ishantha gunadasa asked:
Analytical Case study on a typical construction project from the Architectural Concept Design to the practical completion
Preface
The project is an extension to an international institution, funded by an overseas body of the same institution. The project is substantially completed and it is in the stage of defects liability period.
The project has undergone several problems occurred from the very inception to completion. Therefore, it is a project worth wile to be studied.
The problems are tried to be discussed at the places where they are described itself, under a sub topic named as the observations and conclusions of the author, rather than going to a discussion of important aspects at the end of the document.
Pre Contract Phase One – Pre Design Stage and Out Line Design Proposals
1.1 Project Description
1.1.1. Scope of the Project
The scope of the project is a refurbishment to an existing building of an International Institution at Narahenpita. The scope consists of design and construction of an extension to the existing building and rectification and repainting of the existing building. The new building consisted of approximately 6,000 sq.m. and is almost equal to the size of the existing building. The anticipated project cost is twenty five million Rupees. The existing building is also designed be the same organization (CONSULTANT) 25 years ago.
1.1.2. The client’s Brief and project approval process
The client is an Institute of Management and Accounting at Narahenpita and the head quarters of the organization is located in London. The clients brief consisted of an addition of a Study area, Administrative office area and an auditorium to the existing building. Access is to be provided from the existing building to the new one.
The design to be carried out to the British safety standards. The client had an international consultant and the designs done by the local consultant has to be gone through the international consultant and the clients head office at London and the approval to be obtained.
1.1.3. Location and the Site
The site is located at Narahenpita and is adjacent to the existing building of the client. The land is a government land belongs to the carom players association. The land was leas hold for twenty five years by the client for the purpose of constructing the new building.
1.2. Appointing Consultants
1.2.1. Consulting Firm and other Consultants
The project has a history of starting with an international consultant who worked as the principal designer of the project. The design was finalised and as per the FIDICT conditions of contract as, as invariably recommended by the international consultant, tenders are called. The tender figures were found to be extremely high and the project was not feasible.
The project has to be re designed. The local consultant was then appointed as the principal designer and the international consultant was appointed as an organization to check the design and tenders. The contract was agreed to be done as per the ICTAD conditions of contract.
The design was developed by the local consultant. Design Consortium LD and Archedium was appointed as the main consultant for the Concept Design and the organization has the capabilities to provide all the consortium services that include Structural, Electrical, Mechanical and Quantity Surveying services. The design team appointed included a structural engineer, mechanical and electrical engineer and a quantity surveyor. However, the Fire Services Department was appointed to provide the consulting services for design of fire protection and detection system.
CONSULTANT in writing informed the Fire Services Department, that they are the consultants of the project and they expect to get the consultancy services of the Fire Services Department to design the Fire protection and Detection System of this project. ( annexure 01)
The consultant had the capacity and experience to design the Fire Protection and Detection system by itself. However, because the clients higher concern on the fire protection and the standards of the system, it was decided to go to a specialist consultant.
At the confirmation by the Fire Services Department, that they can provide the requested services, the client organization in writing requested the Fire Services Department, to provide the fee quotation for their services. The received quotation was forwarded to CONSULTANT and CONSULTANT confirmed in writing that the quotation is reasonable and acceptable.
Observations and Conclusions of the Author
The contract formed with the Fire Services Department was a direct contract between the CLIENT and the Fire Services Department and there is no contractual obligation with the CONSULTANT. According to the conditions of engagement, the term governing this situation is – The architect shall be entitled to engage other consultants and shall be responsible to the client for their services. Where other consultants are engaged by client, the architect shall only responsible for coordination and integration of their services.
CONSULTANT has only approved the quotation provided by the Department of Fire Services and no addition of overheads is seen. The Fire Services Department is only being recommended by the CONSULTANT and CONSULTANT has not engaged their services. There is no contract formed with the CONSULTANT but it is a contract with the client. Therefore, there is no contractual responsibility on CONSULTANT for the Fire protection and Detection System of the building.
Calculation of Professional Fees
The professional fees were calculated as recommended by the SLIA. The payments to be made several stages such as
1. Sketch design
2. Schematic design
3. Tender documentation
4. Tendering
5. Inspection and supervision
6. Post contract period
The quotation was sent to the head quarters of the clients’ organization in London and the international consultant for approval.
1.3. Brief Formulation
1.3.1. Inception
Part of the existing building is constructed on a raft and the other half is on piles. The reason for this design has been, the varying condition of earth. The depth to the bed rock at one side of the building is low that it is economical to construct on piles. At the other side of the building, the bed rock was deeper that 28 m that it has been economical to construct on a raft.
The new building is to be constructed adjacent to the existing building and then to be connected together at each level. However, the foundations of the existing building are recommended to be kept undisturbed.
Crack formations are noticed in the existing building and therefore the risk involved in the design of the new extension was high. Due to the construction of the new building, the existing structure cannot be disturbed.
The consultant has decided and informed the client to do the project in two stages. In the first stage, the addition – that is the construction of the new building – is done and in the second stage, the alterations to the existing building to be carried out. The new building is to be constructed totally on end baring concrete piles.
Observations and Conclusions of the Author
The recommendation for the foundation type was given by a consultant soil investigation company and therefore the consultants’ responsibility is reduced or partly transferred to another organization. However, special attention to be given before starting construction, to documentate and photograph the existing cracks.
The decision of the consultant to do the alterations to the existing building – that includes rectification of existing cracks – after the construction of the new building is a safer decision from the consultants’ side. Any effect to the existing cracks of the old building due to the construction of the new building that includes activities that generate vibrations such as pile socketing and Dynamic Load Testing of Piles are the be clearly visible. If the ***** rectification is done before, reason for any redevelopment of cracks cannot be distinguished whether it is a defect of rectification or whether it is an effect of the new construction.
According to the contract, the Contractor has to documentate all the cracks that appear in the existing building, photograph them and then get signed by both the client and the consultant. Therefore, there was no need for the consultant to do a separate recording of the cracks for his justifications. However, in a situation where such recordings are not included in the scope of the contactor, the consultant should have to do an investigation of the cracks by himself.
1.3.2. Conceptual Design Proposal
Conceptual design proposal was done by the consultant and was presented to the client organization for their comments. The proposal was send to the clients head office at London for their comments.
The conceptual design proposal was accepted by the client organization with comments. The design is to be revised to satisfy British safety standards. The revised design was presented to the client with a project plan up to tendering.
2. Pre Contract Phase Two – Design development and Tender Procedure
2.1. Design Development
2.1.1. Site analysis and Outline Proposals
The site is a filled land that has originally being a marsh. Therefore, the baring capacity of the soil was poor. A soil test was carried out and the position of the bed rock was identified to be varying between 18 to 20m.
Designs done by CONSULTANT were sent to CLIENT Head Office, London and their consultant for comments. It was commented that the designs should be revised to the cost limits of the client.
Observations and Conclusions of the Author
A comprehensive site analysis has not been carried out prior to the outline proposals. The project is a good example to show how a project could suffer when the designers lightly consider the need of a proper site analysis.
The problematic things identified later are given below, which, if had identified at the bigining, lot of problems that occurred could have been avoided. (The problems occurred due to some of them are explained else ware in this document)
1. There were data cables, electrical cables and storm water drains running across the site.
2. A public sewer line is identified running across the site.
3. The access road to the site does not have public drains. The drains are available only along the Elvitigala Mawatha and the nearest manhole to which the storm water could be discharged was identified to be located 300m away from the site.
The storm water discharge system of the building was designed in a way that at the discharge point it is coupled with the existing system. After the construction of the system, it was identified that the existing system directly and illegally discharges storm water to the road.
No cost effective solution could be proposed to this problem. And the problem persists. Had it being investigated earlier, the problems could have been avoided by designing a system where the storm water is harvested or directed to a system soakage pit.
2.1.2. Schematic design and statutory approvals
The schematic design was finalised and the approval was obtained from the client. Prior to the approval from CMC, the preliminary planning clearance has to be obtained from the UDA. To prepare this application Clearances from Ceylon Electricity Board, Water and drainage Clearances were to be obtained from relevant authorities. When it is applied for the drainage clearance, CMC informed the position of a 9” sewer line running across the site at a depth of 12’. 5’ minimum distance to be kept from the sewer line and the building and nothing can be built on the sewer line. (Annexure 09)
If the line were to be remained undisturbed, the design has to be changed. The design was continued assuming that the sewer line could be diverted, however, when it was discussed with the authorities of the Municipal Engineers Department, Water and Drainage Division – Maligakanda, it was noticed that the diversion of the sewer line is costly and takes time. Accordingly the design was revised to obtain the required distance from the sewer line.
After obtaining the Preliminary Planning Clearance from UDA, the design was to be submitted to the CMC. The building is an extension to an existing building, and therefore, the permit to be obtained as an extension and not as a new building. However, the old part of the building stands on the ground belongs to the client and the new construction is on a ground belongs to the government. The extension cannot be done unless the lands are amalgamated.
An amalgamated plan was done by a licensed surveyor. And the plan was submitted with the documentary evidences of the lease hold. The situation was discussed with the City Planning Division, Municipal Engineers Department, CMC and the amalgamation plan was approved.
Development permit was obtained from the CMC in August 2003 and it is well before the award of contract.
Observations and Conclusions of the Author
The consultant was not been appointed before leas holding the land. If the consultant was appointed earlier, and the site was properly investigated, the identification of the public sewer would have been an important point that would have brought down the value of land and the lease hold value could have been brought down.
Prior to stat any design work Preliminary Planning Clearance would have been obtained. The consultant has gone to the extent of the schematic design before obtaining PPC and as a result the entire design had to be changed. The time and cost involvement had to be bared by the consultant.
Tender Procedure
Tender Documentation
The consultant proposed to go for a closed tender. The type of contract is name as measure and pay fixed rate type of contract. The conditions of tender and the conditions of contract are derived from the ICTAD conditions of contract.
The consultant first proposed to go for two tenders and project was programmed accordingly– one tender for piling and another tender for the civil works. However, finally it was decided to make it one tender.
Observations and Conclusions of the Author
There are advantages of breaking the tender into two. It is identified that the proposed contractors does not have the capacity to carryout piling works themselves. So that piling would be anyway, a sub contract. By separating the two, the overheads of the main contractor can be saved. The civil contract starts at the completion of piling and therefore, there will be no need of a payment of an attendance fee. Therefore there will be a considerable cost saving.
Preparation of tender documents for the civil contract can be done while piling is in progress and before completion of piling the tender can be awarded. Therefore, there will be a considerable time saving as well.
The disadvantage of going for two tenders is, the responsibility of the structure is then be distributed among two organizations that in case of a collapse or a damage of the structure or a damage or settlement of a neighbouring building, it is hard to identify the default party. The responsibility of the accuracy of the pile setting out becomes an additional responsibility to the consultant.
The insurance of the piling contractor has to cover not only the construction period of the piles but the total construction period plus one year. This large insurance costs to be ultimately born by the client. When the total insurance cost is considered – the sum of the piling contract and the civil contract – the insurance cost were lower in the case of going into a single contract.
The old building adjacent to the construction site got cracks appeared on it and therefore, there is a much danger that this building may get damaged due to vibrations and loading on the site. Therefore, the decision of making it one tender clearly distinguishes the liability of the contactor.
The consultant provided a list of short listed tenderers to the client that included four numbers of tenderers. The client approved the list of tendereds with a proposal to add two more tenderers to the list. The consultant then sent the tender document to the client for their comments.
Client provided their comments in the form of a report. There were two critical comments made by the client to which the consultant disagreed.
The client proposed whether it is possible to make the contractors pay VAT, instead of the client.
The client proposed whether it is possible to ask the tenderers to provide price breakdown detailed as costs of material, labour and overheads.
The consultant explained that it is the owners’ responsibility to pay any subsequent increase of tax imposed by the Government, and therefore it cannot be transferred to the contractors. Further, the Consultant explained that if the tenderers were asked to detail out their tenders to such an extent, no one will be interested in participating this tender.
Tendering
The letter asking the interest to participate in the tender was sent to all the proposed tenderers, and two of tenderers replied that they are not interested to participate in the tender. Because the number of tenderers is inadequate, two new names were proposed.
Tenderers collected the tender documents. The pre bid meeting was held at the site. And the questions and clarifications raised by the tenderers were minuted and the minutes were copied to all the tenderers. Tenderers were allowed to send their quarries to the consultant and all the questions raised by tenderers were answered and copied to all.
Tenders were submitted to the consultants’ office. The tenders were collected and opened with the presence of the client, the consultants project director and the consultant quantity surveyor.
Observations and Conclusions of the Author
It is important that a letter seeking the interest to participate in tender is sent and confirmation is ontained from the tenderers prior to the invitation to tender. Had the invitation to tender being sent indicating the availability of tender documents and time, there would be problems occurred if considerable number of tenderers do not participate, because the dates are being fixed, there would not be enough time to identify tenderers to fill the gap.
Tender evaluation
The tenders are checked whether to be completed correctly and for arithmetic mistakes. The tender was evaluated not looking at the corrected tender figures. Fallowing aspects were also looked at.
cost plan
labour histogram
technical specifications
equipment available with the tenderer
All the tender figures are found to be too high for the clients’ budget. The clients budget was twenty million rupees and the received tender figures varied between thirty five million rupees to sixty million rupees. The reason for this higher bid values may be occurred due to the imposition of higher safety standards, specifications and restrictions by the client. Out of all the tenderers, two competitive bidders were selected using the above criteria. The tender negotiations were held with the two tenderers. In the negotiations, three things were looked at to bring the construction cost down.
possibility of the tenderer to bring down the rates, that are questionable to the consultant and thought to be comparatively too high
in case where the high rates involve consultants specifications, to check the possibility of changing the specifications and bring the rates down
to remove certain items from the main contract and the possibility to get it done through nominated sub contractors at a lower rate.
It was identified that this exercise alone would not bring down the construction cost to the level acceptable to the client. Therefore it is decided to remove certain items from the contract such as construction of water sump, water tank etc. The money for the construction of these are to be obtained from the amount of money to be released for the interior design of the building by the clients head office in London. New prices of the two tenderers were compared and from which, one tenderer was selected to award the contract.
Award of contract
The consultants recommendation was sent to the client with the comparison of two tenderers. The recommendation was accepted by the client and the Letter of Award was sent to the selected tendrderer.
The contractor had to mobilise using the letter of award as the legal document to start his work and the contract is to be signed afterwards.
Post Contract Phase One - Contract Administration
Monitoring, supervising and quality control
For the monitoring and supervision of work, a resident engineer is assigned to the site. Duty of the resident engineer was to ensure that the construction is carried out according to the provided drawings and specifications. The project architect and the engineers to visit the site fortnightly and the construction works and the progress were to be supervised.
Other than the resident engineer, the quality of work and the accuracy was ensured by making the contractor submit method statements prior to perches of material and starting work. For example, method statements are requested from the contractor for pile testing, pile hacking, water-proofing and anti-termite treatment.
For monitoring the construction quality, the contractor had to perform tests as specified in the contract document. Concrete cubes of the concrete of the piles were sent to the testing laboratories and results were obtained by the contractor. The test results of the pile concrete were found not to be satisfactory according to the consultant engineer. However, the contractor is not in agreement with the comment of the consultants. Therefore, an independent analysis report on pile concrete was obtained from a relevant professor of the University of Moratuwa. The report indicated that the quality of the concrete is sufficient to bare the load of the building.
Due to the independent analysis report, the piles were not considered as failed piles. There was no need to do extra piles. However the consultant engineer provided instructions to strengthen the tie beams on the pile foundations. The instructions were as per the recommendations by the independent analyst.
Tests on moisture content of timber, and tests to identify the type of timber were to be done by the contractor.
A sample submission list is included in the contract. The contractor has to submit a sample submission program to tally with his construction program. As per the sample submission program, the contractor has to submit samples. Approved samples to be fixed to a board and are to be displayed at site.
Wastage of material and time is minimised by the system of checking the samples before construction of them are done. For example the door frame sample submitted was rejected and it had to be resubmitted with required size, dimensions, level of workmanship and the material.
Work programming (Contractual)
Contractor was requested to submit his work programme, prior to the commencement of work. The program was to be approved by the consultant. Secondly the contractor was to submit a detailed work program to tally with the submitted program. The project architect commented to the submitted programme and the detailed program was to be resubmitted with incorporated sub-contract programs of aluminium works and waterproofing works.
Monthly progress and programme and daily progress and programme to be submitted. The resident engineer checks these programs with the already given master program and the contractor is advised to increase labour capacity, equipments etc. to avoid delays and to catch up delays. The progress is always checked at the progress review meetings as a comparison to the master programme and further instructions are issued.
The contractor failed to start piling for approximately two months. The reason for the delay was the inability of the selected piling sub contractor to mobilise because the available piling machines were mobilised in other sites. The contractor did not request a time extension because he is confident that he could catch up the delays by increasing the labour and machinery. Due to this, the submitted programme has to be amended and resubmitted. The resubmitted programme was checked by the project architect and was found to be incorrect. It was commented that the amount of work he has to perform at the last two month are increased far too much. The required labour is much large. The contractor has to adjust the programme according to the comments and had to be re submitted.
The project architect and the resident engineer identified that the resubmitted programme is impractical. This was communicated to the contractor but the contractor disagreed.
Progress Meetings
Progress meetings to be held at site fortnightly with the participation of the contractor and his relevant staff, relevant subcontractors, Consultant site engineer, the project architect and the clients representatives. At the first meeting the client was asked to assign the clients project coordinator.
At the time the super structure of the building is started to construct, the client requested to hold the meetings weekly. CONSULTANT pointed out that there would be no enough progress to review weekly. Therefore, it was decided to hold a technical meeting fortnightly, to which the participation of the client is not essential.
Observations and Conclusions of the Author
Assigning of the clients’ project coordinator is important to ensure that all the correspondences with the client happen clearly. Without a key person through whom all the correspondences go through, the communication with the clients organization will get mess up and no one can be held liable. Each party has to assign a person to handle correspondence.
The clients project coordinator would have been appointed at the early stages of the project where the consultant stats the design. However, at these stages the decisions were taken by the discussions of the entire building committee of the client organization.
Commencement of work and setting up Bonds and Insurances
The contractor is expected to program his works prior to mobilising at site. At the progress review meeting no:1, contractor was asked to provide the fallowing documents within 14 days as per the agreement.
Performance bond
Contractors All Risk Policy
Workman Compensation
Advance Guarantee
Detailed Construction Program
VAT Registration Number
Site Organization chart
Labour Histogram
More over, the contractor was asked to attend to the followings prior to commencement of piling.
Service lines across the site – Electrical, Telecommunication, waste water - to be determined and shifted.
Demolition work program to be submitted and the demolition method statement to be submitted for consultants’ approval.
Water, Electricity and Telecommunication connections to be obtained to the site.
Photographic survey of all neighbouring buildings to be done and signed by all three parties.
Workmen Compensation Insurance Policy submitted was not accepted by the client and the consultant. It is identified that the policy should cover the consultants’ site staff and the visiting staff. The clients’ in-house staff, visiting staff and the expatriate staff should also be covered by the insurance as per the contract agreement. It was further noticed that the duration of the construction period should start from the date of the letter of award (Annexure 02). As per the recommendations the contractor resubmitted the insurance.
Observations and Conclusions of the Author
The advices given to locate the cables and pipes that run across the site is not in the contract but site being handed over to the contractor, he is liable for their protection. This instruction given on site enforces the contractors’ liability. However, this can identified as a mistake of the consultant who would have identified these and the ways of relocating would have been thought of at the early stages of the design.
The contract involves demolition of one existing part of the building. The existing building has already developed cracks on it. Therefore, it is critical that the protection of the existing building is ensured while demolition and piling works are on progress. The request of the demolition method statement is important that keeps the contractor liable to carryout the demolition works according to the approved standards.
However, the photographic survey would have been extended to include the situation of the existing building as well that clearly indicated if the existing cracks are affected by the demolition.
There is a public sewer line running across the site identified. Protection of which would be enforced. The position of the sewer line is given only approximately by the authorities and the contractor would have been asked to measure the actual distance between the line and the piles. There is a possibility of damaging the sewer line due to shoring and movement of earth, vibration due to pile socketing and Pile Dynamic Testing. Further, he would have been asked to locate the sewer line in the pile setting out drawing. However, no precautions on this regard can be seen to be taken by the consultant.
Variations and extra work
Several extra works were done based on the requests made by the contractor and the recommendations of the project architect and consulting engineer.
The consulting engineer recommended that an anti-termite treatment is required to be carried out prior to the construction of super structure. The decision was taken after investigating the nature of the excavated soil by the structural engineer. Contractor is requested to provide a quotation and a method statement to do this treatment. The provided quotation is approved by the assigned quantity surveyor with deductions and the new rate was accepted by the contractor.
The client requested to have liquid soap dispensers and hand dryers to be installed in the toilets. The contractor is asked to provide a quotation for the installation of these. The quotation was revised by the consultant quantity surveyor and the revised quotation was accepted by the client and the contractor.
The construction of the sump and the water tank were items included in the tender document. However, in the adjustment of the tender figure to suit the clients budget, these items were removed from the contract considering the possibility of allocating money later. (As explained else ware in this document)
It is identified that to start the refurbishment of the existing building, the client has to move to the new building prior to the interior works commence. Although the building is completed, it cannot be functioned without water. Therefore the possibility to construct the sump and the water tank was rethought.
It is identified that the water tank being a structural element affecting the structure, the responsibility of it can be indistinguishably remained with the present contractor, if it is constructed by him. On the other hand, the cost of another contactor to mobilise at the site would be higher. Therefore, the contractor was asked to provide a quotation to perform this task.
Observations and Conclusions of the Author
It is seen that at the tender stage, the contractor has already provided a quotation for construction of sump and the water tank. But they did not form a part of the signed contract. Therefore there is no contractual obligation formed between the client and the contractor to perform these tasks at the rates quoted. Due to these reasons, the contractor has the right to provide a new quotation that does not base on the quotations he has previously provided.
If the decision were taken to give the construction of the water tank and the sump to the present contractor, the client would have got it done at a lower rate.
Delays and Time extensions
Two months delay of starting the piling work is noticed, the item delayed, being an important item lie in the critical path, the entire program was delayed. The contractor is asked to provide explanation for the delay in writing coupled with the new programme.
Observations and Conclusions of the Author
The record and the request of the in writing explanation of the delay are important. In case the contractor fails to complete the building on time, this written information can be used as valuable evidence to support the investigation of the reasons for the delay of completion.
However, the contractor refrained from providing an explanation in writing but his explanation was incorporated to the minutes of progress review meetings. The architects comment that the reasons provided by the contractor are not contractual, was also recorded.
The contractor was continuously advised to increase the labour and management forces in the site. The instructions were fortnightly minuted and sent in writing as well. The delays were noticed in comparison to the original programme submitted by the contractor and are continuously minuted. When it is found out that the contractor has failed to maintain himself to the programme, he was in writing asked to submit a new programme. (annexure 03)
Before the date of completion the contractor was proposed that he could not complete the building on time, which the contractor refused. On the date of completion, the building was found to be not completed. The contractor has not requested an extension of time.
The contractor is officially informed that he has failed to complete the building and his bonds and insurances are to be extended. He was asked to submit a new programme to complete the building. (Annexure 05)
After this letter, at the progress review meeting the fact that the contractor has not requested a time extension was minuted. The contractor submitted his new program along with a request of time extension of 50 days. The insurances and bonds were extended.
It is identified that the reasons given by the contractor cannot be accepted fully. Therefore, the consultant in writing informed the contractor to submit details of the justification of the reasons for his failure to complete the building. (Annexure 06) The main reasons behind his argument are as fallows
The piling sub contractor did not mobilised causing a delay of two months.
This point is not contractual. The piling contractor is not a nominated sub contractor. The responsibility of the sub contractors works lie on the main contractor.
Due to rain, his works were affected causing a delay of fifteen days.
Rain cannot be considered as an unforeseen reason that causes delays. The weather conditions recorded by the consultant resident engineer do not show an unusual rainfall in during the year. Therefore the contractor was asked to submit his rainfall data. These to be compared with the consultant site engineers data and conclusion to be given.
Due to Tsunami for two weeks he lost labour on site.
However, the labour records do not support his argument. This is anyway, considered to be a valid point.
Due to the delays of client in supplying client supplied tiles and due to the clients delay in approving sanitary fitting samples, his works got delayed.
This also identified as a valid reason by the consultant and can be proved using the progress review meeting minutes.
After the submission of the details of the reasons for the request of time extension, the validity of the request was examined. The decision of the consultant on this matter is still pending.
Payments to contractors
Contractor submits monthly progress bills. The progress is checked by the consultants’ resident engineer and the bill is checked by the consultants’ quantity surveyor. The revised payment certificates are sent to the client for his approval and to release the payments.
A progress bill of three million rupees was submitted by the contractor on 24th of March 2005. The bill is to be evaluated by the consultant prior to approval of the same. An on account payment of two million rupees was requested by the contactor giving the reason that he needs money to settle payments to the workers for the New Year.
Observations and Conclusions of the Author
This payment was requested, was to be deducted from the last payment. In this case the consultant had to look at few more aspects.
what is the possible delay that could be occurred because the contractor had not performed as per the programme
What would be the maximum penalty he would under go, when he fails to complete the building on the scheduled date.
Will the amount of money retained (after the release of the on account payment) and the performance bond is sufficient to cover the penalty and the released payment.
Considering this important factor, only a part of the on account payment requested was released. The client was recommended to make the payment (annexure 04)
Practical completion and the relevant certificate
The contractor promised to substantially complete the building with a delay of two months. The consultant resident engineer was advised to prepare the defects list early so that the contractor can attend to the rectification of defects early.
The consultant was informed by the client that he wishes to hand over the building on such a date. The site was inspected by the consultant and found that the building is not yet completed to an acceptable level. The contractor was officially informed that the consultant could not accept the submission. (Annexure 07)
In one week’s time, the contractor was able to complete the building and the building was handed over to the client after a joint inspection of the building by the client and the consultant. The inventory of defects and items were made and handed over to the client. The certificate of practical completion was issued to the contractor.
After the completion of the building, for the client to obtain the COC, a set of as built drawings, clearances and test results to be obtained from the contractor. This was officially informed to the contractor by the consultant (Annexure 08)
4. Post Contract Phase Two – Maintenance and Final Completion
4.1 Liquidated Damages
The client was conscious, what are the penalties that could be imposed on the contractor. The client officially requested consultant to advise them in this regard. The consultant in writing explained to the client that according to the contract penalty for a day is 19,125.00/- and the delay is to be still calculated. However, on assumption that an extension of 52 days is given to the contractor, the total delay being 142 days, LD could be imposed to the rest 90 days. Therefore the total value recoverable as penalty is Rs. 1,5000,000/-.
4.2 Performance bond and maintenance.
The performance bond is to be retained till the end of the maintenance period. During this period, the defects occur in the building to be rectified by the contractor. There are several minor incidents noticed including burning of a fan, blocking of gullies and these were immediately rectified by the contractor as officially informed by the consultant.
Conclusion
The project is special due to three important aspects that rarely occur in a construction project. Firstly, it is the nomination of another consultant to supervise the works of a consultant. This is not a common practice to Sri Lanka, however, it is interesting to see that the international community tends to look at the agreement between the client and the consultant as a contract agreement and use the term ‘contractor’ to refer to the consultant as well. It is important to note how a consultant should react in this kind of a situation and safe guard himself without falling into trouble.
Secondly, the delays of the project started to occur at the very beginning. The client continuously asked the consultant, what are the actions the consultant could take and what are his powers. It clearly displayed that other than imposing liquidated damages at the end of the project, the only action the consultant can take in this regard is writing letters. It displayed the importance to re look at the definition of the consultants’ role in a contract in the standard contract agreements.
The project displayed the importance of a good site analysis and a through site investigation prior to start any design. Number of problems occurred during the project (explained else ware in this document) would have been avoided by this.
However, the imposition of penalties and the Arguments and justifications made on the same too will be an interesting event that is yet to occur in near future.
