Mega Structures: Dubai’s Palm Island
Episode 1
http://www.youtube.com/watch?v=WybVe8eXXqw …
Contract Administration
Contract Administration
Contract Administration
Insurance and indemnities
by Dennis Brand
The insurance clauses or provisions in a contract will often state the employer’s requirements as to the types of insurance and the required minimum amounts. Sometimes the amount of insurance is linked to the limit of liability under the contract – and, while there is no objection to this in principal, the required amount of insurance should not be more. Moreover, one must take care to ensure that the insurance provisions do not allow for liability which is separate or in excess of the overall limited liability under the contract. …
Contract Administration
Factors to consider when preparing a disruption claim
by David Merritt
Disruption claims are routinely made during the course of a construction project yet they remain notoriously difficult to prove. One of the main reasons for this is that productivity losses are often extremely difficult to distinguish, as opposed to other money claims which are more directly concerned with the occurrence of a distinct and compensable event, such as an instruction for a variation during the progress of work or a properly notified compensation event.
Most claims for disruption are dealt with retrospectively and the claimant is forced to rely on contemporary records to try and establish a causal nexus for identified losses (cause & effect), which are inadequate for evidencing a loss of productivity claim.
When this happens the claimant is often forced into the situation where it advances a weak global or total cost claim to try and recover its losses. The claimant must first establish that the factor causing the disruption is compensable risk under the contract.
To do this, the contract needs to be reviewed to understand the basis of the agreement as certain productivity issues may have been foreseeable and therefore accounted for within the claimant’s productivity allowances. The contract may also identify if a party expressly accepted certain productivity risks. Common causes of disruption on projects that may lead to a loss of production include site access restrictions, unforeseen site conditions, late or incorrect design, changes in the work, labour availability, remedial/corrective work, testing/inspections, client and third party interference, changes in construction methods and adverse weather.
The primary challenges the claiming party faces in preparing a disruption claim are to identify the root cause of the loss of productivity and quantifying the associated labour and equipment productivity losses. Many methods exist to quantify a disruption claim such as the measured mile; the modified total cost approach; a time and motion study or a comparative work study.
Alternatively research data published by the Mechanical Contractor Association or the National Electrical Contractors Association on the effects of disrupted working may be utilised but care must be exercised because no one size fits all.
Productivity is normally measured as production per unit of effect or output divided by input (ie units/hr) or it may be expressed as input divided by output (ie hrs/unit). A loss of productivity occurs when it takes more labour and equipment to do the same amount of work, thereby increasing project costs. A common error made by a claiming party when preparing a disruption claim is to confuse productivity with efficiency.
Efficiency is a measure of productivity as a ratio or percentage during the affected periods. If target production is 50 units per day and actual production is 25 units per day then given the same input the efficiency of the operation would be 50%. If actual production was equal to the target production efficiency would be 100%. The efficiency formula must take into account the variable input (resources) as well as variable output (production).
For instance it is possible to increase productivity but reduce efficiency. A decrease in efficiency is often associated with one or more secondary factors unrelated to the original excusable event but which are implemented to negate or mitigate the effects of the root cause. These secondary factors include out of sequence working, multiple work fronts, new learning and unlearning curves, fatigue (overtime/shift working), dilution of supervision and stacking of trades in confined spaces.
So when preparing a disruption claim for a loss of productivity it is very important to consider not just immediate effects on the rate of production but also the inefficiencies of some of the secondary factors.
Disruption claims are routinely made during the course of a construction project yet they remain notoriously difficult to prove. One of the main reasons for this is that productivity losses are often extremely difficult to distinguish, as opposed to other money claims which are more directly concerned with the occurrence of a distinct and compensable event, such as an instruction for a variation during the progress of work or a properly notified compensation event.
Most claims for disruption are dealt with retrospectively and the claimant is forced to rely on contemporary records to try and establish a causal nexus for identified losses (cause & effect), which are inadequate for evidencing a loss of productivity claim.
When this happens the claimant is often forced into the situation where it advances a weak global or total cost claim to try and recover its losses. The claimant must first establish that the factor causing the disruption is compensable risk under the contract. …
Factors to consider when preparing a disruption claimRead More »
Contract Administration, Project Management
Employee Motivation – 30-Second Management Training Course!
httpv://www.youtube.com/watch?v=HhkjhVzGBIo
Construction Law, Contract Administration
Force Majeure – It’s expected
by Martin Chapman
So what is a force majeure clause? Just about all construction contracts contain such a clause and designed to address risks which cannot necessarily be insured and which are outside of the control of the parties to the contract. …
Contract Administration
Proactive ‘green’ approach urged
Proactive ‘green’ approach urged
by Amy Ward
Developers in the UAE are well advised to voluntarily seek certification for the sustainability of their buildings to mitigate any potential increases in design and construction costs before the emirates make the sustainable building guidelines mandatory, writes AMY WARD*.
With the 2009 World Future Energy Summit having been held in Abu Dhabi last month (January), the focus has once again turned to environmental sustainability in the UAE.
In 2007, the World Wide Fund (WWF) Living Planet Report stated that the UAE had the world’s largest carbon footprint per resident. Whether or not this provided the catalyst, the UAE has since then committed to initiatives that encourage low-carbon living such as the Masdar City development in Abu Dhabi.
In recent times, both Abu Dhabi and Dubai have taken steps to support green building principles and their implementation in the construction industry.
Abu Dhabi introduced its ‘Estidama’ sustainable building guidelines in May 2008. Estidama, meaning ‘sustainability’ in Arabic, provides guidelines for sustainable design and operation and maintenance of all types of buildings and communities in the emirate. It is intended that Estidama will become the basis for mandatory guidelines to be introduced in Abu Dhabi in the future, in addition to being introduced in the other emirates.
The Estidama programme was launched by the Abu Dhabi Urban Planning Council to underpin Plan Abu Dhabi 2030 and a sustainable community, by promoting economic growth whilst enhancing the overall quality of life and protecting environmental resources.
Three sets of guidelines were produced as a result of the programme including the new building guidelines, existing building guidelines and community design guidelines. Whilst at this stage these are discretionary guidelines, the Urban Planning Council has indicated that it plans to introduce mandatory regulations in the future.
The new buildings assessment method assesses 10 different criteria for which credits can be awarded. These include water, energy use, indoor environment quality, ecology, management, transport, pollution, materials, waste management and land use.
The Estidama assessment method, however, differs from other international assessment standards in that it has been tailored specifically to the UAE’s socio-economic and environmental conditions in mind. For example, water and energy conservation are considered to be the most important elements of the Estidama green building principles and make up 50 per cent of the total credits that a building can be awarded. Upon accreditation, buildings are rated using a pearl rating system according to the credits they have been awarded under the 10 criteria.
In Dubai, compliance with internationally-recognised green building standards has been on the rise over the past two years. The Emirates Green Building Council was established in 2006 and decided to use the US-based Leed system (Leadership in Energy and Environmental Design) as a basis for its green building guidelines. As a result, in 2007, the Emirates Leed scheme was released. The UAE, currently, has a small number of Leed-accredited facilities, with more likely to be introduced in the future.
The Leed Green Building Rating System was established in the US in 1994 and provides standards for environmentally-sustainable construction. It identifies six major areas where new commercial buildings (or those with significant renovations) can obtain credits in order to be a Leed-certified building. The areas include sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environment quality and innovation and design process. A building can be ‘certified’ or, if it obtains a higher number of credits, can obtain a silver, gold or platinum rating.
Dubai currently has two Leed-certified buildings – the headquarters of the building automation specialist Pacific Controls, based in Techno Park, which is platinum rated; and the district cooling plant at Wafi City Shopping Centre, which is gold rated – one of only two utility buildings worldwide to achieve a gold rating.
The US is not the only country to have internationally-recognised standards for environmentally-sustainable construction. In the UK, BRE (Building Research Establishment) created the Environmental Assessment Method (Breeam), a voluntary measurement rating for green buildings. Launched in 1990, it is the world’s longest-standing environmental assessment method for buildings.
Breeam now assesses new non-domestic buildings against nine categories including management; health and well-being; energy; transport; water; material and waste; land use and ecology; and pollution. BRE launched an adapted version of Breeam guidelines in the UAE in October which took into account climate difference, water desalination and differences in ecology as well as recognising the number of sea or marine reclamation projects under construction. In developing the adapted guidelines, BRE worked with a local ecologist to look at the impact of building reclaimed islands.
Significance
Until mandatory regulations are introduced, there are advantages and disadvantages for those in the construction industry who voluntarily choose to become accredited under one of the international systems or the UAE’s own Estidama system.
Once certification is pursued under an accreditation or certification system, there may be an increase in the initial design and construction costs. This could be firstly because sustainable construction principles may not be well understood by the design professionals undertaking the project and, as a result, further time may be required on research or additional liaison between the design team, construction team and client. Secondly, there may be a lack of available manufactured building components that meet the standards required under the green building certification systems. Thirdly, there are likely to be additional costs associated with pursuing certification for the project itself and subsequent liaison with the accreditation body.
However, there are many advantages associated with green buildings, which include a tendency to use key resources more efficiently, when compared with more conventional buildings; and healthier work and living environments, which contribute to higher productivity and improved employee health and comfort.
Higher initial costs may also be mitigated over time if operational costs are lower, which typically is the case with a green building-certified project. In addition, as further developments come onto the market, differentiation may become more important as developers try to attract buyers. Sustainability may be one of the key differentiating factors for future projects in the UAE.
Developers in the UAE, especially in Abu Dhabi, may be well placed to consider voluntarily certification under Estidama in order to prepare for, and mitigate, any potential increases in design and construction costs should the Urban Planning Council introduce the guidelines as mandatory requirements.
Aside from contributing to the reduction of the UAE’s carbon footprint, and as the global community (and in particular the UAE) becomes more environmentally aware, green buildings may become one of the key features for investors in a property market. This may be an advantage in itself in persuading developers to start voluntarily seeking certification under Estidama or any of the other internationally-recognised green building certification systems.
Gulf Construction
by Amy Ward
Developers in the UAE are well advised to voluntarily seek certification for the sustainability of their buildings to mitigate any potential increases in design and construction costs before the emirates make the sustainable building guidelines mandatory.
With the 2009 World Future Energy Summit having been held in Abu Dhabi last month (January), the focus has once again turned to environmental sustainability in the UAE. …
Construction Law, Contract Administration
A huge thirst for knowledge
By Richard Harding
The boom in professional education has been a global phenomenon, which the UAE has not escaped. Barely a week goes by without a seminar or conference offering the latest insights. Most of these are fearfully expensive, and those which are not, tend to consist of little more than a new entrant into the market selling its imported “expertise.”
…
Construction Law, Contract Administration
Respect is due to my authority
By Nick Carnell
Have you recently spent what seemed like a lifetime trying to make sense of the identity card regulations? Have you also looked in your wallet at the number of cards you have with your photograph staring out at you?
Do you as a matter of course carry a copy of your passport visa page because you are almost bound to need to produce it somewhere? …
Contract Administration
The new FIDIC Contract: Design Build Operate
By Edward Sunna
The long awaited FIDIC Design Build Operate Contract has finally been published by FIDIC. The purpose of this article is to provide readers with a general overview of the new build contract and its intended application. …
Contract Administration
Estimating Productive Hours per Day
When estimating effort hours, duration and cost, you must start off with an estimate of effort hours. Without an idea of the effort hours, you cannot accurately estimate duration or cost. …
Contract Administration
Building Design
Building designs
by Dennis Brand
Perhaps the best way to describe design and build contracts is to explain what they are not. The traditional design-bid-build contract is a sequential process of phases or stages in which the owner or developer first contracts with a design professional to prepare a concept or basic design, then later a detailed design that is suitable for construction. This will include plans and specifications that when complete will be used to solicit competitive bids and finally the award of a construction contract to the lowest bidder.
In design and build contracts, one entity performs both the design and construction under a single contract. Often the contract is awarded by some process other than competitive bidding, thus it differs from traditional design-bid-build in two ways. First, the design and construction components are packaged into a single contract; second, it is not necessarily awarded to the lowest bidder after competitive bidding.
Why use design and build?
Design and build contracts have the potential to reduce the overall project costs as the contractor performing the design has a better appreciation of the construction costs of the various alternatives. They can therefore produce a design that is less expensive to build and they have an incentive to do so.
Another way to look at this advantage is that it moves value engineering from after the contract award, where the contractor proposes cost reduction ideas and shares the savings with the owner, to pre-award, where the owner enjoys most of the savings.
Design and build contracts may also result in the earlier completion and occupancy of a project as there is no downtime between the completion of a design and start of construction. Furthermore, the contractor can begin construction of early phases of the project, such as grading and foundations, before the design of later phases like the building envelope and MEP systems are complete.
This process is sometimes referred to as fast-track. It eliminates the traditional liability gap that can occur when the design is produced by a consultant and the contractor constructs the design under a separate contract. Design professionals can obtain insurance coverage for professional liability insurance only, which covers negligence, error and omissions. Virtually all design contracts limit their liability to this.
However, there can be non-negligent errors and omissions on the part of the designer that cost the owner money, but for which the designer is not liable. One example of this is where the designer undertakes reasonable subsurface investigations but fails to detect a rocky outcrop that will require additional work on the part of the construction contractor.
In the traditional design-bid-build approach, the owner warrants the correctness of the plans and specifications to the construction contractor. In the event of an error where the contractor incurs additional costs, these are met by the owner with little prospect of recovery from the designer. Design and build contracts eliminate this gap because the is solely responsible for defective plans, specifications or differing site conditions.
When a project is designed around current generation products, any proposed substitution of new or alternative items following bidding may require revisions to the structure, mechanical or electrical components to accommodate the new design. In such occasions the question arises: who will pay for the resulting charges? Design and build contracts solve this problem: the contractor selects the equipment then designs the building around this, which seems a more logical way to proceed.
The traditional design-bid-build method of contracting can suffer from under-optimisation when individual project participants seek to optimise their own positions. For example, the total cost to the owner of a building’s steel frame includes the cost of the engineering to determine the required steel sections plus that of the steel. The designer has little incentive to minimise the amount of structural steel, their concern is only to spend sufficient design time to ensure that there is enough steel to meet both gravity and seismic loads.
With design and build contracts, the contractor has an incentive to use additional engineering in order to achieve the optimum amount of steel required for the structure. That is not to say that this type of contract results in unsafe or less efficient structures, rather that it reduces unnecessary quantities of materials and equipment that do not necessarily add to the robustness of the structure.
Design and build contracts may reduce the administrative burden on the owner as there is one award and one contract to administer. The total cost of the project becomes apparent earlier. In traditional design-bid-build jobs, construction costs are not known until bid opening and it is possible to spend money on a design that the owner may not be able to build. Frequently construction bids exceed the project budget, which results in it having to be redesigned, thus delaying completion.
The risk factors
Under a traditional design-bid-build contract arrangement the owner has full control over the details of the plans and specifications. It does not publish them for bids until it is satisfied that they reflect their requirements. With design and build contracts the owner gives up some of this control.
Moreover, the owner must confirm its needs much earlier. With traditional design-bid-build contracts, if the owner is indecisive on its needs, it can clarify them during the design phase. With design and build projects, however such changes can be very expensive and disruptive, impacting on both costs and completion.
To summarise, if the owner is not certain what they want, due to the expense in making changes after contracts are awarded, the more traditional design-bid-build method may be the best choice.
Building designs
by Dennis Brand
Perhaps the best way to describe design and build contracts is to explain what they are not. The traditional design-bid-build contract is a sequential process of phases or stages in which the owner or developer first contracts with a design professional to prepare a concept or basic design, then later a detailed design that is suitable for construction. This will include plans and specifications that when complete will be used to solicit competitive bids and finally the award of a construction contract to the lowest bidder. …