Evaluation of Contract N0. 117/2020 between the Abu Dhabi Government Department of
Transport and Gulf Contracting Co. For the provision of Building Abu Dhabi Road- Exit
The tender and procurement procedures are two essential elements involved in obtaining
services. They operate hand in hand as they cannot be separated from the other. To define and
distinguish the two, they imply the following: Tender is the process by which a party, which can
be referred to as a promoter, specifies what they are looking to get. The party then proceeds to
lodge their bids; the bids are what are referred to as tender(s). Parties that are interested will
come up with proposals detailing how they will meet the specifications of the tender. The
procuring party will then select from the biding entities based on their proposals on which entity
meets the set threshold, there by being declared the winner of the bid.
Law Number 6 of 2008 is the primary law that governs tendering and procurement procedures in
the UAE. The department of Finance handles all the legal issues that comes with procurement in
the UAE. The Department of Finance is situated in Abu Dhabi, and they provide public financial
services to the Government of Abu Dhabi.
The said law provides for standard and format that government contracts should take in order to
conform with the general standards provided by the law. The general rules apply in most cases
but are rarely applied in construction contracts as provided for Under Article 5 of the Law
Number 6. There certain situations where the standard form of contracts is not taken into
consideration as the peculiar situation may warrant the use of certain elements of a contract.
Under Article 5 (2), it provides that all exceptions must be approved by the purchase section
head and must also be reviewed by the legal division of the specific government agency that
seeks to make the purchase. This provisions makes the standard procedure to be followed in case
of any deviation from the standard form.
Article 7 of the law Number 6, further provides for the introduction of the purchasing section.
This section deals with securing with the government entity throughout when they are dealing
with external entities. Some of the key responsibilities include:
Ensuring the best price and facilities that are obtained on behalf of the government entity;
The outsourcing of work to competent entities;
Ensuring that the task is completed and takes into consideration the appropriate time,
locations and quantities.
The purchasing section is also able to make purchase of materials and connected items through
bids of the value between AED 25,000- AED 250,000. Any amount that exceed the
aforementioned set value must be taken up with the tender and auction committee through a
From this, the primary responsibility placed under the purchasing section are”
Collection of information regarding suppliers and material, and to maintain the records;
Determining the standard specifications of the items, and materials;
Ensuring the quality assurance on the topic of purchases activities tender documents and
evaluations and consider that standards of the environmental protection, sustainability,
and SME and local economy support.
Article 9 establishes the ethical standards and responsibilities of the government entities
while they are in the processes of making the procurement. Transparency and ethical
standards are supposed to be upheld in the process of procuring any goods and/or
Article 12 introduces the requirement for government entities to have a tender and auction
committee. It is the sole responsibility of the Chairman of the said entity to make sure that the
tender and auction committee us up and running. The committee is supposed to be composed of
not less than 5 members and it needs to have the chairperson or their alternate. The purpose of
the committee is to meet up, discuss and vote on the various tenders on the most suitable tender.
The vote is decided on the majority votes.
Once the tender committee evaluates and votes on the tenders, a specific supplier is usually
identified. Once the party had been identified, they are supposed to sign the contract detailing
their qualification and the service they are going to render. The contract becomes binding once
the parties sign the agreement. The responsibilities of parties are provided in the contract, where
each party knows what they are supposed to do in the contract.
The payment of the contract is supposed to be made once the service has been rendered
effectively and the receiving party is satisfied with the service rendered. Parties are supposed to
adhere to all the standards procedures set in the contract. This is to ensure that all the terms
placed in the contract are highlighted.
Offer and Acceptance
In the contract, the offer and acceptance doctrine was successfully implemented. The offer was
made vide a public tender no. 117/727. The acceptance was made after the tender was accepted
and the consideration for the contract being performance bond of AED 20,000,000/00.
Subject of the Contract
The contract was for the construction of Abu Dhabi Road-Exit 727. The contract deals with the
construction of road, thereby it deals with the development of roads. The contract has special
provisions compared to the traditional contracts.
The duration of the contract as provided from the contract is supposed to be two years, it was
running from 1/10/2019 to 1/10/2021. The contract is placed under the applicable laws in the
Emirate of Abu Dhabi and the United Arab Emirates. As it is provided in law, the contract has to
obtain the relevant license. The department shall pay to the contractor the contract price as it set
in the contract.
The contractor is obligated under the contract to duly carry out and deliver all the works set forth
in the Appendix, “A”. the contractor is supposed to undertake further works and matters which
can be implicitly understood in this contract at the times, the manner and under the same terms.
The contract price is fixed and cannot be varied. The contract further, provides that payment of
the contract price shall not be made without the submission of the performance bond provided
for under the contract. The payment shall be made in reference of the date at which the
department shall receive the correct invoice and any other relevant documents.
Any payment that will be made by the department should not be construed as a waiver of its
rights to object to any invoice already paid. Department reserves the rights to reject any invoice
not raised by the contractor within six (6) months from the date of completion of a certain works
or from the date of bearing any payable costs, unless the invoice is “revised invoice”. In this case
Department shall have the right to reject such invoice if it is presented after six (6) months from
the date of objection to the original or revised invoice. For payment to be effected the contractor
has to present the original invoices marked with the contract number.
Define how variation orders are maintained or approved
The contract provides for the variation of various terms of the contract. For the variation to be
considered to be valid it has to be effected executing a Variation Order which has been duly
approved by the parties. Once the Variation Order has been executed, it is considered to be an
integral part of the contract. The initiation of the variation is done by either party, for the
variation to be binding, it is necessary to have all the parties in the contract consenting to the
changes. Failure to mutually agree on the variation then the provision or term(s) shall not be
The contractor shall comply strictly with all the terms and conditions that have been set in the
contract and shall not carry out any amendments of the contract until formally authorized by
executing a variation order which is duly approved by the parties.
The contract price has been clearly stipulated and shall not be varied. This is done to ensure that
the department does not end up spending a lot on the contract. The in ability to vary the contract
price is to make sure that unnecessary inflations are not made on the contract.
Define One warranty and one condition
Works to be performed under the contract shall be in accordance with the best practice and skills
customarily employed internationally. Tis warranty implies that the contractor has to make sure
that they use their knowledge and skill to ensure that they do the work effectively. The
performance of the work involves the use of proper machinery, skills and judgment to ensure that
the construction of the road is done in a professional manner.
One of the condition of the contract is that all the equipment will be free from all liens, claims,
encumbrances, and will also be free from failures or defects which may arise from the defective
design, materials or workmanship, or from any act or omission of contractor or any of its sub-
contractors. This condition is to make sure that the materials that are used in construction of the
road are of sound quality which will make sure that the quality and the standard of the roads are
The contract provides for termination and the Department can terminate the contract due to
public interest. The department has to provide the contractor with one-month notice of the
intention to terminate the contract. The department will have to pay the contractor the
proportionate price to the extent of the works performed and accepted by the Department. The
contact has further provided the department with more powers on when they can terminate the
contract. The following are the conditions on which the contract can be terminated:
The contractor fails to comply with the performance bond or with a notice to correct;
The contractor abandons the works or otherwise plainly demonstrates the intention not to
continue performance of his obligations under the contract;
The contractor without reasonable excuse fails to proceed with the works in accordance
with the contract;
The contractor sub-contracts the whole of the works or assigns the contract without the
The contractor becomes bankrupt or insolvent, has a receiving or administration order
made against them; and
The contractor gives or offers to give (directly or indirectly) to any person any bribe, gift,
gratuity, commission or other thing of value, as an inducement or reward.
The Applicable Law
The laws that will be used to interpret the contract is the laws that have been enacted and in use
in the Emirate of Abu Dhabi and the United Arab Emirates. The law that is applied in the
governing of the contract has been clearly discussed in the introduction of this paper.
The contract is the standard of reference, in the event there is a dispute parties are supposed to go
through the contract. In the event a dispute arises, the parties that are alleging that a term of the
contract has been violated then they will have to proof it. The doctrine employed here is that he
who alleges must prove it.
The mechanism to resolve disputes
The contract does not provide for mechanisms to handling or rather resolving any dispute that
may arise in the process of undertaking the contract. Since there are no such provisions it implies
that where a dispute arises then the mechanism that will be used to settle such dispute will be
litigation. The parties may decide to mediate among themselves to try and find an amicable
solution to their disputes. Where an amicable solution is not reached then the parties shall
proceed to litigate the matter in court in order to come with an amicable solution.
Define other contractor’s commitment
Insurance and Indemnities
Under this clause the contractor shall notify the Department of any accident occurrence likely to
give rise to a claim under Department’s insurance as soon as possible in any event within (2)
working days of such possible in any event within two (2) working days of such occurrence.
Contractor shall also submit all the claim documents to the Department as soon as possible and
in any event within fifteen (15) days of such occurrence. The purpose of this clause is to ensure
that the contractor reports to the department of any loss to aid in reimbursement. The purpose of
this is to ensure that such accident is reported on time in order to claim from the insurance.
Failure to issue such report then the contractor shall be liable for the act that emerged as the
insurance will not be capable of settling the claim.
The contractor has also been obligated to insure or cause to be insured for liability for bodily
injury by disease or accident including death resulting therefrom sustained by an agent, servant
or employee of the contractor or subcontractor. This is supposed to take place from the day the
contract commences until the day the contract expires. The contractor is; therefore, supposed to
insure his workers from harm. This is a duty that the contractor has to undertake aside from the
responsibilities that have been bestowed upon him on the contract.
The contractor is supposed to issue to the department with a performance bank guarantee by a
bank. The cost of the performance bank guarantee shall be borne by the contractor, and it shall
be issued to secure the due performance of Contractor’s obligations under this contract
notwithstanding any variations. The purpose of this clause is to make it possible for the
Department to recover the sum of the contract from the bank in the event the contractors fails to
deliver on the contract. The guarantee by the bank serves as a safety assurance by the department
that the contract is going to be implemented.
Where the Contractor fails to perform the works on or before the Completion Date, then
Contractor shall pay to the Department, by way of liquidated damages, up to a maximum of 10%
of the Contract price. Where completion is phased, the aforesaid percentage shall be applied to
relevant portion of contract price. The duty imposed on the contractor to pay the fine is to ensure
that contractor does not fall behind schedule. This is because there is a consequence waiting to
befall them when they fail to honor the terms of the contract.
The Contractor is obligated to provide a list bearing the names and the addresses of all the sub-
contractors consultants and any other contractors of service for the performance of the contract.
This responsibility is placed on the contractor to ensure that they provide the names and
addresses of those that they want to delegate the job to for approval by the department. Failure
on the part of the contractor to do this will amount to breach of contract.
The contractor also has a responsibility of ensuring that they exercise reasonable care and
diligence to prevent any action or condition which would result in a conflict of interest with the
best interest of the Department. This means that the contractor has a duty of making sure that
they engage in activities that will promote due diligence, care and the interests of the
Department. If the contractor engages in activities that seem to be prejudicial or rather they will
affect the department then they will be cited to be in breach of the contract.
How can the contract protect the interest of the organization?
Scope of Work
The contract has failed to have an elaborate scope of work. This means that in as much the scope
of work was laid out in the tender documents it needs to be well articulated in the contract. This
is because, the contract is the binding agreement between the two parties. In this regard, the
contractor may not know exactly their scope of work as they depend on implied terms. To ensure
that the client is protected in future, it is necessary in ensuring that the client has given the
contractor proper instruction and that the contractor does not operate in reliance of ambiguous
Termination by the Contractor
The contract has not provided for instances where the contractor can terminate the contract,
thereby, it seems like it ties down the contractor to unreasonable demands. To be able to ensure
that the contractor is well taken care of, it will be necessary to have a clause that provides for
their options of terminating the contract. This is the legal practice, is that if contracts contain
unreasonable clauses then such clauses are considered to be null and void. Therefore, it will be
necessary to have such a provision in future.
This clause helps to protect the contract from being unenforceable in its entirety. This clause
specifically deals with ensuring the contract remains enforceable even a specific clause in the
contract is found to be unenforceable. This will help to protect the interests of the client, because
a provision which is found to be unenforceable does not affect the entire contract. Therefore, the
contract shall continue to be valid as the remaining provisions were not affected. This clause
needs to be introduced in order to protect the client’s interest.
Obligations of the Contactor
It is necessary to have a clause that highlights the obligations of the contractor in the contract.
This provision will make it easy for the contractor to know what they are supposed to do as
provided for in the contract. The purpose of this is to make sure that whatever the contractor is
supposed to do is well defined and that the contractor is not faced with a situation where he is
doing whatever he wants in order to achieve the end goals as anticipated in the contract.
This is an important element as it provides for the method that will be used in solving disputes
that will arise in the contract. The contract did not have this clause, thereby the department was
exposed to continuous litigations that would see them waste a lot of time in court. It would be
necessary to have such clause, as it will provide for the mechanism to be used in settling
disputes. Under most circumstances the preferred method for settling disputes is Arbitration,
which is considered to be quick and also amicable. This clause is therefore important as it will
help parties in dealing with their disputes.
Waiver of Breach
This clause focuses on instances where breach of any provision of the agreement by the other
party shall not operate or be considered to be a waiver of any other subsequent breach by the
party in breach.
It is important to disclose the language that will be used to govern the language, especially in
places where English is not the official language. Abu Dhabi is located in the Middle East,
therefore, they do not use English that much but rather Arabic. It would be beneficial to have the
language used defined in the contract in order to make it easy for the implementation of the
contract and to avoid any confusion that may arise in future.
In summary, the analyzation of the contract has brought about several factors that needs to be
taken into consideration. Such factors may affect the implementation and operation of the
contract. It has therefore, been depicted that it is necessary to have an elaborate contract that
takes into consideration all the needs of the client and the clauses in the contract are realistic as
much as they could be.
Law No. 6 of 2008 Relating to Contracts with Government Departments in the Emirate of Abu