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D39PZ Procurement & Contracts Course Consolidation- Revision and Mock Exam feedback

(From Tutors Pack)

Purpose of the Tutorial Session:

Provide feedback to the students on the mock exam and an overview of learning from the course and opportunity to gain feedback from the students regarding their learning experience overall and through each unit of the course.

Tutorial Session Plan:

Session will be run in two phases, 1- mock exam feedback. Phase 2, tutor facilitated group discussion on he students learning experience.

Introduction and explanation of the session (10 minutes)

Explain to the students the purpose of the session and how the session will be run.

Phase 1 (60 minutes)

Provide individual and group feedback to the students discussing the mock exam suggested solution and the key issues for learning.

Comfort Break- (10 minutes)

Phase 2 (30 minutes)

Tutor to facilitate group discussion with the students to gain feedback on their learning experience from the course.

Tutorial Questions:

SCHOOL OF THE BUILT ENVIRONMENT Procurement and Contracts Course Code: D39PZ MOCK EXAM PAPER Semester 1 - 2011/12

Date: 22 nd November 2011

Time: 2hrs

Answer THREE questions:

Answer at least ONE question from Section A Answer at least ONE question from Section B Answer a further question from either Section A or Section B

All questions carry equal marks

THIS PAPER IS INTENDED TO TEST STUDENTS’ UNDERSTANDING OF THE COURSE AND PREPARE THEM FOR THE EXAM. THOUGH NOT MANDATORY, STUDENTS ARE ENCOURAGED TO ATTEMPT THE PAPER TO THEIR BEST ABILITY. NOTE: THIS PAPER DOES NOT GIVE INDICATION TO THE SUBJECT AREA OF THE EXAM QUESTIONS WHICH WILL BE IN THE ACTUAL EXAM NEITHER DOES THE ACHIEVED MARKS CONTRIBUTE TO THE FINAL (COURSE) GRADE.

SECTION A

Question 1

a) An experienced business client intends to construct a building to accommodate the research and development activities of his organisation. The technically complex nature of the project requires sophisticated features to be incorporated in to the design and construction of the intended building. Critically evaluate the suitability of the traditional procurement route to deliver this building.

(17 marks)

b) A client wishes to undertake the construction project through the traditional procurement route. Consider each stage of the RIBA Plan of Work and explain the role of professional design team within each stage.

(16 marks)

Question 2

a) Describe the key features of the traditional procurement route and advise the client about the situations in which a client’s use of the traditional procurement route would be appropriate.

(15 marks)

b) Compare and contrast the three payment methods that are often used with the traditional procurement route. Recommend one of these methods for a client who wishes to encourage the contractor to innovate and explain why this method is appropriate.

(18 marks)

Question 3 You are a chartered construction professional currently working as the Contract Administrator of an on-going construction project. You realise that the Employer unnecessarily disrupts the interim payment certification process by asking you to delay the certification. Explain what you would do. Support your planned actions with reference to the relevant RICS Core Values, CIOB Code of Conduct, or any other professional standards you consider relevant.

(33 marks)

SECTION B

Question 4

a) Explain what is meant by damages. Differentiate between the liquidated and

unliquidated damages with typical examples from construction projects.

(20 marks)

b) Discuss the importance of using an executed contract instead of a letter of intent to begin a construction project.

(13 marks)

Question 5

a) Explain the process to be adopted in carrying out a Gross Valuation under the ‘JCT 2005

Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(23 marks)

b) Describe what Employer can do if Contractor is not progressing the Works as agreed in the contract. Describe the Employer’s course of action in accordance with the terms of the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(10 marks)

Question 6

a) Differentiate between domestic sub-contractors and listed sub-contractors.

(6 marks)

b) Explain the process of selecting and appointing listed sub-contractors under the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(16 marks)

c) Explain what is meant by an ‘Acceleration Quotation’ under the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(11 marks)

Suggested Solutions

THIS PAPER IS INTENDED TO TEST STUDENTS’ UNDERSTANDING OF THE COURSE AND PREPARE THEM FOR THE EXAM. THOUGH NOT MANDATORY, STUDENTS ARE ENCOURAGED TO ATTEMPT THE PAPER TO THEIR BEST ABILITY. NOTE: THIS PAPER DOES NOT GIVE INDICATION TO THE SUBJECT AREA OF THE EXAM QUESTIONS WHICH WILL BE IN THE ACTUAL EXAM NEITHER DOES THE ACHIEVED MARKS CONTRIBUTE TO THE FINAL (COURSE) GRADE.

PLEASE NOTE THAT THE FOLLOWING ANSWERS ARE NOT A FULL SET OF ANSWERS FOR THE GIVEN QUESTIONS. THE ANSWERS ARE JUST GIVEN UNDER BULLET POINTS. THESE BULLET POINTS ARE USEFUL INDICATIONS OF HOW YOU COULD STRUCTURE THE ANSWERS.

IMPORTANT DESPITE THE POINTS IDENTIFIED IN THIS DOCUMENT STUDENTS ARE ENCOURAGED TO BRING OTHER RELEVANT IMPORTANT POINTS TO ENHANCE/JUSTIFY THEIR ANSWERS. MARKS WOULD BE AWARDED DEPENDING ON THEIR RELEVANCE AND ACCURACY.

SECTION A

Question 1

A) An experienced business client intends to construct a building to accommodate the research and development activities of his organisation. The technically complex nature of the project requires sophisticated features to be incorporated in to the design and construction of the intended building. Critically evaluate the suitability of the traditional procurement route to deliver this

building.

(17 marks)

While the student is expected to provide a definition of the traditional procurement route, an explanation of its features, advantages, disadvantages, etc. (6 marks). (6 marks).

The intent of the question is to elicit an analysis of the suitability of the route.of its features, advantages, disadvantages, etc. (6 marks). The core issue is the level of control

The core issue is the level of control that the client wants over the implementation of the project. As the question states that the client is experienced, we can assume that they have procured projects of this type. This will help them to take responsibility for design development themselves (4 marks). (4 marks).

Students may identify the fact that this is a research and development facility and therefore integral to the development of the company’s future products – it is therefore essential efore integral to the development of the company’s future products – it is therefore essential that it functions correctly. The client may want the control that the traditional route will provide to ensure that this will happen (2 marks).

Alternatively, they may want to shield themselves from this risk by passing design / delivery risk to another organisation through the adoption of an alternative route. E.g. management contracting (2 marks). (2 marks).

Students would be expected to mention that any project can be procured using the traditional procurement. However it may take a long time due to its sequential nature (2 marks). (2 marks).

All students should be able to suggest that other procurement routes may be better. For

All students should be able to suggest that other procurement routes may be better. For this particular building, the traditional route will give the client the greatest control over the design development. As the client is experience, this may make it highly suitable (1 mark).

B ) A client wishes to undertake the construction project through the traditional procurement route. Consider each stage of the RIBA Plan of Work and explain the role of professional design team within each stage.

(16 marks)

Identify the different phases of the RIBA plan of work (3 ½ marks) (3 ½ marks)

Identifying three design team members (Architect, Engineer, QS) (1 ½ marks) (1 ½ marks)

Explain role of each professional design team within each stage (1 x 11 marks) (1 x 11 marks)

Students can prepare a table and explain the role or they can explain in paragraphs.professional design team within each stage (1 x 11 marks) RIBA stages Architect Engineer QS Appraisal

RIBA stages

Architect

Engineer

QS

Appraisal

Identification of Employer’s requirements (needs, objectives and business case) (needs, objectives and business case)

Identify any possible constraints on developmentIdentification of Employer’s requirements (needs, objectives and business case)

N/A

May be involved. If so he prepares cost budgetsEmployer’s requirements (needs, objectives and business case) Identify any possible constraints on development N/A

Preparation of feasibility studies to enable the Employer to decide whether to proceedN/A May be involved. If so he prepares cost budgets Design Brief Carry out studies of

Design Brief

Carry out studies of user requirements, site conditions, planning, design etc, asDesign Brief Assist Architect to carry out studies of user requirements, site conditions, planning, design etc,

Assist Architect to carry out studies of user requirements, site conditions, planning, design etc, asnecessary to reach decisions

necessary to reach decisions

Carry out studies of cost to reach decisionsto carry out studies of user requirements, site conditions, planning, design etc, as necessary to reach

Cost check against budgetdecisions Carry out studies of cost to reach decisions necessary to reach decisions Develop initial statement

necessary to reach decisions Develop initial statement of requirements into the Developed Brief (Prepare Final Detailed Brief) Identification of

Develop initial statement of requirements into the Developed Brief (Prepare Final Detailed Brief)

Identification of procedures, organisational structure and range of consultants and others to be engaged in the project (Assist Employer to decide/select the Design Team)to reach decisions Develop initial statement of requirements into the Developed Brief (Prepare Final Detailed Brief)

Sketch design proposals 

 

Concept

Do studies on user requirements, technical aspects, planning, design asConcept Ensure that project is feasible functionally and Prepare preliminary cost plan

Ensure that project is feasible functionally andConcept Do studies on user requirements, technical aspects, planning, design as Prepare preliminary cost plan

Prepare preliminary cost planDo studies on user requirements, technical aspects, planning, design as Ensure that project is feasible functionally

Ensure financial feasibilityfeasible functionally and Prepare preliminary cost plan necessary to reach decisions Develop the brief further if

necessary to reach decisions Develop the brief further if needed (Develop the Developed Brief into a Full Project Brief)

Develop the brief further if needed (Develop the Developed Brief into a Full Project Brief)

Provide the client with an appraisal and recommendation in order that they may determine the form in which the project is to proceednecessary to reach decisions Develop the brief further if needed (Develop the Developed Brief into a

technically Do studies on user requirements, technical aspects, planning, design as necessary to reach decisions

Do studies on user requirements, technical aspects, planning, design as necessary to reach decisions

of the project

Do studies on costs as necessary to reach decisionsof the project

Preparation of concept design including outline proposals for structural and building services systems, outline specificationsDo studies on costs as necessary to reach decisions Design Completion of Project Brief Development of

Design

Completion of Project Brief Development of concept design to include structural and building services systems, updated outline specificationsSubmit proposals for approval (seek detailed planning permission)

Submit proposals for approval (seek detailed planning permission)Brief Development of concept design to include structural and building services systems, updated outline specifications

Prepare preliminarySubmit proposals for approval (seek detailed planning permission) Preparation of cost plan and full explanatory report

Preparation of cost plan and full explanatory reportupdated outline specifications Submit proposals for approval (seek detailed planning permission) Prepare preliminary

Development

design

 

Technical Design

Full design of every part and component of the building by collaboration of all concerned (technical design(s) and specifications)Technical Design Develop technical designs, complete structural details of designs Complete cost checking of designs

Develop technical designs, complete structural details of designsthe building by collaboration of all concerned (technical design(s) and specifications) Complete cost checking of designs

Complete cost checking of designsall concerned (technical design(s) and specifications) Develop technical designs, complete structural details of designs

Production

Preparation of further/detailed information for construction required under the building contract (Prepare final production information i.e. drawings, schedules and specifications) - Final decisions taken on every matter related to design, specification and construction Review of information provided by specialists Review of information provided by specialists

Review of information provided by specialists

Preparation of further/detailed information for construction required under the building contract (Prepare final production information i.e. drawings, schedules and specifications) - Final decisions taken on every matter related to design, specification and constructionand construction Review of information provided by specialists Final decisions taken on every matter related to

Final decisions taken on every matter related to costschedules and specifications) - Final decisions taken on every matter related to design, specification and construction

information

 

Assist employer to compile necessary documents for statutory approvals (eg:- Building Regulations)taken on every matter related to cost information   Tender Assist QS Assist QS Prepare Bills

Tender

Assist QSTender Assist QS Prepare Bills of Quantities Preparation and/or collation of tender documentation in sufficient detail

Assist QS

Prepare Bills of Quantities Preparation and/or collation of tender documentation in sufficient detail to enable a tender or tenders to beTender Assist QS Assist QS

documentation

     

obtained for the project

Tender action

Identify potential contractors and/or specialists for the construction of the projectTender action Identify potential contractors and/or specialists for the construction of the project Hold pre-tender

Identify potential contractors and/or specialists for the construction of the projectHold pre-tender briefing for potential contractors to ensure they have a good project understanding

Hold pre-tender briefing for potential contractors to ensure they have a good project understandingIdentify potential contractors and/or specialists for the construction of the project

Identify potential contractors and/or specialists for the construction of the projectof the project Hold pre-tender briefing for potential contractors to ensure they have a good project

Hold pre-tender briefing for potential contractors to ensure they have a good project understandingHold pre-tender briefing for potential contractors to ensure they have a good project understanding

Hold pre-tender briefing for potential contractors toensure they have a good project understanding

ensure they have a good project understanding

Identification and evaluation of potential contractors and/or specialists for the project. Submission of recommendations to the client Submission of recommendations to the client

Submission of recommendations to the client

Mobilisation

Assist Employer in letting the building contract and appoint contractor Arranging site hand over to the contractor Issuing of information to the contractorMobilisation Assist Employer in letting the building contract and appointing contractor Assist Employer in letting the Mobilisation Assist Employer in letting the building contract and appointing contractor Assist Employer in letting the

Assist Employer in letting the building contract and appointing contractorto the contractor Issuing of information to the contractor Assist Employer in letting the building contract

Assist Employer in letting the building contract and appointing contractorIssuing of information to the contractor Assist Employer in letting the building contract and appointing contractor

Construction to

Administer the building contract up to and including practical completionConstruction to Regular site inspections of work to ensure it meets specification Regular site inspections of

Regular site inspections of work to ensure it meets specificationbuilding contract up to and including practical completion Regular site inspections of work to ensure it

Regular site inspections of work to ensure it meets specification and costcontract up to and including practical completion Regular site inspections of work to ensure it meets

practical

completion

Further information supplied to the contractor as and when reasonably requiredRegular site inspections of work to ensure it meets specification

Regular site inspections of work to ensure it meets specificationFurther information supplied to the contractor as and when reasonably required

Further information supplied to the contractor as and when reasonably required Review of information provided by contractors and specialists Review of information provided by contractors and specialists

Review of information provided by contractors and specialists

targets

Asses interim valuations submitted by contractorprovided by contractors and specialists targets Review of information provided by contractors and

Review of information provided by contractors and specialiststargets Asses interim valuations submitted by contractor After practical Administration of the building contract

After practical

Administration of the building contract after Practical Completion and making final inspections to ensure specifications have been met Review of project performance in use Assisting building user during initial occupation periodAfter practical Making final inspections Prepare final accounts for the project After practical Making final inspections Prepare final accounts for the project

Making final inspectionsproject performance in use Assisting building user during initial occupation period Prepare final accounts for the

Prepare final accounts for the projectReview of project performance in use Assisting building user during initial occupation period Making final inspections

completion

to ensure specifications have been met

Conduct studies of the building in use. These are particularly important to focus on energy in use against the design specification 

 

Question 2

A ) Describe the key features of the traditional procurement route and advise the client

about the situations in which a client’s use of the traditional procurement route would be

appropriate.

(15 marks)

The student is expected to provide a standard description of the traditional procurement route, identifying its main features (including the contractual relationships of the parties involved) and its advantages and disadvantages (5 marks).procurement route would be appropriate. (15 marks) The remaining marks are to be made from the

The remaining marks are to be made from the student’s relation of these procurement route features to specific situations. procurement route features to specific situations.

With regard to the advice, students would be expected to comment that the route could be used by all types of clients. Students should be able to provide any number of relevant views on the situations in which traditional procurement is appropriate including but not limited to:of these procurement route features to specific situations. inexperienced clients requiring specialised advice “up

inexperienced clients requiring specialised advice “up front” to avoid problems on site. The fact that the route is the simplest to manage and understand is a site. The fact that the route is the simplest to manage and understand is a major reason - attention can be focused on design and construction in isolation (2 marks).

experienced clients wanting to make sure the design is fully developed and will provide a high-quality project that exactly meets their requirements. Its simplicity should not preclude its use in any given situations. Students could argue that an experienced client may prefer this route if they want close control over quality – of the design solution and of workmanship on site. Students should be able to of the design solution and of workmanship on site. Students should be able to relate the need of client control with this procurement route be it control over design development or cost (2 marks). You should clarify the absence of control over construction and programming issues once the construction phase has started (1 mark). The student should associate control with the adoption of risk. They should be able to associate decision making power with the adoption of risk. They should determine that the client must manage design and cost risk under this procurement

route. You may clarify the employment of the design team as the defining feature of the procurement route that gives rise to this risk (1 mark)

clients with a highly technical requirement (i.e. petrochemical facility), technically challenging problems that have never been solved before (e.g. innovative bridges, tunnels) which requires the coordination of many different disciplines and development of a full solution is essential before site work starts – this is to reduce construction risks and is only feasible where time is available this is to reduce construction risks and is only feasible where time is available (1 marks).

any situation in which the client has the time to fully resolve the design solution before starting on site. You may question: (a) the commercial luxury / reality of being able to do this; and (b) the practical reality that design will usually have mistakes in it and problems on site will always occur (1 mark). (1 mark).

They should suggest that the traditional route can be used for all building types, although there may be more appropriate routes available when certain building characteristics are present. For example, when the building design is simple or repetitive (i.e. design and build) or if the building is technically complicated (i.e. management routes) (1 mark). (1 mark).

Students will comment that traditional procurement is not suited to situations where site conditions are not fully understood and design will be required on an emergent, ad hoc basis (1 mark). (1 mark).

Any other relevant discussion is acceptable. Students should be rewarded for explaining why their situations are appropriate to the use of traditional procurement. Students must be able to show understanding by explaining the relation of underlying principles of the route to the situations they have imagined. They should be less well rewarded for merely providing a list of possible situations without this supporting discussion of “why.” without this supporting discussion of “why.”

b) Compare and contrast the three payment methods that are often used with the traditional procurement route. Recommend one of these methods for a client who wishes to encourage the contractor to innovate and explain why this method is appropriate. (18 marks)

The student should identify the three main options as: lump sum contracts; measurement contracts; and cost reimbursement contracts, providing supporting explanation in accordance with Unit 3 (6 marks). (6 marks).

Some variation in the terminology is acceptable so long as the underlying principles are the same.supporting explanation in accordance with Unit 3 (6 marks). Studies should draw a clear relationship between

Studies should draw a clear relationship between each payment method options and the assignment of cost risk within the employer-contractor relationship (4 ½ marks). (4 ½ marks).

Students may relate these payment methods to the JCT05 variations of SBC available to implement them – SBC/Q, SBC/AQ, SBC/XQ (1 ½ marks) SBC/Q, SBC/AQ, SBC/XQ (1 ½ marks)

Students can suggest cost reimbursement contracts as the method of payment which allows contractor to innovate. Students should relate the reasons for this by referring to key features of the cost reimbursement contracts (6 marks). (6 marks).

Question 3

You are a chartered construction professional currently working as the Contract Administrator of an on-going construction project. You realises that the Employer

unnecessarily disrupts the interim payment certification process by asking you to delay the certification. Explain what you would do. Support your planned actions with reference to the relevant RICS Core Values, CIOB Code of Conduct, or any other professional standards you consider

relevant.

(33 marks)

This is a question about professional ethics. Any appropriate response would be acceptable, providing that it is supported by reference to relevant RICS core values, CIOB Code of Conduct (or other values). The student is expected to identify those values that justify a course of action rather than to work through them all explaining whether or not each is relevant. In short, the student is expected to be able to demonstrate understanding of the values and their relevance of a given situation. This requires confidence in their application to provide a rationale for a course of action. While any morally sound course of action is acceptable, students are expected to suggest that the Employer’s stance is inappropriate. The CA will be a complice if he enacts the Employer’s stance, the CA – a member of a professional body must come under the student’s scrutiny (3 marks). While there is no suggestion that the Employer is bound by the standards of a professional body, the student may want to suggest that they would highlight the morally dubious position of the Employer to them (3 marks). Students may establish a tension between commercial, contractual and moral issues within a project, as raising such an issue with the Employer would not be grounds for CA to terminate its duties and any attempt by the Employer to do so would breach that agreement. Employer has an obligation to make regular payments to the Contractor as agreed in the Contract. CA has a duty to advise the Employer regarding his obligations to Contractor and potential for breaching the Contract due to unnecessary disruption. Students can use their contract knowledge to advise the Employer (e.g:- possibility to suspend the work by the contractor, termination by Contractor, Claims, time extensions etc.) (7 marks). The student would be expected to suggest that the CA should not act unprofessionally by contravening the values of acting with integrity and being honest (2 marks). Act with integrity involves never putting your own gain above the welfare of your clients or others to whom you have a professional responsibility. Within a construction Contract CA has a professional responsibility to his Employer and the Contractor as well. Therefore, the CA has an obligation to consider the wider interests of society in his judgements including the Contractor (3 marks). Being honest means being trustworthy in all that you do. As CA you should explain how you could establish your honesty under these circumstances (3 marks).

establish your honesty under these circumstances (3 marks). Further to that you should explain (not just
establish your honesty under these circumstances (3 marks). Further to that you should explain (not just
establish your honesty under these circumstances (3 marks). Further to that you should explain (not just
establish your honesty under these circumstances (3 marks). Further to that you should explain (not just
establish your honesty under these circumstances (3 marks). Further to that you should explain (not just

Further to that you should explain (not just list out) the relevance of following RICS and CIOB core values as well. Be objective at all times - Give clear and appropriate advice. Never let sentiment or your own interests cloud your judgement (2 marks) Set a good example - Remember both your public and private behaviour could affect your own, RICS’ and other members’ reputations (2 marks) Have the courage to make a stand - Be prepared to act if you suspect a risk to safety or malpractice of any sort (2 marks) Ensure, when providing an advisory service, that the advice given is fair and unbiased (2 marks) Ensure, when undertaking any other construction related activity that all such work is in accordance with good practice and current standards and complies with all statutory and contractual requirements (1 mark).

with all statutory and contractual requirements (1 mark). Students may bring their personal standards to justify
with all statutory and contractual requirements (1 mark). Students may bring their personal standards to justify
with all statutory and contractual requirements (1 mark). Students may bring their personal standards to justify
with all statutory and contractual requirements (1 mark). Students may bring their personal standards to justify
with all statutory and contractual requirements (1 mark). Students may bring their personal standards to justify

Students may bring their personal standards to justify the course of action (3 marks). However, students are not able to score good marks if they just limit their arguments to their own personal standards without citing relevant professional standards. They will receive fewer marks than one making use of accepted professional standards.

SECTION B

Question 4

a) Explain what is meant by damages. Differentiate between the liquidated and unliquidated damages with typical examples from construction projects. (20 marks)

Damages are used to return a party who has incurred loss or expense as a consequence of the other party’s breach of obligations under the contract to the position it would of the other party’s breach of obligations under the contract to the position it would have been in had the other party’s breach not occurred. In other words damages ensure that a party that has incurred loss or expense through no fault of its own has those expenses paid by the party whose breach causes them to be incurred (3 marks).

Explain that the damages are only a viable means of presentation of agreement between contractor and employer remains in place. If the actions of either party suggested that agreement has been lost, their material breach occurred and damages become inappropriate. In this situation contract has been determined using the mechanisms available in it (2 marks). (2 marks).

The magnitude of liquidated damages is known before any situation that requires them to be paid arises. The magnitude is agreed as a rate in the Contract Particulars (3 marks).determined using the mechanisms available in it (2 marks). The magnitude of unliquidated damages is not

The magnitude of unliquidated damages is not known beforehand. Because of this, while liability for paying them if specific circumstances arise can be clearly established in the contract, their magnitude cannot not be (3 marks). (3 marks).

Students should clarify that the magnitude (quantum) of unliquidated damages can only be a true reflection of the loss and/or expense incurred by the affected party. It is not possible to inflate these damages or otherwise include a penalty/compensation element to them as penalty clauses are prohibited by the Unfair Contract Terms Act. Therefore, the affected party will have to keep clear records of the magnitude of their loss as the amount on these records is what will be paid – i.e. actual loss (2 marks). Examples: i.e. actual loss (2 marks). Examples:

Liquidated damages = “liquidated damages / delay damages / etc.” – damages paid in the dated damages = “liquidated damages / delay damages / etc.” – damages paid in the event of non-completion on the agreed date (3 marks).

Unliquidated damages = any other form of damages – i.e. where the magnitude of the damages, if they were to arise, is not i.e. where the magnitude of the damages, if they were to arise, is not known beforehand. Most common form would be the contractors’ claims for loss and expenses (3 marks).

Ideally, students should clarify whether Employer or Contractor is paying these types of damages (1 mark). However, a student should not be assuming that damages paid by Employer to Contractor (i.e. addition to Contract Sum) are always unliquidated and those paid by Contractor to Employer (i.e. deduction from Contract Sum) are always liquidated. This is not the case.the contractors’ claims for loss and expenses (3 marks). B ) Discuss the importance of using

B ) Discuss the importance of using an executed contract instead of a letter of intent to

begin a construction project.

(13 marks)

Students should explain what an executed contract is (2 marks) (2 marks)

They show demonstrate their understanding about letters of intents by explaining what a letter of intent is and its purpose (2 marks) (2 marks)

Discuss the advantages of using an executed contract (4 marks) (4 marks)

Discuss the consequences/risks of starting a construction project with a letter of intent (possible negative effects) (4 marks) (4 marks)

To conclude the discussion, highlight the significance of having an executed contract over a letter of intent (1 mark) (1 mark)

Question 5

A ) Explain the process to be adopted in carrying out a Gross Valuation under the ‘JCT 2005

Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(23 marks)

This question should be answered with an explanation of what is largely the standard gross valuation procedure. You should note that this question is mainly about the Gross Valuation procedure, but also about the roles of the entities involved. All students should explain the process defined by cl. 4.16 – ascertain of the Gross Valuation. ascertain of the Gross Valuation.

Usually the Contractor makes an application for an interim payment because the Contractor has the option of submitting an application in accordance with the contract but they do not have to do so (cl.4.12). You should be able to suggest that it would be the Contractor’s commercial interest to use the provision of the contract to it would be the Contractor’s commercial interest to use the provision of the contract to suggest what the magnitude of payment due in any given valuation period should be. It would be commercially sensible to make this application. Despite the fact that the Contractor has not made an application for payment or not, Contractor Administrator has an obligation to carry out a Gross Valuation to make sure that the Contractor is being at agreed intervals (3 marks).

All students are expected to show their understanding of the standard Gross Valuation process which leads up to the issue of each Interim Certificate.that the Contractor is being at agreed intervals (3 marks). Students should state that prior to

Students should state that prior to the date of issue of each Interim Certificate CA informs the QS to ascertain the Gross Valuation of the partially completed Works (2 marks).which leads up to the issue of each Interim Certificate. However, they all should note that

However, they all should note that the amount to be paid is not the Gross valuation, but the Gross Valuation minus retention, previous interim payments, advanced payments – all per 4.10 (2 marks). all per 4.10 (2 marks).

If the Contractor has made no application made, then the QS has to ascertain the value of the partially completed works from the scratch/measuring from first principles (or the previous valuation’ s measurements) (1 marks). principles (or the previous valuation’s measurements) (1 marks).

If the Contractor has submitted an application QS will work with the Contractor’s application, visit the site and other relevant locations to value materials on site and listed application, visit the site and other relevant locations to value materials on site and listed items. All of this is done to accurately ascertain the value of the partially completed works (i.e. the Gross Valuation) (2 marks).

Students are expected to spend some time explaining cl. 4.16.1 – namely the payment of “properly executed”; Site Materials/materials on site (cl. 4.16.1.2); and Listed namely the payment of “properly executed”; Site Materials/materials on site (cl. 4.16.1.2); and Listed Items (cl.4.16.1.3). Each of these three categories should be explained. A clear definition of Listed Items is expected, ideally with an example. Clause 4.16.2 and 4.16.3 can be explained very briefly; detailed explanations are not needed (9 marks).

All students should note that, cl. 4.3 provides the mechanism to make deductions and additions to the contract sum to keep its current definition alive (1 mark). (1 mark).

This valuation is passed to the CA for issue of the corresponding Interim Certificate and Statement of Retention. All students should clearly identify the QS’s role in the valuation procedure. They should ntion. All students should clearly identify the QS’s role in the valuation procedure. They should differentiate this from the CA’s role in the issue of the certificate (3 marks).

c) Describe what Employer can do if Contractor is not progressing the Works as agreed in the contract. Describe the Employer’s course of action in accordance with the terms of the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q). (10 marks)

This question regards the Employer’s right to Terminate the contract in the event of the Default of the contractor. The Specified Default considered is the failure to “proceed regularly and diligently with the works” governed by cl. 8.4.1.2 (2 marks). The underlined terms should be stated by the student. The actions that must be taken by the employer are:

provide written notice to the contractor of its intent to terminate the contract (cl. 8.4.1) – (2 marks). (2 marks).

allow 14 days from receipt of this notice for the contractor to rectify the situation (cl. 8.4.2) - (2 marks). (2 marks).

if this is not done, the employer can determine the contractor’s employment on, or within 21 days s not done, the employer can determine the contractor’s employment on, or within 21 days from the end of that 14 day notice period (cl. 8.4.2) (2 marks).

Upon doing so, the employer must issue a further notice to the contractor stating that the contract has been terminated (cl. 8.4.2) (2 marks). (2 marks).

Question 6 A ) Differentiate between domestic sub-contractors and listed sub-contractors. (6 marks)

Students should mention the basis of sub-contracting in construction projects by referring to the principle called ‘vicarious performance’. In construction contracts, the principal of vicarious performance is more commonly known ed ‘vicarious performance’. In construction contracts, the principal of vicarious performance is more commonly known as ‘sub-letting’ (1 marks).

SBC/Q uses two methods of sub-contracting:is more commonly known as ‘sub - letting’ (1 marks). o Domestic sub-contractors (although the SBC/Q

o

Domestic sub-contractors (although the SBC/Q 2005 version does not define ‘domestic sub-contractors’). This method involves the Contractor selecting and appoint subcontractors to complete all or part of the Works (2 marks).

o

Listed subcontractors are chosen by the Contractor to carry out certain part/s of Work from a list of at least three subcontractors provided by the Employer. Contractor has the freedom the select any subcontractor from the list provided by the Employer and the Contractor or Employer can add to the list (2 marks).

Once appointed both domestic and listed subcontractors become ‘subcontractors’ and they have the same contractual standing. In other (1 marks) ubcontractors become ‘subcontractors’ and they have the same contractual standing. In other (1 marks)

B ) Explain the process of selecting and appointing listed sub-contractors under the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q). (16 marks)

All students should site clause 3.8, its sub clauses and clause 3.9Contract with Quantities’ (JCT05 SBC/Q) . (16 marks) Students are expected to explain the process in

Students are expected to explain the process in detail.should site clause 3.8, its sub clauses and clause 3.9  If the contract bill provides

If the contract bill provides that certain work to be carried out by other people who are to be selected from a list provided by the Employer, opportunity arises to select a sub-contractor under the method called ‘listed subcontractors’ (clause 3.8.1). - (2 marks)

List should contain at least 3 names and both parties (Employer and Contractor) have the right to add/expand the list with other’s permission before execute the sub-contract (cl. 3.8.2) - (3 marks)

Following that the Contractor can select a sub-contractor who is willing to enter sub-contract on prescribed terms (cl.3.8.1 and 3.9) - (2 marks)

Unwilling persons should be removed from the list - (1 marks)

After such removal if there are less than 3 persons in the list that are able and willing to carry out the relevant work, then, either Employer or Contractor can add further names to the list by agreement with other party (cl. 3.8.3.1) Students need to explain this further as depicted in the diagram (3 marks)

If both parties cannot add further names to list to make it 3, the main contractor will have to carry out the work (cl. 3.8.3.2) - (2 marks)

They can use the following diagram to graphically represent the process (3 marks) (3 marks)

ALP TUTOR PACK 11 D39PZ, MAR 2012

C ) Explain what is meant by an ‘Acceleration Quotation’ under the ‘JCT 2005 Standard Building Contract with Quantities’ (JCT05 SBC/Q).

(11 marks)

All students should know that Acceleration Quotation is described in paragraph 2 in Schedule 2 of SBC/Q (2 marks). (2 marks).

Acceleration quotations are used when Employer wants to accelerate the Work, may be to achieve the practical completion of Work or a section on a date before than it was agreed (2 marks) . (2 marks).

The CA invites the Contractor to submit a quotation/proposal to carry out Work in an accelerated manner (2 marks). (2 marks).

Upon receiving such invitation Contractor can either submit an Acceleration Quotation to the CA. It should contain the details about time that can be saved, additional cost involved for acceleration, and any other relevant conditions relevant to accelerate the work (2 marks). (2 marks).

Contractor can reject providing a quotation by stating the reasons why acceleration is impractical (2 marks). (2 marks).

Contractor should not take any measures to accelerate work until a further ‘Confirmed Acceptance’ is ntractor should not take any measures to accelerate work until a further ‘Confirmed Acceptance’ is issued by the CA (1 mark).

Feedback:

Tutors are asked to complete the following Unit Feedback Report at the end of each teaching semester to the ALP Teaching Fellow so that the teaching and learning for the course can be continually enhanced.

 

Course:D39PZ- Procurement and Contracts Unit Feedback Report

 

Course Consolidation- Revision Tutor Name:

General comments on the Unit course material

 

Most liked part of the Unit course material and why

 

Most disliked part of the Unit course material and why

 

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END OF TUTOR PACK