Addis Ababa University Addis Ababa Institute of Technology School of Civil and Environmental Engineering Bsc. Thesis Proposal On

Addis Ababa University
Addis Ababa Institute of Technology

School of Civil and Environmental Engineering
BSc. thesis Proposal on
Title
Extensive Research on Claim Management Practice in Building
Construction Project in Ethiopia
Name ID. Number

Ermiyas Tadesse ATR/3939/08
Eden Genet ATR/9282/08
Fikreyesus Eyob ATR/8877/08
Kaleab Abay ATR/9827/08
Advisor:- Hana Mekuria
Date: Dec 09, 2020

Claim Management Practice in Building Construction Project
ACKNOWLEDGEMENT
First and foremost, praises and thanks to the God, the Almighty, for His showers of blessings
throughout our research work to complete the research successfully.
We would like to express my deep and sincere gratitude to our research advisor, Ins. Hanna
Mekuria, from Addis Ababa Institute of Technology for giving us the opportunity to do research
and providing invaluable guidance throughout this research. Her dynamism, vision, sincerity and
motivation have deeply inspired us. She has taught us the methodology to carry out the research
and to present the research works as clearly as possible. It was a great privilege and honor to work
and study under her guidance.
Finally, our thanks go to all the people who have supported us to complete the research work
directly or indirectly.
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AAIT, Construction Technology & Management
Table of Contents
ACKNOWLEDGEMENT......................................................................................................................... i
List of Tables .............................................................................................................................................. iv
List of Figures............................................................................................................................................. iv
ABBREVIATIONS ..................................................................................................................................... v
ABSTRACT ................................................................................................................................................ vi
CHAPTER ONE: Introduction ................................................................................................................. 1
1.1 Background ......................................................................................................................................... 1
1.2 Statement of Problem ......................................................................................................................... 2
1.3 Objective of the Study......................................................................................................................... 2
1.3.1 General Objective ........................................................................................................................ 2
1.3.2 Specific Objective ......................................................................................................................... 2
1.4 Scope of the study .............................................................................................................................. 3
1.5 Structure of The Thesis ....................................................................................................................... 3
CHAPTER TWO: Construction Claim in Ethiopia ................................................................................ 4
2.1 Background on Construction in Ethiopia ............................................................................................ 4
2.2 Definition of contract .......................................................................................................................... 6
2.3 Types of Construction Contracts ......................................................................................................... 7
2.4 Standard condition of Contract .......................................................................................................... 7
2.4.1 The FIDIC form of Contract .......................................................................................................... 8
2.4.2 BaTCoDA Form of Contract .......................................................................................................... 9
2.4.3 MoWUD form of Contract............................................................................................................ 9
2.4.4 FPPA Form of Contact ................................................................................................................ 10
2.5 Contractual Problems in The Construction Industry......................................................................... 10
2.6 Claim in Building Construction .......................................................................................................... 11
2.6.1 Definition of claims .................................................................................................................... 11
2.6.2 Major causes of claims ............................................................................................................... 12
2.6.3 Impacts of claims ....................................................................................................................... 15
2.6.4 Things to be considered while preparing a claim ...................................................................... 15
2.6.5 Classification of Claim ................................................................................................................ 16
2.6.6 Process of Claim Management .................................................................................................. 20
3.7 Delay Analysis Techniques/ methods ............................................................................................... 23
3.7.1 What is Delay? ........................................................................................................................... 23
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3.7.2 How do you Classify Construction Delay Claims? ...................................................................... 23

CHAPTER THREE: Research Design And Methodology .................................................................... 32
3.1 Approach ........................................................................................................................................... 32
3.2 Study area ......................................................................................................................................... 32
3.3 Source of the data ............................................................................................................................. 32
3.4 Limitations......................................................................................................................................... 33
CHAPTER FOUR:Claims That May Arise Due To Pandemic ............................................................ 34
4.1 The Concept of Force Majeure ......................................................................................................... 36
4.1.1 Is Covid-19 a Force Majeure Event?........................................................................................... 37
4.1.2 Force Majeure Clauses .............................................................................................................. 37
4.1.3 Force Majeure in Standard Forms of Contract ......................................................................... 38
4.1.4 What if your contract does not have a force majeure clause? ................................................ 40
4.1.5 Recommended COVID-19 force majeure action ...................................................................... 41
4.2 Extension of time claims ................................................................................................................... 42
4.3 Escalation clauses.............................................................................................................................. 43
4.4 Loss of Productivity Claims ............................................................................................................... 44
4.5 Notice provisions .............................................................................................................................. 44
4.6 Insurance requirements .................................................................................................................... 45
4.7 Termination clauses .......................................................................................................................... 45
4.7.1 Types of Termination Clauses .................................................................................................... 45
4.8 Liquidated damages clause ............................................................................................................... 46
4.9 Delay and disruption damages.......................................................................................................... 47
4.9.1 Damage for delays ..................................................................................................................... 47
4.9.2 Defences to Construction Delay Claims ..................................................................................... 47
CHAPTER FIVE: Conclusion and Recommendation ........................................................................... 49
Conclusion ............................................................................................................................................... 49
Recommendation.................................................................................................................................... 50
References .................................................................................................................................................. 51
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List of Tables
Table 1: FIDIC contract forms ........................................................................................................ 8
Table 2: Causes of claim ............................................................................................................... 13
Table 3: Advantages and Disadvantages of delay analysis techniques ........................................ 28
List of Figures
Figure 1: structure of thesis............................................................................................................. 3

Figure 2: Potential source of contract claim Source: Conflicts, claims and disputes in
construction ................................................................................................................................... 14
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ABBREVIATIONS
FIDIC = Federal International Des Ingenieurs Conseils
ERA = Ethiopian Road Authority
SBDW = Standard Bidding Documents for Procurement of Works
BaTCoDa = Building and Transport Construction Design Authority
MoWUD = Ministry of Works and Urban Development
PPA= Public Procurement Agency
NCB = National Competitive Bidding
ICB = International competitive bidding
ADR = Alternative Dispute Resolution
GCC = General Condition of Contract
CRE = Contractor risk
ERE = Employee Risk
EDE = Employer Delay Event
CDE = Contractor Delay Event
WHO = World Health Organization
CPM = Critical Path Method
IDT = Isolated Delay Type
SCL = Society of Civil Law
DAT = Delay Analysis Techniques
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ABSTRACT
The complexity of the construction industry due to different stakeholders' involvement makes it
different from other sectors. This complexity gives rise mostly to an unwanted situation like delay
and time extension with their attached effects. Every construction project aims to meet the
objectives of time, cost, and quality. If the project is not completed on its time, on its budget cost,
and specified quality unsatisfactorily, a claim or dispute may arise between stakeholders. Delay
claims are extremely complex and difficult to resolve; for this reason, projects require an effective
and reliable method to minimize the cause and effect of construction delay.
In the construction industry, claims are generally inevitable because of the traditional project
procurement system widely practiced in the country. Moreover, the majority of local construction
organizations manage their construction projects by employing engineers who have little or no
training in construction project management. This results in improper claim administration. In
addition to the complexity of projects being undertaken, these days, the type of project
procurement system and improper claim administration raises more problems.
This study aims to identify the process involved in claim management and how the issue of claim
is addressed by focusing on a different type of claims and delay analysis methods using analysis
of various case studies. To achieve this study's objectives, a review of different related literature
and desk study of the document on construction projects in order to carry out how contractual
claims are managed in the construction industry.
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CHAPTER ONE: Introduction

1.1 Background
The construction industry is a complex and competitive environment in which participants with
different views, talents, and knowledge levels of the construction process work together. In this
complex environment, participants from various professions, each having its own goal and expect
to make the most of its own benefits. In the construction industry, since differences in perceptions
among the project participants are present, conflicts are inevitable. If conflicts are not well
managed, they quickly turn into disputes. Disputes are one of the main factors, which prevent the
successful completion of the construction project.
Construction claims are found in almost every construction project. It is the quest for consideration
or change by one of the parties involved in the construction process. Nowadays, the substantially
increasing volume of claims is the result of the rising complexity of the projects, the price structure
of the construction industry, and the legal approach taken by a lot of owners and contractors.
Several researches show the order of magnitude of construction claims' effects on the projects' cost
and time. Recently, serious claims concerning construction contracts have become increasingly
common in construction projects. It is common practice for designers, contractors, and owners to
negotiate small and uncomplicated claims. However, larger and more complex ones frequently
hinder the project through involvement with lengthy legal issues.
Hence, nowadays, during the coronavirus lockdown, the construction industry is one of the major
sectors that is highly affected by the pandemic. Unless precautions and safety measures are taken,
it will cause delay on projects or additional cost on projects from which they are initially
contracted, which leads to claim by one of the contracting parties.
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1.2 Statement of Problem

Claim and contract are inseparable unless all the contracting parties carry out all their duties, which
do not happen most of the time. Contract claim requires proper claim administration in the
construction industry. Therefore, all the involved contractual parties should possess the knowledge
and necessary experience to deal with claims arising during the contract implementation. In
addition, the external environment, government policies, institutional capacity, and the integrity
of the contractor should be considered. This research will examine the process involved in claim
management to identify issues addressed in contracts and study delay analysis methods. This will
be done by identifying the main problems related to the contract provisions and suggesting ways
of addressing the issues in meeting the research objectives.
1.3 Objective of the Study

1.3.1 General Objective
This paper will focus on the investigation of claim management practice in building construction
projects, evaluating and discussing the current contract administration situation in Ethiopia, and
comment on different claim conditions as sited in MoWUD, PPA, and FIDIC standard conditions
of the contract.
1.3.2 Specific Objective
- Study the process involved in claim management.

- Identify how the issue of claim is addressed under different contracts.
- Access the different types of claims.
- Access issues concerned with the pandemic, which leads to claim.
- Study the delay analysis method.
- Investigate how claims are managed; by assessing different literatures.
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1.4 Scope of the study

The study is encircled to assess the identification of how the issue of different types of claims is
addressed in a contract, delay analysis methods, and claim management analysis techniques
applied in the construction industry with respect to standards.
1.5 Structure of The Thesis
chapter 1: Introduction
chapter 2: literature review
Chapter 3: Methdology
Chapter 4: Result and Descusion

Chapter 5: conclussion and
recomedation
Figure 1: Structure of the thesis
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CHAPTER TWO: Construction Claim in Ethiopia

2.1 Background on Construction in Ethiopia
First, let us define a standard definition set for the construction industry. The description given to
the phrase by the Australian Bureau of Statistics to its construction industry survey seems
appropriate and widely applicable. Accordingly, the construction industry is described as:
"all units mainly engaged in constructing buildings (including the on-site assembly and erection
of prefabricated buildings), roads, railroads, aerodromes, irrigation projects, harbor or river
works, gas, sewerage or stormwater drains or mains, electricity or other transmission lines or
towers, pipelines, oil refineries or other specified civil engineering projects. In general, units
mainly engaged in the repair of buildings or other structures are also included... as are those
engaged in the alteration or renovation of buildings, preparation of mine sites, demolition or
excavation."
Coming to our country, the growth and increasing demand for the construction industry have
followed a similar pattern as observed in the world's trend. Currently, construction is one of the
sectors leading the way towards modernization and industrialization in Ethiopia. In Ethiopia, the
construction sector generally contributes to the realization of about fifty percent of the total capital.
Being the second-largest employer in the country, it is also an engine for technology, innovation,
and overall development (Tecle & Mahlet, 2009).
In Ethiopia's past history, the construction industry was not considered an independent sector of
the national economy. It was rather considered as incapable of generating national wealth. As a
result, no comprehensive strategy for its development was considered. This, in turn, has led to the
undesirable features of the current construction sector. These features include lack of clear
developmental objectives for the industry; inadequate coordination of planning between the
industry and infrastructure programs in the various sectors of the economy heavy dependence on
foreign resources such as materials, equipment, and expertise representation of the role players in
the construction sector by inadequate and ineffective organizations, inadequate numbers of
suitably qualified and experienced personnel at all levels that include engineers, technicians,
mechanics, operators and foremen, etc. inadequate relevant local construction regulations and
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standards, and inadequate consideration is given to the use of local resources (including
community participation in labor-based works).
Ethiopia witnessed a decline in the performance of almost all sectors of the economy during the
various periods of government prior to 1991. The post-world war period in Ethiopia registered
significant changes from the time of Emperor Haile Selassie (1941-1974) to that of the Derg (1974-
1991), culminating in the events of 1991, which resulted in the formation of the Transitional
Government of Ethiopia. Even though various market-based economic reforms have been
introduced to the country's various industries, including the construction industry, since the
downfall of the Derg regime in 1992, the domestic construction industry has still faced several
hindering factors in its development.
With the above considerations in mind, the construction industry is being given special focus in
the country's policies. The construction industry is one of the three sectors of the Ethiopia
Government's economy for special consideration to foster the country's economic
development. However, the general state of the domestic construction industry in Ethiopia is still
characterized by an inadequate capital base, old and limited numbers of equipment, low levels of
equipment availability and utilization, deficiencies in technical, managerial, financial, and
entrepreneurial skills, limited experience and participation of the private sectors in construction
and consultation work, and insufficient and ineffective use of labor-based construction and
maintenance technology.
The construction industry in Ethiopia is a sector that opens the door for the growth of many
additional industries. Building works require high input. For instance, they require different metal
products, clay works, cement and cement products, etc. As such, the growth of these industries
will surely follow the development of the construction industry. (Tecle & Mahlet, 2009)
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2.2 Definition of contract

A contract is a written agreement between or among two or more parties whereby each party
promises to do something and agrees to terms (conditions and warranties) set out in the contract;
these promises and terms shall be enforceable by law and incorporate the rights, obligations and
remedial rights of each contracting parties. "Enforceable at law" means that if the agreement
reached between the employer and the contractor breached (deviations occur from the promises)
by one of the parties, the aggrieved party, either the employer or the contractor, may bring legal
action against the other to demand the enforcement of its rights with the support of the law.
(Koffman & Macdonald, 1998)
According to the civil code of Ethiopian, Art.1675, a contract is defined as an agreement whereby
two or more persons as between themselves create, vary, or extinguish obligations of proprietary
nature.
A further illustration of this definition

'A contract is an agreement.'
The contract being an agreement is not the paper on which it may be written and signed only. Such
a paper is a means of proving that agreement was expressed (Art.1680 (1) of civil code).
'Whereby two or more persons…'
There must not be only one person; one cannot contract with himself. This seems obvious, but it
is not always so. (Art.2180 of the civil code)
'Of a proprietary nature.'
This excludes contracts of "status," such as betrothal of marriage, adoption (Art.560, 570,796),
which create an obligation of "status" predefined by law, of primarily non-patrimonial nature and
except for betrothal. Others are not susceptible to being freely varied and extinguished.
According to Article 1678 of the civil code: no valid contract shall exist unless:
- The parties are capable of contracting and give their consent suitable at law.
- The object of the contract is sufficiently defined and is possible and lawful.
- The contract is made in the form prescribed by law.
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2.3 Types of Construction Contracts

Before signing on a construction contract, it is essential to know the types and choices of the
contracts we have to protect ourselves. The different types of construction contracts vary primarily
with regard to who takes risks, which party has to pay for the cost overruns, and who keeps the
savings if the project costs are less than that of the estimated one. According to (Tecle & Mahlet,
2009), the most common ones, and those widely used in the Ethiopian construction industry,
include:
 Lump-Sum Contracts
 Re-Measurement Contracts
 Cost-reimbursable contracts
 BOT form of Contract
 Turnkey contracts
2.4 Standard condition of Contract

In the construction industry, trade usages and standard forms of contracts are pervasively
in use. Their use saves time and energy. These standard forms of contracts are drawn up by
professional organizations, financial organizations, and governmental organizations. The
Federation Internationale des Ingenieurs Conseils (FIDIC) Standard forms of contract are an
example of those forms that are made ready by professional institutions. The World Bank adopts
the standard bidding documents for the procurement of works of civil engineering construction
(SBDW) for procurement of projects that the World Bank finances partly or wholly. The MoWUD
standard form of contract is one of the many forms prepared by the Ministry of Works and Urban
Development in Ethiopia.
In Ethiopia, we can observe that a number of standard forms of construction contracts have been
formulated and put in use. The prominent ones are:
The Standard Conditions of Contract for Construction of Civil Work Projects authored by the
Ministry of Works and Urban Development(MoWUD).
BATCoDA Standard Conditions of Consulting Services for Design and Supervision of
Construction Works.
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The FIDIC (Red Book) Conditions of Contract for Works of Civil Engineering.
The Standard Bidding Document for the Procurement of Works, issued by the Public
Procurement Agency (PPA).
2.4.1 The FIDIC form of Contract

The Conditions of Contract (International) for Works of Civil Engineering Construction was
prepared by the Fèdèration Internationale des Ingènieurs Conseils (the International Federation of
Consulting Engineers, FIDIC)and the Fèdèration Internationale du Bàtiment et des Travaux
Publics (the International Federation of Building and Public Works, now known as the
International European Constructors Federation, FIEC). As its cover was printed in red, it has
become popularly known as the "RED BOOK". FIDIC is the International Federation of duly
elected associations of consulting engineers representing the profession in their respective
countries.
However, it is essential to remember that the FIDIC forms represent a starting point for the
preparation of a construction contract. However, they are routinely amended to reflect each
project's particular characteristics and the requirements of the parties.
Table 1: FIDIC contract forms
FIDIC contract Year released Notes

The (old) Red Book First published in 1957, the fourth These contracts were aimed at the civil
and final edition was published in engineering sector, as differentiated from
1987, with a supplement added in the mechanical/electrical engineering
1996. sector
The (old) Yellow Book First published in 1967 with the These contracts were aimed at the
third and last edition in 1987. mechanical/electrical engineering sector.
The Orange Book The first and only edition of this This was the first design and build contract
contract was released in 1995. released by FIDIC.
The (new) Red Book Released in 1999 The Red Book is suitable for contracts that
the majority of design rests with the
employer.
The (new) Yellow Released in 1999. The Yellow Book is suitable for contracts
Book that the contractor has the majority of the
design responsibility.
The Silver Book Released in 1999 The Silver Book is for turnkey projects.
This contract places significant risks on the
contractor. The contractor is also
responsible for the majority of the design.
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The Pink Book First published 2005 – an amended This is an adaptation of The Red Book
version was published in 2006, created to fit the purposes of Multilateral
with a further edition in June 2010. Development Banks.
The Gold Book Released in 2008. This is FIDIC's first Design-build and
operate contract.
2.4.2 BaTCoDA Form of Contract

BaTCoDA issued the second version of the local contract form "Standard Conditions of Contract
for Construction of Civil Work Projects" in December 1987. It has 74 clauses and forms of
Agreement, Performance Bond, and Bank guarantee for Advance Payment. This contract form is
much similar to the FIDIC 1987 4th edition Red Book except for some slight modifications to suit
the domestic practices. For instance, those clauses entitle the contractor additional payment and
time extension are modified, omitting the payment component and allowing extension of time
only, which is not fair from the balance of risk point of view.
2.4.3 MoWUD form of Contract

The evolution of conditions of contract in Ethiopia dates back to 1959. The first-ever conditions
of contract prepared by MoUDH in July 1959 were entitled 'General conditions of Construction
Contracts', and its contract form has 54 clauses. BaTCoDA endorsed the Standard Conditions of
Contract for Construction of Civil Works Projects in December 1987 after three decades since the
first one comes into effect. The Standard Conditions of Contract for Construction of Civil Works
Projects by MoWUD enacted in December 1994. There was another condition of contract with a
title 'General conditions of Contract and Tender Procedure document' drafted by MoWUD in 1995,
which was not put into effect.
However, MoWUD issued in December 1994 the third generation of local contract forms,
"Standard Conditions of Contract for Construction of Civil Work Projects," has 75 clauses and
forms of Agreement and Performance Bond. It is almost a reprint of the preceding BaTCoDA 1987
contract form, with two significant changes regarding Advance Payment and Price Escalation,
which are deleted from this contract form. Another significant addition to this contract form, which
was not addressed in the BaTCoDA 1987 contract form, is the provision of a Warranty in respect
of the defects of construction (Clause 71). Standard conditions of contract of MoWUD in 1994
have been in use for more than a decade until it is replaced in 2006 by the PPA conditions of
contract.
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2.4.4 FPPA Form of Contact

The FPPA "s Standard Bidding Document for the Procurement of Works was issued and put in
use by Federal Government Departments as of January 2006. The latter covers a number of
standard contractual terms subdivided into three parts:
Part1, governing bidding procedures for the procurement of works in addition to the Federal
Public Procurement Proclamation and Federal Public Procurement Directives,
Part2, dealing with the schedule of requirements, and,
Part3, dealing with the contract, consisting of the General Conditions of Contract, Special
Conditions of Contract, and Contract Forms.
PPA released the contract form put in place in January 2006, which issued two sets of SBD for the
Procurement of Works for NCB and ICB. The General Conditions of Contract is covered under
section 7, which has 62 clauses with five parts: general, time control, quality control, cost control,
and finishing the contract. However, the PPA 2006 conditions of contract have also been issued
not only for works but also for consultancy services, goods, and non-consultancy services. Unlike
the MoWUD 1994 conditions of contract, the PPA 2006 conditions of contract for works are also
accompanied by other supportive documents, including User's Guide.
Under the latter revised version of the 2011 FPPA standard condition of contract, there are also
three major parts: the bidding procedure, schedule of requirements, and contract part, each
containing different sub-parts of their own. Under the first part bidding procedure, five sub-parts
covering from instruction to bidders to the eligible countries to bid. The second part contains only
the requirement sub-part schedule covering the scope, technical specification, drawing, and
activity schedule (bill of quantity). And the third part has the last three sections, which cover the
general condition of contract, which is stated under section seven containing 89 clauses, specific
condition of contract, and contract forms.
2.5 Contractual Problems in The Construction Industry

The single most common reason that there are problems with construction contracts is that the
parties do not understand exactly what is expected of them. Specifically, one or both parties don't
know the terms of the contract, their obligations, or even their understanding of the other party's
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obligations. And there is also a false sense of security when using standard contracts, that both
parties will be fairly treated. In fact, all contracts are slanted to favor one of the parties, usually the
one that created the contract. Because of this, it is imperative to have a contract that was drafted
for a specific project by an experienced construction attorney. According to different references, a
vast majority of contractual problems arise from voids in and misinterpretation of the clauses,
pertaining to the following 12 subjects:
 Changes in scope work

 Differing in unusual site conditions encountered
 Suspension of work
 Variation in quantities
 Damage due to natural disasters and force-majeure
 Re-inspection and acceptance
 Termination for the convenience of the client
 Possession prior to completion
 Escalation of price due to inflation
 Acceleration of work progress
 Currency fluctuation effect
 Ambiguity in specifications and drawings
2.6 Claim in Building Construction

2.6.1 Definition of claims
Different writers define claims as:
A claim can be defined as a right given to the party who deserves a request for compensation for
damages incurred by the other party (Simon, 1979). A construction claim can also be defined as
"a request by a construction contractor for compensation over and above the agreed-upon contract
amount for additional work or damages supposedly resulting from events that were not included
in the initial contract." (Adrian J. , 1993).
Federal Acquisition Regulation (FAR) 2.101 define a claim as "a written demand or written assertion
by one of the contracting parties seeking, as a matter of right, the payment of money in a sum
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certain, the adjustment or interpretation of contract terms, or other relief arising under or relating
to the contract."
Whenever there is a delay, disruption, or a change in circumstances in the scope of the work, there
is bound to be an effect on expenditure or income, either for the contractor or for the employer, or
both. Subcontractors may also be affected. In some cases, the risk is borne by the contractor (or
subcontractor), and in others, it may be borne by the employer. Where there is a breach of contract,
or where there is a contractual provision to claim loss or damage, one party may have a claim
against the other. (Thomas, 1993).
Claim means simply a request, demand, application for payment or notification of presumed
entitlement to which the contractor, rightly or wrongly at that stage, considers himself entitled and
in respect of which agreement has not yet been reached. (Hughes & Barber, 1992).
A claim is an assertion of a right to property, money, or a remedy (ERA's Claims Manual).
During the contract's execution, one party might request for compensation or any entitlement
persuading to the contract condition, regulations, and related laws from another party due to his
fault or breach of an agreement or the clauses that bond in the relevant legal documents.
2.6.2 Major causes of claims

There have been considerable researches undertaken to determine the causes of claims in the
construction industry. A literature review has been conducted in order to overview the causes of
construction claims during the execution of a contract, and the following lists are general
circumstances that often cause claims in categories:
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Table 2: Causes of claim

Owner caused Consultant Contractor Contract Third-party Caused by Due to Force
caused caused documents caused differing majeure
caused conditions
Changes in design Lack of
and specification expertise in Conflict b/n
schedule Non-compliance design and Change in Site security
management with specifications specification legislation Landslides problem
Delay in Non-adherence Inadequate
Failure to Provide
approval of with site scheduling Obstructions by Severe weather War and
Adequate Funding
quality control instruction clauses local people condition hostilities
Responsibilities Pandemic or
Failure to Give
of individual Epidemic
Adequate and
Change in parties vaguely
Timely Access to
Late instruction construction specified (risk Shortage of
the Work Site
to contractors methods allocation) Labour strike suitable quarry
Failure to Grant
Time Extensions On-site
for Excusable coordination
Delays problems Lack of expertise
Delaying Inadequate Non-updating of
Decisions record-keeping schedule
Shortage and
problem on
delivery of Delay in
materials completion time
Noncompliance to
permit
requirements
Inadequate site
investigation
before bidding
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In addition to the above-stated categories of claim causes, potential contract claims can arise within
the systems of external factors like weather, market and politics, contract, and project management
teams. The interaction shown in Figure1 illustrates the many interacting potential sources of claims
in construction scenarios. Contract claim or conflicts can arise both within systems such as A, B,
and C, as well as at the interfaces of such source systems such as D, E, F, and G. Analyzing further,
claim or conflict may be discerned with and between subsystems like B1 to B4 and C1 to C4.
(Mohan M. Kumaraswamy, 1997).
Political,
Weather
Markets etc.
External
Factors
A
D E
G
B C
Contract F Project
Teams
BOQ and method Client

Of Measurement C1
B1
Drawing Specifica- Consult- Project

B2 tions ant Manager
B4 C2 C4
Conditions of Contract Contractor

B4 C3
eg Payment Terms eg Joint Ventures

Selection Methods Sub-contractors
Management Structure
Figure 2: Potential source of contract claim Source: Conflicts, claims and disputes in
construction
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2.6.3 Impacts of claims

Construction claims are almost inevitable in the construction project. Nowadays, the substantially
increasing volume of claims is the result of the rising complexity of the projects, the price structure
of the construction industry, and the legal approach taken by a lot of owners and contractors.
Contractual claims have such high impacts on the projects' cost and time that the contractors should
establish effective claim management in their organizations. Several researches show the impacts
that happen due to claims. Some of these impacts are:
 Claims require significant time and resources to resolve and cause adversarial among the
parties involved.
 Claims appear to hinder the completion of construction and cause delays in delivering
projects.
 Claims cause strained relationships of parties, stalemates, disputes, that may result in
litigious and arbitral action of the parties, for resolution in contract causing personnel waste
of time preparing for and participating in litigation or Alternative dispute resolution
(ADR).
 They generally produce a "paper war" that can destroy personal relationships on the project.
 Inefficient project delivery in terms of cost, time, and quality
 Claims affect the project's overall budget significantly, which results in increased costs
and loss of control over the outcome.
2.6.4 Things to be considered while preparing a claim

Typically, an act of prevention by the Employer/ his agents or an event outside the contractor's
control are events that provide the need for claim. However, it is sensible to consider certain
matters before proceeding to submit a claim. Some of these are:
1. The likely outcome and seriousness of the event. Will it have a serious enough impact on the
claimant to justify the submission of a claim?
2. The value of the claim. Obviously, the ends must justify the means here, and if it costs a
significant amount to prepare a claim for a small return, it may make little economic sense to
pursue the action.
3. The strength of the claim and its chances of success. Are the odds of success great enough to
justify the effort and expense?
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4. The strategy should also consider how the claim is to be pitched. In general terms, it is
improbable that the claimant will receive the full value of his claim submission, so it is wise
to include a negotiation margin.
5. Some claims are complicated in their very nature. If this is the case, they require a certain
amount of knowledge and experience to prepare.
6. Client relationships should be considered. Claims are inevitably viewed negatively by the
respondent. At best, the person responsible for reviewing the claim and making a determination
will consider another task to include in his already busy working schedule as an inconvenience,
and at worst, the claim will be viewed as an attempt by the 'greedy and unscrupulous' contractor
to maximize his returns.
7. The parties who are likely to make the determination should also be considered. Will they be
difficult to persuade? Do they have a responsibility to protect the employer's interests or to be
impartial?
2.6.5 Classification of Claim
 According to (Chappell, 1984), (Alkass & Harris, 1991), and (Hughes & Barber, 1992)
classified claims into three major types:
Contractual claims are the claims that fall within the contract's specific clauses, typically ground
conditions, valuation, variations, late issue of information, and delay in inspecting finished work.
Extra-contractual claims- This type of claim has no specific grounds within the contract but is a
result of a breach of contract, which may be express or implied. An example of an extra-contractual
claim is the extra work incurred as a result of defective material supplied by the employer.
Ex-gratia claims- are the claims that there is no ground existing in the contract or
the law, but the contractor believes that he has moral grounds. Such claims depend upon ex-gratia
or kindness payments by the employer made in the particular circumstances; sometimes-such
payments are made to avoid or terminate claims negotiations or disputes. It might also be made to
recover the cost incurred by the contractor.
 (Adrian, 1988), classifies claim into four major groups as:
Delay Claim- is a claim for the total project overrun, calculated by comparing the actual
completion date with the planned completion date, where there has been no discrete causal link
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established between the delay claimed and the individual employer's risk (ERE) relied upon. Delay
claims often rely on specialist terminology and require the review and consideration of multiple
documents, including specifications, drawings, change orders, notices, and job correspondence.
Scope of work claim- are widespread problems and represent the most common issue, perhaps
75-90% of all construction claims and disputes are caused by this problem. Scope of work is a
foundation for delay, acceleration, disruption, payment, and many other types of claims; virtually
all claims start with scope of work.
Acceleration claim- Constructive acceleration can arise when an excusable delay occurs that
entitles the contractor to a time extension and where the owner has knowledge of that potential
time extension. If the owner then fails to grant the time extension or unreasonably delays granting
of the time extension, a contractor may be entitled to acceleration costs that he/she incurs upon the
performance of acceleration measures to complete on time. Because an owner may not always
know of a delay, contractors should notify the owner of all delays and any action on the owner's
part that the contractor considers an acceleration order, implicit or otherwise.
Changing site condition claim- occur when the conditions of the construction materials at the
project site differ from existed at the time of contracting or as represented in the contract
documents. Some of the most common claim types involve subsurface conditions, such as
unforeseen underground obstructions or unforeseen rock or water conditions, soil type conditions,
etc.
According to research done by (Abdissa, 2003) on the topic Claims in Ethiopian Construction
Industry, claims can be categorizes based on their legal bases into five, on which a claim may be
made in law; these are:
 Under contract condition
 For breach of contract
 Claims in tort
 On a quasi-contractual or restitionary basis, often called a quantum merit claim.
 Ex –gratia claim.
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Claims can also be classified based on their objectives, which are of two basic types.
(A) Claim for extra time to complete the contract, and
(B) Claim for cost compensation arising out of the contract
A. Extensions of time claims
All modern building and engineering contracts contain provisions for extensions of time in the
event of a delay. The nature of the work and the environment in which the work is carried out is
such that it is almost inevitable that events and circumstances will cause completion of the work
to be delayed beyond the original completion date. It should be clearly understood that an extension
of time merely enables the contractor to have more time to complete the works and the employer
to preserve his rights to liquidated damages.
An extension of time awarded for a cause of delay, which appears to have a financial implication
(delay within the control of the employer) does not necessarily lead to an entitlement to an
additional payment. If the contractor is, himself, also in delay, then the additional costs arising out
of the extended period to execute the works may (in total or in part) have to be borne by the
contractor, On the other hand, an extension of time awarded for neutral events (for example
adverse weather conditions) will not necessarily deprive the contractor of a claim for additional
payment.
In any claim for an extension of time, and whether or not there is a requirement to give details and
particulars, it is good practice to include the following:
 A description of the cause of delay and the contractual provision which is being relied upon
for the extension;
 The date when the delay commenced and the period of delay (giving details of intermittent
effects if appropriate);
 The date of notice of delay, specifying the reference of the relevant document;
 A summary of records and particulars relied upon (with copies included in an appendix);
 A narrative of the events and effects on progress;
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 A diagrammatic illustration showing the status of the programme, progress, and current
completion date prior to the commencement of the delay
Claims for extensions of time probably cause more disputes than any other contractual or technical
issues. Major obstacles to prompt settlement of claims for extensions of time claims are:
 Late, insufficient or total lack of notice of delay on the part of the contractor;
 Failure to recognize delay at the appropriate time and maintain contemporary

records;
 Failure to regularly update the programme so that the effects of delay can be
monitored against a meaningful programme of the day;
 Poor presentation of the claim to show how the progress of the work has been
delayed;
 The probability that the cause of the delay will reflect on the performance (or lack
of it) on the part of the employer's professional advisers;
 Pressure, on the part of the employer, to complete on time, irrespective of delays

that occur.
B. Claim for cost compensation.
The right to claim additional costs/losses and expenses have to be explicitly provided for, either in
the contract or in the governing law. Normally, this would require the contractor to submit a claim
for "Variations" and/or "Value Engineering" to change the works, invoking a change in works due
to "unforeseen circumstances". Sub-Clause 13.7 of the FIDIC Red Book (1999), for example,
provides that adjustment to the price may be made in limited circumstances in case of an increase
in labor, goods, and other inputs. Sub-Clauses 13.1 to 13.3 of the FIDIC Red Book (1999) further
list the procedures for Variations and Value Engineering, which may give rise to time and cost
entitlements as well. Another way to raise a claim for additional costs/losses and expenses could
be invoking a "change in law" if this is provided for under the contract. For example, Sub-Clause
13.6 of the FIDIC Emerald Book 2017 and Sub-Clause 13.6 of the FIDIC Silver Book 2017 both
provide that if a contractor suffers delay and incurs additional costs as a result of any change in
law, it may raise a claim for additional costs as per Sub-Clause 20.2.
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Under the GCC(General Condition of Contract) clause 69 [claim for additional payment] sub-
clause 69.1 circumstances which the contractor considers himself to additional payment, the
contractor shall:
(a) if he intends to make any claim for additional payment, give to the Engineer notice of his
intention or make such claim within 15 days after the said circumstances become known to
the Contractor, stating the reason for his claim; and
(b) submit full and detailed particulars of his claim as soon as it is reasonably practicable, but no
later than 60 days after the date of such notice, unless otherwise agreed by the engineer. In
case the engineer agrees to another deadline than the said 60 days, the agreed-upon deadline
will, in any event, require that such particulars shall be submitted no later than the date of
submission of the draft final statement of account. The contractor shall thereafter promptly
submit such further particulars as the engineer may reasonably require assessing the validity
of the claim.
When the engineer has received, the full and detailed particulars of the contractor claim that he
required shall without prejudice of GCC clause 44.4. After the engineer determines whether the
contractor is entitled to the additional payment and notify the parties accordingly, the engineer
may reject any claim for additional payment that does not comply with GCC clauses' requirement.
2.6.6 Process of Claim Management

The claim process generally classified into the following three parts
A. Claim Submittal
B. Claim Processing
C. Claim Enforcement
A. Claim Submittal
It is a process by which the claimant is obliged to claim within a reasonable period (28-30 days in
most contracts) followed by the claimant's preparation for all substantial documents & legal
aspects supporting its entitlements for an official submittal. This constituted that a claim has been
filed for its consideration if all the three sub-processes called Claim Notification, Claim
Preparation & Claim Submittal are fully undertaken by the claimant.
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Formal claim submission
If individual claims are dealt with and settled promptly, a formal submission setting out the
contractual basis and detailed analysis of the contractor's rights and entitlements will not be
necessary. However, if the settlement is not reached on these claims, the contractor is faced with
preparing a document, which, it is hoped, will lead to an amicable settlement at the earliest possible
time (Thomas, 1993). This type of claim submission may take a form almost approaching
pleadings for arbitration. Some contractors spend considerable time and effort in negotiations,
which fail because of the lack of a sound, comprehensive and persuasive submission which sets
out the contractor's claim and the basis upon which the claim is made. The sooner a formal
submission is made, the earlier a settlement can be reached, or proceedings can commence. A
formal claim submission will include:
 Introduction: contract particulars; names of the parties; description of the works; details
of tender and acceptance; the form of contract and any amendments thereto; the contract
sum; dates for commencement and completion; phased completion (if applicable);
liquidated damages for delay; the programme.
 Summary of facts: Date of commencement and practical completion; dates of sectional or

partial completion (if applicable); summary of applications for extensions of time;
extensions of time awarded; summary of claims submitted.
 Basis of claim: Contract provisions relied upon; common law provisions; contractual
analysis and explanation of the basis of the claim.
 Details of claim: Full details of every matter which is the subject of the claim. Each
separate issue should be carefully set out in a logical format. Key dates, events, causes and
effects, references to relevant documents, and the like should form the basis of a narrative,
which fully describes the history of the project and the effects on progress, cost, and
completion.
 Evaluation of claim: Each head of claim should be calculated, step by step, with
explanations and reasons for the methods adopted. Supporting source documents should
be given in an appendix, or listed, so that the recipient may examine such documents at the
contractor's office when considering the claim.
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 Statement of claim: A brief statement setting out the claimant's alleged entitlements and
relief sought, such as extensions of time; sums claimed; repayment of liquidated and
ascertained damages (if applicable).
 Appendices: Copies of all documents referred to in the claim; programmes; diagrams:

schedules; financial data.
B. Claim Processing
This phase is classified further into the following three sub-processes,
 The Claim Handling: This sub-process initiates checking of the claim whether it is legally
or contractually supported or not, documents provided are valid and reliable to substantiate
the claim for consideration or not, and overall procedural requirements have been followed
or not. After verifying the validity of the claim, proper computations & evaluations will be
carried out to present the proposed compensation for the contractual parties the claim is
applicable to.
 Dispute Resolution: The contractual parties will pass through different dispute resolution
systems depending on their acceptance over the proposed compensation varying from the
simplest mediation by the consulting engineer to the final court ruling in the form of
litigation.
 Claim Approval - Once the contractual parties agree on the claim process's outcome, they
have reached a stage where the claim is approved.
C. Claim Enforcement
This phase is sub-divided into the following two sub-processes.

 Claim Enforcement - The claim enforcement sub-process will entertain the approved
claim's inclusion into payment certificates where their enforcement is due.
 Claim Closure - Once this compensation or entitlement is due in accordance with the
approved claim and its enforcement requirements, it is then concluded for its closure.
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3.7 Delay Analysis Techniques/ methods

3.7.1 What is Delay?
Delay is one of the common and typical problems in a construction project. The standard definition
of construction delay is "the time overrun either beyond completion date specified in a contract or
beyond the date that the parties agreed upon for delivery of a project" (Assaf & Al-Hejji, 2006). A
construction delay is recognized when a project completes or is forecasted to complete beyond the
contract completion milestone or a significant interim contract milestone date specified in the
project schedule. (Levin, 2016) When an event occurs that delays a significant contract milestone,
the contractor and owner must determine what type of delay has been encountered. Firstly, risk
events can be at either the employer's risk (ERE) where an event, circumstance or cause which,
under the terms of a contract (or by subsequent determination of a formal tribunal), or contractor's
risk( CRE) where an event, circumstance or cause which, under the terms of a contract (or as later
formally determined).
However, the process of establishing and proving a delay claim can get complicated quickly. That
is why it's so critical to review the clauses in your contract related to delay claims and disruption
claims. These clauses will determine which types of delays and disruptions are excusable and
inexcusable. Once that is established, be sure to the clauses detail if and when a party will be
entitled to an increase in the contract price or an extension of time.
3.7.2 How do you Classify Construction Delay Claims?

The main types of schedule delays on a construction project are:
 Critical vs. Non-Critical
A critical delay is one that will affect the project completion date (or some other important
milestone date on a project). Critical delays cannot be made up – they just tack on extra time.
Whereas Non-critical delays will affect the completion of specific activities, but not the completion
date or the date of some important milestone (Keane & Caletka, 2015)
 Excusable vs. Inexcusable
An excusable delay event caused by an employer risk event which prolongs planned completion
(whether that date is earlier, or later, then the contractual date for completion) (Keane & Caletka,
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2015) These events may result from an owner-generated issue, such as changes to the construction
documents, extensive approval process, differing site condition, and prolonged adverse weather.
(i.e., Because these delays are out of the contractor's control. The common excusable delays
should be outlined in your contract. The most natural example of excusable delays is when a delay
falls under a force majeure clause – events such as natural disasters or terrorist attacks.)
Whereas Inexcusable a delay event caused by a contractor risk event, which could have been
prevented, or was a result of a breach of contract or contractor's negligence, (Keane & Caletka,
2015) this type of delay does not warrant a time extension or additional compensation from the
owner. In addition to the extra costs required to fund, staff, and manage the project, the contract
may include a liquidated damages clause.
(i.e., If this is the case, then the contractor will be liable for any costs or damages caused by the
delay. This can be a result of delayed mobilization, late submissions, failure to obtain permits, or
general poor planning on behalf of the contractor.
 Compensable vs. Non-compensable
When a delay is "compensable," that means the delay is the one where damages, in the form of
direct time-related costs, as well as indirect time-related costs (site or head-office overheads), are
recoverable under the contract. (Keane & Caletka, 2015) Compensable delays stem from issues
outside the contractor's control that typically result from the owner's actions, a representative of
the owner, or a third party within the owner's control.
Whereas non-compensable delay is described as a period during which a critical delay event is
experienced which is a contractor risk event, not expressly identified as being recoverable under
the contract terms and conditions. These delays are determined to be either parties' fault
(concurrent delay) or neither party. non-compensable delays are typically weather-related or force
majeure events. (Keane & Caletka, 2015)
(i.e., All excusable delays are compensable. Meaning, any time a delay is considered
"excusable," the contractor will generally have a claim for a time extension, compensation, or
both).
According to research done by Alena Vasilyeva-Lyulina on title delay analysis for construction
projects, delays can be classified into four groups depending on their origin:
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1- Excusable compensable – caused by the owner.
2- Excusable but not compensable – neither contractor's nor owners caused (force majeure).
3- Neither excusable nor compensable – caused by the contractor or its subcontractor.
4- Concurrent delay - caused by multiple factors.
Delay analysis (DA) is an investigation into what has caused the project to run late and who is
responsible for the delay events; where this analysis is performed in three steps:
Step1- Investigation- is aimed to identify all delay events and parties responsible for them. In start
with database-relevant project records, then analyzing collected data, linking facts, aggregating,
and filtering results are graphed using Bichat, tables histograms, etc.
Step2- description (analysis of facts) describing and analyzing collected information to identify
the responsible party, draw a conclusion, and prepare a case presentation.
Step3- presentation of the case one is seeking to prove.
There are many papers devoted to describing the different types of delay analysis techniques;
presented and discussed the various delay analysis techniques that at the time were deployed by
practitioners in the industry (Alkass, Mark, & Frank, 1996). The techniques identified were global
impact technique, net impact technique, adjusted as-built CPM technique, 'but for' or collapsing
technique, snapshot technique, time impact technique, and a new DAT developed in that research
called Isolated Delay Type (IDT).
(Stumpf, 2000) classifies these techniques into four major groups, and those are as-planned vs. as-
built, impacted as planned, collapsed as-built, contemporaneous period analysis (snapshot,
window analysis).
In 2017, the Society of Civil Law(SCL) (SCL delay and disruption protocol, 2017) intended to
provide a simple guideline to the process of dealing with time-related claims and to avoid potential
disputes in the project, published a protocol. The protocol discusses the implementation of six of
the mentioned techniques, which are as-planned versus as-built, impacted as-planned, collapsed
as-built, Time slice windows analysis, Retrospective longest path analysis, and Time Impact
Analysis (TIA). SCL categorizes the techniques as either being prospective or retrospective.
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If the contract requires that extension of time, entitlement can be established based on the 'likely
delay' to completion caused by an event. In that case, methods of prospective analysis, which
project 'what-if' scenarios of how the works might have been delayed, may be used. If the contract
terms state that the extension of time entitlement must be established by events which 'have caused
delay' to completion, then a form of retrospective analysis relying on an as-built programmed of
some sort is likely to be most appropriate so that the delay will have a basis rather than prospective
CPM calculations (Keane & Caletka, 2015).
Global Impact Method - Planned schedule (not necessary based on critical path methods), list
of delay events caused by one party (owner, for example) with known durations. The procedure
includes the owner-caused delay periods that are simply added to the end of the planned
completion date, and then the actual completion date is compared with a calculated date. If the
latter is equal to or later than the actual completion date, the contractor is entitled to a full extension
of time.
Net Impact Method: This method is the same as the Global Impact Method with considering the
issue of concurrency of delays. Requires a planned schedule and a list of delay events caused by
one party. If two or more listed events happened at the same time, only the longest one is
considered. The procedure is the same as Global Impact Method.
As-Planned Impacted: Identified delay event(s) are added into the As-Planned program (or
baseline) in chronological order, and then the project completion date is reanalyzed until all the
delays have been impacted.
As-Planned but for: A set of delay events related to one party is added into the planned baseline
program, and then the impacted completion date is compared with the as-built completion date.
And the difference is said to be how much earlier the project could have finished but for all other
events (imposed by the other party) but which have not been analyzed.
As-Built but for- Similar to As-planned approach but in reverse. The As-Planned Impact analysis
adds excusable delay into the As-Planned schedule, while the but-for analysis subtracts excusable
delay from the As-built program. The difference in overall program duration before and after this
subtraction is said to represent the period of critical delay by the particular delay events removed.
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As-Planned Versus As-Built- This methodology simply compares the original CPM activities
(critical path method) or non-CMP baseline schedule with those of the As-Built schedule for a
detailed assessment of the delay that occurred.
Window/Snapshot/Time slice/Contemporary period analysis- Follows the same basic

philosophy to that of As-Planned versus As-Built method. Overall project duration is divided into
periods or "windows" to make the analysis more incremental. The delay analysis begins by
updating the schedule within the first window using As-Built information, including all the delays
encountered in that period, whereas maintaining the remaining As-Planned schedule beyond this
window.
Time Impact Analysis- This method is a combination of the Window technique and As-Planned
Impact method. It concentrates on delay events and applies them to an as-planned model window
by window. The major distinction between the Window/Snapshot and the Time Impact Analysis
is that the former is a retrospective analysis, and the latter is a prospective analysis.
The advantages and disadvantages of the above techniques are summarized in the table below
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Table 3: Advantages and Disadvantages of delay analysis techniques

Delay analysis Advantages Disadvantages
techniques
Easy to understand. Produces theoretical results based on a hypothetical
question
Can be carried out contemporaneously Labour intensive
Can be used to show the potential delaying effect of Technically complex.
Impacted As-
the owner's delay, or contractor's delay, or both
planed
together
Can be used for what-if analysis to predict possible Requires all information's to be analyzed at once.
delays.
Does not require an as-built programme Different conclusions can be drawn if the delay events
are added to the planned program in a different order.
Time Impact Methods are dealing with changes in project planning As each "window" must be updated regularly,
analysis and execution complete detailed records are needed.
It can be used during the currency of the work as well Choosing the impact period is subjective
as for retrospective analysis.
Consequential delays, concurrency, criticality, and Its complexity.
acceleration are taken into account.
The scarcity of activity in each" window "makes
analysis easier and results more convincing.
Intuitive and easy to understand. An as-built programme is required.
Does not require frequently updated progress As-built sequence must relate to as-planned sequence
As-planned versus schedules for activity level variance method
as-built Does not require progress updates Require analyst to deduce the as-built critical path
absent monthly progress updates.
Can isolate the impact of Employer delay event(EDE) Failure to consider changes in the critical path and
from Contractor delay event(CDE). inability to deal with complex delay situations.
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Relies on as-built programme Constructing as-built is subjective.

Does not require a baseline programme Reconstructing sufficiently detailed as-built is
laborious
Collapsed as-built Does not require progress updates. Do not calculate delay based on the contractor's
contemporaneous intentions, 'at the time'.
Can isolate the impact of EDE from CDE( when Requires many subjective assumptions when
iterative applications are applied). recreating the CAB as-built model for analysis
Cannot identify as-built(contemporaneous) critical
path.
No need to consider the actual progress of works (only Requires an accurate and realistic As-planned
completion date). program.
It can be used to show delaying effects for different Requires all information's to be analyzed at one time.
As-planned but for
types of delay. It is a theoretical investigation.
Drawn conclusions are different depending on the
perspective of analysis.
Mainly this method is dealing with changes in project Activities should be performed in proper and logical
planning and execution sequences; if not, it may be necessary to revise the
program logic and return the but-for simulation.
As-built but for
It is a theoretical investigation, and both parties can
produce an analysis in which delays are ascribed to
cause which suits their preferred case.
Allows identification of multiple critical paths. Properly updated progress programmes required.
Conclusions are readily supported by as-built records. Require a reasonable level of planning expertise.
Contemporaneous/
Windows analysis
Can identify both loss and gains achieved between Early programmes may contain logical errors which
progress updates. were corrected in later contractor prepared updates.
Can identify concurrency in the period work was

actually carried out.
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Which method is appropriate, correct, and suitable? To decide which method should be used,
several points should be taken into consideration based on a journal published by Ahmed Fouad
Sedky(2017) on the topic Selecting the best DAT:
 The legal and contractual requirements. What does the jurisdiction or contract require? Is
the delay analysis technique specified? Is the contract silent regarding concurrency? Is the
float owner specified in the contract, or the contract is silent on the issue?
 What is the information available regarding the project? Is the delay a fact, or is it a
forecasted delay? Is there an approved baseline schedule? Are there frequent updates, and
are they approved? Is the as‐built information available? The lack of information can
preclude the use of some of the methods.
 The time and/or money available to carry out the analysis can also determine which method
to use. For example, if the as-built data is not available and it needs to be recreated, this
will require time and cost money, which if not available would mean that some techniques
will be excluded. That is why record-keeping during the project lifetime is so important.
When the project ends, the staff who worked on the project could either not help recreate
the records, or if available and the project was of long duration, the staff may forget
unrecorded details and records.
 Other issues that can impact selecting a method can include the type of project under
analysis, the party preparing the claim (is it the contractor or the client?), and the stage of
the dispute (is the delay analysis performed at the beginning of the project or during
execution or after completion?).
The above delay analysis techniques are best used when:
 Impacted as planned is best used at the beginning of the project.
 Time impact analysis is best used during the course of the project but requires realistic
updates (not political updates) and a correct forecast for future work. Political updates are
those that don't reflect the real forecast for the job; they are affected by project politics.
 Windows analysis is best used during the course of the project, but all changes to logic
and structure have to be agreed to by the other party (the engineer).
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 As-built vs. as-planned is best used at the end of the project and when there is not enough
time or money to do a detailed analysis (note that it does not give accurate results in
complex projects).
 Collapsed as-built is best used at the end of the project, when there is detailed as-built
information and enough time and money to do a thorough analysis. The reconstructed
links and the actual critical path is usually debatable between the parties.
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CHAPTER THREE: Research Design And Methodology

3.1 Approach
This research is basically of a qualitative research type method is employed. There are two types
of researches i.e. qualitative and quantitative research, where the division is based on how the
research objectives can be met. Quantitative research is an inquiry into a social problem; it explains
phenomena by gathering numerical data that are analyzed using mathematically based methods
(Gunderson & Aliaga, 2002). Whereas Qualitative research is an umbrella term for an array of
attitudes towards and strategies for conducting inquiries that are aimed at discovering how human
beings understand, experience, interpret, and produce the social world. (Sandelowski, 2004).
This research mainly focuses on reviewing critical literature and emphasizing the major types of
claim clauses and how they can be addressed under each condition of contracts like the FIDIC,
MoWUD, and PPA.
3.2 Study area

This study focuses on the main types of claims and how they are addressed under contract
conditions that are practiced in Ethiopia, considerations while requesting claims for extra time or
cost compensation, effects of a pandemic on the construction sectors, and clauses that can protect
either party from a claim.
3.3 Source of the data

Secondary data is data from studies, surveys, or experiments that have been run by other people or
for other researches. For the case of this paper, we have gathered information and data from other
research, reviewed literature, journals, and past proposals. Archival documents, correspondences,
and other related documents have been reviewed to understand the background of contractual
claims, delay analysis methods, and different claims that will arise due to the global pandemic that
is affecting the whole world, which may lead to a dispute in public construction works.
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3.4 Limitations
The major limitation faced while preparing this thesis was the covid-19(coronavirus) which makes
it difficult and impossible to gather data from primary sources because the nature of this disease
does not allow people to meet and take interviews or give questionnaires. The country was under
lockdown while preparing this paper; therefore, it was difficult to meet with our advisors.
The major political instability and security problems faced in the country is one of the problems,
which makes it difficult to gather information because internet blackouts were happening for
months.
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CHAPTER FOUR:Claims That May Arise Due To

Pandemic
The sudden appearance of Coronavirus disease in 2019 was firstly reported in Wuhan city in China,
which is caused by severe acute respiratory syndrome. The disease is infectious and has been
spreading drastically all over the world and considered by the World Health Organization (WHO)
as a pandemic (WHO, 2020).
The COVID 19 pandemic has had far-reaching, very severe consequences since it has spread to all
the countries. The economy, in general, faces a direct impact in the mid of the COVID 19 outbreak.
Many countries face recession and economic downturn. All the business activities have been shut
down unless it falls under the essential categories as necessary supplies and medical sectors, in
addition to a few vital projects, which are necessary to support the health system and safety of the
people. Relatively, it has limited the business around the world, and companies have shifted to
work Work-From-Home (WFH) concept remotely to accommodate and run the business and
services.
However, in the construction industry, all the workers and technical engineers need to nearly work
on-site either to perform activities or to monitor the work is done correctly. The construction
industry is far different from other sectors.
During the pandemic, the situation drastically deteriorated by firstly shortage of construction
material supply, which then impacted the construction industry. Following the spread of the virus,
many countries started implementing several measures to reduce people's movement, which has
mainly obstructed the construction because it requires on-site work, and every project member
must be available to work, check, and monitor all the work activities.
Construction industry members, including owners, developers, contractors, subcontractors, and

supply chain vendors, have experienced varying degrees of impacts as a result of the COVID-19
pandemic. The nature of the impacts and extent of the ramifications are in large part dependent
upon the location of both the respective businesses and underlying projects. Direct impacts have
ranged from a slowdown of available goods and labor through to suspensions and, in some
instances, terminations of parties or entire projects. Construction activities remain in flux in some
states and cities depending upon whether construction is classified as an essential business.
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Currently, most construction activities have been designated as essential or allowable business
services in Ethiopia. However, this situation is liable to change due to the public health crisis's
rapidly evolving nature. As construction continues under these conditions, project participants
must deal with a host of specific COVID-19-related challenges: like
 Supplier delivery issues;
 Worker absenteeism due to illness;
 Delayed issuance of permits;
 Travel restrictions, and
 Lost time or inefficiencies due to the need to practice social distancing on the job
site.
Therefore, contractors might also be compelled to find other suppliers of goods and materials,
which might cause the contractor to incur additional costs for performing the works under the
contract. It is also likely that the work's performance will be impacted as the workforce is affected
by quarantines, self-isolation, and infection, which might cause additional delays and disruption
to the project.
For this reason, construction projects are likely to be subject to delays, which will give rise to
potential claims by employers for liquidated damages on the one hand, and claims for extension
of time and additional compensation by the contractor on the other.
Therefore, now is the time to pull out your contract (contractors and project owners alike) and
consider how the contract's delay, time extension, or force majeure clauses, as well as other
contract clauses and legal theories, allocate this unusual risk between the parties.
For this reason, different authors and reports currently transcribed suggest a number of claims and
grounds for relief that might become relevant due to the possible impact of the coronavirus. A vital
issue in this regard are:
 The concept of force majeure
 Extension of time claims
 Escalation clauses
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 Loss of Productivity Claims
 Notice provisions
 Insurance requirements
 Termination clauses
 Liquidated damages clause
 Delay and disruption damages
4.1 The Concept of Force Majeure

The term "force majeure" is French for "superior or irresistible force." In US common and civil
law, the term commonly refers to natural and unavoidable catastrophes that affect contract
performance. (Walker, 2020)
Force majeure is a civil law concept and has no defined meaning at common law; it is normally
used to describe a situation in which a party may cancel or suspend performance of a contract, or
obtain an extension of time for performance, following the occurrence of a specified event that is
outside that party's control. (ICLG.com, 2020)
Force majeure is an event that is not foreseeable and cannot be controlled by the party that is
prevented from performing its contractual obligations due to the force majeure event.
(ROSCHIER, 2020)
Force majeure generally covers any occurrences that were:
(a) Not reasonably foreseeable at the time of contracting
(b) Beyond the control of the parties,
(c) Not caused or compounded by negligence.
Consequently, when one of these events occurs, performance will either be suspended or excused
depending on the contract terms and the duration of the disruption.
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4.1.1 Is Covid-19 a Force Majeure Event?
Force majeure may include events such as war, terrorism, earthquakes, hurricanes, acts of
government, plagues, or epidemics. Where the term epidemic, or pandemic, has been used, that
will cover Covid-19. For example, contracts might refer to events or circumstances "beyond the
parties' reasonable control." Determining whether this covers issues arising from Covid-19 is a
question of interpretation and is fact-specific.
Generally, a force majeure event may exist if the event is unforeseeable and outside the contractor's
control; COVID-19 certainly seems to be that. However, whether a court or arbitration panel agrees
with that general assessment will be revealed only as claims for relief are resolved or otherwise
work their way through the courts and formal dispute procedures.
4.1.2 Force Majeure Clauses
Force majeure clauses are contractual clauses, which alter parties' obligations and/or liabilities
under a contract when an extraordinary event or circumstance beyond their control prevents one
or all of them from fulfilling those obligations.
Typical force majeure clauses apply to events such as strikes, lockouts, fires, extreme weather
conditions, or other circumstances beyond the contractor's reasonable control. Whether an
outbreak situation may also be captured by a force majeure clause largely depends on the
wording of the specific clause in question and whether the circumstances of the outbreak can be
said to be truly "unexpected" and "beyond reasonable human foresight and skill."
Depending on their drafting, such clauses may have a variety of consequences, including:
i. Excusing the affected party from performing the contract in whole or in part.
ii. Excusing that party from delay in performance, entitling them to suspend or claim an
extension of time for performance.
iii. Giving that party a right to terminate.
In a construction project, invoking force majeure might entitle the contractor to an extension of
time and can be invoked as a defence against the employer's claim for liquidated damages.
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Parties seeking to rely on a force majeure clause should follow the following practical steps:
 Consider in detail the precise wording of the force majeure clause, the contract as
a whole, and the circumstances that have arisen;
 Explore alternative means of performing, reducing delay, or minimizing any loss

to the other party;
 Serve any notices as required under the contract, as soon as possible and in
accordance with the notice provisions;
 Do not attempt to rely on increased costs to excuse non-performance or delay, as

this will not usually be sufficient;
 Keep a documentary record, particularly of: why performance was impossible,

hindered, or delayed;
 Delayed as the case may be; the steps taken to find alternatives and mitigate loss,
and the service of any notices;
 Consider other routes and remedies, either under the contract or through agreeing
on binding variations to contracts with other parties.
4.1.3 Force Majeure in Standard Forms of Contract

International form contract documents also address force majeure:
Under FIDIC
The FIDIC Contract includes a Force majeure Clauses; for Example, Clause 19 of the 1999 FIDIC
Red Book, the 2017 FIDIC Contracts refer to "Exceptional events" rather than Force Majeure
events, but the principle is essentially the same.
"Force Majeure" is defined at clause 19 of the 1999 FIDIC Red Book as an exceptional event or
circumstance:
1. which is beyond a party's control;
2. which such party could not reasonably have provided against before entering into the contract;
3. which such a contractual party could not reasonably have avoided or overcome;
4. Which is not substantially attributed to the other party.
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Clause 19.1- also sets out a non-exhaustive list of events, which may constitute Force Majeure,
provided that any such events also meet the condition set out above. These events include war,
hostilities, strikes or lockouts by a person other than the contractor's personnel, and natural
catastrophes such as earthquakes. However, in principle, any event or circumstance can constitute
a Force Majeure if the general tests are met.
Clause 19.2- the party that is or will be prevented from performing its obligation must give notice
within 14 days of the date when the party becomes aware, or should have become aware, of the
relevant event or circumstance constituting Force Majeure. That notice must specify:
i. The event or circumstance constituting Force Majeure and
ii. The obligation, which it is, or will be prevented from performing.
The 2017 edition FIDIC contracts remove specific reference to the term "force majeure" and
replace it with "exceptional event." Although the provision itself remains similar (but not identical)
to the 1999 edition, its retitling emphasizes that a force majeure event must be "exceptional," not
just unusual.
Provided that the contractor Complies with the notice Requirement set out above, it will be entitled
to an extension of time and payment of additional cost. Either party may also terminate the contract
on notice if Force Majeure events subsist of a continuous period of 84 days or multiple periods
totaling 140 days.
Under FPPA
The FPPA 2011 contract includes a Force majeure Clause under GCC Clause 18.1 define force
majeure as for the Contract, "Force Majeure" shall mean an event or events which are beyond the
reasonable control of a Contractor, and which makes a Contractor's performance of its obligations
hereunder impossible or so impractical as reasonably to be considered impossible in the
circumstances, and includes:
(a) An official prohibition preventing the performance of a contract,

(b) A natural catastrophe such as an earthquake, fire, explosion, storm, floods, or other
adverse weather conditions, or
(c) International or civil war, or
(d) Other instances of Force Majeure were identified as such by the civil code.
39 | P a g e
Under clause 18.2 of the GCC considers strike or lockout taking to party, increase or reduction in
the price of raw material, enactment of new legislation and any event which is caused by
negligence or international action of a contractor /sub-contractor/agent/employee as not to be
considered as a force majeure event. The failure of a Contractor to fulfill any of its obligations
shall not be considered to be a breach of or default under the Contract insofar as such inability
arises from an event of Force Majeure, provided that the Contractor affected by such an event has
taken all reasonable precautions.
The party that is affected by an event of force majeure shall take all reasonable measures to remove
party instability to fulfill with a minimum of delay or minimize the consequence of the event. After
when this event happens, the contractor shall notify the public body of such event as soon as
possible, not more than 14 days during the period of inability to carry out the work as a result of
this event. Upon instruction by the public body, the contractor shall demobilize or continue to
perform his obligation to the extent possible in order to be paid under the terms of the contract and
be reimbursed for additional costs reasonably and necessarily incurred.
In not more than 30 days after the result of the force majeure event, parties shall consult with each
other in good faith and use all reasonable endeavors to agree on appropriate terms to mitigate the
force majeure events' effect. If that cannot happen or in case of disagreement between parties as to
the existence or extent of force majeure, matters shall be settled according to GCC clause 26-
settlement of dispute.
4.1.4 What if your contract does not have a force majeure clause?
Suppose a contract does not contain an express force majeure clause or other similar language
addressing "acts of God" or unanticipated delays beyond the contractor's control. In that case, there
is still hope for the contractor, and the owner is not necessarily off the hook. Another angle to
consider is the application of the common law, "the doctrine of frustration."
However, it is very difficult to show that a contract has been frustrated. Frustration requires that
an unforeseen subsequent event outside the parties' control has made the contract impossible to
perform or has transformed the performance of the obligations under the contract into something
so radically different from that which the parties intended that it would be unfair to hold the parties
to their obligations.
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Frustration applies where:
i. An event occurs after the contract has been entered into;
ii. Which is not due to the fault of either party;
iii. Which renders further performance impossible or illegal or makes the parties' obligation
radically different from those contemplated when the contract was entered into.
A frustrated contract will generally result in the contract becoming unenforceable. Most often, this
will have the effect of terminating the contract.
4.1.5 Recommended COVID-19 force majeure action

It is essential to understand your company's contracts as COVID-19 impacts continue to unfold.
Different authors recommend several key actions that you should immediately take to evaluate and
plan for a force majeure event properly:
 Review your contract: Identify key clauses implicated by COVID-19. What relief are
you entitled to under these clauses? What do you need to do to preserve your rights?
 Formulate a plan: All parties have a legal duty to mitigate COVID-19 impacts. Identify
these impacts and the steps you can take to lessen their effect.
 Maintain communication with clients, contractors, and suppliers: Monitors updates to

legislation and other governmental orders, which continue to evolve and vary in your
location.
 Identify specific impacts and document the impacts: What delays is your company
facing? How are your downstream vendors and suppliers affected? How will that affect
your company down the road?
 Communicate to inform, not to agitate: Formal notices and other written and verbal
communications among the parties should be precise, factual, and without emotion or
hyperbole.
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4.2 Extension of time claims

To ensure the smooth progress of any project, it is vital that both parties keep each other informed
of any obstruction, delay, or disruption that the coronavirus might entail. Hence the first,
immediately apparent impact of COVID-19 on construction projects is the delay and disruption
of project activities (ACERIS LAW, 2020), which will inevitably lead to contractors' claims for
additional time. To ensure their entitlement to an extension of time and/or losses suffered,
contractors should make sure they timely submit their requests for an extension of time,
respecting the procedural requirements as listed in their respective contracts. In one of the most
widely-used contract forms globally, the FIDIC contracts, which we use as an example, the global
pandemic can give rise to an extension of time under Sub-Clauses 8.4 and 8.5 of the FIDIC Red
Book 1999, which provide for the contractors' entitlement to an extension of time in the
following circumstances:
Clause 8.4 Extension of Time for Completion
The contractor shall be entitled subject to Sub-Clause 20.1 [Contractor's Claims] to an extension
of the Time for Completion if and to the extent that completion for Sub-Clause 10.1 [Taking Over
of the Works and Sections] is or will be delayed by any of the following causes:
(a) A Variation (unless an adjustment to the Time for Completion has been agreed under Sub-
Clause 13.3 [Variation Procedure]) or other substantial change in the quantity of an item
of work included in the contract,
(b) A cause of delay giving entitlement to an extension of time under a Sub-Clause of these
Conditions,
(c) Exceptionally adverse climatic conditions,
(d) Unforeseeable shortages in the availability of personnel or Goods caused by an epidemic

or governmental actions, or
(e) Any delay, impediment, or prevention caused by or attributable to the employer, the
employer's personnel, or the employer's other contractors on the Site.
If the contractor considers himself to be entitled to an extension of the Time for Completion. In
that case, the contractor shall notice the engineer in accordance with Sub-Clause 20.1 [Contractor's
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Claims]. When determining each extension of time under Sub-Clause 20.1, the engineer shall
review previous determinations and may increase but shall not decrease the total extension of time.
For contracts based on the FIDIC Red Book (1999), contractors may cite "unforeseeable shortages
in the availability of personnel or Goods caused by the epidemic or governmental actions" as one
of the grounds for an extension of time for completion. Naturally, this clause can only be raised if
the COVID-19 pandemic actually impacted the shortage of personnel or goods. Further,
contractors can also refer to Sub-Clause 8.5 of the FIDIC Red Book (1999), which provides that
in case of delays caused by Authorities, which were unforeseeable, the contractor may raise a claim
for an extension of time for completion.
In any event, the ground for an extension of time the contractor is to invoke ultimately depends
on the precise state measures in question and the impact they have on construction activities. It is
important to bear in mind that claims for an extension of time do not automatically grant
contractors the right to claim losses and expenses caused by delay and/or disruption.
Once again, the entitlement to claim for additional money the contractor should invoke in each
particular case primarily depends on the impact that COVID-19 and State-imposed measures had
on the construction project in question.
4.3 Escalation clauses

Typically, present in larger-scale construction contracts, a contracting party may have recourse to
an escalation clause, which can be a powerful tool to mitigate fluctuations in the cost of fuel, raw
materials, or labor rates throughout a project.
Escalation clauses often provide a prescribed formula to adjust the contract price where the costs
of certain inputs have undergone a sharp increase beyond normal market fluctuations. However, if
successfully employed, it can be an important way to protect a contractor against sudden and
unexpected cost increases while at the same time protecting owners against over-inflated bids. In
addition to that, including an escalation clause could also help control cost overruns due to supply
chain disruptions. When volatile market conditions and material shortages are factors, this clause
helps protects contractors from price fluctuations for raw materials.
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4.4 Loss of Productivity Claims

As in other construction claim contexts, a loss of productivity claim during an outbreak cannot
simply be made whenever the contractor has become less productive it must be causally linked to
some owner-caused event or an event for which the owner has expressly agreed to assume the
contractual risk.
The prospect of claims arising in these circumstances may become elevated in the context of a
pandemic, where many supply agreements are subject to increased delays and equipment delivery
issues of their own.
4.5 Notice provisions

Construction contracts are chock-full of notice requirements. Most courts take these notice
provisions seriously: no notice, no claim (Levelset, 2020). Most standard form of construction
contracts contains strict notice and other schedule or cost reporting obligations on the part of the
contractor, which are often a condition precedent to bringing a claim.
Notices may be required prior to claims for delay damages, an extension of the contract time,
change orders, stop-work requests, and terminations. When any time a delay is encountered, send
a project delay letter to the general contractor or owner immediately. It also helps to provide
photos, documentation, or other reports to support the complaint. Where notice is required but not
sent, even the worthiest of construction delay claims can falter.
In many cases, the owner has no independent access to the contractor's progress records or other
subcontractor information other than what the contractor chooses to share. Unless the contractor
advises otherwise, the owner might be contractually entitled to assume that any potential problems
the contractor is facing have been successfully mitigated.
It not only preserves a contractor's rights to make a claim but also maximizes the chances that any
delays or disruptions are identified early and resolved through applicable contract procedures
before they get worse. Waiting until the end of a project to bring a global impact claim can
potentially be fatal to a contractor's entitlement to compensation or an extension of time.
44 | P a g e
4.6 Insurance requirements

Construction contracts should also require some sort of insurance policy coverage for all parties
involved. This can include several types of policies, obviously, with COVID-19 impacts, such as
shutdowns, quarantines, and decontamination; many bonded contractors may experience lost
revenue from their business's interruption.
4.7 Termination clauses

A termination clause is a section of a swap contract that describes the procedures and remedies for
one of the counterparties if the other counterparty defaults or otherwise ends the contract.
(Levelset, 2020)
Therefore, rather than deal with the cost of on-going project delays caused by COVID-19's
impacts, obliges may elect to suspend work on a bonded project until the severity of such impacts
has passed. On the other hand, obliges may have no choice but to suspend work due to local
government shutdown orders, which are now starting to ease but could recur if the fears of a
"second surge" are realized.
Not all breaches of contract are made equally, and it can be hard to decide whether a breach is
small or significant when the matter is not laid out in the contract, so a termination clause can help
to take the ambiguity out of these situations.
4.7.1 Types of Termination Clauses

There are generally two types of termination clauses:
1. Termination for Cause (Termination for Default)
It occurs when one of the parties to the contract "defaulted," meaning that they failed to perform
something they were required to do. These clauses create situations where the contract may be
terminated for a failure to perform specific or general duties under the contract.
Here are some common reasons for terminating a contract for cause:
 Poor Workmanship/Defective Work
 Consistent Failure to Perform According to Schedule
 Failure to Pay Subcontractors, Suppliers, or Laborers
45 | P a g e
 Use of Materials or Equipment Inferior to Contract Specifications
 Understaffing the Project
 Failure to Communicate
2. Termination for Convenience
It gives the owner the right to terminate the contract, at any time and for any reason. When one
side just decides they want to cancel the contract, the term for that is typically a "breach of
contract". Since it's essentially creating a contract with an easy out, it's been lovingly referred to
as a "construction prenup."
Without a termination for convenience clause present, the party who terminates the contract can
only terminate the agreement based on default or breach (or some other term in the contract).
A termination for convenience clause cannot be exercised in bad faith. One common example used
of bad faith is where a customer terminates their contractor or sub when their work is 90%
complete to avoid making a final payment or in an attempt to keep retention.
4.8 Liquidated damages clause

Liquidated damages are an amount of money agreed upon by the parties at the time of the contract
signing that establishes the damages that can be recovered in the event a party breaches the
contract, and these clauses are usually written as some sort of formula.
The most important benefit of the liquidated damages clause is predictability. When setting a
predetermined amount of damages, it allows both parties a chance to negotiate and settle on a
number they each feel is fair and reasonable. This allows them to analyze the level of risk involved
and schedule appropriately from a contractor's perspective. It also allows them the opportunity to
limit the damage claims of the owner.
46 | P a g e
4.9 Delay and disruption damages

4.9.1 Damage for delays
For owner-caused (or other than contractor-caused) delays, a contractor may have a claim for
Project management & supervisory expenses, Overhead, Loss of use, loss of rents, Lost profits,
Insurance costs, Construction loan interest.
For contractor-caused delays, an owner may have a claim for Supervision costs, Extended
general conditions, Jobsite trailer rental, Temporary facilities/utilities, Liability insurance,
Equipment rental & maintenance costs, Field labor, Increased materials cost, Lost productivity,
Hourly labor rate increases, De-mobilization/re-mobilization.
4.9.2 Defences to Construction Delay Claims

Whether a construction business is making a delay claim or defending against one, here are some
of the more prominent defenses for delays.
Concurrent Delay: - occurs when multiple activities affect the project's timeline, but the delays
don't precisely stack on top of each other; instead, if numerous delays do occur and they each
independently impact the completion date, the delays can be regarded as concurrent – at least to
some degree. Proving that a delay was concurrent often requires extensive expert analysis and
documentation evidence. The challenge here is how to allocate the amount and of fault and liability
of each party.
No Damages for Delay Clause: - Because delays are so prevalent in the construction industry,
construction contracts often include a no damages for delay clause (a.k.a. no pay for delay). This
essentially declares that delays are all part of the business, and any costs associated with them
should be written off. The result is eat any losses, request a time extension, and then move on.
i.e., if a 'no damages for delay' clause is not present, in theory, each party could be held responsible
for the fallout from the delays that they cause. Therefore, one party's delay could affect the next
trade, and the next trade, and a supplier, and on and on. On large projects, a simple delay at the
start of a job could create headaches for everyone else on the job.
NOTE- Contractors may be concerned that all delays related to COVID-19 will be deemed
foreseeable in new contracts because the parties were aware of the COVID-19 pandemic when
47 | P a g e
they signed the contract. The best approach is to focus on the specific COVID-19 issue that caused
the delay, rather than the pandemic as a whole.
If the contractor did not know about, and reasonably should not have known about, the COVID-
19 condition when it signed the contract it will be deemed to be unforeseeable and something for
which the contractor can pursue a time extension. The owner is also protected because the
contractor will not be able to seek a time extension based on a COVID-19 condition it knew about
or reasonably should have known about when it signed the contract.
If the contractor is entitled to a time extension for an unknown COVID-19 condition, the next issue
to address in the contract is whether that time extension is compensable.
48 | P a g e
CHAPTER FIVE: Conclusion and Recommendation

This chapter presents conclusions that follow the research objectives stated in the introduction
part and recommendations will also be forwarded.
Conclusion
As stated in the introduction part, the objective of the thesis is to review claim management
practice in building construction and evaluate the different claim conditions as stated in standard
forms of contract. To achieve this objective, the study uses a desk study/literature overview as a
research instrument, and the results are concluded as follows:
 Most times, contracting parties do not understand their obligation and what is expected of
them, and due to this, problems might be caused in the construction phase that may give
rise to claim from either of the parties involved. The party who is entitled to claim to have
to be careful of the outcome, value, strength, and chance of success and follow a certain
process of a claim involving submittal, processing, and claim enforcement.
 Different authors classify claims following a ground existing in the contract, time of
completion, the scope of work, and on their objective, which generally leads to asking for
a time extension or compensation of cost.
 Many construction projects will incur additional costs and time that were not anticipated
when the contract was entered into. Ultimately, these additional costs and time will have
to be borne by one of the contracting parties (i.e., the employer or the contractor) or one of
the sub-contractors or suppliers, depending on the relevant risk allocation contracts. To
recover for resulting project delays or increased labor costs, parties may turn to several
standard contractual provisions and doctrines that may or may not successfully apply.
 During the pandemic, the situation drastically deteriorated by firstly shortage of

construction material supply, which then impacted the construction industry. Following the
spread of the virus, people's movement was restricted, which has a big impact on the
construction industry because it requires on-site work. Every project member must be
available to work.
49 | P a g e
 Different types of Delay analysis techniques involve an investigation step that aimed to
identify the delay, a description step that aims to analyze the collected information to
identify the responsible party, and a presentation step to investigate what caused the project
to run late, including who is at fault.
Recommendation
 Both involving parties employer/contractor entering into a contract should have a deeper
understanding of the general aspects concerned with claim.
 For large projects due to the complex nature of the contract, condition of contracts should
clearly state issues dealing with claims.
 The contractor should give a proper notice for any time or cost-related claims within the
specified period allowed on the standard form of contracts.
 Hence, the pandemic has a significant impact on the construction industry. The parties
involved should be careful in planning, enforcement/understanding of contractual,
communication, legislative, and other rights and remedies, which can allow these risks to
be mitigated.
 In order to select the best delay analysis technique, several key issues should be considered
regarding which delay analysis technique is best suited to each phase of construction work.
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Addis Ababa University

Addis Ababa Institute of Technology

Name ID. Number

Advisor:- Hana Mekuria

Date: Dec 09, 2020

3.7.2 How do you Classify Construction Delay Claims? ...................................................................... 23

Figure 1: structure of thesis............................................................................................................. 3

CHAPTER ONE: Introduction

1.2 Statement of Problem

1.3 Objective of the Study

1.3.2 Specific Objective

- Study the process involved in claim management.

1.4 Scope of the study

1.5 Structure of The Thesis

chapter 2: literature review

Chapter 4: Result and Descusion

CHAPTER TWO: Construction Claim in Ethiopia

2.2 Definition of contract

A further illustration of this definition

'Whereby two or more persons…'

'Of a proprietary nature.'

2.3 Types of Construction Contracts

2.4 Standard condition of Contract

2.4.1 The FIDIC form of Contract

Table 1: FIDIC contract forms

FIDIC contract Year released Notes

2.4.2 BaTCoDA Form of Contract

2.4.3 MoWUD form of Contract

2.4.4 FPPA Form of Contact

Part2, dealing with the schedule of requirements, and,

2.5 Contractual Problems in The Construction Industry

 Changes in scope work

2.6 Claim in Building Construction

A claim is an assertion of a right to property, money, or a remedy (ERA's Claims Manual).

2.6.2 Major causes of claims

Table 2: Causes of claim

BOQ and method Client

Drawing Specifica- Consult- Project

Conditions of Contract Contractor

eg Payment Terms eg Joint Ventures

2.6.3 Impacts of claims

2.6.4 Things to be considered while preparing a claim

2.6.5 Classification of Claim

 (Adrian, 1988), classifies claim into four major groups as:

 Under contract condition

 For breach of contract

 On a quasi-contractual or restitionary basis, often called a quantum merit claim.

(A) Claim for extra time to complete the contract, and

(B) Claim for cost compensation arising out of the contract

A. Extensions of time claims

 A narrative of the events and effects on progress;

 Failure to recognize delay at the appropriate time and maintain contemporary

 Pressure, on the part of the employer, to complete on time, irrespective of delays

B. Claim for cost compensation.

2.6.6 Process of Claim Management

Formal claim submission

 Summary of facts: Date of commencement and practical completion; dates of sectional or

 Appendices: Copies of all documents referred to in the claim; programmes; diagrams:

This phase is classified further into the following three sub-processes,

This phase is sub-divided into the following two sub-processes.

3.7 Delay Analysis Techniques/ methods

3.7.2 How do you Classify Construction Delay Claims?