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CIVL202 Construction Engineering I

Learn about performance and payment bonds, bonding capacity, time extensions, change orders, and more in construction engineering contracts. Understand the importance of acceptance periods and rework in managing construction projects effectively.

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CIVL202 Construction Engineering I

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  1. CIVL202Construction Engineering I Tutorial 3 T1 Mon 11:00 – 11:50 T2 Wed 09:00 – 09:50

  2. Tutorial Outlines • Performance Bond • Payment Bond • Cost and Requirement for Bonds • Acceptance Period • Award of Contract • Contract Agreement • Time extensions • Rework • Change Orders

  3. Performance Bond • Definition: A bond that protect the owner against default on the part of the contractor in performing the project as required • Issued after award of contract • Issued to pay for the damage to the owner • Damage: time or money

  4. Payment Bond • Definition: protects the owner against any unpaid charges as a result of contractor’s default • Issued after award of contract • Issued as a kind of short-term financing for a contractor with financial difficulties

  5. Cost and Requirement for Bonds • Bonding capacity • Definition: The amount that a bonding or surety company is prepared to put at risk in the bonds that it writes for the construction professional. • Multiple of the net quick asset • Usually, the more reliable the contractor, the greater value the multiple is

  6. Acceptance Period • Objective: to protect the bidders • Prior to bid opening, bidders can withdraw without any penalties, but bidders cannot withdraw after bid opening • After bid opening, there is an acceptance period of 60-90 days • If the owner do not act within the acceptance period, the bidder can withdraw and adjust the bids

  7. Award of Contract • Notification of award • Time extensions • Damage for failure to complete the project on time • Duration • If there are barriers to restrict the entry of construction site, letter of intent will be sent

  8. Contract Agreement • Formalized to sign a contract agreement • Covers drawings, general conditions, supplementary conditions, technical specifications, addenda

  9. Time Extension • Claims for delays led by circumstances beyond contractor’s control, e.g. by owner, owner’s agent, acts of God • Large percentage of delays are related to design-related problems

  10. Rework • Definition: Carry out the same job more than one time • Can be caused by: site activities, ineffectiveness of prior project phase

  11. Change Orders • Changes during construction lead to alteration of original contract document • Can be caused by poorly scoped or prepared contract document or changed conditions of the project • Changed conditions: e.g. undetected subsurface conditions or any other conditions which are not detected during design phase

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