Construction Contracts

Nowadays the construction contracts and sub-contracts become more and more comprehensive and with huge amount of contract sum. In previous years, the traditional contracts, particularly the sub-contracts are always of one major activity or a combination of a few site activities such as excavation, backfilling and compaction for Earthworks; trenching, pipe laying, trust anchoring and manholes for Drainage Works; formation, sub-base laying and road paving for Roadwork’s; form work, reinforcement and concreting for Concretes Works, Utility Relocation Works for facilitate the construction etc.

However, probably being learnt by former mistakes or negligence that triggered out the subsequent disputes, the recent Clients / Developers are now trying to stay away from claims and to keep the project cost within budget by award of some sort of a lump sum contract. This type of contract is a fixed-price contract that includes the entire

tendered work of which the extent is thoroughly covered under the various terms and conditions of contract, bills of quantities , method of measurement , specifications , master program and tender drawings , and hardly would have any further price adjustment once the contract is entered into.

While the contractor is awarded the contract under the condition that it bears all the responsibility and obligation for the completion of the whole of works, no doubt this practice is preferred by the Client / Developer and will continue. Thus, the awareness of site works with a wide variety of trades and activities by the site staff becomes more and more important and sometimes even significantly affects the profit and loss of the contractor.

No matter which form of contract is being performed on a construction site, the site staff (such as the foremen, works supervisors, site engineers, or quantity surveyors) should have wide experience and knowledge about the activities to be carried out. Some staff might have ample experience on some trades of work but might be lacked of knowledge about the other trades. As being an aggressive duty staff, one should be courteous and humble enough to try the best to learn more from the seniors, peers, subordinates, sub-contractors, and particularly the “old men” whom had worked on construction sites for years.

Basic engineering knowledge could be easily obtained from school class and reference books, however the valuable practical on-site experience might be learnt perhaps only during the “afternoon tea break” or “happy hour” after the site work. Honestly speaking, a friendly 20 minutes chatting may come up with a contributive solution that already screens out the mistakes and failures made by someone in the past 10 years.

Pre-Contract Stage

Winning a construction contract is not easy. This chapter introduces briefly to the site staff the scope of works that have to be or already carried out by their employer and seniors before the contract is awarded. The site staff should appreciate their seniors and preceding staff’s hard efforts for getting the contract and at least should have some knowledge about the background of the project before one resumes duty on site.

The pre – contract stage can be breakdown as follows

1. Project/ Construction cost

2. Preparation of Contract Documents

3. Types of Contracts

4. Tender of Construction Projects

5. Feasibility Stage

6. Site Investigation

7. Engineering Design

Project / Construction Cost

Naturally the client wants to know as close as possible the forthcoming expenditure that will incur for the project , and also wish to see the project work will be finished at a minimum cost compatible with satisfactory materials , workmanship and time .

So, when the set of engineering drawings is available together with the determination of materials to be used, the apparent cost of the project will be then evaluated for the

client’s consideration. The cost of the project will have to be amended as the revised architectural / engineering design demands, or vise versa until the decision of final design is made.

In case the financial status mainly governs the size and sequence of the project, the client itself should know well about the schedules of its capital investment and expenditure.

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