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16 Contract Administration > Level 2 > Flashcards

Level 2 Flashcards

1
Q

Describe the building (Langtry House)

A
  • 2 Storey former wardens maisonette

* 1950’s building, cavity walls, plain tiled hipped roof

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2
Q

Describe the works (Langtry House) .

A
  • Conversion to 2 flats (Ground Floor/First Floor)

Removal of staircase, two new flats with separate access and installation of new decking area.

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3
Q

Why were there supply issues with the laminate flooring?

A

The supplier stated that the laminate flooring would take longer than anticipated which would have jeopardised the project completion.

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4
Q

How did you deal with the design change?

A

Requested that the Contractor offer 3 similar products with an appropriate lead in time for discussion with the Client.

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5
Q

How long was the rectification period?

A

6 months

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6
Q

What Works insurance Option was selected (Langtry)

A

C

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7
Q

What was the Contract Sum

A

93815

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8
Q

What was included in the tender pack?

A 
Invitiation to Tender
Appendices such as Asbestos/drawings
Designer Risk Assessment
Prelims
Specification (Material and Workmanship Clauses)
Schedule of Works
M&E Specification
Pre-Construction Information
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9
Q

Was the project notifiable under CDM Regulations?

A

No it did not meet the criteria.

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10
Q

Name are some certificates that are issued under JCT Contracts?

A

Interim payment certificates

Practical completion certificate
Penultimate payment certificate

Certificate of making good defects
Final Certificate.

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11
Q

What about if there is a delay to the project? What certificates are issued under JCT then?

A

Certificate of non completion - Fault of Contractor

Extension of time certificate. - Fault of Client or his Team

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12
Q

What is a Contractors Variation Order?

A

Alteration to the scope of works in the contract.

Addition/Substitution/Omission

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13
Q

What are interim Payment Certificates?

A

Allow the client to make payments to the contractor before the work is completed.

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14
Q

What figures would you expect to be detailed on a payment certificate?

A
  • Contract sum
  • Gross valuation
  • Less the retention
  • Less the total amount previously certified
  • Net amount for payment (in figures and words).
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15
Q

Did you or someone else in the firm sign the interim certificate?

A

All certificates were drafted by me, checked by a senior surveyor and then checked and signed by a by a Director.

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16
Q

Did you have a retention?

A

Yes 5% with 2.5% released at practical completion.

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17
Q

What insurance would a contractor require before commencing works on site?

A 
"•	Joint Names Policy for All Risks 
•	Joint Names Policy for Specified Perils
•	Employers Liability 
•	Public Liability 
•	Professional Indemnity 
"
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18
Q

How many insurance options are there in the JCT?

A

3 - Options A-C

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19
Q

What is Option A insurance in the JCT contracts?

A

The CONTRACTOR takes out a joint names policy for all risks insurance with cover for the full reinstatement value.

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20
Q

What is Option B insurance in the JCT contracts?

A

The EMPLOYER takes out a joint names policy for all risks insurance with cover for the full reinstatement value.

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21
Q

What is Option C insurance in the JCT contracts?

A

The EMPLOYER takes out and maintains insurance in respect of the existing structures and their contents and a joint names policy for all risks insurance with cover for the full reinstatement value.

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22
Q

Public Liability Insurance?

A

Loss or damage resulting from a claim for damages by a third party arising from negligence on your part

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23
Q

Professional Indemnity Insurance ?

A

Cover for claims brought against the policyholder due to their professional negligence. This is mainly in relation to contractor design.

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24
Q

Employer’s Liability Insurance?

A

Imposed on an employer to pay damages to an employee injured by the employer’s negligence

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25
Q

Which options would you use for the refurbishment of an existing structure?

A

C- chosen for alterations or extensions to existing buildings.

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26
Q

What is a potential issue with Option C in respect to the Employer/Contractor?

A

Employer to take out/maintain a ‘joint names’ insurance policy in respect of the existing structures and contents. This includes the employer and contractor as composite insured = insurers have no right of recourse against either party as there is a waiver of the insurer’s subrogation rights.

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27
Q

Are there any potential issues with Option C generally?

A

If the employer is a tenant they may not be able to fulfil their contractual obligations under Option C. They may be unable to take out the relevant policy as the responsibility would fall to the landlord and the landlord may be reluctant to add tenant and contractor on to their policy.
If the correct insurances are not put in place by the employer then if the worst happened and the contractor accidentally burns down or floods the building the insurers could sue the contractor for the cost of rebuild. The contractor in turn would sue the employer for their failure to comply with their insurance obligations.

28
Q

Joint Names Policy for All Risks

A

A joint names policy for All Risks Insurance for the full reinstatement value of the works plus percentage to cover professional fees.

29
Q

Joint Names Policy for Specified Perils

A

A joint names policy in respect to the existing structures and contents for which he is responsible, for the full cost of reinstatement.

30
Q

In the event of an insurance claim please explain your understanding of the action that a contract administrator should take following damage?

A

Gather information:
• Is it damage or defect?
• What is the cause of the damage?
• Is it covered by the insurance?
• What is the extent of the loss - physical loss and loss to programme.
• Can the contractor continue to work around the damage or put it right and proceed who will be liable for that cost of them doing so.

31
Q

What is a certificate of practical completion?

A

Document that confirms the works are satisfactorily completed to a standard established in a specification document which forms part of that contract.

32
Q

What is a certificate of making good?

A

The Certificate of Making Good Defects is a certificate that is in relation to the completion of latent defects raised during the Rectification Period.

33
Q

What happens towards the end of the Rectification Period?

A

CA produces schedule of defects, and agrees with the Contractor a date by which they will be rectified.

34
Q

Who pays for remediating the defects and how long does the Contractor have to remediate the defects?

A

Contractor pays & within reasonable time.

35
Q

What is reasonable time?

A

It is the time that the law considers reasonable under the specific contract for undertaking whatever is required and which is deemed necessary – and can be undertaken conveniently – as soon as circumstances permit.

Vague/Subjective = refer to trade practice.

36
Q

What is a Final Certificate?

A

Certification by the contract administrator that a construction contract has been fully completed.

37
Q

What is a Contract Instruction?

A

To vary or postpone the works.

To sanction a variation made by the contractor.

Expenditure of provisional sums.

To open up work for inspection or carry out tests.

To exclude persons from the site.

Any other instructions empowered by the contract.

38
Q

How did you decide whether PC had been achieved?/ When can you certify practical completion?

A

Substantially completed + free of patent defects
Complete health and safety file (issued in draft).
Client ability to take possession and make beneficial use of the building.

39
Q

Under the contract, who’s responsibility was is to value the works?

A

It was mine as the contract administrator.

40
Q

What are the consequences of issuing the PC certificate?

A

1) Rectification period begins,
2) Retention reduces (as per contract)
3) Insuring the premises passes back to the client.
4) Final account is then prepared.
5) Ends the contractors liability for liquidated damaged

41
Q

What happens after the rectification period ends?

A

1) Joint snagging inspection (CA and Contractor).
2) Contractor should rectify any defects.
3) Second inspection should be undertaken to confirm this.
4) Certificate of making good defects/final payment certificate (remaining retention).
5) The contractor will then issue this to the client + final invoice.

42
Q

You say the contractor provided a valuation, what would need to happen if they didn’t provide this?

A
  • Firstly I would inform the contractor.
  • CA must still issue a payment certificate within 5 days of due date
  • Then I would undertake the valuation myself
43
Q

What could happen if the contractor issued their valuation, but the CA didn’t issue a payment certificate?

A

Their application become the payment notice and the employer is required to pay that sum.

44
Q

Why did you choose a JCT minor works contract?

A

It was a simple project and didn’t required any of the contractual mechanisms provided by other contracts. Only 7 weeks long.

45
Q

How did you protect your client against deficiencies in the design work?

A
  • I ensured the conractor had sufficent PI insurance
46
Q

How did you undertake a tender analysis?

A
  • Collected all contractors priced sections and reviewed side by side to copared individual costs.
  • Reviewed their programmes
  • Understood what work they had done previously and how best suited theyr were to the contract
47
Q

How frequent were the interim valuations?

A

Monthly

48
Q

How did you determine that the contractor payment application was correct?

A

Review Contractors programme and compared to the works that were actually completed.

Where items could be quantified, these were done by visual inspection.

49
Q

What is detailed within a payment certificate?

A 
Employers details
Contractors details
Contract date 
Valuation date
Due date 
Gross Assessment of works 
Less retention
Less amount prev calculated 
Sum owed
Endorsement
50
Q

What is the rectification period, how long was it?

A

12 months. It proves the employer with some security that the contractor will return to make good any patent defect found.

51
Q

Who’s job is it to spot defects?

A

The contractor

52
Q

What would you do if the works are not deemed to be practically complete.

A
  • issue a certificate of non completion
53
Q

What affect could this have on the contractor.

A

They could be liable for liquidated damages

54
Q

What are LAD’s

A

Liquidated damages are a genuine pre estimate of loss to the employer due to delay. They are not a penalty

Eg 
Rent for LL
Rent for Temporary accom for Tenant
extra running costs
insurance
professional fees
55
Q

What are Interim payments

A

Payments made before the construction works are deemed to be practically complete based on the value of works carried out to date

56
Q

What is the procedure of claiming liquidated damages

A

1) Certificate of non completion.
2) Employers may inform the contractor in writing that they may withhold, deduct or require payment of liquidated damages.
3) The employer may then advise the contractor in writing that the employer is to be paid liquidated damages at the rate stated in the contract particulars, or at a lesser rate if the employer so chooses for the period between the completion date and the date of practical completion.

57
Q

What are the timescales for payment and what is it governed by?

A

The Housing Grants, Construction and Regeneration Act 1996 intended to ensure payments are made promptly throughout the supply chain and disputes are resolved swiftly.

Amended by the Local Democracy, Economic Development and Construction Act 2009 (introduced 2011)

Sets minimum requirements relating to adjudication and payment.

must exceed 45 days to be entitled to stage payments.

*The amount of each payment is based on the value of the work and other costs to which the contractor is entitled during the payment interval.

  • 28 day payment cycles
  • 7 days after the contractor’s interim application

*The CA must give notice within 5 days of the due date, specifying the amount proposed to be paid and the basis on which it is calculated.

Final date for payment is 14 days after the due date

Pay less notice can be submitted 5 days before last day for payment.

58
Q

What are the payment terms set out in JCT

A

Due Date/Valuations date is set out in the contract.

Contractor submits valuation 7 days before the due date.

CA needs to submit interim payment certificate no later than 5 following the due date.

Contractor to be paid within the following 14 days of the due date.

59
Q

Is a Payment notice still required if nothing is to be paid on the due date?

A

Yes.

60
Q

What if the client do not agree with the contractor Valuation.

A

Issue a pay less notice.

61
Q

What is it? And what is the process for a pay less notice?

A

Pay less notice.

Client must issue stating sums that are deducted from the payment

62
Q

What if the CA has not issued the cert in time?

A

Contractor can issue a default payment notice or their payment application becomes an interim payment notice.

The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice.

If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

63
Q

What is a variation

A
  • is an alteration to the scope of works in a construction contract in the form of an addition, substitution or omission from the original scope of works.
64
Q

How would you go above reviewing a cost for a variation to the schedule of works.

A

Compare the cost against pricing docs such as BCIS and Spons or against similar works from other projects.

65
Q

What would happen if the client failed to pay the Contractor interim payments.

A

Contractor could suspend works and claim

However they must provide notice within 7 days if payment not received .

16 Contract Administration (3 decks)

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