Professional Documents
Culture Documents
Program Magister
SIPIL - MK
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Bagian Isi
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ANALISIS KETIDAKPASTIAN
DAN RESIKO PROYEK
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Risk Allocation
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Provision of Risk
Example 8-1: A Contract Provision Example with High Contractor Risk
"Except where the sole negligence of COMPANY is involved or alleged,
CONTRACTOR shall indemnify and hold harmless COMPANY, its officers, agents and
employees, from and against any and all loss, damage, and liability and from any
and all claims for damages on account of or by reason of bodily injury, including
death, not limited to the employees of CONTRACTOR, COMPANY, and of any
subcontractor or CONTRACTOR, and from and against any and all damages to
property, including property of COMPANY and third parties, direct and/or
consequential, caused by or arising out of, in while or in part, or claimed to have
been caused by or to have arisen out of, in whole or in part, an act of omission of
CONTRACTOR or its agents, employees, vendors, or subcontractors, of their
employees or agents in connection with the performance of the Contract
Documents, whether or not insured against; and CONTRACTOR shall, at its own cost
and expense, defend any claim, suit, action or proceeding, whether groundless or
not, which may be commenced against COMPANY by reason thereof or in
connection therewith, and CONTRACTOR shall pay any and all judgments which may
be recovered in such action, claim, proceeding or suit, and defray any and all
expenses, including costs and attorney's fees which may be incurred by reason of
such actions, claims, proceedings, or suits.
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Provision of Risk
Comment: This is a very burdensome provision for the contractor. It makes the
contractor responsible for practically every conceivable occurrence and type of
damage, except when a claim for loss or damages is due to the sole negligence of
the owner. As a practical matter, sole negligence on a construction project is very
difficult to ascertain because the work is so inter-twined. Since there is no dollar
limitation to the contractor's exposure, sufficient liability coverage to cover worst
scenario risks will be difficult to obtain. The best the contractor can do is to
obtain as complete and broad excess liability insurance coverage as can be
purchased. This insurance is costly, so the contractor should insure the contract
price is sufficiently high to cover the expense.
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Risk Allocation
1. Force majeure (i.e., this provision absolves an owner or a contractor for payment for
costs due to "Acts of God" and other external events such as war or labor strikes)
2. Indemnification (i.e., this provision absolves the indemified party from any payment
for losses and damages incurred by a third party such as adjacent property owners.)
3. Liens (i.e., assurances that third party claims are settled such as "mechanics liens" for
worker wages),
4. Labor laws (i.e., payments for any violation of labor laws and regulations on the job
site),
5. Differing site conditions (i.e., responsibility for extra costs due to unexpected site
conditions),
6. Delays and extensions of time,
7. Liquidated damages (i.e., payments for any facility defects with payment amounts
agreed to in advance)
8. Consequential damages (i.e., payments for actual damage costs assessed upon impact
of facility defects),
9. Occupational safety and health of workers,
10. Permits, licenses, laws, and regulations,
11. Equal employment opportunity regulations,
12. Termination for default by contractor,
13. Suspension of work,
14. Warranties and guarantees.
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Risks and Incentives on Construction Quality
Since most claims and disputes arise most frequently from lump sum
contracts for both public and private owners, the following factors
associated with lump sum contracts are particularly noteworthy:
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Type of Construction Contract
Type of Contract
1. Lump sum
2. Unit price
3. Cost plus fixed %
4. Cost plus fixed fee
5. Cost plus variable %
6. Target estimate
7. Guaranteed max cost
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Pustaka
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