Professional Documents
Culture Documents
50 TIPS For TENDERS
50 TIPS For TENDERS
Construction Contracts
Ver. 2021 (50 Topics with examples)
Prepared by:
Mohamed Maged, MBA, PGDIP, CCP, PMP
Profile:
https://luqmanacademy.com/profile/8
Mohamed Maged Hegazy
Project Management Consultant
LLM, MBA, PMP, CCP, P3O
• Master in Construction Law – Salford University, Manchester, UK
• Master of Business Administration – UoPeople, US
• B.Sc. Civil Engineering – Ain Shams University, Egypt
• Consultant – Saudi Council of Engineers, Saudi Arabia
• CCP, Certified Cost Professional credential – AACE International, US
• PMP, Project Management Professional credential – PMI, US
• P3O, Portfolio, Programme and Projects Offices credential – AXELOS, UK
• FIDIC Contracts Consultant, AIA (Brussels) Fellow
• Chartered Institute of Arbitrators (CIArb, UK): Commercial Dispute Resolution
• Author of 50 Planning fundamentals & Fundamentals of Construction Contracts
• Experience more than 20 years in mega-projects (Buildings, Infrastructure & Roads)
• Section Two – Tender Stage (5Ts) • Section Seven – Contract Closing (5Ts)
• Section Three – Awarding Stage (10Ts) • Section Eight – Admin. and Tech. (2Ts)
• Section Five – Change/ Claims (7Ts) • Section Ten – Professional Certificates (1T)
10
Sec.s
Tender Contract Core Change/ Contract Admin &
Liabilities
Stage Award Functions Claims Closing Disputes
Section One – Basics of Contract (3) 14- International Contract 28- Claims Submittal 42- Convenience Termination
1- Contract Formation 15- Standard Forms 29- Concurrent Delay Section Eight – Admin. and Tech. (2)
2- International Legal Systems 16- Administrative Contracts 30- Prevention Principle 43- BIM and Technology in Contract
3- Procurement procedure 17- Administrative Authority Section Six – Liabilities (6) Management
Section Two – Tender Stage (5) 18- Power and Good Faith 31- Privity and Communication 44- The Importance of Contract
4- Tender Types and Stages Section Four – Core Functions (5) 32- Statute of limitation Administration
5- Tender Submittal and Evaluation 19- Documents and Precedence 33- Damages and Quantum Section Nine – Disputes (5)
6- Selection Bases 20- Implied Terms and Statutes 34- Liquidated Damages 45- Alternative Dispute Resolution
7- Tender Stage Liabilities 21- Prime Obligations 35- Tort and Negligence 46- Adjudication
8- Misconduct in Tenders 22- Roles and Responsibilities 36- Burden of Proof 47- Arbitration
Section Three – Awarding Stage (10) 23- Risk-Sharing and Allocation Section Seven – Contract Closing (6) 48- Lawsuits and Litigation
9- Drafting and Negotiation Section Five – Change/ Claims (7) 37- Taking Over 49- Confidentiality and Enforcement
10- Cases of Acceptance 24- Assignment 38- Decennial Liability Insurance Section Ten – Professional Certificates
11- Unjust Enrichment 25- Change Mechanism 39- Frustration 50- Professional Certificates
12- Letter of Intent 26- Differing Site Conditions 40- Repudiation
13- Types of Construction Contracts 27- Extension Of Time 41- Default Termination
• Contract Formation
• International Legal Systems
• Procurement Procedure
Lord Clarke stated: “the moral was to reach an agreement before work began.
C2
The court was not to impose binding contracts that the parties had not reached;
all would depend upon the circumstances. It was unrealistic to suppose that the
parties had not intended to create legal relations”.
Since the parties did not sign an agreement but only LOI, the facts determine if a
contract is legally concluded and what terms are incorporated.
National Building Specification, National Construction Contracts and Law Report (2018)
ppmconference.net @magedkom ArabPlanners @profplanner
2- International Legal systems
T2
Civil law: Codified written statutes.
Common law: Judicial precedent (Doctrine of stare decisis).
Law itself is classified to public (criminal), and private
(commercial, civil …etc.)
Make or
Business Pre- Post-
Need Buy Award Closing
Case Award Award
Decision
A civil engineering contractor was entitled to damages for loss of chance to obtain a public road
construction contract. In considering its tender, the Road Service's Board had breached the Public
Contracts Regulations 2006 reg.30(6) by failing to request clarification on certain items whose quoted
values it considered to be abnormally low, and which contributed to its decision to reject the bid.
Bid Rigging
Whenever business contracts are awarded by means of soliciting competitive
bids, coordination among bidders undermines the bidding process and can be
illegal.
Bid rigging can take many forms, but one frequent form is when competitors agree
in advance which firm will win the bid.
For instance, competitors may agree to take turns being the low bidder, or sit out
of a bidding round, or provide unacceptable bids to cover up a bid-rigging
scheme.
Other bid-rigging agreements involve subcontracting part of the main contract to
the losing bidders, or forming a joint venture to submit a single bid.
Obligations Drafting
…………..
In the Court of Appeal it was held that there was to be implied into both the main contract
between IBA and EMI and into the sub-contract between EMI and BICC a term that the mast
would be properly designed and reasonably fit for its intended purpose.
Held, that (1) BICC had been negligent in the design of the mast.
EMI were under some contractual liability to IBA extend to the responsibility for a negligent
design.
Lord Scarman: in the absence of any term negativing the obligation, one who contracts to design
an article for a purpose made known to him undertakes that the design is reasonably fit for the
purpose. Such a design obligation is consistent with the statutory law regulating the sale of
goods.
The claimant sub-contractor (L) brought a claim in which it challenged the validity of two withholding
notices issued by the defendant main contractor (M) to the sum of £131K by reason of delays on L's part.
The sub-contract identified a commencement date of September 27, 2010 and a completion date of August 8, 2011.
There were no milestone dates or sectional completion provisions. The withholding notices, and the alleged delays to
which they referred, all arose before the sub-contract completion date of August 8, 2011.
M accepted that the Activity Schedule did not set out dates or periods which were contractually binding but argued
that L had an implied obligation to proceed regularly and diligently with the works, on the basis that L was obliged,
but failed, to carry out the works in accordance with the programme, which was one of the sub-contract documents.
Express remedy: There was an extension-of-time clause such as that agreed on in this case and
where delay was caused by two or more effective causes, one of which entitled the contractor to
an extension of time as being a Relevant Event, he would be entitled to a full extension of time.
Also, prolongation costs amounted to an impermissible "global" claim, being a claim which identified
numerous potential or actual causes of delay and/or disruption (one of the reasons of disruption was the
presence of artists and tradesmen who disrupted the work process of the contractor), a total cost on the job,
a net payment from the employer and a claim for the balance between costs and payment which
was attributed without more and by inference to the causes of delay and disruption relied on.
Assignment Novation
Keeps original contract alive Extinguishes and replaces original
contract
Made without consent Needs consent of original parties and
new party
Transfers rights Transfers rights and obligations
Held that the basis for valuation under cl.52 could not be displaced on the ground that
the rates or prices in a bill of quantities had been inserted by mistake.
4.35m
If, however, work carried out pursuant to a variation to a contract differed significantly
from the work covered by the bill of quantities, it would be open to the engineer to carry
out a valuation of his own. The words "so far as may be reasonable" had been inserted in
cl.52 to cater for that eventuality.
The rates or prices contained in a bill of quantities were not subject to rectification.
To hold otherwise would lead to uncertainty and disturb the basis of competitive
tendering. In the instant case, the arbitrator should have disregarded HBC's mistake and 3.35m
carried out a valuation on the basis of the price which HBC had quoted in the contract.
You may also check FIDIC 2017 for Construction clause ………….
Demonstration of Causation. The contractor must demonstrate the cause and effect relationship between
an impact that was not its responsibility and the effects the impact will have on its ultimate project cost or
ability to complete the project as originally contracted. The element of causation is often the most difficult
to demonstrate of the three elements.
Demonstration of Quantum. The contractor must demonstrate that the cost or schedule impacts that have
been or will be realized as a result of the change are reasonable and supportable.
Global Claim: Walter Lilly & Company Limited v Giles Patrick Cyril Mackay, DMW
Devlopments Limited (2012) in F22/50
Concurrency relieves the contractor from the DDs according to De Beers UK Ltd
(formerly Diamond Trading Co Ltd) v Atos Origin IT Services UK Ltd (2010) Mr
Justice Edwards-Stuart Stated that: “The general rule in construction and engineering
cases is that where there is concurrent delay to completion caused by matters for
which both employer and contractor are responsible, the contractor is entitled to an
extension of time but he cannot recover in respect of the loss caused by the delay”.
However, if the difference can be split, the quantum can include prolongation cost as
per Arcadis UK Ltd v. May and Baker Ltd (t/a Sanofi) (2013).
Mirant Asia- Pacific Construction (Hong Kong) Ltd v Ove Arup & Partners
International Ltd (2007)
The dismantling and re-erection of the steelworks had not caused any overall additional delay to the project,
since the project manager had used the additional time to reassess and reorganise the site and the project.
In particular, the lengthening delay to civil works was arrested and reversed. That had been the dominant cause
of the increasing delay to the project, and it had continued long after completion of the remedial works to the
foundations.
Primarily on the basis of the finding that O had not been responsible for any critical delays in the project, all of
M's claims were rejected.
“The prevention principle [says] that the employer cannot hold the contractor to a specified
completion date, if the employer has by act or omission prevented the contractor from
completing by that date. Instead, time becomes at large and the obligation to complete by the
specified date is replaced by an implied obligation to complete within a reasonable time.”
In the instant case, the fact that three programmes were issued by M under clause 4 did not
prevent M from awarding such extension of time as might be appropriate under clause 11.
Accordingly, the issue of the programmes did not set time at large, as the adjudicator had held.
The burden of proof is often said to consist of two distinct but related
concepts: the burden of production, and the burden of persuasion.
Which means the builder “D” is entitled the payment before all work is complete
based on the doctrine of substantial performance. However, since it was found
that D's work was defective to a certain extent, O was entitled to recover the cost
of remedial works in respect of the relevant items.
In UK, the grounds of negligence and latent defects can lead to the limitation periods of the
liability in tort according to Sections 14A&14B of the Limitation Act 1980 as amended by Latent
Damage Act 1986 whether six years from the cause of action or fifteen years from the date that
the damages claimed are alleged to be attributed.
Illegality due to war - Denny, Mott and Dickson v James Fraser (1944)
It’s really a role that is a value contributor to the bottom line of the company
by both managing throughout the life cycle of the contract and paying
attention to key aspects of the contract.
CA ensures the obligations in the contract are carried out effectively,
gathers data, validation, administers change control procedure, maintains
and updates contract baseline (Financials, Assets and Performance),
monitors service levels/claim service, regular reporting, uses CM software for
self monitoring contracts, maintains contingency plan, manages budget &
relationship management.
Enforcement You can ask the court to collect payment Arbitration Act s.66 (1): “An award made by
from the debtor if they do not pay you after the tribunal pursuant to an arbitration
receiving the court order. You must pay a agreement may, by leave of the court, be
court fee when you ask the court to collect enforced in the same manner as a judgment or
the payment (Gov.UK, 2020). order of the court to the same effect”.
• Professional Certificates
Best wishes
https://www.facebook.com/MagedThoughts
www.slideshare.net/MohamedMaged8
www.ted.com/profiles/9735915/about
projectmanagement.com/profile/mmaged
https://www.luqmanacademy.com/profile/8
+966-(0)580264968