Misc (CPD & hot topics)

Question 1

CPD:

Delever hot topics mind map - what was this about?

Answer 1

Hot topics mind map of current issues

• impact on Covid on industry
• Rules of Conduct consultation

We contribute

Question 2

Is the Employer entitled to terminate an insolvent Contractor (Arabtec) on projects - according to FIDIC Red 99?*

Answer 2

Yes

Notes:

• Cl. 15 Termination by Employer
• Scl. 15.2(e) entitled to terminate if Contractor becomes bankrupt or insolvent.
• OZ contract same - Scl. 30.3 Immediate termination

Question 3

What could be the impact of Arabtec going into liquidation and dissolution be on the industry?*

Answer 3

Unemployment

supply chain into liquidation

Impact on subsidiaries (Depa)

Increase in cost of Performance Bond’s - as Employers are calling bonds

Note:
Contractors more risk adverse (loss of market confidence)

Question 4

What do you think about the inequality of BAME in the construction industry?

Answer 4

article on RICS website highlights inequality and lack of MRICS surveyors who are black, at 1.2%

UK population of black people is 3.3%

Question 5

Are there any recent changes in legislation re Covid-19 - e.g. ways to incentivise/protect firms*

Any recent legislation changes in UAE I am aware of?

Answer 5

revised Bankruptcy Law - now offers 12m company protection from bankruptcy in event of “emergency situations” such as Covid.

new Dubai Building Code - one-stop-shop for obtaining approvals

Notes:

• approvals from licensing agencies and departments (faster and reduce costs by streamlining)
• DIFC enacts new Data Protection Law - Aims to closely aligned with the EU’s GDPR

Question 6

Re Arabtec insolvency, can the Employer rightly call the Performance Bond?

Answer 6

Yes, it is on-demand (no proof of reason required)

Note:
For Conditional PB, insolvency may be a condition. In this instance Employer can call

Question 7

When’s next RICS AGM and what is significant about this one?

(email from CEO Sean Tompkins on 26/10/20)

Answer 7

taking place virtually on 20 November 2020

Question 8

re Covid, the Employer asks advice on termination as they are experiencing cash flow issues and they want to stop works - is the Employer entitled to terminate under FIDIC 99 and what is the process of termination?*

Answer 8

FIDIC has Employer’s Entitlement to Termination (Scl. 15.5)
- Cannot complete works himself or with another MC (OZ he can)

Takes effect 28 day after

• Employer returns Performance Bond
• MC will cease works, return materials paid for, leave site
• MC paid for Works done (likely quantum meruit)

Note:

• consider Suspension if short time cash flow issue
• OZ only when required, Employer will need to appoint another MC to complete - timely and costly

Question 9

Latest RICS news re Covid-19?*

Answer 9

150 redundant jobs/ company restructuring

COVID-19 Recovery Business Plan 2020-21

AGM taking place online this time (20 Nov)

Note:
email from CEO Sean Tompkins on 24/9/20

Question 10

re Covid, the Employer asks advice on FIDIC Scl 8.8 Suspension of the Works - what is the process and what would you advise?*

Answer 10

8. 8 Eng instructs - Contractor shall protect works against deterioration, loss or damage
9. 9 MC to claim EOT and cost - under Scl 8.4 EOT and 20.1 Contractor’s Claim
10. 10 MC entitled to value of works complete up to suspension
11. 11 If over 84d, MC can request continue works. If not granted, MC can omit suspended works as variation, or terminate all works

Note:
instruction may not be supported by Force Majeure, as lacking the required contractual justification

Question 11

What is the RICS draft professional statement - Rules of Conduct Consultation about?*

(email from CEO Sean Tompkins on 26/10/20)

Answer 11

invites feedback on sustainability and respect into our rules, by 7 December

Aiming for one single document, creating a clearer set of Rules.

Note:
The consultation addresses some of the issues identified by our future of the profession research and we want you to help shape how we deliver a new clearer framework.

Question 12

Covid-19 measures in office and on-site?

Answer 12

Thermal scanning for all

Face masks

Social distancing

Perspex screen desk dividing

More Teams meetings

Question 13

Reasons for Arabtec collapse?

Answer 13

Article cites impact of Covid

Weakening Gulf economies in recent years

$216m loss reported for first 6m of 2020

Question 14

How has Covid 19 affected the construction industry?*

Answer 14

Project delays

Wider economic issues - insolvencies and redundancies

Impact on supply chains

Uncertainty

Question 15

“A new global standard to bring consistency on fire safety and help reduce fire risk has been developed by the…”?

(email from CEO Sean Tompkins on 26/10/20)

Answer 15

…“International Fire Safety Standard

coalition of over 60 organisations, chaired by RICS”

The global standard is the first agreement on fire safety principles on an international scale

Question 16

The RICS podcast CPD you did, what was it about?

Answer 16

ICMS for aviation projects

Question 17

Your Employer is unhappy with the MC, and asks whether they can terminate them to get another Contractor in. They suggest citing Covid-19 as the reason for termination - what would you advise?*

Answer 17

Covid-19 is not a valid reason for termination.

Note:
FIDIC is 14d notice for valid reasons such as
- non compliance
- abandonment
- failure to commence works without reasonable excuse
- MC subcontracts works without agreement

FIDIC is immediate termination for valid reasons such as

• bankrupt/ insolvency
• bribery

OZ has Termination for Convenience

Question 18

Last article I read in Modus mag?*

Answer 18

USA cities in Covid recession

many workers left big cities to WFH via internet

many will not return to skyscrapers if WFH was successful for them

Note:
- modus online (rather than physical mag)

Question 19

What are the contractual provisions under FIDIC Red 99 regarding Covid-19?*
(OZ same for simplicity)

Answer 19

Force M defined as “beyond party’s control” at time of entering contract (Scl 19.1)

MC to provide notice of FM <14days (Scl. 19.2)

[Consequence of FM (Scl. 19.4) = Contractor’s Claim (Scl 20.1) for..]

• EOT (Scl 8.4(d) “epidemic”)
• cost under (Scl 20.1)

Note:

• OZ is same for simplicity
• only duty to minimise delay with Contractor (rather than Each party)
• Cost assessed on case-by-case basis e.g. if façade being made in China in January causing delay to manufacturing, then would likely be time and disruption if on critical path.

Question 20

What actions did RICS take to support members during Covid?

Answer 20

• Free 3 months iSurv
• Free CPD
• Guidance for professionals and SME
• future APC interviews on Teams

Ref:
RICS CEO (Sean Tompkins) email 27/3/20

Question 21

Aside from Covid and wider global economic slowdown - why else might the Middle East economy be struggling?*

Answer 21

Lowest price competitive tendering,

unfair risk allocation

low profit margins

uncertain project pipeline

late payments (1yr average from work done to paid)

low oil price

Question 22

Re covid, is your project delayed?

did we have any remedy under the contract to deal with the delay?*

Answer 22

No formal EOT and loss and expense awarded, as of yet, multiple claims team involved and no outcome decided yet

However,

• Dispute is ongoing
• Our contract is not clear on whether it is a force majeure event or not.

However,

• MC claim time under EOT 8.4(d) “epidemic”
• and loss and expense under Contractor’s Claim 20.1