Construction Project Management and Contract Procedures

Module 2 April 12,2012. Mr. B. Leahing

Keian Walker

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Question
The administration of construction contracts are considered significant to the outcome or effective of any construction project. It is therefore essential that the contract administrator or project coordinator has a significant appreciation for the different types of contracts available to him. n If the money being spent by the Jamaican government was secured through negotiating with an international lending agency, select the most effective contract type that can be used to achieve an effective capital construction project in Jamaica. n The FIDIC engineering and construction document sets out the necessary guidelines as to the responsibilities of various stakeholders to a contract.

Explain in detail the responsibilities of the client in the FIDIC engineering and construction document. Explain the responsibilities of the Engineer in the FIDIC Engineering and construction document.
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Introduction
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Construction Contracts Administration Which one will we use? The FIDIC

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Contracts
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Contracts we have not used. Why are they not effective to be used?

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What is BOOT?

B- Build n O- Own n O- Operate n T- Transfer

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BOOT, Project Delivery Method Design and construction

Finance Operations and maintenance Marketing and customer interface Concession period

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Cost and Benefits of the BOOT Procurement Method

n n n n n n

Enhanced efficiency Access to broader funding Risk sharing Whole of life approach Access to latest technology

Economically sound decisionmaking 4/15/12

To Reduce Cost
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Sufficient work by government prior to approaching the market Large amount of certainty that the project will go ahead Engage experienced advisers Short, sharp process High degree of integrity Reasonable (real) short-lists Few negotiable items post bid

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The Client (Employer)

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As per the FIDIC the employer is defined as the person named as employer in the Contract Data and the legal successors in title to this person. This person is the initiator of the project. The Employer can be an individual, an organization or as in the case of the scenario given a government.

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Responsibilities of the Client:

Right of Access to the Site

n

The Employer shall give the Contractor right of access to, and possession of all parts of the Site within the time stated in the Appendix to Tender. However, the Employer may withhold such right of possession until the Performance Security has been received.
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Right of Access to the Site

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If no such time is stated in the Appendix to Tender, the Employer shall give the Contractor right of access to, and possession of, the Site within such times as may be required to enable the Contractor to proceed in accordance with the programme submitted.

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Right of Access to the Site

If the Contractor suffers any delay as a result of a failure by the Employer to give any such right or possession within such time, the Contractor shall give notice to the Engineer and shall be entitled to: Extension of time for any delay if completion is or will be delayed and Payment of any such Cost plus reasonable profit which shall be included in the Contract Price.
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Right of Access to the Site

After receiving this notice the Engineer shall proceed in accordance with the clause on determinations to determine these matters. n However, if the Employers failure was caused by an error or delay by the Contractor including an error in, or delay in the submission of any of the Contractors Documents, the Contractor shall not be entitled of time, Cost or profit. 4/15/12
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Right of Access to the Site

The possession does not necessarily mean exclusive possession, but shared possession needs clarification in the Particular Conditions. n When the Contractor takes possession of the Site, he is responsible for safety, security and insurance. If the Contractor does not have full control of the Site and the activities on the Site, or the site will be shared, then the extent of the Contractors responsibilities must be clearly stated. 4/15/12
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Right of Access to the Site

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If the Employer fails to give right of access to and possession of the Site within the stated period then the Contractor will be entitled to an extension of time plus his costs and a reasonable profit.

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Permits, Licenses or Approvals

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The Employer shall provide reasonable assistance to the Contractor at the request of the Contractor: By obtaining copies of the Laws of the Country which are relevant to the Contract For the Contractors applications for any permits, licenses or approvals required by the Laws of the Country

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Employers Personnel
The Employer shall be responsible for ensuring that the employers Personnel and the Employers other Contractors on the Site: Cooperate with the Contractors efforts and Take actions similar to those which the Contractor is required to take in relation to the clauses relevant for Safety Procedures and Protection of the Environment.
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Employers Personnel
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When two or more Contractors are working on the same Site the possibilities of delays and costs from failures of cooperation can lead to serious problems. The FIDIC Clauses may be adequate when one Contractor is carrying out a high percentage of the total work on the Site. If the work is more evenly divided between two or more Contractors, the provision of the Contract need to be reviewed.

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Employers Claims
If the Employer considers himself entitled to any payment the Employer or the Engineer shall give notice and particulars to the Contractor. n The notice shall be given as soon as practicable after the employer became aware of the event or circumstances giving rise to the claim. n The particulars shall specify the Clause or other basis of the claim, and shall include substantiation of the amount and/or extension to which the Employer considers himself to be entitled for the 4/15/12 claim.
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Employers Claims
The Engineer shall then proceed in accordance with the Determination clause to agree or determine: The amount that the employer shall be paid by the Contractor n This amount can be deducted from the Contract Price and Payment Certificates.
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Employers Claims
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If the Employer deducts money from the Contractor which he (the Employer) is not entitled to do, will enable the Contractor to claim for all consequences of the deductions. This could involve a substantial claim by the Contractor. In such case, the Employer would be advised to reserve his rights but not to deduct any money until the final resolution of this matter.

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Who is the Engineer?

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The Engineer is defined as the person appointed by the Employer and named in the Appendix to Tender. The word person can mean a company, so the Engineer may be named as a firm of Consulting Engineers rather than an individual.

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Who is the Engineer?

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If the Engineer is a company, then the company should designate an individual to carry out the role of the Engineer.

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Who is the Engineer?

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The Engineer has an extremely important role in the administration of the Contract and the way in which he carries out his duties will have a major impact on the work of the Contractor and the success of the project.

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Engineers Responsibilities
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(a) The Engineer shall carry out the duties specified in the Contract. (b) Except as expressly stated in the Contract, the Engineer shall have no authority to relieve the Contractor of any of his obligations under the Contract.

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Engineers Responsibilities
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(c) The Engineer may exercise the authority specified in or necessarily to be Authority implied from the Contract, provided, however, that if the Engineer is required, under, the terms of his appointment by the Employer, to obtain the specific approval of the Employer before exercising any such authority, particulars of such requirements shall be set out in Part II of these Conditions. Provided further that any requisite approval shall be deemed to have been given by the Employer for any such authority exercised by the 4/15/12 Engineer.

Engineers Representative
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The Engineers Representative shall be appointed by and be responsible to the Engineer and shall carry out such duties and exercise such authority as may be delegated to him by the Engineer

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Engineers Authority to Delegate

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The Engineer may from time to time delegate to the Engineers Representative any of the duties and authorities vested in the Engineer and he may at any time revoke such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy thereof has been delivered to the Employer and the Contractor.

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Engineers Authority to Delegate

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Any communication given by the Engineers Representative to the Contractor in accordance with such delegation shall have the same effect as though it had been given by the Engineer. Provided that:

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Engineers Authority to Delegate

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Sub-Clause 2-3: (a) any failure of the Engineers Representative to disapprove any work, materials or Plant shall not prejudice the authority of the Engineer to disapprove such work, materials or Plant and to give instructions for the rectification thereof and,

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Engineers Authority to Delegate

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Sub-Clause 2-3: (b) if the Contractor questions any communication of the Engineers Representative he may refer the matter to the Engineer who shall confirm, reverse or vary the contents of such communication

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Instructions of the Engineer

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The Engineer may issue to the Contractor (at any time) instructions and additional or modified Drawings which may be necessary for the execution of the works and the remedy of any defects, all in accordance with the Contract

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Instructions of the Engineer

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The Engineer has the power to issue additional or modified drawings. This is an important power because many Contracts under the FIDIC Conditions of Contract rely on a small number of Drawings in the Tender documents

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Instructions of the Engineer

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The Engineer or the Engineers Representative may appoint any number of persons to assist the Engineers Representative in the carrying out of his duties The Engineer has the power to issue additional or modified drawings. This is an important power because many Contracts under the FIDIC Conditions of Contract rely on a small number of Drawings in the Tender documents.

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Instructions in Writing
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Instructions given by the Engineer shall be in writing, provided that if for any reason the Engineer considers it necessary to give any such instruction orally, the Contractor shall comply with such instruction. Confirmation in writing of such oral instruction given by the Engineer, whether before or after the carrying out of the instruction. 4/15/12

Replacement of the Engineer

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If the Employer intends to replace the Engineer, the Employer shall not less than 42 days before the intended date of replacement, give notice to the Contractor of the name, address and relevant experience of the intended replacement Engineer. The Employer shall not replace the Engineer with a person against whom the Contractor raises reasonable objection with supporting particulars.

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Replacement of the Engineer

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However a change to the named individual, when the Engineer is a company, does not require this notification. Reasonable notice and discussion would assist in efficient administration.

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Determinations
The Engineer shall consult with each Party in an endeavour (try) to reach agreement. If agreement is not achieved, the Engineer shall make a fair determination in accordance with the Contract. n The determination must express the rights and obligations of the Parties in accordance with the Contract and 4/15/12 applicable law, regardless of the the
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Conclusion
Questions Click to edit Master subtitle style

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