Other Flashcards
Who typically benefits from interest accruing on retention money?
Client
What is public liability insurance?
Protects against liabilities for injury to 3rd parties or their property
For example, if a brick fell on someone’s car, or if a member of the public tripped over an unsecured cable
What is employer liability insurance?
Can pay the compensation amount and legal costs if an employee claims compensation for work related illness or injury
For example, if someone fell from height on site
What is product liability insurance?
Protects the policyholder against liability, resulting in defective products
For example, faulty cladding panels
What is contractors all risk (CAR) insurance?
Coverage for the costs associated with repairing or redoing construction works that have been damaged by any insured event
For example, heavy rainfall damages materials or a fire damages part of the works
What provisions does NEC offer with regards to taking over part of the works?
takeover
NEC provides provision for the client to take over the works if the contractor finishes ahead of schedule
client does not have to take over the works, and this would be clearly defined in the contract data if they would or would not take over early
Can you name some of the NEC X clauses?
X5 - Sectional Completion
X7 - Delay Damages
X8 - Undertaking to Others
X14 - Advance Payment
X16- Retention
What documents make up an NEC contract?
Contract conditions
Contract data
Schedule of Amendments
Scope / Works Information
Activity Schedule / BOQ
Programme
Bonds / Insurances
What kind of information would you expect to find in CD Pt 1?
Information to be provided by the Client:
- Client details
- PM / SM details
- Delay Damages
- Retention amount / %
- Key dates / completion
- Start / access date
- Payment intervals / details
- Share % (NEC Option C - E)
What information would you expect to find in CD Pt 2?
Information to be provided by the Contractor:
- Contractor details
- Fee %
- Tendered total of prices
- Programme included in contract
- Where the activity schedule is located
When might you use the Shorter Schedule of Cost Components? What would be included?
Used in Options A and B contracts
Used to assess the value of Compensation Events
May include people, equipment, plant and materials, subcontracted works, design & fee %s
When might you use the Schedule of Cost Components?
Used in Options C, D and E
Used to assess the value of Compensation Events, and each interim application
May include people, equipment, plant and materials, subcontracted works, design & fee %s
What should an NEC contract programme contain? What would you expect to see on a programme?
Access Date / Start date
Key dates (for critical path)
Planned Completion Date
Completion date
Total float / time risk allowances
What conditions can you withhold money from the contractor, under an NEC contract?
If the contractor does not submit their first programme, 1/4 of the prices of work done to date can be withheld
If the contract conditions state monies can be withheld, for example, if collateral warranties have not been provided
What would classify as a Compensation Event under an NEC contract?
Adverse Weather
Change in Scope
Client retained risks
Any changes in decision
Conditions that would not have been reasonably foreseen by an experience contractor
When would you assess a Compensation Event from?
The Dividing Date
What is the defects date?
The defects date would be outlined in the contract, and would be the last date of the defects rectification period
What is the dividing date?
Not a defined term in the contract, but:
The dividing date is defined as the date in which the communication of a CE was initiated, i.e the NCE issue date
What options are available to the client if the works complete early?
Aware under JCT this can be “partial possession”
Aware under NEC this is “takeover”
Where can you add additional compensation events?
Either through the contract data part one or the z clauses
Under an NEC contract, if the contractor was due to finish early, does the client have to take over the building early?
Depends what has been stated in the contract data
Client can chose whether or not they are willing to take over the building early, but they do not have to
Under an NEC contract, when is the defect certificate issued?
The later of the defects date OR;
When the last defect is rectified
Under NEC Option C, what is a disallowed cost?
A cost that is not due to the contractor due to reasons outlined in the contract. For example:
- Not justified by contractors records or accounts
- Should not have been paid to a subcontractor in accordance with their contract
- Was only incurred because the contractor didn’t give an early warning or do something in accordance with the scope
Can you give us a comparison of NEC 3 vs 4
Terminology has changed, i.e “Employer” now “Client”, “works info” now “scope”, “risk register” now “early warning register”
NEC3 didn’t address what happens if a PM does not accept a programme (i.e just forgets), whereas NEC4 states contractor must prompt for a response if nothing has been received in 2 weeks, and if no response is received after a further 1 week, programme is deemed as accepted
NEC3 did not put onus on the contractor to submit a payment application, and the PM would have to assess the works. Now in NEC4, it puts a positive obligation on the contractor to submit a payment application, as the PM can assess the lesser of two options: what was due at previous application, or what is due at this application as if contractor had submitted by assessment date
NEC3 did not allow contractors to recover the cost of preparing CE’s whereas not allows for this cost to be recovered
NEC3 only provided provision for Retention %, whereas NEC4 allows for the option of a Retention Bond
What certificates are you aware of under an NEC contract?
Termination
Take over
Payment
Defects
Completion
What is the NEC Assessment Interval?
The interval in which payment assessments must be made
In my experience, these have been either calendar months or 4 weeks
What are the W clauses under NEC?
Options for resolving disputes
In my experience this has always been Option W2 - when the construction act applies
What are the Y clauses under NEC?
Relates to what acts apply to construction contract:
PBA
HGCRA
Rights of Third Parties Act
