QUESTION 4 (15 Marks) List five (5) differences between a Variable Construction Guarantee vs Retention as provided for in the JBCC Minor Works Agreement. In particular, point out the percentage values at the different stages of the contract. (10) Variable Construction Guarantee Payment Reduction Offers an immediate higher security. The Security has to slowly build up from nil and Employer is therefore immediately there is a period of risk for the Employer. covered. 1 1 Immediate value not exceeding 6% of the Immediate value limited to 8% of each contract sum. 1 Payment Certificate, up to 4% of the contract sum. 1 Reduces to 4% at Practical Completion up Reduces to 2% at Practical Completion up to the date of Final Completion. 1 to the date of Final Payment Certificate. 1 Reduces to 2% at Final Completion up to Reduces to 0% on the date of the Final the date of the Final Payment Certificate. Payment Certificate. 1 1 A Construction Guarantee is issued by a Payment Reduction relies on the value of reputable financial institution. 1 work delivered by the contractor. 1 QUESTION 5 (20 Marks) In tabulated format, under the four (4) respective headings, briefly list five (5) primary differences between Mediation, Adjudication, Arbitration and Litigation. (4 x 5) Any five differences should warrant full marks. Mediation Adjudication Arbitration Litigation The parties freely The parties freely The parties freely The parties do not and voluntarily agree and voluntarily agree and voluntarily agree freely and voluntarily to appoint a mediator to submit any dispute to submit any dispute submit any dispute to to assist the parties that may occur to the that may occur to the a court of law, but are to seek a negotiated impartial judgement impartial judgement summoned to resolution to the of a third party of of a third party. This appear. dispute. their choice. is done at the point of An adjudicator may concluding the be appointed when a contract. The dispute arises agreement should state the name of the arbitrator, or how the arbitrator is to be appointed. The mediator never The courts cannot The arbitrators The judges expresses an enforce the award of judgement is final judgement is subject opinion. Any the adjudicator to appeal settlement is
QUESTION 4 (15 Marks) List five (5) differences between a Variable Construction Guarantee vs Retention as provided for in the JBCC Minor Works Agreement. In particular, point out the percentage values at the different stages of the contract. (10) Variable Construction Guarantee Payment Reduction Offers an immediate higher security. The Employer is therefore immediately covered. 1 Security has to slowly build up from nil and there is a period of risk for the Employer. 1 Immediate value not exceeding 6% of the contract sum. 1 Immediate value limited to 8% of each Payment Certificate, up to 4% of the contract sum. 1 Reduces to 4% at Practical Completion up to the date of Final Completion. 1 Reduces to 2% at Practical Completion up to the date of Final Payment Certificate. 1 Reduces to 2% at Final Completion up to the date of the Final Payment Certificate. 1 Reduces to 0% on the date of the Final Payment Certificate. 1 A Construction Guarantee is issued by a reputable financial institution. 1 Payment Reduction relies on the value of work delivered by the contractor. 1 QUESTION 5 (20 Marks) In tabulated format, under the four (4) respective headings, briefly list five (5) primary differences between Mediation, Adjudication, Arbitration and Litigation. (4 x 5) Any five differences should warrant full marks. Mediation Adjudication Arbitration Litigation The parties freely and voluntarily agree to appoint a mediator to assist the parties to seek a negotiated resolution to the dispute. The parties freely and voluntarily agree to submit any dispute that may occur to the impartial judgement of a third party of their choice. An adjudicator may be appointed when a dispute arises The parties freely and voluntarily agree to submit any dispute that may occur to the impartial judgement of a third party. This is done at the point of concluding the contract. The agreement should state the name of the arbitrator, or how the arbitrator is to be appointed. The parties do not freely and voluntarily submit any dispute to a court of law, but are summoned to appear. The mediator never expresses an opinion. Any settlement is The courts cannot enforce the award of the adjudicator The arbitrators judgement is final The judges judgement is subject to appeal
PPE_Paper_Two_-_Q_&_A_26_October_2016.docx