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433 > Section 4 > Flashcards

Section 4 Flashcards

Tendering/Contracting

1
Q

What is the role of Government in Construction Law?

A

Regulations, Ordinances, and Bylaws

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2
Q

What is the role of Courts in Construction Law?

A

Charged with interpreting statues, regulations, and local ordinances.

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3
Q

What are the key ingredient (features) of a legally binding contract? Explain each.

A

Offer: Proposal from one party to another.
Acceptance: Undeniable agreement to an offer.
Consideration: Something of value given or promised by each party.
Capacity: legally having the ability to enter into a contract.
Rightful Purpose: contract for legally acceptable purpose.

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4
Q

What are the types of damages?

A

Direct: cost of repair
Consequential: Damages indirectly as a result.
Liquidated: parties agree prior the cost if rhere is a contract breach.
Punitive

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5
Q

What types of Dispute Resolution are there?

A 
Courts
Litigation
Arbitration
Mediation
Negotiation
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6
Q

Draw the Tendering diagram

A

Offer: Call for Tender
Acceptance:Submission of Tenders, Contract A & Bid Bond
Award of Contract, Termination of Contract A, Contract B & Performance Bond.
Completion of Contract.

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7
Q

What is Bidder Pre-qualification?

A

To assess the capacity of potential tenderers to perform the requirements of a forthcoming contract and is carried out before the commencement of negotiations or bidding process.

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8
Q

What is an Alternate?

A

A request for a price for substituting one material for another, or adding or subtracting from the scope of the project.

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9
Q

What is an Addenda?

A

A change in the documents made during the bidding phase, before contract acceptance.
Design documents can be released prior to completion and the Addenda completes them.

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10
Q

What is in the Invitation to Bid?

A 
Project Description
Location
Bid due date
Start and completion dates
Bonding requirements
legal requirements
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11
Q

What are the key steps during bidding procedures?

A 
Offer to Tender by Owner (Tender Call)
Amendments to Tender Call (Addenda) 
Pre-Tender Meeting with Contractors
Receipt and Opening of Tenders
Tender Review
Contractor's Evaluation
Contract Awarded
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12
Q

What do you do if lowest tender is ‘too low’?

A 
Review your estimate/budget
Compare to other bids
Request bidder to review his bid
If he insists its right then; get it in writing, warn him, consider taking next best, consult legal
Bidder cannot raise price.
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13
Q

What do you do if the lowest bid is ‘too high’?

A

First; Review bidder’s estimate
Second; Negotiate on minor changes in scope
Third; Invite 3 lowest bidders to re submit
Fourth; Re-invite all bidders, when changes to scope are substantial.
Fifth; Recall the public tender

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14
Q

What is a BOOT Contract?

A

Build Own Operate Transfer

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15
Q

What is a Turnkey Contract?

A

The project is completed and necessary operators trained by Contractor so that the product is ready for use upon contract completion.

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16
Q

What is a Bond?

A 
An agreement between 3 parties: 
The Principal (Contractor)
The Surety (Bonding Company)
The Obligee (Owner)
The Surety becomes liable to the Obligee if the Principal defaults. The Surety guarantees the Obligee payment of losses up to the Bond value.
17
Q

What are the main types of Bonds?

A

Bid Bonds
Performance Bonds
Labour and Material Payment Bonds

18
Q

What is a Bid Bond?

A

Guarantees the selected contractor will enter into a contract with the owner for the bid price.
It is security required to submit with tender.

19
Q

What is a Performance Bond?

A

Guarantees the contractor will perform the work in accordance with the terms of the agreement.
If the contractor cannot complete then the Surety will.

20
Q

What is a Payment Bond?

A

Guarantees the contractor will pay all the bills

21
Q

Before a claim can be made on a performance bond…

A

The Principal must be in default under the contract.
The Principal must be declared to be in default under the contract by the Obligee.
The Obligee must have performed its obligations under the contract.

22
Q

How can the Surety complete the contract?

A

Complete the contract its self

Obtain bids from other contractors to submit to the Obligee for completing the work.

23
Q

What is a Labour and Material Bond?

A

Required on Gov. contracts
The Principal will pay all claimants defined in the bond for labour and materials used in the performance of the bonded contract.

24
Q

What is the Bid Bond limits?

A

5% or 10% of the tender price

25
Q

What is the Performance Bond limits?

A

50% or 100% of the contract price

26
Q

What is the L&M Bond limits?

A

50% or 100% of the contract price

27
Q

What are some examples of property exposure?

A

Fire
Windstorm, hail, flood, earthquake
Theft, vandalism, malicious damages
Transportation accident

28
Q

What are some Project Insurances?

A 
Builder's Risk Insurance (construction insurance)
Installation Floater (covers subcontractor's work)
29
Q

What does Builder’s Risk Insurance cover?

A 
Fire
Lightning
Explosion
Vandalism
Smoke
Theft
Collapse
30
Q

What does Builder’s Risk Insurance generally NOT cover?

A 
Cost of bad workmanship, faulty material
Mech. or Elec. breakdown
Dishonesty of employees
wear and tear
freezing
31
Q

What is an Installation Floater?

A

Covers subcontractors

Issued annually and covers all projects that year.

32
Q

What are the Owner’s Contractual Obligations?

A 
Make site available
Owner-supplied materials
Design Responsibly
Timely approvals
not to interfere with method of execution
issue change orders
33
Q

What are the Engineer’s contractual obligations?

A

prepare design specs and drawings
prepare bid documents
assist in procurements
oversee execution and maybe inspection

34
Q

What are the Contractor’s contractual obligations?

A

Build the project according to specs, time, budget

comply with laws and regulations

35
Q

What are the main roles of Contracts, Drawings, and Specifications?

A 
Define roles and responsibilities
Assign risks
Specify work to be done
Basis for performance measurement and payment
Define working relations
36
Q

What should NOT be on drawings?

A

Who does work
specifications
references to building codes

37
Q

What are the specifications for?

A

Defining the qualitative and quantitative requirements of the project.
Designed to compliment the drawings.

38
Q

What if the drawings are inconsistent?

A

Find out what was the intent
Determine ‘reasonableness’ of situation
Clarify intent in writing

39
Q 
Which takes precedence:
Specs over drawings?
large scale over small scale drawings?
recent over older documents?
general conditions over specs?
A

Specs
Large scale
Recent
General conditions

433 (9 decks)

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