Question I

1. Explain about the capacities of Physical and Artificial Persons. Under what Conditions do physical
and artificial persons lack capacities to conclude contract? Discuss.

Physical persons are individuals with legal capacity to enter into contracts. They have the ability to
understand the terms and conditions of a contract, make informed decisions, and fulfill their obligations
under the contract. Physical persons are also known as natural persons.

Artificial persons, on the other hand, are legal entities such as corporations, partnerships, and other
organizations that are recognized by law as having legal capacity to enter into contracts. Artificial
persons can enter into contracts, sue and be sued, own property, and engage in other legal activities.

However, there are certain conditions under which physical and artificial persons may lack the capacity
to enter into contracts. These include:

1. Minors: Minors are individuals who have not yet reached the age of majority. In most jurisdictions,
minors lack the legal capacity to enter into contracts, except for certain types of contracts such as
contracts for necessities.

2. Mental incapacity: Individuals who are mentally incapacitated, such as those suffering from mental
illness or disability, may lack the legal capacity to enter into contracts.

3. Intoxication: Individuals who are intoxicated, either by alcohol or drugs, may lack the legal capacity to
enter into contracts if they are unable to understand the terms and conditions of the contract.

4. Lack of authority: Artificial persons may lack the legal capacity to enter into contracts if they do not
have the proper authority to do so. For example, an employee may not have the authority to enter into
a contract on behalf of their employer unless they have been given explicit permission to do so.

In conclusion, it is important for both physical and artificial persons to have the legal capacity to enter
into contracts in order for the contract to be valid and enforceable. If any of the above conditions apply,
it is important to seek legal advice before entering into a contract.

2. What are issues that are necessary for a successful Procurement Management Phase?

The successful procurement management phase involves identifying project needs, developing
specifications, selecting procurement methods, identifying potential suppliers, issuing solicitations,
evaluating proposals, negotiating contracts, and managing supplier performance. Other important issues
include project budget and cost control, quality assurance, risk management, and stakeholder
engagement.

Some issues that are necessary for a successful Procurement Management Phase include:

1. Clear and concise project requirements and specifications

2. Identification and selection of qualified suppliers or contractors

3. Effective communication and collaboration with suppliers or contractors

4. Proper contract management and administration

5. Timely delivery of goods or services

6. Quality assurance and control measures

7. Risk management and mitigation strategies

8. Compliance with legal and ethical standards

9. Efficient and transparent procurement processes

10. Monitoring and evaluation of procurement performance.

3. As a procuring entity, to start the tendering phase we need to prepare invitation for tenderers, so
if you are asked to prepare invitation for tenderers, what are the points to be clearly stated?

When preparing an invitation for tenderers, it is important to clearly state the project requirements,
procurement method, evaluation criteria, deadline for submission, contract terms and conditions, and
any other relevant information. It is also important to ensure that the invitation is clear, concise, and
transparent to all potential bidders.

When preparing an invitation for tenderers as a procuring entity, the following points should be
clearly stated:

1. The purpose of the tender: Clearly state the purpose of the tender, including what goods or services
are required, the expected outcome, and any specific requirements that must be met.

2. Eligibility criteria: Specify the eligibility criteria that potential tenderers must meet in order to
participate in the tender process, such as financial stability, technical expertise, and experience.

3. Tender submission requirements: Clearly state the requirements for submitting a tender, including
the deadline for submission, the format of the tender documents, and any other specific requirements.

4. Evaluation criteria: Specify the evaluation criteria that will be used to assess the tenders, including
the weighting of each criterion and how they will be scored.

5. Contract terms and conditions: Clearly state the terms and conditions that will apply to the contract,
including payment terms, delivery schedules, and any other relevant information.

6. Confidentiality and non-disclosure: Specify any confidentiality or non-disclosure requirements that

must be followed by potential tenderers during the tender process.
7. Contact information: Provide contact information for any questions or clarifications related to the
tender process, including who to contact and how to submit questions.

By clearly stating these points in the invitation for tenderers, potential bidders will have a clear
understanding of what is required and can submit their tenders accordingly

4. What would be the project delivery systems, if the client goal is to seek integrated delivery system
& why?

The project delivery system for seeking an integrated delivery system may include design-build,
construction management at-risk, or integrated project delivery. These systems are selected to provide
better coordination, improved communication, and a collaborative approach to project delivery. They
allow all stakeholders to work together as a team from the beginning to the end of the project.

The project delivery system for a client seeking an integrated delivery system would be a collaborative
approach between all parties involved in the project, including the owner, designer, and contractor. This
approach involves early involvement of all parties in the project, with the aim of improving efficiency,
reducing costs, and minimizing risks.

The integrated delivery system (IDS) is a project delivery method that seeks to integrate the design,
construction, and operation of a project. It involves the collaboration of all parties involved in the
project from the early stages, with a focus on achieving the client's goals and objectives. The IDS
approach is beneficial for complex projects that require a high level of coordination between all parties
involved.

The IDS approach involves the use of various tools and techniques such as Building Information
Modeling (BIM), Lean Construction, and Integrated Project Delivery (IPD). These tools and techniques
facilitate collaboration and communication among all parties involved in the project, leading to better
decision-making, improved quality, and reduced costs.

In summary, the project delivery system for a client seeking an integrated delivery system would be a
collaborative approach involving early involvement of all parties, with a focus on achieving the client's
goals and objectives through the use of various tools and techniques.

5. Discuss the importance of payment provisions in the construction contract from the perspective of
the Contractor;

Payment provisions are critical for contractors because they determine the financial structure of the
project and directly impact the cash flow of the company. Payment provisions should clearly define the
payment schedule, payment terms, and any applicable interest or penalties for late payment. They also
establish the procedures to be followed in case of payment disputes, such as mediation, arbitration or
litigation.
6. What are the legal instruments used to entertain the issues between the contracting parties in
construction contract or agreements?

Legal instruments used to entertain issues between contracting parties in construction contracts or
agreements include dispute resolution boards, mediation, arbitration, and litigation. These instruments
provide different levels of formality, complexity, and cost in resolving disputes.

The legal instruments used to entertain the issues between the contracting parties in construction
contracts or agreements are:

1. Contractual Agreements: These are written agreements that define the terms and conditions of the
construction project, including the scope of work, payment terms, timelines, and dispute resolution
mechanisms.

2. Change Orders: These are written documents that modify the original contract terms, such as changes
in scope, timelines, or costs.

3. Claims and Disputes: These are formal legal proceedings initiated by one party against the other for
breach of contract, non-performance, or other issues.

4. Arbitration: This is a private dispute resolution process where an impartial third-party arbitrator hears
and decides on the dispute between the parties.

5. Mediation: This is a voluntary and confidential process where a neutral third-party mediator facilitates
negotiations between the parties to reach a mutually acceptable solution.

6. Litigation: This is a formal legal proceeding in a court of law where the parties present their case
before a judge or jury who will decide on the outcome of the dispute.

7. What are the grounds to say contain consent is defective? Discuss with examples.

Consent is defective if it is obtained through fraud, misrepresentation, duress, undue influence, or

mistake of fact. For example, if a contractor deceives the client by misrepresenting the quality of
materials used in the construction, the consent of the client is defective. Consent is a critical element in
any contract, and if it is defective, it can render the contract voidable or unenforceable.

There are several grounds on which consent can be considered defective:

1. Mistake: If one or both parties make a mistake about a material fact that affects the contract's subject
matter, the consent may be defective. For example, if a buyer purchases a car believing it has a certain
feature, but it turns out that the feature is not included, the consent may be defective.
2. Fraud: If one party intentionally misrepresents material facts to induce the other party to enter into
the contract, the consent may be defective. For example, if a seller of a property knowingly conceals a
significant defect in the property, the buyer's consent may be considered defective.

3. Duress: If one party uses threats or coercion to force the other party to enter into the contract, the
consent may be defective. For example, if a contractor threatens to walk off a job unless the employer
agrees to pay more than the agreed-upon price, the employer's consent may be considered defective.

4. Undue influence: If one party has an unfair advantage over the other party and uses that advantage to
influence the other party's decision to enter into the contract, the consent may be defective.

For example, if a financial advisor convinces an elderly client to invest in a risky venture that benefits the
advisor more than the client, the client's consent may be considered defective.

In each of these cases, the affected party may have the right to rescind or cancel the contract and seek
damages for any losses suffered as a result of the defective consent. It is essential to carefully review all
contracts before signing them and seek legal advice if there are any concerns about the validity of
consent.

8. Imagine the absence of an Engineer in a given construction project, where the Project Delivery
System is design-bid-build (DBB). What possible adverse contractual affects you might observe
due to the absence of the Engineer in project supervision & contract administration?

The absence of an engineer in a DBB project may result in adverse contractual effects, such as
difficulties in interpreting contract documents, delays in the project schedule, and errors or
omissions in the work. The engineer is responsible for verifying that the work conforms to the plans
and specifications and that the contractor performs according to the contract terms.

The absence of an Engineer in a construction project where the Project Delivery System is design-bid-
build (DBB) can have several adverse contractual effects. Some of these effects include:

1. Delays in the project: The Engineer plays a crucial role in project supervision and contract
administration, and their absence can lead to delays in the project. Without an Engineer, it may be
challenging to ensure that the work is being done according to the plans and specifications, and any
issues that arise may take longer to resolve.

2. Cost overruns: The absence of an Engineer can also lead to cost overruns. Without proper
supervision, contractors may make mistakes or cut corners, leading to additional costs down the line.
Additionally, without an Engineer to review change orders and other contract documents, there may be
disputes over payment, leading to further costs.

3. Quality issues: The Engineer is responsible for ensuring that the work is done to the required quality
standards. Without an Engineer, there may be no one to ensure that the work meets these standards,
leading to quality issues that could result in safety hazards or additional costs to fix.
4. Legal issues: The absence of an Engineer can also lead to legal issues. If there are disputes over the
work performed or payments made, it may be challenging to resolve these disputes without an
Engineer's expertise. This could lead to costly legal battles that could delay the project even further.

In conclusion, the absence of an Engineer in a construction project where the Project Delivery System is
design-bid-build (DBB) can have significant adverse contractual effects. It is essential to ensure that an
Engineer is present throughout the project's duration to avoid these issues and ensure that the project
is completed on time, within budget, and to the required quality standards.

9. As a procuring entity, to start the tendering phase we need to prepare invitation for tenderers, so if
you are asked to prepare invitation for tenderers, what are the points to be clearly stated?

When preparing an invitation for tenderers, it is important to clearly state the project requirements,
procurement method, evaluation criteria, deadline for submission, contract terms and conditions, and
any other relevant information. It is also important to ensure that the invitation is clear, concise, and
transparent to all potential bidders.

if asked to prepare an invitation for tenderers, the following points should be clearly stated:

1. Project description: A clear and concise description of the project, including its scope, objectives, and
any relevant details.
2. Tendering procedure: The tendering procedure to be followed, including the deadline for submission
of bids, the method of evaluation, and any other relevant information.
3. Eligibility criteria: The eligibility criteria that tenderers must meet to be considered for the project,
including any qualifications, experience, or financial requirements.
4. Technical specifications: The technical specifications that tenderers must adhere to, including any
design or performance requirements.
5. Contract terms and conditions: The terms and conditions of the contract, including payment terms,
warranty provisions, and any other relevant details.
6. Evaluation criteria: The criteria that will be used to evaluate bids, including the weighting of each
criterion and any specific requirements for each criterion.
7. Submission requirements: The requirements for submitting a bid, including the format of the bid, any
supporting documentation required, and any other relevant details.
8. Contact information: Contact information for the procuring entity, including the name and contact
details of the person responsible for the tendering process.
9. Deadline for questions: The deadline for tenderers to submit any questions or clarifications regarding
the project or the tendering process.
10. Suppose you are assigned as a procurement manager in a given construction project which is a
public project, so try to answer the following questions.

A. what is tender document and what are the things that should be included in a tender document?

A tender document is a formal invitation to potential suppliers or contractors to bid on a project. It

should include a clear and concise project description, tendering procedure, eligibility criteria, technical
specifications, contract terms and conditions, evaluation criteria, submission requirements, contact
information, and deadline for questions.

Other things that should be included in a tender document are:

1. Scope of work: This should outline the specific work that needs to be done, including any deliverables
or milestones.

2. Schedule: This should include the start and end dates of the project, as well as any key dates or
deadlines.

3. Budget: This should outline the overall budget for the project, as well as any specific budget
constraints or requirements.

4. Evaluation criteria: This should outline how the bids will be evaluated and what factors will be
considered in the decision-making process.

5. Contract terms and conditions: This should include any specific legal requirements or provisions that
will be included in the contract.

6. Insurance and liability requirements: This should outline any insurance or liability requirements that
contractors will need to meet in order to bid on the project.

7. Technical specifications: This should include any technical requirements or specifications that
contractors will need to meet in order to complete the project.

8. Submission requirements: This should outline how bids should be submitted, including any specific
formatting or documentation requirements.

Overall, a tender document should provide potential bidders with all of the information they need to
understand the scope of the project and submit a competitive bid.

B. What are the factors to be considered in determining the least evaluated bidder?

The factors to be considered in determining the least evaluated bidder include the price of the bid, the
quality of the goods or services offered, the experience and qualifications of the bidder, and the delivery
time

when determining the least evaluated bidder, the following factors may be considered:
1. Price: The bidder with the lowest price may be considered the least evaluated bidder.

2. Experience: The bidder with the least experience or qualifications may be considered the least
evaluated bidder.

3. Quality: If the quality of the bidder's work is questionable or not up to par, they may be considered
the least evaluated bidder.

4. Capability: If the bidder does not have the necessary resources or capacity to complete the project,
they may be considered the least evaluated bidder.

5. Delivery time: If the bidder cannot meet the required delivery time, they may be considered the least
evaluated bidder.

6. Reputation: If the bidder has a poor reputation in the industry or has a history of not delivering on
projects, they may be considered the least evaluated bidder.

Ultimately, the decision on who is the least evaluated bidder should be based on a careful evaluation of
all relevant factors and should be made in accordance with the evaluation criteria outlined in the tender
document.

C. Discuss the importance contract negotiation before contract award.

Contract negotiation before contract award is important because it allows both parties to clarify any
misunderstandings or discrepancies in the contract terms and conditions. It also provides an opportunity
to negotiate favorable terms and conditions for both parties. This can help to avoid disputes and ensure
that the project is completed successfully and on time.

Contract negotiation before contract award is essential because it allows both parties to clarify and
agree on the terms and conditions of the contract. This process helps to avoid misunderstandings,
conflicts, and disputes that may arise later on during the execution of the contract.

During contract negotiation, the parties can discuss and agree on important issues such as the scope of
work, payment terms, delivery schedule, quality standards, warranties, indemnification, intellectual
property rights, confidentiality, and dispute resolution mechanisms. The negotiation process also
provides an opportunity for the parties to identify and address any potential risks or issues that may
affect the performance of the contract.

Moreover, contract negotiation helps to establish a good working relationship between the parties. By
engaging in open and honest discussions, the parties can build trust, respect, and understanding, which
are essential for a successful business relationship. This can lead to a more efficient and effective
execution of the contract.
In summary, contract negotiation before contract award is important because it helps to ensure that
both parties have a clear understanding of their obligations and responsibilities under the contract. It
also helps to minimize risks and conflicts, establish a good working relationship, and promote a
successful outcome for all parties involved.
 Case Study Examination (10 points each)
Case Study 1:

 A Construction Management Consultant entered into a turnkey contract with a Contractor to

design and construct a large storage warehouse by the River Side.
 The site information investigated by the Contractor showed 0.5 m of made up ground over 6
m of soft clay overlaying a thick layer of sandy gravel.
 A Foundation Report by the Geo-technical investigation team is driven precast concrete piles
8 m deep to the sandy gravel level.
 After the contract was made and before the piles are driven, the municipality river
conservancy board approved flood protection works which would raise the bank level by 1.5
m. Accordingly; the Construction Management Consultant in consultation with the Employer
provided a work order to raise the floor level of the warehouse by 1.65 m.
 The Contractor following the work order notified that the precast piles already ordered can
not be lengthened and additional piles are required for additional negative skin friction
induced by the rise of the bank level.
 The Construction Management Consultant responds that the foundation type was made by
the contractor and that the valuation should be made by increasing the piling item prices pro
rata and the design should have allowed the negative skin friction even for the 0.5 m fill
originally recommended.
Questions:

 Identify possible effects of the case

 As a Contract Administration expert propose a viable advice if you are working in
o The Construction Management Consultancy Office
o The Contractor Company
Answer
Possible effects of the case:

- Delay in the construction schedule due to the need for additional piles and redesigning of the
foundation.

- Increase in project cost due to the additional piles and redesigning of the foundation.

- Dispute between the Construction Management Consultant and the Contractor regarding
responsibility for the additional costs and design issues.

A . Advice for the Construction Management Consultancy Office:

As a Contract Administration expert, it is important to review the contract documents and determine if
there are any provisions that address changes in site conditions or unforeseen circumstances. If there
are such provisions, they should be followed to ensure that the project proceeds smoothly.

In this case, it appears that the Construction Management Consultant provided a work order to raise the
floor level of the warehouse due to the approval of flood protection works by the municipality river
conservancy board. However, it is unclear whether this change was within the scope of the original
contract or if it constituted a change order.

If it is determined that the change was within the scope of the original contract, then the Contractor
should have anticipated the potential negative skin friction induced by the rise of the bank level and
designed the foundation accordingly. In this case, the Construction Management Consultant can argue
that the valuation should be made by increasing the piling item prices pro rata and that the design
should have allowed for negative skin friction even for the 0.5 m fill originally recommended.

If it is determined that the change was not within the scope of the original contract, then a change order
should have been issued to cover the additional work and costs. In this case, both parties should
negotiate and agree on the terms of the change order before proceeding with any additional work.

B. Advice for the Contractor Company:

As a Contract Administration expert, it is important to review the contract documents and determine if
there are any provisions that address changes in site conditions or unforeseen circumstances. If there
are such provisions, they should be followed to ensure that the project proceeds smoothly.

In this case, it appears that the Contractor did not anticipate the potential negative skin friction induced
by the rise of the bank level and designed the foundation based on the original site information. As a
result, additional piles are required to support the raised floor level of the warehouse.

The Contractor should review the contract documents and determine if there are any provisions that
allow for additional work and costs due to changes in site conditions or unforeseen circumstances. If
there are such provisions, the Contractor should follow them and negotiate with the Construction
Management Consultant on the terms of the change order.

If there are no such provisions, the Contractor should notify the Construction Management Consultant
of the additional work and costs and negotiate with them on the terms of a change order. It is important
for the Contractor to document all communication and agreements with the Construction Management
Consultant to avoid any disputes later on.

Case Study 2:

The Employer was short of budget for five months, and two payment certificates were delayed
for more than they should be due. Consequently, the contractor claimed Time Extension and
Employer’s Default and suspended work after giving notice prior to the Employer. The
Employer then paid both the payments after five months and requested the continuation of the
project. The contractor also requested for compromise to his earlier defaults with regard to his
unjustified delay for four months and refused to continue the project before his request settles
down.

Taking the above case into consideration, if you are;

1. The Consultant, what will be your action / decision?

2. The Employer, what will be your action / decision?
3. The Regulatory Body, what will be your action / decision?

1. As the Consultant, I would review the contract and assess whether the contractor's claims for
Time Extension and Employer's Default are valid. I would also review the contractor's request
for compromise of his earlier defaults. Based on my assessment, I would recommend to the
Employer what actions should be taken to move the project forward, while ensuring that the
contractual obligations of both parties are met.
As the Consultant, my action would be to review the contract thoroughly to determine what
actions are permissible based on the terms of the contract. I would also consult with legal
counsel to ensure that any decision made is in compliance with applicable laws and regulations.
I would then schedule a meeting with both the contractor and the employer to discuss the
issues at hand and seek a resolution that satisfies both parties. If an agreement cannot be
reached, I would provide recommendations for next steps or further action that may be
necessary to ensure the project is completed successfully.
2. As the Employer, I would acknowledge the contractor's claims for Time Extension and
Employer's Default and evaluate the validity of these claims. If the claims are deemed valid, I
would agree to extend the project timeline to compensate for the delay caused by the payment
delays. I would also review the contractor's request for compromise and seek legal counsel if
needed to ensure that any agreements made are in compliance with contractual obligations and
regulations.

As the Employer, my action would be to prioritize the continuation of the project and work
towards resolving the issues with the contractor. I would review the contract to determine if any
breach of contract has occurred on my part and if so, take corrective measures to rectify the
situation. If the contractor is still unwilling to continue work, I would consider legal action or
seeking mediation services to resolve the dispute. I would also conduct an internal review to
ensure that budget constraints do not impact the completion of the project in the future.
3. As the Regulatory Body, I would assess whether the actions of the Contractor and the Employer
are in compliance with the regulations and contractual obligations. If there are violations, I
would take appropriate actions, including investigating the matter further, imposing penalties or
fines, or requiring corrective actions to be taken. I would also aim to facilitate a resolution that
ensures continuity of the project while upholding the principles of fairness and compliance.
As the Regulatory Body, my action would be to ensure that both the contractor and the
employer are complying with all contractual and regulatory obligations. I would review the
contract to determine if any breach of contract has occurred and if so, take corrective measures
to rectify the situation. If necessary, I would engage in dispute resolution services to ensure the
project is completed successfully. I would also work with both parties to ensure that future
budget constraints do not impact the timely completion of the project.
General Course Knowledge Examination (Each questions) (3 points each)

1. Consider yourself as a member of procurement team (Tender committee), as a basic Responsibility

tender evaluation has to be conducted, to do so what the assessment Typically might consider?

2. Discuss the importance of payment provisions in the construction contract from the perspective of
the Contractor:

3. Contract planning includes decisions on proposed Delivery Systems, Procurement Methods and
Contract Types to be followed and used together with is provisions for alterations) so as a project
manager while deciding on these issues what are the regulatory in which one has to consider?

4. Explain how claim prevention can be done effectively in a construction project?

5. As a procuring entity to start the tendering phase we need to prepare invitation for tenderers, so if
you are asked to prepare invitation for tenderers, what are the points to be clearly stated?

6. What would he the project delivery system if the client goal is to seek integrated delivery system?

7. Discus a host at factors to be considered to the prevention of construction disputes.

1. As a member of the procurement team, the assessment for tender evaluation typically considers
factors such as compliance with technical specifications, adherence to project timelines, budget
constraints, quality of materials and workmanship, safety standards, environmental impact, and overall
value for money.

2. Payment provisions in a construction contract are crucial for the Contractor as they ensure timely
payment for work done, cash flow management, and financial stability. Clear payment terms and
conditions also reduce the risk of payment disputes and legal issues.

3. When deciding on proposed delivery systems, procurement methods, and contract types, a project
manager must consider regulatory issues such as public procurement laws, local building codes and
regulations, labor laws, environmental regulations, and taxation laws.
 4. Claim prevention can be done effectively in a construction project by implementing clear and detailed
contract terms, effective communication between parties, regular project monitoring and reporting,
proactive risk management, and timely dispute resolution.

5. When preparing an invitation for tenderers, the points to be clearly stated include the scope of work,
technical specifications, project timelines, budget constraints, evaluation criteria, submission
requirements, contract terms and conditions, and any other relevant information.

6. The project delivery system for an integrated delivery system would involve collaboration between
the client, design team, contractor, and other stakeholders from the early stages of the project. This
could include using a design-build or construction management approach where all parties work
together to achieve project goals.

7. Factors to be considered for the prevention of construction disputes include clear and detailed
contract terms, effective communication and documentation, regular project monitoring and reporting,
proactive risk management, timely dispute resolution mechanisms, and a focus on building positive
relationships between parties involved in the project.

1. Which of the following processes involves obtaining information (bids and proposals) from respective
sellers"

A Procurement Planning

b. Source Selection

c. Contract Administration

d. Solicitation

e. Solicitation Planning

D. Solicitation

2. When evaluating a tender. the organization will invariably look for the most

A economically viable tender

B, ecologically friendly tender

C. believable tender
 D. cheapest tender
A. economically viable tender
3. You have awarded the contract to a seller. However, it was only later that you realized that you have
missed a clause for any project delay. You would now want to modify the contract, what is the right
way to proceed?

A. Contract is legally binding so cannot be modified once awarded

B. Make use of the Contract Change Control System

C. Inform the seller about this change through a formal written communication

D. Casually bring up the change with the seller after a meeting and observe his reaction

B. Make use of the Contract Change Control System

4. What is the primary objective of negotiation

A. Define the exact responsibilities of each party

B. Clarify the contract scope

C. Get the best deal possible

D. Find a win-win proposition for both parties

C. Get the best deal possible

5. You are the project manager of a construction project. You are inviting requests for proposal from
eligible vendors. While going over the list of vendors, you realize that one of the names in the list is a
good friend of yours. You know he is excellent at what he does and will be the perfect match for your
project. What should you do next?

A Disassociate from the bidding process and inform your sponsor

B. Award him the contract since you know he is a perfect match for your project

C Give him some inputs off-the-record on how your organization awards contracts

D. Do not contact your friend and continue with the procurement process

A. Disassociate from the bidding process and inform your sponsor

Case Study 1 Examination (10 points each)

The Employer was short of budget for five months, and two payment certificates were delayed for more
than they should he due. Consequently, the contractor claimed Time Extension and Employer's Default
and suspended work after giving notice prior to the Employer. The Employer then paid both the
payments after five months and requested the continuation of the project. The contractor also
requested for compromise to his earlier defaults with regard to his unjustified delay for four months and
refused to continue the project before his request settles down. Taking the above case in to
consideration if you are;

a. The Consultant, what will be your action/decision?

b. The Employer, what will be your action/decision?
c. The Regulatory Body, what will be your action / decision?

In this scenario, there are three different perspectives to consider: that of the consultant, the employer,
and the regulatory body. Each perspective brings a unique set of considerations and responsibilities to
the situation.

A. As the consultant, the primary responsibility is to review the contract and determine if the
claims made by the contractor are justified. This involves a thorough analysis of the contract
terms and conditions, as well as an assessment of any extenuating circumstances that may have
contributed to delays or defaults. If the claims are found to be justified, the consultant would
advise the employer to negotiate a compromise with the contractor to settle the defaults and
resume work on the project. This may involve adjusting the project timeline or budget, or
making other concessions to address the contractor's concerns. If negotiations fail, legal action
may be necessary to resolve the issue.

B. As the employer, the primary responsibility is to protect their interests and ensure that the
project is completed on time and within budget. This involves a careful review of the contract
and an assessment of any claims made by the contractor. If the claims are found to be justified,
the employer would negotiate a compromise with the contractor to settle the defaults and
resume work on the project. If negotiations fail, legal action may be necessary to enforce the
terms of the contract and protect the employer's interests.

C. As the regulatory body, the primary responsibility is to ensure that both parties are following
the terms and conditions agreed upon in the contract. This involves a careful review of the
contract and an assessment of any violations or breaches of contract. If violations are found, the
 regulatory body would advise both parties to negotiate a compromise and settle their disputes.
If negotiations fail, legal action may be necessary to enforce the terms of the contract and
protect the interests of all parties involved.

Overall, in any construction project, it is essential that all parties involved take responsibility for their
actions and work together to resolve any disputes or issues that arise. A thorough understanding of the
contract terms and conditions, as well as a commitment to open communication and negotiation, can
help to ensure that projects are completed successfully and to the satisfaction of all parties involved.

Case Study 2:

Subcontracts are signed between the Main Contractor & the Sub-contractor, more often, after the Main
Contract has been signed between the Main-Contractor & the Employer. As you certainly know except
the information relative to prices of the Main Contract, all other relevant information of the Main
Contract should, expressly be incorporated in to the subsequent Sub-contract. Assuming that you are
acting as the Project Manager for the Sub-contracting Company Now you are negotiating with the
representatives of the Main Contractor on behalf of the Sub-contracting Company.

Questions

a) What would, in your opinion, be the contractual & legal effects, if the relevant part of the Main
Contract has not expressly been incorporated in your Sub-contract?

b) What are the other possible critical issues to be raised & negotiated with representatives of the Main
Contractor for your Sub contract? it is expected to raise at least, four critical issues & the reason behind
each critical issue.

Answer

a) If the relevant part of the Main Contract has not expressly been incorporated into the Sub-contract, it
could lead to ambiguity and confusion regarding the scope of work, responsibilities, and obligations of
the parties involved. This could result in disputes and legal issues between the Main Contractor and Sub-
contractor. The Sub-contractor may also be at risk of not being paid for work that was not explicitly
included in the Sub-contract but was part of the Main Contract. Therefore, it is crucial to ensure that all
relevant information from the Main Contract is incorporated into the Sub-contract to avoid any legal or
contractual issues.

b) There are several critical issues that need to be raised and negotiated with representatives of the
Main Contractor when entering into a Sub-contract. Some of these issues include:
1. Scope of work: The scope of work should be clearly defined in the Sub-contract to avoid any
ambiguity or misunderstanding. The Sub-contractor should ensure that all work required under the
Main Contract is included in the Sub-contract.

2. Payment terms: The payment terms should be negotiated and agreed upon by both parties to avoid
any payment disputes. The Sub-contractor should ensure that they are paid on time and as per the
agreed terms.

3. Insurance and liability: The Sub-contractor should ensure that they have adequate insurance coverage
and that they are not held liable for any damages or losses that may occur during the project.

4. Dispute resolution: The dispute resolution mechanism should be agreed upon by both parties to avoid
any legal issues. The Sub-contractor should ensure that the dispute resolution mechanism is fair and
impartial.

Overall, it is essential to ensure that all critical issues are addressed and negotiated before signing a Sub-
contract to avoid any legal or contractual issues. Effective communication and clear documentation are
crucial to achieving a successful outcome for both parties involved.