Aim
To gain knowledge and understanding about contract clauses for implementation of construction projects and about the process of contract management.
Learning Outcomes
- To gain knowledge about procurement methods being followed in Oman
- To understand about different standard forms of contract in practice and their drawbacks.
- To get knowledge about types of contracts in practice.
- To understand the contract clauses and their applications.
Task A:
Scenario 1
An Infrastructure company is inviting contractors for the execution of a Hyper City Shopping Mall situated at major cross roads in Al-Hali South Muscat. The following facilities are provided in the proposed building complex.
- Shopping facility
- Restaurants/Entertainment zones
- Multiplex Theatres
- A three floor Multi Level Car Parking (MLCP) Facility (including the basement).
- Other Utility facility
Total plinth area of the building complex = 0.5M Sq.m. Duration of the project = 5 years
Cost of the project = 155, 000, 000 OMR.
The project has time schedules and the contractors need to adhere to the deadlines for its completion.
a) As a contract administrator explain the factors critically needed to be considered before accepting the job. Also discuss the factors that would likely to effect the project performance, if it would be implemented in European Countries.
b) Evaluate the tendering process and evaluation of the tenders for the given project.
c) Demonstrate the usage of standard form of contracts in Omani context
d) Suggest and review the suitable type of procurement method for the specified project
Scenario 2
After due evaluation of the received tenders by the client, M/s ABC construction company is awarded the project for the execution of Hyper City Shopping Mall. M/s ABC Construction company started the work as per the time lines. The project scheduled completion is 5 years. Project progress is reviewed by the client after 2 years and progress status is reported below:
Progress of the work: Only 35% of scheduled construction is achieved.
Further scrutiny of the tender documents, BOQ by the contract administrator the following deviations are noticed and reported below:
a) The contractor has been carrying out additional work without variation order in place. Many of small jobs has been executed by the contractor through verbal instructions, at the request of the client, for which either minutes of meeting(MOM) or verbal instructions have not been documented.
What actions the contract administrator has to initiate to avoid the disputes between the client and contractor for the smooth cash flow and project completion.
b) It is noticed that the contractor is submitting additional claims for the work variations which are not covered by the contract sum. Also it is recorded that the contractor is submitting the additional claims at short notice period for release of payments, which is affecting the scheduled cash flow.
As a Contract Administrator, what measures need to be adopted to ensure the timely cash flow for the smooth running for the project?
c) In spite of issuing Good for Construction (GFC) drawings to the contractor, contractor not adhered to the required specifications and major devotions were recorded on second floor Restaurants/Entertainment zones. Subsequently it was declared that the contractor was at fault for not following GFC drawings and the contractor was terminated. Work is awarded to anew contractor for the completion of the balance work.
Critically examine the hasty decision of contract termination by the client. Also suggest measures to avoid occurrence of such incidents.
d) During the in-situ concrete pile load testing by the quality control division it is noticed that the Piles PF2 and PF4 are failed at 82% and 86% of designed load. Verification of the records reveals that slump and cube strength tests on ready mix concrete were carried and certified for their confirmation to the code provisions.
As the Pile load test is failed, the contractor's is instructed to recast the new piles and the contractor's double claim is rejected for by the client. As the contractors is in the liability period.
The contractor administrators is requested to critically examine the responsibilities of the contractor's during defect liability period and suggest measure for the timely completion of the project with in the budget.
e) The High-Tension cable running across the site is affecting 2nd floor concrete slab. There is a need to shift the power cable utilities and it would likely to affect the project schedule by two weeks. The contractor submitted claims for idling charges of his men and machinery due to time delay's from the client side.
Examine the contractor's claim for compensation of idling charges of the men and machinery as per the scope of work and Terms of Reference (TOR) of the contract. Suggest suitable measures to for the timely completion of the project with in the budget resources.
f) Contractor became bankrupt before completion of the project. It is recorded that about 30% of work is pending for completion.
The contract administrator is summoned up to the site to resolve financial issues and help the contractor to restart the work immediately. Suggest suitable measures for the timely completion of the project.
Task B:
a) Individual presentation of the assignment including answer to the questions
Individual type of project will be informed to the students at the time of delivering the coursework. Your submission should be at least 2000 words and should be word processed in 1.5 line spacing in 12 point Times New Roman font for consistency in the report.