Project Planning, and Contract Management - Assignment Example

PART1: CONTRACT 87459The works This agreement is made this on 27/11/2011 between STATCOM Contractors of 1234 SE Milken St., Portland, Oregon 97999 Tel. (503) 964322 hereinafter "Contractor") and PORTHOUSE Tel. (503)- 356432 (hereinafter "Owner"). The owner does employ the Contractor to perform all the work and provide all the relevant tools, materials, machinery and supervision required for the construction of a residential house on PLOT NO. 12543 the total sum of $0.5million as in drawings and specifications which are attached as Exhibit NO. 3215 and expressly incorporated herein by reference and made a part hereof. The Contractor shall commence the work to be performed within 30 days from Notice to Proceed date, and the work will be completed 365days thereafter. The Contractor is obliged to carry liability insurance of up to $20000 for injury to or death of one person engaged in the project, and $5000 for damage involving property and Workman's Compensation insurance and the contractor will provide the Owner with a proof of the insurance. Hold Harmless The Contractor has agreed to defend, indemnify and hold the owner harmless against any liability for damage resulting from body injury, death, property damage, disease, sickness, or loss and expense that might arise from the negligence of Contractors' in the performance of the construction Contract. The Contractor and subcontractor are acting as an independent Contractor with respect to the Owner. The Contractor in addition is in agreement to protect, defend and indemnify the Owner from claims arising laborers, subcontractors or material men due unpaid work or labor performed or materials supplied in connection with Contract. Assignment of Contract The contractor agrees that there will be assignment to the Construction Contract with no written consent from the Owner. Change Orders The Contractor agrees that there will be no changes involving schedule of work, design, or of the specifications unless there is a written authorization from the owner. General Guarantee The Contractor has a responsibility to remedy any defects resulting from faulty material or workmanship and will pay for any damage to other work that will result there from which shall appear within the period of one year from final payment. The Contractor will also avail to the Owner with all manufacturer's and supplier's written guarantees and warranties which covers materials and equipment furnished in this Contract. Permits and Codes The Owner has obligation to obtain all the required building permits, including those required by the municipality and/or, state agency, and Act 250 as applicable. The Contractor is expected to secure any other necessary permits/licences that are required in order for the work to be done and is expected to follow all building and code regulations that may or may not be covered by specifications and drawings on the work. Work Performance 1) The Contractor is expected to protect all work neighboring to the Contract site from damage resulting from the work of the Contractor and repair or replace any damaged work at his/her own expense. 2) The Contractor shall put in good condition any existing conditions that could have been damaged in carrying out the contract. 3) The Contractor shall take all precautions in order to ensure that people are protected from injury and unwarranted interference or inconvenience. 4) The Contractor is expected to conduct the project activities in a business like manner and follow to the reasonable wishes of the Owner in relation to his working schedule. Condition of Premises The Contractor is in agreement to keep the premises clean and orderly and that he will remove all debris as needed during the hours of work so as to ensure that work conditions which do not cause health or safety hazards are maintained. Use of Utilities The Contractor has permission to use, at no cost, power and water as necessary in carrying out and completing of the work. Inspection The Owner shall have the right to inspect all work performed under this contract. Right to Stop Work If the Contractor fails to correct defective work or persistently fails to supply materials or equipment in accordance with the Contract Documents, the Owner may order the Contractor to stop the work, or any portion thereof, until the cause for such order has been eliminated. The Contractor will terminate this contract if payment is not made by the Owner 13 weeks after the issue of certificate. The Owner will also terminate the contract if the contractor will fail to a bond or guarantee, the contractor makes an appointment for a subcontractor who is charge of a substantial piece of work with no approval from the project manager or the contractor substantially breaks health and safety rules. Payment Schedule Payments shall be made based on the attached schedule of values. Within three days after notification has been made by the Contractor of each stage of completion, the project manager will make inspection and approve the work, or request for adjustments in the work. The Owner agrees to make payments to the Contractor within ten days of approving work. Contract Security (In lieu of conventional performance and payment bonds) The Contractor grant to Owner a mortgage on property on PLOT 231 as in the exhibit. The mortgage will act as a security of the performance of the contractor of all the obligations in this agreement that include, but not limited to, the completion of the contract at the agreed upon price, indemnity of owner from claims as set in this agreement, general guarantee of workmanship and material from the contractor, and any other consequential or special damages that that Owner could be entitled to if the Contractor goes against this contract. The mortgage shall act as security for any payment award to Owner pursuant to arbitration as provided in this agreement. Contractor has full knowledge that the mortgage is being received by Owner in lieu of a conventional performance and payment bond with a commercial surety, as well as Owner's agreement not to require retainage during the construction process. the Contractor also acknowledges that the Owner has no ability to complete the Contract on its own in the event of Contractor defaults, and that the Owner may assign the mortgage and any interests accompanied by it as mortgagee. Owner is agreement that the Contractor is entitled to a discharge of the mortgage one year from the date that the final payment for the completion of the work is made, or 2 months after payment in full by Contractor of any award to Owner pursuant to arbitration. Liquidated Damages Contractor hereby agrees to start work under this contract within 30 days of the Notice to Proceed and to fully complete the project within 365 consecutive calendar days thereafter. Contractor also agrees to pay as liquidated damages, the sum of $200for each consecutive day thereafter. The Contractor will exempted from the damages, incase some unforeseeable causes beyond the control and without the fault or negligence of the Contractor are the cause delays in the completing of the project. Taxes The Owner is in agreement to supply the Contractor with its tax‑exemption number for relief from the sales tax on purchase of materials, if applicable. Arbitration All claims, disputes, and other matters that may arise out of, or related to, the Contract Documents or the breach thereof, with the exception claims waived by the making and acceptance of final payment, shall be decided upon through Arbitration in accordance with the construction Industry. This agreement to arbitrate shall be enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in any court having jurisdiction thereof. Any award shall provide for payment within 30 days of the date of the award. Notice demanding for arbitration shall be filed in writing with the other party to the contract documents. Demand for arbitration shall in no event be made on any claim, dispute or other matter in question which would be barred by the applicable statue of limitations. The Contractor will proceed with work and maintain the progress schedule during arbitration process unless otherwise mutually agreed in writing. PART 2 Critical analysis of how claims are made under NEC3 A key date is described a fixed time where a certain work is expected to meet some specified condition and this is usually stated in the contract data. The assumption is therefore that there will be identification of all dates before the parties enter into the contract. There is no room for addition of key dates later after starting the contract. This means that if the contractor feels he cannot measures up to the key date or condition the need to disagree with the contract. The requirement that a certain key date is to be met is stated in one of the clauses (Gerrard, 2005). The contractor is expected to perform there work so that the condition for key date is fulfilled by the key date, which means it is strict obligation. This therefore suggest that the contractor may be entitled to additional time which will result in change of the key date in case the event that is preventing the achievement of a key date has been stated as a compensation event even when the only change required is the key date. The project manager also can change the key date as part of the compensation event It is a requirement that an early warning is to be given incase either party becomes aware of something that could lead to key date being delayed (Tolson 2007). This may lead to the scope of work being changed. The project manager has the ability of giving instruction that will see the scope being changed which will be a compensation event and this may result in reduction in scope ensuring a key date is met. In event that that a change in scope result in the description of key date condition incorrect, the project manager is entitled to correcting the description and this will be taken into account when assessing the effect of the compensation event. The project manager through the Owner is entitled to change a key date which is in compensation event. The question that arise is whether the agreed compensation events for a project covers all the events that need to believe the contractor of their obligation of meeting specific key dates in situations where they have not been negligent or there has been prevention that were beyond the control of the contractor. Some of the might pause difficulty in their prediction and there might be the need for further events being added. Since the way compensation event affect a key date has to appear into the quotations/assignments of costs and time consequences of all compensation events, it can therefore be logical for one to think the contractor can utilize the compensation event procedure incase a key date cannot be fulfilled as a result of a compensation event. There are consequences if a Contractor fails to meet conditions that have been prescribed in the key date. The consequences are given in a clause that gives the project manager the power to decide if condition of the key date would have not been fulfilled by the stated date. The project manager has also been given the power to make an assessment for the additional cost within 4 weeks to the date of condition of key date event. The question that arises is the case where the project manager is wrong. Even though it is directed that the parties are to work in a spirit of mutual trust and cooperation, this does not seem to cover it. From this it can be observed that there is no clear basis on which this could be challenged. There is also a lack of basis on which the assessment of cost is made by the project manager. It seems that the Contractor has no room to change the decisions/assessment of the project manager. There seems to lack any objective test and therefore lack of a basis on which a challenge can be founded. In case of a challenge it is likely to be channeled through a dispute resolution procedure. The other question is whether the manager will be able to make an accurate assessment within the allocated time. If the manager has not managed to make the required assessment in the time period allocated there will be loss of the right to additional cost which is also not stated clearly. IN WITNESS WHEREOF, THE OWNER AND THE CONTRACTOR HAVE EXECUTED THIS CONTRACT AS OF THE DATE FIRST WRITTEN ABOVE. CONTRACTOR OWNER NAME NAME AUTHORIZED SIGNATURE SECRETARY/TREASURER References Tolson S. and Glover J. (2007).Time bars in construction and global claims Gerrard R. (2005). Relational Contacts- NEC in Perspective. Read More