting hasn’t occurred on Teal at the moment, but I have completed this for a number of other projects. Refer to defecting checklist in case study. I put this together for other graduates to use when they were defecting so they understood things to look out for.
It is important that project is at a point where it can reasonably be defected - the contractor may try to get you to come out to complete inspections without having done a inspection themselves, or when the project just not ready.
Note - defecting is different to practical completion.
Compliance with contract documents and requirements of regulatory authorities is verified at completion of the contract.
How was this achieved on Teal?
(CASE STUDY E7 DEFECTS AND COMPLETION)
This is referring to Practical Completion. In NZS3910 - clause 10.4.1. “the contract Works are complete, in accordance with Contract documents except for minor omissions and minor defects which are identified by the Engineer which do not prevent the Contract Works from being used for their intended purpose”
Refer to Case Study section. Note that Teal has made changes to the default clause which requires the contract hand over more documentation.
Handover advice and as-built records are provided.
What is this?
Handover advice could be an evaluation checklist that ensures the contracted builder’s obligations have been met and the final product meets the design. This will speak to Design, Building Systems (Do these work? Final water/electricity meter readers, should the builder demonstrate these to you?) Responsibilities (how do you report issues and how will these be dealt with, Principle assumes responsibility for insurance, security and maintenance) Council, applying for CCC, an assurance that building work is completed and complies with the Building Consent.
Project maintenance and operation manuals as required by the contract are assembled.
Hard to prove this has happened in Teal, as it hasn’t happened yet. But will do under clause 10.4.1, otherwise Contractor won’t achieve PC. Again, if this was SCC, contractor would be required to provide this information.
