General Flashcards
Normalisation methods for tendering
1 - Use average of submitted costs
2 - Use the highest price
3 - Use cost plan allowance
What happens if contractor fails to issue interim payment application under D&B vs SBC in JCT
QS have to make an interim valuation under D&B and SBC if the contractor fails to issue a interim payment application
What is VE and does it always result in initial cost saving
VM - Process of defining value and what value means to the client in terms of cost quality and time
VE - Forms a process under VM the process of identifying items or methods to produce best value for the client
Value depends on each client time, cost and quality
What piled foundations are you aware of?
CFA Piles - Excavate and concrete poured simultaneously
Bored Piles - Excavated then concrete is poured after
Driven Piles - Pre cast piles driven into the ground creates noise and vibration not suitable for built up environments
Updates to Fire safety regulations?
Ban of combustible materials 11-18m residential
Sprinklers for buildings 11m+
Wayfinding signage for firefighters 11m+
Evacuation Alert Systems over 18m+
Second Staircases 30m+
What is Golden Thread?
Information is stored digitally showing the building is compliant with building regulations
Identify, understand and manage how the building mitigates fire risks
Purpose - Ensure design is recorded and any changes need formal review ensuring it meets building regulations
What are the Gateways to Golden Thread?
1 - Planning Application / Principal Designer
2 - Construction Phase / Principal Contractor
3 - Occupation / Accountable Person
Risks defined under NRM1
Design development risk ( unclear brief, unclear design team responsibilities, unrealistic design programme)
Construction risks ( underground obstructions, inadequate site investigations)
Employer change risk ( changes in design /impact on programme)
Employer other risk ( funding/inflation)
How did you know the cost plan was correct?
Benchmarked with similar schemes within London cost was £280-£400sqft and HRW was £360sqft
How to did you identify building inefficiencies?
Net to Gross 70% Lower range and 80% Higher range HRW was 78%
Wall to Floor (Lower the better)
0.5 Good and 0.6 above not as good
What on costs did you allow for in the cost plan?
Prelims 20%
OH&P 5%
Contingency 5% (Design development and risk allowance)
What did you exclude from cost plan?
VAT
Site fees
Design fees
Surveys/Reports
Changes in building regulations
Loose FF&E
Insurances under JCT
A - Contractor takes out and maintains joint names all risk insurance for new build
B - Employer takes out all risk insurance of the works for new build
C - Employer takes out all risk insurance for renovations/existing structures
What did tenderers submit as part of the first stage of the two stage
Construction programme
Prelims 15%
OH&P 3%
Pre Construction service / design fees
What does a PCSA do and what is the benefits?
Contractor can input into design process
Advise on buildability
Collaborative working from an early stage better understanding of the client
Where is there guidance on provisional sums
NRM2
What is JCT Tendering alternative 1 and 2 and where would this be stated?
The option would be stated in the instructions to tender
Alternative 1 - Contractor has to agree with errors or withdraw
Alternative 2 - Contractor given chance to amend errors
How did you understand clients objectives?
Scoring matrix was created
Time, cost and quality triangle
How do you benchmark?
Previous tender submissions
Contract sum allowance (CSA)
Building construction information services (BCIS)
SPONS
Market testing
Do you adjust rates when benchmarking?
Rates would need to be adjusted based on the base date of the cost plan I would look at Tender price indexes
Location factor - Costs in London and Leeds would be difference
What are suites of contracts under JCT
Standard
Intermediate
Minor works
Design and Build
Management contracting
Construction Management
JCT VS NEC Differences?
JCT - Building / NEC - Building and Civil engineering
JCT - Standard set of clauses / NEC - Bespoke
JCT - Variations/Change / NEC - Compensation event
JCT - Provisional Sums / NEC No provisional sums
JCT - Has QS identified / NEC Has project manager
JCT - Programme not a contractual document / NEC Programme contractual document
JCT - Payment in section 4 / NEC Payment in various sections
How are valuation payments certified calculated?
Gross - Retention - Previous certified to get net payment
Who does risk sit with in a D&B
Design responsibility is transferred to the contractor (client pays a premium)
Other risks would be agreed/discussed before entering contract
When does CDM regulations apply?
Work is longer than 30 days
More than 20 workers
Exceed 500 person days
Factors to consider when selecting dispute method?
Cost/Time/Reputation
Difference between Mediation and Conciliations
Conciliator will give suggestions/recommendations
Mediator acts as a messenger
5 Rules of Conduct?
1)M&F must be honest act with integrity and follow RICS obligations
2) M&F must maintain professional competence and ensure services are provided by competent individuals with the necessary expertise
3) M&F must provide good quality and diligent service
4)M&F must treat others with respect and encourage diversity and inclusion
5)M&F must act in public interest and take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
Examples of Rules of conduct?
1 - Conflict of interests / bribes
2 - Develop knowledge CPD / Complex valuation using senior surveyor to undertake rather than junior grad
3 - Understanding clients requirements/agreeing scope providing limitations/timescales
4 - RLB D&I events EID Black history month/Treat others with respect/ do not discriminate, bully or harass/ check supply chain doesn’t use modern slavery
Professional obligations for members
1) CPD Requirements 20 hours 10 must be formal
2)Cooperate with RICS
3) Provide information as reasonable requested to the standard regulation board
Professional obligations for firms
1) Complaints handling procedure
2) Professional indemnity cover
3) If sole principal arrangements need to be made in place for work to be continued due to their absence sickness or death
4) Cooperate with RICS
5) Provide information to RICS
6) Display business literature in accordance with RICS published policy designation
7) Report to RICS any matters under the Rules for registration for firms
Duty of care and client care difference?
Duty of care - responsibility towards client ensuring work is completed to a high standard
Client care - Going above and beyond
What is a composite window and what other items could you consider?
Composite windows - Made from two different materials typically timber and aluminum
UPV - UnPlasticised polyvinyl chloride
If you market tested, why was it so far out?
Overbudget due to inflation
Event occured which was Ukraine War causes a spike in various packages
Items such as steel surged 20-30%
Why was the VE products not affected by Ukraine war?
Products were not sourced abroad
VE products meet the functionality needed by the client at a lower cost
How did you assess and manage the cost at the 2nd stage to determine value for money?
Open book basis
Contractor would send costs from 3-4 different suppliers.
What is International property measurement standards?
Created to have consistency in measuring
Applies to four sectors
R-esidential
R-etail
I-ndustrial
O-ffice
How do you check accuracy of cost plans?
Benchmark against similiar schemes cost per sqft
Reconciliate against previous cost plan stage 2-3 check quants
Third party rights and Collateral warranty differences?
Third Party - Legislation (right of third party act)
Collateral warranty - A document which creates a contractual link between two parties
What happens if work is defected?
There is a defects liability period within the contract
Contractor has to amend within that time frame
Patent defects - discovered whilst inspecting site
Latent defects - Shows up later after a few months/years
How would you settle a final account?
All provisional sums would need to be expended and agreed
How do you administrate sectional completion and partial possession?
Sectional completion - Agreed within contract)
Partial Possession - Not agreed within contract , client has to ask contractor.
Retention is released upon completion certificate
Defect Liability begins
Liquidated damages reduced in proportion
Steel and concrete what’s cheaper?
Depends on the project and how much of each is required
What is a Z clause under JCT?
Special amendment to the contract
Fluctuations under JCT contract
A- Contribution, levy and tax fluctuations
B - Labour/material and tax
C- Formula adjustment
Liquidated damages list as NIL/0
0 - Means none stated
Blank/Nil - Can claim unliquidated damages has to be proven in court
Liquidated damages - Genuine pre estimate of financial lost suffered by client due to contractor not meeting completion date
How do you value materials off site?
Check if materials listed within the contract
Check against programme if items are due
Check the vesting certificate (transfer ownership of materials to client)
Check the items are stored safely, labelled with clients name and insured
How would you calculate risk
Cost impact and Probability
Quantitative - Costs
Qualitative - Impact/Likelihood
Monte Carlo - Simulation likeliness of impact/ expensive to use
Reviewing anticipated changes
Advantages of using a Design and Build?
Contractor input into the design can advise on buildability and use there expertise and experience
Transfers design risk to contractor
Overlap design and construction
Concrete vs Steel differences
Steel quicker to assemble less labour intensive unlike Concrete
Steel needs fire proofing , intumescent paint is sprayed on and expands when there is a fire concrete does not need fire proofing
Steel longer spans so more Net to Gross area less need for columns such as concrete
Concrete takes times to cure to reach its full strength
How would you measure concrete, rebar and formwork
Concrete measured as m3
Rebar measured as tonnes
Formwork measured as m
How do you assess variations under the valuation rules?
Using the rates and prices in the contract sum analysis where they are applicable and reasonable
If there are no applicable or reasonable rates or prices, variations should be valued using new rates or prices derived from the contract sum analysis or based on fair market rates or prices
If works are not comparable to CSA rates then daywork would have to be applied (Plant, labour, materials and OHP)
Modular Construction advantages/disadvantages
Advantages
Faster construction time and reduced site disruption
Improved quality control and reduced waste
Enhanced design flexibility and customization
Potential cost savings and environmental benefits
Disadvantages
Higher initial costs and transportation costs
Limited design options and standardization
Potential issues with site access and installation
Challenges with coordination and integration of services
What is the difference between a provisional sum and a prime cost sum in a contract?
A provisional sum is an allowance for work or costs that are not yet defined or certain at the time of tendering. A prime cost sum is an allowance for work or materials to be supplied by a nominated sub-contractor or supplier, excluding any profit or attendance by the main contractor.
Benefits and Drawbacks of Two-Stage design and build
Contractor is appointed in two stages
First stage, the contractor is selected based on their fee, preliminaries, overheads and profit, and their ability to develop the design and provide cost certainty.
In the second stage, the contractor finalises the design and tenders for the works packages, and agrees on a lump sum price with the employer. Some benefits of this method are
It allows an early start on site and an overlap between design and construction
It enables early contractor involvement and input into the design and buildability
It reduces the risk of design changes and variations during construction
It provides cost certainty and value engineering at an earlier stage Some drawbacks of this method are:
It requires a high level of trust and collaboration between the parties
It may result in higher tendering costs and longer tender periods
It may create uncertainty or disputes over the scope of works and responsibilities
It may reduce the employer’s control over the design quality and specification
What is the purpose of a schedule of areas in a cost plan?
A schedule of areas is a document that shows the breakdown of the gross internal floor area (GIFA) of a building into different functional areas, such as residential, retail, office, etc. It also shows the net internal area (NIA) and net lettable area (NLA) of each area. The purpose of a schedule of areas is to provide a basis for calculating the cost per m2 of each area and to compare the efficiency and performance of different buildings.
How do you advise the client on selecting the most appropriate method for their project?
To advise the client on selecting the most appropriate procurement method, I would first discuss with them their objectives and priorities in terms of time, cost, quality, and risk. I would then analyse the project characteristics, such as size, complexity, design responsibility, and market conditions. Based on these factors, I would present the client with the advantages and disadvantages of various procurement methods, such as traditional, design and build, management contracting, construction management. I would also provide examples of similar projects that have used these methods and their outcomes. I would then recommend the most suitable procurement method that meets the client’s needs and expectations
What are the main components of a contract sum analysis under the JCT Design and Build Contract 2016
A contract sum analysis is a document that shows the breakdown of the contract sum into different categories, such as preliminaries, overheads and profit, main works, provisional sums, prime cost sums, fluctuations, etc. It is used to provide transparency and clarity on how the contract sum is calculated and to facilitate valuation of variations and payments
How do you monitor and report on the project expenditure against the budget?
I monitor and report on the project expenditure against the budget by preparing monthly cost reports, which include the following information:
The original budget and any approved changes
The current contract sum and any anticipated changes
The value of work done to date and any retention held
The forecast final cost and any contingency remaining
The cash flow forecast and any deviations from the planned cash flow
The risks and opportunities identified and their potential impact on cost and programme
How do you advise the client on selecting the most suitable contractor for their project?
To advise the client on selecting the most suitable contractor, I would first understand the client’s objectives and criteria for selecting a contractor, such as quality, price, experience, reputation, etc. I would then prepare a tender list of suitable contractors based on market research and previous projects. I would also prepare a pre-qualification questionnaire (PQQ) to assess the contractors’ financial stability, technical capability, health and safety record, etc. Based on the PQQ responses, I would shortlist the contractors who meet the minimum requirements and invite them to tender. I would then prepare and issue the tender documents, which include the scope of works, drawings, specifications, contract conditions, pricing document, etc. I would also manage the tender process by answering any queries from the contractors, arranging site visits, conducting tender interviews, etc. After receiving the tender returns, I would analyse and evaluate them based on the client’s criteria. I would check for any errors, omissions, qualifications or discrepancies in the tenders. I would also compare the tenders with each other and with the pre-tender estimate. I would then prepare a tender report that summarises my findings and recommendations. I would present the tender report to the client and advise them on which contractor offers the best value for money and meets their expectations. I would also assist the client in negotiating with the preferred contractor to finalise the contract terms and conditions
How do you prepare and issue contract documents under the JCT Design and Build Contract 2016? (Level 2)
I check that the contract particulars are completed correctly, such as the names and addresses of the parties, the contract sum, the dates of possession and completion, the retention percentage, etc.
I collate the contract documents, such as the conditions of contract, the employer’s requirements, the contractor’s proposals, the contract sum analysis, the drawings and specifications, etc. I make sure that they are consistent and coherent, and that any amendments or qualifications are clearly identified.
I arrange for the contract documents to be signed by both parties in duplicate, and exchange them within a reasonable time after the date of the letter of intent or acceptance. I also ensure that any bonds or guarantees are provided by the contractor as required by the contract.
I distribute one copy of the signed contract documents to each party, and keep a record of the date of issue and receipt.
How do you prepare and maintain a risk register for a project?
Identify the potential risks that may arise from various sources, such as design, site conditions, procurement, construction, etc.
Evaluate the likelihood and impact of each risk using a scoring matrix or a qualitative assessment
Assign a risk owner and a risk status for each risk
Develop a response strategy for each risk, such as avoid, reduce, transfer or accept
Monitor and update the risk register regularly to reflect any changes in the risk profile or the project circumstances
What was fixed at first stage?
OH&P
Prelims
If there are packages defined they can be competitively tendered at 1st stage
Structure of NRM1 and NRM2?
NRM1 (OCE AND CP)
1- Introduction
2 - Measurement rules for order of cost estimating
3 - Measurement rules for cost plan
4 - Tabulated rules for measurement
NRM 2 (BOQ)
1 - Introduction
2 - Measurement rules for detailed measurements
3 - Tabulated rules of measurement for building works
What is Contingency and how do you calculate it?
Allowance for unforeseen costs/unknown risks
Typically done as a percentage (benchmark against similar schemes) and it will be reduced as the design develops and becomes more detailed
Risks then form part of a risk register
Difference between Data Protection Act and General Data Protection Regulation
DPA - Applies to UK /GDPR - Applies to EU
DPA - Not required Data protection officer but required under GDPR
DPA - Fines 1% Annual Turnover whereas GDPR is 4% Annual Turnover
Difference between Mission Statement and Vision Plan
Vision statement - Defines goals
Mission Statement - Companies core values and purpose
What is RLB equality and diversity policy
-Everyone should feel valued
- Equal opportunity regardless of age, sex, disability etc
Who Manages the Golden Thread
3 Gateways
1 - Principle Designer
2 - Principle Contractor
3 - Occupier/Client
Building Safety Regulator will manage
If you wanted to amend the payment terms, how would you do this contractually?
Amend the contract in payment timelines
Examples of Market Conditions affecting construction market
Ukraine war
Post brexit
- Shortage of labour
- Rise of energy and fuel
- Steel prices increased
How did you select the contractor at first stage?
OHP
Prelims
Design Fees
Financials
Capacity
Experience/References
Health and Safety
How does JCT DB differ from Intermediate
DB is administers by a EA
Intermediate is administered by a CA
DB Contractor responsible for all design
Under a Intermediate only responsible for Contractor design portion CDP
What is alternative A and B payments in JCT
A - Stage payments (pre-agreed stages)
B - Interim payments (monthly)
What is in a full set of contract documents in design and build JCT
1 - Articles of agreement (identifies employer/contractor)
2- Contract Particulars (date of possession, date for completion, levels of required insurances)
3 - Conditions (9 sections; contractors obligation, practical completion, change control, payment arrangements, insurance, collateral warranties, termination, dispute)
4- Schedules (additional details of the project)
5 - Employers requirements (sets out what the client what’s to achieve)
6- Contractor’s Proposals (How contractor proposes to meet ERS)
7 - Design documents (Drawings/Specifications)
Wet Screed vs Dry Screed
Wet Screed
- Quicker to pour less labour intensive
- Have to wait to dry (can use heaters to speed up process)
- More cost effective compared to dry screed
- Good for UFH heating covers all the air gaps
Dry Screed
- Can be laid and walked on quickly 24-48hours
-
What was in the Pre Qualification Questionnaire
1- Company information
2 - Financial standing (company turnover to ensure they have financial capacity to undertake the project)
3- H&S
4 - Technical Capabilities (experience/references/similar projects)
5- Capacity (workload projection)
6 - PCG - Performance Bond if required
What was in your tender recommendation?
Tender return costs
Tender normalisation
Tender compliance checks
Scoring matrix commercial/technical
How does NRM differ to IPMS
NRM - Construction cost and measurement has guidance on how to measure and what to include and exclude / guidance note best practice
IPMS - Measurement of real estate properties has illustrations on how to measure , measure to internal dominant face / International standard mandatory when reporting on areas
Portal Frame (Steel frame)
Large opening interior spaces
How do you terminate a contract in JCT?
I would consult the RICS Termination Guidance Note.
- Secure site + offsite materials
- Check contract for termination clauses
- Call in any bonds
- Review collateral warranties & step in rights
- Ensure detailed records are kept
- Draft notional final account
- Revised shedule of works until termination
What must you include in the RICS annual return?
- Type of business + staffing
- Client nature
- CPH
- PI
- Money handling
- Training
What is profitability margin for your project
30-40%
JCT Contract Key Provisions? (4)
Articles of agreement
Contract Particulars
Conditions of the contraction (9)
Schedules
JCT Contract conditions? (9)
Definitions
Carrying out the works
Control of the works
Payment
Variations
Insurance
Assignment, third party rights, collateral warranties
Termination
Disputes
What happens if the contractor goes insolvent?
Secure site + offsite materials
- Check contract for termination clauses
- Call in any bonds
- Review collateral warranties & step in rights
- Ensure detailed records are kept
- Draft notional final account
- Revised schedule of works until termination
- If incompetent in area seek legal advice
How is Loss and Expense claimed for?
Contractor has to provide assessment
Assessed by QS
Relevant matter - responsibilities of the client cause contractor delay
Added to contract sum / paid next interim valuation
(Retention not applied)
JCT 2024 Update
Modernizing & Streamlining: Adopting gender-neutral language, more flexibility with electronic notices.
Extensions of Time: Introducing new events like epidemics, reducing assessment time for extensions to 8 weeks.
Loss and Expense: Adding new events like unexploded ordnance, contaminated materials, and asbestos.
Liquidated Damages: Allowing LADs up to termination, then general damages.
Disputes: Parties must notify potential disputes to seek settlement, with the option to refer to adjudication. No more shortlists; parties choose their adjudication body.
New Form of Contract: Introducing JCT Target Cost Contract as an alternative to NEC Option C ECC.
Structure of RICS?
Governing Council - Responsible for strategy and overseeing
RICS Board - Delivery of business plan and operations
Standards and Regulation Board - Oversee activities such as professional standards, entry to profession, education and qualification standards
RICS Global and professional ethical standards?
1 - Act with Integrity
2- High standard of service
3- Promote trust within profession
4- Treat others with respect
5-Take responsibility
Difference between Professional Statement and Guidance Note
Professional Statement - Mandatory must be followed for example Conflict of interests, Bribery and corruption and money laundering
Guidance note - Best practice such as NRM1 useful to follow best practice if there was a claim for negligence
The role of professional groups within RICS
Provides opportunities for members to connect and network within there technical expertise
Examples of groups
Construction, valuation, commercial property, residential property, land and natural resources, building surveying and building control
How can you check your appointment terms are compliant?
I would check for compliance against the RICS appointment document
What bodies are you aware of within the RICS?
Matrix - To support new joiners into the profession such as apprentices, students and trainees and those who are newly qualified up to 10 years (opportunities for CPD, Mentoring, social events)
Lionheart - Charity supporting RICS past present future professionals. Aim to support
Finance
Health & Wellbeing
Family related support
Work-related support
JCT 2024 Update
Modernising and Streamlining: Gender neutral, electronic notices.
Extension of Time: Relevant events such as epidemics. Time is reduced to 8 weeks.
Loss and Expense: New relevant matters such as UXO, contained materials and asbestos.
LDs: Works not completed at termination can be levied up.
Addition of payment due date after termination.
Disputes: Potential disputes must be raised to a senior executive to seek negotiation.
Adjudication no longer must be a shortlist.
Fluctuations: Using the JCT Fluctuations Hub and moving fluctuation provisions online.
Legislative Changes: Addressing Building Safety Act, Construction Act, and insolvency law updates.
New Form of Contract: JCT Target Cost Contract as an alternative to NEC Option C ECC.
Single stage procurement
Benefits:
The client benefits from a competitive tendering process which can lead to more competitive pricing.
The client can also benefit from a fixed price through this tendering process.
Risks:
The number of contractors prepared to bid for the project may be low. Historically, single-stage procurement was done through an OJEU process, which often resulted in high tendering costs to the contractors. Because of this many have shifted their focus to the more cost effective two-stage schemes over time and are no longer willing to engage in single-stage.
The development scheme is generally designed and costed up by the contractor in isolation which can often result in the project budget being exceeded. Generally, this is because contractors may not have been consulted on the buildability at the outset meaning ever-changing building costs throughout the project.
Two stage procurement
Benefits:
The project doesn’t have to be fully designed and costed before they can start procurement for the project, thus reducing costs.
Shorter timescales required to get a contractor appointed.
Due to the shorter timescales, the client would benefit from contractor early engagement which could result in project costs being reduced through a Value Engineering Process.
The collaborative approach breeds greater communication with the client and the clients team, which can result in improved outcomes.
Risks:
If the client and contractor don’t communicate with each other then it would be unlikely that they would benefit from collaboration and project and cost clarity.
What would you check due diligence for new client
- Dun bradsheet financal checks
- Conflict of interest
- Money laundering /
Client money protection scheme
This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client’s money, up to the limits and exceptions set out in the scheme rules.
Quantitative and Qualitative methods for risks
Quantitative - Monte Carlo
Qualitative - Probability Matrix (Likeliness/Severity)
What were the updates to the building safety act 2022?
The Building Safety Act received Royal Assent in April 22.
Applies to all buildings but with specific focus and actions on ‘Higher-risk Buildings.
HRB are classed as over 18 metres high or seven storeys or more, which contain at least two residential units. Also applies to care homes and hospitals meeting the same height threshold.
Introduction of new duty holders:
1. Building Safety Regulator [BSR] - responsible for overseeing the safety and performance systems of all buildings.
2. Accountable Person [AP] - will have an ongoing duty to assess Building Safety risks and provide a ‘Safety Case Report’ which demonstrates how Building Safety risks are being identified, mitigated, and managed on an ongoing basis.
3. Principal Accountable Person [PAP] - Where a building has more than one AP, the AP responsible for the structure and
exterior of the building will be the Principal Accountable Person (PAP).
The planning Gateways:
1. At the point of planning application, a fire statement is to be prepared and issued along with the planning application.
2. Prior to the commencement of construction, the BSR must give approval. - Any changes to the approved design / materials [during construction] to be approved by the BSR before installation. Between 14 days – 4 weeks depending on the extent of the proposed changes.
3. Prior to occupation of the building, a building assessment certificate must be issued by the BSR BEFORE the building is occupied.
What is GAAP
Generally Accepted Accounting Principles.
To ensure financial reporting is transparent and consistent.
Relevant Event
Contractor can claim for Extension of time
Examples
Variations
Adverse Weather
National strikes
Relevant Matter
Contractor can claim for loss and expense
Not giving possession of site on agreed date
Not giving access to and from site
Delays in instructions
What needs to be issued before Liquidated damages can be claimed?
Non Completion Certificate
Difference between Vision and Mission Statement
Vision - what you hope to achieve
Mission statement - what you’re currently doing
Unconscious Bias
A term that describes the associations we hold, outside our conscious awareness and control
What is the difference between change and variation?
D&B - Change
SBC - Variation
What is procurement and tendering
Procurement - Act of obtaining goods/services
Tendering - strategy to obtain price , bidding process/how contractor is appointed
Why would you use Collaterally over Third party
Collaterally can be customised to clients needs
Whereas third party more to do with step in rights
How long is the defects period?
Defects period 1 year , allows for latent defects and the building is affecting by all weather conditions
How did you manage the risk of the impact redesign fees would have on savings and programme?
Confirm upfront with design team before works undertaken
Was there any scope to carry out a VE exercise prior to the return of the stage 4 tender prices?
Regular catch up with contractor
Soft market testing
How did you manage the risk of the Contractors prices being returned within your estimate for the proposed VE items?
Work collaboratively, market tested suppliers was given to the contractor
Third party rights (step in rights)
Collateral warranty?
Written into the contract
Example funder is able to step into the contractor if contractor goes insolvent
Collateral warranty - creates a contractual link between two parties separate document outside of contract
What was the cost per sqft for NES fit out cost plan
Market tested showed Fit out around £60-£90 per sqft
NES was at £81
Bespoke furniture example full height bookshelves/Lockers
Example of a post contract variation on Harrow Road
Change in kitchen range line Symphony
Supplier Symphony agreed there would be no cost implications by changing the range
Had written confirmation from Symphony that it was a NIL cost
Updated finishes schedule for appliances to the kitchen - Had to review costs allowed within CSA then market test new appliances specified in the contract the information was limited for example cooker hood but it did not specify or reference a certain product
Third party vs collateral warranty
Third party - allows third party to enforce terms of a contract (built into the contract governed by right to third party act eg funder
Collateral warranty - Extends contractual link to third party, client can claim works against sub contractor if undertaken negligently typically used to protect the client if contractor goes insolvent separate document
What is assignment
Transfer of benefits within the contract
Client can assign rights to have works constructed but cannot assign obligation to pay for the works
Contractor can assign the rights to payment but cannot assign obligations of constructing the works
How is risk transferred through procurement routes? Cost, Design, programme
Traditional - Client (Design) Contractor (Cost/Programme)
D&B - Contractor Design, cost and programme
Management Contracting - Client (Cost and Risk) Contractor (Programme)
Construction Management - Client Design, cost and programme
What was allowed in the PTE?
Items which were not included within cost plan such as
Performance bond
S278 Works
Design Fees
Principles of better regulation
Proportionality: The regulation should be proportionate to the risks and benefits involved, and should not impose unnecessary burdens on the profession or the public.
Accountability: The regulation should be accountable to the stakeholders, including the profession, the public, the government and the RICS Governing Council.
Consistency: The regulation should be consistent across different regions, sectors and disciplines, and should be aligned with international standards and best practices.
Targeting: The regulation should be targeted at the areas where it is most needed and most effective, and should avoid duplication or overlap with other regulators or bodies.
Transparency: The regulation should be transparent and clear to the profession and the public, and should involve consultation and communication with the relevant parties.
How did you compare the tender returns?
Inflated cost plan as per TPI to tender return date
Allowed for construction inflation (tender return date to mid point of construction)
Didn’t have time to re-mark test and engage with suppliers
How did you undertake the VE
Primarily targeted costs that was over budget
We did review some packages which were under to see if we can generate more value
How do you manage change on your projects?
EA issues me details of the change
I assess the costs then it is issued for client for review
If there satisfied it would be instructed and negotiated with the contractor
I would review contractors cost see if it is fair and reasonable
How is a provisional sum treated?
As provisional sums are replaced by valuations of the work actually done as the project progresses, the contract sum may increase or decrease
What risks did you highlight to your client going for a D&B Route?
Clients may find it hard to prepare a sufficiently comprehensive brief
The client has to commit to a concept design early
Variations from the original brief are difficult to arrange and are often expensive
It is harder to compare tenders and harder to determine whether VfM is being achieved
Quality of Design - requires novation of architect/engineer to mitigate
How do you monitor costs at the Second Stage of a 2 Stage Tender?
Mutually agreed cost plan between QS and Contractor to budget trade packages against and a timeline of agreement packages
3 quotes for each trade
The level of cost certainty at each interval reported to the Client plus risk and inflation plus agreed Prelims and OH&P from 1st Stage
Contractors try and sneak in additional trade package prelims like material distribution and handling
On what basis was the interim valuations conducted?
Design & Build – Alternative A (Stage Payments) or B (Period Payments) will apply, as stated in the Contract Particulars (if not stated then B will apply)
A - Stage payments (upon completion of a stage)
B - Period payments (monthly valuations)
What types of JCT Contracts are there?
Traditional
Lump Sum (with or without quants)
Measurement (approximate quants)
Cost Reimbursement (Prime cost)
Design & Build
Packages deal / Turnkey solution
Traditional D&B
CDP
What are the differences between Novation & Assigned
Assignment = Occurs when a party transfers contractual benefits
Assignment = The developer can assign their rights to the first purchaser of the building to claim against the contractor for breach of contract if defects appear
Novation = Happens when an employer wishes to pass over obligations to another party (contract between A & B, A cannot simply decide to be replaced by C)
Novation = The contract is typically replaced with a new one, all three parties must agree to it
Example Client novate design team to contractor
What is a Relevant Matter?
Client impacting the progress of works
Results in a contractor claim for loss and expense
What’s the difference between third party rights and collateral warranties?
Third Party Rights = Third parties rights comes in to force under the ‘Contract (Rights of thirds parties) Act 1999
Third Party Rights = Allows one party entering into a contract with another party to contract on behalf of a third party to enforce a term of a contract, not the whole contract itself
Third Party Rights = For example, if a building contract contains a term that the contractor is required to use materials of good quality, then that term might be the subject of a third party enforcement right, subject to the other requirements for the existence of the right being met
Collateral Warranty = A collateral warranty is a contract which is ancillary or ‘collateral’ to a principal contract, such as a building contract, a subcontract or a consultant appointment
Collateral Warranty = It is entered into between the person employed under the principal contract (e.g. a contractor) and a third party (known as the ‘beneficiary’) having or acquiring an interest in the development, such as a funder, a purchaser, a tenant or a management company
Collateral Warranty = The person employed under the principal contract (‘the Warrantor’) generally warrants to the third party that it has complied with its obligations under the principal contract
If you undertook a Pre-tender estimate why where the costs over budget?
The Pre tender estimate allowed for inflation to the point of tender return
However due to Ukraine war this caused spiked in key packages
Such as steel surge by 20-30%
What are alternatives to a Collateral Warranty?
Performance bond 10% of contract sum
Retention bond
Parent company Guarantee
What are the 3 Fluctuation Options?
Option A – allows for adjustments to the contract sum in respect of changes to tax, levies and contributions which the contractor is required to pay. That would cover a change in tax payable on imported goods for example.
Option B – allows for adjustments to the contract sum in respect of changes to the price of labour and material cost. It covers adjustments to the market prices of materials, goods, fuel, gas (and more) which were current at the Base Date.
Option C – is a formula led adjustment to the contract sum. In this instance, the JCT Formula Rules issued by the Joint Contracts Tribunal will apply depending on the type of work being carried out (and there are a vast range of formulas).
What are the different forms of Risk Management Strategies? (STARR)
Share
Transfer
Avoidance
Reduction
Retain
What are the 9 protected characteristics?
Ageism
Disability
Gender Reassignment
Marriage and Civil Partnership
Pregnancy and Maternity
Race
Religion or Belief
Sex
Sexual Orientation
Difference between General Data Protection Regulation and Data Protection Act
The Data Protection Act 2018 is the UK’s implementation of the General Data Protection Regulation (GDPR).
GDPR regulated EU and we have left the EU
Can you give an example of how you’ve managed a conflict?
When agreeing variations we sometimes have disagreements with the contractor over the value of the works, I would rely on the valuation rules that are clear within the contract
I would always try and meet face to face, as information can be misinterpreted over email and negotiation is difficult
It can lead to unnecessary delays and cost on a project
House grant construction act
The amendments seek to provide increased certainty regarding construction payments and to provide a fairer payment regime,
improve rights for contractors to suspend works in non-payment circumstances and make adjudication more accessible for the resolution of disputes
RICS Mission statements
Promote quality standards and solutions
JCT Contract Values
SBC 1m above
Intermediate up to 1million
Minor works up to 250k
Whole life cycle vs Life cycle costing
LCC focuses on the costs associated with constructing and operating the building
WLC takes a broader view, considering all costs and benefits associated with the overall development
