• International conference on construction engineering and project management
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• 2020.12a
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• pp.323-330
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• 2020

Project delays, cost overruns, and disputes are becoming a norm for the construction industry in Hong Kong. Researchers argue that the inability of traditional contracts to manage risk and associated changes are perhaps the main points of contention. The Institution of Civil Engineers published a new engineering contract (NEC), NEC4 Suite of Contracts in this to facilitate better risk management through collaborative culture in construction projects. NEC aims to increase the chances of project success thought its flexible nature of contracts, 'simple' and 'clearly written' documents and provision for the incentive by adopting a better management approach. This paper focuses on traditional and NEC contracts to compare risk management and change management aspects. Through literature review and preliminary interviews with three industry professionals, the paper is exploring how a change in traditional contracts can recuperate from disaster. Our interviewees in this work have extensive experience in traditional as well as in NEC contracts. The results suggest a proactive risk management provisions in NEC contracts does make a difference to avoid later escalation of issues. Whereas, management of change helps streamline all identified issues through a structured process without going in mediation or litigation. NEC, with its new approach to collaborative working, allows partners to be vigilant, yet gratifying in the project process.

• Journal of KIBIM
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• v.11 no.1
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• pp.1-10
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• 2021

Blockchain is a secure technology that enables transactions between parties without risking data corruption. Besides cryptocurrencies, blockchain technology is being widely adopted in various forms by diverse industries. One promising application is construction contracts. Given that construction projects are executed under strict contractual requirements, blockchain technology-based contracts can ensure that contractual requirements are executed among parties to the contract. The objective of this study is to apply blockchain technology to smart construction contracts and determine their potential feasibility in construction management. In this study, a prototype smart construction contract is presented and its applicability is explored. We conclude that smart construction contracts can be effective as a contractual tool to enhance payment flows in the construction process.

• Korean Journal of Construction Engineering and Management
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• v.24 no.2
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• pp.79-87
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• 2023

Given that most government contracts are based on a fiscal year, long-term continuing construction contracts require appropriate provisions as significant amounts of budget is supposed to be invested for several years. This study drew problems and improvements of the long-term continuing construction contracts by analyzing the contents of FGI and list of construction order. We found that a number of problems, such as the mismatch between laws and enforcement decrees, difference in calculating overheads due to the extension of construction period, many construction orders that are hard to see as budget efficiency and over investment in the final annual contract, were tangled up in the process. To solve the problems mentioned, we suggested several improvements as follows: (1) effect of total construction period and total amount should be guaranteed by a law, (2) it is suggested that the scope of long-term continuing construction contract is determined by a law, and (3) it should be clear about the calculation of overheads concerned with the extension of construction period as well as the estimation of construction period to prevent over investment in the final contract.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.25
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• pp.3-40
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• 2005

Many Korean construction companies have been performing a variety of overseas construction projects since the 1970s. It is unfortunate that in many cases they have had to suffer big losses caused by errors and defects in the design and construction of the projects. In the author's opinion, however, there were losses that could have been avoided if they had understood better the feature and content of the particular construction contract. Few lawyers and scholars in Korea have been interested in the research and study of international construction contracts. This is mainly because they do not have access to practical sources outside of Korea for them to research and study since the contracts undertaken have been dealt with by law firms in other jurisdictions to which the disputes apply. This article is aiming primarily at the introduction of the issues which the practitioners are likely to confront in the process of reviewing and performing the international construction contract. In some cases solutions are sought about these issues based upon the FIDIC standard terms and conditions, the actual experience of practice, and UNIDROIT Principles, etc. It is reasonable to say that all the issues related to the international construction contract cannot be covered in a short article like this. The author wishes this article could induce subsequent studies on international construction contracts for further research. It has to be noted that from time to time Korean construction practices have been compared to the international ones for better understanding. This article mostly includes cases where the Korean construction companies go overseas for their projects, while there are some cases where foreign developers and financial investors participated in domestic projects in which international construction contracts forms were adopted. A few precedent domestic writings about international construction contracts seems to lack emphasis on the points that there are several standard construction contract forms and that they are different. The differences are mainly in accordance with who bears the design responsibility, how the owner has to make progress payments to the contractor and who the funding source for the project is. This article tries to make it clear that there are significant differences between the standard contract forms, e.g. a simple construction form, a design-build form and an EPC/turnkey form of contract. Again, the author hopes that this article can arouse the interest in the international construction contracts from both academic and practical fields, so that many subsequent advanced articles can help our construction industry become much more competitive in the world through awareness of the methods of procurement and administration of the contracts.

• International conference on construction engineering and project management
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• 2005.10a
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• pp.638-642
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• 2005

This paper presents incentive application strategies and delay prevention strategies as schematic approaches to improve time performance of highway construction contracts. This research recognizes the importance of improving time performance during highway construction. Strategic solutions of the most core issues on time performance incentive contracting are identified. The suggested incentive application strategies develop criteria for applying time classification to projects, for assigning project time classifications to contractors and designers, and for determining appropriate incentive values in A (cost) + B (time cost) and other performance incentive contracts. The suggested delay prevention strategies develop criteria for determining the appropriate subsurface utility engineering (SUE) level and to develop best practices for avoiding utility relocation delays. A schematic approach for each strategy is developed. This paper also introduces current incentive contracting practices in Florida. The researchers obtained the information from experienced persons in the highway construction industry, including key highway contractors, designers, and Department of Transportation (DOT) and Federal Highway Administration (FHWA) personnel. The major focus of this research is to develop strategies and suggest approaches to improve time performance of highway construction contracts. For future study, practical tools to facilitate implementation of the suggested strategies should be developed, so that the criteria, implementation processes, and best practices developed may contribute to the current industry-wide effort to improve time performance.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.27
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• pp.3-28
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• 2005

It is common that several kind of claims between the parties are arising in carrying out international construction works. Therefore, it is very important for them to settle the claims effectively in order to get expected profits and purposes in international construction works. In this article, the author have studied on the procedures and contents on the settlement of claims between the parties based on the FIDIC contracts for major works which are newly prepared in 1999 by FIDIC. Especially, the arbitration clause in the FIDIC contracts for major works attempts to deal with a number of complex contractual and legal matters, sometimes in a very harsh way, e.g. by cutting off a party's rights. It has never been an easy clause to understand or to observe. Nevertheless, the author hopes he has been able in this article to clarify for the reader some of the issues raised by it. I'd like to suggest that our overseas construction companies refer to the FIDIC contracts for major works(especially article 20 : claims, disputes and arbitration) directly or indirectly for their contract of international construction works with overseas employers.

• International conference on construction engineering and project management
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• 2005.10a
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• pp.699-704
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• 2005

Normally, monetary penalties for breach of agreement will be stipulated in the contract. The contractor parties, who fail to fulfill the agreement, are required to pay the other parties a certain amount or proportion of money as a fine. However, it is worth our study - whether or not the scope of monetary penalty implementation and bases for determination of a fine will cover the losses of social and administrative costs incurred by the interruption of the contract. This research is about the best timing for government to cancel the freeway repair work contracts. Under the goal of the maximum social welfare, the limitation of government spending for the social and administrative costs invoked by interruption of contracts will have to be considered to attain the best timing of contracts' suspension or deferment. According to the factors of social and administrative costs, the best time point is calculated to reduce the loss of the aforesaid costs, which can also be used as theoretical basis for the future road-widening construction at home.

• Korean Journal of Air-Conditioning and Refrigeration Engineering
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• v.29 no.12
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• pp.663-672
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• 2017

Building information modeling (BIM) technology based on 3D modeling has been applied to the entire domestic construction industry since 2010. It can calculate quantity take-off considering construction productivity at design phase. Based on this, it is possible to improve the reliability of construction cost prediction of design phase in the process of cost estimation. However, Building Information Level (BIL) defined by Ministry of Land, Infrastructure and Transport and Public Procurement Service does not seem to offer doable environment due to the lack of detailed application items. By calculating construction cost that meets Construction Cost Estimate Accuracy by American Association of Cost Engineers (AACE) through quantity take-off and cost estimation based on 3D modeling of BIM technology, a BIL improvement proposal at design phase for Mechanical Contracts and Construction is provided here. Results showed that properties including outline and minimum specification of the main equipment, internal main piping, and internal main duct should be defined from the intermediate design phase to have reliable cost estimation.

• International Area Studies Review
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• v.13 no.2
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• pp.325-344
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• 2009

Korean overseas construction contracts reached 40 billion dollars in 2008. In this paper, the economic factors of "the record high growth since 1980's 'overseas construction boom' is investigated. Firstly, most of the contracts were made in the Middle East OPEC countries which made large scale construction investments with the increasing oil revenues... Secondly. large portion of the contracts is heavy industrial plants, in which Korean construction firms have enjoyed comparative advantages. Thirdly, Korean construction firms have been forced to pay attention to the overseas markets, due to the domestic slump of the construction industry.

• Journal of Construction Engineering and Project Management
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• v.1 no.1
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• pp.1-10
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• 2011

This paper discusses the components of a guaranteed maximum price (GMP) and proposes a framework for the development of GMPs as contract payment provisions for construction manager-at-risk (CMR) and design-build (DB) contracts for transportation projects. The framework is the synthesis of a comprehensive literature review, a content analysis of CMR and DB solicitation documents and contracts, and case study project output from twelve projects in nine states worth $3.1 billion. The research also discusses the development of three common types of contingencies that are often utilized in projects with GMPs. The study concludes that owners should specify the structure of the GMP and its components to enhance clarity and understanding of the GMP's composition. It recommends that this structure be included in the CMR and DB solicitation documents so that pricing proposals can be formulated in a manner that is consistent with the contract payment provisions that will be useful to practitioners that need to implement GMP-based contracts.