Engineering Management

by
Amien Rahardjo

Budgeting and Estimates

BUDGET FOR CONSTRUCTION PROJECTS

In all organizations, a construction project is a capital

investment project. Budgeting for the project will, therefore,
be different from annual budgets for the organization.

Budgeting in organization
The usual approach in most organizations is to base next
year's budget on this year's budget and expenses. A
percentage is then added based on anticipated cost
increases, thus
Next year's budget =
This year's budget + X,
The value X may be based on
1. Get feelings,
2. Inflation forecasts,
3. Additional plans made.

Major approaches
1. Top-down budgeting

Management has been said to be better at judging overall

project costs than the cost of individual parts. Top down
budgeting may vary from an assessment of probable cost by
individuals, costs generated through consensus of experts' is
then broken down to individual parts. The broken down may
use factors generated from experience. This approach leaves
the setting of overall budget to the top management while
lower level managers have to distribute budget allocated to
them to parts under them. Using this approach, overall budgets
may be accurate while errors are infighting between lower level
managers.

2. Bottom-up budgeting
In this approach, costs are calculated for individual parts
and then summed up for the whole project. There is thus the
need to ensure that all parts are included. A major failing is that
individuals may tend to "overstate" budgetary requirements in
the knowledge that top management will reduce the budget.
However, the approach lead to participative management
making the lower levels not to feel that budgets are imposed.

3. Mixed approaches

Top management may call for budget requests and then

use suggestions to make a budget that is distributed down the
organization.

24 June 2005

Budgeting for construction projects

Construction project budgets are, ideally based on

estimates of costs of construction resources. However,
most budgets are set before design is finalized. It thus
means that there will be much reliance on historical costs.
In practice, typical approaches that may be used are

1. Setting a fixed amount to which design should conform.

2. Using updated historical unit cost records to generate
overall costs which is then distributed to parts. The overall
cost will have professional fees added together with other
expenses.
3. If the development of the design permits it, resource
costs may be calculated and even project plans may be
used for this purpose to make the budget time-related.
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Important notes
1.A budget depends on estimates.
Budgets are good to the extent that
estimates are good.
2.Estimates are made by people with
preferences.
3.Budgets made early can be used to
control the design process.

TENDERING BIDDING AND CONTRACTS

Contract strategies
1. Choice of contractor,
2. Method of selecting contractor,
3. Organization structure to control design,
construction and interfacing of the both,
4. Selection of the content and sequencing of
work package,
5. Tender documents, including contract
condition, risk allocation.

The tendering procedure

1.
2.
3.
4.

Open tendering
Selective tendering
Serial tendering
Negotiation tendering

1. Open tendering
The project is advertised for all qualified
contractors to submit a bid. The job can be
advertised in several ways such as trade magazine,
public advertisement or local newspapers, designers,
agency bid lists, organization - plan service centers
and national publications.
Advantage
More choice
Definitely competitive

Disadvantages
Too many bidders,
Higher possibility of
low bids
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2. Selective tendering
The project owner may decide to limit
the number of contractors (reasonably,
6-8 contractors) allowed to submit bids
for the project. This may be done by
having approved lists of contractors,
then use selectively approaching
contractors known to the owner.
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3. Serial tendering
This method of tendering is for
continuing work (which the work is
done in stages).

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4. Negotiation tendering
This method of tendering is that a good
contractor may be asked to tender alone for
the job and the price negotiated with the
firm. In other words, the owner prior
accepted the contractor performance (and
intent the contractor to perform the job) but
still need to negotiate the cost of project with
the contractor prior proceeding.
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Approved lists of the contractors

The owner may have an approved list of

contractors for project. The propose is to limit
the number of bids received for any project
and monitor the quality of services received
from contractors. The process of getting into
the approved list is known as "prequalification" or "pre-selection".
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Criteria for pre-qualification

1. References, reputations and past performances,
2. Financial stability,
3. Technical expertise.
Criteria for pre-selection
1. References, reputations and past performances,
2. Financial stability,
3. Technical expertise,
then add some additional criteria such as
4. Status of current work program,
5. Project-specific criteria.
In many instances, the two procedures are referred to as "prequalification".
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Disadvantages of pre-qualification
1. The need to continuously update
information in changing market
situation,
2. Indiscriminate distribution of
company secrets,

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Decision to tender

A good contractor does not need to tender

for every job available in the market. The
decision to tender is based on two (2)
major considerations as follows:

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1.

Information supplied
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17

The name of the job,

The name of client and designers,
The name of any consultants with supervisory duties,
Location of site,
A general description of the work,
The approximate cost range of the project,
Details of any nominated sub-contractors/supplier,
The form of contract to be used,
The procedure to be adopted in examining bids,
Whether contract is to be under seal or under hand,
Anticipated date of possession of site,
The period of completion of the works,
The duration of the tender period,
The period for which the tender is to remain open,
The anticipated value of liquidated damage (if any),
Details of bond requirements (if any),
Any particular conditions relating to the contract.
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2.

Company consideration

2.1 The company's current workload, turnover and recovery of

overheads,
2.2 The company's financial resources,
2.3 The availability of resources to undertake the job,
2.4 Type of work,
2.5 Location of the contract,
2.6 The identity of the client or promoter and his/her
representatives,
2.7 A detailed examination of the contract documents.
If the company decides to tender, an of cost is prepared and
a tender submitted in accordance with owner's requirements.
Normally, estimate preparation will only be done after through
"site investigation".
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Estimating process

The following steps describe the process of producing

a cost estimate by the contractor as a basis for
tender submittal:

1. Decision to tender,
2. Programming the estimate,
3. Collection and calculation of cost information
3.1 Labour,
3.2 Plant,
3.3 Materials,
3.4 Sub-contractors,
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4. Project study
4.1 Drawings,
4.2 Site visit,
4.2.1 Description of site,
4.2.2 Position of existing services,
4.2.3 Description of ground conditions,
4.2.4 Any problem related to the security of the
site,
4.2.5 A description of the access to the site,
4.2.6 Topographic details of the site,
4.2.7 A description of the facilities available for the
disposal of soil,
4.2.8 A description of any demolition works of
temporary works to adjoining building,
4.3 Method statement
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5. Preparing the estimate

5.1 Operational estimating,
5.2 Unit rate estimating,
5.3 Combined method, operational and unit rate estimating,
6. Site overheads
6.1 Site staff,
6.2 Cleaning site and clearing rubbish,
6.3 Site transport facilities,
6.4 Mechanical plant which is not included in item rates,
6.5 Scaffolding and gantries,
6.6 Site accommodation,
6.7 Small plant,
6.8 Temporary services,
6.9 Welfare, first aid and safety provisions,
6.10 Final clearance and handover,
6.11 Defects liability,
6.12 Transport of workers to site,
6.13 Abnormal overtime,
6.14 Risk
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7. Estimator's report
7.1 A brief description of the project,
7.2 A description of the method of construction,
7.3 Unusual risks which is not covered in contract
documents,
7.4 Unresolved or contractual problems,
7.5 Design assessment and financial consequences,
7.6 Assumptions in estimated,
7.7 Assessment of the profitability of the project,
7.8 Other market and industrial information,
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The cost of work to be included in the estimates are reported to

senior management in cost reports containing the following
details:

1. Main contractor's labour,

2. Main contractor's plant allocated to rates and in preliminaries,
3. Main contractor's materials,
4. Main contractor's own sub-contractors,
5. Sums of nominated sub-contractors,
6. Sums of nominated suppliers,
7. Provisional sums and dayworks,
8. Contingencies,
9. Amounts included for attendance on sub-contractors,
10. Amounts included for materials and sub-contract cash
discounts.
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Introduction to
Engineering Economics

24

Engineering Contracts and

Insurance

PROJECT DELIVERY SYSTEMS FOR

CONSTRUCTION PROJECTS

Project delivery system is an organization

which assigns specific responsibilities and
authorities to people and organizations,
and which defines relationships of the
various elements in the construction of a
project. There are four (4) basic project
delivery systems:
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1. The engineering-contractor (E-C) system

in which responsibility for engineering, materials acquisition and construction are
assigned to one responsible organization. Sometimes E-C is referred to as "turn
key system". Owner will usually that there is no overall project manager that can
speak for both engineering and construction.
Advantages:
1) One responsible contract for the owner with materials acquisition and
construction closely coordinated with engineering,
2) Moderate owner participation,
3) Improved construction completion date over the E+C system,
4) Improved costs and quality by liaison utilization without contractual problems
and delay of project completion.
Disadvantages:
1) Inability to establish form project cost in the early stages of construction,
2) More problems in labour relations for a large national operator as opposed to a
local contractor,
3) Only fair "checks and balances" on the E-C apply in contrast with separate
contracts for engineering and construction,
4) The problem of controlling project cost, particularly in monitoring accumulated
cost as construction progresses and projecting final cost from monitoring effort.
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2. The engineering-plus-contractor (E+C) system

in which engineering is assigned to one organization and after all engineering is
completed, material acquisition and construction are assigned to another
organization, during the period when engineering is in progress, there is a direct
relationship between the owner and the engineer, at that time, no contractor is
involved, when engineering is completed and a construction contract is in effect,
there will be direct and responsible relationships between the owner and the
contractor and between the engineer and the contractor, the relationship
between the owner and the engineer will still be maintained.
Advantages:
1) An accepted historically supports system with legal and contract precedents well
established,
2) Provision of good checks and balances between the owner, engineer and
contractor,
3) Determination of project cost before construction contracts are let.
Disadvantages:
1) Construction expertise does not benefit design (minimal E-C liaison),
2) The longest project completion time,
3) Maximum owner participation,
4) Greater coordinating and administrative costs on the part of the owner in most
cases.
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3. The professional construction manager (CM) system

in which a competent construction manager with no vested interests in design or
construction brings the practical construction viewpoint to bear during the design phase and
using phased construction, provide overall management for all construction elements,
professional construction manager as a focal point for the relationships of the three (3)
basic elements, these relationships persist during the entire life of the project, the
professional construction manager has had an important role in the development and
presentation of the engineering design on the basis of his contribution to construction
practicability, suitability and cost, and will also have strong voice in the interpretation of
engineering design as well as provide an excellent control in times of rapidly changing costs
and economic uncertainty,
Advantages:
1) Application of special construction skills with no conflict of interest (excellent E-C liaison),
2) Moderate owner participation,
3) Independent evaluation of costs, schedules and construction performance,
4) Good coordination of engineering and construction,
5) Minimal time for project completion,
6) Best system to construct a project during a period of rapidly changing costs and economic
uncertainty,
7) Application to any project delivery system if function is clearly defined.
Disadvantages:
1) Usually no firm project cost establishment in the early stages of construction,
2) Another layer of responsibility and administrative cost,
3) Forcing of the owner or his agent into the position of referee in settling differences between
construction elements,
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4) Lack of fiscal responsibility on part of professional construction manager.

4. The professional specification (PS) system

in which a lump-sum contract is placed with one organization which provides a
complete "turnkey project", including engineering, materials and construction on
the basis of a performance-type specification, in this system, the engineer is
chosen by the contractor on the basis of his special knowledge and experience
relating to the project and to the construction methods to be used, thus, there
is a direct relationship to the construction and engineering but "none" between
the owner and engineer.
Advantages:
1) Lowest possible cost and excellent time of completion,
2) Determination of project cost before construction contract is let,
3) Minimum owner participation,
4) One responsible contract for the entire project,
5) Provides economical variation in details of construction without affecting
performance of finished project.
Disadvantages:
1) Details of construction sometimes causing personal dissatisfaction,
2) Unsatisfactory or barely satisfactory completed project performance may be
occurred,
3) Limited chance for owner to select most acceptable details of construction or
equipment,
4) Limited application except for highly specialized or standard designs.

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CONSTRUCTION CONTRACTS

A contract is an agreement between two (2)

or more parties for a specific purpose. For the
specific case of construction, it is an
agreement between the owner and the
contractor to get a facility built. However,
there may be other contracts in a
construction contracts such as the contract
between a supplier/sub-contractor and the
main contractor.
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Conditions for contracts

1. Consideration (the purposed obligation
between both parties) "Contract cannot be
signed for nothing".
2. Meeting of minds
Both parties have the same "objectives" to
enter the contract.
3. Intention to enter into binding agreement
Each party has a willingness to enter the
contract.

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Entering into a contract usually progresses through three (3)

stages:
1. Invitation to treat
A first party (A) makes an invitation to another party (B) to
consider entering into a contract for a stated purpose. In a
construction contract, the owner usually invites contractors to
bid by making bidding documents available to them.
2. Offer
Party B having throughly considered the conditions attached to
A's invitation, may decide to act on the invitation by making an
offer. For instance, the contractor may decide to submit a bid
and by the bid, he offers to build for a price and is at liberty to
state his conditions.
3. Acceptance
Party A concludes the contract by accepting B's offer. A contract
is then signed between the two parties and the work, in the
case of consideration, executed according to the contract
conditions.
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Four (4) basic type of construction contracts

1. Lump-sum contract

Lump sum contract, is sometimes referred to as "fixed cost

contract" which the contract price is stated as a total sum of the
project. This is based on the estimates of costs by the
contractor and addition to cover profit and risk. It is assumed
that the contract work will be undertaken for that price. It is the
contractor's responsibility to estimate costs carefully, and
ensure that construction costs on site are well calculated for
prompt payments.

This method can be applied only in case that the scope of work
is clearly defined. In other words, design drawings and all the
related documents such as specification are completed and
available. In practice, this method is suitable for the project
which construction period is relatively short (say 1 year).

Price = Cost + Markup (profit, tax, overhead, risk)

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2. Time-materials contract

The contractor undertakes the job, the owner pays for construction
costs and "adds" a fee for management by the contractor. It is
necessary to have a reputable and efficient contractor who will
undertake detailed accounting for this contract. The contract type is
very good when work must be started early of time is the critical issue
and for construction of specialized projects.

Time-materials contract, is sometimes referred to as "cost plus

contracts" comprise four (4) different categories:
2.1 Cost plus fixed fee,
Price = Cost + Specified amount of fee,
2.2 Cost plus fluctuated fee
Price = Cost + Amount of fee depending on fluctuation of
construction cost,
2.3 Cost plus percentage fixed fee,
Price = Cost + Percent fixed fee,
2.4 Cost plus percentage fluctuated fee
Price = Cost + Percent fluctuated fee.
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3. Guaranteed-maximum-price contract
The contractor agrees to undertake the project for a
fixed price (X) and also gives a guarantee that a
ceiling price will not be exceeded unless the owner
makes further additions to the work. Good
management by the contractor is crucial to successful
application of this type of contract.
In guaranteed-maximum-price contract, the owner
gets savings while the contractor takes the risk.
Price =
Fixed price with a guarantee that a ceiling
price will not be exceeded unless the
owner makes further additions to the
work.
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4. Management contract
A contractor takes over the responsibility of
management for a contract. He/she may or
may not execute part of the work
himself/herself but has overall responsibility
to plan and supervise construction work,
approve changes, budget and control the
execution of the project.
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Build-operate-transfer (BOT) project and contract

Build-operate-transfer were developed a means for involving private developers
in government infrastructures projects. Many developing countries now see this
approach as the best way to provide basic infrastructures. transit system.

Arrangement of BOT projects

1. Build
1.1 Inception and Concessionaire,
1.2 Design,
1.3 Management of project and implementation,
1.4 Carrying out the procurement,
1.5 Construction (build the project),
1.6 Finance (getting loan and debt services),
2. Operate
2.1 Management and operation,
2.2 Maintenances,
2.3 Delivery of product and/or services,
2.4 Receive delivery payment,
3. Transfer
Handover in operating condition at the end of contract period to the responsible
sector/agency.

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Forms of contracts

Forms of contract usually follow the type of

contract. However, a form may be prepared by
different organizations. Contract forms can be
classified under the followings:
1.International forms, for example, FIDIC,
2.Local forms,
3.Company/organization forms.

Forms of contract need specific tailoring to suit

project situations.
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Award of contract

Most construction contracts are awarded on the

basis of competitive bidding. A contract is usually
awarded to the "lowest responsible bidder" (or
"lowest responsive bidder"). Nearly all public
contracts use this approach.
The owner makes decision regarding responsibility
after the bid has been opened. The lowest
responsible bidder has been defined as "the
lowest bidder whose offer best responds in
quality, fitness and capacity to the particular
requirements of the proposed work".
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The owner may request qualification information to be

submitted with bids or undertake pre-qualification of
contractors. Followings may be included as criteria for
judging irresponsibility:

1. Default on previous contract,

2. Proof of dishonesty,
3. Past difficulties in completing projects on time,
4. Reputation for uncooperativeness and non-standard practices.

The surety's recommendation may be relied upon for

judging responsibility. The surety, for the purpose of issuing
bonds will consider the followings:
1. Finances,
2. Experience record,
3. Other qualifications.

The chosen contractor is issued a "notice of award" which is

forwarded with information on how and when the contract
will be signed. The notice sets forth the conditions of award
in form of a letter.
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Letter of intent

In some cases, the owner may want the

contractor to start working before
contracts can be signed. A letter of intent
is issued by the owner to the contractor a
evidence that there is intention to enter a
legal relation. The letter will also state the
limits of liability as well as the types of
work that the contractor should begin.
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The contract documents

The contract defines exactly and explicitly the rights and

obligations of each party to the contract. Construction
contracts are traditionally lengthier than other commercial
contracts because of the unique nature of the product or
service.
The essential documents that make up the construction
contracts are as follows:
1. General conditions,
2. Supplementary conditions,
3. Technical specifications,
4. Drawings,
5. Addenda (which are others documents/things needed to be
included),
6. Agreement.

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Advertisement, invitation for bids, instructions to

bidders and proposal are preliminary to the
contract but are usually included by reference.
Performance and payment bonds may also be
considered as part of the documents.
The documents collectively define what is
intended by the contracting parties. A person
should read before signing as failure to do so does
not excuse one from the contract.
Standard forms of contracts are in general use
because contractors prefer documents and terms
with which they are familiar.
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The agreement

The agreement is specifically designed to formalize the

contract. It is the single instrument that brings together the
contract segments by reference and functions for the formal
execution of the contract. It presents a condensation of the
contract elements, stating the work to be done and the price
to be paid for it, and providing suitable spaces for the
signatures of the parties. The agreement usually contains
clauses not in the conditions (supplementary clauses) such
as the completion time of the project, liquidated damages,
penalty, particulars concerning the payments to the
contractor and that list the contract documents.

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The agreement may be a standard form or

specially prepared for that purpose.
Types of construction contracts shall be as follow:
1.The lump-sum contract,
2.The unit-price contract,
3.Cost plus contracts,
4.Special reimbursable contracts,
5.Cost-plus-percentage-of-cost contracts,
6.Cost-plus-fixed-fee contracts,
7.Incentive contracts,
8.Guaranteed maximum cost contract.
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Contract clauses

Clauses are nontechnical provision that

pertain to the conduct of the work.
Contract clause constitute the general
conditions, supplementary conditions and
provisions of the agreement.

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CONSTRUCTION INSURANCE

Construction harzards

Discussion on accidents in construction has shown that

construction is a hazadous undertaking. The contractor
therefore, needs to protect himself/herself against liabilities
that may be incurred through accidents, strikes, etc to
prevent ruinous financial losses.
Liabilitiy for accidents can devolve on the owner or
architect/engineer as well as on the main contractor and
sub-contractors. Contracts normally, require the contractor
to protect the owner against such liabilities. Thus, the
contractor is often required to protect others as well as
himself/herself.

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Insurance policy

An insurance policy is a conditional contract in which the

insurer promise for a consideration, to assume financial
responsibility for a "specific" loss or liability. It is a legal
document containing many provisions pertaining to the loss
against which it affords protection.
The law of insurance is very close to law of contracts. Each
country of state will have laws regulating insurance practice.
A loss suffered by the contractor as a result of own deliberate
actions cannot be recorded under the insurance policy. His/her
negligence will not invalidate the policy. Premiums are usually
paid before policies take effect and the contractor may only
claim to the extent of loss.
An insurance firm may either be organized as a stock company
or as a mutual company. In stock companies, ownership is
vested in the stockholders. In mutual companies, policy holders
constitute the members of the insurance company or
association.

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Contract requirements

A standard contract normally requires the

contractor to provide certain convergences such
as followings:
: workmen's compensation insurance,
: contractor's public liability and property damage
insurance,
: contingent liability insurance.

Property insurance and owner's liability insurance

may be made the responsibility of owners or
contractors. Special insurances may also be
required depending on the perceived risks of the
project.
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Legal requirements

Workmen's compensation, mortor vehicle,

unemployment and social security
insurance and others may be required by
the law. As such, the contractor has to
provide these insurances whether or not
they are included in the contract.
The main contractor has a contingent
liability for the action of sub-contractors.
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Analysis of insurance risks

It is not economical for the contractor to carry all

insurances available, otherwise, too much
premiums will be paid. For insurable risks, the cost
of premiums must be balanced against the "likely"
loss.
Careful planning and sticking to the rules in
construction may minimize the need for insurance.
Calculated risks may be taken rather than
providing insurance, for examples, working near
existing/old structures, piling, water damage, etc.
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Factors to be considered
In arriving at a decision to what to insure and what costs to
pay, following factors have to be considered.

1) The obligation under the contract for loss or damage to the

work and injury or damage to third parties.
2) The probabilities of loss inherent in the type of project.
3) The geographical location of the project.
4) Exposure to specific perils such as earthquake, flood, etc.
5) Whether major parts of the work are to be done by subcontrcators.
6) The comparative cost of a full insurance program versus selfinsurance and.or deductible forms of insurance.
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Check list for construction insurance

1. Property insurance on project

1.1 All risk, builder's risk insurance
1.2 Builder's risk for fire
1.2.1 Extended coverage endorsement
1.2.2 Vandalism or malicious mischief endorsement
1.2.3 Water damage endorsement
1.2.4 Sprinkler leakage endorsement
1 3 Earthquake insurance
1.4 Bridge insurance
1.5 Steam boiler and machinery insurance
1.6 Installation floater policy
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2. Property insurance on contractor's own property

2.1 Fire insurance on contractor's own building
2.2 Contractor's equipment insurance
2.3 Motor truck cargo policy
2.4 Transportation floater
2.5 Burglary robbery and theft insurance
2.6 Fidelity bond
2.7 Dishonesty, destruction and disappearance policy
2.8 Valuable papers destruction insurance
3. Liability insurance
3.1 Employer's liability insurance
3.2 Contractor's public liability and property damage insurance
3.3 Contractor's protective public and property damage liability
insurance
3.4 Contractual liability insurance
3.5 Owner's protective liability insurance
3.6 Completed operations liability insurance

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4. Employee insurance
4.1 Workmen's compensation insurance
4.2 Old-age, survivors and disability insurance
4.3 Unemployment insurance
4.4 Disability insurance
5. Motor vehicle insurance
Various types are available both to protect own vehicles and
vehicles used on behalf of the contractor.
6. Business accident and life insurance
6.1 Business interuption insurance
6.2 Sole propietorship insurance
6.3 Accident insurance on partners or keymen
6.4 Life insurance on partners or keymen
6.5 Group life insurance
6.6 Group hospitalisation insurance

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Project property insurance

It is depended on the contractors to protect the project from

loss or damage and to see that suitable insurance cover is
provided. The construction contract may specify what covers
are mandatory. The contractor may take additional steps to
protect himself/herself as the job is his/her responsibility
except where "acts of devil (natural disasters)" are involved.

All risks builder's insurance

This type is commonly used for building projects and covers

the project and temporary structures. Materials already
bought irrespective of their locations and equipment on site
except if under another cover, are covered by this insurance.

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Builder's risk fire insurance

The basic form protects against direct loss due to

fire and lightning. It usually covers only the items
stated in it or all materials adjacent to the
structure and supplies incidental to the
construction.
The policy may cease if the structure is occupied
or abandoned for more than 60 days.
Endorsement to the basic coverage are usually
purchased to extend the cover to other items such
as wind, earthquake, etc.
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Builder's risk premium

1. Reporting form
Reporting form requires the contractor to report
progress of work and materials in store monthly to
enable the insurable value to be determined, The
premium is paid in monthly installment.
2. Completed value form
Completed value form is paid lump-sum in advance
and covers the value of the completed structure. The
premium is fifty (50) percent of maximum fee as the
work is assumed to have zero (0) value at the
begining progressing linearly.
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Contractor's equipment floater

This protects from loss or damage to construction

equipment, but does not include liability coverage.
It can cover all equipment for which the
contractor is legally responsible.
Large equipment must be listed with all details
while small items are given blanket cover. The
equipment is usually insured against the
depreciated or value.
The cover can be made flexible as the contractor
desires.
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Fidelity bonds

A fidelity bond is a contract under which any loss sustained by an

employer because of the dishonestly of the employee covered by
the contract are made good by the surety. There are three (3)
types of fidelity bonds.
1) Name bond,
2) Position bond,
3) Blanket bond.

Statutes of limitations

Many countries and states have statutes that protect the contractor
from indefinite liability for failure of constructed facilities. Such
limitations vary from four (4) years to twenty (20) years depending
on local laws.

Insurance claim

It is important that all compensable claims be brought to the

attention of the insurers at the shortest possible time. To this end,
the contractor needs to designate someone for the purpose of
renewals of policies, reporting, filing, cancellations, etc.

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Project Planning

61

(Human Management)

62

(Safety Management)

63

(Information Technology)

64

(Project Control)

65

(Claims and Disputes)

66

(Other Related Topics)

67