Chapter 19 International Construction Contracts

International Contracts Is payment for work assured? –Is there a principal’s bond? –Is there an owner’s escrow account? –Is the World Bank financing a portion? –What is the inflation rate of the country? How will disputes be resolved? –How does the justice system compare to the U.S.? –What does the contract require?

International Contracts What risks does the contractor assume? –Is the government stable? –Is there a liquidated damages clause? –Is there a differing site conditions provision? –Must the contractor hire native workers? –Is a letter of credit required? What type of contract is it? –Lump sum? –Unit price? –Cost plus?

International Contracts Are unique problems associated with the country? –Language barriers? –Social customs that must be known? –Are ethical standards different? –Are borders relatively closed?

International Contracts How will payments be made? –Is engineering work separated from construction? –What is the retainage amount to be withheld? –When are materials and equipment paid for? Is the project in SI (metric) units? –Silly to ask (except in Liberia and Burma)