STANDARD SPECIFICATIONS FOR CONSTRUCTION OF ROADS AND BRIDGES ON FEDERAL HIGHWAY PROJECTS FP-14 Federal Highway Administration Federal Lands Highway (2025)

Construction Surety Bonding Criteria: The US Perspective

EPiC Series in Built Environment

In the United States, construction contracts require that contractors submit surety bonds, hence shifting the contractor’s risks to the sureties. In order to take on the risks of project completion, the sureties employ a complex time-consuming evaluation process that assesses several factors of a contractor that are subjective to make a surety credit recommendation. Several small and emerging contractors find it very difficult to attain bonding capacities as they do not know the factors that go into the sureties’ consideration to extend surety credit. The purpose of this study is to identify the surety bonding criterion that influences bonding decisions through a series of interviews with surety professionals possessing extensive experience in the bonding evaluation process. The outcome is a list of factors that underwriters consider in issuing a surety credit to contractors. Understanding the surety bonding criteria employed by underwriters enhances contractors’ ability to secure r...

Evaluation of the effect of suretyship on rapid delivery public sector construction projects

2007

Suretyship is one of the performance risk management measures used in modern construction contracts. Construction contracts, such as the FIDIC, JBCC Series 2000 and GCC 2004, offer pro forma deeds of suretyship and guarantee forms, but consultants sometimes use in-house contract documentation, which may lead to poor interpretation and application. Suretyship requirements are often the cause of time delays on Rapid Delivery Public Sector Construction Projects (RDPSCP), whether pro forma or in-house deeds or forms are used. Project start dates are generally set within weeks after the contract has been awarded, which time period may be inadequate for some contractors (more specifically emerging contractors) to provide a surety to the approval of the client. In the event of non-performance by the original contractor another contractor must be appointed to complete the works. This process results in loss of time attributable to time frames required for issuing contractual/statutory notic...

Appendix 1: FIDIC (Red Book) Conditions of Contract for Construction

Chern on Dispute Boards

Subclause 20-Claims, Dispute and Arbitration 20.1 Contractor's Claims If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall 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 circumstance. If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim. Otherwise, the following provisions of this Sub-Clause shall apply. The Contractor shall also submit any other notices which are required by the Contract, and supporting particulars for the claim, all as relevant to such event or circumstance. The Contractor shall keep such contemporary records as may be necessary to substantiate any claim, either on the Site or at another location acceptable to the Engineer. Without admitting the Employer's liability, the Engineer may, after receiving any notice under this Sub-Clause, monitor the record keeping and/or instruct the Contractor to keep further contemporary records. The Contractor shall permit the Engineer to inspect all these records, and shall (if instructed) submit copies to the Engineer. Within 42 days after the Contractor became aware (or should have become aware) of the event or circumstance giving rise to the claim, or within such other period as may be proposed by the Contractor and approved by the Engineer, the Contractor shall send to the Engineer a fully detailed claim which includes full supporting particulars of the basis of the claim and of the extension of time and/or additional payment claimed. If the event or circumstance giving rise to the claim has a continuing effect: (a) this fully detailed claim shall be considered as interim; (b) the Contractor shall send further interim claims at monthly intervals, giving the accumulated delay and/or amount claimed, and such further particulars as the Engineer may reasonably require; and * The information used in this book referring to FIDIC and its various contracts including Appendices 1, 2 and 3 is provided by FIDIC, whose address is World Trade Center II, Geneva Airport, 29 route de Prés-Bois, CH-1215 Geneva 15, Switzerland where full copies are available. Its use herein is by permission of FIDIC.

Standard specification for roads and bridges

Notwithstanding the fact that the information on affected services may not be exhaustive, the final position of these services within the works shall be supposed to have been indicated based on the information furnished by different bodies and to the extent the bodies are familiar with the final position. The Contractor must also allow for any effect of these services and alternatives upon the works and for arranging regular meetings with the various bodies at the commencement of the contract and throughout the period of the works in order to maintain the required co-ordination. During the period of the works, the Contractor shall agree if the public utility bodies vary their decisions in the execution of their proposals in terms of programme and construction, provided that, in the opinion of the Engineer, the Contractor has received reasonable notice thereof before the relevant alternations are put in hand.

Contract – Volume 2 – Specification

Appendix 2: FIDIC (Yellow Book) Conditions of Contract for Plant and Design-Build

Chern on Dispute Boards

Subclause 20-Claims, Dispute and Arbitration 20.1 Contractor's Claims If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall 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 circumstance. If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim. Otherwise, the following provisions of this Sub-Clause shall apply. The Contractor shall also submit any other notices which are required by the Contract, and supporting particulars for the claim, all as relevant to such event or circumstance. The Contractor shall keep such contemporary records as may be necessary to substantiate any claim, either on the Site or at another location acceptable to the Engineer. Without admitting the Employer's liability, the Engineer may, after receiving any notice under this Sub-Clause, monitor the record-keeping and/or instruct the Contractor to keep further contemporary records. The Contractor shall permit the Engineer to inspect all these records, and shall (if instructed) submit copies to the Engineer. Within 42 days after the Contractor became aware (or should have become aware) of the event or circumstance giving rise to the claim, or within such other period as may be proposed by the Contractor and approved by the Engineer, the Contractor shall send to the Engineer a fully detailed claim which includes full supporting particulars of the basis of the claim and of the extension of time and/or additional payment claimed. If the event or circumstance giving rise to the claim has a continuing effect: (a) this fully detailed claim shall be considered as interim; (b) the Contractor shall send further interim claims at monthly intervals, giving the accumulated delay and/or amount claimed, and such further particulars as the Engineer may reasonably require; and * The information used in this book referring to FIDIC and its various contracts including Appendices 1, 2 and 3 is provided by FIDIC, whose address is World Trade Center II, Geneva Airport, 29 route de Prés-Bois, CH-1215 Geneva 15, Switzerland where full copies are available. Its use herein is by permission of FIDIC.

The legal conditionality of performance bond in Malaysian construction contract

2007

In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or insurance company (in return for payment of a premium), for the benefit of and at the request of the employer, in a stipulated maximum sum of liability and enforceable by the employer in the event of the contractor's default, repudiation or insolvency. There are two types of performance bonds: Conditional bond or default bond; and Unconditional bond or on-demand bond. However, in Malaysia, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond that has been discussed. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

documents, are entrusted to personnel with the relevant expertise, including the contractual, technical and procurement aspects. This publication concludes with example forms for the Letter of Tender, the Appendix to Tender (providing a checklist of the sub-clauses which refer to it), the Contract Agreement, and alternatives for the Dispute Adjudication Agreement. This Dispute Adjudication Agreement provides text for the agreement between the Employer, the Contractor and the person appointed to act either as sole adjudicator or as a member of a three-person dispute adjudication board; and incorporates (by reference) the terms in the Appendix to the General Conditions. FIDIC intends to publish a guide to the use of its Conditions of Contract for Construction, for Plant and Design-Build, and for EPC/Turnkey Projects. Another relevant FIDIC publication is "Tendering Procedure", which presents a systematic approach to the selection of tenderers and the obtaining and evaluation of tenders. In order to clarify the sequence of Contract activities, reference may be made to the charts on the next two pages and to the Sub-Clauses listed below (some Sub-Clause numbers are also stated in the charts). The charts are illustrative and must not be taken into consideration in the interpretation of the Conditions of Contract.

STANDARD SPECIFICATIONS FOR HIGHWAYS, BRIDGES AND AIRPORTS

FIDIC (SECOND EDITION 2017) Conditions of Contract for Construction

FIDIC publications, 2017

GENERAL CONDITIONS GUIDANCE FOR THE PREPARATION OF PARTICULAR CONDITIONS AND ANNEXES: FORMS OF SECURITIES FORMS OF LETTER OF TENDER, LETTER OF ACCEPTANCE, CONTRACT AGREEMENT AND DISPUTE ADJUDICATION/AVOIDANCE AGREEMENT