***Mock (WW and JL) 14.05.24 (Forwarded Questions) Flashcards
SDM: Partial Possession when only ‘defects’ were left? Shouldn’t this be PC?
No.
The works were not complete to the extent that the client could take full ‘beneficial occupation’ therefore only Partial Possession was certified.
IE:
-Electronic remote controls of pedestrian and lock gates were not in operation (reprogramming and cabling still required)
-Lock gates still required ‘worn parts’ to be replaced
-O&M Manuals had not been finalised
-H&S File had not been finalised
-Temporary shut down of gates for a period required to allow contractor to finish Lock Gate repairs.
The whole site formed the area consisting of the ‘partial possession’ to allow full control of the site which was needed (consequently the whole site reverted back to the client’s insurance)
Key Issue 1: Option 3 - How did this achieve for money in comparison with the other options?
Value for Money in this situation would be defined as: meeting the goals and priorities of the client at the lowest cost
Risk (and time) were the fundamental factors here. The risk was too great for Options 1 and 2 (as indicated in my considerations) - the result of this failure would be additional time and money spent whilst not maintaining quality.
Therefore, Option 3:
Minimal additional cost
Minimal additional time
Minimised loss of quality
This saving could then contribute to the costs of furniture procurement.
More detail?:
Value for Money in this situation would be defined as: meeting the goals and priorities of the client at the lowest cost - this being minimising impact on time and quality whilst also ensuring that costs are reduced.
It was shown that time was best met by the recommended option however quality was better met by options 1 or 2 if they were successful - the likelihood of success was rated as low, therefore the benefits to quality would not be obtained. The result therefore would have been spending more time and money whilst at the same time lowering quality - this is a worse outcome for VfM compared to Option 3 where little time and cost was expended and this saving could then contribute to the time and costs of furniture procurement.
Key Issue 2: Requirement stated in options for ‘redesign/rescope’ with cost impact - why have you included a cost impact when it was the designer at fault?
The ‘erroneousness’ of the original scope was relayed to senior colleagues which became a matter for them and the client to resolve.
My role was to develop advice based on my competencies and scope of action.
i therefore determined that I needed to proceed on the basis of acting within the moment and how the works could be carried forward. I was not to pre-judge what was legally right or wrong (outside awareness of facts and professional competency) - my determination was to arrive at a recommendation that could be seen as making the most out of the situation which would also be looked upon favourably by a dispute body as minimising damage for the client and possible claims against the consultancy.
When developing and presenting my proposals I and the client were aware of the potential legal implications between Ridge and the Client and that my recommendations were subject to the potential legal implications.
The final decision on what action to take based on my proposals was ultimately a question for the Client considering this background. Legal implications and eventual allocation of costs was a matter which would need to be considered separately and potentially at a later stage in the interests of salvaging the project.
Key Issue 2: Termination - on what basis and what procedure would termination be implemented?
Based on Frustration: Unforeseen event renders performance impossible, leading to automatic termination.
Based on Vitiated Contract: Void due to defects like misrepresentation (with remedies outlined in the contract terms???)
Procedure:
-No specific clause addressing frustration as frustration is a common law doctrine. Parties would rely on common law principles rather than clauses.
-The legal consequence of a contract which is found to have been frustrated is that the contract is automatically terminated at the point of frustration.
-A Notice would therefore be issued by the Client to the Contractor identifying that Frustration has occurred (giving reasons) and that the contract is automatically terminated at the point of frustration (when it was identified the erroneous scope).
-If the Contractor wished to dispute this, they could call upon clause 8.9.2.2 (impediment by Client; continuous period of suspension) and Terminate contract on those ground with right to claim for damages.
An Order of Cost Estimate - what are the constituents? (Note - this the same as a cost plan but with less breakdown of costs ie subcost levels)
Ref Key Lists Flashcards
BM:
-How was L&E claimed? (heads of claim)
-How did you assess the claim? (reasons ie Relevant Matter)
-What was the process for agreeing the claim? (first 2 questions plus - programme, costs, contract process)
Claimed:
Contractor notify as soon as becomes apparent
Submit costs
Further submissions as required
CA within 28 days, subsequent iterating within 14 days
Assessment:
Heads of Claim:
As Guidebook Decks - acronym
Assessment:
Relevant Matter:
As Guidebook Decks - acronym
Assessment:
When claim items have passed the Heads of Claim, and the Relevant Matter Claim, test:
-Programme implications valid?
-Cost claims valid?
Then agree costs
Broadly, how is a loss and expense claimed and evaluated in relation in respect of variations? (what must the claim establish?)
[from Grad Dip notes]
When there is a claim for direct loss and/or expense arising under JCT, clause 26.2.7, in respect of a variation, the contractor’s claim must establish the following:
-The an instruction amounting to a variation has been properly issued and carried out by the contractor
-The date of issue and receipt of the variation instruction
-The content of the variation
-The time at which it was necessary to carry out the work contained in the instruction
-That the carrying out of the variation instruction unavoidably affected regular progress of the work
-The extent to which the work was affected as a direct result of the carrying out of the variation which must be more than trivial
-Appropriate evidence of the direct loss and/or expense suffered or incurred directly resulting from the variation
-That the contractor made a proper and timely written application to the architect in respect of direct loss and/or expense.
What was the nature of the supporting evidence when the L&E claim was made?
[from Grad Dip notes]
Firstly, it was the ‘actual’ loss and/or expense, and not figures taken from the BoQs or other indices.
Detailed cost records and comparative programme/progress schedules will be necessary, together with references to correspondence, records of the site meetings, site diaries and the like.
Cost Records - timesheets, plant time, materials, - all clearly referable to the particular disruption or event
Programmes/schedules - able to refer to (how disrupted); progress that could have been achieved
Correspondence
Records of site meeting - which prove a contractor claim
Site Diaries eg site manager/clerk of works (evidence to progress)
A SCOTT SCHEDULE is most organised method.
What does it mean ‘loss’ in a ‘loss and expense’ claim?
Loss:
A result of:
-Disturbance to regular progress
-Full an uninterrupted possession of the site and full information as and when - is disturbed
Entitlement:
-Reimbursement of loss of PROFIT ON OTHER WORK which he might have been performing with the CAPACITY which he has had tied up against his will. [drop in productivity]
-Needs to demonstrate a reasonable likelihood that he could have been so engaged.
-Show that he is running with a reasonably full order book across the contract period and beyond, so that his prime resources are adequately committed without the disturbance element now in question.
Name a formulaic method for calculating overheads in an L&E claim? (can also be used to calculate loss of profit)
Hudson Formula:
The below is wrong?:
Head Office (and profit) % / 100
x
Contract Sum
x
Period of Delay (wks) / Contract Period (wks)
BM: Would you have accepted the submitted tender if it did not include the addendum amendment? (public Client)
As a public client - no.
If a private client - referred to the client for their acceptance or not.
What’s the difference between Adjudication and Arbitration?
Arbitration is binding and it can be a much longer and more formal process and both parties need to agree to enter into it and agree the terms.
Adjudication involves the quick resolution of disputes between parties where an adjudicator hears the outline of both sides of the argument and makes a fast decision within 28 days (or 42, days extended).
What is a ‘Dispute Board’?
A dispute board is a contractual form of dispute resolution procedure. It typically consists of one or three members, whose powers to resolve disputes are set out in the contract or relevant dispute board rules. The dispute board may be formed on an ‘ad hoc’ basis when a dispute arises, or at the outset of a project as a ‘standing’ dispute board.
Dispute boards typically fall into one of three broad categories:
a dispute review board (DRB), which issues informal advice and non-binding recommendations;
a dispute adjudication board (DAB), which issues binding decisions;
JCT has now issued its 2021 dispute adjudication board document, which is Construction Act compliant.
Key Issue 2 (JL and WW):
Option 3:
-was this really an advised option?
-how was this option implemented?
-wouldn’t a formal agreement be required? (amending contract)
-what ‘understanding’ was reached/agreed?
-how was this collaboration/cooperation from the contractor ‘enforced’?
Yes. Using contractual mechanisms ‘in isolation’ was too IMPRACTICAL, ie on THEIR side in ‘isolaton’ for preparing variations:
-THEIR cost assessments
-THEIR EoT assessments
-THEIR L&E assessments
–THEIR programme changes
(ALL THE ABOVE CONTINUOUSLY BEING UPDATED AND ISSUED FOR AGREEMENT AND APPROVAL)
On MY side in ‘isolation’ for reviewing and agreeing/or rejecting on the basis of:
-MY cost assessments
-MY EoT assessments
-MY L&E assessments
-My review of acceptable programme changes.
(AGAIN, ALL THE ABOVE CONTINUOUSLY BEING UPDATED. REVIEWED, AGREED OR REJECTED)
How advised:
Discussed with contractor and agreed collaborative working based on sharing information, risk, and collaborative working:
-Joint ownership of AFA
-Joint ownership of Cost Reports and reporting at weekly client meetings
-agreeing that the FA will not exceed budget (through joint ownership including all cost elements ie varitions, EoT, claims)
-Any claims for L&E or EoT would now no longer apply and replaced with Time at Large and variation costs based on Open Book Accounting (contractor costs and profit protected) where divergences from contract rates WERE REQUIRED.
-Compiled and compiling variations would be budgeted on contract rates (to obtain a budget AFA and projected prolongation) and firmed up on priority basis (programming requiring Instruction). Management of budgeted items items based on AFA and the VE/Scope Reduction measures required.
Wouldn’t formal agreement/amendment of contract be required - no:
-Contractor and Client can agree between themselves within contract conditions what costs to agree, what additional time to accept
-actions and agreements minuted in weekly progress meetings and discussion of the joint owned AFA document
-actions and agreements recorded on email exchanges
How enforce? - Not a matter of enforcement (contractor’s profits will be protected); additional contractor resource (management) obtained and paid for.
What’s the incentive/discipline for the contractor to cooperate in this manner? - Contractor has a wider relationship/commitment with the Client on other projects
What was the ‘understanding’? - WW: Can say, operated on understanding that contractor’s costs/profit will be accommodated when required - a COLLABORATIVE RELATIONSHIP!
The following Flashcards derive from the Questions List document Will sent me after the interview.
Key Issue 1:
One of the predominant roles of a QS is to ensure the Client achieves VfM. It appears that the Option recommended may in fact be the least VfM, can you explain your rationale.
Value for Money in this situation would be defined as: meeting the goals and priorities of the client at the lowest cost
Risk (and time) were the fundamental factors here. The risk was too great for Options 1 and 2 (as indicated in my considerations) - the result of this failure would be time and money spent whilst not maintaining quality.
Therefore, Option 3:
Minimal additional cost
Minimal additional time
Minimised loss of quality
This saving could then contribute to the costs of furniture procurement.
More detail?:
Value for Money in this situation would be defined as: meeting the goals and priorities of the client at the lowest cost - this being minimising impact on time and quality whilst also ensuring that costs are reduced.
It was shown that time was best met by the recommended option however quality was better met by options 1 or 2 if they were successful - the likelihood of success was rated as low, therefore the benefits to quality would not be obtained. The result therefore would have been spending more time and money whilst at the same time lowering quality - this is a worse outcome for VfM compared to Option 3 where little time and cost was expended and this saving could then contribute to the time and costs of furniture procurement.
Key Issue 1:
The case study suggests that re-tendering would result in reduced costs compared to the £100k increase. Can you explain how you came to this understanding?
And if the selected Contractor wasn’t offering VfM, was there anything that could have been done with them to agree a cost?
In the original tender the winning contractor was not the lowest cost - the lowest cost was circa £80k lower which suggested another tender could reduce costs (however quality may be sacrificed). WHAT WAS THE PTE???
The case study was reviewing options that were possible, however, no guarantee of success.
This ‘understanding’ was discussed in the consideration where it could be possible but unlikely. The review of the option discussed that this was the hoped for outcome however it was unlikely (without restricting scoring to just just price - which would reduce quality).
If we are talking about the original winning contractor - there was no mention that their uplift resulted in the them not being VfM - rather, because of the increase in prices over the period, their cost increases were justifiable. Re-tendering would therefore be the hope that greater VfM could be achieved (although considered unlikely).
In terms of anything being done - well, I had discussed with them lowering costs but this impacted on their profitability. In the end, we reduced the scope and agreed changing specifications to get costs down (retaining quality, VfM, but omitting furniture - sacrifice for time wasting and fee costs for other options - not value for money!)
Key Issue 1:
Is there anything else you could have done to provide the Client with more information to allow for clearer decision making? (Provide a cost estimate for professional fees etc?)
For Option 1 and Option 2, for both the additional fees were of comparable costs to the original fee proposal costs for works to get to these stages - which was mentioned to the client. In the best interests of speed and not expending resource on further investigation into consequences, it was better (VfM) that I investigate the options at high level. If it became apparent that any options were difficult to separate in terms of positive outcome then further investigation would be warranted. In this case, I judged I had enough information to convey to the client the preferred option and the reason I proposed it. If the Client wanted further information based on the information I presented then I would have done this however the client would be informed that this would take more time and confirmation of fees (senior approval).
Key Issue 2:
Under key issue two, you have stated additional professional fees for carry out Option 2. Can you talk me through your advice in relation to this, given the fact the design team have proposed a design that doesn’t meet the Client’s brief? (Ie, why should the Client pay additional fees to redesign a new project when the design team did a terrible job in the first place)
Option 2 - Re-Tender Additional Works.
The ‘erroneousness’ of the original scope was relayed to senior colleagues which became a matter for them and the client to resolve.
My role was to develop advice based on my competencies and scope of action.
i therefore determined that I needed to proceed on the basis of acting within the moment and how the works could be carried forward. I was not to pre-judge what was legally right or wrong (outside awareness of facts and professional competency) - my determination was to arrive at a recommendation that could be seen as making the most out of the situation which would also be looked upon favourably by a dispute body as minimising damage for the client and possible claims against the consultancy.
When developing and presenting my proposals I and the client were aware of the potential legal implications between Ridge and the Client and that my recommendations were subject to the potential legal implications.
The final decision on what action to take based on my proposals was ultimately a question for the Client considering this background. Legal implications and eventual allocation of costs was a matter which would need to be considered separately and potentially at a later stage in the interests of salvaging the project.
Key Issue 2:
Under option 3, please explain what you mean by the contract mechanisms not being adequate to come to an agreement with the Contractor, and what was the process you use instead?
Using contractual mechanisms ‘in isolation’ was too IMPRACTICAL, ie on THEIR side in ‘isolaton’ for preparing variations:
-THEIR cost assessments
-THEIR EoT assessments
-THEIR L&E assessments
–THEIR programme changes
(ALL THE ABOVE CONTINUOUSLY BEING UPDATED AND ISSUED FOR AGREEMENT AND APPROVAL)
On MY side in ‘isolation’ for reviewing and agreeing/or rejecting on the basis of:
-MY cost assessments
-MY EoT assessments
-MY L&E assessments
-My review of acceptable programme changes.
(AGAIN, ALL THE ABOVE CONTINUOUSLY BEING UPDATED. REVIEWED, AGREED OR REJECTED)
The Process instead:
Discussed with contractor and agreed collaborative working based on sharing information, risk, and collaborative working:
-Joint ownership of AFA
-Joint ownership of Cost Reports and reporting at weekly client meetings
-agreeing that the FA will not exceed budget (through joint ownership including all cost elements ie varitions, EoT, claims)
-Any claims for L&E or EoT would now no longer apply and replaced with Time at Large and variation costs based on Open Book Accounting (contractor costs and profit protected) where divergences from contract rates were required.
-Compiled and compiling variations would be budgeted on contract rates (to obtain a budget AFA and projected prolongation) and firmed up on priority basis (programming requiring Instruction). Management of budgeted items items based on AFA and the VE/Scope Reduction measures required.
Key Issue 2:
Under option 3, did you advise the Client on any issues with requesting an open book approach with the contractor mid-way through a project, if so, what were they?
I advised the client on the proposed process, how this could be agreed and implemented as follows: ????????…….explained impracticality, how overcome, measures required, their involvement required, any risks and assurances involved, best and worst outcome.
What works would be subject to ‘open-book’ - those works which were still ‘budgeted’ by contract rates and formal agreement (with Instruction and cost stated) not yet achieved - to these items, whenever the contractor stated they needed to increase costs to maintain profit (and hence submission of evidence of costs/payments - open book).
Wouldn’t formal agreement/amendment of contract be required - no:
-Contractor and Client can agree between themselves within contract conditions what costs to agree, what additional time to accept
-actions and agreements minuted in weekly progress meetings and discussion of the joint owned AFA document
-actions and agreements recorded on email exchanges
How enforce? - Not a matter of enforcement (contractor’s profits will be protected)
What’s the incentive/discipline for the contractor to cooperate in this manner? - Contractor has a wider relationship/commitment with the Client on other projects
What was the ‘understanding’? - WW: Can say, operated on understanding that contractor’s costs/profit will be accommodated when required - a COLLABORATIVE RELATIONSHIP! - [review and discussion of AFA and programme in weekly progress meetings]
Key Issue 2: [SH: NEED TO GET TO THE BOTTOM OF L&E/TERMINATION COST CLAIMS!!!]
You have mentioned a potential impact on terminating the project to be ‘loss of profit’ to the Contractor. Can you please explain the process you would have gone through to determine what this was.
ALSO- ESTIMATE OF LOSS???
Loss of profit through Termination:
L&E claim based on VIASI (particularly SI ie Suspension, Impediment by Client).
Heads of Claim for L&E are PTUIOPFAC (loss comes under U and P ie Underemployment of plant or labour; Loss of profit.
The contractor would have notified the client of the claim - what based on and where losses occured. This then followed by substantiation of loss of profit incurred eg:
-The elements of contract works would have had a % addition for OHP (% for each known) and this % addition for profit only would be the baseline profit (together with Preliminary items profit).
-If the works are ‘cut’ short, …..
Cost checks based on:
timesheets; staff grades and rates; project codes; payroll burden; invoices; subcontract accounts; applications and payments; materials invoices; dates; rates; quants; delivery tickets; etc
THE FOLLOWING FROM LEVEL 1 TECHNICAL COMPETENCY FLASHCARDS:
Identify overhead costs.
Allocate costs to the event.
Determine allocation basis.
Maintain detailed records.
Apportion costs to affected period.
Quantify additional costs.
Document event impact comprehensively.
Ensure accuracy and support.
Substantiate claim for loss and expense.
Enhance chances of successful resolution.
Document baseline profit.
Assess event impact on profitability.
Quantify profit loss.
Document causation.
Demonstrate mitigation efforts.
Consider expert analysis.
Ensure comprehensive documentation.
Increase claim resolution likelihood.
