Construction Management Guide

by Sarah Thomas

I am a contractor working on a wastewater project in Eastern Europe, using the FIDIC Yellow Book –Design & Build. Vol.3 of our contract contains the following clause:

“Tests on Completion

The test on completion duration shall be 90 days.

The first 30 days shall be a monitoring period during which the Contractor sets up the operation of the plant and conducts his own water quality tests to confirm that the final effluent consent has been met. At the end of this period the Contractor shall notify the Engineer that the plant is complete and meeting the Process Guarantee which then shall be met by a further 30 consecutive days before Taking Over can take place.” [Read more...]

 By Samer H Skaik

Dear CMguide Reader,

I am currently conducting an academic survey about nominated subcontractors in the UAE. This survey aims to evaluate the current practice of subcontract nomination in the UAE and the possible approaches to improve nomination.

I would like to invite you to participate in this survey if you have an experience in the UAE construction industry. The survey will take about 5-7 minutes only.

I am looking forward to receiving your response. Your participation is highly appreciated.

You may proceed with the survey thru the following link:

http://freeonlinesurveys.com/rendersurvey.asp?sid=3×54crx5jg6nj9o772500

Warm Regards,

Samer Skaik

[Read more...]

by Melanie Grimmitt

Reviewing the wealth of commentary on the use of letters of intent in construction contracts, one might speculate that at the time the pyramids were being built some well-intentioned Egyptian lawyer was earnestly hammering out hieroglyphics warning his contemporaries of the potentially dire consequences of commencing construction works without a concluded contract in place. Nevertheless, despite the plentiful guidance cautioning contractors against relying on letters of intent which has been produced by legal professionals in more modern times, a significant proportion of construction projects do, in fact, proceed on the basis of a letter of intent. This practice is particularly common within the UAE and the wider Gulf Region. [Read more...]

by Sachin Kerur

A large part of the administration of a construction contract comprises a contractor seeking genuine contractual entitlements for additional time and costs and the determination and award or rejection of those claimed entitlements by the engineer/employer. As a result, contractor’s claims for extensions of time and additional costs are also often the subject of arbitral proceedings and litigation.

Under both the contractual process and subsequent formal dispute resolution proceedings, contemporary records form a critical part of the evidence to be utilised in evaluating the contractual entitlement. The importance of good record keeping – by both contractors and employer’s agents or engineers—cannot be overstated. [Read more...]

by Melanie Grimmitt

One of the most interesting aspects of working in different jurisdictions is seeing how different regions approach the same issues in different ways – both legally and commercially. An example of this in the context of PPP transactions, is the differing approach taken in the UK and the Middle East in respect the inclusion of delay liquidated damages regimes in Project Agreements. [Read more...]

by Vincent Connor

Volcanoes – we have rather a lot of them in Asia, but even we’ve been obsessing about the infamous Icelandic one, this week. Though 6000 or more miles away from the action, Japanese car manufacturers relying on components from Ireland and Korean mobile phone suppliers ready to send their wireless wares to a waiting world, have been among those frustrated as the volcanic ash cloud has choked airfreight routes. Which got me thinking…not so much about force majeure (I’ll leave that to my holidaying partners examining their insurance documents to seek support for their compensation claims!) but about the options a contracting party faces when the party with whom he’s entered into an agreement has breached a material provision (say, a delivery date): should he accept that party’s repudiation and sue for damages or simply terminate it in accordance with the procedure provided for in the agreement? [Read more...]

by Sarah Thomas

Answer: when it’s an affirmation. Consider the questions which Shell raised in an appeal case recently decided by the High Court (commented on by Connor in his last post):

Shell’s position was that Centurion Petroleum Corporation was in repudiatory breach and that Shell had clearly “accepted” this repudiation. The problem they faced was that the arbitral tribunal had interpreted their letter notifying Centurion that their contract was at an end as an “affirmation” of the contract – an interpretation with a significant price tag attached. On appeal, Shell were asking the Court “what principle requires a clear election to terminate on the basis that a substantial sum is recoverable to be treated as a termination on the basis that nothing is recoverable?” [Read more...]

by Dennis Brand
Many of you will deal with industry-standard form contracts, while others will deal with company standard or even bespoke forms; whatever the form of contract, the notices provision contained in the conditions of contract is probably one of the least-read provisions. The notices provision does not attract the same degree of interest as, say, the variation or change order provisions, or provisions which deal with certificates of completion, suspension or even termination, but in each case a notice is required.

[Read more...]

The majority of respondents pointed to improper planning and methodology (78 per cent), lack of communication (75 percent), and unrealistic target completion dates (67 percent) as the top three contributing factors to project failure. They also identified inadequate commitment and involvement from senior management (59 percent), insufficient budgets and resources (56 percent), too many assumptions and unknowns (51 percent), project politics and conflicts (38 percent), lack of set targets or measurable results (45 percent), and the formation of the wrong project team (27 percent) as other major causes. [Read more...]

by Júlio César Bueno

Federal Law No. 11079, 2004 [PPP LAW] instituted the general rules for bidding and contracting of Public-Private Partnerships (PPPs) within the realm of public administration. This is an important volley in the Brazilian government efforts to develop funding and management alternatives for public works in furtherance of the bidding system instituted by the Federal Law No. 8666, 1993 [Brazilian BIDDING LAW] and to reduce the state presence in the Brazilian economy. [Read more...]