APC GUIDE

Questions and Answers

Complied by: Jinto Thomas

Jinto Thomas

July 2010

"The fear of the Lord is the beginning of wisdom" (Proverbs 1:7)

Important: This is only for private use

Disclaimer: "The Compiler of this APC Guide does not warrant that the information in this guide is
completely error free. By using this you expressly agree that use of this APC Guide is at your sole
risk. You have to make sure the correctness of the information contained in this. In no event shall the
Compiler be liable for any direct or indirect damages arising out of or related to the use of this APC
Guide

Jinto Thomas

July 2010

Index
Page
A. Conduct Rules, Ethics, Professional Practice (3)

B. Client Care (2)

14

C. Communication & Negotiation. (2)

18

D. Health & safety. (2)

20

E. Accounting Principles and procedures. (1)

28

F. Business Planning. (1)

36

G. Conflict avoidance, Dispute resolution (1)

38

H. Data Management (1)

45

I. Sustainability (1)

47

J. Team working (1)

53

K. Commercial management of Construction. (3)

55

L. Contract Practice (3)

61

M. Construction Technology & environmental services (3)

93

N. Procurement & Tendering (3)

110

O. Project Financial Control & Reporting (3)

127

P. Quantification and Costing of Construction Works (3)

131

Q. Contract Administration. (2)

135

R. Risk Management (2)

169

S. General

185

Jinto Thomas

July 2010

A. Conduct Rules, Ethics, Professional Practice (3)

1.

What are the twelve professional and ethical standards of RICS?

1) Act honourably never put your own gain above the welfare of your clients or others to whom you
have a professional responsibility. Respect their confidentiality at all times and always consider the
wider interests of society in you judgements. Act respectfully
2) Act with integrity be trustworthy in all that you do never deliberately mislead, whether by
withholding or distorting information. 3) Be open and transparent in your dealings share the full facts with your clients, making things as
plain and intelligible as possible.
4) Be accountable for all your actions take full responsibility for your actions and dont blame others
if things go wrong.
5) Know and act within your limitations be aware of the limits of your competence and dont be
tempted to work beyond these. Never commit to more than you can deliver.
6) Be objective at all times give clear and appropriate advice. Never let sentiments or your own
interests cloud your judgement.
7) Always treat others with respect never discriminate against others.
8) Set a good example remember that both your public and private behaviour could affect your
own, RICS and other members reputations.
9) Have the courage to make a stand be prepared to act if you suspect a risk to safety or
malpractice of any sort.
10) Comply with relevant laws and regulations avoid any actions, illegal or litigious, that may bring
the profession into disrepute.
11) Avoid conflicts of interest declare any potential conflicts of interest, personal or professional, to
all relevant parties.
12) Respect confidentiality maintain the confidentiality of your clients affairs never divulge
information to others unless it is necessary.

2.

Your client a landlord has not yet had time to ensure that his properties comply with new landlord
legislation. He instructs you his management company contact to act in conflict with legal
requirements by using delaying tactics to defer implementation. Your refusal to do so may harm your
lucrative business relationship, leading to financial loss. However, to comply with the clients wishes
may endanger the lives of his tenants. What should you do?
Answer: Explain to the client that acting on his instruction would lead to illegal activity. If he still wishes
to proceed then advise him that the management contract will be terminated. - The most desirable
conclusion would be to successfully persuade the client that the ramifications of delaying
implementation are extremely serious for both client and property manager, with severe penalties to be
expected from prosecution.

3.

You a contract manager are aware that a client is being charged incorrectly for time and
subcontractor invoices by a contractor with whom you have a good working relationship. What should
you do?
Answer: Avoid further dealings with the contractor providing you can show valid reasons in any future
competitive tendering exercise for preferring a different organisation. - You are at liberty to avoid
further dealings with a contractor who you suspect of improper practice provided, for example, you can
show valid reasons in any future competitive tendering exercise for preferring a different organisation.

4.

You are marketing a site for a client. A prospective developer has identified your company as a
possible provider of management service once the site is acquired. Your company will receive a fee
Jinto Thomas

July 2010

from the vendor for selling the site, and an even higher fee for management and sub-letting from the
developer. Bearing in mind the potential for conflict of interest, what should you do?
Answer: Disclose any potential fees, commissions and benefits to your client. - In accordance with
Rule 19 of the Rules of Conduct, once your company has decided whether or not to act for any or all of
the clients, you should disclose to each client the possibility and nature of the conflict; the
circumstances surrounding it; and any other relevant facts.
However, please note that there may be circumstances where professional judgement dictates that it
would be best to decline to act.
5.

You were advised by a potential client that lowering your original quote for a job would lead to beating
a competitor and gaining the commission. Despite some doubt, this is agreed. There are now
concerns that you may not satisfactorily be able to carry out the job for this fee. What should you do?
Answer: Complete the undertaken job despite incurring a loss and recognising that this tactic is not of
long-term benefit to your practice. It is desirable for the client to select a surveyor according to fairness
and not manipulation.
However, having agreed a lower fee, it is your responsibility to try not to exceed the quote, risking
future business opportunities with the client. Variations to contracts are not unusual, although this has
occurred as a direct result of you lowering your quote to win the job.

6.

After receiving inside information about a competitors quote, you consider altering your terms to win a
commission. You realise that you may be promising more than you can deliver, but by gaining the job,
would make money for your company. What should you do?
Answer: Be comfortable that you originally quoted according to use of your professional time and
expertise and if the client prefers the services you offer, he will accept your full fee and grant the
commission. - The fee stated in any estimate ideally should reflect a surveyors costs and if the
potential client honestly prefers the services you offer, your full fee should be accepted and the
commission granted on that basis.
Submitting to 'Dutch auction' pressures or attempting to win favour by compromising on fees could
violate RICS rules of ethical conduct governing fair competition.

7.

You are the managing agent of a block of flats. One of the leaseholders is a nuisance to you, the
freeholder and the Residents Association.
Her demands are unreasonable and based on a total ignorance of the law, the lease, and the roles of
the landlord and managing agent.
This particular leaseholder is female, Jewish, elderly, myopic and somewhat large. She has just made
the latest of a large number of unreasonable demands.
Answer: Write back saying that her opinions are incorrect, that your practice prefers to deal with the
Residents Association and you hope she will refer any future concerns to the Residents Association. Both answers which make reference to the Residents Association would be acceptable, dependent on
the circumstances. Treating others with respect does not preclude a Member from being firm or
decisive.
Answering that your practice prefers to deal with the Residents Association would be the preferred first
response. The warning to ignore any further correspondence should be reserved for use if the
leaseholder persists in writing in.

8.

You are instructed to help prevent a proposed development that would require the removal of a nature
reserve. You have very strong views on protecting the environment and think that occupying the
nature reserve will prevent it being destroyed. What should you do?
Answer: Put your personal interests aside and act with professional responsibility, assisting the project
as best you can within the parameters of the law. - Your personal convictions and professional
responsibility should be kept separate.
You must assume that your practice does not wish to enlist in public protest and may disassociate with
your actions if they are outside the parameters of the law.

Jinto Thomas

July 2010

9.

You are aware that your clients properties that you manage do not comply with recently introduced fire
safety regulation. New tenants are about to move into some of the properties but your client has asked
you not to mention the discrepancy to them. What should you do?
Answer: Let the client know that you are not prepared to endanger any lives and explain to him that he
must ensure his properties comply with regulation. - Failure to advise clients about health and safety
directions that may lead to ignorance of statutory demands violates RICS ethical rules of conduct, is
generally unprofessional and could lead to a claim for negligence.

10.

What benefits for RICS membership / Why did you want to be an MRICS
RICS is the largest international property organization in the world. By joining I will get global
recognition and I will become part of an international professional community offering invaluable
networking opportunities and guidance. I will get an opportunity to develop profitable business
partnership with other top quality professionals. I will get an elite professional status. Guidance,
information & support from national association. Member information services. Technical resources to
support my profession. Moreover I will be part of promoting best practices in this profession.

11.

Why do RICS have Rules and Regulations

RICS is a self regulating body. Rules will help members to act in a professional capacity and to deliver
a robust, ethical and proper service to employers, colleagues, clients and other acquaintances
(associates) in both public and private life. Rules of Conduct is related to (1) Ethics, (2) Personal
Solvency (3) LLL
RICS refers to maintaining and promoting the usefulness of the profession to the public advantage.
The public and RICS expect an MRICS to behave in line with the objectives of the charter, and provide
clients with the most appropriate advice for their circumstances. As RICS is a self regulating body,
specific rules of conduct and disciplinary powers maintain the standards.
A firm that has 50% or more partners or directors who are MRICS / FRICS is deemed to be a
Chartered firm. If it is less than 50% they can choose to register to be regulated. Then they are called
Regulated by RICS

12.

13.

14.

Explain what an individual should do to maintain ethical level in his profession.

Keep their own actions under review.

Maintain a level of knowledge and training appropriate to there area of work

Follow advice given by professional bodies on ethical behaviour.

Help their own organizations to develop ethical ways of working

What employers should do to create a ethical environment.

Establish confidential setup for whistle blowing independent of the normal chain of command.

Include ethical evaluations into formal performance assessment.

Include ethical standards into employee hiring, employment contracts and training.

Make sure there is adequate planning, training and ethical performance monitoring when
implementing change.

What are the areas where ethics are important to an MRICS in this society?
Matters related to Gifts / bribes / hospitality / inducements, management of Health & safety, Equal
opportunity, discrimination and sexual harassment, Conflicts of interest, Insider dealing, Money
laundering, Disclosure of confidential company information, Financial transactions, Fair competition,
Alcohol and drug abuse, Whistle blowing in case of any one raise an unethical issue, copyright and
ownership of files, standards in advertising, Environmental protection, Relations with local
communities, Political and social behaviour.

15.

Rules and Regulations of RICS

Guidance to Rules of Conduct.

Disciplinary, Registration and Appeal Panel rules (01 January 2008) of RICS.

Transitional Rules for Registration of Firms

Professional Indemnity Insurance Policy

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July 2010

16.

Rules of Conduct (LLL to CPD Difference) Members shall plan, undertake, record and evaluate
appropriate CPD and on request provide evidence of same

17.

Rules of Conduct (ROC) for members Interpretation, Communication, Professional behaviour,

Competence, Service, CPD, Solvency, Information to RICS, Co-operation. (9 rules) ICPCSCSIC

18.

Rules of Conduct for Firms Interpretation, Communication, Professional behaviour, Competence,

Service, Training & CPD, Complaints handling, Clients money, PI Insurance, Advertising, Solvency,
Arrangement to cover the incapacity or death of a sole practitioner, Use of designations, Information to
RICS, Co-operation (15 Rules) + T AACCPU

19.

Five basic principles of ROC Proportionality, Accountability, Consistency, Targeting and

Transparency (PACTT)

20.

Motto of RICS Est Modus in Rebus ( Everything can be measured, there are well defined boundaries
outside of which the right answer does not lie) ( If you dont measure properly, you cant build properly)
(The Royal Institution of Chartered Surveyors)

21.

General information 17 Professional Groups (Faculties), 21 disciplines,140,000 members (Out of it

86,000 MRICS / FRICS), 146 countries, 500 accredited degree courses, 170 specialist skills, 50
National associations, 7 regions ( UK, Europe, Americas, Asia Pacific, Oceania, India, MENEA)
Governed by International Governing Council Representatives from each regions.

22.

RICS was founded in 1868 the first President was John Clutton. It covers many disciplines 21
altogether including such areas as Antiques and Fine Arts, Building Surveying, Construction,
Valuation, Rural Practice and Environment. The present RICS is structured into world regions and is
governed by an International Governing Council with representatives from these regions. Largest
discipline is QS & Construction, then Valuation

23.

Tell us about some recent news about RICS

24.

Whom should RICS responsible It is a self regulating body. Nevertheless, it should work for common
interests of its members, clients, public etc.

25.

What services RICS provide - RICS is dedicated to providing a range of practice support services for
our members.

26.

online publications - www.isurv.co.uk

book publications - www.ricsbooks.com

cost data services - www.bcis.co.uk

dispute resolution offerings - www.rics.org/drs

various information products - www.rics.org/library

RICS (2010)
RICS President Max Crofts, Robert Peto Vice Chairman, Chief Executive Officer Sean
Tompkins, Regional Director of RICS James Drysdale, Chairman Martin Seward Case, Chairman
of the RICS Construction faculty Stuart Earl, Menea QS & Construction professional group chairman
Daniel Alcon, RICS Matrix Chairman Mark Humphries (2009-10)
Approximately 1000 members in Middle east (2009). Chapters in U.A.E., Bahrain, Oman, Qatar. Abu
Dhabi chapter formed in January 2008.
With around 100,000 qualified members and over 50,000 students and trainees in some 140 countries,
RICS provides the world's leading professional qualification in land, property, construction and the
associated environmental issues.
An independent, not-for-profit organisation, RICS acts in the public interest: setting and regulating the
highest standards of competence and integrity among our members; and providing impartial,
authoritative advice on key issues for business, society and governments worldwide.
Serving the public interest

RICS was founded in London in 1868, and granted a Royal Charter by Queen Victoria in 1881. The
Charter requires the Institution "to maintain and promote the usefulness of the profession for the public
advantage." This commitment to act in the interests of society in everything we do continues to be our
guiding principle.
Jinto Thomas
July 2010
7

Knowledge and best practice

setting the highest standards of academic achievement, practical training and lifelong learning

accrediting over 600 courses at leading universities worldwide

setting and promoting international best practice in professionalism

Regulation

regulating the profession through ethical principles and a state-of-the-art regulatory framework that
works with the grain of modern business life

providing a workable and robust framework of protection and redress for clients

RICS Governance
RICS' top level strategy is set by a 70-strong Governing Council, chaired by the President, including
RICS members from all world regions.
The Council, which meets three times a year, is supported by a number of other RICS member
groups, whose total membership is around 1000.
These include world regional boards, national councils, UK regional boards, 17 specialist Professional
Groups, and policy committees covering ethics, education, public affairs, marketing, research and
dispute resolution.
Governing Council has delegated key decision-making to its Management Board to assist in the
management of operational activities.
7 Regions - UK, Europe, Americas, Asia, Oceania, India, Menea
Corporate Social Responsibility of RICS
Responsible business, responsible employer. Being a responsible business impacts everything we do
at RICS. Our company values and culture provide the foundation for our developing commitment to
corporate responsibility which internally we call 'Responsible Business, Responsible Employer'.
Putting our values into practice, upholding our commitment to corporate responsibility and maintaining
public trust is of the utmost importance to RICS. RICS defines corporate responsibility as action taken
which positively impacts on the Environment, communities, workplace and suppliers .
The RICS Quantity Surveying and Construction Professional Group has approximately 40,000
members who benefit from:

An internationally respected qualification that is recognised as the 'gold standard' of professional

competence

A regular and up-to-date professional journal that provides advice and commentary on key issues
facing the profession

In-depth practice standards and guidance on a wide variety of professional topics

Access to a cost-effective programme of training events

A structured training plan for new entrants into the profession that culminates in an APC and,
ultimately, Chartered status

The ability to lobby and influence government and other policy makers on the future direction of
the profession

Opportunities to promote the profession through the technical press and national press and media

Access to experienced Professional Group members, a professional information team and a

contact centre that provide impartial advice

Access to a network of like-minded professionals through discussion forums

27.

RICS India - Managing Director & Country Head is Mr. Sachin Sandhir, Office is at Gurgaon. RICS
started in India in October 2008.

28.

Have you seen a slogan in the emblem of RICS The mark of property professionalism worldwide.

Jinto Thomas

July 2010

29.

What do you understand by a Chartered Surveyor The surveyor who has a blend of technical and
commercial skills and experience required to operate at the highest level in todays property and
construction markets. It is like achieving gold standard of professional competence.

30.

Why one should use chartered surveyors They add value to the development equation through their
unique blend of construction knowledge, design flair and property expertise. Their experience helps
the clients to get a peace of mind. ( Eg. At concept design stage they can provide strategic advice on
schematic development plans; at detailed design stage they can provide on alternate design options
etc)

31.

Sections of Chartered Building Surveyors Building pathology, Design, Project Management, Building
surveys, Property Management, Contract administration.

32.

What is the name of RICS monthly journal? RICS Business is the flagship journal. But a bimonthly
RICS Construction Journal is for Quantity Surveying & Construction faculty.

33.

DPB Scheme Designated Professional Body For the Mediation activities by RICS

34.

RICS Matrics: Why should I join? RICS junior organisation (The professions future today)
This will help to make and maintain contacts throughout ones career. Building friendships and
contacts early in your career can only be of benefit. These are the contacts who will willingly help
without, necessarily expecting favours in return. They will provide evidence, information and advice.
They may be ones future client, business partner or colleague who recommends him for work or a
new job. (In U.A.E. it is established in Feb 2009)

35.

Can you name some of the different RICS professional groups (faculties)? Quantity Surveying &
Construction, Building Surveying, Dispute Resolution, Facilities Management, Project Management,
Planning & Development etc. (Total 17 groups)

36.

What are key roles of RICS (1) Regulate and promote the profession (2) maintain the highest
educational and professional standards (3) protect clients through strict code of ethics (4) provide
impartial advise, analysis and guidance.

37.

What is meant by Ethics Is a study of morality. It is a standard for deciding right and wrong. It is
general moral beliefs and rule of conduct. It states what one should do instead of what one will do in
particular instance. As per Oxford English Dictionary, it is the science of Morals.
Ethics is essentially a product of our humanity; that human beings are driven to bring about changes
for the better changes for the better in their environment, and that the motives from which they act
depend largely upon a combination of their personal and collective ethical value systems.
A modern definition of ethics: A set of general moral beliefs, normative rules of conduct, a set of
standards that govern what one ought to do when the well and rights of, or duties to, oneself, others,
or institutions are at stake.
It is important to differentiate between ones Legal and Ethical responsibilities. Ethical issues
impose a higher level of responsibility than legal because it is concerned with Moral values also
along with adherence to Legal points.

38.

What is difference between business ethics and professional ethics

Business ethics is the study and analysis of moral principles and moral decision making as it applies to
the business world. It is mainly determined by local customs and practice.
Professional ethics is the giving of ones best to ensure that clients interests are properly cared for but
in doing so the wider public interest is also recognised and respected. (RICS)

39.

Why ethics are important to a QS As they are dealing with some jobs which require high ethical
standards for its success. (Eg. Procurement of construction works, Contract administration, Valuation,
Payment certification etc.)

40.

What do you understand by conflicts of interest? Give examples from your own experience.

41.

Would you accept a case of wine / gifts / Christmas cake from a client / contractor during / after a
project?

42.

What is the minimum level of PI cover? How is it worked out for your company?

Jinto Thomas

July 2010

We should discuss with an insurance broker (As listed by RICS) to work out proper level of cover. We
should remember that if there is a claim we will be liable whether or not you have adequate insurance
cover. In general, it should be each and every claim basis and the policy wordings is written to cover
full civil liability basis. RICS is recommending level of PI Insurance (Eg. Required level of minimum
limit of indemnity for a firm with turnover 100,000 Pounds or less in previous year is 250,000 pounds)
43.

What is LLL (CPD), and how is it achieved? What is the minimum requirement? What is the purpose of
LLL? How would you demonstrate that you have complied with this rule?
It is the systematic updating and enhancement skills, knowledge and competence which take place
throughout working life. LLL is an essential part of being a professional. Creation of a competent,
innovative, forward looking professional as well as the individual is attained by proactive and targeted
learning.
As per current rule (Rule 6), the members shall attain LLL of a minimum of 20 hours per year to
carryout their professional work with due skill, care and diligence and with proper regard for the
technical standards expected of them. AS per RICS, Quality is as important as quantity
LLL should include (1) Technical skills (core / optional competencies) (2) Personal skills
(Communication, negotiation, IT training, team working, data management etc) (3) Professional skills
(Ethics, Conflicts of interest etc)
We all should have (1) Our own personal objectives in our career and (2) The ways to be adopted to
attain those objectives. Hence we have to prepare our own PDP (Personal Development Plan) to find
out our own requirements to grow professionally and set a training schedule for the LLL and we have
to review it periodically. Now there is no specific time limit for LLL but anything less than 20 hours per
year is not recommended by RICS.
As per RICS the LLL could be (1) Professional / work related (2) Personal / informal (3) Voluntary /
charity (4) Courses / seminars / conferences.

44.

What is meant by PDP Personal Development Plan.

45.

After your last referral what you have done with respect to your LLL? I discussed with my superior
and counsellor and revised my PDP (Personal Development Plan) to focus more on the areas where I
lack required knowledge.

46.

How you will help RICS if you become a member? How could you help RICS develop in the future?
By promoting best practices, setting good example, being competent in the field, promoting RICS core
values etc.

47.

If you are successful what designation will you receive? What other designations are there? MRICS.
Others are FRICS, Assoc RICS

48.

What is meant by Diligent Hardworking with care

49.

New Measuring Guidelines by RICS: New Rules for Measurement (NRM) Standards are first of three documents that aim to make it easier for clients to compare estimates. The
first wave of a new set of measuring guidelines from the RICS was launched In March 2009.
The standards for cost estimating and elemental cost planning aim to make it easier for clients to
understand and cross-compare estimates from different firms.
It is the first of three documents due to be published over the next two years as part of the RICS New
Rules of Measurement (NRM), which promises to provide a standardised way of measuring projects
from beginning to end for the first time.
This includes advice on dealing with costs such as risk allowance and inflation plus non-construction
related costs including consultants fees and planning contributions. This helps RICS members get the
guidance to work to the highest standards.
This new suite of rules, enabling the quantity surveying profession to measure construction projects
from beginning to end using a single standardised rule book, will provide them with the tools to provide
clients with the best possible advice in a challenging market place.
The second document on procurement is expected at the end of this year and the third, on whole-life
costing, at the end of 2010.

Jinto Thomas

July 2010

10

50.

What sort of work have you been undertaking in each competency? How your critical analysis is
related to your competencies?

51.

Can you tell the panel how your office is structured and what type of work is undertaken with respect to
the competencies?

52.

Is there anything particularly interesting that you have been working on since you submitted your
papers?

53.

What was the last CPD / LLL event you attended? Have you been to any RICS meetings? Why did
you attend (a particular) CPD event recorded in your CPD schedule? What did you study from it?

54.

How do you prepare the consultancy fee proposal and what are the documents you must have in your
possession? First, I should understand the client requirements. Then I have to calculate how much
resources required to meet the level of services the client need. Price the requirement. Add the
overhead and profit. The required documents include the CV of competent staff, your trade /
professional licences etc.

55.

What type of books you read in general? Books / articles that will generally help me in my
profession.

56.

What would you do if the client is short of money and asks you to reduce the interim valuation for this
month?
Convince the client the importance of unbiased valuation. Politely refuse his request. Advise alternate
options to client (Reach a mutual agreement with contractor and make record of it. If require consider
interest on the reduced amount. Advise client alternate options to get funding) If you think of chance of
insolvency, ask him to get a payment bond.

57.

You are preparing a valuation on site and see badly chipped and otherwise defective bricks in the
completed work. You tell the contractor that you can only include properly executed work therefore
you do not include its value in the valuation. The contractor says it will be remedied before the next
valuation and notwithstanding this he also states that you are acting beyond your duties. Discuss the
issues raised. Convince the contractor that you will consider only those works which are carried out as per the
specification and standards only. Inform him that as that particular work was defective it will not be
included in this valuation. If the contractor is not convinced by these explanations, you have to inform
your manager about this incident. If the contractor tries to escalate this issue to further levels, report
this matter to the Employer. Get advise from Engineer on defective materials.

58.

The contractor also shows you an invoice stating delivery of 20,000 bricks is on Sunday (It is now
Thursday) and you will be in the office on Sunday preparing the valuation forms, therefore if he faxes
the delivery notes on Monday. Will you include their value?
No. In most projects, there will be a fixed date (Say 1st of every month) for payment application and
works / MOS up to which only should be included in the payment application. Therefore the engineer
(QS) is not bound to include any material on site which is delivered after that date or after the
submission of interim payment application.

59.

While you were taking with an MRICS friend, he told you that he do not have a PI insurance even
though he is running a chartered surveyor practice. What you should do?
I have to advise him to take PI insurance. Convince him about the importance of taking a PI Insurance.
Later, if I came to know that he is running his business with out a PI, I have to inform the matter to
RICS office.

60.

The contractor is going on holiday one week before the next valuation date. He requests that you do
the valuation before he goes on holiday. Can you do this and what date would you put on the
valuation?
In most projects, there will be a fixed date (Say 1st of every month) for payment application and the
works completed up to date will be considered. If the contractor wish to submit it one week early, the
quantity of work and thus the value will be less. The Engineer shall consider the time limits from the
date of contractors submission.

Jinto Thomas

July 2010

11

61.

A client contacts you with a request to carry QS Services, what would you offer and what would you
expect to be included?
First understand client brief. Then check priority of client requirement like Quality, Time, Cost etc. If he
require QS services include items like, Cost planning, Budget preparation, Quantity Take-off, Tender
documentation, Advise Form of Contract and Procurement route, Tender Analysis, Budget control,
Cost control and Management, Post contract QS services, Claims Management etc. Make sure that I
am competent in those fields which he ask our services.

62.

During an evening party a friend ask you advice about his own work. What you will do? The key
element in this is whether I have PI Insurance is or not. If I have PII, no problem to advise him. (This is
applicable even if one work after office hours, work for charity, work free of charge, not getting any fee
for advice, give friendly advice etc.

63.

You arrive on site on a Monday morning and you are informed that one of your subcontractors may
have gone into receivership, what do you do?

64.

You have passed a certificate for the now bankrupt subcontractor that is due to go out for payment; do
you still allow it to be processed?

65.

Would you pay some one if he introduce you to a prospective client No problem if your company
policy allows you. Simply introducing to some one will not make any conflict of interest.

66.

Would you accept cash instead of cheque from a client no problem if the payment is due.

67.

If a client want to pay you in advance for your services as he going abroad how you will deal this
matter consider this a client money. Make an agreement with him about the terms of the money
handling.

68.

Client noted a mistake in your valuation. What you will do? Check the matter. If there is a mistake,
admit it to client. Investigate why it has happened. Take steps to avoid such mistakes in future.
Convince client about the steps you have taken. Convey this message to all levels so that others will
not make similar mistakes, Check this matter periodically. Rectify the mistake in next valuation. If client
suffered a irreparable loss, report it to your insurer. Claim the compensation from them.

69.

Would you carry out works for a relative / friend? - No problem if I have PII and I am doing my works
as per professional ethics. Also there should not exists a conflict of interest.

70.

What is meant by Red Book of RICS The appraisal and valuation standards issued by RICS which
set out the procedure, regulations etc. for valuations. RICS Valuation Standards (The Red Book)
contains mandatory rules, best practice guidance and related commentary for all RICS members
undertaking asset valuations. First published in 1980.

71.

Blue Book - Residential estate agency standards : Residential estate agency standards sets out how
an agent should conduct his or her business. Jargon-free and structured to follow the agent's
workflow, it helps to ensure compliance with the law, with official guidance and with industry best
practice.

72.

How do you go about starting a private practice? What PI cover you should have? What are the criteria
to call your firm as a chartered practice? How much maximum deductible RICS suggest in PI
Insurance?

73.

At what stage a client should appoint a QS in a project?

In order to get maximum gain from his skills as a QS, the appointment should be done as early as
possible in the life of a project preferably at the inception stage, so that advice can be provided on (1)
Cost & budget of the project (2) Procurement method (3) Advise on the appointment of other
consultants & contractors.

74.

What are the procedures to set up your own Chartered Practice?

RICS members regulations (Inform the Institution, Follow professional conduct, Handling Clients
Money, Clients money protection scheme, Take PI Insurance, Staff should be competent, Set up
Complaints Handling Procedure (CHP), LLL, Conflicts of Interest, Know Advertising / publicity
rules, Professional charges to RICS, we should manage our own account properly to avoid
insolvency)

Statutory requirements (Follow all statutory requirements of the country of practice)

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75.

What is the first thing you must do before taking an instruction from client? Make sure that you have
a valid contract with them.

76.

Describe about yourself related to QS profession. Why did you select QS profession? What is your
future plans as a QS What is role of QS in this society?

77.

If a client ask you your services in the pre contract stage, what services you will offer - Cost planning,
budget preparation, Value management, Cost control, procurement planning and contractor's
selection.

78.

Within how many days a member should give information to RICS, if the institution requested some
information, to avoid any fines 90 days (Rule 41).

79.

What is a conflict of interest A conflict of interest is a scenario where a professional person is unable
, or may be perceived as unable, to give full, proper and unbiased advice to a client because:

Of acting for another person.

Of having another obligations or pressures that detract from or affect his relationship with client.

Conflicting duties are owed to different clients.

Examples are (1) Acting for a buyer and seller of a property (2) Acting for two or more parties
competing for an opportunity (3) valuing a property previously valued for another client by you or your
firm (4) family related interests
80.

A prospective client asks you your fee for a service. But you already providing service to his
competitor. How you will deal this situation? Check the agreement with existing client about the
exclusiveness of your service to him. If it is not exclusive, inform this matter to both clients to avoid
any conflict of interest. Take actions to construct Chinese wall in your office to avoid passing
information to wrong persons.

81.

Chinese wall concept to manage conflicts of interest between those working in same firm for different
clients.

82.

The persons must be different for different clients.

These persons must be physically separated (Either on different levels of a building if not in
separate buildings)

Any information should not go to other side (to be checked by Compliance Officer)

Such Compliance Officer should oversee the setting up and maintenance of this Chinese wall.

What is meant by Duty of Care It is the responsibility to treat others in a fair, just and professional
manner.

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B. Client Care (2)

83.

What do you understand by client care? It is a continuous process or concept of understanding

clients requirements, suggestions, complaints etc. and analysing it to find a solution suitable to client
requirements and to enhance our own business.

84.

How you will identify who the clients are and their behavioural patterns ?

85.

86.

Specific software packages contacts databases or relationship management databases.

Developing capture plans to assist in the identification and capturing of a specific clients needs.

Understanding clients timescales so that responses can be tailored to suit.

Understanding the need for a polite and professional approach to all business

Understanding the need for clear concise communication to keep clients informed of
developments.

How you will identify and utilize the systems and processes for managing client care

Customer complaint procedures

Quality Assurance procedures

Other policies such as sustainability, equal opportunities, environmental policies etc depending
upon the clients requirements.

Customer satisfaction questionnaires

Client feedback meetings

Lessons learned workshops

Give a practical example of a client care exercise that you have been involved in?
( Here you will need to outline a practical example of where you have instigated or carried out specific
client care activities.
You may want to discuss a specific project that you were involved in where client care activities were
carried out often this takes the form of questionnaires or feedback meetings describe the process
that was adopted formal questionnaires or informal questions. Did you undertake client interviews? If
so were these face to face or telephone interviews?
You should then describe the process of understanding, analysing and acting upon the information
gained. Describe the feedback you obtained and how you changed the service offering the show the
client that you had acted upon the feedback they had given you. You may also want to cover how all
this links into your quality assurance procedures and what internal reporting you did to communicate
your feedback.)

87.

88.

Explain the concept of identifying clients / colleagues / third parties who are your clients and the
behaviour that are appropriate to establishing good client relationship?

Identifying Clients This area should consider both existing and potential new clients. It is
important to address that client care for an existing client base is vital and requires a active
management. The process of identifying new potential clients in a particular market sector and
how to attract them to your business.

Types of clients An understanding that different industry sectors have varying structures and
these affect the nature of the client and their general objectives and interests.

Behaviours An overview of professional conduct with reference to the RICS guidance on ethics
and rules for practices and individuals.

The systems and procedures that is appropriate for managing the process of client care, including
complaints.

Client care on projects Clarity of communication lines and ongoing dialogue with the client on the
deliverables of the team and their input to the project.
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89.

90.

Client account management The process of structured account management, ensuring that
developments in the client organisation are tracked and that there is interaction at a number of
seniority levels. Additionally the process of maintaining regular contact away from current live
projects to identify how assistance can be provided with longer term client business objectives.

Client feed back Process for collecting and responding to client feed back. Alternative processes
such as project reviews, informal feedback and managed client satisfaction surveys.

Client business development activities The concept of arranging off line business development
activities and events as a mechanism to build broader relationship with clients.

Complaints maintaining alternative lines of communication / routes for complaints and how these
should be ideal with by a practice. The RICS guidance on ethics should be referred to as the
option for clients to make formal complaints to RICS.

Explain the requirement to collect data, analyse and define the needs of clients.

The briefing process The importance of the briefing process and defining a clear scope of works
for the team so that the expectations of both parties are aligned.

Job Planning - The internal process of planning how the clients requirements will be met for both
specific deliverables and broader input to the project, together with how this relates to the pricing
and management of the commission.

Continuous Client Management identifying a process to capture any changes to the needs of the
client and the project.

Provide example of how you have applied a number of these principles of client care within your
business activities?
Eg.- A Cost consultant working on a number of projects. The type of issues will be,
Who is your primary client? Explanation of the organizations processes for obtaining feedback from
clients as a project progresses. (Please find examples from our own work field)

91.

Difference between a Client and a Customer

In general both "customer" and "client" can be defined as "one that buys goods or services." However,
there is only the one definition for customer, but has five other definitions for client. A client is also
defined as "the party for which professional services are rendered, as by a lawer" and as "One that
depends on the protection of another." The main difference between a customer and a client is that a
protective, ongoing business relationship is formed with a client, but not necessarily with a customer.
The difference between a customer and a client is that a customer can be just a patron, while a client
is a patron who also seeks advice. In today's business world, we don't just have customer service, but
we have "client care" or "client service" departments in many corporations. Most patrons of a business
want to be informed, but those who depend on their relationship with a business such as a client with a
lawyer, need a protective type of informative business relationship. A client looks to follow the advice
and professional knowledge of a business leader, while a customer may only purchase goods and
services from a business.
In a client / vendor relationship, the buyer is under the protection of the vendor and becomes
dependant upon the ongoing care of the vendor.
Client: One who is under the protection of another. Customer: One who purchases a commodity or
service.

92.

How do you deal with a customer complaint?

First of all we should be familiar with customer complaints procedure in our company. Often that
procedure will have specific timescales to respond within, and specific actions against individuals.
Clearly these need to be adhered to in order to show that the complaint has been handled effectively
and in accordance with company policy. Take following actions,

Allocate the complaint to appropriate person as per company procedure

Respond in the identified timescale to the client

Investigate the complaint using defined procedures

Identify the outcome and course of action to rectify or close out the complaint.

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93.

Communicate the outcomes and course of action to the client.

Formally record using appropriate process

Communicate the lessons learned internally

Review at a pre determined date in the future.

How do you act upon feedback received from a client

The feedback should be formally recorded in proper way. If obtained through a customer satisfaction
questionnaire then this will form the formal record. If the feed back is verbal then a formal record
should be made.
If the feedback is negative then it needs to be verified and the necessary course of action to be taken
depending upon the actual feedback. If a formal approach is required then obviously the company
procedure should be followed. It is also advisable to ensure that feedback is collated in a formal way
and fed back into company through some form of lessons learned process.

94.

What is meant by Clients money? How you will manage clients money.
Any money held or received by the firms which do not solely belong to the firm. This money held in
trust by a firm on behalf of third parties and which is not due to the firm. We have to ensure that the
money entrusted to you is always:

Kept separately from your own, your firms, your companys account.

That this money is clearly identifiable.

Obtain bank confirmation of account conditions.

Advise the client and agree terms of account handling in writing.

Obtain clients written approval to make payments from their account.

That the money that belongs to them should be available to them at all times.

Examples of clients money are Rents, Fees received from client for payment to another consultant,
service charges collected on behalf of client, money due to be paid to other contractors
Purpose of keeping Clients money is to protect it from (1) Insolvency (2) Misappropriation by any
party, (3) Death of sole practitioner.
95.

The RICS Clients Money Protection Scheme Client who entrust money to firms regulated by RICS
are protected in the unlikely event that the money is mishandled. (maximum amount is 50,000 Pounds)

96.

Minimum requirements of complaint handling procedure Every firms should have a CHP (1) It should
be quick, transparent and impartially implemented, (2) Appoint a person to carryout investigation (3)
Information about complaint handling procedures should be available to clients (4) If complainant still
unhappy with the outcome, they have right for separate review or mediation. (5) If complainant still
unhappy, they have right to refer to independent dispute resolution. (Remember you inform your
insurers of the complaints on each stage)

97.

How to complain about a RICS member or firm

First step is to complain directly to member or firm as per CHP. Second step to complain directly to
RICS (Online possible)

98.

What are the subjects RICS investigate against a member or a regulated firm?
Failure to use complaints handling procedure, Incompetence, Conflicts of interest, Misuse of clients
money, Failure to answer correspondence, Allegation or a conviction of a criminal offence.

99.

What is meant by PI Insurance It is a third party insurance to cover the damages and losses suffered by a client due to negligent
actions, omissions, errors of a professional.

100. Why PII is important for the profession and who does it protect?
If the liability to exercise reasonable skill and care failed to happen. PII is an a third party insurance
aimed to indemnify ones liability and legal costs claimed arising out of professional negligence. We
have to insure ourselves for at least 6 years after we stop practising. (similarly till 6 years after one
work is completed)
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Insurance should cover damages; interest on such damages, consequential loss and claimants cost.
All these adds up. (Rule 6 of schedule 1)
PII works on a claims made basis (retroactive type). This means it is the policy in place at the time of a
claim that count, not the policy in place when the work was originally carried out. Hence one need runoff cover as the problems that give rise to claims may not come to light immediately.
Exclusions of PII Claims from environmental contamination (hazards) and pollution.
101. Does one need personal PII cover
If one work for a firm as a consultant, no need to take out a personal insurance on top of that arranged
by the firm if they cover you on their policy. The firms policy must be RICS compliant. But make sure
that the cover is sufficient in the event of claims by (1) Third parties, (2) Your own owner, (3) Another
party for whom your employer is acting as an agent, (4) Insurers.
Avoid works, even charity, after retirement. If required take a new PII to cover yourself.
PII is primarily a consumer protection measure. It is a mandatory requirement for all those professional
and technical members of RICS who offer professional or technical services to public. As per RICS it is
not mandatory for a MRICS to take a PII who is working for a firm.
102. What is run-off cover insurance PII is taken for a minimum of six years after retirement of a chartered
surveyor. This is RICS requirement. As per law one may be liable even after this 6 years. (10 years
requirement as per U.A.E. civil code)
103. Limit of liability in PI Insurance This is to cap or place a limit on the level of expense a business signs
up to in a formal agreement. This may be in aggregate or for each and every claim.
104. What should you do if there is a PI claim against you? Notify the insurer immediately which enable
the insurer, if necessary, to give advice on how to proceed. The insured should inform the
Circumstances to the insurer.
105. Assigned Risk Pool (ARP) This is a temporary PI insurance facility for RICS members through which
insurance cover is arranged when they are unable to comply with the rules.
106. Vicarious liability This principle dictates that an employer is responsible for the negligent acts or
omissions of his employees when acting in the course of their employment. But this does not remove
employees potential liability. Although the employee may not have a contractual obligation to client, he
will incur a direct liability to client in Tort.
107. What is meant by Locum & Locum agreement It is a person who is authorised to manage your
practice in your absence. (Long term absence due to illness, death, holiday longer than one month,
unforeseen events) The agreement between you and the locum is locum agreement. This is an RICS
requirement if you are a sole practitioner of the practice.
108. Say you had a client with a medium sized plot of land on which stood a Gregorian house, what type of
things would you need to take into consideration, if, for example the client wanted to redevelop the
land? (1) Refurbishment or demolition / construction, (2) Environmental factors, (3) Development
control / Law / Regulations (4) Form of Contract / Procurement route
109. If a client came to you with a complaint what would you do? - Diligently address as per the Complaint
Handling Procedure and advise the client at the earliest.
110. You have a client who is a Local Authority for which you have an appointment but have not yet carried
out the service. The client asks you if he can pay you in advance for that service before the end of the
financial year because otherwise he will lose that money. What is your response to the client?
Create an account for client money as per RICS regulation.
111. How you will communicate with your clients? What are the methods?
112. How do you know that your existing client is happy? Repeated business, questionnaire as per ISO
procedure, feed backs from clients.
113. What are the documents you include in a QS bid? Fee proposal, scope of services, exclusions if any,
track record, previous experience, proposed methodology of work distribution, Curriculum vitae of
proposed staff, resource profile, cash flow forecast, references, case studies.
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C. Communication & Negotiation. (2)

114. Different types of Negotiation strategies
Winning Losing, Accommodating, Avoiding, Compromising, Collaborating (Win Win)
115. What is meant by new E = MC2 in business
E Efficiency, M Motivation, C2 Two way empathic communication
116. What are the main elements of successful interviewing (5 P ) Purpose, Preparation, Planning,
Practice, Performance
117. Negotiation - Discussions to reach a compromise or agreement - communication for persuasion
A number of stages for negotiation process:

Establish the agenda

Finalise the position to be taken

Setting the objectives

Compiling supporting evidence

exploring differences

find out non negotiable areas

Find our areas of compromise

Assessing other sides position.

narrowing differences

broad agreement

detailed agreement

Can either be positional or co-operative positional is just bartering over the outcome. Negotiators
should know what is at issue, have authority to deal, and be above the causes of the dispute
118. Difference between effective and efficient communication
Effective means that your communication made its point, no matter how long it took you to explain. But
efficient means that your communication was quick and simple, that doesn't mean it wasn't also
"effective"
When a person uses effective communication, he or she succeeds in reaching his or her goal for
communicating. (The person will really understand what / why it is) But when a person is efficient in
communicating, he or she gets out the message in the shortest amount of time and with the least
amount of energy. (quick action / response without understanding the basics)
Efficient communication is just responding quickly and effective communication is more considered
and actually reaches a satisfactory conclusion.
Efficient communication is to talk to people so they can understand your meaning. Effective
communication is to talk to people and help them learn and objectively hear what you are telling them
119. What type of communication and negotiation technique you use in your work

Oral - Phone calls, Reporting at meetings, bid presentations, staff meetings, meeting with
consultants / contractors, listening skills etc.

Written - Letters, memos, e-mails, report writings, tender reports etc.

Negotiation Setting objectives, Compiling supporting documents, establishing non negotiable

areas, identifying areas of compromise, assessing other sides position.

120. What is difference between co-ordination and managing Co-ordination is to arrange in a proper
order. (Eg. Contractor to coordinate with other contractors at site. But no control over them ) Manage
is to extend control over them.
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121. If you chair a meeting, how do you make it effective Set an agenda, do prepare for it, communicate
with all, be punctual for the meeting, take minutes of meeting, give chance to every one to speak,
understand body language, voice control.
122. Difference between effective & efficient communication Effective means people will understand the
basics (If the superior try to convince a subordinate the importance of being punctual in an office the
subordinate will be punctual next day onwards). But efficient is time saving and will get quick response
(If a superior issue a warning letter to subordinate, next day onwards he will be punctual)

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D. Health & safety. (2)

123. Why is Health and Safety important?
Because it affects you! We take significant risks in our jobs regularly, be it driving in connection with
your work, being at a premises or on site.
Serious accidents at work destroy and disrupt family and personal lives. The loss of a parent,
breadwinner, partner, friend is devastating and trying to rebuild a life after a serious accident can be
equally traumatic, especially if it could have been avoided.
You have a critical role, whatever part you play in the industry. Decisions taken in the Boardroom can
have as much influence on Health and Safety as working practices in the office, travelling on business
or being at a property or on site. Adequate planning, innovation and best practice, good design,
sufficient resources and effective training will provide a better product more safely and more
economically.
This guide has been produced by the new RICS Health and Safety Forum to help you put health and
safety first when carrying out your duties and responsibilities. It will also remind you of the many
aspects of our industry that can be hazardous.
Using effective health and safety procedures will:

Provide a safer environment for those involved in property and construction.

Result in higher productivity, and

Lessen the chance of having accidents or suffering illness.

If we are to make a difference, and make our industry a safer place to work, we have to take personal
responsibility to make it happen by eliminating or reducing risks, and planning and controlling the risks
that remain for ourselves, to our colleagues and the public at large.
You can make a difference by putting Health and Safety first:
124. Safety of yourself

Ensure that you are familiar with your organisations health and safety policy and arrangements for
implementing safe working procedures.

Comply with the office safety policy and ensure that any equipment you may use is in good and
safe condition.

Comply with your organisations safe systems of work, or ensure one is put in place prior to
carrying out work, particularly where a risk assessment shows that a hazard exists.

Refuse to overlook unsafe working practices by yourself or others and distribute information on
hazards;

Ensure that your advice to clients will minimise the risk to the health and safety of others.

Ensure you are aware of any hazards which may exist, together with any safe working instructions,
which have been issued by clients prior to carrying work at their premises

If you are working alone, ensure that you follow your organisations lone working procedures

In other words, follow the dictates of common sense.

125. Safety of others You are responsible for anyone under your supervision, particularly those in training or who are
inexperienced, and also towards anyone who may be affected by your or their work.

Make sure that anyone in your charge takes the right equipment with them on visits. Check that
they know how to use it and that it is safe to use.

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Ensure that a suitable and sufficient risk assessment has been carried out of the tasks to be
performed, and a safe working method is in place which has been communicated to and
understood prior to any field work taking place.

Ensure everyone has suitable and sufficient information , training and instruction regarding health
and safety matters for the task in hand.

Check available records of hazards on particular sites and make sure that all relevant people are
notified.

Ensure, wherever necessary that precautions are put in place to safeguard anyone who may be in
the vicinity of works and unaware of the possible hazards.

Make sure that the right equipment is used. Helmets, safety shoes, ear defenders, face masks,
overalls, torches and batteries. Do not use any equipment which is defective but report it to your
employer.

Finally, the best way to ensure safe practice by people in your charge is to set a good example.
126. What do you understand about CDM?
Construction Design Management Regulations are aimed at improving the overall management and
co-ordination of health, safety and welfare throughout all stages of a construction project to reduce the
large numbers of serious and fatal accidents and cases of ill health which occur every year in the
construction industry.
The CDM Regulations place duties on all those who can contribute to the health and safety on a
construction project. The regulations place duties upon clients, designers, contractors and planning
supervisors, and require the production of certain documents the health and safety plan and the
health and safety file.
The Construction (Design and Management) Regulations 1994 (CDM) require that health and safety is
taken into account and managed throughout all stages of a project, from conception, design and
planning through to site work and subsequent maintenance and repair of the structure. CDM affects
everyone who takes part in the construction process - the client, the designers and the contractors.
The Regulations introduce two new roles - the planning supervisor and the principal contractor. The
Regulations also introduce the health and safety plan and the health and safety file.
CDM apply to nearly all construction work undertaken in the UK and have imposed significant duties
upon construction clients, designers and contractors for Introducing a co-ordinated framework for the
management of health and safety throughout the design, construction occupation & demolition
process. Three main aspects of CDM are,

All parties should be competent H & S and they allocate adequate resource for H&S

There should be H & S Plan.

There should be H & S File

127. Planning Supervisor (PS) CDM introduced a new member to the development team with two main
responsibilities. Client should appoint the PS.

To ensure that designers and principal contractors pre-contract responsibilities are performed.

To prepare the Health & Safety Plan which is delivered to the Principal contractor, and at the end
to compile the Health & Safety Files and deliver it to the Client.

128. Employers responsibilities under CDM regulations

Every client must appoint a Planning Supervisor

Provide information to Planning supervisor

Appoint a Principal Contractor

Ensure that the designers are competent in Health & Safety matters

H & S Plan is prepared by contractor,

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H & S file is prepared

129. Health & safety Plan

This is a requirement as per CDM. This comprises the health and safety evaluation prepared by the
designers and must be compiled by the planning supervisor and provided to the principal contractor.
The contractor should develop the H&S P before the construction starts and should be approved by
the client.
130. Health & safety File
Prepared by planning supervisor. The file contains the design and construction record of the particular
project, which must be in future made available by the client to all who subsequently carryout work on
the building on his behalf. (Eg. Maintenance)
131. Risk assessment process
What the hazards are Who may be at risk (public, employees etc) Severity of risk Acceptability of
Risk by current controls Whether further controls are required The length of time the assessment
should remain valid When the assessment should be reviewed Fire precautions to be taken
132. Explain about what do you know about COSHH? Control of Substances Hazardous to Health
Using chemicals or other hazardous substances at work can put peoples health at risk. Therefore a
number of sets of regulations dealing with hazardous substances. The objective of COSHH regulations
is to prevent workplace disease resulting from exposure to hazardous substances. COSHH
Regulations 2002 applies to these matters.
The three primary routes for hazardous substances to enter the human body are: Inhalation, Ingestion
(through mouth) and Absorption (Through skin)
133. What are the steps to be taken as per COSHH?
Assess the risk Decide what precautions are needed Prevent or adequately control exposure
Ensure that control measures are used and maintained Monitor exposure carry out appropriate
health surveillance Prepare plans and procedures to deal with accidents and emergencies. Ensure
that employees are properly informed and trained.
134. RICS Position on Health & safety management
Health and safety management should be an integral part of good business and project management
as, ultimately, healthier and safer projects are also more profitable projects and all those involved in
the construction industry should be committed unequivocally to reducing further on-site risks and
hazards with an ultimate goal of preventing all fatalities.
RICS believe that health and safety management should be an integral part of good business and
project management as, ultimately, healthier and safer projects are also more profitable projects. All
those involved in the construction industry should be committed unequivocally to reducing further onsite risks and hazards with an ultimate goal of preventing all fatalities.
135. What is Control of Asbestos Regulations 2006
These Regulations (2006 November) bring together the three previous sets of Regulations covering
the prohibition of asbestos, the control of asbestos at work and asbestos licensing.
The Regulations prohibit the importation, supply and use of all forms of asbestos. They continue the
ban introduced for blue and brown asbestos in 1985 and for white asbestos in 1999. They also
continue to ban the second-hand use of asbestos products such as asbestos cement sheets and
asbestos boards and tiles; including panels which have been covered with paint or textured plaster
containing asbestos.
The ban applies to new use of asbestos. If existing asbestos containing materials are in good
condition, they may be left in place; their condition monitored and managed to ensure they are not
disturbed.
136. Why is asbestos dangerous?
Asbestos fibres are present in the environment. So people are exposed to very low levels of fibres.
However, a key factor in the risk of developing an asbestos-related disease is the total number of
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fibres breathed in. Working on or near damaged asbestos-containing materials or breathing in high
levels of asbestos fibres, which may be many hundreds of times that of environmental levels could
increase your chances of getting an asbestos-related disease. Like lung cancer, mesothelioma
137. What precautions you should take while handling a generator?

Before operating any generator system, read the Operator's Manual to become familiar with the
equipment.

Empty the oil tank before you carry it to other places.

Never run generator in a garage, carport, crawl space, shed or porch. Place outdoors but under
cover to prevent electrocution if unit gets wet.

Be sure the generator isnt positioned outside an open window, it allow fumes into the home.

Use a carbon-monoxide alarm thats battery-operated or has battery backup.

Never feed power from a portable generator into a wall outlet. This can kill linemen working to
restore power or your neighbors who are served by the same transformer.
It also can damage your generator.

Dont use power cords that are frayed, torn or cut. This can cause a fire or shock.

Store fuel and generator in a ventilated area and away from natural-gas water heaters. Vapors can
escape from closed cans and tanks, travel to the pilot light and ignite.

Never have wet hands when operating a generator. Never let water come in contact with it.

Make sure you have the right cords and connectors.

Do not spill oil It may ignite

Before refuelling, always turn the engine off

Do not overload the generator. Overloading can seriously damage your valuable appliances.

138. Employers responsibilities as per Health and Safety at Work etc Act 1974

Provide information on health and safety.

Undertake risk assessments.
Eliminate and control risks.
Have insurance.
Undertake health surveillance.
Provide Personal Protective Equipment (PPE).
Make provision for those with special needs.
Provide regular health and safety training.

139. Safety Procedures at site Following points to be considered.

Working at height
COSHH guidelines
Sign boards
Power sources (Gas, electricity etc)
Lime work (Eg. Lime putty on wall)
Stone dust (Inhalation of stone dust)
Noise
Confined space entry (Oxygen levels may be low)
Lead based paints (Ensure adequate ventilation)
Manual handling (Guidelines for Lifting the weights)
Escorting site visitors (Provide safety equipments, inform any hazards)

140. What is the impact on Health & Safety of Design, Construction process, Building maintenance,
Employment of staff.
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141. What is SWMP Site waste management plan. As per the CDM regulation (2007) a project is allowed
to start only after a SWMP is in place. Otherwise the project owner and the principal contractor have to
face penalty.
142. What is the purpose of Site Waste Management Plans Contractors should prepare a site waste
management system. In UK this is compulsory from April 2008. As per this the contractors should
consider estimate for this SWMP, and record how much waste is generated, and how it could be
recycled.
143. Practical points to be considered for sustainable project
Insulation to reduce heat, Reduce house hold waste production, Allowing cloths to dry in by providing
open areas, Use energy efficient lighting, Eco labelled White goods, Use local renewable energy,
Composting facilities, Provide quiet rooms for home office purpose, Provide external water storage.
144. What are the formal Health & Safety qualifications recognised at national level?
145. What is UN Number Number assigned to any dangerous goods by UN Committee of Experts on the
Transport of dangerous Goods
146. What is HAZCHEM Code Emergency action code taken from the system developed by The UK Fire
Services to be specified for any substances covered by this code. These sign should be affixed to all
dangerous goods.
147. What are Codes of Health & Safety in Dubai

Code of Practice for the Management of Dangerous Goods in Emirate of Dubai ( By DM -1997)

Code of Construction Safety Practice (Drafted as per The Environmental Protection Regulations)

148. What kind of PPE (Personal Protective Equipments) would you possess when you are out on site and
office?

At site: Foot protection (Wear safety boots), Head protection (helmets, hard hats), Hearing
protection, Eye & Face protection, Respiratory protection, Protective clothing, Hand Protection
(Glove), safety Belts & Life lines, Safety Nets, . Know fire assembly points. location of fire
extinguishers & first aid boxes

At Office: Know the exit routes, fire assembly points, location of fire extinguishers & first aid boxes,
staircase locations.

149. What do you understand by the term Planning Supervisor? - Appointed by the Client

To carry out the CDM regulations and to ensure that the designers have met their responsibilities
under the CDM regulations and advise the Client and contractor on any matter that will enable
them to comply with their obligations. Eg. Health and safety file.

Prepare a H&S plan and delivered to principal contractor at tender stage so that arrangements can
be made for its carrying out.

Notify HSE in writing certain particulars about the project like timing, no. of people, purpose of HS
etc. before construction starts on site.

150. What is the difference between a Principal ( Lead ) contractor and Main Contractor?
Principal Contractor - In Package Contracting, one Contractor is appointed as Principal (Lead)
Contractor and he shall be responsible for all coordination and monitoring, safety, security, use of
contractors scaffolding, cranes, hoists & waste disposal system. This is also a requirement as per
CDM regulation
Main contractor is Contractor in a General Contracting system wherein he ensures the above said
duties for his Subcontractors.
151. What is meant by HSC & HSE (UK)
There are set up as per the Health and Safety at Work Act (1974)- HSC means Heath & safety
commission The body with prime responsibility for administering the law and practice on
occupational health & safety.
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HSE means Health & Safety Executive is a body with a number of functions including health & Safety
Police. HSE inspectors have wide range of powers and are the people with whom we have to deal if
we are involved in a serious health & safety incident.
152. What is meant by Risk assessment at work
It is careful examination of what in your work could cause harm to people so that you can weigh up
whether you have taken enough precautions or should do more to prevent them.
153. What are the environmental impacts of crushing concrete on site?
154. How do you deal with contamination on site? What are relevant Fidic clauses?
155. How do you deal with asbestos on site?
156. What is your personnel responsibility with respect to Health & Safety?
157. Safety Risk analysis

Look for Hazards

Decide who might be harmed & how
Evaluate Risk, decide existing precautions adequate? and what more to be done
Record findings
Review your Assessment & revise if necessary

158. What is the nature of reporting labour accidents and occupational diseases?
If the employee suffered a work accident or an occasional disease, the employer or his representative
shall report the accident immediately to the police and labour department or one of its branches under
whose jurisdiction the place of work falls. The information shall include the employee's name,
profession, address, nationality and a brief description of the incident and its circumstances, and the
measures taken for treatment or first aid.
159. What are the safety regulations and measures required by labour law?

Every employer should provide his employees with suitable means of protection against injuries,
occupational diseases, fire and hazards by providing the safety equipment and clothes give
instructions which aim to protect him from danger.

display in a detailed instructions regarding the means of preventing fire and the means of
protection of employees from hazards

Every employer shall make available a first aid kit

Every employer shall keep every place of work clean and well ventilated.

An employee shall assign one or more physician and means of medical care

The employer or his deputy shall inform the employee of the dangers of his job and the means of
protection

No employer, his deputy, or any person who has authority over employees shall bring or allow
others to bring any kind of alcoholic drinks for consumption on work premises.

160. Whether insurance will cover fines received from authority due to health & safety default? No. it will
not cover. Fines are designed to punish the companies for their bad habits. So they should pay it from
their profits.
161. Principal Contractor - Is a Contractor, to ensure cooperation between all the contractors, and that
everyone on site complies with any rules in the HS plan. He has to keep unauthorised persons off the
site during construction, displace notices regarding health and safety, and provide any information
needed by the planning supervisor, give proper training to other contractors.
162. What is meant by Fire Protection.
Is the study and practice of mitigating the unwanted effects of fires. It involves the study of the
behaviour, compartmentalization, suppression and investigation of the fire and its related emergencies
as well as the research and development, production, testing and application of mitigation systems.

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Fire protection in buildings is designed to ensure the safety of occupants in the case of fire and to
ensure as best as possible to protect the building. The protection of the building structure is not the
paramount objective of fire regulations. Priority is for the occupants and the fire fighters trying to
evacuate a building suffering a fire.
163. Fire Alarms and Fire Detection Systems
A typical fire alarm system comprises of a Control panel Manual or automatic), fire sensors (Smoke
detectors and heat detectors), manual call points (Break glass & closed circuit call point systems),
Alarm Bells
164. Fire Extinguishers

Water filled extinguishers (for wood, cardboard, textiles)

Form filled extinguishes (for petrol or flammable fires)
Dry powder type ( for fire due to butane & propane)
Carbon dioxide type (For electrical fire)
Wet Chemical type (For cooking oil fire)

165. Sprinkler systems - Fire sprinkler systems, Fire protection sprinklers, Domestic sprinkler systems
166. Fire blankets Fire blankets are made of fire proof materials and can be used to wrap around a
person whose clothing is on fire.
167. Fire compartmentalization
In structures, such as land-based buildings, traffic tunnels, ships, aerospace vehicles, or submarines,
compartmentalization is the fundamental basis and aim of passive fire protection. The idea is to
subdivide a structure into "fire compartments", which may contain single or multiple rooms for the
purpose of limiting the spread of fire, smoke and flue gases, in order to enable the three goals of fire
protection:

Life safety
Property protection
Continuity of operations.

The construction of such compartments and all its components is a matter of systems within systems
to achieve fire-resistance. All components forming part of such compartments are subject to stringent
approval and compliance in countries, where product certification is mandatory.
168. Structural fire protection In land-based buildings, offshore construction or onboard ships) is typically achieved via three means:

Passive fire protection (use of integral, fire-resistance rated wall and floor assemblies that are used
to form fire compartments intended to limit the spread of fire, or occupancy separations, or
firewalls, to keep fires, high temperatures and flue gases within the fire compartment of origin, thus
enabling fire fighting and evacuation)

Active fire protection (manual and automatic detection and suppression of fires, as in using and
installing a Fire Sprinkler system or finding the fire (Fire alarm) and/or extinguishing it)

Education (ensuring that building owners and operators have copies and a working understanding
of the applicable building and fire codes, having a purpose-designed fire safety plan and ensuring
that building occupants, operators and emergency personnel know the building, its means of
Active fire protection and Passive fire protection, its weak spots and strengths to ensure the
highest possible level of safety)

169. Passive Fire Protection (PFP)

Is an integral component of the three components of structural fire protection and fire safety in a
building. PFP attempts to contain fires or slow the spread, through use of fire resistant walls, floors,
and doors (amongst other examples).
170. Goals of Fire Protection - Fire protection has three major goals:

Continuity of operations - this is intended to prevent the interruption of critical services necessary
for the public welfare.

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Property protection - this is intended to prevent area wide conflagrations. At an individual building
level, this is typically an insurance consideration (e.g., a requirement for financing), or a regulatory
requirement.

Life safety - the minimum standard used in fire and building codes

171. What is meant by Building Security Council (BSC)

BSC was established by professionals in the building security arena to address the security issues and
to enhance public safety by promoting building security. The mission of the BSC is to administer and
maintain rating systems that enable building owners and operators to evaluate and improve the
security of their facilities. Their vision is to enhance public safety by promoting building security.
172. Building security systems
In buildings there are many types of security systems and equipments that can be deployed as
potential solutions to address specific vulnerabilities. Their purpose is to help ensure that a building is
safe to use and that protection is provided for materials equipment, information, personnel, physical
facilities and preventing influence that are undesirable, unauthorised or detrimental to the goals of the
particular organization being secured. These are of,

Monitoring of security systems

Physical barriers
Building exterior walls
Security monitoring
Wireless Duress pendants (Used for security in the parking or remote locations)
Asset tracking
Personnel tracking methods
Closed Circuit TV

173. What is QS contribution to H & S

Understand that H & S is responsibility of everyone in a project.

Make sure that H & S subject is included in all project meetings

174. In your project how you will make sure good health & safety

Preparing / contributing work method statement / risk assessment.

Wearing PPE
Adhere to main contractors safety rules
Make sure that H & S subject is included in all project meetings
Always coordinate with safety officer.

175. What is meant by VOC Materials Volatile organic compounds (VOCs) are organic chemical compounds that have high enough vapour
pressures under normal conditions to significantly vaporize and enter the atmosphere. A wide range of
carbon-based molecules, such as aldehydes, ketones, and other light hydrocarbons are VOCs. The
term often is used in a legal or regulatory context and in such cases the precise definition is a matter of
law. These definitions can be contradictory and may contain "loopholes"; e.g. exceptions, exemptions,
and exclusions.
The United States Environmental Protection Agency (EPA) defines a VOC as any organic compound
that participates in a photoreaction.
For a sustainable environment low VOC materials are highly recommended.

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E. Accounting Principles and procedures. (1)

176. What is meant by Balance sheet ?
In financial accounting, a balance sheet or statement of financial position is a summary of a person's
or organization's balances. Assets, liabilities and ownership equity are listed as of a specific date, such
as the end of its financial year. A balance sheet is often described as a snapshot of a company's
financial condition. Of the four basic financial statements, the balance sheet is the only statement
which applies to a single point in time. (Asset Liability = Equity)
A company balance sheet has three parts: assets, liabilities and ownership equity. The main
categories of assets are usually listed first and are followed by the liabilities.
177. What is meant by assets and the liabilities
The difference between the assets and the liabilities is known as equity or the net assets or the net
worth of the company and according to the accounting equation, net worth must equal assets minus
liabilities.
Another way to look at the same equation is that assets equal liabilities plus owner's equity. Looking at
the equation in this way shows how assets were financed: either by borrowing money (liability) or by
using the owner's money (owner's equity). Balance sheets are usually presented with assets in one
section and liabilities and net worth in the other section with the two sections "balancing."
178. What are the elements of typical Consolidated Financial Statement of a company

Directors Report

Auditors report

Consolidated income statement

Consolidated balance sheet

Consolidated Cash Flow statement

Statement of Changes in equity

Notes to financial statements

179. What is meant by double entry book keeping system?

Records of the values of each account or line in the balance sheet are usually maintained using a
system of accounting known as the double-entry bookkeeping system.
A business operating entirely in cash can measure its profits by withdrawing the entire bank balance at
the end of the period, plus any cash in hand. However, many businesses are not paid immediately;
they build up inventories of goods and they acquire buildings and equipment. In other words:
businesses have assets and so they can not, even if they want to, immediately turn these into cash at
the end of each period. Often, these businesses owe money to suppliers and to tax authorities, and
the proprietors do not withdraw all their original capital and profits at the end of each period. In other
words businesses also have liabilities.
180. The Profit & Loss Account
The Balance Sheet is a snap shot in time of a company's overall worth. The Profit & Loss Account
(P&L) is a report of the company's profit on the sale of their goods or the provision of their service over
a trading period, normally one year.
181. Statement Profit and loss account
Statement of the profit or loss of a business organization is taken from its accounts. Profit and loss
accounts comprise three main elements: the trading accounts detailing sales revenues less production
expenses to give a gross profit or loss; an account of any income from other sources (for example,
rent from let properties) as well as administrative and other expenses or costs (overheads) to give a
net profit or loss figure before the deduction of corporation tax; and the appropriation of profits for the
payment of dividends and retention of profits in the company after the deduction of corporation tax. In
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the UK companies are required by company law to file profit and loss accounts with the UK Registrar
of Companies.
182. Income statement (profit and loss statement)
Income statement, also called profit and loss statement (P&L) and Statement of Operations, is a
company's financial statement that indicates how the revenue (money received from the sale of
products and services before expenses are taken out, also known as the "top line") is transformed into
the net income (the result after all revenues and expenses have been accounted for, also known as
the "bottom line"). The purpose of the income statement is to show managers and investors whether
the company made or lost money during the period being reported.
The important thing to remember about an income statement is that it represents a period of time. This
contrasts with the balance sheet, which represents a single moment in time.
Charitable organizations that are required to publish financial statements do not produce an income
statement. Instead, they produce a similar statement that reflects funding sources compared against
program expenses, administrative costs, and other operating commitments.
Revenue expense = Net income
183. What is a capital expenditure versus revenue expenditure?
A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment
or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment.
The cost (except for the cost of land) will then be charged to depreciation expense over the useful life
of the asset.
A revenue expenditure is an amount that is expensed immediatelythereby being matched with
revenues of the current accounting period. Routine repairs are revenue expenditures because they are
charged directly to an account such as Repairs and Maintenance Expense. Even significant repairs
that do not extend the life of the asset or do not improve the asset (the repairs merely return the asset
back to its previous condition) are revenue expenditures.
Revenue expenses are costs in the day to day running of the business for example servicing a
machine, spare parts etc. Revenue expenditure is normally charged against profit in the Income
statement in the year it is expensed.
Capital expenditure is on an item that will help generate profits over the longer term (12 months or
more) so a purchase of a machine or van etc. The item is depreciated over the items useful life and
each depreciable amount is charged to the Income statement in the year the item has help generate
profit.
184. Cash flow (S- Curve mechanism)
Cash flow refers to the movement of cash into or out of a business, or project, or financial product. It is
usually measured during a specified, finite period of time. Measurement of cash flow can be used

to determine a project's rate of return or value. The time of cash flows into and out of projects are
used as inputs in financial models such as internal rate of return, and net present value.

to determine problems with a business's liquidity. Being profitable does not necessarily mean
being liquid. A company can fail because of a shortage of cash, even while profitable.

as an alternate measure of a business's profits when it is believed that accrual accounting

concepts do not represent economic realities. For example, a company may be notionally
profitable but generating little operational cash (as may be the case for a company that barters its
products rather than selling for cash). In such a case, the company may be deriving additional
operating cash by issuing shares, or raising additional debt finance.

cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When
Net Income is composed of large non-cash items it is considered low quality.

to evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default
risk, re-investment requirements, etc.

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Cash flow is a generic term used differently depending on the context. It may be defined by users for
their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total
of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow',
operating cash flow and free cash flow.
185. Difference between employers cash flow and contractors cash flow items Compared to a
contractors cash flow, a client cash flow considers fee to government authorities, consultant fee, land
acquisition charges, marketing, sales charges etc.
186. Cash flow statement
In financial accounting, a cash flow statement or statement of cash flows is a financial statement that
shows how changes in balance sheet and income accounts affect cash and cash equivalents, and
breaks the analysis down to operating, investing, and financing activities. As an analytical tool, the
statement of cash flows is useful in determining the short-term viability of a company, particularly its
ability to pay bills. International Accounting Standard 7 (IAS 7), is the International Accounting
Standard that deals with cash flow statements.
People and groups interested in cash flow statements include:

Accounting personnel, who need to know whether the organization will be able to cover payroll and
other immediate expenses

Potential lenders or creditors, who want a clear picture of a company's ability to repay

Potential investors, who need to judge whether the company is financially sound

Potential employees or contractors, who need to know whether the company will be able to afford
compensation

187. Audit
The general definition of an audit is an evaluation of a person, organization, system, process, project
or product. Audits are performed to ascertain the validity and reliability of information; also to provide
an assessment of a system's internal control. The goal of an audit is to express an opinion on the
person / organization/system (etc) in question, under evaluation based on work done on a test basis.
Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements
are free from material error. Hence, statistical sampling is often adopted in audits. In the case of
financial audits, a set of financial statements are said to be true and fair when they are free of material
misstatements - a concept influenced by both quantitative and qualitative factors.
Audit is a vital part of Accounting. Traditionally, audits were mainly associated with gaining information
about financial systems and the financial records of a company or a business (see financial audit).
However, recent auditing has begun to include other information about the system, such as
information about environmental performance. As a result, there are now professions conducting
environmental audits.
In financial accounting, an audit is an independent assessment of the fairness by which a company's
financial statements are presented by its management. It is performed by competent, independent and
objective person(s) known as auditors or accountants, who then issue an auditor's report based on the
results of the audit.
188. Financial Ratio Analysis / Financial bench marking
The Balance Sheet and the Statement of Income are essential, but they are only the starting point for
successful financial management. Apply Ratio Analysis to Financial Statements to analyze the
success, failure, and progress of your business.
Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its
performance and condition with the average performance of similar businesses in the same industry.
To do this compare your ratios with the average of businesses similar to yours and compare your own
ratios for several successive years, watching especially for any unfavorable trends that may be
starting. Ratio analysis may provide the all-important early warning indications that allow you to solve
your business problems before your business is destroyed by them.

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189. Gearing ratios (Higher the value means higher the risk)
Gearing 1
Long Term Liabilities
Gearing

=
Equity Shareholders' Funds

Gearing is concerned with the relationship between the long terms liabilities that a business has and
its capital employed. The idea is that this relationship ought to be in balance, with the shareholders'
funds being significantly larger than the long term liabilities.
Gearing 2
There is an alternative gearing ratio, we can call it the Gearing Ratio II. The formula for this ratio is:
Long Term Liabilities
Gearing 2 =
Long Term Liabilities + Equity Shareholders' Funds
190. Financial bench marking
Is the process of comparing a companys financial performance with that of standard benchmarks
derived from average performance of similar business in same industry. For this, compare financial
ratios of a company with the benchmark values.
191. Balance Sheet Ratio Analysis
Balance Sheet Ratios measure liquidity and solvency (a business's ability to pay its bills as they come
due) and leverage (the extent to which the business is dependent on creditors' funding). They include
the following ratios:
Liquidity Ratios
These ratios indicate the ease of turning assets into cash. They include the Current Ratio, Quick Ratio,
and Working Capital.
Current Ratios.
The Current Ratio is one of the best known measures of financial strength. It is figured as shown
below:
Total Current Assets
Current Ratio = ____________________
Total Current Liabilities
The main question this ratio addresses is: "Does your business have enough current assets to meet
the payment schedule of its current debts with a margin of safety for possible losses in current assets,
such as inventory shrinkage or collectable accounts?" A generally acceptable current ratio is 2 to 1.
But whether or not a specific ratio is satisfactory depends on the nature of the business and the
characteristics of its current assets and liabilities. The minimum acceptable current ratio is obviously
1:1, but that relationship is usually playing it too close for comfort.
If you decide your business's current ratio is too low, you may be able to raise it by:

Paying some debts.

Increasing your current assets from loans or other borrowings with a maturity of more than one
year.

Converting non-current assets into current assets.

Increasing your current assets from new equity contributions.

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Putting profits back into the business.

Quick Ratios.
The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures of liquidity.
It is figured as shown below:
Cash + Government Securities + Receivables
Quick Ratio = _________________________________________
Total Current Liabilities
The Quick Ratio is a much more exacting measure than the Current Ratio. By excluding inventories, it
concentrates on the really liquid assets, with value that is fairly certain. It helps answer the question: "If
all sales revenues should disappear, could my business meet its current obligations with the readily
convertible `quick' funds on hand?"
An acid-test of 1:1 is considered satisfactory unless the majority of your "quick assets" are in accounts
receivable, and the pattern of accounts receivable collection lags behind the schedule for paying
current liabilities.
192. Working Capital.
Working Capital is more a measure of cash flow than a ratio. The result of this calculation must be a
positive number. It is calculated as shown below:
Working Capital = Total Current Assets - Total Current Liabilities
Bankers look at Net Working Capital over time to determine a company's ability to weather financial
crises. Loans are often tied to minimum working capital requirements.
A general observation about these three Liquidity Ratios is that the higher they are the better,
especially if you are relying to any significant extent on creditor money to finance assets.
193. Leverage Ratio
This Debt / Worth or Leverage Ratio indicates the extent to which the business is reliant on debt
financing (creditor money versus owner's equity):
Total Liabilities
Debt / Worth Ratio = _______________
Net Worth
Generally, the higher this ratio, the more risky a creditor will perceive its exposure in your business,
making it correspondingly harder to obtain credit.
194. What is meant by Income Statement Ratio Analysis
The following important State of Income Ratios measure profitability:
A. Gross Margin Ratio
This ratio is the percentage of sales dollars left after subtracting the cost of goods sold from net sales.
It measures the percentage of sales dollars remaining (after obtaining or manufacturing the goods
sold) available to pay the overhead expenses of the company.
Comparison of your business ratios to those of similar businesses will reveal the relative strengths or
weaknesses in your business. The Gross Margin Ratio is calculated as follows:
Gross Profit
Gross Margin Ratio = _______________
Net Sales
(Gross Profit = Net Sales - Cost of Goods Sold)
B. Net Profit Margin Ratio
This ratio is the percentage of sales dollars left after subtracting the Cost of Goods sold and all
expenses, except income taxes. It provides a good opportunity to compare your company's "return on
sales" with the performance of other companies in your industry. It is calculated before income tax
because tax rates and tax liabilities vary from company to company for a wide variety of reasons,
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making comparisons after taxes much more difficult. The Net Profit Margin Ratio is calculated as
follows:
Net Profit Before Tax
Net Profit Margin Ratio = _____________________
Net Sales
C. Management Ratios
Other important ratios, often referred to as Management Ratios, are also derived from Balance Sheet
and Statement of Income information.
D. Inventory Turnover Ratio
This ratio reveals how well inventory is being managed. It is important because the more times
inventory can be turned in a given operating cycle, the greater the profit. The Inventory Turnover Ratio
is calculated as follows:
Net Sales
Inventory Turnover Ratio = ___________________________
Average Inventory at Cost
E. Accounts Receivable Turnover Ratio
This ratio indicates how well accounts receivable are being collected. If receivables are not collected
reasonably in accordance with their terms, management should rethink its collection policy. If
receivables are excessively slow in being converted to cash, liquidity could be severely impaired. The
Accounts Receivable Turnover Ratio is calculated as follows:
Net Credit Sales/Year
__________________ = Daily Credit Sales
365 Days/Year
Accounts Receivable
Accounts Receivable Turnover (in days) = _________________________
Daily Credit Sales
F. Return on Assets Ratio
This measures how efficiently profits are being generated from the assets employed in the business
when compared with the ratios of firms in a similar business. A low ratio in comparison with industry
averages indicates an inefficient use of business assets. The Return on Assets Ratio is calculated as
follows:
Net Profit Before Tax
Return on Assets = ________________________
Total Assets
G. Return on Investment (ROI) Ratio.
The ROI is perhaps the most important ratio of all. It is the percentage of return on funds invested in
the business by its owners. In short, this ratio tells the owner whether or not all the effort put into the
business has been worthwhile. If the ROI is less than the rate of return on an alternative, risk-free
investment such as a bank savings account, the owner may be wiser to sell the company, put the
money in such a savings instrument, and avoid the daily struggles of small business management.
The ROI is calculated as follows:
Net Profit before Tax
Return on Investment = ____________________
Net Worth
These Liquidity, Leverage, Profitability, and Management Ratios allow the business owner to identify
trends in a business and to compare its progress with the performance of others through data
published by various sources. The owner may thus determine the business's relative strengths and
weaknesses.
195. Credit control
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Policies aimed at serving the dual purpose of (1) increasing sales revenue by extending credit to
customers who are deemed a good credit risk, and (2) minimizing risk of loss from bad debts by
restricting or denying credit to customers who are not a good credit risk. Effectiveness of credit control
lies in procedures employed for judging a prospect's creditworthiness, rather than in procedures used
in extracting the owed money. Also called credit management
196. What is the meaning of credit control? - For any businesses which provide "open terms" policy to their
customers, it is important to have a cap on the amount of credit given. Every customer is given
different amount of credit in relation to their sales turnover. These credits are monitored on a daily,
weekly or monthly basis according to individual companys requirement.
A person from the finance dept or marketing is appointed to ensure the total invoice value at any point
of time do not exceed the credit amount agreed.
197. Insolvency
Insolvency means the inability to pay one's debts as they fall due. Usually used in Business terms,
insolvency refers to the inability for a 'limited liability' company to pay off debts.
Business insolvency is defined in two different ways:

Cash flow insolvency - Unable to pay debts as they fall due.

Balance sheet insolvency - Having negative net assets in other words, liabilities exceed assets.

A business may be 'cash flow insolvent' but may not be 'balance sheet solvent' if it holds liquid assets,
particularly against short term debt that it cannot immediately realise if called upon to do so.
Conversely, a business can have negative net assets showing on its balance sheet but still be cash
flow solvent if ongoing revenue is able to meet debt obligations, and thus avoid default for instance,
if it holds long term debt. Many large companies operate permanently in this state.
Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of
law with resulting legal orders intended to resolve the insolvency.
198. Bankruptcy
It is a legally declared inability or impairment of ability of an individual or organization to pay its
creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an
effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases,
however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent
individual or organization).
199. Limited liability
Is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of
a person's investment in a company or partnership with limited liability. In other words, if a company
with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A
shareholder in a limited company is not personally liable for any of the debts of the company, other
than for the value of his investment in that company. This usually takes the form of that person's
dividends in the company being zero, since the company has no profits to allocate. The same is true
for the members of a limited liability partnership and the limited partners in a limited partnership. By
contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the
business (unlimited liability).
200. Consequences of insolvency
The principal focus of modern insolvency legislation and business debt restructuring practices no
longer rests on the liquidation and elimination of insolvent entities but on the remodeling of the
financial and organizational structure of debtors experiencing financial distress so as to permit the
rehabilitation and continuation of their business. In some jurisdictions, it is an offence under the
insolvency laws for a corporation to continue in business while insolvent. In others (like the United
States with its Chapter 11 provisions), the business may continue under a declared protective
arrangement while alternative options to achieve recovery are worked out. Increasingly, legislatures
have favoured alternatives to winding up companies for good.
It can be grounds for a civil action, or even an offence, to continue to pay some creditors in preference
to other creditors once a state of insolvency is reached
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201. Late Payment of Commercial Debts (Interest) Act 1998

The Late Payment of Commercial Debts (Interest) Act 1998 is an Act of the United Kingdom
Parliament enabling businesses to charge other business customers interest on overdue accounts and
to obtain compensation. The Act extends to Scotland and Northern Ireland.
Originally it was only designed to give small and medium sized businesses (with 50 or fewer
employees) the right to charge interest to larger businesses and public sector organisations of any
size.
202. Statutory interest
The right to charge interest applies to overdue accounts relating to a sale of goods, the hiring of goods
or to a supply of services. The court can modify or exclude the provisions if the conduct of the supplier
has been such as to make the imposition of interest, in whole or in part, against the interests of justice.
Interest can accrue from the latest of

30 days after the goods are supplied or the service is completed,

30 days after receipt of invoice (or the customer is told the amount due is payable).

the agreed date for payment.

The "statutory interest" rate chargeable, which is simple and not compound, is the Bank of England
base rate plus 8%. The increment was set to allow the small business to cover late payments by bank
borrowings.
203. Compensation chargeable
Once statutory interest begins to run in relation to a qualifying debt, the supplier is also entitled to a
fixed sum
(a) for a debt less than 1000, the sum of 40;
(b) for a debt of 1000 or more, but less than 10,000, the sum of 70;
(c) for a debt of 10,000 or more, the sum of 100.

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F. Business Planning. (1)

204. What is meant by Business Strategy?
Strategy is the determination of the long-term goals and objectives of an enterprise, and the adoption
of courses of action and the allocation of resources necessary for carrying out these goals.
It is the organisations pre-selected means or approach to achieving its goals or objectives, while
coping with current and future external conditions.
205. What is meant by Business Planning? How it differs from Business Strategy?
A business plan deals with the detailed implementation of specific aspects of the overall strategy. This
is what distinguishes it from the strategy.
A strategy is concerned with the entire organisation: what it produces, where it competes and how it
allocates resources. It deals with the fundamental choices that will effect the entire organisation.
Business plans are concerned with the details of implementation after the big choices have been
made.
206. The ingredients of a business plan - A well constructed and well presented business plan needs the
following five ingredients:

Packaging.

Layout and content.

Writing and editing.

Focused recipient.

Oral presentation.

207. What is meant by Resource audit

The assessment of the inherent strength of the resource base - the quantity of resources available and
their nature is known as resource audit.. They are typically grouped under the following headings:

Physical resources - machines or production capacity.

Human resources - skills, adaptability, flexibility.

Financial resources - sources and uses of money.

Intangibles - brand names, good contacts, image.

208. What is value chain analysis

This is an analysis to understand the organisations strategic capability relating the resource profile to
its strategic performance. It is to identify how the resource activity of the organisation underpins its
competitive advantage. The value chain analysis has been widely adopted as a method of achieving
such an understanding.
The value chain analysis consists of identifying key value activities and the resources required for
each of these activities. The key value activities are divided into primary activities, those that are
specific to the production of the product or service, and activities which support these primary
functions.
209. What is Best practice analysis The analysis by identifying and utilising the best practices or benchmarks of performance in similar
activities, which can then be applied to the organisation. Some specific examples of this approach are
as follows:
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Competitor profiles - detailed analyses are built up on the performance of key competitors in other
industries. This analysis may then identify successful measures which can be applied to similar
key value activities.

Benchmarking - similar key value activities in other industries are analysed in isolation of the
overall process to find the best practice that may be applied to that key activity in the organisation.

210. The SWOT Analysis The analysis combining Strengths, Weaknesses, Opportunities and Threats of
different elements. SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Swot analysis
is to formulate organizations strategy.
211. Principles of law Parliament, Legislation, Tort, Common law etc.
212. Business plan A business plan is a formal statement of a set of business goals, the reasons why they are believed
attainable, and the plan for reaching those goals. It may also contain background information about the
organization or team attempting to reach those goals.
The business goals may be defined for for-profit or for non-profit organizations. For-profit business
plans typically focus on financial goals, such as profit or creation of wealth. Non-profit and government
agency business plans tend to focus on organizational mission which is the basis for their
governmental status or their non-profit, tax-exempt status, respectivelyalthough non-profits may also
focus on optimizing revenue. In non-profit organizations, creative tensions may develop in the effort to
balance mission with "margin" (or revenue). Business plans may also target changes in perception and
branding by the customer, client, tax-payer, or larger community. A business plan having changes in
perception and branding as its primary goals is called a marketing plan.
213. What is meant by Benchmarking? Give an example from your experience.
214. What is meant by Best Practice
Processes that meet a high standard of professional competence.
Best practice asserts that there is a technique, method, process, activity, incentive or reward that is
more effective at delivering a particular outcome than any other technique, method, process, etc. The
idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer
problems and unforeseen complications. Best practices can also be defined as the most efficient (least
amount of effort) and effective (best results) way of accomplishing a task, based on repeatable
procedures that have proven themselves over time for large numbers of people.
Despite the need to improve on processes as times change and things evolve, best-practice is
considered by some as a business buzzword used to describe the process of developing and following
a standard way of doing things that multiple organizations can use for management, policy, and
especially software systems.
215. Vision / mission of a company Vision is to set a direction for the company and its stakeholders. This
is part of strategic management of company. Mission consists of four elements Purpose, Strategy,
Standards and behaviour and Values.
216. What is meant by taking corrective action in business planning If performance measurement do not
reach the required level of the established goals and objectives, then corrective actions must be taken.
This may be by reducing profit levels of work to complete change in the management level.
217. What you should include in your business plan?
218. How you will calculate your fee? What are the factors involved? Resources, identify the
requirements, Required services, profit level. Once submitted you should not reduce the fee unless
there is a reduction in scope.
219. What are the items you should show to market yourselves? Your experience, resources, previous
projects, previous clients, competent staff, CV etc.
220. In terms of business planning, how your management will ensure that you are making profit?
Evaluate time sheets, Re-sourcing forward planning, Financial management software systems, Fee /
Cost reconciliation tools.
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G. Conflict avoidance, Management & Dispute resolution Procedure (1)

221. How various forms of contract deal with dispute avoidance & their provisions to resolve disputes
222. Recent development in Dubai in dispute resolution (Sep 2009) Dubai set up a Centre for Amicable
Settlement of Disputes. This is as per Law No 16 for 2009 (Judgement within 30 days, Half fee of
litigation, Mandatory step before litigation, End disputes with simple procedures, "Mandatory" but a
settlement would only be reached upon agreement of the parties involved)
223. Hierarchy of dispute resolution methods Negotiation, Mediation, Conciliation, Early Neutral
Evaluation, Expert determination, Adjudication, [Arbitration, Litigation] All except the last two are
coming under ADR.
224. Dispute avoidance in projects
Dispute avoidance can be split into two types; (1) Management methods aimed at achieving better risk
control, and (2) Non escalation mechanisms.
Management methods aimed at reducing risk include better planning, for example by ensuring that
contract documents are clear and precise; utilising project and business structures which lessen the
risk of disputes partnering or integrated project teams are examples; using appropriate procurement
methods; and generally emphasising the value of good management.
Non escalation mechanisms are aimed at resolving disputes before they escalate; for example
structured negotiation including tiered dispute resolution mechanisms within contracts, the use of
dispute boards and project mediation.

Using appropriate procurement practices.

Sufficient preparation and planning for tender.

Complete the design in all respects

Selection of the construction Contract Eg. NEC / ECC

Contract documents are clear and precise.

Utilising project and business structures which lessen the risk of disputes. Eg. Partnering

Adopt good project and commercial management procedures.

Early negotiation and settlement.

Pre-contract reviews to avoid any issues.

Periodical risk audits

Professional training to team members.

Conformity to audit process.

Tiered dispute resolution mechanisms within contracts

Use of dispute boards and project mediation.

Involvement of an impartial third party at the onset of any potential dispute. (dispute boards)

225. Conflict Avoidance Pre-contract and During works

Client should decide what he want (time, cost, quality certainty, early start)

Decide the appropriate procurement route

Know the deal with the Contractor allocation of risk

Make more certain the practical & financial consequences of risks

Make provision for a range of "what ifs"

Put it in writing - agree all terms & contract docs

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Avoid letters of intent (insufficient terms)

Single point responsibility (Eg. To avoid disputes on defects)

Make everything open. Do not hide anything

Manage project effectively have the right team in place

Follow the rule book (the contract)

Ensure Client is always aware of scope/fee increase and costs.

Submit monthly report to Client including

Progress (measure against Programme)
Information required next month
Information outstanding
Issues which needs client decision
Record variations in month and cost
Estimate of outturn cost/programme

226. What are the features of CASD (Centre for Amicable Settlement of Disputes Dubai)
1. Judgement within 30 days, 2. Mandatory before litigation, 3. Half fee of litigation.
227. Project mediation CEDR
Is a variant to dispute boards devised by the Centre for Effective Dispute Resolution (CEDR). It
provides access to two project mediators on a monthly fee retainer for the duration of the project. At
regular intervals one or both of the mediators will attend the project site to discuss progress and
identify with the parties any actual or potential communication problems. Outside the site visits, the
parties will keep the mediators informed about any issues that might affect contract performance.
A project mediation workshop is also arranged prior to contract commencement, and if it is required,
where the parties are unable to resolve a conflict through discussions and interventions by the project
mediators, the parties may enter into a formal mediation conducted by the project mediators using the
CEDR Model Mediation Procedure.
228. How to avoid conflicts by selecting appropriate procurement routes Use of processes like partnering.
Select procurement route based on client requirement
229. What are the legal and statutory requirements for the resolution of disputes in construction contracts?
230. Have you involved in dispute resolution process to resolve any issues in your project? Explain it.
231. Tell us about the dispute resolution mechanisms typically prevalent in UAE Contracts?
Engineers decision, Amicable settlement (Negotiation), Arbitration, Litigation.
232. ADR Alternate to what? Generally ADR is what falls outside government judicial system (Litigation).
But some experts consider ADR is all except Arbitration and Litigation.
233. What are the pre-requisites of arbitration (1) Existence of a dispute (2) Agreement to refer the
dispute to arbitration (3) Agreement to be bound by the award (4) Invitation by one party to arbitration.
234. Adjudication Adjudication is judgemental but not legally binding approach in which the adjudicator forms an opinion
upon the rights and wrongs of the case, based upon evidence presented to him and his own
investigations. The parties may accept the adjudicators decision, or may agree to take the dispute to a
legally binding arbitration, or either party may commence litigation proceedings. The Damaged /
Referring Party can give notice to all others to go for arbitration. The fee of adjudicator is to be jointly
paid by the parties.
Pay now, Argue later method is adopted in adjudication.
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It is an accelerated and cost effective form of dispute resolution in which, unlike other means of
resolving disputes involving a third party intermediary, the outcome is a decision by a third party which
is or can become binding on the parties in dispute.
235. Advantages and disadvantage of statutory adjudication

Advantages
a. Independent assessment
b. Quick decision
c. Binding for duration of the contract works
d. Can be reassessed after work completed

Disadvantages
a. Quick decision
b. Use as a ambushing tactic
c. Binding for duration of the contract works only.
d. Can be reassessed after work completed

236. Difference between arbitration and adjudication. - Arbitration is a consensual process between the
parties but adjudication is a right as per statute. Time is limited in adjudication. But no time limit in
arbitration. Adjudication is not binding but arbitration is legally binding. Adjudication is not legally
binding.
237. Rapid Forms of Dispute Resolution - (1) Expert Determination (2) DAB / DRB (3) Adjudication
238. Arbitration:
It is a settlement of dispute by one or more chosen by the parties; who are called arbitrators. The
arbitrator decides the case and the award is in nature of judgement which can be later on incorporated
into the decree of the court. Proceeds on his knowledge/experience, evidences provided or enquiries
made and make his decision on such evidence.
(Arbitration Act 1996 lead to drafting of two sets of rules CIMAR-Construction industry model
arbitration rules 1996 and ICE arbitration procedures 1997). Advantages of arbitration are is cheap,
quick, suitable for matters of tech. complexity, convenient, private and commercially expedient.
Litigation is possible after an arbitration award if one could prove that fraud or procedural fault
happened during arbitration.
239. Difference between arbitration and litigation

For arbitrate there should be a contract between the parties. But for litigation it is not a must.

Arbitration is suitable for technical or specialist contracts compared to litigation. Arbitrators are
competent in their field.

Arbitration is a private process. So it is confidential.

Arbitration has flexibility in its procedure.

Arbitration awards are easier to enforce overseas (By New York Convention)

In litigation, the parties need not pay to judge or court.

Litigation is possible for multi party disputes.

240. What is TCC Technology and Construction Court (UK)

241. Rapid forms of dispute resolutions Expert determination, DAB / DRB, Adjudication
242. What are the possible ways to avoid disputes in your project?

Assess the impact of local law on your project.

Draft clear unambiguous contracts

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Include the right to vary the works

Insert way to extend the time.

Minimise impact of insolvency (Use Parent Company Guarantee)

Include early warning mechanism in contracts (Resolve disputes at early stage)

Provide arbitration (It is easy to enforce)

Effective contract management (Keep records, update programme)

Successful management of subcontractors (This avoids litigation)

Devise a strategy for a negotiated settlement.

Draft correspondence and claims that are culturally persuasive.(Convincing)

243. What is meant by Disclosure in arbitration This mechanism allows either party in arbitration to see
the file of the other.
244. Early Neutral Evaluation (ENE) Is a non binding assessment by a neutral professional. This could be
used as a basis for settlement.
245. Litigation: - This is the last resort to settle a dispute by an action in court by using law of land. It is often
time consuming and very unclear of the results. Advantages- Ability to join third party's in the action,
availability of legal aid, less expensive and a more decisive approach by the decision maker (judge).
246. Expert witness
There are many issues that the court is required to determine which are so far removed from the
courts experience that it needs to obtain the opinion of experts to help it determine the issue in
question. Where a person is called as a witness in any civil proceedings, his opinion on any relevant
matter on which he is qualified to give expert evidence shall be admissible in evidence. Four important
things to know

Expert Witness report,

the role and duties of an expert witness,

how to give effective expert evidence and

how to deal with cross-examination

247. Expert determination The resolution of a dispute by a suitably qualified person who is experienced in
the particular subject under dispute, and who is specifically not an arbitrator.

Expert third party decides a particular dispute

eg valuation of variations or assessment of an EOT
where an objective truth is out there to be found

Final, binding, cheap, quick, private

A creation of the contract

based on agreement by parties

Courts give support to contractual dispute resolution mechanisms

very difficult to appeal against

248. Non adversarial forms of dispute resolution Techniques, which even though used to settle a dispute,
will not affect the relation between parties adversely.
Mediation: Here the mediator simply attempts to facilitate the parties in resolving their dispute. Note
that the mediator takes no active part in this process: his role is limited to that of non-judgemental
facilitator. Since it is the parties who are resolving their own dispute, there is no reason for them to be
bound by the precise terms of the contract, merely that they should reach some agreement.
Conciliation: Here the conciliator attempts to assist the parties to reach agreement, perhaps by helping
them each to present their point of view or by advising them as to possible courses of action. Note
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again that the process is non-judgemental. It is not part of the conciliators role to decide upon the
rights and wrongs of the case, his role is simply to promote agreement.
Quasi -Conciliation: Here one or both party to a dispute unilaterally appoints an expert professional to
advise on the dispute and to overcome some technical & contractual difficulty. The Quasi-conciliator is
appointed to discover the facts and make recommendation and a report is made to the client which
can be used as a negotiating instrument & evidence in court.
Private enquiry: Here the procedure involves appointment of an independent professional to
investigate for highly sensitive and tech. disputes. There is no fixed procedure and each time based to
suite the situation. The report produced gives the parties a better position to negotiate and reach a
settlement. Private enquiry discovers tech. facts quickly than judicial enquiry where in the person
(expert) can make use of his own knowledge and professional expertise in arriving a conclusion. Eg.
Lockerbie - king's crossfire
Mini-Trail : Here the disputing party's representatives will conduct a trial in front of a board of senior
executives from those organisations. Having heard the evidence the panel can then negotiate their
respective positions until they reach an agreement.
249. Tell us about what do you know about UK adjudication?
First ICE in their NEC contracts (Now ECC) adopted adjudication. This is an ADR effective after
HGCRA (1996). This is a statutory requirement in UK for most type of contracts. (excluding
pharmaceutical, oil & gas etc). This become effective in 1998. Decision to be taken in very limited time.
Also known as quick and dirty fix, Pay now, argue later Decision should be within 28 days (or +14
days extended)
250. Difference between UK Adjudication and Fidic (DAB) adjudication - In UK, the requirement is based on
the statute. But in Fidic it is contract based requirement.
251. What system is followed by World Bank - DRB (Dispute Review Boards) A panel of three members,
visiting site regularly.
252. Mediation
The parties appoint a neutral third party to investigate the underlying cause of the dispute and to
facilitate them through a series of private meetings to settle their differences amicably. The essence of
mediation is separate meeting by mediator with each party. (Private sessions)
This is a non binding process and is controlled by a mediator. Is a private method of ADR. Fees to be
met by the parties. Mediator will not impose / blame his views on any party. There are two types of
mediation,

Evaluative mediation ( Where the mediator gives an assessment of legal legal strength of the
case)

Facilitative Mediation (Where the mediator concentrates on assisting the parties to define the
issues)

253. Conciliation Almost same like mediation. But the conciliator has more active role. He will contribute
to the discussion. He issues recommendations. But does not meet the parties in private sessions. Both
parties together appoint the reconciliator, both equally pays.
254. Ombudsman Many large organisations and central / local governments use ombudsman. His role is
often more like a quality controller than a judge.
255. Executive Tribunals- Makes mini- trial panel. One each from each party and one neutral person.
256. Rules of Commercial Conciliation and Arbitration of Dubai Chamber of Commerce and Industry.
257. What is meant by Judicial Appraisal Parties appoint a judge to receive written representations from
each side and make an appraisal of the likely result if the case goes to the court.
258. Four Cs of ADR are

Consensus (To find a business solution)

Continuity (Solution for on going business relationship)

Control (ability to tailor a solution geared for a business result)

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Confidentiality ( Avoid harmful revelations to the public)

259. What is meant by Alternative Adjudication Which comprises those processes where by a neutral
third party makes a decision, such as arbitration, construction adjudication, expert determination,
ombudsman etc.
260. What is DAB - Fidic (1999) form of contracts contain DAB (Dispute Adjudication Boards) provision with
one or three members. DAB members must be impartial. DAB decision is contractual and all parties
should abide it.
Dispute Adjudication Board provisions

A standing Disputes Board

Board is a standing body and visits the site regularly

Any Dispute referable to the Board

Board has 84 days in which to make its decision

Decision final and binding if no notice of dissatisfaction given in relation to it

261. Clause 67 of FIDIC - As per FIDIC a dispute can not go to arbitration unless it has passed through
clause 67 and has been so identified as a clause 67 dispute which the engineer has either adjudicated
upon or which he has been called upon to decide.
262. What can you do if I dont comply with the adjudicators decision? Is the adjudicators decision final?
263. What are the differences between adjudication and arbitration? Which would you use in your current
situation?
264. What are the dispute resolution mechanisms in your contract?
265. What is meant by Conflict / dispute avoidance? How you will apply in your work?
The process adopted to avoid dispute between the parties of a contract. To avoid a dispute, we should
make sure that we have a legally binding contract, terms and conditions of the contract is clear, keep
proper records, make verbal instructions to writing, Create a friendly atmosphere, try to solve the
issues at lower level itself without escalating to high levels.
In a project first we should try negotiation to achieve a win win situation. If not possible, go for other
steps mentioned in the contract.
266. Difference between Reconciliation and Mediation.
267. You have had problems on your project. What should you have done before the project to avoid them?
Identify risks (prepare checklist of important risks linked with clients priorities for the project-time, cost
and quality), Analyse risks (intermittence of frequency, severity of impact, possible values, maxima,
minima and medians, critical detailed qty analysis) and respond to risk by identifying a contract
strategy to decide who is placed to manage a risk. (transfer, acceptance, avoidance, insurance, or
doing nothing)
268. Disputes: Root Causes

Economic Pressure

Wrong Procurement Selection

Unfair or unclear Risk Allocation

Unrealistic Time/Cost/Quality Targets

Estimating Errors / Unrealistic Tender Pricing

Lack of Information / Poor Design Information

Changes by the Employer

Adversarial Industry Culture - Personality Clashes

Poor Contract Administration / Lack of Competence /Professionalism

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Slow or Under Payment or Non Payment

Exaggerated Claims

269. Disputes: Manifestations (Different ways in which disputes arise)

Variations

Acceleration

Disruption

Delay

Prolongation

Liquidated and Ascertained Damages

Extension of Time

Loss and Expense

270. Conflict Management What if? What do you do if you are in dispute??

Law has rules for unplanned events

Dispute resolution mechanisms usually set out in the contract (the Rule Book)

271. Conflict Management Planning / Logistics

Establish Heads of Claim - Events/Changes, approximate quantum, chances of success.

Advise Client why you believe you are entitled to more fees / EoT etc (Law / Rule Book).

Get feedback on likely response/counterclaim, etc..

Review potential counter arguments. Confirm heads of claim, quantum.

Advise/meet Client and present outline case and quantum. Determine if client needs the detailed
claim.

Production of detailed claim.

Meet client and present. Agree detailed programme for resolution or agreement that you cannot
agree.

272. Preparation of a Claim - It is necessary to establish:

The event (cause): identified as a fact, e.g. late supply of information to a Contractor.

Liability: determined by interpretation of the contract.

Effect (time): the change to the planned progress of the works as a result of the event.

Effect (money): compensation as a result of the effect of the event, the actual costs incurred.

Causation: The causal connection between the event, effect and compensation.

Full particulars of the factual consequences of the event must be given. The activity or activities
affected should be identified together with the period of delay and the dates between which such delay
occurred. If the delay was critical and therefore caused a delay to the completion of the works, this
should be pleaded. [Abstracted from Keating]

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H. Data Management (1)

273. What is data management? (Store information)
Is the management of sources of information and data, and of the systems applicable to an
organization or practice, including the methodologies and techniques most appropriate to collect,
collate and sore data.
274. Building Cost Information Services BCIS, the RICS' Building Cost Information Service, is the leading provider of cost information to the
construction industry and anyone else who needs comprehensive, accurate and independent data.
The BCIS database includes details of 16,000 projects, together with their tender costs. It also provide
the latest resource cost data (both online and through price books), which is invaluable in producing
fast, accurate estimates.
This services include measuring price movement, benchmarking, market research, statistical analysis,
forecasting and impact studies. These services will help in collecting, modeling, analysing and
interpreting data.
275. BCIS Construction
BCIS construction data is used by consultants, clients and contractors to produce specific estimates
for option appraisals, early cost advice, cost planning and benchmarking. Its historic data goes back
45 years, while their forecasts will help to plan for the next five years.
276. Building Maintenance Index (BMI)
Benchmarking data - covering maintenance and operation costs such as cleaning, energy
consumption and administrative costs - has long been relied on by property professionals.
It provides a sound basis for early life cycle cost advice and the development of life cycle cost plans.
Increasingly, this data is taking on a new importance as the industry places more emphasis on
sustainability and whole life costs.
It is committed to encouraging sustainable development and have recently worked with BSi (British
Standards Institution) to develop the construction industry's first standardised method of life cycle
costing for construction procurement. This is set to have a major impact on all future construction
procurement as clients focus more on setting accurate budgets that optimise their life cycle costs, from
both a whole life value and sustainable development perspective. To make their buildings more
sustainable, they need to know more than the initial cost of the building. They need to know the total
cost of their investment.
277. Data Protection Act 1998
The Data Protection Act 1998 (DPA) is a United Kingdom Act of Parliament which defines UK law on
the processing of data on identifiable living people. It is the main piece of legislation that governs the
protection of personal data in the UK. Although the Act does not mention privacy, in practice it
provides a way in which individuals can control information about themselves. Most of the Act does not
apply to domestic use, for example keeping a personal address book. Anyone holding personal data
for other purposes is legally obliged to comply with this Act, subject to some exemptions. The Act
defines eight data protection principles.
The Data Protection Act is mandatory. It is essential therefore that YOUR-COMPANY fully complies
with it. Not just to avoid prosecution and bad publicity, but to demonstrate to customers that YOURCOMPANY operates with due diligence and responsibility. Also bear in mind that a breach of the act
can lead to claims for compensation.
278. Pricing books There are a number of price books (Eg. Spons pricing book) and guides available
from RICS / BCIS which helps the estimation process.
279. Different sources of price information BCIS / BMI, Pricing books, Elemental analysis, In house data
base, Libraries, Statistical Centre Abu Dhabi (SCAD) etc.
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280. Due Diligence is a term used for a number of concepts involving either the performance of an
investigation of a business or person, or the performance of an act with a certain standard of care. It
can be a legal obligation, but the term will more commonly apply to voluntary investigations. A
common example of due diligence in various industries is the process through which a potential
acquirer evaluates a target company or its assets for acquisition
281. What type of data systems using in your organization Computer systems, internet, intranet, computer
data backups, external file storages (physically & electronically) etc.
282. If you want to dispose a document from your office, what are the things you will check

Is it original contract / legal documents

are they need for any litigation

do they relate to any current project

are they for work with outstanding fee

are they related to any disputes

do they belong to any client

can we microfilm it

is it any confidential information- if yes, it should be disposed securely (eg. Shredding)

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I.

Sustainability (1)

283. Sustainable development A development which meets the requirements of present without
compromising ability of future generations to meet their own needs. Four main aspects are,

Protection of environment.

Prudent use of scare resources.

Promotion of access to services for the benefit of all.

Production of a healthy local economy including high levels of employment.

284. Principles of sustainability

Social (The development should respond to the needs of the wider community)

Economic (Efficient use of resources considering labour, material cost)

Environmental (Prevent harmful impacts on environment)

285. Kyoto Protocol Its objective is the reduction of reliance on non renewable fossil fuels and the
corresponding reduction of the emission of green house gases into the atmosphere that are
considered causing global warming.
286. Low and zero carbon technologies for sustainable developments
Biomass boilers, Ground source heat pump, Solar thermal power, Photovoltaic cells, Wind turbines,
Rainwater harvesting
287. Techniques to be adopted in buildings for sustainable development
Building orientation, Building geometry and layout, solar shading, low emissive shading, thermal
performance, maximising daylight, natural ventilation etc.
288. Compare steel and concrete based on BRE ecopoints

Without considering operational energy saving : Structural steel 15 ecopoints / tonne, Concrete
12.57 ecopoints / tonne . Means steel is eco friendly. (30 % difference approx.)

By considering operational energy Then Concrete will be 6% more preferred than steel.

289. What is Life Cycle Cost It is the total discounted cost of owning, operating, maintaining, and
disposing of a building or a building system during a measurable period. (By NIST National institute
of standards and technology)
The cost of an asset throughout its lifecycle while fulfilling the performance requirements (ISO
Definition)
The discounted Cash Flow method is used to find out the life cycle cost of a project.
290. Why carryout lifecycle costing

As part of business case evaluation to work out if you can afford the building structure

To work out if you can afford to run it.

As part of optional appraisal exercise to decide on the most economically advantage solution.

To control the design development within running cost and capital cost budget.

To provide a set of instructions and a budget for the facilities manager.

291. What is LCCA Life Cycle Cost Analysis. It is a method for assessing the total cost of facility (Eg. A
treatment plant) and it takes into account of all costs of acquiring, owning and disposing of the building
over a certain period ( Eg. 30 years.). ( ie it include design & Construction, Maintenance costs,
Personnel salaries etc)
292. BSRIA Building Services Research and Information Association (UK)
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293. Sustainability measuring systems LEED, BREEAM, Estidama (Pearl rating system)
294. Why do you think that commercial waste to be recycled?
Over 70 million tonnes of construction waste are generated each year. 60-80% of builders on site
materials are re-usable (Eg. Wood, aggregate, glass, plastic, tiles, cardboard, furniture etc.). Over 80%
of construction materials use natural resources.
It is calculated that by Reducing, Reusing, Recycling and Reclaiming at least 5% of building waste, we
can save 1,000 12,000 Pounds. (UK Study)
295. What you can do to recycle waste? (RICS)

Minimize the waste generated.

Setting up networks to exchange unwanted materials with other contractors.

Substituting new and primary materials with re-cycled materials.

Carrying balance material of a project to next project .

Encourage conserve attitude and discourage throw away culture.

Minimising the waste going to landfill sites

Promoting sustainable concepts in projects

296. How you will calculate Life Cycle Cost? Consider the capital cost for the building and maintenance
cost for a period, say 100 years). Consider inflation (say 2.5% as recommended by UK Treasury
Green Book 2003). Then rate in Dhs. / m2 / Year is calculated.
297. What is Whole Life Costing
A systematic approach balancing capital with revenue costs to achieve an optimum solution over a
building whole life (By Whole Life Cost Forum)
Systematic consideration of all relevant costs and revenues associated with the acquisition and
ownership of an asset (By Construction Best Practice Programme)
Whole life costs of a facility are the costs of acquiring it, the costs of operating it and the costs of
maintaining it over its whole life through to its disposal. i.e. total ownership costs (By WLC and Cost
Management OGC Procurement Guide 07)
The LCC of an item is the sum of all funds expended in support of the item from its conception and
fabrication through its operation to the end of its useful life (By USA Management accounting Journal )
298. What two concepts influenced the Whole Life Costing PFI (as this is the basis of agreement between
Client and provider) and Global warming (as it will effect the future impact of decisions made)
299. What are the items included in the WLC Planning cost, Design, Construction, Operation,
Maintenance, Renewal / rehabilitation, Financial (depreciation and cost of finance), disposal.
300. BS Code for Life Cycle Costing BS ISO 15686-5 : 2008 Buildings and Constructed Assets. Service
Life Planning. Life Cycle Costing.
It was felt that although this provided a set of principles to enable practitioners to produce consistent
lifecycle costing analysis, it did not provide the UK practice guidance that was needed. So, a working
group was set up to produce guidance to the standard. This is called Standardised Method of Lifecycle
Costing Analysis (SMLCC) for construction procurement.
301. What is meant by Salvage value Is the value of a facility at the end of the analysis period. This could
be resultant of the component having a remaining life, which could be used or sold. It is calculated as
the difference in the resale value of the facility and disposal cost, if any
302. The elements to be considered lifecycle costing as per SMLCC guidelines

Construction costs (Construction cost, Clients definable costs, other related costs)

Maintenance costs (Replacement costs, Refurbishment & adaptation costs, Redecoration cost,
Ground maintenance cost etc)

Operation Costs (Cleaning, windows & external services, External cleaning)

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Utilities cost (Fuel, Service charges)

Administrative cost (Staff cost, Property management, waste management)

Overhead costs, Taxes

Occupational costs (Internal moves, Reception, Security, Helpdesk, Switchboard, Postal)

Miscellaneous (Library, Laundry, Catering, FF & E, Internal plants, Stationary, Porters, Car parking
charges)

End of life costs (Disposal inspections, Demolition, Reinstatement as per contract)

303. Would life cycle cost be of interest to the employer?

304. What are the typical environmental issues that you are facing on site? - Dust, sound pollution, Use of
chemicals, Use of asbestos, disposal of waste, sewage treatment etc.
305. What is LEED? Different types of Certifications? Leadership in Energy and Environmental Design.
(This is a rating system created by USGBC- United States Green Building Council). Different
certifications are Bronze, Silver, Gold & Platinum.
LEED certification in Middle East (2009 April) Pacific Control Systems Building (Platinum grade) and
Dubai District Cooling Plant (Gold grade). LEED consists of more than 2,000 accredited buildings,
69,000 LEED accredited professional
Light House of DIFC (Dubai) is trying to get platinum certification and it will be worlds first skyscraper
in the world. Also, Mirdif City Centre (Shopping Mall) & Dubai Pearl trying for Gold rating.
For LEED certification, we have to consider How much energy we save, How much water we recycle,
How sustainable you are.
306. TRACI Programme The Tool for Reduction and Assessment of Chemical and other environmental
Impacts
307. What is use of PARRYs Valuation table It is to calculate present value of life cycle cost.
308. What is meant by Estidama
Abu Dhabi Urban Planning Council (UPC) has created Estidama (meaning Sustainability in Arabic) for
sustainability initiatives in Abu Dhabi. They have started a new rating system for buildings known as
Pearl rating System. Meanwhile Environmental Agency Abu Dhabi (EA) has started a new initiative
known as Heroes of U.A.E. campaign to promote energy efficiency and reduce consumption across
U.A.E.
U.A.E. Federal government is working (proposing) on a Green Building Code that will regulate the
green building codes created by different emirates of U.A.E. (April -2009)
309. Pearl Design System (PDS) used in Abu Dhabi Four Pillars are Environmental, economic, social and
cultural. Six categories are (1) Living systems (12%), (2) Livable communities/ buildings (30%), (3)
Precious water (22%), (4) Resourceful energy (22%), (5) Stewarding materials (12%), (6) Innovative
practice (2%)
310. EGBC Emirates Green Building Council which is affiliated to World Green Building Council (WGBC)
Chairman Jeff Willis. This is a voluntary organization funded by individual members. But will work
along with Estidama and UPC
311. What is meant by Ecological Foot Print
The ecological footprint is a measure of human demand on the Earth's ecosystems. It compares
human demand with planet Earth's ecological capacity to regenerate. It represents the amount of
biologically productive land and sea area needed to regenerate the resources a human population
consumes and to absorb and render harmless the corresponding waste. Using this assessment, it is
possible to estimate how much of the Earth (or how many planet Earths) it would take to support
humanity if everybody lived a given lifestyle. For 2005, humanity's total ecological footprint was
estimated at 1.3 planet Earths - in other words, humanity uses ecological services 1.3 times faster
than Earths can renew them. Every year, this number is recalculated - with a three year lag due to the
time it takes for the UN to collect and publish all the underlying statistics.
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While the term ecological footprint is widely used, methods of measurement vary. However, calculation
standards are now emerging to make results more comparable and consistent
The WWF's Living Planet Report 2008 ranked UAE as the country with the world's largest Ecological
Footprint per capita in 2005, which is more than three times higher than the average humanity's
Footprint. However, UAE overall demand on global resources was less than half of one percent in this
year
312. What do you know about new Green Building Rules in Dubai? Do you know any Sustainability
initiatives in Dubai Dubai Municipality is proposing Green Building Regulations but not yet effective (April -2009).
Green Building Code will apply to all new buildings in Dubai. It is expected to be introduced by May
2009 and it will apply to all developers and new buildings in the emirate. The legislative regulations will
be implemented in three phases. The first phase has been covered by issuing the DM circular on the
Green building code. Dubai Municipality and Dubai Electricity and Water Authority (Dewa) are working
with an International Consultant to put the green building regulations and their requirements for the
second and third phases.
This will be the first formal legislation on the environmental design of buildings. Sustainable design
guidelines already exist in the form of LEED and Estidama of Abu Dhabi, however, this new legislation
differs by being based on stringent regulations as opposed to recommendations and a point system.
Ruler of Dubai directed in 2007 that all buildings constructed in Dubai should meet the new standard.
As per this new rule anyone who doesnt comply with the regulations will be treated similar to the one
who doesnt comply with any building regulation.
313. BREEAM and LEED. How do they compare?
BREEAM stands for the BRE Environmental Assessment Method, and was invented by BRE, a
building research organisation funded mainly by the government. Based in the UK this organisation
seeks to provide relevant research and information to the building industry, about what kind of
methods would best support environmental protection and sustainable development. According to the
BREEAM website (www.breeam.org), BREEAM assesses the performance of buildings in the
following areas:

Management: overall management policy, commissioning site management and procedural

issues.

Energy use: operational energy and carbon dioxide (CO2) issues.

Health and well-being: indoor and external issues affecting health and well-being.

Pollution: air and water pollution issues.

Transport: transport-related CO2 and location-related factors.

Land use: Greenfield and Brownfield sites.

Ecology: ecological value conservation and enhancement of the site.

Materials: environmental implication of building materials, including life-cycle impacts.

Water: consumption and water efficiency.

LEED was set up in the US, largely inspired by and based on BREEAM. LEED stands for Leadership
in Energy and Environmental Design, and is run by the USGBC.
314. What is the criterion by which sustainability is measured for a finished building?
315. How principles of design, technology and construction process will contribute to sustainable buildings?
316. The principles of material resources efficiency within supply chain.
317. How you will carryout capital cost and value engineering exercise to determine the impact of
sustainability issues on design and construction process?
318. What are the measures taken by U.A.E. to encourage the reduction of the environmental impact of
development?
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319. What is meant by EIA Environmental Impact Assessment. It is a process of identifying the likely
consequences for the biogeophysical environment and for mans health and welfare of implementing
particular development activities.
320. IRENA (International Renewable Energy Agency)- Established in January 2009 at the founding
conference in Bonn, Germany. The agency will facilitate access to all relevant information including
reliable data on the potential of renewable energy, best practices, effective financial mechanisms and
state-of-the-art technological expertise. Head office will be at Masdar City.
321. Masdar City It will be the world's first zero-carbon, zero-waste city fully powered by renewable
energy. It is an extraordinary endeavor that will attract the highest levels of international expertise,
academics, commerce, and residents. By bringing together such resources, Masdar will provide
services that will ultimately support sustainable development throughout Abu Dhabi, the region, and
the country, as well as provide a functioning blueprint for the world.
Under construction since 2008, Masdar City will be home to over 1,500 renewable energy related
companies creating a technology cluster of renewable innovation - indeed, the city could become
IRENA's sought after conduit for knowledge transfer, providing a better understanding of financing
needs and promoting faster development of integrated end-to-end solutions.
322. EAD Environmental Agency Abu Dhabi.
323. Discounted Cash Flow - A method of investment appraisal which takes into account the time
preference for money. It discounts all future cash flow of a particular investment back to their present
value. (Internal rate of return)
324. Environmental Statement Document or a series of documents which have to be submitted with a
planning application. It should mention the significant effect on environment due to the development.
325. Sinking Fund- A notional (imaginary) income put aside in order to assure replacement of capital over
the life of a leasehold interest or an amount invested in a secure account for future expenditure.
326. BREEAM Building Research Establishment Environmental Assessment Method. A method of
assessing the green-ness of a building, BREEAM assessments should be undertaken when planning
all new and substantially refurbished premises.
327. Brownfield site A area of unused or under used urban land with redevelopment potential. These sites
are targeted for development to encourage urban regeneration following government led
discouragement of development on green field sites. (Also known as ballpark by some people)
328. Top LEED certified buildings in Gulf

Pacific Control head quarters, Techno park (Platinum)

ABN Amro Bank Interior Works Project , Dubai Outsource Zone (Gold)

Metito Head Quarters, Techno park (Gold)

District Coolomg Chiller Plant of Wafi City (Gold)

Dubai International Academic City Phase 3 (Silver)

329. Give examples of sustainability from your own projects

330. Design for minimum waste, reuse existing assets, / refurbishment, use brown field sites, recycle waste
construction materials, encourage innovation in techniques, use natural energy without going for
artificial energy, minimise energy consumption, maximise value for money, conserve water resources,
follow ISO 14001 guidelines.
331. How sustainability is possible in a society Implement community living concepts, central facilities for
all living in a society, good waste management, using public transport system, etc.
332. How points are distributed according to Leed 2009:
Energy and atmosphere - 17 points
Achieve points by: Optimising energy performance.

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Indoor environmental quality - 15 points

Achieve points by: Monitoring outdoor air delivery; control indoor chemicals and pollutants; and
increase ventilation in the building.
Sustainable sites - 14 points
Achieve points by: Providing public transportation access; offering pollution prevention plans; reducing
light pollution.
Materials and resources - 13 points
Achieve points by: Reusing building materials; recycle construction waste; and manufacture materials
within 500 miles of the building site.
Water efficiency - 5 points
Achieve points by: Using innovative wastewater technologies; and reducing water use.
Innovation and design process - 5 points
Achieve points by: Have a Leed Accredited Professional as a principal participant on the project.
Additional points for this category are awarded above and beyond 64 points.

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J. Team working (1)

333. You could be impressed by the team leader, but what happens if he leaves? How do you control the
possibility of him leaving to go to another job?
334. What are the advantages of working with the team you know?
335. How does management differ from leadership? What qualities of each do you have?
Leadership is setting a new direction or vision for a group that they follow. A leader is the spearhead
for that new direction. Management controls or directs people/resources in a group according to
principles or values that have already been established.
336. How can you be a manager and a leader? - Leadership combined with management does both their
functions ie it both sets a new direction and manages the resources to achieve
337. How do you manage people who are working under you? - Providing direction, motivation,
coordination, representation & development and also by a model to them.
338. What is meant by Team work - A co-operative effort by a group of people to achieve a common goal.
339. What qualities a team member should have?
The Seven Habits of Highly Effective People, published in 1990, is a book written by Stephen Covey. It
lists seven behaviours that, if established as habits, are supposed to help a person achieve
"effectiveness" by aligning him- or herself to principles of a character ethic.

Be Proactive. An attitude of initiative-taking and compares this to the less effective, but more
common "reactive" stance.

Begin with the End in Mind. This chapter is about setting long-term goals based on "true-north
principles" ie. to formulate a "personal mission statement" to document one's perception of one's
own purpose in life. He sees visualization as an important tool to develop this. He also deals with
organizational mission statements, which he claims to be more effective if developed and
supported by all members of an organization, rather than being prescribed.

Put First Things First. Here, a framework for prioritizing work that is aimed at long-term goals, at
the expense of tasks that appear to be urgent, but are in fact less important. Delegation is
presented as an important part of time management. Successful delegation, according to Covey,
focuses on results and benchmarks that are to be agreed in advance, rather than on prescribing
detailed work plans.

Think Win-Win describes attitudes whereby solutions are sought that benefit oneself as well as
others, or, in the case of a conflict, people on both sides of that conflict.

Seek First to Understand, Then to be understood. Giving out advice before having understood a
person and their situation will likely result in the advice being rejected. Thoroughly listening to
another person's concerns is purported to increase the chance of establishing a working
communication.

Synergize describes a way of working in teams. It is purported that, when this is pursued as a
habit, the result of the team work will exceed the sum of what each of the members could have
achieved on their own.

Sharpen the saw focuses on regaining productive capacity by engaging in carefully selected
recreational activities.

340. What is co-ordination Means integrating or linking together different parts of an organization to
accomplish a collective set of task.
341. Teamwork Is a basic source of integrated activity. Fostering teamwork is creating a work culture that
values collaboration. In a teamwork environment, people understand and believe that thinking,
planning, decisions and actions are better when done cooperatively.
342. Strategies in Team Development in an organization. 4 stages.
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Forming, Storming, Norming & Performing. ie Formation stage, storming with ideas, normalizing &
understanding the goals, performing stage.
343. Issues to be considered in Teamwork
344. Qualifications of an Ideal Team

Motivations are selfless

Everyone is aware of everything

Feelings are expressed and respected.

Trust and openness are highly valued by all.

Difficulties are discussed / resolved openly.

Process maintenance and task are focussed on equally

Commitment is very very high.

345. People Management

It is about problems of motivating the project team, middle management and the work force and of
gaining their commitment.
346. Team Dynamics - Cohesiveness
Group Cohesiveness is the force bringing group members closer together. Cohesiveness has two
dimensions: emotional (or personal) and task-related. The emotional aspect of cohesiveness, which
was studied more often, is derived from the connection that members feel to other group members and
to their group as a whole. That is, how much do members like to spend time with other group
members? Do they look forward to the next group meeting? Task-cohesiveness refers to the degree to
which group members share group goals and work together to meet these goals. That is, is there a
feeling that the group works smoothly as one unit or do different people pull in different directions?
347. SMART-ER SMART / SMARTER is a mnemonic used in project management at the project
objective setting stage. It is a way of evaluating the objectives or goals for an individual project. The
term is also in common usage in performance management, whereby goals and targets set for
employees must fulfill the criteria.
Specific, Measurable, Attainable, Relevant, Time bound, - Evaluate, Re-evaluate
348. Keys to good team work communication, accountability, motivation, leadership, co-operation,
cohesiveness.
349. Strategic alliance is the formal relationship between teo or more parties to pursue a set of agreed
upon goals or to meet a critical business need while remaining independent organizations. They will
provide strategic alliance with resources (products, labour, experience etc) Eg. JV. Allaince os a cooperation or collaboration between the parties to benefit each other.
350. Difference between Team and a Committee Committee is a body of people appointed for a function.
There may not be a unity in actions and disagreement. Team is a group of people aiming for a
common goal in good spirit. Team success will satisfy everyone. But committees success may not
satisfy everyone.

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K. Commercial management of Construction. (3)

351. Essential of good cost control & reporting

Not too complicated or expensive

Reports that are easily understood by all levels.

Cost and level of progress to date must be made available at the same time as well as predictions
as to the cost to complete the scheme.

352. Major elements of Cost management / cost control cost management is the process which ensure
the estimated final contract sum is within the clients approved budget or cost limit.

Engineers Instructions and VOs

Provisional sum adjustments

Claims

353. Budget Annual estimate of projected company performance which, once established, does not alter
and is used as a tool against which to monitor actual performance. Also budget for different elements
of a project.
354. Supply Chain management (SCM)
A process that attempts to fully integrate the network of all organizations and their related activities in
an efficient manner. The focus of SCM is to add value to the product or service at each stage of the
chain so that it meets or exceeds customer expectations.
355. Major elements of Time management

Information about nominated subcontractors, Clients own workers or direct contracts.

Programmes and method statements (Progress reporting, acceleration of works)

356. Major elements of Quality management

Materials standards (BSI, ISO, ANSI standards)

Workmanship (Specify tolerance levels, Quality assurance schemes, ISO 9000, TQM)

357. Cost planning is a technique by which the budget is allocated to the various elements of an intended
building project to provide the design team with balalnced cost frame work within which to provide a
successful design.
358. TQM on site comprise at least the following

To maintain the highest standards of workmanship which consistently satisfy or exceed the
requirements of the client, as defined in the specifications, and to consistently deliver the highest
levels of service in a timely and cost-effective manner.

To assess and improve client perceptions with regard to Company's service levels.

Aim to innovate through advanced methods of design and construction, whilst ensuring safe
systems of work with minimal impact upon the environment.

To provide continual staff and employee training in order to ensure personnel development, with
particular emphasis on matters concerning Quality, environment safety and health.

359. TQM Techniques for controlling these issues would be:

Quality management plan describing how the management team will implement its quality policy

Operational definitions provides not just a definition of an operation but also how it is measured
in the quality control process

Checklists A structured tool used to verify that a set of required steps has been performed

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Regular Audits - A structured review of quality management activities that may be scheduled or
random and conducted by trained in-house or external auditors

Inspection Activities such as measuring, examining and testing to determine if results comply
with requirements

Control Charts A graphical display of results over time

Pareto Diagrams A histogram ordered by frequency of occurrence linked to a category or

identified cause

Statistical Sampling Choosing a part of the population of interest for inspection.

Flowcharting Use of flowcharts to help analyse how problems occur

Trend Analysis Using mathematical techniques to forecast future outcomes based on historical
results

Quality Assurance - The main output from the quality assurance process is quality improvement.
This may lead to change requests and corrective action.

360. What is meant by a Cost Planning? It is the Cost Control during the design process. But during
construction phase there is no cost plan. Then the cost report is used as tool to control the cost.
There are two main forms of cost planning (1) external (designing to a cost) and (2) Comparative
(costing a design) But in practice the method used may be mixture of two.
Cost planning procedure
Different stages of development process are Inception, Feasibility, Outline proposal stage, Scheme
design, Detail Design, Production Information, BOQ, Tender stage. In this at feasibility study the
budget is prepared. During Outline proposals the Outline Cost Plan is prepared. During Scheme
Design stage the Detailed Cost Plan is prepared.
Parallel to this the Cost Checks are done during the Scheme Design and Detailed Design stage.
Finally cost analysis is doing after the tenders are received.
361. Cost Plan A schedule showing how much of a developers budget is to be spent on each element of
his proejct so that the design and construction can be controlled within the forecast.
362. Purpose of Cost planning process is mainly divided into three parts

To set a realistic cost limit

To decide how the money is to be spent

To check that the money is being spent as intended.

363. Preliminaries estimates

This is prepared to enable the clients to understand his financial commitments at the early stage of
the project

Also enables the designer to design within the available budget in a controlled manner.

364. Different methods of preliminary estimates

Conference estimate

Financial methods

Unit method

Superficial method

Cube method

Storey enclosure method

Elemental method (this is an extension of superficial method)

Approximate quantity method.

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365. Different elements of a building - For cost planning purpose

Substructure

Superstructure

Internal finishes

Fittings and furnishings

Services

External works

Preliminaries

Contingencies

366. How to prepare Cost Plan for a project from cost plans of existing projects By adjusting time, quality,
fluctuation, location factors.
367. Cost Value reconciliation (CVR)
This is a format used to compare actual cost against valuation on a project specific basis.
This is to bring together the established totals for cost and value to illustrate the profitability of a
company. Its intention is to ensure that the profits shown in company accounts are accurate and
realistically display the current financial position. CVR provides close control over project cost,
company provisions and overheads, and value earned.
Its purposes are,

Statutory requirements or for audit purpose (Only in some countries like UK)

To get information which can have a direct impact on a company management.

To identify the potential problems or critical elements of a contract.

368. At what stage of a project you will prepare a cost plan? Would you still use it when the project is
underway? Cost plan is prepared in the beginning of the project before issuing tender.
Yes. If it was identified later that there was flaws in the design leading to uneconomic construction and
the Construction has not progressed beyond the alteration stages, but the Net Saving potential is
considerably reduced with Time. VE is to be preferably done initially when there is a better chance of
identifying & overcoming Potential problems at an early stage thus giving better value for money.
369. What are the stages of design of a project? Concept, Schematic, Detailed design.
370. Some terms in Cost Value management

BCWP Budgeted Cost of Work Performed

BCWA Budgeted Cost of Work accomplished.

BCWS Budget Cost Work Scheduled.

ACWP Actual Cost of Work Performed

ACWA Actual cost of work accomplished.

CPI Cost Performance Index = EV / AC (Earned Value / Actual Cost) should be above 1

VAC Value At completion.

EAC estimate at completion (projection of total cost to complete the work)

371. Difference between Cost Management and Value Management

CM focuses on issues like estimation and budgeting, cash flow management, cost control.

VM focuses on Optimizing project value

372. Type of cost control techniques.

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Budget monitoring system

Cost coding system

Earned Value Management

Network analysis.

373. Earned Value Management (EVM)

It is a project management technique for measuring project progress in an objective manner. EVM will
combine measurements of scope, schedule and Cost in a single integrated system. This will provide
an early warning of performance problems.
It is the management of value of the work actually accomplished at the cost rates set out in the original
budget. EVM information provides the efficiency with which the budgeted money is used relative to
realized value. This helps to forecast estimated cost and schedule to the project completion.
374. Earned Value
Is a concept used to express the progress of a project in terms of financial value. (Eg. If I have
completed half of a project valued one million, I can say that I have earned Dhs.500,000. in fact the
real current value may be nothing since no benefit can be generated from a half completed project.)
375. Limitations of earned value management (EVM) It is not considering the quality of the works. Hence,
even if project is within budget, ahead of schedule and scope is fully executed, the client may not be
happy due to poor quality of works.
376. Interim valuations and payment provisions
Under the Housing Grants, Construction and Regeneration Act 1996, a party to a construction contract
in excess of 45 days in duration is entitled to 'interim' or 'stage' payments. The timing, frequency and
calculation of such payments are all determined by the provisions of the relevant contract. These
provisions vary considerably from contract to contract. Many contracts require the works to be valued
at pre-determined dates, following which an interim payment certificate will be issued and payment
made. Procedures for payment 'by milestone' are becoming more common, but the traditional route of
payment for work done is still the most popular procedure.
The Act provides that all construction contracts should have a compliant payment mechanism that
allows the person receiving payment to know in advance when and how much he will be paid. It also
provides for a formal notice procedure if any monies are to be withheld and gives the party receiving
payment the right to suspend work if proper payment is not made and also to refer any amount that is
in dispute to adjudication.
Adjudication is a form of dispute resolution in which a nominated third party (the adjudicator) decides
the matter referred to him within 28 days subject to any extension to this time that the parties might
allow in accordance with the adjudication rules.
It is important, therefore, that proper payment is made in accordance with the contractual payment
provisions. The provisions of most standard forms of construction contract now incorporate compliant
payment mechanisms in accordance with the Act.
377. Elements of interim valuations
Preliminaries, Measured works, Variations, Provisional Sums, Prime Cost items, Materials on-site and
off-site, Dayworks, Claims, Fluctuations (If applicable)
378. Subcontractor liability It is an assessment of a subcontractors value included within the interim
valuation or final account compared with the value that the contractor will be paid for the same
elements of work.
379. What are the sources of cost data that are often used by surveyors. Historic cost information from
previous projects, manufacture / supplier literature, BCIS, Cost models and cost data published in
industry magazines, Price books.
380. What information would typically accompany a budget estimate for a construction project?

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A covering letter, Executive summary, Specification notes, Assumptions, Exclusions, cash flow
information, Drawings and other information upon which the estimate is based, List of value enhancing
alternative suggestions or options, A risk register.
381. If the client require to know urgently how much will be construction cost of the project, how you will
deal the situation
First, contact senior member of your office to get advise.
Get more information from client (like site location, site condition, development area, type of building,
time scale, site access, any restrictions etc)
Based on this prepare a rate / m2 based on historic cost data information, inform the client about the
exclusions, and finally give a range of expected cost. Record the conversation in writing.
382. Identify the components that make up the of cost of the project to the contractor.
383. How the design and construction process affect the cost of the project.
384. What are the techniques used to reconcile the cost against income?
385. What are the techniques to financially mange the subcontractors and suppliers?
386. What is the use of Cash flow analysis? How you will prepare cash flow?
387. As a QS how you will prepare reports such as liability statements, Cost to complete, and Cost value
reconciliations.
388. How you will prepare and submit cost data for in-house and external use in relation to areas such as
cost of preliminaries, comparative cost of different construction techniques and taxation allowances.
Take BOQ of at least 5 projects. Make a format. Enter the data. Consider a base date. Analyse the
rates and find an optimum rate, remove OH &P for external usage.
389. Type of information a QS should provide during the design stage (1) Statement of Cost (2) Indication
of specifications (3) Statement of floor areas (4) cash flow forecast (5) Assumptions and exclusions (7)
Inflation.
390. Value management Is a term used to describe the overall structured team based approach to a
construction project. It involves clearly defining the clients strategic objectives, considering a optimum
design solutions within the context of the clients business objectives and deciding which of these
provide the optimum lifetime value to the client, as well as a review of the process after occupancy. It
is not simply cost cutting.

To avoid unnecessary costs

Increase functionality

Increase value for money

Satisfy clients requirement

391. Value engineering It is a tool in VM. It is a systematic approach to delivering the required functions
(or components) to the required quality at the least cost. i.e. the method of ensuring that the client gets
the best possible value for money in terms of safety, performance and delivery targets. It is a
structured form of consensus decision making that compares and assesses the design solutions
against the value systems declared by the client.
392. Value engineering exercise

Collecting the Information

Functional analysis

Idea generation

Idea evaluation and selection

Proposal development & validation.

Implementation

(Normally Stages 2 to 4 conducted within a work shop)

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393. Cash flow

Cash flow refers to the movement of cash into or out of a business, a project, or a financial product. It
is usually measured during a specified, finite period of time. Measurement of cash flow can be used

to determine a project's rate of return or value. The time of cash flows into and out of projects are
used as inputs in financial models such as internal rate of return, and net present value.

to determine problems with a business's liquidity. Being profitable does not necessarily mean
being liquid. A company can fail because of a shortage of cash, even while profitable.

as an alternate measure of a business's profits when it is believed that accrual accounting

concepts do not represent economic realities. For example, a company may be notionally
profitable but generating little operational cash (as may be the case for a company that barters its
products rather than selling for cash). In such a case, the company may be deriving additional
operating cash by issuing shares, or raising additional debt finance.

cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When
Net Income is composed of large non-cash items it is considered low quality.

to evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default
risk, re-investment requirements, etc.

Cash flow is a generic term used differently depending on the context. It may be defined by users for
their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total
of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow',
operating cash flow and free cash flow.
394. Internal rate of return (IRR)Is a rate of return used in capital budgeting to measure and compare the profitability of investments. It
is also called the discounted cash flow rate of return (DCFROR) or simply the rate of return (ROR). In
the context of savings and loans the IRR is also called the effective interest rate. The term internal
refers to the fact that its calculation does not incorporate environmental factors (e.g. the interest rate or
inflation).

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L. Contract Practice (3)

395. Types of FIDIC Forms of Contracts?

Red Book - Contract for Works of Civil Engineering Construction. for design by employer /
architect. (Traditional)
a.FIDIC International Civil Engineering Conditions, 4th Edition 1987/1992
b.FIDIC Construction Contract (1999)

Yellow book 1999 (1987) for M & E design & built by contractor (Eg. Water treat. plant)

Silver book 1999 (1995) For EPC / Turnkey Contracts (Pharmaceutical, oil & gas etc.)

Green Book 1999 For Minor Works (Short form of contract)

Pink Book 2006 For Multilateral Development Banks (MDB)

Gold Book 2008 For DBO

Orange Book -Conditions of Contract for Design-Build and Turnkey 1995 Edition.

White book For Consultancy services agreement. (Client/Consultant-model services Agreement,

3rd Edition 1999 )
1999 Edition is generally called Rainbow Edition (4 books)

396. Types of FIDIC Red books

1987 COC for Works of Civil Engg. Construction (4th Edition) Amended in 1992 (72 Clauses)

1999 COC for Construction ( 20 Clauses)

397. Different types of contracts.

FIDIC (Federation Internationale Des Ingenieurs Council)

JCT 98, 05 (Joint Contracts Tribunal)

NEC / ECC

ICE 7

PPC 2000

DOMI

IChemE

398. History of FIDIC Formed in 1913 by Belgium, France & Switzerland. Expanded after WW2. Head
Quarters in Switzerland.
Founded in 1913 (in Belgium) by the national associations of three European countries (Belgium,
France and Switzerland), now with membership from over 60 Countries. This form is produced by the
International Federation of Consulting Engineers (FIDIC) in association with European International
Federation of Construction (FEIC), which is substantially based on the 4th Edition of ICE form,
modified to enable it to use anywhere in the world.
The basic characteristics of this are that an engineer is employed as the employers agent and
representative as well as having citification powers. There are provisions for nominated subcontractors, settlement of disputes, extension of contract periods, liquidated damages, and all other
complexities usually encountered in a major project. The most interesting feature is , it is split it into
two parts, Part I for general applicability and Part II contains optional clauses specific to each project.
399. PPC 2000 and TPC 2005 contracts (ACA)
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PPC-2000: This form is implemented by ACA, Association of Consulting Architects. This is a first
contract which makes the partnering in a contractual frame work. It therefore set out specific form of
partnering and establishes a number of formal procedures which must be followed. Everyone in the
partnering team becomes a party to the contract, owing contractual obligation to everyone else.
The form is a new departure for construction contracts in that it is a multi party contract signed by all
members of the project team. The contract is based on a guaranteed maximum price arrangement,
and deals with issues such as partnering objectives, intellectual property rights, price incentives, risk
and change management, duties of care and key performance indicators.
This contract has not yet been fully proved in practice, but there has been considerable interest from
construction clients.
Whereas the PPC2000 is for use with single projects, TPC2005 has now been introduced as the first
standard form Term Partnering Contract and introduces the same principles to the procurement of
term works and services.
List of contracts

PPC 2000 Project Partnering Contract

TPC 2005 Term Partnering Contract

The first standard form of Project Partnering Contract, PPC2000, was launched in September 2000 by
Sir John Egan, chairman of the Construction Task Force, who described it as "a blow for freedom". It
provides a foundation and route map for the partnering process and can be applied to any type of
partnered project in any jurisdiction. However, in October 2007 an International version was published
to cater specifically for jurisdictions outside the UK.
400. Difference between PPC 2000 and other traditional forms

This makes to form a single partnering contract with all parties (Client, consultant, contractor,
specialist subcontractors) So no need to make separate two party agreements.

This encourages team based approach.

Integrated design / supply and construction process (Early selection of project partnering team and
collaborative approach)

KPI (Key Performance Indicators) Achievement of project objectives measured by KPIs.

Supply Chain Partnering Open book policy encourages good partnering relationships.

Core Group Key individuals from each partnering teams. Who operate early warning systems for
problems and review the issues regularly.

Incentives Agreement to share the profit & savings

Value engineering and value management PPC recognises VE & VM.

Risk Management Provides a clear system for managing & sharing risks.

Non adversarial problem resolution Provide a problem solving hierarchy of senior individuals
within each partnering team.

Recognises the role of a Partnering adviser

401. SPC2000 & SPC International

The standard form of specialist contract, SPC2000, underpins the contribution that specialist subcontractors can make by being appointed early and integrated into the project partnering team. It
responds to industry calls for a contract, between the constructor and specialist, which works back-toback with PPC2000. SPC International, published in October 2004 does the same for PPC
International for jurisdictions outside of the U.K.
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402. ICE Conditions of Contract

Institution of Civil Engineers form is a negotiated form, was first published in 1945 and the current
form is ICE 7th Edition which published in 1999. And this form is intended to use for major civil
engineering projects, includes a wide range of works such as, navigable canals, irrigation schemes,
roads, railways, docks, harbours, dams, bridges and tunnels. There is a form called ICE minor works
contract is using for contracts of less than GBP 100,000 and less than 6 months duration.
The essential feature if 7th Edition is that they provide a contract between a promoter and a contractor.
The Engineer is a not a party to the contract and no legal rights o obligations under the contract,
however engineer have their own contract with the Employer.
The conditions create a re-measurement contract, formerly known as admeasurements or measure
and value, that means the contractor is paid based on actual work done. Moreover that, ICE make no
reference to a contract sum; it refer instead to a tender sum and to a contract price which will be
ascertained in accordance with the conditions.
There is no reference in the conditions to a quantity surveyor, the engineer usually performing the
functions of both contract administrator and quantity surveyor. There is provision for the engineer to
appoint an engineers representative to watch and supervise the construction, completion and
maintenance of the works.
This is a family of standard conditions of contract for civil engineering works, which is at the forefront of
best practice and modern procurement methods. Produced by the Conditions of Contract Standing
Joint Committee (CCSJC), the ICE Conditions of Contract are jointly sponsored by ICE, the Civil
Engineering Contractors Association (CECA) and the Association of Consulting Engineers (ACE).
The ICE Conditions of Contract, which have been in use for over fifty years, were designed to
standardise the duties of contractors, employers and engineers and to distribute the risks inherent in
civil engineering to those best able to manage them.
The information below relates to the latest versions of each Contract. Earlier editions are available and
are used but it is recommended that the Conditions of Contract set out below, with their respective
guidance notes, should be used:

Measurement Version 7th Edition

Design & Construct 2nd Edition

Term Version 1st Edition

Minor Works 3rd Edition

Partnering Addendum

Tendering for Civil Engineering Contracts

Agreement for Consultancy Work in Respect of Domestic or Small Works

Archaeological Investigation 1st Edition

Target Cost 1st Edition

Ground Investigation 2nd Edition

403. JCT (Joint Contracts Tribunal)

It is widely using in the building construction industry in UK, with variety of revisions/amendments in
the recent time. Its origin was in 1870, which produced by CIOB and RIBA together called standard
form of contract. Latest well known forms are JCT-98 and JCT-05.
JCT is having various forms for different types of contracts. Following are the well-known forms,

Standard Building contracts with or without quantities (SBC/Q ;SBC/XQ;SBC/AQ)

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Agreement for Minor works. (MW)

Design and Build Contract (DB)

Major Project Construction Contract (MP)

Agreement for Named/Nominated sub-contractors

Management Contract

Measured term Contract

Construction Management Contract

The JCT 2005 suite consists of contract families made up of main contracts and sub-contracts,
together with other documents that can be used across certain contract families. Family names are
given below.

Minor Works Building Contract

Intermediate Building Contract

Standard Building Contract

Design and Build Contract

Major Project Construction Contract

JCT - Constructing Excellence Contract

404. Minor Works Building Contract, Revision 2 2009 (MW)

Appropriate:

where the work involved is simple in character;

where the work is designed by or on behalf of the Employer;

where the Employer is to provide drawings and/or a specification and/or work schedules to define
adequately the quantity and quality of the work; and

where an Architect/Contract Administrator is to administer the conditions.

Can be used:

by both private and local authority employers.

Not suitable:

where bills of quantities are required;

where provisions are required to govern work carried out by named specialists;

where detailed control procedures are needed;

where the Contractor is to design discrete part(s) of the works, even though all the other criteria
are met - consider the Minor Works Building Contract with contractor's design (MWD).

405. Intermediate Building Contract, JCT (Revision 1 2007)

Appropriate: where the proposed building works are of simple content involving the normal, recognised
basic trades and skills of the industry, without building service installations of a complex nature or
other complex specialist work; where the works are designed by or on behalf of the Employer, fairly
detailed contract provisions are necessary and the Employer is to provide the Contractor with drawings
and bills of quantities, a specification or work schedules to define adequately the quantity and quality
of the work; where an Architect/Contract Administrator and Quantity Surveyor are to administer the
conditions. This contract provides more detailed provisions and more extensive control procedures
than the Minor Works Building Contract (MW) but is less detailed than the Standard Building Contract
(SBC). Can be used: where the works are to be carried out in sections; by both private and local
authority employers; where provisions are required to cover named specialists. Not suitable: where the
Contractor is to design discrete part(s) of the works, even though all the other criteria are met consider the Intermediate Building Contract with contractor's design (ICD).
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406. GC Works range of contracts

The G C/Works family of contracts are standard Government forms of contract intended for use in
connection with government construction works. These contracts are published by the Stationery
Office for the Property Advisors for the Civil Estate (PACE), the latter having responsibility for the
management of the G C/Works contracts since 1 April 1996.
Typical contracts are GC/Works/1 (1998 and 1999)
A standard form of contract for major UK building and civil engineering works, available with Model
Forms and Commentary, in the following versions:

GC/Works/1 With Quantities (1998);

GC/Works/1 Without Quantities (1998);

GC/Works/1 Single Stage Design and Build (1998):

GC/Works/1 (1999) Two Stage Design and Build Version

GC/Works/1 With Quantities Construction Management Trade Contract (1999)

Example: GC/Works/2 Contract for Building and Civil Engineering Minor Works (1998).
This is a standard form of contract for minor UK building and civil engineering works. Comprised of
General Conditions plus Model Forms and Commentary. Lump sum tenders are sought on a
Specification and Drawings basis only (without Bills of Quantities), with option for Employer to require
Contractor to provide a Schedule of Rates for the valuation of variations.
GC Works: Form GC/Wks/1(1998): General Conditions of Government Contracts for Building and
Civil Engineering Works.
The documentation is intended primarily for government contracts in UK, but has been designed for to
be equally suitable for private sector work.
This form is for both building and civil engineering works on the basis of either a lump sum accepted at
the time of tendering, or a sum to be calculated on completion in accordance with the rates in an
Approximate Bill of Quantities or in the Contractors Schedule of Rates or in the Authoritys Schedule
of Rates.
The place of the employer is taken by the authority and the contract administrator by the project
manager (PM). On a number of matters the decision of the PM or the authority is final and conclusive
and not subject to adjudication. The contract is biased rather more in favor of the client than the JCT
standard forms and the PM has wider powers than the administrator under the JCT form to issue
instructions and directions. This contract has some unusual aspects, such as payments provisions
related to cash flow S-curves, instead of measured work done, and acceleration provisions.
407. NEC / ECC: New Engineering Contract
It is a non-adversarial form and published by ICE in 1994. Its main contract was renamed as
Engineering and Construction Contract 2nd Edition after appropriate modifications were made.
First objective for the NEC to be generally applicable to all projects, in order to achieve this, various
optional clauses are offered and it can be used for different procurement methods. Second objective
was in developing this form was to avoid legalistic language and using only common words in simple
English. Third objective behind NEC is, form a stimulus to good management.
Three objectives of NEC are (1) Offer flexibility, (2) Clear and simple contract (3) Promote good project
management.
The NEC & ECC imposes a contractual duty on the parties, and anyone else involved, to work
together in a spirit of mutual trust and co-operation but there is no provision for enforcement clauses
for this. The Conditions of Contract themselves comprise the Core Clauses, which are used unaltered
for all projects, and the Optional Clauses. The six main options cover the six basic types of contract,
such as,
1. Priced contract with activity schedule
2. Priced contract with BoQ
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3.
4.
5.
6.

Target contract with activity schedule

Target contract with BoQ
Cost reimbursable contract
Management contract

Secondary options
X1 Price adjustment for inflation
X2 Changes in law
X3 Multiple currencies
X4 Parent company guarantee
X5 Sectional completion
X6 Bonus for early completion. .
X7 Partnering .
X12 KPI
Nine core clauses are General, Contractors responsibilities, Time, Testing & defects, Payment,
Compensation events, Title, Risk and insurance, Termination
While the aims behind this contract are entirely laudable, there may be problems with the approach
that has been taken. The danger is that, the contract may have sacrificed clear litigation routes in favor
of clear English. So that, those who are using this contract should look beyond the statement of
objectives and carefully consider the extent to which the contract enables them to implement their
contract policy.
Different parties in NEC contract are (1) Employer (Project Manager, Supervisor) (2) Contractor &
subcontractor (3) Adjudicator.
Compensation events in NEC 19 Nos
408. What is IChemE Contracts
The Institution of Chemical Engineers (IChemE) is an international professional membership
organization for people who have an interest in and relevant experience in chemical engineering
For over 40 years IChemE has published Forms of contract written specifically for the process
industries.
Process plants are judged by their performance in operation. Process industry contracts must,
therefore, also be performance based. This is the underlying philosophy of IChemEs Forms of
contract suite. It is a fundamental difference from much of the wider construction industry.
IChemE's contracts are used extensively not only in the process industries, which themselves range
from oil and gas to pharmaceuticals, food and fibres and many more, but also increasingly in a wide
range of other industries both in the UK and internationally where their philosophy of fairness between
the parties and teamwork in project execution are recognised as beneficial.
All the contracts are internally consistent and have extensive guide notes to help in their completion
and operation. They are supported by user guides and training courses, as well as an active user
group.
Originally IChemE's contracts were drafted to operate under English law. Their growing international
use has led to the preparation of a further suite of forms of contract written for international use under
a wide range of legal systems.
The IChemE publishes two standard forms of contract; the red book for lump sum projects and green
book for cost-reimbursable projects. It also publishing a back to back form of sub-contract named as
Yellow Book.
409. Difference between 1987 and 1999 versions of FIDIC.

Now Engineer is no longer impartial

Provision for DAB added

Fit for Purpose obligation is added.

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Employer can terminate for convenience.

Force Majeure is added instead of Special risks

Procedure for Employers Claims added

Value Engineering clauses added.

Late payment clauses added. (Clause 14.8) 3% above bank rate.

410. Roles and responsibilities of parties

Client: The duties of client in various procurement routes are totally different. Under any project, the
client is responsible as of right for deciding what finished product he wants, setting his own budget
limits, briefing his consultants and seeing that the design meets his requirements. Not all of these
rights may of course be successfully attainable in the realistic circumstances prevailing. His
consultants have responsibilities which mirror his own and extend to his detailed satisfaction.
In case of traditional pattern, the client becomes contractually passive in relation to the contractor once
the contract exists, except over a few matters in non-standard circumstances. Most initiatives rest with
the contract administrator, who also responds to those of the contractor. Other consultants should
always act through the administrator over the issue of instructions and other documents to the
contractor.
Design and build takes all the usual client team and places them inside the contractors organisation,
so that the contract does not mention the team at all. As this transfers several matters largely into the
contractors discretion, if the client does not have the necessary expertise in the organisation it is
desirable for the client to seek independent advice from at least one consultant over procedures,
general suitability of design and cost control.
Management contracting covers more than one arrangement. Essentially, the contractor providing
management controls a group of either direct contractors to the client or subcontractors to himself. He
is responsible for co-ordination as a minimum and perhaps for selection of firms and cost control as
well, although usually in consultation with the client or his advisers.
By comparison, civil engineering operates fairly close to the traditional pattern, but places more
responsibility on the engineer and contractor to consult and co-operate over aspects of design,
including temporary works.
Contract Administrator/Employers Agent: The Contract Administrator is an employers agent in
JCT & GC works, is traditionally appointed first by the client. The CAs function is to interpret the
clients brief and translate it into a viable building within the stated constraints. He would also be
responsible for obtaining the necessary approvals for planning and compliance with regulations and for
supervising the materials and workmanship in the erection of the building. The powers of the contract
administrator are limited by the terms of the building contract and, provided he does not exceed his
authority, the client is bound by his acts. The CA is required to give such periodical supervision as may
be necessary to ensure that the works are being executed generally in accordance with the contract.
Although he is not required to be constantly on the site, he must check important aspects of the work
and can only delegate matters of detail to a clerk of works.
Most of the forms in the JCT family assumes that Employers principal representative will be either the
Architect or in cases where representative is not entitled under the terms of the Architects Act 1997 to
use the term Architect, the contract administrator. It is perfectly possible for the Project Manager to
be named as contract administrator-indeed, in many cases it may be impossible for the project
manager to carry out the duties specified in his contract of appointment if this not the case.
Similarly, in case of form contracts for civil engineering works, such as FIDIC and ICE forms, the
Employers principal representative will be the Engineer.
Project Manager (ECC): In general, the Project Manager (PM) is appointed by the Employer as his
agent, who is responsible for the programming, monitoring and management of the project in its
broadest sense, for inception to the completion, to ensure a satisfactory outcome. This will involve
giving advice to the Employer on all matters relating to the project, including the appointment of
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architect, quantity surveyor and other consultants. The roles and responsibilities must be clearly
determined and described in the contract documents.
ECC represents a modern attempt to integrate the PMs role into the contract. The PMs role is central
to the operation of the Core clauses, and is described in the accompanying contract guidance notes as
....to manage the contract for the Employers objectives for the completed project.
Normally the Employer will appoint the PM at the feasibility stage and in addition to administering the
construction contract; he may act on the behalf of the Employer and advising him on the procurement
of design, on estimates of costs and time, on the merits of alternative schemes, and choosing the most
appropriate contract strategy.
It is clear that, ECC places considerable emphasis on the PMs contribution to the project. It assumes
as a starting point that he has full authority to act for the Employer in all respects, and to make all
decisions which are required of him. If the PMs authority is constrained in any way of his terms of
engagement, it is his responsibility to ensure that he is able to obtain sanction from his client in good
time to be able to meet his obligations under the contract.
Supervisor (ECC): The role of the supervisor in ECC is to make sure that, the Works are constructed
in accordance with the contract. It is similar to that of a resident engineer or architect who may be
assisted by an inspector or Clerk of works.
Engineer (ICE/FIDIC): The Engineer is the Clients agent, and in traditional forms of contract is
considered to be the leader of the building team depending on the procurement system to be adopted.
In most of the cases he will be the designer and his role is to interpret the clients requirements,
translate them into building form and supervise the work until it is completed.
In general, his duties are, as Employers agent

Advice the Employer

Instructions to the contractor

Information to the contractor

Inspection and monitoring of the contract work

Quantity surveying functions

As an independent Adjudicator,

To certify interim payments

Final certificate

Taking over certificate

Defects liability Certificate

Liability to the employer

Liability to the contractor

In FIDIC 4th Edition, Engineers duties are explaining in clause 2.1 and DM amended version states
that,
The Engineer should obtain approval from the client for following duties,

Instructing work to be carried out addition / omission (Cl: 51 & 52 & accordance with 13.1)

Instructions for the expenditure of Provisional Sum/Contingency sum (Cl: 58 & 59)

Instruction for tests (Cl:36)

Consenting the contractors programme (Cl:14)

Issuing Taking-over certificate (Cl:48)

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Issuing Defects Liability Certificate (Cl:62)

But in case of emergency occurs affecting safety Engineer can instruct immediately as his opinion.
Engineer shall appoint his representative- ER (Cl:2.2) and delegate the duties according to Cl: 2.3
and he can delegate/revoke time to time by writing to the Employer & Contractor.
Any communication given by ER as per his delegation should be considered as Engineers
communication, if non-delegated instruction given by ER, then Engineer can confirm or reject it
through his letter. If any verbal instructions given by Engineer/ER/Assistance to the ER(Cl:2.4), then
contractor can confirm it in writing, and this confirmation is not contradicted within 7 days, should
considered as an instruction from the Engineer.
Contractor: The contractors duties and responsibilities are varying from different forms and from
different procurement strategies.
In FIDIC 4th Edition, Contractors general responsibilities and duties are explaining in clause: 8 and
DM amended version states that,

Cl: 8.1 shall, with due care and diligence, design(only in case of D & B), execute and complete
the works and remedy any defects therein. Shall provide all superindence, labour, materials, plant,
contractors equipment and all other things is specified or is reasonably to be inferred from the
contract.

Cl: 8.2 shall take full responsibility for the adequacy, stability and safety of all site operations and
methods of construction.

Cl: 8.3 shall be liable for the consequences of errors, omissions, negligence of any part of the
Works become apparent during the period of ten years from the issue of taking-Over certificate.

Sub-contractor: In most of the contracts sub-contractors are divided into three,

Domestic Sub-contractor

Named Sub-contractor

Nominated Sub-contractor

In FIDIC 4th Edition/DM amended version is saying that,

The contractor shall not sub-contract the whole of the Works and shall not sub-contract any part
without the prior consent of the Engineer Cl: 4.1
And his duties and responsibilities are depending on his contract with the main contractor.
The appointment of a domestic sub-contractor entirely for the benefit of the main contractor for his
pure domestic matter, and the Main contractor will be responsible for the breaches from the domestic
sub-contractor.
The named sub-contractors are appointing by the main contractor but from the employers lists and the
sole responsibility lying with the MC only.
In case of Nominated sub-contractor (NS), the Employer is appointing him, but the contract will be with
MC. The MC will be responsible for all his actions except the he expressed his reasonable objection in
the time of appointment of NS according to Cl: 59.2.
Quantity Surveyor: The Quantity Surveyor is the clients economic consultant. The QS gives advice
at design stage as to how the building may be constructed with in the clients budget, and, from the
drawings and other information prepared by the architect, measures the quantity of materials and
labour necessary to complete the works. The quantities are incorporated in to the bill of quantities,
which used by the contractors when pricing the building works.
During the contract the QS measures and prepares valuations of the works carried out to date, to
enable interim payments to be made to the contractor. At the end of the contract the QS prepares the
final account for presentation to the client. The QS will also advice the architect on the cost of
additional works and variations.
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411. Traditional, non traditional and other forms of contracts

Traditional forms Design and construction separated. Design by an engineer. Consultant acting
for the employer. Risks are normally passed down to the supply chain to contractors and
subcontractors. Less chance for overlap between design & construction. (Eg. Most of the JCT,
ICT, GC Works, M/F contracts)

Non traditional contract forms Collaborative contracts (Eg. NEC 3, ACA forms, New JCT
Constructing Excellence form.

Design & Build Forms

Management forms

Framework arrangements (Term contracts)

412. Types of Consultants Contracts recommended by World Bank

Lump Sum (Firm Fixed Price) Contract. - Lump sum contracts are used mainly for assignments in
which the content and the duration of the services and the required output of the consultants are
clearly defined. They are widely used for simple planning and feasibility studies, environmental
studies, detailed design of standard or common structures, preparation of data processing
systems, and so forth. Payments are linked to outputs (deliverables), such as reports, drawings,
bills of quantities, bidding documents, and software programs. Lump sum contracts are easy to
administer because payments are due on clearly specified outputs.

Time-Based Contract - This type of contract is appropriate when it is difficult to define the scope
and the length of services, either because the services are related to activities by others for which
the completion period may vary, or because the input of the consultants required to attain the
objectives of the assignment is difficult to assess. This type of contract is widely used for complex
studies, supervision of construction, advisory services, and most training assignments. Payments
are based on agreed hourly, daily, weekly, or monthly rates for staff (who are normally named in
the contract) and on reimbursable items using actual expenses and/or agreed unit prices. The
rates for staff include salary, social costs, overhead, fee (or profit), and, where appropriate, special
allowances. This type of contract shall include a maximum amount of total payments to be made to
the consultants. This ceiling amount should include a contingency allowance for unforeseen work
and duration, and provision for price adjustments, where appropriate. Time-based contracts need
to be closely monitored and administered by the client to ensure that the assignment is
progressing satisfactorily, and payments claimed by the consultants are appropriate.

Retainer and/or Contingency (Success) Fee Contract - Retainer and contingency fee contracts are
widely used when consultants (banks or financial firms) are preparing companies for sales or
mergers of firms, notably in privatization operations. The remuneration of the Consultant includes a
retainer and a success fee, the latter being normally expressed as a percentage of the sale price
of the assets.

Percentage Contract. - These contracts are commonly used for architectural services. They may
be also used for procurement and inspection agents. Percentage contracts directly relate the fees
paid to the Consultant to the estimated or actual project construction cost, or the cost of the goods
procured or inspected. The contracts are negotiated on the basis of market norms for the services
and/or estimated staff-month costs for the services, or competitively bid. It should be borne in mind
that in the case of architectural or engineering services, percentage contracts implicitly lack
incentive for economic design and are hence discouraged. Therefore, the use of such a contract
for architectural services is recommended only if it is based on a fixed target cost and covers
precisely defined services (for example, not works supervision).

Indefinite Delivery Contract (Price Agreement). - These contracts are used when Borrowers need
to have "on call" specialized services to provide advice on a particular activity, the extent and
timing of which cannot be defined in advance. These are commonly used to retain "advisers" for
implementation of complex projects (for example, dam panel), expert adjudicators for dispute
resolution panels, institutional reforms, procurement advice, technical troubleshooting, and so
forth, normally for a period of a year or more. The Borrower and the firm agree on the unit rates to
be paid for the experts, and payments are made on the basis of the time actually used.

413. Important Provisions required in Consultant Agreements (World Bank Recommendation)

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Currency. - RFPs shall clearly state applicable currency.

Price Adjustment - To adjust the remuneration for foreign and/or local inflation, a price adjustment
provision shall be included in the contract if its duration is expected to exceed 18 months.
Exceptionally, contracts of shorter duration may include a provision for price adjustment when local
or foreign inflation is expected to be high and unpredictable.

Payment Provisions - Payment provisions, including amounts to be paid, schedule of payments,

and payment procedures, shall be agreed upon during negotiations. Payments may be made at
regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum
contracts). Payments for advances (for example, for mobilization costs) exceeding 10 percent of
the contract amount must normally be backed by advance payment securities.

Payments shall be made promptly in accordance with the contract provisions. To that end,
a. consultants can be paid directly by the Bank at the request of the Borrower or exceptionally
through a Letter of Credit;
b. only disputed amounts shall be withheld, with the remainder of the invoice paid in accordance
with the contract; and
c. the contract shall provide for the payment of financing charges if payment is delayed due to the
client's fault beyond the time allowed in the contract; the rate of charges shall be specified in
the contract.

Bid and Performance Securities - Bid and performance securities are not recommended for
consultants' services. Their enforcement is often subject to judgment calls, they can be easily
abused, and they tend to increase the costs to the consulting industry without evident benefits,
which are eventually passed on to the Borrower.

Conflict of Interest - The Consultant shall not receive any remuneration in connection with the
assignment except as provided in the contract. The Consultant and its affiliates shall not engage in
consulting activities that conflict with the interest of the client under the contract.

Professional Liability - The Consultant is expected to carry out its assignment with due diligence,
and in accordance with prevailing standards of the profession. As the Consultant's liability to the
client will be governed by the applicable law, the contract need not deal with this matter unless the
parties wish to limit this liability. If they do so, they should ensure that (a) there must be no such
limitation in case of the Consultant's gross negligence or willful misconduct; (b) the Consultant's
liability to the Client may in no case be limited to less than the total payments expected to be made
under the Consultant's contract, or the proceeds the Consultant is entitled to receive under its
insurance, whichever is higher, and (c) any such limitation may deal only with the Consultant's
liability toward the client and not with the Consultant's liability toward third parties.

Staff Substitution - During an assignment, if substitution is necessary (for example, because of ill
health or because a staff member proves to be unsuitable), the Consultant shall propose other
staff of at least the same level of qualifications for approval by the Borrower.

Applicable Law and Settlement of Disputes. The contract shall include provisions dealing with the
applicable law and the forum for the settlement of disputes. International commercial arbitration
may have practical advantages over other methods for the settlement of disputes. Clients are,
therefore, encouraged to provide for this type of arbitration.

414. Entire Agreement

The entire agreement clause (also referred to as the entirety clause or integration clause) is a
contractual provision under which the parties disclaim any prior communications that could otherwise
be considered part of the final, executed agreement. Without such a provision, an electronic
advertisement, sample, sales person's statements, or other communication could be deemed part of
the contract.
In contract law, an integration clause, or merger clause (sometimes, particularly in the United
Kingdom, referred to as an entire agreement clause) is a term in the language of the contract that
declares it to be the complete and final agreement between the parties. The existence of such a term
is conclusive proof that no varied or additional conditions exist with respect to the performance of the
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contract beyond those that are in the writing. A contract that has such a clause is deemed an
integrated contract, and any previous negotiations in which the parties to the contract had considered
different terms will be deemed superseded by the final writing. Sometimes is also known as "Entire
Agreement" Clause, and, in its case, it is usually drafted at the end of the contract.
Sample clause
"This Agreement, along with any exhibits, appendices, addendums, schedules, and amendments
hereto, encompasses the entire agreement of the parties, and supersedes all previous understandings
and agreements between the Parties, whether oral or written. The parties hereby acknowledge and
represent, by affixing their hands and seals hereto, that said parties have not relied on any
representation, assertion, guarantee, warranty, collateral contract or other assurance, except those set
out in this Agreement, made by or on behalf of any other party or any other person or entity
whatsoever, prior to the execution of this Agreement. The parties hereby waive all rights and
remedies, at law or in equity, arising or which may arise as the result of a partys reliance on such
representation, assertion, guarantee, warranty, collateral contract or other assurance, provided that
nothing herein contained shall be construed as a restriction or limitation of said partys right to
remedies associated with the gross negligence, willful misconduct or fraud of any person or party
taking place prior to, or contemporaneously with, the execution of this Agreement."
415. Implied terms in a contract

Reasonable skill and care,

Good and workmanship like manner,

Fit for purposes.

In reasonable time.

416. Time is of the essence This shows that the time limits must be strictly adhered to. Failure to do so
will have serious implications.
417. Without prejudice This term is used in a conversation or a letter shows that the document can not be
used as an evidence in the court. It is to be considered only as a privilege (Eg. A discount agreed
between the parties)
418. Force majeure It must be external, unpredictable, irresistible (3 Ts)
419. Foreclosure Repossess the mortgaged property of a person when a loan is not duly re-paid.
420. Material breach
A material breach is any failure by one party to perform that permits the other party to the contract to
either compel performance, or collect damages because of the breach. If the contractor in the above
example had been instructed to use copper pipes, and instead used iron pipes which would not last as
long as the copper pipes would have, the homeowner can recover the cost of actually correcting the
breach - taking out the iron pipes and replacing them with copper pipes.
The Restatement (Second) of Contracts lists the following criteria to determine whether a specific
failure constitutes a breach:
In determining whether a failure to render or to offer performance is material, the following
circumstances are significant: (a) the extent to which the injured party will be deprived of the benefit
which he reasonably expected; (b) the extent to which the injured party can be adequately
compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party
failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to
perform or to offer to perform will cure his failure, taking account of all the circumstances including any
reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to
perform comports with standards of good faith and fair dealing.
American Law Institute, Restatement (Second) of Contracts 241 (1981)
421. What is meant by quasi- contract situation? If a contractor agrees to start the works at site while still
negotiating with the employer as to, at least, the essential terms of the contract. But these negotiations
fail. Generally there is an obligation to pay reasonable amount.
422. Legal requirements of a contract.
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Offer and acceptance.

Intention to create legal relation.

Form or considerations.

Genuineness of consent

Capacity of parties.

Legality of aims

423. Assumptions in a building contract

Contract is entire in legal sense

Contract with a break clause is not standard

Only one main contractor.

Contract price is more important than period

Client is contractually passive during construction.

Client is responsible for commissioning of the works.

424. Famous UK reports on construction sector.

Constructing the Team (1994) Michael Latham

Rethinking Construction (1998) John Egan

Accelerating Change (2002)

425. Major UK acts on construction sector.

Housing Grants, Construction and Regeneration Act (1996)

Scheme for Construction Contracts Regulations (1998)

Contract (Right of Third Parties) Act (1999)

Civil Procedural Rules (1999)

Arbitration Act (1996)

The Construction (Design and Management ) regulations - CDM (1994)

The Latent Damage Act (1986)

Unfair Contract Terms Act (1977)

Defective Premises Act (1972)

426. Scheme for Construction Contracts Regulations (1998) As per this, if the contract between two
parties do not comply with all requirements of HGCRA, or no adjudication provision has been agreed,
then The Scheme applies by default.
427. Definition of LOI The expression in writing of a partys present intention to enter into a contract at a
future date. These may be a binding one or a non binding one.
428. Why LOI is issued

The need to obtain necessary approvals and permissions.

Anticipated delay in the preparation of a contract.

Need to obtain long lead items of plant and equipments

Clients desire to urgently get the contractor on site.

Need to complete the project funding arrangements.

429. Common law systems (Australia, England, Hog Kong) Civil Law Systems ( Egypt, France, Germany,
Sudan, U.A.E., India)
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430. Court structure in U.A.E.

Court of First Instance (The court of first instance is the first stage in judicial process. The court of
first instance is the process which deals with the judiciary in order to claim the right or to obtain the
one of the services performed by the court regardless of the type of right or service claimed. )

Court of Appeal (The court of appeal is the second stage in the judicial process. This stage resorts
the judicial process to contest the decisions of the court of First Instance through filing an appeal
with the Court of Appeal.)

Court of Cassation (The Court of Cassation is the third stage in the judicial process to which resort
those who challenge the decision of the court of appeal by filing a further appeal against the
judgment of the court of appeal in case the value of the claim is in excess of 200,000 Dirham or is
undetermined at the time of filing the appeal.)

Federal Supreme court (except for Dubai and RAK)

431. Difference between common law & civil law Common law is a law mostly made and applied by the
judiciary of a particular country based on precedents and written law. But the civil law have their laws
made by legislature which applied by the judiciary. In common law decisions of superior courts are
binding on them selves and on inferior courts. But in civil law superior court decisions are not bound by
their own decisions and each case in dealt with its own merit.
432. Relevant clauses in U.A.E. Civil law with respect to Construction Contracts (Federal law No: 5 of
1985 Mukawala. There are 24 articles related to construction and engineering contracts)

Article 258 -The criterion in a contract is Intentions and meaning and not words and forms. The
words have their true meaning

Article 259 - There shall be no scope for implications in the face of clear words.

Article 246 - The contract must be performed in accordance with its contents and as per the
requirements of good faith

Article 141 - There should be an offer and acceptance in a contract.

Article 890 / 891 - Related to subcontracting of the works.

Article 885 -Employer obliged to make payment upon delivery unless there is provision in contract

Article 886 / 887 Payment obligations with respect to Cost plus / Lump Sum contracts.

Article 888 / 889 - If price for the work is not specified in the contract a fair remuneration together
with value of materials provided should be given (quantum meruit principle)

433. If there is no contractual provision to suspend the work, article 247 of civil code support the
suspension. Similarly, article 272 support termination of contract.
434. Emergency measures to make payment from employer as per U.A.E. Civil law
Under 143 (1) of the Civil Procedural code unpaid contractors and consultants may be able to make an
application for an order for payment in respect of sums which are (1) Overdue (2) Supported by clear
document / certificate (3) easily identified by court on the documents.
Before making an order for payment application, it is necessary to (1) issue a Letter of Demand and a
Legal Notice (served by Court Bailiff) (2) All relevant documents to be translated to Arabic (3)
Execute a power of attorney to appoint a local advocate to represent the plaintiff in the court.
435. What is a contract?
A contract is a legally binding agreement made between two or more parties, by which rights are
acquired by one or more to acts or forbearances on the part of the other or others. A contract is
therefore an agreement formed between two or more parties that is intended to have legal
consequences and to be legally enforceable.
The essential elements of a Contract:

offer by one party and acceptance by the other;

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intention to create legal relations;

agreement about the same thing, i.e. genuine agreement;

capacity of the parties;

legality of objects;

possibility of performance;

certainty of terms;

436. Privity of contract A contract can not confer rights or impose obligations arising under it on any
person or agent except the parties to it.
437. What should contain in a binding contract.

An offer and acceptance.

Rights and obligations of each parties.

Confirmation of price

Intention to enter into a contract.

Retrospective effect on LOI.

Clear allocation of risks

Specifications and scope of works

Payment terms.

Provisions for extension of time.

Procedure for dispute resolution.

Provisions for termination.

438. Letter of intent

It is a unilateral assurance indented to have contractual effect if acted upon it. Or, Indented to convey
the fact that, a contract will eventually be put in place.
Such letter places no obligation on recipient to act up on it and there is usually no obligation to
continue with the works or undertake any parcel of work, the recipient can stop the work at any time.
The effect of such letter is to promise reasonable reimbursement if the recipient acted up on it.
Its a tool for,

Reasonable expenditure can reimburse.

No obligation to start or to continue the works.

Can consider as a Provisional contract until parties negotiate the terms on permanent contract.

If there is no agreement with the payment terms, cost will recover by quantum meruit basis.

439. Different types of non binding LOIs. - RFP Award letter, Contract award letter, proposal award letter,
Acceptance letter, Letter of intent to award, Acceptance of bid letter, Acceptance of offer, Proposal
acceptance letter, General contractor award letter, Offer acceptance letter, Comfort letter.
440. Principles of Contract

Offer - there must be an offer and that the offer must be accepted.

Acceptance - is achieved by showing the person making the offer that the terms of the offer are
agreed to. This may be done orally, in writing, or even implied from conduct (usually by doing the
thing required)

Consideration - is the feature that distinguishes a bargain from a gift. It is the price, not necessarily
in money terms, that each party asks of the other in return for entering the agreement. This is
important because, in order to enforce a contract, a party has to show that he or she paid a price.

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Intention to Create a Legal Relationship, If a promise is to be enforceable it must be shown that it

was intended to be allegedly binding commitment. This excludes merely domestic arrangements
such as promises to pay pocket-money or house-keeping money, for these are to be enforced in
the kitchen rather than the courtroom

Contents of the Contract - Not everything contained in a contract are necessarily a term of the
contract. Some matters are classified as ``mere representations'' and are not enforceable. For
example, if a person says, ``I will sell you this very fine Walter Withers for $10,000'', the phrase
``very fine'' would not be considered a term of the Contract. Rather it would be treated as a
promotional puff.

Terms Implied by Statute - Conformity with description, Fitness for their purpose etc.

Formalities for Entering a Contract -

Avoiding Contractual Responsibilities - At common law a number of factors may vitiate a contract.
They include duress, mistake, legal incapacity, deceit, misrepresentation, illegality and undue
influence

Capacity of Contracting Parties - eg. Parties must be over 18 years of age (or need
parent/guardian to sign and guarantee the performance)

441. Quantum Meruit (QM) Principle

(Latin word) As much as one deserve. Payment of reasonable sum for the works done.
QM Claims are one in which a Contractor seeks payment of the reasonable value of work done for the
Employer. It is applied when

There is an Express Undertaking from the Employer to pay a reasonable sum for services
rendered

LOI issued & no price is agreed,

When extra works falls outside the scope of VO,

Contract is void.

QM claims are based on the Law of Restitution (restoring a thing to its proper owner) and coming from
principles of Unjust Enrichment.
442. Wayleave A license to Passover anothers property, with or without a specified marked route.
443. What is meant by Contra Proferentem principle Ambiguity in a document is construed in the way
least favourable to the person who prepared the document.
444. What is Prevention Principle A party of Contract can not benefit from its own breach of contract to
the detriment (damage) of the injured party. (If an employer cause delay to project. Provision to extend
the time is not in the contract. But the contractor is liable to pay LD This situation should not be
allowed)
445. What is meant by Maxim Caveat Emptor Let the buyer beware.
446. What is meant by Without prejudice
A reservation made on a statement or an offer that it is not an admission or cannot otherwise be used
against the issuing party in future dealings or litigation with any determinative legal effect.
Within legal civil procedure, prejudice refers to a loss or injury, and refers specifically to a formal
determination against a claimed legal right or cause of action. Thus, in a civil case, dismissal without
prejudice is a dismissal that allows for re-filing of the case in the future. The present action is
dismissed but the possibility remains open that the plaintiff may file another suit on the same claim.
The converse phrase is dismissal with prejudice, in which the plaintiff is barred from filing another case
on the same claim. Dismissal with prejudice is a final judgment and the case becomes res judicata on
the claims that were or could have been brought in it. Dismissal without prejudice is not.
447. Neighbourhood principle If one man is near to another, or is near to the property of another, a duty
lies upon him not to do any thing which may cause a personnel injury to that other, or may injure his
property.
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448. Good faith principle A contract must be performed in accordance with its contents and in a manner
consistent with the requirements of good faith. This fundamental justice states that if the promisor is
himself the cause of the failure of the performance, he can not take advantage of the failure.
449. PII and Reasonable Care and Skill The consultant should never accept any wording that warrant
that they exercise more than reasonable care and skill
450. Step in clause In collateral warrantees this clause allows the beneficiary of the warranty the right to
step in and, in effect, become the employer under the primary appointment or contract documentation
in certain circumstances (Eg. The original employer becomes bankrupt, then the funder could step in
as the employer)
451. What is meant by Complex Chattel or structure Defect in one part causing defect to other parts.
452. What are the principles of Natural Justice

No one should be judge of his own case (Impartial)

Each side has a right to put forward its case (Everyone should have reasonable opportunity)

453. Commercial Companies Law in U.A.E. Any company formed in the U.A.E. must have a U.A.E.
national shareholder holding not less than 51% of the capital of the company |(Federal Law 8 of
1984 )
454. New York Convention (1958) This is regarding the recognition and enforcement of foreign arbitral
awards. Once a state is accepted to this convention, it becomes bound to implement its terms and
member states legal and judicial systems and required to give effects to its terms. The conventions
purpose is to enable arbitration awards made in member countries to be mutually recognised and
enforced in other countries.
455. What is meant by Subject to Contract A statement used to show that a prepared document is not
legally binding until the parties have exchanged a formal contract.
456. Limitation period in Contract and Tort Limitation period in a contract begins to run from the date of
breech and it is 6 years. But in Tort it starts only when the damage has been sustained. (it is 15 years)
(UK Situation.)
457. What is LOI It merely indicates that it is one partys intention to enter into a contract. But Letters of
Interim Agreements is an interim contract where (1) Works to be started immediately (2) Delay in the
preparation of contract documents (3) If there is a concern that the tenderer may withdraw.
458. Normal wordings in a letter which request rates from a subcontract by main contractor for tender
purpose
In the event of our being awarded the contract it is our intention to place the subcontract works with
you
459. What are the essentials of a contract

An offer has been given,

An acceptance has been made

Consideration is involved (Consideration is the payment made to the contractor for the works)

460. What key issues the Contract document should address?

Responsibility of each party

Payment mechanism

Dispute resolution

Contract management

Measurement & reporting

Termination and default

Scope of work

Mechanism for change (variations)

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Avoidance of grey areas

Standards and specifications

Time frame & schedules

Mechanism for identifying & valuing delays

Extension of time for employer/ neutral delay

Identifying the risk carriers

Liabilities & indemnities

461. What is meant by Frustration?

A situation may arise in which it is not possible for the contract to be completed, without the default of
any party. For example, new legislation may have been passed during the contract which would make
further activity on it illegal. Construction projects are more likely to encounter frustration should, say,
natural events make the site unsuitable for the project.
"Frustration" is a legal doctrine which may bring about termination of a contract when external events
make the contract either:

illegal,

impossible of performance or

radically different from the original bargain

Frustration occurs whenever the law recognises that without default of either party a contractual
obligation has become incapable of being performed because the circumstances in which performance
is called for would render it a thing radically different from that which was undertaken by the contract. It
was not this that I promised to do.
(Eg. Case of Taylor v Cauldwell (1863) Cauldwell granted Taylor a license to promote a series of
concerts to be held in a hall. After the contract was signed but before the first concert the hall was
burned down. Taylor sued for damages on the grounds that Cauldwell was in breach of contract for not
providing the venue. Court held that the contract was frustrated.)
Frustration cannot be used simply because the obligations of the parties are more difficult than they
thought
462. Suspension of Performance Basic common law position is that,
Neither of the parties has the right to suspend performance simply on the grounds that the other party
is in breach of contract. In the event of a breach the remedy is to claim damages whilst continuing with
the work, unless the breach is so serious as to justify his terminating the contract altogether.
But this Common law position has been modified in construction contracts in the UK by the
Construction Act 1996. Where money due has not been paid in full by the final date for payment, and
no withholding notice has been given, the contractor has a legal right to suspend work until full
payment is made.
463. Repudiation
Termination for breach is where the one behaves so badly that the law gives the other party the option
of ending the contract. The common law right to terminate or 'repudiate' a contract can arise in two
ways,

Either party may make it clear that they have no intention of performing their side of the bargain.

Either party may commit such a serious breach that they will be treated as having no intention of
carrying out their obligations.

A breach of this kind is known as a 'repudiatory breach'. In either case, the innocent party may either:(1) 'Affirm' the contract and hold the other party to their obligations (this includes the right to claim
damages for the breach) or (2) bring the contract to an end through repudiation.

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If repudiation is chosen both parties are released from their obligations, but the terms of the contract
remain relevant in establishing liability, assessing damages (including liquidated damages), and
resolving disputes.
Repudiatory conduct does not automatically end the contract. Contract will only be brought to an end
when the innocent party notifies the other party that he is exercising his right to terminate. The other
option would be to serve a notice affirming the Contract. Once the relevant notifications are given they
are then irrevocable. Intentions may be implied from the parties conduct as well as in words. Important
for the innocent party to make clear decisions and to act promptly.
464. Determination
Determination provides a controlled ending to the contract (and/or the contractors employment) in the
event that certain events occur. Not included in every contract, and detailed provisions vary.
Termination of contract takes place at a point in time in the course of the contract period when a
legally binding contract period is brought to an end before it has been discharged by performance due
to the acts of one or both parties.
There is a distinction between determination and termination. According to the Oxford Advanced
Learners Dictionary, the word determination means the quality that makes you continue trying to do
something even when this is difficult or the process of deciding something officially. However, for the
word termination was explained as the act of ending something.
Determination of a contract occurs where a valid and enforceable contract is brought to an end
prematurely either by its becoming impossible of performance by circumstances which were
unforeseeable at the time the contract was formed or by the actions of one or both parties. It is an
interesting feature of many standard forms of construction contract that their express provisions do not
include rights to determine the contract itself but merely confer rights to determinate the employment
of the contractor under it, i.e. to relieve the contractor of his obligation to complete the works which he
undertook. The contract itself remains in existence and the forms usually spell out in detail the rights
and obligations of the parties where either of them exercises the express power of determination of
employment. There is no consistency of terminology in the contract forms prepared by various
organizations, e.g. the words determine and terminate are used synonymously. (Eg Fidic 87)
It is important at the outset to understand the distinction between the two concepts of termination for
breach and determination, and the legal consequences of that distinction. The common law right to
terminate or repudiate a contract can arise in either of two situations. First, one party may make clear
that it has no intention of performing its side of the bargain. Secondly, that party may be guilty of such
a serious breach of contract that it will be treated as having no intention of performing. A breach of this
kind is known as a repudiatory breach. In both cases, the innocent party has a choice; either to
affirm the contract and hold the other party to its obligations (while claiming damages as appropriate
for the breach), or to bring the contract to an end. If repudiation is opted for, then both parties are
released from any further contractual obligation to perform.
Determination is where one party to a contract fails or refuses to perform the contract demonstrating
an intention no longer to be bound by the contract. The circumstances in which this is permitted, and
the manner by which it must be done, will have been agreed in the contract conditions.
465. Examples for Determination by the employer

Suspension of work without reasonable cause.

Failure to proceed regularly and diligently with the work.

Failure to comply with a contract administrator's instruction to remove defective work, so that the
works as a whole are materially affected.

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Unauthorized assignment or subcontracting.

Failure to comply with contractual obligations regarding health and safety regulations.

Insolvency

Corruption

466. Typical employers rights and duties following determination are:

He may employ others to complete the works,

He may use any temporary buildings, plant, tools, equipment and materials belonging to the
contractor

In most cases he may insist that all sub-contracts and materials supply contracts are assigned to
him

467. Examples for Determination by the Contractor

Persistent failure by the employer to pay amounts properly due within the contractual time limits.

Interference by the employer with the issue of any certificate.

Unauthorized assignment or sub-contracting by the employer

Failure by the employer to comply with contractual obligations regarding health and safety
regulations

Suspension of the works in some circumstances

Insolvency of the employer.

468. Determination by neutral reasons

There are circumstances beyond the control of both parties, which can lead to determination. Typically
they will be events causing suspension of the works for a long period such as,

force majeure

riot or civil commotion

loss or damage by fire etc. which is not the fault of the contractor

outbreak of war

terrorism

469. Difference between Termination and Determination.

Determination is a provision commonly included in contracts to end the contractor's employment
whilst leaving the contractual framework in place. Determination provides a mechanism to enable both
the employment of the contractor and the contract itself to be brought to a controlled end in the event
of certain specified events occur.
Not all of these events amount to sufficiently serious breaches of contract to justify termination on the
grounds of repudiation. Some events may justify termination through repudiation and also contractual
determination. Where this is the case it was historically believed that the innocent party would have the
right to choose which remedy to follow.
Where a contract includes a procedure for determination, the common law right of termination may be
implicitly excluded, unless the other party has committed a repudiatory breach.
Even when both remedies are available the innocent party must elect for one or the other.
Determination will generally be the most favourable. Note however that that where determination is
chosen then the innocent party is limited to the remedies included in the contract unless a repudiatory
breach has been committed.
470. What Clause governs joint determination and what actions warrant a determination?
471. Is non-payment of monies by an Employer is a repudiatory breach? - Failure to pay on time is not a
repudiatory breach, but persistent refusal to pay may be.
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472. Breach of contract by Employer (JCT)

Failure to give possession of the site:

Throwing the contractor off the site without good reason

Non-payment of monies due

Withholding certificates

Hindrance of the contractor:

473. Breach of Contract by Contractor. (JCT)

Unjustified abandonment or suspension of the work:

Serious Defective work:

Delay to project. This is possible only in three circumstances. Namely,

a. Delay may be so great as to show that the contractor has no intention of being bound by the
contract.
b. The contract may make time of the essence.
c. Once a delay has occurred, the employer may make time of the essence by giving
reasonable notice to the other party.

474. Keating Chambers

Is a UK based group of barristers providing dispute resolution services to the construction,
engineering, energy and technology sectors worldwide.
475. Why to claim in Contract than in tort - Contract claims are more wide such as rectification and repair of
the damage, consequential loss, loss of profit, alternative accommodation, loss of furniture (like in
case of rain damages). But in tort only consequential damages are recoverable.
476. Law of Tort For a cause of action in negligence to arise there must be,

Duty of care owed by the tort feasor to the injured party.

A breech of that duty occurred.

Breech must have caused the injured person to suffer loss.

In tort economic loss is not recoverable if building is constructed negligently and if any person injured
or adjacent property damaged, injured person could recover compensation or damaged property could
be repaired. But the property itself is not covered under tort and its repairs, loss of revenue is not
covered as it is pure economic loss.
477. Forseeability in Contract and Tort

In Contract A damage must have been reasonably foreseeable at the time of contract was
formed.

In Tort Damage must have been reasonably foreseeable at the time of breech of duty

478. Pecuniary loss and Non pecuniary loss Pecuniary (Economic) loss (Eg. cost of repair) and Non
pecuniary loss (Eg. Personnel injury, pain, suffering, loss of amenity etc)
479. Liquidated damages and its purpose in a contract. It is a measure of compensation to a party who
has been subjected to a breech of contract. It will put the innocent party back into the position it would
have been had the contract been properly performed, Damages can be applied for any breech, not just
for delay.
The essence of penalty is payment of money stipulated as in terrorem of the offending party; the
essence of liquidated damages is a genuine covenanted pre estimate of damages.
In terrorem, Latin for "in order to frighten," is a legal term used to describe a warning, usually one
given in hope of compelling someone to act without resorting to a lawsuit or criminal prosecution. For
example, many intellectual property attorneys send in terrorem letters, which threaten litigation absent
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compliance with the written request, to persons that are violating their clients' trademark rights before
resorting to court proceedings.
480. Liquidated damages and un-liquidated damages LD means an amount already defined in the
contract. In the case of un LD, such damages will be subject to confirmation and quantification by the
court or a arbitration tribunal. If there is no mention about LD in a contract, it is considered as un LD.
481. Liquidated and Ascertained Damages: Also called LADs. Fixed damages stated in the building
contract, and usually set as an amount per week (or part of a week), which the contractor must pay the
employer (or which the employer may deduct from payments to the contractor) if completion is delayed
beyond the contractual date for completion, as adjusted by any extensions of time.
LADs are void as a penalty if they are not a "genuine pre-estimate" of the employer's potential loss, in
which case the employer can usually recover normal, unliquidated damages for breach of contract.
Liquidated damages are a monetary amount stated in a contract as the damages payable by the
Contractor to the Employer in the event that the Works are not completed by the Date for Completion
or Completion Date. The rate at which damages will be charged is entered into the Contract
Particulars, either as a rate for the whole project or for each Section of the Works if sectional
completion is being used. Hence, these damages are liquidated (they are represented by a monetary
sum) and ascertained (their amount is stated prior to commencement of the Works). Liquidated
Damages are often referred to as liquidated and ascertained (L&A) damages. The amount of
Liquidated Damages must be a fair and accurate assessment of genuine loss resulting from any late
completion of the Works. It cannot impose a penalty on the Contractor as such provisions are illegal
under the Unfair Contract Terms Act 1977.
482. Liquidated Damages A pre determined and genuine pre estimate of the loss that will be suffered by
the employer if completion is delayed.
483. FIDIC 1987, 4th edition refers to Liquidated damages for delay (Clause 17.1 ) But new red book (1999)
the terminology used is delay damages (Clause 8.7)
484. Article 390 of Civil Law States that regardless of what parties have agreed in their contract, the civil
code gives the court the ultimate right to examine the level of pre determined pre agreed, fixed
compensation and increase or decrease the amount t reflect the actual loss suffered.
485. Principles of Remoteness of damages This concept means that you can only be liable for damage
which was in the reasonable contemplation of you and your client at the time the contract was formed.
Not every type of damage caused as a result of breach of contract will be recoverable. If the loss
resulting from a breach is too remote then it can not be recovered. Losses, to be recoverable, must
have been within the reasonable contemplation (observation) of the parties.
486. What is meant by Vesting clause
Vesting and seizure. The general rule is that once materials have been incorporated in the building,
they become the property of the Employer and may not be subsequently removed by the contractor.
However, until they are actually affixed to the building, the property in them remains with the contractor
unless the contract expressly provides otherwise.
Provisions in building contracts relating to the property in materials are of two main types: a. vesting
clauses in which ownership of materials and plant passes automatically to the Employer on the
happening of a certain event, (eg upon delivery to site; and b. seizure) and clauses under which on
some default of the Contractor the Employer is empowered to take possession of materials and/or
plant on the site and use them to complete the building.
487. Forfeiture determination of contractors employment and power for employer to engage others to
complete using the contractors plant and materials for the purpose and regulating the state of
accounts between the parties.
488. What is meant by Time at Large
No valid completion date. This is mainly in Old contracts. If there is no provision in contract to extend
the time for completion, and if the contract is delayed due to the employer, then Employer will not have
valid grounds to extend the contract. When time runs over actual Time for Completion, such situation
in known as Time at Large.
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This arise due to mainly two reasons (1) If there is no specified Time for completion as per Contract (2)
If there is no proper procedure in Contract to extend time due to Employer / neutral events.
489. Civil Law clauses related to Liquidated Damages.

Article 390 Increase / decrease of LD as per the actual loss suffered.

Articles 290 / 291 Apportionment of damage as per responsibility and contribution.

Articles 287 Avoidance of LD if the circumstances were beyond his control.

490. Decennial liability (Article 880 883 of Civil Code) A strict joint liability to engineer and contractor for
a period of ten years from date of delivery of the work for ay defect in building that threatens the
stability of the building
491. decisions and Decisions of the Engineer decisions are those taken by engineer for the day to
day supervision of the contract. But Decisions are those arising out of disputes or differences
between employer and the contractor which are to be formally communicated (Eg FIDIC 67.1 )
492. Basic requirements of Engineer ( 3 I s) Independence, Impartiality and Integrity.
493. Insurance and Guarantee

Insurance is a contract of indemnity involving two parties. Some pre agreed events must first occur
and a quantifiable loss sustained before the insurer can be required to pay out under the policy.

Guarantee is a contract involving three parties and it for secondary rather than primary, liability.
The guarantors liability is regarded as secondary to the contractor who is bound to perform his
obligations even though the guarantor is called on to perform by the employer.

Guarantees are also known as contracts of suretyship. (Articles 1056 to 1105 of U.A.E. Civil Code)

494. Difference between Guarantee (Surety) and Bond

Guarantees are conditional which means that a contractor must first commit a default under the
contract before the guarantor can be called in to perform. This requires performance of contractual
obligation by the guarantor. The bank is liable only for an amount contractor is liable.

Payment bonds are unconditional. They do not require any proof of default for the employer to
make demand for payment. Therefore often referred as unconditional on-demand bonds. In this
type the guarantor pay a pre determined sum of money to employer irrespective of the actual loss.

In guarantee, the first obligation is for the contractor to fulfil its obligations. But in a bond, bank has
an obligation to pay without waiting contractor action.

In the case of the bond, bank has primary liability. But in a guarantee bank has only a secondary
liability.

495. Important terms of bonds 12 points

(1) Addressed to employer, (2) Details of project, (3) Value of bond, (4) Name and address of bank, (5)
Validity period of bond, (6) Irrevocable & unconditional undertaking by bank, (7) Immediate & freely
transferable payment as per request, (8) Reduction mechanism, (9) Without any deduction, (10)
Should not affect organisational changes of contractor, (11) Rights and benefits should be
transferable, (12) Local laws and regulations applicable.
496. What is meant by guarantee account?
497. As per FIDIC 1999 there is a provision for payment guarantee to be provided by the employer to make
sure that the employer shall pay for the works done by the contractor.
498. What is a guarantee account This is to keep average two months payments to the contractor in a
separate account so that it could be used in case of employers insolvency.
499. Promissory Note - A promissory note, referred to as a note payable in accounting, or commonly as just
a "note", is a contract where one party (the maker or issuer) makes an unconditional promise in writing
to pay a sum of money to the other (the payee), either at a fixed or determinable future time or on
demand of the payee, under specific terms
500. What are the options for contractor for non payment
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Amicable settlement, Quick dispute resolutions (Eg. adjudication)

Contractual mechanism (suspension / terminations )

Dispute Resolution methods as per contract (Eg. Arbitration)

Litigation

501. Different types of price adjustment mechanisms.

Adjustment from a specified material price in the contract. (Base rate)

Index escalation provision (As per the published cost index) (Tender Price Index TPI)

502. Types of Securities

Surety (Conditional) Guarantees

a.

Performance Guarantees.

b.

Parent company guarantees

On demand (unconditional) bonds.

a.

Tender bonds, Advance payment bonds, Retention bonds, Maintenance bonds

503. Parent company guarantee (PCG)

A guarantee provided by the parent company of the contractor. They undertakes to the employer to
perform its subsidiaries obligations under the contract if the subsidiary fails to do. This is required
when the contractor is a local branch of a foreign entity or if the contracting entity is an unincorporated
association or joint venture. PCG will give the employer direct access to contractors ultimate executive
authority.
For use where a company entering into a contract is required by its client to provide a guarantee of its
performance from its parent company. This document, while fairly balanced, is drafted from the parent
companys perspective and the wording makes it clear that the parent companys liability only arises if
its subsidiary commits a breach of its contract and fails to rectify the breach.. Also, the liability of the
parent is limited so that it will be no greater than that of the subsidiary under its contract with the client.
504. Performance bond - This bond is allowed the employer to recover his losses in the event of any breach
from contractors obligation under the contract. The usual figure is 10% of contract Price, but higher
figures also may found in international contracts.
In FIDIC 10.1, contractor shall submit a performance bond with an amount as stated in the contract
within 28 days of LoA and to be valid up to the completion of the works, which is to be returned back to
the contractor within 14 days of issuance of Defects Liability Certificate.
Prior to making any claim against the performance bond, the Employer need to notify the contractor
accordingly.
505. Retention bond - Two type procedures are generally followed,

Contractor submit a retention bond after issue of TOC to release complete retention (last 5%)

Contractor submit a retention bond every month after engineer issue an interim certificate. Value of
retention bond will be same as the retention to be deducted. This bond help the Contractor any
retention deduction from the certificate. Every month the Contractor should update (increase)
value of bond as per engineers certificate.

506. FIDIC provision - The nature of conditional bonds such as those proposed by Fidic would require a
beneficiary (Employer) of such as bond to only claim for amounts which are "properly" due and further
to establish a claim strictly in accordance with the contract provisions and to provide prior notice to
allow the contractor to remedy a notified breach within a fixed period of time.
507. What is an on demand bond?
508. What effect does a bond have on a contractors financial creditability
509. Essentials of On- demand bonds Date of issue or commencement of guarantee, Maximum amount,
Reference to construction contract, Any agreement to reduce the sum, Currency of payment, details of
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any documents to be presented on demand, expiry date / event, any agreement to extend the validity
of bond.
510. Claims against professionals Must be valid if it is proved that the professional could not Exercise
reasonable skill, care and diligence in the performance of his obligations. As per Article 880 (of Civil
Code) the limitation period for a claim against a professional is 10 years.
511. Have you heard of the Woolf Report?
Published in 1996, Lord Woolf's report ``Access to Justice'' set out a number of problems with the
existing civil justice system, and made several hundred recommendations for its improvement. The
report was adopted by the Government and implemented in a number of measures, notably the Civil
Procedure Act 1997. This Act established the Civil Procedure Rules Committee with authority to define
rules for all civil litigation (except family proceedings). The first official Civil Procedure Rules were
published in January 1999, and substantially modify the way that civil actions are processed.
Among the various problems identified by the report were the following.

Civil litigation is too slow and too expensive

Wealthy litigants enjoy a disproportionate advantage over those of more modest means

It is difficult to predict in advance how long litigation will take and, therefore, what it will cost

The language used in the description of the litigation procedure is difficult to understand, especially
for non-lawyers

No single body has overall responsibility for the whole system, so different procedures apply to
different courts

The process of litigation is run by the litigants, not by the courts. Rules of Court are often flouted
without penalty.

512. Legal Frame works for resolving Construction disputes in U.A.E.

Articles 870 to 896 of the UAE Civil Law No. 2 of 1987 (the Civil Code) relating to construction
works, as well as general maxims and principles set out in the same law, form the basis of the
legal framework relating to construction.

In addition, the provisions of the UAE Commercial Transactions Law No. 18 of 1993, (the CTL)
would also apply to the extent that the parties to a construction claim can be defined as traders
carrying out commercial business in accordance with Articles 6 and 11 of the CTL.

Specialised laws and Decrees - such as Law No. 6 of 1997 relating to contracts with Government
Departments in the Emirate of Dubai.

Articles 203 - 219 of the Civil Procedure Law (Law No. 11 of 1992) (the CPL) relating to
Arbitration and appointment of arbitrators as well as authentication of arbitral awards.

513. What is the difference between Assignment and Novation?

Assignment is a mechanism to transfer the benefit of the contract by one party to a third party. It does
not allow to confer rights or liabilities to a third party. But if a party wish to transfer the burden of a
contract to a third party, this is done by an agreement with the consent of other party which agreement
is called Novation.
Novation - Contract between A & B. In this A cannot decide to be replaced by C, unless all parties
agree and Novate ie a new contract to replace the old.
Assignment - In this the original party transfers only contractual benefits. Eg. Employer / Property
Developer wish to assign to the first purchaser the rights to claim against the contractor for breach of
contract if any defects appear.
Novation is a mechanism whereby one party can transfer all its obligations including burden under a
contract and all its benefits arising from that contract to a third party. The third party effectively
replaces the original party as a party to the contract. A Novation requires the agreement of all three
parties involved.

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An assignment is a transfer, recognised by law, of a right or obligation of one person to another.

Assignment differs from Novation in so much that the parties to the contract do not change. Most rights
and obligations are capable of assignment. A burden (Eg. liability to pay ) is not assignable.
Collateral warrantees, for example, given by consultants, contractors, subcontractors etc. are often
assigned to subsequent owners.
Benefits rights === obligations liabilities (burden)
514. Assignment & Novation
Novation is a mechanism whereby one party can transfer all its obligations under a contract and all its
benefits arising from that contract to a third party. The third party effectively replaces the original party
as a party to the contract. When a contract is novated the other contracting party must be left in the
same position as he was in prior to the novation being made. A novation requires the agreement of all
three parties involved.
An assignment is a transfer, recognised by law, of a right or benefits of one person to another.
Assignment differs from novation in so much that the parties to the contract do not change. Most rights
and benefits are capable of assignment.
An assignment of a right arising under a contract is an exception of the rule of privity in that rights are
conferred upon persons who are not a party to the contract. It must be noted that a burden (i.e. a
contractual liability, such as the liability to pay for the works) cannot be assigned. Contracts used in the
construction industry often contain terms restricting or prohibiting assignments. Such terms have the
effect of making any purported assignment invalid as against the other party to the contract
Perhaps the most widespread use of assignment in the construction industry today is in connection
with collateral warranties. The collateral warranties given by consultants, contractors and subcontractors are often assigned to subsequent owners or leases. Assignment can do no more than
transfer rights available to the assignor; it is not capable of creating new rights in favour of an
assignee. Thus while the client can in theory assign the right to have a building adequately designed, it
is unclear what right would be transferred to sue for damages in the event of breach. If the
developer/assignor has sold the building or created a full-repairing lease, then his right would be to
nominal damages only. A solution that avoids these problems is to draft the document in the form of a
novation, where the assignee third party may take over the full contractual rights of the developer, as
though named as an original party of the building contract.
Assignment is a mechanism in the contract, to transfer of the benefits from one party to other party,
but not burden. This devise is used an owner (Employer) sells or leases the building, construction
contract to some or all rights of action related to the defects with all parties and the assignee may
claim his rights of action in tort. Unless there is an express clause to the contrary, assignment does not
require the consent of the other party/parties. The assignment can never operate so as to put the
assignee in a better position than the assigner.
However, the parties wishes to transfer the burdens of the contract, with the consent of the other party
of the contract called as Novation. Where the Employer wishes to change the contractor, he must get
consent from the original contractor, so that the original contractor can discharge the obligations to the
new contractor, who is also a party to the contract. In design build contracts, the D&B contractor takes
over the clients designer of his concept design in a form of novation.
The common law rule of privity of contract is the principle that a third party cannot sue for damages on
a contract to which he is not a party. This rule has been strongly criticised in recent times, particularly
where the contract is for the benefit of the third party. Indeed civil law systems of other members of the
European Union recognise and enforce such contracts. The common law rule persists in English Law
to prevent a third party enforcing contractual provisions made in their favour, subject to the Contracts
(Rights of Third Parties) Act 1999. The Act allows the parties to draft their contract so as to prevent a
third party enforcing a term of a contract, so that the common law rule may in some cases continue to
apply. This is the case for instance in the standard ICE 7th Edition Form.
The existence of the rule is the reason behind the use of collateral warranties. Collateral warranties
bypass the rule by creating separate independent contracts collateral to the consultancy or
construction contract. It allows future owners of developments to sue consultants or contractors for
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defects in the design or construction under the collateral warranty. There would be no cause of action
under the original consultancy or construction contract.
A further fundamental principle is that the assessment of damages for breach of contract is meant to
be compensation for damage, loss or injury suffered through the breach. It therefore allows the party to
the contract to sue for his loss but does not allow him to sue for the loss caused to a third party.
515. Different types of Novation ( switch novation and novation ab initio.)
The documentation used when the appointment of a consultant engaged by an employer is transferred
to a design and build contractor takes one of two forms. Both are generally called novation
agreements but their legal effect is very different.
The first (sometimes described as a switch) is not a novation in the traditional sense. The agreement
recognises the reality of the situation that the consultant worked for the employer at the outset and
then from a certain stage worked for the contractor.
The second (a novation ab initio, or from the outset) is based on the traditional form of novation, but
creates the fiction that the consultant worked for the contractor from the outset. These two forms are
considered below.
Switch - CIC Novation Agreement
The CIC Novation Agreement, published in March 2004, is of the first kind (a switch) and records the
realities of the situation: namely that the consultant has worked for the employer pre-novation. The
consultant remains liable to the employer in respect of the work done for him. Post-novation, the
consultant agrees to work for the contractor and will be liable to him. The contractor agrees to step into
the shoes of the employer and henceforth act as the client.
Novation ab initio
As explained, novation ab initio is based on the traditional form of novation. Novation in the traditional
sense occurs when, for example, the original employer transfers his interest in the project to another
employer. The new employer, E2, steps into the shoes of the original employer, E1, and is treated as if
he was always a party to the contract, in place of E1. So, post-novation, so far as the consultant, C, is
concerned he can treat E2 as if he had always been the other contracting party. C must agree to
accept the performance of E1s obligations by E2, so there has to be a new contract, but generally the
interests and concerns of E2 can be assumed to be the same as those of E1. An example is where the
interest of the original employer is transferred to an associated company
516. In a D & B procurement, what is the solution to overcome poor design by the contractor Client
appoint a design consultant at initial stage and later when the design is ready / approved by the client,
novate the design consultant to the D&B contractor.
517. How to Improve Contractual link between Client & Consultant under D&B job
Through collateral warranties. Novated D&B. (transferring the rights and obligations) By completing
an initial design, and then novating the design team to the successful D&B contractor)
518. Would a parent company guarantee be capped - would you recommend it? Yes, Parent company is
liable only up to an amount its subsidiary is liable to the employer. It is the cap of PCG.
519. What is a Party wall?
A structural wall between two properties, the responsibility of which is shared equally by both property
owners. In UK, Part Wall Act 1996 is relevant to issues related to it. Under this act the person
intending to carryout the work must serve a notice to all adjoining owners not less than 60 days. Each
neighbouring party should respond within 14 days if he does not consent to the work. No work should
start unless all neighbouring parties have agreed in writing.

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520. What are the clients obligations in a building contract? Hand over the site, Provide building permit,
Make payment on time etc.
521. A LIEN is a claim to property for the payment of a debt, typically one connected to the property.
Because a lien is something that is filed with the local recorder's office, it can be a powerful legal tool.
It is a public record, available to anyone, that alleges a valid, unpaid debt against the specific real
estate named in the lien.
A contractor's lien, often known as a mechanic's lien, or a construction lien, is a claim made by
contractors or subcontractors who have performed work on a property who have not yet been paid. A
supplier of materials delivered to the job may also file a mechanic's lien. In some states, professionals
such as architects, engineers, and surveyors may also be entitled to file a lien for services rendered.
(Other types of Liens are divorce liens, judgement lines, Home owner association liens, Federal tax
lien, Equitable liens etc)
In law, a lien is a form of security interest granted over an item of property to secure the payment of a
debt or performance of some other obligation. The owner of the property, who grants the lien, is
referred to as the lienor and the person who has the benefit of the lien is referred to as the lienee.
In the United States, the term lien generally refers to a wide range of encumbrances and would include
other forms of mortgage or charge. In the USA, a lien characteristically refers to non-possessory
security interests (see generally: Security interestcategories).
In other common-law countries, the term lien refers to a very specific type of security interest, being a
passive right to retain (but not sell) property until the debt or other obligation is discharged. In contrast
to the usage of the term in the USA, in other countries it refers to a purely possessory form of security
interest; indeed, when possession of the property is lost, the lien is released.[1] However, common-law
countries also recognize a slightly anomalous form of security interest called an "equitable lien" which
arises in certain rare instances.
In the USA and Canada the word is usually pronounced / li n/, whereas in the UK and other
countries it is usually / li n/.
Despite their differences in terminology and application, there are a number of similarities between
liens in the USA and elsewhere in the common-law world.
Partial Release
A partial release of lien releases a state tax lien from a specific piece of property. However, the lien
remains in effect and will encumber the transfer of title of any other properties owned or subsequently
acquired by the taxpayer. Reasons to request a partial release include a need to transfer the rights to
the property when there are insufficient funds to fully satisfy the state tax lien or the party with the lien
has no rights to title of the property.
Subordination
A subordination of a lien is not the same as a lien release. The lien remains in effect; however, a
subordination of lien lowers the priority in favor of some other lien against the property. The lien
remains in effect and will encumber the sale of the specified property and any other property owned
or acquired by the taxpayer. Typical situations are the refinance of a loan and there are insufficient
funds to fully satisfy the state tax lien or the existing loan is being modified.
522. What would you expect in a letter of intent? Is a letter of intent a binding contract?
523. What are the differences between LOI and LOA?
524. What is the difference between contracts under hand and under seal? Contracts under hand means
the contracts signed only (not stamped). In UK, its liability under this is valid for 6 years. But contracts
under seal means the one signed and stamped. (Liability is valid for 12 years). The contractor is liable
for 6 years for the damages after DLP. Or 12 years.
525. What would you use the Minor Works contract on?
526. What is a non-adversarial form of contract?
527. What is New Engineering & Construction Contract? How does NEC work?
528. Are letters of intent worth the paper they are written on?
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529. What does the word expressly required mean?

530. What is Law of Tort?
531. What is a contract? What are the essential elements of a contract?
532. Various documents in a contract?
533. Third party rights as per FIDIC contracts.
534. How you will handle contractual mechanisms and procedures relevant to the financial management
aspects of a project.
535. Contractors claim mechanism:
JCT Clause 20.1 states - If the Contractor considers himself to be entitled to any extension to the Time
for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in
connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or
circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later
than 28 days after the Contractor became aware, or should have become aware, of the event or
circumstance. [emphasis added]

28 Day Notice Condition Precedent to TIME or MONEY

No Notice - No Employers Liability!!

Notice to be given not later than 28 days after Contractor aware or should have been aware of the
event or circumstance

Fully detailed claim to be submitted not later than 42 Days after Contractor aware (or should have
been aware).

Engineer to respond within 42 Days

536. Delay compensation

Entitlement to an EOT does not automatically lead to entitlement to compensation.
The Society of Construction Law Protocol states Once it is established that compensation for
prolongation is due, the evaluation of the sum due is made by reference to the period when the effect
of the Employer Risk Event was felt, not by reference to the extended period at the end of the project.
537. How do you calculate compensation for prolongation?
The SCLs Protocol states: compensation for prolongation should not be paid for anything other than
work actually done, time actually taken up or loss and/or expense actually suffered. In other words, the
compensation for prolongation caused other than by variations is based on the actual additional cost
incurred by the Contractor.
538. Due diligence
It is the level of judgment, care, prudence, determination, and activity that a person would reasonably
be expected to exercise under particular circumstances. A due diligence investigation is a reasonable
method of uncovering all facts that would be of material interest to an investor or acquirer of a
business. It may or may not uncover all such facts, but it should be done in a manner reasonably
calculated to do so. Due diligence is essentially a way of preventing unnecessary harm to either party,
or the entity involved, in a transaction. While it may be true to say that the decision to purchase or
occupy is often governed more by commercial pressures than by faults in the building, the due
diligence process is designed to alert the purchaser to issues that will affect the building as an
investment or as an asset - to manage the risks that are inherent in property acquisition.
539. Grounds for withholding payment from contractor
Even where a withholding notice has been issued, the grounds set out in the notice must themselves
be valid.
Leaving aside cases where the employer disagrees with the certified or claimed value of the works, the
most common reason why sums are withheld against an interim payment application or certificate is
that the employer has a cross-claim against the contractor which it wishes to set off against the
amount certified. The cross-claim may be for liquidated damages for delay, or for losses caused to the
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employer as a result of other breaches of contract by the contractor. Contract administrators are
frequently asked to advise their employer clients on whether and, if so, what sums should be withheld
in this way.
Subject to the terms of the contract, cross-claims can generally only be deducted against payments
which are otherwise due to the contractor if they can be relied upon by way of abatement, or as an
equitable, legal or contractual set-off.
540. Abatement
The doctrine of abatement allows a party to a contract for the sale of goods or the supply of materials
and labour (such as a building contract) to defend a claim for payment of the price by showing that the
goods or works are worth less than the contractual price as a result of breaches of contract by the
seller or supplier.
In the context of a building contract, this means that the employer can claim a reduction in the amount
otherwise due to the contractor on an application for payment by showing that the work which is the
subject of that application is worth less than the amount claimed, e.g. because of defects. It is in effect
an alternative to claiming damages in respect of defects in the work. The amount of the reduction is
the amount by which the value of work is diminished as a result of the breach of contract: in the case
of defects, this will normally be the cost of remedial works, although each case depends on its facts.
The doctrine of abatement does not apply to contracts for professional services. This means that in a
design and build contract, an abatement can be claimed for defects in materials or building work, but
cannot be claimed in respect of defective design work.
541. Equitable set-off
An equitable set-off arises where the cross-claim is so closely connected to the contractor's claim for
payment that it would be manifestly unjust to allow the claim without taking into account the crossclaim. This will be the case for most cross-claims which arise under the same contract as the
contractor's claim for payment. However, where the cross-claim arises under a separate, unconnected
contract, an equitable set-off is unlikely to succeed.
542. Legal set-off
A legal set-off does not require there to be a close connection between the two claims. It simply
requires that both the contractor's claim, and the employer's cross-claim, are for liquidated amounts
which are known or can readily be ascertained, even if entitlement is disputed. This will be the case,
for example, where a contractor is seeking payment of a certified sum. Similarly, an employer's claim
for liquidated damages at the contractual rate is a liquidated claim whose amount can readily be
ascertained, even though his or her entitlement to recover that amount may be disputed (for example,
because the contractor claims an extension of time). Therefore, in a contractor's claim for payment of
a certified sum, the employer may rely on a legal set-off of his liquidated damages claim even if the
liquidated damages claim relates to a separate project.
In contrast, an employer's claim for damages in respect of defects is not a claim for a liquidated
amount which can be readily ascertained with certainty. The proper amount of the claim can only be
ascertained by litigation or arbitration. Therefore, this claim could not be relied on as a legal set-off
against the contractor's claim for the certified sum.
543. Contractual set-off
A contractual set-off arises where the terms of the contract expressly allow the employer to deduct
cross-claims arising out of particular matters.
Contract administrators should be aware that some contracts limit or extend the parties' rights of setoff. In addition, the terms of the contract may provide the employer with further grounds for withholding
payment which do not rely on set-off. This again underlines the importance of studying and
understanding the terms of the contract before advising on whether a withholding notice should be
issued.
544. Meaning of a 'sum due'
In a contract to which the Housing Grants, Construction and Regeneration Act 1998 applies, the
employer may not withhold payment of a sum due unless he has given a valid withholding notice. If he
fails to do so, he must pay the sum due in full. However, it is then necessary to identify the sum due for
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this purpose. This is not as straight forward as it may sound because the meaning of the words 'sum
due' will depend on the provisions of the particular contract being used.
In some contracts, the sum due will be the defined as the amount stated in the interim certificate or
notice of payment (e.g. the JCT 2005 Standard Form of Building Contract clause 4.13). Where this is
the case, failure to serve a withholding notice will give the employer no option but to pay the amount
stated or certified. However, in other contracts, the sum due is defined as the proper value of the
works, rather than the certified value. This approach is taken by the Scheme for Construction
Contracts (England and Wales) Regulations 1998. Where the sum due is defined in this way, an
employer who has failed to serve a withholding notice will still be able to withhold payment on the
grounds of defects or other matters which reduce the value of the works.
A sum due under the contract may, depending on the terms of the contract, cease to be due. This may
occur where the contract is terminated following the insolvency of the contractor. For example, see the
JCT Standard Form of Building Contract (With Contractor's Design) 1998 at clause 27.6.1 as
construed by the House of Lords in Melville Dundas Ltd v George Wimpey UK Ltd.
However, as a matter of good practice the contract administrator should always ensure that a
withholding notice is issued at the appropriate time.
545. Interest on late payment by Employer - Contractual provisions
Most forms of contract provide for interest to be payable at an agreed rate where the employer fails to
pay a sum due under the terms of the contract, whether that amount is certified in an interim certificate
or the final certificate. For example, the JCT 2005 Standard Form of Building Contract provides that if
the employer fails to make proper payment of a sum due to the contractor by the final date for
payment, the employer must in addition to the unpaid amount pay simple interest at the rate of 5% per
annum over Bank of England base rate until payment is made (see clause 4.13.6). Payment of the
interest treated as a debt owed by the employer to the contractor.
Interest will fall due under this clause where payment of an interim certificate is withheld in the
absence of a valid withholding notice, even if the underlying reason for withholding payment was valid.
The interest which accrues cannot be recovered by the employer in a subsequent certificate.
When bringing a claim for late or non-payment of a sum due under the contract a contractor may also
be entitled to claim interest under:

the Late Payment of Commercial Debts (Interest) Act 1998;

section 69 of the County Courts Act 1984;

section 35A of the Supreme Court Act 1981; or

section 49 of the Arbitration Act 1996.

If the contractor can prove that he incurred interest losses (including borrowing costs) as a result of the
late or non-payment, it is open for him to claim these as damages for breach of contract: Sempra
Metals Ltd v Inland Revenue Commissioners.
546. Different type of Liabilities
Joint liability
If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So
if a husband and wife take out a loan from a bank, the loan agreement will normally provide that they
are to be "jointly liable" for the full amount. If one party dies, disappears or is declared bankrupt, the
other remains fully liable. Accordingly, the bank can sue one, or other, or both, for the full amount.
However, in suing, the creditor only has one course of action, i.e., the creditor can only sue for each
debt once. If, for example, there are three partners, and the creditor only sues two of them for the
outstanding loan amount and cannot recover the full amount, he cannot recover the remaining amount
from the partner who is left out of the lawsuit.
Several liability
The converse is several liability, where the parties are liable for only their respective obligations. A
common example of several liability is in syndicated loan agreements, which will normally provide that
each bank is severally liable for its own part of the loan. If one bank fails to advance its agreed part of
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the loan to the borrower, then the borrower can only sue that bank, and the other banks in the
syndicate have no liability.
Joint and several liability
Under joint and several liability, a claimant may pursue an obligation against any one party as if they
were jointly liable and it becomes the responsibility of the defendants to sort out their respective
proportions of liability and payment. This means that if the claimant pursues one defendant and
receives payment, that defendant must then pursue the other obligors for a contribution to their share
of the liability.
Joint and several liability is most relevant in tort claims, whereby a plaintiff may recover all the
damages from any of the defendants regardless of their individual share of the liability. The rule is
often applied in negligence cases, though it is sometimes invoked in other areas of law.

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M. Construction Technology & environmental services (3)

547. Recent developments in construction

Improved construction materials and methods. (pre-cast materials, 3D project modelling, Global
Positioning Systems)

Partnering and Frame work Agreements, Project management techniques.

Quality standards, bench marking, value management, team working, Just in time, Total Quality
Management (TQM)

Eliminating waste (Unnecessary meetings, repetitive process etc), Sustainability

548. Lean thinking It is about removing all those activities that do not add value to the finished product for
the customers / client. Removing waste time and efforts represent the biggest opportunity for
performance improvement.
549. What items do you keep in your car?
550. How big is a brick? How many bricks in a m2 ? 20 cm x 20 cm x 40 cm. 12.5 blocks / m2
551. What is the ratio of what materials in concrete mix? 1 : 2 : 4 (Cement Fine aggregate Coarse
Aggregate)
552. How would you measure ground works what are the items in SMM7 What about earthworks
support?
553. Comparison between steel v concrete frames?

Fast Construction as most of the frames are ready made.

Smaller size for the same strength requirements. Less weight of the structure.

Reusable / Salvage value.

Concrete frames cost more than Steel frame.

More site storage area is required for Steel framed buildings (i.e. it should be unrestricted area)

Long lead of time to procure steel (some times from outside the country)

The site conditions and procurement route do not have any influence on the selection. Concrete
frames are used mainly for larger buildings and steel frames in smaller ones. Selection of steel frames
reduces the time taken for construction and has a beneficial effect on other major items like
foundations, cladding and services, which leads to cost saving in overall project.
554. What are the factors should be considered when choosing between concrete or steel framing?
The frame solution for any building will depend upon a number of factors that should be taken into
account to arrive at the most appropriate solution.

The Programme requirements (The steel is quicker to erect on site than concrete)

Design complexity (Steel provide greater flexibility)

Aesthetics and client aspirations.

Repetitiveness of design. (This will make large impact on temporary works.)

Height of the building.

Environmental factors (Concrete can provide thermal massing)

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Climatic conditions

Site logistics (Delivery of materials to site, On / off site storage, plant restrictions etc)

555. What steps to be taken in the selection of steel Vs Concrete.

Understand the clients brief and key objectives.

Understand the site / project constraints that may favour one over the other.

Consider any abnormal specific to the building

Review with design team various structural options available.

Consider and compare the programme to check the time impact of each options.

Prepare comparative cost estimates.

Identify & recommend the frame option by considering all factors (clients brief, cost, time)

Work with design team for possible value engineering exercise.

556. What are common types of ventilation systems

Natural ventilation.(process of air entering and moving around a building by natural means by
openable / powered windows)

Mechanical ventilation (Extract only This is used if the air is contaminated because of some
activities)

Mechanical ventilation (Supply and Extract This contains a central Air handling unit (AHU)
normally containing air filters, along with separate supply and extract fans. By adding heating or
cooling coils along with AHU it will help to cool / heat up the air. A ductwork system is required to
transport the air around the building)

Mixed mode ventilation (This mode contains both natural and mechanical ventilation)

557. Identify some of the issues to consider in the design of ventilation systems.

Employer requirements (as per the functional requirement.)

Occupants requirements (As per the tolerance level of occupants)

Cost

External conditions

Level of Control required (Eg. If the air is to be extracted at certain times of manufacturing)

Space available for AHU and ducts)

Depth of building (If building is deep, an atrium can be introduced to get air thru the building.
Otherwise mechanical installations are required)

Level of security required (Natural ventilation with openings is not suitable for buildings which
require high security)

Environmental issues (If a certain BREEAM ratings may be desired, it will affect choice of
ventilation)

558. The points to be considered while adopting mechanical ventilation.

The mechanical system is an integral part of the overall building design and will have huge impact on
most other building elements like floor height, plant space requirements. Some issues to be
considered are,

Duct work distribution in the building.

Extend of builders work

Fire strategy

Exposed duct work / plant at roof.

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Type of insulations for ducts

Avoiding over design and over load.

Types of duct work profiles (rectangle, circular, oval)

Avoiding unnecessary controls

Co-ordination with building fabric, structure and other services to reduce risk.

559. What is meant by Insurance

Insurance in law and economics, is a form of risk management primarily used to hedge (Protect)
against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss,
from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small
loss to prevent a large, possibly devastating loss.
An insurer is a company selling the insurance; an insured is the person or entity buying the insurance.
The insurance rate is a factor used to determine the amount to be charged for a certain amount of
insurance coverage, called the premium.
The technical definition of "indemnity" means to make whole again. There are two types of insurance
contracts;

An "indemnity" policy and

A "pay on behalf" or "on behalf of policy.

560. Common provisions are (FIDIC),

Injury to persons and property: Cl: 22.1- the contractor shall indemnify the Employer against all
losses or damages in respect of death or injury of any person and loss or damage to any property.

Insurance of the works and contractors machinery: Cl: 21.1 The contractor shall insure an
additional sum of 15% of full replacement cost to be added for works, together with materials, plant
and for contractors equipment/machinery.

All risks insurance by the contractor: The contractors liability to indemnify the employer shall be
limited as stated in the contract except indemnity by the employer (Cl:22.3)for exceptions as per
cl:22.2.

Third party insurance: Cl:23.1 - the contractor shall insure in the joint names of contractor and the
employer, against liabilities of death or injury to any person or loss of damage of any property
arising out of the performance of the contract other than the exceptions as per Cl:22.2.

Joint fire code compliance: it is usually for protection from fire of construction sites and buildings.

561. Vicarious Liability

Is when one person is liable for the negligent actions of another person, even though the first person
was not directly responsible for the injury. For instance, a parent sometimes can be vicariously liable
for the harmful acts of a child and an employer sometimes can be vicariously liable for the acts of a
worker.
Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of
agency respondeat superior the responsibility of the superior for the acts of their subordinate, or, in
a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the
activities of a violator. It can be distinguished from contributory liability, another form of secondary
liability, which is rooted in the tort theory of enterprise liability.
Employers' liability
Employers are vicariously liable, under the respondeat superior doctrine, for negligent acts or
omissions by their employees in the course of employment.[1] For an act to be considered within the
course of employment it must either be authorised or be so connected with an authorised act that it
can be considered a mode, though an improper mode, of performing it. Courts sometime distinguish
between an employee's "detour" or "frolic". For instance, an employer will be held liable if it is shown
that the employee had gone on a mere detour in carrying out their duties, whereas an employee acting
in his or her own right rather than on the employer's business is undertaking a "frolic" and will not
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subject the employer to liability. Neither, generally, will an employer be held liable for assault or battery
committed by employees, unless the use of force was part of their employment (e.g. police officers,
nightclub bouncers), or they were in a field likely to create friction with persons they encountered (e.g.
car re-possessors). However, the employer of an independent contractor is not held vicariously liable
for the tortious acts of the contractor, except where the contractor injures someone to whom the
employer owes a non-delegable duty of care, such as where the employer is a school authority and
the injured party a pupil.
562. What is Property All Risks Insurance?
The Policy indemnifies the Insured for accidental physical loss of or damage to the Property Insured
whilst situated at the premises described in the policy. This will include loss or damage by Fire,
Lightning, Aircraft, Explosion, Earthquake, Strike, Riot, Civil Commotion, Malicious Damage, Storm,
Tempest, Flood, Bursting or Overflowing of Water Apparatus (including Sprinkler Leakage), Impact
damage, Theft or Attempted Theft (by violence to persons or threat thereof or by violent and forcible
entry to or exit from the premises) and Accidental Loss or Damage. The Sum Insured may be either on
the basis of the actual value or the new replacement value of the property insured
563. What is Business Interruption Insurance / Consequential Loss InsurancePolicy covers the Loss of Gross Profit sustained by the business organisation due to reduction in
turnover following a loss or damage because of the operation of an insured event /peril covered under
the Fire or Property All Risks Insurance. For Business Interruption cover to operate it is compulsory
that there be in place a Property All Risks or Fire Insurance Policy.
564. Money Insurance:
Money insurance is an All Risk cover with some exclusions which can be referred to in the policy.
Essentially Money would be cash, notes, cheques, securities for money, stamps, postal and money
orders. The cover is for the said money whilst:

In transit to and from premises and bank

In safe at the premises

Out of safe in working hours at the premises

In a bank night safe

In the care of company responsible staff

In a private dwelling of employees overnight

Cover includes safes (Description of such safes to be provided)

To provide cover for the money insurance consideration is given on the limits - the Estimated Annual
Carrying, maximum limit of any one carrying and maximum limits available in the safe or premises at
any given time.
565. Machinery / Plant Breakdown Insurance The policy covers losses or damages to Electrical or Mechanical machinery, Process plant and
equipment in factories from causes such as defects in casting and material, faulty design, bad
workmanship, physical explosion, tearing apart on account of centrifugal force, short circuit, vibration,
mal-adjustment, misalignment etc. The Sum Insured may be either on the basis of the actual value or
the new replacement value of the property but should be adequate to cover the total exposure.
566. Electronic Equipment Insurance The Electronic Equipment insurance policy provides All Risk cover for Computers and other electronic
equipment. Both hardware and software can be considered for cover. This insurance policy has a
number of cover sections. These sections can be covered in whole or section one alone. The covers
are as follows:

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Section 1 - Material Damage (Scope of cover: If the insured item or any part suffer any unforeseen
and sudden physical loss or damage from any cause not specifically excluded.)

Section 2 - External Data Media (Scope of Cover: If the external data media inclusive of the
information stored thereon, which can be directly processed in EDP systems, suffer any material
damage identifiable under section 1, the company will indemnify the insured not exceeding the
sum insured.)

Section 3 - Increased Cost of working (Scope of cover: If material damage identifiable under
section 1 gives rise to a total or partial interruption of operation of the EDP equipment, the
insurance company will indemnify the insured for any additional expenditure incurred for the use of
substitute EDP equipment, not covered under this policy, up to an amount not exceeding the sum
insured.)

567. Fidelity Guarantee insurance:

Fidelity Guarantee Insurance protect the Employer for the losses due to misappropriation, forgery or
embezzlement committed by employees in the course of their duties. When opting for fidelity
guarantee cover employers should consider one or more of the following items:

Number of employees handling money, valuable or convertibles ,stock etc

Limits being exposed to such employees

Eligibility and legal status of such employee to the organization

568. Third party Liability insurance:

Third party Liability insurance is designed to offer specific protection against third party claims, i.e.,
payment is not typically made to the insured, but rather to someone suffering loss who is not a party to
the insurance contract. In general, damage caused intentionally and contractual liability are not
covered under liability insurance policies. When a claim is made, the insurance carrier has the right to
defend the insured. The legal costs are also covered under the Liability Insurance Policy.
569. Workmen's Compensation Insurance:
Workmen's Compensation Insurance covers the employer's liability for compensation as a result of his
employees suffering bodily injury or death due to work related accidents arising out of and in the
course of performance of his employment of the insured's business.
Coverage -Compensation is payable to employees according to labour laws in force
Extension of Cover -The cover could be extended at additional premium to cover medical expenses
(up to an agreed limit per case)
570. Sum insured Amount stated in the building contract plus value of any free issue materials. As per
FIDIC 15% should be added to cover removal of debris, professional fee, cost of rectification etc.
571. What is non negligent insurance?
It is a requirement as per JCT clause - 21.2.1. This is an insurance taken by the Contractor on behalf
of the Employer.
The standard public liability insurance policy will only cover the contractor against damage to third
party property which has resulted from negligence. If Contractors works damage a neighboring
property, contractor could be held liable with inevitable consequences. Clause 21.2.1 of JCT (or
Clause 23.1 of Fidic 87) requires insurance to be arranged, in the joint names of the Employer and
Contractor, to protect the Employer in respect of their legal liability for damage to adjacent or
surrounding property This is to provide protection against the Employer's liability for loss, claims or
proceedings that arise due to non-negligent damage to property while undertaking a building contract
due to: Collapse, Subsidence, Heave, Vibration, Weakening or removal of support, Lowering of
groundwater. It is always recommend that non negligent insurance cover runs along side the Public
Liability, therefore avoiding possible disputes in the event of a loss.
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Because of the nature of the work, it is possible that adjoining properties to the contract site may be
damaged following the activities of the Contractor. However the Contractor may not have carried out
the work negligently. The Contractor's Public Liability insurance policy deals with allegations of
negligence only and without evidence from the third party that the Contractor had been negligent, their
claim may fail.
However the Employer (Developer) may still be liable, as they will be seen as the party that brought
the Contractor to site (Gold v Patman & Fotheringham 1958), hence the need for this more specific
insurance cover. Clause 21.2.1 is an optional clause, requested by the Architect or Employer under
the Appendix of the JCT Contract and requires the Contractor to arrange appropriate insurance cover
for a specified limit of indemnity. However the intention of a 21.2.1 policy is to cover the Employer
rather than the Contractor.
The usual exclusions for these policies include but are not limited to (1) Damage to the works and
materials something that should be covered by the Contract Works insurance. (2) Losses arising
from the contractors negligence - something that should be covered by the Contractor's Public Liability
insurance. (3) Losses due to errors and omissions in the designing of the works - something that
should be covered by the Architect's Professional Indemnity insurance
Equivalent clause in Fidic 87 is 23.1 Third Party Insurance (including Employers property)
572. Employers Liability Insurance:
Employers Liability Insurance cover any liability that might be imposed on an employer if an employee
is injured in the course of his or her employment.
573. Contractor's All Risks Insurance
Contractor's All Risks Insurance which is in two sections provides coverage as follows :Section 1: Material Damage All Risks Cover
This section provides coverage for losses to principals and contractors/sub-contractors over a material
and contract works from a variety of risks such as Accidental damage during construction, Fire,
Lightning, Water damage, Flood, storm and tempest, Collapse, collision, impact, burglary, theft and
malicious damage, aircraft damage, Breakdown or explosion to any part of the contract e.g. lifts in
buildings etc. Consequent Damages due to defects in material casting, workmanship and design, Riot,
Strike, subsidence, landslide, cyclone, hurricane, earthquake, volcanic eruption etc.
Section 2:Third Party Legal Liability
This section of the policy, with agreed limits, provides indemnity to third party due to the Legal liability
of the insured resulting from negligence of the insured or his employees/family members causing :

Accidental bodily injury &/or death to third parties (Not members of the insured's family or their
employees),

Accidental damage to Property (excluding Property belonging to or in the custody or under the
control of the Insured, his family members or his employees).

In addition it also provides the Legal expenses for defending any proceedings with Insurer's
consent.

Maintenance period risks: Once the contract covered under the CAR policy is completed the
maintenance cover comes to effect automatically. During this period the cover is against any loss &/or
damage that occurs in the course of the compliance with the maintenance obligation under the
contract insured's/contractor's insured provided the cause of such loss or damage originated during
the period of insurance
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574. What is meant by EAR Erection All Risk Insurance (If value of erection and installation works are
above 50%) Otherwise it will be CAR.
575. Standstill Insurance Cover Is suitable for projects which are either suspended or terminated or
absconded. The cover will be reduced from All Risk to Name Perils. A Site Survey is conducted to
assess the situation & progress.
576. Property Insurance
Property insurance provides protection against most risks to property, such as fire, theft and some
weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance,
earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the
policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods,
nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed
in the policy for insurance to be provided. The more common named perils include such damagecausing events as fire, lightning, explosion and theft.
Property insurance covers a business's building and its contents -- money and securities, accountsreceivable records, inventory, furniture, machinery, supplies and even intangible assets such as
trademarks -- when damage, theft or loss occurs.
Some insurance companies offer property insurance by named peril, such as fire and theft. Others
offer policies that cover multiple perils. Most basic multiple-peril policies include losses caused by fire
and theft, but business owners can purchase additional types of coverage if they need it. For example,
a business in the Midwest or on the East Coast may want to purchase coverage for snow, ice or sleet
damage, while businesses on the West Coast may consider an earthquake-insurance policy.
Businesses with good loss-control measures and claim histories often pay lower insurance premiums
than companies with risky procedures and poor claims histories. Taking steps to prevent loss hiring
security personnel to prevent shoplifting, installing a sprinkler system to contain fires or using an alarm
system to protect against theft can help control the cost of property insurance.
Types of Coverage
Many businesses purchase property insurance through a business-owner's policy (BOP), which
bundles property and liability insurance into one policy; however, since the amount of coverage
available in a BOP is generally lower than in a standard property-insurance policy, companies that
require a lot of coverage usually stick with a separate policy.
Some BOPs also include business-interruption insurance and extra-expense insurance -- two types of
optional coverage in a property insurance policy that protect a business after a loss occurs.
Business-interruption insurance provides payments for expenses such as salaries, taxes and debts, as
well as any loss of profit due to the interruption of business.
Extra-expense insurance pays the costs of temporarily relocating a business when a covered peril
occurs. For example, if a fire destroys a clothing store, extra-expense insurance will pay for a business
to resume operations and cover such expenses as buying or leasing equipment, getting new
merchandise and notifying customers about changes that have occurred.
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577. Medical Insurance - Medical Insurance covers the medical expenses of employees
578. Life and Disabilities Insurance:
Life and Disabilities Insurance cover death (natural and accidental), Permanent Total Disability ,
Permanent partial Disability, Temporary Total Disability of all eligible and permanent employees of the
Policy Holder.
579. Professional Indemnity Insurance:
Professional Indemnity Insurance indemnifies the Insured in respect of the Insured's legal liabilities for
any Third Party Claim due to negligent act, negligent error or negligent omission which was or may
have been or is alleged to have been committed or omitted (as the case may be) in connection with
the professional services rendered to Clients.
PI Insurance is for the comfort of party who takes it. If a client has a claim against a consultant, he
should prove consultants professional negligence through a court. Then the damages should be paid
either by the consultant or by the insurance firm who issued the PII. If the consultant has not taken any
PII, the consultant himself will be liable to pay the damages to client from his account. Lack of PII does
not mean that the consultant is not liable to a client for formers professional negligence.
The level of cover of PII is decided by many factors like type of project (tall tower, villa) and the
services (Supervision, design, audit) etc.
580. Directors and Officers Liability Insurance:
Directors and Officers Liability Insurance protects the liability arising out of directors and officers
performance of their management activities within the organization.
581. How many times you can use a formwork for concrete?
582. Different types of slabs
Based on structure
For a suspended slab, there are a number of designs to improve the strength-to-weight ratio. In all
cases the top surface remains flat, and the underside is modulated:

Corrugated, usually where the concrete is poured into a corrugated steel tray. This improves
strength and prevents the slab bending under its own weight. The corrugations run across the
short dimension, from side to side.

A ribbed slab, giving considerable extra strength on one direction. (Hourdi slab)

A waffle slab, giving added strength in both directions.

Hollow core slabs

Voided biaxial slabs are reinforced concrete slabs in which voids reduce the amount of concrete

Based on slabs reinforcement design

A one way slab, have it structural strength in shortest direction.

A two way slab, have it structural strength in two direction.

Post tension slabs -Bonded post-tensioned concrete is the descriptive term for a method of
applying compression after pouring concrete and the curing process

Pre-stressed concrete is a method for overcoming concrete's natural weakness in tension, thereby
enabling longer span. It can be used to produce beams, floors or bridges with a longer span than
is practical with ordinary reinforced concrete

Based on method of construction

Pre-fabricated slabs

Cast-in-situ slabs

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583. What is meant by composite slab and in which circumstances it is used?

Composite slabs consist of a profiled steel deck, acting as the permanent soffit, whilst at the same
time providing the formwork for in situ concrete in-fill. The concrete usually includes steel
reinforcement to increase strength and reduce cracking. Composite slabs are principally for use with
steel frames, although can also be supported on brick, masonry or concrete components.
584. How would you measure the ground works and concrete in a basement?
585. What is meant by underpinning?
In construction, underpinning is the process of strengthening and stabilizing the foundation of an
existing building or other structure. Underpinning may be necessary for a variety of reasons:

The original foundation is simply not strong or stable enough.

The usage of the structure has changed.

The properties of the soil supporting the foundation may have changed (possibly through
subsidence).

The construction of nearby structures necessitates the excavation of soil supporting existing
foundations.

It is more economical, due to land price or otherwise, to work on the present structure's foundation
than to build a new one.

Underpinning is accomplished by extending the foundation in depth or in breadth so it either rests on

more supportive soil stratum or distributes its load across a greater area. Use of micropiles and jet
grouting are common methods in underpinning. An alternative to underpinning is the weakening of the
soil by the introduction of a grout.
586. How would you price a specialised piece of work in an estimate, such as tunnelling?
587. How would you price a brick wall? Where would you start initially?
588. I want to build an office, I have been told that concrete is better than steel, discuss. What would you
consider other than cost?
589. Types of Piles Are generally,

Prefabricated (Pre-cast) Piles

Cast in-situ Piles

Pre-cast piles - Prefabricated piles are driven into the ground using a pile driver. Driven piles are
either wood, reinforced concrete, or steel. Wooden piles are made from trunks of tall trees.
Concrete piles are available in square, octagonal, and round cross-sections. They are reinforced
with rebar and are often pre- stressed. Steel piles are either pipe piles or some sort of beam
section (like an H-pile)

Cast in-situ piles - Also called drilled piers or Cast-in-drilled-hole piles (CIDH piles) or Cast-in-Situ
piles. Rotary boring techniques offer larger diameter piles than any other piling method and permit
pile construction through particularly dense or hard strata.

Under reamed piles - Underream piles have mechanically formed enlarged bases that have been
as much as 6 m in diameter. The form is that of an inverted cone and can only be formed in stable
soils. In such conditions they allow very high load bearing capacities.

Auger cast pile - An auger cast pile, often known as a CFA pile, is formed by drilling into the
ground with a hollow stemmed continuous flight auger to the required depth or degree of
resistance. No casing is required. A high slump concrete mix is then pumped down the stem of the
auger. While the concrete is pumped, the auger is slowly withdrawn, lifting the spoil on the flights.
A shaft of fluid concrete is formed to ground level. Reinforcement placed by hand is normally
limited to 6 metres in depth. Longer reinforcement cages can be installed by a vibrator, or placed
prior to pouring concrete if appropriate specialized drilling equipment is used.

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590. Basic tests to check pile foundation (1) load testing (static or dynamic) (2) Sonic echo testing (helps
to find any discontinuity in pile sections and concrete quality
591. Difference between concrete and steel in piles

Steel piles are good for marine construction.

Concrete is more economic for land based works

Concrete last longer if additives are used

Steel pile works are quick

Carbon foot print of steel piles are very high than concrete

Steel piles can be recycled.

592. What type of piling is suitable for environmentally sensitive sites?

Augercast piles cause minimal disturbance, and are often used for noise and environmentally sensitive
sites. Augercast piles are not generally suited for use in contaminated soils, due to expensive waste
disposal costs. In ground containing obstructions or cobbles and boulders, augercast piles are less
suitable as damage can occur to the auger.
593. What is meant by Dry boring and Wet boring
'Dry' boring methods employ the use of a temporary casing to seal the pile bore through water-bearing
or unstable strata overlying suitable stable material. Upon reaching the design depth, a reinforcing
cage is introduced; concrete is poured in the bore and brought up to the required level. The casing can
be withdrawn or left in situ.
'Wet' boring also employs a temporary casing through unstable ground and is used when the pile bore
cannot be sealed against water ingress. Boring is then undertaken using a digging bucket to drill
through the underlying soils to design depth. The reinforcing cage is lowered into the bore and
concrete is placed by tremmie pipe, following which, extraction of the temporary casing takes place.
In some cases there may be a need to employ drilling fluids (such as bentonite suspension) in order to
maintain a stable shaft. Rotary auger piles are available in diameters from 350 mm to 2400 mm or
even larger and using these techniques, pile lengths of beyond 50 metres can be achieved.
594. What is meant by Pile Cap
Foundations relying on driven piles often have groups of piles connected by a pile cap (a large
concrete block into which the heads of the piles are embedded) to distribute loads which are larger
than one pile can bear. Pile caps and isolated piles are typically connected with grade beams to tie the
foundation elements together; lighter structural elements bear on the grade beams while heavier
elements bear directly on the pile cap.
595. Different types of Specialty piles

Micropiles - Micropiles, also called mini piles, are used for underpinning. Micropiles are normally
made of steel with diameters of 60 to 200 mm. Installation of micropiles can be achieved using
drilling, impact driving, jacking, vibrating or screwing machinery.
Where the demands of the job require piles in low headroom or otherwise restricted areas and for
specialty or smaller scale projects, micropiles can be ideal. Micropiles are often grouted as shaft
bearing piles but non-grouted micropiles are also common as end-bearing piles.

Sheet piles - Sheet piling is a form of driven piling using thin interlocking sheets of steel to obtain a
continuous barrier in the ground. The main application of steel sheet piles is in retaining walls and
cofferdams erected to enable permanent works to proceed.

Suction Piles - Suction piles are used underwater to secure floating platforms. Tubular piles are
driven into the seabed (or more commonly dropped a few metres into a soft seabed) and then a
pump sucks water out the top of the tubular, pulling the pile further down.
The proportions of the pile (diameter to height) are dependent upon the soil type: Sand is difficult
to penetrate but provides good holding capacity, so the height may be as short as half the

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diameter; Clays and muds are easy to penetrate but provide poor holding capacity, so the height
may be as much as eight times the diameter.
596. Different types of Piles, Basements?
Permanent piles:

Auger Piles (for up to 600 mm) Screw type.

Bored Cast in Situ (for bigger piles & for weak soil) Main type.

Secant Piles (For basements Male & Female type)

Temporary Piles (casing):

Sheet Piles (For shoring & temporary purpose Short height)

Steel Piles (For Marine Structures Tube type )

597. Earthworks support? Shoring ( Sheet piles, Steel beams + Timber Planks or Concrete panels),
Secant Piles, diaphragm walls & any underpinning if required.
598. What are different stages of project from conception to completion.
599. Is there any new law, statute or regulation which will impact the construction sector in general.
600. Explain about the Operational and maintenance processes of post contract.
601. Explain how the design solutions vary for different types of buildings - (Eg. Clear span for
warehousing, acoustic requirements in accommodation)
602. Explain with examples alternate construction details in relation to functional elements of the design
such as different types of piling or structural elements.
603. How you will advise on choice of construction solutions in a project?
604. How will be the impact of different design solutions and construction processes on cost and
programme?

Pre cast slabs and frames save time and cost

Tunnel form system save time

Pre stressed concrete save materials and cost

Slip form for towers Save time

605. Types of Building

The nine categories of building types are:

Places of public worship - Churches, Chapels, Mosques etc.

Cinemas, theatres, hotels and other places of public entertainment.

Commercial and industrial premises including shops and offices.

Schools, colleges and educational buildings.

Flats.

Houses and housing estates.

Municipal and other public buildings.

Railway stations, airport terminals and other places associated with public transport.

Miscellaneous.

606. Foundation (Shallow & Deep)

A foundation (also called a groundsill) is a structure that transfers loads to the earth. Foundations are
generally broken into two categories: shallow foundations and deep foundations
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Shallow foundation is, usually, embedded a meter or so into soil. One common type is the spread
footing which consists of strips or pads of concrete (or other materials) which extend below the frost
line and transfer the weight from walls and columns to the soil or bedrock. Another common type is the
slab-on-grade foundation where the weight of the building is transferred to the soil through a concrete
slab placed at the surface.
Deep foundation is used to transfer a load from a structure through an upper weak layer of soil to a
stronger deeper layer of soil. There are different types of deep foundations including helical piles,
impact driven piles, drilled shafts, caissons, piers, and earth stabilized columns. The naming
conventions for different types of foundations vary between different engineers. Historically, piles were
wood, later steel, reinforced concrete, and pre-tensioned concrete.
607. Piling End bearing piling & Friction (side bearing) piles.
608. Testing of Piles Destructive method (2 times of maximum load), Non destructive test (1.5 times of
maximum load), Integrity test (Combined for all piles)
609. Earth Retaining structures Gabion walls, Retained RCC walls, Geo grid & geo mesh, Modular walls.
610.

Gabion walls
These are cages, cylinders, or boxes filled with soil or sand that are used in civil engineering, road
building, and military application. For erosion control caged riprap is used. For dams or foundation
construction, cylindrical metal structures are used. In a military context, earth or sand-filled gabions are
used to protect artillery crews.

611. Tanking water proofing

612. Hourdi slab for roof For creating voids for thermal resistance, save concrete material etc.
613. Superstructure
A superstructure is an upward extension of an existing structure above a baseline. This term is applied
to physical structures like buildings, bridges and to conceptual structures. The word superstructure is a
combination of the word super (Latin for above, in addition) with the word structure (also from Latin,
meaning to build or to heap up).
Different types of superstructures are, Steel, Concrete, Wood and combinations of these.
614. Cladding
In building construction, cladding may refer to the application of one material over another to provide a
skin or layer intended to control the infiltration of weather elements, or for aesthetic purposes.
Cladding does not necessarily have to provide a water-proof condition but is instead a control element.
This control element may only serve to safely direct water or wind in order to control run-off and
prevent infiltration into the building structure. Cladding applied to windows is often referred to as
window capping and is a very specialized field.
615. Glazing
Glazing is a transparent part of a wall, usually made of glass or plastic (acrylic and polycarbonate).
Glazing also describes the work done by a professional "glazier".
Common types of glazing used in architectural applications include clear and tinted float glass,
tempered glass, and laminated glass as well as a variety of coated glasses, all of which can be glazed
singly or as double, or even triple, glazing units. Ordinary clear glass has a slight green tinge but
special clear glasses are offered by several manufacturers.
Glazing can be mounted in a window sash or door stile, usually made of wood, aluminium or PVC. The
glass or plastic is fixed into a rabbet (rebate) in the frame in a number of ways including triangular
glazing points, putty, etc.. Toughened and laminated glass can be glazed by bolting panes directly to a
metal framework by bolts passing through drilled holes.
Glazing is commonly used in low temperature solar thermal collectors because it results in an increase
in the Sun's radiations.
616. Doors Different types

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Hinge door, sliding door, rotating door, folding door, French door. Other type are - Automatic door,
paneled door,
617. Bridges
A bridge is a structure built to span a valley, road, body of water, or other physical obstacle, for the
purpose of providing passage over the obstacle. Designs of bridges vary depending on the function of
the bridge and the nature of the terrain where the bridge is constructed.
There are six main types of bridges: beam bridges, cantilever bridges, arch bridges, suspension
bridges, cable-stayed bridges and truss bridges.
Beam bridges are horizontal beams supported at each end by piers. The earliest beam bridges were
simple logs that sat across streams and similar simple structures. In modern times, beam bridges are
large box steel girder bridges. Weight on top of the beam pushes straight down on the piers at either
end of the bridge.
Cantilever bridges
Cantilever bridges are built using cantilevershorizontal beams that are supported on only one end.
Most cantilever bridges use two cantilever arms extending from opposite sides of the obstacle to be
crossed, meeting at the center. The largest cantilever bridge is the 549-metre (1,800 ft) Quebec Bridge
in Quebec, Canada.
Arch bridges
Arch bridges are arch-shaped and have abutments at each end. The earliest known arch bridges were
built by the Greeks and include the Arkadiko Bridge. The weight of the bridge is thrust into the
abutments at either side. Dubai is currently building the Sheikh Rashid bin Saeed Crossing which is
scheduled for completion in 2012. When completed, it will be the largest arch bridge in the world.
Suspension bridges
Suspension bridges are suspended from cables. The earliest suspension bridges were made of ropes
or vines covered with pieces of bamboo. In modern bridges, the cables hang from towers that are
attached to caissons or cofferdams. The caissons or cofferdams are implanted deep into the floor of a
lake or river. The longest suspension bridge in the world is the 12,826 feet (3,909 m) Akashi Kaikyo
Bridge in Japan. See simple suspension bridge, stressed ribbon bridge, underspanned suspension
bridge, suspended-deck suspension bridge, and self-anchored suspension bridge.
Cable-stayed bridges
Like suspension bridges, cable-stayed bridges are held up by cables. However, in a cable-stayed
bridge, less cable is required and the towers holding the cables are proportionately shorter. The first
known cable-stayed bridge was designed in 1784 by C.T. Loescher. The longest cable-stayed bridge
is the Sutong Bridge over the Yangtze River in China.
Truss bridges
Truss bridges are composed of connected elements. They have a solid deck and a lattice of pinjointed or gusset-joined girders for the sides. Early truss bridges were made of wood, and later of
wood with iron tensile rods, but modern truss bridges are made completely of metals such as wrought
iron and steel or sometimes of reinforced concrete.
Floating Bridges (Eg. Dubai)
A pontoon bridge or floating bridge is a bridge that floats on water, supported by barge-or-boat-like
pontoons to support the bridge deck and its dynamic loads. While pontoon bridges are usually
temporary structures, some are used for long periods of time. Permanent floating bridges are useful for
sheltered water-crossings where it is not considered economically feasible to suspend a bridge from
anchored piers. Such bridges can require a section that is elevated, or can be raised or removed, to
allow ships to pass.
618. Caisson
In geotechnical engineering, a caisson (like a case) is a retaining, watertight structure used, for
example, to work on the foundations of a bridge pier, for the construction of a concrete dam, or for the
repair of ships. These are constructed such that the water can be pumped out, keeping the working
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environment dry. When piers are to be built using an open caisson and it is not practical to reach
suitable soil, friction pilings may be driven to form a suitable sub-foundation. These piles are
connected by a foundation pad upon which the column pier is erected.
619. Cofferdam
A cofferdam (also called coffer) is an enclosure within a water environment constructed to allow water
to be displaced by air for the purpose of creating a dry work environment. Commonly used for oil rig
construction and repair, bridge and dam work, the cofferdam is usually a welded steel structure that is
temporary, typically dismantled after work is completed. Its components consist of sheet piles, wales,
and cross braces
620. Culverts
A culvert is a conduit used to enclose a flowing body of water. It may be used to allow water to pass
underneath a road, railway, or embankment for example. Culverts can be made of many different
materials; steel, polyvinyl chloride (PVC) and concrete are the most common. Formerly, construction
of stone culverts was common.
621. Tunnel
A tunnel is an underground passageway. The definition of what constitutes a tunnel is not universally
agreed upon. However, in general tunnels are at least twice as long as they are wide. In addition, they
should be completely enclosed on all sides, save for the openings at each end. Some civic planners
define a tunnel as 0.1 miles (0.16 km) in length or longer, while anything shorter than this should be
called an underpass or a chute.
Tunnels are dug in various types of materials, from soft clay to hard rock, and the method of
excavation depends on the ground conditions.
622. Tunnel Construction methods
a. Cut-and-cover method
Cut-and-cover is a simple method of construction for shallow tunnels where a trench is excavated and
roofed over. A strong overhead support system is required to carry the load of the covering material,
roads, streets or other transportation systems.
Cut and Fill in earthmoving is the process of constructing a railway, road or canal whereby the amount
of material from cuts roughly matches the amount of fill needed to make nearby embankments, so
minimizing the amount of construction labor. This technique is widely practiced in mining applications
b. Boring machines
Tunnel boring machines (TBMs) and associated back-up systems can be used to highly automate the
entire tunneling process. There are a variety of TBMs that can operate in a variety of conditions, from
hard rock to soft water-bearing ground. Some types of TBMs, bentonite slurry and earth-pressure
balance machines, have pressurized compartments at the front end, allowing them to be used in
difficult conditions below the water table. This pressurizes the ground ahead of the TBM cutter head to
balance the water pressure. The operators work in normal air pressure behind the pressurized
compartment, but may occasionally have to enter that compartment to renew or repair the cutters. This
requires special precautions, such as local ground treatment or halting the TBM at a position free from
water. Despite these difficulties, TBMs are now preferred to the older method of tunneling in
compressed air, with an air lock/decompression chamber some way back from the TBM, which
required operators to work in high pressure and go through decompression procedures at the end of
their shifts, much like divers.
c. Underwater tunnels
There are also several approaches to underwater tunnels, the two most common being bored tunnels
or immersed tubes. Submerged floating tunnels are another approach that has not been constructed.
d. Drilling and blasting
Before the advent of tunnel boring machines, drilling and blasting was the only economical way of
excavating long tunnels through hard rock, where digging is not possible. Even today, the method is
still used in the construction of particularly long tunnels, where a TBM is unpractical, expensive, such
as in the construction of the Ltschberg Base Tunnel.
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623. Choice of tunnels vs. bridges

For water crossings, a tunnel is generally more costly to construct than a bridge. Navigational
considerations may limit the use of high bridges or drawbridge spans intersecting with shipping
channels, necessitating a tunnel.
Bridges usually require a larger footprint on each shore than tunnels. In areas with expensive real
estate, such as Manhattan and urban Hong Kong, this is a strong factor in tunnels' favor. Boston's Big
Dig project replaced elevated roadways with a tunnel system to increase traffic capacity, hide traffic,
reclaim land, redecorate, and reunite the city with the waterfront.
The 1934 Queensway Road Tunnel under the River Mersey at Liverpool, was chosen over a
massively high bridge for defense reasons. It was feared aircraft could destroy a bridge in times of
war. Maintenance costs of a massive bridge to allow the world's largest ships navigate under was
considered higher than a tunnel. Similar conclusions were met for the 1971 Kingsway Tunnel under
the River Mersey.
Other reasons for choosing a tunnel instead of a bridge include avoiding difficulties with tides, weather
and shipping during construction (as in the 51.5 km Channel Tunnel), aesthetic reasons (preserving
the above-ground view, landscape, and scenery), and also for weight capacity reasons (it may be
more feasible to build a tunnel than a sufficiently strong bridge).
In general, High Cost of tunnel, navigational difficulties with bridge, Requirement of large footprint for
bridge on both sides, extra abutment area required for bridges, defence reasons, high maintenance
cost for heavy bridges, tidal problems with bridges, shipping problems during bridge construction,
weight capacity of bridges etc.
624. Types of Roads - Asphalt, Asphalt Concrete, Bitumen, Bioasphalt, Rubberised Asphalt,
625. Sea Defenses
In some jurisdictions the terms sea defense and coastal protection are used to mean, respectively,
defense against flooding and erosion. The term coastal defense is the more traditional term, but
coastal management has become more popular as the field has expanded to include techniques that
allow erosion to claim land.
A seawall (also written as sea wall) is a form of hard and strong coastal defense constructed on the
inland part of a coast to reduce the effects of strong waves.
In the UK, sea wall also refers to an earthen bank used to create a polder, or a dike. The term is also
sometimes used for walls used to make artificial harbours and port facilities.
Seawalls may be constructed from a variety of materials: most commonly, reinforced concrete,
boulders, steel, or gabions. Additional seawall construction materials may include vinyl, wood,
aluminum and fiberglass composite.
Seawalls can be expensive to build, today. Modern concrete seawalls tend to be curved to reflect the
wave energy back out to sea. Poor designs require constant maintenance as waves erode the base of
the seawall.
626. Waterway
A waterway is any navigable body of water. These include rivers, lakes, seas, oceans, and canals. In
order for a waterway to be navigable, it must meet several criteria:

The waterway must be deep enough to allow the draft depth of the vessels using it;

The waterway must be wide enough to allow passage for the beam width of the vessels using it;

The waterway must be free of barriers to navigation such as waterfalls and rapids, or have a way
around them (such as canal locks and boat lifts);

The current of the waterway must be mild enough to allow vessels to make headway.

Vessels using waterways vary from small animal-drawn barges to immense ocean tankers and ocean
liners, such as cruise ships.
627. Canals (difference between waterways)
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Canals are waterways that are constructed to provide a new path of travel for vessels (as opposed to
improving a natural waterway along its current course). At one time, canals were built mostly for small
wooden barges drawn by horses or other draft animals. Today, major canals are built to allow passage
of large ocean-going vessels (see Ship canal).
628. Earthworks
Earthworks are engineering works created through the moving of massive quantities of soil or
unformed rock. Engineers need to concern themselves with issues of geotechnical engineering (such
as soil fluidity and friction) and with quantity estimation to ensure that soil volumes in the cuts match
those of the fills, while minimizing the distance of movement. In the past, these calculations were done
by hand using a slide rule and with methods such as Simpson's rule. Now they can be performed with
a computer and specialized software, including optimisation on haul cost and not haul distance (as
haul cost is not proportional to haul distance).
629. Processing Plant (Eg. Natural gas processing plants)
Natural gas processing plants, or fractionators, are used to purify the raw natural gas extracted from
underground gas fields and brought up to the surface by gas wells. The processed natural gas, used
as fuel by residential, commercial and industrial consumers, is almost pure methane and is very much
different from the raw natural gas.
630. Prefabrication
Prefabrication is the practice of assembling components of a structure in a factory or other
manufacturing site, and transporting complete assemblies or sub-assemblies to the construction site
where the structure is to be located. The term is used to distinguish this process from the more
conventional construction practice of transporting the basic materials to the construction site where all
assembly is carried out.
The term prefabrication also applies to the manufacturing of things other than structures at a fixed site.
631. Advantages and disadvantages of prefabrication

Advantages High productivity, quality control, less wastage, quick work, good for repeated work,
cost effective, suitable if there are more sites.

Disadvantages Double transportation required, large site are required for errection, heavy cranes
required, good coordination is required, additional yard is required.

632. Right to Light

In English law, ancient lights or a right to light is a form of easement that gives a long-standing owner
of a building with windows a right to maintain the level of illumination. They are most usually acquired
under the Prescription Act 1832.
In effect, the owner of a building with windows that have received natural daylight for 20 years or more
is entitled to forbid any construction or other obstruction that would deprive him or her of that
illumination. Neighbours cannot build anything that would block the light without permission. The
owner may build more or larger windows but cannot enlarge his new windows before the new period of
20 years has expired. It is also possible for a right to light to exist if granted expressly by deed, or
granted impliedly, for example under the rule in Wheeldon v. Burrows.
Once a right to light exists the owner of the right is entitled to "sufficient light according to the ordinary
notions of mankind":
633. Party wall
Party wall (or parti-wall) is a dividing partition between two adjoining buildings (or units) that is shared
by the tenants of each residence or business. The wall is sometimes constructed over the center of the
property line dividing two terraced flats or row houses so that one half of the wall is on each property.
They are sometimes two abutting walls built at different times.
Party walls are typically made of non-combustible material. Where required by code, the party wall
could be a fire wall. The wall starts at the foundation and continues up to a parapet, creating two
separate and structurally independent buildings on either side. The term can be also used to describe
a division between separate units within a multi-unit apartment complex. Very often the wall in this
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case is non-structural but designed to meet established criteria for sound and/or fire protection
between residential units.
634. Road works structure Sub base, Base course, Wearing course.
635. Building control
A building code, or building control, is a set of rules that specify the minimum acceptable level of safety
for constructed objects such as buildings and nonbuilding structures. The main purpose of the building
codes is to protect public health, safety and general welfare as they relate to the construction and
occupancy of buildings and structures. The building code becomes law of a particular jurisdiction when
formally enacted by the appropriate authority.
Building codes are generally intended to be applied by architects and engineers although this is not
the case in the UK where Building Control Surveyors act as verifiers both in the public and private
sector (Approved Inspectors), but are also used for various purposes by safety inspectors,
environmental scientists, real estate developers, contractors and subcontractors, manufacturers of
building products and materials, insurance companies, facility managers, tenants, and others
636. Wastewater treatment plant
Wastewater treatment plant also called wastewater treatment works can mean one of the following:
Sewage treatment treatment and disposal of human waste.
Industrial wastewater treatment the treatment of wet wastes from manufacturing industry and

commerce including mining, quarrying and heavy industries.

Agricultural wastewater treatment treatment and disposal of liquid animal waste, pesticide residues

etc. from agriculture.

Radioactive waste treatment the treatment and containment of radioactive waste.

637. HDPE - High-density polyethylene (HDPE) or polyethylene high-density (PEHD) is a polyethylene

thermoplastic made from petroleum. It takes 1.75 kilograms of petroleum (in terms of energy and raw
materials) to make one kilogram of HDPE. HDPE is commonly recycled, and has the number "2" as its
recycling symbol. In 2007, the global HDPE market reached a volume of more than 30 million tons
Low-density polyethylene (LDPE) is a thermoplastic made from petroleum. It was the first grade of
polyethylene, produced in 1933 by Imperial Chemical Industries (ICI) using a high pressure process
via free radical polymerisation. Its manufacture employs the same method today. LDPE is commonly
recycled, and has the number "4" as its recycling symbol.
638. Disability Discrimination Act 1995 (UK)
The Disability Discrimination Act 1995 is an Act of the Parliament of the United Kingdom which makes
it unlawful to discriminate against people in respect of their disabilities in relation to employment, the
provision of goods and services, education and transport. It is a civil rights law.
Other countries use constitutional, social rights or criminal law to make similar provisions. The Equality
and Human Rights Commission provides support for the Act. Equivalent legislation exists in Northern
Ireland, which is enforced by the Northern Ireland Equality Commission.
It is still permissible for employers to have reasonable medical criteria for employment, and to expect
adequate performance from all employees once any reasonable adjustments have been made.
In addition to imposing obligations on employers, the Act places duties on service providers and
requires "reasonable adjustments" to be made when providing access to goods, facilities, services and
premises.

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N. Procurement & Tendering (3)

639. Types of Procurement

Traditional - in which the design is fully completed by the Clients consultants before Contractors
tender (usually competing on price alone) for, then carry out, construction.

Design and Build - in which detailed design and construction is undertaken by a single Contractor
for a lump sum, allowing design and construction to overlap if required. Where a concept design is
prepared by the Client before the Contractor is appointed to finish and construct that design, the
procurement route is called Develop and Construct.

Construction Management, in which the design is developed by the Clients consultants and
construction commences before the design is complete. A fee-earning consulting construction
manager works for the Client to define and manage several works packages, each representing a
specialised or functional aspect of the project. All contracts are between the Client and the trade
Contractors. The final cost of the project may only be accurately known when all the packages
have been let.

Management Contracting, in which the design is developed by the Clients consultants and
construction commences before the design is complete. A management Contractor is appointed
early to let elements of work progressively as a series of trade or package contracts (called works
packages). The contracts are between the works Contractors and the management Contractor. As
with Construction Management, the final cost can only be determined when the last packaged ahs
been let.

Design and Manage In which outline design is completed by consultants in the manner of
Management Contracting, but detailed design is led by the management Contractor. Design and
construction overlap.

640. Lump Sum Contracts:

If the contract amount is based on a lump sum, (Tender Amount or Contract Sum), then the final
account will start with that sum, and will proceed to identify the additions and deductions which require
to be made, and record the reasons for those variations. The account will conclude with the adjusted
total amount, which sum represents the total value of the work executed by the Contractor under the
terms of the contract. This account can also be described as a Variation Account.
641. Measured Contracts:
In this case there will not be a Tender Amount or Contract Sum so the final account will need to be
built up from a zero amount to an Ascertained Final Sum detailing the measured and valued areas of
the project.
642. Guaranteed maximum price (GMP) contracts
This is a cap in a Cost plus contract, beyond which the employer will not pay to the contractor unless a
change or increase in project scope occurs. This imposes a penalty on a contractor for cost overruns
and failure to complete the project on time. In this, the saving amount is shared between employer and
contractor while the contractor is responsible for costs above GMP. This is mainly used in Turnkey
Projects.
A popular method of securing greater cost and programme certainty during the procurement or early
part of a construction process is through the use of a Guaranteed Maximum Price (GMP). This is
generally used with Traditional (single-stage or two-stage) lump-sum contracts. At the appropriate
time, perhaps after receipt of initial tenders, or when sufficient work elements have been procured,
discussions are held with one or more Contractors to convert the contract to a GMP arrangement. The
guaranteed element applies to the defined non-material changes and does not include material
changes. For this reason, care must be taken in both drawing up the contract and in reaching a mutual
understanding, to prevent future debate and arguments. In other words, if the Client fundamentally
changes its mind about the work required, then the Contractor will not be held to the GMP. Here,
material refers to the nature of the agreement formed between Client and Contractor about what is to
be built not the materials of its construction.
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Should the costs exceed the GMP then, after allowing for material changes to the Employers
requirements, the Contractor bears the cost. However, the Contractor includes the cost of bearing this
risk based on its assessment of the likelihood of this situation arising. A GMP project is therefore more
costly than a project procured with a Traditional lump sum, but does offer the Client greater certainty of
this higher price. The Contractor benefits if the construction costs are less than the GMP, as this
difference can be retrained by the Contractor as additional profit. Figure 2.8 illustrates that the passing
of cost risk to the contractor has only become common for small and medium sized projects.
643. Target Contract (Cost)
Alternatively, a share gain/share pain arrangement can be used, whereby if the cost exceeds the
GMP the Contractor and Employer share the extra cost of the overspend, and likewise share any
saving if the cost falls below the GMP. This arrangement provides an incentive for the Contractor to
manage efficiently the tendering and construction process and the agreement of accounts with
subcontractors.
644. Different type of contractor selection (tendering process)

Single source (Negotiation type)

Open tendering (competitive, without restricting number of tenderers- Mainly in govt sector)

Selected competitive tendering

Two stage tendering

E-tendering

645. Objectives of tendering

To select a suitable contractor at a time appropriate to the circumstances

To obtain an acceptable offer at the proper time

646. MEAT Most Economically Advantageous Tender

647. Procurement routes and provision of construction information
Over the years standard forms of contract have been developed following the basic procurement
routes that the contractor is:

not expressly responsible for the design of the project; or

expressly responsible for the design (in part or in whole) of the project.

There are many different types of standard forms of contract in use, but in the UK at least, the two
most common families of standard forms for construction works are the JCT (Joint Contracts Tribunal)
Forms and the NEC (New Engineering Contract) Forms. Therefore, when considering the practical
application of issues relating to construction information, those families of standard forms will be
referred to, and, in particular the JCT 2005 Standard Form of Building Contract, the JCT 2005 Design
and Build Form, and the NEC 3 (the latest edition of the NEC forms issued).
Within these standard forms, the way that construction information is dealt with reflects the differing
roles of the parties involved in the project.
The NEC 3 deals with procurement in an entirely different way to the JCT Forms.
Under the NEC 3 there is no 'construction only' or 'design and build' versions of the form and
consequently, the NEC 3 deals with construction information in a different way altogether.
Under the NEC 3, a project manager operates the provisions of the contract on behalf of the employer.
All relevant construction information therefore passes between the project manager and the contractor.
The contractor may be responsible for all of the design or for none of the design, and this is not
determined by the wording of the standard form and is instead determined by works information.
Works information is a document that sets out the liability of the contractor generally and in particular,
in respect of any design responsibility.
648. What is meant by pre-qualification It is a process conducted by employer prior to tendering in which
contractors capability and other relevant aspects are analysed to find out whether the contractor is
capable to execute the works. The aspects analysed are:
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Reputation

Experience,

Reliability (history on claims and disputes),

Resources,

Technical & logistical capability

Financial strength

Management quality

Health, Safety, Environmental performance

Company policies (ISO Standards)

Quality control procedures, Quality of previous works

Cultural fit

649. Different elements of tender report.

Introduction (project name)

Scope of works

Tender basis / tender documents

Tender list

Tender process / period

Tender addenda

Tender opening, place

Tender evaluation process (arithmetic check, qualifications, breakdown of LS amount, tender

bond, All documents received back?, COSV, Addenda

Summary & recommendation

650. Prequalification process for selection of contractors.

Financial model (FM) Based on financial capacity, current assets, current liabilities etc.

Integrated Model (IM) Based on Management ability, Past performance, Safety rating, Quality
assessment, Claims policy

651. Evaluation of Tenders by weighted method

commercial offers

- 40 : 60 is the typical ratio between technical and

652. What is tender optimization

This is the utilization of the tender process cost and price estimate optimization model and associated
prequalification benchmark mechanism can improve the efficiency of the tender process by optimizing
cost and price estimates, reducing project cost overruns, improving project delivery surety, reducing
the cost of tendering, creating a more price competitive transparent process that rewards
organizational efficiency, eliminating opportunistic behaviour and fostering closer supply chain
relationships.
653. What are the points to be considered in a prequalification?
Regional experience, Trade Licence, Corporate structure (Parent or subsidiary or JV), Financial
situation, Construction experience, Contract performance, Claims, Health & Safety Record,
Management systems.
654. What is meant by gearing ratio?
A general term describing a financial ratio that compares some form of owner's equity (or capital) to
borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a
firm's activities are funded by owner's funds versus creditor's funds.
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The higher a company's degree of leverage, the more the company is considered risky. As for most
ratios, an acceptable level is determined by its comparison to ratios of companies in the same
industry. The best known examples of gearing ratios include the debt-to-equity ratio (total debt / total
equity), times interest earned (EBIT / total interest), equity ratio (equity / assets), and debt ratio (total
debt / total assets).
A company with high gearing (high leverage) is more vulnerable to downturns in the business cycle
because the company must continue to service its debt regardless of how bad sales are. A greater
proportion of equity provides a cushion and is seen as a measure of financial strength.
655. Disadvantages of many tenderers in the tender list As per NJCC (National Joint Consultative
Committee) maximum number is six (6).

Tenderers will be less keen to bid resulting high bid and low performance later.

Increase in contractors over head which he may pass to the client later.

waste of time and resources (For employer and consultants)

656. Project Management Is the overall planning, control, and co-ordination of a project from inception to
completion aimed at meeting a clients requirements in order that the project will be completed on time,
within authorised budget and to required quality standards and function.
657. Briefing Process Is the process in which the Client and the project team reach a common
understanding of the clients requirements for building and problems which need to be solved. There
are two stages.

First stage An initial outline statement of the Clients requirements usually prepared before
appointing the design team

Second Stage Development of a detailed definite project brief prepared during the design stage.

658. Different types of procurements

Traditional procurement (Employer will complete the design before issuing the tender)

Design & Build (Both by the contractor)

Management Contracts (Employer will select the main contractor and different subcontractors to
do packages)

Construction Management (By appointing a Project Manager on behalf of Employer)

Turn key contracts / EPC

Frame work agreements. (Term Contract)

Two stage tendering (contractor is selected for first stage on the basis of limited scope, say
preliminaries, overheads & profit. In second stage full price is negotiated through an open book
tendering of subcontracts)

Partnering Contracts (This is a management approach)

PFI / PPP

659. Traditional procurement advantages and disadvantages

Advantages As design completed lowest tender sum is possible, Cost control process is possible
at design stage itself, Involvement of client in design satge will help to achieve his requirements,
As BOQ is available evaluation of client changes is easy, As design is complete tending
contractors could programme the works accurately, All parties are familiar with their roles and
duties.

Disadvantages Time consuming, No opportunity for contractor ideas and innovations, separating
the design and construction functions may result in divided responsibility on liability for defects

660. Design & Built procurement - advantages and disadvantages

Advantages Single point responsibility for clients, cost control is easy if there are no client
changes, Contractor ideas and innovations possible, Less time required for overall project.

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Disadvantages Client changes will cost more, Increased work load during tendering will cause
high tender sum, quality of materials will be compromised, Success depends of client briefing and
high quality contractor, assessment of tenders are not easy (Consultant service may be required)

661. Management Contracts - advantages and disadvantages

Advantages Early start of works at site, Early involvement of construction manager can lead to
economy,

Disadvantages Require close control of design process to avoid delays, Cost control is difficult,
Not all projects are possible to divide into packages, Strict quality control measures required.
Success of project depends on performance of all package contractors.

662. Difference between Construction Management (CM) and Management Contracting. (MC)
In CM the client appoint on Construction Manger. But in MC the Client appoint Management
Contractor.
In CM Client makes agreement with package contractors. But in MC the management contractor
makes agreement with package contractors.
In CM client has to administrate the package contracts. But in MC it is done by the management
contractor.
663. Advantages of Construction Management procurement than traditional methods?

Acceleration of overall project programme

Ability to incorporate change in design

Delayed completion of specialist items possible without delaying overall programme

Involvement of specialist trade contractors possible.

Creation of a less adversarial, problem solving project culture.

664. What is meant by Novated design & build

This is a construction procurement method where the client initially employer the consultant team to
carry out design and documentation, to the extend that the client needs and intent are clearly identified
and documented. The client then novates the consultant agreements to the contractor who takes
responsibility for the project to completion.
665. Factor affecting the procurement system
Time, Cost, Quality, Flexibility for changes, Certainty of Price, Risk
666. Advantages of management systems of procurement (CM and MC)

Early start on site.

Fast track procurement

Variation is possible throughout the project.

Less adversarial procurement.

Choice of competitive tendering of negotiations are possible.

Target price possible rather than a lump sum

667. What is meant by Fast Track projects

Is the one in which construction commences before the design is completed (Eg. Some design & Build
Contracts) This type is adopted when the employer is ready to scarify some control over the cost for
completing the work quickly in short span of time.
668. Expression of Interest Request for respondents to register their interest in undertaking a specific
contract or to participate in a specific project or programme and to submit their credentials as they
may, in terms of the organizations procurement procedures, be invited to submit tender offer should
they qualify or be selected to do so.
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669. OJEU Official Journal of the European Union in which tender opportunities are published for
construction works. It also deals with related legislation and information and notices of procurement.
670. Development control process The process whereby the decision is made both whether permission
is required, and where it is and what type of decision should be made is called the development
control process.
671. ISO of Procurement Process ISO 10845 1 Construction Procurement Part 1 Processes, methods
and procedures (Draft stage in April 2009) 2 Formatting and compilation of procurement
documentation.
672. BOT (Build Own/Operate Transfer)
Mainly used by government for the infrastructure project. Project is financed by private. The promoter
will build it, own it and operate for a certain period.
Other varieties are BOO (Build Own Operate) BOOT (Build Own Operate Transfer) BRT ( Build Rent
Transfer)
Main parties of a BOT contract are: Principal (Government), Promoter (sponsor - facilitator),
Contractor, Operator, Lender (banks)
673. Different parties in a Development Land owner, Developer, Property development companies,
Institutional investors / banks, Contractors, Consultants, Planning authorities, Insurance companies,
End users (tenants)
674. Problems of a Joint Venture (JV) - Divided loyalty of the staff, Attempted interference, Changes in
policy of parent organization, Lack of trust, Cultural issues.
675. What is a partnering contract? How many partners are in a partnering contract?
Is a management approach used by two or more organisations to achieve specific business objectives
by maximizing the effectiveness of each participants resources (By Reading Construction Forum)
This approach is based on mutual objectives, an agreed method of problem resolution and an active
search for continuous measurable improvements. This will be,

Project partnering (For one project)

Strategic partnering )Long term commitment)

A project based culture is required. No blame culture. Shared commitment. Trust. Win- win situation.
Respect to each other. Best if facilitated by an outside management specialist.
Partnering is a concept that can be applied to any of the procurement routes. In the partnering
scenario, negotiation rather than competitive tender is the key and in long term this achieves better
results for both contractor and employer, particularly as both parties go into the contract with their eyes
open and hopefully no surprises will develop.
676. Difference between contract and partnering agreement contract set out the cost, quality, time frame,
risk proportion of a project. But partnering agreement set out the way the project will executed by
promoting trust, open communication, identification of mutual interests etc.
677. On site neutral Is a person hired by all parties of a partnering contract. This mediator will help the
problem resolution before it escalates into a dispute. But he is not an arbitrator or he can not impose
any decisions.
678. Benefits of partnering for Employer and Contractor

For employer: Better value for money, Same level of quality, Less confrontation, Less risk, Greater
certainty of satisfaction, Fewer claims, Less bureaucracy, Better communications, Faster
construction, Continuous improvement

For Contractor: Increased profit potential, Less confrontation, Greater certainty of work load, Better
communications, Less bureaucracy, More involvement in key decision making, No competitive
tendering

679. Escalation matrix and partnering charter ate two important documents in partnering

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Escalation matrix will identify the project team and the decision makers and the type of problem
that will be resolved by each level within agreed time period.

Partnering charter will formulate the commitment of each parties, specify the dispute resolution
procedures

680. Partnering procedure Two day workshop in a neutral location to create a conducive working
relationship between the parties.
681. Forms of contracts with collaborative approach NEC Partnering agreement (option X 12), PPC 2000
published by ACA.
682. Difference between Project Manager and Project Co-ordinator (RICS Definition)
If Project manager appoint other consultants that service is called Project Management. If Client
appoint other consultant then the service is defined as Project Co-ordination.
683. PPP (Public Private Partnerships) Objectives are:

Public facilities and utilities are designed, built, maintained, and operated by private sector.

Government provide regulatory and non financial support only.

Facilities built at little or no cost or operational risk to public sector.

Government purchases services or products from privately run company.

684. What happens if there is a mistake in the tender returns?

685. RICS e tendering - RICS eTendering offers clients and their consultants a simple, secure, standard,
efficient and cost effective way to managing tenders online. Cut your tendering costs by over 30% and
provide a sustainable, environmentally responsible service to your clients, by switching to RICS
eTendering.
The process include, Publish the tender to tenderers, communicate with tenderers, monitor tender
activity, modify tender requirement if required, open and evaluate tender responses, award letter,
report on tender, archive the completed tender. (Provision for a pre qualification questionnaire also
included if required)
Compared to traditional paper-based tendering, RICS eTendering can also reduce your tendering
process time by 29%.
686. What is meant by e Tendering?
E Tendering can be defined as the process by which tender documentation (drawings, specifications,
BOQ) are issued to tenderers in an electronic format and via internet. Therefore the invitation to
tender, tender award, contract administration and monitoring project performance will be all
undertaken electronically online. Further, tender queries, addendums, updates, evaluation of work for
payment and notification of payments are to be exchanged electronically on the internet via website.
687. What is meant by ancillary processes such as partnering and framed agreements?
688. What is meant by Cover Pricing ? Is a procedure adopted by tenderers by submitting prices high
enough to ensure the contract would not won or if it was, at a comfortably high margin.
689. What is Forced sale Pricing ? is a process used to enable clients to get the job done for the price
they required was known as forced sale pricing. Essentially this involved the client pushing down the
tender sum at the negotiation stage so that the tender sum meet the clients budget. In this, the main
emphasis on cost than time or quality.
690. What if the tenderer deemed to have included for in respect of a defined Provisional Sum? (Ans.
Allowance in programme. & Allowance in preliminaries)
691. How would you choose a list of tenderers? (Ans. Companies reputation in general, The type and value
of work they normally undertake, Their experience in the field, Their management and other resources
avail., Their H&S record)
692. How would you establish a contractors credit rating? (Ans. Get them to send their financial
statements, accounts, and send those to an accountant )
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693. Why would you be bothered by their credit-worthiness? (Ans. In case they are in debt and go insolvent
)
694. How much would the fit out of a speculative office be, per square meter/foot?
695. What criteria do you use to evaluate tenders?

Financial (accounts, prices)

Quality systems (ISO)

Environmental policy

Relevant experience

References

Site Visits

696. Procedure for tender evaluation (Commercial, Technical, Financial)

Check whether tenders are in compliance with the invitation to tender (ITT)

Arithmetical checks on cost components

Non compliant tenders are considered in accordance with conditions set in ITT

All tenders aligned on a like for like basis and compared with each other and with the pre tender
estimate

Analysis undertaken of resource levels committed by each contractor on the merits of the team
proposed

Post tender clarifications / interview / meetings with selected tenderers

Tenders scored against the pre determined selection criteria.

697. Contents of a Tender recommendation report

Bid history

Summary of tender returns

Aligned tenders

Scoring of tenders against technical & commercial criteria

Recommendation on what tender represents overall best value for money

Outline of future actions and contracting approach

698. How would you differentiate between procurement & Contract? - Procurement is the entire selection
process. Contract is a covenant.
699. How do you determine in a bid under Health and Safety / CDM terms whether they are good? What
should they be asked to submit? H & S Policy, H & S Procedure, CV of safety officers, H &S Record
of past years.
700. Tenders are returned with fully priced bills, method statements etc, how do you assess them? How do
you recommend?
701. How do produce a preliminary estimate? What about unforeseen items?
702. How much contingency do you allow in a tender? What is the basis of calculating it?
703. What is an appropriate number of tenderers? What is the right way of assessing number of tenderers
704. Tendering - Alternative 1 - what does it say Why do we have these alternatives and which is fairer
Alternative tenders are to encourage contractor ideas and innovations and proposals to increase value
for money of client.
705. How would you go about estimating demolition works Are demolition works based on m rates

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706. What is the mechanism for TPI calculation? What is the difference between Building Cost Index (BCI)
and tender price index (TPI)
TPI is calculated as follows. Divide the BOQ into different packages (like excavation, substructure etc).
In each package, take the highest amount item and re-calculate the amount by changing its rate with
standard schedule rate for that item. Now new amount is available for that item in the package. Do the
process for second highest amount in the package. Repeat the process till at least 25% of rates in that
package is within existing schedule of rates. Repeat the process for other packages. Finally we get a
new contract price It is the tender price index.
707. Does a tender always represent actual cost
708. What are the 3 main items within a rate build Labour, Material, Plant
709. What cost checks would you be doing during the feasibility stage
710. What cost checks on materials would you be doing
711. What do you understand by the terms of GEA, GIA and NIA All these are defined by RICS Code of
measuring practices.

GEA Gross external area

GIA Gross internal area

NIA Net internal area

712. Give some examples of when performance specified works may be required and when they might not?
What is a Performance Specified Road Maintenance Contract?
The traditional way of contracting road maintenance is based on a schedule of unit prices and
estimates of quantities. The works to be performed are specified in the contract and payments are
based on executed measured works. By contrast, a Performance Specified Road Maintenance
Contract defines the minimum conditions of road, bridge, and traffic assets that have to be met by the
contractor. Payments are based on how well the contractor manages to comply with the performance
standards defined in the contract, and not on the amount of works executed. The nature of the contract
allocates responsibility for work selection, design and delivery solely to the contractor. Hence, the
choice and application of technology and the pursuit of innovation in materials, processes and
management is all up to the contractor. This allocates higher risk to the contractor compared to the
traditional contract arrangement, but on the other hand may increase the contractor's margin where
improved efficiency and effectiveness of technology, process, design or management reduces the cost
of achieving the specified standards.
To define these standards is rather a challenging task. The aim is to minimize total systems cost,
including the long-term cost of preserving the roads as well as the cost to the road user. To avoid
ambiguity, performance standards have to be clearly defined and objectively measurable.
713. Contractor Design Portions (CDP)
Contractors designed portion supplement - This supplement is used in JCT 98 contracts where design
is to be carried out by the main contractor or one of his domestic subcontractors, and design
responsibility is to be transferred from the architect or engineer.
Note that the underlying principle in the JCT 98 Standard Form of Building Contract is that the works
will be designed by an architect commissioned by the employer. This supplement therefore only
provides for a part of the work to be designed by the contractor within this overall framework. Typical
examples are piled foundations or a steel frame. The supplement is not intended to be used to turn the
contract into a design and build form.
For this supplement there are three additional documents which must be signed:

Employers Requirements for the contractors designed portion (CDP);

Contractors Proposals for the CDP;

Analysis of the portion of the contract sum to which the CDP relates.
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These documents must be produced at the time of tender. It should be emphasised that the architect
retains overall responsibility for the design, and co-ordinates the CDP.
Contractor designed work should not be confused with performance specified work. The basic
difference is that performance specified work does not generally require the contractor to carry out
detailed design, merely to choose components which fulfil a particular performance specification.
Typical examples include pre cast concrete plank floors, trussed rafters and parts of services
installations. The contractor does not need to provide details of his proposals for performance
specified work until after the contract has been awarded, and the costs for this work will be provided
within the priced document.
714. Design Portion - Contractors Designed Portion (Taken from JCT Contract 2005 with quantities)
Where the Works include a Contractors Designed Portion, the Contractor shall:

in accordance with the Contract Drawings and the Contract Bills (to the extent they are relevant),
complete the design for the Contractors Designed Portion, including the selection of any
specifications for the kinds and standards of the materials, goods and workmanship to be used in
the CDP Works, so far as not described or stated in the Employers Requirements or the
Contractors Proposals;

comply with the directions of the Architect/Contract Administrator for the integration of the design
of the Contractors Designed Portion with the design of the Works as a whole, subject to the
provisions of clause 3.10.3; and

in complying with this clause 2.2, comply with regulations 11, 12 and 18 of the CDM Regulations.

715. Difference between Joint Venture and Consortium

Joint ventures - organisations remain independent but set up a newly created organisation jointly
owned by the parent companies. It is an entity formed between two or more parties to undertake
economic activity together. The parties agree to create a new entity by both contributing equity, and
they then share in the revenues, expenses, and control of the enterprise. The venture can be for one
specific project only, involves no equity stake by the participants, and is a much less rigid
arrangement. Legal agreement exists between parties.
Consortia - two or more organisations in a joint venture arrangement focused on a particular venture or
project. A consortium is an association of two or more individuals, companies, organisations or
governments (or any combination of these entities) with the objective of participating in a common
activity or pooling their resources for achieving a common goal. Two or more companies who agree
help each other and not to compete with each other in order to achieve a common goal. Each
company remains independent.
Each participant retains its separate legal status and the consortium's control over each participant is
generally limited to activities involving the joint endeavour, particularly the division of profits. A
consortium is formed by contract, which delineates the rights and obligations of each member. Not
indented for a single legal entity. Consortium members do not have a joint interest in the venture
(project) and do not share the profits / losses and do not have any duty to other parties of consortium.
716. What are the key criteria for the selection of tenders?
717. Is the QS able to provide litigation / arbitration support?
718. What is a Development appraisal? What can it be used for? What role does the QS have in a
development appraisal?
719. What procedures do you as a QS carry out during the tender stage?
720. What are the incentives for keeping costs down?
721. What would you ask for in a first stage tender?
722. What happens with errors in a first stage tender?
723. How would you go about producing a preliminary estimate for a leisure complex?
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724. Where would you get the rates for such an estimate?
725. What level of contingency would you include at this stage?
726. What level of contingency would you include at a more developed stage?
727. Suppose your contingency fund was not sufficient and the project ran over budget, the client is angry
with your estimate, what remedy would he have? Check it first. Admit it if there is a mistake. Explain
to client to explain the steps taken to avoid such mistakes in future. Do VE exercise to save money.
Cost saving measures. If client is still not happy with it, allow him to claim under the PI Insurance.
728. Apart from construction cost, what would you include in a cost plan?
729. What are the factors that affect cost?
Cost considerations- Design Factors (Plan Shape ,Grouping, Height, size of Bldg, Circulation space,
cost of major Bldg elements& Site Factors (Access & frontage, roads & car parks, Fences & walls,
Services, Works on site, area @bldgs.
730. What would you do if you found errors in a contractors tender?
731. What are the essential items, statements etc. required on a Form of Tender to be returned by a
tenderer?
732. What do you do, or what do you look for when evaluating a tender?
733. What additional documents / information would you normally want returned to evaluate tenders?
734. When preparing contract documents, what are some typical ERs or restrictions imposed by the
employer on the contractor?
735. Would you have any idea what percentage of the total cost of M&E installations might be in an office
project?
736. When preparing an estimate for reinforced concrete in an RC framed building, what sort of allowance
would you think of including if you had no help from an Engineer (Kg / m)?
737. Did you work in selection of main contractor?
738. Have you carried out estimation? How much does it cost to build something?
739. What differences in the form of a building from one that is air-conditioned to one that is not?
740. Why is the experience of the main contractor important? What would you look for?
741. Why would you need experience in refurbishment?
742. How would you procure the Main contractor if you have already appointed a design team?
743. What is the process? Who does what in terms of trade contractors?
744. Assist firm in bench marking for office building what would you do?
745. What is meant by Prime contractor in MOD Contracts? A prime contractor is one having overall responsibility for the management and delivery of the
contracted requirements, on time, within budget, and fit for the purpose for which it was intended,
including demonstrating that operating cost parameters can be met.
746. Four stages of procurement process of MOD Prime Contracting

Invitations for expressions of interest

Pre-qualification questionnaire

Invitations to tender

Preferred bidder and contract award

747. Difference between Prime Contracting and other forms of procurement

Involvement of Prime Contractor at early stages

Selection principles are based on Partnering concept.

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Terms and conditions reflects Fitness of Purpose

Integrated Project Teams (Harmony between Construction Industry and MOD)

748. What are the factors that affecting the selection of Prime Contractor Project Management
arrangement.

Capability,

Technical

competence,

Financial

standing,

Supply

chain

749. What is a PFI? What contractual arrangements are in place in a PFI? (Private Finance Initiative)
It is the way of involving the private sector in public sector capital spending. Thru PFI the objective is to
generate greater value for money and transfer risk to private sector.
Contractual Arrangements: Built, operate, transfer (BOT), Built, own, operate, transfer (BOOT), Built,
own, operate (BOO), Design, built, finance, operate, (DBFO),
750. What is single source procurement? Why it is required?
751. What are the main contents of the tender documents? - Instructions to tenders, Form of tender, COC,
SOPR, Drawings, Specifications, BOQ, COSC (If applicable)
752. Time limits & other details of a typical tender process.

Issue of addenda by employer Not less than 5 days prior to due date.

Request for clarifications from contractor Not less than 10 days prior to due date.

Submission time No latter than 12.00 Noon of due date

Number of submissions Original + 3 copies (Written by ORIGINAL / COPY )

Tender should be submitted at office. Receipt with time & date should be given by employer.

Form of tender should be signed by authorised person. Each page of FOT to be initialled by him.

If discrepancy is found, amounts inserted in words will get preference over the figures.

A certified Board Resolution of tenderer or a Power of Attorney should be attached authorising the
person signed the FOT.

BOQ should be completed by indelible (that can not be erased) ink. First page of BOQ to be
signed and all subsequent pages initialled by authorised person.

Tender bond (5%) to be submitted with 90 days validity.

Validity of tender for 90 days.

Procedure to submit alternate tender along with original tender.

Tenderers should attend post tender meetings at his own cost.

Employer is not bound to accept lowest tenderer or any tenderer or inform any reason for the non
acceptance.

Form of Tender require, if accepted, the contractor start the work within 7 days.

753. Compilation of tender documents.

Instruction to tenderers (+ Form of tender bond, form of agreement, Confirmation of site visit)

Form of Tender.

Conditions of contract (+ Form of advance payment bond, form of performance bond etc)

Schedule of Project requirements

Specifications

Drawings

Bill of Quantities

754. What is the meaning of Mutatis Mutandis (In comparing cases) making the necessary alterations
(Latin) Ref Oxford Dictionary.
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Mutatis mutandis, Latin literal meaning "with those things having been changed which need to be
changed" or simpler "the necessary changes having been made". The term is used when comparing
two situations with a multiplicity of common variables set at the same value, in which the value of only
one variable is allowed to differ"all other things being equal"thereby making comparison easier
(wikipedia)
If subcontractors are payments are on a mutatis Mutandis basis, they will get payment when the main
contractor is paid.
755. Attachments with Instruction to tenderers Format for Tender bond, Form of Agreement, Confirmation
of Site Visit.
756. Additional documentation with a tender submission.

Preliminary programme on a weekly time scale

Proposed organisation chart for the Works

Name & qualifications of proposed key personnel for Works.

Evidence of relevant experience of tenderer.

Quality Assurance and Quality Control Manuals

Name and address of insurance company with whom insurances are to be placed.

Detailed method statement for the works.

List of proposed subcontractors and suppliers.

Health & Safety Policy Statement.

Dubai Municipality Trade Licence copy

Completed Confirmation of Site Visit form.

Tender bond.

If applicable, JV details and who will act as the leader.

757. What sources of information would you use when pricing a job?

In house historical price data.

From subcontractors / suppliers

Deriving from first principles (Material, labour, plant, Overhead Charges)

BCIS / BMI or other cost indices

Price Books (Eg. Spons Price book)

758. What are Contractors Proposals? Mainly in (1) Design and built contract (2) In JCT, contractors
proposal for contractor design portions (CDP)
759. Would you be entitled if NIL was inserted in the contract for liquidated damaged? What if it was left
blank? Nil means the client do not have intention to claim an LD for the delay. If it is left blank, then
the client can pursue un-liquidated damages if they wish to do so.
760. Can the client still deduct LD even though he does not incur any loss Yes, provided the calculation is
not deemed a penalty, but a genuine pre estimate.
761. What will happen to LD if the contractor gets an EOT from employer The employer can not apply the
LD. The contractor gets a new completion date.
762. Can a QS deduct LD from the valuation? No. The QS along with other team members of the project
should advise the client of the situation with regards to LD, but can not actually deduct it. This is
clients responsibility.
763. What are the Employers Requirements? (ER)
764. D&B is the best route for refurbishment, what do you think?
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765. How would you present your argument against D&B for refurbishment?
766. What types of contract are non-adversarial? NEC3, PPC 2000, Partnering
767. Is management contracting adversarial?
768. If the works are valued at Dhs. 20 million, how long would it take to produce a BQ?
769. What is meant by tender table documents? The one set of tender documents are kept with employer
for reference purpose.
770. What documents would you expect back from a contractor in a tender?
771. What would a Contract Sum Analysis consist of?
772. How easy is it to compare contractors tenders?
773. If the lowest tenderer was sent to you by fax on time, is it OK? - No
774. What you will do if there is an error in a submitted tender?
775. How you evaluate a budget prepared by the consultant?
776. What is meant by two stage tendering?
Two-stage tendering is a refinement of management procurement routes, rather than one in its own
right. It is used to appoint a Contractor to a project as early as possible so that their expertise can be
used by the project. The procurement is split into two stages:
The first, pre-qualification stage in which several contractors compete to win the work. At this time
the design will not be complete (although some works packages, if present, may have been
completed). Tenderers submit a price based on the information available and an outline method
statement.
The second stage comprises negotiation with the winning tenderer from the first stage. During this
process, a price is negotiated with the Client to reflect the additional design information now available.
Two-stage tendering allows Clients to appoint a Contractor on the basis of anticipated competency as
well as price. As part of their first stage submission, tenderers will submit programmes, method
statements, preliminaries costs, initial prices for constructing those packages that have been designed
at the time of tendering, and provisional sums for those packages yet to be designed, together with the
percentage margin they seek to earn on them. The second stage of the process encompasses the
competitive tendering of the provisionally-priced packages to subcontractors until the proportion of the
work that has received a fixed price (from either the main Contractor in the first stage, or main
Contractor or package subcontractors in the second stage) is considered sufficient to agree a price for
the whole project. This is generally done when a fixed price for at least 80% of the project has been
obtained.
The major benefits of two-stage tendering when over Traditional single-stage tendering are:

Allows for a quicker start on site than a Traditional lump sum route due to a shorter tender
documentation period.

Quality is controlled by identifying the subcontractors, who may have design responsibilities
(where permitted by the form of Contract used).

Design can extend into the construction period.

Main Contractors can be informed of the required package subcontractors (where known) at the
time of the first stage tender. This helps them to decide if their will proceed to tender for the work.

The second stage price can be converted to a guaranteed maximum price (GMP).

Disadvantages of two-stage tendering:

There can be problems if the design solutions of the work package subcontractors do not meet the
Clients requirements. This can be addressed by early Contractor involvement.
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There is a need for careful coordination of the activities of all organisations. This management
requirement introduced additional cost and risk when compared with Traditional procurement.

Provisional sums are not converted until costs have been obtained late in the project progression.

Standard forms of contract must be adapted.

Two-stage tendering is suitable for the following:

all Clients, including inexperienced Clients;

project with a developing brief;

quality design development; and

where buildability advice is required.

The main aim of two stage tendering is to involve the chosen contractor on the project as early as
possible. It therefore tends to succeed in getting the person before the design is finalised.
The Contractor's expertise in construction methods can thus be used in the Architect's design. A
further advantage is that the selected contractor will be able to start on site sooner.
In the first instance, an appropriate contractor must be selected. This can be achieved by inviting
suitable firms to price the major items of work from the project. A simplified BOQ is therefore required
that will include the preliminary items, major items and specialist items, allowing the main contractor
the opportunity of pricing for profit and attendance sums.
The Contractor will also be required to state their overhead and profit percentages. The prices of these
items will then form the basis for subsequent price agreement that will be achieved through
negotiation.
There are a number of variants of two stage tendering process and it may be used through a
traditional or design & build approach. Typically a stage one contractor is appointed early on in the
design stage on the basis of limited information, with the objective of achieving cost certain and time
certain outcomes for the employer through further negotiation with the preferred contractor. A
contractor for the construction works is entered into at the end stage two once the detailed design,
procurement and planning works is complete.
777. Advantages of two stage tendering (For Client & contractor)

Early involvement of main contractor and their supply chain enables their input in VE and design
process.

Encourage collaborative working atmosphere

Potential for early start on site through enabling works by stage one contractor.

Potential for greater client involvement in supply chain selection.

Reduced risk on price during construction

Potential to transfer greater degree of design and construction risk to contractor

Contractor can help & manage risks at early stage

Costs of abortive tendering reduces

Profitability secured through first stage and cost secured through second stage

Contractor can influence the design

778. Disadvantages of two stage tendering.

If packages are not properly fixed, cost will be high due to a number of provisional items in stage
two

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Additional pre construction cost in the appointment of contractor.

Client is forced to commit the unit rates of contractor before getting a LS amount.

Procurement time is more than a single stage tendering

Contractor may take advantage of the second stage negotiations leading to cost increase

Failure to agree rates at the end of stage two will cause time loss and cost of retender.

779. When contractor submitted a tender, how do you know that their rates are competent?
780. If time is a major factor, what procurement route you will adopt? D & B, Management Contract.
781. What is meant by a term contract? For what type of works it is used?
This is a contract made with schedule of rates for a particular term for small type of works which
contractors services are required for an employer for a certain period of time. (Eg. Piling & Shoring
works, Soil investigation works, Maintenance Works). Advantages are,

Avoid repeated tendering process.

Saves time. Possibility of starting works immediately at site.

Get competitive rates from contractor.

Help the contractor to manage the works for a certain period.

782. What is meant by Serial Contracts It is a term contract with lump sum amount mentioned in it for
typical works for a certain period. (Eg. Install typical portable cabins at different parts of a city as and
when instructed by the Employer for a certain period)
783. Framework Agreement Agreement between an organization and one or more contractors, the
purpose of which is to establish the terms governing contracts to be awarded during a given period, in
particular with regards to price and, where appropriate, the quantity envisaged.
784. What is Performance Specified Works and what is its difference between traditional methods
Traditional ways of infrastructure works are based on schedule of unit rates and estimates of quantities.
The works to be performed are specified in the contract and the payments are based on executed
measure works. By contrast, a performance specified works defines a minimum conditions of
infrastructure works that have to be met by the contractor. Payments are based on how well the
contractor manages to comply with the performance standards defined in the contract and not on the
amount of works they executed. The nature of contract allocates the responsibility for work selection,
design and delivery solely to the contractor. Hence the choice of technology, innovation, material,
process and management is all up to the contractor. This causes high risk for the contractor compared
to traditional contracts. But the margin of profit will be high for the contractor. ( Eg. Performance of roads
should be satisfactory for a period of 5 years after its completion)
785. What is meant by bidding strategies Every time when a contractor get a tender enquiry, he has to
examine and carefully take a decision how they should respond. It is,

Reject the project

Provisionally accept the project.

Add the project to reserve list

Remove a project from reserve list and add current project

Unconditional acceptance

786. Different factors that affect the project (tender) selection by the contractor include,

Client related factors

Type of work

Value of project

Current work load

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Estimating work load

Likely profitability of contract

Location of project

Form of contract

Physical resources to do the job

Identity of Consultants

Time available to tender.

787. Bid = Cost + Mark up. This mark up includes the Risk premium.
788. Different bidding models

The Probability approach

Regression Models

Econometric Models

789. What is tender settlement The process of converting the contractors estimate into a tender bid is
normally called a tender settlement and it is a management activity.
790. Estimators report A summary report prepared by the estimator who prepared the estimate to enable
the management to make informed the decisions about the tender bid. It should have key information
contained in the estimate.
791. Tactical pricing in bidding Also called unbalanced bidding means manipulation of the prices inserted
into the priced bill by artificially inflating some rates and deflating others in order to gain some financial
advantage. Three basic methods are indentified

Front end loading To get good amount in the beginning and to minimise the effects of retention.

Individual loading (item spotting) To maximise the return on the re-measured work (In Bill pf
approximate quantities, the contractor would check the required quantity and it will help him to
identify the item for spotting.

Back end loading In contracts with price adjustments, it will help if the contractor make back end
loading.

792. Purpose of BOQ

For tender comparisons

For evaluating the work done for payments

For estimation and cost planning of QS

For contractors job programming and material ordering

At site - To find our the required quantity to be carried out.

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O.

Project Financial Control & Reporting (3)

793. How do you prepare Cost reports explain the contents (prepared by Engineer) 794. Difference between Cost Reporting & Cost Management.
Cost reporting is making or reviewing records of how money has already been spent. But Cost
management involves making day-to-day decisions on the expenditure of funds
795. What are the advantages the employer gets through cost reporting and at the end of the projects
financial report?
796. Are cost monitoring and cost control the same thing?
797. In a QS perspective, the difference between Cost planning & Cost control

Cost planning is Costs arrived at by him (QS) on behalf of the client (Pre tender stage)

Cost control is Costs arrived at by taking in tenders to construct the building (Post tender)

798. What is being controlled in cost control? Capital cost of building works, professional fees, Finance
charges, Loss of interest on capital used to finance the construction, Cost of running the building (local
taxes, lighting, water, electricity), Cost of refurbishment & alteration, cost of demolition and site
clearance.
799. What items to be included in the cost report of a single stage traditional procurement route

Executive summary (Current budget and forecast, Contingency position, Level of Cost certainty
Agreement of provisional items, Total commitment and expenditure to date, Final account
progress, Contract position, Cash flow position, progress in the period and current financial
position, outstanding information, Major risks or causes of concern)

Next steps and recommendations (Analysis of contingency and risk status, register of approved
variations, summary of provisional sums and its status, Value engineering and its register, Risk
register, Cash flow forecast )

800. Elemental cost control The element refers to a piece of construction in a unique situation in a
building. Most important of all the actual form of construction used does necessarily need to be the
same in every building, but the situation of the element in every building must be the same.
801.

Budget & forecast Budget is an estimated company activity and performance for the coming 12
months period. Once the budget is approved, its figures should not be changed so that it can be used
as a bench mark against which to monitor actual performance.
Forecast is an essential next step further after an annual budget. It is the process by which the budget
is updated in the light of current information in forecast for the remainder of the accounting period

802. Cost & Value Cost refers to the estimated and total expenditure incurred by the contractor on a
specific project, and included all overheads associated with the project. (Net cost of production +
Overheads)
Value is all costs as above plus the margin of profit. Value is the figure paid by the client to the
contractor following interim / final certifications.
803. CVR Cost value reconciliations The monthly assessment by which the income (Value) and
expenditure (Cost) of a project is compared with the initial analysis and anticipated performance. This
is called CVR or Profit and Loss account.
804. How you will establish change control strategy in a project.

Set the main client objectives.

Define the change control procedure.

Documentation process change control log

Monitor the change identify the potential change.

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reconciliation with budget limit

Remedial actions to be taken.

805. What are the sources of information in preparing a CVR

Budget forecast

Subcontractor liabilities

Analysis of BOQ

Plant returns

Risk register

Labour costs

Work certified for payment

Variation account

Agreed claims

Materials received at site

Site / HO Overheads

806. Purpose of Change Control Is to provide a method of assessing and managing change, giving
details of consequent cost, programme and scope effect. Effective cost control procedures enables the
monitoring and reporting of cost changes where they affect the out turn cost and enables the project
team to monitor and appraise programme implications and impact. The client is made aware of the
consequences of a potential change and the effect will have on the overall project.
807. Different elements of cost control.

Set the parameters (Eg. Budget)

Monitor the situation (Eg. CVR)

Action taken (Eg. Cost saving, strict control)

808. Purpose of cost control

To give the client good value for money

To achieve balance of expenditure over various parts of the building

To keep the expenditure within the amount allowed by the client

809. Effective cost control measures to be taken

Proactive risk and contingency management

Implement robust change control process

Management of provisional sums within the budget

Regular cost reporting

810. How the cash Flow for a Client is calculated?

It is by the S - curve method. Assume that in the first third of the total duration time, one quarter of the
total project cost will be spent. In the second third of the duration, one half of the total project cost will
be spent. In the third third of the duration, the remaining quarter of the total project cost will be spent.
It should be noted that in clients cash flow, items other than contractors construction cost to be
included (Eg. Land purchase cost, Local authority fee, Feasibility and management fee, Design and
other professional fee, Legal fee, Finance / interest charges, Marketing charges)
811. How the pre-tender cash flow forecast for the contractor is prepared
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One method is S curve method. Another accurate forecast of contractors outgoings for a project is
based on the calculation of weekly costs. To calculate weekly costs, the estimators rates are linked to
work activities on the project programme, and the total costs for each work sections are divided by the
time allowed.
If we superimpose S curve cash flow of client and contractor cash flow (based on weekly estimate) on
a graph, the net difference is the contractors profit at a given time.
The difference between the gross value forecast and estimated cumulative costs in theory equals
profit. The difference between the forecast of cumulative income and cumulative costs equals
anticipated positive or negative cash flow.
812. How you will establish cost reporting protocol.

Content & format of cost report

Timing and frequency of issue of report

Interfaces with other parties (Eg. Contractor & Client financial teams)

Distribution list

Method of presentation of report

813. Give us an idea on the differences when preparing a cost plan for specification regarding an owner
occupier and a speculative developer.
814. Explain Cash Flow forecasting and monitoring.
815. Explain application of Spreadsheets in quantity surveying.
816. Types of financial reporting systems adopted in a project? Balance sheet, Income statement,
statement of cash flow.
817. How you will implement change control procedures within the contract?
818. How you will establish reporting regimes / protocol?
819. How you will use risk management and analysis techniques while preparing budget?
820. What are controlling and reporting cost in a project?
821. How to control cost effectively during the construction phase of the project.
822. What is meant by Design Risk. How you will allocate it?- The risk associated with potential flaws in the
design of a good or its production and their effect on the project's cash flow. It is also known as
engineering risk.
823. What are the principles of contingencies and risk allowances?
824. How you will use cash flow in financial management?
825. What are the Change Control Procedures in a Contract?
826. Financial benchmarking Performing a financial analysis and comparing the results in an efforts to
assess your overall competitiveness and productivity. Eg. Budget productivity benchmarks
827. Financial benchmarking tools

Income statements, balance sheet, cash flow analysis, financial ratios

Five year industry forecasts

Data to compare the company results with its competitors

KPI based benchmarking

828. Advantages of benchmarking

Understand where cost saving and efficiency gains could easily made.

To understand and compare the company profit levels with industry average

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To identify the scope of growth and how the growth prospects change if business conditions are
adjusted.

829. Different heads of CVR / How to prepare CVR

Contract sum

Gross value of works certified to-date

Gross value of work executed to date

Difference between above two and its explanation

PS adjustments

Variations

Claims

Fluctuations

Retention money held

Any other amount deducted (Eg. LD)

Materials on Site (Value not covered)

830. Different methods to forecast capital cost during cost planning stage

Square foot method.

Cube method (based on volume of building)

Based on functional units (Eg. Number of beds in a hospital)

Approximate quantities

Elemental cost analysis (Eg. Different rates for substructure, roof etc.)

831. BCIS Building Cost Information Services by RICS. It is a centralised data base of cost of materials.
This can be used as a benchmark and used for elemental cost analysis.
832. Purpose of cost control

To give client good value for money (Eg Utilization of PS amounts)

To achieve a balance of expenditure over various parts of a building (Eg. Using different cladding
materials for the faade)

To keep the expenditure within the budget amount.

833. Principles of elemental cost control

834. There should be parameters (Cost limit is divided into different cost targets)
835. There should be method of checking / monitoring (Eg. CVR, Budget monitoring)
836. There must be means of remedial action (Eg. Use different materials, change design etc.)

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P.

Quantification and Costing of Construction Works (3)

837. How does BCIS operate?

Established in 1962, the RICS Building Cost Information Service (BCIS) provides information,
publications, research and consultancy services for the construction and property industries. BCIS
covers capital, maintenance and occupancy costs.
BCIS collates and analyses unique data submitted by members and incorporates material from other
relevant sources. The information is interpreted and made available to subscribers in a number of
online services which brings the very latest BCIS information direct to your desktop.
In addition, BCIS publishes a range of publications and run a number of seminars to keep you up to
speed with the latest building cost information.
A team of specialist consultants also run a number of research projects and provide consultancy.
Many products and services are offered at a special discount rate for RICS members.
838. What are the methods of quantifying and pricing of construction works? Quantification by standard
measurement methods and pricing by tendered rates, quotations, dayworks etc.
839. How to supervise the valuation of construction works in a project?
840. What are the methods of measurement and costing? Different codes of Measuring Practice 841. As a QS what is your role in the negotiation and agreeing the valuation of construction works at
various stages of the project such as the contract sum, construction and final account.
842. Various standard methods of measurements? POMI, CESMM 3, SMM 7
843. What are different types of Pricing Documents? BOQ, Schedule of Rates, Schedule of activities /
works.
844. Defined and undefined PS are coming under SMM7. CESSM 3 explains format for BOQ. But SMM 7
does not give BOQ format. In SMM 7 the quantity should be accurate. In a BOQ, Provisional Sums
should be in the preliminaries.
845. Performance Certificate in FIDIC 99 is same as Defects Liability Certificate in FIDIC 87
846. Defects Notification Period Is the word used in FIDIC 99 for Defects Liability Period.
847. Statement at Completion (FIDIC 87) Contractor should submit this within 84 days from TOC. Final
Statement should be submitted within 56 days from DL Certificate. Within 28 days from the submission
of Final Statement, the Engineer shall issue a Final Payment Certificate. 6 copies of each should be
submitted by the contractor.
848. CESMM3 Four types of rules

Measurement rules Set out how to measure works

Definition rules Sets out meaning of terms used in CESMM 3

Coverage rules Explains what items are included but not specifically stated in the description

Additional description rules States whether additional descriptions are required over and above
standard phases.

849. Structure of BOQ (CESMM3)

List of Principal quantities (This helps the tenderer to make a rapid analysis)

Preamble

Daywork schedule

Work items

Grand summary

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850. Structure of BOQ (POMI)

Rates and measurement clauses

General requirements

Works (Site work, concrete, masonry, )

Dayworks

Provisional Sums

Main summary

851. Purpose of standard measuring systems

To get a universal approach

Pricing for tendering

For post contract financial control

852. If there is no time to prepare a detailed BOQ before tendering, what are the possible options?

Bill of approximate quantities

Ask the tenderer to take quantity from the drawings and specs.

Procurement thru management contracting

Two stage tendering

853. Work classification and coding as per CESMM3

The work classification structure is made up of four levels. First level consists of 26 classes identified
as alphabets A to Z. Most classes are divided into 8 features in the first division identified as 1 to 8.
Classes are again divided into second and third divisions again identified as numbers 1 to 8. If no
phrase is available, it is coded as 0 Eg. E 570 is for Excavation ancillaries; timber supports left in.
Codes are used only for identification.
854. Specific Requirements
Preliminary section of the specification will contain the general contract provisions that the contractor
must comply with such as the insurances that he has to taken out. The specification is a separate
documents and these preliminaries can not be priced by the contractor. They must therefore listed in
the general items of BOQ.
855. Definition of Works All Plant to be provided and work to be done by the Contractor under the
Contract.
856. Method related charges
Amounts included by the Contractor in the General items for his intended method of Working, which is
not proportional to the Quantities in the B.O.Q ie. is not re-measurable, and will be paid in installments
as agreed between the Contractor and Engineer. However, the amount can be varied only in such
situations, where the Engineer specifically instructs to change the method of working the Contractor
allowed for.
Advantages of Method related charges:

Contractor can recover the moneys he spent at the beginning for site establishment.

Contractor can recover his normal overheads (site), if BOQ Quantities get reduced by remeasurement.

Client can easily assess the preliminary items for calculating Prolongation costs on any Time
extensions.

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857. CESMM3 explains three types of charges other than Work related charges

Method related charges

Time related charges

Fixed charges

858. SMM7 In this the BOQ shall be fully describe and accurately represent the quantity and quality of the
works to be carried out. More detailed information that is required by these rules shall be given where
necessary in order to define the precise nature and extent of the required work.
859. Difference between SMM7 and CESMM3
SMM7 is a document for measurement. It does not set out the rules for the production of a BOQ. But
the object of CESMM3 is to set forth the procedure according to which BOQ should be prepared and
priced and the quantities of works should be expressed and measured.
SMM7 requires more detailed items of BOQ (Eg. Excavation is excavation, earthwork support, working
space etc. ) But CESMM3 consider all items deemed to be included in one item.
SMM7 is suitable for building projects (where items are more and quantities ate less) CESMM3 is
suitable for civil engineering works (Items are less and quantities are more)
CESMM3 is based on ICE Conditions of Contract.
860. As per POMI what are the objectives of BOQ

To assist in the preparation of tenders by providing measurement of quantities in a uniform basis

To provide a basis for the financial control of a project, in accordance with the conditions of
contract.

861. RICS Code of Code of Measuring Practice, Fifth Edition 2001 defines

GEA Gross External Area is the area of a building measured externally at each floor level.

GIA Gross Internal Area The area of a building measured to the internal face of the perimeter
walls at each floor level.

NIA Net Internal Area Usable area within a building measured to the internal face of the
perimeter walls at each floor level.

EFA Effective Floor Area Usable area of the rooms within a building, measured to the internal
face of the walls of those rooms.

862. What are the elements of Ground works Strip turf, Remove top soil, Excavate trench, Back fill,
Earthwork support, compact, Concrete, Brickwork, Cavity, Filling, Adjusting top soil out side.
863. Elements of Concrete In-situ concrete, Form work, Reinforcement, Designed joints, worked finishes,
Accessories.
864. What are the elements of Contractors Cost report Amount applied, Amount certified, Amount paid,
VO Status, Pending VOs, Provisional sums, Claims details, Cash Flow chart, Dayworks,
Subcontractors liability statement.
865. Variations Management (Change management)
To successfully incorporate variations in a project, systems need to be established which should be
clearly itemised in all documents and formal contracts. They should also be detailed in the procedures
manuals for each project. Once these steps have been implemented, efficient and controlled
management of the procedures will ensure that very few unexpected variation claims arise.
866. Cost Report Executive Summary

Current budget and forecast

Contingency position

Level of certainty of PS items

Cash flow position

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Final account progress

Outstanding information

Major risks / concern

Contract position

Total commitment and expenditure

867. What is discounted cash flow Cash flow without the retention
In finance, the discounted cash flow (or DCF) approach describes a method of valuing a project,
company, or asset using the concepts of the time value of money. All future cash flows are estimated
and discounted to give their present values. The discount rate used is generally the appropriate
WACC, that reflects the risk of the cashflows. The discount rate reflects two things:

the time value of money (risk rate) - investors would rather have cash immediately than having to
wait and must therefore be compensated by paying for the delay.

a risk premium (risk premium rate) - reflects the extra return investors demand because they want
to be compensated for the risk that the cash flow might not materialize after all.

Discounted cash flow analysis is widely used in investment finance, real estate development, and
corporate financial management. It is very similar is the net present value.

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Q. Contract Administration. (2)

868. Acceptable exclusions in insurance as per FIDIC (1987) Clause 21.4 )

War, hostilities, invasion, act of foreign enemies

Rebellion, revolution, insurrection or military or usurped power.

Ionising radiation or contamination by radio activity

Pressure waves by aircraft

869. What is the remedy if the contractor fails to provide insurances (Clause 25.3 of FIDIC 87) The
employer may take insurances, pay premium and deduct the amount so paid as a debt due from the
contractor.
870. What is meant by Subrogation in insurance?
Right of insurance company (generally) to sue the person who has caused defect in order to recover
the amount the insurer has had to pay to the policy holder.
Subrogation is the right of the insurer to sue whoevers responsible for causing loss to the insured. If
New India Assurance has insured my house and my neighbour has through his negligence caused
damage to my house, NIA will of course pay me up but will then subrogate the neighbour.
Since you now know what subrogation is, you'll see why and how important the waiver of its right is!
Assume that because of some design directive you gave a designer on a project design the design
gets to be faulty. Although to you designer is liable, in designer's insurer's eyes you are the one who's
caused designer to err, because of which he can subrogate you! Any/every sensible client should first
insist on the incorporation of a waiver of the insurer's right to subrogate... and this subrogation waiver
right should naturally extend to the client's agents like PM, etc.
871. Insurance against loss of LADs (Liquidated and Ascertained Damages)
This is straightforward. Anyone with potential exposure to LDs and other damages (e.g. Shutdown
damages in cases of industrial plants) can opt to buy insurance. Whether such cover would be
available is another matter and would depend largely on the nature of exposure, reputation and quality
of the chap seeking the cover, reputation of the entity whos likely to impose LDs, etc.
872. Net contribution clause.
This is in relation to PI policies. A net contribution clause aims to limit the proportion of any loss or
damage payable to the consultants fair share (of culpability). If a building project goes wrong and
loss is incurred, it is often due to the fault of various parties, who are all jointly liable. Any of these
parties can be sued by the party suffering loss, and each will be 100% liable for the damages,
whatever their share of blame. If more than one party is sued, the parties can claim contribution from
each other also, in some countries. The intention of the net contribution clause therefore is that the
consultant will only be liable for his proportion.
873. Cross Liability Clause
Cross liability is the liability incurred by an insured because of him damaging another insured when
both insured are covered under the same liability insurance policy. Each insured will then be treated as
a discrete entity by the insurer under a cross-liability clause.
Suppose that a large Development had bought an umbrella CAR policy for the whole of the projects,
covering all contractors and while working concurrently had, say, a culvert slab cast by infra contractor
crashes and damages a cable laid by building contractor, the cross-liability extension would kick in
because the same CAR policy covers both contractors, and both would receive compensation from the
insurer for losses suffered by each of them individually.

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Clause 23.3 of FIDIC says The insurance policy shall include a cross liability clause such that the
insurance shall apply to the contractor and to the employer as separate insured.
874. What are the clauses in insurance related to asbestos and terrorism? CAR do not cover loss due to
terrorism or any electronic data loss.
875. Deductible The first amount of claim not covered in an insurance.
876. First Party Insurance A policy where payment is first made to the insured, not to a third party. Most
material damage insurances are first party type.
877. Negligence Breach of duty to take reasonable care.
878. No fault compensation Compensation which is available without need to prove fault.
879. First Loss in insurance An alternative to full value insurance which may or may not be available in
particular circumstances. If property is worth 20 million; but the possibility of loss exceeding 10 million
is remote, insurance is arranged for first loss basis for 10 million.
880. What are Employers risks

War, hostilities, invasion, act of foreign enemies

Rebellion, revolution, insurrection or military or usurped power.

Ionising radiation or contamination by radio activity

Pressure waves by aircraft

Riot Commotion or disorder.

Loss or damage due to employers occupation

Loss or damage due to design given by employer

Any forces of nature which an experienced contractor could not foresee.

881. What an Engineer should do after issuing a suspension of the works (Clause 40.2)

Determine an EOT to which the contractor is entitled

Determine the amount which should be added to contract price.

882. What should the contractor do, if the employer do not take any action, after the 84 days time period of
suspension Contractor may give notice either to consider the suspended part of the works as an
omission (as per clause 51) or in case of whole of the works to consider it as a default of the employer
(as per clause 69.1). In both case the contractor should give 28 days notice period.
883. Damage and Damages Damage means defects. Damages means Money recoverable in law as
compensation for loss or injury.
884. Discharge letter A letter submitted by the contractor along with final account statement to the
employer confirming that the total of the final statement represent full and final settlement of all monies
due to the contractor under the contract.
885. Tort A wrongful act or omission independent of contract in respect of which damages may be
awarded.
886. Different types of certificates issued by engineer in a contract

Interim payment certificates

Taking over certificate

Defects liability certificate

Final certificate

887. On what grounds a Final Certificate can set aside even if it is conclusive

If certificate is not issued in correct form at correct time or by correct person.

If some one who do not have authority issued the final certificate

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If fraud or collusion between certifier and one of the parties

If employer has improperly pressurised or influenced the certifier.

888. Value management Is a process to achieve value for money (VFM) and to achieve clients
requirements.

It is a systematic process

Concentration on value (utility) not cost.

Removal of unnecessary cost without reducing value (utility)

889. Different elements of value management

Value planning

Value engineering

Value audit (assessment)

890. Items in a valuation which are not under retention deduction

Loss and expense claims

Fluctuations

891. Value Engineering

This is an exercise to get better value for a project by decreasing the costs, increasing profitability,
improving quality, saving time and using resources more effectively. (SAVE International)
892. Effects of Substantial completion (Issue of TOC) in a project.

Engineer issues TOC

Beginning of DLP.

Relieves the contractor from insuring the project. (Not as per FIDIC Refer clause 21.2 of FIDIC)

Release of 50% retention.

Contractor is no longer liable for LD.

893. Letter of credit is a guarantee of an automatic payment by a purchaser in advance of receipt or

acceptance of goods supplied to him by a supplier. If there is defect in the goods the only option is
litigation. Purchaser opens LC. Supplier provide bill of lading to claim the payment.
894. Difference between Damage and Damages Damage is the defect in a structure. But Damages is the
money recoverable in law as compensation for loss or injury.
895. What is deductible in insurance The first amount of claim not covered in insurance. Also called as
excess.
896. First Party Insurance A policy where the payment is first made to the insured, not to the third party.
Most material damage insurances are first party.
897. First loss in insurance An alternative to full value insurance which may or may not be available in a
particular circumstance. If a property is worth 20 million but possibility of loss exceeding 10 million is
very remote, insurance may be arranged for first loss basis for 10 million.
898. No default compensation Compensation which is available without need to prove a fault.
899. Negligence Breach of a duty to take reasonable care
900. Subcontracting
A contractor may have or be in the process of creating a contract with an employer to carry out certain
works. He may consider that part of the Works is best carried out by another contractor. In that case
he will wish to sub-contract that part of the Works to the sub-contractor. The sub-contract is then
intended to create a contractual relationship between the two parties, in order to allow the contractor to
perform part of his obligations under the main contract.
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Insofar as the sub-contract is intended to create legal relations, it is subject to the same principles
which apply to the formation and operation of any contract. A formal Agreement may not always be
executed particularly if there is some urgency or disagreement as to the terms.
Sub-contracting arrangements introduce another element of complexity. This arises from the
mechanisms which contractors need to adopt in order to transfer to sub-contractors appropriate parts
of the risks which they have accepted under the main contract. In addition the contractor must ensure
that the creation of the sub-contract does not itself create other risks outside their control.
The problems which arise from this added level of complexity inevitably requires examination of the
relationship between employer/contractor/sub-contractor, as well as examination of the terms of both
main and sub-contracts. Some of the more common problems are examined below.
901. Effect on Contractor of Subcontracting
The general principle is that a contractor cannot sub-contract performance of any part of the Works
without the consent of the employer, unless the contract expressly states otherwise. This applies
equally to a sub-contractor. He cannot sub-sub-contract performance of part of the sub-contract works
unless the contractor consents, subject to the terms of the sub-contract.
This arises from the nature of contract. The contractor (or sub-contractor) is employed for his
experience, character and capability. He is required to perform a personal service.
If the contractor does sub-contract part of the Works without consent, then this may amount to a
repudiatory breach of contract. The employer will then be discharged from further obligation under the
contract including payment, since the contractor's substituted performance will amount to nonperformance. The employer will also be entitled to damages for the repudiatory breach. This applies
mutatis mutandis to the contractor and sub-contractor.
The commercial basis of this principle is that the employer values the financial standing, technical
capability and trustworthiness of the contractor. This is particularly the case where the contractor has
been chosen from a list of contractors who have pre-qualified for instance.
This general principle is based on the inference of personal performance being essential to the
contract. In the absence of express terms, it may be that the nature and circumstances of the contract
will prevent such an inference. In a decided case it is stated that the question whether personal
performance is essential to the contract, depended on the common intention of the parties, as inferred
from the nature of the services, the other terms of the contract and all the circumstances of the case.
In that case the employer had selected the contractor for his particular development expertise, in
particular that of the principle negotiator. The contractors purported to sub-contract the work. Held that
the parties envisaged a development based on close personal co-operation. The contractor had
repudiated the contract by failing to perform their planning and instruction function.
902. Importance of incorporation of Main Contract Terms in subcontract
If a contractor is to avoid introducing additional risk in sub-contracting the performance of his
obligations under the contract, he must take particular care to ensure that the terms of the sub-contract
are consistent with those of the main contract. He should ensure that the relevant terms of the main
contract are incorporated into the sub-contract, but additionally that the administrative operation of
both forms is consistent one with the other.
Incorporation of certain terms of the main contract by reference may create substantial risks for the
contractor. In Smith and Montgomery -v- Johnson Bros & Co Ltd (1954) the sub-contractor was
required to carry out tunneling works "To the dimensions and specification as set forth in the main
contract."
The Engineer stopped that main contractor tunneling in accordance with the contract. Although the
contractor could claim an extension of time, he was not entitled to additional payment under the
particular terms of the contract. However, the sub-contractor was entitled to damages because the
particular power to stop work without incurring additional costs was not incorporated into the subcontract.
Even if the sub-contractor has agreed to carry out the Works in accordance with the terms of the main
contract, this does not give the contractor the equivalent powers under the sub-contract as the
employer has under the main contract. In Chandler Bros Ltd -v- Boswell (1936) the employer had
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power to have the contractor dismiss the sub-contractor. This term of the main contract was not
incorporated into the sub-contract. Although the sub-contractor was aware of the term when entering
into the sub-contract, the court would not imply a term that the sub-contract would come to an end with
the exercise of this power.
The Sub-contractor's knowledge of the main contract terms is not enough to imply a term that he is
bound by them. Thus if the contractor becomes entitled to payment only by a certifying officers
certificate, the absence of such a certificate will not entitle the withholding of payment to the subcontractor if the sub-contractor has completed the work, and if there is no equivalent provision in the
sub-contract.
903. Different types of Subcontractors

Domestic subcontractor (Who is selected by main contractor. There is no privity of contract

between employer and subcontractor)

Works Contractor (Subcontractor in a management form of contract) In Management Contracts

Approved subcontractor (Whose details are furnished by the consultant in the tender. There will be
a list of subcontractors. After the subcontract is awarded they are like domestic subcontractors)

Named Subcontractors (Employer invite tenders, select and instruct the main contractor to enter
into a subcontract with this named subcontractor, once subcontract is made, it will be a domestic
subcontractor)

Nominated subcontractors (Employer fully involved in the selection process. Select at early stages
of the project to get its professional expertise for design. Contractual responsibility to employer.
Formal link between subcontractor, engineer & employer) (JCT)

Nominated SC- Nominated by Employer and the amount included as Provisional sums in the BOQ and
the Main contractor can add any other charges & Profit to it.
Named SC - Named by Employer but no amount is included as Provisional sums. It is in effect similar
to a Domestic SC. A Named subcontractor's price for a section of the Work may be asked by the
Employer to be included in the BOQ with the main contractor's OH&P. There will be no chance of
negotiation and that is how it differs with Domestic SC.
904. How profit and attendance cost to main contractor is adjusted while adjusting the PS The profit will be adjusted as per the final PS sum. But the attendance cost of main contractor will not
be adjusted unless there is a change in scope in nominated package. Eg. If the PS was 10 million for
installation of two lifts. The main contractor quoted 5% profit and 500,000 for attendance. Later after
the adjustment PS has increased to,

11 Million for 2 lifts Profit only will be adjusted as per 5%. No change in attendance cost

11 Million for 3 lifts Both profit and attendance cost will be adjusted.

905. Types of Subcontract Relationships

Under the standard forms there are two broad categories of subcontract relationship: firstly, those
where the rights of the Subcontractor are largely determined by a third party, as in the case of a
nominated subcontractor; and secondly, those where no outside control is exercised, and the
subcontractor is entirely dependent on the main contractor for the proper operation of the subcontract,
subject to the right to arbitrate. In this category are the so called domestic subcontracts.
The Domestic subcontract is a direct contract between a specialist sub-contractor and the main
contractor.
A form of letting sub-contracts whilst giving the Employer some choice is where the main contractor is
given a list of names of sub-contract companies to whom he may go for that package of works.
A Works contractor appears under management forms of contract. The main contractor is the
management contractor. He will not carry out any work himself, he will simply manage the contract. All
sub-contracts are therefore complete packages called works contracts which are managed by the
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main contractor. In theory the sub-contract packages are let as required to meet the design and
contract programme - the best combination of all sub-contracts should be achieved. In many cases the
contract is fragmented and the work reduced to small packages i.e. pipe work, ductwork, insulation,
plant. It can result in a fast-running and also a smooth running contract.
A further approach is the Named sub-contractor. The employer has full involvement in inviting tenders,
selecting those who will tender, selecting the named sub-contractor and instructing the main contractor
to enter into the sub-contract with that company. Once the named sub-contractor and main contractor
enter into their contract the employer has no further dealing with that sub-contractor, he becomes a
totally domestic sub-contractor.
Nomination is means of sub-letting sections of the work allowing the employer or his professional team
full involvement in selecting the individual company early, using the sub-contractors expertise for
design, co-ordination etc. This in turn gives to that sub-contractor certain security regarding payment
and information throughout the contract.
The reasons for nomination are:

The employer selects the firm to be the nominated sub-contractor.

The employer is able to choose which company he wishes to use and that decision does not have
to be based on price.

The timing of the involvement and appointment of the sub-contractor is left to the employer to meet
his requirements.

The nominated sub-contractor can be involved early and so his design expertise and his
knowledge of the contract and co-ordination of services can be utilised.

The sub-contractor is made part of the contracting team being fully involved, if required.

Clear contractual liability is established providing a clear line of responsibility to the employer.
(JCT)

By introducing formal links between the sub-contractor and the consulting engineer, architect, QS
and employer time is saved, there are no long chains of correspondence and quick action on price,
design, programme, variations etc. is established. (JCT)

By establishing direct links and involvement delay can be prevented on the project. (JCT)

The principal features which are usually found in nominated subcontracts ( but not always) are:

the provisions for extensions of time, which reserve to the architect/engineer the power to fix a
revised period or periods for completion of the subcontract works;

the right of the subcontractor to use the contractors name in arbitration proceedings (subject to
provision of such indemnity and security as the contractor may reasonably require);

the requirement that the architect must issue a certificate in writing certifying the subcontractors
failure to complete the subcontract works within the stipulated time, before the contractor may
claim reimbursement of any loss suffered by reason of the delay;

the provisions for reimbursement of loss and/or expense, which reserve to the architect/engineer
power to ascertain the subcontractors entitlement;

the provision for the architect to certify practical completion of the subcontract works;

the provision for the quantity surveyor to value all variations required or sanctioned by the
architect/engineer;

the provision for payment, which reserves to the architect/engineer the power to determine the
value of work included in Interim Certificates;

the provision for determination of the subcontractors employment in the event of default by the
subcontractor, which must be exercised only if the architect/engineer so instructs.

906. Employers responsibility with respect to nominations / nominated subcontractors

To nominate a subcontractor on time

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To make direct payment if main contractor delay it.

Nominate another subcontractor if the first NSC fails to perform

Appoint another NSC if contractor has reasonable objection to appoint the first one.

907. Responsibility for Performance in a subcontract

The general principle is that the contractor is responsible for performance of his obligations and cannot
excuse his breach by reference to having sub-contracted that part of his performance. In a case it was
stated that it is the main contractor who contracts with the sub-contractor and it is he, not the
employer, who, as between himself and the employer, takes the risk of non-compliance by the subcontractor with his obligations.
Defects Liability - The contractor is responsible for performance of all his obligations under the
contract. He can delegate performance but not responsibility. This is of course subject to the express
terms of the contract.
Subcontractors Design - A subcontractor will be liable for any design he contracts to produce if that
design subsequently proves to be faulty. The subcontractor will, in the absence of an express
provision, be liable in contract for any failure to produce a design fit for its purpose and in tort a
subcontractor will be liable for any breach of a duty of care to use all reasonable care and skill. The
clauses for fitness for purpose and subcontractors reasonable care and skill to be clearly specified.
Where design does arise expressly in construction contracts, the standard of design duty is normally
set out, and this usually takes the form of an undertaking by the designer that he will exercise all
reasonable skill and care.
Even where there is no express design provision, if as a matter of fact design has been provided as
part of a contract for the provision of work and materials, certain terms will be implied into the contract
relating to the sufficiency of that design.
A main contractor may in some instances have no design liability, but the design may rest with the
subcontractor Norta Wallpapers (Ireland) Ltd-v-John Sisk and Sons (Dublin) Ltd (1977). A nominated
subcontractor was appointed to supply and erect the superstructure of a wallpaper factory. The design
proved faulty and the court held that in the absence of an express term in the main contract the main
contractor did not accept responsibility for the design. It was not reasonable to imply into the main
contract a term that the main contractor accepted responsibility. The subcontractor was nominated and
the main contractor was not required to check the design because an engineer had been employed by
the employer for this purpose. (This is under JCT only)
908. FIDIC definition of subcontractor (Clause 1.1 ) any person named in the contractor as a
subcontractor for a part of the works or any person to whom a part of the works has been sub
contracted with the consent of the engineer
909. FIDIC definition of nominated subcontractor (clause 59.1 ) All specialist executing any work or
supplying goods, materials, plant or services for which provisional sums are included in the contract
who may be selected by employer or engineer
910. Two important clauses required in a nominated subcontract as per FIDIC.

Clause that will indemnify the contractor from all claims, proceedings, damages, costs etc. by the
employer due to any failure by subcontractor to perform its obligations.

Clause to indemnify the contractor from and against any negligence by the nominated
subcontractor or its agents against and misuse by him of any temporary works.

No need to appoint a nominated subcontractor if the main contractor has a reasonable objection.
911. Options if a main contractor refuses to make a subcontract with a nominated subcontract

Nominate another subcontractor.

Omit the subject work from main contractor and award a direct contract to a subcontractor.

Seek more favourable terms with nominated subcontractor.

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Indemnify the main contractor against any liability he might suffer from this subcontract.

Advise the main contractor to do this works as a variation.

912. Nominated subcontractor is liable for the design he prepares for the Works. (JCT)
913. SCL Society of Construction Law: Delay and Disruption Protocol (October 2002)
914. Purpose of EOT

The benefit to the contractor of EOT is only to relieve the contractor of liability for damages for
delay

The benefit to the employer is that it establishes a new contract completion date and prevent time
for completion of the works becoming at large

915. How a request for an EOT to be assessed?

The event should be one for which an EOT is permitted under the contract.

Timely notice has been given by the contractor.

The event is likely to cause delay and the effective items of work are on critical path.

Contractor made all his efforts to mitigate the effects of delay

916. What is critical path

The consecutive sequence of activities in a project whose cumulative time requirements determine the
minimum total project time. The longest path through the network of identified and logically sequenced
a construction activity that establishes the minimum over all project duration. Delays in a CP activities
delay the entire project if other steps are not compressed.
917. Critical Path Method (CPM) / Critical Path Analysis (CPA)
It is the process of deducting critical activities in a programme by tracing the logical sequence of tasks
that directly affect the date of completion. It is a management technique that determines a projects
critical path.
918. Culpable Delay and Excusable Delay Culpable delay is Contractors delay (No EOT). Excusable
delay is Employers delay (EOT allowed.)
919. Milestones Sections in a project that should be achieved on particular dates.
920. Critical path methods

As planned projected.

As built collapse network

Window analysis (A small window is taken out of as built programme to analyse)

921. Concurrent delay (5 elements)

Two or more delays caused by different parties occur independently of each other, but during the
same period and it affects the critical path. Delays absorbed by floats are not considered as
concurrent. Only delays that extend completion can be considered as concurrent.
This will occur either by (a) Multiple impacts to a single activity or (b) Impacts to two or more critical
paths by different parties.
Example Ceramic tile work was in critical path. Employers supplier delayed the supply for one week.
At the same time contractors workers were on strike for the same week.
922. Concurrent delay analysis - The analysis is done as follows.

Allocation of Risk Risk allocation has been decided in favour of contractor and he should get
benefit of a full extension due to relevant event.

The But for argument

The Dominant Cause argument Engineer to decide which is the dominant cause of delay.

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If the contractor incurs additional costs that are caused by both employer delay and contractor delay,
then the contractor should only recover compensation if it is able to separate the additional costs
caused by the employer delay from those caused by the contractor delay. (SCL Protocol)
923. Disruption of the Works Is a disturbance, hindrance or interruption to the contractors ability to
complete the works or it is reduction in the actual productivity of contractors labour due to an action or
omission of the employer, but for which an EOT is not sought.
924. What is meant by causal link in delay claims In all delay claims the contractor should prove that but
for the event giving rise to the claim, the contractor wouldnt have suffered the loss. The loss must be
seen to be naturally and directly arising out of that breach. This direct link is known as causal link
925. Difference between Delay and Disruption
Delay is lateness (Eg. Delayed completion equals late completion). But Disruption is loss of
productivity due to some disturbance or interruption. The disruptive work is the work that is carried out
less efficiently than it would have been, had it not been for the cause of the disruption. (SCL)
926. If the work is disrupted due to employer interruption, but project was not delayed. What the contractor
should do?
If the work disrupted but not delayed, the contractor can not claim for an EOT, but it may have a claim
for the cost of the reduced efficiency of its work force. The objective of this disruption claim is to put
the contractor in the same financial position it would have been if the disruption had not occurred
(SCL)
927. Shall a loss of profit be considered in a disruption claim? - Disruptions caused by events for which
employer is liable, compensation should be as per the actual cost incurred, plus a reasonable
allowances for profit if allowed by the contract. (SCL)
928. Is claims preparation cost recoverable?
Most contracts says the contractor may only recover the cost, loss and/ or expense it had actually
incurred and that this be demonstrated or proved by documentary evidence. Contractor is not entitled
to additional costs for claim preparation, unless it can show that it has been put to additional cost as a
result of the unreasonable actions or inactions of the engineer or employer in dealing with contractors
claim. Similarly unreasonable actions or inactions by the contractor in prosecuting its claims should
entitle the employer to recover its costs. (SCL Protocol)
929. Global claims This is a group claim for EOTs and disruptions submitted together for a number of
delay events for . For a claim to succeed, it is necessary to establish a direct link between the cause
and the subsequent effect. It is not necessary however, to always establish an individual effect (cost)
where a number of causes are complained of (items giving rise to the claim)
930. Procedure of EOT valuations by Engineer

Make sure that contractor notified the delay within the time limit.

Make sure that contractor submitted all details of EOT within the time limit.

Engineer verifies the delay event is due to employer risk events or by contractor.

Engineer verifies the sub programme for the delay event and its effect on main programme.

If delay is not due to employer delay event, notify the same to contractor.

If complete submission is not available, engineer take decision as per available information.

If contractor do not agree with Engineer decision, it should notify Engineer immediately.

If no agreement is reached quickly, either party should refer to dispute resolution process.

931. What is meant by Float in a programme Float is the time available for an activity or path in addition to
its duration. Critical path is the series of activities with least float or no float. Types are,

Free (activity) float Float available in an individual activity without affecting its succeeding
activity.

Project float Time available to a critical path where it ends before the contract completion date.

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932. Who owns Float and why? Generally says Contractor own the float because of following reasons.

Most Forms of Contract only say (1) Contract shall proceed with due expedition and without delay
and (2) Shall complete the works within time for completion It would be unfair for the contractor
to allow the employer reduce his time to utilise the float.

Float in a programme is as a result of how the contractor chooses to execute the works. It is the
contractor who decides the method of construction, sequence of activities, deployment of
resources. It is the contractor who undertakes if there is risk in his action. Therefore he should get
the benefit of the float in a programme.

933. Difference between Accepted Programme, As-Built Programme and Collapsed As-Built (SCL)

Accepted Programme Programme submitted by contractor for whole of the works and consented
by the Engineer. ( As per clause 14 of FIDIC)

As Built Programme Record of the history of construction project and its activities in the form of a
programme.

Collapsed As Built A method of delay analysis where the effects of events are subtracted from
the as built programme to determine what would have occurred in the absence of that events.

934. What is meant by Hammock An activity representing the period from the start of an activity to the
completion of another. Used as a way of summarising the duration of a number of activities in a
programme as one single duration.
935. Hanging activity An activity not linked to any proceeding or successor activities. Also known as
dangling activity.
936. What is Lag & Lead in a programme
Lag in a programme is the minimum lapse of time between the finish of one activity and finish of
another overlapping activity.
Lead is practically same as lag but from the perspective of successor activity. The time difference
between a preceding activity and a successor activity.
937. Method statement A written description of the contractors proposed manner of carrying out the
works or parts thereof.
938. PERT Programme Evaluation and review Technique. It is a programming technique similar to CPM,
but whereby the probability of completing by the contract completion date is determined and
monitored by way of a quantified risk assessment based on optimistic, pessimistic and most likely
activity durations.
939. Mitigation
The contractor has a general duty to mitigate the effect of its works of employer Risk Events. The duty
to mitigate does not extend to requiring the contractor to add extra resources or to work outside its
planned working hours. This has two aspects (1) The contractor must take reasonable steps to
minimise its loss (2) The contractor must not take unreasonable steps that increase loss.
940. Difference between mitigation and acceleration in a project.

Mitigation is a contractual obligation. But acceleration is not.

Mitigation does not mean contractor to use extra resources. But in acceleration, the contractor
uses extra resources.

Contractor will not get paid for mitigation. But will be paid for acceleration if due to employer delay
(and if it is agreed)

Mitigation can be done without employer approval. But acceleration should not be done without
employer approval (especially if he seek payment for it)

941. Claims arising from Terminations Clause 63.1 of FIDIC 4th edition. Article 218 of Civil Code.
942. Discharge letter A letter submitted by the contractor along with final account statement to the
employer confirming that the total of the final statement represent full and final settlement of all monies
due to the contractor under the contract.
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943. How do you deal with Concurrent delays on your project?

944. If contractor defaults, what remedies for Employer in place in a contract? - Faulty construction,
Defective & Incomplete work, - Repair costs, loss of profit etc. are the defaults.
LD in case of late completion, Employer can complete the work by another contractor and recover
money from defaulter thru Performance guarantees, Bond, Collateral warranties etc. & the money due
to the contractor for already executed works. In case the Contractor is over paid, the Employer can
recover the excess under a legal doctrine known as restitution ( unjust enrichment )
945. What is substantial completion and when would you consider issue of TOC?
946. Is it possible for an Engineer to issue a VO after issuing a TOC?
The architect should not issue any more variations to the works after the issue of the practical
completion date" (CEM Notes)
"The Contractor is not obliged to carry out variations where the instruction is issued after practical
completion unless there is a clause in the contract which gives the engineer power to issue an
instruction this nature, unless of course the contractor is willing to carry them out"
947. What constitutes end of Defects Liability Period to the Contract?

Issue of DL certificate (Certificate of making good defects)

Contractor is not liable for damages (except decennial liability)

Preparation of Final Certificate

Release of final retention.

End of insurances (As per clause 21.2 of FIDIC, DLP works should be covered in contractors
insurance scope of works)

End of contractors obligations

948. Explain the liabilities of the contractor after the issue of Defects Liability Certificate

Liabilities with respect to any extended warrantees

Decennial liability as per UAE civil law. / Inherent defects

Any secrecy undertakings (not to reveal any information about the Contract / project to others)

Any unfulfilled obligations between the parties which are incurred before issuing DLC (Clause 62.2
Fidic 87)

949. Who has to take insurance during Defects liability period? In principle employer has to take. But in
some cases if the contractors CAR is valid till issue of Final certificate. ( As per clause 21.2 of FIDIC,
DLP works should be covered in contractors insurance scope of works)
950. On what grounds the Contractor is not entitled to Costs when there is an award of EOT? - If delay is
caused by a neutral events.
951. How do you handle Provisional Items with in BOQ and what is its impact on Effective Contract price?
For calculation of ECP, provisional sums, dayworks and adjustments of price escalation are excluded.
952. Can you tell how is the provisional items (not provisional sums) treated with regard to Effective
Contract Price clause?
953. How is the format of Statement at completion differing from interim Certificates and what are extra /
additional characters this has got? It include final value of all works done + any further sums due +
An estimate of amount due.
954. What are exclusions on delegated powers that is retained with the Employer and that needs consent
prior to Engineers approval to Contractor?
955. Do you need both a bond and a parent company guarantee? - Yes
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Acceleration following failure by the employer to recognise that the contractor has encountered
Employer delay for which it is entitled to an EOT and which failure required the contractor to accelerate
its progress in order to complete the works by the prevailing completion date.
This situation may arise either due to Employers denial of a valid EOT request or a late granting of
EOT. (SCL - Society of Construction Law)
As a general principle, the contractor can not be instructed to accelerate to reduce Employer Delay,
unless the contract allows for this. If the contractor accelerate as per its own accord it is not entitled for
an acceleration cost.
957. Why would the contractor accelerate the works?
If the employer do not approve an EOT or he delay the EOT, the contractor will have problem. Either
he pumps his own money to speed up the works or he has to wait the EOT claim resolved by the
arbitrator or court. But he is not sure about the outcome. Hence to avoid the delay damages,
contractor accelerates progress to complete on time, meanwhile trying to convince the employer that
he is entitled for his acceleration cost.
958. How do you value acceleration costs?

Working additional hours (OT)

Providing additional labour

Providing additional or different equipment

Advancing the date of delivery of manufactured elements

959. Would you allow any loss of productivity as a result of the acceleration?
960. If you have to accelerate the works for Employer or Contractor delay, what are the costs to be
considered?
961. What does Extension of Time mean? How is an Extension of Time a benefit to the Employer? If
there is no EOT provision, the time will be at large if there is any delay due to the employer. (Eg.
Variations). Therefore it helps the employer too.
962. Do you get an Extension of Time for specified peril damage? If yes, what does this mean?
963. Are there any time restrictions on the Engineer to issue an Extension of Time? Can this decision be
reviewed? engineer shall without any undue delay, make an interim determination No final review
shall result in decrease of any EOT already determined by Engineer (Clause 44.3)
964. What is the process for the contractor to claim an Extension of Time?
965. What matters result in a Loss and Expense claim?
966. What action would you take if the contractor becomes insolvent?
Inform the employer, Stop further payment, ensure site security, ensure bonds and insurances are in
place and in safe custody, take steps to maintain essential services to the site, protect works from
damage, liaise with liquidator. Accepts determination, produce schedule work done and identify
defective work (preferably joint measurement), photographic records at the time, As-built drawing.
Inform subcontractors. Terminate the contract.
967. If Ive got a bond, is that any use to me?
968. What benefit is the insurance of liquidated damages clause?
969. What is meant by LD & LAD? Why cant I get any Liquidated and Ascertained Damages if I give an
Extension of Time?

LD - Amount inserted in contract for damages compensation to Employer for late completion by
the contractor.

LAD - Liquidated & Ascertained Damages (Ascertained, General or Un-liquidated damages) are
the actual damages incurred. Cost Headings- Loss of return on capital, professional costs, loss of
income, extra cost of fluctuations, commissioning costs, cost of hiring alternative accommodation.

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970. Why might the Employer wish to insure against loss of LADs? It may take time to settle the matter
with contractor if he dispute the matter and go to the court.
971. Could the Employer choose not to insure the Works?
972. If by the nature of the Works the Employer requires third party insurance to be taken out, how is that
incorporated into the contract? It should be in joint names to cover negligence and non negligence.
973. Definition of Cost (FIDIC) All expenditure properly incurred or to be incurred, whether on or off site,
including overheads and other charges properly allocable thereto but not include any allowance for
profit.
974. Head Office Overheads
Are the incidental costs of running the contractors business as a whole and include indirect cost which
can not be directly allocated to production, as opposed to direct costs of production at site. (Eg. Rents,
Directors salary, Pension fund, auditors fee, Administrative expenses)
975. Heads of EOT Claims.

Site overheads / preliminaries (Supervision, Site offices, Services, Plant & Transport, Premium for
Insurances and bonds, Bank / Finance Charges, Health & Safety)

Head Office Overheads

Loss of Profit.

Disruption and Loss of Productivity. (Eg. Global claims due to intermittent bad weather)

Increased costs (fluctuations) due to fixed price shift. (Eg. Wage, material price increase)

Finance Charges. (Increased bank overdraft charges, loss of interest on deposit 2% above bank
rate)

Cost of preparing claims (This is recoverable only in some arbitration cases)

Interest on late payments

976. Formulae for Head office over heads recovery (Hudson, Emden, Eichlay, Hanklaan, Samaratunga)
977. What formulae is suggested by SCL In limited circumstances where a HO overhead formula is to be
used, protocol prefers Emden or Eichleay formulae.
978. Samaratunga formula
Reimbursement of HO Overheads = H x CP / SCP where,
H - Actual total head office overhead cost of the contractors HO for the period of prolongation.
CP Contract Price for the delayed project divided by its time for completion and multiplied by the
period of prolongation.
SCP Sum total of the Contract price of each concurrent projects divided by its Time for completion
multiplied by whole or part period prolongation through which, it was in progress taking into
consideration of all projects in progress at that time.
Example:
Contract sum = 1 million, Time for completion = 10 months, Prolongation = 1 month
Sum of Contract Sums of HO = 5 million, Projects = 5 Nos, Total of all Times for Completion = 50
months
H = 25,000, CP = [ 1,000,000 / 10 ] x 1 = 100,000 SCP = [ 5,000,000 / 50 ] x 5 = 500,000
h = 25,000 x [ 100,000 / 500,000 ] =5,000 (If all the projects were prolonged for a total of 5 months
979. How do you question the build up process (eg. Plant for so many number of hours)?
980. An Engineers Instruction to carry out work has disrupted another activity. Is this a Head of Claim?
How would the contractor be able to prove it? Disruption is a head of claim.
981. What does prolongation mean and how would you value it?
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The additional time taken by the contractor to complete the works due to employer / neutral delay is
called prolongation.
If the contractor incurs additional cost due to employer delay then the employer should pay these
additional costs to the contractor.
Compensation for prolongation cost other than by variations is based on the actual additional cost
incurred by the contractor. (SCL Protocol)
The points to be considered in a prolongation cost are:

Material (Deterioration, increased wastage, additional delivery charges for small quantity, handling
charges)

Labour (Supervision charges, site administration, Travel allowances)

Accommodation (Office hire/ equipment, storage/ welfare, cleaning, security)

Plant & equipment (Scaffolding, Plant & equipments, site hoardings, temporary works, protection
systems, site safety, fuel, maintenance costs, small tools)

Utilities (Electricity, water, telephone, sewerage disposal)

Administration (Insurances, stationary/ consumables, sundries)

982. We hear that the Works have been suspended. Why would the works be suspended?
983. If the Engineer instructed a suspension, what would the contractor be entitled to?

Site demobilization & Staff repatriation.

Protection of works, Site security.

Protection of materials on site & off site.

Prolongation costs.

Idle cost of contractors machinery.

984. If the contractor was negligent and damaged an adjoining building, where would the employer is
covered? Third Party Liability Insurance
985. What about insurance of the building / works?
986. What is the procedure for claiming and EOT? How would you value an EOT claim.
Within 28 Days of the event first arising give Notice of Event to Engineer + Copy to Employer, Within
28 days - Detailed Particulars, If event is of continuing nature, give interim particulars @28 intervals
and final particulars within of 28 days of end of effect. Engineers Award of EOT, Accept or renegotiate
within the time allowed in the contract
987. How the loss of productivity claimed by the contractor is analysed? from site records and site
reports, compare the productivity of affected duration & normal duration.
988. What events may result in an agreement to discharge the contract.- Eg. Change in government law,
landslide in the plot etc.
989. What would you do when you noticed something had changed on your contract? Give notice for
variation specifying cost & time implications to Engineer.
990. What happens to sub-contractors if main contract is determined
991. What if it is a repudiatory breach
992. Types of Contractors breach - Repudiated the Contract, Failed to commence, Failed to Proceed with
the works Diligently & regularly, Failed to comply with Notices, Rejection and removal of Plant or
material-(37.4 & 39.1), Neglecting to Comply with Engineers instruction, Contravened Sub-Clause
4.1(Subcontract full works)
993. Employers breach - Not paying on time , not giving access to site, Interrupting the contractors work,
becomes insolvent,
994. After receipt of a delay notice how soon must a decision be made?
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995. Name some examples of each head of claim?

996. What should the insurance level of liability cover? What factors are affecting it? Third party liability
insurance should cover against death, injury to any person (TP) or loss / damage to any other property
other than works (Clause 23.1)
997. How is the protection of nominated subcontractors covered, in respect of insurance?
998. What is the limit of liability you would advise?
999. Which clause refers to Insurance in FIDIC? Clause 21 to 25
1000. Why is clause 21.1 Insurance taken out in a joint names policy? This is for the works, materials and
plant and should be valid till issue of TOC. If contractor is not taking any action to claim from Insurance
Company, the employer is allowed to claim.
1001. Exclusions in TP liability insurance (22.2) (a) permanent use or occupation of land (b) right of
employer to execute the works (c) damage to property which was unavoidable result of execution of
works (d) death, injury due to an act or neglect of employer or agents.
1002. When do the 21.1/21.2 / 22A insurance expire? Till issue of TOC
1003. What is excluded from clause 21.1 and 21.2 of insurance?
1004. If damage is caused to a project through a design fault, how does the employer recover losses? PI
Insurance.
1005. A fire-damaged building that you worked on was only six years old. Assume that the cause of the fire
was through an original design fault. Does the client have any recourse against the original design
team for the fault? PI Insurance, Decennial liability clause.
1006. How do you prepare an estimate for the reinstatement of the building without any design information?
1007. How did the trade contractors get paid by the client?
1008. On a project with a contract duration of 8 weeks the contractor has been on site for 6 weeks of which
he has done 2 weeks worth of productive work, but he is in delay by 4 weeks, due to 2 weeks of
Contractor delay and 2 weeks Employer delay. In a valuation how would you value the prelims?
1009. What do you do if someone phones you up and says the contractor is in receivership?
1010. What are the common types of insurance for a building project? CAR, Public Liability, Workmen
compensation, Motor vehicle, Machinery, Plant and Equipment.
1011. What happens if construction work causes damage to adjacent buildings, who is responsible and what
sort of insurance do you need? TPI, Third Party Insurance.
1012. What are warranties? Why would you put them in place?
1013. Does the contractor have to give notice of halting the works?
1014. If a variation incurs cost and programme implications, what would you expect to receive in the
Contractors Notice of Delay?
1015. When a delay occurs due to client delay what actions are required to be taken by the Contractor?
Notices, Contemporary records, mitigation of delay, acceleration of works with approval of client.
1016. A client asks your advice on L.A.D.s, what questions would you ask and how would you determine the
figure? It depends on the expected loss like rent, engineers overtime, employers expenses, loss of
revenue etc.
1017. The client says he wants some teeth in the damages figure as an incentive to make the Contractor
perform and suggests that a penalty figure of 20,000 per week should do the trick, if this is stated in
the documents and the contractor signs on that basis, is it valid? Penalty is valid in U.A.E. But not
valid in common law countries (Eg. UK)
1018. Please advise the basic insurance provisions of the FIDIC contracts?
1019. What is a relevant event (under JCT) contracts? Name some of them.

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16 events listed in contract (Clause 25.4 of JCT) leading to an EOT- Force Majeure, Exceptional
Inclement Weather, civil commotion, loss due to specified perils, Architects instruction regarding
discrepancy, variations, late receipt of information, works by employer at site etc
1020. How do you assess exceptionally adverse weather conditions when deciding whether an extension of
time is granted? (1) Exceptionally adverse condition (2) Affected the work (3) Was not reasonably
foreseeable by an experienced contractor.
1021. How do you value loss and or expense due to a delay?
1022. Are head office overheads a legitimate expense in valuing a delay claim? - Yes
1023. What if the delay falls over a statutory holiday period like Christmas where a couple of days delay
before the break for Christmas effectively means that the contractor loses a further two weeks
overheads which he says where not covered by this contract?
1024. Can you under FIDIC contracts go to law to settle disputes (ie. Opt out of adjudication, arbitration?
Clause 5.1 states the law which shall be applied to construe the contract. But as New York Convention
is valid, arbitral rules are accepted in U.A.E.
1025. A contract is running considerably over the date for completion and no extensions of time are justified.
Damages are very small and the contractor is still working but nothing is being completed. The
employer requests you advice on what to do.
1026. What is a quantum meruit claim? Claim for expenses incurred in the absence of a valid contract.
1027. What are the types of costs involved?
1028. If I wanted to start a project I needed to pre- order long lead in time of materials, how would you
suggest I prove it?
1029. How can I pre-order without nominating S/C? By free issuing the materials to the contractor.
1030. How long after PC has been given does the Engineer have to confirm Extensions of Time?
1031. What does the Extension of Time do?
1032. An Extension of Time has bee given, does this entitle the contractor to loss and expense? For
neutral events, contractor will get EOT but not the cost.
1033. What can a contractor claim for if the delay means plant stands idle?
1034. What is decennial insurance? Why is it required?
1035. If the project is in the city, would you need terrorism cover? What is the standard cover for terrorism?
1036. Can the owner take out all insurance?
1037. Contractors third party insurance, can employer take it out also? Yes.
1038. What are LADs? Who says when they are deducted? Does it affect your valuation? It will not affect
the valuations. Generally the Engineer recommends the value of LD separately to the employer and
the employer deduct it from payment due.
1039. If the projects, say a school with a critical end date, what LADs would you require?
1040. Describe the provisions within the building contract for two major contractors on the same site. -There
must be a principal contractor and the other contractor must follow his H&S regulations.
1041. Is a programme a contract document? Could it be? No. It is not a contract document.
1042. Have you heard of Clause 14 under FIDIC?
1043. If a programme becomes a contract document, what value does it have? Can the contractor change it
around?
1044. Is there a certificate which releases retention monies?
1045. Who determines PC, and what are the effects of this certificate?
1046. How long is the defects liability period? What happens if defects appear in 3 years time? Wouldnt
warranties have expired by then?
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1047. Why Defects Liability Period is for 12 months generally ? It is to cover all climatic seasons so as to
test and reconfirm that the building and its services are suitable for all seasons.
1048. Suppose the design was faulty? Suppose the defect arose 15 years after PC?
1049. Is it possible for overheads and profit to be a head of claim? Yes.
1050. Are costs associated with producing a claim included? Not always. If the contractor was forced to
incur additional expense (Eg. Hired an external consultant to prepare the claim) due to Clients
persistent denial of a valid claim, then contractor is eligible for claim preparation cost from client. This
is applicable vice versa too.
1051. If I incur additional finance charges as a result of a delay can I include these?
1052. What would you consider in preparing a valuation?
1053. What do you include in an insurance valuation?
1054. Why and when would you carry out an insurance exercise?
1055. Describe Prime cost sums?
1056. What are dayworks for?
If any works which has a high degree of unpredictability, and not specified in the BOQ, is to be done
dayworks are used. Main three elements of dayworks are Labour, Material and Plant.
1057. If a contractor returns a rate of 20/hour what would be your response?
1058. Describe the purpose of retention and the process for release of retention monies?
It is an small proportion of payments which the employer withheld from the contractor until the work
has been completed. These are deducted from each interim certificate. The retention money is
intended to be available to the employer especially to rectify the defects or inducing the contractor to
rectify the defects in Defects liability period.
Retention is to ensure performance of contractor. Retention deductions directly affect the contractor.
Hence it will have more effect on contractor than a performance bond.
1059. If the contractors QS comes to you and says that he has found some errors in the BOQ. How would
you deal with them? (This should be analysed on both contexts pre contract and post contract
stages)
1060. Why do we have retention? Do we have the same amount throughout the contract?
1061. Can you define the difference between a Provisional Sum, Prime Cost Rate and a Prime Cost Sum?
PS are used for work that has not been finalized or for costs unknown at the time the BOQ was
prepared. These may be simply contingency sums and it is not necessary for the employer to use it.
The Engineer should instruct to spend it.
PS means a sum included in the contract and so designated in the BOQ for the execution of any part
of the works or for the supply of goods, materials, plant or services, contingencies which sum is used
part or full on the instruction of the engineer.
PC Sums are used for works under the contract that are to be carried out under the direction of the
main contractor by certain other persons, namely nominated subcontractor / suppliers. Nominated
subcontractors will usually have been selected prior to the selection of the main contractor. (This is as
per JCT Contract)
1062. Have you heard of a Defined Provisional Sum?
1063. Describe the nomination process.
1064. Can the main contractor be nominated to work for a PC Sum?
1065. What about payment for a nominated sub-contractor?
1066. When you are preparing a valuation, what factors do you take into account? What things are included?
1067. If Main contractor is paid on % additions is it in his interest to escalate the cost? Is there an incentive
to keep the cost down? Make it GMP Contract or Target Cost method.
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1068. If there are variations does his % increase or is it non-adjustable?

1069. What if the work cost more? (i.e. 40/m carpet to 50/m carpet)
1070. Where do prelims fit in? Who produced them, who priced them?
1071. What element is the pricing? What would he pass on to the trade contractors?
1072. The Main contractor would pass on a certain element, is it a fixed sum or is it an estimate?
1073. If you are in a dispute with a Contractors QS over the value of a variation and the contractor
complains to the Employer, what do you do?
1074. Do you automatically include for materials off site? Would you want any paperwork? What documents
are required?

There should be provision in contract for materials off site.

Approval of the Engineer to store off site due to space constraints & any other valid reasons.

Undertaking by the Contractor that the material stored offsite is the sole property of the Employer.
(Certificate of vesting)

It should be set apart from other materials, clearly marked and coded.

Invoices, Delivery Notes, Approved material Specs. by Engineer.

Insurance against loss or damages.

Payment as per the contract.

The Employer could request an advance payment bond to safeguard them.

1075. Documents required for the approval of Materials Off site

Ownership certificate (vesting Certificate)

Insurance

Documents required for the approval of overseas Materials Off site

Bill of Lading

Factory Inspection Certificate

Marine Insurance.

Advance payment bond.

Vesting certificate.

1076. Bill of lading

A bill of lading (sometimes referred to as a BOL,or B/L) is a document issued by a carrier to a shipper,
acknowledging that specified goods have been received on board as cargo for conveyance to a
named place for delivery to the consignee who is usually identified. A through bill of lading involves the
use of at least two different modes of transport from road, rail, air, and sea. The term derives from the
noun "bill", a schedule of costs for services supplied or to be supplied, and from the verb "to lade"
which means to load a cargo onto a ship or other form of transport.
It is quite evident that a bill of lading can be used as a traded object. The standard short form bill of
lading is evidence of the contract of carriage of goods and it serves a number of purposes:

It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may
incorporate the full terms of the contract between the consignor and the carrier by reference (i.e.
the short form simply refers to the main contract as an existing document, whereas the long form
of a bill of lading (connaissement intgral) issued by the carrier sets out all the terms of the
contract of carriage);

It is a receipt signed by the carrier confirming whether goods matching the contract description
have been received in good condition (a bill will be described as clean if the goods have been
received on board in apparent good condition and stowed ready for transport); and

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It is also a document of transfer, being freely transferable but not a negotiable instrument in the
legal sense, i.e. it governs all the legal aspects of physical carriage, and, like a cheque or other
negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried.
This matches everyday experience in that the contract a person might make with a commercial
carrier like FedEx for mostly airway parcels, is separate from any contract for the sale of the goods
to be carried, however it binds the carrier to its terms, irrespectively of who the actual holder of the
B/L, and owner of the goods, may be at a specific moment.

1077. If contractor has applied for materials off site, you ok them, and architects rejects them what do you
do?
1078. When you agree the cost of a variation up front, does it cover everything else, eg loss and expense? Is
it practical?
1079. If you issue a variation and there is a disagreement, what happens?
1080. What happens if there is a disagreement with payment certificate issued?
1081. During valuations how do you value preliminaries. (This depends on the type of contract Fixed Price
LS or Remeasured)
1082. How you will value insurances in the valuation
1083. Using an approximate quantities bill, how do you firm it up
1084. What if client does not have funds for payment? What do you advise?

Get fund / loan from bank

Allow interest on late payments

Change the payment terms

Suspend the works / terminate it.

Extend the duration of project to reduce the monthly payment.

1085. What is the difference between named and nominated sub-contractors? What is the definition of a
domestic sub contractor?
1086. Which form of contract is the named sub-contractor included in?
1087. Difference between domestic and nominated with reference to client position.
1088. Who is responsible for nominated sub-contractor if he becomes insolvent? What about extension of
time for contractor?
1089. What clause controls nomination under FIDIC 59.1,2,3,4,5
1090. How does the employer make allowances for nomination? What is the benefit of nomination?
1091. If a prime cost sum is included what is the contractor deemed to have included for?
1092. How do you foresee phasing of the works in sectional completion? How do phasing (portioning) of the
works and sectional completion differ?

Sectional completion is as per the existing contract provisions Time already mentioned in
contract

Portioning (phasing) is as per the requirement of employer during the progress of works

Sectioning depends on the following

Type of works in each section.

Volume of work.

Area / location.

Admin / tender expenses.

Time for completion.

1093. Would you use more than one contractor rather than sectional completion
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1094. Engineers duties are,

Active Duties to be initiated by the engineer (Eg. Issue interim certificate)

Reactive Duties in response to action initiated by employer / contractor (Eg. Analyse a claim)

Passive Duties expressed as rules to be followed (Eg. Keep one set of drawings at site)

1095. How would you write preliminaries to incorporate phased completion

1096. Is sectional completion appropriate on a phased contract
1097. Difference between Sectional Completion and Partial Possession
If different sections are identified in the contract each with different time for completion, it is called
Sectional Completion. But if the employer requests and contractor agrees, the employer can take
possession of those parts of the Works which is already completed.
Sectional completion is a contractual obligation of the contractor. But partial possession is not.
1098. What is meant by Practical completion? It is the word used for Substantial Completion in JCT. In
FIDIC and ICE it is Substantial Completion.
The date at which, in the opinion of the Contract Administrator, the Works (or a Section of the Works)
are complete. These definitions of the end of the construction stage of the contract gives three
possible situations:

Practical Completion may occur before the Date for Completion (or Completion Date);

Practical Completion may occur on the Date for Completion (or Completion Date);

Practical Completion may occur after the Date for Completion (or Completion Date);

1099. What is substantial completion?

The contractor has substantially completed the works at that point in time when the employer can take
advantages of the project for purpose intended by the Employer.
Substantial completion does not relive the contractor of completing the project in its entirety, nor does
it obligate the employer to pay the entire contract sum. However it entitle the contractor to be paid the
contract balance minus the value of the pending works
1100. Difference between date for Completion and Completion date.
Date for Completion is the date inserted in the Contract which is the date agreed at the time of
agreement. But the Completion Date is the Date for Completion of the Works after considering any
extension or pre-agreed adjustment. (JCT) FIDIC states Time for Completion
1101. What is meant by Punch List This is an American version of Snag List at the time of substantial
completion.
1102. What is meant by Lien - Right to hold anothers property until a debt on it is fully paid.
1103. Is sectional completion different from partial possession
1104. How would you manage a contingency sum
1105. What is a paid when paid (back to back) clause? Why is it unfair?
1106. What are direct payments?
1107. In a valuation what items are not subject to retention? (1) Adjustments as per clause 70 and (2) Any
sum due to Employer by the contractor.
1108. What are the criteria for issuing Toc for sections or parts?

For sections already mentioned in contract.

For parts already completed & occupied by employer

For parts employer occupied prior to completion.

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1109. If the nature and character of the works are not known at tender stage but you want the contractor to
price or make allowance what can you do?
1110. What would you advise the client to use, defined or undefined provisional sum and why?
1111. If contract period is twelve months, can the client insist on taking possession in ten months? Yes. As
per clause 48.2 ( c ) of FIDIC.
1112. If the contractor can finish in ten months, can the client take possession by issuing P.C. certificate?
How would you advise the client? Yes. As per clause 48.2 (b) of FIDIC.
1113. Were you involved in valuations and how were they handled?
1114. Did you have to check ownership of materials paid for off-site?
1115. I have ordered some lifts but the nominated subcontractor goes bankrupt but the work has been
started, what are your duties? Would this be a contractors problem? If the job is late is it the
contractors responsible?
1116. Why would the client introduce a nominated subcontractor?
1117. Can I transfer the risk of delay? The employer transfer the risk of any delay to contractor as LD. The
contractor will transfer the possible LD amount to employer by increasing the rate or by fairly including
the possible LD in the contract sum.
1118. What are Fluctuations in price of material? Do they affect estimates? Where would you include it?
1119. Sub clause 70.2 provides for price fluctuations as a result of changes in legislation in the country
where the project is to be constructed which occur after the date 28 days prior to the latest date for
submission of tenders for the contract. Such fluctuations are easily calculated and the engineer is
required to determine any additional or reduced cost after due consultation with the employer and
contractor. Once determined the additional / reduced cost to be notified by the engineer to the
contractor with a copy to the employer.
1120. How long after the issue of an interim certificate must payment be made under FIDIC 87, JCT 98, IFC
98, MW 98 and ICE contracts?

FIDIC Fdration Internationale Des Ingnieurs-Conseils

JCT Joint Contracts Tribunal

IFC Intermediate Form of Building Contract

MW 98 Minor Building Works 98

ICE International Council of Engineers

1121. Is retention a good thing? Are bonds more equitable (reasonable)? The retention directly affecting
the contractor. Hence it induce him to perform well. But the bond will affect the contractor only
indirectly.
1122. What does a planning supervisor do? Does he have to visit the site regularly?
1123. Under D&B the documents refer to Employers Agent (EA), what role does the EA perform?
1124. Quantity Surveyors often get the role of EA, what must they be aware of that is different to a QS role?
1125. Elements of interim certificate

Estimated works + MOS + Any other amount to contractor = Total

Total Advance payment recovery Retention Any amount to employer Previously certified
amount = Net payable.

1126. Is it necessary to define a site boundary? Should the site boundary be the same as the ownership
boundary?
1127. What functions are required post contract for design team?
1128. Would the Employers Agent be able to inspect the works?
1129. What remedies are in place when a contractor defaults on a contract?
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1130. How is a loss & expense claim assessed?

1131. Relationships deteriorate on site and your subcontractor serves notice to adjudicate. What do you do?
Who pays the costs of adjudication?
1132. Is the decision of the adjudicator binding and when can you start other proceedings, arbitration,
litigation etc?
1133. What path can be followed to improve contractual links between parties such as clients and
consultants under a traditional D & B job? Novated D & B, Collateral Warrantee.
1134. What is a collateral warranty (CW) and what would you normally expect to be included in.
Collateral warrantee is an agreement which exists along side another contract and it is related to that
other contract. It is a method of joining together parties who in other circumstances would not have a
contractual relationship, but who are nevertheless involved in the same undertaking.
Collateral warranties are a form of protection, usually for the client, in the event that third parties
involved in the contract fail to perform their contractual obligations. The purpose of CW is to give the
beneficiary the benefit of a direct promise from the parties of a contract that it has performed its
contractual obligations.
CW is required because of privity of contract. It means that a contract can not confer rights or impose
obligations on any person who is not a party to that contract.
Contracts (Right of third parties ) Act is to overcome the limitations due to privity of contract.
This is a method of joining parties, who does not have a contractual relationship but who are involved
in the same undertaking.

A related agreement alongside a main contract between the parties.

Which contained in a deed or a simple contract can bring the party responsible for the defect to
compensate the same under tort.

Which allows the investor/funder to protect his investment by contractual link with the design team
and with the contractor and it allows him to sue in the event of defect.

Employer getting a direct contractual link with the sub-contractor.

1135. What are the core clauses in a Collateral warrantee.

It should define standards of skill and care.

It require the consultant submit PI Insurance

Ensure that no material that will damage or harmful to health, safety or durability are used.

Incorporating rights of beneficiaries (Eg. Funders rights)

Copy right and licensing clause

Assignment clauses

1136. Contracts (Right of third Party) Act

The principles of contract states that, only the parties to a contract can sue on the contract. This is
preventing the third parties to a contract can sue to enforce the obligations. This situation was a
reason to implement the said act.
This is giving the right of third party to enforce a term of the contract with the following conditions,

Contract should expressly provides that,

The contract claims to award a benefit on him.

1137. What is meant by BUILD Building Users Insurance Against Latent Defects.
1138. Alternatives to Collateral warrantees Latent Defects Insurance & contract (Right of Third Parties) Act.
1139. What is meant by Latent Defects Insurance Insurance against defects noticed after the DLP. This is
for 10 years. (Decennial Insurance). Liability of all those involved in this provision of a building is
collective and runs for 10 years.
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Exceptions of latent defects insurance is Consequential losses, defects in non structural works defects
due to lack of maintenance, defects due to structural alterations, normal fire perils, deficient water
proofing etc.
1140. How do you determine level of liquidated damages? What are the items to be considered?
Loss of rent or other income, Additional fees, Fines from statutory bodies, Cost imposed by other
parties to client, Cost incurred by client as consequence of not having the building (storage, rent other
properties, abortive costs), Any other cost that justifiably the client will incur.
1141. What examples can you give me of Value Engineering that you have carried out?
1142. When is Value Engineering used? Would you still use it when the project is underway?
1143. What is the effect of Practical Completion?
1144. Does the contractor have any responsibility after the end of the defects liability period with respect to
latent defects? Yes, as per decennial liability as per Federal law.
1145. What would you do when you noticed something had changed on your contract? Give notice.
1146. What are the procedures for paying a subcontractor? What timescales?
1147. What would you do if your client did not pay you?
1148. A Contractor has included for 100,000 materials on site. Would you pay it? If they attached invoice,
delivery notes, material specification approved by engineer, stored properly by contractor, materials
are required at site as per the programme.
1149. As per FIDIC where the terms cost allows profit in it Insurance (Clause 21.1 )
1150. How do you treat dayworks? Just because a dayworks sheet is signed by Engineer do you pay it?
Engineers instruction to execute that varied work on a Dayworks basis. Proper Records (Name,
occupation & time of workmen, Description & Quantity of material & Contractors equipment. are to be
maintained & submitted to the Engineer punctually, in duplicate & signed off by the Engineer and one
copy to be given back to the Contractor
1151. How do you treat a dayworks that has not been instructed by Engineer? No payment.
1152. How do you decide on the rates for dayworks? - Either it should be in the BOQ or Take market rates
and add allowance for contractors overheads.
1153. What is substantial completion and when would you consider issue of TOC? - When the facility is
ready for use. TOC will be issued after fulfilling all contractual requirements.
1154. What constitutes end of Defects Liability to the Contract?
1155. On what grounds the Contractor is not entitled to Costs when there is an award of EoT?
1156. How do you handle Provisional Items with in BOQ and what is its impact on Effective Contract price? Provisional Items with in BOQ are not included in Effective Contract price
1157. What benefits are given to the main contractor by nomination?
1158. Different types of Provisional Sums

Defined provisional sums- In which amount and type of work is mentioned, included in programme.

Undefined provisional sums - Only amount is mentioned, type of work is not mentioned, it is a
contingency and not specified in programme.

1159. What the differences are between named and nominated subcontractor?
1160. What does force majeure mean?
This is a clause designed to address risks which can not necessarily be insured and which are outside
the control of the parties to the contract. This is generally operates to discharge a contracting party
when a supervening, some times supernatural event beyond the control of either party makes
performance impossible. The common thread is that of the unexpected, something beyond reasonable
human foresight.
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As per French law if a party in a contract to involve a force majeure clause, the event must pass
through three ts. It must be external, it must be unpredictable and it must be irresistible.
1161. Who is responsible for materials on site which are to be included or excluded from an interim
certificate? Engineer is the one who should take decision.
1162. Who are materials on site insured by? Contractor.
1163. FOB Free On Board / Freight On Board The seller pays up to the port including loading in to ship.
From that point the buyer is responsible (including shipping, marine insurance, unloading etc)
1164. What happens if the demolition works cause the basement to collapse in an adjoining building?
1165. What happens on completion of phase one works under a contract where several sectional
completions exist?
1166. Can you nominate in all standard forms?
1167. Can you have partial possession / sectional completion in all standard forms?
1168. What are the roles and responsibilities of Employers Agent on a D&B project?
1169. Can the Employers Agent issue Final Certificate stating the works and materials are to his
satisfaction?
1170. What is Goods in Transit What are the governing conditions related to this? The goods that have
departed from the dispatch, loading or shipping point but have not yet arrived at the delivery point.
1171. How do you calculate Plant cost?
1172. How do you terminate a contract? Who will issue letter? Employer will issue letter as per clause 63.1
with 14 days notice.
1173. How do you suspend a contract? Who will issue letter? Engineer (clause 40.1)
1174. FIDIC 87 use the word terminate employment of the contractor if he is in breach, or the contractor
terminate his employment under the contract if employer is in breach. The term termination of
contract is coming only in clause 65.6 (Outbreak of war)
1175. What is the purpose of getting Loss and Profit made by the Contractors for pre-qualification.
1176. Type of Construction Law applicable in U.A.E.
1177. What Fidic say about health & Safety. What is the relevant clause. Clause 19.1 (Safety, security and
protection of environment)
1178. Types of bonds required as per FIDIC
1179. What a QS should check when a contractor submit first payment. Bonds, Insurances, Breakdown of
LS items in the BOQ, Programme, Cash flow estimate.
1180. VE workshops; are they better carried out by third parties?
1181. Is VE something you would do in the normal course of your work?
1182. How are VE reports presented?
1183. A term that has come up to public notice recently is contractors inspired variations. Do you know
what it means? Why might the contractor inspire variations?
1184. What if a contractor takes the Engineers advice to change the programme?
1185. What is a logic link? What is a resource link? Link in a programme
1186. Final account Once a contract has been completed and the Defects Liability Period expired, the Contractor is entitled
to be paid the Final Valuation. In order to make this payment it is necessary to produce a Final
Account. Except in the case of a very small project, it is likely that there will be a large number of
adjustments to be made to the original Contract Sum. This requires a detailed document setting out
how much the Employer is due to pay the Contractor and showing how it has been calculated. It is
also important that the details of this calculation are acceptable to the Contractor, Architect and, of
course, the Employer.
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This is to make a final payment to a Contractor of the sum of which he entitled under the terms of the
Contract. For which detailed documents are necessary to show to the satisfaction of the concerned,
such as, what amount of money the Employer is liable to pay and the Contractor is entitled to receive
and how it was calculated.
Generally, this comprises,

A Summary of the Account.

Adjustments on Prime costs.

Adjustments on Provisional Sum.

Variation Accounts.

Adjustment of approximate quantities.

Claims.

Fluctuations in cost of labour, materials & statutory contributions, levies & taxes, if applicable.
Final Certificate should state,

Adjusted Contract sum / Ascertained Final sum.

The total Amounts Paid on Account.

The advance Payment, if any.

The difference between the amounts expressed as a balance due from one party to other.

1187. When the contract is complete Upon issue of DL Certificate a contract is considered as completed.
Engineer signs it, give original to employer, copy to contractor. This should issue within 28 days from
DLP )Clause 62.1)
1188. Who should prepare the Final account As per JCT the quantity surveyor should prepare the final
account within nine months after practical completion. As per FIDIC 87 the contractor shall within 56
days of issue of Defects Liability Certificate submit to Engineer draft final account in 6 copies (Clause
60.6) Final Statement
1189. What are the Contents of the Final Account?
The following sections are normally required for Lump Sum contracts:

Summary of Account

Prime Cost Sums - adjustments

Provisional Sums - adjustments

Variation accounts

Provisional Items - adjustments

Fluctuations, i.e. increased costs (labour, materials. statutory contributions, levies and taxes)

Contractors claims.

1190. What is the definition of variation as per FIDIC (51.1)

Increase / decrease the quantity of work.

Omit any such works ( if the omitted work is not to be carried out by Employer or another
contractor)

Change in character / quality of works

Change in levels, lines, position and dimensions in any part of the works

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Any additional works necessary for completion of Works.

Change any specified sequence or timing of Works.

1191. How do you value variations?

As per the rates and prices in contract or these rates should be taken as basis or engineer agrees a
rate after consulting employer and contractor or engineer fixes a rate (if there is disagreement). Until
then the engineer use provisional rate for valuation purpose.
1192. Varied work Work is required to done at site as per drawings and specifications. But there is no rate
in the contract (BOQ) For varied work, Engineers Instruction is not required.
1193. What is meant by Response Time and Resolution Time?
This is the time limits provided in some bespoke contracts for the contractor to take action during
defects liability period for any defects notified by the Engineer. Response Time mean the time within
which the contractor responds to engineers notification and Resolution Time means the time within
which the contractor should rectify the defects. These limits are set as per the seriousness and
importance of the defects.
1194. What is meant by bespoke contract?
The parties to a contract may choose to draft their own agreement setting down the terms and
conditions that have been agreed. This is sometimes done on smaller jobs, but also occurs on some
very large projects, particularly those financed in special ways.
Build/Operate/Transfer contracts for major infrastructure frequently require bespoke contractual
arrangements in order to reflect the distribution of risk between parties.
1195. Advantages of standard form of contracts over bespoke contracts?

Terms and conditions of standard forms are agreed by representatives of various construction
professionals. Hence it is balanced and fair to all parties.

Clauses in standard forms are time tested against any possible flaws.

Standard forms are familiar to all contracting parties.

Clients legal fees will be reduced

Ready to use forms

1196. If dayworks sheets are signed by Contract Administrator (CA) / Clerk of Works (CoW) but you think it is
too high, what will you do?
1197. How do you check the quantity and value of the materials on site? Check invoice, Delivery Notes,
Approved By Engineer and Payment as per the contract.
1198. Would you make a payment on account for example a lorry load of unpainted steel?
1199. On what basis do you value variations on a D&B project? If it is additionally instructed by the
employer.
1200. What are the rules regarding valuing dayworks (JCT) It should be valued strictly as per the rules set
out in definition of Prime Cost of Daywork carried out under a building contract Issued by RICS
1201. Can you value dayworks in a valuation for interim payment if they are not signed by an Architect / CA /
CoW / person in authority? - No
1202. What status under a contract has for a contractors statement / bespoke form (vis confirmation of
V.O.)?
1203. Sometimes an architect issues drawings marked for information only or preliminary, what is the
contractual position regarding their use by the contractor?
1204. It is valuation date, and an assistant QS comes to site, you are very busy and give him the task of
measuring stockpiled crushed concrete, what would you do?
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1205. You are the QS of the project and you receive an application for payment from the main contractor and
he has applied for 100,000 due to delay and disruption, what do you do? Since it is a claim,
payment for claims is allowed only after engineer verified it to his satisfaction. (Clause 53.5)
1206. What should a contractor hand over at the end of a project?
1207. What does a Final Certificate mean to a contractor?
1208. How is the format of Statement at completion differing from interim Certificates and what are
extra/additional characters this has got? There will be no Material on Site, Retention in Statement at
Completion.
The Contractor shall submit within 84 days from TOC with 6 copies (Clause 60.5). This includes (1)
Final Value of Works (2) Any further sum as per the contractor (3) Estimate of amount due to the
contractor
1209. Final Statement (Clause 60.6)
To be submitted within 56 days from DL Certificate. It should be in 6 copies. This includes (1) Value of
the Works (2) Any further sum as per contract.
1210. What are exclusions on delegated powers that is retained with the Employer and that needs consent
prior to Engineers approval to Contractor?
1211. If you were on a Greenfield site would you require adjoining properties insurance?
1212. How many copies of the drawings is the contractor entitled to under the normal Fidic contracts?
1213. What is the priority of documents as per Fidic? Agreement, LOA, Tender, Part 2 of FIDIC, Part 1 of
FIDIC, Any other documents
1214. If bad weather exists for a whole month, how do you evaluate EOT as per Fidic? As per clause 44.1
C. Exceptionally adverse weather conditions allow EOT.
1215. Types of insurances required as per FIDIC
1216. What are the matters still continuing even after issuing Final Certificate
(1) Extended Warrantee (2) Inherent defects (3) Secrecy undertakings (4) Any fraud or dishonesty (5)
Any disputes raised within 90 days from issue of Final Certificate (6) Any unfulfilled obligations as
per clause 62.2
1217. Post Contract Administration
Post Contract Administration provides the means to ensure that the contract you sign today will still
represent value for money at the end of your project. As we have said elsewhere, in Contracting and
Procurement Strategy, it is essential to build a bridge between the needs of Construction and the
Engineering output, and the Contracting and Procurement Plan does this. The services offered in the
area of Post Contract Administration represent one of the important buttresses supporting this bridge.
They are directed at ensuring that the agreements made in an original Contract or Purchase Order are
sustainable over the life of the Project.
All too often, a Contract or Purchase Order is awarded (at a good price) and then the essential
maintenance of the agreements is virtually ignored until the due date for completion. This inevitably
results in poor performance of the work and, more often than not, a claim.
The main aspects of Contract Management are that professional and timely post-Contract
administration lies at the very heart of change management and claims prevention.
1218. Managing Changes
The best time to avoid or to mitigate changes is before a contract is even awarded. Many claims
originate from the nave and irresponsible belief that a Lump Sum contract will guard against poor
scope definition as well as any cost or schedule growth. Accurate scope definition is crucial to the
overall cost of a project and the time spent in defining the scope of work prior to contract award will be
amply rewarded. However, quite often all the hard work put into scope definition can be destroyed
when the scope comes to be administered. The same skilled and experienced people who contribute
to the award the Contracts and Purchase Orders should be available to follow these agreements up in
the execution phase giving a continuity of knowledge, skill and commitment.
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Almost all projects encounter changes in one form or another. Changes probably cause
disproportionately more work and disruption than almost any other item in a Project Manager's busy
schedule and must be handled in an orderly and efficient manner if we are to avoid the firefighting
scenarios seen all too often on projects today.
The expertise in controlling and evaluating changes can relieve a busy Project Manager from the
heavy administrative loads resulting from the evaluation, review, discussion and tracking process
involved with changes.
It should ensure that all changes are properly documented, evaluated, reported and incorporated into
both cost and schedule reports to provide management with a clear and concise overview of project
status at any given time. Most importantly, we address matters as they arise, actively pursuing
settlement of open matters.
Having access to an early warning and trending system allows management to make strategic
decisions based on accurate and up-to-date information.
1219. Change order procedure as per FIDIC

Employer / engineer (Clause 51.1) / cost consultant / contractor (52.2) may request for variation

Engineer prepares Variation Order Request (VOR) and submit to employer for approval together
with Impact Assessment (IA) unless in case of urgency

If approved, engineer issues Engineers Instruction (EI) to contractor (51.2)

Engineer in coordination with Cost consultant prepare Impact Assessment to determine the
resultant time and financial impact for approval

Contractors notice to engineer of his intention to claim extra payment / varied rate / price (52.2 (a))
/ by the engineer to the contractor of his intention to vary a rate or price (52.2 (b)). Both within 14
days from EI

Following approval of IA, receipt of notices under sub clause of 52.2, the engineer shall prepare a
Variation Order (VO) relating to VOR

Upon approval by the employer, the VO shall be formally issued to the contractor.

The cost consultant and engineer shall consult with the contractor to determine the final agreed
value of the VO (52.1). Such negotiations shall not be binding upon the employer. Then cost
consultant in coordination with the engineer shall make a recommendation to the employer in the
form of an Agreed Variation Order (AVO)

Employers approval shall be issued to Engineer for formal issue to the contractor for
countersignature, then copies distributed.

1220. Interim & Final Accounts

One of the important characteristics of the successful organization is its ability to move quickly where
opportunities need to be captured or disasters avoided. Essential to this opportunistic strategy is a
clear financial picture of the state of the Project. The Interim Valuation, giving an up-to-date picture of
the value of Contracts and Purchase Orders is part of this picture. Aegis prepares Interim Valuations
based on progress or milestones achieved. The interim valuations can also include a valuation of all
change orders agreed and approved up to the payment certificate date. Interim Valuations can be
derived from Bills of Quantity or from Progress Reports, dependent on the type of contract.
Similarly, Final Accounts are prepared to incorporate all progress payments or milestones, change
orders, claims, etc as well as to ensure a release of liens and indemnification against any further
claims from sub-contractors or other vendors, suppliers, etc. The Final Account is a powerful
instrument in a defensive strategy. It forces the matters of completion and final payments. It ensures
that issues are dealt with at a time most advantageous you rather than waiting for a Contractor or
Supplier to submit its final bill as and when it suits him.
1221. Cost Control

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Project related Cost Control should not be confused with or try to duplicate, head office accounting and
bookkeeping. Effective Cost Control is directed far more at the question What is the maximum value
to which I am exposed? It should be focused on the importance of project specific cost controls that
allow the development of an accurate budget and facilitate the comparison of the budget to the actual
costs and possible exposures as the project progresses. The complacency (self satisfaction) is one of
the greatest threats to successful Project Management and the aim should be to ensure that this does
not occur in a Project. Experience shows that the costs of establishing proper controls are far
outweighed by the potential benefits to recover lost revenue.
From initial range estimates at tender stage through commodity take-offs to detailed estimates of
purchasing and installation costs, a project manager can assist in preparing the estimates and
transforming these into a detailed cost breakdown structure.
Using proprietary computer software systems, it is possible to monitor and compare actual costs
expended on the project to the budget estimate and indicate the variances. By identifying and coding
the costs associated with changes, project managers produce reports and documents that can be
used to support additional costs for owner requested changes. In addition, the advantage of knowing
where the actual costs stand strengthens the position and can allow one to become a more profitable
business.
Comparison and analysis of budgeted cost versus actual cost indicates to management where
improvements can be made to reduce potential losses, to improve cash flows and to improve future
bidding methods.
1222. What is meant by Overheads Is the contractors indirect cost of the management, supervision and
conduct of its business which include general and administrative costs which is not attributable to a
specific job. (This is mainly head office overheads)
1223. What is meant by Loss and Expense (LEX) claims?
If due to employer delay, the contractor incur additional expense to maintain its facilities at site for a
longer duration it is called Expense claim.
But if due to employer delay the contractor lost its opportunities for some other works, some where
else, from which he could have made profit, it is called Loss Claim.
1224. Claims
Is a legitimate request for additional compensation (cost and/or time) on account of a change in the
terms of the contract
It follows from this definition that a claim may arise under any form of construction contract, except
perhaps those very rare kind, in which all costs are fully reimbursable without any reservations at all.
Of course, a claim is most likely to arise under a fixed price form of contract, and in fact today there
are few such contracts in which there are no claims, negotiations and settlements before the contract
is finally closed out.
1225. Types of Claims

Contractual claims (As per the contract conditions) These are Time & Money.

Ex Contractual claims (Legitimate claims that occur but that do not have their basis in the
conditions of contract. So it should be dealt with mediation, arbitration or litigation) Eg. Intermittent
rain disrupted the works.

Ex gratia claims (A claim on account of moral responsibility and broader business relationship)

1226. Types of Claims

Contractual claims Arising out of express provision of Contract.

Common law / civil law claims Based on alleged breach of implied terms of Contract

Quantum meruit claims If no price is agreed, or if Contract is replaced with a new one due to a
number of variations.

Ex gratia claims Out of kindness. To maintain good relationship between parties.

1227. How you will analyse loss and expense claims?

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1228. Claims and remedies

(1) Claims under the contract Remedy is specified in contract
(2) Claims arising from the contract Terms of contract has breached. But remedy is not specified in
contract (Eg. Prolongation Cost)
1229. Compensation events is related to NEC / ECC contracts. It identifies 19 compensation events. All
compensation events are listed in the core clauses of Contract at clause 60.1. As per this the
Contractor should be paid the additional costs arising from the compensation events which are outside
his control.
1230. Contra Charges - A contra charge is a effectively a back-charge. A term often used in Construction
that refers to offsetting a particular element of works to another contractor. I.e. A main contractor will
contra charge a sub-contractor if they had to incur additional costs for fixing a fault.
1231. Costs-plus contracts tendering
Costs-plus contracts reimburse the Contractors actual costs, together with an addition (usually a
percentage) for overheads and profit. This form of procurement can be competitively tendered, with
the overhead and profit addition being the competitive element, together with any other lump sum
items required at the tender stage (such as site management costs and other preliminaries).
This method of procurement is not normally an economic way to procure a project, as there would be
likely to be a lack of competitive tendering on some elements, and no incentive for the Contractor to
reduce cost. However, it has the advantage that the works can start very promptly, with minimal tender
documentation. This form of procurement is usually only be suitable for small and simple projects.
1232. Types of Cost reimbursable (Cost plus) contracts
Cost Contracts (Only cost is reimbursed) Eg. For research works mainly with NGOs.
Cost + Fixed fee
Cost + Percentage fee (Fixed percentage)
Cost + Variable percentage fee (Percentage will decrease if the amount goes beyond the budget
value or time exceeds allotted time )
Cost sharing contract (No fee paid. Portion of cost only paid useful if the contractor will receive
substantial commercial benefits as a result of this contract performance)
Target Cost method (If the final contract sum is less than the target cost, the gain will be shared by
both employer and contractor. But if the final contract sum is greater than the target cost, the pain
should be completely borne by the contractor)
Target Cost contract means a cost reimbursement contract in which a preliminary target cost is
estimated and on completion of the work the difference between the target cost and the actual cost
is apportioned between the parties on a pre agreed basis.
1233. What type of Costs should include a Cost plus contract? Actual cost of
Materials and supplies to the project
Wages of workers
Salaries of superintendents
Insurance premiums.
1234. What are the items that should include in Contractors fee of cost plus contract - Indirect overhead
expenses (salary, telephone, office supplies)
1235. In a cost plus contract, who pays for the defective works due to contractors negligence?
Generally the contractor should bear the cost of correcting the defects. But the AIA ( American
institute of Architects) and EJCDC (Engineers Joint Contract Documents Committee) contracts permit
the contractor to charge the owner for cost of repairing or correcting defective works caused by
contractors negligence.
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1236. Advantages of cost plus contract

(1) Quick start at site (2) Less tender process (3) Suitable during high price fluctuation (4) Less Price
risk to contractor
1237. What is meant by Star Rates? Star rates are derived from the first principles of Labour, Material and
Plant.
All unit rates or lump sum items not covered by contract rates are considered as Star Rate. It is
approved if it is (a) Equal to or close to the term rate of similar nature or unit rate employed by
government authorities (If it is within + 15% range) (b) If it is within + 15% range of rate of previously
employed in other contracts. (c) Acceptable by comparing with quotations from other contractors. (d) If
its supported by its built- up with all components (e) By Negotiation if all above methods are not
acceptable.
1238. After a contract is terminated, what are the immediate duties of a QS?
1239. Is it possible to terminate based on a LOI?
1240. What are the clauses in a subcontract about time & cost claims?
1241. What a contractor should do if a client is insolvent? As per clause 69.1 c of FIDIC, if the employer is
bankrupt, the contractor is entitled to terminate his employment.
1242. Effects of termination / suspension of a project with respect to Insurances. During Suspension of the
Works, standstill insurance is possible
1243. Type of contractor claims after employer terminated the contract. (Termination for convenience)
Material on site
Materials ordered, cancellation charges
Loss & expense claims
1244. Design co-ordination
Selection of the right design team is an essential element to project success. Client or the Project
manager on his behalf should identify potential design firms that offer the talent, interest, and depth of
service required by the specific project. The Request for Qualifications (RFQ) and include a Standard
of Deliverables using recognized industry standards.
The Project Manager typically performs the following Pre Design / Program Phase procedures:
Creates the project management plan
Creates a project directory
Develops and verifies facility requirements
Conducts a local construction market survey
Establishes, with the clients prior approval, contact with the appropriate governmental authorities to
determine the regulatory requirements applicable to the project
Assists and supervises preparation of the program budget, including input from all consultants
Develops the preliminary project master schedule
In coordination with the client, conducts a project kickoff meeting and team orientation
Establishes the project cost budget process
Prepares detailed monthly reports
1245. Certificates issued by an Architect (JCT) Certificate of Practical completion, Non completion,
Completion of making good defects, Approximate value of work on partial possession, Interim
Certificates, Final certificate.
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In FIDIC (1) Interim Payment Certificate (2) Taking Over Certificate (3) Defects Liability Certificate
1246. How variations are valued By rates in BOQ, Pro-rata rates, Agreed rates, Daywork rates, quotation
rates from subcontractor / suppliers, Derived from first principles.
1247. If you saw a defective work during valuation at site, what should be your course of action? We have
to include the defective work in the valuation for time being and inform the Engineer about this matter
for him to decide. If the Engineer decide that it is a defective work, they have to omit it form the
valuation.
1248. How you will value the dayworks sheets? Check contractors wage sheet and verify the hours
mentioned in the dayworks sheets are correct, Check the quantity of material used, Check the material
prices, Check from the plant record about the plant used, check the percentage of additions, Do
arithmetic check.
1249. MRC Method related charges In BOQ generated using CESMM 3, the contractor is invited to write
in to the BOQ the provision and items of plant required for undertaking the works as detailed in their
method statement. These are referred to as method related charges.
1250. BWIC Builders work in connection with mechanical and electrical service installations are frequently
provisionally as the design of MEP items will be incomplete in the initial stages.
1251. BoAQ Bill of Approximate Quantities. This is produced when in order to secure the early
appointment of a contractor on site, the quantities of the unit items of the main elements of the works
are approximated before the deign is complete. Such BOQs are priced by the contractor and the
quantities will be re-measured. Mainly used in civil engineering works and where there will be
contractors design elements.
1252. Insolvency Is the inability to pay off ones creditors (the people one owe money to). This is often the
first stage of bankruptcy. Insolvency is a generic term used to describe bankruptcy, liquidation,
administration etc.
The administration is where someone (administrator) is appointed to manage the companys affairs on
behalf of creditors. Liquidation involves the shutting down of a company or partnership and the selling
off of the assets to pay off the creditors there are various types of liquidation including voluntary and
compulsory.
1253. How to release Final retention if pending defects exists in a project Engineer shall withheld an
amount as cost of work remaining to be executed, and release the balalnce amount to contractor upon
expiry of DLP (Clause 60.3 (b))
1254. What you will do if the main contractor on a project went bankrupt

Verify that what I heard is true. This will help one to overcome the rumours.

Secure the site

Advise the client to put some insurance in place

Review and check what payment has done. Temporarily stop all payments.

Review the pending payments.

Undertake a valuation for the works done at site.

Make contact with the administrator/ liquidator.

Advise the client about the cost to complete balance works

Consider the implication of any bonds or PCG.

1255. Clauses in FIDIC related to insurance

4.1

20.1

Care of Works Contractors liable for loss or damage to works (excluding the
Expected Risks) before Certificate of Completion is issued.

20.4

Excepted Risks described i.e. Political Risks like War, Nuclear Explosion etc.

21.1
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22.1

Damage to Persons and Property

23.1

Third Party Insurance To be insured by Contractor

24.1

Accident & injuries to Workers

25.3

Remedies on Contractors failure to Insure

49.1 }

49.4 } Defects Liability

50-1 }

1256. CAR Insurance Who is covered

Principal/ Owner/ Employer/Client

Main Contractor (s)

Sub Contractor (s)

Engineers/Consultants/Architects

Banks

Others having Insurable Interest

1257. CAR What are insured

Contract Works

Plant & Machinery

Principals & Surrounding Property

1258. Third party liability insurance

Third Party Liability

a. Accidental Injury /Death to third party.
b. Property Damage (Adjacent property)

Legal Costs & Expenses incurred

1259. Exclusions of CAR

Penalties for delay /guarantee of performance

Wilful (determined) Act or Gross Negligence

War, Terrorism, Nuclear Weapons etc.,

Consequential Losses

Faulty Design, Material, Workmanship

Cessation of work

Normal Wear & Tear, Corrosion, Gradual deterioration due to atmospheric conditions

Shortages revealed at time of stock taking Inventory Losses

Damage to Works put into use or for which certificate of completion is issued

Arising out of employment of a person by Insured (or under Workmens Compensation)

Items insurable under Section I

Vibration/ Withdrawal or weakening of support

Liability of vehicles insurable under Motor Insurance

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1260. Cross liability Generally various parties like Principal, Contractors & Sub Contractors, all covered under the same
policy.
These parties cannot be considered as Third Parties to each other. Any claim against each other not
covered. If a Cross Liability extension is endorsed on the policy each insured party is considered as
separate entities and will be treated as if separate policy has been issued to each. This extension
excludes damage to property who can be covered under Section I
1261. Claims procedure for insurance

Notification of claims immediately

Detailed incident report (Damage report)

Original replacement /repair invoices

Basis of Loss Settlement

(a) In the case of damage which can be repaired the cost of repairs necessary to restore the
items to their condition immediately before the occurrence of the damage less salvage and
excess
(b) In the case of a total loss, the actual value of the items immediately before the occurrence of the
loss less salvage and excess

1262. What should be insured in general Reinstatement of damage, Preservation of income, Liabilities
incurred, Legal liabilities.
1263. Deed A formal legal document signed by the parties which may be sealed, but does not have to be.
1264. Dilapidation lack of repair to a property through breach of contract by the occupier.

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R. Risk Management (2)

1265. Risk Management
Is the identification, assessment, and prioritization of risks followed by coordinated and economical
application of resources to minimize, monitor, and control the probability and/or impact of unfortunate
events. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit
risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary.
1266. Employers Risk as per FIDIC (Clause 20.4) for which Employer shall pay to contractor.
War, hostilities, invasion, act of foreign enemies
Rebellion, revolution, insurrection or military or usurped power.
Ionising radiation or contamination by radio activity
Pressure waves by aircraft
Riot, commotion or disorder. (unless it is by the employees of contractor or subcontractor)
Loss or damage due to use or occupation by employer of any section of permanent works, except as
may be provided in contract.
Loss or damage due to design of works provided by employer.
Any operation of forces of nature (if even an experienced contractor could not foresee)
1267. Risk Analysis in a Project
Development involves considerable risk and uncertainties. Risk can be analysed, one identified steps
to be taken to avoid these risks. Profits must be sufficient to cover the risks. Profit is of course reward
for risks. Obtain expert advice to analyse the risks. If cost increases without commensurate rise in
value, the profit will be reduces. Profit element should cover at least the foreseeable risks. (Eg. Void
period between project completion and date of letting it to the customers)
1268. Risk Analysis Risks can be transferred or distributed, and should be taken by the person best able to
control them, or able to obtain insurance against them.
1269. Why a consultant should try to limit the liability of indemnity in a service contract? Indemnities are
broaden and deepen liability causing the consultant to take on extra liability that his insurance is
unlikely to cover. An indemnity is not appropriate and that the normal contractual rules should apply. If
a consultant is unable to avoid an indemnity entirely then try to lessen the obligation under indemnity
by specifying particular events to which only indemnity apply; not for all general breaches of the
contract (RICS)
1270. How to manage risk in contracts (from a consultant point of view)?
Make a written contract, Set out the details of the services, Ensure the payment mechanism, Make
sure that parties obey the contract strictly, make sure that contract contain a Force Majeure clause to
deal with a situation outside the control of parties, Include a cap on liability, Do not give indemnities.
1271. Why a force majeure clause is a must in a consultancy services? If it is a design services and
consultant could not complete work properly due to some force majeure events, then, the consultant
will be liable for the delay even if there was no effect to the area of the building site due to the force
majeure event.
1272. Definition of Risk as per British standard A combination of the probability or frequency of occurrence
of a defined hazard and the magnitude of the consequences of the occurrences
1273. Definition of Hazard as per British standard A situation that could occur during the life time of a
product, system or plant that has the potential for human injury, damage to property, environment or
economic loss
1274. Risk Management strategies ( I-A-M )
1. Identification 2. Analysis 3. Monitoring / control
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1275. PRAM Project Risk Analysis and Management

1276. RAMP Risk Analysis and Management for Projects (By ICE)
1277. Difference between Risk and Hazard
Hazard is something with the potential to cause harm. But Risk is the likelihood of potential harm from
that hazard being realised.
1278. Risks of physical loss or damage occurring is covered by an insurance policy. But risks related to
contractual performance are usually secured either by conditional guarantees or unconditional ondemand payment bonds.
1279. How is the risk valued?
1280. What is meant by Mutual Insurance Company Insurance company formed by a group of
professionals for themselves. The characteristics are,
Not to make profit.
Elected members will do the supervision role.
Long term basis (So members know the premium)
1281. Examples of Risks in construction (Most of these are coming under contractors risks)
Physical risks (Grading Conditions, obstructions, weather, inadequacy of plant, labour & materiel,
time),
Delay and disputes (possession of site, late information., inefficient execution, delay outside control),
Direction and supervision (poor communication, incompetence, defective designs, inappropriate
consultants/contractor),
Damage and injury to person (non insurance of risky matters, negligence or breach of warranty and
property, accidents, uninsurable risks, consequential loss),
External factors (govt. policy or taxes),
Payment (insolvency, delay in settling claims/payment, legal limits to recovery, inflation finance),
Law and arbitration (lack or records, ambiguity, delay in resolving disputes)
1282. Is all risk really risk? Give examples of what it covers
1283. Describe some excepted risks?
1284. What do you mean by risk of delays? Is it that does not complete on time?
1285. What is risk management and give an example of what you would do to manage risk?
Risk management is the discipline of identifying, monitoring and limiting risks. In some cases the
acceptable risk may be near zero. Risks can come from accidents, natural causes and disasters as
well as deliberate attacks from an adversary.
In businesses, risk management entails organized activity to manage uncertainty and threats and
involves people following procedures and using tools in order to ensure conformance with riskmanagement policies.
Identify risks (prepare checklist of important risks linked with clients priorities for the project-time, cost
and quality), Analyse risks (interims of frequency, severity of impact, possible values, maxima, minima
and medians, critical detailed qty analysis) and respond to risk by identifying a contract strategy to
decide who is best placed to manage a risk. (transfer, acceptance, avoidance, insurance, or doing
nothing)
1286. Risk Management processes - STARR
Sharing - Eg. Advance weather condition. Contractor will get EOT But no cost
Transfer Eg. Use Insurance
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 Avoidance Removing cause of risks Eg. If there is incomplete design, try to complete it.
Reduction Impact should be reduced Eg. Buy materials early to avoid price escalation
Retention Eg. Use contingency amount if risks materialise.
1287. What are the principles of risk management?
1288. How various procurement routes deals with the risks?
1289. What is meant by mitigation strategies?
1290. What are the techniques used for quantification of risks?
1291. What are the effects of risk on programme and cost? If there is a risk which may cause to the
project, then it will affect prolongation cost.
1292. As a QS how you could contribute to the identification of risk in a project? Consider both pre and
post contract scenario. Check how each risk elements affect client objectives of quality, cost , time and
H & S.
1293. Are there more risks in refurbishment than new build?
1294. What is meant by risk register?
The Risk register or Risk schedule is developed by the management team for each project locating
potential problems and assessing the methodology needed to manage the risk. Various techniques are
adopted for the risk analysis. The risk register will be divided into high and low risk categories with
likelihood chances of its occurrence. This should have the time and cost implications of each risks.
This is vital tool in the management of any project and is essential to accurate compilation of the
project forecast
This is a document listing all the risks identified for the project, explaining the nature of each risk and
recording information relevant to its assessment and management.
A typical risk register should include, Risk number, Description, Risk Ownership, Probability, Impact,
Risk factor (probability multiplied by impact), Response, Status (done, active, monitor, not yet
developed), Comments.
A risk register is a tool commonly used in project planning and organizational risk assessments. It is
often referred to as a Risk Log (for eg in PRINCE2).
This tool is widely used within Risk Management for identifying, analysing and managing risks. In this
context a project risk is essentially an uncertain event that, should it occur, will have an impact on the
project (this could be positive or negative).
It contains the information on the identified and collected project risks that the project team identifies
when estimating and adjusting the activity durations for risks.
The project team considers the extent to which the effects of risks are included in the baseline duration
estimate for each schedule activity, particularly the risks with high impact.
This Risk Register helps you to track all risks within your project or business.
Register, you can identify, track and mitigate risks from occurring.

Using

the

Risk

The Risk Register provides a key tool for Risk Management, as it holds all of the information relating to
risks within your business. It also gives you a clear view of the current status of each risk, at any point
in time
Risk rating = Likelihood x Severity
1295. The Risk Register will help you to record the following information:
Type of risk, who raised it and how it could affect your business
Likelihood of the risk occurring and its potential impact
Risk Priority, based on its affect on the business
Actions taken to prevent the risk from happening
Contingency actions taken in case it does eventuate
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You can also use this Risk Register to:

Monitor and control all risks effectively
Identify the actions needed to manage and mitigate risks
Report the overall risk status at any point in time.
Using the Risk Register, you can identify all of the risks to your project or team, and then create a plan
of action to reduce the likelihood of them occurring. This makes Risk Management easy.
1296. Risk A uncertain event which, should it occur, will have an effect on the achievement of the projects
objectives. A risk can be measured in terms of likelihood (probability) and consequence (impact)
1297. Risk management A structured and auditable process for the benefit of all members of the project
team which is dedicated to the sole purpose of controlling and mitigating uncertainty in a project.
Generally three steps in risk management Identification, Analysis and Monitoring/Response.
1298. Risk identification methods By desk top studies, interviews, brainstorming. Past experience,
Historical data, checklists. Then collate all the potential uncertainties in delivering an objective.
1299. Risk analysis An adequate and effective assessment of the individual and combined effect of
identified risks on the successful delivery of the objective.
1300. Risk analysis method Monte Carlo simulation, Cost movement forecast method, Multiple Estimate
Risk Analysis (MERA), Spider diagrams, Flow charts, Delphi technique etc.
1301. Monte Carlo analysis This is a simulation technique for the analysis of the behaviour of probabilistic
simulation models. It is used to determine the potential financial impact of the identified risks and thus
the prudent level at which to set the risk contingency. Different organisations will have varying policies
as to what level of confidence the contingency is set, but an 80% confidence level is common. This
means that based on the analysis there is an 80% probability that the financial impact of the identified
risks will be within the specified level of contingency. The purpose of such analysis is to enable a
deeper understanding of project uncertainty and thus better inform decision making.
1302. Monte Carlo methods
Monte Carlo methods are a class of computational algorithms that rely on repeated random sampling
to compute their results. Monte Carlo methods are often used when simulating physical and
mathematical systems. Because of their reliance on repeated computation and random or pseudorandom numbers, Monte Carlo methods are most suited to calculation by a computer. Monte Carlo
methods tend to be used when it is unfeasible or impossible to compute an exact result with a
deterministic algorithm.
Monte Carlo simulation methods are especially useful in studying systems with a large number of
coupled degrees of freedom, such as fluids, disordered materials, strongly coupled solids, and cellular
structures (see cellular Potts model). More broadly, Monte Carlo methods are useful for modeling
phenomena with significant uncertainty in inputs, such as the calculation of risk in business. These
methods are also widely used in mathematics: a classic use is for the evaluation of definite integrals,
particularly multidimensional integrals with complicated boundary conditions. It is a widely successful
method in risk analysis when compared to alternative methods or human intuition. When Monte Carlo
simulations have been applied in space exploration and oil exploration, actual observations of failures,
cost overruns and schedule overruns are routinely better predicted by the simulations than by human
intuition or alternative "soft" methods.
The term "Monte Carlo method" was coined in the 1940s by physicists working on nuclear weapon
projects in the Los Alamos National Laboratory.
1303. Risk Management - Monte Carlo distribution
Risk management is part of project management. Monte Carlo simulations can lead to Monte Carlo
distributions helping assess risk combinations.
1304. Monte Carlo distribution:
The histogram represents, in this case, a total of 1000 simulations. Each column shows how many
simulations occurred for each 'total cost' range. If these are totaled they will add up to 1000.
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If we indicate (by the arrow) where a total of 800 simulations occur we can assess the 'total cost' at
this point.
Based on the example below this would be 120,000 to 130,000 (assumes the range of total costs
was 0 to 200,000, had the start been at 50,000 this value would have been 170,000 to 180,000)
Hence, we can see that there is an 80% (800 out of 1000) chance of the 'total cost' not exceeding
130,000. So, there is a 20% risk that the project will exceed 130,000.
Seen another way, for every 1000 simulations it is likely that 800 of them will have a 'total cost' value
of less than 130,000. So this histogram, taking 1000 simulations can be used as a prediction of what
could happen in real life.

It can indicate project management (see 'The Complete Project management package') risk.

1305. Central limit theorem (CLT)

In probability theory, the central limit theorem (CLT) states conditions under which the sum of a
sufficiently large number of independent random variables, each with finite mean and variance, will be
approximately normally distributed (Rice 1995). Since real-world quantities are often the balanced sum
of many unobserved random events, this theorem provides a partial explanation for the prevalence of
the normal probability distribution. The CLT also justifies the approximation of large-sample statistics
to the normal distribution in controlled experiments.
The central limit theorem is one of the most remarkable results of the theory of probability. In its
simplest form, the theorem states that the sum of a large number of independent observations from
the same distribution has, under certain general conditions, an approximate normal distribution.
Moreover, the approximation steadily improves as the number of observations increases. The theorem
is considered the heart of probability theory, although a better name would be normal convergence
theorem.
1306. Risk management plan An auditable document which describes the risk management approach (
identification, analysis, and response) to be adopted for a specific project or objective delivery and
which states who should undertake it and when.
A Risk Management Plan is a document prepared by a project manager to foresee risks, to estimate
the effectiveness, and to create response plans to mitigate them. It also consists of the risk
assessment matrix.
A risk is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect
on a project's objectives."[1] Risk is inherent with any project, and project managers should assess
risks continually and develop plans to address them. The risk management plan contains an analysis
of likely risks with both high and low impact, as well as mitigation strategies to help the project avoid
being derailed should common problems arise. Risk management plans should be periodically
reviewed by the project team in order to avoid having the analysis become stale and not reflective of
actual potential project risks.
Most critically, risk management plans include a risk strategy. Broadly, there are four potential
strategies, with numerous variations. Projects may choose to:
Accept risk; simply take the chance that the negative impact will be incurred
Avoid risk; changing plans in order to prevent the problem from arising
Mitigate risk; lessening its impact through intermediate steps
Transfer risk; outsource risk to a capable third party that can manage the outcome
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1307. Risk Response methods Avoid, Transfer, Mitigate, Control

1308. What is the purpose of risk contingency on a project? The contingency sum is usually incorporated
to allow for unforeseen items and / or project specific risk. Risk assessment can be used to provide an
objective assessment of the contingency requirement, rather than relying on percentages which do not
relate to project circumstances.
If the risk can not be fully mitigated or eliminated it is prudent to allow a time and cost contingency in
the planning of the project to minimise the overall impact on planned outcomes should the risk occur.
1309. Effects of risk management / Why Risk Management is required in a project
Increased confidence to achieving the project objectives
To reduce the surprises
Identifying new opportunities
To avoid disputes
1310. Procedure to identifying and mitigation risks in your project
Identify the type of risks, identify possible risk events, any specific risk events to this project, quantify
the risk, analyse the impact and its affect on project, how to mitigate, how to transfer, who will take the
risk (risk owner), periodic review.
1311. Risk workshop Is a brainstorming activity involving the professional team, client and end user
representatives. To keep the sessions focussed it would be common to use prompt heading to focus
the team in turn on different areas of risk.
1312. Risk Management and Quantity Surveyors / As a QS what you will do to manage the risk in a project?
Construction projects involve a lot of risks and it is in the interest of the Client that all risks are
identified, monitored and controlled through out the life of the project.
To assure that the clients above interest is achieved, an experienced team of experts in the
identification, definition, quantification, monitoring and controlling of risks. We should appreciate that
risk management is an on going process, which should be exercised through out the life-time of the
project.
1.Risk workshops
2.Objective identification, analysis and evaluation of project risk
3.Preparation and management of risk registers
4.Effective risk allocation and management
5.Risk monitoring and control
6.Alert the client on all unforeseen changes, delays, disputes and cost overruns
7.Risk mitigation and transfer
8.Claims risk assessment
9.Dispute avoidance
1313. Risk Management Consulting
Risk management is a structured approach to managing uncertainty through, risk assessment,
developing strategies to manage it, and mitigation of risk using managerial resources. The strategies
include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk,
and accepting some or all of the consequences of a particular risk.
1314. Expected Monetary Value (EMV)
If you could somehow determine precisely what would happen as a result of choosing each option in a
decision, making business decisions would be easy. You could simply calculate the value of each
competing option and select the one with the highest value. In the real world, decisions are not quite
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most valuable being, in this case, the option that has the highest Expected Monetary Value (EMV), a
measure of probabilistic value.
1315. How to create a risk contingency budget using Expected Monetary Value (EMV)
A risk contingency budget can be established to prepare in advance for the possibility that some risks
will not be managed successfully.
Risk management is the process of identifying and proactively responding to project risks. Generally
(but not always) you will look for ways to eliminate risks or to minimize the impact of a risk if it occurs.
However, what if you're unsuccessful in preventing some risks? In that case, the risk will actually occur
and cause some type of problem to the project. If the risk occurs, there may be some monetary impact
on your project.
A risk contingency budget can be established to prepare in advance for the possibility that some risks
will not be managed successfully. The risk contingency budget will contain funds that can be tapped so
that your project doesn't go over budget.
The question is how do you know how much money to place into the risk contingency budget account?
You can use Expected Monetary Value (EVM) as a technique to quantify the risk into budget terms.
We will need two numbers for each risk:
P--probability that the risk will occur.
I--the impact to the project if the risk occurs. (This can be broken down further into the cost impact and
the schedule impact, but let's just consider a cost contingency budget for now.)
If you use this technique for all of your risks, you can ask for a risk contingency budget to cover the
impact to your project if one or more of the risks occur. For example, lets say that you have identified
six risks to your project, as follows:
Risk

P (Risk Probability)

I (Cost Impact)

Risk Contingency

.8

$10,000

$8,000

.3

$30,000

$9,000

.5

$8,000

$4,000

.10

$40,000

$4,000

.3

$20,000

$6,000

.25

$10,000

$2,500

$118,000

$33,500

Total

Based on the identification of these six risks, the potential impact to your project is $118,000.
However, you can't ask for that level of risk contingency budget. The only reason you would need that
much money is if every risk occurred. Remember that the objective of risk management is to make
sure that the risks do not impact your project. Therefore, you would expect that you will be able to
successfully manage most, if not all, of these risks. The risk contingency budget should reflect the
potential impact of the risk as well as the likelihood that the risk will occur. This is reflected in the last
column.
Notice the total contingency request for this project is $33,500, which could be added to your budget
as risk contingency. If risk C and F actually occurred, you would be able to tap the contingency budget
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for relief. However, you see that if risk D actually occurred, the risk contingency budget still might not
be enough to protect you from the impact. Risk D only has a 10% chance of occurring, so the project
team must really focus on this risk to make sure that it is managed successfully. Even if it cannot be
totally managed, hopefully its impact on the project will be lessoned through proactive risk
management.
The risk contingency budget works well when there are a number of risks involved. The more risks the
team identifies, the more the overall budget risk is spread out between the risks. The EVM technique
provides a formula for determining the right amount of budget to apply to the risk contingency budget.
1316. EMV Calculation (Eg. Risk Price escalation of steel)
During the risk analysis, the possible options to mitigate this risk are

Consider LS contract with fixed price -Then the contractor will evaluate it & include in his offer.

Consider a base rate and allow fluctuation adjustment

Agree to supply steel to the contractor

Agree to pay the contractor as Material On Site.

Now evaluate each options to find out which has maximum EMV
1317. What is Risk Mitigation and Risk Contingency plans?
Risk Contingency plan - is referred as plan B. That is a alternate path totally.
For e.g. If your office is in an earthquake prone area, Risk mitigation plans can include, earthquake
drills to train people, etc.
And Contingency plan could be that, you have a back up office in another place, so that in case
something happens you can shift your operations to a new place.
Eg. In the case of Fire Perils,

Risk Mitigation Plan Fire extinguishers, Risk Contingency Plan Insurance Policy
1318. What is a project contingency plan?
Contingency or management reserve is an amount the consultant or the contractor may want to
include the unexpected resources that may be overlooked or tasks that may have to be redone
because they might not work for the first time. Contingency provision is to cover the elements of
unforeseen minor changes in the technical and design specification.
A Contingency plan is a plan devised for a specific situation when things could go wrong. Contingency
plans are often devised by governments or businesses who want to be prepared for anything that
could happen. They are sometimes known as "Back-up plans", "Worst-case scenario plans" or "Plan
B".
Contingency plans include specific strategies and actions to deal with specific variances to
assumptions resulting in a particular problem, emergency or state of affairs. They also include a
monitoring process and triggers for initiating planned actions. They are required to help governments,
businesses or individuals to recover from serious incidents in the minimum time with minimum cost
and disruption

1319. Risk the combination of the possibility of an event and its consequence
Project risk is primarily the likelihood of negative occurrences adversely affecting the project so that
its objectives become more difficult or even impossible to achieve
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An uncertain event or condition that, if it occurs, has a positive or negative effect on a projects
objectives (Definition of PMI, The Project Management Institute )
An uncertain event or set of circumstances that should it occur, will have an effect on the achievement
of the projects objectives (Definition of APM, The Association for Project Management)
1320. Why risk should be managed
If risk is successfully managed and a project is delivered on time, within budget and to required quality
standards, then that should be good for all participants in the process. In the modern era of integrated
project teams all parties should contribute to the success of, and share in the benefits of, good project
performance. There is no long term benefit from certain parties to the project gaining at the expense of
others.
1321. Identify some common risky site activities in construction. Lack of enough PPE, Expose live cables,
Improper usage of scaffolding, Lack of enough safety sign boards.
1322. Explain different types of risks in projects
3rd Party Risks

Contractor risks

Approvals

Planning approvals

Conservation area consents

Environmental impact assessment

Legal Agreements

Failure to meet programme

Poor co-ordination of
subcontractors

Inclement weather

Price changes permitted under

certain contracts

Rights of way

Disputes and claims

Rights of light

Poor site management

Noise control requirements

Site of special scientific interest

Pressure Groups

Local pressure groups

National pressure groups

Industrial action

Terrorism

Changes in regulation

Accidents or injuries for which client

retains responsibility

Under contract

Due to client staff

Latent Defects

Liquidation of contractor

Client Controlled risks

Site specific risks

Ground conditions

Extent of pre-construction
investigations

Inaccurate or insufficient terms of

reference

Changes in project scope

Occupancy

Soil types and variability

Usage

Mining works/subsidence

Size

Contaminated land

Delays

Climate and weather conditions

Late decision making

Access restrictions/limitations

Late handing over of site

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Delayed programme

Existing occupiers/users

Alternative provision

working hour restrictions

maintenance of access roads

Design team risks

Maintenance of services

Inaccurate interpretation of terms of

reference

Errors in design, contract documents,

drawings

Failure to meet timescale

Estimating inadequacies

Existing buildings

Need for protection

Need for demolition

Security

Escalating labour, plant,

material costs

Taxation changes

Environment risks

Political change

Government legislation

Liquidation of design team members

1323. What is the difference between an event and a set of circumstances in risk management?
Event is a single event which causes the effects of risk. A set of circumstances means the causing
effect is coming from different angles, especially in large complex projects where the cause and effect
of risk is not easily apportioned to a single party.
1324. Should all risk be avoided
Not necessarily. But conventional view is that risk is something to be avoided or minimised where
possible, certainly when discussed in the context of construction projects.
The risk can have a range of effects on the achievement of project objectives, from the total disaster to
the unexpected welcome surprise, but is in no doubt that common usage of the word risk sees only
the downside. The negative connotations are reflected in traditional definitions of the word, both in
standard dictionaries and more technical definitions, but some professional bodies and standards
organisations have gradually developed their definitions of risk to include both upside and downside.
1325. What are Pure risks and Speculative Risks
Pure risk: normally arises from the possibility of accident or technical failure.
Speculative risk: possibility of loss or gain, which may be financial, technical, or physical.

1326. Difference between Uncertainty and Risk

In the beginning of a project there will be many uncertainties which are not clear at that stage. The
time span for these uncertainties may be months or even years in advance. Most future events are
uncertain to a degree since perfect information about the future does not exist. Eg. For a developer,
the availability of an experienced contractor for his project may be uncertain in the design stage. If he
get an experienced contractor, then onwards there is no uncertainty. But if he does not get a good one
then there is a risk. An inexperienced contractor may not complete the work to the expectation of the
developer. Then this risk should be analysed.
It is obviously more desirable to make decisions under risk than decisions under uncertainty since
more knowledge is gained about a possible event after it has been considered.
1327. Difference between Risk and Uncertainty
Risk Involves an assessment based upon historical data or experience.
Uncertainty Arise when no historical data or experience exists.
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1328. Uncertainty on a project as including one or more of the following

Lack of clear specification of what is required
Novelty, lack of experience of a particular project or activity
Complexity in terms of the number of influencing factors and inter-dependencies between these

factors
Limited analysis of the processes involved in the activity
Possible occurrence of particular events or conditions which could have some (uncertain) effect on the

activity
Note that only the last item really relates to specific events or conditions as referred to in the earlier
definitions of a risk. The other sources of uncertainty arise from a lack of understanding of what is
involved and are less obviously described as threats or opportunities.
1329. Examples of uncertainties in construction projects
Uncertainty about the basis of estimates
Uncertainty about design and logistics
Uncertainty about the project organization
Uncertainty about objectives and priorities

1330. What is Risk Management - (PMI definition)

The systematic process of identifying, analysing and responding to project risk. It includes maximising
the probability and consequences of positive events, and minimising the probability and consequences
of events adverse to project objectives. It includes processes of RM planning, risk identification,
qualitative risk analysis, quantitative risk analysis, risk response planning and risk monitoring and
control
1331. What is meant by Project Life Cycle
Sequential phases through which a project passes to reach its objectives
A comparison of the various project life cycle frameworks shows that the timing and responsibilities for
the various design and construction activities involved may vary, the way the various participants are
brought together may differ, and the number of steps detailed and terminology used varies. However,
fundamentally they all exhibit a number of common features which see the project go through a
strategic definition phase followed by tactical delivery phase.
1332. Relationship between Value Management & Risk management
RM and VM are said to be two sides of the same coin. They are interrelated activities that should be
carried out in parallel on the project. In practice, VM activities are carried out first to determine what it
is that constitutes value to the business from delivery of the project. As risk is an inherent by product of
available project options, it follows that the project (and VM which helps shape it) must come first.
Although risk should be assessed at the earliest stages of the project, this exercise is more likely
carried out as part of VM rather than a stand alone risk study.
A major risk at the outset stems from not properly scoping or defining the project precisely what VM
is intended to address. Naturally then, most effort and attention is given over to VM at the early project
stages. It is only as the project progresses and the design and logistics of its delivery become an issue
that RM as a separate and defined activity comes into its own.
In short VM has its major role at the earlier stages of a project (particularly the strategic phase) whilst
RMs major role is in the latter delivery stages.
1333. What distinguishes hazards from other types of risks?
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A hazard is a situation that poses a level of threat to life, health, property, or environment. Most
hazards are dormant or potential, with only a theoretical risk of harm; however, once a hazard
becomes 'active', it can create an emergency situation.
The construction phase, unlike the previous design phase, involves exposure to hazards. This is the
particular class of risks that result in physical damage, injury or death rather than just commercial loss,
should they occur. The building site and erection of the works is a particularly hazardous environment
1334. What are the external risks to a project
Political issues, Social matters, Interest rates, weather conditions, taxation rules, changing interest
rates, inflation, material shortage, war,
External risks are normally are un controllable.
1335. Risk analysis from Employer point of view.
The 3 risk aspects to be reviewed relate to
How the T, C and Q objectives are established at the outset and the degree of confidence in them
What the impact to the client organization is in failing to meet these objectives
The riskiness of the project itself- the risk profile of the building.

1336. How to establish & meet Time, Cost & Quality aspects of risk
Objective
Risk

Time

Cost

Quality

Rating
1

Benchmarks were used to

establish schedule and
adequate contingencies
exist

Benchmarks were used

to establish budget and
adequate contingencies
exist

Quality requirements have

been agreed and
documented

Benchmarks were used to

establish schedule

Benchmarks were used

to establish budget

Quality requirements have

been agreed and are being
documented

The basis for the schedule

is clear, but indications are
that overruns are possible

The basis for the budget

is clear, but indications
are that overruns are
possible

Quality requirements have

been agreed but not yet
documented

The basis for the schedule

is unclear or the budget is
likely to be inadequate

The basis for the current

budget is unclear or the
budget is likely to be
inadequate

Some initial discussions with

the client on quality
requirements

There is no clear schedule

or the schedule is clearly
insufficient

There is no clear budget

or the budget is clearly
insufficient

Quality requirements are not

known

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Meeting T, C and Q objectives

Objective
Risk

Time

Cost

Quality

Rating
1

Completion date not

important

Additional funds
available

(project period <6

months)

(project cost <25000)

Alternative arrangements
available

Some scope for

additional funds

(project period 6 12
months

(project cost 25000 250000)

Delays undesirable but

could be managed

Request for additional

funds would be difficult

(project period 12 18
months

(project cost 25000 1M)

Severe disruption to
clients business

No additional funds
available and scope
reduced

(project period 18-24

months)
5

Clients business ceases

altogether
(project period >24
months)

No noticeable effect on
clients business

Tolerable effect on clients

business

clients business moderately

affected

clients business severely

disrupted

(project cost 1M - 2M
No additional funds
available and project will
not proceed

clients business ceases

altogether

(project cost >2M)

1337. Risk profile of a project

High
Factor

Risk Rating
4

Low
2

Uniqueness of
project

Prototype
incorporating
new
techniques

Unusual
project

Conventional
project

Modifications
to an existing
design

One of a
series of
repetitions

Complexity of
deliverable

Outcome
based contract
(e.g. PFI)

Coordination
of services
(e.g FM)

Design and
construct

Supply and
installation

Supply only

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Financing

Private sector
funding or joint
venture

Capital
works not yet
approved or
requested

Capital works
in forward
estimates

Capital works
already
allocated

Recurrent
funds in
current year

Adequacy of
funds

Very likely to
be inadequate

Likely to be
adequate

Tight budget,
achievable
with control

Adequate
with some
contingency

Adequate
with
generous
contingency

Project
location

Remote,
inaccessible

Remote,
accessible

Regional but
distant

Regional

Metropolitan

Project
surroundings

Activities in
occupied
areas

Staging
within
occupied
areas

Additions to
occupied
areas

Well clear of
occupied
areas

Greenfield
site

Hazardous
materials

Working with
hazardous
materials

Possibly
involves
hazardous
materials

Hazardous
materials
exist, but not
part of works

Unlikely to
encounter
hazardous
materials

No known
hazardous
materials

Definition of
project

No project
information
available

Brief project
description

Generic
project brief
available

Feasibility
study
completed

Detailed
project brief
available

Site availability

Site not
identified

Several sites
identified

Site identified
but not yet
purchased

New site
purchased

Existing site

Project
justification

Need has not

been justified

Justification
is
questionable

Needs justified
but may
change
through
project

Need justified
based on
historical
information

Need fully
justified
through
recognized
process

Project
approvals

Unidentified
approvals
required

Potential
approval
delays have
been
identified

Required
approvals are
known and
documentd

Few
approvals
required or
most
obtained

No approval
required or
already
obtained

Clients
experience

Inexperienced
multiple clients

Mixed
experience
amongst
clients

Inexperienced
single client

Experienced
multiple
clients

Experience
d single
client

Client
relationships

Multiple
reluctant
clients or
relationship

Mixed
relationship
with clients

Reluctant
client or
relationship
not

Good
working
relationship
(multiple

Good
working
relationship

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not
established

established

clients)

Assessment of
contractors

Unknown
contractors

Limited
number of
unproven
contractors

Limited
number of
competent
contractors

Adequate
number of
competent
contractors

Abundance
of
competent
contractors

Procurement
method

No tendering
and involving
sponsorship

Negotiated
tender

Tendered
outside
agency

Public open
tender

Selected
tenderers

Consultant
selection

Selection
without
approved
processes

Design
competition

Full EOI and

RFP

Period panel
consultant

Consultant
selected
using
approved
process

Stakeholder
interest

High level of
political,
community or
media
sensitivity

High profile
client or
project

Stakeholder
groups
involved

Project may
attract
stakeholder
or media
interest

Project
unlikely to
attract
stakeholder
or media
interest

1338. Insurance as a risk transfer strategy

A common means of risk transfer is through insurance. The effect of obtaining insurance cover is to
convert an uncertain exposure to some risk and to a known cost, that is to say, the premium to be paid
for obtaining cover. It has the advantage of smoothing out unpredictable peaks in losses, in favour of a
regular annual liability to the insurance company. Insurance is an easy sleep soundly option to risk
management, suitable for organisations who could not cope with financial exposure to such losses from
time to time. However, it is also perceived as an unsophisticated approach to risk management and
should only be used as a last resort or when strictly necessary, such as when required by the contract or
for statutory reasons.
1339. The risk register
Document recording the risk status of a project at a particular point in time. Requires frequent updating.
The results of a risk management exercise should be recorded in a single document, known as the risk
register. The risk register is simply a single source of reference for all the risks and their current status
for a project. It should be emphasised that the risk register is a dynamic document and will need
updating over time as the risk profile changes.

Probability
Source

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EFFECT

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Eliminat
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Transfer

Reduce

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1340. Tools / techniques for risk identification Historical data, checklists, brainstorming
1341. Risk analysis method

Assessed likelihood

Equivalent probability

No chance of occurring

0%

Unlikely to occur

5 - 45%

As likely as not

45 - 55%

Likely

55 - 95%

Almost certain

95 - 99%

Certain to occur

100%

Assessed likelihood

Equivalent probability

Loss is not possible

Very remote possibility

0.1

Remote possibility

0.2

Slight chance of occurrence

0.3

Slightly less than equal chance

0.4

Equal chance of occurring

0.5

Fairly possible

0.6

More than likely to occur

0.7

Predictable

0.8

Very likely to occur

0.9

Loss is certain

1.0

1342. Qualitative and quantitative analysis Qualitative analysis - Non-numerical assessment of risk based on judgement and experience of
individuals.
Quantitative analysis - Numerical measurement of risk exposure using RA techniques and processing
of hard data.
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S. General
1343. Competencies Level 1 (Knowledge & Understanding) Knowing Level 2 (Application of knowledge &
understanding) Doing Level 3 (Reasoned advice and depth of technical knowledge) Advising.
1344. What is CIS? How does it operate? Construction Industry Scheme. This started in1999. This scheme requires considerable input from
both contractors and subcontractors with issuing of tax certificates. Under the scheme the contractors
has to make deductions in certain situations when making a payment to subcontractors under a
construction contract.
1345. How do you deal with the discrepancies between E.R.s and C.P.s?
E.R Emergency Response / Employers Requirements
C.P Contingency Plan / Contractors Proposals
1346. What is GDP & GNP.

GDP Gross Domestic Product (Total market value of goods and services produced within the
borders of a country)

GNP Gross National Product (Total market value of goods and services produced by the
resident of a country even if they are living outside)

1347. What is INCOTERMS ?

Incoterms are standard trade definitions most commonly used in international sales contracts. Devised
and published by the International Chamber of Commerce (ICC), they are at the heart of world trade.
Among the best known Incoterms are EXW (Ex works), FOB (Free on Board), CIF (Cost, Insurance
and Freight), DDU (Delivered Duty Unpaid), and CPT (Carriage Paid To).
ICC introduced the first version of Incoterms - short for "International Commercial Terms" - in 1936.
Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with
the development of international trade.
Most contracts made after 1 January 2000 will refer to the latest edition of Incoterms, which came into
force on that date. The correct reference is to "Incoterms 2000". Unless the parties decide otherwise,
earlier versions of Incoterms - like Incoterms 1990 - are still binding if incorporated in contracts that are
unfulfilled and date from before 1 January 2000.
1348. What is the approximate value of an office building per Sft..
1349. What is FF & E and OS & E? (Furniture, Fit out Equipment), (Operation, System & Equipment)
1350. What is meant by ESCROW account in Dubai? Another word of Trust account or guarantee account
where monies are held in a trust safeguarded by a third party.
Law No 8 concerning Guarantee Accounts of Real estate Developments in Dubai regulates property
developers requires all funds received in relation to a development to be administrated through an
escrow account controlled by Dubai Lands Department. This is applicable to all developers receiving
payments from buyers or financiers before completion of the development. The department will
maintain a register with names of developers licensed to carry on such business in Dubai. The
developers should enter into an escrow agreement with account trustee which is a bank or a financial
institution certified by department. The land department will issue guidance through RERA (Real
estate regulatory Agency)
1351. How will the payments made into a guarantee account (Escrow) be managed?
Payments will be managed on the following basis:

Instalments will be made to the contractor of the project according to the agreement between the
project consultant and the bank.

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5% of the sum will be given to the developers for marketing and other miscellaneous purposes.

Instalments could be taken from the account if the sufficient funds were available for the
completion of the construction of the project for which the account has been opened.

1352. What is the latest news from U.A.E. Real Estate field - Dubai off-plan contract rules to be amended
(April 2009)
The Dubai Land Department will release an amended Article 11 of Law No 13 in the next two weeks,
introducing new provisions for the cancellation of contracts.
The much anticipated amendment to the Real Estate Regulatory Agency's (Rera) Article 11, Law 13,
has caused some confusion in the industry.
The article states that if a buyer defaults on a sales contract, after a 30-day notice period the
developer may cancel the contract and return the buyer's money minus 30%.
But the confusion was over whether the law applies to 30% of money already paid to the developer by
the date in question or 30% of the total due amount for the property.
Meanwhile, Dubai Land Department stated that it will issue an amendment, in April 2009, to Article 11
and it will be good for the market as it is more comprehensive and detailed. The revised article will set
new grades for properties and developers. It will be more than the 30-70 rule, which is now applicable.
1353. In current scenario in Dubai, how you will deal with falling prices during tender process (View from
contractors side)

Minimise the risk to the margin (do not simply reduce the margin)

Omission of works (ask employer to remove unwanted elements from project)

1354. What is UNCITRAL United Nations commission on International Trade Law.

The core legal body of the United Nations system in the field of international trade law. A legal body
with universal membership specializing in commercial law reform worldwide for over 40 years.
UNCITRAL's business is the modernization and harmonization of rules on international business.
Trade means faster growth, higher living standards, and new opportunities through commerce. In
order to increase these opportunities worldwide, UNCITRAL is formulating modern, fair, and
harmonized rules on commercial transactions.
The Model Law on International Arbitration - is designed to assist States in reforming and modernizing
their laws on arbitral procedure so as to take into account the particular features and needs of
international commercial arbitration. It covers all stages of the arbitral process from the arbitration
agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court intervention
through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on
key aspects of international arbitration practice having been accepted by States of all regions and the
different legal or economic systems of the world.
1355. What is a structural survey? How does this differ from a building survey?
Building Survey (Formerly Structural Survey) (RICS Information)
This report is really the best report to open your eyes to all of the potential or actual problems in your
new home. Our structural survey report goes in depth on all areas from minor to major and looks at the
property from top to bottom, inside and out. You will be advised on areas that concern the Chartered
Surveyor, why he feels there is a problem there and in most instances what he feels you need to do in
order to rectify them. Our structural survey report includes full colour photography, technical
definitions, and a Helpline service after the report has been sent to you.
You should also be able to ask the Surveyor to advise you on specific areas of concern or perhaps
alterations or extensions that you may be considering within the Building Survey (or structural survey).
The Building Survey is suitable for any property old or new (although people tend to think of it more in
terms of older, unusual properties). It is particularly useful if the property is older or has been
extended or altered or perhaps been kept in a poor state of repair. However, this may mean that your
decision about which house to make an offer on is more informed from the start (it should be borne in
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mind that these days they are not designed to replace a full independent survey, however the cost of
this will usually be reduced as you are a repeat customer!).
1356. What constitutes planning?
1357. What constitutes building regulations?
1358. Why do you need listed building consent?
1359. CIS - Construction Information Service (CIS) is an expert knowledge tool that delivers key technical
information critical to all construction projects in one easy-to-use online package.
1360. Why do I need a survey?
The best way to reach an informed decision on investments such as a home or business premises is
to instruct a professional survey and valuation of the property that interests you. Before one decide to
go ahead and commit yourself legally, he can minimise the risks by asking a qualified surveyor to
answer these questions for you:
Is the agreed price reasonable?
Are there drawbacks I don't know about?
If so, what do I need to do about them?
A survey may prevent from making a costly mistake or it may influence the final price of the property.
1361. Building survey
A full, detailed description and analysis of the building. In 3-6 hours experienced one can undertake a
detailed surface examination of all components of a typical building. Structural and non-structural
elements to be evaluated and they should interrelate to determine whether they are fit for the purpose.
The full written report prescribes any remedial action required and concludes with a summary list,
which, for a small additional fee can be priced.
1362. Quantity surveyors scope of services

Cost Modelling

Cost Estimation

Cost Planning

Pre Contract Advice

Bill of Quantities Production

Tender Analysis

Post Contract Cost Control

Legal Support

Expert Witness

1363. Abbreviations

RIBA Royal Institution of British Architects

BPF British Property Federation

CIOB The Chartered Institute of Building

NEDO National Economic Development Office.

KPI Key Performance Indicators

MBO Management by Objectives.

ICSID International Centre for Investment Disputes

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PPI Producer Price Index

BLS - Bureau of Labour Statistics.

1364. What is meant by ISO? Which ISO certification you used? ISO 9001 : 2000
It is an International standard that promotes the adoption of a process approach for developing,
implementing and improving the effectiveness of a quality management system, to enhance customer
satisfaction by meeting customer requirement
It emphasizes the importance of:

Understanding and meeting requirements

The need to consider processes in terms of added value

Obtaining results of process performance and effectiveness, and

Continual improvement of processes based on objective measurement.

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