Construction Management Approach based on FIDIC Conditions of Contract for Construction, 1999 1st Edition Dr. Munther M. Saket March 2015 1
Traditional Construction Contracts Owner of a construction project appoints a main contractor to execute the project, and an Engineer to oversee the completion of the project works for a fee Standard traditional conditions of contract mainly adopted in Jordan are based on FIDIC Conditions of Contract for Construction (1999 1 st Edition ) . INVOLVED PARTIES EMPLOYER – ENGINEER - CONTRACTOR 2
Construction Management Contracts (50+ years old) Owner of a construction project appoints separate trade contractors to execute the project, and a construction manager to oversee the completion of the project works for a fee Standard CM conditions of contract issued by AIA, CMAA, JCT, etc. INVOLVED PARTIES OWNER – ARCHITECT/ENGINEER – CONSTRUCTION MANAGER - CONTRACTOR 3
Traditional Construction Construction Management Contract Contract Involved Parties & Involved Parties & Communication Communication 4
In the Traditional Approach, the Engineer is the Contract administrator on behalf of the Employer (as an Employer’s Agent). The Engineer is a Supervisor and Certifier. In the Construction Management Approach, the CM is the Contract Administrator on behalf of the Employer (as an Employer’s Agent). The Architect/Engineer (as also an Employer’s Agent) is a Supervisor, but the CM acts as a Certifier. 5
The following ASPECTS of the FIDIC Engineer’s role intersect in part with that of the CM: 1. DEFINITION ASPECT 2. COMMUNICATIONS ASPECT 3. INTERPRETATION ASPECT 4. INSTRUCTION & DETERMINATION ASPECT 5. SITE POSSESSION & MULTI-CONTRACTOR ASPECT 6. QUALITY CONTROL ASPECT 7. MEASUREMENT OF WORK ASPECT 8. CERTIFICATION OF PAYMENTS ASPECT 6
1.DEFINITION ASPECT The Engineer’s definition is incorporated in Sub- Clause 1.1.2.4, and also is defined as one of the Employer’s Personnel under Sub-Clause 1.1.2.6. To perform the Engineer’s role, the Construction Manager and the Supervision Consultant need also to be defined in a similar fashion in the above Sub- Clauses. For Example: 7
1. DEFINITION ASPECT 1.1.2.4 "Construction Manager or CM" means the person appointed by the Employer to act as the CM for the purposes of the Contract and named in the Appendix to Tender, or other person appointed from time to time by the Employer and notified to the Contractor under Sub- Clause 3.4 [Replacement of the CM or the SC]. "Design & Supervision Consultant or SC" means the person appointed by the Employer to act as the SC for the purposes of the Contract and named in the Appendix to Tender, or other person appointed from time to time by the Employer and notified to the Contractor under Sub-Clause 3.4 [Replacement of the CM or the SC]. 8
1. DEFINITION ASPECT 1.1.2.6 "Employer's Personnel" means the CM, SC, the assistants referred to in Sub-Clause 3.2 [Delegation by the CM and SC] and all other staff, labour and other employees of the CM, SC and of the Employer; and any other personnel notified to the Contractor, by the Employer or the CM, as Employer's Personnel. 9
2.COMMUNICATIONS ASPECT Almost all communication in Contract is between Engineer and Contractor, with a few exceptions (e.g. insurances, guarantees, suspension, termination, & disputes aspects). To perform the Engineer’s role, communication lines with the Construction Manager and the Supervision Consultant need to be clarified in all pertinent Sub-Clauses. For Example, the Communications Sub-Clause 1.3 can be amended as follows: 10
2. COMMUNICATIONS ASPECT 1.3 Communications Wherever these Conditions provide for the giving or issuing of approvals, certificates, consents, determinations, notices and requests, these communications shall be: (a) in writing and delivered by hand (against receipt), sent by mail or courier, or transmitted using any of the agreed systems of electronic transmission as stated in the Appendix to Tender; and ( b) delivered, sent or transmitted to the address for the recipient's communications as stated in the Appendix to Tender. However: (i) if the recipient gives notice of another address, communications shall thereafter be delivered accordingly; and (ii) if the recipient has not stated otherwise when requesting an approval or consent, it may be sent to the address from which the request was issued. Approvals, certificates, consents and determinations shall not be unreasonably withheld or delayed. When a certificate is issued to a Party, the certifier shall send a copy to the other Party. When a notice is issued to a Party, by the other Party or the CM, a copy shall be sent to the CM or the other Party, as the case may be. All communication from the SC to the Contractor or vise versa shall be directed to the CM. 11
3. INTERPRETATION ASPECT Under Sub-Clause 1.5, the Engineer is entrusted and authorized with clarifying and instructing in cases of discrepancy or ambiguities. To perform the Engineer’s role, the Construction Manager can be authorized to interpret discrepancies and ambiguities except those which relate to technical design or specification aspects. As such, Sub-Clause 1.5 can be amended as follows: 12
3. INTERPRETATION ASPECT 1.5 Priority of Documents The documents forming the Contract are to be taken as mutually explanatory of one another. For the purposes of interpretation, the priority of the documents shall be in accordance with the following sequence: the Contract Agreement (if any), the Letter of Acceptance, the Letter of Tender, the Particular Conditions, these General Conditions, the Specification, the Drawings, and the Schedules and any other documents forming part of the Contract. If an ambiguity or discrepancy is found in the documents, the CM shall issue any necessary clarification or instruction, which clarification or instruction shall be based upon the SC's opinion insofar as the ambiguity or discrepancy relates to technical design aspects. 13
4. INSTRUCTION & DETERMINATION ASPECT The Contractor shall only take instructions from the Engineer … . (Sub-Clause 3.3). To perform this role of the Engineer, both the Construction Manager and the Supervision Consultant may instruct (the latter’s instructions only relating to technical design and specification aspects), but communication lines as proposed earlier need to still be followed. Examples on this ASPECT are proposed for Sub-Clauses 1.9, 3.2, 3.3, 3.5, 7.6, 20.4, 20.6 as follows: 14
4. INSTRUCTION & DETERMINATION ASPECT – cont’d 1.9 Delayed Drawings or Instructions The Contractor shall give notice to the CM whenever the Works are likely to be delayed or disrupted if any necessary drawing or instruction is not issued to the Contractor within a particular time, which shall be reasonable. The notice shall include details of the necessary drawing or instruction, details of why and by when it should be issued, and details of the nature and amount of the delay or disruption likely to be suffered if it is late. The SC shall issue to the CM such necessary drawing or technical design-related instruction as necessary and the CM shall transmit same and/or issue as necessary such non-design-related instruction to the Contractor. If the Contractor suffers delay and/or incurs Cost as a result of non-issuance of the notified drawing or instruction within a time which is reasonable and is specified in the notice with supporting details, the Contractor shall give a further notice to the CM and shall be entitled subject to Sub-Clause 20.1 [Contractor's Claims] to: • an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and • payment of any such Cost plus reasonable profit, which shall be included in the Contract Price. After receiving this further notice, the CM shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine these matters. However, if and to the extent that the non-issuance failure was caused by any error or delay by the Contractor, including an error in, or delay in the submission of, any of the Contractor's Documents, the Contractor shall not be entitled to such extension of time, Cost or profit. 15
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