Contracts & Intl Project Management

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E-Book Overview

Project Management has, as one of its essential ingredients, development, use, administration and management of contract. On any significant project here will be many players and stakeholders contractually linked. It is essential therefore that all project personnel be aware of contract matters. The difficulty with this for project personnel in the past, however, has been in finding a systematic and comprehensive coverage of contractual matters in the literature, written at an understandable lever. This book goes toward filling this void. This book focuses on the important issues of whether to contract out (outsource) work or do it in-house, on the numerous contractual payment options including bonuses and penalties, and on the delivery method or contractual relationships between project participants. This is provided in an international context, where project management takes on an added dimension related to differing practices and customs between countries. Numerous case studies and exercises are given to promote the understanding of the contractual and project management issues covered.

E-Book Content

CONTRACTS AND INTERNATIONAL PROJECT MANAGEMENT This Page Intentionally Left Blank A The University of New South Wales, Sydney, Australia Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by A.A.Balkema, Rotterdam, provided that the base fee of Per copy, plus per page is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, USA. For those organizations that have been granted a photocopy license by CCC, a separate system of payment has been arranged. The fee code for users of the Transactional and for the Reporting Service is for the hardbound edition: 90 5809 324 7/00 student paper edition: 90 5809 333 6/00 Published by A.A.Balkema, P.O.Box 1675, 3000 BR Rotterdam, Netherlands Fax: +3 1.10.4135947; E-mail: [email protected]; Internet site: http://www.balkema.nl A.A.Balkema Publishers, Old Post Road, Brookfield, VT 05036-9704, USA Fax: 802.276.3 837; E-mail : info 0ashgate. corn ISBN 90 5809 324 7 hardbound edition ISBN 90 5809 333 6 student paper edition 0 2000 A.A.Balkema, Rotterdam Printed in the Netherlands V Contents ABOUT THE AUTHOR 1 INTRODUCTION VIlI 1 2 IN-HOUSE VERSUS OUTSOURCING 2.1 Introduction 2.2 In-house approach 2.3 Outsourcing - Contract approach 2.4 Public sector and private sector work 2.5 Case studies 2.5.1 Case study - Road construction 2.5.2 Case study - Contractor decisions on outsourcing 2.5.3 Case study - Outsourcing coal mining 2.5.4 Case study - Local government practices 2.6 Exercises References Bibliography 5 5 5 6 9 15 15 16 18 19 22 24 24 3 CONTRACT (PAYMENT) TYPES 3.1 Introduction 3.2 Outline 3.3 Fixed price contracts 3.3.1 Lump sum contracts 3.3.2 Schedule of rates contracts 3.3.3 Guaranteed maximum price (GMP) contracts 3.4 Prime cost contracts 3.5 Incentives/disincentives 3.6 Choice of contract (payment) type 3.7 Case studies 3.7.1 Case study - Sewer reticulation project 3.7.2 Case study - Substation dismantling project 3.7.3 Case study - Building excavation contract 3.7.4 Case study - Redevelopment of a large city park 3.7.5 Case study - Construction of a shopping centre 3.7.6 Case study - A contractor’s business 25 25 25 27 30 33 40 40 55 62 65 65 67 69 70 73 74 VI Contents 3.7.7 Case study - Local government - flooding and drainage 3.8 Exercises References 76 77 82 4 DELIVERY METHODS 4.1 Introduction 4.2 Outsourcing options 4.2.1 Case study - Contaminated sites 4.3 Traditional 4.3.1 Case study - House construction 4.3.2 Case stud