Practical Guide to Engineering Procurement and Construction Contracts

Eric Eggink

Document

Page 151

Index

acceleration, constructive 103–105
acceptance of work: as Owner obligation 41–42
accounting: in Joint Venture 119–121, 138–140
advance payment 11
approvals: as Owner obligation 38
archaeological items 70
automobile liability insurance 138
award criteria 47

Basic Design and Engineering Package (BDEP) 5
BDEP see Basic Design and Engineering Package (BDEP)
bias: in dispute causes 2;
- optimism and 31;
- political 2, 48, 56;
- psychological 2, 48, 56

cap on liability 65
causal connection, in claims 107–108
change control: in contract management 94
change valuation 105–106
choice of law: Joint Ventures and 126, 147
claim(s): anticipation 95;
- causal connection in 107–108;
- defined 106–107;
- Joint Venture and 125–126, 146–147;
- management 95–96
collaboration 54–55
conceptual design 34–35
concurrent delay 76–77;
- see also delay
confidentiality: Joint Ventures and 121–122, 140–141
consequential changes 103
consequential or indirect damages 50
Consortium: expulsion from 148;
- formation of 126–128;
- insurance in 118–119;
- Joint Venture vs. 126–127;
- leader 147–148;
- liabilities 148;
- offer by 117;
- reasons for forming 114;
- securities in 117–118;
- steering committee with 147;
- see also Joint Venture (JV)
construction/erection all risks insurance 118, 137
construction management: daily tasks of 69;
- responsibilities of 68–69;
- setting out in 69–70;
- team 67
Construction Program Manual (CPM) 94
constructive acceleration 103–105
constructive changes 101
contract conditions 36–37, 46, 47, 52–57;
- change control in 94;
- claim anticipation in 95;
- method of performance changes and 102;
- subcontract 64–65
contract management: change valuation and 105–106;
- claims management in 95–96;
- consequential changes and 103;
- constructive acceleration and 103–105;
- constructive changes and 101;
- Contractor-ordered changes and 100;
- defective specifications and 101;
- defects and 96–101;
- documentation control in 93–94;
- entitlement preservation and 110–111;
- information supply and 3;
- notices and 108–109;
- over-inspection and 102;
- Owner-ordered changes and 99–100;
- Owner-provided defective materials or property and 102–103;
- plans and procedures in 93;
- program 93–96;
- purpose of 91–92;
- records in 109–110;
- and rejection of conforming work 102;
- schedule control in 94;
- third party changes and 100;
- variation orders and 98–99
Contractor: in contract tendering and negotiation 49–52
contract review 93
contract tendering and negotiation: award criteria in 47;
- Contractor in 49–52;
- Page 152
  
  exclusions in 50;
- liabilities in 50–52;
- Owner in 46–49;
- science of 48–49;
- warranties in 50–52
contractual exclusions 50
cooperation 29
cost control 67

damage: as dispute cause 21–24;
- liability for, as Owner obligation 42–44
damages: for delay, liquidated 19;
- as dispute cause 21–24;
- penalties vs. liquidated 19
defect(s): contract management and 96–101;
- Contractor-ordered changes and 100;
- failure to remedy 89;
- Owner-ordered changes and 99–100;
- price reduction for 89;
- search 88–89;
- subcontractor warranties and 97–98;
- third party changes and 100;
- variation orders and 98–99
defective specifications 101
Defects Liability Period 87–88, 96
delay: delay-causing events 75–76;
- concurrent 76–77;
- as dispute source 18–19;
- liquidated damages for 19;
- sequential 77–78
design: complexities of 60;
- liability 58–60;
- submission of documents, to Owner 59–60;
- variations provision and 60–61
Design Brief 4
dispute causes 1–26;
- bias in 2;
- damages in 21–24;
- delay in 18–19;
- information supply in 2–4;
- origins of 1;
- from outside contractual parties 15–17;
- payment in 11–15, 13;
- price in 9–11;
- quality in 19–20;
- rely-upon information and 3;
- scope of work in 4–6;
- site access as 7–8
dispute resolution 24
documentation control 93–94
drawings: as Owner obligation 39
due diligence: decision-making after, in project conception 30–32
duty of non-interference 39–40

Employer’s Requirements: conceptual design in 34–35;
- contract conditions in 36–37;
- facility requirements in 35;
- general requirements in 35;
- overview of 34;
- Owner’s obligations in 37–44;
- particular requirements in 35;
- tender phase in 35–36
entitlement preservation 110–111
environmental protection 71–72
EOT see extension of time (EOT)
equipment: Ownership of 73;
- Owner-supplied 72
exchange rates 10
exclusions: in contract tendering and negotiation 50;
- in scope of work 6
experience 29
expulsion: from Joint Venture 122–124
extension of time (EOT) 94

facility requirements 35
feasibility study 28–30
FEED see Front-End Engineering and Design (FEED)
Final Acceptance 41–42, 89
financing: in Joint Venture 120
fixed price contract 9–10
Flyvbjerg, Bent 2, 31, 48, 56
Force Majeure 17
forward contract 10
fossils 70
Front-End Engineering and Design (FEED) 36, 48, 58

general purchase conditions 65
general requirements 35

Health, Safety and Environment (HSE) 68;
- see also safety
hold harmless 22–23
HSE see Health, Safety and Environment (HSE)

information: as Owner obligation 39
information supply: as dispute cause 2–4
innovation 29
inspection: joint 88;
- over- 102
instructions: as Owner obligation 39
insurance: construction/erection all risks 118;
- in Joint Venture/Consortium 118–119, 136–138;
- liability 119;
- marine cargo/transportation 118, 137;
- third-party liability 138;
- work 136–138;
- workman’s compensation 119, 137–138
invoicing: in Joint Venture 119, 138

joint inspection 88
Joint Venture (JV): accounting in 119–121, 138–140;
- arbitration and 125–126, 146–147;
- choice of law with 126, 147;
- claims and 125–126, 146–147;
- Page 153
  
  confidentiality and 121–122, 140–141;
- Consortium vs. 126–127;
- continuation of 143;
- contributions of members to 133;
- dispute resolution and 125–126, 146–147;
- effective date of 124;
- exclusivity with 135;
- expulsion from 122–124, 142–146;
- financial plans of 115–116;
- financials in 119–121, 138–140;
- financing in 120, 139;
- formation of 114–115;
- insurance in 118–119, 136–138;
- invoicing in 119, 138;
- liability and 122, 141–142, 144–145;
- management structure of 130–132;
- offer by 117, 135–136;
- payments in 120, 138–139;
- principles of joint operation in 134–135;
- profit and loss sharing in 134;
- project management in 116–117, 131–133;
- reasons for forming 114;
- securities in 117–118, 136;
- steering committee in 116–117, 130–131;
- strategic management in 130;
- taxes and 121, 140;
- termination of 125, 145–146;
- unpaid working capital in 120, 139;
- use of property and 144
JV see Joint Venture (JV)

knock-for-knock 21–23, 26, 42
knowledge sharing 30

labour shortage 76
late payments 11–12
L/C see letter of credit (L/C)
letter of credit (L/C) 12–13, 13
liability: Consortium and 148;
- in contract tendering and negotiation 50–52;
- for damages 124;
- design 58–60;
- Joint Ventures and 122, 141–142, 144–145;
- as Owner obligation 42–44;
- for work provided 124
liability insurance 119
loss of profit, loss of use 50
lump sum pricing 9–10, 55

marine cargo/transportation insurance 118, 137
materials: Ownership of 73;
- Owner-supplied 72;
- shipping responsibility for 73
method of performance changes 102
milestone payments 18
mineral deposits 70
mutual hold harmless 22–23

non-interference, duty of 39–40
notices 108–109

optimism 31
option contract: exchange rates in 10
overall liability cap 50
over-inspection 102
Owner: changes ordered by 99–100;
- in contract tendering and negotiation 46–49;
- defective materials or property provided by 102–103;
- equipment supplied by 72;
- materials supplied by 72;
- plant supplied by 72;
- services to be supplied by 72;
- submission of design documents to 59–60;
- supplies to be supplied by 72
Owner’s obligations: acceptance of work as 41–42;
- approvals as 38;
- drawings as 39;
- duty of non-interference as 39–40;
- in Employer’s Requirements 37–44;
- information as 39;
- instructions as 39;
- liability as 42–44;
- payment as 40–41;
- permits as 38;
- site access in 37–38;
- site possession in 37–38;
- start date as 38–39
Owner’s risks 17

particular requirements 35
payment: advance 11;
- as dispute source 11–15, 13;
- guarantees in 13–15;
- in Joint Venture 120, 138–139;
- late 11–12;
- letter of credit in 12–13, 13;
- as Owner obligation 40–41
penalties: liquidated damages vs. 19
performance measurement 20
performance tests 79–80
permits: as Owner obligation 38
physical conditions, unforeseeable 15–17
Planning Fallacy 31
plant: Ownership of 73;
- Owner-supplied 72
political bias 2, 48, 56
price: as dispute cause 9–11;
- reduction, defects and 89
procurement, project 32
project conception: cooperation in 29;
- due diligence in, decision-making after 30–32;
- experience in 29;
- feasibility study in 28–30;
- innovation in 29;
- knowledge sharing in 30;
- management in 27–28;
- preparation in 29;
- procurement and 32;
- standardisation in 29
project management: in Joint Venture 116–117, 131–133
Page 154

psychological bias 2, 48, 56
public convenience 71
public utilities 72
Punch List 89
purchase conditions 65

quality: as dispute cause 19–20

recordkeeping 109–110
Reference Class Forecasting 31–32, 48–49, 56–57
rely-upon information 3
requirements: facility 35;
- general 35;
- particular 35
Ruskin, John 48

safety: in construction 70–71;
- see also Health, Safety and Environment (HSE)
schedule control: in contract management 94
scope of work: as dispute cause 4–6;
- exclusions in 6;
- subcontract and 64
securities: in Joint Venture/Consortium 117–118, 136
sequential delay 77–78;
- see also delay
setting out 69–70
shipping responsibility 73
site access: as dispute source 7–8;
- failure, in delay 76;
- as Owner obligation 37–38
software issues 88
specifications, defective 101
standardisation 29
start date: as Owner obligation 38–39
storage responsibility 73
strikes 76
subcontract: conditions 64–65;
- scope of work and 64
subcontractor warranties 97–98
substitution: expulsion by 124, 145

Taking-Over: assessment procedures after 84;
- certificate 83–84;
- conditions 82;
- procedure 83;
- relevance of 84;
- responsibility transfer in 82–83
taxes: and Joint Ventures 121, 140
tender phase 35–36
termination: of Joint Venture 125
tests, performance 79–80
third parties: disputes arising from 15–17
third-party liability insurance 138
time management 67
transportation insurance 118

unforeseeable physical conditions 15–17

variation orders 98–99
variations provision 60–61

warranty: contractual 50–52;
- quality and 20;
- subContractor 97–98
wear and tear 88
workman’s compensation insurance 119, 137–138

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Practical Guide to Engineering Procurement and Construction Contracts

Page 151

Index

Index

Page 152

Page 153

Page 154