CONSTRUCTION CLAIMS MANAGEMENT

Mr
 Project Analysis

Project analysis slide 2

ANALYSIS SPECIFICATION

PROJEC
IMPLEMENT DESIGN
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TESTING DEVELOP
 CONSTRUCTION CLAIMS MANAGEMENT PLANNING
EOT DELAYS ANALYSIS • ENGINEER

CONTRACT MODULE
CONTRACT IS ONE OF THE MOST IMPORTANT REFERENCES
AND DOCUMENTS FOR ANY CLAIM , YOU HAVE TO REFER

FOR EVERY ENTITLEMENT YOU ASKING FOR IN YOUR CLAIM

WITH THE CONTRACT REFERENCE AND ITS CLAUSE.
IN CONTRACT MODULE AND ITS LECTURES WE WILL FOCUS
ON SOME OF THE MOST IMPORTANT CONCEPTS AND
ESSENTIAL INFORMATION , YOU HAVE TO KNOW DURING
YOUR CLAIM PREPARATION FORM THE CONTRACT
ADMINISTRATION POINT OF VIEW.
CONSTRUCTION CLAIMS MANAGEMENT PLANNING
EOT DELAYS ANALYSIS • ENGINEER

PART 1
INTRODUCTION ABOUT CONTACTS &
CONTRACTS TYPES
 Construction Claims Management ( Contract Module – Part 1 )

Agend
a
• Introduction
• Construction Industry Parties
• What is Contract ?
• Contract Strategy
• Contract Need Documents
• Contract Documents Priorities
• Contract
• Construction Contract Forms
• Contracting Process
• Types of Contract
• Conditions of Contract
• Legal Laws
 Construction Claims Management ( Contract Module – Part 1 )

Construction Industry Parties

The key parties involved in most construction projects
and considers what each of their roles are and how
they are linked to one another i.e. the contracts that are
entered into between them.
Employer
Contractor
Professional Team ( Engineer )
Sub-Contractors
Employer's Agent/Project Manager
Funder / Sponsor
 Construction Claims Management ( Contract Module – Part 1 )

Construction Industry Parties

The relationship between all the parties differs
according to the contract type ,form and conditions.

Employer

Engineer

Contractor
 Construction Claims Management ( Contract Module – Part 1 )

What is a Contract
 A contract is defined as: “An agreement made
between two or more parties which is enforceable by
law to provide something in return for something
else from a second party".

 The two parties are expected to perform the various

obligations they have undertaken, as expressed in a

mutually agreed set of contract documents.

 Construction Claims Management ( Contract Module – Part 1 )

Contract Strategy
 Contract strategy means selecting organizational
and contractual policies required for the execution
of a specific project.

 The development of the contract strategy comprises

a complete assessment of the choices available for
the management of design and construction to
maximize the probability of achieving project
objectives.
 Construction Claims Management ( Contract Module – Part 1 )

Contract Strategy
A proper contract strategy for a project involves Four
key decisions:

 Setting the project objectives and constraints.

 Selecting a proper project delivery method.

 Selecting a proper contract form / type.

 Contract administration practices.

Construction Claims Management ( Contract Module – Part 1 )

Do you think …

All Agreements are Contracts ??

 Construction Claims Management ( Contract Module – Part 1 )

 Competent (legal standing) Parties

For an agreement to be a contract, there must be two or
more competent parties. In order to be considered
competent, a part must have a certain legal standing.

 Proper Subject Matter

For the subject matter of a contract to be proper, the first
requirement is that it was be clearly defined as to the
rights and obligations of each party. Second, the
purpose of the contract must not violate the law.
 Construction Claims Management ( Contract Module – Part 1 )

 Consideration

There must be
a lawful and
valuable
consideration
 Agreement
given to contract,
For valid both there must be a mutual agreement.
parties. A is considered to have been reached
An agreement
consideration
when an offer made by one party is accepted by the
often calledBoth parties must
second party. and intend their
wish
"Something for
 Construction Claims Management ( Contract Module – Part 1 )

 Proper Form
The terms of a contract must be written so that both
parties are very sure of what their rights and
responsibilities are.

 Consent (agreement) of the Parties

The agreement must be free from Misrepresentation or

Duress (by force) , ..etc.

 Construction Claims Management ( Contract Module – Part 1 )

Contract Need
 Contracts provide a description of responsibilities and
liabilities.

 Contracts bind parties to their duties.

 Contracts can establish a time frame for duties.

 Contracts can secure payment.

 Contracts can provide resources.

Construction Claims Management ( Contract Module – Part 1 )

What are the …

Contract Documents??
 Construction Claims Management ( Contract Module – Part 1 )

Contract Documents
The contract is defined by the contract documents,
which are developed from the tender documents.

Contract
Document
s

Agreement General Special

Additional
Form Conditio Conditio
ns ns
 Construction Claims Management ( Contract Module – Part 1 )

Contract Documents
1- Contract Agreement.
Which represent the final agreement document that is signed by both
parties and contains the full detailed information about them.

2- Letter of Tender.
Letter of Tender is the letter which is completed by the contractor and
contains the signed offer to the Employer.

3- Letter of Acceptance.
Letter of Acceptance” is the letter sent from the Employer to the
contractor including any annexed attached agreed between both parties.
If the Letter of Acceptance is not available it will be referred to
the
Contract Agreement and related dates.
 Construction Claims Management ( Contract Module – Part 1 )

Contract Documents
4- Conditions of Contract.
1. Special Conditions.
2. General Conditions
Which represents the rights and obligations for both parties

5- Specifications.
Which should contain a detailed description on design and material used
in execution.

6- Drawings.
Which Indicates to the drawings specified in the Specification
Document and any drawing modifications written by the Consultant.
 Construction Claims Management ( Contract Module – Part 1 )

Contract Documents
7- Programme
Means the document(s) entitled schedules, completed by the
Contractor and submitted with the Letter of Tender, as included in
the Contract. Such document may include the Bill of Quantities,
data, lists, and schedules of rates and/or prices.
Construction Claims Management ( Contract Module – Part 1 )

Contract Documents Power??

 Construction Claims Management ( Contract Module – Part 1 )

Contract Documents - Priorities

In the Case of any differences arising between the contract
documents, What is the order of documents power?

For Example :

1.The Contract Agreement 5.Drawings

2. Letter of Acceptance 6. Specifications

3. The Particular Conditions 7.B.O.Q

4. The General Conditions

 Construction Claims Management ( Contract Module – Part 1 )

Construction Contract Forms

They are forms guide the drafting of documents on civil
engineering and construction projects for the purpose of
obtaining tenders, awarding and administering Contracts.

As such they legally define the responsibilities and duties

of Employers (who commission work) and Contractors
(who carry out work) in the Works Information such as
( Fidic Contract Forms , NEC Form , …etc.).
Construction Claims Management ( Contract Module – Part 1 )

Contracting Process
Identify Project
Prepare Scope
Select Contract
Prepare Tender Documents
Invite Tenders
Tender Meetings
Tender Evaluation
Place Contract
Construction Claims Management ( Contract Module – Part 1 )

Types of Contracts

Cost Plus
Cost based
Target Cost
Contract
Unit Price
Price based
Lump Sum
 Construction Claims Management & EOT Delay Analysis – Part 1

Unit Price contract


Contract Value: Tender price is usually increased by
variations and claims.

 Payment : Payment is paid monthly for all work

completed during the month or any duration agreed .

 Design Changes : Offers a facility for the client to

introduce changes in the work defined in the tender
documents.

 Additional Payments : Additional payments for any

changes in the work content of the contract.
~PLANNING
ll;i"ENGINEER Construction Claims Management & EOT Delay Analysis – Part 1

Unit Price contract

 Using : This contract is best suitable for repetitive
works.

 Variations : Not limited

 Additional Payments : For variations or quantity

increase of the items in the BOQ
 Construction Claims Management & EOT Delay Analysis – Part 1

Lump-sum contract
 Contract Value: Single tendered price is given for the
completion of specified work by a certain date.

 Payment : May be staged at intervals on the completion.

 Design Changes : Contract has a very limited flexibility

for design changes.

 Contract Final Price : Final price is known at tender.

 Contractor Risk : High Level of Risk.

 Employer Risks : Low Level of Risks, transfer risks to
the contractors.
 Construction Claims Management & EOT Delay Analysis – Part 1

Lump-sum contract
 Using : This contract may be used for a turn key
construction

 Important Risk : An important risk t the client is that of

not receiving competitive bids from desirable
contractors who may avoid a high-risk lump-sum
contract.

 Variations : limited variations are expected

 Additional Payments : For variations Only.

Construction Claims Management ( Contract Module – Part 1 )

Construction Claims Reference

to the Contract
 Construction Claims Management ( Contract Module – Part 1 )

Construction Claims
• A construction claim is a request for payment or
time extension to which the contractor considers
him/herself entitled under the contract conditions
and terms . There are three types under which
claims are required:

Extension of time only.

 Additional cost.

 Both extensions of time and additional cost.

Construction Claims Management ( Contract Module – Part 1 )

Legal systems

Legal Systems

Civil Law Common Law

) ‫بوتكمال‬ )‫ةيئاضقال‬
‫( نوناقال‬ ‫( قباوسلا‬
Construction Claims Management ( Contract Module – Part 1 )

Egypt Applicable Law

Egypt Applicable Law

Civil Law Administrative Law

) »‫( نوناق صاخل نوناقل ىندم‬ ) »‫ىرادإلا‬ ‫ماعال‬ (
‫ال‬ ‫«ا‬ ‫ا‬ ‫ال‬ ‫«نوناقال‬ ‫نوناقال‬

Arbitration Law
Law 89 and its Law 119 year 2008 (Law 27 year 1997)
Amendments () ‫دحومال ءانبال‬ ( ‫نوناق‬
‫نوناق‬ )
‫ميكحتال‬
Construction Claims Management & EOT Delay Analysis – Part 1
Thank You