Managing

Construction
Contracts
Effectively

Kelvin Hughes
KH Consultants LLP

11.45am: Registration & Logging In

12.00am: Session Begins

1.30pm: Break

1.45pm: Session Resumes

3.15pm: Break

3.30pm: Session Resumes

5pm: Session Ends

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 Day 1

MODULE I: DEFINING THE CONTRACT TYPES

AND THEIR ADVANTAGES IN PRACTICE

• Lump Sum contracts

• Remeasurement contracts
• Cost reimbursable contracts
• Target contracts
• Management contracts
• Design and Build Contracts
• Subcontracts

Activity – “Which contract for which project?”

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 MODULE II: COMPARING VARIOUS STANDARD
FORMS OF CONTRACT TO STRATEGIES THE
BEST APPROACH FOR PROFICIENT
CONSTRUCTION PROJECT MANAGEMENT

This session will consider the structure and content

of various standard forms of contract used for
building, civil engineering and process engineering
projects

MODULE III: THE ESSENTIAL ELEMENTS THAT

OUTLINE THE FOUNDATIONS OF AN
EXPERTLY DRAFTED CONTRACT

• When do we have a contract?

• Express and implied terms and conditions:
deciphering legal jargon used in the
construction industry
• Exclusion clauses and their significance in
project management

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 MODULE IV: MAPPING THE OBLIGATIONS TO
DRAFT A CONTRACTUALLY SOUND
AGREEMENT

• Assessing the needs of the Client: looking

beyond cost effectiveness to ensure Client
objectives are met
• Project cost assessment: Budgeting and cost
management to increase profit by decreasing
the preventable expenses

MODULE IV: MAPPING THE OBLIGATIONS TO

DRAFT A CONTRACTUALLY SOUND
AGREEMENT (CONTD)

• Common mistakes when drafting contracts and

how to avoid them
• Pitfalls when inviting tenders and awarding
contracts
• Letters of intent: Safeguarding your organisation
against use and abuse of the letter of intent
• Carrying out project audits, how was it for you,
how could it be better next time?

Activity – “Draft me a watertight contract”

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 MODULE V: SCHEDULING AND TIME
MANAGEMENT FOR EFFICIENT
CONSTRUCTION PROJECTS

• Completion of service against timelines and its

benefits
• Bar charts: How to use simple bar charts and
links for performance improvements
• Elemental trend analysis (Line of Balance)
• Project network techniques, precedence
diagrams, network analysis, critical path
analysis

MODULE V: SCHEDULING AND TIME

MANAGEMENT FOR EFFICIENT
CONSTRUCTION PROJECTS

• Using planning and programming software

• Extensions of time and the adverse effects of
the delays on construction projects###

Activity - “A valid extension of time claim or a waste

of time?”

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 Day 2

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MODULE VI: DEVISING AND SUPERVISING THE

PROJECT QUALITY FOR OPTIMUM END
RESULTS

• Positioning yardsticks: Setting the standards of

service quality
• Defining design liability for effective service
delivery
• Dealing with construction and design defects:
Remedies in contract and tort for recovery of
loss
• Total quality management (TQM) of building and
construction projects
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 MODULE VII: MEASURING RISK FOR
IMPROVED OPERATIONAL EFFECTIVENESS

• Identifying the risks involved in construction

projects
• Risk assessment for hassle free operations in
unpredicted situations
• Managing risk for improved project proficiency
• Use of risk registers to analyse and monitor
project risk
• Dealing with float and time risk allowances

Activity - “Risk?...........what risk?”

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MODULE VIII: INSURANCES, BONDS,

WARRANTIES AND GUARANTEES—
INCORPORATING SUPPORT SYSTEMS IN A
CONTRACT TO EFFECTIVELY DEAL WITH
PROJECT RISK

• Exploring the diversity of contract insurances

• Types of bond and the advantage of their use in
construction projects
• Collateral warranties: the benefits and the
drawbacks

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 MODULE IX: DISPUTES – HOW TO MANAGE
THEM, BUT BETTER STILL, HOW TO PREVENT
THEM

• Administering monetary claims and successful

project completion according to contractual
objectives
• Recovery of loss and expense in unforeseen
circumstances
• Dispute resolution: Prevention of disputes
before the molehill becomes a mountain
How to prevent disputes

Activity - “A claim conundrum”

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MODULE X: FORESEEABLE DEVELOPMENTS

IN CONSTRUCTION CONTRACTS AND THEIR
IMPLICATIONS ON CONSTRUCTION
PROJECTS

• New developments in construction contracts

• Partnering and alliancing arrangements
• PFI/BOT/BOOT Contracts

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 MODULE I: DEFINING THE CONTRACT TYPES
AND THEIR ADVANTAGES IN PRACTICE

• Lump sum contracts

• Remeasurement contracts
• Cost reimbursable contracts
• Target contracts
• Management contracts
• Design and Build Contracts
• Subcontracts

Activity – “How would you manage the following

risks?”

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17

Contract
Types

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 For this course the notes and slides will
refer to the latest version of each form
of contract although it is recognized
that some delegates will be using
previous editions of the contracts.

The tutor is fully conversant with all

editions of each contract and
welcomes questions on all editions.

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Lump sum contracts

• FIDIC 1999/2017 “Red” Book
• FIDIC 1999/2017 “Green” Book

• NEC3/4:ECC Option A

• JCT 2016 Standard Building

Contract without Quantities
• JCT 2016 Minor Works Building
Contract (also with Contractor’s
Design)

• I Chem E “Red” Book

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 Remeasurement contracts

• FIDIC 1999/2017 “Red” Book

• FIDIC 1999/2017 “Green” Book

• NEC3/4:ECC Option B

• JCT 2016 Standard Building Contract with

Quantities
• JCT 2016 Standard Building Contract with
Approx Quantities
• JCT 2016 Intermediate Building Contract (also
with Contractors Design)
• JCT 2016 Measured Term Contract

• ICE/ICC Conditions of Contract

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Cost reimbursable contracts

• NEC3/4:ECC Option E

• JCT 2016 Prime Cost Building Contract

• I Chem E “Green” Book

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 Target contracts

• NEC3/4:ECC Option C&D

• I Chem E “Burgundy” Book

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Management
contracts

• NEC3/4:ECC Option F

• JCT 2016 Management Building

Contract
• JCT 2016 Construction
Management Agreement

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 Design & build contracts

• FIDIC 1999/2017 “Yellow” Book

• FIDIC 1999/2017 “Silver” Book

• JCT 2016 Design & Build Contract

• JCT 2016 Major Project
Construction Contract

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