Professor Will Hughes and me just got a paper accepted for publication in Engineering, Construction and Architectural Management Journal.
Title of paper: Commercial reviews in the tender process of contractors.
Samuel Laryea and Will Hughes
School of Construction Management and Engineering, University of Reading, UK
Here is the abstract:
Purpose
This paper provides a better understanding of the extent to which standard forms of contract are amended in practice, nature of the amendments, and how contractors respond to these special terms and conditions proposed when putting together their bids.
Design/methodology/approach
Four live observational case studies were carried out in two of the top 20 UK construction firms, where the whole commercial review process was shadowed using participant observation, interviews and documentary analysis.
Findings
All four cases showed strong evidence of amendments relating mostly to payment and contractual aspects: 83 amendments in CS1, 80 in CS2, 15 in CS3 and 29 in CS4. This comprised of clauses that were modified (37%), substituted (23%), deleted (7%) and new additions (33%). Risks inherent in the amendments were mostly addressed through contractual rather than price mechanisms, reflecting commercial imperatives at the time of bidding. 'Qualifications' and 'clarifications' were included in the tender submission for post-tender negotiations. Therefore, the amendments seemed to have no significant impact on price itself.
Conclusions
Amended versions of standard contracts seem to be the norm in practice. However, the amendments do not necessarily affect price. In practice, there may be no 'standard forms of contract' although clients may draw on them 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
The extent of amendments in standard contracts and how contractors respond is investigated.
About Me
- Samuel Laryea
- Johannesburg, Guateng, South Africa
- I am a Senior Lecturer in the School of Construction Economics and Management at University of the Witwatersrand, South Africa. In the past, I have been a Lecturer in the School of Construction Management and Engineering at the University of Reading, UK (2010-12); and also a Post-Doctoral Academic Fellow (2009) and Graduate Teaching Assistant (2008). I completed my PhD at University of Reading in Dec 2008 on the relationship between risk and price in tendering. Prior to transferring to Reading in Jan 2008, I was an MPhil/PhD student at KNUST, Ghana (2004-07). I gained my undergraduate degree in Building Technology from Kwame Nkrumah University of Science and Technology (KNUST), Ghana in 1998-2002. During school days, my peers elected me to serve in several leadership positions including SRC President at KNUST. From 1994-96, I attended Suhum Sec. Tech. School after basic education at schools in Ghana and Nigeria. I did my National Service with the Fanteakwa District Assembly in 2002-03. After that, I worked at the Development Office of KNUST until I started my PhD in 2004. I am a co-organiser for the WABER Conference and an author of 30+ research publications.
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