Construction Contract Management

in Diritto e Processo, 2017, pp. 165-238 (http://www.rivistadirittoeprocesso.eu/upload/Articoli/10-Cerri.pdf)

The essay analyses the issue of contract retention in the light of contingencies disturbing the balance between the interests objectified in the stipulation. In particular, it will be examined the institutions of ius variandi and “contract renegotiation”, instruments capable of safeguarding a contract become no longer efficient.

Various risk factors influence construction projects cost and schedule performance from project conception to completion. In the context of project management contract assessment helps allocate integrated risks. The aim of this thesis is to investigate standard conditions of contract, namely FIDIC, Turnkey EPC (Engineer, Procure, Construct) conditions of contracts as a standard contract format. Implications of the contract clauses for the risk management strategy to be adopted by contractors are analyzed through pre defined risk assessment plan RMP. Relevant conditions will be scrutinized in terms of induced risk events. The basis for defining major risk categories and events are described through RBS (Risk Breakdown Structure) schemes, as well as, proposed actions and mitigation plans. Finally, EPCCM; modeling system is created to assist contract administrators, to diminish time, effort, wading back and forth between construction cases and developed projects. The result is a more efficient and proactive contract management environment by providing database for lessons learned in addition to tracking ongoing projects contractual risks, and consequently for issuing relevant decisions and activity plans.

The Ethiopian Roads Authority is responsible for the construction and maintenance of the road network
system in the country. ERA is dedicated to reduce cost and time of maintenance activities and to control
quality of work as well as keeping the road infrastructure in an efficient state using the traditional methods
of contracting. Since 2016, ERA has been contracting out road projects (construction and maintenance) on
performance measures as an alternative methods of contracts. This method is named performance based
contract (PBC). Starting from 2016, ERA is implementing PBC on three projects at a pilot level those
financed by local financer (government and road fund) and one project financed by the World Bank.
Therefore, the aim of this thesis is to examine the potential of this method for improving the road
construction and maintenance practice of ERA. In addition, the advantages and disadvantages of the PBC
were investigated by analyzing the challenges faced by ERA during the implementation of PBC at the pilot
projects. Accordingly this thesis presents reviews of literatures recently produced. It also briefly discusses
the problems of traditional methods of contracting in ERA which is supported by a case study. The
implementation of PBC in ERA has been reviewed and analyzed.
The thesis examined those implemented PBC projects to identify the benefits achieved and respectively
differentiated the negative impacts of PBC and Traditional Contracts on ERA projects. To effect this, a
series of questionnaire surveys and interviews were conducted out, which helped to achieved research
objectives.
The main contributions of this thesis are: (i) defining PBC and explaining its advantages and disadvantages
during implementation in ERA projects; (ii) examining the potential of PBC in ERA; and (iii) analyzing
the challenges faced during implementing PBC in ERA. Therefore, the significant achievement of this study
was identification of hindrances in establishing PBC in ERA and examining its potentiality and
effectiveness. The research recommended that PBC is a better alternative that should be adopted by ERA
together with the traditional contract method. The potential of reducing maintenance costs, increasing the
quality of works and reducing the chance of corruption are some of the benefits of PBC.

Contract management is an essential part of project management as well as construction management. International contract management practice has a great influence on Croatian construction contract management practice (CCCMP). The influence is manifested in the terms of globalization and integration processes, in the implementation of new financing models, in the ascending market demands, as well as in the increase of projects’ complexity. The shortage of national assets and a constant need for the Government’s borrowing from international financial institutions, resulted with the presence of international contract management and legal systems (Common Law) in the Republic of Croatia, which are inconsistent with the domestic ones (Civil Law). Such an influence urges for a remodelling and reshaping of the national contract practice. For instance, public projects financed by the international finance funds, due to the lack of quality and eligible domestic contract practice, often resul...

The right selection of implementation system for projects in the construction industry is critical to achieve success. Integrated Project Delivery (IPD), is a comprehensive implementation system which has in recent years been seen to play an effective role in projects improved efficiency. Implementing an IPD system to resolve various problems of traditional systems is very important; however there are several barriers to its implementation. In addition, rooting and classifying the barriers is very significant in being able to resolve them. The aim of this study is the identification of barriers to IPD basically extracted from existing case studies. In this research, the meta-synthesis qualitative method is used for identifying and classifying the IPD barriers. The results are presented in a comprehensive table, and then are illustrated as a pattern by using macro concepts. This pattern is useful for presenting barriers to IPD. Identifying the barriers and resolving them are as important as identifying the benefits of IPD in creating motivation for construction industry owners. They also serve to provide the context for required predictions in implementing this approach in the construction industry.

A construction contract is a legal binding agreement between the contracted parties on the con-struction performance specified in Construction Law 2014 and its enforcement guideline documents. New construction law system creates a legal framework for the contracting parties to enter into and execute the construction contract but there are some problems inside. In this article, the authors focus on analyzing the regulations of construction contract termination under the Decree 37/2015/ND-CP and its aspects of legal construction technique and content, therefore assess to clarify the inadequacies of those regulations. As a result, the article proposes some recommendations to improve the law’s regulations on construction con-tracts termination in particular and the law of construction in general.

Nepal is one of the least developed countries in the world and is undergoing peace process after a decade of armed struggle (1996 – 2006). For FY 2070/71 (2013/14), government has unveiled the budget of Rs. 517.24 billion, of which 46.7 % is allocated as development expenditure and 53.3 % as regular expenditure. Only 69.6 % of the budget is expected to be met through its own revenue and 14 % by foreign assistance with projected deficit of 17 %. In general, the government has been able to make expenditure of less than 80 % of the allocated budget. On the other hand, Nepalese economy is facing major challenges like low economic growth rate (less than 5 %), high inflation rate,  import based production system, limited labor market to absorb yearly 400,000 new entrants, lack of physical infrastructure, low institutional capacity, and lack of good governance. In this background, this paper discusses the status of public procurement in Nepalese context against the following core pillars of public procurement:
1. Value for money;
2. Open and effective competition;
3. Ethics and fairness; and
4. Accountability, transparency and reporting
5. Equity
This paper helps in understanding the public procurement challenges in one of the least developed conflict ridden country and the issues associated with it so that the experience of Nepal can be used as lesson learning and in formulating policies and programs for reform in public procurement practices.
This paper is based on the review of the existing procurement law and the practices in the country.

It has been argued that effective, efficient and transparent procurement can be achieved using the traditional paper-based tendering. Nonetheless, the very nature of the traditional paper-based procurement system does not lend itself to these. Moreover, the gravity-shift from paper based to e-Tendering elsewhere in the world is due to the better merits of e-Tendering than its traditional paper-based counterpart. Studies also suggest that government in developing countries can save significant amount of money by adopting electronic means of procurement. The issue is more
lucrative for Ethiopia since Ethiopia spend colossal sum in capital expenditure; has sizable public expenditure to GDP ratio; has low tax to GDP ratio; has recurrent budget deficit and mounting public debt. Moreover, according to a study commissioned by FEACC, the public procurement is plagued by lack of transparency. These facts points to a better, efficient, effective and transparent procurement system like e-Tendering.
This study aims to asses readiness of contractors to adopt e-Tendering. To achieve this, the study employed critical success factors (CSF) approach. Both e-Survey, manual paper based survey and document review were used as data collection instruments. The survey data were analyzed using Google Forms engine, MS Excel and SPSS. Relative importance index (RII) analysis was also used to probe the underlying constructs to be measured. The study shows that e-Notification is a misnomer for e-Tendering; contractors are still frequently using newspaper as means of tender information and use of web portals is quite meager; difficulty in getting clarification and collection of bid documents, involvement of much paper work, money and time are the frequent challenges in traditional tendering method; and there is generally good consensus among contractors that e-Tendering will benefit all of the
major stakeholders of the construction industry. Most contractors, however, are willing to adopt e-Tendering in its rudimentary form as one way information pull. However, due to technology and people factors limitations, the foreseeable future of e-Tendering will be limited to e-Notification as the case is now.

Key Words:  e-Tendering, Public Procurement, Consultants, Contractors, Readiness, Critical Success Factors(CSF), Construction Industry

The article examines the implementation of the new trends in the Project Integration Management in construction. The authors demonstrate how the knowledge from the latest editions of the PMBOK ® and its Construction Extension may be used to manage complex projects with several related FIDIC contracts for design, construction, supervision, supply chain. The modern multi-party partnering form, called the "Framework Alliance Contract FAC-1", can integrate all related two-party FIDIC contracts between the participants in the investment process. Practical examples demonstrate how several FIDIC contracts can be managed more efficiently under the umbrella of FAC-1. FAC-1 enables collaboration, BIM, lean practices and the transfer of knowledge.

In Malaysia, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

With high gratitude to Allah S.W.T. who gave me the ideas and physical strength in preparing this master project. This project would not have been completed without the support and encouragement from the various people involved. Because of that, I wish to express my deepest gratitude to these people who provided valuable cooperation in my carrying out of this final project. First of all, I would give my acknowledgement to my supervisor En Jamaluddin Yaakob for his guidance, support and giving the ideas in preparing of this master project. My appreciation also goes to all the lecturers for the course of Master of Science in Construction Contract Management, for their patient and kind advice during the process of completing the master project. I am also thankful to my parents, Hj Supardi Surtiman and Hjh Zamnah Abdul Hamid, my beloved wife, Noor Baini Abdullah, my three sons, Muhammad Haziq, Muhammad Hakim and Muhammad Hafiy, and a daughter, Nur Batrisyia for their great consideration and encouragement while preparing this master project. Lastly, I would like to thank my classmates for giving me the needed morale support and supplying me with the information on how to write a master project. Thank you to all the parties involved who have provided me with great cooperation that I really need in completing the master project. v ABSTRACT In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or insurance company (in return for payment of a premium), for the benefit of and at the request of the employer, in a stipulated maximum sum of liability and enforceable by the employer in the event of the contractor's default, repudiation or insolvency, as stated by Nigel M Robinson et. al. in his book, Construction Law in Singapore and Malaysia. He further added that there are two types of performance bonds: Conditional bond or default bond, whereby the surety accepts 'joint and several' responsibility for the performance of the contractor's obligations under the contract; and Unconditional bond or on-demand bond, which is a covenant by the surety (usually a bank) to indemnify the employer following contractor's default, subject to stated terms and up to a sum commonly 5% of the main contract sum. However, in Malaysia, for the past 20 years and since the famous case of Teknik Cekap Sdn Bhd v Public Bank Berhad [1995] 3 MLJ 449 to the recent Suharta Development Sdn Bhd v United Overseas Bank (M) Bhd & Anor [2005] 2 MLJ 762, the question of whether the performance bond in a construction contract is a conditional or an unconditional

A B S T R A C T Disputes are common problems in the construction industry. The unclear contract underlines in most practiced procurement systems lead to various disputes among stakeholders. In order to minimise the problem, it is interesting to identify the disputes and conflict arises in the industry. This paper explore the pattern of construction disputes occurrence in Malaysia through legal cases synthesis extracted from available data bases such as Construction Law Report and Building Report. Result identified six (6) categories of disputes happen in the Malaysian construction industry that are people/stakeholders/ organisation, nature of the work and project administration, contractual and procurement, poor workmanship, design and external factors. These factors are worth to be considered in proposing new procurement system for sustainable Malaysian construction industry.

Construction activities have made a great breakthrough in the last two decades on the back of an increase in
development activities, and public demand. Still, occupational health and safety issues have become a major concern to
construction organizations. The world society and economy have suffered financial and human losses as a result of poor safety
management in the construction industry. The impact is however more in developing countries. The purpose of this study is to
explore major safety provisions and also a detailed study has been conducted on safety management procedures in construction
sites. Different types of accidents occurring in construction sites and measures taken to control these accidents are also analyzed
in this paper. Data have been collected through various site visits, literature reviews, and various construction safety
standards including BIS and OSHA (Occupational Safety and Health Administration). The paper has been concluded after
putting forward a set of recommendations for construction organizations to improve occupational safety in the construction
sites

Disputes are common problems in the construction industry. The unclear contract underlines in most practiced procurement systems lead to various disputes among stakeholders . In order to minimise the problem, it is interesting to identify the disputes and conflict arises in the industry. This paper exp lore the pattern of construction disputes occurrence in Malaysia through legal cases synthesis extracted from available data bases such as Construction Law Report and Building Report. Result identified six (6) categories of disputes happen in the Malaysian construction industry that are people/stakeholders/ organisation, nature of the work and project administration, contractual and procurement, poor workmanship, design and external f actors. These factors are worth to be considered in proposing new procurement system for sustainable Malaysian construction industry.

The administration of construction contracts in
Malaysia is facilitated through a standard form of contract. The
application of each however depends on the type of project, mode
of finance and owner of the project. International Federation of
Consulting Engineers (FIDIC), Public Work Department 203A
(PWD203A), Pertubuhan Akitek Malaysia (PAM) Standards form
of contract are widely implemented in Malaysia. In generally,
each standard form of contract aims at ensuring effective,
efficient and non-disputable contract administration.
Nonetheless, variations arise in certain matters. This paper
appraises the differences in roles and responsibilities of contract
administrator as stipulated in each forms, namely PWD203A,
PAM and FIDIC via literature review on some different types of
forms of contract used in Malaysia. This aim can be achieved by
determining the important factors affecting final account closing
success caused by contract administrator, and investigating the
differences between forms of contract. The understanding of
these roles and responsibilities is important at the preliminary
stage especially in selecting superintending party as well as
identifying the contract liability in the persuasion of the contract.
This paper shows that the use of contract documents either
FIDIC, PAM and PWD 203A is dependent on the project
owner/employer, type of project as well as the nature of a project
and financing involved. Most of the projects under the
government will apply PWD203A contract document while the
private sector will use PAM contract document and FIDIC
contract document will be used for projects involving
international contracts.

The main intention of this thesis is to signify Life Cycle Management while procurement of Construction Project from purchasing a single Asset ( e.g - a boiler) to managing a group of assets ( e.g- a township) .These thesis report  mainly emphasis on reducing overall ownership cost by promoting sustainability  taking into consideration social, cultural and economical factor keeping whole life cycle thinking of a project at every spectrum while making procurement decisions for construction projects.

This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.

Variation order is very popular and commonly said as inevitable in all construction project especially in Malaysian construction industry. It may bring positive, negative or both effect to the parties involved in the construction project, especially the contractor. The research is carry out due to study how the contractor manage variation orders works in construction project by identifying the contractors' challenges and ascertaining the strategies of contractor to overcome the challenges in dealing with variation order works. In achieving the objectives of the study, survey have been conducted through distribution of questionnaire survey form to 35 respondents who are Quantity Surveyors, Architects, Civil Engineers and Mechanical & Electrical Engineers. All of the respondents are from G7 Contractor Companies who registered under CIDB and which govern the Klang Valley areas. The results have been analyzed by using Google Form and Microsoft Excel 2013. The findings of the research found that, the challenges of the contractor in dealing with variation order works are delay in overall work programme, disruption of time schedule for the unchanged works, increase in materials cost, increase in employment cost and unconscious of secondary impact such as loss of productivity on the works not include in variation order, delay and disruption events, as all of these challenges got the top five rating of mean score from the analysis of the respondents feedback. The study also revealed that, among the strategies to overcome the challenges ascertained by the contractor are distribution and management of documents and drawings in latest versions, awareness of site team on the details in contract documents, stipulate what can be changed and how the change process works, day-to-day process and cost recording and understand their rights and responsibilities under the contract. ii APPROVAL PAGE This dissertation was submitted to the Department of Quantity Surveying and is accepted as a partial fulfilment for the degree of Bachelor of Quantity Surveying _______________________________________ Head, Department of Quantity Surveying iii DECLARATION I hereby declare that this dissertation is the result of my own investigations, except where otherwise stated. I also declare that it has not been previously or concurrently submitted as a whole for any other degree at IIUM or other institutions. NURUL SHUHADA BINTI SHAMSUDIN Signature _________________

Construction activities have made a great breakthrough in the last two decades on the back of an increase in development activities, and public demand. Still, occupational health and safety issues have become a major concern to construction organizations. The world society and economy have suffered financial and human losses as a result of poor safety management in the construction industry. The impact is however more in developing countries. The purpose of this study is to explore major safety provisions and also a detailed study has been conducted on safety management procedures in construction sites. Different types of accidents occurring in construction sites and measures taken to control these accidents are also analyzed in this paper. Data have been collected through various site visits, literature reviews, and from various construction safety standards including BIS and OSHA (Occupational Safety and Health Administration). The paper has been concluded after putting forward a set of recommendations for construction organizations to improve occupational safety in the construction sites.

Construction industry is realizing the plans and specifications for the physical structure. The
project is success when it is completed to meet customer needs without any issues and problems in
terms of time, quality and budget allocation. The budget allocation is important especially to get the
total final cost of the project that will be added in the final accounts. Final account is the fact that
the sum agreed to be paid at the end of the contract by the owner to the contractor. Moreover, the
final account issue has existed in Malaysia construction industry for several decades in which the
important factors significantly affect the closing of final account that related with contractor,
management and the contract as well. Successful closing is categorized as resolved at the stipulated
time without any problems in the dispute and delay. Therefore, the purpose of this paper is to
investigate the important factors that contribute to the closing of final account in construction
projects in Malaysia. This aim can be achieved through the objectives of evaluating the contract in
Malaysia to compare the final closure of various forms of contract and finally identify the causes
and effects of the dispute and delays in the final account closing. As a result, this paper can assist
construction industry players to create more effective planning and be used as guidelines in
ensuring the on-time closing of final account in constructions projects in Malaysia.

This chapter contains sections titled: Contractual Issues Contract Strategy and Type Roles, Relationships, and Responsibilities Time, Payment, and Change Provisions Remedies for Breach of Contract Bonds, Guarantees, and Insurances Claims Dispute Resolution Flexibility, Clarity, and Simplicity Summary References Recommended Further Reading Contractual IssuesContract Strategy and TypeRoles, Relationships, and ResponsibilitiesTime, Payment, and Change ProvisionsRemedies for Breach of ContractBonds, Guarantees, and InsurancesClaimsDispute ResolutionFlexibility, Clarity, and SimplicitySummaryReferencesRecommended Further Reading

The effective contract management is an important aspect of the excellent governance in public sector organizations. Through efficient contract management, the construction organization is able to maintain the excellent quality of service to stakeholders, especially in terms of successful delivery of construction projects. Therefore, this paper aims to appraise the best practices of successful construction projects from the contract management perspective rather than the project management perspective alone. Best-practised contract management is defined as a certified statement of effective contract administration procedures through systematically excellent service culture, where an on-time and within-budget construction is a major criterion of project success and client satisfaction as a whole. Via comprehensive literature review, this paper materializes its objectives of reviewing the contract management concepts in construction projects, assessing the formal process of contract management carried out by the contracting parties in ensuring the successful delivery of the construction project and proposing the strategies in improving the current contract management process for construction project. This paper reveals the basic concepts of contract management of construction projects, the principles of legality and accountability as well as the provisions of the laws and regulations that must be followed by the contractual parties. Furthermore, the strategies that can be implemented by organizations in improving the effectiveness of contract management aspects are discussed. Ten key strategies proposed, namely managing contracts based on strategic goals of the organization; developing standards, procedures and guidelines; implementing standards and benchmarking; improving financial management training; utilizing technological capabilities; zero financial mismanagement (ZFM); dealing with misconduct and fraud; establishing key performance indicators (KPI); implementing risk management; and applying values and ethics. This paper is very significant in achieving the excellent service culture in construction project without neglecting the substantial principles of project management that drive the project towards ultimate success.

Back cover text: Megaprojects and Risk provides the first detailed examination of the phenomenon of megaprojects. It is a fascinating account of how the promoters of multi-billion dollar megaprojects systematically and self-servingly misinform parliaments, the public and the media in order to get projects approved and built. It shows, in unusual depth, how the formula for approval is an unhealthy cocktail of underestimated costs, overestimated revenues, undervalued environmental impacts and overvalued economic development effects. This results in projects that are extremely risky, but where the risk is concealed from MPs, taxpayers and investors. The authors not only explore the problems but also suggest practical solutions drawing on theory, experience and hard, scientific evidence from the several hundred projects in twenty nations and five continents that illustrate the book. Accessibly written, it will be the standard reference for students, scholars, planners, economists, auditors, politicians and interested citizens for many years to come.

In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or insurance company (in return for payment of a premium), for the benefit of and at the request of the employer, in a stipulated maximum sum of liability and enforceable by the employer in the event of the contractor's default, repudiation or insolvency, as stated by Nigel M Robinson et. al. in his book, Construction Law in Singapore and Malaysia. He further added that there are two types of performance bonds: Conditional bond or default bond; and Unconditional bond or on-demand bond. However, in Malaysia, for the past 20 years and since the famous case of Teknik Cekap Sdn Bhd v Public Bank Berhad [1995] 3 MLJ 449 to the recent Suharta Development Sdn Bhd v United Overseas Bank (M) Bhd & Anor [2005] 2 MLJ 762, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond that has been discussed. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequences are cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost–benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as ‘survival of the unfittest’. Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending, combined with more investments in emerging economies, combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire.

In Malaysia, subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, the particularly small sized sub-contractors need to enhance knowledge of the so-called the 'Security of Payment' Regime to improve their awareness of the benefits of the Act. Due to this, this on-going research attempts to introduce balance and proper guidelines to the sub-contractors, in giving the knowledge, to claim for payment and the main contractors able to make prompt payments. Before that, the research may first identify the payment provisions in the standard forms of contracts as well as in domestic sub-contracts especially on Contingent Payment, and exploring the problems and legal issues relating to payment default. Then, by determining the level of knowledge that the sub-contractors have to the proposed CIPA Act, and analysing the various avenues which improve the payment problem in the construction industry those have been incorporated in the construction contract or statutes in the other developed countries as well as the proposed CIPA Act, the aim may be achieved. The purpose of this paper, though, is to disclose the finding of the first objective of the on-going research. In the standard forms of construction contracts, currently, the payment structure to the sub-contractors are divided into three: payment upon certification, direct payment from the employer, and contingent payment or conditional payment. As long as the Malaysian 'Security of Payment' Regime remains in proposal, the sub-contractors have to bear with the current structure of payment mechanisms.

Construction industry is realizing the plans and specifications for the physical structure. The project is success when it is completed to meet customer needs without any issues and problems in terms of time, quality and budget allocation. The budget allocation is important especially to get the total final cost of the project that will be added in the final accounts. Final account is the fact that the sum agreed to be paid at the end of the contract by the owner to the contractor. Moreover, the final account issue has existed in Malaysia construction industry for several decades in which the important factors significantly affect the closing of final account that related with contractor, management and the contract as well. Successful closing is categorized as resolved at the stipulated time without any problems in the dispute and delay. Therefore, the purpose of this paper is to investigate the important factors that contribute to the closing of final account in construction projects in Malaysia. This aim can be achieved through the objectives of evaluating the contract in Malaysia to compare the final closure of various forms of contract and finally identify the causes and effects of the dispute and delays in the final account closing. As a result, this paper can assist construction industry players to create more effective planning and be used as guidelines in ensuring the on-time closing of final account in constructions projects in Malaysia.

As megaprojects have become ubiquitous, their real benefits and costs have come under increased scrutiny. We interviewed Bent Flyvbjerg, who has extensively studied megaproject development. Flyvbjerg has found systematic problems in the development process: by intentionally misrepresenting information and deliberately disregarding risks, proponents instigate projects that result in fewer benefits and higher costs than promised.

The Supplementary Green Book Guidance on Optimism Bias (HM Treasury 2003) with reference to the Review of Large Public Procurement in the UK (Mott MacDonald 2002) notes that there is a demonstrated, systematic, tendency for project appraisers to be overly optimistic and that to redress this tendency appraisers should make explicit, empirically based adjustments to the estimates of a project’s costs, benefits, and duration. HM Treasury recommends that these adjustments be based on data from past projects or similar projects elsewhere, and adjusted for the unique characteristics of the project in hand. In the absence of a more specific evidence base, HM Treasury has encouraged departments to collect data to inform future estimates of optimism, and in the meantime use the best available data. In response to this, the Department for Transport (henceforth DfT), has contracted Bent Flyvbjerg in association with COWI to undertake the consultancy assignment "Procedures for dealing with Optimism Bias in Transport Planning". The present Guidance Document is the result of this assignment.

"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.

The purpose of this study was to investigate influence of project planning on success of road construction projects within Uasin Gishu County. This study adopted descriptive research design. The target population of this study was 51 employees in 15 government road construction projects which are in construction within Uasin Gishu County. Census was adopted in this study where project managers in each road project were involved in the study totaling to 51 respondents. The study relied on primary data which was collected through use of a questionnaire. The study established how project planning affects the performance of construction projects and the greatest roles of the top project team thus informing decision making for future road construction projects. The study found that there was a positive correlation between success of road construction project and project time planning, project scope planning, project cost planning and project risk planning. Government and individual architects, engineers, quantity surveyors, construction project managers and site agents will benefit from this study by applying the results of its findings while carrying out construction projects. The finding of the study will ensure challenges faced in project implementations are successfully mitigated.

Contracts are designed to govern the relations between business partners and allocate risk among them, yet they cannot mitigate all risks; hence, dispute resolution mechanisms have been developed to assist. According to research, arbitration is considered one of the most efficient legally binding dispute resolution mechanisms. Since initiating an arbitration case against business partners often severs the business relationship between them, predicting the arbitrator's decision becomes valuable to the arbitrating parties. To do so, arbitration prediction models are suggested in this paper through modeling the arbitrator's award in two stages: evidence admissibility and evidence evaluation. While arbitrators currently admit evidence in a relatively unsystematic way, this proposed admissibility framework systemizes the current practice by preserving its subjectivity, yet aligning it with the widely deployed rules of arbitration. This research further proposes an evidence evaluation model, providing a rapid answer to the famous commercial arbitration battle, discovery. While the current arbitrators' practice in allowing discovery is not systematic, the proposed optimization model is a tool that could systematically assist arbitrators trading between the arbitration key characteristic, efficiency, and justice. This is achieved by assigning weights to evidence parameters such as sufficiency and credibility, which in turn provide numerical measures to reduce the decision's subjectivity.

This article presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth U.S.$59 billion. The study shows with very high statistical significance that forecasters generally do a poor job of estimating the demand for transportation infrastructure projects. For 9 out of 10 rail projects, passenger forecasts are overestimated; the average overestimation is 106%. For half of all road projects, the difference between actual and forecasted traffic is more than ±20%. The result is substantial financial risks, which are typically ignored or downplayed by planners and decision makers to the detriment of social and economic welfare. Our data also show that forecasts have not become more accurate over the 30-year period studied, despite claims to the contrary by forecasters. The causes of inaccuracy in forecasts are different for rail and road projects, with political causes playing a larger role for rail than for road. The cure is transparency, accountability, and new forecasting methods. The challenge is to change the governance structures for forecasting and project development. Our article shows how planners may help achieve this.

Construction industry has recognized BIM implementation as a best practice that provides a new set of processes and technologies in construction projects. Despite the significant growth in BIM adoption and research on technological aspects of BIM, far too little attention has been paid to research on BIM contracting. So far, two industry leading organizations (AIA and AGC) have developed standard forms of agreement for BIM contracting. However, many projects have incorporated custom manuscripts to satisfy their special contractual needs, but the existing literature has not dealt with these industry-wide trends of BIM contracting. Thus, the purpose of this paper is to examine custom developed contracts in order to trace the advances in BIM contracting. This research demonstrates that there are several areas of importance in that standard forms have not addressed them. These include but are not limited to (1) requirements for BIM process inputs (e.g. BIM staff competencies), (2) requirements for BIM process management (e.g. BIM quality assurance and quality control, a metric based BIM processing assessment), (3) requirements for information modeling (e.g. landscape, facility management), and (4) requirements for data security (e.g. corruption of files, and data misuse). This study has practical implications for BIM contracting practices and future developments of inclusive BIM standard agreements.

Do different types of megaprojects have different cost overruns? This apparently simple question is at the heart of research at the University of Oxford aimed at understanding the characteristics of megaprojects, particularly in terms of how they are established, run and concluded. In this study, we set out to investigate cost overruns in the Olympic Games. To do so, we examined the costs of the Games over half a century, including both summer and winter Olympics. We looked at the evolution of final reported costs and compared these to the costs established in the Games bids, submitted to the International Olympic Committee (IOC) up to seven years before the Games occurred. In so doing we established the largest dataset of its kind, and documented for the first time in a consistent fashion the costs and cost overruns for the Olympic Games, from 1960 to 2012. We discovered that the Games stand out in two distinct ways compared to other megaprojects: (1) The Games overrun with 100 per cent consistency. No other type of megaproject is this consistent regarding cost overrun. Other project types are typically on budget from time to time, but not the Olympics. (2) With an average cost overrun in real terms of 179 per cent – and 324 per cent in nominal terms – overruns in the Games have historically been significantly larger than for other types of megaprojects, including infrastructure, construction, ICT, and dams. The data thus show that for a city and nation to decide to host the Olympic Games is to take on one of the most financially risky type of megaproject that exists, something that many cities and nations have learned to their peril. For the London 2012 Games, we find that: (1) With sports-related real costs currently estimated at USD14.8 billion, London is on track to become the most costly Olympics ever. (2) With a projected cost overrun of 101 per cent in real terms, overrun for London is below the historical average for the Games, but not significantly so. (3) The London cost overrun is, however, significantly higher than overruns for recent Games since 1999. London therefore is reversing a positive trend of falling cost overruns for the Games.

The complex nature of construction projects and the involvement of a large number of unpredictable correlated factors make them susceptible to disputes. Although a wide range of dispute resolution mechanisms exists, experts in the construction industry favor arbitration over litigation when legally binding dispute resolution mechanisms are concerned. Because initiating a litigation or arbitration case against a business partner often severs the business relationship between them, predicting the arbitrator’s decision becomes valuable to the arbitrating parties. Because arbitration has been extensively treated as a game, and because the proposed approach relies on the wealth maximization concept, which is in turn dependent on the sum of utility sources of a firm, modeling arbitration is best achieved as a game with disputing parties’ utility profiles that would have an agreement zone. A construction-specific utility framework for the disputing parties arbitrating before a single arbitrator is proposed based on the additive expected utility theory. The proposed additive utility framework preserves the industry practicality and, most importantly, considers direct short-term factors and indirect long-term factors that would address factual disputes related to claim entitlement and quantification. It is expected that such a framework could then be used to identify utility equilibrium points between the disputing parties, which would serve the purpose of predicting the arbitration outcome.

As megaprojects have become ubiquitous, their real benefits and costs have come under increased scrutiny. We interviewed Bent Flyvbjerg, who has extensively studied megaproject development. Flyvbjerg has found systematic problems in the development process: by intentionally misrepresenting information and deliberately disregarding risks, proponents instigate projects that result in fewer benefits and higher costs than promised.

The construction industry contributes significantly to a country's social and economic development, allowing for long-term and transformative growth. Many projects completed and in progress in Ethiopia have been seen to suffer time overruns due to delays and disruptions, resulting in cost overruns and improbable outcomes. In Ethiopia, the PPA 2011 General Conditions of Construction Contracts are widely utilized, while the FIDIC Conditions of Contract for Construction are used less frequently. In this paper, the PPA 2011 GCC is compared to the FIDIC Conditions of Contract for Construction 1999 in terms of delays, to guide potential contractors.

Traditional construction scheduling approaches have proved not to have the capacity to produce and make it easily and timely available the information needed for a latter effective and efficient construction control and execution reflected in a high Percentage of Planned Activities Completed. nD poses barriers and opportunities associated to big transformations which for example could lead to relegate traditional construction scheduling approaches like the CPM in which the critical path has become a bottleneck, a constraint of a project. The big change of working with a nD construction schedule can lead to lose less time on the critical path itself but exploiting this constraint and subordinating everything else to it. Most problems that impact the critical path do not occur on the critical path itself, then subordination is not a nicety, it is a must (Goldratt, 1997). Another big change is that using nD Modeling it is possible to alter the order in which the different level of detail schedules are developed for a construction project. Using nD and CAVT it is possible to develop first the more detailed schedule and then obtaining the master schedule grouping activities in this more detailed schedule. The master schedule can then be adjusted to project requirements and the detailed schedule reviewed in an iteratively process. This opposes to the way scheduling is carried out today in which the detailed schedule follows the master schedule development effort and rarely one goes back to review the master schedule deeply, but makes the maximum effort to adjust the detailed schedule to the master schedule. And finally a very important change is that Visualization, Planning, Analysis and Communication capabilities embedded in a new nD construction scheduling development process can improve the traditional scheduling process to the extent that this schedule could finally be used as a real production control mechanism that could lead to tackle problems proactively and re-schedule the project as necessary.

Back cover text: This book aims to enlarge the understanding of decision-making on mega-projects and suggest recommendations for a more effective, efficient and democratic approach. Authors from different scientific disciplines address various aspects of the decision-making process, such as management characteristics and cost-benefit analysis, planning and innovation and competition and institutions. The subject matter is highly diverse, but certain questions remain at the forefront. For example, how do we deal with protracted preparation processes, how do we tackle risks and uncertainties, and how can we best divide the risks and responsibilities among the private and public players throughout the different phases of the project? - Presenting a state-of-the-art overview, based on experiences and visions of authors from Europe and North America, this unique book will be of interest to practitioners of large-scale project management, politicians, public officials and private organisations involved in mega-project decision-making. It will also appeal to researchers, consultants and students dealing with substantial engineering projects, complex systems, project management and transport infrastructure.