International Federation of Consulting Engineers Speaker: Frank Kehlenbach (Director of EIC)

International Federation of Consulting Engineers

Speaker: Frank Kehlenbach (Director of EIC)

The EIC Contractor‘s Guides

EIC Contractor‘s Guides on the FIDIC „New Books“ were produced between 2000 and 2003

and the EIC Guide on the DBO Contract in 2009. The EIC Guide on the “MDB Harmonised

Construction Contract” was published in April 2011.

March 2000March 2000 March 2002March 2002 March 2003March 2003 MayMay 200 20099

22 Wednesday 19 April 2023 MDB Harmonized Contract Conference 2012

April April 20112011

The EIC Contractor‘s Guides

International Construction Law Review, October 2011 (Introduction)

They [the EIC Contractor’s Guides] are valuable as they are the product of a responsible

and reputable international organisation. They also through a light on the approaches to

be adopted in drafting international construction contracts... As in the past,

EIC’s comments are balanced. They indicate what it regards as improvements and what

it believes to be retrogressions.


Wednesday 19 April 2023

EIC acknowledges that there are no more deviations betweenFIDIC MDB 2010 and the World Bank’s GCC March 2012

44 MDB Harmonized Contract Conference 2012

New provisions / titles in the FIDIC MDB Edition


Improvements on FIDIC 1999 Editions

The MDB Harmonised Construction Contract accommodates

some comments of the EIC Contractor’s Guides, such as

Rate of profit is pegged at 5% of the Cost

Both parties are required to keep the contract details

confidential

Obtaining building permit is responsibility of the Employer

28-days notification period applies also to Employer’s Claims

Time limit for Engineer’s determination is 28 days

Employer shall provide the necessary special or temporary rights-

of-way

Introduction of „pay-when-paid“ clause re. Nominated Subcontractor

66 MDB Harmonized Contract Conference 2012Wednesday 19 April 2023

Improvements on FIDIC 1999 Editions

The MDB Harmonised Construction Contract accommodates

some comments of the EIC Contractor’s Guides, such as

Ownership of Plant & Material has been revised

Commencement of the Works only upon fulfilment of

certain conditions precedent

Additional right to refuse a Variation (“economic imbalance”)

Repayment deduction does not commence until 30% of the

Accepted Contract Amount less Provisional Sums has been certified

DAB can be activated if the Engineer fails to respond within

deadline


EIC criticism towards FIDIC 2010 MDB Harmonised Contract

The MDB Harmonised Construction Contract has also

introduced some problematic concepts with regard to:

Role of the Engineer

Employer has now an unilateral right to change authority of

and to replace the Engineer

No authority to agree or determine extension of time

Limited authority to instruct a Variation

No authority to approve a Variation submitted by Contractor

No authority to specify the amount payable in each of the applicable

currencies

Whilst these provisions are understandable from the Employer’s

perspective, these limitations can lead to difficulties in practice

8Wednesday 19 April 20238 MDB Harmonized Contract Conference 2012

EIC criticism towards FIDIC 2010 MDB Harmonised Contract

The MDB Harmonised Construction Contract has also

introduced some problematic concepts with regard to:

Performance Security

Employer has now a discretionary right to make a claim

Corrupt and Fraudulent Practices

Employer has now an unilateral right to terminate the

Contract

Limitation of Liability

is watered down compared to the FIDIC 1999 forms and includes now a

reference to Sub-Clause 15.4 [Payment after Termination]

International Arbitration

The arbitration clause distinguishes between “foreign contractors”

(international arbitration applies) and “domestic contractors“


Conclusion: A positive outlook

EIC welcomes the various technical improvements introduced by FIDIC and

the MDBs which make the FIDIC 2010 MDB Harmonised Contract Edition a

more balanced contract than the two precursors in 2005 and 2006

Users should, however, be very conscious that MDB Sub-Clauses 3.1, 3.4,

4.2, 17.6 and 20.6 (and the new Sub-Clause 15.6) deviate significantly from

the FIDIC 1999 “Red Book” standard and may represent an opportunity

for abusive behaviour towards the Contractor

EIC is prepared to join forces with FIDIC and EFCA in order to make the

2010 version a truly “harmonised” FIDIC MDB Edition which is also used

by the European Commission and other European bilateral donor agencies


EIC Contact

Address: EIC SecretariatKurfuerstenstrasse 129, D - 10785 Berlin, Germany

Phone: ++49 (0)30 /21286-244

Fax: ++49 (0)30 /21286-285

E-mail: [email protected]

Internet: www.eicontractors.de


International Federation of Consulting Engineers

President Geoff French, UK

Vice-President Pablo Bueno, Spain

Secretariat FIDICWorld Trade Center 2Geneva AirportBox 311 CH-1215 Geneva 15 Switzerland Tel: +41 22 799 49 00Fax: +41 22 799 49 01

[email protected] www.fidic.org

Managing Director Enrico Vink

International Federation of Consulting Engineers Speaker: Frank Kehlenbach (Director of EIC)

Documents

Transcript of International Federation of Consulting Engineers Speaker: Frank Kehlenbach (Director of EIC)