Methods Of Construction Delivery

With Qatar gearing up to enter another construction boom with its successful World Cup 2022 bid, construction parties may wish to look beyond the type of construction delivery and relationships which commonly govern projects in the region to those which are often successfully used elsewhere. This article looks at some of the advantages and disadvantages of both the common methods of construction delivery in the region and those less commonly used.

The most familiar types of construction contracts (and ancillary contracts) in the region are based on the FIDIC and NEC suites of construction documents. The terms of these documents are, of course, often heavily amended to redress risk and as such, the comments below are in respect of their standard terms as unamended.

The Conditions of Contract for Works of Civil Engineering Construction Fourth Edition 1987 and its more recent edition, the Conditions of Contract for Construction of Building and Engineering Works First Edition 1999 (known as the "Red Book") are known as the "traditional" methods of construction delivery. The works are generally designed by a professional consultant appointed by the employer. The works are then supervised on the employer's behalf by either the design consultant or another advisor, such as a project manager, who will act as "semi-independent" certifier. The employer places less reliance on the contractor's skill or judgment in relation to the design of the works, the choice of materials or the suitability of materials for their purpose. In its unamended state, the risk allocation in the Red Book is more favourable to the employer. Further, the contractor is required to manage and maintain responsibility for subcontractors and the supply chain.

The advantages to the use of the Red Book are well known; the lump sum or remeasurement basis provides a good comparison basis for competitive tendering and there is, to some degree, cost certainty (provided the design is complete and is not altered significantly). In addition, the professional skill and care of the engineer / project manager is brought to bear on time, cost and quality.

The disadvantages to the use of the Red Book are considered to be the often strained and adversarial relationship between the employer-appointed consultant and contractor and, in financial terms, the time and cost required to be expended in tendering and the uncertainty of tender prices against the budget, particularly in respect of non-accepted bids.

In another of the FIDIC suite, the Design and Build ("D&B") option can be found in Conditions of Contract for Plant and Design Build for Works Designed by the Contractor First Edition 1999 (known as the "Yellow Book") and the Conditions of Contract for EPC/Turnkey Projects First Edition 1999 (known as the "Silver Book). As the name implies, the contractor has the responsibility both to design and construct the works. The employer provides "requirements" on which the contractor bases a proposed design. The role of the employer's consultant is reduced to certifying payments and acting as the employer's representative. Not only is this method generally used when the employer does not have access to adequate design expertise (as is often the case with...