univErsity of Bahri

College of Engineering & Architecture

Civil Engineering Department
5th year 8th semester

construction EnginEEring

typEs of contracts in civil EnginEEring

Supervisor:
Prof. Salih Alhadi M. Ahmed

1
 typEs of contracts in civil EnginEEring

Prepared By:

1- Mohamed Kamal Aldin Ali Alsadig

2- Riham Alsir Altoum Idreis
3- Ahmed Mohammed Elsamani Elsafi
4- Shaima Mohammed Eltayeb Jaber
5- Mohammed Obeid Abo Elgasim Adam
6- Osman Abd Allah Abd Alwahab Ahmed
7- Abd Alrahman Mohammed Yousif Alsayed
8- Rashid Suliman Moustafa Isahag
9- Omer Ahmed Mohammed Ahmed
10- Almithana Faroug Saeid Attia

Supervised By:

Prof. Salih Alhadi Mohammed Ahmed

2
Index:

Page
No. Topic
Number

1 Preface 2

2 Index 3

3 Introduction 4

4 Construction Contracts 5

5 Construction Contracts Parties 8

6 Legitimacy of construction contracts 9

7 Factors in Selection of Contract Type 10

8 Types of construction contracts 10

Difference Between Fixed-Price and Cost-Reimbursement Contracts:
9 18

10 Examples of projects and problems of contracts in Sudan 21

11 Reasons for ending engineering contracts 23

12 Conclusion 25

13 List of References 27

3
Introduction:
According to the "natural development of life, we find that civil engineering in
general and construction engineering in particular has undergone a" great "development
like other sciences, and of course human nature, most of the beholder of this development
only observes the physical development in construction engineering like high skyscrapers
and huge dams and bridges "However, according to this development, it was necessary to
develop another parallel development with this science because construction engineering is
not only a" Physical "science, but includes many, many aspects or other sciences.
Management is the science of engineering contracts this aspect or science is significant
because it is considered as a judge between the parties to the contract, and publicly we all
heard the famous saying that says (the contract law of contractors).

In view of the increasing role played by the engineering contracts in general and
the construction contracts in particular, we have been developing and develop specialized
disciplines and curricula that are only interested in this science. Also, official jobs have been
created in this specialization. We have become very much aware of names that were not
mentioned before, like (contracts engineer, contract auditor, etc.) and other engineering
disciplines. The most obvious example of the British project management approach,in
which the project manager is formally called (contract manager), is the largest indication of
the importance of this specialization and science.

In addition, several international federations and associations have been

established to take care of this specialty. The most famous (if not the most famous at all) is
the International Federation of Consulting Engineers (FIDIC), founded in 1957 in France
and representing the world's consultants engineers. The publication of books periodically is
the global and unified reference for engineering contracts, which outlines the contracts and
clarifies the relationships, rights and duties between the parties to the contract these books
vary according to the type of contract and the nature of the work, the most important of
which is the Red Book. It is a construction contract between the employer and the executor
(The Contractor).and the White Book, It is a contract between the employer and supervisor
(The Consultant). We also find the "The Green book, Yellow, Orange, each according to the
nature of the work and the parties to the contract. As well as the Institute of Civil Engineers
in Britain.

4
 From the above, the engineering contract can be defined as: the legal document
concluded by all the parties involved in the work, which clarifies the rights, duties and
obligations of each party and all the legal and financial procedures followed until the
completion of the works provided that such acts are legitimate and not contrary to the law.
The contracts are classified based on several aspects of the engineering contracts can be
classified according to the nature of the work to:.

- Construction contracts (contracting)

- Design and supervision contracts
- Operating contracts
- Maintenance contracts
- Management contracts

Also may be classified according to the parties to the contract as follows:

From the owner's point of view:

- Contract between the owner and the contractor (contractor)

- Contract between the owner and the financier (loan or financing)

- Contract between the owner and consultant (supervision)

- Contract between the owner and the supplier (supply)

From the Contractor's point of view:
- Contract between contractor and employees (work)

- Contract between the General Contractor and the Subcontractors (Subcontracting)

Constructioncontracts:
Since the projects of all kinds are carried out by the specialists in the field and they
are called (contractors). In order for the contractor to execute the project according to the
specificications, drawings, and Quantities, the Owner will enter into an agreement with him
to provide for it. This is the subject of this research (The construction contracts) shall be
defined as: One of the types of engineering contracts concluded between the owner (the
employer) and the contractor (the executing agency) whether the parties are individuals or
institutions and generally provides that the contractor shall carry out the work assigned to
him by the owner under specified technical and financial terms agreed upon Within a

5
specified time period and delivered to the owner in his agreed form. The contract also
includes the method of paying the contractor's expenses and penal procedures to the
parties in case of breach of any of the terms of the agreement.
The construction contracts contain several documents and paragraphs that vary
according to the type of contract, the most important of which are:

The contract Paper:

The contract between the owner and the contractor and the agreement of its type,
legitimacy, value, period and all items and signed by representatives of the parties.

Specifications:

Specifications contain all the conditions and specifications to be met in the materials
used in the construction industry, as well as the basis of industry and methods of
measurement, and standard quantities that are the basis for the judgment of the validity of
work. The specifications in construction contracts are the set of requirements and
recommendations that are written and documented for reference in execution and receipt.
The specifications are one of the main contract documents and are expressed as general
requirements in the form of general specifications or as special requirements in the form of
specifications for the project.

Because the specifications of the project are the responsibilities of the designer, this
requires extensive knowledge, continuous knowledge and the ability to write the
specifications in a clear, accurate and easy to understand, and this is imperative to those
who write the specifications are familiar with everything new in the world of construction.
And be familiar with the characteristics and characteristics of the materials and their
advantages and disadvantages as well as prices. It must also be familiar with the types and
productivity of the equipment, its characteristics, operating cost, maintenance, advantages
and disadvantages of using the equipment in the circumstances and nature of the various
projects
General Conditions:

Many international bodies interested in the construction industry have developed

general requirements for the purpose of internationalization and utilization of them when
writing construction contracts, especially in international projects. Examples of global
bodies that have made a great effort in this area are: the American Institute of Architecture,

6
the American Civil Engineering Association, the British Society of Civil Engineering, and
others.
General requirements generally include:

- General definition of the project and who is the owner, contractor and designer.
- The contents of the contract and its documents
- Contractor's rights and responsibilities
- Rights and Responsibilities of the Designer
- Estimated time of project implementation
- The method of material handling between the owner and the contractor
- Terms associated with any changes to the project terms
- Insurances and guarantees required
- The method to be followed to resolve any disputes

Particular conditions:

These are the supplementary requirements that are added to the general
requirements in order to achieve some of the requirements of the project which have not
been met by the general requirements, or are intended to modify certain general conditions
to suit the conditions of the project under study. Examples of special requirements include:

- Change the insurance system provided for in the general requirements.

- Special requirements to give the owner some freedom to make changes in the items of
the project without an increase in prices.
- The owner is responsible for providing some equipment or materials that are not
available locally and providing some special services such as: Surveying works, soil
testing works or public services (telephone, electricity, water)
- Requirements for non-engagement of the Contractor in other works during the period of
implementation of the project or setting limits thereto.
- Delay penalties and how to take risks of each type

Drawings and drawings:

All drawings are detailed, which explain to the contractor and enables him to perform
the work through them without any ambiguity or ambiguity, and also can know how to
implement and calculate quantities.

7
Parties and legality of construction contracts:
Construction
nstruction contract parties:

The number of parties to the contract varies depending on the nature of the contract
itself and the nature of the work. The construction contract has Three main parties:

Owner or Employer:

The person or the group of individuals or enterprise that owns and is responsible for
the project after its completion, which will bear the full costs of the project, whether the
costs of implementation, supervision, operation or maintenance. And may use or dispose of
it in violation of the law and general regulations.
Consultant

Iss the person, or the group of individuals or the institution that is acting on behalf of
the employer, by entrusting him with the necessary technical and professional services from
the planning, design and supervision of project implementation, and ensuring the
implementation of all the technical specifications specified in the contract

Contractor:

The person or group of individuals or institution that carrie

carries out the practical
implementation of the project as stipulated in the contract between him and the owner, and
completion of the specifications and quantities provided and during
during the specified period.
In some projects there may be other parties such as the
the financier, the management
consultant or the presence of more than one contractor, the contractor, the maintenance
contractor and others

8
Legitimacy of construction contracts:
In order for the contract to be of value, it must be in line with domestic and
international law, become meaningless and cannot be implemented or adopted as a
judgment or evidence in court proceedings, if required. In order for the contract to be legally
acceptable, it must contain the following basic clauses:
1- There must be a offer from one of the parties (the contractor) and acceptance of the offer
from the other party (the employer): There must be a genuine offer from one of the parties
made with complete consent and freedom, and acceptance of that offer by the party or
other parties. It should be noted that this requirement does not mean that the offer is fair, or
full in its material value, as long as it has been freely accepted by the party or other parties

2- There should be a realistic agreement reached between the parties by way of consent
and acceptance in order for there to be a legal contract there must be a clear understanding
of the terms of the agreement and hence the language of the contract is very important, it
must be done with clarity and accuracy, as agreed by the parties, or Interested parties.
Traditionally, the parties, or parties, have signed
3- The Convention as a means to prove their understanding and say what it said
the contract should be considered null and void if it is guaranteed to be contrary to public
law or contrary to existing regulations. Examples of invalid contracts include offenses,
fraud, fraud or forgery, as well as contracts involving conspiracy, collusion, or similar.

4- The parties concerned are legally entitled to enter into such a convention, since non-
adult persons or persons who have lost their minds, whether permanent or temporary, are
not entitled to enter into agreements. In case of signing a contract between a person of
legal age, The contract becomes non-binding to the non-adult party, but is binding on the
party or other parties.
In the event that none of the above conditions are met in any agreement, the contract
shall be null and void.

9
Factors in Selection of Contract Type:

The Federal Acquisition Regulation (FAR), Subpart 16.104, includes the following
factors to consider in selecting contract type:

- Type and complexity of the requirement;

- Urgency of the requirement;
- Period of performance or length of production run
- Contractors technical capability and financial responsibility
- Concurrent contracts
- Extent and nature of proposed subcontracting
- Acquisition history
- Degree to which price competition results in realistic pricing
- Degree to which price analysis can provide a reasonable pricing standard; and
- Cost analysis including assessment of cost impact of uncertainties and reasonable
allocation of cost responsibility to the contractor.

Types of construction contracts:

The types of construction contracts are based on several factors: the nature of the
project, the cost of the project, the general environment of the project, the legal aspects in
this environment, the time period of the project and the relationship between the contractor
and the owner. On this basis, there are four main types of construction contracts. These
main are then include several sub-types based on the factors mentioned above. The main
types are

1- Fixed Price or Lump Sum (Turnkey) Contract

2- Cost Plus or Cost Reimbursable Contract
3- Time & Material or Unit Price (Measured) Contract
4- Build, Operation and Transfer Contract (BOT)

10
 Typs of Construction Contracts

Time & Materials or Unit Build, Operate, Transfere

Fixed Pricxe or Lump Sum Cost Plus or Cost Price or Measured
Contract Reimbursable Contract (BOT) Contract
Contract

Cost Plus Bill of Quantities

Firm Fixed Price Percentage of Contract
Contract Cost Contract

Cost Plus Fixed Schedule of

Fixed Price with Rates Contract
Incentive Fee

Fixed Price with

Economic Price Cost Plus Award
adjustment Fee
Contract

Cost Plus
Incentive Fee

11
1- Fixed Price or Lump Sum Contract:

Is one of the types of construction contracts in which the contractor is obliged to do the
agreed work for a fixed total amount of money paid by the owner. In this case, it is not
possible to increase the total wage agreed upon except in cases where the Civil
Transactions Law provides as follows:
- The amendment or addition is due to an error from the employer.
- The amendment and addition shall be done with the permission of the employer and
agree with him on the determination of remuneration.

- The agreement shall be in writing if the original contract is written.

-That the contract contains an additional condition allowing that. In any case, the contractor
and the employer may agree to increase the wage; otherwise the judge must be consulted
for their estimation. The judge may judge the increase in the total price or the dissolution of
the contract if the contingency theory can be applied, and the implementation of the
obligation has not begun. If the execution has begun, the price may not be adjusted.
This type is divided into three types:
1:1 Firm Fixed price Contract (FFP):

These contracts provide for a price that is not subject to any adjustment on the basis of
the contractors cost experience in performing the contract.

This contract type places upon the contractor maximum risk and full responsibility for
all costs and resulting profit or loss.

Features:

1- It provides maximum incentive for the contractor to control costs and perform
effectively, and imposes a minimum administrative burden upon the contracting
parties.
2- End product must be delivered to earn entire fee Obligates contractor to devote and
expend a specified level of effort for a stated period of time. As long as effort is
satisfactory to government fee is paid
3- The owner does not bear any kind of risk as the transferor is transferred to the
contractor

12
 4- The total cost of the project is consistent from the owner's point of view Provides the
contractor with a very large incentive to provide any funds
Disadvantages:
1- Does not give any flexibility to the owner to change the number or size of the
project items
2- Needs to determine the total cost of high precision before contracting, which
necessitates the complete completion of all drawings, designs, specifications and
any requirements for the project before starting to prepare the bill of quantities and
cost calculation

1:2 Fixed price with an incentive Contract (FPI):

In which an agreement between the owner and the contractor for a total price to
complete the work assigned to the contractor during the time period agreed upon, and then
it is agreed to allocate an incentive to the contractor in case of completion of all work and
the same specifications within a period of time less than agreed.
Features:
1- Also "the owner does not bear any kind of risk as the risk is transferred to the contractor
2- Encourage the contractor to complete the work in less time

Disadvantages:

1-The contractor's attempt to complete the work in a shorter period of time may affect the
quality of the execution, which requires high accuracy in supervising the execution by the
owner or his representative
2- Does not give any flexibility to the owner to change the number or size of the project
items
Also "needs to determine the total cost in high precision before contracting, which leads to
the need to complete completely of all drawings, designs, specifications and any
requirements for the project before the start of the preparation of Bills and cost calculation

1:3 Fixed Price with Economic price adjustment (FPEPA):

If the portion of the effort in question is a material or labour element, a fixed-price

contract with an economic price adjustment (FPEPA) can help address a specified
contingency that may be beyond the contractors ability to control, such as fluctuation in the

13
price of a commodity item (e.g., steel, petroleum, specialty metals). FPEPA contracts are
used when: The market prices at risk are severable and significant;

The risk stems from industry-wide contingencies beyond the contractor's control. The
dollars at risk outweigh the administrative burdens of an FPEPA; Market or labour
conditions are projected to be unstable during an extended contract performance period.
Using an FPEPA contract may incentivize a contractor to accept a fixed-price effort without
inflating the price to cover the risk due to the variability of a cost element, because of the
built-in mechanism to mitigate the risk. For example, perhaps a significant portion of the bill
of material includes a precious metal; or, perhaps a particular labour category is
experiencing significant 15 volatility due to labour shortages. A FPEPA provides for upward
and downward revision of the stated contract price upon the occurrence of specified
contingencies. There are three general types of adjustments:

Adjustments based on established prices: These price adjustments are based on increases
or decreases from an agreed-upon level in published or otherwise established prices of
specific items or the contract end items.

Adjustments based on actual costs of labour or material: These price adjustments are
based on increases or decreases in specified costs of labour or material that the contractor
actually experiences during contract performance (i.e. actual costs).

Adjustments based on cost indices of labour or material: These price adjustments are
based on increases or decreases in labour or material cost standards or indexes that are
specifically identified in the contract (e.g. Producer Price Index).

Features:
1- In this type, a portion of the risk is distributed between the owner and the contractor
2- The contractor does not have to manipulate quality to try to reduce the cost in the event
of a major change in some prices because it will compensate for them
3- Helps business continuity and not stop because of the price increase of some goods

Disadvantages:

1-Does not give any flexibility to the owner to change the number or size of the project
items

14
It is difficult to use in countries with a volatile economy where commodity prices change
rapidly

Fixed Price or Lump Sum Contract

Firm Fixed Price

Fixed Price with

Incentive

Fixed Price with

Economical Price
Adjustment

2- Cost Plus or Cost Reimbursable Contract:

In this type of contract, the owner and the contractor agree to perform the required
work in the contractor on the contractor cost,
cost and then the owner return
returns any expenses
incurred in addition to the contractor's fees (profits) for the performance of the works.

This may be a fee or a percentage of the actual cost, or fixed amount, or may be
combined, This type is divided into four types:
types

2:1- Cost Plus percentage of cost (CPPC):

In
n which the owner and the contractor agree that the contractor to perform the work
at his own expense, and then the owner to pay the contractor's expenses plus "a
percentage of these expenses
Features:
1- It does not need to be a precise specification of the scope of the work where payment is
made against the outlet only
2- It can be used in the case of projects that require the commencement of implementation
work as soon as possible without waiting for studies and designs, such as: maintenance
work, or completion of work stopped for any reason and should begin
begin completion as soon
as possible.
3- Allows the owner flexibility in changing business volumes and specifications without risk
risk.

15
Disadvantages:

1-Its implementation requires very high confidence "between the two parties as the
contractor's profit is directly related to increasing the actual cost. This type of contract is
used between the sister companies belonging to the same institution
2:2 Cost Plus Fixed Fee (CPFF):

In this type of agreement between the owner and the contractor, the contractor shall
execute the works at his own expense. The owner shall pay the contractor's expenses plus
a fixed value regardless of the value of the expenses.
Features:
1- In which the contractor's profit is not linked to the cost of the business in order to try to
neutralize the contractor, thereby reducing the likelihood of an attempt to increase the cost
by the contractor.

2-Allows the owner flexibility in changing business volumes and specifications without risk
3- It can be used in projects where the scope of the work is not precise or unclear as to
incomplete designs or drawings Or specifications and quantities
Disadvantages:
1- Also "needs high confidence between the parties
2- Absence of motivation from the contractor, leading to delay of work

2:3 Cost Plus Award Fee (CPAF):

A cost-plus-award- contract provides for a fee consisting of:

- A base amount (known as the base fee) fixed at inception of the contract and the
base fee percentage shall not exceed 3%; and
- An award amount (known as the award fee pool) that the contractor may earn in whole
or in part during performance and that is sufficient to provide motivation for excellence
in the areas of cost, schedule, and technical performance.

Features:
1- In which the contractor is involved in the objectives of the owner and is the
implementation of the work with the required quality and the lowest possible cost
2- Allows the owner flexibility in changing business volumes and specifications without risk
3- The owner's participation in the project management and follow-up, where he can see

16
the expenses, and be fully aware of the amounts given to the contractor
contractor.
Disadvantages:
1- Also "trying to reduce the cost may push the contractor to breach the quality it nee
needs to
be checked and follow up

2:4 Cost Plus incentive Fee (CPIF):

(CPIF)

In this type the agreement between the owner and the contractor that the contractor
to perform the work at his own expense, and then the owner to pay the contractor's
expenses plus "fixed value plus a fixed amount (incentive) in case Complete the business in
less than the period specified in the contract
Features:
1- In which the contractor is involved in the objectives of the owner and is the
implementation of the required quality
quality of work at the lowest cost possible and in a period of
time less than expected
2- Allows the owner flexibility in changing business volumes and specifications without risk
3- Used in projects whose time period is limited and whose objectives are linke
linked to a
specific time such as fear of entering a new competitor or attempting to launch the project
at a particular date or time "with a particular occasion

Disadvantages:

1- 1-The
The contractor's attempt to complete the work in a shorter period of time may
affectt the quality of the execution, which requires high accuracy in supervising the
execution by the owner or his representative.
representative

Cost Plus or Cost

Reimbursable Contract

Cost Plus
Percentage of
Cost

Cost Plus Fixed

Fee

Cost Plus
Award Fee

Cost Plus
Incentive Fee

17
Difference between Fixed-Price and Cost-Reimbursement Contracts:

A fixed price type contract places upon the contractor maximum risk and responsibility
for all costs and resulting profit or loss. If the contractor does not perform in an efficient
manner, it may experience a loss on the contract. If the contractor does not perform in
accordance with the terms of the contract, it is subject to termination for default or cause.
Cost-reimbursement types of contracts require the contractor to put forth a best effort to
perform, and provide for payment of the contractors allowable, allocable, and reasonable
incurred costs. These contracts establish an estimate of total cost for the purpose of
obligating funds and establish a ceiling that the contractor may not exceed (except at its
own risk) without the approval of the contracting officer.

The 2014 Annual Report on the Performance of the Defence Acquisition System
showed no statistical correlation between performance and broad contract type; thus, a
simple bifurcation of contract types (i.e., grouping all fixed-price and all cost-reimbursement
contracts together) is misleading. Fixed-price contracts exhibit lower cost growth because
they are used in lower-risk solicitations, not because they inherently lead to lower cost
growth. The price can actually be overstated under a FFP contract to the extent a
contractor is successful negotiating a firm-fixed price that is inflated if risk is priced in the
FFP in an attempt to shift the cost risk to the Government. This highlights the importance of
a good Government understanding of actual cost as the Government risks paying increased
prices on FFP contracts. In addition, there is no sharing of cost savings with the
Government on FFP contracts. The 2014 Annual Report on the
Performance of the Defence Acquisition System found a positive correlation between the
use of incentive contracts and better performance outcomes. This is why it is important to
consider incentive contracts separately from the fixed-price and cost-reimbursement
families of contracts.

3- Time & Materials or Unit Price (Measured) Contract (T&M):

Time-and-materials (labour-hour) contracts both have a fixed fully-burdened labour

rate, but only include an estimated number of hours needed to complete a task.

Both generally resemble a cost reimbursement contract, as neither requires the

completion of the task within the agreed to maximum price and both contract types pay the

18
contractor for actual hours worked. In practice there is no cost incentive for either contract
type.

T&M is the least preferable contract type. Where requirements cannot be stated in
performance based terms and must be articulated as term or level-of-effort, then CPFF or
CPIF should be used rather than T&M so long as the contractor has an adequate
accounting system (and other requirements for cost reimbursable contracts. are satisfied).
This Type of Contract is divided into two types:

3:1 Bill of Quantities Contract (BOQ):

An agreement between the owner and the contractor that the contractor will execute
the work indicated in the contract, according to the quantities and rates of items which also
contained in the contract either have been prepared by the designer or by the contractor
and approved by the owner.

Features:
1- It is one of the most accurate types of contracts and it is easy to follow up, check and
compare it with reality
2- The final cost of the project is specific and can be known before the completion of the
implementation work.
3- Allows the contractor the opportunity to balance items in profits and identify the items'
profit effect "at least
Disadvantages:
1- Needs a specific scope of work, very precisely and clearly "since any change in scope
has a" significant "effect on quantities and items
2- The owner is allowed to make some changes in some items in excess or in deficit during
the execution phase, but the owner will have to pay for these changes by issuing (change
orders)
3- The landlord needs to pay the value of the contract often because the contractor does
not work at his expense as in the contracts returned value

3:2 Schedule of Rates Contract (SR):

It is agreed between the owner and the contractor that the contractor to determine
the price of the unit of any item without specifying the quantities of these items.

19
Features:
1- Allows the owner the opportunity to change the business and quantities as it is not
associated with the contractor quantities but only items
2- It does not require a specific
ecific scope of work and can be used in projects whose quantities
have not been quantified or where changes are expected to occur either in quantities or in
the items themselves
Disadvantages:
1- Does not provide an opportunity to balance items for the contractor
con
2- It is considered to be one of the contracts in which the contractor has a risk ratio, since
he does not know the quantities that he intends to implement, and therefore determines his
prices accordingly

Time and Materials or Unit Price or

Measured Contract

Bill of Quantities
Contract

Schedule of Rates
Contract

4-Build,
Build, Operation and Transfer Contract (BOT):
Is a model of international contracts for construction, known as the system of (BOT)
This system is intended to be taken by a private investor from the private sector after the
authorization of the State or government agency concerned
concerned with the construction and
construction of a particular project, often "a state infrastructure projects, Airport, road,
power station or otherwise). This is done at the expense of the investor to undertake the

20
operation and management of the project after its construction for a specified period. During
this period, the investor will obtain the costs incurred and profits of the project through the
revenues and fees performed by the users of this project And then This Contractor shall
transfer the ownership of this Legislator entirely to me.

This system goes through multiple stages, the first of which is the conclusion of the
concession contract agreement under which the license is obtained and then construction
and construction are carried out. This is done in the framework of a contract which often
takes the form of a contract for the total price. This is followed by the stage of operation in
which the contractor starts to recover his money and earn profits from During the proceeds
of the project, and ends that process to the stage of transfer and transfer to the state the
state that crosses its primary owner.
Features:
1- Very useful "to the owner in the event of an urgent need for a service project with
insufficient funds to implement it
2- Is also used "in the case of lack of expertise and technical capabilities of the owner in
any type of projects and to benefit from the experience of the contractor in the
implementation and operation

Disadvantages:
1- He needs a contractor with great financial capabilities to enable him to execute the
project at his own expense
2- Is not appropriate in countries with volatile economies, since the disbursements and
profits of the contractor and the owner obtain them after a period of time is not often short,
leading to the possibility of losing or deducting the value of these amounts.

Examples of projects and problems of contracts in Sudan:

1- Project Musheireb:

Is a residential complex in the city of Khartoum overlooking the Nile and located in a
maritime locality
- Owner: Aldyar AlQatariya (Qatari company)
- Consultant: Arab Union Engineering Office (Khatib & Alami)
- Contractor: China Chan Sau

21
- Financed by Aldyar AlQatariya Company
- Problem: Foreign exchange rate

The reason for this is that the financing is transferred to the Sudan in foreign
currency by banks. The contractor is given the equivalent value of this loan in local
currency. The problem is that the foreign exchange rate in the banks is quite different from
the price in the parallel market. To be dealt with by the contractor in the market and of
course the contractor incurred very large losses "
This is a clear loophole in the decade as it was necessary to take into account
exchange rate fluctuation in Sudan when signing the contract.

2-The Tokar Garoura Road Project:

Is a 179 km long highway located in the eastern Red Sea state of Sudan linking the city
of Tokar near the city of Sawakin and the border town of Qaroura with the state of Eritrea
- Owner: National Roads and Bridges Authority, Ministry of Transport and Emaar East Fund
- Consultant: Neotec Consulting Group
- Contractor: El Nasr Co. for General Contracting (Egyptian Company)
- Financed by: World Bank
- Problem: Change orders

The contract was signed between the king and the contractor at a cost of 274 million
(two hundred and seventy-four million Sudanese pounds). Two orders were issued to
change the first by adding a 200 m concrete bridge and the other by modifying the asphalt
layer type. Based on this change, the cost of the project changed to 304 million (three
hundred and four million Sudanese pounds) An increase of 10.9% from the original cost.
Perhaps the problem here is not a contract problem in the first place, where there is a
problem of study and design, but you could choose a type of contract that allows some
changes to be made under certain conditions to avoid this large increase in cost.

3- Project of the Saudi German Hospital in Sudan:

- Owner: Saudi German Hospitals Group
- The consultant:
- Contractor:
- Financed by:
- Problem: Change in scope of work

22
 Is the establishment of the German-German Hospital in Sudan as a foreign
investment and to provide a distinguished treatment service for citizens. The contract was
signed and started and during the final stages of construction, the scope of work was
completely changed to the Open University of Sudan.
The problem may also be technical, political or otherwise, but there has certainly
been a major change in the contract depending on this radical change. It was possible to
choose a type of contract that would take into consideration the lack of clarity.

Reasons for ending engineering contracts:

The parties involved in any contract shall be entitled to terminate its effect at any time
during the period of its validity, if such parties agree to the termination and conditions
thereof. There are also other cases where the contract is deemed terminated or
automatically cancelled, such as the death of the contractor, As well as when each party
fulfils its obligations under the contract.

1- Contract Completion:
The contract is normally terminated automatically at the moment when each of the
parties to the contract fulfil its obligations in full, when ascertaining the accuracy of the
contract, its terms, specifications and all its documents, and fulfilling the contractor's full
benefits for the work done

2-Termination of contract by agreement:

The parties to an engineering contract may agree to terminate that contract at any time
during its validity period. The termination agreement may be based on mutual waiver, ie the
parties to the contract will waive their rights and obligations under the contract in a timely
manner

It often happens that the termination of the Convention is based on the principle of
compensation. Is that the contractor undertakes to pay money to the party in return for not
being required to perform the obligations under the original contract and the termination
agreement can be based on agreement and satisfaction, so that either compensation or
exemption from obligations is free of charge. Engineering is usually a special clause
allowing the owner to terminate the contract at any time at the request of his or her interest,
in which case the parties concerned agree to settle the financial aspects of the agreement.

23
3-Termination of contract by Transgressing:
When one of the parties to a contract fails to fulfil its obligations under the contract or
when the actions of one party result in the impossibility of the contract being executed, the
other party may terminate the contract on the basis of the veto, and then the failed or
defaulting party is liable to pay damages to the party or other parties In return for the
damage suffered by those parties and the liquidation of financial matters after the
conclusion of the contract can be cancelled either by direct agreement between the parties
concerned or by the arbitration

4-Termination of contract for impossibility of implementation:

The contract may be terminated because of the impossibility of implementation, when it
becomes apparent that after the contract was signed, a circumstance that did not exist prior
to the signing of the contract made the implementation impossible, such as the discovery
that the soil condition in a project site does not bear the construction of the dam to be
constructed, The contract and execution of the contract, when implementation becomes
impossible due to local laws and regulations such as preventing the transfer from the
Central Bank of foreign companies, when the subject of the contract disappears from
existence before implementation such as the sinking of a ship before signing the contract of
purchase, illness, Or when the means that were to be used for the execution of the contract
are destroyed or destroyed

5-Termination of contract by Force Majeure:

Force majeure is the power of an extraordinary event such as declared or undeclared
war, a revolution, or a change in the system of government makes it impossible to continue
to implement the contract. The contract must contain a clear definition of force majeure
given the critical importance of such a definition and the possible future legal and financial
implications These definitions differ from decade to decade and from country to country.
The definition of force majeure adopted by a body or organization specialized in the
preparation of model contracts varies according to the laws of the State or States in which
such bodies or organizations exist. For example, the definition of force majeure in FIDEC In
Europe than in the model of the American Institute of Architects, and the definition of force
majeure must be given special importance and addressed in as clear and explicit a
language as possible so as to narrow the potential area of disagreement in the future.

24
 In accordance with the definition of force majeure, the terms of the contract usually
contain a special clause or clauses dealing with the future of the relationship between the
parties or parties to the contract in the event of force majeure. Detailed clarification of the
rights of the contractor for the works performed prior to the termination of the contract and a
fair compensation for such termination Foreign companies operating in developing
countries are usually afraid of the possibility of force majeure and are therefore trying to set
biased conditions in their favour when force majeure occurs. They try to insist on the
definition of force majeure to cover all imperatives Different machines, the definition of force
majeure includes for example: the spread of epidemics, riots, chaos, war, civil
disobedience, armed, commercial boycott, the trade embargo or blockade, strike.

Conclusion:
From all the above, we conclude that engineering contracts in general and
construction contracts in particular have become an integral part of the construction
engineering itself. The engineer must know them very well and know their applied on the
ground as well as know their management and deal with them. and how to choose the
appropriate contracts for the nature of work.
The engineer should also increase his knowledge of engineering contracts, whether
through training courses or attending seminars and related workshops or conferences, in
order to avoid the common mistake which is practiced in a large way, which is the reviewing
and auditing of contracts from legal aspects only this role is performed by the legal advisor.
Also specialization and higher education institutions should increase the dose for students
in terms of contracts in general and make it a basic material of the subjects taught in
institutions of higher education, especially students in the last year until the student comes
out of the university is fully aware of everything related to contracts and there are training
courses in public companies the students will be responsible for the way in which contracts
are implemented on the ground.

Students who wish to specialize in engineering contracts should be encouraged to

provide all necessary for their development and knowledge. This will address many of the
problems that have occurred recently due to lack of Specialized in Engineering Contracts
The FIDIC has become a global reference in the field of engineering contracts and its
periodic publications helped solve many of the issues related to the field of contracts. There
are many institutions that have also contributed in this field. We hope in the coming period

25
that the Council works Engineering to put a brick in the field of engineering contracts to
develop this area and encourage Sudanese institutions and institutions to develop
engineering contracts.

26
List of References:
- The book of construction project management, Dr. Eng. Ibrahim Abdul Rashid Nasir

- Project Management Professional (5th Edition), Project Management Institute (USA)

- Conditions of contract (Red Book) for construction works, FIDIC, 1999
- The official website of the US Department of Defense on the Internet

27