Tarcísio B. Celestino Vicepresidente ITA-AITES

Transcription

1 Seminario Internacional: Prácticas contractuales en Obras Subterráneas 14 de abril de 2015 Contexto de Temas y Problemáticas Contractuales en Espacios Subterráneos Tarcísio B. Celestino Vicepresidente ITA-AITES 45 páginas

2 Acknowledgments Juan Carlos León GG Corporación de Desarrollo Tecnológico (CDT) de la Cámara Chilena de la Construcción. Talk in 2013 about event related to contractual practices Alexandre Gomes, President Comité de Túneles y Espacios Subterráneos de Chile Carlos Zeppelin, President CDT

3 Sources of Information 1. ITA Working Group 3 on Contractual Practices - ITA Position Paper on Types of Contract, The ITA Contractual Framework Checklist for Subsurface Construction Contracts, 2010

4 Sources of Information 2. T.B. Celestino, 1995 Aspectos Contratuais da Construção de Túneis Based on an international survey about contractual practices and prices of underground works

5 On going work within WG3 Task-force ITA-FIDIC (Fédération Internationale des Ingénieurs Conseils) Contacts since 1979 for inclusion in FIDIC s Red Book of particular conditions related to tunnels. Protocol signed in Work in progress.

6 1996 Publication Types of Contract 1. Design-Bid-Build design under control of the owner call for tenders to construction contractors construction contract Advantages Owner has full control of design. Changes in design can be made at little expense. Final design carried out while owner can complete third-party agreements. Advantage of information like rights of way, etc. Final design team selected according to owner s criteria. Packaging of on-site construction according to owner s objectives (e.g. reservation of work for small contractors, etc.)

7 1996 Publication Types of Contracts Disadvantages Too general design to attract wide range of contractors (experience, equipment, etc.) Detailed design and construction in distinct stages. Too long (Solution! Simultaneous design) Risk Less risk to contractors Contract interfaces managed by owner

8 Partial Design-Build Final design and construction in a single contract. Private sector. Advantages Reduction of total cost via competitive fixed price bid (See criticism of the 2010 publication!) Design tailored to experience and equipment of contractor Less interfaces for owner s management

9 Partial Design-Build Disadvantages Bid based on preliminary design: variations of 20-35% expected at final stage Third-party issues not necessarily resolved when contract is awarded Owner has less control over qualifications of design team Important interfaces still remain to be managed by owner

10 Partial Design-Build Risks Preliminary design is never detailed enough to owner s expectations Changes in design desired by owner will be costly Owner will experience lack of direct access to design team Commitments made by the owner to obtain rights-of-way and third-party agreements may fail. Consequences may include delay, additional costs, etc. Owner with little basis to oppose differing site conditions claim

11 Design-Build and Turnkey Final design, construction, procurement and system with installations under same contract

12 Build-Operate-Transfer (B-O-T) Turnkey + defined period of maintenance and operation; facility transferred to the owner after specified period of time Advantages Owner better assured of efficiently operated and easily maintained facility Owner not immediately faced with hiring and training personnel Possibility of subsidy in case revenues do not cover costs (advantage to contractor)

13 B-O-T Disadvantages Image of operating personnel may not be up to owner s expectations Contractor s motivation to reduce maintenance and operating costs Potential problems with organized labor (possible different wages and benefits)

14 B-O-T Risks Too long contract period, from design to operation. Difficulties with long term budgets. Difficulties in specifying operation and availability of services.

15 Compatibility between type of contract and form of payment e.g. Partial Design-Build incompatible with unit price

16 2010 Publication Contractual Framework Checklist With particular project delivery schemes, tunnel owners may seek to lock in a contractor for a fixed price. Such a simplistic approach to the allocation of financial risk has been responsible for a large number of contractual disputes in subsurface projects due to the consequences of unexpected geological and other conditions. Clients who would like a fixed price can expect to pay a premium for certainty of price because they will pay for risks which may not occur. Contracts which include a mechanism for adjusting remuneration according to the conditions encountered will only pay for the risks that do occur.

17 Clear split and balance of responsibilities Clear indication of who is responsible for: geological investigation, interpretation, safety, environmental issues, insurance, systems integration, etc.

18 Dispute resolution process Failure to articulate dispute resolution process will result in delays, increased costs, expensive litigations, etc. ITA s opinion: traditional court procedures not in project s best interests Modern mechanisms: expert dispute resolution boards (DRBs), arbitration and mediation Mechanisms compatible with the highly technical nature of the root cause

19 Implementation of formal risk management Improve capacity to: identify control monitor communicate contractually allocate risk All parties involved should participate in process to manage and mitigate risks (ITIG Code of Practice, 2007)

20 Scope Clear and complete definition of scope environmental impact during construction and operation archeological significance limited access to working face etc. Subsurface geotechnical conditions never fully revealed until excavation Clear definition of completion, despite existence of defects.

21 Schedule Contract must be able to accommodate unforeseen events ITA s view that underground construction contracts must deal with variations to presumed geological and other conditions Permissions and relocation of sewer and other utilities usually poorly identified Time for testing and commissioning systems Lead time for equipment, personnel, capital, insurance, etc.

22 Risks The exposure of any party should be commensurate with their commercial participation in the project All parties aware of the nature of the risk they bear Allocation of risks related to 3rd party approval, changes to laws and regulations Differing site condition clauses combined with Geotechnical Baseline Reports should be encouraged

23 Tunnel Construction Contracting Aspects Celestino, 1995

24 Tunnel Construction Contracting Peculiarities High cost for owners Substantial loss for contractors Significant revenues for lawyers Unplanned outcome Court disputes cost delay non-technical decisions

25 Lump Sum (USNCTT, 1974) High cintingency cost high bidding prices lotery proffit loss, bankrupcy

26 Unit Prices No dispute No incentive for efficiency Incentive for overbreaks, poor blasting, etc. High cost Construction delay

27 U.S.A., 1974 National Science Foundation Department of Transportation Bureau of Recalmation Corps of Engineers N. York Contractors Association Contractors, consultants USNCTT(1974) Avoiding and Resolving Disputes in Underground Construction

28 Concept of Shared Risk Lump sum for predictable items Unit price for changed condition Importance of geotechnical report Disclosure of geological information Possiblity of arbitration Emphais on technical decisions

29 Contractor Prequalification Technical capacity Availability of equipment Financial health History of claim in previous jobs Flexibility to negotiate

30 Financial Costs Contractor is not in banking business; adequate cash flow Price Adjustment Clause Elimination of inflation risk Dispute Resolution Boards

31 TBM Higher prices Inflexible negotiation Equipment risk Consideration during planning stage

32 Geological Information Disclose everything Owner s responsibility Avoid disclaimers (never accepted by judges) Avoid effort multiplicity Avoid short investigation during bidding Investigation cost by bid loosers MANDATORY Better investigation -> Less problems

33 Alternative Proposals (previously not allowed in U.S.A.; only bid winner) Usual in Europe Use experience accumulated by all bidders Property of contractors

34 Dispute Resolution Boards (Denning, 1993) 3 independent members indicated by Contractor Owner First two members Members approved by all parties

35 Advances of DRB (Denning, 1993) Low cost compared to lawsuits Significant benefits: cost, schedule Techical decisions among engineers, geologists Record of 21 contracts without legal dispute US$ 1.1 billion 64 disputes satisfactorily settled Confidence to bid low price

36 Temporary Support Not always contractor s responsability Risk to nearby buildings Easy to specify final lining

37 Buying final work Concept of buying final work, not temporary stages E.g. shotcrete for primary support not specified Owner s responsibility: workshop, Washington DC, 1996

38 Norway - NOTCOS 1960s: legal disputes, high prices NOTCOS: Norwegian Tunneling Contract System Kleivan & Aas (1987) 2700 km tunnels constructed 2000 contractors involved No legal dispute

39 NOTCOS Incentives for cost optimization with shared risk

40 Changed Condition Comprehensive and unchanged bill of prices Construction Schedule Incentives or penalties for new schedules Quality Included in contract, e.g. air flow test to measure roughness of hydraulic tunnels

41 International Survey Responses Brazil Other Unit Prices Lump Sum Shared Risk - 15 Preliminary Design: owner Final Design: owner (83%) contractor (17%)

42 Responsability for Geological Investigation Owner: 75 % Contractor: 25 % (shared) Disputes Direct negotiation: 68 % Legal disputes: 14% Colombia: largest perecentage of legal disputs U.S.A.: 45% of solution with DRB Norway: 90% negotiation according to contract

43 Cost (US$/m 3) Cost of Tunnels other countries A (m2)

44 Conclusions ITA endorses Comprehensive contracts Schedule, clauses for unforseen events, thirdparty agreements, expropriations, etc. Importance of geotechnical investigation disclosure Indication of risk and responsibilities Positive concept of shared risk Positive role of DRBs

45 Gracias!