Technical Paper 23

CLAIMS AVOIDANCE TECHNIQUES
USING ABUDHABI GENERAL
CONDITIONS OF CONTRACT
Prepared by
ID No.55393
MARCH 2010
Claims Avoidance Techniques using Abu Dhabi General Conditions of Contract
Technical Paper for CCE Exam on March 05, 2010 (Rev-1)
TABLE OF CONTENTS
PAGE
1. ABSTRACT ...................................................................................................3
2. INTRODUCTION..............................................................................................4
3. CLAIMS MANAGEMENT PROCEDURES ............................................................5
4. CLAIMS ANALYSIS PROCEDURES ..................................................................7
5. CLAIM AVOIDANCE TECHNIQUES .....................................................................8
6. CASE STUDY………… .................................................................................14
7. CONCLUSION ...............................................................................................16
8. REFERENCES………………………………………………………….……….…16
AUTHOR ID - 55393 Page 2 of 16

1. Abstract
The Government of Abu Dhabi is engaged in a vast range of construction projects,

ranging from irrigation projects to desalination plants and from sports stadiums to
power generation stations and sewage treatment facilities. Mosques, schools, villas,
government administration buildings, hospitals, airports, bridges, ports, roads and
every kind of infrastructure project are constructed under the auspices of the
Government.
In Abu Dhabi, The General Conditions of Contract for Civil Engineering Works, „Abu
Dhabi GCCCW‟ is the core of the contractual relationship between the Department
and the Contractor in Construction Contracts. These conditions have been prepared
in accordance with the rules and regulations in force in the Emirate of Abu Dhabi and
the U.A.E and in general legal regulations.
Abu Dhabi GCCCW addresses the rights and duties of the contracting parties, and
so, is of special concern to claims avoidance / treatment practices in construction
contracts. It deals with numerous issues which are of paramount importance.
Author‟s topic - Construction Claims Avoidances using Abu Dhabi General
Conditions of Contract Civil, communicate the various claim avoidance techniques
to be practiced by the Engineer (Consultant), as per the Articles of Abu Dhabi
GCCCW.
The report consists of an Overview of Construction Contracts in Abu Dhabi, Local

Project Management Organization, Claim Analysis and Management procedures
etc…The integral part of the report is the analysis and summarization of a few
articles of General Conditions of Contract and a list of experienced Claim Avoidance
Techniques related to these articles, which are to be exercised and accomplished by
the Engineer during project phase. A Case Study / Claim Analysis Report of one of
the Author‟s Contracts, is also included for claim management illustration purposes.
Author concludes that the Engineer‟s practice of active claim avoidance techniques
based on the correct interpretations and applications of the Conditions of Contract
and the utilization of a thorough claim review process can effectively abate the
occurrence and impact of contractor claims.

2. Introduction
Author is a Civil Engineer, working as a Contracts Engineer in an Engineering

Consulting Firm and is engaged in Construction Contract Administration roles at
various projects in the Emirate of Abu Dhabi. Accordingly, in Author‟s point of view,
Claims Avoidances must be practiced by the Engineer at every phase of the project
life cycle. Its effectiveness is increased by the use of a project risk assessment to
identify potential risks for claims and to develop means to avoid or minimize the risks.
It requires careful preparation and review of Contract Documents to eliminate
ambiguities, discrepancies or errors and to ensure completeness and consistency.
There are two major components of Claims Avoidances.
 Proper Project Management.

 Consistent Interpretation and Application of the Contract.
Basic project management skills and application of the contract include:
 Contract preparations.
 Thorough knowledge of the contract.
 Consistent application of contract provisions.
 Effective communications.
 Conducting inspections of the work.
 Prompt review and return of submittals.
 Assuring the quality of materials and workmanship.
 Utilizing practical techniques for tracking submittals.
 Organization and maintenance of accurate project records.
 Obtaining information from various construction participants.
 Keeping the Client informed of the project status.
 Conducting progress meetings and preparing minutes.
 Estimating, budgeting and controlling the project costs.
 Planning, scheduling and controlling the time.
 Assuring the scope of works.
 Authority and decision making.
 Close out the Contract.

Author considers that continuous application of the above will be better able to
contribute to claims avoidances.
3. Claims Management Procedures in Abu Dhabi
Typical Project Management Organization of Abu Dhabi Emirate
EXECUTIVE
COUNCIL
CLAIMS
COMMITTEE
GENERAL FINANCE
PLANNING
PROJECTS DEPARTMENT
DEPARTMENT
COMMITTEE
EXECUTING DEPARTMENTS
CONSULTANTS
CONTRACTORS
Project works are executed under the authority of the appropriate Department, with
the control of payments resting with the Finance Department. Authority over the
Government‟s construction projects rests with the Executive Council of Abu Dhabi.
The Principal Departments involved in the execution of construction projects include:
 Abu Dhabi Public Works Department.

 Abu Dhabi Municipality Department.
 Abu Dhabi Town Planning Department.
 Abu Dhabi Water and Electricity Department.

Overview of the Contract

In Abu Dhabi, usually the Construction Contract consists of four (4) parts:
 Volume 1- Instruction to Tenderers, Forms, Conditions of Contract etc..

 Volume 2- Bills of Quantities, Analysis of Rates etc..
 Volume 3- Technical Specifications.
 Volume 4- Drawings.
Claims Management Procedures
The claims review and resolution in Abu Dhabi which presents the opportunity for the
amicable settlement of Contractor Claims, usually carried out by any of the following
ways:
 Engineer Assessment & Department Review and Resolution.

 Claims Committee / Executive Council Review and Resolution.
 Through the courts of Abu Dhabi.
Engineer Assessment & Department Review and Resolution
The resolution of claims at the Department level occurs when the Engineer
assess the claims and the Department and Contractor can agree the terms of
settlement of the claims. The General Projects Committee must approve
settlements involving an amendment of the Contract‟s time for completion and
settlements which amend the Contract value with Executive Council approval.
Claims Committee / Executive Council Review and Resolution
If the Department and the Contractor cannot agree the terms of a settlement
of the contractor‟s claims recommended by the Engineer, the Contractor can
request that his claims be referred to the Claims Committee for further review.
The Claims Committee is comprised of representatives of the concerned
Departments and is chaired by a member of the Executive council: The
Claims Committee utilizes independent claims experts and analysis in its
evaluation of claims. Claims Committee recommendations require Executive
Council approval.

Through the courts of Abu Dhabi
When the Contractor‟s claims cannot be resolved at either the Department or

Claim Committee level, he may pursue them through the courts of Abu Dhabi.
4. Claims Analysis Procedures in Abu Dhabi
Usually, in Abu Dhabi, the construction claims analysis procedure is divided into five
parts:
 Notice.
 Acknowledgment.
 Merit Evaluation.
 Cost and Time Evaluation.
 Resolution.
Notice
The first phase of the claims process involves the Contractor‟s notice of the
claim. This phase is important as the Contractor‟s compliance with contractual
notice requirements may affect his entitlement. Such notice is commonly
imposed by construction contracts as a condition on the Contractor‟s
entitlement to relief.
Acknowledgement
Once the claim has been received by the Department / Engineer, an

acknowledgment should be sent to the Contractor as soon as reasonably
possible. The acknowledgment should indicate the date and time that the
claim was received by the Department / Engineer.
Merit Evaluation
The purpose of this analysis is to establish an effective method for

assessments of claim issue, and to establish clear, concise, and persuasive
positions to be taken by the Department / Engineer, and, in addition, to
identify the procedures necessary to refute, resolve, or defend claim issue in
a timely manner. Note that one of the most important steps in claims
resolution is the isolation of issues. Evaluation of the merit of the Contractor‟s
claim focus on two elements: Liability and Causation.

Cost and Time Evaluation
Where the Department / Engineer analyzes and conclude that the

Contractor‟s claim presents a case for entitlement, it must then proceed to
quantify such entitlement. This quantification is achieved through analyses of
the cost and time elements of the claim.
Resolution
After the Department / Engineer has evaluated the Contractor‟s claim with
respect to merit, cost and time, serious consideration should be given to
resolving all disputed issues. Generally, it will be in the best interest of the
Department to resolve claims as soon as possible. The early resolution of
claims will have the benefits to the Department. Any settlement of a claim will
reflect the relative positions and strengths of each party.
5. Claim avoidance techniques, using the Abu Dhabi GCCCW
The Abu Dhabi GCCCW is divided into 12 chapters and is contained in 53 Articles
and is governed in „Arabic‟ (the ruling language of the country).
The Author has prepared a brief summary of the definitions of the following Major
Articles from the Abu Dhabi GCCCW in English (analysis of entire Articles of
GCCCW will lengthen the report and hence are not included).
Under the Article summary, a list of Claim avoidance Techniques to be practiced by

the Engineer while administering these Articles, are given.
Article 1 - Scope of the Contract
Article Summary
Article 1 identifies the four elements which form the Contract. All four elements are
taken together as a unit to form the contract. According to Article 1, the four elements
are:
 Instruction to Tenderers, Forms, Conditions of Contract etc..

 Bills of Quantities, Analysis of Rates etc..
 Technical Specifications.

 Drawings.
Claims Avoidance Techniques:
 Make certain that the four elements of the contract are consistent.
 Review the various documents to identify and correct ambiguities.
 Make sure that the drawing and specifications are complete.
 Convey a clear understanding of the scope of the project.
 Treat seriously and respond in writing to clarifications / correspondences.
 Correct inconsistencies when discovered during the tender phase.
Article 2 - Time for Completion
Article Summary
Article 2 identifies the time upon which all of the works shall be competed.
 Make certain that the time for completion is reasonable and achievable.
 Carefully evaluate the likely time for completion of the project.
 Perform an independent schedule evaluation.
 Determine the shortest possible duration for the completion of the project.
Article 3- Extension of Time for Completion
Article Summary
Article 3 provides for the Extension of Time for completion of the Works, at the
discretion of the Department, for certain identified factors.
Claims avoidance Techniques:
 Recognize delay events when they occur.

 Evaluate the delay impact and grant extensions of time, if required.
 Enforce the notice requirements but recognize its limitations.
 Be mindful of constructive notice of delays.
 Enforce the requirement Contractor make every effort to avoid delays.
 Investigate the Contractor‟s given reasons for delays.

 Evaluate carefully the Contractor‟s schedule or programme

 Ensure schedule reasonableness and compliance with the Contract.
Article 4- Suspension of Work with contract provisions
Article Summary
Article 4 provides that if the Contractor fails to satisfy any provision of the Contract or
specifications or otherwise fails to advance progress on the works, the Engineer may
suspend all or part of the Works. Any such suspension will remain in effect until the
Contractor has provided a remedy for such identified deficiencies. It is important to
note that the Contractor will have no right to claim for a time extension for any delays
by suspensions in accordance with this article.
 Justify and carefully document any default decisions.

 Be sure that the proof of the Contractor‟s default is sufficient.
 Provide a chance to “cure” his inadequate performance before suspension.
Article 6- Payment Certificate
Article Summary
Article 6 sets out the contract‟s mechanism for payment to the contractor for work
performed. The Contractor is required to the Engineer, who then verifies the
Contractor‟s statement and issues a payment certificates. Payment is made on the
basis of 90% of the value of executed works and 75% of the value of materials on
site, provided they comply with the specifications. Payment is to be made within 45
days of the submission of the payment certificate by the Engineer. Note that UAE
national contractors are exempted from any retention of funds if they provide a bank
guarantee in lieu thereof.
 Issue Payment Certificate within a reasonable time frame.

 Establish effective system within Department for processing Payment.
 Ensure that the time frame is adequate to Department process..

 Ensure that the payment is compatible with Regulations and Requirements.
Article 7 to 10 - Contract Amendments Provisions
Article Summary
Articles 7 through 10, which collectively provide for changes and variations to the
contract as may be required by the Department. Articles 7 and 8 relate to
amendments of quantities. Articles 9 and 10 relate to amendments of the time for
completion.
 Understand the type of contract employed (Lump sum, Unit Rates etc..),
 Study the meaning and intention of the articles, and apply it fairly.
 Endeavour to resolve differences amicably, if at all possible..
 Be clear with the Contractor so that he understands that the threshold.
Articles 14 – Maintenance Guarantees
Article Summary
Article 14 establishes a 12 month maintenance period (24 months for mechanical

and .electrical equipment), commencing on “the date of preliminary handing-over of
the Works or any part thereof separately handed-over.”
 Maintain a clear record of any part handed over separately to avoid disputes.
 Check whether the guarantee period has lapsed for a given part of the works.
 Diligently record any notices of default and notices of intent to cure.
Article 17- Program of Works
Article Summary
Article 17 addresses the requirements for the submission, review and approval of the
Contractor‟s proposed construction schedule. This article also identifies the

obligations of the Contractor and the Department with respect to the use of the
schedule following approval by the Department.
 Enforce the time requirement for the Contractor‟s detailed schedule.

 Review the detailed schedule submission professionally.
 Retain an expert in critical path method scheduling.
 Review and analyze the schedule to ensure the Department understands.
 Utilize computer-based CPM schedules for significant and complex projects.
 Develop guidelines and specifications for schedules.
 Obtain the types of information that can best utilize to monitor construction.
 Define the type and level of detail required in the 2 week schedule.
 Recognize the schedule‟s benefit in monitoring the progress of the work.
Article 18- Engineer’s Instructions
Article Summary
Article 18 describes the authority of the Engineer to issue instructions affecting the
Works.
 Clearly define the specific departmental procedures for issuing instructions.

 Confirm the level of authority for issuing instructions.
 Provide dear and concise instructions to avoid misunderstanding.
 Anticipate the impact of instructions in advance of issuing them.
 Prepared and discuss potential impacts with the Contractor.
 Maintain contemporaneous notes and other documentation of instructions.
 Confirm verbal, instructions to avoid disagreements.
 Clearly indicate the provision of Article..
Article 21 - Materials, Goods and Workmanship
Article Summary

Article 21 describes the Contractor‟s responsibility for the execution of the Works
according to the specifications. Article sets out the responsibilities of the parties with
respect to the testing of materials to ensure compliance with the specifications.
 Record the reasons for resulting delays in materials, goods and workmanship.
 Approval of alt. materials should expressly state Contractor‟s responsibility.
 Alternative materials shall not entitle him to an extension of time, if possible.
Article 22, Work Progress Reports
Article Summary
Article 22, Work Progress Reports, requires the Contractor to submit to the Engineer
periodic detailed reports with respect to the progress of the works. The timing and the
form of the reports are to be specified by the Engineer.
 Require detailed progress reports to be submitted, as per contract.

 Require the job progress reports on a regular basis as appropriate.
 Require to submit daily reports of labor and plant resources.
 Recognize the value of good, detailed, organized contemporaneous reports.
Article 24 - Inspection of Site
Article Summary
Article 24 - Inspection of Site requires the Contractor to declare in writing that he has
inspected the site, determined that the soil is suitable for foundations in accordance
with the drawings and checked the drawings for the foundation requirements.
Claim Avoidance Techniques:
 Mitigate potential claims by seeking to resolve issues immediately.

 Settle the issues in an amicable manner.

Typical Examples of Specific Risks and Treatment under Abu Dhabi GCCCW
Author has also provided a list of specific risks and its treatment under Abu Dhabi
GCCCW observed during his contract administration of the involved projects.
RISK EXAMPLES OF SPECIFIC RISKS TREATMENT UNDER

CATEGORIES ABU DHABI GCCCW
Delays due to exceptionally adverse

FORCE Contractor may be entitled to
weather, floods, storms,
MAJEURE Extension of time.
earthquakes, etc.
Delayed payments to Contractor.

ECONOMIC Not addressed.
RISKS
Inflation/ price escalation. Not addressed.
Contractor may be entitled to
Change of design, quantity/ quality.
Extension of Time and Cost.
DESIGN RISKS
Design omissions/errors by Contractor may be entitled to
Consultant/Department. Extension of Time and Cost.
Contractor may be entitled to

Restricted access or possession.
PHYSICAL Extension of Time and Cost.
RISKS Contractor may be entitled to
Additional work.
Extension of Time and Cost.
Contractor liable for Suspension
Suspension of works.
for Default.
CONTRACTOR
RISKS Contractor or Department‟s risk
Extension of Time for Completion. depending upon cause.
6. Illustration of a Case Study / Claim Review Report
The case below illustrates some claims issues raised by the Contractor in one of the
Author‟s contract. Note that the conclusions reached in respect of any particular case
depend upon the circumstances present and the applicable contract provisions. It
cannot be assumed that similar issues would result in the same conclusions if
presented in the context of other projects where other circumstances and contract
provisions would apply.
This Claim Review Report has been prepared in response to „The Arab Contractors‟
Abu Dhabi (The Contractor) claim for extension of time and extra costs. The report

provides summary of Contract information, the Contractor‟s submission and the

Engineer‟s review and recommendation.
Contract Information
Name of the Contract : Irrigation Facilities for xxxxx Area
Contract No. : xxxxxxxxxxxxx
Description of Work : GRP Pipes and Chambers
The Contractor : The Arab Contractors, Abu Dhabi
The Engineer : xxxxxxxxxx, Abu Dhabi
The Department : xxxxxxxx, Emirates of Abu Dhabi
Amount of Contract : Dhs. 33,404,616
Date of Award of Contract : 24.08.1998
Date of Commencement : 30.11.1998
Period of Contract : 546 Calendar days
Date of Completion : 28.05.2000
Contractor Submission
The Contractor has claimed a total 156 days extension of time as the difference
between the total lengths of the approval process for GRP Pipe materials against 30
days mentioned in the Contract, together with extra cost and losses in the amount of
AED 3, 524,686.
Description Amount Time
AED.
Delay in Approval of Materials 156 days
3,524,686.00
The Contractor has neither stated the specific Articles of the General Conditions of
Contract which he considers gives entitlement to his claim nor a reasoned
explanation as to their relevance. Also, the Contractor has not submitted any break-
down of his financial compensations.

Engineer‟s Review and Recommendation
The Supplementary Conditions of Contract clause states that a minimum of 30 days

should be allowed by the Contractor to approve the pipe materials submittal; it does
not state a maximum period. However, the time taken to approve the submittal
should be reasonable. Therefore, the Engineer considers that a reasonable time to
approve the early pipe materials submittals could be 30 days.
The Engineer analyzes from the site records that there was a delay of 66 days due to
third party involvement in the approval of the pipe material submittal but disagrees
with the calculation of 156 days. The Engineer considers a reasonable assessment
to be 36 days (66 days - 30 days). However, from monitoring activities on site during
this „claimed delay period‟ appeared to have no effect on the overall progress, as the
Contractor was on schedule.
Accordingly, The Engineer, under the Contract Conditions, was unable to

recommend any award of extension of time or additional costs.
7. Conclusion
Author concludes that the Abu Dhabi GCCCW can be consistently interpreted and
applied by the Engineer for claims avoidances purposes, throughout the project
phase.
It can be achieved through the demonstration of the links between proper project
management and the use of specific policies and procedures.
Author reiterates that the practice of active claim avoidance techniques and the
utilization of a thorough claim review process can effectively abate the occurrence
and impact of Contractor claims.
The aim of these efforts is to optimize the expenditure of resources on Development

Projects and thus to maximize the benefit to the projects executed by the
Government of Abu Dhabi.
8. Reference
 General Conditions of Contract for Civil Engineering Works.

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CLAIMS AVOIDANCE TECHNIQUES

USING ABUDHABI GENERAL

3. CLAIMS MANAGEMENT PROCEDURES ............................................................5

4. CLAIMS ANALYSIS PROCEDURES ..................................................................7

5. CLAIM AVOIDANCE TECHNIQUES .....................................................................8

6. CASE STUDY………… .................................................................................14

AUTHOR ID - 55393 Page 2 of 16

The Government of Abu Dhabi is engaged in a vast range of construction projects,

The report consists of an Overview of Construction Contracts in Abu Dhabi, Local

AUTHOR ID - 55393 Page 3 of 16

Author is a Civil Engineer, working as a Contracts Engineer in an Engineering

There are two major components of Claims Avoidances.

 Proper Project Management.

Basic project management skills and application of the contract include:

AUTHOR ID - 55393 Page 4 of 16

3. Claims Management Procedures in Abu Dhabi

Typical Project Management Organization of Abu Dhabi Emirate

The Principal Departments involved in the execution of construction projects include:

 Abu Dhabi Public Works Department.

AUTHOR ID - 55393 Page 5 of 16

Overview of the Contract

 Volume 1- Instruction to Tenderers, Forms, Conditions of Contract etc..

Claims Management Procedures

 Engineer Assessment & Department Review and Resolution.

Engineer Assessment & Department Review and Resolution

Claims Committee / Executive Council Review and Resolution

AUTHOR ID - 55393 Page 6 of 16

Through the courts of Abu Dhabi

When the Contractor‟s claims cannot be resolved at either the Department or

4. Claims Analysis Procedures in Abu Dhabi

Once the claim has been received by the Department / Engineer, an

The purpose of this analysis is to establish an effective method for

AUTHOR ID - 55393 Page 7 of 16

Cost and Time Evaluation

Where the Department / Engineer analyzes and conclude that the

5. Claim avoidance techniques, using the Abu Dhabi GCCCW

Under the Article summary, a list of Claim avoidance Techniques to be practiced by

Article 1 - Scope of the Contract

 Instruction to Tenderers, Forms, Conditions of Contract etc..

AUTHOR ID - 55393 Page 8 of 16

Claims Avoidance Techniques:

Article 2 - Time for Completion

Claims Avoidance Techniques:

Article 3- Extension of Time for Completion

Claims avoidance Techniques:

 Recognize delay events when they occur.

AUTHOR ID - 55393 Page 9 of 16

 Evaluate carefully the Contractor‟s schedule or programme

Article 4- Suspension of Work with contract provisions

Claims Avoidance Techniques:

 Justify and carefully document any default decisions.

Article 6- Payment Certificate

Claims Avoidance Techniques:

 Issue Payment Certificate within a reasonable time frame.

AUTHOR ID - 55393 Page 10 of 16

 Ensure that the payment is compatible with Regulations and Requirements.

Article 7 to 10 - Contract Amendments Provisions

Claims Avoidance Techniques:

Articles 14 – Maintenance Guarantees

Article 14 establishes a 12 month maintenance period (24 months for mechanical

Claims Avoidance Techniques:

Article 17- Program of Works

AUTHOR ID - 55393 Page 11 of 16

Claims Avoidance Techniques: