ARE_410_L07_Types_of_Construction_Contracts_I

ARE_410_L07_Types_of_Construction_Contracts_I - ARE 410...

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10/24/2016 1 ARE 410: Contracts and Liability Jorge A.J. Caeiro, Ph.D. Department of Civil and Architectural Engineering Lecture 7 Engineering Contracts categories Outline In this lecture will be investigated the major contractual forms used to establish contracts for the construction of projects. The context: Construction is a product-oriented activity that has a very strong business dimension . The business aspects of construction require the establishment of contractual relationships with a wide range of parties. The need for contracts
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10/24/2016 2 In a business context, a contract is an agreement between two or more competent parties to do something for a consideration. The central role played by contracts is reflected by the fact that construction firms are referred to as ‘‘contractors.’’ Why Contractors are actually called Contractors a) Competitively Bid Contract The most widely used format of contract Traditionally used in public projects because the bidding process yields a low and competitive price that ensures taxpayers that their monies are well spent. Construction Contract Types
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10/24/2016 3 b) Negotiated Contract Selection of the contractor is based on the preferences of the owner and the strengths and weaknesses of the contractor’s proposal. Not well suited to public projects since favoritism can play a major part in determining which contractor is selected.
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