ASSESSMENT OF CONDITIONS OF CONTRACT CLAUSES USED IN STATE OWNED CONSTRUCTION PROJECTS A CASE OF JIMMA

Abstract

Due to its forward and backward links with other sectors, the construction industry contributes significantly to the economy of any nation by creating jobs and wealth. Unfortunately, a lot of projects in developing nations suffered from incredibly significant cost overruns, delays in completion, and poor quality. Among other things, one of the contributing elements in the construction industry is problems with contract terms. Consequently, the quality required to achieve its criteria is lacking in domestic contract administration and construction management processes. In this regard, the purpose of this study is to identify gaps in the local construction contract conditions in Ethiopia and to identify clauses that have had an adverse effect on the sector's development. The data collection method integrated questionnaire survey, interview and desk study. Samples for the study have been randomly selected from a clustered group of public employers, domestic consultants, and domestic contractors who are actively participating on construction works. In this thesis, a descriptive and inferential statistical analysis method has been used. Interpretation and discussions were made based on results from the analysis. As a result, the price adjustment clauses are not sufficient to compensate the current soaring prices. Besides, termination is not exercised as per the contract provisions whereas claim substantiation and dispute resolution lack a balance of risk favoring the employer in most cases. In addition, another finding reveal that the civil procedure code Art. 315(2) hinders arbitration practices for administrative contracts. Some concepts such as experienced contractor need to be expressed in a more clear and concise manner to reduce subjectivity. Furthermore, local contract forms lack suitability to manage construction projects efficiently. Finally, the study concludes that the performance of the local construction industry, construction management, and contract administration procedures fall short of the criteria set by contract rules. This study further provides recommendations on how to improve the existing prevailing situations of the local construction sector in general and construction management practices in particular.