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TitleUniqueness, Complexity And Risks in Construction Projects
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Contents
	Building Economics (W055)
		The Application of Life Cycle Costing for Building Retrofit
		Managing Mega Construction Projects - Learning from Two Case Studies: London Underground’s Jubilee Line Extension and BAA’s Heathrow Terminal 5
		Improving the Design Process
		Innovations in Tunnel Construction and the Associated Economical Consequences for Supplier, Contractor and the Client
		The Implications of Incomplete Contracting for Construction Management
		The Price of Risk in Construction Projects: Choosing of an Appropriate Research Methodology
		Poor Quality Costs in Medium-Sized Construction Companies: What can be Learned from  other Industries
	Performance Concept in Building (W060)
		Risk Management in PPP Maintenance Projects of Communal Street Networks
		Risk Management in Different Forms of Contract and Collaboration – Case of Sweden
		Client Involvement in Performance based Briefing in Public Private Partnerships Procurement and the use of ICT: Dutch Best Practice
		Risk Management: A Bottom-up Approach to Ascertain Responsibility
		Portuguese Thermal Code’s Evolution and its Contribution to the Sustainable Construction
		Decentralized Energy Generation and Waste (Water) Treatment in Residential Districts: The ‘Sustainable Implant’
		Why Insulate? The Arguments for Sustainability
		Autonomy or Heteronomy of Essential Services in the Built Environment?
		Dynamic Model of Energy Saving Projects Market
		Ecology of the Building Geometry - Environmental Performance of Different Building Shapes
		Solar Energy Conversion with Flexible Photovoltaic Modules Integrated Into Single Ply Roofing Membranes
		Smart Materials: Self-Regulating Envelopes
		Integrating Ventilated Façades in Hot and Humid Climates
		Holistic Enterprise Risk Management - Risk Coverage and Risk Control
	Organisation and Management of Construction (W065)
		Complexity of Megaprojects
		Stakeholder Perceptions of Contractor Time, Cost and Quality Management on Building Projects
		Effective Financial Incentive Mechanisms: An Australian Case Study
		Hunters and Farmers? The HRM Implications of ‘Product-Service’ in Construction
		Generic Axiomatic Requirement Management Model (GARM-M) – Accelerated Target Oriented Handling of Total Service Contracts
		Supply Chain Systems Engineering in Construction
		The Evaluation of the Delays in the Portuguese Construction
		Whither Partnering? A Trade-off Analysis using a Hong Kong Case Study
		A Method to Evaluate and Manage Client Requirements in Housing Projects
		Ethics and Authenticity of Leadership in the Construction Industry
		Strategic Cooperation Networks for Life-Cycle Service Provisions in Building Construction
		Workforce Issues in the Knowledge Age
		Implementing Innovation: Transforming Practices and Technologies in Construction Work
		A Locus for Dynamic Competitiveness in Construction
		Measuring Performance in Construction Projects: The Case of the Swedish “Best Practice tool”
		Evaluation of Individual Characteristics in Partnering Projects
		Human based Value Creating Cooperation in Construction Projects
		Culture in Construction: Characteristics and Paradigms
		The Roots to Conflicting Interests among Different Partners in a DBFM Consortium
		The Design of the Organisation of a Building Process of an Underground Multimodal Station with a Case-Study of Station Amsterdam Zuid/ WTC, a PPP-Project
		The Harmony Model: A Case Study on New Contractors Approach
		Internal Logistics at the Building Site
		Strategic Purchasing ‘from Project-Related Collaboration to Sustainable Strategic Collaboration’
		Procurement Policy and the Adoption of Integrated Contracts for Civil Works by Local Authorities: A Case Study for the Netherlands
		What Makes a Leader in Construction? An Analysis of Leaders in the UK Construction Industry
		Integrated Solutions in Construction: Combining Products and Services in the PFI Context
		Constructing Strategy: Practitioners, Practices and Practice
		Living Building Concept for Adding Value in an Unpredictable Future
		Project Risk Management in Oman: A Survey of Risk Practices in the Construction Industry
		Value Creation by Process-Oriented Project Management
		Development of Construction Process Optimal Designed Decision
		The Crossover of Burnout and Engagement
		Evidence-based Design for Health Facilities: Benefit Realisation and Assessment of the Business Case
		Improving the Skills and Competencies of Knowledge Management ‘Specialists’ throughTargeted Education and Training
		Construction Clients and Industry Innovations: an Understanding of their Roles and Impact
	Facilities Management and Maintenance (W070)
		A Facilities Management Resource Consumption Model
		Advances in ETICS Behaviour Analysis and Consequences for Planning Maintenance
		An Integrated Approach to the “Relife” of Office Buildings
		Public Private Partnership for Maintenance Activities – System Boundaries for a Life Cycle Oriented Economic Efficiency Analysis
		Building Condition Assessment: A Performance Evaluation Tool towards Sustainable Asset Management
		The Jerusalem Eco-Housing Project: Integrated Design Solutions
		Issues and Actions for Sustainable Renovation
		Integrated Plan Analysis (IPA) of Buildings
		The Ventilation Implication of a Combined Life Cycle Assessment (LCA), Life Cycle Costing (LCC) and Health Impact Assessment (HIA) Study for Public Housing in Hong Kong
		Sustainable Cities for a Sustainable Development: Building Renewal as a Mean of Increasing the Sustainability of the Existing City
		Performance Measurement to Communicate Strategy
		Diagnostic System for Monitoring and Revaluing of Building Constructions
		A Survey of Operation and Maintenance Budgetary Practices for Commercial Buildings in Hong Kong – Preliminary Findings
		Pervasive Technologies for Workspace Management at Nationwide Building Society
		Selection Framework for Domestic Subcontractors by Contractors in the Construction Industry
	Procurement Systems (W092)
		Rethinking the Contractors Trilogy: Identifying the Missing Dimension in the Traditional Construction Delivery System
		From Bureaucracy to Value-Based Procurement: The Client as Change Agent
		Introducing Innovative Procurement Methods for Supply Chain Integration – Implementing the Challenge
		Defining the Conditions of a Contractors’ Past Performance Measurement System for Dutch Construction Clients
		The Construction Contract as a Means for Improving the Contractors’ Performance
		PPP Process Model for Service Provision - PPP tender and Award Process Model
	Architectural Management (W096)
		Designing Risk on International Projects
		Why is Design Delivery always Behind Schedule? A Critical Review of the Design Planning Techniques Adopted for Real Estate Projects in São Paulo - Brazil
		A Comparative Study of Architects’ use of Briefing Documents Interim Report
		Designing in the Virtual World
		The Strategy of Building System Design based on the Influence of “Feng Shui” in Traditional Culture
		Managing Intellectual Capital Strategically: A Core Competence for Architectural Design Firms in the Turkish Construction Sector
		Towards Sustained Competitiveness in UK Construction: A Multi-Methodological Approach
		Building Information Management for AEC - The Recording and Integration of Concept and Detail Design Data using Ubiquitous Sources
		Design Process of a Temporary Light Weight Emergency Shelter with Integrated Climate Control
		Residential Window Selection Model for Different Climates of Turkey
		A Study of a Recreation Area for the Application of Ecological Engineering in Taiwan
		General Managers’ and Building Managers’ Different Evaluation of Building Value and Quality - As Built and Over Time
		Influence of Local Cultural Peculiarities on National and International Design Process and Results
		The Prototype of Land- Architecture in Taiwan: The Case of Yami-Aboriginal Housing in Lanyu Island
		Sustainable Briefing for Sustainable Buildings
		Using Digital Information for Hybrid Project Design
		The Capture and Reuse of Design Cost Information in Architecture
		Role of Cultural Capital towards the Development of a Sustainable Business Model for Design Firm Internationalisation
		Web Supported Process Management to Achieve Consistent International Project Team Integration and Performance
		Managing Design with the Effective use of Communication Media: The Relationship between Design Dialogues and Design Team Meetings
		Integrating Design and Construction from a ‘Lean Perspective’
		Intelligent Library and Tutoring System for EURASIA Project
	Intelligent and Responsive Buildings (W098)
		Design Strategy for the Integration of Climate-Responsive Building Elements in Dwellings
		The Climate Adaptive Skin: The Integral Solution to the Conflict between Comfort and Energy Performance
		Intelligent Buildings for Sustainable Construction
		Towards a Continuum of Computational Building Simulation Tools to Support the Design and Evaluation of Complex Built Environments
		Design of Intelligent Two-Storey Residential Buildings, Made of Ecologically-Safe Structures of Prefabricated Elements
	Safety and Health in Construction (W099)
		Keeping Older Workers in Construction: Project Brief
		Characteristics of Accidents on Construction Work in Thailand and Prevention Guide
		Evaluating Health and Safety Performance of Nigerian Construction Site
		Usability in the Workplace Case Study of Pamela Youde Eastern Hospital, Hong Kong
		The Effect of Awareness of and Compliance with the Duty to Manage Asbestos Regulations
		Analysis of Accidents on Building Construction Sites Reported in Uganda during 2001 - 2005
		Powered Aerial Access Platforms (PAAPs): Their use and Benefits
		Health and Safety (H&S) in Roofing
		Uptake of an OHS Code of Practice by Australian Construction Firms
		Dealing with Cost and Time in the Portuguese Construction Industry
		Developing the Management Practices and Cultural Values for the Deployment of Construction Quality Assessment Systems (CONQUAS): the MP&CV-AM approach
		A Review of Recent Legislative Developments in South Africa and Turkey
		Social Housing Building Stock Renewal Needs: A Case Study
		Evaluating the H&S Performance of Nigerian Contractors
		The Influence of Architectural Designers on Construction Ergonomics
		Safety and Quality in the Portuguese Construction industry
	Information and Knowledge Management in Building (W102)
		Using the French EPDs to Compare and to Choose Building Products
		Innovative Housing Projects for Low Income Groups in Urban Central Areas: An Approach of Information and Knowledge
		Knowledge Creation and Absorptive Capacity: Influences of Social Capital
		Knowledge Sharing and Reuse for Improving Construction Project Earned Value
		Technology and Knowledge Transfer for Capability Building in the Ghanaian Construction Industry
		The Construction of the Knowledge Base of Fuzzy Expert System in Building Pathology – From a Functional Access
		Towards a Sustainable Building Approach: Arenas of Enactment, Models of Diffusion and the Meaning of Demonstration Projects for Change
		FMEA Software to Enhance Innovation in Building
		Ready? Go the National E-Tendering Initiative – A Malaysian Experience
		Innovation Circles Stimulating Construction Knowledge Exchange
		Sharing Knowledge through the Construction Knowledge Exchange: A Demand-led Approach
		Successful Collaboration with the Client - A Comparative Study of Three Public Project Networks
		The Current Development of China’s Construction Management
		Open Residential Building in Iranian Context
		Knowledge Modelling for Performance Measurement of Built Environment
	Open Building Implementation (W104)
		Open Building within the Practice of Polish Architects
		Renovation and Alternation: An Efficient Way for the Existing Residential Building to Keep up with Social Life
		Development of an Adaptable Integrated Façade System for Housing in Taiwan
		Worlds of Difference: Constructing Urban Landscapes for Inhabitation
		Time as the Main Factor
		The Systemic Nature of the Construction Industry
		Urban Regeneration and Renewal: A Case Study of Gaziosmanpasa Municipality in Istanbul
		Feng Shui: An Alternative Framework for Complexity in Design
		Operable façade: An Open Building Approach for User Responsive Architecture
		Re-architecture of Industrial Heritage
		Study on the Development of Korean-Style Residential Open Building through the Remodelling of the Experimental Open Building of KICT
		A Study on the Amendment of Regulations for the Activation of Long life Span Multifamily Housing
		Teaching Architecture Students to Work with Distributed Design
		Space and Time to Dwell Santa Ursula through 50 years
		Designing for Diversity in South Africa: Opportunities for Inclusive Design through the Application of Open Building
		Partnering and the Problem Resolution Process in Practice
		Urban Harvest, and the Hidden Building Resources
		Participation Supported, Flexible and Appraisable Model - PSFAM in Urban Transformation
		Sustainable Building Design - case study for Rio de Janeiro - Brazil
		Sustainability as the Force that Tames an Exponentialoid
	Construction in Developing Countries (W107)
		Side Stepping Poor Infrastructure: Enabling Environments in Developing Countries
		Construction as a Driver for Sustainable Regional Development: Focussing on Practice and People
		Public Private Partnerships: The Provision of Social Infrastructure in Australia
		Joint Construction of Community Schools in Disadvantaged Areas
		The Challenge of Engaging South Africa’s Unemployed in Construction Sector Delivery
		International Technology and Knowledge Flows among Foreign and Local Contractors in Ghana
		Mapping the Australian Regulatory Environment: Implications for Construction Firms
		Developing a Systems Framework for Sustainable Infrastructure Technologies (SIT) in the Built Environment Focussing on Health Facilities: A Case for Cape Town
		Factors of Construction Time for Commercial and Residential Projects in India
		Improving Housing Quality as a Marketing Strategy
		Defining a Strategic National Agenda on the Theory of Construction for Development
		The Declining Role of the General Contractor in the Kenyan Construction Sector
		School Infrastructure Performance Indicator System (SIPIS)
		The South African Construction Micro Enterprise Development Challenge
		Student’s Perception of the Service Learning Component of the Construction Studies Programme at the University of Cape Town
		Developing a Systems Analytical Framework for the National Poverty Alleviation System (NPAS): The Community Based Public Works Programme (CBPWP) Case Study
		The Effect of Political Unrest on Construction Time for Food Grain Warehouses in Bangladesh
		Procurement Reform: A Research Agenda for Construction in Developing Countries
		Collaborative Teamwork in Construction: An Exploratory Study of the Role of Project Insurance
	Informal Settlements and Affordable Housing (W110)
		Community Participation in the Upgrading of Informal Settlement & Housing at the River Bank of Surabaya
		The Role of Urban Design in Developing Communities
		People-Planet-Profit-(re)searching for Sustainable Urban Development – How Students from Hogeschool Utrecht, Institute for the Built Environment work in the Tshwane Region of South Africa
		High- Rise Buildings – Needs and Impacts
		Adobe Technology - A Possible Solution to Urban Housing Problems in Ethiopia
		Reducing Construction Fall Accidents in the Maintenance Sector: An Industry-Based Survey from Hong Kong
		Nature and Performance of Portuguese Real Estate Investment Funds
		Low-Cost Housing: A Continuous Struggle (Overview, Research, Future)
		Opportunities for Clients’ Requirements Management in a New Form of Housing Provision in Brazil
		Ready-made Shacks: Learning from the Informal Sector to meet Housing Needs in South Africa
		Optimization of Building Materials and Designs towards Sustainable Building Construction in Urban Tanzania
		Ethics In Construction: Examples from Uganda
		Sustainable Construction Industry for Sustainable Environment: Trees for Shelter and Alternative Building Materials
		An Evaluation of Small Contractor Development Programme in Swaziland
		Harnessing the Informal and Formal SMME Construction Sectors to Resolve the South African Construction Skills Shortage
		Integrated Design and Production. Decision-making Tools for Optimal Industrialization ofHousing Construction
	Law and Dispute Resolution (W113)
		Teaching Law to Undergraduate Surveyors and Construction Managers: A Problem based Learning Approach
		Recent Developments in Letters of Intent
		The Contractor’s Quality Obligations: Different Concepts under English and German Contract Law
		Application of Public Participation Provisions in Environmental Regulation: Implementation of the Water Framework Directive in UK and Germany
		“What do you think of it so far?” The Views and Experiences of Specialist Contractors on Partnering in the UK
		Regulatory Systems for Building in Europe
		Teaching and Learning Ethics: The Construction Manager’s Perspective
		Tasks and Responsibilities for Building Control in Europe
		The Evolution of Adjudication Law in the Construction Industry in New South Wales
		Expert Evidence in Rights to Light Litigation: A Review of Judicial Attitudes to Current Practice in the UK
		Incentives in Construction Contracts: Should we Pay for Performance?
		Liability for Building Operations in Singapore: Sorry and then Safe?
		A Facility Manager’s Approach to Standardized Construction Contracts
	Smart and Sustainable Built Environments (TG55)
		Geosynthetics: Some Sustainable Design Concepts for Developing Countries
		Ecological Sustainability in Construction: A Vision for 2025
		Innovation in Buildings: A Socio-Eco-Technical Approach
		Managing Building Projects through Enhanced Communication – An ICT Based Strategy for Small and Medium Enterprises
		Steel and Zinc as an Important Component of Sustainable Construction
		Possibilities of Indoor Air Pollution due to Conventional Construction Industry Practices
		The Building Material Selection Importance at the Building Design Process for its Sustainability
		The Construction Portuguese Industry seems to Ignore the Deconstruction Method
		Environmental Criteria and Indicators used in Environmental Assessment of Buildings
		Sustainability Assessment of Buildings: Would LEED Lead Brazil Anywhere?
		Sustainable Management of Construction Projects
		A Methodology for Predicting the Magnitude of Environmental Impacts Related to the Building Construction Process
		Energy Potential Mapping – A Systematic Approach to Sustainable Regional Planning based on Climate Change, Local Potentials and Exergy
		The Impact of the Spanish Built Environment on Climate Change and the Implication to Legal Frameworks
		Environmental Impact of Construction Products: Leaching Behaviour During Service Life
		Project Performance Measurement for Productivity Improvements
		Finding Complementary Lines for a Sustainable Development of Buildings in a Worsened Climate
	Industrialisation in Construction (TG57)
		Advantages and Limitations of Precast Concrete Construction in High-rise Buildings: Hong Kong Case Studies
		Innovative Sales Concept and Knowledge-Platform for Prefabricated Building Construction
		Strategy to Enhance use of ICT in Construction
		Applying Future Industrialised Processes to Construction
		Design of One-Storey Residential Houses, made of Prefabricated Elements, Intended for Building in South Africa
		Designing Communications on International Projects
		Reducing Construction Waste by Decisions within the Design Process
		A Systems Approach to Generate Integrated Design Solutions
		Industrializing the Construction Sector through Innovation – Tolerance Dilemma
		Investigation into the Feasibility of Hybrid Concrete Construction (HCC) in South Africa
		Re-Architecture: Reality or Utopia?
		Reusing and Recycling Construction Aggregates as Mitigation Measures to EnvironmentalDestruction - The Case of Dar es Salaam, Tanzania
		Development in Assembling Sandwich Facade Units
		Effect of Contract Programming on Project Performance in Nigeria
	Built Environment Complexity (TG62)
		The Exponentialoid of Resource Consumption
		A Decision making Tool based on Ontologies for Risks Evaluation and Systems Integration
		The Exponentialoid of Emissions Generation
		The Cyclical Nature of Construction Industry Employment and Higher Education Recruitment
		The Forces Behind the Exponentialoid Growth in Construction
		Defining the Force that Tames an Exponentialoid
		Complexity Theory and the Maintenance Paradigm
		Systems Dynamics, Sustainability and Construction Complexity
		Models and Metaphors: Some Applications of Complexity Theory for Design, Construction and Property Management
		Inflation, Profit and Building
		Comparison of Construction Materials and Techniques in New and Refurbished Housing Projects
		Principle Solutions with SILA
		The Human Factor in Building
		A Complexity-based Conceptual Framework for Whole Life Risk Assessment
		The Complexity of Issues Surrounding the Implementation of Continuing Professional Development for Construction Managers
		The Contractor’s Liability for Workmanship and Design: Is it a Matter of Competence or Status?
		A Preliminary Report on Applications of the Most Economically Advantageous Tender (MEAT) Award Mechanism
		The Impact of the Workplace Safety and Health Act 2006 on the Developer
		Project Contract Strategy Knowledge Base of Civil Engineers -the Time to Reflect
	Disasters and the Built Environment (TG63)
		A Tale of Two Floods: Reconstruction after Flood Damage in New Zealand
		Modular Building Solutions for Emergency in Developing Countries
		Construction for Development (but also for Security?)
		PRE-EMPT: Developing a Protocol for Built-in Resilience to Disasters
		Synergising Disaster Risk Management and Construction Research: A Multi-Disciplinary Initiative from the UK
		Regulatory Frameworks for Post-Disaster Reconstruction: Improving Resilience in the Process
		EURASIA: Role of Construction Education in Capacity Building for Facilities and Infrastructure Development within a Developing Country Setting
		Knowledge Sharing in Disaster Risk Management Strategies: Sri Lankan Post-Tsunami Context
		Improving Infrastructure to Reduce Future Vulnerabilities to Natural Disasters: Review of Infrastructure Development Associated With Post Tsunami Reconstruction in Sri Lanka
		Improvement of Basic Functions for Visualizing Schedule and 3D Object in 4D CAD System
		The use of E-commerce Applications in Construction: An Interpretative Model
	Miscellaneous
		Reusing and Recycling Construction Aggregates as Mitigation Measures to Environmental Destruction The Case of Dar es Salaam, Tanzania
		The Structure of the South African Building and Construction Industry; Preliminary Results
		Uniqueness, Complexity and Risks in Construction Projects: Implications for Small/Medium Scale Contractor Development Programmes of South Africa
		Success Factors of Women Entrepreneurs in Construction
		Use of Steel-making Co-Products and Marble and Granite Industry Waste in the Production of Low Impact Building Components
		Structural and Finishing Costs in Yemen
		The Challenges of Quantifying Construction Works for Project Control in Ghana
		Regional Construction Markets: The Example of Bremen, Germany
		Liberalisation of Construction and Related Engineering Services
		A Comprehensive Framework for Building Design Support
		An Integrated Emerging Contractor Development Model for the Construction Industry: Practical Implementation and Statistical Quantification
		The Importance of the Project Coordinator in Construction Management: The Entrepreneur’s Vision
		The Role of Women in Construction Industry Development: The UK Perspective
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Document Text Contents
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CIB2007-465 Uniqueness, Complexity And Risks in Construction Projects: Implications for small/medium Scale Contractor Development Programmes of South Africa Emeka Egbeonu School of Civil and Environmental Engineering, University of the
Witwatersrand, Johannesburg, South Africa. [email protected]
ABSTRACT

Most small/medium contractors fail bec
ause they lack adequate capacity to
handle the uniqueness, complexity and ri
sks in contracting. This paper
explores the implication for emer
ging small/medium contractor
development in South Africa. Progr
ammes are examined; literature
reviewed; established small/medium co
ntractors are engaged in discussion
with schedules of questions. Found: on mere paper drawings intangible
project with substantially variable components that must all come to
tangibly definite whole in specific period through some unstable
construction process, is at contractor™s risk given definite price that hardly
changes. Government departments prov
ide projects, develop contractors,
and transfer risk to contractors that la
ck required capacity to carry such
risks. The arising failure implies that
programmes must provide emerging
contractors with capacity required to
handle the risks; lesson can be learnt
from how established small/medium
contractors handle such risks.
Keywords: Construction, Uniqueness, Complexity, Risk, Contractor,
Capacity

1. INTRODUCTION
For the past decade some government building and civil engineering

construction projects are being used to support emerging small/medium



Page 2




black contractors in order to enable
them participate in South African
construction industry (DPW 2005). However, huge failure rate is being
witnessed due to lack of adequate sk
ill/resource capacity of these
contractors to handle the unique, comp
lex and risky nature of construction
contracting (CIDB 2005).
But the need to remedy socio-
economic imbalances makes still
makes contractor development attrac
tive. Again, there exists a general
understanding that small enterprises, in
cluding small contractors, contribute
immensely to economic development of countries (SBA,
www.sba.gov
; ILO 1987; and Croswell and McCutcheon 2001). But DPW (1997) states that
contractor development in South Africa
is needed for the following reasons:

- They can be powerful tool to
create jobs for the 42% national
unemployed
- The relatively low skills/resources required at this scale can enable a
large number of functional small/medi
um black contractors to enter and
help to decentralize the construction
industry historically dominated by
established white contra
ctors; it will also develop the platform for growth and redistribution of wealth in South Africa.
These seem to be the motivating factors, but before discussing the

complex situation that cons
trains them, it will be ne
cessary to look at the opportunities for such development.
1.1 Opportunities/avenues for contractor development

Over the years South African constr
uction industry has been attracting
large investments. CIDB (2004) states
that the combined annual public and
private sectors construction expe
nditure amounts to R57Billion:
government sector invests 43% representing R24.5Billion, while private
sector invests 57% repres
enting R32.5Billion. In its vigorous drive to use such investment to remedy apartheid
legacy, government expects that the
emerging black contractors will execute about 80% of its projects, while
also taking about 50% of the private
sector projects. This expectation
amounts to about R35.85Billion repres
enting 63% of the whole. And DPW
has recently indicated an increase of
the annual amount to R100Billion due
to the massive construction required for the hosting of the 2010 FIFA World
Cup; the emerging black cont
ractors™ share of the projects is also expected
to increase in the same proportion. Based on the large investment
opportunities, government considers the
construction sector an appropriate
avenue for the implementation of emergi
ng black small/medium contractor
development.
The following are some of the black emerging small/medium

contractor development programmes being implemented: Black Prime
Contractor Initiative, 1995-2002; Emerging Contractor Development



Page 8




- The most difficult problem may not lie with putting price on work
and the actual work execution; it actually lies in the timing of
payment receipts. Contractor us
ually makes heavy initial cost
investment, but must minimize the time gap between cumulative
expenditure and income in order to remain afloat. But payment is
usually delayed.
- Normally contractor must be smart enough to front-load costs in
order to keep a healthy cash-flow over project duration. But, this is

not always allowed small contractor because it may not comply
with lowest bid/win system, coupled with lack of trust. This stifles

cash-flow leading to long delay and sudden collapse.
In all, Edmonds and Miles state that experience shows that the Bill of
Quantity/Estimate system coupled with
its contract finance, execution,
acceptance, and payment system might be good for the

client/designer/estimator, but is too costly, burdensome, and risky for small

contractors in the developing countri
es who tend to lack the skills and
resources to handle it. This might be suitable to British and European

contractors who evolved it, but quite
alien and unsuitable to contractors in
the developing countries considering capacity issues.
3. SOME CONCERNS REGARDING THE SITUATION
However, it is stated that the unique
, complex and risky situation is not

suitable to small/medium contractors
in the developing countries, but the
practices and contract conditions formed from the situation are being

implemented in such developing countries
to the detriment of contractors in
such countries.

From the evolution account, it could be observed that the

contractor contributed in creating this
situation by presenting the ‚one-price™
for the whole project. The client seemed to have quickly exploited the

situation by cleverly transfer all the
risks to the contractor; and again, the
contractor accepted it hoping it will in
crease his profit chances. But on the
contrary, the contractor suddenly real
ized the dilemma he helped to evolve.
It could be observed that discusses on the uniqueness and complexity are

centered on the fact that almost all
the risks are heaped on the contractor,
which leads to lots of disputes that either impedes the contractor or results
to total collapse. This l
eads to calls for reform.
Marks
et. al (1978) state that tendering
is actually a test of the
contractor™s skills and ability to put a price on all the managerial and

operational risks including the inevit
able vagaries of site and weather
conditions in the project executi
on. Therefore, the reason why the
client/engineer transferred almost all the risk to the contractor and refuses

to re-absorb them is based on the knowledge that the contractor has the
adequate skill/capacity to handle the
risks, and in the event of an



Page 9




unexpected difficulty, it is the skill,
care, and resources of the contractor
that can be used to control the actu
al expenditure. Therefore, with some
justice, the risk should be bor
ne by the contractor, who is actually the party
that has the opportunity to control the expenditure connected with it.
Here, it seems that the client/engineer have made their case clear
and strong, and it looks like it will take
a stronger argument for them to shift
that position. But Marks
et. al suggest that the client/engineer™s objection
can to a certain extent be neutralized by
the fact that the engineer uses
instruction to interfere with contractor
™s expenditure of provisional sum to
cover special risks, which is not fl
exible to allow the contractor enough

freedom to exercise his best skills. Marks
et. al suggest that 20% of project
value should be allowed the contractor to cover and manage the risk. But

this does not happen.

Avijit Matra (1999) in (Holroyd 2003) noted that every time an
engineer puts an idea on paper, he or she may commit people to work in a
hazardous environment, that is, he or
she creates a risk, and it will not be
right for the responsibility of such risks to be transferred to other parties.
Here, Avijit is quoted from a health
and safety risk concerns, but it
is possible to also argue that by desig
ning project to client™s specifications,
the engineer/architect and client have actually created all the construction
process risks involved. Ther
efore, it will not be prop
er for them to transfer
to another person the responsibility for t
he risks they created. As it seems
that this line of argument is not being used to challenge the client™s

position, the contractor continues to bear almost all the risk to his

detriment.
Regarding this, contractor is deemed to have the requisite
skills/capacity even if the reverse is
the case. Therefore, any suggestion
that the risks should be shared, must first defeat or weaken the client™s
poison before stating how it should happen. The contention that client
creates the risk and ther
efore should not transfer its responsibility to
another person sounds benign to the contractor. But it does not look as if it
has actually defeated or weakened the client™s position. For example in
fierce competition to outdo one another, each contractor attempts to give a

price he considers good enough for him to undertake the project. This
could mean that the contractor ha
s used an adequate competence to
properly value and give a viable price to the project regarding all known
and anticipated operation costs, and he has placed himself in the position
where he can adequately carry the associ
ated risks. Therefore, the fierce
competition scenario tends to give a solid credence to the client™s position,

for it leaves the client with the opport
unity to accept an offer. This may help
to understand why the risks are still not being shared. Latham (1994) recommends that all parties involved in the project
should have clearly specified duties, which they must carry out in an
atmosphere of mutual cooperation,
with a shared financial motivation,
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