CONTRACTOR CLAIMS REQUIRING NOTICE:

1. Clause 1.9: Delayed Drawings or Instruction: Contractor may claim extension of time, Cost
and reasonable profit if Engineer fails to issue a notified instruction or drawing within a
reasonable time.
2. Clause 4.12: Unforeseeable Physical Conditions: Contractor may claim extension of time
and Cost if he encounters physical conditions which are Unforeseeable.
3. Clause 4.24: Fossils: Contractor may claim extension of time and Cost attributable to an
instruction to Contractor to deal with an encountered archaeological finding.
4. Clause 16.1: Contractor’s Entitlement to Suspend Works: Contractor may claim extension
of time, Cost and reasonable profit if Engineer fails to certify or if Employer fails to pay
amount certified or fails to evidence his financial arrangements, and Contractor suspends
work.
5. Clause 17.4: Consequences of Employer’s Risk: Contractor may claim extension of time,
Cost and (in some cases) reasonable profit if Works, Goods or Contractor’s Documents are
damaged by an Employer’s risk as listed in Sub-Clause 17.3.
6. Clause 19.4: Consequences of Force Majeure: Contractor may claim extension of time and
(in some cases) Cost if Force Majeure prevents him from performing obligations.

EMPLOYERS CLAIMS REQUIRING NOTICE:

1. Clause 7.5: Rejection: Employer may claim costs if defective Plant, Materials or
workmanship is rejected and subsequently retested.
2. Clause 7.6: Remedial Work: Employer may claim costs if Contractor fails to carry out
remedial work and if he would not have been entitled to be paid for it.
3. Clause 8.6: Rate of Progress: Employer may claim costs attributable to revised methods
which Contractor adopts in order to overcome a delay for which no extension of time is
due.
4. Clause 8.7: Delay Damages: Employer may claim prescribed delay damages if Contractor
fails to achieve completion within Time for Completion.
5. Clause 9.4: Failure to Pass Test on Completion: Employer may claim costs if Works or
Section repeatedly fails Test on Completion.
6. Clause 11.3: Extension of Defects Notification Period: Employer may claim extension of
the Defects Notification.
7. Clause 15.4: Payment after Termination: Works, Goods and Contractor's Documents are
valued after Employer has terminated Contract.
CONTRACTOR’S CLAIMS PROCEDURE

1. An event or circumstance occurs with the potential of a claim under any clause of the
Contract Conditions or otherwise in connection with the Contract.
2. The Contractor should give notice of the claim to the Engineer describing the event or
circumstance giving rise to the claim. This notice should be given with the following in
mind:
a. It should be given as soon as practicable; and not later than 28 days after the
Contractor became aware, or should have become aware, of the event or
circumstance. Failure to do so is fatal to the claim.
b. All supporting particulars for the claim, as relevant to such event or circumstance,
should also be submitted.
c. Any other notices required by the Contract should also be submitted.

3. The Contractor should keep substantiating contemporary records, which the Engineer may
monitor and/or instruct the Contractor to keep further contemporary records.

4. Within 42 days of the event, the Contractor should submit a fully detailed claim which includes
full supporting particulars of the claim. The period may be varied if approved by the Engineer.
If the event or circumstance giving rise to the claim has a continuing effect:

a. this fully detailed claim shall be considered as interim;

b. the Contractor should submit further interim claims and any further particulars at
monthly intervals, giving the accumulated effect; and
c. the Contractor should submit a final claim within 28 days after the end of the effects
resulting from the event, or within such other period approved by the Engineer.

5. Within 42 days after receiving a claim or any further particulars supporting a previous
claim, the Engineer should respond with approval or disapproval and detailed comments.
He may also request any necessary further particulars, but shall nevertheless give his
response on the principles of the claim within such time. This period may be varied if
approved by the Contractor.

6. Substantiated amounts for any claim should be included in each Payment Certificate. It is
to be noted that the requirements of Sub-Clause 20.1 are in addition to those of any other
Sub-Clause which may apply to the claim and failure to comply preventing or prejudicing
proper investigation should be taken into account by the Engineer.
7. The Engineer should then proceed in accordance with Sub-Clause 3.5 to agree or determine
(i) the extension of time (if any) and/or (ii) the additional payment (if any) to which the
Contractor is entitled under the Contract.

8. The Engineer should consult with each Party in an endeavour to reach agreement, failing
which he is required to make a fair determination in accordance with the Contract.

9. If agreement between the parties is achieved, the Engineer is required to give a notice with
supporting particulars. Otherwise, he is required to give a notice of his determination with
supporting particulars.

10. Each Payment Certificate shall include such amounts for any claim as have been reasonably
substantiated as due under the relevant provision of the Contract.

11. If the Engineer’s determination is not acceptable to any of the Parties, the dispute arising
should be resolved in accordance with Sub-Clauses 20.2 to 20.8.
EMPLOYER’S CLAIMS PROCEDURE

1. An event or circumstance occurs with the potential of a claim by the Employer against the
Contractor under any clause of the Contract Conditions or otherwise in connection with
the Contract.

2. The Employer or the Engineer should give notice and particulars of the claim to the
Contractor. This notice should be given with the following in mind:
a. It should be given as soon as practicable after the Employer became aware of the
event or circumstance.
b. A notice relating to an extension of the Defects Notification Period should be given
before the expiry of such period.
c. Notice is not required for payments due under Sub-Clauses 4.19, 4.20, or for other
services requested by the Contractor.
d. Supporting substantiating particulars should also be submitted with the notice
specifying the basis of the claim.

3. The Engineer should then proceed in accordance with Sub-Clause 3.5 to agree or determine
(i) the amount (if any) which the Employer is entitled to be paid by the Contractor, and/or
(ii) the extension (if any) of the D.N.P in accordance with Sub-Clause 11.3.

4. The Engineer should consult with each Party in an endeavour to reach agreement, failing
which he is required to make a fair determination in accordance with the Contract.

5. If agreement between the parties is achieved, the Engineer is required to give a notice with
supporting particulars. Otherwise, he is required to give a notice of his determination with
supporting particulars.

6. The amount determined may be included as a deduction in the Contract Price and Payment
Certificates. The Employer shall only be entitled to set off against or make any deduction
from an amount certified in a Payment Certificate, or to otherwise claim against the
Contractor.

7. If the Engineer’s determination is not acceptable to any of the Parties, the dispute arising
should be resolved in accordance with Sub-Clauses 20.2 to 20.8.
DISPUTE RESOLUTION PROCESS
1. A dispute arises.
2. The dispute is referred to the D.A.B in writing for its decision, under Sub-Clause 20.4.
3. The D.A.B gives notice of its decision within 84 days or it fails to give a decision within
that period.
4. The Parties react to the decision of the D.A.B, which could be one of two possibilities:
a. Both Parties are satisfied with that decision, the dispute is resolved and such
decision becomes final and binding; or
b. At least one of the Parties is dissatisfied with the decision of the D.A.B, or with
its lack of decision, and thus notifies the other Party of its dissatisfaction within
28 days. In this case, the Parties are given 56 days to attempt resolving their
dispute by amicable settlement, under Sub-Clause 20.5. If the attempt is
successful, the dispute is resolved. If not, step 5 applies.

5. If the attempt to amicably resolve the dispute fails, such dispute is to be finally settled by
international arbitration, under Sub-Clause 20.6.
THE TRADITIONAL DESIGN TENDER CONTRACT
In this method the Contractor builds to a defined scope of works for a fixed price lump sum. The
client retains the responsibility for the design and the project team. The contractor will be
appointed normally following a tender process.

ADVANTAGES

1. Completion of design prior to tender provides good time and cost control.
2. Involvement of the designer throughout the construction process gives good quality
control.
3. Well established and familiar to all – ‘everyone knows how it works’.
4. Extensive provision for client changes and well defined processes for the evaluation of
variations.

DISADVANTAGES

1. The process is time-consuming since all design work must be completed prior to
solicitation of the construction contract. The process is very sequential and efforts to
reduce the overall time frame by tendering on incomplete data tend to lead to an
increased risk of higher prices and time over-runs.
2. The designer may have limited ability to assess scheduling and cost ramifications as the
design is developed which can lead to a more costly final product.
3. The Owner generally faces exposure to contractor claims over design and constructability
issues since the Owner accepts liability for design in its contract with the contractor.
4. The approach tends to promote more adversarial relationships rather than cooperation or
coordination among the contractor, the designer and the Owner.
5. The contractor pursues a least-cost approach to completing the project, requiring
increased oversight and quality review by the Owner.
6. The absence of a contractor’s input into the project design may limit the effectiveness and
constructability of the design. Important design decisions affecting both the types of
materials specified and the means of construction may be made without full consideration
of a construction perspective.
7. Divided responsibility for design and construction may lead to post-contract disputes
over defects.

TWO STAGE TENDER PROCUREMENT

In this process, the Contractor is appointed on the basis of a first stage tender which
determines the level of overhead and profit for each Contractor. The Contractor then
works with the Project Team during the second stage to develop the designs and establish
detailed costings for separate project work elements. This process will provide for a fixed
price on a detailed design basis. This process requires a long second stage period in
which to design and tender the different work elements and therefore a start on site would
occur later than normal.
 THE DESIGN AND BUILD CONTRACT

The Client appoints a building contractor, as before standard forms of contract are
available for this purpose to provide a completed building to an agreed cost and
programme. The Contractor is responsible for design and construction. The Contractor
can be chosen through a tender process or through negotiation. The Client can appoint a
consultant to oversee the works.

ADVANTAGES

1. Speed of construction
2. Single point of responsibility
3. Specialization and know-how
4. Certainty of cost
5. Continuity
6. Improved communications

DISADVANTAGES

1. Not so good where high quality design is required. It has been said that design
and build contracts build down to a price not up to a quality
2. Lack of independent advice to client
3. Quality control in hands of contractor
4. Cost of variations

Novation

An alternative is to appoint a contractor when designs have been developed in order to retain
control of the important elements of design and specification.
The Design Team can then transfer their contractual obligations to the contractor and complete
the designs on behalf of the Contractor.
The Professional Construction Management Contract
This is a fast track strategy where individual elements of the project are let before the design of
later work packages or elements have been completed. The provider will appoint a Construction
Manager to manage the overall contract in return for a management fee as with Management
Contracting. In this process the contracts for the sub-contractors are placed directly between the
Client and the sub-contractor and the Client will need to have a high level of involvement during
the design development and the construction phases of the work.

Advantages
1. The C.M. also provides advisory professional management assistance to the owner prior
to construction, offering schedule, budget and constructability advice during the project
planning phase.
2. The C.M. scenario offers the opportunity to begin construction prior to completion of the
design.
3. The C.M. can bid and subcontract portions of the work at any time, often while design of
unrelated portions is still not complete.
4. The C.M. and owner negotiate a guaranteed maximum price (G.M.P.) based on a partially
completed design, which includes the C.M’s estimate of the cost for the remaining design
features.
5. Furthermore, C.M. may allow performance specifications or reduced specifications to be
used, since the C.M’s input can lead to early agreement on preferred materials, equipment
types and other project features.

Disadvantages

1. The C.M. system involves the contractual relationship among designer, C.M. and owner
once construction begins. As construction gets underway, the C.M. converts from a
professional advisory role of the construction manager to the contractual role of the
general contractor.
2. Tensions over construction quality, the completeness of the design, and impacts to
schedule and budget can arise. Interests and stake holding can become similar to the
traditional design-bid-build system, and adversarial relationships may result.
3. While the fixed G.M.P. is supposed to address the remaining unfinished aspects of the
design, this can in fact increase disputes over assumptions of what remaining design
features could have been anticipated at the time of the negotiated bid.
4. Since a commitment is made to a contractor earlier in the process, a premium is placed on
the proper selection of the C.M. to provide the best value to the owner.
5. The final costs will only be known once the final work elements have been awarded.
Cost Planning
A cost plan is utilized to control the development costs although actual costs cannot be
obtained until the final work package has been awarded.
Partnering
Commonly referred to as Public Private Partnerships (PPP), particularly Private Finance
Initiatives (PFI). The projects are created for the provision of services and not specifically for the
exclusive provision of capital assets such as buildings. It is therefore preferable to investigate
PPPs as soon as possible after a user need has been identified rather than leaving it until a
conventional construction project has been selected as the solution. It should be noted that the
tendering process in this procurement route is expensive and requires negotiation rather than
competitive tendering.

ADVANTAGES

1. Less confrontation and therefore speedier delivery

2. Better value for money. At least the same level of quality
3. Less risk, greater certainty of satisfaction
4. Fewer claims
5. Less bureaucracy
6. Better communications, understanding and tolerance of problems
7. Faster construction
8. Continuous improvement
9. Increased profit potential
10. Less confrontation
11. Greater certainty of workload
12. Better communications and understanding from clients
DISADVANTAGES
1. In comparison with other procurement routes the time from commencement of the project
to attaining a start on site is substantially longer.
2. Key personalities fall out, resulting in acrimony.
3. Client begins to wonder if he is paying too much because of the non-competitive pricing.
4. Reducing the risk may affect the competitiveness of the contractor or his ability to
innovate. The contractor becomes too ‘comfortable’ and reliant upon too few clients.
5. The client expects too much, and so becomes disillusioned.
6. The arrangement fails owing to a lack of understanding by one partner of the other
partner’s business

User Needs Assessment

Partnerships projects are created for the provision of services and not specifically for the
exclusive provision of capital assets such as buildings. It is therefore preferable to investigate
partnerships as soon as possible after a user need has been identified rather than leaving it until a
conventional construction project has been selected as the solution.
Framework Agreements

Framework Agreements can be established with single suppliers or with a limited number of
suppliers. Frameworks can allow suppliers to be brought together with the relevant expertise and
experience which can result in savings to both parties where a number of projects are involved.

These agreements can cover different forms of procurement including Design and Build,
Traditional, etc.