Bring Back the Engineer

By: Isam Saad Sahawneh B.Sc.C.E., Lina Salameh Zureikat M.Sc.C.E, Tuesday, August 08 2012

Recent lean years have tempted employers with work on offer to modify standard conditions of contract to their advantage, confident that the work-hungry contractor will accept terms which put an unreasonable amount of risk on his shoulders. This has gone hand in hand with an erosion of the authority of the Engineer. Isam Saad Sahawneh, CEO of Construction Management Associates in Lebanon, has seen this practice growing in the Middle East and is deeply concerned about its effects.

“The majority of prevailing contracts are modified versions of the standard FIDIC conditions. These contradict the basis philosophy of the ‘Red Book,” he says.
“The principles require an independent Engineer appointed by the Employer to act fairly and independently between the Employer and the Contractor.”

Because Employers suspect Engineers of being in sympathy with Contractors, the Engineer’s powers are restricted, hindering progress and resulting in unbalanced contracts.

“Circumscribing the powers of the Engineer is now prevalent in most contract documents. The Engineer is required to seek the written approval of the Employer before issue of numerous major decisions. With the necessary powers, on-the-job techniques, skills and procedures, the Engineer should be equipped to administer the contract with the main objective of promoting the success of a construction project. Desirable circumstances such as these are now filed under ancient history,” says Sahawneh.World lending institutions such as the World Bank may insist on the use of unaltered FIDIC conditions but without much success. “Employers do not follow recommendations and change conditions to suit themselves. Some supposedly FIDIC based contracts are mutilated beyond recognition: truly a Contractor’s unqualified nightmare,” he says.

In Sahawneh’s view, the only necessary changes are those required by local laws, and must be introduced with extreme care. “Amendments are always accompanied by clouds of uncertainty. They set up a new set of rules. Modifying the FIDIC contract simply means it is not acceptable in its present form. The result is a contract where the Employer is the dominant party, with a transfer of all the risks to the Contractor. Contracts should be based on the concept of fairness.”Consultants should advise clients on how to use international conditions of contract effectively. “The Engineer is intended to be a moderator between Employer and Contractor. To find an Engineer with these objectives nowadays is as common as finding an honest politician,” says Sahawneh.All too often, the Engineer is simply a ‘representative’ of the Employer. “Truly, Engineers seem to be entrusted with no more than checking dictionaries for spelling errors,” and this erosion of the Engineer’s traditional role means that he is often dictated to by the Employer. “Completion of the works is often treated as ‘absolute’ as opposed to ‘substantial’.

Certificates are rarely processed diligently by the Engineer and the ‘time for payment’ is rarely honoured by the Employer,” he comments. Extension of completion dates and delays on payment, while the Employer ‘reviews’ the Engineer’s ruling result. Sahawneh praised a ruling in Saudi Arabia which forbad an Employer from withholding monies for alleged liquidated damages in a case of project overrun until judgment on a Contractor’s claim was made.

“The ‘performance’ of a Contractor’s promise in a contract is becoming increasingly difficult to fulfill as a result of unbalanced contracts coupled with the disintegrating role of the Engineer. In these circumstances the ‘breach’ of a Contractor’s promise will undoubtedly give rise to remedies at law,” he warns.Speaking as an objective person and not as a Contractor, the present prevailing contract terms and conditions place significant risks on Contractors without proper consideration. The result is that Employers gain an unfair advantage.

Contractors, in general, are reasonable people and the Engineers must realize that Contractors are in the business to make a profit.” He admits his comments may seem harsh, “though I don’t wish to criticize any profession or arm of the construction industry in particular. It is only fair to say that contracts should be formulated so as to strike a ‘fair’ balance between the interests of the parties,” he concludes. “A return to balanced contract documents would, for a contractor, be an intoxicating dream.”