Liquidated damages – sum of money agreed to and written into contract,

specified as the total amount of compensation an aggrieved party should get,

if the other party breaches certain part(s) of the contract.

LD = (1/10) of 1% of the contract price per calendar day of delay until

completion, delivery of the work; maximum amount not to exceed 10%.

Force majeure – “superior force”, chance occurrence, unavoidable accident that

essentially frees both parties from liability or obligation when an
extraordinary event or circumstances beyond the control of the parties, such
as war, flooding, earthquake, volcanic eruption, etc. that prevents one or both
parties from fulfilling their obligations under contract.

Value engineering – is a creative, organized approach the objective of which

is to optimize the cost or performance of a project.

- Best applied in the designing stage, building process.

- Should consider all aspects of a project which affect
cost and provide value (savings) to the owner.

Assignment:

How to reduce construction cost:

1. design concrete structures with as many duplicate members as practical In

order to permit the reuse of forms without rebuilding.

2. simplify the design of the structure where possible.

3. design for the use of cost-saving equipment and methods.

4. eliminate unnecessary use of special construction equipment.

5. design to minimize labor intensive activities.

6. specify a quality workmanship that is consistent with required project

quality.
7. furnish adequate subsurface information where possible.

8. refrain from requiring the constructor to assume the adequacy of design or

the responsibility for information that should be furnished by the engineer
or the architect.

9. use local material where they are satisfactory.

10. write simple of straightforward specifications which clearly state what

is expected.

11. when possible, use standard specifications which are familiar to the
constructor.

12. hold pre-bidding conferences.

- site visit is a necessity for contractors

13. use inspectors who have sufficient judgment and experience in order to
eliminate uncertainties: to understand the project and to give them authority
to make decisions.

- excellent in planning, making schedule (manpower schedule, equipment

schedule, materials schedule) [pilferage – losses]