Development of Review Processes and Tools for Liquidated Damages for EPC/Turnkey Project: Contractor's Perspective

As a recent global trend, the majority of plant projects are delivered through EPC or EPC-turnkey contracts, where a contractor's liability is more complicated because of the mega size scale and financing method. Previous researches have been lacking a practical usability for project members for liabilities of contracts. Those were focused on solving the claims or schedule calculation issues only. The objective of the present study was to develop a validation process for LDs (liquidated damages) in contractor's liabilities with various case studies and expert judgments. As summarized in this paper, the processes and tools were developed with project life cycle process. The project preparation phase includes 3 step check lists to determine the Go or No-go for projects. In progress phase, contractors should focus on the response strategies for claims with liabilities. The study concludes that those developed processes and tools will help to manage risk of LDs for the contractors in the overseas projects.