FIDIC and the Standard Form Contracts

8/13/2019 FIDIC and the Standard Form Contracts

1/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

FIDICMohammed Said Fatha

Consultant Engineer

M C I Arb-London

Member of the Arabic translation Task Groupof FIDIC Contracts

Member of the Arab Center Of Arbitration Cairo.


2/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

1- What is FIDIC?2-Types of standard

forms of contractsIssued by FIDIC &

their main features.

Contents of this presentation.


3/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils HISTORY OF FIDIC

FEDERATION INTERNATIONALE DESINGENIEURS-CONSEILS

Initial foundation in 1913 by French,

Belgium& Switzerland consultants

Engineers comities.

Expanded in 1945 to include 40 National

Associations of Consulting Engineers.

Published first Conditions of Contract in1957

In 2012 has 94 National Association

Members .


4/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

International Federation of Consulting Engineers

Founded in

1913 with

headquartersin Geneva

To promote the

business interests of

suppliers of

technology-basedintellectual services for

the built and natural

environmentFdration Internationale des Ingnieurs-Conseils World Trade Center 2

CH-1215 Genve 15 www.FIDIC.org

To be the

recognized

global voice forthe consulting

engineering

industry


5/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils


6/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

Strategic Objectives

Be the authority on issues relating to business practicePromote the development of a global and viable consulting engineering industry

Represent globally the consulting engineering industry

Enhance the image of consulting engineers

Promote qualityActively promote conformance to a code of ethics and to integrity

Promote commitment to sustainable development

What FIDIC does

What FIDIC offers the industry

What are FIDICs governing principles


7/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

Principles

Quality Services

Value for the clientCost efficiency

Impartiality

Best Practice

Standard contract documents

Policies and guidelines

Fair allocation of risks and responsibilities

SustainabilityLong-term perspective

Respect for the environment

Project-level focus

High Standards

PerformanceKnow how

Integrity

Selection by Ability

Quality of proposals

Skills and experience

Fair remuneration

Capacity BuildingInternational co-operation

Training & transfer of know-ho

Manuals


8/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

Activities

Annual conferences

Provide a meeting place for

clients,contractors and consultants

involved in development

International agenciesKeep the consulting engineering

industrys concerns on the

agenda

Strategic partnerships

LiaisonCommunication between

members,

committees & other

organizations

Publications

Establish best practice proceduresPublish contracts for the

infrastructure industry

Training

Capacity building for the

consulting

industry in both developed and

developing economies

www.FIDIC.org

Distribute updated information

& services to members &

society

B i P i G id B i P i M l


9/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

Business Practice - Guide to Business Practice Manual

- The consulting industry- Organising a consulting firm

- Administration of the firms activities

- Business development

- Human Resources Management

- Financial Management- Client relationships and communications

- Project execution

- Risk Management

- Quality Management

- Business Integrity Management

- Performance Management

Each modulespecifies:

- Content

- Resources

- Case studies

Training Modules


10/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

Works Contracts - Contracts Training Manual

- Professional Services

Agreements

- Practical Use of FIDIC contracts

- Claims and Dispute Resolution

- Dispute Adjudication

- Contract Management

Recommended for

National Adjudicator

Lists

FIDIC

Presidents List

Training Modules

Each module specifies:

- Content

- Resources- Case studies


11/108


12/108

Fdratio

n

Internationale

des

Ingnieu

rs-Conseils

History of FIDIC

Conditions of Contract

Prior to 1957, there were no

internationally recognised contract

conditions for construction work.

1957 first edition of Conditions of

Contract for Works of Civil Engineering

Construction known as the Red Bookwas published.


13/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

History of FIDIC Conditions of Contract

Red Book based upon British form ofcontracts, used by Institution of Civil

Engineers and reflects British

traditions, language and legal system.FIDIC maintains committees to

improve documents and to add

further Contract Conditions for othertypes of construction.


14/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

FIDIC is now best known as: the

organisation which publishes standardforms of contract documents related tothe procurement of engineering works.

These standard forms include those foruse by consulting engineers, such as theWhite Book (Client / Consultant ModelServices Agreement) and other forms which

are suitable for the procurement of buildingand engineering works.


15/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Hereafter aresome Standard

form of contracts

issued By FIDIC.


16/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

The White Book.

The terms of the Client ConsultantModel Services agreement (TheWhite Book) have been prepared byFIDIC and are recommended forgeneral use for the purposes of:

Pre-investment and feasibilitystudies, designs and administrationof construction and projectmanagement.

Where proposals for such servicesare invited on an international basis:

They are equally adaptable fordomestic agreements.


17/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

The White Book Guide.

The purpose of the White BookGuide is twofold, namely :a) To assist those who wish todraft Consultancy Agreementsusing the White Book

(Client-Consultant Agreement)as published or as the mainreference, and

b)To provide some insights intothe rationale for the WhiteBook's provisions and thecontent of the Guide dealingwith completing an Agreementbased on the White Book.


18/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Consultant SelectionGuidelines.

The purpose of theseguidelines is:

1. To present the commonlyused methods of consultant

selection.2. To explain the respectiveprocedures and to combinethem all in one compact

document.3. As well as to emphasize andexplain FIDIC's policies on thesubject of selection.


19/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Representative Agreement. The terms of the FIDIC Model Representative

Agreement are intended for Consultants wishing

to enter into a contract with a Representative forthe provision of services in a foreign country.

Following the Agreement, the clauses of generalapplication have been grouped together in thispublication and are referred to as GeneralConditions.

They are intended for incorporation as printed in

the documents comprising the Agreement. The General Conditions are linked with data given

in the Particular Conditions, identified by thecorresponding numbering of the sub-clauses, andAppendices, so that General Conditions andParticular Conditions (with Appendices) togethercomprise the conditions governing the rights and

obligations of the Parties. Given as Appendices to the Particular Conditions

are Scope of Services, Basis for Remuneration,Consultants Code of Conduct and ConsultantsBusiness Integrity Policy Statement.

Guidance Notes assist in the preparation of anAgreement.


20/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Sub-consultancy Agreement .

The model Sub-Consultancy Agreement

has been developed essentially with a viewto its operation between an internationalfirm and a local firm in a developingcountry, where:

- Either the local firm will be a Sub-Consultant providing certain specificservices and inputs for the internationalfirm;

- Or the international firm will be a Sub-Consultant providing specific specialist orgeneral advisory services to the local firm;

and- The Main Consultancy Agreement willembody FIDICs Client/ Consultant Model

Services Agreement (i.e. The White Book).


21/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Joint Venture (Consortium)Agreement.

The Joint Venture (Consortium) ModelAgreement was prepared essentially to be

used for the association between two or more

Consultants, when:

- The association is for marketing and/or

performing the Services required for a

specific project, rather than for a more

permanent type of arrangement; and

- One party will be an international firm and

one may well be a local firm in the country of

the Project.

It is recommended, but not essential to thewording of the Joint Venture (Consortium)

Model Agreement, that FIDIC's

Client/Consultant Model Services Agreement

(the White Book) will be the basis of the

Agreement for Professional Services with the

Client .


22/108

Fdratio

n

Internationale

des

Ingnieurs-Conseils

Guide to the joint venture andsub-consultancy agreements .

The Joint Venture (Consortium)Model Agreement was preparedessentially to be used for theassociation between two or more

Consultants, when: Services required for a specificproject, rather than theassociation is for marketingand/or performing a more

permanent type of arrangement ;And one party will be aninternational firm and one maywell be a local firm in the countryof the Project.


23/108

Fdratio

n

Internationale

des

Ingnie

urs-Conseils

Quality Based Selection.

Quality Based Selection for theProcurement and Consulting Services.

(QBS=Quality. Based. Selection).

This brochure sets out to help allthose responsible for the selectionof consultants.

It explains how to assess the abilityof consulting firms and whatmethod to use to select the best firmfor the projects.

The phrase Quality-based selection

has been chosen because it bestrepresents the process of selection ofconsulting firms on the basis ofqualifications, experience, ability andintegrity.


24/108

Fdratio

n

Internationale

des

Ingnie

urs-Conseils

Business Practice - Consultant Selection

Quality is paramount in the selection of

consultants, and Quality Based Selection is the

recommended method for procurement.

Best practice principles

Quality is Pre-eminent Harmonisation

Informed Purchaser Liability to be limited

Transparency Insurance

Capacity building Life-cycle costs to be considered

Integrity Monitoring outcomes

Fair competition Design for safety

Updated 2009


25/108

Fdratio

n

Internationale

des

Ingnie

urs-Conseils

Quality Based Selection (QBS)

Guidelines (2011) brochure

This is a guidelines

Brochure for theQuality Based

Selection (QBS).


26/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Business Integrity ManagementSystem (BIMS) Guidelines .

The Guidelines set out:

1. Why consultants should

apply Business IntegrityManagement in all of theirwork.

2. And provide an introduction

to initiating the businessintegrity managementprocess in their firms.


27/108

Fdration

Internationale

des

Ingnie

urs-Conseils

FIDIC Guide to PracticeThe business of a professional services firm.

This training manualforms part of the FIDICGuide to PracticeCollection that includesdocuments related tobest practice that are

published by FIDIC .


28/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Project SustainabilityManagement guidelines.

This guidelines aim to commit to theprinciples of sustainable developmentby building or refurbishing facilities andinfrastructure that make more efficient

use of resources, protect ecologicalsystems and account for communityneeds.PSM enables project owners andconsulting engineers to devise andcustomize indicators to meetstakeholder concerns and issues, whiledemonstrating a rigorous , causal linkto the fundamental concerns and goalsof sustainable development.

G id t Q lit M t i


29/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Guide to Quality Management inthe consulting engineering

industry.

The FIDIC Quality ManagementGuide has been developed as aliving document, subject toperiodic review and update in

order to provide ConsultingEngineers with a comprehensivedocument on Quality Management.

The document sets out reasonswhy Consulting Engineers must

apply Quality Management in alltheir work, and provides anintroduction to initiating thisQuality Management process in afirm.


30/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The Red Book.

The terms of the FourthEdition of the Conditionsof Contract for Works ofCivil Engineering

Construction arerecommended for generaluse for the purpose ofconstruction of such workswhere tenders are invitedon an international basis.

The Conditions , subject tominor modifications, arealso suitable for use ondomestic contracts.


31/108

Fdration

Internationale

des

Ingnie

urs-Conseils

FIDIC RED BOOKSUB-CONTRACTS.

Red Book Subcontract(Condition of subcontract for work ofcivil engineering construction).

For use in conjunction with theConditions of Contract for Works ofCivil Engineering Construction.Part I: General Conditions .Part II: Guidance for the Preparationof the Particular Conditions .Part III: With Forms of Tender, andAgreement.


32/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The Yellow book.

The Yellow Book,

( condition of

contract forelectrical andmechanical works).


33/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Design-Build and Turnkey(Orange Book).

Conditions of Contract for Design-Build and Turnkey (1st Edition, 1995).

Part 1: General Conditions;Part 2: Guidance for the Preparation

of Conditions of ParticularApplication. With Forms of Tenderand Agreement.

The terms of the Conditions ofContract for Design - Build andTurnkey have been prepared by(FIDIC) and are recommended forgeneral use for the purpose of thedesign and construction of workswhere tenders are invited on aninternational basis;


34/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The Orange Book Guide.

Design-Build and

Turnkey(Orange Book) Guide .

f


35/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Insurance of largecivil engineering projects.

The FIDIC Committee which reported in 1981 thispaper was appointed to discuss dissatisfaction with thegaps in insurance cover for large scale engineeringprojects. Particular attention was focused on the

position of the owner who may not always besufficiently experienced to realise the uninsured losseshe faces.

The position was reviewed in the light of the ContractConditions which were in general use at the time ,i.e.

between owner and contractor-FIDIC Conditions ofContract( International) For Works of civil EngineeringConstruction, and between owners and engineer- FIDICIGRA Agreement for design and supervision ofconstruction of works.


36/108

Fdrati

on

Internationale

des

Ingnie

urs-Conseils

Insurance of largecivil engineering projects.

The 1997 edition. The 2005 edition.

B i P ti Ri k M t


37/108

Fdrati

on

Internationale

des

Ingnie

urs-Conseils

Business Practice Guides

Risk Management Manual

Risk Management Primer

Professional Indemnity

Insurance

Professional Liability Insurance

Insurance of Large Projects

Managing Risk

Business Practice Risk Management


38/108

Fdrati

on

Internationale

des

Ingnie

urs-Conseils

Risk Management Manual

This Manual discusses in detail and atlength the many aspects which shouldbe kept in mind and suggests soundmanagement procedures which shouldbe followed in a professional practice to

minimize risk exposure.Systematic risk management involvesidentification, assessment andmitigation of risk, minimization ofpotential damage and setting up ofrealistic mechanisms to finance theresidual risk on project by project basis.This Manual touches on all theseissues.


39/108

Fdration

Internationale

des

Ingnie

urs-Conseils

FIDIC Tendering Procedure.

This Tendering Procedure isprimarily addressed procedureswhich FIDIC recommended for:1. the selection of tenderers.

2. and the preparation andevaluation of tenders for civilengineering contracts.

FIDIC recommends that users of

the new contracts (Construction,Plant and EPC/Turnkey) refer tothe FIDIC Contracts Guide foradvice on tendering procedures.

FIDICS R f


40/108

Fdration

Internationale

des

Ingnie

urs-Conseils

FIDICS Reasons forIntroducing

New Suite of Conditions of

Contract Documents

1. Expansion of types of projects to be

covered that reflects changes withinthe International construction sector.

2. Attempt to standardise format of main

FIDIC contract documents .


41/108

Fdration

Internationale

des

Ingnie

urs-Conseils

3. Introduction of new clauses and

update of certain clauses to meet

current practice within the

construction industry .4. Update the role of The Engineer

and develop use of Disputes

Adjudication Board- DAB .


42/108

Fdration

Internationale

des

Ingnie

urs-Conseils

New FIDIC Contract Conditions

first published in September 1999

Conditions of Contract for Construction(New Red Book) .

Conditions of Contract for Plant andDesign-Build (New Yellow Book).

Conditions of Contract for EPC/ TurnkeyProjects (Silver Book) .

Short Form of Contract (Green Book) .


43/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The New Red Book.

Conditions of Contract for Construction. Which are recommended for building orengineering works designed by theEmployer or by his representative, theEngineer.Under the usual arrangements for thistype of contract, the Contractor constructsthe works in accordance with a design

provided by the Employer.However, the works may include some

elements of Contractor-designed civil,mechanical, electrical and/or constructionworks.

Conditions of Contract for Construction


44/108

Fdration

Internationale

des

Ingnie

urs-Conseils

Conditions of Contract for Construction(Multilateral Development Bank Harmonised Ed. May 2005).

For Building and Engineering Works designed by the Employer.

The MDB Harmonised Conditions ofContract for Construction, arerecommended for building orengineering works designed by theEmployer or by his representative, theEngineer.

The Conditions are for use underlicence for projects financed by theMultilateral Development Banks.

Under the usual arrangements forthis type of contract, the Contractorconstructs the works in accordance

with a design provided by theEmployer.

However, the works may includesome elements of Contractor-designed civil, mechanical, electricaland/or construction works.


45/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The New Yellow Book.

Conditions of Contract for Plant andDesign-Build .

which are recommended for theprovision of electrical and/ormechanical plant , and for the designand execution of building orengineering works.

Under the usual arrangements for thistype of contract, the Contractordesigns and provides, in accordancewith the Employers requirements,plant and/or other works; which may

include any combination of civil,mechanical , electrical and/orconstruction works.


46/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The New Silver Book.

Conditions of Contract for EPCTurnkey Projects.

Which are recommended where oneentity takes total responsibility for thedesign and execution of an

engineering project. Under the usual arrangements for this

type of contract, the entity carries outall the Engineering, Procurement andConstruction: providing a fully-equipped facility, ready for operation

(at the "turn of the key"). This type of contract is usually

negotiated between the parties.

Th N B k


47/108

Fdration

Internationale

des

Ingnie

urs-Conseils

The New green Book.

These Conditions of Contract arerecommended for engineering andbuilding work of relatively small capitalvalue( 500,000$ -1,000,000$).

However, depending on the type of workand the circumstances, the Conditionsmay be suitable for contracts ofconsiderably greater value.

They are considered most likely to besuitable for fairly simple or repetitivework or work of short duration withoutthe need for specialist sub-contracts.

This form may also be suitable forcontracts which include, or whollycomprise contractor-designed civilengineering, building, mechanicaland/or electrical works.


48/108

Fdration

Internationale

des

Ingnieurs-Conseils

The FIDIC Contracts Guide.

Each of the three new FIDIC contracts(Construction, Plant and Design-Build andEPC/Turnkey) is in three parts :

- General Conditions , the part which isintended to be incorporated (by reference)into each contract , and whose Sub-Clausesare often referred to in this Guide without the

use of the word "Sub-Clause" (for example :"CONS 1.1");

Guidance for the Preparation of the ParticularConditions, the part which is referred to inthis Guide as "GPPC", which commences byproposing suitable wording to incorporate theappropriate General Conditions into a

contract , and which concludes with annexedexample forms of securities;

And - Forms of Letter of Tender, ContractAgreement and Dispute AdjudicationAgreement , the part which is referred to inthis Guide as "the Example Form (s)".

DBO C t t


49/108

Fdrat

ion

Internationale

des

Ingnieurs-Conseils

DBO Contract

FIDIC has chosen to adopt the green-field

Design-Build-Operate scenario, with a 20- yearoperation period, and has opted for a single

contract awarded to a single contracting entity

(which will almost certainly be a consortium or

joint venture) to optimise the coordination of

innovation, quality and performance, rather than

award separate contracts for design-build andfor operation.

The contractor has no responsibility for either

financing the project or for its ultimate

commercial success.

This is the basis upon which this document has

been prepared.

The document, as written, is not suitable for

contracts which are not based on the traditional

Design-Build-Operate sequence, or where the

Operation Period differs significantly from the

20 years adopted.


50/108

FIDIC DBO C t t G id (C t)


51/108

Fdrat

ion

Internationale

des

Ingnieurs-Conseils

FIDIC DBO Contract Guide (Cont)

These can be briefly identified as

follows:

up-graded visual timelinesshowing key activities;

definitions listed alphabetically;

risk and insurance provisions

restructured and up-dated;

claims procedures up-dated withemphasis on dispute avoidance;

Particular Conditions containing

two Parts;

Part A - Contract Data

Part B - Special Provisions

Additional sample forms provided.

Each of these aspects, and much

more, is covered in this guide

C diti f S b t t f C t ti


52/108

Fdrat

ion

Internationale

des

Ingnieurs-Conseils

Condition of Subcontract for Construction(1st Edition 2011)

For use in conjunction with the FIDIC

Conditions of Contract for Construction, 1st

Edition 1999.General Conditions

Guidance for the Preparation of the Particular

Conditions

Forms of Letter of Subcontractor's Offer,

Contractor's Letter of Acceptance and

Subcontract Agreement

Foreword The terms of the Conditions ofSubcontract for Construction have been

prepared by the Fdration Internationale des

Ingnieurs-Conseils (FIDIC) and are

recommended for use in conjunction with the

FIDIC Conditions of Contract for Construction

for Building and Engineering Works Designed

by the Employer, 1st Edition 1999, and with

the Multilateral Development Bank

Harmonised Edition of the FIDIC Conditions of

Contract for Construction for Building and

Engineering Works Designed by the Employer

CONDITIONS OF CONTRACT


53/108

Fdrat

ion

Internationale

des

Ingnieurs-Conseils

CONDITIONS OF CONTRACT

Guide

published

2001

published 1999

CONTRACT CONTINUITY


54/108

Fdrat

ion

Internationale

des

Ingnieurs-Conseils

CONTRACT CONTINUITY

Employer /consultant

design

Contractor

design

Various

formats

Uniform format and

contents


55/108


56/108

C f D d i d R l i W k


57/108

Fdration

Internationale

des

Ingnieurs-Conseils

Contract for Dredging and Reclamation Works.

Form of Contract for Dredging and Reclamation Works .

It contain:

1. Agreement.2. General Conditions.

3. Rules for Adjudication .

4. and Notes for Guidance.

It has been issued With collaboration of TheInternationalAssociation of Dredging Companies(IADC), and for dredging and reclamation work.

The aim has been to produce a straightforwarddocument which includes all essential commercialprovisions, and which may be used for all types ofdredging and reclamation work and ancillaryconstruction with a variety of administrativearrangements.

Under the usual arrangements for this type of contract,the Contractor constructs the Works in accordance withdesign provided by the Employer or by his Engineer.

However, this form may also be suitable for contractsthat include, or wholly comprise, contractor-designedworks. In addition, the Employer has a choice ofvaluation methods,

Operation maintenance and


58/108

Fdration

Internationale

des

Ingni

eurs-Conseils

Operation, maintenance andtraining.

Operation, Maintenance and

Training (OMT) guidelines for the

provision of OMT services.

This guidelines set out proper

planning to ensure:1. Successful project commissioning.

2. Planning for training for operation

and maintenance .

3. The training of personnel must be

accomplished prior to project

start-up and testing.

Q lit f C t ti


59/108

Fdration

Internationale

des

Ingni

eurs-Conseils

Quality of Construction.

A best-practice approach tohelp solve a worldwide lackof Quality of Construction.

Contents:

1. Introduction

2. FIDIC Quality of ConstructionSurvey

3. Policy and strategy

4. Approach to Quality

5. Recommended actions

6. Appendices

Work in Progress


60/108

Fdration

Internationale

des

Ingni

eurs-Conseils

Work in Progress

Contracts & Agreements

- Construction and Plant Sub-contracts (new)

- Client - Architect (new)

- Joint venture (update)

- Sub-consultant (update)

- Project Procurement (replaces Tendering Procedure)

Business Practice

- Quality Based Selection guide (update)

- Risk Management guide (update)

- Definitions of Scope guidelines (new)- Design for Safety guidelines (new)

FIDIC Contracts


61/108

Fdration

Internationale

des

Ingnieurs-Conseils

FIDIC Contracts

Contractor Employer

Engineer

Powers of Engineer

Contractual Relations

61

FIDIC C t t


62/108

Fdration

Internationale

des

Ingnieurs-Conseils

FIDIC Contracts

Common Law v. Civil Law FIDIC Conditions of Contracts have

their roots in the common law.

Lots of concepts are not understandwithout rfrence to common law.

Most of the notions are issued from

the anglo-saxon legal vocabularies .

62

FIDIC C t t


63/108

Fdration

Internationale

des

Ingnieurs-Conseils

FIDIC Contracts

Common Law v. Civil Law (mots cl)

Taking over certificatev. rception

Defects Notification Periodv. responsabilit pournon conformit et garantie de parfait achvement

Delay Damagesv. Pnalits

Time for Completionv. Dlai dachvement

Engineerv. Matre doeuvre

Claimv. Avenant

63

FIDIC Contracts


64/108

Fdration

Internationale

des

Ingnieurs-Conseils

FIDIC Contracts

Understanding FIDIC

64

Legal background

Implied Definitions

Context

Common lawSubstantial completion

v. acceptation

Liquidated damages

v. penalties

Reasonable/Shall

Definitions

To give notice

Defects Notification

Period

Wayof

working Identify

term

Check

definitions

Check

Legal

background

Check

context


65/108

FIDIC Contracts


66/108

Fdration

Internationale

des

Ingnieurs-Conseils

Instruction

FIDIC Contracts

White Book

Contract Administration

Contract

authorises

Consultant/Engineer

to act

Contract

administration

Determination

Certification

Valuation

66


67/108


68/108

FIDIC Contracts and Dispute Resolution


69/108

Fdra

tion

Internationale

des

Ingnieurs-Conseils


Claims Claim Management

69

Risk Assesment Management

Input

Legal Advice

Application forStatement

Calculation

Advice

Supervision

EngineeringRepresentative

Action


70/108



71/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Start A new event becomes apparent

Which kindof event?

Actual progress is too slow to completewithin the Time for Completion (Cl. 8.6)or a Variation seems to be appropriate

(Cl. 13)

A claim has been notified by theContractor or the Employer

The Contractor gives notice of the dateafter which the Contractor will be ready

to carry out Tests on Completion (Cl. 9.1)

A defect appears or a damage occurs(Cl. 11.1) or work is not in accordancewith the Contract (Cl. 7.6) etc.

Contractor gives notice that work is ready

List of events, Cl. 8.6,8.3, 1.5, 9.1 etc. to beestablished

List of actions to

be established

Determination of a claim

To approve, certify

Instruction

To examine, to inspect, totest, to measure

Request of proposal

Action of the Engineer

Finish

Chart 2: Actions of the Engineer (FIDIC Red Book)

Application for Payment (Cl. 14)

Contractor submits a proposal

71

FIDIC Contracts and Dispute


72/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

FIDIC Contracts and Dispute

Resolution

Actions of the

Engineer

ApprovalCheckCertificateConsentDeterminationDisapprovalExaminationInspectionInstructionNoticeProposalRequestSuspensionTestValuation

List of actions tobe established

Contract Interpretation

Payment Certification

Taking-Over

Variations

Cost Management

Time Management

Claim Determination

Quality of Works andWorkmanship

Cl. 1.5 with

consequence ofvariation

Cl. 7.4, 7.6, 9.4,11.1, 11.3, 11.4

Cl. 14

Cl. 10

Cl. 13

White Book

Cl. 13.2

Cl. 8.3, 8.6, 8.1

Cl. 2.5, 3.5

72



73/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils


All the claims should be setteled by Binding agreement or by disipute

resolution decision.

Every solved Claim should be included in the contractual price

Ajustement or deduction

73

ClaimNotice ClaimProcedure Amount due

Amount dueClaim

Notice

Claim

Procedure

Contractor

Employer

Balance

Balance

Payment

CertificatePayment

Retention of

uncertified

amounts

excluded2.5

Balance



74/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils


Commencement Date

Letter of

Acceptance

or

Contract

Agreement

Commencement

Date

21 days

7 days

Programme

Engineer Contractor

Performance

Security

28 days

14 daysAccess to the site

74

FIDIC CONTRACTS


75/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

FIDIC CONTRACTS

CONSTRUCTION

PLANT AND DESIGN-BUILD

EPC/TURNKEY PROJECTS

SHORT FORM OF CONTRACT

CLIENT/CONSULTANT MODEL SERVICES AGREEMENT

FEATURES AND ADVANTAGES


76/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

FEATURES AND ADVANTAGES

fair apportioning of risks, rights and obligations between the parties

BALANCED

WELL

TRIED

long case history for earlier contracts

ACCEPTED

known and recognised; in wide use for international contracts

SUPPORTED

recommended or required by development banks, ISPA, etc.

EFFECTIVE

clear and complete conditions; time limits; provisions for adjudication


77/108

Key points: PLANT & DESIGN-BUILD


78/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Key points: PLANT & DESIGN BUILD

Contractor designs.

Engineer, working for the Employer.

Lump sum pricing.

Payments according to progress.

Certification of payments by Engineer.

Key points: EPC/TURNKEY PROJECTS


79/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Key points: EPC/TURNKEY PROJECTS

Contractor designs and takes full

responsibility.

Employer mayappoint a Representative.

Fixed price, to cover risks taken on by

Contractor.

Payments according to progress.

No certification of payments.

Key points: SHORT FORM


80/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Key points: SHORT FORM

Simple projects.

Design by either party.

Employer mayappoint a Representative.

Valuation as appropriate; to be agreed.

Payments according to value of Works executedand Materials and Plant delivered to site.

No certification of payments.

Key points: CLIENT/CONSULTANT


81/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

ey po ts C /CO SU

Agreed Scope of Services: Appendix A.

Normal, Additional and Exceptional

Services.

Normal Services priced as agreed.

Additional and Exceptional Services atrates agreed.

Payment schedule as agreed.

FIDIC GUIDES


82/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

The FIDIC Contracts Guide.

The White Book Guide.

Guide for the preparation of particular conditions

(in the major contracts).

Notes for Guidance (in the Short Form of Contract).

Tendering Procedure and Pre-qualification forms.

Quality Based Selection.

USE OF FIDIC CONTRACTS


83/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Match contract and project.

Decide early.

Appoint DAB early.

Draft by professionals.

Do not touch the General Conditions.

Buy originals.

PRINCIPLES OF PROCUREMENT


84/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Effectiveness.

Economy.

Efficiency.

Accountability.

Transparency / confidentiality.

Strong competition.

Publicity, wide participation.

Fair and equal conditions.

Standard procedures.

Standard documentation.

PROCUREMENT CATEGORIES


85/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Goods.

Works.

Consultant services.

Other services.


86/108

SELECTION PROCEDURES/CRITERIA


87/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Criteria defined and published inadvance.

Economically most advantageousoffer.

Quality based selection.

Quality and cost based selection.

PROCUREMENT STEPS.


88/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Preparation.

Publication.

Pre-qualification / short-listing.

Invitation.

(Submission).

Evaluation.

Award, contracting.

Supervision, contract administration.

Lessons learned.

PREPARATION OF PROCUREMENT


89/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Determination of needs and objectives.

Determination of constraints.

Identification of parties.

Planning, budgeting, financing.

Contract type.

Selection procedure.

Requirements / Specifications / Bills of Quantities

/ Terms of Reference.

Pre-qualification and evaluation criteria. Particular conditions.

Publicity.

Tender documents.

CONTRACT ADMINISTRATION


90/108

Fdra

tion

Internationale

des

Ingn

ieurs-Conseils

Supervision.

Enforcement.

Quality and quantity.

Invoice verification.

Payments.

Extensions, variation orders, amendments.

Termination.

Disputes and their resolution.

RISKS IN PROCUREMENT


91/108

Fdration

Internationale

des

Ingn

ieurs-Conseils

Wrong goods, works, services.

Bad value for money.

Not available, productive, reliable, maintainable.

Not used (!)

Fraud.

Corruption.

Construction General Conditions Contents.


92/108

Fdration

Internationale

des

Ingn

ieurs-Conseils

92

1 - General Provisions .2 - The Employer .3 - The Engineer .4 - The Contractor .5 - Nominated Subcontractors ..6 - Staff and Labour .7 - Plant, Materials and Workmanship .8 - Commencement, Delays and Suspension . . 9 - Tests on Completion .

10 - Employer's Taking Over .11 - Defects Liability .12 - Measurement and Evaluation .13 - Variations and Adjustments .14 - Contract Price and Payment .15 - Termination by Employer .16 - Suspension and Termination by Contractor .17 - Risk and Responsibility .18 - Insurance .19 - Force Majeure .20 - Claims, Disputes and Arbitration .

Major steps under FIDIC Explaining the timeline

Construction Contract 1999 Red Book


93/108

Fdration

Internationale

des

Ingn

ieurs-Conseils

Construction Contract 1999 Red Book

Tender Stage

Floating

the Tender

Tender

Submission

Tender Period

Base Date

Tender Evaluation28d

Clause 13.7Adjustment forChanges in Legislation

Clause 13.8Adjustment for

Changes in Cost



94/108

Fdration

Internationale

des

Ingn

ieurs-Conseils

Project Starting

Issuance of

LOA

28d

Performance

Security 4.2

Project Execution

Time for Completion42d Max.

Payments will not be certified 14.6

Contract Termination 15.2

Employer may withhold the site access

2.1

Commencement

Date 8.1

Extra

Cost

Insurance

Typical Sequence of PaymentEvents Envisaged in Clause 14


95/108

Fdration

Internationale

des

Ingn

ieurs-Conseils

95

Events Envisaged in Clause 14



96/108

Fdration

Internationale

des

Ingnieurs-Conseils Interim Payments

Payment

Application


97/108


E l t


98/108

Fdration

Internationale

des

Ingnieurs-Conseils Final Payment

PC


99/108

Fdration

Internationale

des

Ingnieurs-Conseils

Claim Procedure

Event


100/108

Fdration

Internationale

des

Ingnieurs-Conseils

Project Closure

TOC

DNP

Performance

Certificate

Remedying of defects


101/108

Fdr

ation

Internationale

des

Ingnieurs-Conseils

Dispute

DAB Procedure

Decision

Arbitration

Amicable Settlement

Clause 20.4

Clause 20.2, 20.4

Clause 20.4

Clause 20.5

Clausel 20.6, 20.7

Stages of disiputes resolution

101

DAB :How This procedure work?


102/108

Fdr

ation

Internationale

des

Ingnieurs-Conseils

Reference of the

dispute in writing to DAB

Submission of

additional information

DAB organise the

procedure

Access to

the site, etc.

Hearing

DAB gives ist decision

See Procedural

Rules

Experts

84days

See Procedural

Rules

Cl. 20.4

Notice of intention to

refer a dispute to DAB Appointment of DAB

28

days

112

days

102


103/108

Typical Sequence of Dispute


104/108

Fdr

ation

Internationale

des

Ingnieurs-Conseils

74

Events Envisaged in Clause 20


Event


105/108

Fdr

ation

Internationale

des

Ingnieurs-Conseils

DisputeEvent


106/108

Fdr

ation

Internationale

des

Ing

nieurs-Conseils

procedure of Arbitration (Clause 20.6).

The ICC is not a permanent tribunal,butit is an organisation:

Who rcommends rules of procedures.

Who nominates Arbitrators.

Who is charged of quality control.

106

Unless otherweise agree

the dispute shall be settled

under the Rules of Arbitration of the ICC


107/108


108/108

Fdr

ation

Internationale

des

Ing

nieurs-Conseils

Thanks

FIDIC and the Standard Form Contracts

Documents

Transcript of FIDIC and the Standard Form Contracts