Guide to the FIDIC Conditions of Contract for Construction
Description
Guide to the FIDIC Conditions of Contract for Construction: The Red Book 2017 helps the reader overcome some of the difficulties encountered on a typical international construction project using the FIDIC Construction Contract 2nd Edition (the 2017 Red Book), by summarizing the activities and duties of those involved, and crystallizing the requirements of the contract. To aid in reader comprehension, the text explains clauses in the sequence they appear in the contract, but also in the order they happen in real time on site. It further provides practical guidance in a concise manner, and in straightforward, jargon-free language.
It is a highly practical resource for use during the project, rather than a legal review of the contractual requirements, ensuring readers are fully conversant with the revised requirements and procedures mandated by the 2017 edition of the contract.
Guide to the FIDIC Conditions of Contract for Construction: The Red Book 2017 includes:
* A review of the duties and responsibilities of the three parties, the Employer, the Engineer and the Contractor, engaged on a FIDIC-based Contract
* A review of the flow of documentation and instructions which is to be provided by one party to another party throughout the contract period
* Practical guidelines are provided for the avoidance of disputes and delays in order that contracts are completed as planned
Guide to the FIDIC Conditions of Contract for Construction: The Red Book 2017 is a practical and highly useful resource for engineers, consultants, project managers, and others who are engaged in the site management of international projects using the FIDIC Construction Contract, along with those involved in contractual administration on behalf of the client.
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Person
Michael D. Robinson is an Independent Consulting Engineer with 50 years of experience with contract management and contractual issues for major civil engineering projects worldwide. He has extensive experience of dispute resolution, engineers' decisions, and dispute resolution boards under the FIDIC Contracts, and has lectured on the FIDIC Conditions of Contract. He is the author of two earlier books on the subject of FIDIC Conditions of Contract, First Edition: A Contractor's Guide to the FIDIC Conditions of Contract, published in 2011, and An Employer's and Engineer's Guide to the FIDIC Conditions of Contract, published in 2013. Much valuable information contained in these books remains relevant.
Content
Preface
Acknowledgements
Clause 1 General Provisions
Clause 2 The Employer
Clause 3 The Engineer
Clause 4 The Contractor
Clause 5 Subcontracting
Clause 6 Staff and Labour
Clause 7 Plant, Materials and Workmanship
Clause 8 Commencement, Delays and Suspension
Clause 9 Test on Completion
Clause 10 Employer's Taking Over
Clause 11 Defects after Taking Over
Clause 12 Measurement and Valuation
Clause 13 Variations and Adjustments
Clause 14 Price and Payment
Clause 15 Termination by the Employer
Clause 16 Suspension and Termination by the Contractor
Clause 17 Care of the Works and Indemnities
Clause 18 Exceptional Events
Clause 19 Insurance
Clause 20 Employer's and Contractor's Claims
Clause 21 Disputes and Arbitration
Appendices
Appendix A Guidance for the Preparation of Particular Conditions
Appendix B Employer's Claims
Appendix C Contractor's Claims
Appendix D Notices and Site Organisation
Appendix E Daywork and Contemporary Record Sheets
Appendix F Contractor's Costs
Appendix G Joint Ventures
Index
1
Clause 1 General Provisions
1.1 Definitions
Of the 58 definitions included in the First Edition, 34 have been included unchanged in the Second Edition and a further 18 included with minor changes only. Just one item, Sub-Paragraph 1.1.6.4 (Force Majeure), included in the First Edition, has been deleted from its original position and is now included in Clause 18 of the Second Edition under the revised heading 'Exceptional Events'.
There are 37 new or revised definitions included in the Second Edition and are listed below:
1.1.10 The Contract
The definition has been broadened to include two additional documents:
- 'The Contractor's proposal', which itself is not a defined term. It is assumed to be a general statement of how the Contractor intends to proceed with the execution of the Works. Conventionally, this is provided as part of the Contractor's tender.
- 'The JV Undertaking, if any'. A grouping of Contractors intending to tender as a Joint Venture will enter into a Pre-Bid Joint Venture Agreement to ensure that each member is committed to the Joint Venture. If the Employer requires a pre-bid qualification process, then the Pre-Bid Joint Venture Agreement can be used to support the JV qualification, otherwise it shall be included in the Joint Venture tender offer. The full JV Agreement will be finalised immediately after award should the tender be successful. An example of a Joint Venture Agreement is provided in Appendix G.
1.1.12 Contract Data
In the First Edition, 'Contract Data' was referred to as 'Appendix to Tender'. In the Second Edition the number of items included under this heading has been significantly increased (these are discussed later in Appendix A, 'Guidance for the Preparation of Particular Conditions').
1.1.13 Contract Price
This definition is minimal. A full definition is included in Sub-Clause 14.1 (The Contract Price).
1.1.15 Contractor's Documents
This definition has been enlarged seemingly to ensure every potential item has been included. Considering that the sub-clause ends 'and other documents of a technical nature', an extensive listing is hardly required.
1.1.20 Cost Plus Profit
This definition has been significantly improved from that given in the First Edition and provides clarity on an issue that has led to disputes in the past.
- The percentage for profit shall be as stated in the Contract Data.
- The percentage for profit shall be 5% if not otherwise stated in the Contract Data.
The Contractor should note that there have been instances where the Employer has failed to add any percentage for profit in the Contract Data. At a later date, the Employer could claim that because no percentage was given, the Contractor was not entitled to any payment under this item.
1.1.22 DAAB
'Dispute Avoidance/Adjudication Board' () replaces the "Dispute Adjudication Board" described in the First Edition, as it more accurately defines the purpose of the Board as stated elsewhere in Clause 21 of the Second Edition.
1.1.23 DAAB Agreement
An updating of the DAB wording used in the First Edition.
1.1.24 Date of Completion
This is a new sub-paragraph not used in the First Edition and is self-explanatory.
1.1.26 Daywork Schedule (If Included)
This is a new definition not used in the First Edition but arguably should have been included. For further comment refer to commentary on Sub-Clause 13.5 (Daywork).
If a Daywork Schedule is not included in the Contract, it would be appropriate to query this omission in the Tender period.
1.1.27 Defects Notification Period (DNP)
The wording has been slightly modified but has the same intent as that stated in the First Edition.
1.1.28 Delay Damages
In the First Edition, the Delay Damages were specified in the (then) Sub-Clauses 8.2 and 8.7 and valued as stated in the Appendix to Tender. In the Second Edition, the relative clause numbers are Clauses 8.2 and 8.8 and any Delay Damages are to be valued as stated in the Contract Data (which is the retitled 'Appendix to Tender' - see Sub-Paragraph 1.1.12 above).
1.1.29 Disputes
This is a new definition not included in the First Edition. It is a very important topic and is to be referenced to Clause 21.
1.1.37 Exceptional Events
Clause 19 of the First Edition (headed 'Force Majeure') defined Force Majeure as an 'exceptional event or circumstance'. In this edition, the wording 'Force Majeure' has been retitled as 'Exceptional Events' with only very minor changes to the contents of the clause. The clause number is changed from Clause 19 to Clause 18.
1.1.38 Extension of Time (EOT)
This is a new definition. Sub-Clause 8.4 of the First Edition has been replaced by Sub-Clause 8.5 in the Second Edition. Refer to Sub-Clause 8.5 for further discussion. Note that the abbreviation EOT is now regularised.
1.1.40 Final Payment Certificate (FPC)
The wording is unchanged from the wording in the First Edition. Note that the abbreviation FPC is now regularised.
1.1.43 General Conditions
This is a new definition added presumably for the sake of completeness.
1.1.45 Interim Payment Certificate (or IPC)
Text is slightly modified with same intent as in the First Edition. Note that the abbreviation IPC is now regularised.
1.1.46 Joint Venture
This is a new definition. The First Edition did not contain this definition even though it is a frequently used term to describe a well-recognised Contractor's business structure. Note that the abbreviation JV is now regularised. It is observed that this Second Edition does not make reference to other Contractor's business structures such as a 'Consortium'.
1.1.48 Key Personnel
This is a new definition added presumably for completeness. Note that it specifically refers to the Contractor's personnel excepting only the Contractor's Representative.
1.1.49 Laws
This is a new definition added to reflect the changed heading of Sub-Clause 13.6 (Adjustment for Changes in Laws).
1.1.54 Month
This is a new definition. 'Month' is a word used occasionally in the Conditions of Contract.
1.1.55 No objection
This is a new definition and is a wording occasionally used in the Conditions of Contract.
1.1.56 Notice
This is a new definition. When read in conjunction with Sub-Clause 1.3 (Notices and Communications), this definition will have an important impact on the day-to-day management of the project. More than 100 instances where a Notice is required to be issued are identified in Appendix D of this book.
1.1.57 Notice of Dissatisfaction (or NOD)
This is a new definition and refers to the Notice one Party may give to the other Party if he is dissatisfied with either an Engineer's determination (Sub-Clause 3.7) or with a DAAB decision (Sub-Clause 21.4).
1.1.59 Particular Conditions
This is a new definition. No definition of 'Particular Conditions' was included in the First Edition, although the wording 'The Particular Conditions' was included in Sub-Clause 1.5 of the General Conditions. The same wording is included in the Second Edition, Sub-Clauses 1.5(a) and (b). This definition is solely a tidying up exercise.
1.1.62 Performance Certificate
This issue of the Performance Certificate is conditional on the Contractor having completed all his obligations, i.e. at the end of the expiry date of the last Defects Notification Period.
1.1.65 Plant
The wording of this definition has been slightly enlarged in the Second Edition. The definition refers to 'apparatus, equipment, machinery etc.', intended to form part or forming part of the permanent works.
1.1.66 Programme
This is a new definition. Although Sub-Clause 8.3 of the First Edition described the Contractor's general obligations in respect of programming, no specific definition of the word "Programme" was provided. A much-enlarged Sub-Clause 8.3 (Programme) is included in this Second Edition.
1.1.68 QM System
This is a new definition. The First Edition Sub-Clause 4.9, headed 'Quality Assurance', contained only a brief description of the Contractor's obligations. In this Second Edition, Sub-Clause 4.9, headed 'Quality Management and Compliance Verification Systems', contains a much more detailed description of the required QM system.
1.1.70 Review
This is a new definition. The word 'review' was variously used in the First Edition. However, a clear definition was not provided.
1.1.71 Schedules
The...
