Part II: Administration of Works Contracts Table Of Contents

1 Introduction.....................................................................................................................28 2 The Contract Documents................................................................................................30 2.1 Form of agreement...................................................................................................30 2.2 Letter of acceptance.................................................................................................31 2.3 Contractor’s bid.......................................................................................................31 2.4 The Conditions of Contract......................................................................................33 2.5 The Specification.....................................................................................................33 2.6 The Drawings...........................................................................................................34 2.7 The Bill of Quantities...............................................................................................34 3 The parties to a works contract and their duties and responsibilities.............................35 3.1 The Parties to a Works Contract..............................................................................35 3.2 Duties and responsibilities of the Employer............................................................35 3.3 The Engineer’s duties and responsibilities .............................................................40 3.4 Duties and responsibilities of the Contractor...........................................................43 4 Guidance to the Employer and his staff, in the administration of works contracts........45 4.1 Assignment of Staff and facilities............................................................................45 4.2 Familiarization with contract documents and prior history & status of the project.47 4.3 Establishing the lines of communication with the Engineer ..................................48 4.4 Giving assistance and advice:..................................................................................49 4.5 Land Acquisition and Removal of Obstructions:.....................................................49 4.6 Securities..................................................................................................................51 4.7 Information and Approvals......................................................................................59 4.8 Site Instructions, Variation Orders and Claims.......................................................60 4.9 Payment Certificates................................................................................................61 4.10 Sub-Contractors and other Contractors ................................................................62 4.11 Progress Monitoring..............................................................................................62 4.12 Cost monitoring and control.................................................................................64 4.13 Quality control......................................................................................................65 4.14 Health, safety and environment............................................................................66 4.15 Reporting...............................................................................................................66 4.16 Taking over of the works......................................................................................66 4.17 Concluding Remarks.............................................................................................69 Appendices Appendix 1: Appendix 2: Appendix 3: Appendix 4: Appendix 5: Sample forms from standard works contract documents Sample Advance utilization agreement and utilization schedule Sample forms of Contractor’s application for payment Inspection forms for internal reporting Contents of monthly progress report to be submitted by the Engineer 26
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Abbreviations:
FIDIC PPA ERA MOWUD RRA PE APE Federation Internationale Des Ingenieurs – Conseils (International Federation of Consulting Engineers) Public Procurement Authority of the Federal Democratic Republic of Ethiopia Ethiopian Roads Authority Ministry of Works and Urban Development of the Federal Democratic Republic of Ethiopia Rural Roads Authority Project Engineer Assistant Project Engineer

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1 Introduction
Road construction, rehabilitation and maintenance consumes considerable amount of money and usually take place over a period of years. Therefore, it is very important that road projects are: selected through integrated network planning; technically and economically designed and are properly constructed so as to meet the project objectives and provide adequate services for which the project is intended. Although the planning and design phases are very important and often considered more technically demanding tasks, nevertheless it is the adequate quality and cost control that is the best guaranty that the investment in roads will provide good service through out their life. Therefore, in addition to properly planning and designing, compliance with plans and specifications under the direction of competent contract management and construction supervision team is very essential element in the realization of project objectives. The basic objectives of conducting contract administration of works contracts is to insure that the quality of work specified is maintained, the works conform with the contract documents, and of nearly equal importance is the need to control and manage the costs of construction, timely completion of the works, and to provide proper and consistent as built records and other project documentation. In addition to the natural and man made uncertainties which exist in civil engineering projects, errors caused at the design and procurement stages and inefficiencies contribute to changes and new issues to arise during execution of the project. Timely identification of these changes and issues and timely resolving them requires, amongst others: efficient organization, flow of information and decision making. This guide intends to make execution of the works flow efficiently and smoothly by suggesting how the Employer’s personnel should be organized and by providing recommended set of working principles and procedures to be followed in administering works contracts. However, it is essential to mention that this guide is advisory hence does not modify any contractual obligations and relationships of various parties. Therefore, it is very important that each responsible person carefully reviews and understands particulars of each contract for its proper implementation. The first chapter introduces the objectives and contents of this guide. The second chapter discusses the set of documents which form works contract (contract documents). The third chapter discusses the parties to a works contract and their duties and responsibilities. The fourth chapter, which is the main subject matter of this document, presents guidance to the Employer and his staff in the administration of works contracts. Relevant clauses 28
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of the FIDIC (4th edition) conditions of contract and that of the PPA have been quoted to illustrate some provisions of the conditions of contract, as appropriate. In preparing this guide reference has been made to the existing similar guides in ERA. Nevertheless, its suitability to the RRAs should be tested and its contents enhanced through lessons gained from experience. It is intended that, the contents will be tested and improved or refined, as appropriate based on the feedbacks received during implementation. Therefore comments, suggestions or clarification requests from users are most welcome.

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32.2 The notification of award will constitute the formation of the Contract.2. 32. The notification of award (Letter of acceptance) will constitute the formation of the Contract. Clause 32 of the above mentioned instruction to bidders states the following: 32. in a construction works contract. Notification of Award and Signing of Agreement 32. This notification (hereinafter and in the Conditions of Contract called the "Letter of Acceptance") will state the sum that the Employer will pay the Contractor in consideration of the execution. and maintenance of the Works by the Contractor as prescribed by the Contract (hereinafter and in the Contract called the "Contract Price"). 2. subject to the Bidder furnishing the Contract Security and signing the contract.1 Form of agreement In accordance to the standard instruction to bidders prepared by PPA. are the documents which make up and describe the works to be implemented by a Contractor and the conditions under which those works are to be undertaken and which form the Contract. The documents forming the Contract are taken as being mutually explanatory of one another.2 The Contract Documents Contract documents. 2007 .3. In general the documents and a typical order of priority is shown below: • • • • • • • • • • The form of Agreement Letter of Acceptance Contractor’s bid Special (particular) conditions of contract General Conditions of Contract Special specifications Specifications The Drawings Bill of Quantities Any Other Document forming part of the contract.3 The contract will incorporate all agreements between the Employer and the successful 30 December. in the event that any discrepancies exist between these several documents an order of priority of the documents may be defined. completion. However.1 The Bidder whose Bid has been accepted will be notified of the award in writing by the Employer prior to expiration of the Bid validity period and following the elapse of the notification period in accordance with ITB Sub-Clause 30. subject to the Bidder furnishing the Contract Security in accordance with Clause 33 and signing the contract in accordance with Sub-Clause 32.

It will be signed by the Employer and sent to the successful Bidder following the notification of award. For many organizations signing of the form of agreement is essential in order to give the contract full effect and proceed with their respective duties and obligations stated in the contract. The standard Forms of Agreement prepared by PPA and FIDIC are included in appendix 1 for reference. 2. ERA’s & PPA’s standard form of Letter of Acceptance has been included in appendix 1.2 Letter of acceptance Once the evaluation of Tenders has been completed and the preferred Tender selected and all necessary approvals to accept the tender obtained. The letter of acceptance should be signed by the person who has the power of attorney to bind the Employer. the letter of acceptance of bidders offer by the Employer can constitute formation of contract. 2007 . For example government organizations require signing of the contract agreement as one of the criteria to effect payment to a contractor. for reference. To this effect the Employer and the selected bidder sign a document called form of agreement. The documents which comprise the Contractor’s bid are.3 Contractor’s bid The Contractor’s bid means the Contractor's priced offer to the Employer for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract. Therefore. Within 15 days of receipt. the following: • • • • • • • • The Bid submission form (Form of Tender) The Power of Attorney The Bidding Data The Bid Security The Priced Bill of Quantities Addenda to the bid (if any) Alternative Offers (where applicable) Schedules of Supplementary information 31 December. As stated above. as accepted by the Letter of Acceptance. the Employer issues a Letter of Acceptance. in general. the successful Bidder will sign the contract and deliver it to the Employer. the date of this letter marks the start of the Contract and immediately commits both the Employer and the Contractor to fulfill their obligations as defined in the Contract. 2. It is therefore important that the Employer ensures that it is able to meet all of its contractual obligations before issuing the Letter of Acceptance.Bidder.

Written confirmations and signed minutes of such meetings by the parties shall become part of the contract documents. changes. ERA’s & PPA's standard Bid submission forms (Form of Tender) have been included in this document in Appendix 1. 2007 . Changes may arise from own interest of the Employer or from request for clarification made by a bidder(s). 32 December. The Priced Bill of Quantities When the Employer issues bidding documents. Addenda to the Tender During the bidding period it may be necessary to make.Of these bid documents. Those not included are only relevant to the procurement process and not to the works contract: • • • The Bid submission form (Form of Tender) The Priced Bill of Quantities Addenda to the bid including any Minutes of Negotiation (if any). But the bidder after examining the bidding documents and the site submits the bill of quantities which includes the offered unit rates and the total contract amount. the Employer may hold pre-award meeting(s) with a bidder to clarify matters which arise during the process of examination and evaluation of the bidder’s offer. This letter states the sum for which the Contractor will undertake the Works as described in the various bid documents. it becomes part of the Contract documents. only the following are included in the Contract document. The Employer should also insure that all bidders have received such addenda in time. The bidders afterwards should incorporate the addenda when preparing and submitting their offers. If making changes to the bidding documents is necessary such changes should be made through issuing addenda. prior to award of a contract to a bidder. The priced bill of quantities submitted by the bidder makes part of the contractor’s bid. The Bid submission form (Form of Tender) The Bid submission form is the Contractor's official letter in which he summarizes his offer and states his compliance to the various documents comprising his bid. The bidder shall be required to provide written conformation of his agreement to clarifications or correction of his offer prior to award. additions or deletions to the bidding documents. Similarly. the Bill of Quantities as presented to the bidders does not include any unit rates. The Addenda thereafter becomes part of the bidder’s offer and if the bidders offer is accepted. for reference.

In 2002G. The contents of the special conditions of contract take precedence over that of the general conditions of contract in the event of discrepancy between the two. It is recommended that the standard issued by ERA or the guidance of PPA be referred to in drafting the special conditions. The PPA in accordance to the power vested to it as per the procurement proclamation no. fourth edition.2.C. For works of higher magnitude the PPA does not provide any other conditions of contract except that it states other suitable conditions of contract should be used.C. which is prepared by the International Federation of Consulting Engineers (FIDIC) for contracts awarded through international competitive bidding. These documents are applied by ERA. the general conditions of contract and special conditions of contract. It may also include the method of measurement. 2.C standard specification for road maintenance. The Ethiopian Roads Authority (ERA) uses conditions of contract for works of civil engineering construction part I general conditions. 2007 . when drawing up the special conditions to avoid unnecessary and ambiguous terms. with special conditions of contract which supplement and amend the general conditions of contract. ERA also produced in 2003 G. The conditions of contract normally are subdivided in to two parts. ERA produced a Standard Technical Specification for road construction works.5 The Specification The Specification is a set of definitions and descriptions which define and describe in detail the character and quality of the materials to be utilized. published standard bidding documents which includes special conditions of contract to be used with the FIDIC general conditions of contract. 430/2005 has issued in 2006G. the construction processes to be followed and the characteristics of the finished project and its components. standard contract documents for works contract. The special conditions of contract compliments or amends the general conditions of contract and forms an integral part of the Contract Documents. It is important. 33 December. including the rights and obligations of each party and the powers and duties of the Engineer appointed for the purpose of the contract. The PPA recommends such documents to be applied in small works contracts whose value does not exceed USD 10 million. part I being the general conditions of contract and part II the special conditions of contract (also referred to as conditions of particular application). ERA in 2002 G. among which are. and the standard conditions of contract issued by MOWUD (December 1994) for contracts awarded through local competitive biding.4 The Conditions of Contract The Conditions of Contract provide the broad contractual framework for the supervision and administration of the contract and define the general legal relationship between the contracting parties.C.

Description of the work such as dimensions. samples patterns. calculations and technical information of a like nature provided by the Engineer to the Contractor under the Contract and all drawings. locations. as with the special conditions of contract. The FIDIC Conditions of Contract defines the Drawings as follows: "Drawings" means all drawings. They are not to be taken as the actual and correct quantities of the Works to be executed by the Contractor in fulfillment of his obligations under the Contract. the Special Specification compliments the Standard Specification and forms an integral part of the Contract Documents. operation and maintenance manuals and other technical information of a like nature submitted by the Contractor and approved by the Engineer. volume etc of each item. calculations. 2007 .7 The Bill of Quantities The Bill of Quantities is a list of items giving descriptions of every item of work to be undertaken under the Contract. It is these drawings which describe the exact scope of the works and which determine exactly what is to be measured in the final Bill of Quantities.If it is necessary to modify the Standard Specification or specify new items to suit needs of each particular project this can be done via issuing a document called Special Specification (some times referred to as supplemental specification or special provision) and. 34 December. 2. In admeasurements type of contract the quantities set out in the Bill of Quantities are the estimated quantities for the Works. and the cost per number. strengths etc. quantity. together with the number.6 The Drawings Whilst the Specification and Special Specification describe the quality and nature of the materials to be used and the finished product they do not fully define what work is to be undertaken. quantity. The actual works performed are to be measured and paid to the contractor at the rates provided in the BOQ. volume etc. 2. models. is described in diagrammatic form on the contract drawings. The contents of the Special Specification take precedence over the Standard Specification in the event of a discrepancy between the two parts.

but under the provisions of the conditions of contract between the Employer and the Contractor.3 The parties to a works contract and their duties and responsibilities 3. The Employer and the Contractor are bound by the obligations stated in the works contract. The inclusion of the Engineer's function in the contract. Therefore. the Employer enters in to a contract with the Engineer.2 Duties and responsibilities of the Employer The Employer’s duties and responsibilities are: • • • • • • December. which define the Engineer's functions. The Contractors compliance with these and the exercise of his general obligations is subject to the satisfaction of the Engineer. The Employer normally appoints an Engineer to supervise and administer the works contract. duties and obligations of the two parties to the works contract and that of the Engineer who has a vital role in the supervision and administration of the contract. the Contractor and the Engineer: 3. between the Employer and the Contractor. roles. The detailed requirements for the Contractor’s work are contained in documents such as the Drawings. Approval of the Securities. Following is summary of the duties and responsibilities of the Employer. Therefore it is important to see the functions. the Engineer has powers to instruct the Contractor. If the Engineer is not from the internal organization of the Employer. Making of payments to the Contractor Responding promptly on matters for which the Engineer is required to consult the Employer before issuing an instruction or making determination.1 The Parties to a Works Contract In a typical works contract there is contract between the Employer and the Contractor. insurers and terms of the insurance policies. responsibilities and obligations for the administration of the construction contract. is effected via the conditions of the works contract. as it is the case in most contracts. Specifications. there is contract between the Employer and the Contractor and another contract between the Employer and the Engineer. Bills of Quantities. 2007 Appoint the Engineer and advise the Contractor Appoint the Contractor and advise the Engineer Providing the site and access to the site for the Contractor to undertake the works. 35 . There is no legally binding contract between the Engineer and the Contractor. etc.

resettlement and compensation are time taking tasks. FIDIC general conditions require the Engineer to be named in the contract change of which requires the consent of both parties. an amendment to the general conditions should be made through the special conditions of contract to allow the Employer to change the Engineer from time to time. preferably at the design stage. and notify the contractor. is to remain in the hands of the Employer. The Employer may also appoint an Engineer from his own organization.• • • Taking over the works once substantially completed Deduction of liquidated damages from monies due to the Contractor when payable Terminating the Contract in the event of the Contractor failing to perform Appointment of Engineer & Contractor The Employer being the initiator of the construction project appoints the Contractor and the Engineer and should advise so to the Engineer and the Contractor respectively. 2007 . but it is essential to give sufficient portion of the site initially (on/before notice to commence is issued) and additional portions of the site from time to time as requested by the contractor in accordance to the work program. the Engineer has been appointed earlier. however. It is possible that the consultant who has designed the works or another consultant be appointed to supervise the works. Any delay due to failure of the Employer to give possession of site shall entitle to the contractor extension of time and compensation of additional cost incurred. The FIDIC conditions state that ‘the Contractor shall commence the Works as soon as is reasonably possible after the receipt by him of a notice to this effect from the Engineer…’ Although this is an obligation of the Engineer it demonstrates the contractual obligation of the Employer to make a prompt or timely appointment of an Engineer unless the contract make it quite clear that this obligation. if required so. Hence the Employer should start and finalize these tasks well a head of time. In most of the cases. In construction projects. desires to have the option of replacing him unilaterally. and make sure (before he issues the letter of acceptance) that sufficient portion of the site is available and remaining portion will be made available well ahead of time without causing obstruction to the progress of the works. by the time the Contractor is appointed. It is up to the Contractor to asses the capacity of the Engineer to make independent and fair judgment and consider it while submitting his offer. Possession of site and access there to: The Employer as per the contract is required to hand over as much of the site reasonably required for the performance of the works and agreed means of access. 36 December. particularly in road construction projects it may not be necessary to give possession of the whole site. This arrangement enables for the Engineer and the Employer to make the necessary arrangements and issue the commencement letter to the contractor within the period specified in the contract. Land acquisition. If the Employer.

Examples of such provisions are: i) PPA’s guidance note for preparing the special conditions of contract suggests: ‘The Employer’s specific approval is required for: [insert any decisions for which the Employer’s approval is required]. Making payments to the contractor This is one of the primary obligations of the Employer. the Employer should ensure that sufficient fund is secured for the works before accepting the Contractor’s offer. [e. interest on delayed payment and even suspension and or termination of the contract. the Employer should effect the payment within the time specified in the contract. Failure to effect payment can lead to sever consequences such as delay in the progress of the works. or there is no full-time engineer as Engineer. the following clause may be inserted to limit the authority of the Engineer and require him to get the Employer’s approval where there are potential additional costs or extensions of time involved: “The Engineer shall obtain specific approval from the Employer before carrying out any of his duties under the Contract which in the Engineer’s opinion will cause the amount finally due under the Contract to exceed the Contract Price or will give entitlement to extension of time. then the following may be used instead: “The Engineer shall obtain the specific approval of the Employer in writing before taking any of the following actions specified in the General Conditions of Contract: 37 December. Similarly. additional cost. such should be clearly stated in the contract. The Employer should make him self available for the consultation and timely respond to issues which require the specific approval of the Employer. When the engineer certifies the amount of money payable to the contractor.”] If it is desired that the limitations on the Engineer’s authority be more clearly defined. Issues which require the specific approval of the Employer prior to the Engineer issuing instruction or determination are normally stated in the special conditions of contract. If it is considered that the standard GCC clause gives too much authority to the Engineer. if the Employer intends to introduce other contractors into the site such should be provided in the contract and should be checked if adequate allowance is made in the contractors’ programs. Failure to do so may lead to claims by the contractors. This requirement shall be waived in an emergency affecting safety of personnel or the Works or adjacent property. In order to discharge his obligation.g. Responding promptly to Engineers request: Some decisions to be made by the Engineer require prior consultation or approval with/from the Employer. 2007 .If possession of the whole site is not necessary and the Employer intends to give possession of the site to the contractor only that part of the site that is required by the contractor to perform the works in accordance to the work program.

Taking over the works Once the Contractor has completed the works. (h) Authorizing the use of Provisional Sums in excess of the monetary limit for variations. insurers and the terms of the insurance policies Securities such as advance guarantee. (c) Awarding an extension of time under Clause 44. (f) Certifying payment if the Contract Price will be exceeded. the contractor applies to the Engineer to certify the substantial completion of the works and issue the taking over certificate. [Add other limitations and quote clauses]” ii) ERA 2002. The Engineer will do so if he is satisfied that that the works are substantially completed.Certifying additional costs under Clause 44. or (ii) If such variation would increase the Contract Price by less than the amount stated in the Appendix to Tender. the security providing institution and the amount of cover are subject to the approval of the Employer. Items to be checked for compliance in order to approve the securities will be discussed in more details in another chapter of this document. particular conditions of contract based on FIDIC conditions of contract suggests: ‘The Engineer shall obtain the specific approval of the Employer before taking any of the following actions specified in Part I. Ordering suspension or termination under Clause 59. are required to be submitted by the contractor to the Employer with a copy to the Engineer.’ Approval of securities. (e) Issuing any variation. (i) Certifying additional payment under Clause 65. as reasonably determined by the Engineer. Minor changes to be notified to the Employer within 7 days. Issuing a variation order under Clause 40 except in an emergency situation as reasonably determined by the Engineer or if the variation does not increase the Contract Price. insurance of the works etc. Determining an extension of the Intended Completion Date under Clause 28. such approval to be copied to the contractor: 1 2 3 4 5 0 6 7 8 9 10 11 (a) Consenting to the subletting of any part of the Works under Clause 4. (b) Certifying additional cost determined under Clause 12 or Clause 53. 2007 . The terms. (g) Issuing any Taking-Over Certificate. if the sum of all variations issued has exceeded five percent (5%) of the Contract Price. and (j) Major changes to the Design and/or Specifications. After 38 December. Fixing rates under Clause 40. performance security. except: (i) In an emergency situation. (d) Issuing a variation under Clause 51.

The Employer may terminate the contract due to default of the contractor or for his convenience. Under the general conditions of contract (both PPA and FIDIC 4 th) the Engineer does not require the approval or consent of the Employer to issue the Taking-Over Certificate. 2007 . the Employer deducts agreed amount of money for each delayed day up to a maximum amount specified in the contract. Therefore. The Employer should be aware that. In accordance to the terms of the contract. the Contractor • Without reasonable excuse has failed to commence the works • Rate of progress is not adequate and hasn’t shown sufficient improvement after receiving notice to do so. could result in delays to the demobilization of the Contractor with associated costs to the Employer. the Employer is required to take over the Works. Termination of the contract Under the terms of the contract. termination of contract without sufficient grounds or for his own convenience 39 December. the Employer should make all efforts required on his side for the successful completion of the contract before deciding to terminate.the issuing of the Taking-Over Certificate. that in his opinion. plants and workmanship within the period specified in the contract • Is persistently neglecting to comply with any of his obligations under the contract • Has sub-contracted part of the works without the approval of the Engineer unless it is provided otherwise in the contract. In the event that an Employer wishes to be consulted or give approval prior to the issuance of the taking over certificate. it is essential that such provision be made in the special conditions of contract at tender stage. Moreover. Defaults of contractor which may lead to termination of the contract are: o If the Contractor is made bankrupt or goes into liquidation other than for a reconstruction or amalgamation. Termination of contract will have consequences such as settlement of outstanding issues with the contractor and selection of another contractor which may take considerable time and cost. the Employer should have sufficient grounds for such decision. for whatever reason. Failure to do so. there are situations where both the Employer and the Contractor can terminate the contract. • Has not complied to make good or remove defective materials. o Assigns the contract or any part thereof without prior consent of the Employer o Or if the Engineer certifies to the Employer with a copy to the contractor. Deducting liquidated damages When the contractor delays the completion of the works or part(s) of the works from completion date(s) specified in the contract plus extension(s) of time awarded in accordance to the contract. it is the Employer not the Engineer who can deduct liquidated damages.

approval of the program and method statements (and requesting up-dated versions as and when appropriate). Details of the Engineers duties and responsibilities are to be stated in the supervision agreement between the Employer and the Engineer (Consultant). For convenience the duties and powers can be reviewed under three headings representing the main functions of the Engineer. specs etc. The Engineer’s duties.3 The Engineer’s duties and responsibilities Duties and responsibilities of the Engineer include (but not limited to) the following under the Conditions of the Works Contract: • • • • • • • The issue of information (drawings. 2007 .can cause him claims for additional costs incurred by the contractor due to termination of the contract. ensuring compliance by the Contractor with time and quality obligations. as normally provided in works contract. it is not necessary to disclose all of those duties and responsibilities in the works contract. However. 3. issuing instructions for variations and negotiating rates for payment thereof. issuing drawings and ordering tests. include general administration.) and instructions to the Contractor Commenting on the Contractor’s proposals for carrying out the work Ensuring that materials and workmanship are as specified Measurement of works done by the contractor Certifying to the Employer that the Contractor is eligible for payments Evaluation of claims All other matters of an administrative nature Once the construction Contract has been awarded to the Contractor the Employer steps back from routine administration activities and delegates most of the contract administration activities to the Engineer. Approval and Acceptance • permission to sub-let parts of the works • approval of program and proposed methods of working • approval of contractor’s representative and employees • acceptance of workmanship and quality of materials • approval of measures to deal with problems such as slow progress • unforeseen physical obstructions or conditions • issue of taking-over certificate • issue of defects liability certificate Instruction • issue drawings • variations of the works • suspend the work 40 December.

the Engineer is required to exercise his discretion by: (a) giving his decision. under the Contract. As per FIDIC conditions. opinion or consent. certification of payments etc.• • • • • • dealing with unforeseen physical obstructions and conditions uncovering and making openings removal of improper work or materials provisional sums. Clause 4 of the PPA general conditions of contract provides: 41 December. and employment of nominated sub contractors day works contemporary records with regards to claims Evaluation and Adjudication • ambiguities and discrepancies • obstructions or conditions unforeseen • delays and additional costs • liability for damage to the works • avoidance of damage to roads • assessment of progress • measurement for interim payments and final account • variations and new rates • settlement of disputes The Engineer’s role: as Agent of the Employer and or as Independent (Impartial) When the FIDIC general Conditions of Contract define the authorities and responsibilities of the Engineer. issuing drawings etc. in so far as any of his duties are discretionary. shall act fairly as between the client and the contractor. Sub clause 2. it describes two distinct roles of the Engineer: • • Agent of the Employer e. Independent and impartial e. (b) expressing his satisfaction or approval. the Engineer. giving permission to sub-contract the works. ` On the other hand the PPA conditions of contract require the Engineer to make his decision in the role representing the Employer. (c) determining value. 2007 . fixing rates.g.6 of the FIDIC Conditions of Contract provides: ‘Wherever.g. valuation of claims. or (d) otherwise taking action which may affect the rights and obligations of the Employer or the Contractor he shall exercise such discretion impartially within the terms of the Contract and having regard to all the circumstances.

’ But the Contractor can refer his case to an independent body if he is not satisfied with the decision of the Engineer as provided in clause 24 of the PPA conditions of contract which states: ‘If the contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the contract or that the decision was wrongly taken. He may comment on the Contractor’s proposals for carrying out the Works and must ensure that the workmanship and quality of materials are in accordance with the Specifications. get final and binding effect by the parties and avoid subsequent dispute resolution processes. All contract documents provide for the subsequent steps to be taken should either or both of the parties are not satisfied with the decision of the Engineer. Examples of circumstances under which the Engineer is usually required to seek the specific approval of the Employer have been discussed earlier.’ It is important to realize. in any case it is essential that the Engineer’s decision be reasonable and fair to increase the likely hood of being accepted. The Engineer may have considerable powers but he has no authority to do anything that relieves the Contractor of any of his obligations under the Contract.‘Except where otherwise specifically stated and subject to any restrictions in the special conditions of contract. directions and orders to the Contractor so that the construction of the Works can proceed. Engineer’s Representative The Engineer may not be able to devote all his time to the management and control of only one contract. But it should be noted that many organizations would like to be consulted before the Engineer issues instructions which can have substantial implications on cost and time. however. In order to carry out the responsibilities of each particular contract. Therefore. the Engineer may appoint his Representative to supervise the construction process. Authorities of the Engineer: The Engineer may issue instructions. that neither the Employer nor the Contractor is finally bound by the Engineer’s interpretation or determination. The representative is required to carry out such duties and exercise as may be delegated by the 42 December. If the Employer wishes to limit the authority of the Engineer this must be clearly stated in the Conditions of contract. the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineer’s decision. In these cases it would be necessary for the Engineer to obtain the Employer’s approval prior to issuing any instructions. He will measure and value the work done by the Contractor and will issue payment certificates to enable the Employer to pay the Contractor. 2007 . the Engineer will decide contractual matters between the Employer and the Contractor in the role representing the Employer.

The Contractor must be notified. What powers to delegate to his representative and what powers to retain is within the responsibility of the Engineer. of the appointment. but it should be supported by reasoned assessment. names. the best division is one which gives the representative the authority to act in those areas where relatively rapid decisions and /or specific knowledge of the site is needed. 2007 . design (to the extent provided for within the contract). with due care and diligence. The number required and the minimum qualification & experience are stated in the supervision agreement. it is essential that both the reference to the Engineer by the Contractor and the Engineer’s decision are in writing and specifically state that they are made under the provisions of Clause 67 of the Conditions of Contract. The party not satisfied with the Engineers decision must submit the matter in dispute to the Engineer. The assistants may not have any authority to issue instructions to the Contractor other than to the extent that such instructions may be necessary to enable them to carry out their duties and to record their acceptance of work. The Engineer as Dispute Settler The PPA conditions do not state specifically the role of the Engineer as dispute settler. If either of the parties or both are not satisfied with the Engineers decision made as per clause 67 of the general conditions of contract they may proceed to the subsequent dispute resolution mechanism stated in the contract. depending on the complexity of the works to be carried out. But in accordance to the FIDIC conditions. duties and scope of authority for each assistant. execute and complete the Works and remedy 43 December. with copies to the Employer and the Contractor. leaving issues of longer range and wider consequences for the Engineer. rights and responsibilities under the Contract. The number and function of assistants will vary considerably from site to site. A dispute mostly occurs when the Contractor is not satisfied with the decisions of the Engineer.Engineer. upon which the Engineer will open up the case and make his decisions in accordance to clause 67 of the conditions of contract.1 States: ‘The Contractor shall. The Engineer’s representative should issue to each assistant a job description defining duties. In case of supervision contracts. With regards to the matter in dispute. the Engineer has a role as settler. under the provisions of the Conditions of works Contract. 3. in the first instance. in writing. materials etc. instead it provides a dispute to be referred to an adjudicator if it arises. of any disputes that arise between the Client and the Contractor. Disputes may arise from a variety of sources under the Contract. he will supervise the construction of the Works and ensure that they are completed in general accordance with the requirements of the works contract.4 Duties and responsibilities of the Contractor FIDIC Clause 8. The Engineer or his Representative may appoint number of people to act as “assistants” to the Engineer’s Representative. Principally.

there are circumstances. usually related to payments whereby the Employer defaults and the Contractor must notify that he is terminating the contract. The above outlines the fundamental and overall obligation of the contractor to execute the works and remedy any defects prior to the end of the Defects Liability Period. Providing all the required labour.1 2. The Contractor’s remedies are contained within Clauses 65 & 66. failure to pay the amount certified pursuant to Clause 60. Notifying any claims for payment supported by such contemporary records and particulars as are necessary for proper investigation and assessment. As long as the works are clearly defined with sufficient precision the Contractor cannot abandon the works. There are. required in and for such design. Provide the required securities.1 indicates obligation for the contractor to carry out and complete the works described within the several documents comprising the contractual agreement. The situations which may give rise to termination or suspension as per clause 69 are: 1. Carrying out the instructions of the Engineer and his representative. Compliance with statues. which includes: • • • • • • • • • • • • • Signing the contract agreement if called upon to do so Constructing. 2007 . and avoiding any unreasonable noise. whether of a temporary or permanent nature. regulations and bye-laws. They are demonstrated under Clause 20.4 (Employer’s Risks). Providing plant and labour returns. refusing or interfering with the issue of such a certificate 44 December. under Clause 69. materials. Likewise. circumstances which may release the Contractor from his obligations. Another measure is for the Contractor to ‘suspend’ the works (Clause 69. Providing adequate superintendence. The Contractors duties and obligations are further stated in several clauses of the contract. completion and remedying of any defects. completing and maintaining the works within the contract period. materials. Setting out the works. however close he might be to completion. contractor’s equipment and all other things. disturbance and damage. whereby he may receive payment for works completed up to the point of termination of the contract.4) until such time that the ‘fault’ be remedied or even slow his rate of progress down. execution. Providing for the safety and security of the site and all construction operations.any defects therein in accordance with the provisions of the Contract. The aforementioned Clause 8. Providing program together with methods of working and updates. The contractor shall provide all superintendence. labor. plant etc. of course. so far as the necessity for providing the same is specified in or is reasonably to be inferred from the Contract’. Care of the works during construction period and making good any damage. plant.

3. act of bankruptcy or liquidation 4. The Employer.O r d i n a t i o n B r a n c h i n i s t r Pa tr i oo cn u r e m e n t B n g in e e r i n g o n s t r u c t i o n B a n d C o n t r a c t A d m r a n c h B r a n c h r a n c h 45 December. Duties and responsibilities are recommended to be assigned to certain management bodies based on the chart below. 4 Guidance to the Employer and his staff. R R A B o a r d G M A S u d it e r v ic e s e n e r a l a n a g e r L S e g a l e r v ic e s O D M p e r a t i o i v i s i o n a i n t e n s P la n n in g a n d C oH n u t m a ac n r t R e s o u r c e D e v e lo p A d m i n i s t r a t i o n D i v ai s n i o d n F i n a n c e D i v i s i o n c e B r a n c hP l a n n i n g a n d P r o g r a m m i n g B P e r s o n n e l a n d cT h r a i n i n g B r a n c h c h m e n t n a n r a n E E C S q u p p li e s a n d C u i p m e n t B r a n o m m u n i t y R o a d D e v F e i ln o a p n m c ee n B t r a n c Ch o . It is the failure to pay agreed and certified money which will trigger action under this Clause of the contract. In the event that changes to the organization chart are made in future. 2007 . Notice by the Employer of his inability to meet his contractual obligations due to economic reasons. In addition to those duties and responsibilities.1 Assignment of Staff and facilities In the earlier chapter we tried to see the duties & responsibilities of the Employer in works contracts. the Employer has the duty to monitor the progress of the works for the successful achievement of the project’s objectives. in order to meet its obligations and monitor progress. It must be noted that the Contractor will not be entitled to terminate/ suspend the works in the cases of disputes which he feels he is entitled to receive additional payments for. the duties and responsibilities should be suitably adjusted to fit the new organization chart. in the administration of works contracts 4. The current typical structure of the RRAs is as shown below. should have the required resources and should be properly organized.

The Project Engineer (PE) will be responsible for a project and the Assistant Project Engineer (APE). 46 December. However. Equally important is that such staff should have sufficient delegation and facilities needed to perform their duties. the GM or even the division manager may not be able to make themselves available to communicate and discuss with the Engineers and the Engineers representatives on each and every matter of each contract. the staff should receive adequate training along with the required documents (ERA may be requested to provide assistance in this regard). preferably the staff(s) who are assigned to perform land acquisition and compensation tasks (RoW agents as they are referred to in ERA) should be under the legal service unit and hence the legal service unit assumes the responsibility. as some projects comprise of more than one contract. and the responsible body should be identified. Some matters will of course. There are no trained staffs. Every project and preferably every contract. 2007 . it is very important that depending on the extent and type of contracts the RRA has. require that the PE confirms his decision or response with superiors. The PE should be delegated sufficient responsibility and encouraged by the RRA management to take decisions without constantly having to refer matters to more senior personnel. Individual contracts on a project may be awarded to different contractors and may also be supervised by different consultants. matters which require the approval or consent of the Employer should be signed by the GM or his delegate. should have a project counterpart who may be designated as assistant project engineer and project engineer. This is mainly because the RRAs experience of out sourcing road works to contractors is very limited. The APE should also be based at headquarters visiting site when necessary. it should appoint appropriate staff. The designated PE should be based in the RRA headquarters and the RRA should inform both the Engineer and the Contractor. The APE shall report to the PE. the branch head for contract administration can perform the duties of the PE. If there are no many contracts to be handled by the RRA. The task of the APE/PE will be to work closely with the legal service to ensure the timely acquisition of the land and removal of obstructions. for one particular contract in a project. Therefore. especially on routine matters. This is even more essential if the Project Engineer is responsible for more than one project. Sufficient staff should be appointed. If he is in doubt about his response he can also seek advice from senior staff working in the RRA. hence the recommendation that each contract has a separate Assistant Project Engineer can be beneficial. The Project Engineer should similarly encourage his APE(s) to take as much responsibility as they feel they are able to minimize the involvement of the PE. relevant government policies and procedures and the responsible department for this function is not properly identified. Therefore. The RRAs at the moment are not very familiar with land acquisition and compensation. With the likely hood of future increment in outsourcing construction and maintenance works this function of the RRAs should be strengthened.The General Manager of the company is the highest body of the organization that is authorized to give decisions that can bind the Employer.

to minimize his traveling. The RE should pass most of his time on site.The APE should visit site at least once a month . In addition to the hand over of physical documentation. The RRA must ensure that transport is available for all APEs so that when they are required to visit site they can do so without delay. These meetings can be arranged on consecutive days for the various contracts on the same project. design and procurement) to the body responsible for following up the implementation of the contract. 2007 . copies of minutes of all post tender meetings. copies of all post tender correspondence. If the APE wishes to observe construction operations to enhance his knowledge and increase his experience this should be possible by extending his monthly visit or by making a subsequent visit during the month. Arrangement should be made for handing over of documents. The number of visits of the Resident Engineer to the RRA head quarters ‘to see the Employer’ should be kept to a minimum. details of any important considerations during the tender evaluation period.for the monthly progress meeting and will.e. these meetings should include the presentation of an oral and written history of the project up to that point in time. Action will then have to be taken to alleviate this situation. 4. He will also need suitable accommodation (as will the PE occasionally) either on site or near the site office. at the very least. spend a couple of days on site so that he keeps up-to-date with construction activities and is available for discussions with the Resident Engineer. any other details of 47 December. status and prevailing issues of the project from the person/body involved in the prior stage of the project (i. drawings and computer records.2 Familiarization with contract documents and prior history & status of the project The PE and APE should first of all familiarize themselves with Contract Details through reviewing the contract documents. The meeting will necessitate handing over of a complete set of tender documents. During the early stages of the contract he should attend all the monthly progress meetings. The workload of each PE should be monitored by the Planning and Contract Administration division/department to assess if any PE/APE is becoming overloaded. The PE should visit site occasionally. holding discussion with staff of the RRA involved in the design and procurement stages and reviewing files and correspondences related to the contract. The APE should arrange that he has suitable office facilities and equipment on site for his use within the consultant’s site compound. In order for the Hand-Over to be complete and effective it should take the form of formal minuted meeting.

especially lines of communication. It is recommended that the APE becomes the initial point of contact for the consultant’s site staff’s (Engineer’s Representative) day to day/routine communications with the 48 December. 2007 . 4.3 Establishing the lines of communication with the Engineer It is recommended that the PE arranges an introductory meeting with the Engineer and his representative to introduce the APE and discuss the contract. mobilization. but not necessarily be limited to. Handing Over of the following documents: o Feasibility Study o Final Design Report o Tender Document o Post Tender Correspondence o Post Tender Meeting Minutes o Tender Evaluation Report o Signed Contract Documents including Drawings o Copy of the Letter of Acceptance o Consultant Supervision Contract o All project correspondence o Computer files o RoW authorizations Supervising Consultant Other Departments and Organizations • Any Other Business • • • In the event of changes of PE/APE similar handing over between the outgoing PE/APE and the incoming PE/APE should be made. the following: • • • • • • Project History Design Philosophy and Criteria Project Funding Technical and Financial Constraints RoW status The Tender Process and the Tender Evaluation. work program etc. The meeting should be attended by at least the following members of the RRA: • • • Contract administration division head Contract administration branch head The PE The agenda for the meeting should include. construction drawings and RoW authorizations etc. agreements and the Contract Document including the Letter of Award.post tender decisions.

5 Land Acquisition and Removal of Obstructions: Before the notice of commencement is given the RRA should make all efforts and follow up to acquire the necessary land and accesses to the site. The APE and consultant should investigate these items thoroughly. writing letters to government offices which may be necessary or appropriate for the prompt and effective implementation of the contract.RRA. 2007 . Similarly arrangements should be made to make the borrow pits and quarries identified during the pre-construction stage available to the Contractor. The Contractor may or may not use such borrow pits and quarries. Such situation can be prevented if the Employer gives the required assistance promptly. old landmines may be encountered on deviations or on new alignments the Contractor should be advised of this possibility. Assistance should be given to the Contractor if liaison is required with other Government Authorities. His requirements for land for borrow pits and quarries may not be known until he carries out investigations. the Contractor contending that the Employer did not act quickly to assist them. should be directed through the PE who should pass everything on to the APE for either action or information. he may locate other sources which he considers to be more suitable. Customs procedures and the obtaining of radio and explosives licenses have led to claims on road projects. It is the Contractor’s responsibility to provide material that complies with the specification. The PE will be the point of contact for the Engineer in the first instance if matters dictate that decisions are taken ‘above’ site level. causing them to be delayed.4 Giving assistance and advice: The contract may require the Employer to assist in issues like obtaining residence & work permit to expatriate personnel. 4. In-coming correspondence. Work permits and any other assistance to be given to the Engineer and or the Contractor as required by the contract. for example. The APE should advise and give assistance on how to obtain Residence permits. however. therefore. The procedures for arranging/making any compensation payments should be well advanced prior to the Contractor arriving on site. Property affected by the construction work should be identified during the design or design review stage and the land acquisition report itemizes those properties or cultivated land which may require compensation payments to be made to the owners. If there is any possibility that. the sources identified during the 49 December. 4.

The portion of the site adequate for the contractor to commence works is to be decided in accordance with the program referred to in Clause 14 if any or in accordance to request of the Contractor reasonably made through a notice to the Engineer with a copy to the Employer. and usually will. There may be some matters of land acquisition which cannot be resolved until the Contractor arrives on site and has prepared his program for the Works. claim for being delayed under sub-clause 21. This can involve discussions with and action by. should protect ERA from any possibility of Sub-Clause 42.2 of FIDIC conditions also states that possession of so mush portion of the site and access to site shall be given with the Engineer’s notice to commence. of course. stockpiling etc.1 of the PPA conditions of contract or Sub-Clause 42. quarries. diversion roads etc well ahead of time and closely follow up the process of compensation and removal of obstructions so as not to cause any impediment to the contractor in performing the works. The PE/APE should make all efforts to identify the list of obstructions and requirements of the contractor for borrow pits. If the Contractor does not have possession of site when he needs to commence work he is entitled to. The APE should monitor progress to ensure that any other parties involved act efficiently to process whatever is required. that the Employer gives possession when requested to. camp construction. 2007 . without undue delay. to ensure that they are completed as quickly as possible and that compensation payments are finalized.design stage should be available for him to commence activities such as removal of overburden. In accordance to the PPA conditions of contract the contractor is required to commence the works on the start date which is specified time period (14 days as per the recommendation of PPA’s guide) after the letter of acceptance. the legal service of the RRA. The Employer should give possession of the site to the Contractor as defined in the Contractor’s approved work program. If the Contractor is delayed or incurs 50 December. Hence a separate notice to commence from the Engineer is not required to start the works. In accordance to the FIDIC conditions of contract the contractor commences the works as soon as the Engineer issues the notice to commence.2 of FIDIC. The APE should then act immediately and must take full responsibility to follow up the procedures that are necessary.2 being invoked. Areas for site camps and how he intends to accommodate traffic can only be addressed after he has advised the Engineer and the Employer of his intentions. It is suggested that giving sufficient access to the site with the notice of commencement and at the same time requesting which parts of the Site the Contractor requires to possess to commence and proceed with the works. The Program is to be submitted within specified period after the Letter of Acceptance and this may not give the Employer a great deal of time. That is assuming. Clause 42. amongst others. if this is necessary. Furthermore possession of site is not related to date of commencement. This conflicts to some extent with giving possession with the notice to commence the Works.

2007 . earthquakes etc. deductibles.g. The works are damaged or delayed by natural or accidental disasters e. floods. These securities provide for financial compensation in case of certain occurrences which cause loss to the Employer. under works contracts. Therefore.g. fire. The Contractor’s quality of work or rate of progress is so poor that the contract is terminated by the Employer. Contract securities can take a number of different forms/types e. 51 December. etc which exist with in the right of way have to be relocated. period of cover and the institution are amongst those to be checked. The Engineer should well ahead of time identify those utilities to be relocated and advise the Employer. Therefore. Utilities such as power line. 4. water supply line. These include: • • • • Performance Security Advance Payment Security Insurance Retention Security The above securities are to be submitted in accordance to a prescribed format and or approved format. and conditions). The APE should visit the area of the Works before the Contractor commences on site and consult local representatives to explain the extent of the construction work in their area. This could avoid the Contractor being disrupted by local inhabitants during the contract. the Employer should check that there is sufficient cover prior to approval. Examples of events where the Employer requires security are: • • • The Contractor has gone in to liquidation or becomes bankrupt. If delays occur in such instances it could result in a claim being made by the Contractor. Areas of significance and land which may be sensitive to residents can then be identified. telephone line.costs due to a failure by the Employer to give necessary possession. amount of cover. The Employer then arranges for the relevant utility corporation to do the work and pays them directly. the Employer requires the Contractor to submit a number of different types of securities. The terms (exclusions. the Engineer is to grant an extension of time and costs. the Employer seeks some forms of security.6 Securities In order to reduce the risk of loss in certain events.

especially a collateral agreement to answer for the debt. the surety agrees to pay the beneficiary a certain sum of money in the event that the principal fails to perform the relevant contractual duties. A guarantee. Bonds and Guarantees Construction contracts usually require a number of different types of bonds/guarantees. defined as “a written acknowledgement of an obligation to pay a sum or to perform a contract”. 2007 . The most commonly used bonds/guarantees encountered in works contracts are: • • • • Bid Bonds/Guarantees Performance Bonds/Guarantees Advance Payment Bonds/Guarantees Retention Bonds/Guarantees Conditional and Unconditional Bonds/Guarantees A conditional bond/guarantee sometimes termed an ‘on-default’ bond/guarantee is one which can be called when a contractor fails to comply with its obligations under the contract. The very reason why some Employers demand unconditional bond/guarantee is because their demand can be settled quickly without going into any possible arguments on determining whether the Contractor is on-default or not. the employer should not demand without justifiable cause (just 52 December. defined as "securing of compensation in the event of loss or damage by advance regular payments" A surety is defined as: “a person who assumes legal responsibility for the fulfillment of another’s debt or obligation and himself becomes liable if the other defaults”. default or miscarriage of another”.• • • A bond. The surety normally signs counter indemnity agreement and or holds co-lateral to enable it recover the payments from the principal (in other words the Contractor). Insurance. Nevertheless. In their usual form. An unconditional bond/guarantee sometimes referred to as an ‘on-demand’ bond/guarantee is one which may be called by the employer even when there may be no justifiable cause for such calling. defined as “a promise.

the security provided from the foreign financial institution may be required to be counter guarantied by a financial institution operating in Ethiopia. If the security is not acceptable then the Contractor must be advised to obtain the security from another source or make amendments as appropriate. Inmost of the cases only those institutions which operate in Ethiopia are allowed to issue the above mentioned securities. it is recommended that the matter be discussed fully with the Engineer. These costs could relate to the employment of a second contractor to complete the works or the demolition and reconstruction of unacceptable elements of the works etc. If the RRA intends calling the performance security. Foreign contractors. The second and subsequent installments of which will be made provided that the Contractor has utilized the released portion of the advance payment for the contract and in accordance to approved advance payment utilization schedule. The release of the advance payment to the joint account is subject to a special agreement to be signed by the Employer and Contractor (a sample of which is shown in appendix 2) which amongst others provides that the advance payment to the Contractor will be released in a number of installments. The Current procurement guideline of the FDRE (July 2005) allows both unconditional & conditional performance security and advance security from bank or insurance institutions to be accepted for local (domestic) Contractors. are required to submit unconditional performance and advance securities. Consultations with senior RRA staff and the Legal Service may be made if necessary. Performance Security A Performance security is a promise by a third party to cover any cost (in the case of a guarantee) incurred by the Employer as a result of non or poor performance by the Contractor. In case of Contractors (mostly foreign) who wish to provide security from foreign financial institutions. however. The APE/PE should carefully review the provisions of the contract in approving the institution issuing the security. Works contracts usually require the Performance Security to be furnished prior to the formal signing of the contract and within a specified period after the award of the 53 December. then release of the advance payment will be made to a special account (joint account) to be operated by two signatories one from the Employer and the other from the Contractor. 2007 . It is important to note that the APE/PE of the RRAs should always be aware of the current and applicable Government regulation in this regard and more importantly the provisions of the contract document in approving the securities. Institutions Usually guarantees are issued by banks whereas bonds and insurances are issued by insurance companies. and such an action should preferably result from a recommendation of the Engineer. If a local contractor chooses to submit conditional security for advance payment. or to complete the works (in the case of a surety bond) for the same reasons.because he can do so) as such action may not benefit the implementation of the contract.

Retention & retention security In addition to the above Performance securities works contracts usually provide for the Employer to retain a small percentage of all payments made to the Contractor as a further. The Advance Payment Security The works contract may provide for the Employer to give interest free advance payment in the form of loan to the Contractor to help him cover initial expenditures associated with mobilization. This figure is usually 20% for most of works contracts. In accordance to the current procurement guideline of the FDRE. The performance security is to be returned certain days after the taking over certificate or after issuing of the defects liability certificate. Until performance security is submitted and accepted no application by the Contractor for payment is to be certified by the Engineer. The APE/PE should refer to the contract to determine the date by which it should be returned. the Contractor may be requested to increase the performance security proportionally. security. If substantial additions (usually above 25%) are made to the contract price. more readily available or liquid. The reason for this additional security is that the Performance Security is provided by a third party and is considered to be available for “more serious” failures by the Contractor e. In order to avoid the risk of the Contractor disappearing without repaying the loan. 2007 .g. This advance payment is repaid to the Employer by deducting pre agreed amounts from each of the payments made to the Contractor. advance payment up to a maximum amount of 30% is allowed.Contract. The Performance Security is very valuable financial document. The amount (usually 10% of the contract price) is to be specified in the contract. presentation of which may be required to cash in the amount specified. Bid security is to be returned to the Contractor upon submission of acceptable performance security. On satisfactory completion of the works the Employer is required to return the guarantee to the Contractor thereby releasing the Contractor from all liabilities with regard to the performance of the works. where the Employer is required to undertake the completion or rectification of the works. the Employer will usually require the Contractor to provide some form of security to guarantee the repayment. Following the full repayment of the advance payment the security is returned to the Contractor for cancellation. It is therefore very important that the guarantee document be retained in a safe place. 54 December.

In accordance to the current procurement guideline of the government the amount is 5%. The insurances are usually required to be taken out in the joint names of the Employer and the Contractor in order to facilitate claims by both parties. In addition both parties are required to indemnify each other from claims by a third party against damages caused by the other party. Vehicles etc. Like any other guarantee the terms. the second half on the issuance of the Defects Liability Certificate. Under the General conditions of Contract the Contractor must obtain insurance cover on the following: The works (including materials & plant to be incorporated into the works). be covered by insurance for damage. validity and the institution providing the security should be checked.The amount to be retained from each payment is to be specified in the contract. Insurance All contracts require that the Works. injury etc. amount. loss. in order to assist the APE/PE in his evaluation. The retention of cash from payments can create cash flow problems to the Contractor. 55 December. The responsibility for taking out this cover is usually that of the Contractor and the cost of this is included in the Contract Price. The requirements for insurance are summarized in the following table. workmen’s injury or death. 2007 . contractor’s equipment. third party (person & property). Plant & Equipment. contractors may prefer to replace the retained cash with a guarantee. for the duration of the project. theft. As with all security documents it is important that the Retention guarantee be retained in a safe place as it is required to be returned to the Contractor once they have fulfilled their obligations as described above. Personnel. The guarantee should be in the same amount as the retention payment to be released. In order to improve their cash flow. The amount retained is to be released to the Contractor in two stages: the first half on the issuance of the Taking-Over Certificate.

Any accident Up to Defects Liability Certificate Whilst anyone is employed on the works The Employer. against all claims. Damage arising out of execution of the works. The works and third party insurance should be in the joint names of the Employer and the Contractor as per the FIDIC conditions. Main Points to be checked o Amount of Cover and deductibles (excesses) The amount of cover should be enough to enable recover the maximum possible damage by the event covered under the policy.Types of Insurance Insurance of works Insurance of The works (including materials & plant to be incorporated into the works). The insurance must be in the joint name of the Contractor and the Employer as per the PPA conditions. Any person or property Insurance Against Damage from any cause except the ‘Employer’s risks’ or “exclusions” as stated in the conditions of contract. Insurance companies may 56 December. plus additional sum (usually 10 to 15%) to be specified in the contract. The APE/PE through the RE should press the Contractor to forward the policies as soon as possible. 2007 . Same as above Period of Insurance Up to taking over certify date and during defects Liability Period if the damage or loss is caused due to a cause which occurred prior to the defects liability period or occasioned by the contractor in complying with his obligations during the defects liability period. Contractor’s equipment for the sum sufficient to provide for their replacement at site. remedying any defects. The provisions of the policies should be checked with special attention being paid to any provisions. exceptions and deductibles. The insurance shall provide for compensation to be payable in the types and proportions of currencies required to rectify the loss or damage incurred. therefore the minimum acceptable is normally specified. etc. Same as above Contractors equipment Third Party Workmen’s All Contractor’s and compensation Subcontractor’s Liability Employee on the works. under the contract is required to approve the Insurance Company and the terms of all policies.

it is safer to select a higher level of minimum cover and lower deductibles. o Period of Insurance Some policies run for period announced in the tender and others are applicable over the period of the Contract. Generally the deductibles (excess) accepted by a Contractor the cheaper will be the insurance charges.000 with US$25. The following values are given in US Dollars as a guide only. The purpose may be to discourage many small claims which would be time consuming to administer. The following is provided by the PPA guide: “Greatly. o Exceptions (exclusions) in the Standard Insurance Policy These should be carefully studied to see whether their acceptance would place unreasonable risks upon the Employer or Contractor. Procuring Entities should obtain professional advice on acceptable minimum cover limits. Plant.provide in their terms to deduct a fixed amount from any payment made against a claim. If the policy is for the period named in the Tender. The APE/PE through the RE should make sure that the insurance is valid and premiums are settled on time. If in doubt. in which case the subcontractors own policies should be called for and examined. Subcontractor’s work may be excluded. Materials. 2007 .000 maximum deductible (c-d) minimum cover for loss of or damage to Equipment: 100% of the value of equipment required for the performance of the contract with US$25. and Materials: 110% of the Contract Value with US$50. if such deductibles accepted by the Contractor are high they will not provide sufficient cover to the Employer. in the event he wants to make a claim.000 with no deductible. Insurances may be valid for a period of one year to be renewed every year after paying the necessary premium. it would be advisable to check that the deductibles are not more than acceptable limits. depending on the nature and value of the works.000 maximum deductible g) minimum cover for personal injury or death: US$500. During the course 57 December. Plant. However. but may be varied and may be specified in Ethiopian Birr or another appropriate currency: (a-b) minimum cover for loss of or damage to the Works. and Equipment) in connection with the Contract: US$250. the Contractor would then be liable for an additional premium for any extension of completion time. Therefore.000 maximum deductible (e-f) minimum cover for loss of or damage to property (except the Works.

or 4. breach of statutory duty. the Employer will be liable. o Vehicles For the Contractor’s vehicles the (RE) should check the policies to ensure that they cover the third party risks. including passengers. the following are Employer’s risks: a) The risk of personal injury.of the Contract the RE should examine receipts for premiums and ensure the policies are updated to account for variations /time extension that may have occurred. Plant. Such risks are called Employer risks: Employer’s risks in accordance to PPA conditions: “Unless otherwise specified in the SCC.6. Plant. and Equipment). and Equipment to the extent that it is due to a fault of the Employer or in the Employer’s design.2 Negligence. Materials. when driven by the engineer’s staff as sometimes these may be used as replacement vehicles. or loss of or damage to property (excluding the Works. which is the unavoidable result of the Works. b) The risk of damage to the Works. Employer’s risk There are special risks which are unlikely to happen but are very expensive to insure. 58 December.1. The contract normally does not require the Contractor to take out insurance against such risks. or due to war or radioactive contamination directly affecting the country where the Works are to be executed. Plant. o Definition of Site See that the policy definition does not exclude quarries or other remote installations and the access routes thereto. Materials. For vehicles supplied for the specific use of the Consultant check whether these are covered by comprehensive insurance policies. which are due to: 4. instead the Employer takes such risks and incase they occur and damage results. death. From the Completion Date until the Defects Correction Certificate has been issued. or interference with any legal right by the Employer or by any person employed by or contracted to him except the Contractor.6. 2007 .1.1 Use or occupation of the Site by the Works or for the purpose of the Works. the risk of loss of or damage to the Works. from the Start Date until the Defects Correction Certificate has been issued. and Materials is Employer’s risk except loss or damage due to a) A Defect which existed on the Completion Date. In case of vehicles the area of coverage should not be limited to the site as there will also be frequent traveling outside the site.

(c) ionising radiations. If an issue is delayed he 59 December. and (h) any operation of the forces of nature against which an experienced contractor could not reasonably have been expected to take precautions Users are advised to refer to the provisions of the applicable general conditions and special conditions of each contract to know the Employer’s risks of each contract. or civil war. (g) loss or damage to the extent that it is due to the design of the Works. (e) riot. other than any part of the design provided by the Contractor or for which the Contractor is responsible. invasion. information or approval from the Employer. or c) The activities of the Contractor on the Site after the Completion Date. (b) rebellion. except as may be provided for in the Contract. act of foreign enemies.b) An event occurring before the Completion Date. insurrection. Employer’s risks in accordance to FIDIC conditions are: (a) war. radio-active toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof. or from any nuclear waste from the combustion of nuclear fuel. (d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. (f) loss or damage due to the use or occupation by the Employer of any Section or part of the Permanent Works. Remedy on Contractors failure to insure If the Contractor fails to effect and keep in force the insurances required the Employer can effect such insurance and pay the premium by deducting from payments payable to the contractor. The APE should prepare a special follow up list (file) to record the status of issues which require assistance. commotion or disorder. unless solely restricted to employees of the Contractor or of his Subcontractors and arising from the conduct of the Works. or contamination by radio-activity from any nuclear fuel. 2007 .7 Information and Approvals One of the principal responsibilities of the APE is to ensure that any information or assistance requested by the Engineer or the Contractor is given in due time and that the Contractor (particularly) is not delayed by a lack of information or by matters which require the Employer’s assistance. hostilities (whether war be declared or not). or military or usurped power. which was not itself a Employer’s risk. revolution. 4.

The APE should ensure that the Engineer values all variations and that the Engineer copies all such details to him. The PE and APE should. has to be given without delay. If there are financial implications to any of these instructions the APE should ensure that a Variation Order is issued by the Engineer and if so required. ensure that they are not making decisions that should be made by the Engineer. 4. The PE and APE should carefully understand which matters require the confirmation or approval of the Employer.I. where such is required by the Conditions of Contract. The Engineer should do this and seek confirmation from the Employer. under the Conditions of Contract to be given by the Employer to the Engineer before he advises/instructs the Contractor on a particular subject. If the information required by the Contractor is to be provided by the Engineer (for example drawings).8 Site Instructions. the APE should request that a release of information schedule is prepared by the consultant which indicates dates for issue of information/drawings to the Contractor and which corresponds to the Contractor’s program. Correspondence requesting approval from the Employer should contain recommendations made by the Engineer.’s may need approval before issuing but others may not. The supervising consultant should also not make changes to the design (except minor realignments or level changes) or specification without referral to the APE or PE. 2007 . If errors in design become evident to the Engineer during construction or if the Contractor discovers such errors they should be brought to the attention of the PE. and should consult more senior personnel as necessary. It is not the responsibility of the Employer to propose solutions to problems posed by the Contractor. approved by the Employer. The Employer/Project Engineer should not propose/instruct a change to the Contractor directly. The terms of the contract will generally require that the Employer has to approve such extensions of time before the Engineer notifies the Contractor. A site instruction file should be kept in the APE’s office and he should check it every time he visits site. Changes to the design or scope of the Works required/proposed by the Employer should be discussed initially with the Engineer by the Project Engineer and the Engineer will then issue the necessary instructions to the Contractor. Any confirmation which is required. Some S. The Project Engineer should then communicate the Employer’s requirements and authorize the necessary action to be 60 December.should promptly report to the PE who should try to resolve it himself or discuss/report to higher or other relevant personnel to resolve the issue as early as possible. Variation Orders and Claims The APE must be aware of (be issued with) any instructions given to the Contractor by the Engineer. The APE will in turn advise the PE of the same. Any variation orders that could result in extensions of time and or additional cost should be advised to the PE by the Contractor and Engineer. however. The PE must ensure that the RRA respond quickly to such requests. If decisions are required they must be made quickly.

A standard format for payment application by a Contractor being used by ERA is shown in appendix 3. If liquidated damages are to be applied then the Employer deducts this on recommendation from the Engineer (the Engineer does not deduct them himself on his certificate). should be in a position to agree the Engineer’s certificate without too many queries. The APE. The PE and APE must also ensure that the Engineer gives his recommendation to the Employer without delay. 4. He should follow up the process of payment at the RRA to ensure that the contractor receives payment in time. 61 December. In such cases he shall not propose a solution. 2007 . Such disagreements often lead to deteriorating relationships between the Contractor and the Engineer and can result in claims for underpayment by the Contractor.taken by the supervisory team. Some of the response may require the consent of the Employer before the Engineer gives his determination or certification to the Contractor. that is the Engineer’s job. If the Contractor is paid before the deadline for payment it often leads to better relations on site and assists the Contractor to carry out his obligations. especially with regard to the foreign and local currency proportions. Sometimes disputes occur when the Engineer does not certify what the Contractor has claimed. The same format may as well be used by the RRAs. but he will have to consider any financial and time implications and the correctness of the engineering solution before authorizing the Engineer to order the change. The main responsibility of the PE (and APE) is to ensure that the Engineer has provided a well considered and detailed response to the Contractor’s claim. as it improves his cash flow. The APE needs to monitor if there are such differences and attempt to resolve the matter to the satisfaction of both parties. The PE and APE must therefore review the Engineer’s response thoroughly and reply to the Engineer as quickly as possible. Differences may occur due to a varying interpretation of what work has been completed. The procedure for dealing with claims is covered in the Conditions of Contract.9 Payment Certificates An important part of the Project Engineer’s duties is to ensure that applications for payment are processed quickly by both the Engineer and the RRA. The APE should act on certificates for payment immediately he receives them and then pass them for approval and payment. by visiting site regularly. The APE will ask the consultant to give him a summary of the escalation costs each month and should check the calculations during the early stages of the contract and periodically thereafter. The APE should carefully review the increases in cost under Clause 70 and should ensure that the Engineer has done so in his certification.

The program needs to be supported by cash-flow and equipment and manpower utilization schedules. The over all completion time cannot be changed while updating a program. such nomination must be made in sufficient time and the consent of the Contractor obtained to enable the Contractor to perform his obligations under the contract.10 Sub-Contractors and other Contractors If the Contract requires the Engineer to obtain prior approval of the Employer before he approves sub contractor proposed by the Contractor. he should make sure that such actions of the Employer does not interfere with the works of the Contractor. Clause 41 and Clause 43 & 47 of the FIDIC conditions respectively state: “The Contractor… shall proceed with the works with due expedition” and … “the whole of the works shall be completed within the time stated in the tender … or … extended time …” “if the Contractor shall fail … he shall pay liquidated damages. This will assist in meeting partial targets (slippage of one week shall be recovered within the succeeding week) to cope with the monthly schedule progress and so on. unless due to approved time extensions.4. In the case of sub-contractors nominated by the Employer. the PE should be responsible for reviewing the suitability of the sub-contractor and the program. In accordance to the General Conditions of Contract the Contractor is fully responsible for the timely completion of the works. If the Employer intends to undertake work on site himself or employs other contractors. A program is a tool to help progress and it must thus show the works in sufficient detail for planning.” 62 December. The time interval at which program updates should be submitted by a Contractor is sometimes specified in the contract.11 Progress Monitoring Normally the Engineer is the one who approves the work program. At site level whenever the Contract is suffering slippage the Engineer should insist on the submission of short term schedules (monthly or weekly). monitoring and reporting purposes. The practice of having program updates regularly so as to keep the program alive and take into account actual performance and remaining activities to date should be encouraged. The PE and APE should be aware of this. 4. delay of which affects the overall completion of the project. The Contractor’s work program is to be submitted within the time specified in the Contract. 2007 . It should also identify the critical activities. The Engineer should make necessary effort and follow up to have it presented in time.

This can be achieved at the early stage of the contract. He should make the Employer aware of areas of construction that may be falling behind the contract program. twice a month or monthly. backed-up by updated programs and short term schedules. should jointly with the Contractor’s Site representative lay-down the procedures for progress monitoring. Good working relations between the RE’s and Contractor’s staff. 2007 . Often when progress falls behind schedule the Contractor may claim that he is being delayed by matters beyond his control. These. At section level. As per the conditions of contract “The manner and speed of execution of the works are to be to the satisfaction of the Engineer” The R. thus he has the duty to: provide the Contractor with information and necessary help. Resolving these matters may avoid a claim situation and/or deterioration in relations between the Contractor and the Engineer. He will report the same to the PE who may then need to attend the next Progress Meeting. and Exercise effective pressure on him at the time when delays occur by means of programming the works and closely monitoring the progress. confidence between the Engineer and Employer and between the RE and the Contractor’s Representative are essential for effective contract administration and supervision. The APE should always try to establish the facts at monthly meetings and to question if this may be because of the Employer’s lack of action or the Engineer’s shortcomings. reviews must be carried out weekly and at project level. however. keep up-to-date on matters that may be affecting progress and require answers from the Engineer and Contractor.E. It is equally important to gain the Contractor’s trust. The main purpose of the meetings would be to review: o o o o o o The availability and flow of information The progress of work Contractor’s proposals for future activities Any obstacles currently hindering or likely to hinder the progress of work Proposed remedies Program updates Special attention should be given to items/ activities on the critical path. of course. the Engineer can often see the overall progress position better than the Contractor. will be discussed at the monthly meetings and will be highlighted in the Engineer’s Report. Notes of agreed /required actions resulting from these meeting should be circulated and acted upon quickly. the principal means being progress meetings and reports. by the Supervision Consultant (engineer) When the Engineer’s 63 December.However. The Engineer monitors the overall progress of the Works. The APE should.

12 Cost monitoring and control Changes to the originally estimated cost may occur due to the following: o o o o Increase in quantities Additional works ordered Price adjustment Claims 64 December. 4. for a particular work item. ii) induction (addition) of equipment. 2007 . at the same time. offering the Contractor all necessary help and information concerning the Contract. the R. The Contractor must then submit in writing his remedial proposals. The Contractor shall there upon take such steps as the Contractor may think necessary and the Engineer may approve to expedite progress so as to complete within the time for completion. should report them to his Head Office for these matters to be discussed at the Employer and Contractor’s Management level. time delays are closely related to the Contractor’s cash-flow problems which result in a lack of financial support to the site Organization. in the opinion of the Engineer. the Engineer shall notify the Contractor. ii) shortage of fuel and spare parts. amongst others. Dealing with Delays The conditions of contract state: should the rate of progress be. Typical indicators of lack of financial support are i) delayed payment of salaries and wages. iii) increasing the labor-force and/or iv) extending the working hours. iii) shortage of construction materials and iv) claims emanating from subcontractors /suppliers. or going to be late. It is thus important that as early as possible the RE is fully briefed on all aspects of the project by the Engineer who should ensure that a maximum effort is made in order to help the Contractor. If progress does not improve it may be necessary to institute weekly scheduling subject to review during corresponding weekly meetings. These are intended to keep a firmer grip on the situation but. to ensure more flexibility. this should be brought to his attention in writing or at monthly meetings.E. Remedial measures may include i) improving the site organization. Often.knowledge of the works is greater than that of Contractor. Whenever the Contractor is late. When such occurrences happen. too slow to ensure completion by the prescribed time.

the APE/PE must closely follow up the costs incurred during execution of the project. The APE/PE should immediately advise the Engineer. o Check that tests are conducted in the number and the frequency stated in the specifications and quality plan.In order to ensure the completion of the project on budget or otherwise to timely secure additional budget if additional cost is unavoidable. o Require the Engineer to report summary and status of the claims made by the Contractor if any. 4. The “estimated cost to complete” of a project will aware the Employer what the project cost will be by the time it is completed. if they observe non compliance with the requirements. hence will provide him a valuable information in deciding on whether to order additional works or not and in securing additional budget if necessary. It is of course the duty of the Engineer to check and certify the Contractors applications. inspection. 65 December.13 Quality control Again it is the duty of the Engineer to supervise and control the quality of the works. calibration and other records on site. o Check how non conformance is treated o Check that sufficient and qualified supervision staffs are at site and inspection is being adequately conducted. o Check that sufficient and appropriate testing equipment is available on site and that they are properly calibrated. Inspection form developed by ERA to be used by the APE/PE is shown in appendix 4. the APE/PE must be aware that checking of the applications should be done promptly and within the time specified in the contract. In doing so the APE/PE shall: o Check that the Engineer has submitted appropriate quality plan. o Review the relevant test. but the RRA’s project engineers should also check that the Engineer is performing his duties in an appropriate manner and see that errors are not made. However. But the APE/PE should periodically visit the site and inspect the works so as to ensure that the Engineer is properly supervising the works and the works are performed in accordance to the contract. o Check the applications for payment including (if price adjustment is applicable in the contract) the base and current indices (prices) are correct and from appropriate & reliable sources. The APE/PE should do the following: o Require the Engineer to submit “estimated cost to complete” of the project regularly. The estimated cost to complete a project should be updated at least each quarter to incorporate changes which happen during the quarter. 2007 .

16 Taking over of the works Procedure for full or partial completion and taking-over of works is given in the conditions of contract. Standard formats for Progress Reports on Construction Contracts being applied by ERA are included in appendix 5 for reference and may also be applied by the RRA’s as well. The task of the RRA’s project engineers will be to check that an approved plan exists. visit to the site and holding periodic meetings. so control of variations is essential. 4. The contractor should submit to the Engineer his plan of action which should be in compliance to the requirements of the law & the contact and to the satisfaction of the Engineer. One of the most important items of the report is the financial status of the contract. 2007 . The Project Engineer should advise the Engineer. It is vital that the Project Engineer is made aware of this by the Engineer (and APE) and a quarterly estimate of the Final Contract Price should identify these items so that any requisite action can be taken. 4. The Engineer should follow up compliance of the Contractor during execution. The Engineer should provide an estimated ‘cost to completion’ every three months. that the Engineer is monitoring the actual execution.4. The Contractor upon substantial completion of the works shall notify the Engineer to issue the taking over certificate together with an undertaking to complete outstanding works and rectify defective works. It is the PE’s duty to ensure that there are sufficient funds available to pay the Contractor as the contract nears completion. of the RRA’s requirement regarding the format and contents of the Engineer’s monthly report. is included as annex. Another report is the report compiled by the APE for the PE to pass on to the senior management. The Engineer shall either issue the taking over certificate within the stated time in the contract or instruct the Contractor to complete remaining activities (along with a list of activities to be performed) which. safety and environment It is the requirement of the law and the contract that the parties observe the relevant regulations and bi-laws to protect the health.15 Reporting The APE/PE monitor the progress of the works through reports they receive from the project engineer. safety of the workers and the environment. Again a standard format for such reports being applied by ERA. Only the relevant sections should be completed in the early stages of the contract. and verify so through inspection of the site and relevant documents. in 66 December.14 Health.

Alternatively. Provided that the defects do not affect operations or the safety of the works. the following: From the Employer APE. should list the outstanding work and press the Contractor to perform them while he still has equipment and skilled labor on the site. An efficient Contractor is usually keen to complete this quickly and close down the site as soon as possible though he may leave behind some limited resources to tackle correction work during the Maintenance Period.his opinion should be performed for the works to be stated as substantially completed. Form the Engineer Senior Contract Engineer (from head office of the Engineer) Resident Engineer & relevant staff Quality Control & Pavement Design Expert From the Contractor Project Manager & relevant staff It is recommended that the APE checks that the following are ready to facilitate the inspection For Field Inspection 67 December. Prior to the inspection team from the head office it is recommended that the engineer and his staff at site with the contractor’s project manager and staff at site jointly make an initial inspection and list out the outstanding works and defects. such works must be done by the Contractor immediately. this is usually acceptable. But if there is any outstanding or repair work which the Engineer considers to be urgently necessary for safety of the works. If the Engineer determines that the works are substantially completed. The inspection team should include. PE Representative of operation department/division (department from the RRA which takes over the completed project) Representative from the designer (if the designer is different from the supervision engineer). Before the issue of the Taking-Over Certificate the R. If the contract requires the Engineer to obtain the approval of the Employer prior to issuing taking over certificate. but not be limited to. he may wish to leave all correction work to be done later but before the end of the Defects Liability Period and return to do it all at once.E. he should do so and obtain the required approval prior to expiry of the specified period. It is recommended that the RRA sends inspection team to satisfy itself that the works are completed to its satisfaction. suitable time can then be arranged for the final inspection to be conducted in the presence of delegates from the head office. 2007 .

Official minutes of the meeting will be prepared to record findings and conclusions. 2007 . and then the RE will organize the office and field activities to be conducted during the inspection.50) Partial Taking over 68 December. The purpose of the Defects Liability Period is to allow time after completing construction for defects in the Works to come to light and to be put right by the Contractor while he is still on call.49 (2)) or searched for (C1. The inspection should start with an assessment meeting to be chaired by the R. of the defects still to be remedied (C1. During defects liability period. The Contractor. Outstanding works and defects shall be listed and sent to the Contractor for their completion.- Survey Team Laboratory Team At the Site Office As-Built Drawings Final Quantity Computations Updated List of Outstanding Works Update List of Deficiencies Correspondence Files Laboratory Tests by Category of Works Regular and contemporary records. except for: (a) completing outstanding works (b) remedying defects “due to the use of materials or workmanship not in accordance with the contract or failure to comply with any obligation under the Contract” (Classes 49 (3) and 64) (c) correcting for a defect for which he is liable (C1.50) Before the end of the Defects Liability Period the Engineer must inspect the works and then inform the Contractor within two weeks of the expiry date. shall carry out the outstanding and remedial works and latent defects identified during the defects liability period. It is not a period during which the Contractor has to rectify the effects of fair wear and tear free of charge. the Contractor is entitled to additional payment for all his work.. The resulting minutes should clearly sate whether there are still defects and outstanding works to be undertaken during the Defects Liability Period. The minutes will be signed by the members of the Inspection team. during the defects liability period.E.

In this regard offering short term training directly related to the task will be very beneficial. through training and experience. to specification. i. the RRA must have sufficient and qualified project engineers in accordance with the number of contracts at hand in the RRA. including the Employer. and as far as possible for the price quoted in the tender. Their principal aim should be to have a contract that runs smoothly and one on which all parties work together. assistance and training until he is able to handle the tasks on his own. Therefore the RRAs should make themselves ready for the future. the PE should assign APE(s) to assist him and should encourage them to take responsibility particularly on routine matters. unambiguous decision or answer to whatever has been requested. Similarly. If the PE has acquired the required ability. in the event that a number of contracts are to be handled by him. may be requested to give assistance in this regard.17 Concluding Remarks The Project Engineer and Assistant Project Engineer have very important tasks to perform and they can contribute considerably to the success of a works contract. giving them sufficient delegation to perform most of the tasks on their own should be encouraged. it is anticipated that the number of contractors to be outsourced will increase. ERA. But with the existing rural roads strategy. The PE should ensure existing formats for reporting are adhered to by the Engineer and that claims procedures required by the Conditions of Contract are followed by the Contractor. 4. 2007 . o Substantial part of the permanent works which has been both completed and occupied or used by the Employer or o Any part of the permanent works which the Employer has elected to occupy or use prior to completion. At the moment the number of contracts being handled by the RRAs is not significant and in some of the RRA’s all of the ongoing projects are being executed by own force. to achieve the desired outcome. In order to achieve this. 69 December. partial taking over of parts of the works may be made under the following circumstances: o Separate time for completion is provided in the contract for any section of the works. However if the APE is new to the job he may require close supervision.In accordance to the procedures set out. a project built on time.e. Equally important is to make sure that the APEs/PEs have the required ability to perform the task assigned to them. The PE should respond quickly to reports and letters from either the Contractor or the Supervising Engineer with a clear. which has better experience.