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    13 views41 pages

    004 Short Form of Contract - First Edition 1999 PDF

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    Jun Licerio

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    © All Rights Reserved
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    “Federation Internat International Feder Internationale Verek Foseracton Ini Consuling Engi Boratender Ingen Short Form of Contract AGREEMENT GENERAL CONDITIONS RULES FOR ADJUDICATION NOTES FOR GUIDANCE Pate Ie | FIDIC © Copyright FIDIC 1996 All ights reserved, No part ofthis publication may be reoroduces co transmitted m any form or by any means without remission of the publishes. FIDIC is the French acronym for the Interational Federation of Consuiting Engineers : IDIC was founded in 15° by three national associations of consulting engineers within Eurovs, The objectives of forming the federation were to promote in common the professional interests of the member associations and to @'sseminate information of interest to members of its component national associations, Tox. FIDIC membersii numbers more than 60 countries from all pans of the globe and the federation rapresems most of the private practice consulting ‘engineers in the world IDIG arranges seminars, conferences and other events in the furtherance of its goals: maintenance of high etnical and professional standards; exc ange of ‘views and informe'ion; discussior of problems of mutual concern ameng member associations anc representative: c° the international financial instcution development of the consulting engineering industry in developing countries. IDIG publications include proceedings of various conferences and seminars information for consulting engineers, project owners and internation development agencies, stanaard pre-qualfication ‘orms, contrac’ documents anc client/consuitant agreements. They are availaise from the secretariat in Switzerlanc Published by Fédération Internationa! des Ingéniours-Consolis (FIDIO} World Trade Canter PO, Box 31 H 1215 "=NEVA 15 (Switzerland) +41 22 798 4900 Fax +41 22 789 480° E-mail fdie@dic org Interot wficc.ors AGREEMENT GENERAL CONDITIONS SHORT FORM of Contract ies JUDICAT RULES FOR ADJUDICATION NOTES FOR GUIDANCE FEDEBATION INTE"NATINALS 26S NGENIELAS-CONETILS INTER: ATIONAL FEJERATION CONSULTING EM INTERNATIONALE VEREINIGUNG BERATENDE® Nt FEDERACION INTERNACIONAL DE INCENER Fiat ACKNOWLEDGEMENTS ‘The F4dération Intemationele des Ingénieurs-Conseils (F.DIC) extencs special ‘rianks to the following members of its Task Grovio: Philip Jenkinson (Task Group Leader), WS Atkins, UK: AEJ (Tony) Sanders, Moucnel, UK; and Eclward Corbett, Corbett & C>. Lix. Liaison with other active Task Gre us was provided by Peter L Zoos, GIBB Ltc., UK, ‘The preparation was carried out under the general direction of ire FIOIC Contracts Committee comprising Jon B Bowcack {Chairman}, Consuiting Engineer, UK; Michesi Mortimer-Hawkins, SwedPower, Sweden; Axel-Voikmar faeger, Schmidt Reuter Partner, Germany; and KB (Tony) Norris (Soeciat Acwiser}, Consulting Engineer, UK. rafts were commented on by the following persons and organisations: Mushtex, Anmad, NESPAK, Pakistan; Peter Eatty, Post Buckley Intemational, USA: Nae! G. Bunni, Consulting Encneer, ireland; Kathryn Josephine T. dela Cruz, Construction Indusiry Authority of the Philipines; Micnael Dudley, UNOPS; Hans Enhérning, ABB. ‘Asea Brown Boven Ltd, Switzerand; Mam Griffths, Grifiths & Armour, UK; Geoitrey F Hawker, C ansulting Engineer and Barrister, UK; Adam K Heine, Consutting Engineer, Poland HS Kwong, Secretary for Works, Hong Kong; Jan Cees Overbeseh/Evert Jan Wiers, DHV Beheer SV, The Netherlands; Marek Aultowski, Cosrncoal Constants, Poland; J G Rees, Birnie Black & Veatch, UK; Asian Development Bank; E./o9ean Bank for Reconstruction and Development; Inter-American Develooment Bank; International Association of Dredging Companies; Inter-Paciic ar Association; Crcanisme de Liaison Industries Métalliques Européennes ("ORGALIME)); and The World Bans. Acknowledgement of reviewers does not mean that sucn persons 3 ‘organizations approve the wording of all clauses. FIDIC wishes to record its appreciation of the time and effort devoted by ail the above. The uitimate decision en the form and content of the document rests with FIDIC, onpe # FOREWORD These Concitions of Cr tract have been prepared by ‘he #Sdération ir-srnatonale das Ingénieurs-Gonseiis ;FIDIC’ and are recommended for engineering and oullding ‘work of relatively smail capital veiue. However, devencing cn the tp of work and th= circumstances. the Conditions may be suitable for contracts of greater value. They are consiclered most ikely to be Suit: “le for faily simple or repetitive work o: work of short duration without the need for sexcialst sub-contracts. “The mann aim has baen to oroduce a straighticrward flexible document which includes: all essential commercial provisions and whicn may be used for all iypee of engineering and buiding work with a variety of acministrative arrangements, Urder the usuah arrangements for this tye of contract, the Contractor constructs the Werks in accordance with design pro’ sied by the Employer or by his representative {if any, “owever, this form may alco be suitable for contracts which include, or wholly comprise, contractor-designed civil, mechanical and/or electrical wou.'s 'n adcition. the Emeloyer has a choice of veluation mnethods. Furthermore. although there 1s no reference to an impartial Engineer, ie Employer may appoint an independent Engineer to act impartially, should he wish to do 80, ‘The form is recommended for general use, though mocifications may be required in some jurisdictions. FIDIC considers the official and authantic text to be the version in the Engjish language. The intention is that al necessary information should be provided in the Appendix to the Agreemers. the letter incorporating the tendere’'s offer ana its acceptance in one emele document. The General Conditions are expected to cover the majority of contracts, Nevertheless, users will bo ablo to ntroduce Particular Conditions if they wisn, 12 cater for special cases or circumstances, The General Concitions and the Peioular Consitions wil together comprise the Concitions governing the rights anc ‘oclgations of the parties. ‘To assist in the preparation of tender documents’ using these Conditions, Notes for Guigance are included, These Notes will not become one of the documents forming the Contract. Finally, applicable Ruses for Adjudication are also included. ‘The attention of users is drawn to the FIDIC publication “Tendering Procedure", which resent’ 3 systematic approach tc the selection of tenderers and the obtaining and evaluation of tenders. 2G 1380 CONTENTS Agreement ........... Offer Acceptance ‘Appendix Generai Conditions 1 GENERAL PROVISIONS ....... 1.1 Definitions The Contract Persons Dates, Times and Periods Money and Payments ther Definitions 1.2 Interpretation 1.3 Priority of Documents 14 Law 15, Communications 1.8 Statutory Obligations 2 THE EMPLOYER ...... Peete 2.1 Provision of Site 2.2 Permits and Licences 2.3 Employer's instructions 2.4 Approvals 3, EMPLOYER'S REPRESENTATIVES .. 3.1 Authorised Parson 3.2 Employer's Representative 4 THE CONTRACTCR ..... General Ooigation: Contrac.or's Representative Subconsacting Performance Security 198 a 82 10.1 10.2 103 10.4 105 " aUbRRaRS 12 Ricoh ao ove DESIGN BY CONTRACTOR Contractor's Design Responsibilty for Design EMPLOYER'S LIABILITIES... Employer's Liabilities TIME FOR COMPLETION ........... Execution of the Works Programme Extension of Time Late Completion TAKING-OVER ..... ‘Completion ‘Taking-Over Notice REMEDYING EFFECTS .. Remedying Defects Uncovering ar Testing VARIATIONS AND CLAIMS... Fight to Vary Valuation of Variations Early Warning Right to Claim Variaton and Claim Procedure CONTRACT PRICE AND PAYMENT . Valuation of the Works Monthly Statements interim Payments Payment of First Hal of Retention Payment of Second Half of Retention Final Payznent Currency Delayed Payment DEFAULT Default by Contractor Default by Empiover Insolvency Payment upon Termination i RISK AND RESPONSIBILITY . Contractor's Care of the Works Force Majeure INSURANCE oo... eee eee cece eeeee eee weed Extent of Cover Arrangements Failure to Insure RESOLUTION OF DISPUTES .- 6.22.0... 0ce cece sees ve10 Notice of Dissatisfaction axcitration : "1 Particular Conditions ..................... 13 Rules for Adjudication ...................0.0.0....15 Notes for Guidance .... 221 Notes ..... cece aM Gunter ‘COND JUCALILN, 8S Agreement ‘The Employer is __ OFFER ‘The Corsracto; has examined ine documents listed in the Appendix which forms par af this ‘Agreement and offers to execue the Works in conformity with the Contract for the sum of fin words) (in figures) ¢ 7 such othar sum as may be ascertamed under the Contract ‘Tis offer, of which the Contractor has submi.ted two signed originals, may be accented by the Employer by signing =nd returning one origina. of this document to the Contractor batore (date) The Contractor understands that the reosived for the Works, Signature: Date: Name: Capacity ACCEPTANCE ‘The Empicyer has by signing below, accepted tne Contractor's offer and agrees that in ‘cor sideration for the execution of the Works by the Contractor, the Emplover snail pay th” Contractor in accordance with the Contract. This Agreement comas inte effect on the de when the Contractor reoeives one original cf this document signed by the €-waloye: Signature: Date: Name: Capacity eof 188 APPENDIX ‘This Appendix forms part of tre Agreeinent, [ Note: with the exception ofthe tems ‘or whieh the Employer’ been inserted, the Contractor shall complete the folowing information submitting his offer. | tem Documents forming the Contract listed in the oruge of priority Document {dsietef not spoicabe) fa) The Agreement () Particuar Concitions (c} General Conditions {d) The Spectication fe] The Drawings: (The Contractor's tendered design (9) “he bill of quantities, tb) i o Time for Completion caw of the Contract Language Provision of Site ‘Authorised person, Name, and address of Employer's representative (f kncwnh Pertormance secutly (far »: Amount Form Sub-Cause wa 44 44 * Employer to amen 38 appropriate eFoe Data Document identiication a _____ “sys Law of the Country’ (On the Commencement Dato” _ {deta} pease Requirements for Contractors “Time for submission Form of programme Amount payable due to failure 10 Period for notifying defects Variation procedure Daywork rates Valuation of the Worke* Lume sum Price Lump sum price with sc.redules Lump sum price with bi! of Remoasurement with tender bil ‘Oost reimbursa Percentage of value of Materi 7.2 818115 10.2 4 a4 Wt & Employer to amend as appropriate Date Scecitication Clause Now With 14 days" of the Commence- ment Date. a er day uo maximum of 10%" of sum Stated in the Agresrnent 862 days" caleulaled from the date stated in the notice under Sub-Ciause 8.2 _ tdetaus) (cietals) (aetals} (details) (cetals! a _ . (Wetails Materiais eon Prant 0%" hem Pee-entage of retertion Curren: of payment Rate of interast surances ‘Type of covert The Works, Matenals, Plant end fees, Contractor's Equipment ‘Third Party injury 10 persans ‘and damage to property Workers (iner cover* Arbitration "ules Appcinting authority Face of Arbitration 11.3 Amcunt of covert Exclusions" The sum stated in the Agreement plus 15% Full reolacement cost 153 153 President of FIDIC or his nomines* = ‘idetals) 183 The Country” “Employer to amend 28 gpprognate iv alan General Conditions ae General Provisions it Definitions The Contract Porsons Dates. Times and Periocs Money and Payments Other Definitions |p the Contract as defined oelow. the wards and exeressions defined chal have the sing meanings assignad ta them, except where the context ‘equites otherwise 14.10 12 44.48, rata 0 1988 "Contract" means the Agreement and the other documents fste in the Aposndix. *Soecification’ means the document as isted in the Appendix, incl sing nployer's requirements in respect of design to be carried out by the Contractor, if any, and eny Variation to such document. ‘Drawings’ means the Employer's drawings ~t the Works as listed in the Appendix, and any Variation to such drawings. "Employer" rmsans the person named in the Agsement and the legal SUSCESEOTS in title to this person, but not (except with the consent of the Contractor) any assignee. "Contractor" means ste person named in the Agreement and the legal successors in thle {0 this person, out not (except with the consent of the Employer) any assignee. arty" msans elther the Employer or the Contracter, “Commencement Date” means the date “+ clays after the date the Agrsement comes into effect ar sny other date agised between the Parties, “day” means a calendar day, “Time for Completion” means the time for campleting the Works as staved in the Acpendix (or as extended under Sub-Ciause 7.2), calculated from the ‘Commencament Date. “Cost” means al! expenditure properly incurred (or to be incurred } by the Contractor, whether on oF off the Site, including overheads and similar charges, but does not include proft. ‘Contracter's Equipment” means all apparatus, me-hinery, vehicles, faciities and other things required for the execution of tne Wores but dees ot includ Materials or Plant. ‘Country’ means the country in which the Site is jocstec. “Employer's Liabil ities" means those matters listed in Sub-Claucs 6.1 “Force Majeure’ means an -xceptional event or circumstane®: which is peyond a Party's control; which such Pary could not reasonably have 1 PORE Eanes = providec against before entering into the Contract; whier., having arisen, ‘such Party could not rensonaily nave avoided or overcome; and, which is substantially attriouyabio to ths other Pany. 1.1.15 "Materials" means things of all kinds (other than Plant) intended to rom or forming part of the permariant work, 1.1.16 "Plant" mesns the machinen, and apparatus intencsd to “orm or forming Part ci the permanent work, 1.1.17 "Site" means the places provided by the Employer where the Works are to be executed, and any other places specified in the Contract as forming part of the Sits, 4.1.18 *Variation’ means a change to the Specification and /or Drawings ‘if any) which is mstrusted oy the Employer under Suo-Cleuse 10.1 1.1.12 ‘Works’ means alf the work and desion iif any) 10 be performed by the Contractor including temporary work anc any Variation 12 Interpretation Words importing persons or parties shall.inciude firms 2nd or:anisations. Words importing singular or one gender shall include piural or tne ather gender where the context requires 13 ——— a — Priority of Documents The documents to-ming the Contrest are to be taken as mutually explanatory of one another. § 9 ambiguity or discrepancy is found in the documents. the Empioyer shall issue any necesvary instructions to the Contractor, ang the priaiy of the documents shall be in accord="ce wih the order as isted in the ADpencic 14 ee —— Law ‘The law of the Contract is stated in the Apoendix, 6 so —— — Communications Wherever provision is made for the giving or issue of any notice, inst-uction. ar other ‘eommunication by any person, unless otherwise soecified sucn communication shall ba written in the language stated in the Appendix arc! shal: not be unreasonably withheld or delayed BEES — eee Eee eeet Statutory Obligations ‘The Contractor shall comply with ‘the laws of the countries where activities are performed. The Contractor shail give all notices and pay all iges and otner charges in respect of the Works. om he ‘Employer Provision of Site The Empioyer sna" provide tne Site and right of eacess thereto at the times stated in the Appenax Fo nits and Licences _The Empiover eval, if requested by the Con: 2cto:, assist him in aoplying for pes, ficences or approvals which ars required for the Werks. Fine 1200 ‘een vs 23 ‘The Contractor shail comply swith ail nstructions given by the Employer in respect ~t Employer's instructions “2 Works inclucing the suspension of al or part of *he Works. 24 Approvais No approval or consent or absence of comment by the Employer or the Employer's representative shall fect the Contractor's abigations, ra 8 or ‘ Empidyer’s Representatives aa Authorised Person One of the Empicyer’s personrel shall have authorty to act for him, This autrorsed ‘person shail be as stated in the Appendix, or as othenwise notified by the Empioyer to the Contractor. 32 ee re pee Hee Employsr's The Employer may aiso appoint a firm or individual to carry out certain duties. The Representative appointes may be named in the Acoendix, or notified by the Employer to ‘Contractor from time to time. The Emp.oyer shal notify the Contractor of the delegated ‘utes and authorty of this Employer's represer tative. eee 44 General Obligations The Contractor shall carry out the Werks properly and in accordance with the Sontract. The Contractor shall orovide all supervision, labour, Materials, Plant and Contractor's Equic nent wnich nay be required. All Materais and Plant on Site shal bbe deemed to be the property of the Employer. 42 Contractor's ‘The Contractor shall eubmit to the Employer for consent the name and particulars of Representative the per an authorised to vecsive instructions on behaif of the Contracter 43 7 ‘Suacontracting ‘The Cor actor shall nat subcontract the whole of the Works. The Contractor shell not subcontract any part of the Works without the consent of the Emplcver. A ee ausnesaianest eee - Performance security if stated in the Appendix, the Contractor shail deliver to the Employer within 14 days of the Commencement Date a performance security in a form and fom a third party approved by the Employer. ved) by Contractor 54 Contractor's Design ‘The Contractor shail carry out assign to the extent specified, as rererrad to in the Apoencix. The Contractor shall promptly suismit to the Employer all designs prepared by him. Within 14 days of receiot the Empioyer shall notify any comments of, if the design submitted is not in accordance with the Contract, shall reject it stating :ne reasons. The Contractor snall not construct any element of the permanent work designe’ by him within 14 days after the design has bes ser Sones rei 1a 3 G 5.2 Responsibilit: for Design Ei 64 Employer's Liabilities submitted to the Employer or where the design for that element hes been reiacted. Design that has been rejected shall be prompt, amended and resubmitted. The Sontractor shall resubmit all designs commented on taking these commants inte. account as necessary. ‘The Contractor shall remzin responsible for his tendered des.» and the sasigr. : ager this Clause, both of whicn shal be fit for the intended purposes defined, xe Contract land he shail also remain responsible for any infringement of any petent or 2opyright | respect of the same. The Empioyer shall be responsisle fc the Speciicatioy anc Drawings, er’s Liabilities In this Contract, Employer s Liaoilties mean 2) war, hostiities (whether war be declared or nol, invasion, act of tore'gn ‘enemies, within the Country, 5} rabetion, terrorism, revolution, insurrection, military or usurped power, OF = ‘war, within the Country, }_ lot, commotion ar disorder by p=:sans other thar the Contractor's personne! ‘and other employees, affecting the Site and/or the Works, ionising radiations, or 2ontamination by radio-activity from ary nuclear fuel, or from any nuclear weste tror the combustion of nuclear fuel, radio-ective ‘oxic explosive, or other hazardous properties of any explosive nucioar assembly or nuclear component of such an assembly, except to the extent to which the Contractor may b¢ responsible for the use of ey radio-active material, ©) pressure waves caused by aircratt or otner aerial devices traveung e+ sonic or supersonic spescs, fuse or occupation oy the Employer c* any part of the Works, except as may be specified in the Contract, 9g) design of any part of the Works by the Employer's personnel or by other whom the Employer is responsible, and hb any operation of the forces of nature affecting the Site andar the Works, which ‘was unforeseeable or against which an experience contractor could not reasonably have been expected to take precautions, i) Force Majeure, |] a suspension under Sub-Clause 2.3 unless it Is attributable to the Contractor's: ‘aikre, k) any failure of the Employer, |) physical obstructions or physical conditions other thay climatic conditions, encountered on the Site during the performance of the Works, whion ‘obstructions or conditions were not reasonably ‘oreseeabie b) an expen=ncad contractor and which the Contractor immediate: natiied to the Emplaye m) any delay or disruption caused by any Variation : nm} any change to the law of the Contract atter the de:e of the Contractor's offer as stated in the Agreement, ' ©} losses arising out of the Employer's right to have the permanent work exe ‘0, over, unde in oF through any tand, 2.9 ta cccupy tnis lander the permanent work. and fp} damage which is an unavoidable result of the Contracto: s obligations execute the Works ang to remedy any defects, for Time for Comoletion Execution of the Works The Contractor shall commence the "Nerka on the Commencement Date and shall ‘ proceed expeditiously anc without celay and shall complete the Werke within the Time for Completion, : 72 Programme ‘Within the tins stated in the Agpendix, the Contractor shall suismit to the Employer (programme for the Works in the form stated in the Appendix 73 — - 7 ssense —— Extension of ‘ime Subject 19 Sub-Clause 10.3, ihe Contractor shail be entitled to an extension to the Time for Completion it he is or will be delayed by any of the Employer's Liabilities, On receipt o* an application from the Contractor. the Emplover shall consider a supporting cetaiis provided by the Contractor and shall extend the Time for ‘Completion as aopronriate 74 aoe - mene Late Completion If the Contractor fails to complete the Works within the Time ior Completion, the Contractor's only labilty to the Employer for such failure shall be to pay the amount staied in the Appendix for each day for which he fails to complete tne Works. Tak Over aa Completion The Contractor may notify the Employer when he conskiers that the Works are complete, 82 Taking-Over Notice The Empioyer shall notify the Contractor wihon he cansivers that the Contractor has completed the Works stating the tate accordingly. Alternatively, ihe Employer may notify the Cortractor that the Works, although not fully complete. are ready for taking over, stating =e date accorcinaly. The Emaloyer shail take over the Works upon the issue ofthis notice. The Contractor shail promptly compiete any outstanding work and, subject to Clause 9, cles the Site. oo Defects O41 Remedying Defecis The Employer may at any time prior to the expiry of the period stated in the Appendix, notify th= Contractor of any defects or outstanging work, The Contractor shell remedy at no cast *9 the Employer any defects due to the Contractor's design, Materia's, Plant or woramanship not being in accordance with the Contract. Sara Coesnos ‘enoe 199 5 2 Pannen The cost of remedying defects attritutable to any other cause shal be valuec as a Vanation, Failure to remeay any oatects ov complete outstanding work within 2 reasonable tme of the Employer's notic= eval entitie the Employer to carry aut all necessary work at the Contractor's cost. 9.2 Uncovering and Testing The Employer may give instructior as te the uncovering and/or ‘ ting of any work Unless as @ result of ar Unooverin and/or testing it is es ablisheo that the Contractor's design, Materals, Plant or workmanship arc not in agcordance with the Contract, the Contractor shall be paid for such uncovering and/or testing as a Variation in accordance with Sud-Ciause 10.2. varte(gh and Ciair..s 10.1 Right to Vary ‘The Employer may instruct Vanations. 10.2 ——.-- _ Valuation of Variations —_Varations shall be valued as follows ale" a lump sum price agreed between the Part b) —winere appropriate, at rates in the Contract, or ©} in the absence of appropriate rates, the rates in the Con-act snall be used 2° the basis for valuation, or tailing which 1) at appropriste new rates, as may be agre‘ or which t appropriate, or 2} if the Employer so instructs. at caywork rates set out in the Appendix for wi the Contractor shall keep records of hours of labour and Contractor Equipment, and of Materials used, Employer considers s 10.3 Early Warning 4 Party shall notify the other as soon as he is aware of any circumstance which may Gelay or disrupt the Works, or which may give rise to a claim for .delitonal payment. ‘The Contractor shall take all reasonabie steps to minimise these effects, ‘The Contrestor's entitlement to extension to the Time for Completion cr additional payment svall be limited to the time and paymer which would have oeen due if he had given prompt notice and had take’ all reasonable staps. 10.4 Right to Claim If the Contractor incurs Cost as 2 result of any of the Employer's Liabiliias, the Contractor shall be entitled to tn= amount of such Cost, ff as a result of any of the Employers Liabilties, itis necessy to change the Works, 1's shall be dealt with as a Variation, v . Variation and Claim The Contactor shall submit to the Employer an iterisad make-up of the value of Procedure Variations and cigims within 28 days of the instruction or of the event giving rise to the claim. The Employer shall check and if possivie agr ‘agreement, the Employer shall cetermins the value. th 1 value. fin tne absence of 6 © FDIC ra “4 | Cofitract Price and Payment at Valuation of the Works 12 Monthly Statements 13 iterim Payments 4 Payment of Fire’ Half of Recention ns Payment of Second Half of Retention 118 Final Payment Ww? Currency 11.8 Delayed Payment ‘The Werks shall be valued as provided! for in the Appendix, subject to Cieuse 10. The Contractor shall be entitled to be paid at monthly intervals! al b} the value of the “Works executed, 1@ percentage stated ir ‘he Appendix of the value of Materials and Plant delivered to “he Site at a. zasonable time, subject to any additions or aeduetiens which may be due. ‘The Contractor shall submit “ach month to the Employer a statement showing the amounts to which he considers himself entited. ‘within 28 days of de “=-y of each statement, the Employer shall pay to the Contractor the amount shown the Contractor's statement less retention at the rate statec ir the Appendix, ani. less any amount for which the Employer has zecified his reasons, for disagreement. The Employer shall net be gound by any sum pssviousty considered by him to be due to the Contractor. The Employer may withhold nterim payments until he receives ‘he periormance secunty under Sub-Clause 4,4 (if any). One hai of the retention sha" be paid by the Employer to the Contractor within 14 days after issuing the notice under Suo-Clause 8.2, T'9 remainder of the retention shail be paid ‘oy the Empioyer to the Contractor within 114 days attr ether the exoiry of the penod stated in the Anpendix, or the remedying of notiied defects or the comsietion of sutstanding work, all as referred to in Sud- Clause 8.1, whichever is the later. ‘Mithin 42 days cf the latest of the events fisted in Sub-Cleuse 11.5 ~bove, the Contractor shall suomi! a final account to the Employer together with any documentation reesonaniy required to enable the Employer to ascertain the final contract value, Within 2€ ays after ine suomission of this “nal account, the Employer shall pay to the Contractor any amount due. f the Employer aisagrees with any part of the Contractor's final aeccunt, he shail spcify his reasons (cr cisagreement wien making Payment Payment shail be in the currenay stated in the Appendix, The Contractor shall be entitiad to inierest at the rate stated in the Appendix for each day the Employer fails to pay beyona the prescribed payment period, 2 PDC 1808 7 veka 124 Default by Contractor 12.2 Default by Employer 12.8 Insolvency 12.4 Payment upon jermination lf the Contractor aparsions the Works, refuses o* falls to comply witt a valid instruction of the Employer or fails to proceed expeditiously and without delay, or 1s, despite @ written compiaint, in breach of the Contrest, the Emplayer may give notice reternng to this Suc-Ciause and stating the default Hf the Contractor has not taken all practicable steps to remedy the defautt within 14 ays after the Contractor's receist of the Employer's notice, the Employer may by a second notice given within a further 21 days, terminate the Contract. The Contractor shall then demobilse ftom the Ste leaving behind Materials and Pant and any Contractor's Equipment which the Employer instructs in the second notice 13 to be used until ne completion of the Works. |f the Employer fails to pay in accordance with the Contract, or is. despite a writen ‘complaint, in breach of the Contract, the Contractor may give notice referring to this ‘Sub-Clause and stating the defaul. If the default is not remedied within 7 days atter the Employer's recsipt of this notice, the Contractor may suspend the execution of all parts of the Works, i If the default is not remedied within 28 days after the Employer's receipt of the Contractor's notice, the Contractor may by a second notice given within a further 21 days, terminate the Contract. The Contractor shall then demobllise trom the Site. 'ta Party is osclared insolvent under any applicable law. the other Party may by notice terminate the Comract immediately. The Contractor shal then demobllise from the Site leaving behind, In the case of the Contractor's insolvency, any Contractor's Equipment which the Employer instructs in the notice is to be used until the ‘somplation of the Works, After termination. the Contractor shall be entitled to paymen’ of the unpaid oalance of the value cf the Works executed and of the Matsrals and Plant reasonably usivered to the Site, adjusted by the following a) any sums to whch the Contractor is entitled under Sub-Clause 10. b) any sume fo wich the Empiover is entitles, ©} if the Employer has terminate. under Sub-Clause 72.1 a 12.9, the En ployer shall bs sniitied to. a sum equivalent tc. 20% of the value of those pans of ts Works not executed at the date of the termination, o} ifthe Contractor has terminated under Sub-Clause ° 2.2 or 12.8, the Gantractor shall be enttied to tha Cost of his suspension and demobilisation together with 4 Sum equivalent to 10%6 of the vals of tnose parts of the Works not executed at the date of termination, The net balance due shell be paid or repaid with. 26 days of +i termination See Fee ae Ris! BES en 18.8 Contractor's Care of the The Contractor shail take ‘ul tesconsiality for the care of she Works fram the Works ' Commencement Date unti the date of the Employer's notice under - .b-Clause 8.2, Responsioilty snall then pass to the Emple er. If any loss or damage hapcans to the Works during the above ceriog, the Contractor shail rectify such loss or damage so E ther the Works conform with the Contract. AGH CEMENT LUness the loss or damage happens as a resut of an Snpioyer's Lieoity, the Contractor shail indemnity the Employer. the Employers cntractors, agenis and ‘amployees against 21 ss or damage happening to the Works and against all claims or expense arising out of the Works caused ka breach of the Contract, by agigence or by other default of the Contractor, he agents or employers, 13.2 - Force Majeure it a Pany is or wil be prevented from performing any of ‘ts obligations by Force ‘Majeure, the Party affected shell notify the other Pam immediataly. if necessary, the Contractor shal suspend zhe execution of the Works and, to the exient acreed with the Employer, demobilse the Contractor's Equipment it the event continues for a period of 84 days, either Party may then give notice of termination which shall take effect 28 days after the iving of the notice. ‘A or termination, the Contractor shail be entitled to payment of the unpaid balance of the value of the Works oxecuted and of the Materials and Plant reasoranly ceiivered to the Site, adjusted by the ‘olowing: 3} any sums to which the Contractor is entiled uncer Suio-Clause 10.4, b} the Cost of his suspension and demobit'ation, ¢}_ any sums to which the Employer is entiied. The net Halance due shall be paid or repaid within 28 days of the notice of termination. 7 isd Extent of Cover ‘The Contractor shall, prior to commencing the Works, sffect and thereafter maintain insurances in the joint names af the artes: a) for loss and damage to the Works, Materials, Plant and the Contractor's Equipment, bj for liabity of both Parties fer loss, damage, death or injury to third parties or their property arising out of the Contractor's performance of the Contract, Including the Contraczor’s liability for damage to the Emplover's property other than the Works, anc } Tor lisbilty of both ‘Parties and of any Employer's representative for death or injury to the Contractor's personnel except to the extent that labilty arises from the negligence of the Empicyer, any Employer's representative or their employees. ‘General Corcttons ORD 399 9 3 142 All insurances shalt conform wit’: any requiements detaled in the Appenciix. The Arrangements policies shall be Issued by insurers anc in terme approved by the Emoloyer. The Contractor shall provicie the Employer with evidence that any required poliay isin force {and that the premiums have been paid, ‘Ail payments received from insurers relating to loss or damage to the Works shall b held jointly oy the Parties and used for the renal of the lors or damage or as ‘compensation for loss or damage that is nat to be repaired, 14.3 Failure to Insure if the Contractor fats to effect or keep in force any of the insurances referred to in the previous Sub-Clauses, oF falis to provide satisfactory evidence, policies or receinss, the Employer may, witnaut prejudice to any other right or remedy: etfect insurance for ‘the cover relevant to such detautt anc pay the premiums due and recover the same as a deduction from any other monies due to the Contractor. apa of Disputes 15 Adjudication Unless settled amicably, any dispute or, diference which arisx between th Contractor and the Employer cut of or in connection with the Contract ‘ncluding any valuation or other decision of the Employer, shall be roforred by exer Party to ‘adjudication in accordanse wih the attached Rules for Adjudication ("the 7 ies"). The adjudicator shall be any person agreed by the Parties. In the event of disagreemen: the adjudicator shall be appointed in accordance with the Fes, 152. —— ee Nolice of Dissatisfactior. fa Party is dissatisfied with the decision of the adiudicator or If no decison is ca on within the fime set out in the Rules, the Party may give notice of cissatistacron referring to this Sub-Clause within 28 days of receit of the decision or the exoir. of the time for the decision. If ne notice of dissatistaction 1s given wthn the spsoted time, the decision shall be final and binding on the Perties. i notice of dissatistaction i" given within tne specified time, the decision shal! be binding on the Farias wino sha ve effect to it without delay unless and until the decision of the adjudicator is revised by an arbitrator 15.3 Arbitration ‘A dispute which has been the subject of @ notice of cissatistaction shall be finaly sattled by a single arortrator uncer the rules specifi. the Avoendix, in the aosence of agreement, the arbitrator shall be- designated ny the aopoint.. authority specified an tne Appendix. Any hearing shall be held at the place specified in the Aggandix and in the language referred to in Sub-Clause 1.5. 10 er 1 INDEX OF SUB-CLAUSES Agjudication Approvals Arbitration Arrangements, Insuarce Authorised persen Communications Completion Contractor's Care of the Works Contractor's Design Contractor's Representative Currency Defauit by Contrctor Default by Emoloyer Doiiritions Delayed Rayment Early Warning, Claims Employer's instructions Employer's Representative Empioyer's Liabilities Execution of the Works Extension of Time Extent of Cover, Insurance Failure to lesure Final Payment Force Majeure ‘€snerel Obligations, Contractor Insolvency Interim Payments interpretation Late Completion law Monthly Statements Notice of Dissatistaction Payment ‘-0n Termination Performa.» Security Permits and Licences Priority of Documents 009 Sub-Clause 16.1 183 142 3.1 15 84 434 Ba 42 We 1244 122 14 11.8 103 23 32 64 7A 73 14.1 ask gas 123 113 12 15.2 124 ag 2.2 13 Page 10 1 10 3 5 3 3 ONanwae mwa @ ond SHELA = Programme Provision of Site 24 Remedying Defects Responsibility for Design Retention, First Hat 7 Retention. Second He’ 7 Right to Clair 6 Right to Vary € Statutory Obigations z 2 ‘Subcontracting 8 Taking-Over Notice 5 5 Uncovering ant Testing 92 6 Valuation of the Works 44 7 \Valuat'on of Variations, 10. 6 ‘i Variation and Claim Procedure . 10, 6 12 . Particular Conditions Note: It is intended that the Short Form of Contract will work satisfactorily -ithout any Particslar Conditions. However, i the requirement of the projact makes it destat! to ‘amend any Cieise or to add provisions to the Contract, the amendments. and additions shoulc be set aut on pages ieaded Particular Gorditions. Care should be taken with the drafting of such Clauses aspecially in view of the high orionty civen to the Paricular Concitions by Sub-Crause 1.3. PERE EEE Ee Sere ere ee ere ree PEE ene 1998 13 ~ Rules for Adjudication referred to in Sub-Clause 15.1 General Appointment of Adjudicator ‘Terms of Appointment Pues tor Acqua 6 10 Any reference in the Conditions of Contract to the Rules for Acjucication shall be deemed to be a reference to these Rules, Defitions irr the Contract shall apply in these Fules. The Parties shail jointly ensure the appointment of the Adiudicator. The Adjudicater shail be a euitably qualified person, If for any reason the a¢ccintment of the Acjudicator is nc* agread at the latest within 12 days of the .sference of a disoute in accordance with these Aules, then eithar Party may apply, with 2 copy of the applic~tion to “ne other Parts. to any appointing authority named in the Contract or, none, to the President of FIDIC or his nominee, to aopoint an Adjudicator, and such appointment shal be final and conclusive. ‘The Agjudicator's appointment may be terminated by mutual agreement of he Parties. The Adjucicator's apgointment shall expire when 7s Works have been completed or when any cisputes referred to the Aciudicetor shall have been withdrawn or decided, whichever is the later. The Adjucicator is to be, and is to remain throughout his appointment, imeatial and indeoendent of the Parties and shall imrediately disclose in writing to the Parties anything of which he becomes aware which coud affect his impertaity or independence, The Adjudicator shall not give advice to the Parties or ther representatives coneeming tha conduct of the project of which the Works form part other than in accordance with these Rules, ‘The Adjucicator shall not 2e called as a witness by the Parties to give evidence concerning any dispute in connection with, or arising out of, the Contract. “The Adjudicator shall treat the details of the Contract and =| activities and hearings of the Adjucicator as confidential and shail not disclose the same. without the orior written consent of the Parties, The Adjuaicaror shall not, without the consent of the Parties, assign or delegate any of his work under these Rules or engage iegal or technical assistance. The Adjucicator may resian by giving 28 days' notice to the Parties. In the evant of resignation, death or incapacity, termination or a failure or refusal to perform the duties of ‘djudicater under these Rules, the Parties shall agree upon a replacement -diudicator within 14 days or Rule 4 shall anol. SB PDIC 1999 15 Payment Procedure for Obtaining Adjudicator's Decision 16 a 12 13 14 15 16 7 18 18 20 ‘The Adjudiestor shall in no circumstances be fable for any claims for anything done or omitted in the discharge of the Adjudicator's duties unlegs the act 0° ‘omissicn is shown to have been in bad fait If the Adiudicator shall knowingly breach any of the provisions of Rule 6 or act in bad faith, ne shail not be entitiad to any fees or expenses hereunder end sha: reimburse each of the Parties for any faes and expenses properly paid to him ff, as a consequence of such breach any proceedings ar decisions of tne Adjudicator are rendered v>id or ineffective, The Adjudicator shall be paic the fees and expenses set out in the Adjudicator's ‘Agreement ‘The retainer fee, if applicable, shall be payment in full for; (a) being available, on 28 days' notice, for all hearings and Sits visits: (0) ail office overhead expenses such as secretarial servioes, photocopying and office silpples incurred in connection with his. duties: (©) all services performed hereunder except those performed during the days referred to in Rule 15, ‘The daily fee shall be payable for each working day prenaring for or attending Site visits or hearings or preparing decisions including a: associated traveling ime. ‘The retainer and daily fees shal remain fixed for the period of tenure of the Adjudicater: Al payments to the Agjudicator shall be made by the Gonactor who will be entitled to be reimbursed half by the Employer. The Contractor shall pay invoices addressed to him within 28 days of receipt. The Adiudicatar's invoices ‘or any monthly retainer shall be submitted quarterly in advance and invoices for daily fees and exoenses shall be submitted following the conclusion of a Site visit or hearing. Al myoices shall contain a briet description of the activities performed curing th= relevant period. The Agjucicator may suspend work if any invoice remains unpaid at the expiry cf the period for gaymen’. prowcied tha! > days prior notice has been given !9 bath Parties, Hf the Contractor falls to pay an invoice addressed to tt. the Employer shall be entitled to pay the sur: Cue to the Agjudicator and recover the sum paid irom the Contractor, A disoute between the Parties may be referred in writing by exner Party to the Adjudicator for his decision, with a copy to the other Parly. I the Adjudicator has not beer agreed or annointed, the dispute shal! be referred in wrting to the other Party, together with @ proposal for the appaintment of an Adjuciicator. & relerence shall identity the dispute and refer to thase Rutes. ‘The Adjucicator may decide to visit the Site, The Adjudidator may decide io conduct @ hearing in which event he shai decide on the cate, place and duration for the hearing. The Aciuicator may requis that written staléments from the Parties be presented to hum prior to, at or after the hearing, The Parties shal promptly provide the Adjucicator with sufficient copies of any documentation end information relevant to the Contract thai he may request 31968 Sra fen Pecos 21 23 ‘The Aaijudicator shall act as an impartial expert, not as an arbitrator, and shalt have full authority to conduct any nearing as he thinks fit, not ireing bound by any ‘ules oF procedures cther than those set out herein. Without limting the foregoing, the Adjudiestor shal have power to: (@)__ decide upon the Adiudicator's own jurisdiction, and as to the scope of any dispute referred to him, (BI make use of his own specialist knowledge, if any, ‘c)__adost an inouisitoriel procedure, decide upon the payment of interest in accordance with the Contract. e! open up, review and revise any opinion, instruction, determination, certificate or valuation, related to the dispute, (i refuse admission t= hearings to any persons ather than the Empioyer, the Contractor anc: zheir respective reuresentatives, and to ereceed in the absence of ary Party who the Adjucicator is satisfied receivexi notice of the hearing All communications between either of the Parties and the Adjudicator and all hearings shall be in the language of the Adjudicator's Agreement. All suich communications shall be coped to the other Party. No later than the fity-sodth day after the day on which the Adjudicater -eceWved a reference cr, if later, the day on which the Adjudicator's Agreement came into effect, the Adjudicator shal give written nolice of his decision to the Parties, ‘Such decision shal include reasons and state that i s given under these Rules. ros 1399 7 i Adjudicator’s Agreement Identification of Project: tthe Project?) Name and edldress of the Employer (the "Empioyer") Name and adaress of Contractor: the "Contractor Name anc! addrese of Agjudicator: Ghe "Adjudicator) Whereas the Employer and the Contractor have entered into a contract fn Contract") for the execution of the Project and wish to appoint the Agjudicalor to act ‘as adjudicator in accordance with th= Rules for Adjudication ['the Rules") ‘The Employer, Contractor and Adjudicaior agree as follows: 1. Ths Rules end the dispute provisions of the Contract shal! iorm tart of this Agrearent 2. The Adjusisator shall be paic: A retainer foe of per calendar month (wihere applicable) A dally fee of . Expenses (including ti'e cost of telephone calls, courier charges. faxes end fetexes incurred in connection with his cuties: all reasonable ana necassary tavel expenses, hotel accommodation and subsistence and other direST travel expenses} Receipts willbe required! for all expenses, 18 re 8 The adiucicator at Kees to act as adjudicator in accordance with the Rules ano hhas ciecicsed to the Parties sny previous or existing relationship with the Parties or others concernad wita the Project. ‘This qreement shail be governed by the law of ‘The caguage of this Agreement shall be SIGNED © for and on oehelf of the Employer in the presencs: 2¢ Witness __ Name Address Date SIGNED BY for anc on behait of the Contractar in the presence of Witness Name Adress Date SIGNED BY Witness Name Address Date 19 ESTs g cu Les ~ Notes for Guidance {not forming part of the Contract) Genersi 16 Objectve of “his Contract is to express in clear and simpie terms traditional Procurement conceots. The Contract is intended to be suitable for works of simpie, content anc short duration, #f it is required thet the Contracter should undertake: design, this is also provided ‘or. “There are no Particular Conaitions, although these Notes contain alternative worcing for consideration in particular circumstances. All necessary additional information is intended to be provided in the Appendix, ‘single document is proposed for the form of tender and the agreement. This reflects ‘the simple projects envisaged, 4 (One resuit of the simple form of Contract is that there is an increased ourden on the Employer to set out in the Specification and Drawings the full scope of works, including the extent of any design to be dene by the Contractor, ‘There is no Engineer or Employer's Representative in the tormal sense used in some other FIDIC Conditions. The Employer takes all necessary actions. However, the Emctoyer mus- nominate his authorised spokesman and, f he wishes to engage a consultant to administer the Contract, may at.peint a representative with spect delegated duties and authority. The Contractor also nominates a rapresomative, The Conditions contein no overall mit on the Contractor's liability. if such @ limit is required, a Clause should be inserted in the Particular Conditions. Agreement The printed form envisages a simole procedure of offer and accaptanca. in arder 10 oid tne traps and uncertainties that surround "letters of acceptance’ anc ‘letters of intent’, it was thought preferaoie to promote a clear and unambizuous orectice. [tis intended that the Employer will write in the = mployer's name in the Agreement and fll in the Appancix where appropriate and seid two copies to tendere’s together \with the Specification, Drawings etc forming the tender package. In respect of beth copies, the Contractor is to complete, sign and date the Cifer section ana complete ary semaining spaces in the Appendix. Having decided whicn tender to accept, the Employer signs the Acceptance section of both copies and returns ove copy to #3 Con-actor, The Co~rract comes into effect upon receipt by the Contracior of his copy. If post-tender negotiations sre permitted art changes in -gecification or price are gress, then the forn can stil be used after the Parties have made and initialed the aperoonate changes to their resoective documents, The Contrsctc” thus makes 2 revised offer in response to the Employer's revised tender document: and the revised cer is accepted by the Employsr signing and retuming the Acceptance form. if the changes are extensive, anew form of Agreement sould be complsted by the Parties, ‘Neras for Gurae oe 0c 1999 a1 Appendix General Provisions 22 ‘As the Contract comes into effect upon recelnt of the signed Acceptance by the Contractor, the Empioye: should take sieps ic establish when recaipt occurs, tor ‘example by recurring the Contractor to collect end e'gn for the Agreement When the applicable law imposes any form of tax sucri as VAT on the Works. th Employer shoud make clear whether tenderers should include such taxes ir their prices. Similarly if paymen: is to be made in whol: or in part in a currency other than the currency of the Country. the Employer should make this clear to tenderers. See Sub-Clause 11.7, Any Notes for Guidance on the completion of the Appendix ate to be found in the Notes to the Ciauses concerned. The Employer snould compiete the Appendix as indicated pror to inviting tencers, Tenderers may be asked to insert a Time for Completion at 1.1.9 if none is specified. Where tenderers are required to submit Gesign with the'r tenders, the documents containing the tendered design should bs identiied by the tenderer against item 1.1.1(f] of ne Appendy. ‘A number of suggestions have been macle in the Appendix, such as the time for submission of the Contractor's programme under Sub-Clause 7.2 and the amount of retention under Suo-Ciause 11,5. if these suggestions are adopted by the Emolover no acon is required. Otherwise, they should be deleted and ~-piaced, 1.7 Definitions. The datintions in these Conditions are not all thy same as. those to be found in other FIDIC Cont. cts. This is as a result of the nead for simplicity in Conditions of this sort. Significantly different definitions include Commencement Date, Site, Variation and Works. 1.1.1 *Contract’. The list of cocumiants serves two purposes: firstly, to teentity which docume’:s form part of the Contract; and secondly, to provide an order of priority in the evant of conflict between them, Document identification is necessary to avoid any possibie doubt, for exam = because specifications have baen subject to revisions. A compiate list of Drawings ss always desirable and could be atiached on 2 separate sheat Theis is no need for Particular Conditions but i amendments to these Conditions are required, they should be insertad on the sheet headed: Patticutar Conditions and given priority over the General Conditions. ifnone, Gelete the reierence. The Specification should set out in clear terms any dasign thet the Contractor is required to undertake, including the extent to which any design proposals are to be submitted with the tender. If none, the reference to the Comtractor's tendered dasign should .< deleted, If mere is ne bill of quantities, delete the reference, If there are adgitional documents which 22 required to form part of the Contract, such as schedules of information provided by the Contractor ‘these should be added © the Employer, Consideration should be owen in each case to the reauiras priority, 7 If a letter of acceptance is used, it should be given high priority, with or in place of tr Agreement, for examale. The Employer Employer's Representatives ioe or Gua ie ata 4.4.49 16 24 ‘Commencement Date’. ~e siartng date for the Contract is 14 days alter she date when the Contractor receives the Agreement signed by the Employer, unless the Parties agree athisrwise, “Force Majeure’ may include, but is nat limited to, exceptional events or circumstances of the Kind listed below, so long as all of the four concitions stated in the definition have heen setistisc: a} war, hostiities (whether war be declared or nol), invasion, act of foreign enemies, b) bation, terrcrism, revolution, insurrection, military or sured Power, oF civil war, } riot, commotion, disc der, strike or locicut by persons other than ths Contractcr's personnel and other smoloyees, munitions cf war, explosive materials, ionising radiation or contamination by radioactivity, except as may be attributable to *he Contractor's se of suc munitions, explosives, radiation or rac activity, and ) ratural catastrophes such as earthquake, hurricane, typhoon \oicanie activity, "Works". The term “Works” 's intended “9 cover all the obligations of the Contractor, including any design and the remedying of defects. Communications. The probiem of languages is addresso¢ by requiring the important communications such as notices and instructions to be in the language stated in the Appendix. Otherwise there is no “Ruling Language” Any arbitration will be concicted in the epectfied language. Changes to the law after the date of the Contractor's offer are at the Employer's risk and any delay or additional cost are recoverable by the Contractor. i the taw of the Contract is not the law of the Country, cen Sub- Ciause 6.1 should be changed in the Particu'ar Concitions, Unless the Parties have agreed otherwise, the Site must be vianrled over by the Employer to the Contractor on the Commencement Date. This is 14 days after the Contract has come into effect, which occurs when the signea Agreement has be=7 retuned by the Employer to the Contractor (see also ‘Sub-Ciause 1.1.7 above). It for any reason, permits et2 may also be required irom places other than the Country, this Sub-Clause could be limited by the addirn at the enc of the words: in the Country out not elsewhere." The term “approval” is only used in the Conditions in relation *> the performance security at Sub-Clause 4.4 and insurances at duo-Ciause 14.1, It ig important that risks such as those of poor workmanship or Contractor's design are not transferred to the Employer unintentionally. The ‘Sud-Ciaurs is intended to prevent argument. Two principles guided the cratting of this Cisuse. Frstly, the Contractor should knaw who in an Emeloyer organisation is authorised to speak and 23 MT The Contractor Design by Contractor 2e act for the Employer at any given time. This is achieved wy Sub-Ciause 3.1 the authorised individual should be named in the Appendix ‘Secondly, those Employers who require professional assistance should not, bbe discouraged from doing so and ther consultant should have clearly established delegated powers. This is the object of Sub-Ciause 5.2. Onde appointed, the Employer's resresentative acts for and in tne interests of the Employer. There is no dual role or duty tc be imoartia. It an impartial Employer's Representative 1s required wth a rote similar to the traditional Engineer, then the following words could be used in the Particular Consitions: : “Replace the fing: sentonce of Suo-Clause 8.2 with the folowing: “The Employer's Represen:tve shal exercise in @ fair and imoanial manner the powers of the Employer under or in connection with the following Suo-Clauses: 1.3, 23, 4.2, 4.3. 5.1, 7 82, 9.1, 82, 101, 162, 105, Tit to 116, 11.8, 12.1, 182 and 14, To the extent that the Employer has delegated po..ers to an Employer's representativ. he should be careful not to exercise © ich powers himself in order to avoid the risk =f conflicting instructions, decisions ste. 4.1 Most contracts do not specify the exact standard recuired for each element Of the Works, so some benchmark standard is neecied with whioh the Contractor is to comply. Ifa more specific set of standards coud be reierred to for a particular project, tnen an amendment in the Particular Conditions would be desirable, 44 Performance Security. Suagested forms of periormance cond (surety ‘bondi or bank guarantee have not been proviced. ti is felt that tho scale of project warrants security by means ot af nd, than local commercial practice should dictate the form, Example for. s are included! with FIDIC = Conaitions of Contract for Construction. The amaunt and a reference 10 tho desired form of any required security snould be set out in the Appendix 5.1 AS with all design-build contracts # is essential that the Employer's recurements are set out clearly anc precisaly. The Apoandix should indicate to tenderers the Sub-Ciause(s} in the Specification tha: set out the design requirement, Where the ‘Employer procures any par af the design, the resonsibilty for design will be shared as this Contract makes the Contractor responsible only for design prepared by him. The extent of the Contractor's design obiigation shou'd therefore be cleari: stated if disputes, are to be avoided. The Ganditions «.vold the confusing ccncept of approve of design. Designs are submitted and may be returned with comments o rejected. The Employer need not react at a. 5.2 The Contractor's responsinilty for his design remains, ag . made olzer "21 and in Sub-Ciause 2.4, In the event of confict tween the Specification fang Drawings and the Contractor's tendered desir. the order of priority in the Append: makes it clear that the Employer's documents ¢revail, This means that # the Emplayer orefers the Contractor's tendered sclution, the Specificatior and Drawings should be amended before the Contact is signe by the Parties, roloyer's Liabilities Time for Completion Taking-Over Remedying Detects 82 ‘The Contractor .vil have en absclute obligation to encure that the parts of the Worms desigred cy nim are fit for the curpose, provided that the intended curposes are defned in the Contract, The Emplover must therefore make clear in the parts of the Soecifcation that inpese design obligations, the intended purnoses of the sart of the Works to 66 aesicned ‘by the Gontractor. This shcu.d be done aven where this seems covic 3 in orcer to avoid argument about whether an iniended curpose is defined or rot. fa party wishes to arotect the intellectual prope:ty in his deeigh must 26 made in the Particular Conditions. This Sub-Ciause gathers together in one place the grounds for “stension of time under Sub-Clause 7. and the grounds ‘or claims under 3ub-Ciause 10.4, Thee is no time or claim for bad weather although nis could be adjusted in the Particular Condttions if so required. The Appendix should stioviate ary particular requirements as to the form and level of cetell of programme to be submitted. Where Contractor's design is required, the Agpencix could stioulate that the programme should show the dates on which itis intenced to prepare and suomit drawings etc. The test for entitiement to an extension of time is whether it is approrriave. This means that if an event under Sub-Cieuse 8.1 caused critical deiay to tha Works anc itis fair end reasonable to grant an extension of time. the employer should do so. An extension of time shculd not be granted! to the axtent that any faliure by the Contractor to give an early warning notice Ader Suo-Clause 70.9 contributed to the delay. ‘There is a maximum amount which the Cantrector is liable 10 pay fer ‘ate completion specified in the Appendix, 10% of the sum stated in the Agreement is suggested. In fing with normal practice. it is not envisaged that the Works need be 100% comslete betore the Emoloyer may take over, Ones the Works are ready to be used for their intended purpose, the notice s* uid be given, ‘There is no provision fer taking-over of only parts of the We «s but if this is required, provision should be made in the Particular Conaitions, If cry tests are required to be completed prior to taking-over, these should "2 specified in the Specification. The detintion of Works is oroad enough te faclude any such tests. ‘There is no defines: Detects Liability Period but during the perica - normally 42 months - irom the date of taxing-over, the Empioyer may notify the Contractor of defects. The Contractor must emedy such defects within a reasonable time. if he fails “odo <0, the Employer may employ athers for that >urpose at the Contractor's cast. The Empioyer may also natily defects at ary time prior to taking-over. The ‘ability of tne Contrector for defects wil not normally end w.:7 the expiry of the period stated in the Appendix. Although he is then no iongar obliged SAG 1909 25 1 GENERAL CONDMONS. ADYULICATION Variations and Claims Contract Price and Payment 26 104 10.2 10.8 Wt DKS 10 to return to Site to remedy detects, the detect renresents a breach of ‘contract tor which the Contractor is liable damages. This liaoity remains fo’ as long as the law of the Contract stiouates, often 3, 6 or 10 years from the dae of the breach. tf this long-term liability 1s 10 be reduced or eliminated, a Clause in tne Particular Conditions is required, Variation is defined to inciude any change to the Specification or Drawings includes in the Contract. If the Employer requires @ change “o part of the Works designed by tha Contractor either as pert of his tend” ar after the Contract was awarded, then this is to ye done oy way af an addition to the Speciication or Drawings which by Sub-Ciause 5.2 will prevat over Contractor's design. This Sub-Clause sets out aternative procedures for the valuation of Variations, to 08 applied in the order of prionty given. It applies equally :© omissions as “0 adiitione’ «orks, a} Alump’sum shou Je the first methas to be considered as ft can encompass the tu: cost of a Variation and avoie! subsequent Gispute over the indirect effect, The Employer can invite me Contractor to suiomit an itemised make-up (Gub-Clause 10.5: before instructing the Variation so thet en agreed lumo sum car + m1 part of the instruction. b}—Aternatively, a more traditional approach can be teken by vaiuing the \Vetiation at rates in the bill of quantities and any schedules, or ©} Using these rates as & basis. or 2 Using new ratos, 2) Daywork rates are normally used when the Variation is of an indeterminate nature or s cut of sequence witr, the remaining Works: ‘To ensure reasonable daywork sates, provision should be made f these to bs price compatitivaly in the tender docunents. This Sub-Clause and Sub-Clause 10.6 require the Contractor to notify the Employer of events promptly and to detall any claim within 28 days. If effects of the event are increased or if tne ability of the Emplover to verily any claim is affactad by the tailure to notify, then the Employer # orotectec. Normally only one of t's options in the Appendix snould be used to indicate how the sum in the oer is be calculate: and presented. The folowig ‘explans what is interciec Lump sum price Alump sun. offer without any supooriing details, ‘This would be used tor very minor wor? where Variations are not anticipated and the Vs.rks will bbe completed in = short period reauiring only one Payment to the © raat. Lump sum price with A lump eum after suoportse by schedules of senedute of rates rates prepead by the tender: This would Ds & larger convact where Variations and. stage payments would be required. If the Employer does rot hee the resources to prepare is awn bil of quantas then tne alternatwe would oe suite. Sra Se nha 4 lump sum offer based an bil of quantities precared by the Employer, This «would be the ame as last Dut wher> tha Employer nae che resources t0 prepare his own bill af quantities, A. better contract would result with an Empicysr's bill of quantities Femeasurement with 4 slim subject to remeasurement at the rates tl of quantities offered by the tercerer in the 2 of quantities, ‘orepared by the Emoboyer. This would be the same as last but would suit a erstract where many changas are envisaged to th: Works atter the Contract has been awardea, Cost reimbursable An estimate prepared by the :enderar “shich will ‘be replaced by the actual cost of “hs Works calculated in accordance with the ierms sat by the Employer. This would suit a orcject where the ‘extent of work cannot be ascerained before the Contract is placed. An example of this wouid be an emergency reconstruction of 2 building camaged by tre. Aaa However, i for some special reason, .ore than one ontion is swected, * example there is 2 temieasureabie element in alump sum Contract, then se atalis should be carstuly deine. ‘The Foreword indicates that this Short Form uf Contract is intended for works of short curation. In the event of a contract for works af long duration, a new clause could be inserted at Sub-Clause 11.1 to adjust for the rise and fallin the cost of =bour, materials and other imperts to the Works. Such a ‘slause could be adapted from the other FIDIC Conditions of Gentract. 41.2 If the Contract is tor 2 lump sum, consideration should be given as to now the;workis to be valued for the purp. ses of interim payments. In compieting the Appendix for Sub-Clause 11.1, the Employer may request tenderers to submit 2 cash flow forecast linked to a stage cayment provosal for agreement. This would be reviewed in the event of an extension of ime made in accordance with Sub-Ciause 7.3, ‘Alternatively, inter payment can be based on valuation of the Works which would also 08 appropriate for remeasurement and cost reimbursable Contracts. Payment could also be based on the achievement of milestones or a schedue of activities to which values are assigned, ._ [Flocal law or practice so dictates, an invoice may also be required, in which case it could be submitted with the statement, 14.2 No provision is made for advance payments. If such @ payment is to be made, there should bs provision in the Particular Soniticns and for any security to be provided by the Contractor. An example form of advance payment guarantee is to be found in FiDIC’s Conditions of Contract for Construction. 17.4 The deduction of retention is sometimes replaced by the provision of security by the Contractor to the Employer. Alternatively, the entire retention neve or Suis ‘ene rama 27 Defautt Risk and Responsibility 28 ns 421 is 13.4 v9 sum deducted is relensed alter taking-ove: upon the provision by the Contractor °f security. In either event, suitable text wou. be reaured ins Particular Conoitions. An example form of retention guarantee is to be found in FIDIC's Conditions of Contract for Construction ‘The relzase of the s¢ all notified de"2cte ha: ‘ond part of the retention will serve es confirmation that been remediod. It is assumed that payments wil be in a single curency, if this is not the ase, the proportions of different currencies shoul’ be stated in the Appendix and provision mace in the Spectication. or the Particular Conditions as to how payment is to be made, ‘The Employer may terminate the Contract if the defaulting Contractor does ot respond to a formal notice by taking all practicalble steps to put right his, default. This recognises that not all defaults are capable of comection in 4 deys. If termination takes place, the Employer may take 0.8" ane use the Contractor's Eouioment to complete the Works. “are shouts be taken however, f the equipment on Site is hired: no specitic provision is made te cover this situation and the Empioyer is unlikely te be able to retain such eouioment. This provision provides th» Contractor's main remedy for nan-ayment, 7 days after the Employer'e receppt of @ default notice, which: must refer to Sub-Ciause 12.2, the Contractor may suspenc all ar part of his work. 21 days late" the ootion to terminate aris: if the Empiover persists with nor payment or other default. The Contractor must use his right to terminate withn 21 days 0 lose it. Ths is to prevent a party abusing = right to terminate in ris decings with the otner party for the remainaer >t H Contractor's Equipment is essential for the safety or stability of tne Wor the Employer will be obliged te agrse terms with the Contractor for the retention of such equipment, Leal law will often protect tne Employ 2 from the immediate and reckless removal of essential items, ‘The fight of the Employer to retain the Contractor's Equioment may clash with the night of a liquidator or receive’ to realise tna assets of an insolvent Contractor, Referenze to the applicale law wauld be necessary ‘This Sub-Cisuse enables the financial aspects of the Contract to be resohec Qhick’y and without the necessty t¢ await tne complation of the Wks by others. By specifying the damages payabie to tne Innocen party :0° t defauts leading to the termination, mucr: delay, complization end scape for dispute are avoided. The Employer's casts in cbtaining ¢ replacement Contractor wl generaly be highe” than the Contractor's loss o* profi ‘Although the Contractor is responsible for the Works prisr te takiny-oves, Ne is protected by the cbigatior to insure the Works unde: Clause 14 and by his ability to recover under Clause 6 his Cost # ons'e tne Empioye-'s Liabilities occurs, To: valfy as Force Majeure, events must prevent performance of an onligation. See aise the definiton at Sub-Cis #e¢ 1.1.74. Notice mus! be given at once, Insurance 12.1 The Employer shot id set out his orecise -equitements in the Apoencix. Third Party, public labiity insurance would normally be mandator,. As smaller contracts are ivaly to fall within tenderers’ staneng Contracters' all Sisk (CARI insurancs policies. ‘enderers should generally be 2°xe to submit s tails of their ine: -ance cover with their tenders. , ‘Any cequirements for insurance after the date of the Employer's notice under Sub-Giause 6.2, or grising rom taking-over saris of the Works, should be covered iy Particular Concitions. See also Ciause ‘3, It the Empioyer wishes to take cut the insurances instead of the Contractor, the folowing shoule be usad ag 2 Particular Condition in glace cf Sub- Clause 14.7 “eplace *he text of Sub~lauso 14.1 with the following: ‘The Employer shail, prior to the Cummencement Date, effect insurance in the joint pans of 2's Partss of the types, in the amounts and with the exclusions stouated' .n the pendix. The Employer shail provide the Contractor wth evidence that eny required policy is in force and that the premiums ve been pard,* Sub-Clauses 14.2 and 14.9 crould be ceteted if the Employer takes out the insurances. It should be noted that in the event of the Employer's failure to insure, the Contractor may give notice under Sue-Clause 12.2. Resolution of Disputes 15.1. There are advantages in appointing an aojusieator om the outset aver though the ackdicator ay not be required to take -ny action or earn any fee unless ana antl a disoute is refered to him. Delays will inevitably occur ' the cartes initiate the eracedure to appoin® an adjudicator only when a dispute has arisen, * is therefore cacommende: that the Employer pronose person to act as adjudicator either at tencer stage 1 shortly after the Agreement is signeci and that the matter is cisoussed andi agreed as soon as possible, Cate snould 2 taken about whether an adjudicator enould be local c: ‘tom ‘4 neutral couniry, Although the adjudicaior should be mpartial, he cosis of amploying someone from a third country could te disproporticnate if itis necessary for the adjucicator to visit or if a hearin became necessary, However, in view of tne costs invcived in arbitration, even of minor disoutes, any extra cost of a truly impartial adjudicator is a recommended investment. It is intended that all decisions made by the Employer or his representative should be cavabie of being reviewed boy an adjudicator and, if required, by an arbitrator. 18.3 Arbitration may not be commenced unless the cispute has frst been the subject of an aciudication. The Rules of arbitration should ‘ve -

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