Steve Ooi

Here we share construction claim management and EOT Analysis 😊 #pmprodigy #pmp #sharing #planningengineer #projectmanagement #claim #contract #eot

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Construction works intended to be awarded to contractors are given by publicity so that a sufficient number of interested parties may bid for the work. Usually the lowest bid is accepted unless there are valid reasons for not following these practices. Every written contract which clearly describes the work should also define the right and obligations of the parties. If the right and obligations of the owner and the contractor are defined in a document , then it is called the contract document. This document generally follows a standard format for construction contracts entered into by govt. and public bodies. 1. Cover or Title- It contains the name of the work, name of the owner, name of the contractor, contract agreement number, contents etc. 2. Contents page It contains the contents of the agreement with page references 3. Notice Inviting Tender(NIT) It contains a brief description of work estimated cost of work date and time for receiving the tender, amount of earnest money (EMD), security deposit(SD), time of completion etc. 4. Tender form It comprises of bill of quantities, contractor‘s rate, total cost of work, time for completion, security money to be deposited and penalty process etc. 5. Schedule of issue of materials It contains the list of materials to be issued by the department or owner to the contractor with rates or place of issue. 6. Drawings These comprise a complete set of fully dimensioned drawings including plans, elevations, sections, detailed drawings and site plan. 7. Specifications It is not practicable to include the detailed information of each item of work in the limited space of description in the bill of quantities. As such detailed agreement forms a part of the contract agreement. Specification should be clear and precise covering all items of bill of quantities (BOQ). Following specifications are normally included in the contract document a. General specification- These specify the class and type of work, quality of materials etc, in general for the work as a whole. b. In detailed specification – These views detailed description of each item of work including material and method to be used along with quality of workmanship required 8. Conditions Of Contract The terms and conditions of the contract specify the following. a. Rates of each item of work b. Amount and form of earnest and security money to be deposited c. Manner of payment to contractor including running payments, final payments, refund of security money d. Time of completion of work e. Proportionate progress to be achieved f. Penalty for poor quality and unsatisfactory work, back to proportionate progress and for delay in completion g. Extension of time for completion of work h. Engaging other agency at contractors cost and risk i. Termination of contract j. Changes in design and drawings etc and valuation of variations k. Measurement of the work l. Arbitration for settlement of disputes.

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4-Part Effective Procurement Strategies: 1. Procurement pathway (traditional tender/ design and build/ two stage early contractor involvement/ construction management). 2. Form of contract price (lump sum/ lump sum with a schedule of quantities (SOQ)/ re-measurement contract/ schedule of rates/ cost reimbursement/ guaranteed maximum price (GMP)/ target value). 3. For of tender (open/ selective/ negotiation). 4. Whether 3D building information modelling (BIM). For example: 2S-ECI has been found to substantially decrease contract variations on projects involving large complex alterations and extensions. Thus helping complex project arrive on time and within budget (e.g., Queenstown seismic upgrades case study). The client should save more from contractors being held to their rates against a SOQ than the cost of paying for the SOQ, where the project is likely to incur a large number of contract variations. Cost reimbursement can be used where requiring a lump sum price would mean the client paying for the worst case scenario. Better then to call that price a ‘guaranteed maximum’ (GMP) and pay reimbursement up to that. Although it does increase the administrative burden checking timesheets and invoices and monitoring how many workers on site each day. Selective tender or negotiation is sensible for large or complex projects where reliability is a greater focus than ‘cheapest’ price. Otherwise ‘cheap’ contractors may proceed low then claim high at the expense of quality. 2S-ECI provides an open-book pathway for negotiation. The client should save more from advanced clash detection than the cost of paying for the BIM on projects involving integrating difference design elements such as structural timber, structural steel, and concrete. My Services - Procurement Strategist: I can typically establish an effective procurement pathway within hours after meeting with the client and understanding them and their project (in person or over the phone). Regardless of size and complexity. A minimal cost that should save you more than my fee. Then architects, engineers, and professional quantity surveyors (PQSs) can contractually manage the project with the main contractor, creating considerable savings in ‘project management’ consultancy fees. I can provide contracts to use. My doctoral thesis established New Zealand’s first a contractual framework for 2S-ECI. The pre-construction services agreement (PCSA) that I wrote, is currently being used across NZ for this (available to members if the Society of Construction Law). The largest project I advised procurement on was as part of the procurement team for Antarctica NZ for the $250 million redevelopment of Scott Base. Let me know if I can help with your project. Dr. David Finnie Building Strategies Ltd 021 396 111

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Project Management (Construction): Contract & Claims:- Variations/Extra Claims_ 1. Most of it is a tricky situation. The client expects to execute the work and let the claim go parallel. First get the engineer instructions before variation claim and execution. Sometimes finalisation of such claims may take a few quarters. Hence predict such scenarios in advance by comparing the drawings with scope and act accordingly. Start the claim process as per contract to mitigate cash flow challenges. 2. At times finalisation of DWP/CWP will take several revision before final approval with Notice of No Objection (NoNo). Hence rigorous follow up is required to close the comments given by the client with each revision.

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Project Management (Construction): Arbitration . Cost & Time - While it is a dispute resolution process, it is often expensive and time consuming. Your time and energy will be consumed significantly due to the length of arbitration proceedings. . Mitigation - Only use arbitration when necessary, as a last resort after all attempts to resolve the dispute through meetings, discussions, mediation, negotiations SGRC and DAB have failed. You can effectively manage the correspondence, prevent disputes and address claims and conflicts in a way that minimises both time and cost for all the parties involved.

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imparting training to all frontline construction managers/engg; How active participation by everyone to contribute towards quality goal along core job responsibility, and conceptual clarity about; #QA, #QC, #QMS and #TQM It was 1950 post 2nd world war where Japan product/manufacturing quality were count in worst/poor category. The great man behind the revolution of Quality system in small time span in entire Japan was, Dr. William Edward Deming Dr. #Deming who known as father of quality management system and top quality Guru. He was an American theorist, composer, economist, industrial engineer, management consultant, statician and writer. His 14 points theory of quality management system bring new height and a big revolution in Japan after adoption of his principle and advise. His key believe/suggestion, "improving quality would reduce expenses, while increasing productivity and market share" out of his 14 points no 6th is my all time favorite and in fact its need for the new era construction where no one from talented/competent/qualified list left OR interested to work in frontline as doer i.e. ✍️Institute training on the job. Means job specific training in field which is known term as JST & Pep-talk to all who are doer OR in frontline. There is one new quality term being too popular in all big corporate system now days after #QMS (quality management system) i.e #TQM - Total Quality Management. Actually its nothing new, its all old theory/practice which was included in Dr. Deming 14 principles in 1950 thats why foundation and origin of #TQM is Dr. #Deming. "Basic conceptual difference in QMS and TQM is its extension of responsibility from a particular operating department under operation to control, to all especially management/leaders of organization to bound equal responsible towards change and contribution for a single cause with everyone participation within their role" And, how this will achieve?? The only way where organization Quality Leader/head will give all conceptual clarity through workshop, interaction with all departments leaders, top management from top to bottom to unite for the quality goal. #Bottom who are also called; #Frontline heros/Doer are most important. They are like building foundation/base who define how building strong is. Leaving them as low importance and low value, improvements towards quality is impossible even after spending high amount/value to appoint big contractor, design consultant and top leadership. ✍️If you appoint top tier contractor & your frontline engineers team is not competent then final value is nothing/doubtful. ✍️If you appoint top tier design consultant with rich specification and your frontline engineers team not competent then final result is doubtful. ✍️If you hire top tier qualified leadership team and your organization have not enough competent engineer's leader & manager from field experties then final result is doubtful. #Vision #Leadership #Quality

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Variation Orders in Saudi Procurement Law vs. FIDIC Based on my understanding and knowledge, the process of handling Variation Orders under Saudi Procurement Law and the FIDIC Red Book is as follows: Some conditions in the FIDIC Red Book: 1. Changes to the Works (Clause 13.1) 2. Unforeseeable Physical Conditions (Clause 4.12) 3. Discrepancies in Documents (Clause 1.5) 4. Instructions from the Engineer (Clause 3.3 and 3.5) 5. Errors in Setting Out (Clause 4.7) 6. Delay and Extension of Time (Clause 8.4) 7. Unforeseen Events (Clause 19.4) 8. Adjustments for Changes in Legislation (Clause 13.7) Saudi Procurement Law: 1- Changes in Custom Duties, Taxes, or Official Prices: Conditions: - The contractor must prove that they have paid the increased costs due to these changes. - The change must occur before the contract's completion period. -The contractor should not be at fault for delays. 2- Increase in Material Prices (e.g., cement, steel): Conditions: - The price change must occur after the contractor's bid submission. Delays due to the contractor’s fault do not qualify. - The price change must exceed 10% for individual items, and the overall contract cost impact should be more than 3%. - If prices decrease, the contractor must return the difference. 3- Unforeseen Difficulties During Execution: Conditions: - The contractor must submit a claim within 60 days of the event. - The claim is reviewed by the project consultant and then by the government body, with final approval possibly limiting compensation to 20% of the total contract value. Although FIDIC contracts and Saudi Government Procurement Law both aim to ensure effective management of contract variations, they differ significantly in implementation. FIDIC allows for more flexibility with engineer-driven changes, while Saudi Law mandates strict controls and caps on variations. Recognizing these practical differences is key to effectively integrating FIDIC principles within the Saudi contractual environment. Key Points of Comparison: Saudi Procurement Law provides clear and strict conditions for Variation Orders, ensuring control and transparency in public projects. FIDIC Red Book offers a more flexible approach, with the Engineer playing a central role in managing changes. #FIDIC #ProcurementLaw #Contracts #Sharing

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𝗟𝗼𝗼𝗸𝗶𝗻𝗴 𝘁𝗼 𝗛𝗶𝗿𝗲 𝗮 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗮𝗹 𝗘𝗻𝗴𝗶𝗻𝗲𝗲𝗿? 𝗪𝗵𝗮𝘁 𝗗𝗼 𝗬𝗼𝘂 𝗣𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝘇𝗲? 1. Educational Background 🎓 A degree in Civil or Structural Engineering from an accredited institution is essential. 2. Professional Certifications 📜 Engineers with advanced certifications from reputable organizations like the NCSEA or ASCE. These credentials validate their specialized knowledge and commitment to industry standards. 3. Licensing ✅ Make sure the engineer is licensed in your state. This is a non-negotiable for ensuring they can sign off on plans and meet local regulations. 4. Relevant Experience 🛠️ Experience in projects similar to yours is invaluable. Request to see a portfolio of past work to assess their suitability for your specific needs. 5. Communication Skills 🗣️ A great structural engineer should translate technical knowledge into clear, understandable information, and actively listen to your needs. 6. Technical Expertise 💡 They should be up-to-date with the latest technologies, materials, and construction techniques relevant to your project. 7. Collaboration and Project Management 🤝 The ability to work seamlessly with architects, contractors, and other professionals is crucial, as is managing the project to ensure it stays on schedule and within budget. #structuralengineering #structuralengineers #hiring #structuralengineeringrecruitment

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Title: Ex Gratia Payment in Construction Contracts: An Explanation Ex gratia payment is a term commonly used in construction contracts, and it holds significance within the contractual framework. In this post, we will delve into the meaning of ex gratia payment from the perspective of construction contracts. Ex gratia payment refers to a voluntary payment made by one party to another, even though there might not be a legal obligation or liability to do so. It is essentially a payment made out of goodwill, as a gesture of generosity, or to resolve a dispute or claim in an amicable manner. In construction contracts, ex gratia payments often arise in situations where there may be unforeseen circumstances or events that impact the project's progress, cost, or quality. These circumstances may fall outside the scope of the contractual obligations or entitlements of the parties involved. Contractors or employers may choose to make ex gratia payments to address issues such as delays caused by factors beyond their control, variations in the scope of work, or rectification of defects not explicitly covered by the contract. These payments are typically made to maintain a positive working relationship, avoid protracted disputes, and ensure project completion without undue financial strain. Ex gratia payments can also be seen as a proactive measure to promote fairness and equity in construction contracts. They provide an opportunity to address unforeseen circumstances that may arise during the project's lifecycle but are not specifically addressed within the contractual terms and conditions. It is important to note that ex gratia payments are made voluntarily and are not enforceable as a legal right. They are based on the mutual agreement and understanding between the parties involved. Therefore, it is crucial to have clear communication, documentation, and a spirit of cooperation when considering or making ex gratia payments. In conclusion, ex gratia payments play a significant role in construction contracts by allowing parties to address unforeseen circumstances or resolve disputes outside the strict confines of the contractual obligations. They promote goodwill, fairness, and the maintenance of positive working relationships. However, it is essential to approach ex gratia payments with transparency, open dialogue, and a thorough understanding of their voluntary nature. subscribe to my youtube channel to learn more https://lnkd.in/d2Tm3Btr #ConstructionContracts #ExGratiaPayment #FairnessAndEquity

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Will be sharing my knowledge on "Practical & Legal Issues Pertaining To Payment In Construction Contracts (PWD 203/203A - REV.1/2010)" The success of a project is contingent on a "healthy" cash flow system. Hence, payments are crucial to the sustainability of the construction industry. However, there are often practical and legal issues and disputes related to payments. Therefore, it is important for practitioners in the construction industry to have a thorough understanding of the management of construction contracts pertaining to payment. This knowledge sharing, inter alia, will explore how to: - Effectively manage payment issues and prevent disputes that can negatively impact projects. - Discuss current legal and contractual issues regarding payments in order to ensure practitioners are able to govern their construction contracts in the best way possible. To enroll, please visit and register at the following link https://lnkd.in/gPUWczXY For more information, please refer to the attached flyer. See you in Kuching, Sarawak!!

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Project Management (Construction): Contracts & Claims 1. Record the achievement of key dates (i.e. Mobilization of the project office,mobilisation of casting yard, Handing over to interface contractor,etc) through valid correspondence to the employer/client/consultant. In Design Build Contracts these items carry a weightage for payment schedule. 2. Monitoring of RFIs (Request For Inspection) is important for raising IPC/RA Bill on time. Closed RFIs are equivalent to cash. Hence proper documentation is essential. Closely follow up with the construction team for the closure of open RFIs.

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Under Sub-Clause 15.2 [Termination by Employer] of 1999 FIDIC Red Book; There are six grounds that entitle the Employer to terminate the contract after giving 14 days' notice. But, in two of these events or circumstances, the Employer may by notice terminate the contract immediately. These are; 1. If the Contractor becomes bankrupt or insolvent etc. under Sub-Clause 15.2 (e) 2. If the Contractor gives a bribe, gift, inducement or reward etc. under Sub-Clause 15.2 (f)

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NEC 4 clause 11.2 (1) The Accepted Programme is the programme identified in the Contract Data or is the latest programme accepted by the Project Manager. The latest programme accepted by the Project Manager supersedes previous Accepted Programmes. The definition of the Accepted Programme is designed to accommodate two scenarios: one where a programme is mentioned in Contract Data part two and one where it is not. The Client should have informed tenderers if the intention was for the tender programme to become the Accepted Programme in this manner. Ideally, any such tender programme should generally comply with the requirements of clause 31.2. #programme #nec #nec4 #nec #construction #contract #contractlaw

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MEMORANDUM OF UNDERSTANDING (MOU) : An MOU or equivalent is a document issued prior to a contract and sets forth the initial understandings between the parties. Typically, an MOU is later replaced by a contract containing more specific terms and conditions. There are times when an MOU or equivalent document is issued prior to a contract being finalized. Work may proceed based on the terms of the MOU. It is vitally important that members of the project team with contract management responsibility understand the MOU. MOU’s by their nature do not have the detailed terms and conditions that exist in a full contract. At times, MOU’s provide limited authorizations with regard to: - The scope of work to be performed. - The amount of money that can be expended on the MOU. - The duration that the MOU is in effect. Knowing these factors is vital to understanding Contractor’s risk in performing work on the basis of an MOU. The project team must understand the limitations of the MOU so that team members do not inadvertently expose the Contractor to risk by working outside of those limitations. #MemorandumofUnderstanding #MOU #contracts #construction #fidic #prince2 #rics #zeon #engineering #consulting #design

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The ADB Loan Disbursement Handbook serves as a comprehensive guide for managing the disbursement of funds for projects financed by the Asian Development Bank (ADB). It provides detailed procedures and guidelines to ensure the smooth, timely, and efficient release of loan funds. The handbook covers various disbursement methods, including direct payments, reimbursements, and advances, outlining the requirements and documentation needed for each. It emphasizes the importance of adhering to strict financial controls and compliance with ADB’s disbursement policies to prevent misuse of funds. The handbook also offers guidance on setting up and managing project accounts, maintaining accurate financial records, and preparing withdrawal applications. Furthermore, it addresses common challenges and provides solutions to expedite disbursements while safeguarding financial integrity. By following the protocols outlined in the handbook, project teams can ensure that funds are effectively managed and utilized to achieve project goals, contributing to the overall success and sustainability of ADB-supported initiatives. #ADB

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Questions and Answers on Contract Law (Part 19) 91. IF THERE ARE MAJOR QUALIFICATIONS WITH THE CHEAPER COST SUBMITTED BY A BIDDER, HOW DO YOU DEAL WITH IT? When a bid includes qualifications, the evaluation team should: Review the qualifications’ impact on project requirements. Discuss adjustments or negotiate with the bidder. Reject the bid if qualifications undermine compliance. The case Pratt Contractors Ltd v Palmerston North City Council (1995) emphasized that non-compliant qualifications may justify rejection to maintain fairness and adherence to project specifications. 92. THE LOWEST TENDER IS A GOOD CONTRACTOR, AND ITS OFFER IS SIGNIFICANTLY LOWER THAN OTHER OFFERS AND THE PRE-TENDER ESTIMATE; WHAT WOULD BE YOUR ADVICE ON THIS? If a bid is unusually low: Investigate reasons for the low bid. Confirm that the contractor can meet project requirements. Review for potential omissions or unsustainable pricing. In Abbey Developments Ltd v PP Brickwork Ltd (2003), the court advised against accepting unreasonably low bids without review, as they may lead to underperformance or contract disputes. 93. IF ALL OFFERS RECEIVED ARE SIGNIFICANTLY HIGHER THAN THE PRE-TENDER ESTIMATE, WHAT WOULD BE YOUR ADVICE ON THIS? When all bids are higher than expected: Assess the reasons for the higher costs. Reconsider project specifications for potential cost reductions. Retender if significant adjustments are needed. In Merton London Borough Council v Lowe (Contractors) Ltd (1981), the court supported retendering when bids exceeded budget, especially when adjustments could make the project more viable. 94. HOW WILL YOU AVOID DISPUTES IN THE FUTURE, DURING TENDER STAGE? To avoid disputes: Ensure clear and detailed tender documents. Establish transparent evaluation criteria. Provide consistent communication throughout the process. In Essex County Council v Premier Recycling Ltd (2006), clear communication and comprehensive documentation helped prevent misunderstandings, reducing the potential for disputes. 95. BY EVALUATING THE AUDITED FINANCIAL REPORTS SUBMITTED WITH THE TENDER, YOU FOUND THAT THE WORKING CAPITALS OF ALL THE TENDERS ARE NOT GOOD. WHAT IS YOUR ADVICE? If all tenders show poor working capital: Review other financial metrics (e.g., cash flow) for viability. Consider requesting a performance bond to mitigate risk. Potentially reconsider the shortlist if financial stability is a priority. The court in Lebanon Gencay v Israel Discount Bank of New York (2004) highlighted the need to assess financial stability, especially when multiple indicators point to high financial risk. https://lnkd.in/dPbvPAJ6 https://lnkd.in/dVWqJdkE https://lnkd.in/dgHK9MJJ https://lnkd.in/dGEVGtMz https://lnkd.in/dD8FXBcX https://lnkd.in/d45j6P42

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I noticed a couple of areas in the calculations that could be improved Re-measurement Contracts: In the example, the adjustment of $3.74/m² includes overhead and profit, but in re-measurement contracts, those costs are already part of the original unit rate. The adjustment should only cover the difference in material costs ($20.00 - $17.00 = $3.00/m²), which means the new rate should be $33.62/m² instead of $34.36/m² Lump-Sum Contracts: Quantities in lump-sum contracts are fixed, so any adjustments should only be made for the original quantity (200 m²). The image shows an extra 350 m² being added, which wouldn’t apply in this type of contract. The correct way would be to adjust the original quantity at the new material rate. An actual measurement is not required in LS contracts especially if there isn’t any difference between the contract drawings and newly issued drawings,isn’t it? Experts,please share your thoughts on this matter #PCRateAdjustment #LumpSumContracts #Remeasurement #VariationOrder #ContractManagement

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