Contractors’ Claims in an EPC and Turnkey Contract: Lessons Learned from a Hydropower Project

Abstract

This study focuses on the contractor's claims on a hydropower project contracted under an international engineering procurement and construction (EPC) and turnkey contract in Nepal. The contractor faced challenges from the mobilization phase and submitted multiple claims to the employer for time extensions and additional overhead costs. This study identified 80 claims for a time extension and additional overhead costs. Through content analysis, this study grouped these claims under six categories: natural disaster, strike, unforeseen risk, material shortage, payment, and the COVID-19 pandemic. First, the study analyzed the claim type, outcome, and decision criteria of the claims. Next, the analysis presented decisions based on general conditions of contract (GCC) and the particular conditions of contract (PCC) clauses. The study found that the employer granted a time extension to most of the claims under natural disaster under force majeure and rejected most of the claims under the other five groups. Finally, the study presents findings and lessons learned from the case study, including the relevant GCC and PCC clauses used in claims resolution. The findings and lessons learned from this case study could help employers and international EPC contractors who want to build hydropower projects in Nepal. © 2022 American Society of Civil Engineers.