Construction Management Guide

By Samer H Skaik

Abstract

Subcontracting is a very common aspect of the procurement strategy in construction. The practice of subcontract nomination has produced many problems to the constructionindustry in the UAE. Examining the nature of associated challenges and investigating newapproaches to improve the nomination practice become more critical and demanding. (Read more..)

If you are a contractor and having a delayed project (presumably not solely caused by you!), Head Office Overheads Contributions may be in your list for Loss and Expense claims. It is common for contractor to adopt the simplest and so called ‘accepted’ method of calculating such expenses hoping the other side will accept it too. (Read more..)

Variations Clause
Most standard forms of contract include a clause under which the employer or his representative is able to issue an instruction to the contractor to vary the works which are described in the contract. A change in shape of the scheme, the introduction of different materials, revised timing and sequence are all usually provided for by the variations clause. It will also usually include a mechanism for evaluating the financial effect of the variation and there is normally provision for adjusting the completion date. In the absence of such a clause the employer could be in a difficulty should a variation to the works be required. The contractor could either refuse to carry out the work or undertake the work and insist upon payment on a quantum meruit or fair valuation basis. Calculation of the price for the extra work applying this method could involve payment well in excess of the contract rates. (Read more..)

It has been said that an army marches on its stomach. Contractors and subcontractors in the construction industry run on cash. Lord Denning many years ago made the oft repeated phrase that cash flow is the lifeblood of the construction industry and this sentiment is still relevant today. Estimators when preparing tenders usually concentrate on building profits into the price. Of equal importance is the amount of working capital required to fund the contract and the need to keep the amount to a minimum. The payment terms are therefore crucial to every contractor and subcontractor. Certification and payment should be the subject of careful strategy and planning. (Read more..)

Get to grips with the ins and outs of using FIDIC contracts at an event designed by FIDIC and featuring FIDIC speakers.

The 2nd annual FIDIC Middle East Contract Users’ conference is taking place on Wednesday 23rd & Thursday 24th February 2011 in at the InterContinental Abu Dhabi.

Cmguide readers get a 10% discount to attend! Quote VIP Code: KW8116CMGP or visit:
http://www.informaglobalevents.com/KW8116CMGP (Read more..)

By Dr Jay Palmos

To date, both the public and private sector’s attempts to resolve this problem have failed. Security of Payment (SOP) style legislation has successfully solved this issue in other jurisdictions, and should be considered in Dubai before we lose the best sub-contractors and suppliers to other more reliably paying regions. Just last month, Laing O’Rourke closed its Middle East division of 20 000. The loss of this and other superior-grade contractors signifies that the presently available source of high-quality contractors has diminished. (Read more..)

By Dennis Brand

Conciliation is a form of alternative dispute resolution (ADR) process whereby the parties to a dispute agree to utilize the services of a conciliator, who then meets with each of the parties separately in an attempt to resolve their differences. Conciliation differs from arbitration in that the conciliation process, of itself, has no legal standing, and differs from mediation in that the parties seldom, if ever, actually face each other across the table in the presence of a conciliator.

(Read more..)

By Martin Preston
THE majority of the features of a project finance loan agreement are the same as a corporate loan agreement. However, because the basis on which the lenders are advancing the loan is the forecast revenues of the project, rather than the assets or creditworthiness of the sponsors, the risks taken by the lenders and, therefore, the controls that they require under the loan agreement, are greater than would be required under a corporate loan agreement. Inevitably, some of these additional controls impact on the construction contract.

(Read more..)

Despite the harsh lessons learnt over the latter part of 2009 and first quarter of 2010 it is still patently obvious that parties to contracts are falling into a number of age old pitfalls, many of whom are convinced that they have no other viable choice but to accept top-down back-to-back arrangements and in some cases a scramble of documents that barely resemble a contract at all.

There is still an overwhelming market tendency to order mobilisation and commence work on the back of a very brief Letter of Intent (LOI), particularly if the commissioned works are minor works or low value. This is a particularly high risk practice. (Read more..)