Other

Question 1

Who typically benefits from interest accruing on retention money?

Answer 1

Client

Question 2

What is public liability insurance?

Answer 2

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

Question 3

What is employer liability insurance?

Answer 3

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

Question 4

What is product liability insurance?

Answer 4

Protects the policyholder against liability, resulting in defective products

For example, faulty cladding panels

Question 5

What is contractors all risk (CAR) insurance?

Answer 5

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

Question 6

What provisions does NEC offer with regards to taking over part of the works?

Answer 6

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

Question 7

Can you name some of the NEC X clauses?

Answer 7

X5 - Sectional Completion
X7 - Delay Damages
X8 - Undertaking to Others
X14 - Advance Payment
X16- Retention

Question 8

What documents make up an NEC contract?

Answer 8

Contract conditions
Contract data
Schedule of Amendments
Scope / Works Information
Activity Schedule / BOQ
Programme
Bonds / Insurances

Question 9

What kind of information would you expect to find in CD Pt 1?

Answer 9

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)

Question 10

What information would you expect to find in CD Pt 2?

Answer 10

Information to be provided by the Contractor:
- Contractor details
- Fee %
- Tendered total of prices
- Programme included in contract
- Where the activity schedule is located

Question 11

When might you use the Shorter Schedule of Cost Components? What would be included?

Answer 11

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

Question 12

When might you use the Schedule of Cost Components?

Answer 12

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

Question 13

What should an NEC contract programme contain? What would you expect to see on a programme?

Answer 13

Access Date / Start date
Key dates (for critical path)
Planned Completion Date
Completion date
Total float / time risk allowances

Question 14

What conditions can you withhold money from the contractor, under an NEC contract?

Answer 14

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

Question 15

What would classify as a Compensation Event under an NEC contract?

Answer 15

Adverse Weather
Change in Scope
Client retained risks
Any changes in decision
Conditions that would not have been reasonably foreseen by an experience contractor

Question 16

When would you assess a Compensation Event from?

Answer 16

The Dividing Date

Question 16

What is the defects date?

Answer 16

The defects date would be outlined in the contract, and would be the last date of the defects rectification period

Question 17

What is the dividing date?

Answer 17

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

Question 18

What options are available to the client if the works complete early?

Answer 18

Aware under JCT this can be “partial possession”
Aware under NEC this is “takeover”

Question 19

Where can you add additional compensation events?

Answer 19

Either through the contract data part one or the z clauses

Question 20

Under an NEC contract, if the contractor was due to finish early, does the client have to take over the building early?

Answer 20

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

Question 21

Under an NEC contract, when is the defect certificate issued?

Answer 21

The later of the defects date OR;
When the last defect is rectified

Question 22

Under NEC Option C, what is a disallowed cost?

Answer 22

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

Question 23

Can you give us a comparison of NEC 3 vs 4

Answer 23

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

Question 24

What certificates are you aware of under an NEC contract?

Answer 24

Termination
Take over
Payment
Defects
Completion

Question 25

What is the NEC Assessment Interval?

Answer 25

The interval in which payment assessments must be made
In my experience, these have been either calendar months or 4 weeks

Question 26

What are the W clauses under NEC?

Answer 26

Options for resolving disputes
In my experience this has always been Option W2 - when the construction act applies

Question 27

What are the Y clauses under NEC?

Answer 27

Relates to what acts apply to construction contract:
PBA
HGCRA
Rights of Third Parties Act