CHAPTER THREE

CONTRACT ADMINSTRATION
CHAPTER THREE CONTRACT ADMINISTRATION
 
Contract – Definition (Conditions of Contract for Civil Engineering Works-1987)
Means conditions of Contract, Specifications, Drawings, Priced Bill of Quantities,
Schedule of Rates and Prices for labor, materials and equipment (if any),
Contractor’s Tender, Form of Contract, letter of award and any other documents
stipulated as such in the Form of Contract, collectively constituting the Contract
Documents”.
Others defined as:
The agreement is reached by the acceptance of an offer made by one party to do
something for other for a stipulated consideration.
Contact Documents (Conditions of Contract for Civil Engineering Works-1987)
1.Form of Contact (Agreement)
2.Conditions of Contract (Part I and Part II)
3. Priced Bill of Quantities
4. Drawings
5.Specifications
6. Letter of Award
7. Form of Tender
8. Contractor’s offer
9. Instruction to Tenderers
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Main documents

-Agreement
-Conditions of the contract (usually general condition and special conditions).
-Plans
-Specifications

Agreement: (Form of Contract)

The agreement describes the work to be performed, the required completion time,
contracts provisions for progress payments and final payment, and lists the other
documents making up the complete contract.
 
Conditions of the Contract:
General conditions: The general conditions contain those contract provisions
applicable to most construction contracts written by the owner.
Special conditions: The special conditions contain any additional contract provisions
applicable to the specific project.
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Time of Contract (or Time for Completion)
Means the time for completion of the Works or any section thereof as specified in the Contract (in day )or such extended time
as may be allowed under Clause 45- Extension of time for completion (Conditions of Contract for Civil Engineering Works-
1987). See Clause 44
Clause 44. Time for Completion
Subject to any requirement in the specification as to completion of any portion of the Works before completion of the whole.
The Contractor shall complete the whole Works within the time stated in the Tender calculated from the actual day of
commencement or from the next day following the expiration of the period fixed in Part (II) hereof within which the Works are
to be commenced whichever date precedes or such extended time as may beallowed under Clause 45 hereof.

Time Extension
Construction contracts normally contain provisions for time extensions to the contract due to circumstances beyond the
control of the contractor, such as
- owner-directed changes
- acts of God (fire, flood, etc.) and
- strikes.

See Clause 45
Clause 45. Extension of Time for Completion
1. The Contractor may request the extension of time for the completion of Works agreed upon:
a. If any increase of variation supervenes in Works qualitative or quantitative in such a manner to affect the
progress of Works so that it cannot be accomplished at the period agreed upon.
b. If the delay in completion of Works was due to causes or procedures of the Employer or of any duly
constituted authority or of other Contractors employed by the Employer.
c. If exceptional circumstances which are not due to the Contractor and could not be expected or avoided
supervene after contracting in such a way to delay the completion of Works within the period agreed upon.
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Time Extension From FIDIC*
Extension of Time for completion in the event of:
1.The amount or nature of extra or additional work; or
2. Any cause of delay referred to in these conditions; or
3.Exceptionally adverse climate conditions; or
4. Any delay, impediment or prevention by the employer (owner) ; or
5.Other special circumstances which may occur, other than through a default of or breach of
contract by the contractor or for which he is responsible.
* (Fédération Internationale des Ingénieurs-Conseils, which means the International Federation of Consulting Engineers. It was founded in 1913 by France,
Belgium and Switzerland. Currently, FIDIC is based in Geneva, Switzerland and has members from more than 100 countries).

Plans and Specifications

Plans (or Drawings) (plans, sections and elevations = Contract drawings):
Construction plans are drawings that show the location, dimensions, and details of the work to
be performed. Taken together with the specifications, they should provide a complete
description of the facility to be constructed. Contract drawings are usually organized and
numbered according to specialty, such as: structural, electrical and mechanical. See Clause 1 –k

Clause 1-k)
"Drawings" means the drawings referred to in the Contract Documents and any
modification of such drawings approved in writing by the Engineer and such other drawings
as may from time to time be furnished or approved in writing by the Engineer.
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Specifications
Construction technical specifications provide the detailed requirements for
the materials, equipment, and workmanship to incorporated into the project.
Contract drawings and specifications complement each other and must be used
together. An item need not be shown on both the plans and specification to be
required.
Frequently, the item may be identified on only one of these documents.
However, when the provisions of the plans and specification conflict, the
General Conditions of the contract generally provide that the requirements of
the specifications will govern. See Clause 1-I

Clause 1-l
"Specifications" means the technical specification according to which the Works
are to be executed attached or referred to in the Contract Documents and any
other specifications agreed thereon.
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THREE CONTRACT ADMINSTRATION
 
The format most widely used for construction specifications consists of 16 divisions, organized as
shown in table 1.
This format was developed by the Construction Specification Institute (CSI) and is usually identified
as the GSI format or Uniform System for Building Specifications. Although developed for use on
building construction projects, it is also widely used for other types of construction.
Table 1. Organization of the Uniform System for Building Specifications
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Shop Drawings and Samples
  Shop Drawings
Shop drawings are drawings, charts and other data prepared by a contractor or supplier which describe
the detailed characteristics of equipment or show how specific structure elements or items of
equipment are to be fabricated and installed. Thus they complement but do not replace the contract
drawings (plans) .

Samples
Samples are physical examples of materials, equipment, or workmanship which are submitted to the
owner for approval prior to their incorporation in a project.
Contract documents should contain the specific requirement for submission of shop drawings and
samples.
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Progress Reports and Payment

Construction contracts commonly require the contractor to submit a proposed progress

schedule to the owner shortly after contract award. Upon approval by the owner or his
representative, this schedule form the basis for judging the contractor's progress toward
project complete.
The contract may require the contractor to submit his plan and schedule in the CPM
format and may also require periodic updating of the schedule as work progresses(Bar
chart).

1957owner's representative must continuously evaluate the contractor progress to keep

the owner informed and to provide a basis for the approval of the contractor's requests
for progress payment.
Failure of contractor to attain a satisfactory rate of progress may provide the basis for
termination of the contract by the owner, (as described later).
For project expected to require more than a few months to complete, it is customary for
the owner to make progress payments to the contractor.
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Payments
Progress payments are make at the interval specified in the contract, usually monthly or
upon completion of certain milestones.

Payment is customarily made for:

- the work completed,
- materials delivered to the work site, and
- work prefabricated but not yet incorporated into the project.

Retainage (Retention)
It is customary to with hold a percentage of the value of work completed as a guarantee
against defective work and to ensure that the remaining work can be completed within
the unpaid amount of the contract.
The amount withheld is referred to as retainage or retention.
A retainage of 10% is rather typical.
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 Changes and Delays
Changes (Variations)
It is rare indeed if a construction project is completed without changes being made.
The usual construction contract contains a clause authorizing the owner or his representative to order changes to the
project within the general scope of the contract. The document directing such a change is referred to as a "change order".
The contract also provides that an equitable adjustment in time and contract value (cost) will be made for such change.
See Clause 52 Variations
Clause 52. Variations
1. The Engineer shall make any variation of the form quality or quantity of the Works or any part thereof that may in his
opinion be necessary or desirable and for that purpose shall have power to order the Contractor to do and the Contractor
shall do any of the following:
a. increase or decrease the quantity of any work included in the Contract.
b. omit any such work.
c. change the character or quality or kind of any such Work.
d. change the levels lines position and dimensions of any part of the Works and
e. execute additional work of any kind necessary for the completion of the Works and no such variation shall
in any way vitiate or invalidate the Contract but the value (if any) of all such variations shall be taken into
account in ascertaining the amount of the Contract Price and its completion time.

Causes of Changes
The majority of changes are due to design modifications initiated by the owner or designer.
However, change orders may also be used to formalize adjustments to the contract required by site conditions differing from
those anticipated at the time of contract award (commonly referred to as "changed conditions").
To minimize disputed, all change orders issued should contain the adjustment in contract time and price which is mutually
accepted to the contractor and owner.
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Delays
 
Delays in the orderly progress of a construction project may result from a multitude of causes.
Types of delays
The three general categories of delay include:
– Those beyond the control of either the contractor or owner (acts of God);
– Those under the control of the owner, and
– under the control of the contractor.
– Concurrent delays
,can easily be defined as simultaneous delays caused by the general contractor and the project owner [
.]affecting the project schedule and project completion date
The general principles established by law and precedent for financial and time adjustments to the contract
as a result of such delays are as follows:
1. If the delay is beyond the control of contractor due to say:
- fire,
- flood,
- earthquake, or other disaster, and
- strikes,
- a compensating time extension to the contract will be made.
- any financial (Cost) compensation to the contractor would be provided by the contractor's insurance, not by th
owner.
2. if the owner is responsible for the delay (such as by the late delivery of owner-provided equipment), the owner must
compensate the contractor for:
- any additional costs incurred
- as well as provide an appropriate time extension to the contract.
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3. If delay is under the control of the contractor:
- no compensation
- no time extension is provided to the contractor.
- the contractor is responsible for reimbursing the owner for any damages (actual or
liquidated) resulting from the delay. (contractor must pay to owner panalties). See Clause 48-1.

Clause 48.
1. Penalty For Delay:
If the Contractor shall fail to complete the Works within the time prescribed by Clause (44) hereof or
extended time then the Contractor shall pay to the Employer the sum stated in Part (II) hereof as a penalty
for such default. The Employer may without prejudice to any other method of recovery deduct the amount
of such penalty from any monies in his hands due or which may become due to the Contractor. The
payment or deduction of such penalty shall not relieve the Contractor from his. obligation to complete the
Works or from any other of his obligations and liabilities under the Contract.

Classification of delays
•  
- Excusable compensable delays
- Excusable non-compensable delays
- Non-excusable delays
- Concurrent delays
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Acceptance and Final Payment
 Owner’s representative defines the deficiencies
The acceptance of a completed project is customarily based on a final inspection performed by the owner's
representative ( acceptance committee ) and conditioned upon the correction of any deficiencies noted.
The list of deficiencies to be corrected which is prepared at the final inspection is sometimes referred to as the
"punch list of record".
Certificate of Completion for project or a portion
If the facility (project) or a portion thereof is substantial complete, the owner's representative will execute a
"certificate of substantial completion" for the work. The contractor may then request and receive a final
progress payment for the completed portion of the project. However, sufficient retainage is withheld to ensure
the correction of any remaining deficiencies.
The certificate of substantial completion should clearly state the responsibilities of the contractor and the
owner for maintenance utility service, and insurance until final acceptance.
Final Payment
Upon correction of all deficiencies on the punch list of record, the contractor should notify the owner's
representative of this fact and submit a "request for final payment", together with any other documents
required by the contract (such as releases of liens, an affidavit that a payrolls and bills connected with the
project have been paid, consent of surety to final payment, etc.). when inspection confirms to correction of all
deficiencies, the owner's representative will issue a final "certificate of payment".
Deficiencies Period
The contract customarily provides a warranty against defective work for some period, usually 1 year. Any
deficiencies discovered after preparation of the punch list of record should be handled under the warranty
provision of the contract. Final payment and its acceptance by the contractor usually constitute a waiver of all
claims by either the owner or contractor exit for unsettled liens and claims and deficiencies having under
warranty provision.
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Claims and Disputes
Claim
A claim is a request by the contractor for a time extension or for additional payment based on the occurrence of an event beyond
the contractor's control that has not been covered by a change order.
Examples of such events include unexpected site conditions, delays in delivery of owner provided property (or equipments), and
changes directed by the owner.
The usual construction contract empowers the owner's representative (architect/engineer or governmental contracting officer) to
decide on the validity of such claims. However, if the contractor is not satisfied with the decision, the matter becomes a dispute.
See Clause 53 – 4.

Clause 53- 4 Claims:

The Contractor shall send to the Engineer's Representative, once every month, an account giving particulars (as full and detailed
as possible) of all claims for any additional expense to which the Contractor may consider himself entitled and of all extra or
additional work ordered by the Engineer which he has executed during the preceding month and no claim for payment for any
such work will be considered which has not been included in such particulars. Provided always that the Engineer shall be entitled
to authorize payment to be made for any such work notwithstanding the Contractor's failure to comply with this condition if the
Contractor has at the earliest practicable opportunity notified the Engineer that he intends to make a claim for such work.

 
Disputes
Disputes are disagreements between the contractor and owner over some aspect of contract performance. In addition to
unsettled claims, disputes may involve such matters as substitution for specified materials, the responsibility for delays in project
completion, and the effect of changes ordered by the owner.

Settling disputes
In recent years there has been an increase in the use of arbitration for settling disputes instead of taking the matter to court.
In 1966, the American Arbitration Association, together with a number of professional organizations involved in construction,
established arbitration procedures for the construction industry, known as the "construction Industry Arbitration Rules".
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Contract Termination
Methods of Contract Termination
1. Satisfactory Performance
Most construction contracts are terminated by satisfactory performance.
- completion of project & acceptance
- agreement between owner & contractor to terminate even project not finished.

2. Adversary Process
The principle adversary basis for contract termination is for breach ( ‫ ) خرقهو مخا لفة‬of contract.
2.1Termination by Contractor
The basis for termination by the contractor based on breach of contract is usually the failure of the owner to make the
specified progress payments or owner-caused delay of the project for an unreasonable period of time.
When termination is due to breach of contract by the owner the contractor is generally held to be entitled to payment
for all work performed and the expenses of demobilization and cancellation of orders, plus profit.

2.2Termination by Owner
Termination by the owner for breach of contract is most commonly due to failure of the contractor to make reasonable
progress on the project or to default by the contractor.
When termination is due to breach of contract by the contractor the contract commonly permits the owner to take
possession of the work site and all on-site equipment and tools owned by the contractor and to complete the project
at the contractor's (or surety's) expense.
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References
• Nunnally, S. W. “ Construction Methods and Management”, 7th
Edition, Upper Saddle River, New Jersey: Prentice Hall, 2007.