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02/08/2022

A Practical Guide for


Using the FIDIC
Conditions of Contract
1999

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Features and
Introduction

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Introduction to Fidic

FIDIC: International Federation of Consulting


Engineers

global voice for the


Founded in 1913
Consulting Engineers

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1
02/08/2022

A Practical Guide for Using the FIDIC Conditions of


Contract 1999 Founded in 1913
To be the Headquarters in Geneva
recognised global
voice for the
consulting
engineering
industry

To promote the business


interests of suppliers of
technology-based
intellectual services for
the built and natural
environment
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Representing nearly 1 million staff in more than100


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countries - One Member Association per country 5

A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Standard Contracts and Agreements
Standard model agreements for professionals services
- Client - Consultant
- Joint Venture
- Sub-Consultant
- Representative

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

1994 for 2011 for 1991


JV Rep
1987 1999 1998
1992 2004
Red Red 2006
Book Book

Consult.
Subcontracts Others
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FIDIC Contract Management


AEH Consultancy L.L.C.

FIDIC Other Books


CONTRACTS & AGREEMENTS
GUIDE TO BUSINESS PRACTICE
QUALITY BASED SELECTION
QUALITY & INTEGRITY MANAGEMENT
RISK MANAGEMENT
SUSTAINABILITY

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

2008

2005
2006
2010

1987 1995 2006


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Standard Contracts and Agreements
Standard contracts for civil engineering & construction works
- Minor Works
- Construction
- Plant and Design-Build
- EPC/Turnkey
- Design-Build-Operate

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Risk Allocation in 1999

• Definition of force majeure has broadened.


• Contractor recovers time and money for Force
Majeure.
• Increased power of the Contractor in relation to
the Employer’s ability to pay. Financing charges
and suspension for late interim payment
certificates all increase the pressure on Employers
to have their financing properly organised.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Risk Analysis

Employers’ risks Contractors’ risks

Shared risks
LAW
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Employer
Service
Agreement

Construction
DAB
Contract
Conflict Engineer

Contractor

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Risk Allocation

• Which party can best foresee the risk?


• Which party can best control the risk?
• Which party can best bear the risk?
• Which party most benefits or suffers if the
risk eventuates?

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Risk Types

Insurable Risk Uninsurable Risk

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Projects based on Risk
Lump-sum
Re-measurement
Re measurement
contracts
contracts
Red Book
Red Book
EPC
Silver
Design and Build
Contract
Yellow
DBO
Cost-reimbursable
Gold
contracts
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Which Form to use

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Which Form to use


• The type of the project to be procured.
• Choice of design liability.
• How and when payment is made.
• Certainty of final cost of the project.
• Method of tendering.
• Control during construction.
• Possibility or probability of having a
variation or change in the works after
entering into the Contract.
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Contract 1999

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Features of the 1999


Editions

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Harmonisation of terms and clauses

85% of the
More than 80% of
definitions and
the content was
expressions were
consistent
the same

To the users to understand them completely,


To save the study time
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Wide applicability under various project
delivery and contracting systems
Engineering
Construction Contract
Construction Contract
Contractor makes the
Plant Contract
design
The Contractor takes
EPC Turnkey Contract
more risk

Short Form Contract Small Projects


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Tackle the problem of late payment

The Employer is obliged to show his financial


arrangements
Interest for late payment +3% of the national
bank

If the Contractor does not receive his financial


entitlements in 42 days after the expiry date
for payment, Termination of the Contract
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Dispute resolution made more effective

Using the DAB. The adjudicators are


independent, chosen by both parties, and
paid by both parties

The Engineer’s role in mediation is eliminated


since he is not impartial any more

The DAB decision in binding


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Structure of the FIDIC


Contracts

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Structure of the FIDIC
Contracts

General Conditions

Guidance for the Preparation of the Particular


Conditions
Forms, e.g. Letter of Tender, Contract
Agreement and Dispute Adjudication
Agreements
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

General Conditions

General Conditions are intended to be used


unchanged for every project

The General Conditions should be amended in


the Particular Conditions to suit the local and
project requirements

Changing the General Conditions is illegal and


in breach of copyright
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

1999 General Conditions

The General Conditions comprise twenty


Clauses, covering similar subject matter in all
three contracts

17 Clauses out of these 20 are carrying the


same headings

The following three Clauses are different in


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Construction Plant EPC


3 – The
3 – The Engineer 3 – The Engineer
Employer’s
Administration
5 – Nominated
5 – Design 5 – Design
S/C
12 –
12 – Tests after 12 – Tests after
Measurement &
Completion Completion
Evaluation
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Particular Conditions

The guidance provided by FIDIC is for those


preparing the Particular Conditions

Some example texts are included

Guidance contains various recommendations


on a clause-by-clause basis
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Contract Agreement

Similar defined words and phrases are used


in all 1999 editions, the main exception being
their respective descriptions of the
documents comprised in the Contract

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Construction Plant EPC


- Agreement, - Agreement,
Agreement,
- LOA, - LOA,
LOA,
- Letter of Tender, - Letter of
Letter of
- COC, Tender,
Tender,
- Employer’s - COC,
COC,
Requirements, - Employer’s
Specification,
- Schedules, Requirements,
Drawings,
- Contractor’s - Contractor’s
Schedules.
Proposal Proposal
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Commercial and other
forms
The following forms are included in the 1999
edition

• Forms of Security
• Form of Letter of Tender
• Contract Agreement,
• Dispute Adjudication Agreement.
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Forms of Security
There are example texts for six forms of
securities

• Parent Company Guarantee


• Tender Security
• Performance Security, with alternative
examples
• Advance Payment Guarantee
• Retention Money Guarantee, and
• Payment Guarantee by Employer.
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

User Friendliness

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Before 1999

Till 1998 FIDIC had classified the Contracts as

• for civil engineering works (Red Book),


• for electrical and mechanical work
(Yellow Book),
• and for design-build (Orange Book)

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
In 1999 Edition
Common Definitions

The aim was that common definitions would


be used in both the Construction and Plant
Contracts, to harmonise the wording and
thus eliminate the complexity that arises
from differently formulated definitions

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
In 1999 Edition
Incorporate as much text as possible in
General Conditions
Some provisions cannot apply unless
invoked/enabled by the insertion of the
required data
Performance Security, Progress Reports,
Adjustment for Changes in Cost, Advance
Payment, Plant and Materials intended for
the Works
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Preparation of
Conditions of Contract

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions

Give the rights and obligations of the Parties

Give the procedure to resolve disputes.

Project management procedure for the


administration of the Project.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions
The General Conditions include numerous
references to

• Appendix to Tender (or Contract Data for


the DBO Contract)
• Particular Conditions
• Specification
• Contract Agreement

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions

Defined terms are in CAPITALS in the General


Conditions. It is important to use defined
terms when preparing Specifications, Bill of
Quantities, Particular Conditions and
Employer’s Requirements

Insert essential information in the Appendix


to Tender
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions

Prepare Particular Conditions to suit the


Employer’s requirements

Check the sub-clauses that refer to


information that may be included elsewhere
in the Contract
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions

Consider the need for a Contract Agreement

Decide whether to require a one-person or


three-person Dispute Adjudication Board and
whether to nominate potential members.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
General Conditions

Consider the use of FIDIC Annexes for the


forms of securities

Consider the use of a standard Letter of


Tender for use by tenderers when submitting
their Tender.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Particular Conditions

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Particular Conditions
If risks allocated to the Contractor become
excessively high, the following problems may
occur:
• Higher tender price.
• Tender failure and disruption of project
implementation.
• Non-participation of reliable and capable
contractors.
• Contract award to a tenderer who fails or was
not capable of estimating the risks properly.
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Particular Conditions
• Poor construction quality and delay to the
progress of the work due to lack of risk
contingency
• Undermining the relationship of mutual trust
and respect between the Employer and the
Contractor.
• Repetition of groundless claims from the
Contractor.
• Frequent disputes between the Employer and
the Contractor.
• In an extreme case eventual termination of the
Contract.
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Particular Conditions

Particular Conditions should be

• Prepared by suitable qualified engineers


who are familiar with the technical
aspects of the required works;
• Reviewed by suitably qualified lawyers

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Parties of the Contract

Main parties and stake holders

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Responsibilities of the
Main Parties

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Clause 1 - General
Provisions and
General Issues

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Definitions

The definitions are grouped in 6 cat.


• The Contract
• Parties to the Contract
• dates, Tests, periods and completion
• money and payments
• Works and Goods
• other definitions.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
The Contract

Letter of Acceptance

Letter of Tender

Appendix to Tender

Parties and Persons


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Employer’s Personnel

This definition is wide-ranging and includes


not just, as one would expect, those who
work for the Employer but also the Engineer
and his staff.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Contractor’s Personnel

It includes any other personnel assisting the


Contractor in the execution of the Works.

How the Law will consider this.

The definition is essential to avoid claims


“ambushes” at the end of the Contract, and
otherwise promote good administration of
the Contract
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Base Date

Commencement Date

Time for Completion

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Accepted Contract
Amount

Contract Price

Cost

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Works

Site

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.3 Communication

All “approvals”, “certificates”, “consents” and


“determinations” are to be in writing

shall be delivered as set out in the Appendix


to Tender to the address as stated in the
Appendix to Tender

Approvals, Certificates, Consents to


Determination shall not be unreasonably
withheld or delayed
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1.4 Law and Language

It is important to remember that the


governing law clause dictates the law which is
to be adopted when resolving disputes.

The governing law maybe different than the


law of the country where the Site is located
and the Contractor should consider while
executing the Contract.
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.5Priority of Documents

Such clauses are typically included in case


there is a conflict in meaning between the
various contract documents.

The order of priority of the documents


forming the Contract can be significant where
complex questions of interpretation arise

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.6 Contract Agreement

The Parties are to enter into a formal Contract


Agreement within 28 days of the receipt of
the Contractor’s of the Letter of Acceptance

The Employer will be responsible for any


stamp duties or other charges.

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1.7 Assignment

Neither Party can assign its interest in the


Contract without the prior written agreement
of the other.

However the Contractor is permitted to


assign payments due under the Contract to
his bank or other source of financing

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.9 Delayed Drawings or
Instructions
It is the responsibilities of the Employer and
the Engineer to maintain a timely issuance of
instructions and drawings and may justify
Contractor’s claims.
An important aspect of the notice
requirements in Sub-Clause 1.9 is for the
Contractor to specify a reasonable period by
which the information is required
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.9 Delayed Drawings or
Instructions

The two-stage process of notification by the


Contractor

Identifying reasonable dates for the provision


of information which is already late

Delay Notification, if the information is not


released.
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1.9 Errors in the Employer’s
Requirements (plant)

Following the Commencement Date, the


Contractor has a specified period given in
the Appendix to Tender in which to examine
the Employer’s Requirements and other
information provided by the Employer to
check for any errors or faults which he can
find.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.9 Errors in the Employer’s
Requirements (plant)

If the Contractor finds errors or faults, he is


required to notify the Employer’s
Representative and ask for instruction as to
how to deal with the alleged error or fault

If the Contractor finds errors or faults after


the reviewing period;
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
1.9 Errors in the Employer’s
Requirements (plant)

If the Employer’s Representative considers


that an experienced contractor should have
discovered the error, then the Contractor
will not get any additional compensation. If
the Employer’s Representative considers
that an experienced contractor would not
have discovered the error, then the
Contractor will be entitled to compensation.
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Clause 2 –
The Employer

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Appoint the Access to Possession
Payment
Engineer. Site of Site

Free Issue Appointing


material The Employer, as a DAB
defined in the
Particular Conditions
Employer’s
Nomination
Claim

Employer’s Permits and Financial


Instructions Approvals Arrangement
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Right of Access to the Site

• It is the Employer’s responsibility as


stated in Appendix to Tender
• It is not exclusive.
• The Employer’s failure may lead to an
Extension of Time.
• The Employer may withhold the
possession of site till the submission of
the Performance Bond.

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A Practical Guide for Using the FIDIC Conditions of


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Employer’s Financial
Arrangements

• Upon the Contractor’s request the


Employer shall provide evidence of his
financial arrangement to pay the Contract
Price.
• If the Employer fails, the Contractor may
suspend or terminate the Contract

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Employer’s Claims

• The Employer or the Engineer shall give notice


and particular.
The Employer
• The Engineer cannot
shall make the deduct the
determination as per
amounts
Clause 3.5 from the
and include it inpayments to
the next PC
• There is no timethebarContractor
for the notice and the
particulars, it should be as soon as practicable.

• Payment Extending DNP


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Clause 3
The Engineer

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Identifying the Engineer’s


Authorities

The Engineer is authorized to

Instruct
Approve Determine
Variations

EOT Payments
Variations
Entitlements Certificates
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Duties

Inspection monitoring

Test Check

RFI meetings

Examine Correspondences
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Authorities

Approve Determine

Certify Instruct

Consent Correspondences

Request Notify
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Authorities
The Engineer shall be deemed to act on behalf
of the Employer

The Engineer has no authority to relieve either


Party of any duties, obligations or
responsibilities under the Contract

The Engineer shall have no authority to amend


the Contract
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Delegation by the
Engineer

• Engineer can delegate functions to


assistants or to a Resident Engineer.
• These delegations must be in writing and
delivered to both parties.
• Unless agreed by both Parties, the
Engineer shall not delegate his
Determination function.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Instructions of the
Engineer

• Contractor must comply with instructions


given by the Engineer
• Where possible, these instructions
should be in writing
• If Contractor considers that the
instruction constitutes a variation then
he should respond in accordance with
Sub-Clause 13.3 and 20.1.
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Confirmation of oral
Instructions
Oral site instructions should be given only in an
emergency

The Contractor
The Engineer does not
confirms an Oral
contradict within 2 days
instruction within 2
of receipt
days

Then it shall be deemed as an instruction


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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Determination

The Engineer shall consult The Engineer’s duty


with both Parties in order is to provide a fair
to reach agreement. determination

The Engineer must provide a reasoned notice


of his determination.

Determination is binding unless revised in


accordance with Clause 20
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Clause 4
The Contractor

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Contract 1999
Contractor’s obligations

Obligations which are Obligations which apply


construed from the under the applicable law
agreement between the of the Contract, during
Parties as prescribed in the Construction and
the conditions of beyond the completion
contract of the Contract.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Contractor’s obligations

Construction and securities, indemnities


completion of the Works and insurances
Design where
Performance of applicable
Supply of information
administrative and notices

Use of Materials, Plant and Workmanship as per


the Contract and the Engineer’s instructions
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Performance Security

It is applicable only if Valid till the issuance of


mentioned in the the Performance
Appendix to Tender Certificate
Failure to
submit
Should be approved by the Employer

Site access and Payment


Payment
possession Certificate
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Subcontractors and
Suppliers

The Contractor shall not subcontract the whole of


the Works, or more than a specified percentage of
the value of the Contract Price

The Contractor obtains the Engineer’s consent prior


to employing any Subcontractor

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Subcontractors and
Suppliers

The Engineer’s approval is not required for suppliers


of Materials or labour , nominated Subcontractors,
or whom his name is mentioned in the Contract

The Engineer may visit the Subcontractor’s off-site


facilities

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Setting Out
Employer’s responsibility to set out the original
points, lines and levels of reference.

Contractor has to use reasonable efforts to verify


the accuracy of the setting out.
ERROR
whether the error could have No Contractor Claim as
been found by “an
per Clause 20
experienced Contractor”
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Site Data

Employer must make available all relevant data


in his possession on sub-surface and
hydrological conditions at the Site.

The Contractor shall examine and inspect the


Site and take into account all the risks,
contingencies and other circumstances in
compiling and submitting his tender

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Access Route

Contractor shall:
Satisfy himself as to the suitability and
availability of access to the Site;
bears all the costs and risks associated with
access.

The Employer does not guarantee the suitability


or availability of particular access routes.

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

DAB

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Definition

means the sole member or three members (as


the case may be) so named in the Contract, or
appointed under Sub-Clause 21.1 [Constitution
of the DAAB] or Sub-Clause 21.2 [Failure to
Appoint DAAB Member(s)].

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Role

To give informal non-binding opinion when


requested jointly by the Parties.

To give Decision within 84 days when a dispute is


referred to the DAB.

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Clause 5
Nominated
Subcontractor

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Definition

someone who is either so-named in the


Contract or who the Engineer has instructed the
Contractor to employ as a Subcontractor

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Objection to Nomination

Lacks competence or Lack of appropriate


sufficient finances or indemnity in relation to
resources. any negligence

To ensure that the The Subcontractor will not


Contractor will discharge indemnify the Contractor
his obligations under the in respect of any failure to
Contract perform his obligations.
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Evidence of Payments

Engineer may request from the Contractor


evidence of payment to the Nominated S/C.
If the Contractor can not satisfy the Engineer
of Payment or reasons to withhold money,
then the Employer may pay the Subcontractor
direct.
The Contractor must repay that sum to the
Employer.

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The Design-Build
Responsibility

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Contract 1999

Clause 5
Design

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Contract 1999

Yellow Book

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Contractor’s Obligations

• The Contractor shall carry out, and be


responsible for, the design of the Works.
• The design shall comply with the criteria (if
any) stated in the Employer's Requirements.
• Designers shall be available to attend
discussions with the Engineer until the
expiry date of the relevant Defects
Notification Period.
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• The Contractor shall scrutinise the


Employer's Requirements after the
Commencement Date within the period
stated in the Appendix to Tender.
• The Contractor shall give notice to the
Engineer of any error, fault or other defect
found in the Employer's Requirements.
• Clause 13 will apply unless an experienced
contractor would have discovered the error
during tendering stage.
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Contractor’s Documents

• The comprise of the technical documents


specified in the Employer's Requirements,
documents required to satisfy all regulatory
approvals, as-built drawing, and Operation
and Maintenance Manuals.
• Documents shall be submitted to the
Engineer for review and/or for approval, as
per the Employer’s Requirements.
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• "review period" means the period required
by the Engineer for review and (if so
specified) for approval.
• Unless otherwise stated in the Employer's
Requirements, each review period shall
not exceed 21 days
• The Engineer may give notice to the
Contractor that a Contractor's Document
fails to comply with the Contract. The
document shall be rectified, resubmitted
and reviewed at the Contractor's cost.
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Silver Book

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Contractor’s Obligations

• The Contractor shall be deemed to have


scrutinised, prior to the Base Date, the
Employer's Requirements (including design
criteria and calculations, if any).
• The Contractor shall be responsible for the
design of the Works and for the accuracy of
such Employer's Requirements.

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Contractor’s Obligations

• The Employer shall not be responsible for


any error, inaccuracy or omission of any
kind in the Employer's Requirements as
originally included in the Contract and shall
not be deemed to have given any
representation of accuracy or completeness
of any data or information, except as stated
below.
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Contractor’s Obligations

• However, the Employer shall be responsible


for the correctness of the following portions
of the Employer's Requirements and of the
following data and information provided by
(or on behalf of) the Employer:

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Contractor’s Obligations
(a) portions, data and information which are
stated in the Contract as being immutable or
the responsibility of the Employer,
(b) definitions of intended purposes,
(c) criteria for the testing and performance of
the completed Works, and
(d) portions, data and information which
cannot be verified by the Contractor, except as
otherwise stated in the Contract.
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Contractor’s Documents

• The comprise of the technical documents


specified in the Employer's Requirements,
documents required to satisfy all regulatory
approvals, as-built drawing, and Operation
and Maintenance Manuals.
• If the Employer's Requirements describe,
Contractor’s Documents shall be submitted
for the Employer’s review.
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• "review period" means the period required
by the Employer for review and (if so
specified) for approval.
• Unless otherwise stated in the Employer's
Requirements, each review period shall
not exceed 21 days.
• The Employer may give notice to the
Contractor that a Contractor's Document
fails to comply with the Contract. The
document shall be rectified, resubmitted
and reviewed at the Contractor's cost.
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Management of
Projects

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Clause 6
Staff and Labour

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General

The Contractor is responsible for staff and labour;


• Makes arrangements for the engagement of all staff and
labour; local or otherwise.
• Must comply with the relevant labour laws, including laws
related to the employment, health, safety, emigration and
shall allow personnel all their legal rights.
• Ensures that his personnel are appropriately skilled, qualified
and experienced for the job (Engineer can request Contractor
to remove from the Site unsuitable persons).

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General

The Contractor is responsible for staff and labour;


• Makes arrangements for the engagement of all staff and
labour; local or otherwise.
• Must comply with the relevant labour laws, including laws
related to the employment, health, safety, emigration and
shall allow personnel all their legal rights.
• Ensures that his personnel are appropriately skilled, qualified
and experienced for the job (Engineer can request Contractor
to remove from the Site unsuitable persons).

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General

• Submits to the Engineer the list of his personnel &


equipment.
• Provides and maintains all accommodation and welfare
facilities for all of his personnel.
• Pays his personnel and is responsible for the personel’s
housing, feeding and transport.
• Ensures that no work is carried out outside normal working
hours and on days of rest, for the location of the Site, unless
accepted by the Engineer.

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General

• Ensure the maintenances of all health and safety standards


of his personnel.
• Ensures that his personnel act in an orderly fashion and in no
way act in an unlawful or riotous fashion.
• Supervise the plans, arrangements, directions, management,
inspection and testing of the Works, for duration of the
Works.
• Ensures that all required and any other reasonable health
and safety precaution are taken.
• Appoint an accident prevention officer.
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6.10: Records of Contactor’s


Personnel & Equipment

• number of each class of Contractor’s Personnel;

• number of each type of Contractor’s Equipment


on the Site.

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Clause 7
Plant, Materials and
Workmanship

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Summery

• Plant, Materials and execution of the Works to be in


accordance with Contract and in workmanlike manner.
• Employer/ Engineer is entitled to inspect and test plant and
materials on site or at the location for production.
• Rejection: Plant and Materials may be found defective and
will have to be rejected and replaced.
• Remove or re-execute work not in accord with Contract.
• Execute any work urgently required for safety reasons.
• All Plant and Materials are the property of the Employer on
delivery to the Site or payment to the Contractor.
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7.3: Inspection

On Site Off Site

The fact that an inspection has been carried out will


not relieve the Contractor of any liability

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Works Inspection, Testing &


Acceptance

Standard forms should be used by the Contractor


and the Engineer for recording inspection, testing
and acceptance.

The Contractor to give notice to the Engineer


whenever any part of the Works is ready and
before it is covered up
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Works Inspection, Testing &


Acceptance

If the Contractor covers up work without giving


notice or adequate notice.

Engineer is entitled to require the Contractor to


uncover work and to make good at the
Contractor’s expense
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If the Contractor gave adequate notice before


covering up;

The Work have not


The Work have been
been executed in
executed in accordance
accordance with the
with the Contract
Contract

Cost to be Cost not to be


reimbursed reimbursed
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7.4: Testing

Tests under Additional


Contracts Tests

No Test Failed Tests after


additional Variation Completion
Cost Clause 9

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7.5: Rejection

Default Rejection Remedial

Termination
Pass
Re-do the work Retest

Deduction
Failed
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7.6: Remedial Works

Engineer’s instruction Contractor must


to remove defective comply within a
works reasonable time

Termination

Re-do the work Failed

Deduction

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Clause 8
Commencement,
Delays and
Suspension

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Project Starting

Performance Notice to TOC


Security – 4.2 Commence

28d 7d

Project Execution
42d Max. Time for Completion – 8.2
Issuance of
LOA 1.1.1.3 Commencement
Date – 8.1
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8.3 Programme

28d 21d
Notice to
Commence Programme Comments

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Delays and Extension


of Time

If the Contractor does not


The Contractor is
complete the whole of
still obliged to
the Works within the
complete the Works
Time for Completion,

If the Contractor does not


complete sections of the Liquidated Damages
Works within milestones.
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The Contractor shall


be entitled to an
extension of time if;

a cause of delay A Variation is instructed


under the Conditions or other substantial
Any delay caused by
of Contract change in the shortages
Unforeseeable quantity
or attributable to the
inexceptionally
resources caused by
Employer or hisby
Delay caused governmental
adverse climaticactions
contractors
the Authority
conditions
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EOT
Procedure

The Contractor shall The Contractor shall


submit a notification submit detailed claim
within 28 days within 42 days

The Engineer may increase, but shall not decrease, the


total extension of time.
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Preparation
of Claim

The base line update The delay event is to


on the event date is be loaded on the
to be choosen update
Cause and effect
analysis
The concurrent delay The event impact is
is to be analyzed to be determined
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Claim
Substantiation

• The notification of claim to be timely served


and demonstrated in the submission.
• The event relation to Clause 8.4 or 8.5 to be
clarified.
• The supporting instructions, documents is to
be referenced, clarified and attached.
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EOT Claim
If the delay

Solely attributable to No Additional Cost or Time


the Contractor
Liquidated Damages
Solely attributable to
Additional Costs and Time
the Employer
Concurrently Time, but no Cost
attributable
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Work Suspension

By the Engineer By the Contractor

Protect, store and secure the suspended Works


against any deterioration, loss or damage

EOT

Prolongation Costs
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Suspension By the
Engineer

If a suspension of Works has continued for more


than 84 days

Contractor may give notice requesting


permission, within 28 days, to proceed

Omit that part Terminate the Contract

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Contract 1999

Advance Warning
Sub-Clause 8.4 of
2017 Edition

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• Both Parties and the Engineer shall advise


when any known or probable future events or
circumstances which may:
a) adversely affect the work of the Contractor’s
Personnel;
b) adversely affect the performance of the
Works when completed;
c) increase the Contract Price; and/or
d) delay the execution of the Works or a Section
(if any).
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• The Engineer may request the Contractor to


submit a proposal under Sub-Clause 13.3.2
[Variation by Request for Proposal] to avoid or
minimise the effects of such event(s) or
circumstance(s).

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Financial Clauses and


Procedure

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Clause 12 –
Measurement and
Evaluation

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Contract 1999

Measurement

• Clause applies only to the Construction


Contract
• Clause written for a re-measurement
contract where Accepted Contract
Amount is based on estimated quantities
• If the Contract is based on a lump sum, a
cost-plus or other basis, then Clause 12
must be omitted
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Works to be Measured
Engineer decides that he requires a part of the
Works to be measured

Notify The Contractor of the periods or timing


for measures
Yes No
Contractor attends
and assists the The Engineer’s
Engineer and measurements are
supplies any details accepted as accurate
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Method of Measurement

Except where otherwise


stated in the Contract, According to the Bill of
be the measurement of Quantities (preambles)
the net actual quantity

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Evaluation

Evaluation is to proceed on the basis of Sub-


Clauses 12.1 and 12.2 and the appropriate rate
or price for that item of work.

New rates and prices are to be derived from any


relevant rates or prices in the Contract, with
reasonable adjustments

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Evaluation

New rate or price will be appropriate if the


circumstances described in (a) or (b) are fulfilled

If no existing rates and prices are relevant for


the purposes of the derivation of a new rate or
price, then the new rate or price should be
based upon reasonable cost and reasonable
profit.
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Omission
If the omission is a result of a Variation;

produces will result in a has a cost which


abortive work sum not forming is not part of
for the part of the replacement
Contractor, Contract Price, work,

the Engineer shall proceed with Determination


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Clause 13 –
Variations and
Adjustments

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Instruction

If Employer wants to make a change, he must


request the Engineer to issue the instruction.

If Employer gives an instruction direct to the


Contractor then the Contractor must obtain
the Engineer’s confirmation and instruction
before he executes the change.

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Right to Vary

Variations can be initiated at any time prior to


the issue of the Taking-Over Certificate by the
Engineer.

Request for a
Instruction
proposal

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Variations

Shall be instructed by the Engineer to facilitate,

Employer To correct a To issue further


changes his mind mistake information

Engineer is only authorised to instruct Variations under the


Contract. Not empowered to instruct a variation of the Contract
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Variations

Contractor cannot make any Variation without the


Engineer’s instruction or consent

Plant Contract Construction Contract

change to the Works as


change to the Works as
described in the
described in the
Employer's Requirements,
Specifications
the Specifications, and the
and Drawings,
Contractor’s Proposal
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changes to the any additional work.


sequence or timing of Plant. Materials or
the execution of the services necessary for
Works the Permanent Works

Definition

changes to the quality changes to the levels


and other positions and/or
characteristics of any dimensions of any part
item of work of the Works
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changes to the
quantities of any item of
work Any changes of the
form, quality or quantity
of the Works that may
Definition be necessary or it shall
be appropriate to
omission of any work complete the works
unless it is to be carried
out by others
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Variations

The Engineer’s should obtain the Employer’s pre-


approval

What if the Employer could disown an instructed


Variation which he considers unnecessary or
inappropriate

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Variations

Contractor is bound to comply with the Engineer’s


instructed Variations, except;

Promptly gives notice to The Variation will reduce


that he cannot readily the safety or suitability of
obtain the Goods required the Works

The Engineer shall cancel, confirm or vary the Variation


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Variation after the issuance of the TOC

Instructions of Variations after issuing a TOC


are not recommended

Contractor’s to
Further test
search
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Value Engineering

It is a proposal by the Contractor subject to the


Engineer’s approval, which may lead to one of the
following;

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Value Engineering

Other benefit to Accelerate


the Employer completion

Reduce the cost of


Improve the
executing,
efficiency or value
maintaining or
of the completed
operating the
Works
Works
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Value Engineering

The cost benefit is to be shared between the


parties

If the V.E. resulted a design changes, the


design and design liability is the Contractor’s
scope and liability
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Valuation of Variations

General Principle

Based on
BOQ Rate New Rate
BOQ Rate

due consultation by the Engineer with the Parties, suitable


rates or prices shall be agreed
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Valuation of Variations

In the event of disagreement

The Engineer will Notify both Certify Payment


fix the rate Parties on account

if an instruction to vary the Works is necessitated by default


or breach of Contract by the Contractor, or for which he is
responsible, any additional cost shall be borne by the
Contractor
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Provisional Sum

means a sum (if any) which is specified in the


Contract as a provisional sum, for the execution of
any part of the Works or for the supply of Plant,
Materials or services under Sub-Clause 13.5
[Provisional Sums].

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Provisional Sum

Shall be instructed by the Engineer, otherwise it is not


part of the Contract.

To be carried out as a Nominated


variation; and to be evaluated Subcontractor; as per
based on Clause 13.3 Clause 5;

The Contract Price to be adjusted


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Daywork
It should be for
Minor Incidental
OR
works nature

The Engineer’s instruction is to be


issued on the day work basis

The work is to be valued as per the


Daywork Schedule
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Daywork

Material

The Contractor shall submit quotation for the


material to be ordered to the Engineer, if such
material is not specified in the Daywork
Schedule

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Other Resources

The Contractor submit on daily basis to the


Engineer details of resources used such as;
• Contractor’s personnel,
• Contractor’s Equipment and Temporary
Works,
• Plant and Material used

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Daywork

• Such records is to be signed off by the Engineer.


• The Contractor shall submit a priced statement of
such resources.
• Then the Contractor shall include such works in the
next Statement.

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Adjustments for Changes
in Legislation

Where there is a change in the law of the


Country after the Base Date which affects the
performance of the Contractor the Contract
Price shall be adjusted.

Clause 20 procedure should apply.

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Adjustments for Changes
in Cost

This sub-clause only applies if the adjustment


data table is part of the Contract “ Appendix
to Tender”.

A formulae for the adjustment shall be agreed


and used.

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Clause 14 – Contract
Price and Payment

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The Contract Price
Contract Price shall be evaluated by the
Engineer in accordance with the provisions of
Sub-Clause 12.3.

It is the responsibility of the Contractor to


submit, within 28 days after the
Commencement Date, a non-binding
breakdown of each lump-sum price shown in
any schedule.
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Advance Payment

An interest-free loan, paid by the Employer for


mobilization, if total stated in Appendix to
Tender

The Contractor shall first submits a guarantee in


accordance with Sub-Clause14.2.

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Advance Payment
Guarantee
The Advance Payment should be submitted to the
Employer with a copy to the Engineer.
The Engineer is expected to review the guarantee

Acceptance of the advance payment guarantee is


the Employer’s contractual obligation

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Repayment of
Advance Payment

Advance payment is re-paid through percentage


deductions in the payment certificates and
payment

When the deduction should start


?
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Payment of Advance
Payment
Within;

42 days after issuing 21 days after


the Letter of receiving
Acceptance
Performance Advance
Security Payment

Whichever is later
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Contractor’s Interim Payment Statements

Construction Contract

Progress payment
On stages payment
quantities of work
The Contractor will
executed,
submit a payment
applying the unit rates
whenever the stage is
and prices from the
completed
BOQ

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The payment constitutes of;

1) The value of Works executed including Variations ;


2) Any amounts to be added and deducted for
changes in legislation and changes in cost, in
accordance with Sub-Clause 13.7 and Sub-Clause
13.8 ;
3) Any amount to be deducted for retention,
4) Any amounts to be added and deducted for the
advance payment in accordance with Sub-Clause
14.2 [Advance Payment];

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The payment constitutes of;

5) Any amounts to be added and deducted for Plant


and Materials in accordance with Sub-Clause
14.5;
6) Any other additions or deductions which may
have become due under the Contract or
otherwise, including those under Clause 20
[Claims, Disputes and Arbitration]; and
7) the deduction of amounts certified in all previous
Payment Certificates.
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Contractor’s Interim Payment Statements

Contractor’s IPS must be accompanied by

• supporting documents necessary for the


Engineer to verify amounts claimed;
• Contractor’s Monthly Progress Report for the
period to which the IPS corresponds

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Contract 1999
Valuation of Plant and Materials
intended for the Works
Contractor may claim interim payments of
stated percentage of value of Plant and
Materials delivered to Site

This is for Plant and Materials required to be


incorporated into the Works but have not yet
been incorporated

To minimise the Contractor’s financing costs


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Interim Payment Certificate

The Engineer shall within 28 days of receiving the


Contractor’s IPS, issue the Payment Certificate
stating the amount of payment which the
Engineer determines due and payable

The Payment Certificate shall be issued to the


Employer with a copy to the Contract

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Interim Payment Certificate

Will be issued if;

The net amount is not


The Contactor has
less than the Minimum
submitted, and the
Amount of IPCs stated
Employer accepted, the
in the Appendix to
Performance Security
Tender

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Payment
Employer must make payment to the
Contractor within

Interim Payment; 56 Final Payment; 56 days


days after the after the Employer
Engineer receives the receives this Payment
Statement Certificate

Employer’s obligation is to pay the sum that is


certified without any deductions.
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Delayed Payment

Suspend the Work Terminate the Contract

Reduce the Rate of


Progress
Contract may entitle the Contractor to interest

Contractor should include such interest in the


IPS and the Engineer is obliged to certify it
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Payment of Retention
Money

Outstanding balance
First 50% of retention
for retention money
money shall be
shall be certified
certified after the issue
promptly after the
of the Taking Over
expiry of the Defects
Certificate
Notification Period

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Contractor’s Statement at Completion

The Contractor shall, within 84 days after receiving


the TOC, submit to the Engineer a Statement at
If the Contractor does not claim an
Completion
entitlement in his Statement at
• Completion,
value of all work he loses it.
done in accordance with the Contract
up to the date of completion stated in the TOC;
• Any further sums which the Contractor considers due;
• An estimate of other amounts which the Contractor
considers will become due to him under the Contract.

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Interim Payment Certificate at Completion

The Engineer shall, within 28 days certify to the


Employer the amounts,

• only those amounts that Engineer determines to be


due to the Contractor for works already acceptably
completed, and
• other payment entitlements: a) at date of completion
stated in the TOC; b) after date of completion stated
in the TOC

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Interim Payment Certificate at Completion

The Engineer shall submit to the Employer a


supplementary report,

• Payments due to the Contractor;


• Payments that are known will become due to the
Contractor;
• Estimates of the value of remaining works yet to
executed and outstanding claims and disputes;
• Employer’s entitlement (if any) to Delay Damages

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Interim Payment at Completion

The Employer shall pay within 56 days, to the


Contractor the amount certified by the Engineer
as payable,

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Contractor’s Final Statement

Within 56 days of receiving the PC, the Contractor


must submit to Engineer a draft Final Statement

Any further sums which


the Contractor considers
Value of all work done
to be due to him under
the Contract

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Contractor’s Final Statement

If the Engineer disagrees with or cannot verify any part


of the draft final statement, Contractor

To make such changes


To submit such further
in the draft as may be
information
agreed between them

to then prepare and submit to the


Engineer the final statement as agreed
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Contractor’s Final Statement
FIDIC contract:

“…. if, following discussions between the Engineer and the


Contractor and any changes to the draft final statement
which are agreed, it becomes evident that a dispute exists,
the Engineer shall deliver to the Employer (with a copy to the
Contractor) an Interim Payment Certificate for the agreed
parts of the draft final statement.
Thereafter, if the dispute is finally resolved under ..... The
Contractor shall then prepare and submit to the Engineer
(with a copy to the Employer) a Final Statement.”
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Contractor’s Discharge

Contractor is required to submit with the Final


Statement a Discharge stating that the total of the
Final Statement represents full and final settlement of
all moneys due to the Contractor

Although there is no requirement for the Contractor to


state in his Discharge that “it is predicated on the
Employer’s payment and return of the Performance
Security”, wise for the Contractor to so state.

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Final Payment Certificate

Engineer shall, within 28 days after receipt

The Contractor’s Contractor’s written


Final Statement Discharge

Issue to the Employer the Final Payment Certificate

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Final Payment Certificate

If Contractor has not

applied for a Final Payment


submitted a
Certificate within the
Discharge
prescribed time

The Engineer should request the Contractor to do


so within 28 days; if Contractor fails;
The Engineer issues the Final Payment Certificate
for an amount he determines
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Final Payment

Employer shall make the Final Payment to the


Contractor within 56 days after the date of his
receipt of the Engineer’s Final Payment Certificate.

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Project Closure

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Contract 1999

Tests

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Contract 1999

Tests on Completion

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Test on Completion

Means the tests which are specified in the


Contract or agreed by both Parties or
instructed as a Variation, and which are
carried out under Clause 9 [Tests on
Completion] before the Works or a Section
(as the case may be) are taken over by the
Employer.

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Who is responsible of
the Test on Completion

The Contractor shall provide all apparatus,


assistance, documents and other
information, electricity, equipment, fuel,
consumables, instruments, labour, materials,
and suitably qualified and experienced staff,
as are necessary to carry out the specified
tests efficiently

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Procedure
The Contractor shall give Tests will be carried out
21 days’ notice to the within 14 days after this
Engineer date

Permanent
Deduction Test to be Test
repeated Failed
11.4 Failure to
Remedy Defects

Test
Employer to carry pass
Deduction Termination
out the works
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Contractor’s Obligations
It is the responsibility of the Contractor to
carry out the Tests on Completion. Before the
Tests are carried out, the Contractor must
provide the as-built drawings and operations
and maintenance manuals.
In accordance with the Specification and in
sufficient detail for the Employer to operate,
maintain, dismantle, reassemble, adjust and
repair this part of the Works
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Contractor’s Obligations

The Engineer should arrange for any specialist


engineers to attend and for the Employer to
make any necessary arrangements

As soon as the Works, or a Section, have


passed any Tests on Completion, the
Contractor shall submit a certified report of
the results of these Tests to the Engineer.
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Contractor’s Obligations

The tests must be carried out within 14 days


after this date, on a date instructed by the
Engineer.

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Delayed Tests
If the Employer unduly delays the Tests on
Completion then the provisions of Sub-Clause
9.2 or Sub-Clause 7.4 or 10.3 apply and the
Contractor may be entitled to additional time
and costs.
The Contractor will give notice to the
Engineer under Sub-Clause 7.4 and follow the
Sub- Clause 20.1 procedure to claim for an
extension of time and an additional payment
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Delayed Tests

If the delay lasts for more than 14 days then,


under Sub-Clause 10.3, the Employer is
deemed to have taken over the Works or
section on the date when the Tests on
Completion would have been completed.

The Tests must then be carried out during the


Defects Notification Period
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Delayed Tests

If the Tests on Completion are unduly delayed


by the Contactor the Engineer may give
notice requiring the Contractor to carry out
tests within 21 days

The Contractor will The Employer’s Personnel


carry the tests. can complete the Tests
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Retesting
If the Works do not pass the Tests on
Completion, the Engineer can reject the
Works and require the Tests to be repeated

the Contractor shall make


good any defect and
The tests can then be
ensure that the rejected
repeated
item complies with the
Contract
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Retesting
There is no limit set on how many times the
Works can be carried out

This sub-clause should be read in conjunction


with Sub-Clause 7.5 “Rejection”

Sub-Clause 15.2(c) provides that the


Employer is entitled to terminate the Contract
if the Contractor fails to comply with a notice
issued under Sub-Clause 7.5
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Tests After
Completion

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Procedure

Only in the Yellow and


Silver Book

Will apply only if the


Tests after Completion
are specified in the
Contract.
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Yellow Book

It is the Employer’s obligation to carry out the


Tests after Completion

The Contractor may attend

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Yellow Book

The Employer shall provide

Electricity, equipment, fuel, instruments,


labour, materials, and suitably qualified and
experienced staff.

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Yellow Book

The tests shall be carried out in accordance


with the manuals provided by the Contractor
and the Contractor’s guidance, as either Party
may reasonably request.

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Silver Book

It is the Contractor’s obligation to carry the


Tests after Completion

The Employer’s personnel presence is


recommended and may be reasonably
requested.

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Silver Book

The Employer shall provide

Electricity, fuel, and materials, and make the


Employer’s Personnel and Plant available.

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Silver Book

The Contractor shall provide

Any other plant, equipment, instruments,


labour, and suitably qualified and experienced
staff.

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Silver Book

The Contractor shall carry out the Tests after


Completion in the presence of such
Employer’s Personnel.

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Procedure

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Notice

The Contractor (Silver) or the Employer


(Yellow) shall give 21 days’ notice to the
other Party of planned tests after completion

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Notice

The Tests after Completion shall be carried


out within 14 days after the expiry of 21 days
notice

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Yellow Book

If the Contractor does not attend, the


Employer may proceed with the Tests after
Completion, the Contractor shall accept the
readings.

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Delay

If tests are unduly delayed by the Contractor,


the Engineer may carry out the tests at the
Contractor’s risk and cost

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Delayed Tests

If the Employer unreasonably delays the Tests


after Completion then the provisions of Sub-
Clause 20.1 apply and the Contractor may be
entitled to additional costs.

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Delayed Tests

If the Tests after Completion are not carried


out during the Defect Notification Period, for
reasons not attributable to the Contractor,
then the Works or Section shall be deemed
to have passed the Tests after Completion.

The Tests will not be carried out

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Failure to Pass Tests after


Completion

If the tests fail


repeatedly there are
2 ways to deal with
such situation;

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Failure

If
• If the Works do not pass any or all the

1
Tests after Completion,
• There is a sum for such failure stated in
the Contract, and
• The Contractor paid the amounts during
the Defect Notification Period.

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Failure

The Works or Section shall be deemed to have


passed the Tests after Completion.

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Failure

The Contractor
The Contractor will
proposed
be instructed by the
modification or

2
The Contractor Employer
will
adjustment
remain liable to carry
such modification
The Contractor will The Employer will
do the modification grant access to the
or adjustment facility

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Failure

If the Access is not granted during the Defect


Notification Period, the Contractor will be
relieved of his obligation and the Work or
Section shall be deemed to have passed the
Tests after Completion.

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Failure

If the Contractor incurred additional cost as a


result of any unreasonable delay in getting
access, Clause 20.1 shall apply.

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Clause 10
Employer’s Taking
Over

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Substantial Completion
The work will be considered substantially
completed when;
The Works have been Passed the tests on
completed completion
Issuing the As Built
O&M manuals
Drawings
Will not substantially
Minor outstanding affect the use of the
work and defects Works for their
intended purpose
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Taking Over Certificate

The Contractor may request and Engineer


shall issue a TOC for;
Any Section in respect
of which a separate Any part which is ready
Time for Completion is of the Permanent
provided in the Works
Contract

Any part of the Permanent Works which the


Employer has elected to use prior to completion
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Taking Over Certificate
The Contractor applies by notice to
Engineer for a Taking-Over Certificate;

The Engineer shall within 28 days;

Issue the TOC Reject the application,


• The date Works • Reasons of rejection
were completed • Specifying the work
• Snags and required to be done
outstanding list to issue the TOC
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If The Engineer failed to response within 28
days;

The Works or Section (as the case may be) are


substantially completed in accordance with
the Contract

the Taking-Over Certificate shall be deemed to


have been issued on the last day of that period

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Taking Over Certificate

After the issuance of the TOC

• Responsibility for care and maintenance


transferred to the Employer;
• Contractor’s obligation to insure the Works
ends;
• Part of the Retention Money is paid to the
Contractor;
• Time begins to run for the Contractor’s
submission of a Statement at Completion
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Clause 11
Defect Notification
Period

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Project Closure Performance
Test on Certificate Return of the
Completion 11.9 Performance
– 9.1 Bond – 4.2
Remedying of defects – 11.3
<21d
DNP – 1.1.3.7

TOC
10.1 Notifying of
defects –
11.1(b)
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Definition

Is the period for notifying defects, as stated in the


Appendix to Tender (typically 12 months but
sometimes longer) from the date of issuing the TOC

In the event of more than one TOC having been


issued, the respective dates so certified

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Defect Notification
Period
The Contractor is required,

To complete items listed To rectify any defects


in the TOC within such which are notified to him
reasonable time as is by or on behalf of the
instructed by the Employer on or before
Engineer during the DNP the DNP expiry date

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Inspections and notification of defects

The Contractor is required,

The Intent is that at or soon


Checkafter expiry
that defects
Check remaining works
of the DNP, the Works shall be in the Snagging
notified
completed during the DNP
delivered to the EmployerList in the to the TOC
appended
condition required by the Contract, fair
wear and tear excepted.,
Identify defects that
become manifest during
the DNP
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Cost of Rectifying Defects and Damage

The Contractor is not obliged, at his cost, to rectify,

Defects which are


Fair wear and tear; attributable to faults of
design

damage not caused


by/attributed to Contractor in
the DNP
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The Employer may choose to rectify defects or
damage that are not attributable to the Contractor by

The Employer to request Employer executing the


the Contractor to perform remedial works outside
the remedial works the Contract

Payment and payment


terms to be jointly agreed

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Contractor to search
If an argument arises as to whether or not a
defect is attributable to the Contractor, he shall,
upon instruction of the Engineer

The defect is The Contractor


the Contractor’s shall bear the
Search for the responsibility cost
cause of the
defect The defect isn’t The Employer
the Contractor’s shall bear the
responsibility cost
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Remedies for Non-Performance in Defects
Liability Period
If the Contractor didn’t complete the remaining
works or rectify the notified notices within
reasonable time;

Recover from
The Employer the Contractor
Do the work;
can; the Employer’s
full costs

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Extension of Defects Notification
Period

If the Works or part


The Employer entitled to an
cannot be used
Extension of Defects
because of a defect or
Notification Period
damage

Maximum 2 years

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Failure to Remedy the Defects

Where the Contractor fails to


Notice to
make good defects or damage
correct
within a reasonable time

Termination

Make other arrangement Failed


Accept the work and
deduction
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Right of Access

Employer is under an obligation to grant the Contractor


access to remedy defects.
Contractor has a right of reasonable access to the
Works
Right to access is subject to the Employers’ reasonable
security restrictions.

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Performance Certificate

To be issued

within 28 days of the Once the Defects


expiry of the latest DNP are remedied

Only the Performance Certificate will constitute deemed


acceptance of the Works
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Suspension and
Termination

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Contract 1999

Clause 15 &16 –
Suspension and
Termination

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Termination by Employer arising


from Contractor’s default

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Employer entitled to terminate the Contract if
the Contractor;

1. Enters into liquidation or dissolution


2. Becomes bankrupt or insolvent
3. Gives or offers any bribe, gift, gratuity or commission
4. Fails to maintain an acceptable Performance Security
5. Fails to commence the Work
6. Abandons the Works
7. Fails to expedite progress of the Works
8. Fails to comply with a notice of remedial action
9. Neglects to comply with any of his obligations
10. Subcontracts the whole of the Works.
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Termination by Employer

FIDIC contracts do not require any certification by the Engineer

In any of the above, the Employer may give 14 days’ notice to


the Contractor of termination; except that immediate notice
may be given in the event of reasons (1), (2) and (3).

If the Employer gives notice and then wishes to withdraw it,


the Parties may agree that the notice shall be of no effect.
Or, it may be agreed that the notice be put on-hold
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Termination by Employer

After expiry of the Employer’s notice of termination

Employer, or his other


Employer may complete the
contractors, may use any of
Works himself or arrange
the Contractor’s Materials,
for others to do so
etc. as they deem fit

Employer is entitled to require the Contractor to assign


to him the benefit of any agreements or subcontracts

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Contract 1999
Termination by Employer
Facilities should be released to the Contractor only
after receipt from the Employer of a notice, which
might not be until the Works have been completed

Engineer shall Employer is entitled to


determine sums due withhold further payments
to the Contractor until the expiration of the DNP

Upon completion, Contractor is entitled to receive the amount he


was entitled if he had completed the Works less Employer’s costs.
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Contract 1999

Termination by Contractor arising


from Employer’s default

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Contractor entitled to terminate the Contract if
the Employer;
Fails to pay to the
Becomes bankrupt or goes
Contractor the amount
into liquidation
under any IPC

substantially fails to
fails to provide his financial
perform his
arrangements
obligations

If the Engineer fails, within 56 days after receiving a


Contractor’s Statement and supporting documents, to
issue the relevant IPC
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Contractor entitled to terminate the Contract if
the Employer;

After a suspension by the


Engineer of the whole of without the Contractor’s
the Works exceeding 84 prior agreement, the
days, the Employer fails Employer transfers to a
give permission to resume third party any of its
working within 28 days obligations or rights under
after the Contractor’s the Contract
request

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Contract 1999
Termination by Contractor

For each of the above events, the Contractor may give 14 days’
notice to the Employer of termination; except that he may give
notice of immediate termination for (2) and (3).

Contractor’s election to terminate the Contract does not


prejudice any of his other rights under the Contract
If the Contractor gives notice and then wishes or agrees to
withdraw it, the Parties may agree that the notice shall be of
no effect.
Or, it may be agreed that the notice be put on-hold.
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Termination by Contractor
After expiry of the Contractor’s notice of termination

Removes from Site all his


Contractor ceases all further
Equipment and facilities,
work
and leaves the Site

Contractor hands over to the Employer any


documents, Plant, Materials and other work for which
he has received payment

Employer returns the Contractor’s Performance Security


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Termination by Contractor
Engineer determines and Employer pays to the Contractor

Amounts payable for works Cost of Plant and Materials


acceptably performed delivered by the Contractor

any other cost or liability Cost of repatriation of the


reasonably incurred staff and labour

cost of removal of Temporary Works and Contractor’s


Equipment from Site and their return to Contractor’s
home base
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Termination by Contractor

Employer to pay the amount of any loss of profit or


other loss or damage sustained by Contractor as a result
of termination

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Termination resulting from Force


Majeure

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Contract 1999
Termination resulting from Force Majeure

Contract may be terminated if a Party is or will be prevented


by Force Majeure from performing its obligations

Party prevented from performing must notify the other Party


of the event within 14 days after the event became known to
him, or should have been known.

Notice shall contain details of the obligations whose


performance is prevented.

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Contract 1999
Termination resulting from Force Majeure

Either Party may give notice of termination if performance is


prevented for a continuous period of 84 days or for multiple
periods totaling more than 140 days due to the same Force
Majeure event ( notice to take effect 7 days after being given)

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Termination resulting from Force Majeure
After notice of termination

Removes from Site all his


Contractor ceases all further
Equipment and facilities,
work
and leaves the Site

Contractor hands over to the Employer any


documents, Plant, Materials and other work for which
he has received payment

Employer returns the Contractor’s Performance Security


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Contract 1999
Termination resulting from Force Majeure
Engineer determines and Employer pays to the Contractor

Amounts payable for works Cost of Plant and Materials


acceptably performed delivered by the Contractor

any other cost or liability Cost of repatriation of the


reasonably incurred staff and labour

cost of removal of Temporary Works and Contractor’s


Equipment from Site and their return to Contractor’s
home base
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Contract 1999

Employer’s Termination for


Convenience

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Employer’s Termination for Convenience

Employer entitled to terminate the Contract at any time for his


own convenience by giving notice to the Contractor.

Termination takes effect 28 days after the later of the dates on


which the Contractor receives the notice or the Employer
returns the Contractor’s Performance Security

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Contract 1999
Employer’s Termination for Convenience

Employer cannot terminate the Contract in order to execute


the Works himself or by other contractors

Ensuing obligations shall proceed as for termination resulting


from Force Majeure

Contractor may consider that the Employer should reimburse


him for losses and damages attributable to termination

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Contract 1999
Employer’s Termination for Convenience
After notice of termination

Removes from Site all his


Contractor ceases all further
Equipment and facilities,
work
and leaves the Site

Contractor hands over to the Employer any


documents, Plant, Materials and other work for which
he has received payment

Employer returns the Contractor’s Performance Security


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Employer’s Termination for Convenience
Engineer determines and Employer pays to the Contractor

Amounts payable for works Cost of Plant and Materials


acceptably performed delivered by the Contractor

any other cost or liability Cost of repatriation of the


reasonably incurred staff and labour

cost of removal of Temporary Works and Contractor’s


Equipment from Site and their return to Contractor’s
home base
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Contract 1999

Risk, Liability, and


Force Majeure

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Contract 1999

Clause 17– Risk and


Responsibility

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Indemnities

Contractor held liable for the following risks

personal injury arising out of the Contractor’s design


and/or execution of the works

damage to property arising out of the Contractor’s


design and/or execution of the works which is
attributable to the negligence, wilful act or breach
of contract of the Contractor or its Personnel
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Contract 1999
Indemnities

Employer will beheld liable for the following risks

Of any negligence, wilful act or breach of the


Contract by the Employer

The matters for which liability may be excluded from


insurance cover, as described in Sub-Clause 18.3
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Contract 1999

Contractor’s Care of the


Works

Until the Taking-Over Certificate is issued

remedying, at its
Works and own risk and cost,
Goods any damage for
which it is
responsible
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Contractor’s Care of the


Works

After the Taking-Over Certificate is issued

any loss or damage


Employer is that arises from an
responsible for the event, prior to the
Works and Goods issue of the
certificates
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Contract 1999
Employer’s Risks

war, hostilities, invasion; rebellion terrorism,


revolution, civil war, riot; munitions of war,
explosive; pressure waves caused by aircraft;
use or occupation by the Employer of any
part of the Permanent Works; design by the
Employer of any part; any unforeseeable
adverse operation of the forces of nature.
Disorder or rioting on the part of the
Contractor which arose from the conduct of
the Works is not an Employer risk.
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Contract 1999
Consequences of
Employer’s Risks

Notice to the
Loss or damage
Engineer

Rectify this loss or


Claim under Clause damage to the
20 the Cost and time extent required by
the Engineer
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Contract 1999
Intellectual and Industrial
Property Rights

The Party receiving the claim has 28 days to notify


the other of the claim.
If no notice is given, right to indemnity is lost.

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Contract 1999
Intellectual and Industrial
Property Rights

Employer must indemnify the Contractor

the unavoidable a result of the


result of the Employer using the
Contractor Works for purposes
executing the not related to the
Works Contract
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Contract 1999
Intellectual and Industrial
Property Rights

Contractor must indemnify the Employer in respect


of any such claim arising out of its design or works

Parties must co-operate together to deal with any


claims that may arise against one of the Parties

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Limitation of Liability

Contractor’s total liability is capped to the sum


stated in the Contract or the Accepted Contract
Amount

There are no limitations on liability in cases of


fraud, or deliberate default or reckless misconduct

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Contract 1999

Clause 18–
Insurance

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Contract 1999
Insurances

FIDIC contracts require the following equivalent


insurances (Clause 18):.

Insurance for Works Insurance against


and Contractor’s Injury to Persons and
Equipment Damage to Property

Insurance for Professional Indemnity


Contractor’s Personnel Insurance
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Insurance for Works and Contractor’s


Equipment (CAR+ Equipment)

Limit: Full Reinstating + Demolition 1.15 of


Contract Price

Validity: Till the Issuance of the TOC and


Performance Certificate

Cover: All loss and damage from any cause not


listed in Sub-Clause 17.3 [Employer’s Risks]
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Contractor’s Equipment

Limit: The full replacement value, including


delivery to Site

Validity: Till it is no longer required

Cover: All loss and damage


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Contract 1999

Insurance against Injury to Persons and


Damage to Property

Limit: As stated in the Appendix to Tender

Validity: Till the issue of the Performance


Certificate

Cover: Any loss, damage, death or bodily injury


which may occur to any physical property
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Insurance for Contractor’s Personnel

Limit: As stated in the Appendix to Tender

Validity: Till the issue of the Performance


Certificate
Cover: liability for claims, damages, losses and
expenses arising from injury, sickness, disease or
death of any person employed by the Contractor’s
Personnel, the Employer, and the Engineer.
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Contract 1999

Professional Indemnity Insurance


For parts designed by the Contractor

Limit: As stated in the Appendix to Tender

Validity: Till the issue of the Performance


Certificate or 10 years of the TOC

Cover: All loss and damage caused by faulty in


design
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Contract 1999

Clause 19 –
Force Majeure

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Notice of Force Majeure

The affected Party shall give notice within 14 days


Force
after the Party Majeure
became shall not apply
aware
to obligations of either Party
to make payments to the
other Party under the
The delivery of a force majeure
Contract notice will excuse the
affected Party from performing its obligations for the
duration of the force majeure event

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Contract 1999
Duty to Minimise Delay

The Parties will work together to minimise any delay


caused by the force majeure event

Notice must be given when the force majeure event


is no longer of any effect

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Contract 1999
Consequences of
Force Majeure

Notice to the
Force Majeure
Engineer

Notice must be given


when the force majeure Claim under Clause
event is no longer of 20 the Cost and time
any effect
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Force Majeure Affecting
Subcontractor

Contractor cannot rely on a broader, force majeure


clause in a sub-contract to claim force majeure relief
against the Employer.

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Contract 1999
Release from Performance
Under the Law

Parties will also be released from performance if

Any irresistible event makes it


impossible or unlawful for the the Governing Law
Parties to fulfil their allows this
contractual obligations
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Contract 1999

Claims, Disputes, and


Arbitration

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Contract 1999

Clause 20
Claims, Disputes
and Arbitration

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Contract 1999

Contractor’s Claim

The Contractor should submit a claim and


particulars.

The Engineer should response within 42 days

The Engineer should


The Engineer should certify sums
make determination acknowledged in respect
of substantiated claims.
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Contract 1999
Claim Procedure 20.1
– No EoT
– No additional payment
Notification
of Claim Engineer to
respond Approve
<42d <42d
<28d Disapprove
Further
particulars
Claim
Event Particulars
Limited EoT and Claim
additional payment Principals
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Contract Management – Variations, Claims, and


Extension of Time

When you will have a Dispute

• When there is a disagreement about the Contract


or the execution of the Works, including any
dispute as to any certificate, determination,
instruction, opinion or valuation of the Engineer
• One Party objected or rejected any of the above
matters.
• The objection was rejected.
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Contract Management – Variations, Claims, and


Extension of Time

Background of Dispute
Resolution

• Before Fidic 1999.


• Engineer’s Decision.
• Time Bar.

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Contract Management – Variations, Claims, and


Extension of Time

Disputes Adjudication Board

• DAB shall be appointed by the dated stated in the


Appendix to Tender.
• DAB to be appointed by the parties.
• DAB is to be one or three members.
• Dispute Adjudication Agreement is to be signed.

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Extension of Time

How to select the DAB


members

• Language.
• Experienced in the field.
• Nationality.
• Will be free.

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Contract Management – Variations, Claims, and


Extension of Time
Types of DAB

Standing Ad- hoc

Construction Plant
Harmonised EPC/Turnkey
DBO

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Contract Management – Variations, Claims, and


Extension of Time
DAB Termination

By the Parties By the DAB

Upon Agreement of
If the Parties or one of
the Parties
them failed to comply
If the Board didn’t
with the DAB
comply with the DAB
Agreement
Agreement Conditions

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Extension of Time

DAB Payment

• The parties are jointly and severally liable for


the DAB member payments.
• Each party is to bear 50% of the costs.
• The payment shall be included in the DAB
agreement.

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Contract Management – Variations, Claims, and


Extension of Time
DAB Payment

• Retainer fee
• Being available on 28 days’ notice
• Becoming and remaining conversant with
the Project requirements.
• The office and overhead expenses.
• Daily fee for preparing reports and ….
• Reimbursement of reasonable costs
• Reimbursement of taxes
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Contract Management – Variations, Claims, and


Extension of Time
Site visits

Interval visits Upon request

At intervals not more Either the Employer


than 140 days. or the Contractor can
Usually quarterly request

The Site visits should be attended by the Employer,


the Contractor and the Engineer
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Contract Management – Variations, Claims, and


Extension of Time

DAB Mechanism

• When a dispute arises, either party may refer to


the DAB.
• DAB members shall make a decision on the
disputed matter.
• Either party shall give its notice of dissatisfaction
within 28 days of receiving the decision, or the
decision will be final and binding.
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Contract Management – Variations, Claims, and


Extension of Time
DAB decision procedure

• The Referral
• Site Visit
• The Response
• The Hearing
• The Decision

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Contract Management – Variations, Claims, and


Extension of Time

Amicable Settlement

• If DPA decision given under Clause 20.4 is


disputed, both parties shall attempt to settle the
dispute amicably.
• Arbitration will be commenced on or after the
fifty-sixth day after the day on which notice of
dissatisfaction was given.
• No need to proof the attempt of amicable
settlement.
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Extension of Time

Arbitration

• If dispute is not settled amicably, and


• The DAB decision has not become final and
binding.
• Then the dispute shall be finally settled by
international arbitration.

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Contract Management – Variations, Claims, and


Extension of Time

• The rules of arbitration shall be decided at the


tender stage.
• Number of arbitrators to be decided at the
tender stage.
• The language and place of arbitration is to be
decided at the tender stage.
• The arbitration decision is final and binding.

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Contract 1999
Arbitration

The Rules of
Language Place
Arbitration

ICC
Appendix to
Tender
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Contract 1999
Dispute Event
<28d
– No EoT N Notification of Y Claim Particulars
– No additional payment Claim 20.1 <42d 20.1
<42d
DAB Decision N
<84d DAB 20.4 Engineer to
20.4 respond – 20.1
N <28d Y
Y
Notification N No notice of
N Parties Accepted
20.4 <28d dissatisfaction Y
Amicable Succeeded Y
Settlement 20.5 56d
Dispute Resolved
Arbitration Y
20.6 N

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Contract 1999

Differences between
1987 Red Book and
1999 Construction
Contract

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Contract 1999
FIDIC 1999

The 1999 editions differ on the basis of the


allocation of design function, the existence of
an Engineer, and the paying methodology.

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Contract 1999
Specific Clauses
The role of the Engineer under Clause 3.l (a)
declares that

"whenever carrying out duties or exercising


authority, specified in or implied by the
Contract, the Engineer shall be deemed to act
for the Employer."

The Engineer is the Employers Personnel


1.1.2.6
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Contract 1999
Specific Clauses

While Clause 3.5 requires the Engineer to


make

“a fair determination in accordance with the


Contract, taking due regard of all relevant
circumstances”

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Contract 1999
Specific Clauses
The replacement of the Engineer's decision
with a Dispute Adjudication Board as the first
step in the dispute process set out in
clause 20
Should substantially reduce the duration of
disputes

Their decisions will have interim binding effect

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Contract 1999
Specific Clauses

Value Engineering is introduced under Clause


13.2

The benefit will be shared between the


Employer and the Contractor at 50-50 %

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Contract 1999
Specific Clauses
Suspension for late payment and late
certification under clause 16.1
Financing charges compounding monthly for
late payment under Clause 14.8
The Employer must comply with a claims
clause (Clause 2.5) and may not make
deductions from sums otherwise certified
and payable, the deduction shall be
determined and certified by the Engineer
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Contract 1999
Specific Clauses

Unforeseeable Physical Conditions at clause


4.12 in the Red and Yellow Books with the
proviso that a claim may be reduced where

"other physical conditions in similar parts of


the Works (if any) were more favourable than
could reasonably have been foreseen when
the Contractor submitted the Tender."
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Contract 1999
Specific Clauses
Sample on-demand bonds are now included
with the conditions

The ability for a Contractor to demand under


Clause 2.4
"reasonable evidence that financial
arrangements have been made and are being
maintained which will enable the Employer to
pay the Contract Price ... "
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Contract 1999
Specific Clauses
Failure to provide claim notices within the 28
days provided by clause 20.1 will prevent the
Claim
Progress reports are required under Clause
4.21 and it is a must for the Payment
Termination for convenience is provided for
at clause 15.5
The Defects Notification Period, as it is now
called, may be extended for up to 2 years
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
Specific Clauses
Force Majeure is broadly defined by clause
19.1
"(a) which is beyond a Party's control, (b)
which such Party could not reasonably have
provided against before entering into the
Contract, (c) which, having arisen, such Party
could not reasonably have avoided or
overcome, and (d) which is not substantially
attributable to the other Party ..."
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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
The Yellow Book

In this lump sum form, the Contractor has to


produce;

"When completed, the Works shall be fit for


the purposes for which the Works are
intended as defined in the Contract"

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
The Silver Book
This is intended as a turnkey form for EPC
and other similar projects where the risk is
placed largely on the Contractor. So clause
4.12 states that

"(b) by signing the Contract, the


Contractor accepts total responsibility for
having foreseen all difficulties and costs of
successfully completing the Works"

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999

Differences between
First Edition 1999 and
Second Edition 2017

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A Practical Guide for Using the FIDIC Conditions of


Contract 1999
From FIDIC Gold Book
• Definitions are in alphabetical Order.
• “Contract Data” instead of “Appendix to
Tender”.
• Clause 17: “Risk allocation” instead of “Risk
and Responsibilities”.
• Clause 18: “Exceptional Risks” instead of
“Insurance”
• Clause 19: “Insurance” instead of “Force
Majour”
• Standing DAB in all books instead of Ad-Hok
DAB in Yellow and Silver Book
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Contract 1999
From FIDIC Pink Book

• Structure of the Particular Conditions


1. Part A – Contract Data
2. Part B – Special Provisions
• Percentage of the Contractor’s Profit; in
Contract Data or 5%

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Contract 1999
From FIDIC Subcontract
2011

• Detailed Programming Requirements

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New Definitions
For More Clarity
• Claim: means a request by one Party to the
other Party for an entitlement or relief under
any Clause of these Conditions or otherwise in
connection with, or arising out of, the Contract
or the execution of the Works.
• Cost plus Profit,
• DAB Agreement
• Daywork Schedule
• Delay Damages
• Dispute
• Employer-Supplied Material
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New Definitions
• Employer’s Risks
• General Conditions
• Joint Venture
• Notice
• No-objection
• Review
• NOD or Notice of Dissatisfaction
• Part
• Programme
• Particular Conditions
• Schedule of Rate and Prices
• Month
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New Definitions
For New Provisions

• Contractor’s Risks
• CV System
• Engineer’s Representative
• Exceptional Events
• Joint Venture Undertaking
• Key Personnel
• Non-Performance Damages
• QM System
• Schedule of Performance Guarantee

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Enhanced Project Management
Tools
• Notices to be identified as such and refer to the
Sub-Clause.
• New provision for Meetings which can be called
by the Contractor or the Engineer and attended
by third parties.
• Both Parties shall keep the contemporary
records for their claims
- Defined as records that are prepared or
generated at the same time or immediately
after the matter occurs.
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Contract 1999
Enhanced Project Management
Tools
• More detailed requirements for the Contractor’s
Programme and the supporting reports,
- Identifying key dates: Commencement Date,
Access to Site,….
- All activities to be logically linked: ES, LS, EF, LF.
- Showing the critical path and float.
- Advance Warning by both Parties and the
Engineer.
• New provision for the Contractor to implement:
- Quality Management System
- Compliance Verification System.
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Role of the Engineer reinforced

• The Engineer shall be:


- Professional Engineer.
- Qualified, experience, and competent.
- Fluent in ruling language.
• New provision for Engineer’s Representative.
• The Engineer shall act neutrally under Sub-Clause
3.7 [Agreement or Determination].
• Time bar for the Agreement and the
Determination.
• Variations by the Engineer’s Instruction only.
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Balanced Risk Allocation


• Maintained the Risk Allocation in FIDIC 1999.
• Confidentiality: expressly stating that both
Parties has obligations to keep the information
and documents as private and confidential.
• Employer’s Claim: Similar Notice and detailed
particulars time bar
• Performance Security:
 Provision of reducing or increasing the
Security for a change more than 20%.
 Clarifying when and how the bond will be
called.
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Other Provisions

• Contractor’s Key Personnel, shall be specified in


the Employer’s Requirement and will be replaced
after obtaining the Engineer’s consent.
• Notice to Correct, more detailed requirement to
be stated in the notice; the Contractor shall
propose the remedial actions.
• Payment after termination for the Contractor’s
default included the Delay Damages.
• Limitation of Liability and specifying the liabilities
of each Party.
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Claims and Disputes
Claim is not a Dispute
• Clear Definition for the Claim and the Dispute.
• Presented in two separate Clauses.
• Bothe procedures are clarified to have more
clarity and formality.
• The Contractor and the Employer has one Claim
procedure and time bar to deal with their Claims.
• Clarification of the Engineer’s Role in
 Mediation to reach an Agreement.
 Determination.
 Clear time bar for the Agreement and the
Determination.
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Claims and Disputes

• For Disputes: A standing DAB in all FIDIC Books.


• DAB decision is binding bot not final
• Enhancing the DAB’s role in dispute avoidance by
providing a provision for both Parties to
approach the DAB for informal discussion which
is not binding on both Parties and the DAB’s
members.
• No disputes will be declared or informally
discussed with the DAB during the Engineer’s
Agreement or Determination.

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Thank You

Asel El Housan
B.Sc., MBA, Dipl PM, ACIarb,
Arbitrator, CMC Certified
Mediator, Expert Witness
FIDIC Certified Trainer
FIDIC Affiliate member
FIDIC TG9 Member
Asel.Housan@aehconsultancy.com
AEH Consultancy
+44 7427 668859
+971 50 446 8548
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