Laryea, S A and Hughes, W P (2009) Commercial reviews in the tender process of contractors. Engineering, Construction and Architectural Management, 16(6), pp. 558-572. ISSN 0969-9988
Abstract
Purpose The purpose of this paper is to show the extent to which clients amend standard form contracts in practice, the ITlocus/IT of the amendments, and how contractors respond to the amendments when putting together a bid. Design/methodology/approach Four live observational case studies were carried out in two of the top 20 UK construction firms. The whole process used to review the proposed terms and conditions of the contract was shadowed using participant observation, interview and documentary analysis. Findings All four cases showed strong evidence of amendments relating mostly to payment and contractual aspects: 83 amendments in Case Study 1 (CS1), 80 in CS2, 15 in CS3 and 29 in CS4. This comprised clauses that were modified (37 per cent), substituted (23 per cent), deleted (7 per cent) and new additions (33 per cent). Risks inherent in the amendments were mostly addressed through contractual rather than price mechanisms, to reflect commercial imperatives. "Qualifications" and "clarifications" were included in the tender submissions for post-tender negotiations. Thus, the amendments did not necessarily influence price. There was no evidence of a "standard-form contract" being used as such, although clients may draw on published "standard-form contracts" to derive the forms of contract actually used in practice. Practical implications Contractors should pay attention to clauses relating to contractual and financial aspects when reviewing tender documents. Clients should draft equitable payment and contractual terms and conditions to reduce risk of dispute. Indeed, it is prudent for clients not to pass on inestimable risks. Originality/value A better understanding of the extent and ITlocus/IT of amendments in standard form contracts, and how contractors respond, is provided.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | contracts; project evaluation; risk management; United Kingdom |
| Index terms: | case study, qualification, dispute, form of contract, risk management, negotiation, project evaluation, observation, interview, construction firm, United Kingdom, evidence, tender document, methodology, contractual term, documentary analysis |
| Subjects: | educational resources, tendering, research methods, contract structure, Geography, conflict resolution, organization, risk assessment, evaluation and assessment methods, data collection methods, value management, dispute resolution, contractual arrangements, data science |
| Topics: | Stakeholder Management, Risk Management, Procurement, Business Strategy, Geographical Context, Project Management, Research Practice, Education, Contract Administration, Legal Issues |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here