Determination of Construction Contract Duration  for Public Projects
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Determination of Construction Contract Duration for Public Projects in Saudi Arabia By: Ahmed Saleh Al-Sultan, June 1989. Presented by Sameh Elish January 6, 2004. OUTLINE. Introduction Research Objective Literature Review Research Methodology Results and Analysis

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Determination of Construction Contract Duration for Public Projects in Saudi ArabiaBy: Ahmed Saleh Al-Sultan, June 1989

Presented by

Sameh Elish

January 6, 2004


Outline
OUTLINE Projects

  • Introduction

  • Research Objective

  • Literature Review

  • Research Methodology

  • Results and Analysis

  • Conclusions and Recommendations


Introduction
INTRODUCTION Projects

  • The issue of time in construction projects is important for both the owner and the contractor.

  • Construction Contract Duration (CCD) is the amount of time given to the contractor to execute the work described by the plans and specifications.

  • It is a very important issue of any construction contract documents.


Research objectives
RESEARCH OBJECTIVES Projects

  • To investigate the available methods used to set CCD and the factors affecting the determination process.

  • To study and evaluate the current practice applied for set CCD for public projects in Saudi Arabia.

  • To make recommendations related to the practice of setting CCD in the Kingdom.


Scope and limitations
SCOPE AND LIMITATIONS Projects

  • The scope of this research will be limited to public construction projects in Saudi Arabia (owner’s point of view).

  • Projects that the Government Department (project owner) has authority to decide on the setting of CCD.

  • Projects that have value of SR 100 million or less will be under discussion in this research.


Literature review
LITERATURE REVIEW Projects

  • There is a relationship between time and cost.

  • In general, the time dependent costs increase linearly with the passage of time.

  • Examples of time dependent costs: cost of supervision and site office utilities.

  • CCD is normally expressed in either working days, calendar days, or a fixed date for completion.


Literature review1
LITERATURE REVIEW Projects

  • Methods for setting CCD

  • Construction season limits: project must be finished prior to a certain season

  • Quantity or production rate:breaking the project down into the major controlling work items

  • Work flow technique: large complicated projects where a lot of coordination effort is needed (CPM)

  • Estimated cost:related to contract time or working days required to complete a particular project


Research methodology
RESEARCH METHODOLOGY Projects

  • Interviews and telephone calls were performed with some of government officials.

  • A questionnaire was developed in order to collect the data needed for the research. It consists of 18 questions.

  • The total population consists of 70 authorities (government departments responsible for executing public construction projects).

  • A total of 47 completed questionnaires were used for analysis. SAS software were used.


Results and analysis
RESULTS AND ANALYSIS Projects

  • Who set CCD:

    • 91% of the respondents reported that CCD is set at their department by either top management, engineering department, or by hired consultant.

  • Attention paid to setting CCD:


Results and analysis1
RESULTS AND ANALYSIS Projects

  • Methods of setting CCD:

    • Budget allocations (30%)

    • the need for the project (18%)

    • Past experience (13%)

    • Critical Path Model (CPM) (8%)

    • Joint work of the engineering department and a consultant (8%)

    • Contractors are requested to submit CCD with their bids (6%)

  • The majority of respondents (87%) expressed the need to apply a method to set CCD.


Results and analysis2

Negative Consequences for Short CCD Projects

Rank

Poor performance by contractors resulting from inadequate time allocation to work items

1

Excessive administrative burden resulting from delay claims

2

High bid prices

3

Positive Consequences for Short CCD

Raising contractor’s awareness of the importance of time

1

Promoting effective management

2

Low prices due to short CCD

3

RESULTS AND ANALYSIS


Results and analysis3

Negative Consequences for Long CCD Projects

Rank

Encouraging contractors to bid more work than can be handle in a timely manner

1

Discourage effective management and innovation

2

Leading to poor performance resulting from discontinuous operations (relaxed schedule)

3

Positive Consequences for Long CCD

Good coordination with other agencies

1

Permitting more contractors to bid

2

Low bid prices

3

RESULTS AND ANALYSIS


Results and analysis4
RESULTS AND ANALYSIS Projects

  • Factors affecting the setting of CCD:

    • Project size

    • Site conditions

    • Project design

    • Top management assessment of the city need of the project

    • Project type

  • Factors affecting CCD can be grouped into three main categories: project ,contractor ,and environmental characteristics.


Conclusion
CONCLUSION Projects

  • There seems to be no systematic engineering methods or at least formal procedures followed by Government Authorities to set CCD for public projects.

  • CCD is currently set by engineering department, hired consultant, or top management of the government agencies.

  • Several factors affects setting CCD. Among the most important factors are project size, design, budget allocations, type, and site conditions.


Recommendations
RECOMMENDATIONS Projects

  • The Government procurement Regulations should address the setting of CCD. Articles have to be written to establish guidelines to improve the current practice of setting CCD.

  • Engineering methods should be developed and used to set CCD. Concerned Government Authorities such as Ministry of Housing and Public Works should take the initiative to develop such methods.

  • The engineering department of concerned Authorities should participate in the setting of CCD.


Recommend guidelines to set ccd
RECOMMEND GUIDELINES TO SET CCD Projects

  • Step 1: Determine a CCD range. Based on:

    • The project’s tender documents.

    • Factors affecting CCD.

    • The experience gained from constructed projects.

  • Using the above inputs and utilizing scheduling techniques (CPM, PERT, Bar chart), production rates, or any other approach, a reasonable CCD range can be estimated.


Recommend guidelines to set ccd1
RECOMMEND GUIDELINES TO SET CCD Projects

  • Step 2: Check weather the setting of CCD is under the authority of the project owner.

  • If there is any preplanned completion date established by higher authorities to meet special operational or public needs.

  • The project owner can discuss CCD with decision makers based on the range established in step #.1


Recommend guidelines to set ccd2
RECOMMEND GUIDELINES TO SET CCD Projects

  • Step 3: If the project owner is authorized to set CCD, then he can proceed to check weather budget allocation constraints exist or not.

  • Step 4: In the case where there is no budget allocation constraint, the project owner is to identify his objectives of CCD.

  • Objectives include: at least possible bid price, at shortest possible CCD, or an optimal total cost CCD.


Recommend guidelines to set ccd3
RECOMMEND GUIDELINES TO SET CCD Projects

  • Step 5: The set CCD, produced by either steps #3 and 4, should be reported to top management for approval.

  • Step 6: The approved CCD is to be incorporated in the tender documents.


Thank you

THANK YOU Projects


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