1. KFUPM, Department of Construction Engineering and Management CEM 520 LIABILITY ALLOCATION AMONG THE PARTIES TO FIXED-PRICE CONSTRUCTIN CONTRACTS IN SAUDI ARABIA By: Abdulrahman A. Al-Amer For: Dr. Sadi Assaf

2. Outline  Introduction  Objective  Research methodology  Findings and results  Liability matrix  Major findings  Conclusion

3. Introduction  One common goal for construction parties  Liability  Who is liable and for what?  Better understanding of responsibilities  Reduce claims  Reduce schedule delays  Overcome the inevitable relations

4. Objective  Liabilities sharing  Impacts of improper liability allocation  Production of proper sharing and allocation of liabilities

5. Research Methodology and Limitations  The sampling technique used in this research is Quota Sampling  Questionnaire  Liability Matrix  Owner, A/Es and Contractors in the Eastern Province of Saudi Arabia  Public and Semi-Public Owners  Categories 1 and 2 for contractors

6. Liability Matrix  Serves as a checklist for writing contracts  Give guidance for allocation of liabilities  Suggests better allocation of liabilities  Indicates to owners which items are not included in contracts

7. Findings and Results  Proposed matrix for design contracts  The A/E should assist the owner in completing the detailed scope of work  The owner should provide all information on the project  The A/E should advise the owner of missing information  The owner should share the liability for the appreciated drawing scale  The liability for preparing the contract document should be shared  The owner should share the liability of obtaining the necessary licenses  The A/E should share the owner to document changes in the construction contract

8. Findings and Results (cont.)  Proposed matrix for construction contracts  Bid mistake liability  Necessary licenses and permits  QA/QC, inspection and testing of work  Site conditions liability  Issuing and documenting change

9. Findings and Results (cont.)  Major findings  Contract language  Delay of progress payments  Delays of reviews and inspection  Contractor unfit personnel  Contract information

10. Findings and Results (cont.)  Unique liabilities to construction contracts  Owners rejection of bids  Verification of site conditions  Contractor verification of quantities  Weather  Price escalation  Unique liabilities to design contract  Accuracy of estimate  Providing data

11. Conclusion and Recommendation  Conclusion from the design liability matrix  Liabilities borne by owner but proposed to be shared  Detailed scope of work  Stipulate payment methods  Issue and document change  Liabilities borne by A/E but proposed to be shared  Best selection for drawings scale  Preparation of the construction contract document  Estimation of construction cost  Confidentiality of information  Conflict of interest  Coordination with concerned agencies (license, permits…)  Use of national products  Adherence to laws and customs of Saudi Arabia

12. Conclusion and Recommendation (cont.)  Conclusion from the construction liability matrix  Liabilities borne by owner but proposed to be shared  Confidentiality of bid details  Special risk  Issue and document change  Liabilities borne by contractor but proposed to be shared  Coordination with concerned agencies (license, permits…)  QA/QC (inspection and testing of work)  Confidentiality of information  Conflict of interest  Use of national products  Adherence to laws and customs of Saudi Arabia

13. Conclusion and Recommendation (cont.)  Conclusion from the third part of the questionnaire applicable for both contracts  Language of contracts  Guarantee or payment bond (progress payment)  Owners right to terminate contractors  Contractor compensation  Unfit personnel  Confidentiality of contract information

14. Conclusion and Recommendation (cont.)  Conclusion from the third part of the questionnaire applicable for construction contracts  Bid rejection from the owner  Site condition  Verify quantities  Weather  Price escalation

15. Conclusion and Recommendation (cont.)  Conclusion from the third part of the questionnaire applicable for design contracts  Accuracy of estimate  Project data and information  Risk and liability will lead to lower bids

16. Thank You