Construction Management: Contract Planning and Control, Project and Contract Close‐Out, and Final Settle

Introduction

Engineering and construction projects have a history of contractual disputes and conflict. These problems have reduced the efficiency and profitability of developments, and have not been to the benefit of either clients or contractors. Both engineering and construction tend to attract contractual problems because of the complex nature of the work itself, and also the complicated commercial arrangements involved. The purpose of this course is to help delegates understand the reasons why such problems arise, and how to avoid them in the future. Many contracts are now being conducted in a different way to the traditional approach, with more openness between the parties, and this has, in some cases at least, reduced conflict and increased profitability for all parties.

 Course highlights will include:

• A review of major issues in engineering and construction contracting
• An examination of why things so often go wrong
• Consideration of ways to improve
• Detailed discussion as to how a more collaborative approach might benefit engineering and construction projects
• Examination of real issues, from real projects

Objectives

 The course has the following main objectives:

• Understand how contracts work, and why they sometimes cause problems
• Address some specific clauses and provisions that are a common source of problems
• Develop thinking around more collaborative approaches to working on engineering and construction contracts
• Recognize the dangers that such approaches bring, and how to minimize problems
• Look at engineering and construction contracts in an international context
• Understand how to resolve disputes quickly and efficiently

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

• Business Managers
• Commercial staff
• Project Managers
• Project Engineers
• Procurement staff
• Legal staff
• All involved in disputes and their resolution
• All staff involved in selecting contracting strategies
• Staff new to engineering or construction contracting
• Experienced staff looking for a refresher, together with new ideas
• Staff from client/developer and contractor/subcontractor backgrounds

Course Outline

Day 1 - The fundamentals of engineering and construction contracts

• Why contracts are necessary
• How contracts are formed
• Particular issues with engineering and construction contracts
• Use of standard forms
• FIDIC
• NEC
• LOGIC
• Differences in bargaining positions
• Problems with competitive tendering
• Problems with different industries – including between engineering and construction
• And different regions/countries
• Issues with different legal systems

Day 2 - Some major problem clauses in engineering and construction contracts

• Design responsibility
• Requiring contractors to warrant the design of others
• Standard of work
• Fitness for purpose
• International/National/Company standards
• Standards for professional services
• Variations
• Time
• Money
• Force majeure
• Intellectual property
• Limits of liability
• Indemnities
• Insurance
• Some minor problems:
• Notices
• Entire Agreement
• Incorporation by reference

Day 3 - Traditional approaches to engineering and construction contracts

• Lump-sum/fixed price
• Bill of Quantities/Schedule of Rates
• Adding incentive fees
• Escalation
• Dealing with general price inflation
• Economic Price Adjustment
• Problems with volatile materials (or labor) markets
• Selecting the right index
• Call-off contracts

Day 4 - Looking beyond the traditional approaches

• Risk and reward structures
• Build Operate Transfer (and similar models)
• Open Book approaches
• Collaborative working
• Advantages
• Dangers – and how to avoid them
• This session will involve delegates in developing their own ideas as to different ways in which engineering and/or construction contracts could be structured so that commercial drivers are focused on the goals of the parties, not on conflict

Day 5 - Disputes – avoidance and resolution

• How disputes arise
• Methods to avoid disputes or deal with them quickly as they arise
• Negotiation techniques
• Traditional third-party approaches
• Courts (litigation)
• Arbitration
• Adjudication
• Some alternative approaches
• Mediation
• Conciliation
• Early Neutral Evaluation
• Expert determination
• Dispute Review Boards and similar arrangements
• Pendulum arbitration
• Mini-arbitration