Asim AliProjects Control Manager| Trust Cost Project Management Services Dubai, United Arab Emirates
Missed contract closure I came across a building construction project, where the owner of the proposed building sold the executed part of the unfinished building to another owner. The contract was amended by changing the owner's name and transferring all the obligations and liability of the first owner to the second owner. Now comes the argument: From FIDIC point of view, is it right practice, to transfer construction contract from one party to another keeping the same contractor with the same conditions of contract? Is the contractor has thrift to refuse to sign the contract addendum ? On the other hand If we refer to PMI standard, and what is prescribed in PMBOK, project closure is a major process in projects management. So, is it correct practice to continue with the same contract , without closing, even if the owner is satisfied with whatever stage the project reached , which may be done through change request, and transferring the executed product and the rest of the project requirements, to anew owner? Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
I think you are mixing the two issues together. Changing the name of the owner as long as they will comply with all the contractual obligations is normal. FIDIC rules for the contrsctual part, not the PMBOK especially if it is referred to the FIDIC in the agreement.
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1 reply by Asim Ali
Jul 29, 2018 3:39 PM
Asim Ali
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You are talking about agreements beween two owners. But what about the contractor? May be contractor doesn't want to enter a new agreement. Think about this. For PMI contract closure has to be done whether the project continues with another owner or otherwise I don't see where is the mixing up
Saving Changes...
Asim AliProjects Control Manager| Trust Cost Project Management Services Dubai, United Arab Emirates
Jun 23, 2018 10:30 PM
Replying to Rami Kaibni
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I think you are mixing the two issues together. Changing the name of the owner as long as they will comply with all the contractual obligations is normal. FIDIC rules for the contrsctual part, not the PMBOK especially if it is referred to the FIDIC in the agreement.
You are talking about agreements beween two owners. But what about the contractor? May be contractor doesn't want to enter a new agreement. Think about this. For PMI contract closure has to be done whether the project continues with another owner or otherwise I don't see where is the mixing up Saving Changes...
RAJESH K LProject Manager, PMP| Bharat Electronics, Bengaluru, IndiaBengaluru, Karnataka, India
Agree with Rami Saving Changes...
Tamer Zeyad SadiqAssistant Cost Manager| Turner & TownsendRiyadh, Ar Riyad, Saudi Arabia
Agreed with Rami!!! there are some mixing between FIDIC and PMBOK!!! As when I solved PMP questions, I faced this issue for new item after closing and the solution is make new contract to other party after signed final settlement and handing over, because, all resources will be released after closure and all documents will be archived and updated.
It's up to client if give this current contractor to continue any new items or not and the contract condition should be mentioned for this issue!!! Saving Changes...
Pablo Cesar Garcia BonillaConstruction Contracts Manager / Construction Manager| Green Soul EngineeringSan Jose, Costa Rica
Hi Asim,
I think you might keep in mind that the conditions of the contract are ruled by the FIDIC forms, PMI don't rule the contractual relationship.
If you were using a 1999 FIDIC form (at least red, yellow or silver), the specific topic of of assignment is adressed under sub-clause 1.7. If this clause wasn't not changed in particular conditions, the owner can't assign the contract unless the Contractor agree to the assignment.
And, from the viewpoint of the project management, I think if Contractor accepted the assignment of the contract, you may register it as a major change, but in fact, it could even not modified the scope and other constraints at all. And there's not a necessary reason to use the closure processes.
If the Contractor doesn't agreed the assignment, he might procceed under sub-clause 16.2 and terminate the contract. And on this scenario, the PMs must use the closure proccesses of PMBOK. Saving Changes...
Asim AliProjects Control Manager| Trust Cost Project Management Services Dubai, United Arab Emirates
Yes the contract is governed by FIDIC. But also the PM is governed by PMBOK. And closure can be done to a project phase. Changing owner can be classified as changing project phase. So in all cases closure could be done. Any way thank you Paplo for mentioning Fidic clauses. You simply explained how you can deal with such case contractually. Thanks once more. You cleared my doubts Saving Changes...
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