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The current emphasis on improved procedures for the avoidance or resolution of claims and disputes has added to these pressures on the staff on site. Contract’s Managers and the other construction professionals who prepare documents and administer projects on site should not have the Conditions of Contract on their desks and refer to its requirements and procedures on . Resident Engineers and Constructor’s Project Managers were probably aware that such documents existed. and were only consulted when a claim or dispute became a serious problem. One of the consequences of the movement towards improving efficiency and reducing costs has been the increasing use of the Conditions of Contract as a manual of good project management procedures.PREFACE In recent years the role of the Conditions of Contract in a construction project has undergone a radical change. which were published by FIDIC in 1999. This development has been evident in the successive revisions to the Federation Internationale des Ingenieurs (FIDIC0 Conditions of Contract for Works of Civil Engineering Construction. and experienced a major leap forward with the publication of the New Engineering Contract by The Institution of Civil Engineers in London. In more recent years. much less used it as a reference to guide their actions on the site. the traditional FIDIC ‘Red Book’. in a style and format that could be readily understood by construction professionals. but most of them had never even seen the Conditions of Contract. The Conditions of Contract were originally a legal document. Hence. it is now inconceivable that Resident Engineers. The New Engineering Contract not only incorporated procedures which virtually formed a manual of good project management techniques and encouraged a less approach to the relationship between Contractor and Employer but also was written in good English. The Conditions of Contract. mark a further step forward in the process of the incorporation of management procedures expressed in a practical style and format. the increase in the size and complexity of projects and the increasing demand from Clients and Employers that projects should finish on time and within budget have increased the pressure for improved management techniques on construction sites. giving the rights and obligations of the Parties.
There is also comparison with previous FIDIC Conditions and comparison on Clause numbers to assist those who are familiar with the traditional FIDIC Red Book. The book is not intended to be a legal analysis of the new FIDIC Conditions or a comparison of the correct interpretation of the conditions of contract in different jurisdictions. conducting training courses and the resolution on disputes. Contractor and Engineer with the milestone events during the construction of the project are shown in a series of flow charts. based on the author’s practical experience construction projects. The book includes a detailed review of the Conditions of Contract for Construction and comparison with the other FIDIC Conditions which were published in 1999. It is intended to assist the people who are preparing Contact documents as well as those are administering the project on the Site or dealing with claims and disputes.This book is a practical guide for the people who actually use FIDIC Conditions of Contract. . To review must be read together with the wording of the actual Sub Clause. That task can be for those who are better qualified to analyze and speculate on the correct legal interpretation of controversial Clauses. The interrelation of the actions and notices by the Employer.
17. 4. Clause 2: The Employer 11. Cause 7: Plant. 5. Clause 12: Measurement and Evaluation .P.P. 6.B. Contents: General Conditions 8. 20. Clause 4: The Contractor 13. Clause 11: Defects Liability – R. Clause 8: Commencement. Clause 3: The Engineer 12. Delays and Suspension – R. 19. Clause 6: Staff and Labour 15. & L.B. 2.B. Clause 10: Employer’s Taking Over – L. Materials and Workmanship 16. Clause 9: Tests on Completion 18.GENERAL P. Clause 1: General Provisions 10. Clause 5: Nominated Subcontractors 14. 3. Introduction to the FIDIC Conditions of Contract The 1999 FIDIC Conditions of Contract for Construction Comparisons between the different FIDIC Conditions of Contract Claims and dispute procedures Flow charts PART 2 – THE FIDIC CONDITIONS OF CONTRACT FOR CONSTRUCTION .CONTENTS PART 1 – THE TRADITIONAL AND THE 1999 FIDIC CONDITIONS OF CONTRACT 1. Definitions listed alphabetically 9. Introduction to Part 2 7.
P. PART A1 A2 A3 A4 Clause Clause Clause Clause Clause Clause Clause Clause 13: Variations and Adjustments – R.B. 27. & A. 25. 14: Contract Price and Payment – M. 26. 3 – APPENDICES – General Conditions of Dispute Adjudication Agreement – J.P. Disputes and Arbitration – J. 24.21. 19: Force Majeure 20 : Claims. 23.McC. 22. – Annex: Procedural Rules – Index of Sub-Clauses – Annexes and Forms PART 4 – SUB-CLAUSE COMPARISON A comparison of Sub-Clause numbers between the fourth edition of ‘The Red Book’ and the 1999 Conditions of Contract for Construction ADDITIONAL TOPICS INCLUDED IN SEMINAR * Implementation of FIDIC in Romania * Conflicts between FIDIC and Romanian law 10 * Transfer of Ownership .S. 28.McC. 15: Termination by Employer 16: Suspension and Termination by Contractor 17: Risk and Responsibility 18: Insurance – L.
PART 1: THE TRADITIONAL AND THE 1999 FIDIC CONDITIONS OF CONTRACT .
CHAPTER 1: INTRODUCTION TO THE FIDIC CONDITIONS OF CONTRACT 1.2 THE FIDIC CONDITIONS OF CONTRACT • The General Conditions and • The Particular Conditions .1 CONSTRUCTION CONTRACTS (a) The Constructor’s Tender (b) The Employer’s Letter of Acceptance (c) The Contract Agreement (d) The Conditions of Contract (e) The Technical Documents 1.
1. 1981 plus 1997 update. Explanation and Guidelines. first edition 1995 • Conditions of Subcontract for Works of Civil Engineering Construction. second edition 1994 • Guides to the Use of the different FIDIC Conditions of Contract • Amicable Settlement of Construction Disputes. • The Conditions of Contract for EPC/Turnkey Projects.4 THE 1999 FIDIC CONDITIONS OF CONTRACT • The Conditions of Contract for Construction. . fourth edition 1987 • Conditions of Contract for Electrical and Mechanical Works. first edition 1993 • Insurance of Large Civil Engineering Projects. first edition 1994 • Tendering Procedure.3 THE TRADITIONAL FIDIC CONDITIONS OF CONTRACT • Conditions of Contract for Works of Civil Engineering Construction. first edition 1992 • Mediation. 1. first edition 1998 • Conditions of Contract for Design-Build and Turnkey. • The Short Form of Contract. third edition 1987 • Client/Consultant Model Services Agreement. • The Conditions of Contract for Plant and Design-Build. • Other publications on different aspects of the construction of engineering projects and the work of FIDIC.
Contents -The General Conditions.Annex .General Conditions of Dispute Adjudication Agreement .Index of Sub-Clauses .1 THE CONTENTS OF FIDIC PUBLICATION The FlDlC publication Conditions of Contract for Construction is arranged in three sections – General Conditions. as Clauses 1 to 20 . However. The FIDIC publication includes: • Foreword • General Conditions . only the General Conditions and the other documents which are included in the Contract documents are important for the Contractor and the staff on the construction site who will administer the Contract.Appendix . All these sections are important for the Employer or Consultant who is preparing Contract documents.and includes far more than just the Conditions of Contract.CHAPTER 2: THE 1999 FIDIC CONDITIONS OF CONDITIONS FOR CONTRACT 2.Procedural Rules . Guidance and Forms .
Annex C .Annex G – Example Form of Payment Guarantee by Employer • Forms for: .Introduction .and additional Sub-Clauses .Notes on the Preparation of Tender documents .Example Form of Performance Security – Surety Bond .Annex B .Comments and Examples of alternative .Example Form of Parent Company Guarantee .Letter of Tender .Annex E .Dispute Adjudication Agreement (for each member of a three-person DAB The content of these documents is reviewed in Part 2 of this book but.Example Form of Tender Security .Dispute Adjudication Agreement (for one-person DAB) . in general.Contents .Annex F – Example Form of Retention Money Guarantee .• Guidance for the Preparation of Particular Conditions . they cover the following subjects.Contract Agreement .Example Form of Advance Payment Guarantee .Annex D . (1) The Foreword (2) The General Conditions .Annex A .Example Form of Performance Security – Demand Guarantee .Annexes: Forms of Securities .
and .The Specification.‘in the Contract’ • Insert essential information in the Appendix to Tender • Prepare Particular Conditions to suit the Employer’s requirements • Many of the Sub-Clauses in the General Conditions rely on the other Sub-Clauses • Check the Sub-Clauses which refer to information in the Specification • Check the Sub-Clauses which refer to information • Consider the need for a Contract Agreement • Decide whether a one-person or three-person Dispute Adjudication Board is required • Consider the use of FIDIC Annexes A to G for the forms of securities and guarantees which are referred to in the General Conditions and the Appendix to Tender. .The Appendix to Tender .2 PREPARATION OF THE CONTRACT DOCUMENTS • Incorporate the FIDIC General Conditions unchanged .The Particular Conditions .(3) The Guidance (4) The Form 2.
10 and 11: Commencement. THE LAYOUT OF THE GENERAL CONDITIONS Clause 1: General Provisions covers subjects which apply to the Contract in general. The Engineer. the priority of the different documents which make up the Contract and the use of the different documents. 9. Materials and Workmanship deal with the requirements for the items of men and materials which the Contractor brings to the site and uses to execute the project. ‘ . . the applicable language and law. Clauses 6 and 7: Staff and Labour. Plant. Clauses 8. Many other Sub-Clauses throughout the General Conditions refer to the Contractor's obligations.3. such as definitions. Delays and Suspension. It is significant that the Contractor's Clause contains more Sub-Clauses than all the others added together. Defects Liability follow the sequence of events during the construction of the project. Nominated Subcontractors deal with the duties and obligations of the different organisations who play a part in the execution of the Works. Tests on Completion. Clauses 2 to 5: The Employer. The Contractor. Employer's Taking Over. It is the Contractor who is responsible for executing the Works and so is the most active of the people who are involved with the project.2.
Clause 19: Force Majeure is a general Clause which will only be used when the particular problem occurs. which must be implemented at or before the commencement of the Works in addition to the procedures to be used when a problem occurs which will give rise to an insurance claim. Clause 20: Claims. as well. It includes procedures such as the submission and response to Contractor's claims. Variations and Adjustments. Clause 17: Risk and Responsibility relates to the project as a whole and includes Sub-Clauses. Clause 20 also includes the procedures for the appointment of the Dispute Adjudi. Suspension and Termination by Contractor refer to events which may occur at any time during the construction sequence and may bring the Contract to a close. which must be used at or before the commencement of the Works. 13 and 14: Measurement and Evaluation. Disputes and Arbitration will probably be the most frequently used Clause in the whole Conditions of Contract. Contract Price and Payment give the procedures for the Employer to pay the Contractor for his work. together with matters which are critical to the Parties' responsibilities and overlap with the requirements of other important SubClauses Clause 18: Insurance includes important procedures.Clauses 12. Board. The final Sub-Clause refers to release from performance in a wider context than just due to Force Majeure. . as the procedures for the resolution of claims and disputes. which are only used rarely. which must be used when a problem has arisen. Clauses 15 and 16: Termination by Employer.
2. .4 THE SEQUENCE OF THE CONSTRUCTION OPERATIONS • • • • • Commencement Progress Completion Defects Period Disputes.
6 4.2 4.5 4.7 4.1 4.8 INTRODUCTION CLAIMS AND THE CONDITIONS OF CONTRACT CLAIMS BY THE CONTRACTOR CLAIMS BY THE EMPLOYER THE DISPUTE ADJUDICATION BOARD (DAB) AMICABLE SETTLEMENT ARBITRATION THE COURTS .3 COMPARISON BETWEEN THE DIFFERENT 1999 CONDITIONS OF CONTRACT The Conditions of Contract for Construction The Conditions of Contract for Plant and Design-Build The Conditions of Contract for EPC/Turnkey Projects The Short Form of Contract CHAPTER 4: CLAIMS AND DISPUTE PROCEDURES 4.CHAPTER 3 : COMPARISONS BETWEEN THE DIFFERENT FIDIC CONDITIONS OF CONTRACT 3.1 THE TRADITIONAL AND THE 1999 CONDITIONS OF CONTRACT 3.4 4.3 4.2 THE TRADITIONAL ‘RED BOOK’ AND THE CONDITIONS OF CONTRACT FOR CONSTRUCTION 3.
PART 2: THE FIDIC CONDITIONS OF CONTRACT FOR CONSTRUCTION Clauses 0-20 CHAPTER 5 – FLOW CHARTS CHAPTER 6 – INTRODUCTION TO PART 2 .
Annex F – EXAMPLE FORM OF RETENTION MONEY GUARANTEE .Annex D – EAMPLE FORM OF PERFORMANCE SECURITY.Annex G – EXAMPLE FORM OF PAYMENT GUARANTEE BY EMPLOYER .Annex A – EXAMPLE FORM OF PARENT COMPANY GUARANTEE .Annex C – EXAMPLE FORM OF PERFORMANCE SECURITY.DEMAND BOND .PART 3 : APPENDICES Appendix A1: General Conditions of Dispute Adjudication Agreement Appendix A2: Annex: Procedural Rules Appendix A3: Index of Sub-Clauses Appendix A4: Annexes and Forms .DEMAND GUARANTEE .Annex E – EXAMPLE OF ADVANCE PAYMENT GUARANTEE .Annex B – EXAMPLE FORM OF TENDER SECURITY .
person DAB) – DISPUTE ADJUDICATION AGREEMENT (for each member of a threeperson DAB) PART 4: SUB-CLAUSE COMPARISON A comparison of Sub-Clause numbers between the fourth edition of ‘The Red Book’ and the 1999 Conditions of Contract for Construction.Annex F – LETTER OF TENDER – APPENFDIX TO TENDER – CONTRACT AGREEMENT – DISPUTE ADJUDICATION AGREEMENT (for one. .
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