May,2014

  Awareness Session

Contracts Management

descon.com
 

Contents

1. Introduction To Contracts

2. Role Of Contracts Management

3. Potential Claim Clauses

4. PC Contracts Administration

!. "ecti#e Contracts Administration$ ngineering

Pers%ecti#e

&. Com%arati#e Anal'sis

 

1
I(TRO)*CTIO( TO
CO(TRACTS
 

+,at is a Contract -

  It is a %romise document w,ic, is enforceale at law

•

 
• A document t,at de/nes contractual0 tec,nical and
eecution
oligations of t,e %arties
 

+,' to use a Contract -

•  (ecessar' to carr' out usiness in toda

toda's
's com%le
world 
de/nes woring interfaces

•  "ecti#e mec,anism to otain

otain 5 furnis, desired goods
goods
and
ser#ices

•  )escries 6rules of t,e game7

 

ssentials of t,e Contract

• Ca%acit' of t,e %arties

•
+ell de/ned res%onsiilities 8 oligations
• 9alid o"er and willful acce%tance wit, free
consent

Considerations
• :air and et,ical a%%roac, ;$ +I($+I(
SIT*ATIO(
 

T'%es of Contract

Contract t'%es #ar' according to<

•  T,e etent of sco%e of wor and time line

res%onsiilit'

assumed ' t,e contractor for t,e eecution of

contract= and

  T,e amount and nature of t,e %ro/t5incenti#e

o"ered to t,e
contractor for ac,ie#ing or eceeding s%eci/ed
standards or
goals
 

Contract T'%es wit, res%ect to Pa'ment

Mec,anism
•  :ied $ Price Contracts< The specifc contract types range
rom frm-
  fxfxed-price,
ed-price, in which the contractor has ull responsi
responsibility
bility or
the
perormance costs and resulting proft(or
proft(or loss).

•  Cost $ Plus Contracts<  The contracts in which the

contractor has
minimal responsibility or the perormance costs and the
negotiated
ee (proft) is fxed.

•  Incenti#e Contracts<  These contracts include cost and

perormance
incentives to the contractor on eectively managing the
cost and
 other uncertainties involved in the pro!ect.
 

Contract T'%es wit, res%ect to ecution

Mec,anism
Some of t,e contracts are=

•  ngineering )esign Contracts

•  Procurement Su%%ort Contracts

•
  Construction Su%%ort Contracts

•  PC >T
>Turne'
urne' Contracts
Contracts?? 5 PCC 5 PCM
 

:actors in@uencing Contracts

•  Price com%etition

• Cost anal'sis 8 ris assessment

•
T'%e and com%leit' of t,e reBuirement
•  *rgenc' of t,e reBuirement

• Period of %erformance or lengt, of %roect 5

%roduction run
• Contractors tec,nical ca%ailit' and /nancial
res%onsiilit'

Concurrent contracts
• tent and nature of %ro%osed
% ro%osed sucontracting
sucontracting
 

Ste%s to Award a Contract

• Contractor recei#es instruction to idder >ITD?

documents

• Pre $ Did clari/cations

•
Contractor sumits id stating ece%tions
5alternati#es

• Post ; Did clari/cations

• (egotiations on sumitted id and %ro%osed

ece%tions

• :inaliEe contract documents to e read' for

signatures
 
• )e/n
)e/nit
iti#
i#e
e cont
contra
ract
ct is
is si ne
ned
d at awa
award
rd
Contract Award Mec,anisms

A. Signing a de/niti#e
d e/niti#e contract >%referred a%%roac,?
• Food usiness %ractice
• stalis,es 6rule of t,e game7 efore starting wor 
• Parties can focus on %roect eecution wit,out an'

im%act from
negotiations5/naliEation continued contract

D. Getter of intent >non$%referred a%%roac,?

• :reBuentl' used
• Carries ris e%osure for %arties
• Sometimes usti/ed w,en owner not in %osition to
mae oHcial award ut woring on sc,edule crunc,
 

" ROG O:
CO(TRACTS
MA(AFM(T
 

:ocus of Contracts Management

• )rafting of %roect s%eci/ed terms 8 conditions of

contract5consortium5oint
contract5consortium5oint #enture etc.

• Contract negotiation wit, client 5 #endor

• Re#iew and identif' contractual oligations and riss

• Su$contract and5or %rocurement contract

administration

•
Claims >cost 8 time? management0 including
identi/cation0 sustantiation0 documentation0
Buanti/cation and follow$u%s

•
Su%%ort dis%ute resolution %rocesses0 including
mediation0 aritration and litigation
 

Contracts Management Role in

Pro/tailit'
• T,oroug, understanding of liailities

• Allocation of riss during negotiations

• Pricing for contingencies

• Awareness on claimale e#ents

• Pro%er record ee%ing and documentation

Identi/cation and management of c,ange

• To wor %re#enti#el' and strategicall' wit, contracts
 

Contracts Management Role at )IPG

6T,e contracts de%artment at )IPG is %rimaril' a su%%ort

de%artment.7

S%ear,ead o#erall contract management of t,e com%an'

Pro#ide su%%ort to usiness acBuisition in %re%aration of

contracts for #arious %ro%osals including ngineering 8 PC
%roects
(egotiate contractual terms and conditions wit, clients 5
#endors
Pro#ide assistance to Proect Management in contracts
administration including claims management during %roect
eecution
 

Contracts Management Process :low

)iagram
 

:unctional Out%uts of CM)

1 Selection of
of Co
Contracting St
Strategies

#dvising in selection o appropriate main and secondary options

or new contracts
2 J

#lign ris$ strategy with contract strategy

2 Pro
Pro#i
#ide
de ad#
d#ic
ice
e Pr
Pre
e an
and
d Post Ten
ende
der
rin
ing
g P,
P,as
ase
e

%valuation and ris$ assessment on contract conditions and

tender documentation during tendering phase

&etting specialist opinion rom commercial , legal and

a nd 2J
insurance specialists as and when re'uir
re'uired
ed
 

Continued.

3 Pro#ide Contract Administration

uring lie cycles

onitoring and controlling contractual related activities

4 J
*roviding cost advise and implement contract variations and
compensations

aintaining that contract conditions and specifcations are

adhered to

4 Contract )i
)is%ute Re
Resolution

+nput and acilitate the implementation o the process related

to dispute resolution
2J
+ntegrate into the contract and implement resolution
 


POT(TIAG CGAIM
CGA*SS
 

Im%ortant Clauses of a Contract

• Feneral Rig,ts 8 Oligations
• Sco%e of +or 
• )esign )ocuments
• Re#iew and A%%ro#al C'cle
• Proect Sc,edule
• Pa'ment Terms and Conditions
• Performance Dond
• Taing O#er and Pro#isional Acce%tance

• GiBuidated )amages
• 9ariation
• Insurance
• :orce Maeure
• Sus%ension and Termination
• +arrant' 8 tended +arrant'
• Con/dentialit' and IP rig,ts
• )is%ute Resolution
 

Contractual Riss

MITIGATION
 

Prolematic Areas
 

)is%utes 5 Claims T'%icall' In#ol#e

• Owner ordered c,anges wit,out agreed u%on

cost5time adustments
• Im%act of owners actions 5 inactions  re#iews0
a%%ro#als0 ins%ections0 etc.

• )ela's  %erformance0 eBui%ment 5 materials

deli#er'
• :orce maeure e#ents
• Actual or %ercei#ed di"ering sco%e of wor 5 site
conditions
• rrors 5 omissions in contractors id
• Com%ounded e"ect of numerous c,anges
• Signi/cant maret c,anges 5 unusual in@ation
 • Owner #s. Contractor inter%retation of contract
 

Kandling )is%utes 5 Claims

• Antici%ate %otential claims earl' 8 tae

correcti#e action.
• Com%re,ensi#e drafting of contracts
• Lee% good records

• Timel' noti/cations
• Pro%er documentation 8 record ee%ing
• Settlement of matters amical'
• Coordinate wit, a%%ro%riate %ersonnel
>legal0 tec,nical0 %roect?
• Counterclaim0 if a%%ro%riate0 or ot,er

6alancing7 a%%roac,
• If a%%ro%riate0 refer to ,ig,er le#els of
management

T,e maorit' of contractual dis%utes5claims mig,t ,a#e een a#oided0

or mitigated to a great etent or made easier to resol#e0 ' e"ecti#e
 contracts de#elo%ment and administration.
 

Goo%,oles in Contracts

• Poorl' de/ned terms

• *nclear sco%e of wor 5 ser#ices
• *nclear roles and res%onsiilities
• O%en$ended de/nitions 5 statements >etc0 including ut not
limited to0 ?
• Poor document management
• O%en$ended c,ange order co#erage
• Gong dela's in reac,ing agreement on earl' issues
•
Gong decision lines on eit,er side
• Starting %roect eecution efore contract is /naliEed
/n aliEed
• Tendenc' to defer resolution of issues
• cessi#e interfaces
 

Continued

• Assum%tions 5 undocumented %romises and 5 or commitments

• Inconclusi#e %roect oecti#es

• Amiguous statements

• +in$Gose situations
 


PC CO(TRACTS

A)MI(ISTRATIO(
 

+,' PC Contracts-

• PC contract is designed to satisf' t,e lenders

reBuirements for Danailit'

• A single %oint of res%onsiilit'

• A /ed contract %rice

• A /ed com%letion date

 

+,en PC Contracts are not Suitale-

PC conditions of contract are not suitale under

following circumstances
circumstances== 
• InsuHcient time and information for tenderers to c,ec
t,e em%lo'ers reBuirement

• Construction in#ol#es sustantial wor underground or

wor in ot,er areas w,ic, tenderers cannot ins%ect

• Ine%erience 8 lac of e%ertise of contractor for s%eci/c

 o
 

Parties in#ol#ed in PC Contract

 

S%lit PC Contract

 

 ::CTI9
CO(TRACTS
A)MI(ISTRATIO($
(FI(RI(F
PRSPCTI9
 

ngineering Issues liel' to Trigger

)is%utes
•
ngineering errors 8 omissions
• Amiguous wor sco%e 5s%eci/cations
5 s%eci/cations
• )iscre%ancies in %i%ing 8 instrumentation diagrams
>P8I)?0 SG)s etc
• )i"ering inter%retations
• cessi#e c,ange orders as a result of addition 0
deletion or modi/cation of wor 
• )i"ering site conditions
 

Riss associated wit, ngineering Clauses

•  The /ontractor s,all e deemed  to have obtained all 

necessary inormation as to ris$s, contingencies and other
circumstances
circumstance s which may in0uence or aect the or$s2

•  The /ontractor accepts total  responsibility or having

oreseen all  di3culties and costs o successully completing
the or$s2 and

•  The /ontract *rice shall not be ad!usted to ta$

ta$e
e account o
an' unforeseen di3culties or costs.
 

Continued

Scrutin' and SuHcienc' of engineering data<

•  The /ontractor s,all e deemed to have, scrutini4ed

%mployer5s re'uirements (including design criteria and
calculations, i any).

•  The /ontractor s,all e res%onsile or the design o the

wor$s and or the accurac' o such %mployer5s re'uirements
(including design criteria and calculations).

•  The %mployer shall not be responsib le or an'

responsible an'   error,
inaccuracy or omission o an'  $ind in the %mployer5s
re'uirements as originally included in the /ontract and shall
not be deemed to have given any representation o accuracy

or completeness
inormation o by
received anythe
data or inormation.
/ontractor, rom the#ny data or
%mployer or
 otherwise, shall not relieve the /ontractor rom his
 

Co%e wit, )esign Contractual Riss

Pro%osal Stage<
6ew clauses in the general T7/ at +T8 stage can give signifcant
impacts.

1.Clari/cations and Site 9isits<

•9ndermining importance o site visits and tender clarifcations2

technical
•
'ueries
'ueries
;ta$es are low results
rat
esults
+T8 in
instage
ill-defned wor$ ascope
wor$
thereore :specifcations.
sound contractor5s
practice is to fnali4e the scope o wor$ at +T8 level.

2. Additional Information and Alternati#e Pro%osal

•+t allows you to oer alternate solutions along with a ully
compliant <base tender.=
•;peciy technical and commercial advantages o alternatives
and indicate how the base proposal could be ad!usted with
increased perormance or lower costs.
•9nderstand your competitive advantage.
 

Continued

3. Adustment of rrors
• +t allows you to correct errors and omissions in lump sum
rates and prices contained in a tender and ad!ustments or
changes or data subse'uently revised and provided by the
employer.

4. :i
:ii
ing
ng m%l
m%lo'o'er
ers
s Res%on
Res%onsisii
ili
liti
ties
es
 The employer shall be responsi
responsible
ble or the corr
correctness
ectness o the
ollowing portions o the employer5s re'uirements and o the
ollowing data and inormation provided by (or on behal o)
the employer>
• *ortions, data and inormation which are stated in the
contract as being immutable or the responsib
responsibility
ility o the
employer,
• efnitions o intended  purposes o the wor$s or any parts
thereo,
• /riteria or the testing and perormance o the completed
wor$s,
 • *ortions, data and inormation which cannot be verifed by
 

? COMPARATI9
A(AGSIS
 

)ata Accurac' and SuHcienc'

Stringent Clause alanced Clause !ecommended
A""roac#

CO(TRACTOR acnowledges t,at it ,as  The %mployer shall not be responsible

Pre$Did )ata < Pre$Did Measures<
or any error, inaccuracy or omission o 1) Thor
Thorough
ough unde
understand
rstanding
ing o
eamined wit, all due diligence t,e any $ind in the %mployer5s the scope o wor$ and
PRONCT )OC*M(TS made available to Be'uirements as originally included in prepare a list o
/@ATB#/T@B prior to the %66%/T+C% #T% and they /ontract and shall not be deemed inormation, in
confrms that they are su3cient and ade'uate coordination with the
to have given any representation o
or the intended purpose o the *B@D%/T 0 and relevant departments, that
t,at t,e' contain no errors0 faults0
accuracy or completeness o any data may be re'uired or such
omissions0 or discre%ancies t,at would or inormation, except as stated below. $ind o pro!ect.
#ny data or inormation received by the
result
:ailurein of
an'CO(TRACTOR
9ARIATIO( totot,eso+ORLS.
notif' /ontractor, rom the %mployer or ") +nspec
+nspectt all the docu
documen
ments
ts
/@*#AE prior to %66%/T+C% #T% shall not otherwise, shall not relieve the and promptly notiy the
relieve /@ATB#/T@B o any o its /ontractor rom his responsibility or the /lient or any missing
responsibilities nor shall its liabilities be design and execution o the or$s. document or any error,
diminished under this #&B%%%AT.
#&B%%%AT. omission and discrepancy
Kowe#er0 t,e m%lo'er s,all e in the document.
Post$Did )ata< res%onsile for t,e correctness of
/@*#AE
/@* #AE may provide or cause
c ause to be provided ) 6amil
amiliari
iarity
ty with the
the ;ite
;ite
t,e following %ortions of t,e
to /@ATB#/T@B ater the %66%/T+C% #T%, conditions and existing
supplementary data in addition to the m%lo'ers ReBuirements and of wor$s.
inormation that is contained in the %FG+8+T;. t,e following data and information
/@*#AE may also supply urther inormation %ro#ided ' >or on e,alf of? t,e ) /onsid
/onsidera
eration
tion o any
any
as may ecome reasonal' a#ailale  as m%lo'er< contingent cost or the
well as inormation the at /@ATB#/T@B may missing or inaccurate item
reasonably re'uest. 6or the avoidance o (a) portions, data and inormation which which an experienced
doubt, t,e entiret' of an' suc, are stated in the /ontract as being /ontractor can reasonably
information %ro#ided to CO(TRACTOR immutable or the responsibility o the oresee.
under t,is Su$Article s,all e %mployer,
considered as %art of normal engineering (b) defnitions o intended purposes o ecution Stage=
de#elo%ment0  the incorporation o such the or$s or any parts thereo, 1) Aot
Aotiy
iy in case
case o any
any
inormation by /@ATB#/T@B into its @BH; change in ;cope o or$
 (c) criteria or the testing and
or the *B@D%/T being ully contemplated and that has an cost and
perormance o the completed or$s,
covered within the I9* ;9 *B+/% and schedule impact.
and
 

)esign and )rawing S%eci/cations

Stringent Clause Dalanced Clause 5Associated Recommended
Riss A%%roac,

 The design shall be prepared by 'ualifed  The design shall be prepar

prepared
ed by
designers who com%l' wit, t,e 'ualifed designers who comply with the 1) Try to Iimit or
or cap
e%ressed and im%lied design design re'uirements, ;*%/+6+/#T+@A; generali4ed terms.
reBuirements0 SPCI:ICATIO(S and and ;/@*% @6 @BH included in the
SCOP O: +ORL included in t,is #&B%%%AT, or where not specifed, ") o not
not ta$e
ta$e
AFRM(T. /@ATB#/T@B shall be comply with good engineering, responsibility o basic
fnancially responsible or any construction and management practices data which is to be
discrepancies, errors or omissions in the and proven up to date technologies to provided by the
/@ATB#/T@B prepared specifcations, t,e etent a%%licale to or /@*#AE .
drawings and other technical documents im%lemented ' an e%erienced
whether they have been approved by CO(TRACTOR for similar +ors. ) Bep
Beplace
lace <intended=
<intended= or
/@*#AE or not. T,e CO(TRACTORS liailit' s,all <+mplied= with
e limited onl' to rewor5correction <expressed= purpose.
of an' mistae attriutale to
CO(TRACTOR. T,e CO(TRACTOR ) 6ix respons
responsibilit
ibility
y o basic
basic
s,all e entitled for com%ensation data to limit chances o
incase t,e errors etc occur due to error.

non %ro#ision0 error or omissions of

asic data to e %ro#ided ' t,e
 COMPA( 

Continued
Stringent Clause Dalanced Clause Recommended
5Associated Riss A%%roac,
/@ATB#/T@B shall immediately /@ATB#/T@B shall immediately upon
upon receipt o all drawings and receipt o all drawings and specifcations 1. 6ix respons
responsibi
ibilit
lity
y
, veriy and chec$ the correctness
specifcations , veriy and chec$ the
thereo and shall promptly notiy ". Aot
Aoti
iy
y *ro
*rompt
mptly
ly
correctness thereo and s,all /@*#AE in writing o any errors,
%rom%tl' notif' COMPA( in omissions , or discrepancies beore . Ta$
a$e
e indemnit
indemnity
y
writing o any errors, omissions , or commencing any or$s to which the
discrepancies beore commencing drawings and specifcations including . Heep @ptio
@ption
n to claim any
any or$s to which the drawings improperly described or$s where such damage
or$s are clearly necessary to carryout
and specifcations including
the intent thereo or which is
improperly described or$s where customarily perormed shall not relieve
such or$s are clearly necessary to /@ATB#/T@B o its obligations to
carryout the intent t,ereof or perorm such omitted or improperly
w,ic, is customaril' %erformed described or$s and such or$s shall
s,all not relie#e CO(TRACTOR of be perormed by /@ATB#/T@B as i

its oligations to %erform suc, ully 7 correctly

herein. set orththe
Aotwithstanding andabove
described
, all
omitted or im%ro%erl' descried cost and ris$s impacts associated with
+ors and such or$s shall be execution
executio n o improperly described or$s
perormed by /@ATB#/T@B as i shall remain
rem ain with the /@*#AE.
/@*#AE. T,e
ully 7 correctly set orth and COMPA( s,all indemnif' and ,old
described herein. ,armless t,e CO(TRACTOR for an'
loss or damage occurring
,owsoe#er due to suc, im%ro%erl'
descried +ors .:urt,ermore 0 t,e
CO(TRACTOR
CO(TRACT OR s,all e com%ensated
 for all inds of loss or damage
incurred ' it in relation to
%erforming suc, im%ro%erl'
 

:amiliariEation wit, Site

Stringent Clause Dalanced Clause Recommended

5Associated Riss A%%roac,

/@ATB#/T@B hereby ac$nowledges that it T,e m%lo'er s,all ,a#e made Pre$Did Measures<
has examined and is amiliar with the ;+T%
a#ailale to t,e Contractor for ,is
and %F+;T+A& 6#/+I+T+%; and the nature 1) #war
wareness
eness o
o the
the site
and location o the *B@D%/T, and has, by information0 %rior to t,e Dase )ate0 conditions and acilities
careul investigation, satisfed itsel as to to avoid any $ind o
all rele#ant data in t,e m%lo'ers
the di3culties in execution o the @BH;, surprises.
the general and local labor conditions, ;+T% %ossession on susurface and

regulations
including and
ut all
not other matters
limited to ,'drological conditions at t,e Site , ") #wareness
war
;oil eness with
withand
conditions thema$e
the ;ub-
;ub-
transportation, material handling and including environmental aspects. The available the drawings o
disposal, water and electricity, roads and underground
undergr ound acilitates
%mployer shall similarly ma$e available
site access, climate conditions and the
character o e'uipment and acilities to the /ontractor all such data which ) /oordina
/oordinate
te with the
needed preliminary to and during other /ontractors (i any)
come into the %mployer5s possession
perormance o the @BH;. already wor$ing on the
ater the 8ase ate. site or aorementioned
inormation.
/@ATB#/T@B urther ac$nowledges that it
has satisfed itsel as to the character, T,e m%lo'er s,all e liale for ) + re'uir
re'uired,
ed, random
ra ndom test
'uality and 'uantity o surace and sub- boreholes would be
suHcienc' or com%leteness of suc,
surace materials or obstacles to be re'uired to inspect the
encountered insoar as this inormation is data. existing underground
reasonably ascertainable rom the acilities
inspection o ;+T%, including all

e%lorator' wor as wellprovided

drawings and specifcations as rom the
under
this #&B%%%AT. An' failure '
 CO(TRACTOR to tae t,e actions
descried in t,is Article will not
 
relie#e CO(TRACTOR from

Im%ortance of Sur#e's
Stringent Clause Dalanced Clause 5 Associated Recommended
Riss A%%roac,

+n general the CO(TRACTOR s,all +n general the /@ATB#/T@B shall 1. Try to Iimit liability
deemed to ,a#e otained all deemed to have obtained all under this clause.
necessar' information  as to ris$ necessary inormation as to ris$
contingencies and all other contingencies which may aect ". +mporta
+mportance
nce o ;+T% ,
circumstances which may aect perormance under the /ontract topographic and geo-
perormance under the /ontract, to t,e etent reasonal' technical surveys.
CO(TRACTOR s,all neit,er ,a#e foreseeale ' an e%erienced
entitlement for etra %a'ment CO(TRACTOR, /@ATB#/T@B . ;pe
;pecifc
cifcatio
ations
ns to be
nor it shall be relieved o any o its shall neither have entitlement or shared with the
obligations under the /ontract as a extra payment nor it shall be /@*#AE
result o such lac$ o $nowledge. relieved o any o its obligations
under the /ontract as a result o
such lac$ o $nowledge except
under those circumstances which
could not be reasonable
oreseeable by an experienced
 /@ATB#/T@B.

Re#iew and A%%ro#als

Stringent Clause Dalanced Clause 5Associated Recommended
Riss A%%roac,
6or all documents submitted by 6or all documents submitted by 1. 6ix time
time line
lines
s or
or
/@ATB#/T@B to /@*#AE or its
/@ATB#/T@B to /@*#AE or its approvals
review:approval, /@*#AE shall use its
review:approval, /@*#AE shall use its best eorts to respond within /fteen
>1!? woring da's of recei%t unless
best eorts to respond wit,in 1. +mp
+mpor
ortan
tance
ce o
otherwise specifed in the /@ATB#/T,
reasonale time unless otherwise provided that the said documents are deemed approval
complete in every respect and were
specifed in the /@ATB#/T, provided sub!ect to /@ATB#/T@B internal review necessary.
that the said documents are complete in and chec$ process. If COMPA( fails
to res%ond wit,in t,e res%onse
every respect and were sub!ect to ". 6ol
ollo
low
w up
up
times stated t,erein0 t,en said
/@ATB#/T@B internal review and chec$ documents ma' e deemed to ,a#e
een a%%ro#ed or re#iewed wit, no
process..
comments ' COMPA(  and  and

/@ATB#/T@B may, upon notifcation to

/@*#AE o non-receipt o the re'uired
approval, be entitled to proceed
accordingly. Gowever, /@*#AEJs
response times to documents set above
and in %FG+8+T shall not apply to those
documents which have been
disapproved, commented upon, or
re!ected by or on behal o the
/@*#AE which were initially submitted
 incomplete, or uncoord
uncoordinated.
inated.

Sc,edules
Stringent Clause Dalanced Clause Recommended
5Associated Riss A%%roac,

/@ATB#/T@B is to comply with isturbance in /ash 6lows. 1. Besist #cceptance

#cceptance o
the ;/G%9I% re'uirements set such /lause
out in %FG+8+T. COMPA( s,all Gas impacts on ;chedule.
retain !J from ". /@*
/@*#AE
#AE already

CO(TRACTORs in#oiced charging the

amount until CO(TRACTOR /@ATB#/T@B with
,as com%lied wit, its Ii'uidated amages
oligations in res%ect of t,e 6@B %I#E and
reBuired SCK)*G Betention #mount.
milestone.  ;uch retained
amount can be invoiced by . #s a last resort
resort
/@ATB#/T@B upon ulflling this negotiate on
obligation. percentage.
 

Giailit' of Sco%e of +or 

 

GiBuidated )amages
Stringent Clause Dalanced Clause Recommended
5Associated Riss A%%roac,
+ clause Kdelay li'uidated  The damages claimed by the *arties should
damagesL is ound or any reason pro!ect company must not clearly and
to be void, invalid or otherwise exceed Kthe amount specifed L unambiguously
inoperative so as to disentitle the or any one day o delay and in agree that their

pro!ect company rom claiming aggregate must not exceed the only remedies are
delay li'uidated damages, the Kdefned percentageL o the %*/ those within the
pro!ect company is entitled to contract price %*/ contract.
claim against the contractor
damages at law or the   *(GI*I)AT)
contractor5s ailure to complete )AMAFS  or
the wor$s by the date or practical /ommon law right
completion. to sue or breach o
%*/ contract is to

be contractually
removed, It must
 e done ' #er'
 

Im%ortance of (oti/cation 8 Sc,edule

Mitigation of reection of dela' claims<

•Be'uire early notifcation o disruptions 7 delays
•*ro!ect planning 7 schedules to be constantly monitored, !oint
monitoring

•etailed wor$ programs with critical path> general 7 area or

wor$ specifc
•+dentifcation o 0oat 7 provision on 0oat ownership (shared or
owned by pro!ect /o)
•Besource allocations 7 management
•Besource re-scheduling 7 leveling