FIDIC Training

FIDIC – Module 1

In cooperation with

Muscat, 25th and 26th September 2011

Trainer:
Rechtsanwalt Dr. Götz-Sebastian Hök

[email protected]
© Axel Volkmar Jaeger & Dr. Götz-Sebastian Hök
INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 1

Dr. Hök
•! defends the interests of clients in cross-border
relationships
–! in particular in the international construction field
•! is specialised in international litigation
•! speaks French, English and German
–! is a licensed FIDIC trainer
–! is a listed Adjudicator
–! is an arbitrator
–! is a lecturer at Berlin University of applied science

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 2

Dr. Götz-Sebastian Hök graduated in and articles in French, English and

Law from Göttingen University and German on FIDIC forms of contract.
is a German solicitor registered at He is a co-author of the book FIDIC
the Berlin Bar. He has extensive for Practitioners and member of
international project and commercial the German Dispute Adjudication
experience gained while working in Assessment Panel and former past
Europe, the Middle East, Africa and Chairman of Eurojuris Commission
Asia. For the past 20 years he has International Litigation. He was also
been partner and senior partner of a friendly reviewer of the FIDIC Gold
Dr. Hök, Stieglmeier & Kollegen. Dr. Book and the FIDIC Subcontract
Hök is acting as arbitrator, form. Dr. Hök has broad forensic
adjudicator and legal counsel and experience as a counsel. He was
also a licensed FIDIC trainer. He is involved in projects in Algeria,
a lecturer at Berlin University of Angola, Australia, Azerbaijan,
applied science for construction Belgium, Bosnia, Cameroon, Chile,
contract management law. Since England, France, Germany, Ghana,
2009 he is a FIDIC listed Laos, Latvia, Qatar, Poland,
Adjudicator. He was member of Romania, South Africa, Syria,
DAB and arbitral panels in Bosnia, Turkey, United Arab Emirates and
Germany, Latvia, Mali and Poland. Vietnam.
Dr. Hök has written various books

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 Special Appointments •! ACET Training on FIDIC July
(Dr. Hök) 2011
•! Speaker DRBF Conference
•! Member of the German VBI Sao Paulo, May 2011
assessment panel for the •! Speaker FIDIC-ICC
German FIDIC Adjudicator´s Conference Sao Paulo, June
List (2005 – 2010) 2011
•! Member of the Assessment •! Speaker IBF FIDIC Conference
Panel for the assessment of Far East 2011
FIDIC Adjudicators in Japan •! Member of FIDIC Trainers´
(2010) Assessment Panel
•! ADB Training on FIDIC in June •! Member of FIDIC Design &
2009 (New Delhi) Build Task Subcontract Group
•! ACEB Training on FIDIC in •! Member of FIDIC ODB Task
February 2010, April 2011 Group

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 4

FIDIC Training Module 1

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 5

World Trade Center 2

To be the recognized Box 311
global voice for the CH-1215 Geneva
consulting engineering Switzerland
industry
Tel: +41 22 799 49 00
To promote the business Fax: +41 22 799 49 01
interests of suppliers of
technology-based
intellectual services [email protected]
for the built and natural www.fidic.org
environment

Fédération Internationale des

Ingénieurs - Conseils

International Federation of
Consulting Engineers

Dr. Götz-Sebastian Hök

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 6

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 Member Associations

representing more than 1,5 million

professionals in 86 countries
Dipl.-Ing., Dipl.-Wirt.-Ing. Axel-V. Jaeger
INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 7

Member Associations
Algeria, Botswana, Cameroun, Congo, Egypt, Ethiopia, Ghana, Guinea,
Kenya, Lesotho, Lybia, Malawi, Mali, Mauritania, Mauritius, Morocco,
Namibia, Nigeria, Senegal, South Africa, Sudan, Swaziland Tanzania,
Tunisia, Uganda, Zambia, Zimbabwe

Argentina, Barbados, Bolivia, Brazil, Canada, Cayman Islands, Chile,

Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Honduras,
Mexico, Netherlands Antilles, Paraguay, Peru, Suriname,
Trinidad and Tobago, Uruguay, United States, Venezuela
Australia, Bangladesh, Brunei, Bahrain, China (PRC, Taiwan, Hong Kong),
India, Indonesia, Iran, Japan, Korea, Malaysia, Mangolia, Nepal, New
Zealand, Pakistan, Papua New Guinea, Philippines, Saudi Arabia,
Singapore, Sri Lanka, Thailand, Vietnam
Albania, Austria, Azerbaijan, Belarus, Belgium, Bosnia, Bulgaria, Croatia,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Israel, Italy, Kazakhstan, Latvia,
Lithuania, Luxembourg, Malta, Montenegro, Netherlands, Norway, Poland,
Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, Ukraine, United Kingdom, Uzbekistan
Dipl.-Ing., Dipl.-Wirt.-Ing. Axel-V. Jaeger
INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 8

Principles
Quality services High standards
Value for the client Performance
Cost efficiency Know how
Impartiality Integrity

Best practice Selection by ability

Standard contract documents Quality of proposals
Policies and guidelines Skills and experience
Fair allocation of risks and Fair remuneration
responsibilities

Sustainability Capacity building

Long-term perspective International co-operation
Respect for the environment Training and transfer of know-
Project-level focus how
Manuals

Dr. Götz-Sebastian Hök

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 Activities
Annual conferences Publications
Provide a meeting place for clients, Establish best practice procedures
contractors and consultants involved Publish Contracts for the
in development infrastructure industry

International agencies Training

Keep the consulting engineering Capacity building for the
industry’s concerns on the agenda consulting industry in both
Strategic partnerships developed and developing
economies
Liasion
Maintain communication between www.FIDIC.org
members, committees and Distribute updated information
other organizations and services to members
and society

Dr. Götz-Sebastian Hök

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 10

FIDIC Conditions of Contract

CLEAR, COHERENT
Works Contracts - Advantages Essential clauses.
Detailed definitions.
Consistent structure.
FAIR, EQUITABLE
Risk allocated to party best placed to
control it, bear it, and deal with it.
THIRD PARTY
Drafted by consulting engineers who
design and manage projects.
COMPLETE, FLEXIBLE
Range covers most needs.
Readily adaptable to fit requirements.
RECOGNISED
Positive FIDIC image.
World-wide acceptance
Tested for 50 years.

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG

COMMITTEES
CONTRACTS
Draft standard international CONTRACTS
AGREEMENTS between EMPLOYER and CONTRACTOR
Draft model AGREEMENTS
BUSINESS PRACTICE between CLIENT and CONSULTANT
Prepare publications on: or between Consultants
BEST practice
RISK management
LIABILITY
INTEGRITY management
QUALITY management
SUSTAINABLE development
TASK FORCES
CAPACITY BUILDING
Analyse current issues
Prepare training materials Liaise with organisations
based on the GUIDE TO Help manage FIDIC affairs
PRACTICE
and organise training
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events Hök
Dr. Götz-Sebastian INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG

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 FIDIC Training Module 1
GAMA EFCA Member Firms

FEPAC ASPAC Member Association

Executive
General Assembly
Regional Group Committee
Meeting
Meeting

Secretariat
Book Shop Auditor Committee

Task Group

Forum
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FIDIC Training Module 1

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FIDIC Training Module 1

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 FIDIC Training Module 1

FIDIC Executive Committee, FIDIC Contracts Committee

Result Result

Consulta tion
BIMS BIMS
Con sultation

Business Integrity Management System

OECD, Transparency International and others

Organisation for Co-operation and Development

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Kanzlei Dr. Hök,

Stieglmeier & Kollegen

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FIDIC Training Module 1

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 FIDIC Training Module 1

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FIDIC Training Module 1

Consultant
design

Contractor
design

Various formats Uniform format

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FIDIC Training Module 1

Guide
published 2001

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 FIDIC Training Module 1

MDB Multilateral Development Bank

Harmonised Edition

published May 2005

Adjustment March 2006
Adjustment March 2007

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FIDIC Training Module 1

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FIDIC Training Module 1

STRAIGHTFORWARD EMPLOYER yes

PROJECT yes DESIGN
no

Fixed price - lump sum CONTRACTOR DESIGN

Little employer involvement Plant and/or high
no
No major unforeseen risks unforeseen risks
yes yes
DISCUSS IN DETAIL
Employer’s requirements
with the Contractor, and
negotiate a modified
FIDIC contract

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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 FIDIC Training Module 1

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FIDIC Training Module 1

For subcontracting currently and quite often the

FIDIC Green Book is used:
Short Form
of Contract
( Green Book )

Conditions of Subcontract
for Construction 32
Dr. Götz-Sebastian Hök
INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG

FIDIC Training Module 1

published 1999

Standard Bidding
Document of the
World Bank

Dr. Götz-Sebastian Hök

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 FIDIC Training Module 1

THE NEW GREEN BOOK

Conditions of Short Form of Contract
Intended for engineering and building work of relatively small capital value.
Suitable for fairly simple or repetitive work or work of short duration without the need
for specialist sub-contracts.
Contract comes into effect upon ( when Employer signs the Acceptance of the offer/
tender ) receipt of the Agreement by the Contractor
No reference to ‘ the Engineer ’, Employer must nominate a spokesman or may
appoint a representative
The Works shall be designed by the Contractor to the extent as specified in the
Appendix
No advance payment, Interim Payments in accordance with the value of Works
executed, retention percentage stated in the Appendix
Resolution of Disputes: provision for amicable settlement, local adjudication,
appointment peferably from outset, but can be only after dispute occurs. Arbitration

Dr. Götz-Sebastian Hök

INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 34

FIDIC Training Module 1

Subcontract Conditions :
Conditions of Subcontract are
intended for use with main
contracts for works,
becoming updated consistent
with the update of the
Rainbow Edition 1999 and
the new FIDIC form for
Design, Build and Operation
GB
Dr. Götz-Sebastian Hök
INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WORLD TRADE CENTER – GENEVA – SWITZERLAND – WWW.FIDIC.ORG 35

FIDIC Training Module 1

Dr. Götz-Sebastian Hök

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 FIDIC Training Module 1

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FIDIC Training Module 1

Forms and content: Yellow Book

Content

Guidance for the

General
Preparation of
Conditions
Particular Conditions

Dispute Adjudication Procedural Rules

Agreement
Letter of Tender

Guarantee Forms
Appendix to Tender

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FIDIC Training Module 1

Forms and content

Content: General Conditions

1. General Provisions
2 The Employer 11 Defects Liability
3 The Engineer 12 Tests after Completion
4 The Contractor 13 Variations and Adjustments
5 Design 14 Contract Price and Payment
6 Staff and Labour 15 Termination by Employer
7 Plant, Materials and Workmanship 16 Termination by Contractor
8 Commencement, 17 Risk and Responsibility
Delays and Suspension 18 Insurance
9 Tests on Completion 19 Force majeure
10 Employer´s Taking Over 20 Claims, Disputes and Arbitration

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Forms and content

Content: the Guide

Recommandations:
Confidential details
Risk reallocation as to
physical conditions
Management Meetings
Contractor´s equipment
Collection of Liquors and drugs
recommendations and
advice etc.
Advice:
Penalties and treatment
Decennial Liability
etc.

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FIDIC Training Module 1

Forms and content: Red Book

Content

Guide for the

General Conditions Preparation of
Particular Conditions

Dispute Adjudication Procedural Rules

Agreement
Letter of Tender

Guarantee Forms
Appendix to Tender

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FIDIC Training Module 1

Forms and content

Content: General Conditions

1. General Provisions
2 The Employer 11 Defects Liability
3 The Engineer 12 Measurement and Evaluation
4 The Contractor 13 Variations and Adjustments
5 Nominated Subcontractors 14 Contract Price and Payment
6 Staff and Labour 15 Termination by Employer
7 Plant, Materials and Workmanship 16 Termination by Contractor
8 Commencement, 17 Risk and Responsibility
Delays and Suspension 18 Insurance
9 Tests on Completion 19 Force majeure
10 Employer´s Taking Over 20 Claims, Disputes and Arbitration

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Forms and content

Content: The Guide

Recommendations:
Confidential details
Risk reallocation as to
physical conditions
Management Meetings
Collection of Contractor´s equipment
recommendations and Liquors and drugs
advice Lump sum
Advice:
Penalty treatment
Decennial liablity
etc.

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FIDIC Training Module 1

Guidance

The Guide comprises

–!various recommendations for the
preparation of Particular Conditions on
a clause by clause basis.
•! Management Meetings (additional Sub-Clause 3.6)
•! Measurement, if necessary (see Clause 14)
•! Bill of principal quantities of the Permanent Works (the
"BPQPW")
•! Etc. If merely a limited
number of different
kind of work is required

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FIDIC Training Module 1

Annexes
The Annexes: Contract Agreement

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Annexes

Annexes

Letter of Tender
Appendix to Tender
Dispute Adjudication
Agreement
Guarantee Forms

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FIDIC Training Module 1

Annexes
Annexes

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FIDIC Training Module 1

Annexes
annexes

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Annexes
Bank securities

Parent Mother
Guarantee

Tender Security

Performance Security

Performance Bond

Advance Payment
Guarantee
Retention Money
Payment Guarantee
Guarantee
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FIDIC Training Module 1

subgrade embankment

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FIDIC Training Module 1

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 FIDIC Training Module 1

•! A word is not a crystal, transparent and

unchanged, it is the skin of a living thought,
and may vary greatly in color and content
according to the circumstances and the time
in which it is used.

Oliver Wendell Holmes

•! one of the historic great Supreme Court Justices

see Lamar v. United States, 240 U. S. 60, 240 U. S. 65

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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Anglo saxon legal language

–! Remember that FIDIC Conditions have their

roots in Common Law
•! Most terms derive from anglo-saxon legal terms;
–! being however sometimes strongly influenced by
French vocabulory: Force Majeure
•! Various concepts shall therefore be explained
against its Common Law background
•! Quite often a mere/only literal translation is not
sufficient in order to understand FIDIC Conditions

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FIDIC Training Module 1

Liquidated damages
v. penalties
Legal background Common law
Substantial completion
v. acceptation
Implied Definitions Reasonable/Shall

Defects Notification
Definitions
Period

Context To give notice

Way
of
working Check
Identify Check Check
Legal
term definitions context
background

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FIDIC Training Module 1

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Common Law v. Civil Law (key terms)

–! Substantial completion v. acceptance

Completion
Contractor Employer
= substantial completion

Remedy
Completion
of defects

Discharge

Remedy Defects
Completion
of defects Liability
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FIDIC Training Module 1

Common Law v. Civil Law (key terms)

–! Substantial completion v. acceptance

Remedy
Contractor Completion Employer
of defects

Remedy Defects
Completion
of defects Liability
Discharge

Taking Perfor-
acceptance
Over mance
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FIDIC Training Module 1

Common Law v. Civil Law (key terms)

–! Defects Notification Period v. legal defects

liablity
Defects Notification ( warranty )
Period

Remedy Defects
Completion
of defects Liability

Taking Perfor-
Over mance

Garantie de parfait achèvement

Droit
Garantie de bon fonctionnement
français
Décennale

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Common Law v. Civil Law (key terms)
–! Delay Damages v. Pénalities

Common Liquidated Pre-estimated

Law Damages amount of damages

Droit Condition
Penality
français in terrorem

•! French and Belgium Law have never recognised an understanding of penalties other than
that of a genuine estimate of damages.
•! The Algerian Civil Code also rejects the idea of a condition in terrorem.
•! However in France
–! the existence of damage is not necessary for that a penalty clause applies; a penalty is an agreement by which
somebody promises to do something in the event he fails to perform. It applies because of the failure only (3e CIV.
- 20 décembre 2006. BICC n°659 du 15 avril 2007)
–! article 1152 Civil Code provides for the possibility that the judge may readjust the contractual amount if he
considers that this amount appears manifestly excessive.
–! the penalty clause applies without knowing whether the plaintiff has incurred loss or not (Cass. 3e civ., 20 déc.
2006), JCP N 2007

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FIDIC Training Module 1

Common Law v. Civil Law (key terms)
–! Time for Completion v. fixed delay

•! The concept of „Time for Completion“ must be explained in

conjunction with of the anglo-saxon concept of „liquidated
damages“
•! The concept of „Time for Completion“ presupposes that „time is of
the essence“, meaning that a the works shall be completed within a
specific time.
•! If the Contractor fails to complete the works within Time for
Completion the delay damages clause applies notwithstanding the
fact that the failure is not attributable to the Contractor.
•! However, if the Employer has caused the delay English law makes
„time at large“, which means that the Employer looses its entitlement
to „delay damages“.
•! In order to avoid the defence „time at large“ the contract shall
provide for a clause which entitles the Contractor to extension of
Time for Completion.

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FIDIC Training Module 1

Common Law v. Civil Law (key terms)

–! Time for Completion v. Fixed delay

•! Hence, all anglo-saxon model forms of contract
provide for EOT clauses.
•! Thus EOT clauses protect the Employer´s
entitlement to „delay damages“.
•! The Contractor´s will have the benefit of
extension of Time for Completion the effect of
which is that he avoids the payment of „delay
damages“ if he fails to complete the works within
the agreed Time for Completion.

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Extension of Time (SCL Delay and Disruption

Protocol : October 2002 )
The Extension of Time serves both Parties, the
Employer as well as the Contractor and represents
quasi a win-win-position.
Employer’s benefit: that it establishes a new contract
completion date, and prevents time for completion of
the Works becoming ‘at large‘.
Contractor’s benefit: to relieve the Contractor of
liability for damages for delay for any period to the
extended contract completion date.

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FIDIC Training Module 1

The System of the Extension of Time for Completion

and Liquidated Damages as a win-win-position :
‘ time is of the essence ‘
Time for Completion Delay Damages

Extension of Time " time at large "

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FIDIC Training Module 1

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 FIDIC Training Module 1

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FIDIC Training Module 1

Common Law v. Civil Law (key words)

–! Time for Completion v. fixed delay
Completion
Letter Taking Over
of Acceptance
Base
Date
Time for Completion for the Works Delay damages

8.1 10.1 10.1

Commencement Event EOT

Event EOT
Event EOT
access to
the site
(App.to Tender)

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FIDIC Training Module 1

Common Law v. Civil Law (key terms)

–! Engineer v. Employer´s agent

•! For example in French law the role of the Maître
d´Oeuvre (employer´s agent) has been specified
by a special Law referred to as the Loi MOP.
•! The Engineer as referred to in Clause 3 of the
General Conditions shall not be confused with the
role of an employer´s agent.
•! The Engineer plays a role which is merely based
on the Contract which provides for his authorities
and obligations towards both Parties of the
construction contract.

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 FIDIC Training Module 1

The Engineer

Engineer

Contractor

Powers of Engineer
Contractual Relations
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FIDIC Training Module 1

Consultant
shall perform
Services

Contract
Instruction
administration

Determination

Certification

Valuation
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FIDIC Training Module 1 Conditions of Contract

organisational
chart
RB/YB
Employer

Engineer

Contractor

Design / Planning
Dispute Adjudication Board
Build / Construction

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 FIDIC Training Module 1

Contract
Instruction
administration

Determination

Certification

Valuation
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FIDIC Training Module 1

Even Continue working Give notice Particulars Determination

t
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FIDIC Training Module 1

Delay caused Employer´s

EOT
by Employer Risk
Cost caused Employer´s
Cost
by Employer Risk
Breach of Employer´s
Profit
Contract Risk
Legal
Claims
Delay caused Employer´s
EOT
by Employer Risk
Cost caused Employer´s
Cost
by Employer Risk
Breach of Employer´s
Profit
Contract Risk

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FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

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 FIDIC Training Module 1

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FIDIC Training Module 1

•! What is the function of law?

–! All determinations and decisions shall be
made with due regard to all relevant
circumstances
•! All circumstances shall be reported:
–! FIDIC ensures a complete documentation
»! by monthly reports (Sub-Clause 4.21)
»! by early warnings (Sub-Clause 8.3)
»! by claim notices and appropriate substantiation
»! by the programme (Sub-Clause 8.3)
»! by additional notice requirements in various other
Sub-Clauses

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FIDIC Training Module 1

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 FIDIC Training Module 1

•! What is the function of law?

–! A FIDIC contract shall be read in
conjunction with the proper law of the
contract which stipulates default rules,
provides for interpretation guidelines and
legal concepts which should be respected.
•! However this shall not mean that FIDIC based
contracts should be read without taking in
account which sense draftsperson have
conveyed to a particular clause or which type of
concept has been used by the draftsperson!

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FIDIC Training Module 1

•! What is the function of law?

–! The proper law of the contract
–! provides for gap filling provisions, in particular
»! default rules (such as Civil Code provisions, case law
as to breach of contract etc.)
»! references to good faith, usages and customs
»! references to tribal and religious rules (e.g. islamic
principles)
»! implied terms (such as fit for purpose)
–! provides for construction rules
»! plain meaning of words
»! contra proferentum rule
»! extrensic evidence rule & merger rule
»! ejusdem rule

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FIDIC IBC User´s Conference 2009

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FIDIC IBC User´s Conference 2009

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FIDIC General Conditions

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FIDIC IBC User´s Conference 2009

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 FIDIC IBC User´s Conference 2009

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FIDIC General Conditions

Recovery of claims: Meaning of „claim“
Comparative study
–! The German approach is such that it is believed that there is a
claim (Anspruch) if the facts prove the existence of it
•! At court the claimant must show evidence for the claim
–! (1) submit substantiated facts
–! (2) submit evidence for it if contested
–! The English approach is that there is a claim if somebody
asserts that he is entitled to something,
•! (even though the facts show that there is no entitlement at all)
subject to further ascertainment or determination
–! Thus one could say that the term claim management is
ambiguous: Under English law it means to manage assertions
of entitlements whilst under German law a claim manager deals
with existing claims which are enforceable.

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FIDIC IBC User´s Conference 2009

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FIDIC IBC User´s Conference 2009

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FIDIC IBC User´s Conference 2009

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FIDIC IBC User´s Conference 2009

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 FIDIC IBC User´s Conference 2009
Recovery of claims
FIDIC claims (Civil Law)
–! It has been submitted that time bar provisions contradict with Civil law
prescription stipulations (limitation rules)
•! However, for this to be a valid objection it must be checked whether the
relevant set of rules as to prescription is mandatory or not.
–! It has been argued that the Qatari Civil Code is mandatory:
»! Actions arising from obligations prescribe in fifteen years except for
cases for which the law prescribes a different period such as the
following articles" (Article 403, New Qatar Civil Code).
•! It should be taken in account that time bar rules have a different purpose
than limitation rules.
–! There is authority for the view that „Contractual terms requiring a contractor to
give prompt notice of delay serve a valuable purpose. Such notice enables
matters to be investigated while they are still current. Furthermore such notice
sometimes gives the employer the opportunity to withdraw the instructions
when the financial consequences become apparent“.
»! Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Ltd (No. 2) [2007]
EWHC 447 (TCC) (06 March 2007)
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FIDIC Training Module 1

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FIDIC Training Module 1

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 FIDIC Training Module 1

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FIDIC Training Module 1

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FIDIC Training Module 1

•! I. Pre-Tender and Tender Stage

–! At pre-tender stage and tender stage
various forms of bribery may occur
•! Design stage
•! Pre-qualification
•! Tendering
•! Tender Assessment

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 FIDIC Training Module 1

•! I. Pre-Tender and Tender Stage

•! The 1994 Tendering Procedure presents a
systematic approach for tendering and
awarding of contracts for international
construction projects. The Procedure covers:
»! 1.0 Project Strategy (Establishment of
Procurement Method and Form of Tendering)
»! 2.0 Prequalification of Tenderers
»! 3.0 Obtaining Tenders
»! 4.0 Opening of Tenders
»! 5.0 Evaluation of Tenders
»! 6.0 Award of Contract

10
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FIDIC Tender Procurement Procedures

Update Procurement Procedures
‘user-friendly‘ Guide Book
including:
Development of Project Strategy
Procurement Management
FIDIC Contract Types described
( incl. Design, Build and Operate )
Prequalification
Tendering Procedure
Appendices giving more detailed
guidance ( incl. Flow Charts )
Dipl.-Ing., Dipl.-Wirt.-Ing. Axel-V. Jaeger
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FIDIC Tender Procurement Procedures

•! takes account not only of the publication of new FIDIC
forms of contract but also of the gradual introduction
and widening acceptance of novel approaches to the
procurement of engineering projects, including new
methods
of contract management and implementation,
•! early chapters give essential guidance on the underlying
concepts and philosophy of projects in the broadest sense,
to the point where a contract type is chosen,
•! the guide provides up-to-date detailed guidance on each
step in the tendering processes, complemented by
sample documents covering such matters as expressions
Dipl.-Ing.,of interest,
Dipl.-Wirt.-Ing. prequalification,
Axel-V. Jaeger and instructions to tenderers. 7
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 FIDIC Tender Procurement Procedures
Proposed Contents :
1.! Introduction
2.! Basic considerations
3.! Developing a project strategy
4.! Management of procurement
5.! Contract types
6.! The project strategy
7.! Prequalification of tenderers: Consultancy services appointments
8.! Prequalification of tenderers: Contracts for works
9.! Obtaining tenders: Consultancy services appointments
10.!Obtaining tenders: Minor works contracts
11.!Obtaining tenders: Construction contracts
12.!Obtaining tenders: Plant and Design-Build contracts
13.!Obtaining tenders: EPC/Turnkey contracts
14.!Obtaining tenders: Dredging and reclamation works
15.!Obtaining tenders: Design, Build and Operate Projects
16.!Receipt and opening of tenders
17.!Tender evaluation and recommendations:
Award of consultancy services appointments
18.! Tender evaluation and recommendations:
Award of contracts for works
19.! Contract awards
Appendices
Dipl.-Ing., Dipl.-Wirt.-Ing. Axel-V. Jaeger
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FIDIC Training Module 1

•! II. After contract award

Contract Administration procedures

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FIDIC Training Module 1

Start
Notice of Commencement Date

Progress of the Actions of the

Contractor Contractor
Commencement of Early Warning, Cl. 8.3 Access to the Site?, Cl.
Execution, Cl. 8.1 2.1
Submission of Notice of Claims, Cl. Drawings?, Cl. 1.9
Programme, C. 8.3 20.1
Progress Reports, Cl. Others
4.21
Notice when work is Application for Payment, Interim & Final
ready, Cl. 7.3 Cl. 14 Statements
Agreement as to time Engineer shall give notice of Testing procedure, Cl.
and place for testing, 7.4 intention to attend 7.4

Contractor shall forward Engineer shall endorse certified

certified test results results
Ready for Tests Notice for Tests, Cl. 9.1 Testing procedure

Ready for Taking-Over Ready for Taking-Over

Expiry of Defects Issue of Performance

Notification period Certificate, Cl. 11.9 108
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 FIDIC Training Module 1

•! II. After Contract Award (Procedures)

–! Payments shall be made in accordance with
Clause 14
–! Instructions shall be given according to Clause 3
–! Variations shall be instructed in accordance with
Clause 13
–! Claims shall be settled in accordance with Sub-
Clauses 3.5, 20.1, 2.5
–! Defects shall be made good in accordance with
Sub-Clauses 7.6, 11.1
–! Evaluation shall be made in accordance with
Clause 12 RB

10
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FIDIC Training Module 1

•! II. After Contract Award (Documentation)

–! The Contractor shall submit a Programme
–! The Contractor shall submit monthly reports
–! The Contractor shall submit records of his
Personnel and Equipment
–! The Contractor shall give early warnings
–! The Parties shall give notice of a claim
–! The Contractor and the Engineer shall keep
contemporary records with regard to all claims

11
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FIDIC Training Module 1

•! II. After Contract Award (Documentation)

Monthly report
4.21
Monitoring

Future possible Contemporary

Contractor Event Engineer
event records

Personnel &
Equipment

Employer Claim Notices

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 FIDIC Training Module 1

•! Reporting

Legal requirements

Monthly reports
Engineer
takes regard
Con- Early warning of all
tractor relevant
circumstances
Contractor´s Personnel

Claims

Preliminary notices

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FIDIC Training Module 1

•! II. After Contract Award (Engineer)

–! The Engineer shall determine Claims and
other relevant matters
–! The Engineer shall inspect the Works
–! The Engineer shall issue Payment
Certificates
–! The Engineer shall issue Taking-Over and
Performance Certificates

11
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FIDIC Training Module 1

•! II. After Contract Award (Quality)

–! The Works will be tested according to Sub-
Clause 7.4
–! Testing specifications shall be included in
the Contract
–! A special Defects Notification Period
ensures that all defects will be remedied
just in time

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FIDIC Training Module 1

Amicable
Settlement

Interim
Claim Notice Substantiation
or final

Determination
by Engineer
Time line
Notice
28 days

42 days
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FIDIC Training Module 1

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FIDIC Training Module 1

The Engineer is appointed to …

Determine Self-Binding DAB

Instruct Self-Binding DAB

Certify payments Correction Engineer

Determine Self-Binding DAB

Instruct Self-Binding DAB

Certify payments Correction Engineer

11
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FIDIC Training Module 1

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FIDIC Training Module 1

Engineer

Contractor

Powers of Engineer
Contractual Relations
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FIDIC Training Module 1

White
Where the Services a) have due regard to the third party contract
include the provided that the details of such powers
and duties are acceptable to him and
exercise of
agreed in writing where they are not
Book powers or
performance of
described in Appendix 1 (Scope of
Services);
duties authorised b) if authorised to certify, determine or exercise
or required by discretion do so fairly between the Client
the terms of a and third party not as an arbitrator but as
contract between an independent professional exercising his
Clause 3.3.2 the Client and judgement with reasonable skill, care and
diligence; and
any third party,
the Consultant c) if so authorised vary the obligations of any
4. Auflage third party, subject to obtaining the prior
may: approval of the Client to any variation
which can have an important effect on
costs or quality or time (except in any
emergency when the Consultant shall
inform the Client as soon as practicable

Due skill and care

Normal, additional and exceptional services
Scope of Services
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 FIDIC Training Module 1

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FIDIC Training Module 1

Chart: Actions of the Engineer (FIDIC Red Book)
Start A new event becomes apparent

List of events, Cl. 8.6, 8.3, 1.5,

Which kind of 9.1 etc. to be established
event?

Actual progress is too slow to complete within the

Time for Completion (Cl. 8.6) or a Variation seems
List of actions to be to be appropriate (Cl. 13.1 ff.)
established
A claim has been notified by the Contractor or the
Employer
Determination of a claim (Cl. 3.5) Application for Payment (Cl. 14)
To approve, certify (Cl. 20.1, 14, 13.2)
The Contractor gives notice of the date after which
Instruction (Cl. 1.5, 13.1, 7.6 etc.) the Contractor will be ready to carry out Tests on
Completion (Cl. 9.1)
To examine, to inspect, to test, to
measure (Cl. 3.1) C gives notice that work is ready (Cl. 7.3) etc.

Request of proposal (Cl. 13.3) Contractor submits a proposal (Cl. 13.2, 13.3)

Action of the Engineer A defect appears or a damage occurs (Cl. 11.1) or

work is not in accordance with the Contract (Cl.
Finish 7.6) etc.
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FIDIC Training Module 1

Actions of the Contract Interpretation Cl. 1.5 with conse-

Engineer quence of variation

Quality of Works and Cl. 7.4, 7.6, 9.4,

Workmanship 11.1, 11.3, 11.4
List of actions to be
established Payment Certification Cl. 14

•!Approval Taking-Over Cl. 10

•!Check
•!Certificate
•!Consent Variations Cl. 13
•!Determination
•!Disapproval
•!Examination
•!Inspection Cost Management White Book
Cl. 13.2
•!Instruction
•!Notice
•!Proposal Time Management Cl. 8.3, 8.6, 8.1
•!Request
•!Suspension
•!Test Claim Determination Cl. 2.5, 3.5
•!Valuation

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 FIDIC Training Module 1

•! V. Effects of Engineer´s actions

–! All determinations of the Engineer are
temporarily binding (3.5)
–! The Contractor shall comply with the
instructions given by the Engineer (3.3)
–! The DAB has power to open up, review
and revise any certificate, determination,
instruction, opinion or valuation, relevant to
the dispute
–! The arbitral panel may open up, review and
revise any decision of the DAB
12
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FIDIC Training Module 1

Settlement by
Agreement

Notice
Referral Interim
Dispute of Intention
to refer Dispute to DAB or final
to DAB

Nomination
Decison
28 days by DAB

Time line

no delay no delay 84 days

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FIDIC Training Module 1

FIDIC Dispute Resolution Stages

Dispute Sub-Clause 20.4

DAB Procedure 20.2, 20.4

Decision 20.4

Amicable Settlement 20.5

Arbitration 20.6, 20.7

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Engineer

Determination Rejection Nomination DAB

Yellow Book
–! Rejection by the Engineer
–! Then: Notice of Intention to refer dispute to DAB and then referral
to DAB and decision by DAB, if there is any dispute
–! Notice of intention: No delay
Yellow Book
•! No permanent DAB existing, to which a dispute can be referred at any
time, but there is an option to provide for a permanent DAB

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FIDIC Training Module 1

Engineer
Permanent
DAB

Nomination
Determination Rejection DAB
if necessary

Red Book
–! Rejection by the Engineer
–! Then: Referral to DAB and decision by DAB, if there is a dispute
–! Referral: no delay
Red Book
•! Permanent DAB exists, to which may be involved at any time,
(Attention, quite often the appointment of the members of the DAB
has been omitted)

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FIDIC Training Module 1

Engineer
Permanent
DAB

Nomination
Determination Rejection DAB
if necessary

Certificate …,
DAB Decision Decision on the merits
Determination
No appeal

Red Book
–! Procedural Rules, Annex Cl. 8 (h): The DAB is empowered to „open up,
review and revise any certificate, decision, determination, instruction,
opinion or valuation of the Engineer, relevant to the dispute“

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 FIDIC Training Module 1

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I. Rights and Duties (Overview)

Approach to contractual rights and duties under FIDIC

1.! Step one: Choice of forum
2.! Step two: Choice of law
3.! Step three: Offer and acceptance
4.! Step four: What terms are in the contract?
5.! Step five: Enforceability
6.! Step six: Risk allocation
7.! Step seven: Remedies for breach

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subject
to the
proper law
of contract

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subject
to the
proper law
of contract

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subject
to the
proper law
of contract

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subject
to the
proper law
of contract

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Risk allocation Case

–! (Thiess Services v. Mirvac QLD [2006] QCA 50)
–! The owner intended to develop the Site for residential and
commercial use.
–! He was unable to do so because the Site was listed on the
Environmental Management Register (listing contaminated land
under the local Environmental Act).
–! Hence the owner prepared a Remediation Action Plan (RAP)
prescribing a method of remediation which –if followed- would
result in the Site being removed from the Register.
–! The owner entered finally into a remediation Contract with the
Contractor.
–! Once on the Site the Contractor discovered far more contaminated
water than expected resulting in additional work including
additional support and longer sheet pile walls than expected.
–! The Contractor shows evidence for a claim amounting to ! 2 Mio
of additional Cost.

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Rights and Duties of the Parties

II. Rights and Duties of the Employer

1.! Duty to cooperate

2.! Obligation to provide the design
3.! Access to and Possession of the Site
4.! Financial arrangements
5.! Employer´s Personnel
6.! Employer´s Claims
7.! Duty to pay

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Employer´s responsibilities: in general

•! A contract for works is an entire contract according to
which the contractor promises to complete the work
against an agreed price.
•! Common law does not know the concept of nominate
contracts. In principle, all types of contracts are treated
equally.
•! A contract comprises all the duties which expressly or
implicitly arise from the contract, thus the parties must
identify
–! Express terms
–! Implied terms

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Employer´s responsibilities: in general
•! There is authority for the view that :
–! Where there is a written contract it appears that both parties have
agreed that something should be done which cannot be effectively
be done unless both concur in doing so, the construction of the
contract is that each agrees to do all that is necessary to be done
on his part for the carrying out of that thing though there may be
no express words to that effect
•! Compare Hudson´s Building and Engineering Contracts, note
1-187 with reference to Mackay v. Dick (1881) 6 A.C. 251, at
263
–! Instead it has been held in Australia that there is a positive
obligation to take steps to see that he performs his duty as a
certifier where is failing to do so
–! Applying this principle to construction contracts there is not only a
negative implied term that an owner should not interfere with or
obstruct an Engineer in certifying
•! Hudson´s Building and Engineering Contracts, note 1-188
•! Perini Corporation v. Commonwealth [1969] 2 N.S.W.R 536
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If the Contractor suffers a delay and/or incurs Cost - Claim

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The Employer: under the Contract

–! Responsibilities of the Employer

2.1 Right of Access to the Site
2.2 Permits, Licences or Approvals
2.3 Employer´s Personnel
2.4 Employer´s Financial Arrangements
2.5 Employer´s Claims
+ Construction Permit ( attend YB and SB )

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Employer´s Responsibilities
–! Access to the Site
•! The Employer shall give the Contractor right of access to,
and possession of, all parts of the Site within the time
stated in the Appendix to Tender … However the Employer
may withhold any such right or possession until the
Performance Security has been received.
–! This Sub-Clause should be read in conjunction with Sub-
Clause 4.6:
»! If, under the Contract, the Employer is required to give to
the Contractor possession of any foundation, structure,
plant or means of access in accordance with the
Contractor´s Documents, the Contractor shall submit
such documents to the Engineer in the time and manner
stated in the Specification.

If the Contractor suffers a delay and/or incurs Cost - Claim

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Employer´s Responsibilities
–! Access to the Site
•! If no such time is stated in the Appendix to
Tender, the Employer shall give the Contractor
right of access to, and possession of, the Site
within such time as may be required to enable the
Contractor to proceed in accordance with the
programme submitted under Sub-Clause 8.3
–! It is then the Contractor who determines the date on
which he needs access to and possession of the Site:
»! Beware that the programme may be rejected.

If the Contractor suffers a delay and/or incurs Cost - Claim

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Employer´s Responsibilites
–! Permits, Licences or Approval
•! The Employer shall provide reasonable
assistance to the Contractor at the request of the
Contractor
–! by obtaining copies of the Laws
–! for the Contractor´s applications for any permits,
licences or approvals required by the Laws
»! which the Contractor is required to obtain under
Sub-Clause 1.13

If the Contractor suffers a delay and/or incurs Cost – Legal Claim

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Compliance with
Laws - adjustments

Time Extension

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Employer´s Responsibilities
–! Employer´s Personnel
•! The Employer shall be responsible for ensuring
that the Employer´s Personnel and the Employer
´s other contractors on the Site:

–! co-operate with the Contractor´s efforts under Sub-

Clause 4.6
–! take actions similar to those which the Contractor is
required to take under subparagraphs (a) to (c) of Sub-
Clause 4.8 and under Sub-Clause 4.18
If the Contractor suffers a delay and/or incurs Cost – Legal Claim

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Employer´s Responsibilities

–! Financial arrangements
•! The Employer shall submit, within 28 days after receiving
any request from the Contractor, reasonable evidence that
financial arrangements have been made and are being
maintained which enable the Employer to pay the Contract
price (as estimated at that time) in accordance with Clause
14. If the Employer intends to make any material change to
his financial arrangements, the Employer shall give notice
to the Contractor with detailed particulars.
–! The applicable law may provide for privileges, liens, pledges
and other forms of security.
If the Employer fails to provide reasonable evidence Clause 16 applies

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Employer´s Responsibilities

–! Construction permit
•! The Employer shall have obtained the planning, zoning or
similar permission for the Permanent Works, and any other
permissions described in the Specification as having been
(or being) obtained by the Employer; and the Employer
shall indemnify and hold the Contractor harmless against
and from the consequences of any failure to do so
–! The local Laws may provide that before the commencement of the
Works a construction permit must be obtained
–! attend : YB and SB, design by the Contractor within the Time for
Completion

If the Employer fails to comply with the Contractor may rely on S.-Cl. 8.4, 8.5

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Employer´s Responsibilities

–! Design
•! It follows from Sub-Clause 1.9 Red Book that the Employer
shall provide the design.
•! Whenever the Works are likely to be delayed or disrupted if
any necessary drawing or instruction is not issued to the
Contractor within a particular time, which shall be
reasonable, the Contractor shall give notice to the
Engineer.

If the Contractor suffers a delay and/or incurs Cost – Legal Claim

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Employer´s Responsibilities

–! Employer´s Claims
•! If the Employer considers himself to be entitled to any
payment under any Clause of these Conditions or
otherwise in connection with the Contract, and/or to any
extension of the Defects Notification period, the Employer
or the Engineer shall give notice and particulars to the
Contractor.. … The Employer shall only be entitled to set
off against or make any deduction from an amount certified
in a Payment Certificate, or to otherwise claim against the
Contractor, in accordance with this Sub-Clause.

Any retention and compensation right is restricted!

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Employer´s Responsibilities

–! Employer´s duty to pay

•! Notwithstanding the fact that the General Conditions do not
expressly provide for a duty to pay there is of course a duty
to pay
•! The Employer shall pay the Contract Price to the
Contractor: Accepted Contract Amount + Adjustments
•! The payment procedures are covered by Clause 14
–! Sub-Clause 14.7 provides that the Employer shall pay the
Contractor an advance payment, certified interim payments
and the amount certified in the Final Payment Certificate.

Failure to pay in time leads to financial charges!

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Employer´s Responsibilities
–! Employer´s duty to pay
•! Additionally Sub-Clause 20.1 applies:
–! Each Payment Certificate shall include such amounts
for any claim as have reasonably substantiated as due
under the relevant provision of the Contract. Unless
and until the particulars supplied are sufficient to
substantiate the whole of the claim, the Contractor shall
only be entitled to payment for such part of the claim as
he has been able to substantiate.
»! Is the Certificate a condition precedent of the
entitlement to payment ?

Failure to pay in time leads to financial charges!

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Employer´s Responsibilities
–!Employer´s duty to pay -construction of ICE Standard Form (6th
edition)

•! In my judgment, on the true construction of this contract, certificates are a

condition precedent to [Contractor´s ] entitlement to payment under clause
…, and they are not merely evidence of the Engineer's opinion. By
"condition precedent" I mean that the right to payment arises when a
certificate is issued or ought to be issued, and not earlier. It does not,
however, follow from the fact that a certificate is a condition precedent that
the absence of a certificate is a bar to the right to payment. This is
because the decision of the Engineer in relation to certification is not
conclusive of the rights of the parties, unless they have clearly so
provided. If the Engineer's decision is not binding, it can be reviewed by
an arbitrator (if there is an arbitration clause which permits such a review)
or by the court.
–! Henry Boot Construction Ltd. v Alstom Combined Cycles Ltd. [2005] EWCA Civ 814 (16
June 2005) at para 23

Failure to pay in time leads to financial charges!

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Employer´s Responsibilities
–!Employer´s duty to pay
•! … If the arbitrator or the court decides that the Engineer ought to
have issued a certificate which he refused to issue, or to have
included a larger sum in a certificate which he did issue, they can,
and ordinarily will, hold that the Contractor is entitled to payment
as if such certificate had been issued and award or give judgment
for the appropriate sum. (see further …). It is convenient to make
such an award or to enter such a monetary judgment in order to
avoid the risk of further proceedings in the event that the
Employer does not pay. For the reasons that follow, I consider
that the right to payment arises when a certificate is issued or
ought to be issued, and not when the work is done (although the
doing of the work is itself a condition precedent to the right to a
certificate).
–! Henry Boot Construction Ltd. v Alstom Combined Cycles Ltd. [2005] EWCA Civ
814 (16 June 2005) at para 23

Failure to pay in time leads to financial charges!

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Rights and Duties of the Parties (Contractor´s responsibilites)
–! III. Responsibilities of the Contractor
•! 4.1 Contractor’s General Obligations
•! 4.2 Performance Security
•! 4.3 Contractor’s Representative
•! 4.4 Subcontractors
•! 4.5 Assignment of Benefit of Subcontract
•! 4.6 Co-operation
•! 4.7 Setting Out
•! 4.8 Safety Procedures
•! 4.9 Quality Assurance
•! 4.10 Site Data
•! 4.11 Sufficiency of the Accepted Contract Amount
•! 4.12 Unforeseeable Physical Conditions
•! 4.13 Rights of Way and Facilities
•! 4.14 Avoidance of Interference
•! 4.15 Access Route
•! 4.16 Transport of Goods
•! 4.17 Contractor’s Equipment
•! 4.18 Protection of the Environment
•! 4.19 Electricity, Water and Gas
•! 4.20 Employer’s Equipment and Free-Issue Material
•! 4.21 Progress Reports
•! 4.22 Security of the Site
•! 4.23 Contractor’s Operations on Site
•! 4.24 Fossils

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Contractor´s responsibilities

–!The Contractor
•! shall design (to the extent specified in the
Contract), execute and complete the Works in
accordance with the Contract and with the
Engineer´s instructions, and shall remedy any
defects in the Works.
Design, Execution of Remedy
Guaranties
if required the Works of defects

Execution of Remedy
Design Guaranties
the Works of defects

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Contractor´s responsibilities
–!The Contractor
•! is under an obligation « fit for purpose » subject
to the applicable law.
–! If the Contract specifies that the Contractor shall design
any part of the Permanent Works, then unless
otherwise stated in the Particular Conditions:
»! (c) the Contractor shall be responsible for this part
and it shall, when the Works are completed, be fit
for such purposes for which the part is intended as
are specified in the Contract (Sub-Clause 4.1 (c))
–! Pursuant to Sub-Clause 8.2 the Contractor shall
complete the Works within Time for Completion

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Contractor´s responsibilities

–!The Contractor
•! is under an obligation fit for purpose
subject to the governing law.
–! When completed, the Works shall be fit for the
purposes for which the Works are intended as defined
in the Contract (Sub-Clause 4.1 para. 1)
–! Pursuant to Sub-Clause 8.2 the Contractor shall
complete the Works within Time for Completion

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Contractor´s responsibilities

Design, Execution Remedy

If required Guaranties
of the Works of defects

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Contractor´s responsibilities

Annexes C + D

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IV. Preparation of tender documents

–!When preparing the contract
documents and the specifications it is
absolutely important
•! to take in account the particularities of the
FIDIC Conditions
•! to have made a survey
–!in order to ascertain the needs of the project
in conjunction with the FIDIC Conditions

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•! It is critical to underline that preparing the contract documents does not
mean to make copies of existing schedules, bills of quantities,
specifications and standard forms.
–! Even though it may be helpful to review such existing forms contract
preparation means to shape and establish an individual law for an
individual project. Moreover existing standard forms assume that the
parties using it read it carefully and fill it out properly.
•! FIDIC standard forms are recommendations and recognise that quite
often particular adjustments are appropriate.
–! A careful reader of the FIDIC conditions will frequently find the
wording “unless otherwise” agreed or stated. Whenever this wording
has been used within the General Conditions the FIDIC Drafting
Committee has supposed that adjustments or changes to the
recommended wording can be either useful and appropriate or even
necessary.
•! FIDIC standard forms shall be completed by stating and indicating the
according data in either the Appendix to Tender or the Particular
Conditions.
–! Sometimes completion of data shall be done in Schedules and
Appendices. Some of the Sub-Clauses within the General Conditions
do not apply if the therein required data are omitted.

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•! Sub-Clause 4.10 para. 1:

–! The Employer shall have made available to the
Contractor for his information, prior to the Base
Date,
•! all relevant data in the Employer’s possession on sub-
surface and hydrological conditions at the Site, including
environmental aspects.
–! The Employer shall similarly make available to the
Contractor all such data which come into the
Employer’s possession after the Base Date.
–! The Contractor shall be responsible for interpreting
all such data.

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•! Sub-Clause 4.10 para. 2:

–! To the extent which was practicable (taking account of cost
and time), the Contractor shall be deemed to have obtained all
necessary information as to risks, contingencies and other
circumstances which may influence or affect the Tender or
Works. To the same extent, the Contractor shall be deemed to
have inspected and examined the Site, its surroundings, the
above data and other available information, and to have been
satisfied before submitting the Tender as to all relevant
matters, including (without limitation):
–! …

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•! Sub-Clause 4.10 para. 2: …

(a) the form and nature of the Site, including sub-surface

conditions,
(b) the hydrological and climatic conditions,
(c) the extent and nature of the work and Goods necessary for
the execution and completion of the Works and the
remedying of any defects,
(d) the Laws, procedures and labour practices of the Country,
and
(e) the Contractor’s requirements for access, accommodation,
facilities, personnel, power, transport, water and other
services.

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•! Summary
–! The Employer shall make available all relevant data in the
Employer´s possession.
–! The Contractor shall be responsible for the interpretation of
all such data.
–! The Contractor shall ensure that he has obtained all
necessary and available information to the extent which
« was practicable ».
•! Hence he is under the obligation to carry out all research to the
the extent which was reasonable and practicable with regard to
the financial ressources and the available time
–! for example:
»! If the Contractor shall submit his offer within a very short period
of time he will not have the time for make a site survey.
»! For a tunneling project the Contractor will not be obliged to
carry out preliminary borings

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•! Survey Report

FIDIC Book
Generalities Procurement Route Contractual Issues
Requirements

Parties Risk assessment Budget Contract documents

Site data Risk allocation Time for Completion Proper law

Permissions Tender period Project Management Fall back clauses

Legal Basics Prequalification Design Definitions

Availaibility of
goods & services
Tender procedure Risk & allocation „Requirements“

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•! Survey Report

FIDIC Book
Employer´s Requirements
Requirements

Contract documents Performance data

Proper law Quality pre-determination

Fall back clauses Time (interfaces)

Definitions Methods

References Sub-Contracting

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•! Survey Report

FIDIC Book
Requirements

Contract documents Particular Requirements

Proper law Functional Requirements

Fall back clauses Quality and Scope

Definitions Supply of particular items

References Consumables

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 FIDIC Training Module 1
•! Survey Report
Items which shall be specified in the
Employer´s Requirements:
2.1 : Definition of conditions for access to the
Site
4.20 : Specification of Employer´s materials
4.6 : Specification of coordination
requirements
Particular Requirements 5.2 : Documents to submit for prior check or
approval
5.2 : Specification of approval and review
periods as to design documents
Functional Requirements 5.1 : Specification of designers´ skills and
experiences
5.4 : Specification of technical standards
Quality and Scope 5.5 : Specification of trainings
5.6 : Specification of as built drawings
5.7 : Specification of manuals
6.1 : Specifications as to the staff
Supply of particular items 9.1 : Specification of testing procedures

Consumables

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FIDIC Training Module 1

Chart: Pre-tender interfaces

Tender Represen- Contract Assump-

Documents tations tions

Employer Expectation: Reliability; completeness Contractor

Risk allocation Good faith

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FIDIC Training Module 1

Legal
Procurement
risk Good faith
law
allocation

Make available all

Sub-Clause
relevant data
4.10
in Employer´s possession

Risk of No duty to
Posession? Relevance?
interpretation make survey

To the extent
which was … shall be deemed to have obtained
practicable

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 FIDIC Training Module 1

•! Sub-Clause 4.11
The Contractor shall be deemed to:
(a) have satisfied himself as to the correctness
and sufficiency of the Accepted Contract
Amount, and
(b) have based the Accepted Contract Amount
on the data, interpretations, necessary
information, inspections, examinations and
satisfaction as to all relevant matters
referred to in Sub-Clause 4.10 [Site Data].

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FIDIC Training Module 1

Prec-contractual duties (Design & Build)

Precontractual
Base Date Contract
stage

Site Visits Under the Silver Book the Contractor can

Inspection and not claim for errors which he did not
Examination disclose prior to submit his offer

To scrutinise To scrutinise
Claims, Claims
Employer´s Employer´s
Cl. 5.1, 13 Cl. 1.9
Requirements Requirements

Under the Silver Book the Employer is only

Verification and
responsible for the correctness of data which
Interpretation of
are included in the Employer´s Requirements
submitted data
to the extent specified in Sub-Clause 5.1

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FIDIC Training Module 1

Foreseeability of change

Contract
Agreement
SB: Full risk of
Operation of forces of nature, Cl. 17.3
Contractor
Physical conditions

Variations

Weather etc. Force Majeure Delay by Employer

Technical Standards

Changes in law

Base Tender
date date Contract Completion period

201
Dr. Götz-Sebastian Hök
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 FIDIC Training Module 1

•! Sub-Clause 4.12
–! If the Contractor encounters adverse physical
conditions which he considers to have been
Unforeseeable, the Contractor shall give notice to
the Engineer as soon as practicable.
•! is considered being Unforeseeable what was not foreseeable by
an experienced contractor by the date for submission of the
Tender
–! In this Sub-Clause, “physical conditions” means natural
physical conditions and manmade and other physical
obstructions and pollutants, which the Contractor encounters
at the Site when executing the Works, including sub-surface
and hydrological conditions but excluding climatic conditions.

If the Contractor encounters such conditions he can recover EOT + cost

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FIDIC Training Module 1

•! Sub-Clause 4.21 (Reporting)

–! The Contractor shall submit monthly
reports: It shall include all details
concerning the progress of the Works and
ist quality
•! The details which shall be included are specified
in a detailed catalogue
–! Complementary duties to inform follow from
various Sub-Clauses
•! Sub-Clauses 8.3, 20.1, 6.10 etc.

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FIDIC Training Module 1

•! Sub-Clause 4.21 (Reporting)

Legal requirements

Monthly report (4.21)

The Engineer
shall take
Early warning (8.3) In account
Contractor
all relevant
circumstances
Records of Contractor´s Pers.

Claims

Notice requirements

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20
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FIDIC Training Module 1

Sub-Contractor´s responsibilities

–!Nominated Subcontractors
5.1 Definition of « nominated Subcontractor »
5.2 Objection to nomination
5.3 Payments to nominated Subcontractors
5.4 Evidence of Payments
Payments to Subcontractor
Right to Request for
Employer Nomination in accordance with
object evidence
Engineer´s Certificates

Direct payment Sub-Contractor

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FIDIC Training Module 1

RB
The Contractor shall not subcontract the whole of
the Work
Shall include provisions which would entitle the
Employer to require the subcontractor to be
assigned to the Employer
Assignment of Benefit of Subcontract
Duty of the Contractor to assign the benefit of the
obligations to the Employer
20
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 FIDIC Training Module 1

YB
Instruction to employ a ‘’nominated Subcontractor’’
The Contractor shall not sbe under any obligation
against whom the Contractor raises reasonable
objection by notice with supporting paticulars.

20
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FIDIC Training Module 1

Subcontracting at present by practitioners

according to FIDIC forms :
Short Form
of Contract
( Green Book )

Conditions of Subcontract
for Construction
20
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9

FIDIC Conditions of Contract

published 1999

Standard Bidding
Document of the
World Bank

210
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 FIDIC Conditions of Contract
THE NEW GREEN BOOK
Conditions of Short Form of Contract
Intended for engineering and building work of relatively small capital value.
Suitable for fairly simple or repetitive work or work of short duration without the need
for specialist sub-contracts.
Contract comes into effect upon ( when Employer signs the Acceptance of the offer/
tender ) receipt of the Agreement by the Contractor
No reference to ‘ the Engineer ’, Employer must nominate a spokesman or may
appoint a representative
The Works shall be designed by the Contractor to the extent as specified in the
Appendix
No advance payment, Interim Payments in accordance with the value of Works
executed, retention percentage stated in the Appendix
Resolution of Disputes: provision for amicable settlement, local adjudication,
appointment peferably from outset, but can be only after dispute occurs. Arbitration

211
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FIDIC Training Module 1

update Sub-Contract :
General Conditions now
intended for main types of
works contract, updated
consistent with the update of
the Rainbow Edition 1999
and the new provision of the
improvement and continuous
development for
Design, Build and Operation
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2

FIDIC Training Module 1

21
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 Model Services Agreement
White Book
FIDIC publishes Agreements
for Consulting Services :

X
!! - Client - Consultant
!! - Joint Venture
!! - Sub - Consultant
!! - Representative

Update
4. Edition 9.2006

Contractor‘s
Designer YB / SB
32
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FIDIC Training Module 1

Contents of the Agreement – General Conditions

1. General Provisions
2. The Client
3. The Consultant
4. Commencement, Completion,
Variation and Termination
5. Payment
6. Liabilities
7. Insurance
8. Disputes and Arbitration
21
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FIDIC Training Module 1

Particular Conditions
A.! References from ( clauses in the ) General Conditions
B.! Additional Clauses ( any variations and additions to GC )
Attention for Contractor’s Design: change responsibility from ‘’reasonable
skill, care and diligence’’ to
‘’fitness for purpose’’ § 3.3.1 , if Gen.Cond. for Plant ( YB / SB ).

Appendices
A.! Scope of Services
B.! Personnel, Equipment, Facilities and Services
of others to be provided by the Client
C. Remuneration and Payment
D. Time Schedule for Services 21
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FIDIC Training Module 1

Project management – key aspects

–! Staff and Labour

–! Plant, Materials and Workmanship
–! Commencement, Delay and Suspension
–! Tests and defects, defects liablity

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FIDIC Training Module 1

Project Management
Engineer
gives notice
–key aspects
Availability of designers, Sub-Clause 5.1

Liability

Engineer inspects, gives instructions,

determines, approves, etc

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 FIDIC Training Module 1

Project management – key aspects

–! Staff and Labour
•! 6.1 Engagement of Staff and Labour
•! 6.2 Rates of Wages and Conditions of Labour
•! 6.3 Persons in the Service of Employer
•! 6.4 Labour Laws
•! 6.5 Working Hours
•! 6.6 Facilities for Staff and Labour
•! 6.7 Health and Safety
•! 6.8 Contractor’s Superintendence
•! 6.9 Contractor’s Personnel
•! 6.10 Records of Contractor’s Personnel and Equipment
•! 6.11 Disorderly Conduct

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FIDIC Training Module 1

Project managment – key aspects

–! Staff and Labour

•! Sub-Clause 6.8
–! Throughout the execution of the Works, and as long
thereafter as is necessary to fulfil the Contractor’s
obligations, the Contractor shall provide all necessary
superintendence to plan, arrange, direct, manage,
inspect and test the work.
»! Subject to Sub-Clause 4.3 the „whole of the time“
of the Contractor´s Representative shall be given to
directing the Contractor´s performance of the
Contract.

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FIDIC Training Module 1

Project management – key aspects

–! Plant, Materials and Workmanship

•! 7.1 Manner of Execution
•! 7.2 Samples
•! 7.3 Inspection
•! 7.4 Testing
•! 7.5 Rejection
•! 7.6 Remedial Work
•! 7.7 Ownership of Plant and Materials
•! 7.8 Royalties

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 FIDIC Training Module 1

Project Management – key aspects

–! Plant, Materials and Workmanship

•! The Contractor shall carry out the manufacture
of Plant, the production and manufacture of
Materials, and all other execution of the Works:
–! (a) in the manner (if any) specified in the Contract,
–! (b) in a proper workmanlike and careful manner, in
accordance with recognised good practice, and
–! (c) with properly equipped facilities and non-
hazardous Materials, except as otherwise specified in
the Contract.

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FIDIC Training Module 1

Project Management – key aspects

–! Plant, Materials and Workmanship

•! Workmanship
–! Undefined term, to be precised by law
»! France: The Contractor is « master of the rules of
his profession» (Cass.civ., 07 avril 1965, JCP
1965-II-13328)
•! Recognised practise
–! Undefined term; to be precised by law
•! Norms and standards

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FIDIC Training Module 1

Project Management – key aspects
–! Plant, Materials and Workmanship
•! Règles de l´art – state of the art, etc.
–! In principle in matters of defects and quality the courts rely on
legislation, contractual standards, recognised technical norms
and standards and publications which establish or fix the
established rules of technical practise in the filed of practise.
–! In Canada the applicable technical standards are written or non written
ones.
–! In Switzerland, the technical standards of professional art are deemed
to be recognised if their correctness has been proved in theory and if
they have been duly established and a majority of experts in this field
have clearly confirmed their practical validity.
»! In fact the term state of the technical knowledge in a specific field
must be distinguished from the « recognised state of the art ».
Hence, if the standards derive from the most advanced research
but did not yet prove their practical validity they are not considered
being technical rules in its strict sense..
»! For example the SIA technical norms and standards may
represent the recognised state of the art of the profession but
there is no presumption that they do so.
»! Source: http://www.sia.ch/f/actuel/presse/communiques/
20041202_normes.pdf

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 FIDIC Training Module 1

Project management – key aspects

–! The inspections
•! The Contractor shall give notice to the Engineer
Notice that whenever any work is ready and before it is covered up,
work ist ready
put out of sight, or packaged for storage or transport.
•! The Engineer shall then either carry out the examination,
inspection, measurement or testing without unreasonable
Engineer delay, or promptly give notice to the Contractor that the
verifies
Engineer does not require to do so.
•! If the Contractor fails to give the notice, he shall, if and
when required by the Engineer, uncover the work and
thereafter reinstate and make good, all at the Contractor
Discovery cost
´s cost.

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FIDIC Training Module 1

Project management – key aspects

–! The Tests, Sub-Clause 7.4

•! The Contractor shall provide all apparatus, assistance,
documents and other information, electricity, equipment, fuel,
Preliminary consumables, instruments, labour, materials, and suitably
measures qualified and experienced staff, as necessary to carry out the
specified tests efficiently.
•! The Contractor shall agree with the Engineer, the time and
place for the specified testing of any Plant, Materials and other
Place and time
parts of the Works.
•! The Engineer shall give the Contractor not less than 24 hours´
notice of the Engineer´s intention to attend the tests.
Engineer´s –! …If the Engineer dies not attend … the Contractor may proceed
attendance with the tests, unless otherwise instructed by the Engineer, and the
tests shall be deemed to have been made in the Engineer´s
presence and shall be deemed to be accurate.
•! The Contractor shall immediately forward to the Engineer duly
Reports certified reports of the tests.

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FIDIC Training Module 1

Start
Notice of Commencement Date

Progress of the Actions of the

Contractor Contractor
Commencement of Early Warning, Cl. 8.3 Access to the Site?, Cl.
Execution, Cl. 8.1 2.1
Submission of Notice of Claims, Cl. 20.1 Drawings?, Cl. 1.9
Programme, C. 8.3
Progress Reports, Cl. 4.21 Others

Notice when work is Application for Payment, Interim & Final

ready, Cl. 7.3 Cl. 14 Statements
Agreement as to time and Engineer shall give notice Testing procedure, Cl. 7.4
place for testing, Cl. 7.4 of intention to attend
Contractor shall forward Engineer shall endorse
certified test results certified results
Ready for Tests Notice for Tests, Cl. 9.1 Testing procedure, Cl. 7, 9

Ready for taking-Over Ready for taking-Over

Expiry of Defects Issue of Performance

Notification period Certificate, Cl. 11.9

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 FIDIC Training Module 1

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FIDIC Training Module 1

Project Management – key aspects

–! Remedy of defects, Sub-Clause 7.6

•! The Engineer may instruct the Contractor to:
–! (a) remove from the Site and replace any Plant or Materials
Instruction which is not in accordance with the Contract,
–! (b) remove and re-execute any other work which is not in
accordance with the Contract, and
–! (c) execute any work which is urgently required for the
safety of the Works, whether because of an accident,
unforeseeable event or otherwise
Obligation •! The Contractor shall comply with any instruction
•! If the Contractor fails to comply with the instruction, the
Employer is entitled to employ and pay other persons to
Recovery of
cost
carry out the work

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FIDIC Training Module 1

Project Management – key aspects

–! Commencement, Delays and Suspension

•! 8.1 Commencement of Works
•! 8.2 Time for Completion
•! 8.3 Programme
•! 8.4 Extension of Time for Completion
•! 8.5 Delays Caused by Authorities
•! 8.6 Rate of Progress
•! 8.7 Delay Damages
•! 8.8 Suspension of Work
•! 8.9 Consequences of Suspension
•! 8.10 Payment for Plant and Materials in Event of Suspension
•! 8.11 Prolonged Suspension
•! 8.12 Resumption of Work

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 FIDIC Training Module 1

Sub-Clause 8.1:
–! The Engineer shall give the Contractor not less than 7 days’
notice of the Commencement Date. Unless otherwise stated
in the Particular Conditions, the Commencement Date shall be
within 42 days after the Contractor receives the Letter of
Acceptance.
•! This is the clear instruction to the Engineer to give the notice of
the Commencement Date
–! The Contractor shall commence the execution of the Works as
soon as is reasonably practicable after the Commencement
Date, and shall then proceed with the Works with due
expedition and without delay.
•! Hence, Time for Completion can not be extended as a result of an
event which eventuates prior to the commencement except if this
event has continuing effect which means
–! If the event prior to the Commencement Date does not affect Time
for Completion the Contractor is not entitled to EOT.

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FIDIC Training Module 1

Start Notice of Commencement Date

Progress of the Actions of the

Contractor Contractor

Commencement of Early Warning, Cl. 8.3 Access to the Site?, Cl.

Execution, Cl. 8.1 2.1

Submission of Notice of Claims, Cl. 20.1 Employer´s

Programme, C. 8.3 Requirements?, Cl. 1.9 YB

Progress Reports, Cl. 4.21 Others

Notice when work is Application for Payment, Interim & Final

ready, Cl. 7.3 Cl. 14 Statements

Ready for Tests Notice for Tests, Cl. 9.1

Ready for taking-Over Application for taking

Over, Cl. 10.1

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FIDIC Training Module 1

Project Management – key aspects

–! Commencement, Delays and Suspension

Not
ice

Commencement Submission Monthly Ready for

Date of Programme Reports inspection

Not Not
ice ice

Ready for Ready

Certificate
Tests Taking Over

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 FIDIC Training Module 1
Commencement Date (Yellow Book)

Engineer Contractor

42 days
Commencement Programme
Date
7 days
Letter of
Acceptance
oder Performance
Contract Security
Agreement 28 days

Employer

Access to the site

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FIDIC Training Module 1

•! Within 28 days after receiving the notice of the

Commencement Date the Contractor shall submit
the „Programme“ (Sub-Clause 8.3):

Completion
Time of Completion for the Works Delay damages

Commencement EOT
Date Up-date

Submission of Engineer
Programme Employer

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FIDIC Training Module 1

Chart: Programme according to Cl. 8.3 FIDIC Red Book

Start Cl. 8.3

Is there any Has the Contractor
programme which received the notice
has not been under Cl. 8.1?
rejected

Revising the Reliance on

Submission in Time?
Programme Programme

The C shows on each Programme:

(a) the order in which the Contractor intends to carry out the Works, including the
anticipated timing of each stage of design (if any), Contractor’s Documents, Sanction?
procurement, manufacture of Plant, delivery to Site, construction, erection and
testing,
(b) each of these stages for work by each nominated Subcontractor (as defined in
Clause 5 [Nominated Subcontractors]),
(c) the sequence and timing of inspections and tests specified in the Contract, and
(d) a supporting report which includes:
(i) a general description of the methods which the Contractor intends to adopt, and
of the major stages, in the execution of the Works, and Progress Reports
(ii) details showing the Contractor’s reasonable estimate of the number of each Cl. 4.21
class of Contractor’s Personnel and of each type of Contractor’s Equipment,
required on the Site for each major stage. Reports. Cl. 6.10

Rejection
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 FIDIC Training Module 1

Critical path
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FIDIC Training Module 1

Critical Path
Event

3 5

activity activity
Event

Commencement
1 4 6
Date
activity activity activity

2 7 8

activity activity

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FIDIC Training Module 1

Accelaration
Cl. 8.6
Co-operation
Variation Claim
Cl. 4.6

Instruction
Variation Claim
Cl. 3.3

Programme To review

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 FIDIC Training Module 1

Tests on Sub-Clause Certified

Completion Taking Over
Completion 7.4 report

To provide documents To give notice

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FIDIC Training Module 1

Issue of
Tests were
Notice Taking Over Defects Notification Period
successful
Certificate

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FIDIC Training Module 1

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 FIDIC Training Module 1

Non attributable Perfor-

Variation mance
Defect
at cost
attributable
Max.
Defects Notification Period Extension Remedy
2 years

Taking
Over Non attributable
Variation
Defect
at cost
attributable

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FIDIC Training Module 1

Perfor-
mance

Performance
Certificate
Remedy
Expiry of Defects
Notification Period New defects?

Remedy
Attention:
Documents
Effect of
civil law
Tests

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FIDIC Training Module 1

Per
form
anc
eC
erti
fica
te

Defects
Design & Defects
Contractor Notification Employer
Completion Liability
period

Yellow Book

Engineer

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 FIDIC Training Module 1

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FIDIC Training Module 1

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•! Financial Clauses – Payment

Procedures

–!Measurement and Evaluation

–!Variation and Adjustment
–!Contract Price and Payment
–!Guarantees, Bonds
–!Insurances

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Measurement and Valuation

–! Clause 12 concerns Measurement and
Valuation
•! Sub-Clause 12.1 Works to be measured
•! Sub-Clause 12.2 Method of Measurement
•! Sub-Clause 12.3 Evaluation
•! Sub-Clause 12.4 Omissions

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Measurement and Evaluation

Engineer requires any part of the by reasonable notice
Works to be measured

•!Attendance of the Contractor

•!Supply of particulars by Contractor

Method of measurement (Sub-Clause 12.2)

•!Net actual quantity
•!Method in accordance with BoQ

Evaluation (Sub-Clause 12.3) Agreement or

•!according to rates specified in the Contract determination of
•!according to rates to be determined Contract Price in
accordance with Sub-
Clause 3.5
according to rates according to rates to be
specified in the Contract determined

Changement of quantity

Work instructed as a Variation

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Measurement and Evaluation (Rates)

Measured actual quantity of
MDB
the item is changed
Version

by more than 10 % for the quantity Principle of a

of this item in the BoQ 25 %
balanced contract

This change in quantity multiplied Principle of relevancy

by such specified rate for this item 0,25 %
exceeds 0,01 % of the Accepted
Contract Amount

This change in quantity directly Principle of relevancy

changes Cost per unit quantity of
1%
this item by more than 1%
Any item for which no rate
This item is not a fixed item Principle of exclusivity was specified shall
be included in other rates
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§14 Contract Price and Payment
Unless otherwise stated in the Particular Conditions:
- Red Book
agreed or determined under Sub-Clause
12 Measurement and Evaluation
- Yellow Book
lump sum with adjustments
- Silver Book
lump sum ( fixed price character ) with less
adjustments
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§14 Contract Price and Payment

•! Contract Price
•! Advance Payment
•! Interim Payment
•! Schedule of Payments
•! Payment
•! Delayed Payment
•! Payment of Retention Money
•! Final Payment
•! Discharge
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Variations and Adjustments

–! Clause 13 addresses Variations
•! Sub-Clause 13.1 Right to vary
•! Sub-Clause 13.2 Value Engineering
•! Sub-Clause 13.3 Variation procedure
•! Sub-Clause 13.4 Payment in Applicable
Currencies
•! Sub-Clause 13.5 Provisional Sums
•! Sub-Clause 13.6 Daywork
•! Sub-Clause 13.7 Changes in Legislation
–! which in fact is a Claim clause
•! Sub-Clause 13.8 Adjustments for Changes in Cost

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Variations and Adjustments

–! Clause 13 concerns Variations
•! A Variation means a change to the Works (RB) or a change
to the Employer´s Requirements or the Works (YB).
–! Although Sub-Clause 13.1 says that the Contractor
shall not make any alteration and/or modification of
the Permanent Works, unless and until the Engineer
instructs or approves a Variation, a Variation always
requires an unilateral declaration by the Engineer to
do or to omit something (instruction).
•! An approved proposal as referred to in Sub-Clause
13.3 does not constitute an acceptance of an offer.
•! Each Variation shall be evaluated in accordance
with Clause 12 (RB) or agreed or determined in
accordance with Sub-Clause 3.5 (YB).

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Variations and Adjustments

–! Variations may be initiated by the Engineer at any
time prior to issuing the Taking-Over Certificate for the
Works, either by an instruction or by a request for the
Contractor to submit a proposal (Sub-Clause 13.1).
–! The Contractor may, at any time, submit to the
Engineer a written proposal which (…) will, if adopted
•! (i) accelerate completion, (ii) reduce the cost to the Employer
of executing, maintaining and operating the Works, (iii)
improve the efficiency or value to the Employer of the
completed Works, or (iv) otherwise be of benefit to the
Employer (Sub-Clause 13.2)
–! Hence, the Contractor and the Engineer may initiate
Variations
•! Beware: Each instruction may constitute a
Variation!

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Variations
Adjustments Cost § 13 / EOT § 8

Time Extension

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Variations and Adjustments
Chart: Variations (Meaning I)
Start Instruction or approval of Prior to issuing of Taking-
the Engineer Over Certificate

No omission of Special Variations: Instruction or

work possible Adjustments for Changes in Cost, Cl. 13.7, approval which
which shall be and Legislation, Cl. 13.8 may result to a
carried out by Co-operation, Cl. 4.6 variation
others Samples, Cl. 7.2 subject to Cl.
Testing, Cl. 7.4 1.1.6.9
Prolonged Suspension, Cl. 8.11
Defect work, Cl. 11.2

Any change to the Works, which

is instructed or approved (Red
Book) Is there a
Any change to the Employer´s Variation?
Requirements (Yellow Book)
Yes Cl. 3.3

In this event the proposal

contains the items according to No which is not an
Cl. 13.3 approved proposal?
The Contractor shall claim for Yes
EOT!
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Projects in Uzbekistan

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 Projects in Uzbekistan

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Variations and Adjustments
Engineer may initiate
variation Instruction

No
Yes
Contractor may submit Engineer may request
proposal submittal of proposal Claims Procedure for EOT

Requirements Cl. 13.2 Requirements Cl. 13.3 Evaluation Procedure

(Value Engineering)
Determination, Cl. 3.5
Proposal of Contractor

Engineer responds with approval, disapproval or Work shall no be delayed

comments (Cl. 13.3) whilst waiting for response

Instruction to execute the Variation

Contractor shall not make any alteration and/or modification of the Permanent Works, unless and until
the Engineer instructs or approves a Variation, Cl. 13.1

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 FIDIC General Conditions

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Chart: Payments I
Start Issuing of Letter of Acceptance Contract Price, Cl. 14.1

Appendix to Tender provides Estimate of contract value Measurement and

for advance payment executed, Cl. 14.3 Valuation, Cl. 12

Contractor has submitted Advance Payment Security and Performance Security, Cl. 4.2, 14.2

Application for Advance

Payment

Engineer issues Interim

Engineer issues Interim Engineer issues Interim Payment Certificate or Final
Payment Certificate, Cl. 14.2 Payment Certificate, Cl. 14.6 Payment Certificate, Cl.
14.10, 14.13

Payment within 42 days after Payment within 56 days after Payment within 56 days after
issuing the letter of reception of statement by reception of Final Payment
Acceptance, or within 21 Engineer, Cl. 14.7 lit. b Certificate by Employer, Cl.
days after receiving 14.7 lit. b
Securities, Cl. 14.7 lit.
Failure to pay Contractor entitled to finance charges, Cl. 14.8

Notice to suspend +/or Termination Notice, Cl. 16

Finish
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Contract Price and Payments

Chart: Contract Price and Payments, Cl. 14

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Chart: Final Payment
End of Defects Engineer issues Performance
Notification period Certificate, Cl. 11.9
within
56 days
Engineer certifies payment of Contractor applies for Final Six copies
balance of Retention Monies Payment Certificate, Cl. 14.11 etc.

Payment of balance of Contractor submits draft Final Statement, Cl.

Retention Monies 14.11

Issuance of Final Payment Engineer agrees with Engineer disagrees

Certificate to Employer draft with draft

Payment within 56 days after Final Statement + Changes to the

reception of Payment written discharge draft
Certificate

Evidence that
dispute exists
Failure to pay,
see Cl. 14.8
Dispute Resolution Engineer issues Interim Payment
according to Cl. 20.4 Certificate for agreed parts, Cl.
Finish 14.11
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Financial Clauses – Payment procedures

–! Guarantees, Bonds
•! The General Conditions only refer to two types of securities
–! Performance Security
»! This security shall not be given back before the
Performance Security as referred to in Sub-Clause 11.9
was issued
–! Advanced Payment Guarantee
»! The Employer shall make an advance payment, as an
interest-free loan for mobilisation, when the Contractor
submits a guarantee in accordance with this Sub-Clause.
The total advance payment, the number and timing of
instalments (if more than one), and the applicable
currencies and proportions, shall be as stated in the
Appendix to Tender.
–! No interim payment shall be made before the Employer has
received the Performance Security

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Taking Over Performance

Certificate Certificate

Care for the Works Remedying Defects Proper law of contract

Defects
Time for Completion Notification Defects Liability
Period

CAR Décennale?

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Chart: Insurance (How to proceed)

Insurance Cover required by Cl. 18

Insurance Terms Insuring Party Contractor

and Insurers are
assumed to be
agreed before
the date of
letter of accep- Works and Contractor Injury to persons and Contractor´s Personnel,
tance, Cl. 18.1 ´s Equipment, Cl. 18.2 damage to property, Cl. Cl. 18.4
18.3

In the name of both Parties who shall be entitled

jointly to receive payments

Maintenance by Contractor

Submission of evidence/policies

Within period stated in Insurance has been Premium Payment Finish

Appendix to Tender effected has been done

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Example:
–! In Sharpe v. San Paulo Railway the contractor had
undertaken to lay a railway line from terminus to
terminus.
•! During the course of the works, the contractor found that
the employer’s design was quite inadequate and had to be
replaced by another.
•! As a result and upon instruction of the engineer the
contractor carried out two million cubic yards of excavation
work in excess of the quantities of work set out in a bill of
quantity, which was part of the contract. It was held that the
works were not in “any sense of the words extra
works” (Sharpe v. San Paulo Railway (1873) L.R. 8
Ch.App. 597).

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Contract

Force majeure Force majeure

Sub-Clause 19.6 Sub-Clause 19.6

Termination Termination
by Employer by Contractor
Clause 15 Clause 16

without good without

with good cause with good cause
cause (yes) good cause
(yes) (yes)
Sub-Clause 15.5 (No)

Without Balance: Works, Balance: Works

prejudice to profit, damages profit, damages
other rights Sub-Clause 16.4 Sub-Clause 16.4

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Breach of contract

Engineer
Notice to remedy
Sub-Clause 15.1

Remediation Remediation
(yes) (no)

Verify reasons
for termination

Termination

Balance

Contract price for

Damages
performed works

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•! Risk and responsibilities

–! Contractual risk shall be taken in account at tender
stage.
–! Risk allocation affects Contract price

Less claims,
no scrutiny,
fixed price

Design risk and

quantity risk
Contractor´s
Risk Forseeable
subsoil risk

Price
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•! Risk and responsibilites shall be

distinguished.
–! Risks exist whenever an event or
circumstance arises for which no allowance
has been made.
–! Typical examples are:
•! Changed physical conditions
•! Changed climatic conditions
•! Changed technical standards

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•! FIDIC Books are balanced

–! Clear Risk allocation based on Abrahamson´s
principles
–! Reallocation of risk if necessary
•! Care of the Works, Sub-Clause 17.2
–! Employer´s Risk and Claims subject to Sub-Clause 17.4
•! Force majeure
–! Claims subject to Sub-Clause 19.4
•! Ground risk
–! Claims if unforeseeable risk eventuates

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•! If a Force Majeure event eventuates there is a need

for action:

Notice Availability Notice

Claim Notice Determination Termination Notice

Termination Notice Special financial

Instructions
arrangements

Obligation to Obligation to
minimise delay minimise delay
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If the Contractor is prevented from

performing any of its obligations under
the Contract as a result of Force
Majeure, of which notice has been
given under Sub-Clause 19.2 and
suffers delay and/or incurs Cost by
reason of such Force Majeure …

Event:
Force Cut-
Majeure
Off

Give Notice Minimise suffers delay,

28 days
(14 days) delay incurs cost

Give Notice Give

of a Claim particulars

Claim procedure according to Sub-Clause 20.1, 3.5

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PARENT COMPANY
GURANTEE

TENDER SECURITY

PERFORMANCE
GUARANTEE

PERFORMANCE BOND

ADVANCED PAYMENT
GUARANTEE
PAYMENT RETENTION MONEY
GUARANTEE GUARANTEE
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Start Instruction or approval Prior to issuing of

of the Engineer Taking-Over Certificate

No ommission of Special Variations:

work possible Adjustments for Changes in Cost & Legislation
which shall be Co-operation, Cl. 4.6
carried out by Samples, Cl. 7.2
others Testing, Cl. 7.4
Prolonged Suspension, Cl. 8.11
Defect work, Cl. 11.2

Any change to the Works,

which is instructed or
approved (Red Book)
Is there a No
Any change to the Employer variation?
´s Requirements (Yellow
Cl. 3.3
Book) Yes
In this event the proposal
contains the items according No which is not an
to Cl. 13.3 approved
proposal?
Contractor shall give notice
Yes
to Engineer of any claim
arising from the Variation!
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Variations

Instruction vs. Variation

•! Any instruction may constitute a Variation
–!until the issue of the Taking-Over Certificate
–!if it constitutes a change to the Works and/or
the Employer´s Requirements
–!Thus: The Engineer must carefully check
whether any of his instructions may constitute
a Variation

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Contractor shall Variation (?)

comply with subject to Cl.
Instruction, Cl. 3.3 1.1.6.9

Contractor shall be bound,

Cl. 13.1 Goods are not
readily available

No Yes

The Contractor considers himself Prompt notice to the

to be entitled to EOT and/or Engineer
additional payment

Cancellation,
EOT, Cl. 8.4 confirmation, variation
of instruction
Provisional Sums, Cl.
13.5
Restart in the event of
New Rates, Cl. 12.3 confirmation, variation
or instruction
Evaluation according to Cl. 12

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Variations

Claims vs. Variation

•! Claims and Variations must be
distinguished, although both of them deal
with cost and time issues:
–!Variation
»!Instruction-Variation-Determination
»!Instruction-Variation-Claim-EOT
–!Claim
»!Cost or EOT (& profit, if any)

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Price Consultation
Modification Evaluation Fair
Notice
Variation Cl. 12 Endeavour determination
to reach
agreement
EOT Claim

Price
Endeavour
Modification Fair
Consultation to reach Notice
Variation determination
agreement

EOT Claim
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Start Engineer may initiate

Instruction
Variation
No
Yes
Contractor may submit Engineer may request
Claims Procedure for EOT
proposal submittal of proposal

Evaluation Procedure
Requirements Cl. 13.2 Requirements Cl.
(Value Engineering) 13.3
Determination, Cl. 3.5

Proposal of Contractor

Work shall no be delayed

Engineer responds with approval, disapproval or whilst waiting for response
comments (Cl. 13.3)

Instruction to execute the Variation

Contractor shall not make any alteration and/or modification of the Permanent Works, unless and
until the Engineer instructs or approves a Variation, Cl. 13.1

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Reminder: Risk assessment is crucial!

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Contractual
Events Conditions Instructions Changes Basics
knowledge

Input

Econo-
Designer Engineer Lawyer
mist

Internal
Evaluation Action
decision

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Site, surroundings etc.

Instruction Request
Variation
Presumption

Amendment

EOT
Legal Risk Damages Rescission Adjustment

Contractual Risk EOT Cost Profit

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Advice
Supervision

Input

Legal Advice

Application for
Statement
Action
Calculation

Engineering
Representative

Risk Assesment Management

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Event Cut-
: Off
Fossils

Give Notice Give Notice

Instruction 28 days
(promptly) of a Claim

Claim procedure according to Sub-Clause 20.1, 3.5

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If and to the extent that the Contractor

encounters physical conditions which
are Unforeseeable, gives such notice,
and suffers delay and/or incurs cost …

Event: Variation
adverse Cut-
physical
conditions Off

Give Notice suffers delay,

Instruction 28 days
(as soon as practicable) incurs cost

Consider
Give Notice
favourable
of a Claim
conditions

Claim procedure according to Sub-Clause 20.1, 3.5

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Clause 20.1 (Red & Yellow Book)

•! If the Contractor considers himself to be entitled …., the
Contractor shall give notice to the Engineer
•! The notice shall be given as soon as practicable, and not later
than 28 days after the Contractor became aware or should have
become aware, of the event or circumstance.
•! The Contractor shall keep such contemporary records as may be
necessary to substantiate the claim …
•! Within 42 days … the Contractor shall send a fully detailed claim
which includes full particulars of the basis of the claim …
•! Each Payment Certificate shall include such amounts for any
claim as have been reasonably substantiated as due under the
relevant provision of the Contract
Consultation Endeavour
Claim Notice Fair
Approval to reach Notice
20.1 determination
Disappoval agreement
–! Cl. 20.1 plays a critical role

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Clause 3.5 (Red & Yellow Book)

•! Whenever these Conditions provide that the Engineer shall

proceed in accordance with this Sub-Clause 3.5 to agree or
determine any matter, the Engineer shall consult with each
Party in an endeavour to reach agreement. If agreement is
not achieved, the Engineer shall make a fair determination
in accordance with the Contract, taking due regard of all
relevant circumstances.
•! The Engineer shall give notice to both Parties of each
agreement or determination, with supporting particulars.
Each Party shall give effect to each agreement or
determination unless and until revised under Clause 20
[Claims, Disputes and Arbitration].

Consultation Endeavour
Claim Notice Fair
Approval to reach Notice
20.1 determination
Disappoval agreement
–! Cl. 3.5 plays a critical role

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Sample Notice
To [Engineer] Claim Notice
This letter is only suitable for use with FIDIC Yellow Book 20.1
Notice number [insert number]
Dear Sir
" This notice is issued in accordance with Sub-clause [insert Sub-Clause] and
" as the case may be in accordance with Sub-Clause 20.1.
We became aware of
" an error or defect of a technical nature in a document which was prepared for use in
executing the Works
" an error in the Employer's Requirements
" Unforeseeable physical conditions

" We hereby give notice of a claim under the Contract or in connection with the
Contract. We draw your attention to [describe the circumstances giving rise to the
claim with dates and other details as necessary to identify the claim]. We consider
that these circumstances entitle us to a claim for
" damages/cost/quantum meruit [delete as appropriate] against you.
" cost
" cost plus reasonable profit
" extension of Time for Completion
Yours faithfully

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Claim Notice
•! Beware Cl. 1.3: 20.1
•! Wherever these Conditions provide for the giving or issuing of
approvals, certificates, consents, determinations, notices and
requests, these communications shall be:
(a) in writing and delivered by hand (against receipt), sent by mail or
courier, or transmitted using any of the agreed systems of
electronic transmission as stated in the Appendix to Tender; and
(b) delivered, sent or transmitted to the address for the recipient’s
communications as stated in the Appendix to Tender. However:
(i) if the recipient gives notice of another address, communications
shall thereafter be delivered accordingly; and
(ii) if the recipient has not stated otherwise when requesting an
approval or consent, it may be sent to the address from which the
request was issued.
•! Approvals, certificates, consents and determinations shall not be
unreasonably withheld or delayed. When a certificate is issued to a
Party, the certifier shall send a copy to the other Party. When a notice
is issued to a Party, by the other Party or the Engineer, a copy shall
be sent to the Engineer or the other Party, as the case may be.
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Claim Notice
•! The notice (of the Contractor) shall 20.1
–! enable the Engineer to make his own
observations and records of the problem
–! enable the Engineer to consider possible
actions to overcome the problem
–! put the problem on record and make it
possible for the Contractor to receive a
prompt decision on his entitlements
•! Vgl. Totterdill, FIDIC User´s Guide, 2. Auflage,
291
–! A copy of the notice shall warn and inform
the Employer!

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•! The Contractor shall substantiate the Claim, which
means
–! The Contractor shall enable the Engineer to
make a fair determination with regard to all
relevant circumstances
–! The Contractor shall submit all facts, establish
the claim on the merits of the case, make
reference to the relevant clauses of the Contract
and the law
–! The Contractor shall show evidence of the
relevant facts
–! In a summary: The Contractor shall show
whether there is a case or a claim Claim Notice
20.1
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Consultation
Approval
Disappoval

Consultation Endeavour
Claim Notice Fair
Approval to reach Notice
20.1 determination
Disappoval agreement

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Fair
determination

Consultation Endeavour
Claim Notice Fair
Approval to reach Notice
20.1 determination
Disappoval agreement

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Consultation Endeavour
Claim Notice Fair
Approval to reach Notice
20.1 determination
Disappoval agreement

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•! Payments (Measurement)
Start Engineer requires any part by reasonable
of the Works to be measured notice

•!Attendance of the Contractor

•!Supply of particulars by Contractor

Method of measurement (Sub-Clause 12.2)

•!Net actual quantity
•!Method in accordance with BoQ

Evaluation (Sub-Clause 12.3) Agreement or

•!according to rates specified in the Contract determination of
•!according to rates to be determined Contract Price in
accordance with
Sub-Clause 3.5
according to rates according to rates to
specified in the be determined
Contract

Changement of quantity

work instructed as a Variation

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Chart: Payments I (Advance Payments)

Start Issuing of Letter of Contract Price, Cl. 14.1

Acceptance

Appendix to Tender provides Estimation of contract Measurement and

for Advance Payment value executed, Cl. 14.3 Valuation, Cl. 12

Contractor has submitted Advance Payment and Performance Security, Cl. 4.2, 14.2

Application for Advance Application for Interim Statement at Completion

Payment Payment, Cl. 14.3 and Final Statement

Engineer issues Interim

Engineer issues Interim Engineer issues Interim Payment Certificate or Final
Payment Certificate, Cl. Payment Certificate, Cl. Payment Certificate, Cl.
14.2 14.6 14.10, 14.13

Payment within 42 days Payment within 56 days Payment within 56 days

after issuing the letter of after reception of after reception of Final
Acceptance, or within 21 statement by Engineer, Cl. Payment Certificate by
days after receiving 14.7 lit. b Employer, Cl. 14.7 lit. b
Securities, Cl. 14.7 lit.
Failure to pay Contractor entitled to finance charges, Cl. 14.8

Suspension and/or Termination Notice, Cl. 16

Finish
338
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FIDIC Training Module 1

Chart: Payments I (Interim Payments)

Start Issuing of Letter of Contract Price, Cl. 14.1

Acceptance

Appendix to Tender provides Estimation of contract Measurement and

for Advance Payment value executed, Cl. 14.3 Valuation, Cl. 12

Contractor has submitted Advance Payment and Performance Security, Cl. 4.2, 14.2

Application for Advance Application for Interim Statement at Completion

Payment Payment, Cl. 14.3 and Final Statement

Engineer issues Interim

Engineer issues Interim Engineer issues Interim Payment Certificate or Final
Payment Certificate, Cl. Payment Certificate, Cl. Payment Certificate, Cl.
14.2 14.6 14.10, 14.13

Payment within 42 days Payment within 56 days Payment within 56 days

after issuing the letter of after reception of after reception of Final
Acceptance, or within 21 statement by Engineer, Cl. Payment Certificate by
days after receiving 14.7 lit. b Employer, Cl. 14.7 lit. b
Securities, Cl. 14.7 lit.
Failure to pay Contractor entitled to finance charges, Cl. 14.8

Suspension and/or Termination Notice, Cl. 16

Finish
339
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Chart: Payments I (Final Payments)

Start Issuing of Letter of Contract Price, Cl. 14.1

Acceptance

Appendix to Tender provides Estimation of contract Measurement and

for Advance Payment value executed, Cl. 14.3 Valuation, Cl. 12

Contractor has submitted Advance Payment and Performance Security, Cl. 4.2, 14.2

Application for Advance Application for Interim Statement at Completion

Payment Payment, Cl. 14.3 and Final Statement

Engineer issues Interim

Engineer issues Interim Engineer issues Interim Payment Certificate or Final
Payment Certificate, Cl. Payment Certificate, Cl. Payment Certificate, Cl.
14.2 14.6 14.10, 14.13

Payment within 42 days Payment within 56 days Payment within 56 days

after issuing the letter of after reception of after reception of Final
Acceptance, or within 21 statement by Engineer, Cl. Payment Certificate by
days after receiving 14.7 lit. b Employer, Cl. 14.7 lit. b
Securities, Cl. 14.7 lit.
Failure to pay Contractor entitled to finance charges, Cl. 14.8

Suspension and/or Termination Notice, Cl. 16

Finish
340
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FIDIC Training Module 1

Chart: Final Payment (special procedure)
Start End of Defects Engineer issues
Notification period Performance Certificate,
Cl. 11.9
within
56 days
Engineer certifies payment of Contractor applies for Final Six
balance of Retention Monies Payment Certificate, Cl. copies
14.11 etc.

Payment of balance of Contractor submits draft Final Statement,

Retention Monies Cl. 14.11

Issuance of Final Payment Engineer agrees Engineer

Certificate to Employer with draft disagrees with
draft

Payment within 56 days Final Statement + Changes to the

after reception of Payment written discharge draft
Certificate

Evidence that
dispute exists
Failure to pay,
see Cl. 14.8
Dispute Resolution Engineer issues Interim
according to Cl. Payment Certificate for agreed
Finish 20.4 parts, Cl. 14.11
341
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FIDIC Training Module 1

Start Appendix to Tender provides for Eng. certifies interim payments

Retention Monies with deductions, 14.3

Issuance of Taking-Over Certificate Expiry of Defects Notification period

Engineer starts to certify first If agreed, early release Engineer starts to certify second
half of Retention Monies against Bank Guarantee half of Retention Monies

Engineer issues Retention Bank Guarantee is Work remains to be executed under

Money Certificate, Cl. 14.9 handed out Cl. 11

First half when Retention Money Engineer is entitled to withhold

reaches 60 % of limit estimated cost of this work, 14.9

Second half Payment when Engineer issues Retention Money

taking-Over-Certificate is issued Certificate, Cl. 14.9

No time limit for payment (but promptly)

Finish

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FIDIC Allgemeine Vertragsbedingungen

Disputes and dispute avoidance

DAB only all concerned all concerned

persons persons

Appoint- every
1. Meeting Coordination Site Visits
ment 3 months

All concerned persons

Recommen- General
Opinions
dations Meeting

private
Disputes Hearings Decisions
meeting
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Overall structure Jurisdiction level

Yellow
Contractor Book Employer

Dispute Dispute Dispute Working

Adjudication Adjudication Adjudication level
Agreement Agreement Agreement

DAB DAB DAB

Member Member Member

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How to proceed?
28 days

Notice of intention to
Appointment of DAB
refer a dispute to DAB

Reference of the DAB establishes its See Procedural

dispute in writing to DAB proper way of working Rules
112 days
84 days

Submission of Access to
Experts
additional information the site, etc.

See Procedural
Hearing
Rules

DAB gives ist decision Cl. 20.4

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