FIDIC CONTRACTS A COMPARATIVE - CEAI · PDF fileFIDIC CONTRACTS – A COMPARATIVE ......
Transcript of FIDIC CONTRACTS A COMPARATIVE - CEAI · PDF fileFIDIC CONTRACTS – A COMPARATIVE ......
FIDIC CONTRACTS – A COMPARATIVE
Uttam Sengupta
Sr. GM – Contracts & Risk Management
FIDIC AND INTRODUCTION TO FIDIC
CONDITIONS OF CONTRACT
2
OUTLINE
What is FIDIC?
Characteristics of FIDIC Conditions of Contract
Application Prospect of FIDIC Conditions of Contract
3
FIDIC CONDITIONS OF CONTRACT
The new models include :
FIDIC Conditions of Contract for construction, the (New Red Book)
FIDIC Conditions of Contract for Plant and Design/Build, the (New
Yellow Book)
FIDIC Conditions of Contract for EPC Turnkey Projects, the (Silver
Book)
FIDIC Short Form of Contract, the (Green Book)
4
THE PARTIES IN A FIDIC CONTRACT
Contracting Authority/
Employer
Contractor - Contract
between Employer &
Contractor under Red/
Yellow FIDIC
Engineer - Contract
between Employer &
Engineer
Engineer to administer
FIDIC Contract on behalf of
Employer
5
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of
Contract for
Design, Build and
Operate Projects
“Gold Book”
Key Features of
Contracts:
Employers
Obligations
Access Permits,
licenses or
approvals
Employers
personnel
Employers
Financial
Arrangements
Access Permits,
licenses or
approvals
Employers
personnel
Employers
Financial
Arrangements Site
data
Access Permits, licenses or
approvals Employers
personnel Employers Financial
Arrangements
Access Permits,
licenses or
approvals
Employers
personnel
Employers
Financial
Arrangements
Role of
Engineer
Engineer:
Duties and limits on
authority
Instructions
Ability to replace on
42 days notice
Engineers
determinations
Engineer:
Duties and limits
on authority
Instructions
Ability to replace
on 42 days notice
Engineers
determinations
Dual role
No Engineer, Employers
Representative appointed
Duties and limits on authority.
Ability to replace on 14 days
notice
No Engineer,
Employers
Representative
appointed
Duties and limits
on authority.
Ability to replace
on 14 days notice
Comparison of key features of the FIDIC Contracts
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for
Design, Build and
Operate Projects
“Gold Book” Administering
Claims
Employers Claims:
Requirement for
notice and particulars
to the Contractor
A notice to be given
as soon as
practicable.
Ability to set off or
deduct
Employers Claims:
Requirement for
notice
Notice to be given as
soon as practicable.
Ability to set off or
deduct
Employers Claims:
Requirement for notice
- notice to be given as soon as
practicable.
Ability to set off or deduct
Employers Claims:
Requirement for notice
– as soon as
practicable.
Claim to be
determined by
Employers.
Representative and, if
party is dissatisfied
issue a notice of
dissatisfaction and
proceed to Dispute.
Adjudication Board
(DAB) within 28 days
of determination.
Amount determined by
DAB set off or
deducted.
Contractors Claims:
Initial notice must be
given within 28 days
after the Contractor
became aware of, or
should have become
aware of the event or
circumstance giving
rise to the claim.
Condition precedent.
Contractors
Claims:
Initial notice must be
given within 28 days
Objective test and
condition precedent.
Fully detailed claim
within 42 days.
Engineers response
with 42 days.
Contractors Claims:
Initial notice must be given within
28 days after becoming (or
should become ) aware of the
event or circumstance.
Fully detailed claim within 42
days. Employers response within
42 days. Condition precedent.
Contractors Claims:
Contractor must
comply with specified
procedure (condition
precedent), initial
notice within 28 days
(extension only on
DAB decision),
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for
Design, Build and
Operate Projects
“Gold Book” (cont) Fully detailed claim
must be sent to
Engineer within 42
days of becoming
aware of (or should
be aware of) event or
circumstance.
Engineer to respond
to claim within 42
days.
Contractor must keep
contemporaneous
records and if
instructed submit to
Employers
Representative, with
42 days of even, send
employers
Representative fully
detailed claim
(extension only by
DAB decision).
If circumstances /
event has continuing
effect, Contractors fully
detailed claim
considered as interim,
Contractor send further
interim claims at 28
day intervals, send
final claim within 28
days after end of
effects resulting from
event/circumstance.
Within 42 days receipt
of fully detailed claim
Employers
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract
for Design, Build and
Operate Projects “Gold
Book” (cont) Representative determines
claim. If no response
deemed rejected and
either party can refer to
DAB. If dissatisfied with
decision of Employers
Representative refer to
DAB within 28 days.
Contract Price Lump sum
Advance Payment
Advance Payment
Guarantee
Retention monies
Adjustment for
changes in
legislation and cost
Employer not liable
to Contractor for any
matter or thing in
connection with
Contract or
Execution of Works
except to extent
Contractor included
amount expressly for
it in Final Statement
and also Statement
at Completion
Lump sum contract
price
Advance payment
All payments
conditional on
receipt of required
Performance
Security Retention
Adjustments for
changes in
legislation and cost
fluctuations
Lump sum
Contractor to pay duties,
taxes and fees
Advance payment
Performance security
Retention
Currencies for payment
stipulated – this covers
payment of damages under
contract
Adjustments for changes in
legislation
Adjustments for changes in
costs
As submitted for Design-
Build and Operation
Service including Asset
Replacement Fund.
Contractor pays taxes,
duties, fees
Advance payment
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract
for Design, Build and
Operate Projects “Gold
Book”
Payment
Procedure
Periodic / stage
payments
Engineer issues
interim Payment
Certificate within 28
days receiving
Statement and
Supporting
Documents
Employer pays
amount certified
within 56 days
Engineer receiving
Statement and
Supporting
Documents (Interim
Payment Certificate)
and 56 days after
Employer receives
Final Payment
Certificate
Periodic or stage
payments
Contractor submits
application to
Engineer
Engineer issues
interim payment
certificate with 28
days of receipt of
application.
Employer pays the
amount certified
within 56 days of
application receipt.
Periodic payments
Employer to pay Contractor
within 28 days of receipt of
Statement and supporting
documents. Employer pays
first installment of advance
payment within 42 days of
date of Contract coming into
effect or 21 days of receipt
of security documents.
Employer pays amount due
in respect of each statement
within 56 days of receipt of
Statement and supporting
documents.
Final payment due 42 days
after receipt of Final
Statement and written
discharge
Contractor entitled to
financing charges 3
percentage points above
discounted rate of central
bank in country of currency
of payment compounded
monthly for delayed
payment.
If contract has schedule of
Payments as per
schedule. Monies to be
paid per Asset
Replacement Fund
Schedule. Employers
Representative issues
interim Payment
Certificate within 28 days
receiving Statement and
Supporting Documents.
Employer pays amount
certified within 56 days
receiving Statement and
Supporting Documents.
Final payment within 56
days Employer receiving
Final Payment Certificate
Design Build and final
Payment Certificate
Operation Service.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract
for Design, Build and
Operate Projects “Gold
Book”
Variations Engineer may initiate
any time prior to
issue of Taking Over
Certificate either by :
an instruction or
request for
Contractor to submit
a proposal.
Contractor to
execute unless gives
prompt notice to
Engineer that
Contractor can’t
readily obtain goods
required.
Engineer may
initiate any time
prior to Taking Over
Certificate either by
: an instruction or a
request for
Contractor to
submit a proposal.
No entitlement to
omit any work to be
carried out by
others.
Contractor to
execute variation
unless prompt
notice given to
Engineer that; can’t
readily obtain
required goods; it
will reduce the
safety and
suitability of the
Works, adverse
impact of Schedule
of Guarantees
Engineer then
cancels, confirms or
varies instruction,
value engineering.
Employer may initiate
variations any time prior to
issuing of Taking Over
Certificate either by;
instruction or request for
Contractor to submit
proposal.
Employer can instruct
variations for work of a
minor or incidental nature
on a day work basis. This
will be valued in accordance
with day work schedule
Employer may initiate
variations any time prior to
issuing of Commissioning
Certificate either by; an
instruction, proposal.
Contractor to execute
Variation unless prompt
notice given that, can’t
readily obtain goods
required, reduce safety or
suitability of works,
adverse impact on
schedule of guarantees,
adverse affect on
Operation Service.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Variation
procedure
Engineer requests
proposal; Contractor
responds in writing
as soon as
practicable with
reasons for non
compliance or
proposal. Engineer
shall respond to
Contractor as soon
as practicable.
Variations evaluated
in accordance with
Measurement and
Evaluation
provisions unless
Engineer instructs /
approves otherwise
Engineer requests
proposal;
Contractor
responds as soon
as practicable with
reasons for non
compliance or
proposal. Engineer
responds as soon
as practicable with
approval,
disapproval or
comments. Upon
instructing or
approving a
Variation, Engineer
agrees or
determines
adjustments to
Contract Price and
Schedule of
Payments
Employer requests proposal;
Contractor responds as soon as
practicable with reasons for non
compliance or proposal
On instructing or approving
variation, Employer will agree or
determine adjustments to
Contract Price and Schedule of
Payments. Adjustments will
include reasonable profit and
take into account Contractors
submissions under value
engineering
Employer
Representative
requests proposal;
Contractor responds
as soon as
practicable with
reasons for non
compliance or
proposal.
On instructing or
approving variation,
Employers
Representative will
agree to determine
adjustments to
Contract Price and
Schedule of
Payments and will
include reasonable
profit and take into
account Contractors
submissions for value
engineering.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Programming
issues:
Commencement
Engineer to give
atleast 7 days notice
of Commencement
date.
Commencement
date to be within 42
days of receipt of
Letter of Acceptance
Engineer to give
atleast 7 days
notice of
Commencement
date.
Commencement
date to be within 42
days of receipt of
Letter of
Acceptance
Not applicable if
there is a Contract
Agreement. Ensure
that Contract has
retrospective effect.
Employer to give atleast 7 days
notice of Commencement Date.
Commencement date to be
within 42 days of date. Contract
comes into effect.
Employer
Representative to
give atleast 14 days
Notice of
Commencement date.
Commencement date
to be within 42 days
of Contractor
receiving Letter of
Acceptance.
Programming
Issues :
Completion
Contractor to
complete whole
Works and Section
within Time for
Completion.
Completion includes
passing Tests on
Completion;
completing all work
in Contract required
for Works or Section
to be considered
completed
Contractor to
complete whole
Works and Section
within Time for
Completion.
Completion
includes passing
Tests on
Completion; and
completing all work
required under the
Contract
Contractor to complete whole
Works and Section within Time
for Completion.
Completion includes passing
Tests on Completion;
completing all work stated in
Contract as required
Contractor to
complete the whole of
the Design-Build and
each section by Time
for Completion of
Design Build or as
extended and will
provide Operation
Service for the period
stated in Contract
Data (as agreed by
partied).
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Programming
Issues:
Programme
Contractor to submit
programme within 28
days of receiving
Notice of Commence
Engineer has 21
days to respond
Contractor give
prompt notice to
Engineer of: specific
probable future
events or
circumstances which
may adversely affect
the work, increase
the Contract Price or
delay execution of
the Works
Contractor to submit
programme with in
28 days of Notice of
Commence
Engineer has 21
days to respond.
Submission of
revised
programmes. Early
warning.
Contractor to submit programme
to Employer within 28 days of
Commencement Date. Employer
has 21 days to respond to
Contractors programme
otherwise Contractor proceeds
with programme. Submission of
revised programmes.
Contractor to submit
programme within 28
days receiving Notice
of Commencement
date. Employers
representative has 21
days to respond to
Contractors
programme otherwise
Contractor proceeds
with programme.
Submission of revised
programme within 14
days of notice of
programme failing to
comply with contract
or actual progress
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Programming
Issues: EOT
Variations
Exceptionally
adverse climatic
conditions
Unforeseeable
shortages of
personnel or goods
caused by epidemic
or govt. actions
cause of delay giving
entitlement under the
conditions.
Delay, impediment
or prevention
attributable to
Employer, Employer
personnel or
Employers other
Contractors on site
Delay caused by
authorities
Variations
Exceptionally
adverse climatic
conditions
Unforeseeable
shortages
Employer acts of
prevention. Any
other cause of
delay giving an
entitlement under
the conditions.
Delay, impediment
or prevention
caused by or
attributable to
Employer, his
personnel or
Employers other
Contractors on site
Variations
Cause of delay giving
entitlement under the conditions.
Delay, impediment or prevention
caused by or attributable to
Employer
Delay caused by authorities
For completion of
Design Build
Variations
Cause of delay giving
entitlement under the
conditions.
Exceptionally adverse
climatic conditions.
Unforeseeable
shortages of
personnel or goods
caused by epidemic
or govt. action
Delay, impediment
prevention caused by
Employer, his
personnel or other
Contractors on site
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk allocation :
Design
responsibility
Contractor
generally
responsible for
design. Employer
requirements and
contractors
Proposals Errors in
the Employers
requirements.
Contractor review
period. Fitness for
purpose. If errors,
omissions,
ambiguities,
inconsistency
defects found in
Contractor
documents,
Contractor
Documents and
Works corrected at
Contractors cost
notwithstanding
consent or
approval.
Contractor generally responsible
for design
Contractor deemed to have
scrutinized Employers
requirements. Contractor
responsible for design of Works
and for accuracy of Employers
requirements
Contractor undertakes the
design. Contractors documents,
execution of completed works
will be in accordance with Laws
in country and documents
forming Contract (as
altered/modified by variations).
Contractor
responsible for design
of works. Contractor
warrants experience
and capability of
designers.
Conditions of
Contract for
Construction
“Red Book”
Conditions of Contract for
Plant Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk
allocation:
Design
Developmen
t
Contractor prepare all
Contractors Documents.
Contractor Documents to be
submitted to Engineer for
review and (where specified)
approved. Review period not
to exceed 21 days from
receipt of Contractors
Documents and notice.
Engineer notified contractor
within review period if
Contractors Document fails to
comply with Contract.
Execution of relevant works
not to commence prior to
expiry of review period. If
Contractors Document
submitted for Engineers
approval. Engineer gives
notice to Contractor that
Contractors Document is
approved, with or without
comments, or that it fails to
comply. Engineers approval
is a condition precedent to
relevant part of the Works
commencing. Absence of
notice within review period
triggers deemed approval.
Contractor shall prepare all
Contractors Documents.
Documents to be submitted for
review. Review period not to
exceed 21 days from receipt of
Contractors. Documents and
Contractors notice. Employer
notifies Contractor within review
period if Contractors Document
fails to comply with Contract.
Contractor shall
prepare all
Contractors
Documents.
Documents to be
submitted for review,
review not to exceed
21 days from date.
Employer's
Representative
receives Contractors
Document and
Contractors Notice.
Employers
Representative
notified Contractor in
review period if
Contractors
Documents fall to
comply with Contract.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk allocation:
Site Conditions
Employer to make
available to
Contractor all
relevant data in
Employers
possession re
subsurface and
hydrological
conditions including
environmental
aspects Contractor
responsible for
interpretation.
Deemed to have
obtained all
necessary
information and
deemed inspection
of site. Sufficiency
of Accepted Contract
Amount
Employer to provide
site data Contractor
responsible for
interpretation.
Deemed
awareness (to the
extent practicable).
Sufficiency of
Accepted Contract
Amount
Employer to make available to
Contractor all relevant data in
Employers possession re
subsurface and hydrological
conditions including
environmental aspects
Contractor responsible for
verifying and interpreting all
data.
Employer has responsibility for
accuracy, sufficiency or
completeness of data sufficiency
of contract price.
Employer to make
available to
Contractor all relevant
data in Employers
possession re
subsurface and
hydrological &
climatic conditions at
site including
environmental
aspects. Contactor
deemed to have
inspected and
examined the site, its
surroundings data
and other available
information.
|
Sufficiency of
accepted Contract
amount
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk allocation :
Unforeseeable
physical
conditions
Contractor notifies
Engineer as soon as
practicable.
Engineer inspects
and makes
determination.
Entitlement to
Extension of Time
and payment of cost.
Engineer can take
into account more
favourable
conditions
Contractor notifies
Engineer as soon
as practicable.
Engineer inspects
and makes
determination.
Entitlement to
Extension of Time
and additional cost.
Engineer can take
into account more
favourable
conditions
Unforeseeable difficulties :
Contractor deemed to have
obtained all necessary
information as to risks,
contingencies and other
circumstances which may
influence / effect Works.
Contractor accepts total
responsibility for having
foreseen all difficulties and costs
of successfully completing
works, no adjustment to
Contract Price for unforeseen
difficulties.
Contractor notifies
Employers
Representative as
soon as practicable.
Employers
Representative
inspects /
investigates.
Entitlement to
Extension of Time
and payment of cost.
Employers
Representative can
take into account
more favourable
conditions and any
evidence of physical
conditions foreseen
by Contractor when
submitting tender.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold Book”
Risk allocation:
Indemnities
Contractors
Indemnities: injury,
sickness, disease,
death damage or
loss of property, real
or personal (other
than Works) arising
out of Contractors
design (if any) the
execution and
completion of works
and remedying
defects. Is
attributable to
negligence, wilful act
or breach of Contract
by Contractor.
Contractors
Indemnities:
injury, sickness,
disease, death.
Damage or loss of
property (other than
Works). Contractors
care of the Works.
Employers
Indemnities:
injury, sickness,
disease, death
attributable to any
negligence, wilful
act or breach of
Contract by
Employer his
personnel or agents
and for matters for
which liability is
excluded from
insurance cover
(insurance under
contract).
Contractor Indemnities:
Injury, disease, death, loss
property real or personal (other
than Works) to extent damage
or loss arises out of or in the
course of or by reason of
design, execution and
completion of Works and
remedying of defects or not
attributable to any negligence,
wilful act or breach of Contract
by Employer.
Employers Indemnities:
injury, sickness, disease,
death attributable to any
negligence, wilful act or breach
of Contract by Employer his
personnel or agents and for
matters for which liability is
excluded from insurance cover
(insurances under contract).
Contractor
Indemnities: Injury,
disease, death, loss
property real or
personal (other than
Works). Indemnify
Employer against all
errors in Contractors
design of the Works and
other professional
services which result in
works not being fit for
purpose or result in any
loss/damage to
employer. Fitness for
purpose net
contribution.
Employers
Indemnities: injury,
sickness, disease,
death. Damage to or
loss of property real or
personal (other than
Works) which is
attributable to any
negligence, wilful act or
breach of contract by
Employer. Employers
personnel or agents.
Employers Risks net
contribution.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract
for Design, Build and
Operate Projects “Gold
Book”
Risk allocation:
Indemnities
Employers
Indemnities: injury,
sickness, disease,
death attributable to
negligence, wilful act
or breach of Contract
by Employer,
Employers personnel
or agents and any
matters for which
liability cover is
excluded from
insurance cover
(insurance under
contract). Contractor
has total cap on
liability (excluding
electricity, water, gas,
Employers equipment
and free issue
material, IP, fraud,
deliberate default and
reckless misconduct).
Other:
Both parties liability
for indirect and
Consequential losses
are excluded.
Level of total cap to
be negotiated by
Parties.
Other:
Contractor has total
cap on liability
(excluding
electricity, water,
gas, Employers
equipment and free
issue material,
IP).Level of total cap
to be negotiated by
Parties.
Both parties liability
for indirect and
Consequential
losses are excluded.
Other:
Contractor has total cap on
liability (excluding electricity,
water gas, Employers
equipment and free issue
material, IP, fraud, deliberate
default and reckless
misconduct). Level of Total
Cap to be negotiated by
parties.
Both parties liability for
indirect and Consequential
losses are excluded
Other:
Both parties liability for
indirect and
Consequential losses are
excluded.
Contractor has total cap
on liability. Level of total
cap to be negotiated by
Parties.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk allocation:
Employers Risks
Employer risks e.g.
war, hostilities,
rebellion, riot
munitions of war,
pressure waves, use
or occupation by
Employer of any part
of Permanent Works
except as specified
under contract,
design of any part of
Works by Employers
personnel or by
others who Employer
is responsible for,
operation of forces of
nature that is
unforeseeable.
Consequences: If
Contractor suffers
delay / incurs cost as
result of Employers
risk Contractor shall
give notice to
Engineer and shall
be entitled (subject to
Contractors claims
procedure) EOT,
payment of Cost.
Employers risks e.g.
war, hostilities,
rebellion, riot
munitions of war,
pressure waves,
use or occupation of
the Works except as
specified,
Employers design,
unforeseeable
operation of the
forces of nature.
Employers risks e.g. war,
hostilities, rebellion, riot
munitions of war, pressure
waves
Consequences: Contractor will
give prompt notice to Employer if
Employers Risks result in loss,
damage to Works, Goods,
Contractor Documents. If
Contractor suffers delay and/or
incurs Cost as result will be
entitle to EOT, payment of cost.
Employers Risk
(During design build
period & Operation
Service Period) :
Commercial risks -
financial loss, delay
damage allocated to
Employer under
Contract or liable by
Law, right to construct
works on, over, under,
in through site, use or
occupation of site by
works for design,
construction or
completion of works
(other than abusive or
wrongful use by
Contractor) use
occupation by
Employer or any part
Permanent Works
except as specified
under Contract.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Risk allocation:
Employers Risks
(cont)
Risks of Damage -
damage due to
interference whether
temporary or
permanent with any
right of way, light, air,
water easement which
is unavoidable result
of construction of
works in accordance
with Contract, fault,
error, defect, omission
in any element design
of works by Employer
or in Employers
Requirements (other
than design carried
out by Contractor,
operation of forces of
nature, Exceptional
risk.
Conditions of Contract
for Construction “Red
Book”
Conditions of
Contract for
Plant Design
and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract for
Design, Build and Operate
Projects “Gold Book”
Testing and
Taking Over :
Tests on
Completion
Contractor to give
Engineer atleast 21 days
notice of date after which
Contractor ready to carry
out Test on Completion
Engineer carries out Test
on Completion within 14
days or as instructed.
Delayed tests. Employer
delay, Contractor delay -
Engineer may require
Contractor to carry out
tests within 21 days after
receipt of notice. If
Contractor fails to carry
out Tests on Completion
within this period
Employers Personnel
can proceed with Tests at
risk and cost on
Contractor. Tests
deemed carried out and
results accepted as
accurate. Retesting.
Failure to pass -
Engineers options,
further repetition, reject
Works or section, issue
Taking Over Certificate
and Contract Price will be
reduced.
Contractor to give
atleast 21 days
notice. Engineer
instructs tests
within 14 days/
Test sequencing
Delayed Tests:
Employer delay,
Contractor delay
Retesting Failure
to pass -
Engineers options
: order further
repetition,
rejection if failure
deprives Employer
of substantially the
whole benefit,
issue a taking
Over Certificate if
Employer
requests.
Contractor to give atleast 21
days notice of date after
which Contractor ready to
carry out Tests on
completion. Tests on
Completion will be pre-
commissioning test, trial
operation. Delayed Tests:
Employer delay, Contractor
delay, Employer may require
contractor to carry out tests
within 21 days after receiving
notice. If Contractor fails to
carry out tests on completion
within 21 days. Employer
personnel may proceed with
test at Contractors risk and
cost. Tests deemed to be
carried out in presence of
Contractor and results
accepted as accurate.
Retesting. Failure to pass -
Employer can order further
test, reject works or section,
issue Taking Over Certificate
Contractor applies no earlier
than 21 days before ready to
carry out Tests on Completion
of Design-Build. Tests on
Completion Design Build will
be, pre-commissioning test,
commissioning test, trail
operation. Employer sole
beneficiary of any revenue or
benefit resulting from Tests on
Completion of Design Build.
During Trial Operation when
Works are operating under
stable conditions, the
Contractor shall give notice to
Employers Representative
that Works are ready for any
other tests on completion of
Design Build including
performance tests to
demonstrate if works confirm
with Employers requirements
and schedule of guarantees.
Trial operation is not
commencement of Operation
Service. Delayed Tests :
Employer delay, Contractor
delay. Retesting Failure to
pass - Employers
representative options : order
further repetition, issue Notice
to Correct.
Conditions of Contract
for Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Testing &
Taking Over :
Employer's
Taking Over
Contractor apply not
earlier than 14 days
before Contractor
anticipates completion.
Within 28 days Engineer
either: issues. Taking
Over Certificate or
rejects application. In
absence of Engineer
doing either within 28
days and if works or
section are substantially
in accordance with
Contract, deemed take
over occurs. Engineer
may take over part of
Permanent Works
Interference with Tests
on Completion :
prevention by Employer
more than 14 days
triggers deemed take
over, Tests on
Completion carried out
before expiry of Defects
Notification Period
Contractor entitled to
EOT and cost as a
result of delayed tests
on completion.
Contractor applies
no earlier than 14
days before
Contractor
anticipated
completion. Within
28 days Engineer
either: issues.
Taking Over
Certificate, rejects
Contractor's
application. In the
absence of either,
deemed takeover
occurs. Taking
over part of Works
Interference with
Test on
Completion,
prevention by
Employer for more
than 14 days
triggers deemed
take over, Tests on
Completion then to
be carried out
during the Defects
Notification period,
entitlement to EOT
and cost plus profit.
Contractor applies no earlier
than 14 days before Contractor
anticipated completion. Within
28 days Employer issues.
Taking Over Certificate, rejects
Contractor's application. If
Employer fails to do either within
28 days and if Works or Section
are substantially in accordance
with Contract Taking Over
Certificate deemed issued. No
Taking over in parts except as
stated in contract or as agreed.
Interference with tests on
completion. If Contractor
prevented more than 14 days by
Employer, Contractor carry out
tests as soon as practicable. If
Contractor suffers delay and / or
incurs Cost plus reasonable
profit. Retesting.
Contractor applies no
earlier than 14 days
before anticipated
completion. Within 28
days Employer
Representative
issues.
Commissioning
Certificate, rejects
Contractor's
application. If
Employer's
Representatives fails
to do either within 28
days and if Works or
Section are
substantially in
accordance with
Contract the
Commissioning
Certificate deemed
issued.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Testing and
taking over :
Tests after
Completion
Employer to give 21
days notice
Employer then
determines date
within 14 days.
Delayed tests and
retesting. Failure to
pass Tests after
Completion, non
performance
damages,
adjustments or
modifications to the
works.
Employer gives Contractor 21
days notice of tests after
Completion. If tests after
Completion are delayed
unreasonably by Employer
Contractor entitled (subject to
claim procedure) to payment of
Cost plus reasonable profit.
Failure to pass tests after
Completion. If works of Section
fail to pass any or all Tests after
Completion, relevant sum
payable for non performance
damages is stated in contract
(or calculation for non
performance damages) and
Contractor pays this sum to
Employer during Defects
Notification period then Works
or Section deemed passed.
Conditions of Contract
for Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of Contract for Design,
Build and Operate Projects “Gold
Book”
Defects Contractor obliged to
complete any
outstanding work on
date stated in Taking
Over Certificate and
remedy defects or
damage on or prior to
expiry date of Defects
Notification Period
Employer can extend
Defects Notification
Period upto 2 years.
Failure to remedy.
Defects / damage by
notified date, Employer
may carry out work
himself or by others at
Contractors cost,
Engineer agree to
determine reasonable
reduction in Contract
Price, terminate contract
if defect / damage
deprives Employer of
substantially whole
benefit of Works or
major part of Works.
Engineers ability to
instruct further tests.
Contractors obligation to
search for cause of
defect.
Contractor obliged
to remedy defects
or damage notified
on or prior to the
expiry date of the
Defects Notification
Period Extension of
Defects Notification
Period by upto 2
years. Failure to
rectify defects:
Employer may carry
out work at
Contractor's cost, or
Employer may
require Engineer to
agree or determine
reduction in
Contract Price, or
Terminate if defect
deprives Employer
of substantially the
whole benefit of the
Works, etc.
Engineers ability to
instruct further tests.
Contractors
obligation to search
Serial defects and
latent defects.
Issue of
Performance
Certificate.
Contractor shall complete
any outstanding work on
date stated in Taking Over
Certificate and remedy
defects or damage on or
prior to expiry Defects
Notification Period. All
remedy work carried out at
Contractors cost to extent
work is attributable to design
of Works, Plant Materials of
Workmanship, improper
operation or maintenance
for which Contractor
responsible failure to comply
with any other obligation.
Employer can extend
Defects Notification Period
by upto 2 years.
Failure to remedy Defects :
If fails within reasonable
time a date may be fixed by
Employer to remedy
defects. If fixed date is
missed Employer may, carry
out work himself in
reasonable manner at
Contractors cost, agree /
determine a reasonable
decrease in Contract price,
terminate if defect / damage
deprives Employer
substantially of whole
benefit of Works
Design- Build Period : Contractor
shall complete any work outstanding
on date stated in Commissioning
Certificate and no later than 1 year
after such date and remedy defects or
damage as notified by Employer.
Operation Service Period : Contractor
responsible repairing and making
good any damage or defect occurring
during Operation Service Period
whether defect is notified by Employer
or Employers representative or
observe by Contractor.
All work to repair defects or damage
executed at risk and cost of
Contractor except where attributable
to act of Employer / Employers
representative or is an Exceptional
Risk.
Failure to Remedy Defects during
Design Build Period or operation
Service Period. If fails within a
reasonable time a date may be fixed
by Employer / Employers
representative to remedy defects. If
fixed date is missed Employer may,
Employers representative determine
and certify reasonable reduction in
Contract Price or rates and prices
submitted for Operation Service
Period, terminate the contract if the
defect is such that deprives the
Employer substantially of the whole or
part of Works.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Force Majeure Exceptional event or
circumstance Notice
must be given within
14 days of becoming
aware, or should
become aware of
relevant event or
circumstance
constituting force
majeure. Contractor
entitled to EOT and
Cost in specified
circumstances
Option to Terminate :
continuous period for
84 days or multiple
periods totalling
more than 140 days
due to the same
notified force
majeure
Exceptional events
or circumstance
Notice to be given
within 14 days of
becoming aware -
objective test.
Contractor
entitlement to EOT
and cost in
specified
circumstances.
Option to terminate
: continuous period
for 84 days,
multiple periods
totalling more than
140 days.
Exceptional events or
circumstance Notice to be given
within 14 days of becoming
aware (or should become
aware). Duty to minimise delay.
If Contractor suffers delay
and/or incurs cost entitled to
EOT and Cost in specified
circumstances Option to
Terminate : continuous force
majeure period of 84 days or
multiple periods (of same event /
circumstance) totalling more
than 140 days
No definition of Force
Majeure - Exceptional
Event" Notice to be
given within 14 days
of becoming aware
(or should be aware).
Duty to minimize
delay. If Contract
suffers delay and / or
incurs cost entitle to
EOT and cost in
specified
circumstances.
Option to terminate.
Continuous
exceptional Event
period of 84 days or
multiple period (of
same event /
circumstances)
totalling more that
140 days.
Conditions of Contract
for Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Suspension
by Employer
Engineer may instruct
suspension of part or all
Works at any time. If
Contractor suffers delay
and/or incurs Cost
entitlement (subject to
Contractors claims) to
EOT and Cost Payment of
value plant and/or
materials not delivered to
site if suspension more
than 28 days and
Contractor market Plant
and/or materials as the
Employers property as
per Engineers instructions
Prolonged suspension
more than 84 days.
Contractor may request
Engineers permission to
proceed, if Engineer does
not give permission within
28 days Contractor may
treat suspension as
omission. If suspension
affects whole of Works,
contractor may give notice
of termination.
Engineer may
instruct suspension
at any time.
Contractor
entitlement to EOT
and costs. Payment
for Plant and/or
materials not
delivered to Site if
suspension more
than 28 days.
Prolonged
suspension for more
than 84 days.
Contractor may
request Engineers
permission to
proceed. If Engineer
does not give
permission within 28
days suspension
may be treated as
an omission or if
suspension affects
whole works,
termination.
Employer may instruct
suspension any time. If
Contractor suffers delay and/or
incurs cost entitlement to EOT
and Cost Payment of value (as at
date of suspension) of plant
and/or materials which have not
delivered to site if suspension
more than 28 days and
Contractor marked Plant and/or
materials as Employers property
in accordance with the employers
instructions.
Prolonged suspension more than
84 days. Contractor may request
the Employer permission to
proceed, if Employer does not
give permission within 28 days
suspension may be treated as
omission. If suspension affects
whole of Works, contractor may
give notice of termination.
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Suspension
by Contractor
Contractor may
suspend on 21 days
notice if : Employer
fails to certify issue
interim payment
certificate; Employer
fails to comply with
Employers financial
arrangements;
Employer fails to pay.
Contractor may
suspend on 21 days
notice if : Engineer
fails to issue an
interim Payment
Certificate; Employer
fails to comply with
Employers financial
arrangements;
Employer fails to pay.
Contractor may suspend on 21
days notice if: Employer fails to
comply with Employers
Financial Arrangements or
timing of payment.
Contractor may
suspend on 21 days
notice if : Employers
Representative fails
to certify issue of
advance, interim
payment certificates,
fail to comply with
Employers. Financial
Arrangements or fails
to pay.
Conditions of Contract for
Construction “Red Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of
Contract for
EPC/Turnkey
Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold Book”
Termination
by Employer
For specified default on 14 days
notice to Contractor.
Immediately for Contractor
bankruptcy, insolvency,
liquidation, or Contractor offers
(directly / indirectly) bribe, gift,
gratuity, commission or thing of
value as inducement or reward
Employer may complete works /
arrange to do so. Employer and
other entities may use any
Goods, Contractor. Documents
and other design documents
made by or on behalf of
Contractor. Employer can
terminate for convenience.
Engineer will agree or
determine value of Works,
Goods and Contractors
Documents and any other sums
due to Contractor for work
executed in accordance with
Contract. Payment after
termination. Employer may
proceed with Employers claims
procedure withhold further
payments to Contractor until
costs of execution, completion
and remedying of any defects,
damages for delay and all other
costs of Employer established
and/or recover
For specified default
on 14 days notice.
Entitlement to
terminate immediately
for insolvency or
corruption.
No obligation to pay
further amount until
cost position of
completing the Works
is established.
Employer also entitled
to terminate for
convenience -
Contractor entitled to
value of work done
plus reasonable costs
etc, no entitlement to
loss of profit, Employer
not entitled to complete
the works
For specified default
on 14 days notice.
Immediately for
bankruptcy,
insolvency, liquidation,
Contractor or
Contractor offering
bribes, gift, gratuity,
commission or other
thing of value as
inducement / reward.
Employer can
terminate for
convenience.
Employer can
complete works or
arrange for others to
do so. Employer may
use any goods,
Contractor documents
and any other sums
due to Contractor.
Employer can proceed
with Employers claims
process, withhold
payment until costs
design execution and
completion and
remedying defects
For specified default
on 14 days notice.
Immediately for
bankruptcy, insolvency,
liquidation, Contractor
or Contractor offering
bribes, gift, gratuity,
commission or other
thing of value as
inducement / reward.
Employer can terminate
for convenience.
Employer can complete
works or arrange for
others to do so.
Employer may use any
goods, Contractor
documents or other
design documents
made by or on behalf of
Contractor.
Payment after
termination for
Contractors Default.
Proceed with Employers
claims procedure,
withhold payment until
costs of design,
execution, completion,
remedying defects
established,
Conditions of
Contract for
Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects “Silver
Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Termination by
Employer
(cont)
any losses and
damages incurred by
Employer and any
extra costs of
completing works
and pay Contractor
balance.
remedying defects established
and/or recover costs from
Contractor.
recover any losses or
damages incurred and
extra costs of
completing works.
Payment after
termination for
convenience: return
performance security,
pay contractor in
accordance with
optional termination
payment and release,
pay amount of any
loss of profit or other
loss or damage
sustained by
Contractor as result of
termination.
Conditions of Contract
for Construction “Red
Book”
Conditions of
Contract for Plant
Design and Build
“Yellow Book”
Conditions of Contract for
EPC/Turnkey Projects
“Silver Book”
Conditions of
Contract for Design,
Build and Operate
Projects “Gold
Book”
Termination by
Contractor
For specified default on
14 days notice.
Terminate immediately for
: prolonged suspension or
Employer becomes
bankrupt, insolvent, goes
into liquidation. On
termination Employer
promptly return
performance security to
Contractor, pay contractor
value of work done (as
determined by Engineer)
include amounts payable
for work carried out under
Contract, Cost of plant
and materials ordered for
works and delivered to
Contractor or which
Contractor liable to
accept and any other
reasonable cost or
liability, Costs of removal
temporary works and
Contractors Equipment
and Cost of repatriation
Contractor staff and
labour and any loss of
profit.
For specified default
on 14 days notice.
Entitlement to
terminate immediately
for insolvency or
prolonged suspension
Employer required to
pay for value of Works
performed, reasonable
costs etc and loss of
profit.
Entitled to terminated
immediately for prolonged
suspension or bankruptcy,
insolvency, liquidation of
Employer.
After notice of termination
Employer will: return
performance security to
Contractor, pay contractor
for amounts payable for
work carried out (price
stated in contract), cost of
Plant and materials ordered
and delivered or Contractor
liable to accept, reasonably
incurred Cost or liability, cost
of removal of Temporary
Works and Contractors
Equipment, repatriation
Contractors staff and labour.
Entitled to terminate
immediately for
prolonged suspension
or bankruptcy,
insolvency, liquidation
of Employer.
After notice of
termination Employer
will: return
performance security,
pay Contractor in
accordance with
optional termination
payment and release,
pay amount of any
loss of profit or other
loss or damage
sustained by
Contractor as result of
termination.
EXTENSION OF TIME 34
WHY THE CLAIMS MADE BY THE CONTRACTOR
1. Most claims are made by the Contractor and may be claims for an extension of time for the
completion of the works, for the reimbursement of costs including in some cases reasonable
profit.
2. Claims for additional time frequently result in claims for additional payments, which under the
FIDIC conditions must be submitted as a separate claim.
3. All claims for additional time or money must follow the procedures of clause 20.1 which require
a notice to the Engineer as soon as practicable as and in any event not later than 28 days after
the Contractor became aware, or should have become aware, of the event or circumstances.
4. If the Contractor fails to give notice of a claim under this clause he shall not be entitled to
additional payment and the Contractor shall be discharged from all liability in connection with
the claim. The Contractor is also under an onerous obligation to keep contemporary records as
may be necessary to substantiate the claim.
35
Specific Probable Future Events or
Circumstances
Duty to Give Notice
(Sub Clause 20.1) Duty to Give Notice (Sub Clause 8.3)
SubClause 20.1 Notice of any claim in connection with the Contract by describing the event or circumstance giving rise to the claim
Clause 8.3 Alternative 1 The Contractor shall submit a detailed time programme to the Engineer within 28 days after receiving the notice under Sub-Clause 8.1 (Commencement of Works)
Clause 8.3 Alternative 2 The Contractor shall submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor’s obligations
Clause 8.3 Alternative 3 The Contractor shall promptly give notice to the Engineer of specific probable future events or circumstances which may adversely affect the work, increase the Contract Price or delay the execution of the Works.
Real Cause
TIME BARRED
28 DAYS TIME
BARRED
28 DAYS
TIME BARRED
REASONABLE
TIME BARRED PROMPTLY
Advanced
Warning
MANDATORY NOTICE OBLIGATIONS UNDER FIDIC
SUMMARY OF GROUNDS IN THE FIDIC FORMS WHICH EXPRESSLY
ENTITLE THE CONTRACTOR TO AN EXTENSION OF TIME
Red Book /
MDB
Yellow Book Silver Book Gold Book
Sub-
Clause Heading Grounds EoT
Additional
Payment EoT
Additional
Payment EoT
Additional
Payment EoT
Additional
Payment
1.9
(R/M)
Delayed
Drawings or
Instructions
Failure of
Engineer to
issue the
drawing or
instruction
within notified
reasonable
time
Y Cost +
37
SUMMARY OF GROUNDS IN THE FIDIC FORMS WHICH EXPRESSLY ENTITLE THE
CONTRACTOR TO AN EXTENSION OF TIME
Red Book /
MDB
Yellow Book Silver Book Gold Book
Sub-
Clause Heading Grounds EoT
Addition
al
Payment
EoT Additional
Payment EoT
Additional
Payment EoT
Addition
al
Payment
1.9(Y)/
1.10
(G)
Errors in the
Employer’s
Requiremen
ts
Error in the
Employer’s
Requirements,
and an
experienced
Contractor
exercising due
care would not
have discovered
the error when
scrutinizing the
Employer’s
Requirements
under Sub-Clause
5.1
Y Cost + Y Cost +
38
SUMMARY OF GROUNDS IN THE FIDIC FORMS WHICH EXPRESSLY ENTITLE
THE CONTRACTOR TO AN EXTENSION OF TIME
Red Book / MDB Yellow Book Silver Book Gold Book
Sub-
Clause Heading Grounds EoT
Additional
Payment EoT
Additional
Payment EoT
Additional
Payment EoT
Additional
Payment
2.1
Right of
Access to
Site
Failure by the
Employer to give
right of access to,
or possession of,
the Site within
required time
unless and to
extent Employer’s
failure was
caused by any
error or delay by
the Contractor.
Y Cost + Y Cost + Y Cost + Y Cost +
39
SUMMARY OF GROUNDS IN THE FIDIC FORMS WHICH EXPRESSLY ENTITLE THE CONTRACTOR TO AN EXTENSION OF TIME
Red Book / MDB Yellow Book Silver Book Gold Book
Sub-
Clause Heading Grounds EoT
Additional
Payment EoT
Addition
al
Payment
EoT Additional
Payment EoT
Additiona
l
Payment
4.6 Co-
operation
Instruction by
contract
administrator to
allow specified
others
appropriate
opportunities to
carry out work
Y
(under
8.4(a) )
As part of
Valuation
under
Sub-
Clause
13.3
Y
(under
8.4(a) )
As part
of
Valuation
under
Sub-
Clause
13.3
Y
(under
8.4(a) )
As part of
Valuation
under
Sub-
Clause
13.3
Y
(under
8.4(a))
As part of
Valuation
under
Sub-
Clause
13.3
4.7 Setting-
out
Execution of
Work which was
necessitated by
an error in terms
of reference and
an experienced
contractor could
not reasonable
have discovered
such error and
avoided this
delay and / or
cost.
Y Cost + Y Cost + Y Cost +
40
SUMMARY OF GROUNDS IN THE FIDIC FORMS WHICH EXPRESSLY ENTITLE THE CONTRACTOR TO AN EXTENSION OF TIME
Red Book / MDB Yellow Book Silver Book Gold Book
Sub-
Clause Heading Grounds EoT
Additiona
l
Payment
EoT
Additiona
l
Payment
EoT Additional
Payment EoT
Additional
Payment
4.12 Unforeseea
ble
Physical
Conditions.
Encountering
Physical
conditions which
are Unforeseeable Y Cost + Y Cost + Y Cost +
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Thank you very much for your participation and attention!
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Thank you very much for your participation and attention!
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