CONTRACTUAL RISKS

 Cl.1.9 Drawings  Cl.2.1 Site  Cl.4.7 Setting Out  Cl.4.12 Unforeseeable  Cl.4.24 Fossils  Cl.7.4 Testing  Cl.8.4 EoT  Cl.8.4 Adverse Climatic Conditions  Cl.13.7 Legislation  Cl.13.8 Changes in Cost  Cl.14.8 Delayed payments  Cl.19.4 Force Majeure

Project Control Issues

 Cl.1.9 Delay to details  Cl.2.4 Finance Details  Cl.2.5 Employers Claims  Cl.3.3 Instructions by Engineer  Cl.4.1 Method Statement  Cl.4.21 Reporting  Cl.8.3 Programme  Cl.12.1 Measurement  Cl.13 Variations & Value Engineering  Cl.14 Payments  Planning  Funding & Budget  Disbursement approval  Cl.18 Insurances


Cl.20 Contractor s Claims / Records

THE FIRST 100 DAYS

Pre Award Check List

General
     Document negotiated changes Prioritise and sign changes Cl 1.5 Agree terms of insurances Cl 18.2 Agree DAB membership Confirm communication and addresses Cl 1.3

Engineer s Duties & Authority

    Employer names Engineer Employer s constraints on Engineer s Authority Cl 3.1 Delegation of Engineer s Authority to Resident Engineer Cl 3.2 Engineer s Determination Cl 3.5

Employer s Risks
   Right of Access - Cl 2.1 Provision of Specifications Cl 1.8 Supply of Drawings Cl 1.9

Award to Commencement Date

General
     Formal Letter of Acceptance signed Cl 1.1.1.3 Contract Agreement - Cl 1.1.1.2, 1.6 Date on which the Contract becomes legally binding Instruction of Commencement Date Engineer Cl 8.1 7 days notice Time for Completion Cl 1.1.3.3

Contractor s obligations
    Performance Security Cl 4.2 Consent for sub-contractors Commencement of sub-contract wks Compliance with applicable laws, etc prior to Commencement

Employer s obligations
  Obtaining planning, zoning etc permits for the Permanent Works Cl 1.13 Ensuring that the Contractor will have right of access to and possession of all parts of the Site

Commencement Date to + 28
Employer s Actions
 Right of access & possession Cl 2.1  Ensuring Employer s personnel are aware of responsibilities Cl 2.3  Preparing evidence of Employer s financial arrangements Cl 2.4  Provision of copies of the Contract and Drawings Cl 1.8 & 1.9

Engineer s Responsibilities
 Advising Contractor of Engineer s Authority and Delegations Cl 3.2  Ensuring assistants are suitably qualified  Providing reference survey points, lines and necessary data Cl 4.7

Contractor s Responsibilities
 General obligations adequacy, stability & safety Cl 4.1  Provide Performance Security prior to access to Site Cl 4.2

 Submit name of Contractor s Representative for consent Cl 4.3  Give notice of any delegation of CR s responsibilities  Obtain consent for sub-contractors not named in Contract Cl 4.4  Give notice of commencement of sub-contract work  Provide details of suppliers not named in Contract (see Cl 4.16)  Make objections to any Nominated Sub-contractors who the Contractor does not wish to employ  Submit detailed time programme within 28 days of receipt of the notice to commence Cl 8.3  Give notice of probable future events or circumstances which may increase price or delay completion  Confirm working hours Cl 6.5  Site health & safety facilities Cl 6.7  Appoint Accident Prevention Officer

RESPONSIBILITIES
Employer
 Cl.2 Provides Access to the Site  (not access & other areas Cl.14.15 & 14.23) Assists Contractor with Permits Financial Arrangements  See Variations & Cl.16.1 Suspension (strike out??) Notice of Claims

 Appoints the Engineer Cl.3.1  Cl.14.7 make Payments !!  Cl.20.2 appointment of DAB members

Engineer
 Exercises stated authority  Employer s Approval Particular Conditions  When he exercises specific authority deemed to have Employer s approval  Acts for Employer  Cl.3  Cl.3 Delegation except Cl.3.5 Instructions in writing  Oral confirmation by contractor written Employer undertakes not to impose further constraints (Breach of Contract) No authority to amend contract Acts for Employer No authority to relieve the parties of duties or obligations etc. Cl.3.5 Fair Determination

Employer instructions to Engineer Determination  Consult agreement fair determination  Give notice  Give effect unless Cl.20

 Cl.4.1 Method Statements  Cl.8.1 Give Commencement Notice  Cl.8.6 Rate of Progress  Cl.12.1 Measurement  Cl.13.1 Variations  Cl.14.6 Interim Payment Certificates  Cl.20.1 Records / Determination

Contractor
 Cl.4 Execute & Complete the Works  Cl.8.1 due expedition & without delay  Adequacy & safety  Method Statement  Fit for purpose Performance Bond Engineer s Approval of Representative May delegate Fluent in language Sub Contractor approval

 Setting Out to lines & levels of Engineer  Quality Assurance Details in Specification

Procedures Compliance documents

 Site data Costs included Risk Inspections All relevant data obligation Care in Tender failure to provide

 Sufficiency of Contract Amount  Unforeseeable Physical Conditions Excludes climatic conditions  Cl.8.4 & 17.3h Extension of time Payment of cost  (see Cl.1.1.4.3 includes off site) No profit  (as a general rule not included where risk is not the fault of either party)  Transport to site  Protection of the Environment Emissions Surface discharges Effluent Local Law

 Progress Report  Monthly 6 copies See also (Cl.4.9 procedures) and: Cl. 6.7 Accident Records

Cl. 6.10 Personnel Cl.14.3 Application for payment Cl.20.1 Contemporary records

 Progress Report: Charts Photographs Manufacturing report Personnel QA documents Claims Cl.2.5 & 20.1 Safety statistics Progress

 Security  Staff & Labour Facilities / Health & Safety

 Tests on Completion Cl.9.1  Value Engineering Cl.13.3  Application for Payment Cl.14.3  Contemporary records Cl.20.1 Nominated Subcontractors  Clause 5  Applies to Subcontractors and suppliers nominated by Employer or as instructed by the Engineer under Cl.13  Payment Cl.5.3  Grounds to object Cl.5.2  Reasonable Objection  Supporting details  Lack of competence, recourses, financial strength

 Lack of indemnity  Lack of obligations and liability Staff & Labour  Clause 6  Engagement of Staff & Labour Payment, housing feeding & transport Cl.8.4d & 13.7

 Rates of pay & conditions NO Poaching !! (Cl.6.3  Labour Laws (including immigration)  Working Hours (days of rest)  Facilities (including Employer s Personnel)  Health & Safety Medical staff & facilities Accident prevention officer Records

 Cl.4.3 Contractor s Representative  Cl.6.8 Superintendence (Language)  Personnel qualified, skilled, experienced Records monthly (cl.4.9 procedures Plant Materials & Workmanship  Cl.7  Execution of works as specified Recognised good practice Proper facilities Non hazardous materials

 Samples

For consent Labelled origin / intended use

 Inspection: Access to locations of natural materials Place of manufacture Provide access, facilities, permissions, safety equipment Give notice and provide opportunity Testing may proceed after notice Delay claim Test Reports & Certificates

 Rejection Retest costs Cl.2.5  Remedial works  Ownership of Plant & Materials Local law When delivered When contractor entitled to payment under Cl.8.10 (suspension)

 Royalties

COMMENCEMENT DELAYS & SUSPENSION

 Contract becomes effective when Letter of Acceptance has been received by Contractor  Cl.8.1 Commencement Date Engineer SHALL Contractor SHALL

 Engineer determines the date or 42 days after the LA

COMPLETION
 Cl.8.2 Fundamental obligation to complete within Time for Completion Includes all of Works Includes all tests See Cl.10.1

PROGRAMME
 Programme of Works Cl.8.3 Within 28 days Specific requirements of programme Methods of execution Details of personnel & equipment

 Engineer does not approve (21 days)  Employer may rely on programme  Specific, Probable, Future events  Revisions to programme  Monthly progress charts  Engineer may request a revised programme

Extension of Time
 Contractor SHALL be entitled Not dependant upon further decision

  Cl.20.1

If no extension then time at large Variation Sub Clause giving delay Exceptionally adverse climatic conditions Unforeseeable shortages personnel & goods Employer s delay

 Cl.3.5 Engineer s Determination  Cl.20.1 & 3.5 give time limits to Engineer to Determine or Cl.13 shall not be unreasonably withheld or delayed  Delays by authorities

Rate of Progress
 Engineer may instruct submission of revised programme  Contractor to proceed with due expedition and without delay  Delay Damages Failure to complete by due date Delay damages Limit of damages

 Suspension Engineer may instruct

Tests on Completion
 Cl.9 Contractor shall give 21 days notice Tests carried out within 14 days of notice Certified report

 Delayed tests Employer Cl.7.4 or 10.3 apply Contractor to complete 21 days after notice

 Failure Retest Cl.11.4

Taking Over Responsibilities

 Responsibilities under Financing Agreement Proper use of funds Proper management of construction Final payment

 Responsibilities under the Contract: Before Taking Over After Taking Over

 Before Taking Over: Take over on Completion Tests on Completion Contractor s request for TO Certificate

 Cl.10.1 The Employer SHALL take over when: Works completed Tests completed TO certificate issued

Employer s Taking Over

 Cl.10 TO Certificate issued when works completed and ready for intended purpose Minor outstanding work may be completed after issue of TOC

 Contractor may apply for TOC within 14 days of Works being complete  Sectional Completion  Engineer may Issue TOC Reject application giving reasons

 Failure of Engineer to issue TOC or reject Within 28 days TOC deemed to be issued

 Sectional Taking Over Tests Cost due to STO Delay Damages reduced after STO Certificate issued Reduction in ratio of value of STO Works No difference to maximum damages

 Reinstatement of ground or surface  Taking Over Certificate Appendix listing all minor defects Listing all works yet to be carried out

 Contractor responsible to carry out repairs before end of Defects Notification Period

Defects Liability
 Cl.11 Provides procedures and responsibilities under the Defects Notification Period Works are accepted by Engineer on the issuance of Performance Certificate

 Works & Documents completed Fair wear & tear accepted Complete all o/s work in TOC Remedy defects & damage notified by the end of the DNP

 Remedy works at Contractor s cost  Extension to DNP Max 2 years, or Suspension Cl.8.8 or 16.1

 Failure to Remedy

Reasonable notice Carry out work himself or by others Contractor has no responsibility Reduction in Contract Price Recover all sums paid & costs

 Removal Further Tests Right of access Contractor to search

Performance Certificate
 Performance Certificate Contractor s obligations complete Engineer to issue Date Issue within 28 days of DNP expiry After submission of all documentation All tests complete All remedying works complete

 Constitutes Acceptance of Works Liability for fulfilment of obligations Removal of equipment, rubbish etc Contractor may be liable for latent defects

Measurement, Evaluation & Variations

 Measurement by Engineer  Standard method of measurement as specified in schedules  Cl.12.3 Basis of evaluation  Rates in contract will apply

 New rates may be determined  Qty changed more than 25%  Variation  Not specified  No appropriate rate  Reasonable Cost & Profit  Cl.12.4 Compensation  Cl.13.3 Determinations  Means of measurement may be necessary  Payment schedule linked to milestones Cl.14.4

Variations
 Cl.13.1 Engineer has the right to vary Prior to issue of TO certificate List of variation inclusions

 Value Engineering Cl.13.2 Development risk with Contractor Savings 50/50

Variation Procedure  Engineer requests proposal from Contractor Contractor responds with:  Description  Programme  Evaluation Work proceeds without delay

Variation due to Legislation  Local law at Base Date  Cl.20.1 claim

Extension of time Payment of cost

Contract Price & Payment

 Considerations: Payment schedules Disbursement approval Particular Conditions Budgeting  Funding availability  Additional Costs / Variations  Advance payment Design Mobilisation Funding facilitation

 Interim payments 56 days

 Final Payment  84 days  Aid funding requires: Authority approval Timing Variations Routine audit checks Time to transfer funds Advance notice of change

 Cl.14 requires prompt action within time constraints  Finance costs will lead to claims

 Alter Cl.14 by Particular Conditions to suit funding authority  Financial planning: Check estimates & budgets Prepare draft payment schedules Update estimates & programme Check funding Cl.14.4 estimates each 90 days

Budget Forecast
 Engineer prepares for Employer Regular intervals Updated budget Report of changes

 Data for report: Cl.2.4, 2.5, 3.5, 4.21, 8.3, 13.1, 13.3, 14.3, 13.8, 14.3, 14.6, 20.1, 20.4

Advance Payment
 Cl.14.2 Advance payment Interest free loan for mobilisation  Guarantee  Application Cl.14.3  Performance Security approved by Employer Repayment  Commence after when certificates >10%  Deductions 25% of each Certificate

Interim Payment
 Cl.14.3 Application 6 copies In a form approved (Cl.4.9)

Cl.4.21 List of items (a) (g) Note : Cl.20 items included

 Cl.14.4 Schedule of payments: Payment dates not recommended Engineer determination Cl.3.5 Cross guarantees Milestones preferred

 Cl.14.6 Issue of IPC Engineer determines FAIRLY IPC SHALL not be withheld

 Cl.14.7 Payment IPC paid within 56 days after Engineer receives Statement

 Cl.14.8 Interest on late payments

Non Payment
 Cl.16.1 Suspension Engineer fails to certify Employer does not provide Cl.2.4 details Non payment 21 days notice

 Cl.16.2 Termination

Guarantees & Bonds

 Cl.4.2 Performance Security  Contractor finance Guarantee by Employer No Cl.8.1 notice before Guarantee

 Cl.14.2 Advance Payment Guarantee

Risk & Responsibility

 Cl.17.1 Basis for Indemnity  Cl.17.2 Full responsibility for Works & Goods until TO Certificate  Cl.17.3 Employer s Risks  Cl.17.4 Compensation & Claims

Insurance
 Cl.18 Employer to approve insurers Agreed terms Currency Payments to be used to rectify loss Cl.18.3 Appendix minimum amount

Force Majeure
 Basic Principles: Exceptional event Not reasonably provided against Not reasonable to overcome / avoid Not attributable to either party Beyond control of affected party

 Cl.19.1 Definitions (i) (iv) man made

 Cl.19.4 Consequences EoT Man made cost Man made in country cost Cl.19.6 Termination

CAUSES OF CLAIMS FOR CONTRACTORS

       Unforeseeable ground conditions Delayed drawings Delayed payment Lack of possession of site Consequence of risk Suspension Force Majeure

CONTRACTOR S CLAIM PROCEDURE

 Clause 20.1 o o o o o o o o o o o o   Sets out Contractor procedure Condition Precedent Not later than 28 days Sets out Engineer procedure Contractor gives notice Within 28 days Contractor keeps contemporary records Engineer may monitor Engineer may instruct further records Fully detailed claim Supporting documents Within 42 days of event

Cl.20.1 continuing procedure After 42 days: o o o Claim submission is considered interim Further monthly claims Final claim with 28 days of end of effects

Engineer s Response: o o o Within 42 days of receiving claim Approval / Disapproval Detailed comments

  

May ask for further details Proceed with Cl.3.5 May certify interim sums

CAUSES OF CLAIMS FOR EMPLOYERS

     Quality below Specification Delay in Completion Date Slow Rate of Progress Defective Materials Failures of Tests

EMPLOYER S CLAIM PROCEDURE

 Employer gives notice o  As soon as practicable

Contractor Receives Notice o No obligation to respond

  

Engineer proceeds with Cl.3.5 Contractor can dispute if dissatisfied Engineer s determination applied to Certificate of Payment

CONTEMPORARY RECORDS
     Crucial for determination of claim Records for any future dispute Contractor obliged to keep records Procedure for this work Employer & Engineer to agree Engineer s actions

CLAUSE 3.5 DETERMINATIONS

       Engineer makes a Determination Makes his own evaluation Shall NOT delegate Cl.3.5 authority Engineer shall consult both Parties Try to reach agreement Give notice with supporting particulars Where no agreement then Engineer makes a FAIR determination

DISSATISFACTION WITH Cl.3.5 DETERMINATION

  Dispute : Refer to Dispute Adjudication Board No definition of Dispute o o o o  Rejection of Determination No agreement with continued discussion One party declines to discuss No progress in protracted discussion

Subsequent procedure - Clause 20.4