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Determine from the NEC contract the requirements for valuation of the works in the event of termination and provide a narrative on the process that is to be followed referring to the P procedures and R clauses
Assignment
FQ530 The Use of Forensic QuantumAnalysis by an Expert Witness
Programme Title
Professional Diploma in Forensic Quantum Analysis
Module Name
The Use of Forensic QuantumAnalysis by an Expert Witness
Module Code
FQ530
Student Name
Student Signature
Upload Date
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Please note that the bands below describe indicative characteristics only. An overall holistic approach is required when assessing a candidate’s work and assigning a grade.
Grade
Task Achievement
The Relevance of the Response
Inclusion of Relevant Technical
Knowledge in Content
Presentation/Coherence
Distinction
70% +
The work demonstrates a comprehensive understanding of the task. All relevant information is included. The main issues are effectively identified and analysed.
There is evaluation and some analysis of solutions to issues relevant to the task. The response shows control of content within the word count.
The work demonstrates a strong understanding of a wide range of technical issues relevant to the task. There is analysis of the advantages/disadvantages of possible choices, risks and potential outcomes.
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Merit
60-
69%
The work demonstrates a clear understanding of the main issues relevant to the task. The issues are explained effectively, and potential solutions identified. There is some attempt to analyse the merits of the solutions to the task. The task is broadly achieved within the word count, if relevant to assignment.
The work demonstrates an understanding of the key technical issues of the task. There is clear description of relevant technical aspects with some attempt to evaluate the merits of these as appropriate to the task.
Demonstrates an awareness of presentation and an attempt to present the information with clarity and coherence. There is referencing of sources and use of paragraphing and titling to assist the reader.
There is use of clear graphical information to support the assignment which has broad relevance to the task. There may be some limited inaccuracies/omissions in these.
Pass
40-
59%
The work demonstrates an understanding of the task. The main points are identified, and the task is achieved. There is no attempt to evaluate or analyse the solutions. There may be some inaccuracies, omissions and irrelevant content. There may be lack of control in relation to the word count.
The work demonstrates an understanding of the main technical issues which are identified. This may be limited to description with little evidence of evaluation. There may be some omissions and inaccuracies in the detail. There may be some irrelevant details.
There is an attempt to structure the information. There is evidence of paragraphing and titling which is not always appropriate. Some basic graphical information may be included which is of some assistance to the reader. There may be some omissions or inaccuracies. The work is generally coherent but there may be occasional lapses in coherence and structure.
Fail
0-39%
The work shows a poor understanding of the task. Frequent inaccuracies. Failure to identify important aspects of the task.
Much of the information is irrelevant to the task. There may be evidence of copy and paste from external sources. The response may be limited to lists of words with no attempt to explain the relevance/merits of these to the task. The assignment falls short of the word count.
The work demonstrates a lack of understanding of the technical aspects. There are omissions of important technical information. Errors are evident in the technical content. There is no attempt to explain the relevance of the technical content to the task.
Lacks structure and may be limited to lists of points which are not developed.
Disorganised in structure causing difficulty for the reader to understand the points. The response is Illegible or incoherent in places. No referencing of external sources. The graphical illustrations are of poor quality or absent. They may be irrelevant.
There may be errors and a lack of clarity causing difficulty for the reader to understand.
Assessment Criteria and Grading Sheet
No.
Learning Outcomes
Weight (%)
Marks Awarded (%)
1
Task 1
Determine from the NEC contract the requirements for valuation of the works in the event of termination and provide a narrative on the process that is to be followed referring to the P procedures and R clauses (350 words)
10%
2
Task 2
The termination of the contract is valid, and you do not to consider the merits of it, you must however, provide your
client with a proposed methodology for addressing the termination costs premised (250 words)
10%
3
Task 3
Following the initial referral to adjudication it is MRU’s position that no/little money arises due to the failings in the substantiation provided. The Adjudicator agreed. You are engaged to provide an independent opinion on the validity of
this statement. You are to agree or disagree with the report of the MRU expert and provide reasons thereof (250 words)
10%
4
Task 4
Having decided that you can support the client’s claim you are tasked with responding to the submissions of the MRU expert
in detail determining their credibility and rebutting them with points of law and/or authority (900 words)
25%
5
Task 5
You must respond to and rebut this statement in your report
to the client and consider how the valuation should be provided (500 words)
20%
6
Task 6
You are tasked with providing your client with a conclusion on the rebuttal, your request for evidence and the correct
method of calculating entitlement (250 words)
15%
7
Task 7
Provide advice to your client as to the merits and entitlement of the matter, you can make assumptions as to entitlement as you deem appropriate. However, the client is concerned that in the event of a positive award, MRU will not pay and wonders if this is all worth the effort? Advise CBL of their
rights to secure the award (or not) and ensure payment thereafter. (250 words)
10%
TOTAL
100%
ASSIGNMENT
Scenario
You are engaged by Corn Balls Ltd (“CBL”) from the UK to act as their Quantum Expert in a matter that they have with the principal Contractor, Mines R Us Ltd from Spain, in the construction of new facilities at a mine in Kenya.
The mine was constructed under the NEC3 Engineering & Construction Contract, June 2005 (with amendments June 2006), main Option A (Priced Contract with activity schedule).
The contract was terminated by Mines R Us Ltd, and they have valued the amounts outstanding at zero.
Corn Balls Ltd have valued the amount due on termination as R44 328 533.54.
Corn Balls Ltd entered into adjudication (as per the contract provisions) and the Adjudicator concluded that they had failed to bring forward one single jot of evidence and decided that zero should be awarded.
The adjudicator relied on the report in contravention of the Mines R Us expert who rebutted all of the claims made by Corn Balls Ltd.
Unfortunately, in the adjudication Corn Balls Ltd did not use a Quantum expert but in referring the matter to arbitration you are now engaged.
The expert for Mines R Us report rebutted each and every claim, this is included as attachment 01.
Your client wants to know what to supply in support of evidence and needs your guidance. The client relies on you to rebut the failure to bring forward one single jot of evidence
Task 1
Determine from the NEC contract, the requirements for valuation of the works in the event of termination and provide a narrative on the process that is to be followed referring to the P procedures and R clauses (See Clause 90.2 from NEC3 contract) . (350 words)
The particulars of contract are as follows:
Task 2
a. On 28 June 2017, CBL and MRU entered into a sub-contract ("the Contract") for the execution of Works which included the modification of the existing tippler system, new conveyors, transfer houses, modifications of existing conveyors and infrastructure.
THE CONTRACT REQUIREMENTS
To the extent that the Contract is an NEC3 Engineering & Construction Contract, June 2005 (with amendments June 2006), main Option A (Priced Contract with activity schedule) with various secondary Options and as amended by additional Z clauses, this provides for the methodology of evaluation.
The termination of the contract is valid, and you do not to consider the merits of it, you must however, provide your client with a proposed methodology for addressing the termination costs premised on ; (250 words)
On 26 July 2019, MRU issued a termination notice in accordance with clause 91.5 of the Contract.
On 28 November 2019, CBL provided MRU with its final assessment of the amount due on termination.
On 14 October 2020, CBL provided MRU with a ‘full’ breakdown of the amount claimed in the sum of R44 328 533.54.
Task 3
Following the initial referral to adjudication it is MRU’s position that no/little money arises due to the failings in the substantiation provided. The Adjudicator agreed. You are engaged to provide an independent opinion on the validity of this statement. You are to agree or disagree with the report of the MRU expert and provide reasons thereof. (250 words)
Task 4
Having decided that you can support the client’s claim you are tasked with responding to the submissions of the MRU expert in detail determining their credibility and rebutting them with points of law and/or authority. (900 words)
The focus of your response is to be on the claimed sums below. BASIS OF CLAIM. The summary of the amounts subjected to further evidential burden are below and you should refer to the MRU’s commentary on each (Please see report example provided with module 3 Lecture 7 that may assist you):
Item
Claim Description
Amount Claimed
1.0
Assessment of work done under Certificate 19
R5,503,812
2.0
Open & Active Compensation Events.
R23,196,655
2.1
CE007: Spike rollers
R825,076
2.2
CE009 Rev 1: New specifications 10 galvanizing and painting
of hand railings & stanchions guards, crawl beams
R821,549
2.3
CE013 Rev 1: Additional signals on conveyor system
R96,360
2.4
CE014 Rev 3: Updated Ventilation fans and starters
R350,798
2.5
CE017: Interim change to completion date to 02 September 2018
R13,771,321
2.6
CE022 Rev 1: Cancellation of Shutdown (up to April 2019) provisional
R7,331,551
3.0
CE027: Subcontractor’s costs for the Termination
(including its Sub-Subcontractors)
R9,146,635
4.0
Previously part of the items certified under certificates 4 and 8.
R6,370,348
4.1
Omitted from the total in payment certificate 4
R4,888,726
4.2
Omitted from the total in payment certificate 8
R1,481,622
Total
R44,217,450
Task 5
You must respond to and rebut this statement in your report to the client and consider how the valuation should be provided (in the primary and secondary position?); (500 words)
‘The issue of whether a compensation event should be calculated by reference to forecast costs or actual costs in an NEC3 contract was referred to the court for determination in a 2017 court case. Although the case related to a dispute under the NEC3 Professional Services Contract and was heard in the Northern Ireland Queen’s Bench Division (Commercial) the decision may be of some benefit to the current disputes, if not authority. The decision was supportive of the use of actual costs to assess the effect of compensation events.
Paragraph 35 of the Decision states:
‘Evidence, from time sheets and other material, of what the consultant actually did in that period, particularly with reference to the change in instructions, is not only relevant evidence but clearly the best evidence to assist the court in calculating the compensation to which the consultant is entitled.’
Mr. Bond says in his report, ’In my experience it is standard industry practice to support claims for costs of personnel or labour with breakdowns of the time expended (with timesheets that reference the activity undertaken) and hourly rates (supported by payroll information). It is also standard industry practice to support amounts claimed for materials or equipment supplied with invoices from suppliers.
Task 6
You are tasked with providing your client with a conclusion on the rebuttal, your request for evidence and the correct method of calculating entitlement (the primary and/or secondary position) (250 words)
In your conclusion consider the following.
You are not so sure on the concept of standard industry practice as this would result in all variations being valued to cost whereas the mechanisms of the traditional contract provide for the use of rates.
Is this a matter for further debate in the submissions given that the NEC is an Option A Contract?
MRU’s expert’s further point, ‘It is also consistent with the breakdowns and substantiation required by the SSCC when submitting and assessing Defined Cost’ has some place within the NEC Option A but it is not to detract from the efficacy with which the NEC is to be used.
Further discussion on this alternative form of valuation should be robustly contended in the ensuing Referral, the conclusion of this aspect may well be MRU’s willingness to accept the NEC priced CE when confronted by higher actual costs having been incurred.
Task 7
Provide advice to your client as to the merits and entitlement of the matter , you can make assumptions as to entitlement as you deem appropriate. However, the client is concerned that in the event of a positive award, MRU will not pay and wonders if this is all worth the effort? Advise CBL of their rights to secure the award (or not) and ensure payment thereafter. (250 words)
Please attachment 1 – Expert Report of 21 January 2021 – Note that the appendices to this report have not been included. The figures and amounts have been included in the contents of the report.
Sample Answer
Determine from the NEC contract, the requirements for valuation of the works in the event of termination and provide a narrative on the process that is to be followed referring to the P procedures and R clauses (See Clause 90.2 from NEC3 contract) . (350 words)
In the event of termination under the NEC3 contract, Clause 90.2 outlines the process for the valuation of works. The procedure is established to ensure a fair assessment of the Contractor`s entitlement at the point of termination, taking into account the extent of the work completed, associated costs, and the application of relevant contract clauses.
Upon termination, the Project Manager is required to assess and certify the amount due to the Contractor. The procedure for determining this amount involves several key steps:
Assessment of Work Done : The Project Manager will evaluate the value of the work completed by the Contractor up to the date of termination. This includes work that has been carried out but may not yet be certified. The work should be valued in accordance with the terms of the contract, including the Schedule of Cost Components and the Defined Cost (Clause 11.2(23)), ensuring that the assessment reflects the work accurately at its current stage.
Materials and Equipment : In addition to the work done, the Project Manager will assess the value of materials and equipment that have been delivered to the site but not yet used in the works. The ownership of these items typically transfers to the Employer following termination, and their valuation is conducted based on their condition and relevance to the project.
Costs Incurred and Liabilities : The Contractor may be entitled to recover certain costs associated with the termination. This could include demobilisation costs, costs for cancelling subcontracts, and other related expenses. These must be reasonable and verifiable as part of the valuation.
Deductions and Damages : The Project Manager will also consider any deductions to be made from the amount due, including any payments already made to the Contractor and any damages the Employer is entitled to claim. For example, if the termination was due to the Contractor`s default, damages may be deducted from the assessed amount.
Final Certification : The Project Manager then issues a termination certificate, which certifies the final amount due to the Contractor. The certificate is prepared in line with the P procedures and R clauses, ensuring compliance with the contractual framework.
The process ensures transparency and provides a structured approach to resolving financial matters post-termination, protecting the interests of both the Employer and Contractor.
Continued...
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