The guest lecture “Infrastructure Project and Contract Administration” was given on March 8th 2016 by Prof. Dr. Shunji Kusayanagi. He is a Visiting Professor at Tokyo City University, Tokyo and Professor Emeritus at Kochi University of Technology, Kochi, Japan. Prof. Dr. Shunji Kusayanagi has more than 40 years experiences at construction both in Japan and all over the world. The topic of the lecture, Contract Administration, is one of his speciality.
The guest lecture began with the exposure of content “Project Infrastructure Characteristics and Contract Administration”, where the collaboration between the contractor and the project owner is an integration of both functions. To execute the projects appropriately, arrangements in the contract conditions are needed. The problems in the project can be resolved with technical and contractual approach. It was said too, that contract administration and risk management is one unity, where the selection of the type of contract is based on the ability of project owners and contractors, technical difficulty, uncertainty, financing conditions, and others, all of which boiled down to risk sharing and allocation between the project owner and contractors. In this case, each type of contract has a different risk allocation.
Furthermore, Prof. Dr. Shunji Kusayanagi thoroughly explained the contract administration in FIDIC’s contract through Rainbow Forms, where color identity is given to each FIDIC’s contract reference book that has the designation of certain types of contracts. In his presentation, few examples that was shown are the Red Book, Yellow Book, Silver Book, Green Book, Pink Book, Orange Book, the Gold Book and Blue Book, with each designation. Prof. Shunji said that the Red Book is the basic of contract administration, Pink Book for projects funded by the Multilateral Development Banks and ODA, and Yellow Book for Design Build Contract which is used in the function-oriented projects. Furthermore, Silver Book is used for the EPC Contract and Gold Book for BOT’s projects / concession. He also gave examples of international projects related to the use of each of those books.
After the break, Prof. Shunji discussed the detail of the Red Book which is the basic of Contract Administration. He expressed some principles such as balance in the allocation of risk, the role and involvement of supervisory consultants or the engineer in the execution phase of construction, as well as Contract Administration based on Qualitative and Quantitative Analysis for handling claims. He gave an illustration using CPM on several scenarios of delays in the project that caused by the project owner and the contractor and its contribution for the delay. Some important notes submitted were float is owned by the project, and in concurrence delay, the owner has the responsibility for delays that occur because an owner has more information than contractor. In force majeure event, contractors could only be paid based on how much is spent (regardless of profit) and are entitled to an extension of time related to the impact of the force majeure. In the end of the lecture, Prof. Shunji conveyed how to resolve a dispute that set out in the FIDIC form of mediation, Dispute Adjucation Board, Arbitration and Litigation. It was vital for an engineer to have knowledge of contract administration because it is one of approaches to be used when there are problems in the project, in addition to the technical approach.