The document discusses best strategies for effective project control in construction projects. It begins with an introduction of the conference organizer, Mohamed Maged, and his qualifications. It then covers various topics related to contract management, including definitions of contracts, the contract lifecycle, FIDIC contracts, contract parties, stakeholder identification and management, the importance of relationships, and strategies for effective administration, negotiation, communication and conflict resolution.

1. ‫الراعي‬
‫السنوي‬ ‫المؤتمر‬‫المشروعات‬ ‫وإدارة‬ ‫للتخطيط‬-‫الرابع‬2017
Contract Relations
Management
‫المحاضر‬:
‫المهندس‬/‫ماجد‬ ‫محمد‬
Best Strategies for
Effective Project Control

2. Mohamed Maged (Conference organizer):
 Senior Project Control Engineer, B.Sc. of Civil engineering - Ain
Shams University, with experience in MENA region of (construction,
infrastructure, and roads) Mega projects, in professions of Contract
administration, Procurement, Tender estimating, Cost control,
Planning & Claim analysis.
 PMP, ACIArb, AIA Fellow, SCE-PE, SFC, FIDIC Contracts
Consultant & Certified Negotiation Associate.
 Arranged Two Annual Conferences of Planning and Project
Management (Anniversary of Facebook Page: Prof.Planner)-
American University in Cairo, August 2014 & 2015.
Other accounts:
 P P&C Academy: http://prof.planner.teachable.com/
 Telegram channel: t.me/profplanner
 SlideShare: www.slideshare.net/MohamedMaged8/
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
2
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
Best Strategies
for Effective
Project Control

3. Content
What’s Contract
Contract Lifecycle
What’s FIDIC
Contract Parties
The Importance of Relationship
Value and Benefits
Contract Administration
Negotiation
Communication
Conflict Management
Ethical Decision Making
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
Best Strategies for
Effective Project Control

4. 4
What’s Contract?
Legally binding relationship
between parties to define
procurement statement of work,
requirements of reporting, roles,
responsibilities, liabilities,
payment, indemnities and risk
allocation (helps in better
communication, clear
responsibilities, good change
management mechanisms).
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

5. 5
Legal Contract
What Do You Need to Have a Legal Contract?
- An offer
- Acceptance
- Consideration (Something of value, not necessarily
money)
- Legal capacity (Separate legal parties, competent parties)
- Legal purpose (You can’t have a legal, enforceable
contract for the sale of illegal goods or services)
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
A contract, offer, or acceptance may be verbal or written,
though written is preferred.

6. 6
Types of Commercial Contracts
There are many types of contracts such as:
Commercial agencies agreements, Contracting(e.g.
public works contracts, management, operation
and maintenance contracts, consulting services
contracts), employment contracts, insurance
contracts or insurance policy, lease contracts, loan
agreement, Trade(e.g. bill of lading, letter of credit,
…) … etc.
http://www.unidroit.org/instruments/commercial-contracts/unidroit-principles-2016
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Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

7. 7
Contract Lifecycle
Post-
Award
Award
Pre-
Award
Make or
Buy
Decision
Business
Case
Need
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Best Strategies
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

8. Contract Domain
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

9. 9
What does Contract Define?
Roles & responsibilities
Duties & Authorities
Commence date & time frames
Risk allocation
Change management mechanisms
Performance measurements
Plain language & visual aids
Rights & liabilities
Records & communication
Closing & taking over
Payment & indemnities
Procedural rules & priorities
Governing Law
General:
Special:
- Scope
- Price
- Duration
of
constructi
on,
warranty
& Delay
damages.
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Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

10. 10
What’s FIDIC?
FIDIC is the International Federation of Consulting Engineers. Its members are
national associations of consulting engineers.
Founded in 1913, Today, FIDIC membership covers 97 countries of the world.
As a result of a research for independent expert consultants for the World Fair Exhibitions
in 1913, a number of consulting engineers met to discuss the possibility of forming a
global Federation. The meeting was a success in that it led to the formal constitution on
22 July 1913 of FIDIC, Fédération Internationale des Ingénieurs Conseils, or later, the
International Federation of Consulting Engineers. The founding principles adopted were
Quality, Integrity, and Sustainability. There were 59 participants at the inaugural meeting;
official delegates from Austria, Belgium, Canada, Denmark, France, Germany, Hungary,
Netherlands, Russia, Switzerland, the United Kingdom and the USA. Three countries,
Belgium, France and Switzerland decided to found the Federation. The other countries
maintained provisional links during the initial years. However, due to the World Wars and
other major political disturbances, FIDIC development was slow until the late 1940’s. The
number of member countries changed constantly, and all came from Europe. In 1959,
they were joined by Australia, Canada, South Africa, and the USA. This made FIDIC a truly
international Federation.
http://fidic.org/about-fidic ‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

11. 11
FIDIC’s Forms of Contract
In this course contractual aspects will be according to
FIDIC (International Federation of Consulting Engineers) –
Conditions of Contract for Construction- 1999 “Red
Book”
Conditions of Contract for PLANT and DESIGN-BUILD “Yellow
Book”
Conditions of Contract for EPC / Turnkey Projects “Silver
Book”
Short Form of Contract “Green Book”
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

12. 12
Advantages of Using FIDIC Contracts
FIDIC Contracts have been developed over 50 years as the international standard
for the Consulting Industry. They are recognised and used globally in many
jurisdictions, on all types of projects.
The key ingredient for their success as industry standard lies in their balanced approach
to the roles and responsibilities of the main parties, as well as the allocation and
management of risk.
For this reason, the fundamental principle behind the FIDIC contracts is the use of
General Conditions of Contract, deemed to be suitable in all cases, based on thousands
of successful projects around the world.
However, given that no two projects are the same, FIDIC does acknowledge that special
conditions will be required for project specific issues, on a case by case basis.
Experience in different countries and with different kinds of client, suggests that changing
or upsetting the balance of risk-sharing in FIDIC contracts typically results in higher
tender prices; delays to completion; additional time and cost claims; and, in the worst
cases, major protracted disputes leading to arbitration, and sometimes to contract
termination.
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

13. 13
Standard Contract is not a magic wand
It needs Other Proper documents & Collaboration
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

14. 14
Contract Parties & Privity
Privity: no contractual relationship between client and subcontractors, so
he has to deal with him through the main contractor.
Employer:
- Representative (CM or
PM).
- Supervision
consultant (Engineer).
- Designer.
- PMC.
- Other contractors.
Contractor:
- Project Manager.
- Staff (from key
staff, to labors).
- Subcontractors.
- Suppliers.
Who Signed the Contract
http://download.e-bookshelf.de/download/0002/3297/26/L-G-0002329726-0003186194.pdf
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

15. 15
Stakeholders Identification
A stakeholder is defined as any individual or group
which has an interest in the actions of the party
concerned: The interest may be direct, as in
employees or only as part of a regulatory requirement
but in the commercial world competitors are also
stakeholders since they are definitely interested in
what you are doing.
Stakeholder Register. A document including the
identification, assessment (e.g. role, skill), and
classification of project stakeholders.
-Employer (sponsor/ client/ owner/ customer)
-Consultant (Engineer/ supervision, designer & PMC)
-Contractor (performing organization/ company,
suppliers & subcontractors) -External authorities
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

16. 16
Stakeholders Management
Manage Stakeholder Engagement. communicating and working
with stakeholders to meet their needs/ expectations (expected
result may happen), satisfaction, address issues as they occur,
and foster appropriate stakeholder engagement throughout the
project life cycle.
PMP: Stakeholder knowledge areas
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

17. 17
The Importance of Relationships
The importance of relationships
At the end of the day, you know, we are human beings. So a business
relationship is about dealing with others. And it's very important to
understand each other. Not only the intention & expectation management in
the forming, but also in the managing of the business relationship.
Sometimes we spend too much time in the forming of the relationship, which
is a very transactional-based activity. You understand each other, you write it
down, you negotiate. You end up with a piece of paper that people signed
and that's it. But the most important is also the managing of the relationship
through the life cycle of that contract or that tradition. That could be six
months, two years, 10 years, 20 years, whatever.
So what is very important is to balance both, it’s not only the time you spend
in forming, but also the time and the appropriate skills you need to put in
the management and the managing of the relationship.
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

18. 18
The Process of Relationships
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Best Strategies
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Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
Team-building activities. As an ongoing process (The Tuckman Model: Forming.
Independent. Storming. Norming. Trust each other. Performing. Well-organized unit.
Adjourning. The team completes the work and released / moves on from the project).

19. 19
Power & Legitimacy
What is power - relative thing might be double edged? Power can be described
as one party having the ability to force another party to do something that they
would not choose to do if left on their own.
In commercial relationships this can often happen when the other party has no
choice but to agree. Examples can include a monopoly supplier raising its prices or a
customer demanding a price reduction to help their own financial situation.
Power used in this way leaves a lasting memory of what is felt as abuse and the
danger is that if the situation is reversed at some time in the future then the initial
‘wronged’ party takes revenge on the initial user of the power.
Customers often think that they have power simply because they have money to
spend and are making a choice between alternative suppliers.
That power is transitory however since any power the customer has while making the
choice is completely lost when they decide to award the contract to one supplier.
The supplier now has power in that they can decide whether they are going to live up
to all of the promises they made, especially if they felt they were forced into making
unrealistic agreements during the negotiations, to win the order.
In certain circumstances the power of one party to force another party to behave in
ways which are clearly unfair and possibly inhuman, needs to be controlled by
legislation making such behaviour illegal.
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

20. 20
RELATIONSHIP MANAGEMENT
Build and improve relationships to
drive up performance and optimize
outcomes.
Relationship Barometer: Joint Risk
Management, Joint Improvement
Plans, Joint Training &
Development Encourage Innovation
Problem Resolution, Escalation
Dispute Management & Resolution.
Also: Joint Teambuilding,
Stakeholder Engagement, Strategic
Vision Review & 360 Degree
Feedback.
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

21. 21
In some societies the nature of commercial behaviour is very
influenced by the nature of interpersonal trust. In this case, business
cannot take place between strangers since there has been no
opportunity to demonstrate that each party is worthy of building a
trusting relationship with them.
One important role for contracts has been to generate confidence
even if trust comes later once behaviour justifies it.
If you are dealing with someone you don’t know well, the contract is a
formal and enforceable record of rights and obligations.
So in summary, trust is more efficient but hard to establish and
demonstrate and so contracts try to do some of this so that business
transactions can go ahead with some confidence.
Trust Building and Confidence
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

22. 22
Value & Benefits
Contract is not a legal weapon, it is a business instrument.
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23. 23
Record…Record…Record
20.1
Contractor’s Claims
……The Contractor shall keep such contemporary records as may be
necessary to substantiate any claim, either on the Site or at another
location acceptable to the Engineer. Without admitting the Employer’s
liability, the Engineer may, after receiving any notice under this Sub-
Clause, monitor the record-keeping and/or instruct the Contractor to
keep further contemporary records. The Contractor shall permit the
Engineer to inspect all these records, and shall (if instructed) submit
copies to the Engineer………
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

24. 24
CONTRACT ADMINISTRATION
Ensure the obligations in the contract are carried out
effectively, Administer Change Control Procedure, Ensure
Changes are Reflected in the Contract, Maintain and
update contract baseline (Financials, Assets and
Performance), Monitor Service Levels/claim service,
Regular Reporting, Use of CM Software for Self Monitoring
Contracts, Maintain Contingency Plan & Manage Budget.
Data Gathering, Validation & Reporting Relationship
Monitoring Review Joint Plans.
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

25. 25
Negotiation
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
What’s negotiation? Formal discussion between people (2 or more) has Initial
positions, goals, interests, offering proposals, counter proposals and trying to
reach an agreement.
Two main ways are: Distributive (win/ lose) & Integrative (win/ win).
Distributive: Individual game, pie is limited (fixed resource), avoid sharing
information, and other party is an enemy to be defeated.
Integrative: Joint game to expand the pie, there is more…for every one, share
information openly, and other party is a partner (extended relationship).
-A Non-Zero Sum game describes a situation where both sides win something of value
to them even if they do not achieve a fully optimum result in the short term.
-There is skill, as well as tactics and game playing, in some of these situations but the
argument is that for your critical business to business contracts it is better to look for
a collaborative solution and a Win-Win outcome.
-ZOPA (Zone of Possible Agreement): is the range in which the agreement is possible
without causing loss to any of the parties in the negotiation. It is the “bargaining
range” within which an agreement can be reached.
https://www.youtube.com/watch?v=1FeM6kp9Q80&feature=youtu.be

26. 26
Procurement Negotiations.
Pre-contract: clarify the structure, requirements,
and other terms of the purchases so that mutual
agreement can be reached prior to signing the
contract. Final contract language reflects all
agreements reached (in order: performance,
scope, schedule, price).
Post contract: the final equitable settlement of all
outstanding issues, claims, and disputes by
negotiation is preferred. Otherwise some form of
alternative dispute resolution (ADR) including
mediation or arbitration may be explored. When all
else fails, litigation in courts is the least desirable
option.
Procurement Negotiations
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

27. 27
Negotiations tactics
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Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
You may refer to any of these tactics:
• Fait Accompli - Standard contract terms that are nonnegotiable. (In reality, anything in the
contract is negotiable although your adversary will never admit it).
• Deadline - Make it clear that this is the time by which they must do. As the deadline approaches,
increase the emotional pressure, talking more about what will happen if the deadline is missed.
• Good guy /bad guy - One person acts in an aggressive and pushy way, making unreasonable
demands and requiring compliance. The other person acts in kind and friendly, asking nicely - and
getting compliance.
• Missing man - The person who can actually make the decision is missing from the negotiation. The
negotiator can then negotiate for a lower price or more favorable terms which they claim they can
agree to.
• Limited authority - Refusing to give in on items because you have not been given authority to do
what is being requested.
• Fair and reasonable - You can engage the other person by asking them 'what is fair'. You can also
bring something into the negotiation that is, by definition, fair. You can also reject criteria from the
adversary on the grounds that it is not fair.
• Unreasonable - Stating that the other side is making unreasonable demands of you in the
negotiation.
• Delay - Stretching out the negotiation, especially at critical moments.
• Attack - A direct attack on your integrity, trustworthiness, competence, or other such bullying
bombast designed to force compliance out of you.

28. 28
Negotiations Tips
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We negotiate all the time: Negotiations are to a great extent about preparation and
controlled interaction, as well as managed process during the negotiation.
When negotiate:
If it’s Ethical, Legal, has Value, Trust, and enough Time (Risk analysis).
Principled negotiation:
-Separate the people from the problem (even if they are the reason, and no
stereotyping).
-Invent options for mutual gain (more than one solution for any given scenario).
-Use objective criteria (measure of success).
-Remain open and flexible for unpredictable and nonlinear nature of negotiation
(alternatives/ changes of people or relations of individuals or organizations).
Multiphase negotiation:
Each phase has different issues, agreement reached can be implemented after each
phase, which minimize complexity, provides walk-away or kill-points (termination)
and leads to better understanding, trust and improve relations.

29. 29
Communications
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- Internal (within the project) and external (customer, vendors,
other projects, organizations, the public); -Vertical (up and down the
organization) and horizontal (with peers).
- Paralingual communication is the tone and pitch of your voice (55%
of the message transmitted comes through body language, 38% of the
message transmitted comes through vocal inflection (paralingual),
Only 7% of your message consists of the actual words that you use).
Communication Technology. Specific tools,
systems, computer programs, etc., used to
transfer information.
Meetings. Most project meetings are more formal
with a prearranged time, place, and agenda.

30. 30
Communication Management
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
Manage Communications. The process of creating, collecting, distributing, and the
ultimate disposition of project information. (Presentation techniques. Awareness
of the impact of body language and design of visual aids. Building consensus and
overcoming obstacles. Listening techniques. Listening actively (acknowledging,
clarifying, and confirming understanding, and removal of barriers/blockers).
Information Management Systems. Facilities, processes, and procedures used to
collect, store, and distribute information between producers and consumers of
information in physical or electronic format.
Issue Log. A project document used to document and monitor elements under
discussion or in dispute –unresolved may cause conflict/ delay- between project
stakeholders (who is responsible for resolving specific issues by a target date).

31. 31
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
Collaborate/Problem Solve (Confronting). Incorporating multiple viewpoints and insights
from differing perspectives; requires a cooperative attitude and open dialogue that typically
leads to consensus and commitment (win / win).
Compromise/Reconcile. Searching for solutions that bring some degree of satisfaction to all
parties in order to temporarily or partially resolve the conflict (lose / lose).
Smooth/Accommodate. Emphasizing areas of agreement rather than areas of difference;
conceding one’s position to the needs of others to maintain harmony and relationships.
Force/Direct. Pushing one’s viewpoint at the expense of others; offering only win-lose
solutions, usually enforced through a power position to resolve an emergency.
Withdraw/Avoid. Retreating from an actual or potential conflict situation; postponing the
issue to be better prepared or to be resolved by others.
Conflict Management. Handling, controlling, and
guiding a conflictual situation to achieve a
resolution – by team themselves then their boss
specially in the social responsibility/ law/ ethics.

32. 32
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬
PMI Code of Ethics and Professional Conduct
RESPONSIBILITY
RESPECT
FAIRNESS HONESTY
Ethical Decision-
Making
Decision Making Model: Problem
Definition- Problem Solution Generation-
Ideas to Action- Solution Action Planning-
Solution Evaluation Planning- Evaluation
of the Outcome and Process.
Factors that affect the decision style: time
constraints, trust, quality, and acceptance.

33. ‫االيميل‬ ‫علي‬ ‫التواصل‬ ‫يرجى‬ ‫استفسارات‬ ‫أي‬ ‫لديكم‬ ‫كان‬ ‫اذا‬:
magedkom@gmail.com
33
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
‫واالستفسارات‬ ‫االسئلة‬ Best Strategies
for Effective
Project Control
Contract Relations Management‫م‬/‫ماجد‬ ‫محمد‬

34. ‫المراجع‬:
1- PMP – Project Management Professional, references (PMBOK 5th edition &
Rita).
2- Contract Management course (University of Southampton in partnership with
IACCM & Crown Commercial Service).
3- Contract Management Standard - International Association for Contract and
Commercial Management.
4- FIDIC - Conditions of Contract for CONSTRUCTION (Redbook 1999)
5- NBOKTM Guide - A Comprehensive Guide to Negotiate Better.
6- Other online materials and posts – as mentioned in slides’ footers.

35. ‫المتابعة‬ ‫لحسن‬ ً‫ا‬‫شكر‬
‫إلى‬ ‫االسال‬ ‫يمكنكم‬ ‫التواصل‬ ‫أجل‬ ‫من‬:
conference@eppma.org
______________
‫المؤتمر‬ ‫إعداد‬ ‫فريق‬
35
‫الرابع‬ ‫السنوي‬ ‫المؤتمر‬2017:‫المشروعات‬ ‫في‬ ‫الفعال‬ ‫التحكم‬ ‫استراتيجيات‬ ‫أفضل‬
‫السنوي‬ ‫المؤتمر‬‫المشروعات‬ ‫وإدارة‬ ‫للتخطيط‬-‫الرابع‬2017
Best Strategies
for Effective
Project Control