Transcript New Contractor’s Orientation

Contractor’s Orientation
1
Behailu Demeke,
West Region Directorate
P/Director
Ethiopian Roads Authority
August 2011
Outline of the presentation
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Introduction
What you should do to succeed
Risks in construction
The contractor’s obligation
Concluding remarks
1. Introduction
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Currently 27 contractor’s work with ERA
It is planned to increase this number to 100
by 2007 EFY
Why?
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How?
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To develop the LCI
To create healthy competition
With your participation
With ERA’s support
Introduction, … Our Common Goals
the Project
As specified
– On schedule
– Within budget
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Safely
 Finish
We understand contractor works to make
reasonable profit in the process
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2. What you should do to succeed
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Plan
Organize
Control
The Golden Rule of Construction
Management
2.1 What you should do, Plan!
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Physical Plan
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Financial Plan
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Construction execution plan
Detailed schedule, clause 14.1 & 14.2
Cash flow clause 14.3
2.1.1 Clause 14 program
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Critical path method with Logical link
Description of work method & arrangements
Period of construction for each activity,
daily/monthly productivity rates
Equipment, labor and material arrangements
& sources
Climatic conditions, subsurface conditions,
custom process, LC & etc
2.1.1 Clause 14 program… Cont’
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The program should detail
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Deadline for the provisions of engineer’s facility
Timeline for completion of contractor’s site facility
Time frame for the delivery of plant, equipment
and material
Right of way and other land requirements
Temporary works arrangement
HIV alleviation programs, safety & environmental
issues
2.2 What you should do, Organize!
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Organizational Activities
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Developing system
Organizational chart
Key positions & descriptions
Site operation procedures
Site facility
Issue control procedure
Mobilize & motivate field staff
2.2.1 Organizational activities
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Appoint competent project management
team
Timely mobilization of equipment, manpower
and material (proper utilization of the mobilization advance)
Timely establishment at the site
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Office, accommodation, laboratory, workshops etc
Put in place effective communication system
Recording system
2.2.1 … activities cont’
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Establish work procedures (mandatory to avoid rework)
Environmental management should be part
of the work system/flow
Safety of workers & third party has to be an
inbuilt element of the work method/procedure
Traffic management plan is mandatory
2.3 What you should do, Control!
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Control activities
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Quality – materials, products,
Time – measured against the schedule
Money – construction budget and cash-flow
Physical Progress and Productivity
Reporting – informs the output of the Controlling activity
2.3.1 Controlling the site activities
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Make sure the work being done is of the
required quality (regardless of the engineer’s checking and approval)
Make sure that the actual productivity for
each activity is as planned or even better
Monitor the return on financial spending
Report is the most important tool to follow up
your performance
Visit your sites regularly
3. Risks as to construction
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Construction work is inherently a risky
venture
Risk is the probability that an adverse event
occurs during the construction period
Establish the probability of occurrence of the
adverse events, Measure/estimate the
potential impact and account it in your tender
Risk can be managed, minimized, shared,
transferred or accepted, but it cannot be
ignored!
3. Risks … cont’
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Estimation and pricing of risk is very difficult
(lack of database and documentation)
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The condition of contract serves to allocate
the risks and liabilities
The risks are usually allocated based on the
fact that who is best suited to handle them
Contractor’s have to assess which risks they
assume as per the contract and/or the law
4. The Contractor’s Obligation
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Construction & completion within the time
allowed
The use of material & workmanship as
specified & instructed by the Engineer
Provision of securities, indemnities &
insurances
4. The … Obligation cont’
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Supply of information and notices
Perform certain administrative & other
functions
These obligations are spread through time
4.1 Obligations during tendering
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Inspecting the site & its surroundings
Inspect information available in connection
with the site
Receive & interpret data on hydrological &
subsurface conditions
So far as is practicable, having regard to considerations of cost and time
Sub-clause 11.1
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Obligations during tendering
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Satisfied himself
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The form & nature of the site, including the
subsurface condition
The hydrologic & climatic conditions
The extent & nature of work & material necessary
Sub-clause 11.1
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Obligations during tendering
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Obtain necessary information as to risks,
contingencies & all other circumstances
which may influence or affect his tender
Based his tender on the data made available
by the Employer & on his own inspection &
examination
Satisfied himself as to the correctness &
sufficiency of his tender (cl 12.1)
Obligations during tendering
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To agree on the general terms of the
insurance (cl 25.1)
Arrangements for price adjustment should be
reflected in the tender rate
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Indices should relate to proposed source of
supply
4.2 Obligations during
Construction
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Prior to commencement of the works
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Provision of performance security (cl 10.1)
Program submission (cl 14.1)
Insurance evidence (cl 25.1)
Breakdown for lump sum items (cl 57.2)
Obligations during Construction
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Construction & completion of the works with
due care and diligence & within the time for
completion (cl 8.1, 41.1)
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Substantial completion (cl 48.1)
A stage that warrants issuance of DLC (62.1)
The contractor has to complete the works
irrespective of any difficulties he may
experience
Obligations during Construction
Do anything necessary to complete the
works
 Incidental works when risks eventuate,
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(repair of damage, additional works etc)
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Rate of progress should enable to meet
the time for completion (cl 46.1)
Obligations during Construction
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Use of materials, plant and workmanship as
specified and instructed
The GCC & COPA set the principles (the
Specs give details)
Obligations during Construction
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Provision of securities, indemnities &
insurances
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Performance security
Care for the works and materials and plant for
incorporation therein
The indemnity & insurance cover are listed in cl
20 to 25 (CAR, Workmen, third party, etc)
Compliance with statutes & regulations
Obligations during Construction
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Provision of securities, indemnities &
insurances
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Patent rights, design trademarks or names &
other protected rights
Interference with traffic & adjoining property
Indemnity for use of in-route facilities
Obligations during Construction
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Supply of information, notices or alerts
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Design related information
Program
Cash flow estimates
Geological & archeological finds
Details of labor and equipment returns
Particulars of EOT
Obligations during Construction
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Supply of information, notices or alerts
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Emergency works
Varied works, to be executed under day-works
Contemporary records
Measurement
Use of provisional sums
Payment to nominated subcontractors
Monthly statements
Obligations during Construction
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Performance of certain administrative
functions
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Not to assign the contract, any obligation or
benefit to others
Is responsible for the acts of sub-contractors
To afford reasonable opportunity to other
contractors on site
Engagement of staff and labor (observing the law)
Obligations during Construction
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Performance of certain administrative
functions
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Making payments in some cases (temporary rows,
reinforcing bridges along the route improving the roads, etc)
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Making and keeping further copy of drawings (cl
6.1)
Assigning benefit to the employer in case of
termination (cl 6.1)
4.3 Obligations after substantial
completion
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Site clearance cl 33.1
Searching defects and remedying (cl 50.1)
Preparation and submission of statement at
completion (cl 60.5)
Draft final statement and further information
(cl 60.6)
Issuing discharge to the employer (cl 60.7)
5. Concluding remarks
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You have to carefully plan, organize and
control your work
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You have to mobilize and commence work at
the site ASAP
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You have to monitor the progress and quality
of the work
Concluding remarks … cont’
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You should have a robust financial utilization
and controlling system
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You have to have a good supply chain
management system
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You have to take corrective measures
through close follow up
Concluding remarks … cont’
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This is a one time opportunity
If you succeed a lot more is coming for you
If you fail in this opportunity you may jeopardize
the opportunity of others
This projects will be counted as an experience
for you when you complete 70% of the work
You will be eligible for another opportunity after
you progress 50%
Thank you and
Good Luck