Supporting Claims in Construction Projects: A Dissertation

This dissertation delves into the complexities of construction project claims, specifically focusing on acceleration, errors and omissions, and variations within the construction industry. It begins with a background on the construction industry, highlighting its significance, particularly in a growing market like Oman, and the various sectors involved. The research aims to support claims arising from these issues, examining the legal frameworks and contractual provisions that govern them. The literature review defines key terms such as acceleration, errors, and omissions, and variations, providing context through examples and case studies. The dissertation explores different types of acceleration, and the factors contributing to claims, including contractual disputes and changes in client preferences. It also examines successful and unsuccessful claims, offering a comprehensive understanding of the legal and practical aspects of construction project claims. The dissertation aims to identify issues, contractual provisions, and instances of successful and failed claims in the construction industry.

Dissertation

Title-
“Supporting Claims for Acceleration, Errors and Omissions and Variations in
Construction Project ”.
CHAPTER-1 INTRODUCTION
1.1 Background of research
Construction is an appropriate procedure of designing a building or infrastructure which
is totally different from manufacturing. Basically, production involves mainly mass production
of similar products without having a designated purchaser whereas construction is takes place on
specific location for known client. However, it’s an industry consist of six to nine percent of
Gross Domestic product in developed nations. Mainly, construction process begins with
planning, designing, financing which continues till the project is going to build and ready for use.
Large scale construction project needed collaboration across number of disciplines. Although,
project manager manage entire job which consist of several business activities such as;
construction engineer, scheduling, budgeting, safety at construction site, logistics, building
materials and many more. Generally, there are three major sectors of construction industry such
as; buildings, infrastructure and industrial. Constructing a building is further classified into
residential and non-residential. Secondly, infrastructure is also known as heavy civil or heavy
engineering which includes large public works, dams, bridges, highways, railways and other
utility distribution. On the other hand, industrial construction covers refineries, procedure of
chemical, power generating, mills and producing plants. Apart from this, there are some other
ways are also identified from which industry breaks into sectors or markets.
Mainly, in this industrialized world, construction is all about conversion of designs into
reality. However, designs of project mainly covers drawings and specifications that is prepared
by designer group which includes architect, civil engineers, mechanical engineers, electrical
engineers and several other specialist. This team is mainly bind in a contract with property owner
for completing the whole project as per design by considering necessary facts or figures. On the
other hand, maximization in complexity of various construction projects emerge the requirement
for design professionals who are trained in several phases of project life cycle. As a result, helps
in accomplishing all the necessary activities in most suitable manner by understanding each or
every aspects of project.
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Oman’s construction industry is continuing with highest growth which is outlined
through various projects which drives the growth or development of whole industry. Basically, in
this nation almost 2410 active projects are identified that exceeds around US$190 billion in
April, 2018. As per the BNC network, one of the largest assignment intelligence provider in
Middle East and North Africa (Mena) region. Out of these, around 1840 projects are worth
nearly $61 billion which are of urban construction, another 70 projects is of worth $39 billion
associated with oil and gas sector and last worth of 150 projects is almost $32 billion that are
related with transport sector. In fact, various report of Oman states that, success in this industry
is fully depending upon favourable regulations in Sultanate which helps in incentivise foreign
investment. Along with this, ambitious economic expansion agenda, full support of governing
bodies for entire construction industry like renewables, water and logistics.
Consequently, major part of research is based on claims which might take place in
construction industry by various clients due to fluctuations in numerous of factors. Basically,
entire research will focus in supporting that claims with the help of several cases, statues and
various other resources. Hence, construction industry is major background of this assignment
which will cover all the necessary elements associated with it for understanding the things which
are incurred in this industry.
1.2 Focus of the research
This research is entirely circulated around action and reactions which have been taken
place in construction industry for understanding the legal laws associated with these situation.
Basically, designs are framed by engineers on paper but when it is going too built in real then
there must be minute difference or might be major. Therefore, this type of circumstance created
complex relationship between client and company. In order to handle these kinds of issues, legal
bodies have enacted number of legitimate laws, provisions, rules and regulations for managing
the situation in suitable manner. However, main focus of this research is on in the favour of
claims for Acceleration, Errors and Omissions and Variations which might incurred in several
large Construction projects. Due to the occurrence of these situations, whole industry comes in
major dilemmas and enables to make final decision. As a result, suggestion from judiciary
member is really required by analysing several past cases which are already take place and other
provisions that will help in coming out from these certain problems.
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Additionally, depth detail information on acceleration claim that usually take place will
initially explain for understanding this concept in much better manner in order to move forward
in construction projects. Moreover, claims associated with mistakes, omissions and few
variations is also increasing day by day because clients haven’t single choice. In fact, taste,
preferences and choices of customers always fluctuates by getting influenced with other external
factors such as; neighbour, professional friends, advertisement, foreign buildings and many
more. For example; there is a client who wanted to build a house for his family have now
decided to change the structure or designing of his house roof. As a result, now he is demanding
with his engineer to make this change and engineer have passed this message to sub-contractor
which further create a situation of variations. Hence, these kinds of circumstances really create
major problems construction industry and they will go through drastic complexity while making
the house.
Consequently, number of cases are raised which are associated with the several issues of
construction projects due to which legal bodies have implemented numerous of norms for
controlling these issues. Apart from this, some other aspects on which entire report is revolving
such as; acceleration in several projects of infrastructure due to which parties comes for claims.
On the other hand, sometime variations that might incur in buildings projects due to changes in
some other external factors resultant into involvement of legitimate bodies. Furthermore, project
is also focussing on number of cases which are comes in judiciary court are successful in
claiming this and unsuccessful defences too. Hence, overall project helps in acquiring depth
knowledge on changes which incurred into business projects or industrial assignments for
understanding the dilemmas situation.
1.4 Aims and objectives
This section of research will highlight the main aims and target of the project in order to
direct the assignment into correct direction.
Aims- “Supporting Claims for Acceleration, Errors and Omissions and Variations in
Construction Project ”.
Objectives-
(1) Define the terms ‘Acceleration’, ‘Errors and Omissions’ and ‘Variations’.
(2) To identify issues encompassing ‘Acceleration’, ‘Errors and Omissions’ and
‘Variations’.
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(3) To define and explain the term ‘claim’ in context with the construction industry.
(4) To identify contractual provisions (if any) concerning ‘Acceleration’, ‘Errors and
Omissions’ and ‘Variations’.
(5) To investigate instances where such claims have failed.
(6) To investigate instances where such claims have been successful.
CHAPTER-2 LITERATURE REVIEW
2.1 Introduction
Literature review is also considered as narrative review which is a kind of reviewing
article and scholarly paper. It includes the current information consist of substantive findings as
well as theoretical and methodological contributions on a specific subject matter. Basically, this
review is consider as secondary sources which is gain by analysing information, data, facts or
figures expressed by specialist personality. However, it’s a base of research and include as a part
of peer reviewed journal article representing fully new investigation. Mainly, this part of report is
going to highlight the actual meaning of aim that is prior designed by explaining the objectives in
more detail manner. Apart from this, data will be accumulated from distinct authors, specialist,
published articles, journals, books and different cases related with subject area. In fact, data that
is mentioned in this part will help in making final understanding on certain topic. Therefore, this
part plays a major role in explaining the meaning of subject with the help of several books and
articles that are designed by specialist on selected topic.
2.2 Define; Acceleration’, Errors and Omissions’ and Variations’
Construction industry is all about designing of building, infrastructure and handling of
several other projects associated with constructing. Therefore, various types of assignments are
falls under this industry due to which managers are gone through major dilemmas during this
situation. As a result, parties have to face claiming procedure in order attain their set objectives
or gaols in a defined time period. For example; government of Oman wanted to build a dam in
order to facilitate whole community and various people through this service. Therefore, gone for
contracting a project with Construction Company in order to design it first on paper but
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unfortunately when it is going to implemented then there is minute difference between paper and
reality. As a result, case of variation might incurred which resultant in claiming process such as;
government might claim for this variation but construction can defend themselves by taking
various necessary measures. Therefore, just like these cases there are number of other situations
are arises which is named with other elements such as; acceleration, Errors and Omissions and
Variations.
According to……….Acceleration is a term which means additional work in a given time
frame for completing a project in a minimum duration on the request of party. In simple words,
procedure of speeding up the work for specific activity or to complete the project as a whole in a
less time frame is consider as acceleration process. It means, demand of client for completing the
building or house in a minimum time period for certain purpose such as; marriage purpose,
anniversary, birthday or any other occasion. Mainly, this demand is done from the client side as
they wanted to accomplish this project in minimum duration or earlier than that is known as
directed acceleration. As a result, contractor demand for additional cost which shows the claim
against client.
On the other hand, …….states that sometime acceleration also works or undertaken by
contractor voluntarily because of their own reason such as; might have to move on another
project, safeguarding the costs. Additionally, bonuses are also major reason behind this action
like; manager or builder set maximum amount of bonus on completion of project earlier than set
date. Therefore, if contractor voluntarily selected this acceleration than they don’t have right to
claim for additional cost from the client.
On contrary to this Richard J. Long, P.E states that time is consider as money in
engineering and construction projects because delaying in completion of any assignment
resultant into maximization of owner, engineer as well as cost of contractor. It means, overall
duration performance is act as a financial success in construction projects. However, there are
three distinct types of acceleration is identified in construction assignment such as; directed
acceleration, constructive and voluntary.
Directed acceleration- In this case, owner or manager of construction team issues a
particular order to the contractor under the provisions of agreement to, 1) completion of specific
project in minimum time or earlier than the time which is originally scheduled for completing it.
2) Re-sequencing of entire work which includes various changes such as; utilization of overtime,
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additional shifts of workers, extra engineering, construction labour, supervision and more
equipment’s for completing the base as well as changed work in defined time frame. 3) All these
re-sequencing procedure cause major delays which threaten the on time accomplishment of
project.
Constructive acceleration- In this case, contractor is going to compelled by the client
for completing the allotted project ahead of scheduled. It means, there is a change in contract
time which might be delay or acceleration, maximization contractor expense and many more.
Thus, it becomes a case of claim. Basically, in this situation owner of building just refused or
rejected the extensions of time. However, classic case is when a petition for extension of
duration for excusable delay is rejected and agreement provides liquidated damages for late
completion. Although, doctrine of constructive acceleration permits recovery for additional
expenses which is created by contractor. Additionally, case laws have determined five major
elements that will require while claiming for constructive acceleration such as;
 Existence of excusable delay,
 On time notice for delay and an appropriate request for extending the duration requisite to
given,
 Given notice of time extension must be either postponed or refused,
 Owner of contract must ordered the completion of project within its prior set time period
with the help of several manners such as; either through coercion, direction and many
more.
Excusable delay is a term which means that contractor is entitled for extending duration
under the given agreement. It is indispensable for contractor to must demonstrate reasonableness
of schedule as well as its current position while acceleration order. However, contractor must
gave suitable notice for stretching the time for recovering any additional expense of acceleration.
Mainly, case of Constructors- Pamco is a most suitable example of this circumstance where
constructive acceleration is identified. Board of governing bodies have identifies that entire work
was accomplished without any extension of duration.
Voluntarily acceleration- As per this term, it has been understood that if contractor is
going to complete the project in earlier than set time frame just for their benefits are known as
voluntarily acceleration. For example; bonuses are offered by head for finishing the work in a
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minimum duration. In this situation, there is no involvement owner because this is done by
contractor by their own choice either they have another project or some other benefits.
Considering the construction projects, delays are really complex procedure because
number of things is going to change in this situation which affects the contractor as well as client
both in various manners. According to Clause 47 of Standard Conditions, penalty is going to be
applied in delaying the project by contractor for each single day in which assignment remains
incomplete. “Appendix to Tender” which is a most common for agreeing the parties in which
any delay means penalty will be sum of 0.1% of contract value per day. On the other hand,
Clause 47 (2) of standard conditions sets a significant control on penalty for delay. Therefore, as
per this clause penalty is only applied on the work or portion which is left uncertified by
Engineer. For instance; if 80% work is fully certified by engineer in a given time frame then
penalty of delay is only applied on outstanding 20%.
On contrary to this, if it is essential then contractor may also follow the Clause 48 (2) or
Clause 48 (3) Substantial completion certificate; In this case, contractor get aware about that
project is not going to complete on scheduled time than contractor have an opportunity to request
for engineer to issue a Clause of 48 (2) Substantial Completion Certificate in context with works
which have finished by the contractor at completion date.
Clause 48 (2) states that on the request of contractor, Engineer may issue the Certificate
of completion for which means any part of permanent works or substantial section of permanent
activity both has been completed to the satisfaction of Engineer and engaged or utilized by
employer. Furthermore, Clause 48 (3) offers that “if the part of permanent work has been
substantially accomplished than Engineer must have to issue a Certificate of Completion in
context with the part of permanent job before accomplishment of entire job role.”
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2.3 Issues encompassing ‘Acceleration, Errors and Omissions and Variations
2.4 Meaning of “Claim” in context with construction industry
2.5 Contractual provisions concerning ‘Acceleration”, Errors and Omissions and Variations’
2.6 Examples where these claims are failed
2.7 Examples where these claims are failed
CHAPTER-3 RESEARCH METHODOLOGY
3.1 Introduction to methodology
3.2 Research strategy
3.3 Data collection
3.4 Research methods
3.5 Limitations and Potential problems
3.6 Ethical consideration
CHAPTER-4 DATA COLLECTION
4.1 Introduction
CHAPTER-5 FINDINGS
5.1 Introduction to findings
5.2 Analysis
CHAPTER-6 CONCLUSIONS
6.1 Introduction
6.2 Research objectives- Reminder
6.3 Summary of research
6.4 Recommendation
6.5 Reflection
REFERENCES
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Books and Journals
Acceleration claims on Engineering and Construction projects, 2017. [Online]. Available
through<
http://www.long-intl.com/articles/Long_Intl_Acceleration_Claims_on_Eng_and_Constr_Project
s.pdf>.
Cases
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