Addis Ababa Science & Technology University

School of Civil Engineering & Construction Technology

Department of Construction Technology & Management

Graduate Program: Construction Technology & Management

Construction Contract & Law Course

Questions on Presentations:

Employer’s Obligations Management

Contractor’s Obligations Management

Time Management

Quality Management

Scope Management

Cost Management

Safety Management

Risk Management

Payment Management

Claims & Disputes Management

Organized by:

Zewdu Tefera Worke

Environmental & Engineering Contracts Lawyer

November, 28-30, 2014

Addis Ababa, Ethiopia

Organized by: Zewdu Tefera Worke, Environmental & Engineering Contracts Lawyer Page 1
 Addis Ababa Science & Technology University

School of Civil Engineering & Construction Technology

Department of Construction Technology & Management

Graduate Program: Construction Technology & Management

Construction Contract & Law Course (CEng 6107)

Instructor’s Questions & Reflections on the Student’s Written Assignment

Instructor: Zewdu Tefera Worke

………………………………………………………………………………………………………

I. Employer’s Obligations
Member name Abiot Eyasu Zelalem
Present/absent
Evaluation10%
1. What are the general lessons learnt from the paper? NB: not seems well organized &
well researched except only to try to answer the posed research questions directly!
2. Who is the employer? Is he a professional? He is independent? If it is independent from
whom?
3. What is the reason that the public employer so important in the Ethiopian construction
industry in general and the construction contract in particular?
Design Related
4. What is a design document in terms of say your building project?
5. What is the basis for such design? How the designer begins to design and on what basis?
(Like employer’s requirement; regulatory requirements; site conditions; financial
limitation…)
6. Who is under design obligation in DBB project delivery system and under such
construction contract? Why?
7. Does mean that the designer has no design liability in this process? To whom the
designer becomes liable? Why?
8. Is there any possibility for the contractor under DBB delivery system to participate in
the design process? If yes, under what circumstances?

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 9. Who becomes liable for such contractor’s design? Why?
10. What are the contractual effects of not providing the design information to the
contractor in due time?
11. Does the contractor’s program have any relation with the provision of the design to the
contractor?
Site Related
12. What do you understand by the concept & scope of site within the context of a
given construction project & contract?
13. How the employer secures the site for its project be it in rural or urban area?
14. Why utilities pose special problem in the process of acquiring site in urban projects for
the planned project? say road or rail;
15. Does program have any relation with the handover of site from the employer to the
contractor? How?
16. What do you understand by the concept of access to the site?
17. What would be the contractual effect of not providing the site & access thereto in due
time to the contractor?
Takeover Related
18. What do you understand by the concept of takeover?
19. What are the pre-conditions to be fulfilled for the takeover of the works to take place?
20. Would there be any legitimate ground for the employer to refuse takeover of the works?
21. Would you tell us the procedure to be followed for provisional acceptance or takeover?
22. What are the contractual effects of provisional acceptance or takeover?
23. What are the effects of final takeover (issuance of the defects liability certificate) of the
works by the employer?
24. What are the possible remedies to the contractor under the MDB if the Engineer refuses
to issue a taking over certificate or the employer to take over the said completed works?
Case Study Related
25. What are the lessons learnt from the three case studies in brief? as related to design; as
related to site; and as related to takeover; NB: The third case is not clear. Was there
any takeover?

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II. Contractor’s Obligations
Member name Abdulkadir Mulualem D. Yewoubdar
Present/absent
Evaluation10%
26. Who is the contractor? Is he an employee or servant of the employer? Or is he a
professional with independent legal status?
27. If the contractor were a professional (and also independent) what are the legitimate
impacts of being a professional & independent in terms of a given construction
contract?
NB: autonomy: organizational; management; schedule; and method autonomy; indeed,
with two broad categories of limitations on such autonomy: contractual limitation
(coming from the contract through instruction of the employer to the extent agreed) &
legal limitation (coming from the practice & rules of its profession);
28. How do you bring on board the contractor from such web of potential contractors in the
market to your project? NB: the procurement law & process serves this very purpose;
29. On what ground you design your specific works procurement process and timing, i.e.,
when in terms of the project phase? Does delivery system have any impact on your
procurement planning? If so how?
30. Tell us how the winning bidder transformed into a contractor? What are the
subsequent tasks to be done following letter of acceptance? Or does the letter of
acceptance per se transform the winning bidder simply to a contractor? Why not?
NB: undertaking negotiation; signing the contract documents; submission of
performance security; …;
31. What would be the legal effect of signing a contract with the employer by such
contractor as planned?
NB: a paradigm shift will result in that the pre-contractual (legal) relationship
transformed in to contractual relationship!
32. How about if the employer refuses or declines to sign the contract without any plausible
ground? Does the said potential contractor have any recourse against such potential
employer?
33. How about if, before signing, the said potential contractor has been ordered to
commence some works & executed some portion of the works? Does the contractor have
any recourse against the employer if the planned signing of the contract has been
abandoned by such potential employer?

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 34. You stated (see p. 15 & 16) that execution obligation of the contractor commences to be
discharged upon receipt of the Notice to Commence the Works. How? Where is the
mobilization; where is the site? Where is the advance payment? When is the right time
to issue notice to commence, then?
35. Does mobilization schedule forms an integral part of the construction schedule? How do
you execute the project without first being mobilized? If so, what would be the
contractual effect, then?
36. What do you generally understand by the execution obligation of the contractor? Does
it have some specific dimension & scope to this obligation? NB ; time dimension; scope
dimension; quality dimension; safety dimension; entitlement dimension;
37. What are the possible factors that may impact the non-realization of the execution &
completion obligation of the contractor?
NB: two factors: temporal factors (like delay; variation; suspension; payment related
problems ;) & permanent factors (like termination or abandonment of the project);
38. What do you understand by the very concept & scope of completion obligation of the
contractor?
NB: scope: physical & non-physical aspects: physical aspect related to: substantial
completion of the works before tests on completion; passing tests on completion;
remedying defects in the works; non-physical aspect related to: submission of as-built
documents; and receiving performance certificate;
39. Would there be any post-completion obligation of the contractor? If any, is it a
contractual or legal obligation of the contractor?
40. What are the lessons learnt from the case study from the perspective of the execution &
completion obligation of the contractor?
41. If the SBD were that of PPA (ICB), how the MDB-FIDIC becomes the applicable
conditions of contract for the said project? See p. 26 Project Profile!
42. If PPA (ICB) were applicable, how do you explain that in October, 2010 the bid was in
process during which time there was no PPA 2011?

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III. On Delay & Disruption
Member name Negatu Berhanu Mulualem M Belay
Present/absent
Evaluation10%
43. You have discussed the importance of the establishment of specific commencement date
& completion date, which gives us the duration of the project within which time frame
the contractor required to commence, progress & complete the works. What do you
understand then by the concept of commencement date?
44. Does commencement date have any relation with mobilization period? Would there be
any possible pre-conditions to be fulfilled to actually commence execution of the works?
If yes, what are those pre-conditions?
45. Does your discussion on commencement, progress & completion, have any reference to
or relation with program? How?
46. Is program an integral part of the contract document?
47. What do you understand by completion date? By what factors may this critical date be
affected or not being realized?
48. What would be the possible legal effect of having no time as related to your project?
49. What are the possible factors to be considered which may lead the project to no time
scenario?
NB: no time at all; default (delay) by the employer and no extension of time to the
contractor; prevention by the employer through variation and granting no comparable
extension of time to the contractor; or the contract contains no extension of time clause;
50. What would be the legal effect of having no time or time becomes at large to the
contractor and to the employer?
51. You have identified bar chart & CPM as time management tools? What do you mean
by bar chart & CPM? Why you prefer CPM than bar chart for time management and
then for the establishment of delay in the project, if any?
52. Is there some level of similarity or difference between MDB & PPA in terms of time
management? How?
53. By what factors the completion of the works being affected either caused by the
employer or the contractor or risk factor?
54. How do you understand by the concept of delay in light of the discussion related to
commencement & completion date?

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 55. What are the possible contractual remedies to the contractor if the delay were caused by
the contractor? Time only or (prolongation) cost (direct, indirect plus risk allowances)
only or both time & cost?
56. What is the remedy for the employer if the contractor were in delay? How do you
calculate? Is there any difference as to the ceiling of the remedy if there were any delay
as related to sectional completion date? NB: to the whole of the contract price or to the
contract price of the section? Why not be limited (in both cases) to the works not yet
completed as affected by delay? What does our contract say?
57. What do you understand by the concept of disruption?
58. Does the concept of disruption have any nexus with program? How?
59. Is there any difference between delay & disruption?
60. What is the remedy to the contractor if the employer were responsible for the said
disruption? Time, cost or both? If it were time, how do you determine the extent of the
time extension to be granted? If it were cost, what is your basis to calculate such cost?
Would there be any possibility to require both time & cost as related to disruption
claim? How?
61. What are the lessons learnt from the case study in terms of delay and/or disruption
claims?
62. All delay causes may trigger disruption. All disruption causes may trigger delay.
Discuss the legitimacy of the statement.
63. All delay causes provide both time & cost as remedial right to the contractor, whereas,
all disruption causes provide only cost as remedial right to same. Discuss the validity of
the statement by providing illustrations.
IV. On Quality
Member name Endalew Kebede Markos
Present/absent
Evaluation10%
64. In terms of the critical parameters of any project schedule, budget & quality are some.
If you have a chance to prioritize among the three parameters for which parameter you
give first priority? Why?
65. Does compliance with quality requirement have a cost? What kind of cost?
66. You have well discussed the restructuring of the former Ethiopian Quality & Standards
Authority of Ethiopia. The authority has been reorganized in to the following four
institutions: Ethiopian Standard Agency; Ethiopian Conformity Assessment Enterprise;

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 Ethiopian Metrology Institute; and Ethiopian Accreditation Bureau. What are the
respective roles of such institutions in general and to the construction industry &
project in particular?
67. Do we have any national quality standards for building structures?
68. Do we have any national quality standards for hydraulic structures like dam?
69. Do we have any national quality standards for roads & bridges?
70. How the construction project benefits from quality assurance if we separate design
responsibility from construction supervision? NB: Do you mean that the supervision
consultant critically reviews the design documentation of the design consultant to
ensure quality assurance? see p. 7
71. Shall we consider then in our procurement strategy or delivery system the design build
system to get the maximum compliance with quality requirements of the employer in
the final product of the project like in your building project for example? see p. 7
72. If design build delivery system found to be acceptable in terms of quality requirements
of the project, how we be able to introduce such system as procurement strategy in
Ethiopia?
73. Do you think that failure in design quality parameters as contractual or legal liability of
the designer? Why? see p. 8
74. The importance of Quality Assurance System has been much emphasized in the
construction process with a view indeed to achieve the quality parameters of the project.
Assuming that such system in terms of some approved documentation have been
introduced in the construction project by the contractor. Is this documentation a
binding contractual document or a quality assurance guiding document? Why?
75. Is it not possible to achieve the quality requirements of the employer as defined &
prescribed in the technical specifications & technical drawings, which are clearly
integral parts of the construction contract?
76. Discuss the critical importance of undertaking tests on completion from quality
requirements of the employer & obligation of the contractor? see p. 12
77. Are tests on completion a matter that related to quality parameters of the construction
project under consideration? How?
78. What would be the contractual effects of not passing tests on completion? Say why we
reject the works, for example under MDB?(retesting; rejection or reduction of the
contract price; no rejection under PPA)

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 79. What do you understand by patent & latent defect? Is there any difference in terms of
the possible contractual and/or legal regulation of same? see p. 14
80. What is the overall understanding of the group in terms of quality management under
MDB, PPA & Applicable Law? Is there any substantial difference in terms of their
treatment of the subject quality management? NB: Verbatim long quotation from pp
18-26.
81. What are the lessons learnt from the case study? NB: Collapse of the stair case due to
error in design, which is the responsibility of the employer.
82. Was there any claim by the contractor against the employer other than the employer
covering the cost redesign & reconstruction of the stair like disruption claim, if any?
Extension of time? Prolongation cost if there were any delay to the project?
V. On Variation
Member name Sintayehu Frehaileab Yohannes Amsal
Present/absent
Evaluation 10%
83. Is there any difference between contract variation & variation or alteration in the
works? How?
84. How do you understand variation in the works? Does it relate to the permanent works
or to temporary works or to both?
85. If it were related to the permanent works, to what aspect of such permanent work that
variation being related? Discuss the scope of variation by taking your case study project
(i.e., road)?
86. Does change in method of construction triggers variation?
87. Does increase in quantity triggers variation? Why not? When triggers variation then?
88. How do you explain the importance of a variation clause in a given construction
contract to management scope of the project?
89. Assuming that such standard conditions of construction contracts contain no variation
clause. How do you manage each & every “variation need” of the employer?
90. Variation (as related to the works) as defined under MDB (see p. 5) contains two broad
categories of variation: viz., instructed variation & approved variation. What do you
understand by instructed variation? What are the possible causes of variation leading to
instructed variation both under MDB & PPA?
91. What do you understand by approved variation?

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 92. Is there regulation of approved variation under PPA & the Applicable law as the MDB
does?
93. What are the major causes for variation during construction?
94. Is it possible to absolutely avoid the causes for variation in the works? Why not?
95. If it not possible to avoid, is it at least possible to minimize the extent of variation? You
may consider the efforts to be exerted at different phases of the project to achieve such
minimization.
96. How the contractor involves during planning & scheduling process as related to
variation control in light of the DBB delivery system perspective? see p. 16
97. Is it possible to apply value engineering (MDB) during design phase? How? see p. 17
98. What are the standard rules for valuation of variation under MDB & PPA? NB:
valuation by measurement for same or similar quantities under similar condition;
valuation for omitted work; and valuation for not to be measured (this requires new
price proposal from the contractor side);
99. How do you understand works of similar character to be executed (if varied) under
similar or different conditions? Does it have any effect? What kind of effect? see p. 20
100. What is the contractual ground to use the provisional sum in the contract? Day
work?
101. What are the major contractual effects of variation on the contractor? NB: cost;
time; possible disruption claims?
102. What are the lessons learnt from the case studies leading to variation? NB: design
error & quantity increase. Is quantity increase always treated as variation? When is to
be treated as such i.e., as variation?
103. Recommendation: Why you suggest design build delivery system in relation to
variation? Is DB free from variation? If variation occurs under DB based conditions of
contract what would be the probable cause for such variation taking in to consideration
the basic feature of such delivery system i.e., DB?
104. Why not you discuss value engineering under separate chapter as instructed?
105. PPA 2011 not listed in the reference materials. Why?

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VI. On Cost
Member name Alem Behailu Bikat Binyam
Present/absent -
Evaluation10%
106. What is your general understanding about the paper in terms of cost & cost
overrun?
107. How you define cost & cost categories?
108. Which phase of a construction project being a ground for cost overrun? Why?
109. The group has discussed extensively on the Ethiopian procurement system & legal
framework. Well done. Is there any relationship between project cost management &
the procurement system? If yes, how? see p. 5
110. Do you see any relationship, if any, between Accepted Contract Amount & Final
Contract Price? NB: not addressed in the paper as instructed!
111. Do you see any relationship between final Contract Price & final Construction
Project Cost? NB: not addressed in the paper as instructed!
112. Avots definition: “Cost overrun is the difference between the original cost & the
actual cost when the project is completed”. Does it have any contractual implication!
Why you choose the definition given by this scholar? It may not have a direct nexus to
the of contract price.
113. You have identified & discussed design error as the fundamental cost overrun factor
during planning & design phase. What are the roots causes leading to design error
itself? lack of project requirement definition by the employer; time constraint; budget
constraint; lack of professional competence; lack of critical information as an input to
the design like due to lack investigation information?
114. Does error in design contribute to error in the project cost estimation process?
How?
115. What are the factors triggering cost overrun during construction period based on
the construction contract?
NB: parties (claims & variation); nature (like due to differing site condition…); market
(as related to the rise of the labor wage; the price of materials and/or equipment); act of
government (like changes in legislation);
NB: The concept of price adjustment related to market driven factor;
116. To which aspect of the cost type & structure the concept of price adjustment
relates? Why?

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 117. Do you see any significant difference between the MDB & PPA in terms of the
management of price adjustment as triggered by market factor?
118. You have identified & discussed three methods of price adjustment: invoice method;
index method; and hybrid method. Which method is adopted by MDB & PPA? What
are the possible drawbacks using the invoice method for price adjustment purpose?
119. If we follow the Index Method, where is the source of the original cost of such inputs
(materials; plant; labor) to the project? Locally or internationally or from the source
country?
120. What is then the cause for the claims and then disputes as related to the application
of the Price Adjustment Clause under MDB or PPA?
121. What are the lessons learnt from the case study?
NB: Cost overrun factors variation (46%) & other factors (100%) as related to a
building project.
122. What do you mean by”….the following recommendations are expected from the
consultant; the client; and the contractor; or are you recommending respectively to
them for their compliance? See pp. 33-34
123. Why the group uses PPA 2006 than PPA 2011 as reference? see p. 13
124. What are your key messages to the consultant, the client or the contractor in terms
of your recommendations?
VII. On Safety
Member name Dereje Desta Kidist Kinfe
Present/absent
Evaluation 10%
125. What is your general understanding about safety?
126. What are the general lessons learnt as related to the safe performance status of the
construction industry in Ethiopia? Are we safe?
127. You mention radiation. Does radiation have any connection with any type of
construction project? see p. 7
128. What are the specific lessons learnt from the site visit of such project “X” in light of
safety in construction?
129. Safety in construction indeed is very important. How do you ensure this safety
requirement in your construction project systematically? Does method of construction
help in this regard for site operation? How about the safety aspect of construction off
site?

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 130. The safety of the human environment concentrated merely on the project
employees. The safety of the general public possible to be affected by the project has
been excluded or not discussed at all. Why? For example, the Ethiopian Building
Proclamation 624/2009 & the Civil Code Article 2027 ff regulate such aspect &
consequences thereof.
131. What do you understand by the concept of the built-environment?
NB: the works under construction; the existing neighboring structure, if any (due to
excavation); and roads and/or bridges (due to transportation); and other structures, if
any (due to use of explosives);
132. Is there any NGO which provides public utility services? see p. 30
133. Who is liable if damage occurred to utilities? Why? see p. 30
134. What are the benefits accrued to the Company X by planning & executing a safety
management plan?
135. What was the scope of the safety management plan of the Company X in terms of
your assignment? NB: human environment only; built-environment; natural
environment; utilities environment;
VIII. On Risk
Member name Wondmenew Seifu Biniam
Present/absent
Evaluation 10%
136. What is risk in general?
137. What is then construction risk in particular?
138. What is the relevance of “Product Liability Coverage” as related to construction
project? See p. 46.
NB: That may be relevant for process plant contracts like industrial plant contract.
139. How is construction risk allocated to the employer & the contractor under any
standard conditions of construction contract like PPA & MDB-FIDIC?
140. Why we bother at all in the issue of risk allocation management at all in the
construction industry?
141. Does risk have cost? How do you asses, analyze & determine the extent of such risk
based or related cost?
142. Do you see any role of the conditions of contract in terms of identifying & allocation
of risks to the contracting parties?

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 143. Figure 2-1: Is it practically possible to plan & collect information to arrive a total
certainty scenario as depicted in the Figure? Risk should have a certain level of
uncertainty? If it is totally certain can you get an insurance coverage for such kind of
risk?
144. What are the possible categories of risks? See p. 18. Are all risks insurable by
insurance companies? Why not?
145. Is there any concept of nominated sub-contractor under PPA? Under which PPA?
see p. 25
146. Case 2: Why the Oromia Roads Authority follows the MoFED’s Regulation? If so,
what was the ground for such regulation and/or relationship?
147. What are the lessons learnt from the case studies?
NB: on advance & performance bond; and on performance related case;
148. Conclusion: is there any problem with PPA if such conditions of contract cross refer
to the Civil Code?
149. What are the lessons generally learnt from the assignment on risk management?
IX. On Payment
Member name Kiber Selam Workneh
Present/absent
Evaluation 10%
150. Does schedule of payment have any connection with schedule of works? If yes, how?
See p. 4.
151. Is there any contractual possibility to provide to the contractor an advance payment
in the middle of the project? See p. 4. Then what is the purpose & definition of an
advance payment?
152. What form of security the contractor is required under MDB or PPA to get the
advance payment? Bond or guarantee? Is there any difference between the two forms of
security?
153. In the middle of the project, the contract price may be different from the originally
Accepted Contract Amount. This is so due to cost overrun factors. In the recovery of the
advance payment from the contractor, is there any influence coming from some factors
of cost overrun in calculating the percentage of the advance payment or are we sticking
to the original management line based on the originally Accepted Contract Amount?
Why?

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 154. Under the PPA & MDB-FIDIC monthly payment is based on ad measurement,
namely that the quantities executed by the contractor are measured & valued. Would
you tell us the process how the quantities executed are so measured & valued?
155. Are all executed quantities are measurable, valuable and thus payable? See also the
interrelationship among valuation clause; the BOQ; the Drawing; and the Technical
Specifications.
156. How do you see measurement related claims to surface if all quantities so executed
are payable? What are the causes for measurement related claims by the contractor,
then?
NB; No joint record on the take off sheet? Disagreement on the extent of the quantities
so executed?
157. To what extent the contractor is paid for working space taking road project as an
illustration?
158. You have identified, in terms of interim payment, monthly & milestone payment. Do
you have any experience as related to milestone payment?
159. Does the certified IPC serves as the certification of the quality of the works executed
by the contractor? Why not?
160. MDB & PPA both allow adjustment of certified IPC. Assuming that the certified
IPC (No. 3) has an arithmetic error. The effect of such error has brought the over
payment of ETB 5 Million to the contractor. The contractor has become bankrupt. The
contract has been terminated by the employer. How the Engineer adjusts the IPC on the
next IPC where there is no next IPC?
161. Whose risk is it any way? Do you see any liability of the Engineer? How?
162. From whom the employer demands the repayment of such overpaid sum of money?
163. What do you understand by the concept of entire contract? Is the concept included
in our legal system?
164. Assuming that the contract has been terminated due to the default of the contractor.
Would there be any payment right available to the contractor say under Clause 15.4 of
MDB? If so, when & how?
165. There is a strict requirement to undertake valuation at the date of termination.
Discuss the scope & process of such valuation? What is the importance of such
valuation exercise?
166. What is the conceptual difference between/among Final Statement, Final Account &
Final Payment Certificate, if any? see p. 41.

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 167. What are the fundamental lessons to be drawn from the three case studies as related
to payment?
168. What is Final Payment Certificate? What is the legal or contractual effect of final
payment on the contractor, on the employer & on the Engineer?
169. Why do you recommend DB delivery system as related to payment?
X. On Claims & Disputes
Member name Abdulalim Asaminew Tesfaye Tsome
Present/absent
Evaluation10%
NB: The paper largely lacks any analysis & source citation! No references at all.
170. What is your general understanding about & lessons learnt from the paper?
171. What do you understand by the concept of construction claims & claims
management?
172. Why we have construction claims? Is it possible to avoid or to prevent claims? If so
how?
173. How do you understand by construction disputes and their management?
174. What do you think as the fundamental cause for claims & disputes in the Ethiopian
construction industry?
175. What do you understand by delay & disruption claims? Are they same ofr
different? How?
176. How do you understand by quantum meruit claims? see p. 19
177. How do you see the role of the Commercial Code of Ethiopia in terms of claims
management? See p. 6.
178. Are there any formal claims of the employer? Under which conditions of contract?
see p. 22
179. What is the role of the Engineer under MDB & PPA as related to claims
management? see p. 23
180. Would you tell us the dispute management system under MDB? see p. 25
181. Would you tell us the dispute management system under PPA? see p. 26
182. Does PPA provide adjudication & arbitration as discussed under page 27?
183. Why you list all the articles from the Civil Code as related to negotiation;
conciliation; and arbitration without any discussion or analysis? see pp. 28-29?
184. Why you put Dispute Review Board under prevention? see p. 30 & 31
185. Why you put Adjudication under judgmental? see p. 33

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 186. Would there be any relationship between DRB & Adjudication?
187. What is arbitration as dispute resolution method?
188. Is there any similarity between arbitration & adjudication?
189. What are the lessons learnt from the case studies?
190. What is the process of arbitration from the context of your case studies; from the
context of the Arbitration Rules of the Chamber?
191. What could be drawn in terms of conclusion from your paper?
192. What are the points of your recommendations? Not clear.

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