DARSP LECTURES AFTER 5 FRB 2016 AND UPTO

26 FEB 2016
PROCUREMENT
 DISCUSS BRIEFLY THE CONSTRUCTION
BIDDING/PROCUREMENT STRATEGY
QUANTITY BIDDING

SELECTIVE BIDDING

NEGOTIATED WORK
 QUANTITY BIDDING
BID ON EVERY JOB THAT COMES ALONG. HIGH-VOLUME
APPROACH IS BASED ON THE BELIEF THAT PUTTING OUT A
LARGE QUANTITY OF BIDS MEANS THAT YOU WILL
USUALLY WIN AT LEAST A
CERTAIN PERCENTAGE OF THEM.
 QUANTITY BIDDING FOR WHOM?

MOST EFFECTIVE FOR NEWER COMPANIES WITH

LITTLE NAME RECOGNITION . GOOD STRATEGY FOR
COMPANIES STRUGGLING TO FIND WORK, OR
THOSE THAT HAVE A LARGE NUMBER OF
EMPLOYEES WHO ARE NOT BUSY WITH
CURRENT PROJECTS.
 SELECTIVE BIDDING

MORE EFFECTIVE STRATEGY IS TO CAREFULLY EVALUATE

BID OPPORTUNITIES BASED ON QUALITY, AND TO
PASS ON BIDS THAT ARE NOT A GOOD MATCH
FOR THE COMPANY. ALLOWS ESTIMATORS TO TAKE
THEIR TIME ON EACH BID AND REFINE THEIR
PRICE, WHICH USUALLY RESULTS IN MORE
SUCCESSFUL BIDS.
 SELECTIVE BIDDING-HOW?
CONSIDER TYPE OF WORK YOUR COMPANY IS MOST
SUCCESSFUL AT: SPECIFIC PROJECT LIKE HOSPITALS OR
SCHOOLS, OR A CERTAIN SIZE RANGE OF JOBS. GIVEN-AN
APPROPRIATE BID OPPORTUNITY, PRODUCE
ACCURATE ESTIMATE BY OBTAINING PRICES FROM
SUPPLIERS/SUB CON. EVALUATE THE PLANS AND
SCHEDULE TO SEE HOW YOU COULD PERFORM THE JOB
EFFICIENTLY. THIS WILL ALLOW YOU TO KEEP YOUR BID
LOW AND IMPROVE YOUR CHANCES OF LANDING
THE JOB.
 NEGOTIATED WORK

MOST GOVT. BIDS FOR OR MUNICIPAL AGENCIES SEALED

BIDS. PRICES ARE SUBMITTED- LOWEST QUALIFIED BIDDER
GETS THE JOB. NO ROOM FOR NEGOTIATION OR BID
MODIFICATION.
MANY PRIVATE PROJECTS ARE OPEN BID. PRICES
SUBMITTED TO OWNER WHO CAN BASE HIS SELECTION ON A
WIDE RANGE OF FACTORS. THERE IS NO LEGAL
OBLIGATION TO GIVE THE CONTRACT TO THE
LOW BIDDER.
 NEGOTIATED WORK-HOW?
MORE RELIANCE ON NETWORKING & PERSONAL RELATIONSHIPS.
PREPARE BIDS AS CAREFULLY AS YOU CAN, AND STAY IN CONTACT
WITH THE OWNER THROUGHOUT THE PROCESS. OFFER TO
HELP OWNER OR GENERAL CONTRACTOR WITH BUDGET
PRICING EARLY IN THE PROJECT. GIVE YOU LEG UP ON
THE BID-OWNER MAY GIVE A SECOND LOOK AT THE
PROJECT THAN OTHER BIDDERS. ONCE SUCCESSFUL-WORK
PERFORMED TO HIGHEST STANDARDS. OFTEN LEAD THE OWNER TO
AWARD YOU ADDITIONAL WORK THROUGH A NEGOTIATION
PROCESS, RATHER THAN A BID. NEGOTIATED WORK OFTEN
COMES WITH HIGHER PROFIT MARGINS AND FEWER
DISPUTES-DELAYS-CLAIMS
DISPUTES AND CLAIMS
 PROXIMATE CAUSE
AN ACT FROM WHICH AN INJURY RESULTS AS

A NATURAL, DIRECT, UNINTERRUPTED CONSE

QUENCE AND WITHOUT WHICH THE INJURY

WOULD NOT HAVE OCCURRED.

CONTRACTS
LIQUIDATED DAMAGES
INCENTIVE/DISINCENTIVE (BONUS/PENALTY)
ACCELERATION
INCREASE CREW LEVELS, CREW SIZE
ADD SHIFTS AND/OR EXTEND WORK HOURS
CPM SCHEDULE IS AN EXTREMELY VALUABLE
TOOL IN ANALYZING DELAY CLAIMS
BRIEFLY DISCUSS WHAT ARE CONTRACTORS CLAIMS AND
DISPUTES?
(A) WHAT ARE THESE CAUSED BY.
A CLAIM IS A REQUEST BY A CONTRACTOR FOR ADDITIONAL
COMPENSATION OR TIME EXTENSION FOR OCCURRENCES
BEYOND THE CONTRACTORS CONTROL INCLUDING:
DIFFERING OR UNEXPECTED SITE CONDITIONS
CHANGE IN SCOPE
DELAYS CAUSED BY THE OWNER
(B) WHAT IS THE OWNERS DUTY AND OBLIGATION?
OWNER HAS DUTY TO PROVIDE ADEQUATE,
ACCURATE DATA TO THE BIDDERS
 OWNER IS LIABLE TO CONTRACTOR WHEN:
INACCURATE DATA ARE GIVEN
EXTRAS DEVELOP BECAUSE OF IMPROPER DESIGN
DESIGN IS SIGNIFICANTLY CHANGED AFTER THE
CONTRACT IS SIGNED (CONSTRUCTIVE CHANGE)
(C) WHAT IS CONTRACTORS DUTY AND OBLIGATION?
MUST PROVE ENTITLEMENT AND THE ASSOCIATED
DAMAGES
CONTRACTOR MUST PROVIDE TIMELY NOTICE OF CLAIM
UPON DISCOVERING IMPACT
LIST OUT VARIOUS TYPES OF CLAIMS?
DELAY OR DISRUPTION CLAIM
EXTRA WORK CLAIM
ACCELERATION
IMPOSSIBILITY-OF-PERFORMANCE CLAIM
DEFECTIVE DESIGN CLAIM (ERROR OR OMISSION)
INTERFERENCE CLAIM
SUPERIOR KNOWLEDGE CLAIM
CREDITS
CREDITS REIMBURSEMENT FROM CONTRACTOR TO OWNER
FOR WORK ELIMINATED (LUMP SUM CONTRACT OR ITEM)
CREDIT MAY ALSO BE GIVEN WHEN SPECIFIED
PERFORMANCE CRITERIA IS NOT MET
HOW CAN THE CLAIMS BE AVOIDED?
PRODUCING COMPREHENSIVE, ACCURATE, CONTRACT
DOCUMENTS- CLEAR, ACCURATE, COMPREHENSIVE AND
FAIRLY DISTRIBUTE RISK
CONSTRUCTABILITY REVIEW
CLEAR UNDERSTANDING OF CONTRACT REQUIREMENTS
PRIOR TO BIDDING
HAVING GOOD ADMINISTRATIVE PROCEDURES IN PLACE
OPEN AND HONEST COMMUNICATION
TIMELY TROUBLESHOOTING
WHAT DO YOU UNDERSTAND BY CLAIMS AVOIDANCE
BEGINS IN THE PRE-CONSTRUCTION PHASE?
GREATEST POTENTIAL TO INFLUENCE COST IS DURING THE
PRE-CONSTRUCTION DESIGN PHASE:
INTENSIVE PREPARATION AND REVIEW OF CONTRACT
DOCUMENTS
CAREFUL CONSIDERATION OF METHODS AND EQUIPMENT
= CONSIDER OVERALL CONSTRUCTABILITY.
DESIGN PROFESSIONAL SHOULD SPECIFY LOCALLY
AVAILABLE MATERIAL
 ALLOW SUBSTITUTION OF EQUAL QUALITY MATERIAL
AVOID ONE-OFA-KIND OR NON-STANDARD ITEMS WHERE
POSSIBLY DESIGN STRUCTURES WITH AS MANY REDUNDANT
ELEMENTS AS POSSIBLE
DESIGN SHOULD ALLOW CONSTRUCTION USING THE
PREVAILING METHODS AND EQUIPMENT
DESIGN TO MINIMIZE REQUIRED LABOR
SPECIFY A QUALITY OF WORKMANSHIP CONSISTENT WITH
THE QUALITY OF THE PROJECT
 DO NOT REQUIRE THE CONTRACTOR TO ASSUME
RESPONSIBILITY FOR INFORMATION THAT SHOULD
BE FURNISHED BY THE DESIGN
ENGINEER/ARCHITECT
PRODUCE SIMPLE, STRAIGHT-FORWARD SPECS =
CLEARLY STATE WHAT IS EXPECTED
 WHAT IS THE RELATIONSHIP BETWEEN PROJECT
FAILURE AND RISK MANAGEMENT?
A MAJOR CAUSE OF CONSTRUCTION PROJECT FAILURES IS THE LACK
OF EARLY STAGE PLANNING AND COMMUNICATION ABOUT WHAT TO
DO WHEN DISAGREEMENTS ARISE.
A BETTER SOLUTION IS FOR PROJECT STAKEHOLDERS TO JOINTLY
IDENTIFY CURRENT AND FUTURE RISKS AND THEN TO WORK ON
WAYS TO AVOID THEM OR TO BLUNT THEIR IMPACT.
FOR THIS TO HAPPEN, RISKS HAVE TO BE EVALUATED, AND THOSE
STAKEHOLDERS WHO ARE IN THE BEST POSITION TO HANDLE THEM
WITH A DEGREE OF CONTROL MUST BE PREPARED TO TAKE ON
RESPONSIBILITY FOR DEALING WITH PROBLEM SITUATIONS AS THEY
OCCUR.
 EXPLAIN HOW PARTNERSHIP HELPS IN DISPUTE AVOIDANCE?

IDENTIFYING AND SETTING UP SYSTEMS TO

MANAGE POTENTIAL PROBLEMS AS SOON AS
POSSIBLE
HELPS PARTIES ACHIEVE COMMON OBJECTIVES AND
ENHANCES THE CHANCES FOR THE SUCCESS OF THE PROJECT.
 HOW?

ON A PARTNERSHIP BASIS WHERE ALL OF THOSE

INVOLVEDOWNERS, CONTRACTORS, CONSULTANTS,
ATTORNEYSHELP IDENTIFY THE LIKELY POINTS WHERE
CONFLICTS MAY ARISE AND AGREE TO PLAY AN
APPROPRIATE ROLE IN A SYSTEM CUSTOM-DESIGNED TO
AVOID OR RESOLVE THEM.
 WHAT ?
A GENERAL TERM COVERING PRACTICES DESIGNED TO
PROMOTE GREATER CO-OPERATION BETWEEN ALL
PROJECT TEAM PARTICIPANTS.
EMPHASIS ON MANAGEMENT OF PEOPLE, NOT
NECESSARILY WITHIN A BUSINESS, BUT BETWEEN BUSINESSES.
NOT LIMITED TO THE CONTRACTUAL RELATIONSHIPS,
BUT ABOUT BUILDING COLLABORATIVE
RELATIONSHIPS TO MINIMISE CONFLICT AND
 WHY & WHEN?
WHY? PROMOTE A MORE OPEN SYSTEM OF
COMMUNICATION LEADING TO GREATER
PRACTICAL BENEFIT TO THE PROJECT.

WHEN? REGARDLESS OF THE CONTRACTUAL

NATURE, PARTNERING IS ONLY EFFECTIVE IF
THE PARTICIPANTS ARE PROACTIVELY ENGAGED
IN THE PROCESS THROUGHOUT THE PROJECT.
 HOW?
THE PARTICIPANTS IN A PROJECT MIGHT SIGN A
PARTNERING CHARTER WHICH IS NON-BINDING. IN
OTHER WORDS, IT IS NOT INTENDED TO HAVE
CONTRACTUAL EFFECT.
ALTERNATIVELY PARTIES COULD ADOPT A BINDING
CONTRACT WHICH INCORPORATES PARTNERING
PRINCIPLES.
THAT CONTRACT COULD BE BETWEEN THE MAIN
CONTRACTOR AND EMPLOYER, OR IT COULD BE A
MULTIPARTY CONTRACT EMBRACING THE DESIGN
TEAM AND KEY MEMBERS OF THE SUPPLY CHAIN.
 HOW TO?
AN IMPORTANT STEP IN A PARTNERING ARRANGEMENT- TO
HOLD, AT THE OUTSET, A PARTNERING WORKSHOP WITH
KEY PARTICIPANTS.
THIS PROVIDES AN OPPORTUNITY FOR KEY INDIVIDUALS
WITHIN ORGANISATIONS TO UNDERSTAND HOW
PROCESSES OPERATE AND-
TO BECOME FAMILIAR WITH EACH OTHER, IN THE SPIRIT
OF CO-OPERATION AND BEST ENDEAVOURS FOR THE
PROJECT
 MORE SOPHISTICATED APPROACH OF PARTNERING AND
ALLIANCING MIGHT NOT BE APPROPRIATE FOR ALL PROJECTS BUT
CORE CONFLICT AVOIDANCE TECHNIQUES ARE:
GOOD MANAGEMENT
CLEAR DOCUMENTATION
A GOOD APPROACH TO PROJECT MANAGEMENT
RECORD KEEPING, REGULAR REPORTING, AND
PROACTIVITY.
 DISPUTE AVOIDANCE
PROCEDURES & ESCALATION
26 FEB 16
LIFE CYCLE SPECTRUM OF DISPUTE AVOIDANCE IN
CONSTRUCTION PROJECTS
 WHAT ARE THE MAIN REASONS FOR DELAYS IN
COMPLETION DURING CONSTRUCTION-INFRA PROJECTS?
DELAY IN LAND ACQUISITION
ENVIRONMENT AND OTHER REGULATORY CLEARANCES
HIGH INTEREST RATES
WEAK DEMAND
DELAY HAS A CASCADING EFFECT:
RISING RAW MATERIAL PRICES
LAND ACQUISITION COSTS
RISE IN MANPOWER AND EQUIPMENT SHOOTING UP
OVERALL PROJECT COSTS.
 HOW DISPUTES CAN BE CAUSED DUE TO LAND ACQUISITION
DELAY AND ENVIRONMENTAL CLEARANCES?
MAJOR INFRASTRUCTURE PROJECTS THAT ARE LANGUISHING
DUE TO A PLETHORA OF REASONS HAVE RESULTED IN A COST
OVERRUN OF OVER RS 1.2 LAKH CRORE.
ACCORDING TO GOVERNMENT DATA, 328 PROJECTS SPANNING
SECTORS LIKE POWER, ATOMIC ENERGY, STEEL AND SURFACE
TRANSPORT (ROADS), ARE RUNNING BEHIND SCHEDULE.
THESE PROJECTS NOW FACE RS 6,99,233 CRORE INVESTMENT
AGAINST RS 5,75,227 CRORE CAPITAL ESTIMATED IN FY14, AN
INCREASE OF 23 PER CENT (SEE TABLE).
 THE 328 PROJECTS RELATE TO CENTRAL-SECTOR PROJECTS
ABOVE RS 100 CRORE.
DURING FY15, OF THE 751 PROJECTS, ONLY 3 WERE AHEAD
SCHEDULE, 123 ON SCHEDULE, 328 BEHIND SCHEDULE AND
297 ARE WITHOUT DATA OF COMMISSIONING.
IN FACT, SEVERAL OF THE PROJECTS ARE DELAYED FOR YEARS
RESULTING IN COST OVERRUNS, IN SOME EVEN MULTI-FOLD.
FOR INSTANCE, THE THREE ATOMIC ENERGY PROJECT COSTS
SHOT UP AN EYE-POPPING 83 PER CENT BETWEEN FY14 AND
FY15.
SIMILARLY, THERE WERE 366 DELAYED PROJECTS IN FY10
WITH A COST OVERRUN OF `60,426 CRORE. IF WE COMPUTE
THE 328 DELAYED PROJECTS IN FY15, ITS A 105 PER CENT
RISE IN COSTS.
THERE ARE MULTIPLE REASONS AFFECTING PROJECTS. IF
WE TAKE POWER SECTOR, THERE ARE RAW MATERIAL
CONSTRAINTS AND DELAYS IN ENVIRONMENT CLEARANCES.
SIMILARLY, FOR ROAD PROJECTS, THERE ARE DELAYS IN LAND
ACQUISITION AND REGULATORY APPROVALS.
FOR OTHERS, IT COULD BE THE GENERAL STATE OF
ECONOMY, HIGH INTEREST RATES AND WEAK DEMAND,
MADAN SABNAVIS, CHIEF ECONOMIST, CARE RATINGS TOLD EXPRESS.
SPECTRUM OF DISPUTE RESOLUTION TECHNIQUES
MANY LABELS OF DISPUTE RESOLUTION TECHS.
IN REALITY ONLY THREE DISTINCT PROCESSES ALSO KNOWN
AS THREE PILLARS :
NEGOTIATION-PARTIES THEMSELVES SOLVE PROBLEM
THEY CREATED..! BINDING IF SIGNED OFF..
MEDIATION OR CONCLIATION-3RD PARTY INTERVENTION-
NOT BINDING IF IMPOSED ON BOTH.
ADJUDICATIVE PROCESS-FINAL OUTCOME DETERMINED
BY 3RD PARTY. BINDING IN NATURE UNLESS CHALLENGED
THREE PILLARS OF DISPUTE AVOIDANCE AND RESOLUTION
 NEED FOR STANDARD FORMS
BY ITSELF DISPUTE AVOIDANCE PROCEDURES
NOT ADEQUATE TO AVOID DISPUTES..
WELL DEFINED AND CAREFULLY NEGOTIATED
CONTRACT.
STANDARD FORMS OF CONTRACTS-CONTAIN
PROVISIONS FOR DISPUTE AVOIDANCE.
 STANDARD FORMS OF CONTRACT & DISPUTE
ESCALATION
STD FORMS TRADITIONALLY CONTAIN ARBITRATION
CLAUSES.
WITH DEVP OF ADR METHODS COMMERCIALLY SINCE
EARLY 1990s, TREND TOWARDS ESCALATION CLAUSES.
STANDARD FORMS RECOGNISE THAT DISPUTES AT ANY
STAGE CAN BE REFERRED TO ADJUDICATION OR
ARBITRATION OR COURT
 DISPUTE AVOIDANCE-STANDARD FORMS OF CONTRACTS
DISPUTES-VARIATIONS, LATENT CONDITIONS, DEFECTIVE
WORK-HENCE PAYMENTS WITHELD
BIGGEST PROBLEM?
COMMUNICATION BETWEEN PARTIES TO RESOLVE AT
MINIMUM COST & SHORTEST TIME. MAINTAIN POSITIVE
RELATIONSHIPS? COMN NOT DELAYED.
COMN PROACTIVE CIRCUMSTANCES-MOST EFFECTIVE
REGULAR DISCUSSIONS CONCERING POTENTIAL
CONFLICTS PREVENT ESCALATION
 RISK ALLOCATION
BIGGEST ADVANTAGE OF STANDARD FORMS OF CONTRACTS?
RISK ALLOCATION IS KNOWN AND UNDERSTOOD-
THEORETICALLY LEADS TO REDUCTION OF DISPUTES AND LOWERING OF
COSTS.
HOWEVER IF HYBRID,.. ADVANTAGES AS ABOVE DISAPPEAR. TENDERER
PRICES IDENTIFIED RISKS. EVEN UNIDENTIFIED RISKS DEMAND
RISK PREMIUM AND BIDS GO UP!!
INFLUENCE OF PARTY IN STRONGER BARGAINING
POSITION HAS A HOLD ON RISK ALLOCATION.
UNFAIR RISK ALLOCATION-A MAJOR FACTOR CAUSING DISPUTES
DISPUTE AVOIDANCE PROCEDURES VERSUS DISPUTE RESOLUTION (ADR)?
ADR (APPROPRIATE DISPUTE RESOLUTION???)
 MORE SOPHISTICATED DISPUTE ESCALATION
CLAUSES
NOTICE CRYSTALLISING ISSUES.
REFERRAL OF DISPUTE WITHIN STRICT TIME FRAME
BETWEEN SENIOR MANAGERS OF BOTH ORGS FOR
NEGOTITION.
IF DISPUTE NOT RESOLVED WITHIN FIXED TIME FRAME-
MATTER REFERRED TO TOP EXECUTIVES OF BOTH
ORGS.
THERE IS POTENTIAL FOR MEDIATION OR CONCILIATION.
IF NOT RESOLVED-ARBITRATION AND LITIGATION
 DISPUTE AVOIDANCE PROCEDURES
ADR-DURING THE CONSTRUCTION..
DAP-AS SOON AS AWARD MADE. BEFORE ANY SIGN OF A DISPUTE.
DRB? TECHNICAL AND CONTRACT EXPERTS. MEMBERS HAVE INTIMATE
KNOWLEDGE OF THE PROJECT FROM THE BEGINNING AND AS PROGRESS
TAKES PLACE. SITE VISISTS AND PERUSAL KEY DOCUMENTS.
PROACTIVE COMMUNICATIONS-EVERY QUARTER FRANK DISCUSSIONS.
JOINT PRESENTATIONS BOTH PATRTIES..
FACILITATES HARMONIOUS RELATIONSHIPAIM-DISPUTE AVOIDANCE-
MUTUAL PROBLEM SOLVING.
ROLE CHANGES TO DISPUTE RESOLUTION AS SOON AS
DISPUTE ARISES-PRESERVE POSITIVE WORKING
RELATTIONSHIP-BASED ON REFERENCE BY EITHER PARTY.. NO OATH.
NON ADVERSARIAL.
 SPECIFIC STANDARD FORMS OF CONTRACTS & DISPUTE
AVOIDANCE
LARGE NUMBER OF STANDARD FORM CONTRACTS ARE NOW
PUBLISHED AND WIDELY AVAILABLE.
ORIGINALLY, THE JOINT CONTRACTS TRIBUNAL (JCT) FAMILY OF
CONTRACTS WERE PREDOMINANT IN THE BUILDING INDUSTRY.
BUT THE INSTITUTION OF CIVIL ENGINEERS (ICE) & FIDIC
STANDARD FORM CONTRACTS WERE USED FOR
INFRASTRUCTURE AND CIVIL ENGINEERING WORKS.
HOWEVER THE INTRODUCTION OF THE ENGINEERING AND
CONSTRUCTION CONTRACT (NEC 3), AND PROJECT PARTNERING
CONTRACT (PPC) NOW REASONABLY WIDELY USED.
 JCT CONTRACTS
IN RESPECT OF ADJUDICATION, EITHER PARTY MAY REFER A
DISPUTE TO ADJUDICATION UNDER THE APPLICABLE
CLAUSES OF THE RELEVANT JCT CONTRACT.
THE USUAL APPROACH IN THE JCT CONTRACTS IS AN
EXPRESS REFERENCE TO ADJUDICATION IN THE ARTICLES OF
AGREEMENT, TOGETHER WITH A FURTHER EXPRESS
REFERENCE TO ARBITRATION OR LEGAL PROCEEDINGS.
 JCT
MOST JCT CONTRACTS PROVIDE THAT THE PARTIES
COULD, BY AGREEMENT, SEEK TO RESOLVE ANY
DISPUTE OR DIFFERENCE THROUGH MEDIATION. THE
JCT PRODUCES A HELPFUL GUIDE FOR MEDIATION.
PARTIES CAN EITHER THEN SELECT ARBITRATION AT
THE OUTSET OF THE WORKS, OR COURT
PROCEEDINGS. THE BENEFITS OF ARBITRATION ARE
THAT THE DISPUTE WILL REMAIN PRIVATE.
 JCT

HOWEVER, AN EMPLOYER MIGHT CHOOSE COURT

PROCEEDINGS LITIGATION ON THE BASIS THAT IT
WILL BE EASIER IN COURT TO BRING A CLAIM FOR
DEFECTS, AS THOSE CLAIMS ARE OFTEN MULTI-
PARTY.
MULTI-PARTY DISPUTES ARE NOT SO EASILY DEALT
WITH IN ARBITRATION.
 ICE
THE ICE FORMS OF CONTRACT PROVIDE THAT ANY
DISPUTE WILL BE REFERRED TO THE ENGINEER
UNDER THE CONTRACT, WHO WOULD THEN MAKE A
DECISION WHICH WOULD BE BINDING.
IF THE CONTRACTOR (?) DID NOT ACCEPT THAT
DECISION THEN THE MATTER COULD BE REFERRED
TO ARBITRATION.
 ICE
THE INTRODUCTION OF ADJUDICATION MEANT THAT
DISPUTES COULD BE REFERRED TO ADJUDICATION AT
ANY TIME, AND SO THE ICE CONTRACTS HAVE BEEN
AMENDED TO REFLECT THAT APPROACH.
IT IS NO LONGER POSSIBLE TO DELAY A REFERRAL TO
ADJUDICATION ON THE BASIS THAT THE PARTIES ARE
APPARENTLY WAITING FOR THE ENGINEER TO MAKE
A DECISION.
 NEC 3
NEC3 PROVIDES AN ADJUDICATION PROCEDURE FOR USE IN
THE UK WHEN THE HGCRA (HOUSING GRANT
CONSTRUCTION AND REGENERATION ACT 1996) APPLIES.
THE FINAL DISPUTE RESOLUTION PROCEDURE IS A REVIEW
BY THE TRIBUNAL.
IF EITHER PARTY IS DISSATISFIED WITH THE ADJUDICATORS
DECISION THEN THEY MAY REFER THAT DISPUTE TO THE
TRIBUNAL. THE TRIBUNAL MAY BE A COURT OR AN
ARBITRATION.
 NEC
IF THE PARTIES ARE TO REFER THEIR DISPUTE TO
ARBITRATION, THEN THEY NEED TO MAKE IT CLEAR IN
THE CONTRACT DATA THAT ARBITRATION APPLIES. IN
ADDITION, THE PARTIES WILL ALSO HAVE TO
IDENTIFY:
AN ARBITRATION PROCEDURE
THE PLACE WHERE THE ARBITRATION IS TO BE HELD
THE DEFAULT METHOD FOR APPOINTING AN
ARBITRATOR.
 FIDIC
THE INTERNATIONAL FIDIC FORMS OF CONTRACT ALSO
PROVIDE DISPUTE ESCALATION PROVISIONS. A WRITTEN
NOTICE COMMENCES THE PROCEDURE BY IDENTIFYING THE
DISPUTE.
THE NOTICE NEEDS TO 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
CIRCUMSTANCES GIVING RISE TO THE DISPUTE.
 FIDIC INITIAL PROCEDURE
INITIALLY, THE ENGINEER IS TO CONSIDER A FULLY
DETAILED CLAIM. THIS MAY RESOLVE THE DISPUTE
EITHER BY AGREEMENT OR A CERTIFICATE PAYING
ANY ADDITIONAL MONEY.
DISPUTES THAT ARE NOT RESOLVED ARE THEN
REFERRED TO THE DISPUTE ADJUDICATION BOARD.
THE DISPUTE ADJUDICATION BOARD HAS 84 DAYS
WITHIN WHICH TO MAKE A REASONED DECISION.
DECISION BECOMES BINDING-UNLESS NOTICE OF DISSATISFACTION
NOT RECEIVED 28 DAYS OF RECEIVING DECISION

IF EITHER PARTY IS NOT SATISFIED WITH THAT

DECISION THEN THEY WILL NEED TO ISSUE A NOTICE
OF DISSATISFACTION WITHIN 28 DAYS AFTER
RECEIVING THE DECISION.
IN THE ABSENCE OF A NOTICE OF
DISSATISFACTION THE DECISION BECOMES
FINAL AND BINDING.
EITHER PARTY MAY REFER A FAILURE TO COMPLY
THAT DECISION TO ARBITRATION
 IF A NOTICE OF DISSATISFACTION HAS BEEN GIVEN THEN
EITHER PARTY CAN REFER THAT DISPUTE TO BE FINALLY
SETTLED UNDER THE RULES OF ARBITRATION OF THE
INTERNATIONAL CHAMBER OF COMMERCE.
THE ARBITRATORS HAVE THE POWER TO OPEN UP,
REVIEW AND REVISE ANY CERTIFICATE,
DETERMINATION, INSTRUCTION, OPINION OR
EVALUATION OF THE ENGINEER WHEN COMING TO
THEIR DECISION.
 PPC
PPC PROVIDES A PROCEDURE FOR PROBLEM SOLVING
AND CONFLICT AVOIDANCE OR RESOLUTION.
THE ESCALATION PROVISIONS PROVIDE THAT THE
PARTNERING TEAM IS TO ATTEMPT TO RESOLVE ANY
DIFFERENCES OR DISPUTES.

A PROBLEM SOLVING HIERARCHY SHOULD BE

ESTABLISHED, WHICH PROVIDES FOR A CORE GROUP TO
REVIEW, WITHIN AN IDENTIFIED TIMETABLE, THE ISSUES
AND ATTEMPT TO FIND A SOLUTION.
 PPC
DISPUTES MAY ALSO BE REFERRED TO
CONCILIATION, MEDIATION OR ANOTHER
ALTERNATIVE DISPUTE RESOLUTION PROCEDURE.
THESE PROCEDURES COULD BE SET OUT INITIALLY IN
THE CONTRACT DOCUMENTS, OR MIGHT BE
RECOMMENDED BY THE PARTNERING ADVISOR
DURING THE COURSE OF THE WORKS.
PPC ALSO PROVIDES FOR ADJUDICATION, IN ORDER
TO MEET WITH THE REQUIREMENTS OF THE HGCRA.