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ECCS5102
CONSTRUCTION CONTRACTS DOCUEMENTS
Faculty of Applied Engineering and Urban Planning
Civil Engineering Department
Lect. 1
2nd Semester 2008/2009
UP Copyrights 2009C
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Eng: Eyad Haddad
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Lecture 1
Syllabus
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About Eyad Haddad
Master Degree of Construction Management
Eyad Haddad contact details
Website: http://www.up.edu.ps
Email: [email protected]
Room: BK008
Mobile: 0599 834754 when necessary only
Office Hours: (11.00 – 09.30 )السبت و الثالثاء BK113
All lecture slides, assignments, Notes will be posted on the web as
can as possible
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Structure and delivery
2 lectures per week (90 minutes each)
Students will be expected to attend the lectures.
(12.30 – 11.00 )السبت و الثالثاء
Students will be expected to have undertaken a
wide range of reading
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Ground rules: Coming in late.
Don’t ask for an extension without good Reason.
Individual work only is allowed, Group.
discussions for concepts and problems.
Don’t copy previous year work.
When confused ask instructor.
Academic honesty.
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Ground rules: Cont.
Cell Phones are strictly prohibited Please.
Don’t bring your cell to the lecture or
keep it always closed
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CONSTRUCTION CONSTRUCTION CONTRACTS CONTRACTS
DOCUEMENTSDOCUEMENTS
APPLIED CIVIL ENGINEERING DEPTAPPLIED CIVIL ENGINEERING DEPT
BY
LECTUREREng: Eyad Haddad
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ResourcesResources Construction Documents and Contracting, Joseph D. Coleman ,
2004, Prentice Hall
Construction Contracts, Keith Collier, 1987, Prentice Hall
“Construction Management”, by Daniel W. Halpin and Ronald W. Woodhead, 2nd Edition , John Wiley & Sons
Fidic Conditions of Contract for Construction, FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER, 2005
Fidic Tendering Procedures, prequalification, tendering and award the contract, 1994.
Handouts and lecture notes
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Grades
Research Projects & homework 30 % Midterm Exam. 30% Final Exam. 40%
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Course OutlineCourse Outline
1. Introduction to construction project stages, overview of the construction contracting methods, and contracts types.
2. Bidding document Invitation to bid Instruction to bidders Information to bidders & bid data Biding Forms General conditions of contract Specific condition of contract Specification BOQ Drawings Contract forms
3. Methods of Tendering, Bidding and Awarding 4. Contract Documents and Conditions5. FIDIC Form of Contracts
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Course ContentsCourse Contents
1. Definition of construction project1.2 Stages of construction projects.
1.2.1 Briefing stage.
1.2.2 Engineering stage.
1.2.2.1 Design stage.
1.2.2.2 Contracting Stage.A. Bidding Documents.
B. Contractor selection.
C. The agreement.
1.2.2.3 construction stage.
1.2.3 commissioning stage.A. First commissioning.
B. Final commissioning.
1.3 Responsibilities of the owner & contractor during stages.
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Course Contents Course Contents (Cont.)(Cont.)
2. Construction Contract )Cont.(
2.1 Introduction.
2.2 Construction contract documents.
2.2.1 Specifications.
2.2.2 Quantity surveys.
2.3 cost estimating in the construction projects.
A. Approximate estimates.
B. Detailed estimates.
2.4 Bidding and Tendering.
A. Open tendering.
B. Selective tendering.
C. Serial tendering.
D. Forced contract.
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Research / Case study
Each student )or group of 2 or 3 students( is required to
submit one paper. Papers should tackle course related aspects
reflecting the local practice.
: مقترحة مواضيع
: إلجراءات نقدية دراسة
التامين.-
-( / / / الصيانة ( المقدمة الدفعة التنفيذ حسن للمناقصات الضمان
-. والعمال العمل قوانين
-. المقاولين تصنيف
- / / الدفاع ( البلدية الترخيص مثال المصاحبة االدارية االجراءات
. والحفر / – الطريق وإغالق الصب الشرطة المدني
الوكالة : ( – – – – - البلديات االسكان االشغال العامة للشروط نقدية دراسة
االردن – – – - االشغال الدولي البنك بكدار االشتشارية ).FIDIC- UNDP المكاتب
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Research / Case study )Cont(
: مقترحة مواضيع
-. االستشاريين تعاقدات
-. الباطن مقاولى تعاقدات
-. والسالمة والعمل العمال مشاكل
-. التغيرات مشاكل
-. التأخيرات مشاكل
-. الدفعات مشاكل
-. العمل جودة مشاكل
-. العقود انهاء مشاكل
-. العقود ألنواع مقارنة دراسة
-. التحكيم مسائل
-. العامة لألعمال المناقصات قانون
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Introduction to Construction Project Stages
Lecture )2(
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Research / Case studies:
The major phases in the project cycle that are common to most design and construction projects are :
Project Planning
Design
Schematic Design
Design Development
Contract Documents
Construction Procurement (Bidding Phase)
Construction
Post Construction
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Major Project PhasesMajor Project Phases The major phases in the project cycle that are common
to most design and construction projects are :
Project Planning
Design
Schematic Design
Design Development
Contract Documents
Construction Procurement (Bidding Phase)
Construction
Post Construction
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Construction Project Construction Project CharacteristicsCharacteristics
Construction projects are different than other types of projects due to the following characteristics;
Construction projects are complex undertaking. Every construction project is unique. Construction projects involve a lot of uncertainties,
lack of information and variables.
every project is one-of a kind;
many conflicting parties are involved;
projects are constrained by time, money and quality; and high risk.
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Project Life CycleMost of Construction projects life-cycle have common characteristics, Construction projects start with low cost and resources, high risk and uncertainty. The life-cycle of a typical construction project could be summarized as following :
Stage I : represents the project formulation, feasibility studies,
and the strategic decisions needed for project continue.
Stage II : represents planning, basic design, budgeting,
tendering and placing the project major contracts.
Stage III : involves the construction phase of the project,
equipment installation and testing.
Stage IV : represents the final phase in the project which
includes the project turnover, final testing and start-up.
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Project Life Cycle
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Perc
en
t C
om
ple
te
Stage I Stage II Stage III Stage IV
Project "GO" Decision
Major Contracts Let
Installation Substantially Complete
Full Operations
Feasability- P roject Formulation - Feasabiltiy Studies- Strategies Design & Approval
Planning & Design - Base Design - Cost & Schedule- Contract Terms & Conditions. - Detailed P lanning
Turnover & Start Up- Final Testing - Maintenance
Construction - Manufacturing - Delivery - Civil Work - Installation - Testing
Figure 1.1 : Construction Projects Life-Cycle (Ref: PMBK, 2000)
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A( Preconstruction Phase
B( Procurement Phase)bidding & award(
C( Construction Phase
D( Closeout Phase
A-1 Conceptual Designمفاهيم
A-2 Schematic Designتخطيطي
A-3 Design Development
A-4 Contract Documents
The Project Life Cycle
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The project phases can be summarized as follows:
A. Preconstruction phase
The preconstruction phase of a project can be broken into conceptual
planning, schematic design, design development, and contract
document
1. Conceptual design:- Very important for the owner.
- During this stage the owner hires key consultants including the designer and project manager, selects the project site, and establish a conceptual estimate, schedule, and program.
-The owner must gather as much reliable information as possible about the project.
-The most important decision is to proceed with the project or not.
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2. Schematic design:- During this phase, the project team investigates alternate design solutions, materials and systems.-Completion of this stage represents about 30% of the design completion for the project.
3. Design development:- Designing the main systems and components of the project.- Good communication between owner, designer, and construction manager is critical during this stage because selections during this design stage affect project appearance, construction and cost.- This stage takes the project from 30% design to 60% design.
4. Contract documents:- Final preparation of the documents necessary for the bid package such as the drawings, specifications, general conditions, and bill of quantities.- All documents need to be closely reviewed by the construction manager and appropriate owner personnel to decrease conflicts, and changes.-With the contract documents are almost complete; a detailed and complete cost estimate for the project can be done
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B. Procurement phase )Bidding and award phase(
- The project formally transits from design into construction.
- This stage begins with a public advertisement for all interested bidders
- In fast-track projects, this phase overlaps with the design phase.
- If the project is phased, each work package will be advertised and bid
out individually.
- It is very important stage to select highly qualified contractors.
C. Construction phase
- The actual physical construction of the project stage.
- This stage takes the project from procurement through the final completion.
- It is the time where the bulk of the owner’s funds will be spent.
- It is the outcome of all previous stages )i.e., good preparation means smooth construction(.
- The consultant will be deployed for contract administration and construction supervision.
-Changes during construction may hinder the progress of the project.
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D. Closeout phase
- Transition from design and construction to the actual use of the
constructed facility.
- The management team must provide documentation, shop drawings,
as built drawings, and operation manuals to the owner organization.
- Assessment of the project team’s performance is crucial in this stage
for avoiding mistakes in the future لتجنب وحاسم جدا ضروري العمل فريق اداء تقيم
. االخطاء
- Actual activity costs and durations should be recorded and compared
with that was planned.
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Major Types of Construction Projects:
1. Residential Housing Construction:Residential housing construction includes houses and high-rise apartments.
2. Institutional and Commercial Building Construction
such as schools and universities, medical centers and hospitals, sports
facilities, shopping centers, warehouses and light manufacturing plants,
and skyscrapers for offices and hotels.
3. Specialized Industrial Construction:Specialized industrial construction usually involves very large scale
projects with a high degree of technological complexity, such as
oil refineries, steel mills, chemical processing plants and coal-fired or
nuclear power plants.
4. Infrastructure and Heavy Construction:such as highways, tunnels, bridges, pipelines, drainage systems and
sewage treatment plants.
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Lecture )3(
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Construction Contracting Method Construction Contracting Method (delivery methods)(delivery methods)
Traditional Approach )D-B-B(:The most common delivery system is called “the traditional or standard approach” or “design-bid-build”, in which the employer assigns the design and construction phases to two different firms )consultant/designer and contractor(.
ConstructingDesigning
Appointing Consultant
Appointing Main Contractor
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Traditional Approach (D-B-B):
For many years, DBB has been the most common method of project delivery for public projects, and for many private projects as well.
Design Bid-Build is effective on projects where the owner needs both professional design services and
construction services where the designer does not require detailed knowledge of the
means and methods of construction. DBB provides the owner with a high degree of control. That’s why
it is the preferred project delivery system for owners who:
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Traditional Approach (D-B-B)Traditional Approach (D-B-B)::
The owner defines project goals and objectives, secures the financing, and specifies the standards and contract terms.
The owner may perform planning, conceptual design and full design, or may engage an outside design professional )designer( for some or all of these tasks.
During this planning and preliminary stage, owner and designer work as a team to obtain required permits and conduct necessary site investigations.
The designer prepares the construction bid documents to reflect the owner’s project goals and objectives, the project’s site conditions, and sound engineering practices.
Prospective contractors prepare their bids from these complete and specific bid documents.
The bidders submit their proposals to the owner, who determines the most responsive )typically the lowest( bid meeting project requirements.
In certain circumstances, owner may be justified in selecting a contractor outright and negotiating contract terms directly.
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Advantages of D-B-B ApproachAdvantages of D-B-B Approach
Applicable to a wide range of projects. Well established and easily understood. Clearly defined roles for all parties. Provides the lowest initial price that competitive
bidders can offer. Extensive litigation has resulted in well established
legal precedents. Insurance and bonding are well defined.
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Disadvantages of D-B-B ApproachDisadvantages of D-B-B Approach
Least-cost approach requires higher level of inspection.
Initial low bid might not result in ultimate lowest cost or final best value.
Designers may have limited knowledge of the true cost and scheduling implication of design decisions.
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Design-Build ApproachDesign-Build Approach
Design-build approach is a project delivery system involving a single contract between the project employer and a design-build contractor covering both the design and construction of a project.
The design-builder performs design, construction engineering, and construction according to design parameters, performance criteria and other requirements
established by the employer or his representative.
ConstructingDesigning
Appointing design & construction contractor
Tendering
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Design-Build ApproachDesign-Build Approach
The owner contracts with a single entity to provide the design and to construct the project according to that design.
The contract might be negotiated with a single design-builder or result from competitive proposals.
The selection can be based on low price or on a set of value criteria )experience, staff, bonding capacity, etc.(.
Design-build provides the owner with a single point of contact for project responsibilities, eliminating the need to assist in resolving designer-contractor disputes.
With the contractor playing a major role in design, costs are typically defined and maintained to a greater degree, and the coordination of fast-track management to achieve early completion is greatly simplified.
The design-builder makes many decisions that owner would make under DBB, due to delegation of greatly increased authority.
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Design-Build ApproachDesign-Build Approach
For many owners, delegation of responsibilities leads to satisfactory projects. However, if the parties are inexperienced and do not cooperate, the transfer of control and risk can be disappointing.
The owner may need to restructure his/her internal procedures to accommodate design-build approach.
Compared to DBB, this involves a significantly different set of requirements and expectations for process, timelines and communications.
A clear understanding and documentation of design-build processes enhances the quality of design-build projects
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Advantage of Design-Build ApproachAdvantage of Design-Build Approach
Innovation and quality improvements through: - Alternative designs and construction methods
suited to the contractor’s capabilities - Flexibility in the selection of design, materials, and
construction methods.• Earlier schedule and cost certainty
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Disadvantage of Design-Build Disadvantage of Design-Build ApproachApproach Reduced opportunities for smaller, local construction firms. Fewer competitors and increased risk may result in higher
initial costs. Elimination of traditional checks and balances. Quality may
be subordinated by cost or schedule considerations. Less Engineer control over final design. Higher procurement costs. Traditional funding may not support fast-tracking
construction or may require accelerated cash flow. Accelerated construction can potentially overextend the
workforce.
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Others
TurnkeyTurnkey Turnkey VariationsTurnkey Variations Direct Labor Approach.Direct Labor Approach. Construction managementConstruction management
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Turnkey Turnkey adds to the design-builder’s
responsibilities the operation and/or maintenance of the completed project.
Turnkey delivery has the potential for bringing a new project on line more quickly.
Three forms of turnkey project delivery: Design-build-operate-transfer
Design-build-operate-maintain
Design-build-own-operate-transfer
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Turnkey Variation Variations on turnkey add financing as a key
component. While financing arrangements are unique for each project, developer financed projects generally resemble one of the turnkey delivery methods: FDBT )Finance, design, build, transfer( FDBOT )Finance, design, build, operate, transfer( FDBOOT )Finance, design, build ,own, operate, transfer(
In each case, the transfer of the project occurs only after the developer’s interests and financial obligations have been satisfied.
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Assignment (1)Assignment (1)
Describe the turnkey methods, turnkey variation methods, direct labor approach, and construction management method, highlighting on advantage and disadvantage of each one.
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Lecture (3)
The contract, and contract types, overview of the construction documents.
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Contract DefinitionContract Definition
Agreement of at least two parties with purpose of
creating legal obligation between the parties and
capable of being enforced by the court of law.
Contract = offer + Acceptance + Consideration
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Introduction to contractsIntroduction to contracts
Why Use contract in construction: Describe scope of work Establish time frame
Establish cost and payment provision Set fourth obligations and relationship Minimize disputes Improve economic return of investment
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Content of the contractContent of the contract
o Identify the partieso Promises تعهداتand responsibilitiesمسئوليات
o Scope of worko Price and payment termso Commercial terms and conditionso Project execution plan.
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Major Contract Types (traditional)
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Lump Sum Contract One price for the whole contract Lump sum includes costs plus overheads and profits Higher risk to contractor Price quoted is a guaranteed price as per contract
documents. Payment based on a scheduled percentage scheme
)monthly progress claims( The contractor is free to use means and methods to
complete the work and responsible for proper performance Work must be well defined at bid time. Fully developed plans and specifications
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Lump Sum Contract/ advantage Low risk on the owner, Higher risk to
the contractor Cost known at outset Contractor will assign best personnel Contractor selection is easy.
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Lump Sum Contract/disadvantage
Changes is difficult and costly. Contractor is free to use the lowest cost of
material equipment, methods.
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Unit Price
Quote Rates / Prices by units No total final price Re-negotiate for rates if the quantity or work
considerably exceeds the initial target Payment to contractor is based on the measure. Unbalanced bids Higher risk to owner Ideal for work where quantities can not be accurately
established before construction starts.
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Unit Price contract
Require sufficient design definition to estimate quantities of units
Contractors bid based on units of works Time & cost risk )shared(
Owner : at risk for total quantities Contractor : at risk for fixed unit price.
Large quantities changes )>15-25%( can lead to increase or decrease of unit price.
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Unit Price / Requirement Adequate breakdown and definition of work units Good quantity surveying and reporting system. Adequate drawings. Experience in developing BOQ Payment based on the measurement of the finished
works. Quantity sensitive analysis of unit prices to evaluate
total bid price for potential quantity variation.
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Unit Price / advantagesUnit Price / advantages Suitable for competitive bid Easy for contract selection Early start is possible Flexibility : quantities and scope can be easily
adjusted
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Unit Price / Unit Price / disadvantagesdisadvantages Final cost not known from the beginning )BOQ
only is estimated( Staff needed to measure the finished quantities
and report on the units not completed. Unit price sometime tend to draw unbalanced bid.
)For Unit-Price Contracts, a balanced bid is one in which each bid is priced to carry its share of the cost of the work and also its share of the contractor’s profit.
Contractors raise prices on certain items and make corresponding reductions of the prices on other items ,without changing the total
amount of the bid(
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Cost Plus1. Actual cost plus a negotiated reimbursement to
cover overheads and profit.2. different methods of reimbursement :
Cost + percentageCost + fixed feeCost + fixed fee + profit-sharing clause.
3. Higher risk to owner4. Compromise : guaranteed maximum price )GMP(
reduces risk to owner while maintain advantage of cost plus contract.
5. By using this type of contract the contractor can start work without a clearly defined project scope, since all costs will be reimbursed and a profit guaranteed.
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Cost + Percent of CostFee = percentage of the total project cost
)Cost = $500.000,Fee = 2%(
AdvantagesDisadvantages
profitable for the profitable for the contractorcontractor
No incentive to No incentive to finish jobfinish job
quicklyquickly
Owner does not Owner does not know totalknow total
priceprice
Larger the cost Larger the cost of the job, theof the job, the
higher the fee higher the fee the owner paysthe owner pays
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Cost + Fixed Fee
Fee = percentage of the original estimated total figure Utilized on large multi-
year jobs Ex: WW treatment plant
Facility )Cost = $20 million, Fee = 1%(
$20 Million 1% fee = $200,000 Million
AdvantagesDisadvantagesDisadvantages
Fee amount is Fee amount is fixed fixed regardlessregardless
of price of price fluctuationfluctuation
تذبذب إهمالاالسعار
Expensive Expensive materials andmaterials and
construction construction techniques techniques maymay
be used to be used to expediteexpedite
constructionconstruction
Provides Provides incentive to incentive to completecomplete
the project the project quicklyquickly
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Cost Plus Fixed Fee Most common form of negotiated contracts COST = expenses incurred by the contractor
for the construction of the facility Includes: Labor, equipment, materials, and
administrative costs FEE = compensation for expertise
Includes: profit
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Cost + Fixed Fee +Profit-Sharing Clause
Rewards contractors who minimize cost
Percentage of cost under GMP is considered profit
and shared with the contractor
Guaranteed Maximum Price )GMP(
% of profit sharing is specified in contract
AdvantagesDisadvantages
Provides Provides incentive to incentive to thethe
contractor to contractor to save moneysave money
Contractor must Contractor must absorb anyabsorb any
amount over the GMPamount over the GMP
Plans & specs. need Plans & specs. need to detailedto detailed
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Cost + Fixed Fee +Profit-Sharing Clause
variation of this type of contract is called variation of this type of contract is called a guaranteed a guaranteed maximum price (GMP).maximum price (GMP).
In this type of contract the contractor is reimbursed at cost In this type of contract the contractor is reimbursed at cost with an agreed-upon fee up to the GMP, which is essentially with an agreed-upon fee up to the GMP, which is essentially a cap; beyond this point the contractor is responsible for a cap; beyond this point the contractor is responsible for covering any additional costs within the original project covering any additional costs within the original project scopescope
An An incentive clause, incentive clause, which specifies that the contractor which specifies that the contractor will receive additional profit for bringing the project in will receive additional profit for bringing the project in under the GMP. under the GMP.
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Quiz 1Quiz 1 (13/10/2009 )
1.1. Define construction contract ? And What are the main three Define construction contract ? And What are the main three
elements of the construction contract ?elements of the construction contract ?)2mark()2mark(
2.2. What are the main steps of the project life cycle ? What are the main steps of the project life cycle ? )2mark()2mark(
3.3. Write four methods of construction contracting methods ? Write four methods of construction contracting methods ? )2mark()2mark(
4.4. Explain the meaning of the following words:Explain the meaning of the following words:)4mark()4mark(
A. FDBT contract.
B. FDOBT contract.
C. FDBOOT contract.
D. DBOT contract.
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Lecture 4
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Construction Documents Bidding requirements
Notice to Bidders
Instruction to Bidders
Proposal Form
Contract Documents
Contract Forms
Conditions of the Contract
Specifications
Drawings
Addenda
Change Orders
Agreement.
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Construction Documents Construction Documents are defined as the written and
graphic documents prepared or assembled by the A/E for communicating the design of the project and administering the contract for its construction.
2 major groups
1.Bidding Requirements
Used to attract bidders & explains bidding process
2.Contract Documents
Legally enforceable requirements that become part of the contract
Include all construction documents except bidding forms
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CONSTRUCTION DOCUMENTS
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CONSTRUCTION DOCUMENTSBIDDING REQUIREMENTS
BIDDING REQUIREMENTS
Bidding Requirements are used to attract bidders and explain the procedures to be followed in preparing and submitting bids .
Bidding requirements help bidders follow established procedures and submit bids that will not be disqualified because of technicalities. They do not become part of the contract documents
Bidding documents
All of the construction documents issued to bidders before the signing of an owner-contractor agreement.
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Bid Package Documents available to the contractor and on which he must make a decision to bid or not
A set of plans and technical specifications, Proposal form, general conditions, special conditions,
Description of the project to be constructed
Bid Package is prepared by:
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It describe the scope of the bid, source of fund )if it is financed from other agency(, fraudulent and fraud practices, eligible bidders, Eligible Materials, Equipment and Services, Clarification of Bidding Document, Site Visit, Pre-Bid Meeting, Amendment of Bidding Document
2-1 Instruction to bidders
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See attached example for ITB.
2-1 Instruction to bidders (cont’d)
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2-2 Bid Data Sheet (BDS) Definitions, Engineer’s Authority to Issue Variations, Performance
Security, Inspection of Site, Program to Be Submitted, Cash Flow Estimate
Bid Security, Minimum Amount of Third Party Insurance Time for Issue of the Notice to Commence, Time for Completion Amount of Liquidated Damages, Limit of Liquidated Damages Amount of Bonus for Early Completion, Limit of Bonus Defects Liability Period, Amount of Interim Payment Certificates Percentage of Retention, Limit of Retention Money, Amount of
Advance Payment Start Repayment of Advance Payment, Monthly Recovery of Advance
Payment Number of Copies of Statement of Completion and Final Statement Procedure for Settlement of Disputes Notice to Employer and Engineer Origin of Materials and Plant
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2-3Evaluation and qualification
This section contains all the criteria that the Employer shall use to evaluate bids and qualify Bidders if the bidding was not preceded by a prequalification exercise and post qualification is applied.
In accordance with items specified in ITB, no other methods, criteria and factors shall be used. The Bidder shall provide all the information requested in the forms included in )Bidding Forms( section..
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1- evaluation : describe the Adequacy of Technical Proposal, in case of Multiple Contracts, the conditions governs, Completion Time,
2- Qualification : describe the Eligibility, financial situation, staff, experience , equipments.
2-3Evaluation and qualification (con’d)
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2-4Bidding forms letter of bid )bid form( Form of bid security Technical proposal forms )personnel, equipment( Bidders qualification forms as bidders data, JV information,
Historical Contract Non-Performance, Current Contract Commitments , Historical Financial Performance, Average Annual Turnover, General and specific Experience,
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See attached file
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CONSTRUCTION DOCUMENTS
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Contract documents (graphic and written) describe the proposed construction (the ‘Work’) that results from performing services, furnishing labor, and supplying and incorporating materials and equipment into the construction
A. Contract Forms
B. Conditions of the Contract
C. Specifications & BOQ
D. Drawings
E. Addenda
F. Change Orders
CONSTRUCTION DOCUMENTS
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A. CONTRACT FORMS CONTRACT FORMS
Agreement
Performance Bond
Payment Bond
Certificates
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B.CONDITIONS OF CONTRACTCONDITIONS OF CONTRACT
Define basic rights, responsibilities, and relationships of the parties involved in the construction project.
2 types: General Conditions and Supplementary Conditions
GENERAL CONDITIONS
General clauses that establish how the project is to be administered.
Contain basic expressions of rights, duties, and limitations of the entities involved.
Usually in the form of published standard documents that include principles common to most construction Contracts.
SUPPLEMENTARY CONDITIONS
Modify or supplement general conditions as need to provide for requirements specific to a project. They are not standardized documents and are prepared for specific project needs.
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A.1 AgreementThe written document signed by the owner and the contractor that is the legal instrument binding the parties to the contract.
Defines the relationship and obligations between owner and contractor.
The agreement is quite brief and appears to consist mostly of statements of fact, whereas the general conditions section deals primarily with matters that pertain generally to be construction work and the persons involved.
In other words, the agreement appears to consist of statements and the general conditions appear to be terms, or conditions.
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Agreement (cont’d) The agreement should contain: The names of contracting parties A brief description of the work A list of contract documents, including agreement, general
conditions, drawings, and specifications. The contract sum, or amount )lump-sum contract( The procedures for payment The contract time, or dates for start and completion The signatures of contracting parties and witnesses International construction documents are also often based
on industry-prepared standard forms.
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AGREEMENT FORM A number of organizations prepare recommended standard
general conditions and associated forms. Such as: ENAA )Engineering Advancement Association of Japan( FIDIC )International Federation of Consulting Engineers( ICE )Institute of Civil Engineers, United Kingdom( JCT )Joint Contracts Tribunal(
SEE ATTACHED WORD FILE FOR EXAMPLES
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A.2 .Bonds / Guarantees FORMS1- PERFORMANCE BOND / security
The Contractor, upon receiving the Letter of Acceptance, shall obtain and provide to the Employer before signing the Contract, the Performance Guarantee in the value of ten percent of the Contract Sum, as a guarantee of the proper execution of the Works in accordance with the Contract. This guarantee shall be issued by a licensed bank or financial institution acceptable to the Employer. The guarantee shall be prepared in the form included in part B of these conditions. The obtaining of such guarantee shall in all respects be at the expense of the Contractor.The Performance Security shall be provided to the Employer no later than the date specified in the Letter of Acceptance and shall be issued in an amount specified in the PCC )particular conditions of contract(, by a bank or surety acceptable to the Employer, and denominated in the types and proportions of the currencies in which the Contract Price is payable.
The Performance Security shall be valid until a date 28 days from the date of issue of the Certificate of Completion in the case of a Bank Guarantee, and until one year from the date of issue of the Completion Certificate in the case of a Performance Bond.
In general , it is 10% of contract value
Defect liability
CERTIFICATES
Includes certificates of insurance, certificates of compliance with applicable laws and regulations.
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Advanced payment bond Provide a guarantee that subcontractor, material suppliers, and
others providing labor, material goods, and services to the project will be paid.
The Employer shall make advance payment to the Contractor of the amounts stated in the PCC by the date stated in the PCC, against provision by the Contractor of an Unconditional Bank Guarantee in a form and by a bank acceptable to the Employer in amounts and currencies equal to the advance payment. The Guarantee shall remain effective until the advance payment has been repaid, but the amount of the Guarantee shall be progressively reduced by the amounts repaid by the Contractor. Interest shall not be charged on the advance payment.
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Advanced payment bond (cont’d)
The Contractor is to use the advance payment only to pay for Equipment, Plant, Materials, and mobilization expenses required specifically for execution of the Contract. The Contractor shall demonstrate that advance payment has been used in this way by supplying copies of invoices or other documents to the Project Manager.
The advance payment shall be repaid by deducting proportionate amounts from payments otherwise due to the Contractor, following the schedule of completed percentages of the Works on a payment basis. No account shall be taken of the advance payment or its repayment in assessing valuations of work done, Variations, price adjustments, Compensation Events, Bonuses, or Liquidated Damages.
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Defect liability Security After primary taking over, 5% guarantee is
submitted to employer for defect liability, valid for 365 days or as stipulated in PCC.
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INSURANCE Certificates Insurance for Works and Contractor’s Equipment, Insurance against Injury to Persons and Damage to
Property , Insurance for Contractor’s Personnel
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General Conditions of contract The conditions are intended to govern and
regulate the obligation of formal contract.
Although the headings and topics included within different sets of GCC vary, there is a certain similarity of subject matter
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Contents of GCC Definitions Contract documents Rights and responsibilities of owner Duties and authorities of engineer Rights and responsibilities of contractor Sub-contractor, Separate contractors Time Payments and completions Changes in the work Protection of persons and property Insurance and bond Disputes Termination of contract Miscellaneous provisions
