REPUBLIC OF SERBIA

TRANSPORT REHABILITATION PROJECT

SERBIAN ROAD SUPERVISION

MANUAL

1. LEGISLATION AND CONTRACTS

BELGRADE, 2012
Publisher: Public Enterprise Roads of Serbia, Bulevar kralja Aleksandra 282,
Belgrade

Edition:

No. Date Description of amendments

1 30.04.2012 First edition
Serbian Road Supervision Manual Legislation and Contracts

CONTENTS

1.1 INTRODUCTION ............................................................................................................1

1.1.1 TERMINOLOGY .............................................................................................................1
1.1.2 REFERENCE DOCUMENTS .........................................................................................3
1.1.2.1 Laws................................................................................................................................3
1.1.2.2 Rulebooks .......................................................................................................................3
1.1.2.3 Regulations .....................................................................................................................4
1.1.2.4 Other ...............................................................................................................................5
1.2 CONTRACTS .................................................................................................................5
1.2.1 CONDITIONS OF CONTRACT ACCORDING TO FIDIC...............................................5
1.2.1.1 Contract types.................................................................................................................5
1.2.1.2 General Conditions according to the Red Book .............................................................7
1.2.1.3 Particular Conditions according to FIDIC......................................................................13
1.2.1.4 Contract sample according to FIDIC.............................................................................20
1.2.2 CONTRACT CONDITIONS ACCORDING TO MFI......................................................22
1.2.2.1 Institutions of the MDB and MFI ...................................................................................22
1.2.2.2 The Harmonised MDB version of the Red Book – the Pink Book ................................22
1.2.3 OTHER CONDITIONS OF THE CONTRACT ..............................................................22
1.2.3.1 Contract sample of the PE Roads of Serbia .................................................................23

PE Roads of Serbia i
Serbian Road Supervision Manual
1.1 INTRODUCTION
The area of road infrastructure is principally
regulated by two laws – the Law of Public
Roads and the Law of Planning and
Construction, and it lies within the
competence of both the Ministry for
Infrastructure and Energy, and the Ministry of
the Environment, Mining and Spatial
Planning. All operational laws are listed in
item 1.1.2 Reference Documents.
Investments into road infrastructure are
implemented based on a contract that has
been concluded between the Employer and
the Contractor. The construction contract
defines at the very least the following: the
Employer and the Contractor, as well as their
authorised representatives, the type of work,
contract value, method of calculation of the
completed works (turn-key principle/fixed
price or price by quantity unit) and deadlines
for the completion of the work. Apart from
this, a contract mostly contains certain
appendices which depend on the applied
contract type, and on the type of work.
The Professional Supervisor i.e. the
Engineer, must be fully acquainted with the
contract in order to be able to perform his
activities properly and professionally. In
addition to professional supervision he must
also be acquainted with the terms and
conditions defined during the contracting of
works i.e. he must be acquainted with the
tender documentation. The Professional
Supervisor must also be acquainted with the
authority and obligations given by the
Employer.
Technical control of the quantity and the
quality of the work alone is insufficient. The
Professional Supervisor should work to the
benefit of the Employer by complying with
duties, obligations and responsibilities for the
sake of all contracting parties. The
professional supervisor should keep the
Employer informed by means of reporting.
Apart from this, he should feel responsible for
the entire project.
Each construction project is performed based
on the construction contract. The Public
Procurement Law stipulates the method of
the assignment of construction works when
the Employer is an organisation financed
from the budget. By setting out the tender
requirements for the construction of a certain
structure, the Employer sets special
PE Roads of Serbia
Legislation and Contracts
requirements regarding the provision of
adequate quality, guarantees, insurance,
required documentation, methods of
execution of the work, protection of the
environment and people, health and safety,
the calculation of and compensation for
completed work, preparation of the
documentation regarding the taking-over,
assigning maintenance and management,
registration at the Public Registry, etc.
1.1.1 TERMINOLOGY
Accepted Contract Amount (Prihvaćena
ugovorna cena) is the amount accepted in
the Letter of Acceptance.
Commencement Date (Datum početka) is
the date of the commencement of works.
Conditions (Uslovi) are the General
Conditions and Particular Conditions of the
Contract.
Contract (Ugovorna dokumentacija)
comprises the text of the Contract Agreement
itself, the Letter of Acceptance, the Tender,
the Conditions, the Specifications, the
Drawings, the Schedules and other
documents (if any) specified in the text of the
Contract Agreement or in the Letter of
Acceptance.
Contract Agreement (Ugovor) is a
document concluded between the Employer
and the Contractor in the form enclosed with
Particular Conditions.
Contract Price (Ugovorna cena) represents
the amount of the Contract (the sum of all
bills of quantities’ positions and the estimated
quantity of those positions) with all
adjustements in accordance with the
Contract.
Contractor’s Documents (Dokumentacija
Izvođača) are calculations, computer
programmes and other software, drawings,
manuals, scale models and other documents
of a technical nature supplied by the
Contractor under the Contract.
Defects Notification Period (Rok za
prijavljivanje nedostataka) is the period
given for notifying defects in the Works or in
a Section; this period lasts for 12 months
from the issuance of the Taking-Over
Certificate, if not otherwise stipulated by the
Contract.
1
Legislation and Contracts
Dispute Adjudication Board - DAB
(Komisija za rešavanje sporova - KRS)
consists of one or three persons nominated
in the Contract, if the Contract stipulates an
arbitration clause.
Drawings (Crteži) are drawings of the
Works, as well as any additional and
modified drawings issued by (or on behalf of)
the Employer.
1
Employer (Investitor) is the person
designated in the Contract as the Employer
along with his legal successors (according to
the Law on Public Procurements).
2
Engineer (Inženjer) is the person appointed
by the Employer to the role of supervision as
per the requirements of the Contract.
FIDIC is an abbreviation for the International
Federation of Consulting Engineers
(Fédération Internationales des Ingénieurs-
Conseils).
Final Payment Certificate (Konačna
situacija) represents the entire amount that
the contractor is entitled to according to the
Contract.
General Conditions (Opšti uslovi
Ugovora) are the contracting conditions
according to FIDIC publications or other
general conditions defined by the Employer.
Goods (Dobra) are the Equipment,
Materials, Plant and Temporary Works of the
Contractor.
Interim Payment Certificate (Privremena
situacija) means a payment certificate
issued by the Contractor, other than the Final
Payment Certificate.
Letter of Acceptance (Potvrda o
prihvatanju ponude) is the document of the
formal acceptance of the Tender, signed by
the Employer.
Materials (Materijali) are things of all kinds
(other than Plant Plant) intended to be or
which already represent a part of the
Permanent Works, including the supply-only
materials to be supplied by the Contractor
under the Contract.
1
The terms designating persons or parties comprise
companies and other legal persons.
2
In the Red Book, the term „Engineer” is translated in
Serbian as “Nadzorni organ”, which is not in accordance
with regulations in the RS.
2 PE Roads of Serbia
Serbian Road Supervision Manual
MDB (Multilateralna razvojna banka) is a
multilateral bank for development.
MFI (Multirateralne finansijske institucije)
are multilateral financial institutions.
Particular Conditions (Posebni uslovi
Ugovora) represent an addition and
amendment to the General conditions of the
Contract.
Party (Ugovorna strana) is the Employer or
the Contractor.
Performance Certificate (Potvrda o
valjanom izvršenju) is the document signed
by the Engineer in accordance with the
Employer certifying that the Contractor has
fulfilled all the obligations of the Contract.
Performance Security (Garancija za
valjano izvršenje posla) is a guarantee for
proper performance.
Plant (Oprema, Postrojenje) are apparatus,
machinery and vehicles intended to form or
forming part of the Permanent Works.
Schedules (Tabele) are the documents
completed by the Contractor which represent
a part of the Tender (bill of quantities, data,
lists, price-lists).
Section (Sekcija) represents a part of the
Works specified in the Contract as a Section.
Site (Gradilište) is the location where the
Permanent Works take place; the Site
includes the working area and areas for the
storage of Plants and Materials.
Specification (Specifikacija ili tehnički
uslovi) is a document within the Contract
which specifies the Works.
Subcontractor (Podizvođač) is the person
designated in the Contract as a subcontractor
of a part of the Works.
Supervising Engineer (Nadzorni organ) is
the person who makes supervision defined in
the Law on Planning and Construction.
Supervision/Supervisor (Stručni nadzor) is
defined in the Law on Planning and
Construction.
Taking-Over Certificate (Potrvrda o
prijemu) is a certificate for the taking-over of
the Works, issued by the Engineer with
approval of the Employer.
Serbian Road Supervision Manual
Temporary Works (Privremeni radovi) are
all temporary works required for the
execution and completion of the Permanent
Works, and for the remedying of any defects.
Tender (Ponuda) represents the signed offer
by the Contractor to the Employer and all the
additional documents the Contractor
submitted with it.
Time for Completion (Rok za završetak) is
the time for the completion of Works or of the
Section from the Commencement Date.
Unforeseeable (Nepredvidivo) is a situation
which an experienced contractor could not
have foreseen prior to the submission of the
Tender.
Variation (Izmena) is any ordered or
approved change to the Works.
Works (Radovi) comprise the Permanent
Works and/or Temporary Works according to
the Contract.
1.1.2 REFERENCE DOCUMENTS
1.1.2.1 Laws
- Fire safety law, Official Gazette of the RS,
No. 111/09
- Law of contract and torts (Law on
obligations), Official Gazette of SFRY, No.
29/78, 39/85, 45/89 and 57/89 and Official
Gazette of SRY, No. 31/93 and Official
Gazette of the Serbia and Montenegro,
No. 1/03 – The Constitutional Charter
- Law on agricultural land, Official Gazette
of the RS, No. 62/06, 65/08 and 41/09.
The new law is in the procedure.
- Law on air protection, Official Gazette of
the RS, No. 36/09
- Law on arbitration, Official Gazette of the
RS, No. 46/06
- Law on environmental impact
assessment, Official Gazette of the RS,
No. 135/04 and 36/09
- Law on environmental protection, Official
Gazette of the RS, No. 135/04, 36/09,
72/09
- Law on free access to information of
public importance, Official Gazette of the
RS, No. 120/04, 54/07, 104/09, 36/10
- Law on integrated environmental pollution
prevention and control , Official Gazette of
the RS, No. 135/04
- Law on noise protection, Official Gazette
of the RS, No. 36/09 and 88/10
PE Roads of Serbia
Legislation and Contracts
- Law on planning and construction, Official
Gazette of the RS, No. 72/09, 81/09,
64/10, 24/11
- Law on public roads, Official Gazette of
the RS, No. 105/05, 123/07
- Law on railway, Official Gazette of the RS,
No. 18/05; the new Law on Railway is in
the procedure.
- Law on Ratification of the Aarhus
convention on access to information,
public participation in decision-making
and the right to legal protection in
environmental matters, Official Gazette of
the RS, No. 38/09
- Law on Ratification of the Espoo
convention on environmental impact
assessment in a transboundary Context,
Official Gazette, No. RS 102/07
- Law on state survey and real estate
cadastre, Official Gazette of the RS, No.
72/09 and 18/10
- Law on strategic environmental impact
assessment, Official Gazette of the RS,
No. 135/04 and 88/10
- Law on waste management, Official
Gazette of the RS, No. 36/09 and 88/10
- Law on water, Official Gazette of the RS,
No. 30/10
- Mining law, Official Gazette of the RS, No.
34/06
- Occupational safety and health law,
Official Gazette of the RS, No. 101/05
- Public procurement act, Official Gazette of
the RS, No. 116/08
- Road traffic safety law, Official Gazette of
the RS, No. 41/09, 53/10, 101/11.
1.1.2.2 Rulebooks
- Rulebook on content and method for
conducting expert supervision, Official
Gazette of the RS, No. 7/10
- Rulebook on content and method for
conducting technical control of the
detailed design, Official Gazette of the
RS, No. 93/11
- Rulebook on content and method for
conducting the technical examination of a
structure and issuing usage permits,
Official Gazette of the RS, No. 93/11
- Rulebook on content and method for
issuing building permits, Official Gazette
of the RS, No. 93/11
- Rulebook on content and method for
keeping inspection books and
construction diaries, Official Gazette of
the RS, No. 105/03
- Rulebook on content and method for
observing soil and the structure during
use, Official Gazette of the RS, No. 93/11
3
Legislation and Contracts
- Rulebook on obligatory elements of the
bidding documentation in public
procurement procedures, Official Gazette
of the RS, No. 98/04
- Rulebook on occupational safety for
conducting construction works, Official
Gazette of the RS, No. 53/97
- Rulebook on preventative measures for
occupational safety and health during
exposure to vibration, Official Gazette of
the RS, No. 93/11
- Rulebook on records for public roads and
accompanying structures, as well as
technical data for those roads, Official
Gazette of SFRY, No. 52/83 and 60/83 -
corr. and Official Gazette of Serbia and
Montenegro No. 1/03 - Constitutional
charter
- Rulebook on surveying and cadastre of
lines, Official Gazette of the RS, No.
63/10
- Rulebook on technical normative and
conditions for planning and construction of
tunnels on roads, Official Gazette of
SFRY, No. 656-5
- Rulebook on the appearance, content and
positioning of the construction information
board, Official Gazette of the RS, No. 4/10
- Rulebook on the categories, testing and
classification of waste, Official Gazette of
the RS, No. 56/10
- Rulebook on the conditions and method
for collecting, transporting, storing and
treatment of waste which is used as
secondary raw materials or for obtaining
energy, Official Gazette of the RS, No.
98/10
- Rulebook on the conditions which must be
fulfilled by a professional organization for
measuring noise, Official Gazette of the
RS, No. 72/10
- Rulebook on the content of the
elaboration of construction site
organization, Official Gazette of the RS,
No. 31/92
- Rulebook on the content, method,
conditions of supervision and control of
the execution of geodetic works in
engineering-technical fields, Official
Gazette of the RS, No. 59/02
- Rulebook on the creation and keeping of
the cadastre of properties, Official Gazette
of the RS, No. 46/99
- Rulebook on the emission limits, method
and deadlines for measurement and
recording of data, Official Gazette of the
RS No. 30/97 and 35/97
- Rulebook on the execution of expert
supervision, examination and acceptance
of works, Official Gazette of the RS, No.
43/10
4 PE Roads of Serbia
Serbian Road Supervision Manual
- Rulebook on the license for the work of
geodetic organization and geodetic
licenses, Official Gazette of the RS, No.
33/10
- Rulebook on the limits, methods for
measuring emissions, criteria for
establishing measurement locations and
recording of data, Official Gazette of the
RS No. 54/92 and 30/99
- Rulebook on the method and conditions
for acquiring authorization to plan and
perform geodetic works in engineering-
technical fields, Official Gazette of the RS,
No. 59/02
- Rulebook on the method and minimum
number of quality tests for waste water,
Official Gazette of the RS, No. 47/83 and
13/84
- Rulebook on the method and process for
submitting an application for a change to
a property and declaration of a geodetic
organization, Official Gazette of the RS,
No. 56/02
- Rulebook on the method for determining
and maintaining a zone of sanitary
protection for water supply sources,
Official Gazette of the RS, No. 92/08
- Rulebook on the methods for
measurement of noise, content and scope
of reporting on noise measurement,
Official Gazette of the RS, No. 72/10
- Rulebook on the minimum warranty
periods for individual types of structures
or works, Official Gazette of the RS, No.
93/11
- Rulebook on the technical normative
when handling explosive compounds and
placement of explosive in mining, Official
Gazette of SFRY, No. 26/88 and 63/88
- Rulebook on the technical normative,
methodology for drafting technical
documentation and control of technical
documentation for the execution of
geodetic works in engineering-technical
fields, Official Gazette of the RS, No.
59/02
- Rulebook on traffic safety conditions
which transportation infrastructure and
other elements of public roads must fulfil,
Official Gazette of the RS, No. 50/11
- Rulebook on traffic signalisation, Official
Gazette of the RS, No. 26/10.
1.1.2.3 Regulations
- Regulation (EU) No 305/2011 of the
European Parliament and of the Council
of 9 March 2011 laying down harmonised
conditions for the marketing of
construction products and repealing
Serbian Road Supervision Manual
Council Directive 89/106/EEC, Official
Journal of the European Union, 88/11
- Regulation on occupational safety and
health on temporary and mobile
construction sites, Official Gazette of the
RS, No. 14/09
- Regulation on depositing waste in dump
sites, Official Gazette of the RS, No.
92/10
- Regulation on the establishment of house
numbers, marking of buildings with
numbers and marking of names of
settlements, streets and squares, Official
Gazette of the RS, No. 110/03, 137/04
and 58/06.
1.1.2.4 Other
- Special practices in construction, Official
Gazette of SFRY, No. 18/77.
1.2 CONTRACTS
The Construction Works Contract is a
temporary service contract where the
Contractor undertakes to build a certain
structure according to the given design and
within the agreed timeframe and on the
defined plot of land or to perform (on that plot
of land or on the existing structure) any other
construction works, and the Employer
undertakes to pay the Contractor a defined
price for those works. The Construction
Contract is concluded in written form.
The Serbian language uses the term
“Ugovor“ (Contract Agreement) and
“Ugovorna dokumentacija” (Contract). Most
of the Employers’ requirements are stated in
the tender documentation. Therefore, a
Contract consists of the General and the
Particular Conditions along with other
documentation which makes up part of the
tender documentation or a part of the Bid of
the Contractor. The contents of all the
documents which a Contract consists of must
be precisely specified.
Article 21 of the Law of contract and torts
states that usage is only applied if contractual
parties agree upon its application or if
circumstances imply that they desire its
application.
If the conditions dealing with the same issues
as the usage represent a part of the tender
documentation, then these conditions are
applied.
PE Roads of Serbia
Legislation and Contracts
The Employer and the Contractor may add
an Annex to the Contract in cases of:
- Change in the position of the works;
- Change with the entire contract price (in
accordance with the Public procurement
act);
- Change of deadline for the completion of
works;
- Change in the representatives for the
Employer and/or the Contractor;
- Other changes.
In the case of an Annex being added to the
Contract, the Supervisor inspects whether
the Contractor has delivered all the required
documentation required for the Annex and
also checks if all the data is correct.
1.2.1 CONDITIONS OF CONTRACT
ACCORDING TO FIDIC
1.2.1.1 Contract types
FIDIC is the French abbreviation, for the
International Federation of Consulting
Engineers. The international federation
consists of national member associations.
The activities of the federation of engineers
include the improvement of the professional
interests of its members, as well as the
exchange of information. Members develop
professional and ethical standards of
consulting engineering in Europe and in
developing countries.
FIDIC publications contain data for consulting
engineers, employers and contractors in the
form of standard forms for prequalification,
contractual documents and agreements. It is
possible to incorporate these forms into
tender and contractual documentation in
accordance with the conditions published on
the official website of FIDIC whose
secretariat is located in Switzerland.
www.fidic.org
ACES (The Association of Consulting
Engineers of Serbia) is a professional and
non-profit association founded in April 2009
with the objective of promoting the role and
the importance of FIDIC standards in Serbia.
The activities of the Association include
providing support to the implementation of
FIDIC standards through the stimulation and
monitoring of the adjustment of the relevant
regulations of the Republic of Serbia with EU
standards and regulations and then informing
members about this; the organisation of
FIDIC training, the sale of FIDIC publications,
the organisation of educational and
5
Legislation and Contracts Serbian Road Supervision Manual

informative events – seminars, workshops, and construction, and bears all the risk
panel discussions, professional lectures; except from force majeure;
introduction of new trends in the construction - There is no Engineer;
sector; promotion of the role of a consultant - The price of the works is a lump sum.
engineer in investment ventures; informing - Conditions of contract for electrical and
members of relevant developments in the mechanical works
construction sector and other areas of Yellow Book (old)
significance for providing quality engineering - “Turnkey” system conditions of
consulting services; exchange of experiences contract;
between members and related foreign - Designing and performance of
companies; establishment of new business electrical and mechanical works, as
opportunities in the country and abroad; well as the supply and installation of
improvement of the business climate in the electrical and mechanical equipment at
Republic of Serbia, and improvement of the the location;
profession in general. The establishment of - Technical documentation is created by
the Association was significantly supported the Contractor;
by the US Agency for International - The total price of the works is a lump
Development – USAID. The Association also sum.
cooperates with the World Bank/International - Conditions of Contract for Facilities and
Finance Corporation – IFC. Design - Build
The official web page of ACES is Yellow Book (new)
www.aces.rs - For electrical, mechanical and
construction works according to the
FIDIC publications which have been Contractor’s design;
translated into the Serbian language are: - Part of the design performed by the
- Conditions of Contract for Construction for Employer: contained in the Employer’s
Building and Engineering Works Designed requirements;
by the Employer – Parts I and II - For electrical and mechanical facilities
Red Book Part I and equipment;
- Employer (Investor) provides the entire - Need for modern multi-disciplinary
or almost entire design; contracts recognised for the first time;
- It is possible that the Contractor - Payments according to the lump sum
designs a part of it; based on the payment plan, however,
- Civil engineering and building measurements are also possible;
construction designs; - Engineer administers the contract
- Payment based on the measured (administration), supervises the
quantities and unit prices; production, performance and works,
- Contractual values exceed 500,000 and verifies the payments;
USD; - The procedure for dispute resolution is:
- Engineer administers the contract DAB → amicable settlement →
(administration), supervises the works arbitration.
and verifies all payments; - Client/Consultant Model Services
- The procedure for dispute resolution is: Agreement
Dispute Adjudication Board→ amicable White Book
settlement → arbitration. - Client/Consultant Model Services
Red Book Part II Agreement;
- Guidance for the Preparation of - Recommended for the purpose of
Particular Conditions; feasibility studies and similar studies;
- Forms of Letter of Tender; - For the service of project
- Forms of Contract Agreement; management.
- Forms of Dispute Adjudication - Short Form of Contract
Agreement; Green Book
- Conditions of Contract for Design – Build - Short form of contract
and Turnkey - Short execution time (less than 6
Orange Book months);
- The “turnkey” system conditions of - Simple and repetitive works
contract intended for the delivery of a (excavation works represent a good
completely equipped structure (mostly example);
facilities) ready for utilisation; - Contract price is less than 500,000
- The Contractor assumes complete USD;
responsibility for the designing, supply

6 PE Roads of Serbia
Serbian Road Supervision Manual
- Without an Engineer, the Employer
shall appoint a “spokesperson” or a
representative;
- For civil, mechanical, electrical and
other engineering works;
- All required provisions are defined in
15 clauses;
- The language is simple;
- Included in the Standard tendering
document of the World Bank intended
for simple works;
- Balanced risk distribution;
- Payment based on the total price or on
any other basis;
- The Works are designed by the
Contractor in the scope specified in the
Appendix (Appendix to the Contract);
- There are no advance payments, while
the value of the monthly balance
complies with the Works done;
- Dispute resolution: Invitation to
amicable settlement or local arbitration
designated at the beginning (however,
it takes place only after the dispute has
arisen).
- Conditions of Contract for Design, Build
and Operate Projects
Gold Book
- Long-term contracts
- DBO (Design – Build – Operate)
access combines design, construction
and long-term commitment (and
maintenance) in one project with one
Contractor;
- The Contractor is usually either a joint
venture entity or a consortium;
- For Public Private Partnerships (PPP).
There is also a Pink Book (which is explained
in the chapter Conditions of Contract by MFI).
1.2.1.2 General Conditions according to
3
the Red Book
The General Conditions of Contract
(hereinafter referred to as: General
Conditions) are divided into 20 groups:
1. General Provisions
2. The Employer
3. The Engineer
4. The Contractor
5. Nominated subcontractors
6. Staff and Labour
7. Plant, Materials and Workmanship
8. Commencement, Delays and Suspension
9. Tests on Completion
3 Employer’s Financial Arrangements, and
Source: Conditions of Contract for Construction Works
– Part I (Serbian Chamber of Engineers, Belgrade, 2008)
PE Roads of Serbia
Legislation and Contracts
10. Employer’s Taking Over
11. Defects Liability
12. Measurement and Evaluation
13. Variations and Adjustments
14. Contract Price and Payment
15. Termination by Employer
16. Suspension and Termination by
Contractor
17. Risk and Responsibility
18. Insurance
19. Force Majeure
20. Claims, Disputes and Arbitration.
1.2.1.2.1 General provisions
Chapter 1 of the General Conditions presents
the Definitions of the terms used,
Interpretation, Communications, Law and
Language, Priority of Documents, Contract
Agreement, Assignment, Care and Supply of
Documents, Delayed Drawings or
Instructions, Employer’s Use of Contractor’s
Documents, Contractor’s Use of Employer’s
Documents, Confidential Details, Compliance
with Laws, and Joint and Several Liability.
The Engineer must be acquainted with the
terminology if he wants to correctly interpret
the meaning of the individual items in the
General Conditions. Individual terms are
presented in Item 1.2.1 of this volume.
Point 1.5 of the General Conditions (“Priority
of Documents”) is very important. In the
event of inconsistency between the individual
documents (for example, between the survey
and the drawings), the priority of documents
is of decisive importance. In the situation of
ambiguity or discrepancy in the documents,
the Engineer will provide the necessary
explanations.
If the Contractor gives notice to the Engineer
that Works are likely to be delayed due to the
requirement of a drawing or if instructions are
not delivered within the anticipated
timeframe, the Engineer is responsible for:
- An extension of the deadline for the
completion of Works;
- Payment of any Costs for the Works
according to the Contract Price for those
and similar Works.
1.2.1.2.2 The Employer
The rights and the role of the Employer are
presented in Chapter 2 of the General
Conditions, and these are: The Right of
Access to the Site, Permits, Licences and
Approvals, Employer’s Personnel,
Employer’s Claims.
7
Legislation and Contracts
The Employer shall provide, at the request of
the Contractor, the required level of
assistance to:
- Obtain copies of the Laws of the Country
relevant to the Contract;
- When the Contractor applies for a permit
or an approval which must be provided in
accordance with the Laws of the Country.
The Employer is obliged to issue (within 28
days as of the day of receipt of the
Contractor’s request) a written confirmation
that the Works will be paid for.
1.2.1.2.3 Engineer – Supervisor
Chapter 3 of the General Conditions includes
the Engineer’s Duties and Authority,
Delegation by the Engineer, Instructions of
the Engineer, Replacement of the Engineer,
and Decisions.
In the Serbian version of the FIDIC
publication, the term “Engineer” is translated
as “Supervising Engineer” and it relates to a
legal entity. In accordance with the
Regulations in regards to quality control the
“Supervising Engineer” is a physical person
who performs supervision. Hereinafter the
term of “Engineer” will be used instead.
The Employer shall appoint the Engineer who
will carry out the duties assigned to him. The
Engineer’s staff shall include qualified
engineers and other professionals who are
competent to carry out such duties.
The duties, the authority, the delegation, the
replacement and the instructions of the
Engineer are presented in Chapter 3 of the
General Conditions.
The Engineer is not authorised to amend the
Contract.
The Engineer may exercise the authority
implied by the General Conditions if they are
not amended along with the Particular
Conditions.
The Engineer acts on behalf of the Employer.
The Engineer is not authorised to relieve
either party of any duties, responsibilities or
obligations under the Contract.
No single act of the Engineer shall relieve the
Contractor from responsibility under the
Contract.
The Engineer must appoint a Supervising
Engineer (a physical person) for each
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Serbian Road Supervision Manual
construction site; the authority will be
responsible for the supervision of the given
site. The Supervising Engineer is authorised
to assign duties and authority to assistants.
The assignment or revocation of any duties
and authorisations is performed in writing and
becomes effective upon the delivery of the
same to the Parties. If the Contractor does
not agree with any decision or instruction
from an assistant, the Contractor may refer
the matter to the Engineer who shall promptly
confirm or vary the assistant’s decision.
If the Engineer has no objections to the
Works, this still does not constitute approval
and it does not influence his right to reject the
Works, Facilities or Materials.
The Engineer may issue to the Contractor (at
any time) instructions or modified Drawings.
If this implies a Variation in the price or the
deadline, Clause 13 is applied. If possible,
the Engineer’s Instructions to the Contractor
should be in written form.
If the Employer decides to replace the
Engineer, the Employer shall notify the
Contractor regarding this no less than 42
days prior to the intended date of the
replacement. The Employer notifies the
Contractor in written form with the name,
address and relevant experience of the new
Engineer.
Before any decisions are made, the Engineer
should consult both Parties in order to reach
an agreement. The Engineer shall give notice
to both parties of each decision or agreement
along with all supporting particulars.
1.2.1.2.4 The Contractor
The Contractor’s General Obligations,
Performance Security, Contractor’s
Representative, Subcontractors, Assignment
of Benefit of Subcontract, Co-operation,
Setting Out, Safety Procedures, Quality
Assurance, Site Data, Sufficiency of the
Accepted Contract Amount, Unforeseeable
Physical Conditions, Rights of Way and
Facilities, Avoidance of Interference, Access
Route, Transport of Goods, Contractor’s
Equipment, Protection of the Environment,
Electricity, Water and Gas, Employer’s
Equipment and Free-Issue Materials,
Progress Reports, Security of the Site,
Contractor’s Operations on Site, and Fossils,
are explained in Chapter 4 of the General
Conditions.
For each subcontractor (except for Material
suppliers) the Contractor needs to have the
Serbian Road Supervision Manual
Engineer’s approval. The Contractor shall
provide the Engineer with proposals (with
supporting explanations) in written form 28
days prior to the commencement of any work
by Subcontractors.
The Contractor must establish a system of
quality assurance aimed at meeting the
requirements of the Contract. All activities are
controlled by the Engineer.
The Contractor shall be deemed to have
inspected the Site and to have collected all
details that may influence the Tender or the
Works.
If the Contractor encounters any unforeseen
adverse physical conditions, the Contractor is
obliged to immediately inform the Engineer
(within 28 days). If, due to these conditions
the Contract Price or the Deadline changes,
the provisions of Chapter 13 of the General
Conditions shall be applied.
The Contractor is obliged to submit monthly
Progress Reports to the Engineer.
1.2.1.2.5 Nominated Subcontractors
Chapter 5 of the General Conditions explains
the definition of the term “nominated
Subcontractor”, Objection to Nomination,
Payments to nominated Subcontractors, and
Evidence of Payments.
According to Chapter 13 of the General
Conditions, the Engineer is authorised to
nominate a Subcontractor.
The Engineer may check whether the
Subcontractors have been paid by the
Contractor. Unless the Contractor provides
the Engineer with evidence (in written form)
that a Subcontractor is not entitled to direct
payment, the Employer may at his sole
discretion make a direct payment of part or
the entire amount to the nominated
Subcontractor.
1.2.1.2.6 Staff and Labour
Chapter 6 of the General Conditions deals
with the following issues: Engagement of
Staff and Labour, Rates of Wages and
Conditions of Labour, Persons in the Service
of Employer, Labour Laws, Working Hours,
Facilities for Staff and Labour, Health and
Safety, Contractor’s Superintendence,
Contractor’s Personnel, Records of
Contractor’s Personnel and Equipment, and
Disorderly Conduct.
PE Roads of Serbia
Legislation and Contracts
The Contractor will provide the Engineer with
details of any accidents as soon as possible.
The Engineer is entitled to demand the
removal from the Site any employee of the
Contractor who fails to respect the conditions
of the Contract, fails to perform their duties in
a professional manner, disregards safety,
health and the environment, or behaves in a
disorderly manner.
The Contractor shall submit to the Engineer
the number of each class of the Contractor’s
Personnel and of each type of Contractor’s
Equipment on the Site; the details shall be
submitted each calendar month in the form
approved by the Engineer.
1.2.1.2.7 Plant, Materials and Workmanship
Chapter 7 of the General Conditions consists
of: Manner of Execution, Samples,
Inspection, Testing, Rejection, Remedial
Work, Ownership of Plant and Materials, and
Royalties.
Prior to the utilisation of Materials, the
Contractor shall submit for the Engineer’s
approval, samples of materials with the
relevant information.
The Contractor is obliged to provide all the
required conditions for the inspection of the
Plant, Material and other parts of the Works.
The time and place of the inspection are to
be agreed with the Engineer.
If, as a result of the inspection, any Plant,
Material or other Workmanship is found to be
defective or otherwise not in accordance with
the Contract, the Engineer may reject it.
The Engineer is entitled to instruct the
Contractor to remove any Materials and Plant
which are not in accordance with the
Contract; to remove and re-execute any
Works which are not in accordance with the
Contract; and to perform any work required
for the safety of the Works.
If not otherwise stipulated in the
Specifications, the Contractor shall pay all
costs for natural Materials obtained from
outside the Site and for the disposal of
Materials after demolition and excavation, to
disposal areas specified in the Contract.
1.2.1.2.8 Commencement, Delays and
Suspension
The contents of Chapter 8 of the General
Conditions are: Commencement of Works,
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Legislation and Contracts
Time for Completion, Programme, Extension
of Time for Completion, Delays Caused by
Authorities, Rate of Progress, Delay
Damages, Suspension of Work,
Consequences of Suspension, Payment for
Plant and Materials in the Event of
Suspension, Prolonged Suspension, and
Resumption of Work.
The Engineer is to notify the Contractor
regarding the Commencement Date at least
seven days in advance. Within 28 days of
receiving notice of the Commencement Date,
the Contractor shall submit a detailed time
programme to the Engineer. If the
programme is no longer in accordance with
actual progress, the Contractor shall submit a
revised programme. If the Engineer finds no
objections within 21 days, it shall be deemed
that the Contractor is to perform in
accordance with this programme.
The Engineer may suspend Works, but if the
Contractor is not responsible for the
Suspension, then Sub-Clauses 8.9, 8.10 and
8.11 of the General Conditions shall apply.
Upon the approval for resuming Works, all
Works, Plant and Materials shall be
inspected by the Contractor and the
Engineer. The Contractor shall remedy all
defects caused by the suspension.
1.2.1.2.9 Tests and Completion
The sections of Chapter 9 of the General
Conditions are: Contractor’s Obligations,
Delayed Tests, Retesting, and Failure to
Pass Tests on Completion.
The Contractor should notify the Engineer in
regard to testing 21 days in advance.
Immediately after the Tests have been
performed on the Works or Sections, the
Contractor is to submit a certified report with
the Tests results to the Engineer. If the Test
results are unsatisfactory, Sub-Clause 7.5 is
applied.
If the Engineer unduly delays the Tests, Sub-
Clauses 7.4 and/or 10.3 of the General
Conditions are applied.
If the Tests are unduly delayed by the
Contractor, the Engineer instructs him in
writing to perform the Tests within a
maximum of 21 days. Upon the expiration of
this time period, the Employer will order the
Tests at the expense of the Contractor.
If the Test results are unsatisfactory, the
Engineer is entitled to use Sub-Clause 9.3 or
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Serbian Road Supervision Manual
11.4 of the General Conditions or to issue the
Taking-Over Certificate if the Employer
requests him to do so.
1.2.1.2.10 Employer’s Taking Over
Chapter 10 of the General Conditions deals
with the following issues: Taking Over of the
Works and Sections, Taking Over of Parts of
the Works, Interference with Tests on
Completion, and Surfaces Requiring
Reinstatement.
The Contractor may apply to the Engineer for
a Taking-Over Certificate no earlier than 14
days prior to the Completion of Works or
Sections. If, within 28 days the Engineer
does not issue the Taking-Over Certificate or
if he does not reject the Contractor’s request
to issue it, it shall be deemed that the
th
Certificate has been issued on the 28 day of
the receipt of the request.
1.2.1.2.11 Defects Liability
The following is explained in Chapter 11 of
the General Conditions: Completion of
Outstanding Work and Remedying Defects,
Cost of Remedying Defects, Extension of
Defects Notification Period, Failure to
Remedy Defects, Removal of Defective
Work, Further Tests, Right of Access,
Contractor to Search, Performance
Certificate, Unfulfilled Obligations, and
Clearance of Site.
After the issuance of the Taking-Over
Certificate, the Contractor shall complete all
Works within the period of time as
determined by the Engineer, while during the
Defects Notification Period the Contractor
shall remedy any defects declared by the
Employer.
The Employer is entitled to extend the
Defects notification Period.
Should the Contractor fail to remedy any
defects, the Employer is entitled to (among
other things) demand from the Engineer an
agreement on determining a reasonable
reduction in the Contract Price.
At the request of the Engineer and under his
supervision, the Contractor should establish
the cause of the defects.
The Engineer shall issue the Performance
Certificate within a maximum of 28 days upon
the expiration of the Defects Notification
Period. The Performance Certificate shall be
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Serbian Road Supervision Manual
the only document deemed to constitute the
acceptance of the Works.
1.2.1.2.12 Measurement and Evaluation
The contents of Chapter 12 of the General
Conditions are: Works to be Measured,
Method of Measurement, Evaluation, and
Omissions.
If the Engineer requires any part of the Works
to be measured, the Contractor shall provide
him with assistance in the measurement
process or with the provision of relevant data.
The prices of individual items will be the
Contract Prices. For Works that are not
defined by the Contract, the price of similar
Works shall be applied.
The Engineer decides on how Omissions
influence the variation of the Contract Price,
based on a detailed notice submitted to the
Contractor.
1.2.1.2.13 Variations and Adjustments
The titles of the Sub-Clauses of Chapter 13
of the General Conditions are: Right to Vary,
Value Engineering, Variation Procedure,
Payment in Applicable Currencies,
Provisional Sums, Daywork, Adjustments for
Changes in Legislation, and Adjustments for
Changes in Cost.
An order for variation and/or the modification
of the Works may be issued only by the
Engineer.
The Value Engineering and the Variation
Procedure commence on the basis of the
written proposal of the Contractor.
The Engineer is entitled to approve the
Provisional Sums for Works that still do not
have an agreed price (see Sub-Clause 13.5
of the General Conditions).
The Contractor’s reasons for a variance in
price will be explained.
1.2.1.2.14 Contract Price and Payment
Chapter 14 of the General Conditions
comprises the following: The Contract Price,
Advance Payment, Application for Interim
Payment Certificates, Schedule of Payments,
Plant and Materials intended for the Works,
Issue of Interim Payment Certificates,
Payment, Delayed Payment, Payment of
Retention Money, Statement at Completion,
Application for Final Payment Certificate,
Discharge, Issue of Final Payment
PE Roads of Serbia
Legislation and Contracts
Certificate, Cessation of the Employer’s
Liability, and Currencies of Payment.
The Engineer shall deliver an Interim
Payment Certificate for the first instalment of
the advance payment after the Employer
obtains the Performance Security.
A request for the issuance of the Interim
Payment Certificate is submitted by the
Contractor in the form approved by the
Engineer. Along with the application for the
issuance of the Interim Payment Certificate,
the Contractor will also deliver the Progress
Report for the given month.
The Engineer controls the instalments (the
amount of the Interim Payments) if the
Contract includes a schedule of payments
specifying the instalments.
No amount will be certified or paid until the
Engineer receives and approves the
Performance Security.
The Engineer is entitled to make any
correction or modification in any Payment
Certificate that should have been made in
any of the previous Payment Certificates.
The Interim Payment Certificate shall not be
deemed to be a document which confirms the
acceptance, approval, consent or satisfaction
of the Engineer.
After the issuance of the Taking-Over
Certificate the Engineer approves the
payment of the first instalment of the
Retention Money to the Contractor. Upon the
expiration of the Defects Notification Period,
the Engineer approves the payment of the
rest of the Retention Money to the
Contractor.
When the Contractor submits the Statement
at Completion, the Engineer certifies it.
If the Engineer does not agree with or cannot
certify any part of a draft final statement, the
Contractor shall submit the additional
information required by the Engineer and
shall make the agreed modifications. The
agreed statement is then referred to as the
Final Statement. Within 28 days of receiving
the Final Statement and the Discharge, the
Engineer will deliver to the Employer the
Final Payment Certificate which shall state
the total amount due and the balance (if any)
due by the Employer to the Contractor or by
the Contractor to the Employer.
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Legislation and Contracts
1.2.1.2.15 Termination by the Employer
Chapter 15 deals with the following: Notice to
Correct, Termination by Employer, Valuation
at Date of Termination, Payment after
Termination, and Employer’s Entitlement to
Termination for Convenience.
Should the Contractor fail to fulfil any
obligations under the Contract, the Engineer
shall require the Contractor to correct the
failure within a reasonable period of time.
The examples of Termination by Employer
are explained.
Upon the decision of the Employer to
terminate the Contract, the Engineer should
establish the amount due to the Contractor
for the Work, Goods, Contractor's
Documentation or other items in accordance
with the Contract. Payment conditions are
explained in Sub-Clause 15.4 of the General
Conditions.
1.2.1.2.16 Suspension and Termination by
Contractor
The Contractor’s Entitlement to Suspend
Work, Termination by Contractor, Cessation
of Work and Removal of Contractor’s
Equipment, and Payment on Termination
represent part of Chapter 16 of the General
Conditions.
The Contractor is entitled to suspend Works
if the Engineer fails to certify the Interim
Payments, if the Employer fails to submit the
Employer’s Financial Arrangements or if the
Employer fails to comply with Sub-Clause
14.7 of the General Conditions. The
Contractor should notify the Employer
regarding this at least 21 days in advance.
Sub-Clause 16.2 of the General Conditions
provides a list for reasons of Termination by
Contractor.
1.2.1.2.17 Risk and Responsibility
Chapter 17 of the General Conditions covers
Indemnities, Contractor’s Care of the Works,
Employer’s Risks, Consequences of
Employer’s Risks, Intellectual and Industrial
Property Rights, and Limitation of Liability.
If risks on the Employer’s side cause any
damage to the Works, Goods or
Documentation of the Contractor, the
Contractor shall immediately inform the
Engineer of any such occurrence and shall
remedy the damage and the losses
12
Serbian Road Supervision Manual
according to the Engineer’s instructions. The
Engineer decides on the right to extend the
Completion Time and the payment of all
expenses incurred by this delay. The
Engineer makes a decision regarding this –
see 3.5 of the General Conditions.
1.2.1.2.18 Insurance
Chapter 18 deals with the following: General
Requirements for Insurances, Insurance for
Works and Contractor’s Equipment,
Insurance against Injury to Persons and
Damage to Property, and Insurance for
Contractor’s Personnel.
Via the insurance policy of the Contractor's
workers, both the Employer and the Engineer
are also entitled to compensation.
1.2.1.2.19 Force Majeure
Chapter 19 of the General Conditions covers:
Definition of Force Majeure, Notice of Force
Majeure, Duty to Minimise Delay,
Consequences of Force Majeure, Force
Majeure Affecting Subcontractor, Optional
Termination, Payment and Release, and
Release from Performance.
One Party shall notify the other Party (within
a maximum of 14 days) in regards to
contractual obligations it is not able to or will
not be able to fulfil due to Force Majeure. If
the Contractor suffers any damage or loss to
the Works, Goods or Documentation due to
Force Majeure, the Contractor is entitled to
an extension of time and a reimbursement of
the costs incurred by these circumstances.
The Engineer makes the decision regarding
this – see 3.5 of the General Conditions.
If the execution of practically any of the Work
in progress is prevented for a continuous
period of 84 days by reason of Force Majeure
or for a discontinuous period exceeding 140
days after the notice of the occurrence of
Force Majeure, each Party is entitled to
terminate the Contract by giving notice to the
other Party. The termination shall take effect
7 days from the termination notice. In these
circumstances the Engineer will determine
the value of the completed Works and will
issue the Payment Certificate.
1.2.1.2.20 Claims, Disputes and Arbitration
Chapter 20 covers the following: Contractor’s
Claims, Appointment of the Dispute
Adjudication Board, Failure to Agree on the
Composition of the Dispute Adjudication
Board, Obtaining Dispute Adjudication
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Serbian Road Supervision Manual
Board’s Decision, Amicable Settlement,
Arbitration, Failure to Comply with Dispute
Adjudication Board’s Decision, and Expiry of
Dispute Adjudication Board’s Appointment.
If the Contractor considers himself entitled to
any extension of Time for Completion and/or
any additional payment, the Contractor will
notify the Engineer no later than 28 days
after the Contractor has become aware or
should have become aware of the event or
circumstances giving rise to the claim. After
this period of time the Employer is
discharged from all liability regarding the
claim.
Within 42 days from the receipt of the fully
detailed claim, the Engineer will make a
decision regarding his acceptance or
rejection of the claim, and will give an
explanation for this decision.
If not otherwise stipulated in the Contract, the
Dispute Adjudication Board (DAB) will consist
of three members. The Employer and the
Contractor shall each appoint one member,
approve these two members and will then
agree upon a third member.
1.2.1.2.21 Appendix: General Conditions of
Dispute Adjudication Board
Agreement
The Appendix to the General Conditions
explains the general provisions regarding the
Dispute Adjudication Board, the qualifications
required of the Board members, obligations
of a Board member, and the obligations of
both the Employer and the Contractor
towards the DAB.
1.2.1.3 Particular Conditions according
to FIDIC
The General Conditions of the contract
according to FIDIC do not change. All
variations are formulated in the Particular
Conditions. The Particular Conditions of a
Contract contain the variations of the articles
of the General Conditions, where the relevant
regulations of RS are applied and additional
requirements of the Employer are added. The
Particular Conditions have greater legal
authority than the General Conditions.
In the Conditions of the Contract for
Construction Works – Part II, the guidelines
for the preparation of the Particular
Conditions have been given.
PE Roads of Serbia
Legislation and Contracts
The Particular Conditions are created by
indicating the article number and the
amendment of the precisely defined word,
sentence or paragraph for each clause of the
General Conditions of the Contract to be
amended or supplemented, or by writing the
following: at the end of the article, the
following text shall be added:.................. (in
accordance with the requirements of the
Employer).
These Conditions of the Contract contain
General Conditions and together they
constitute the Conditions of the Contract for
Construction Works, first edition 1999,
published by Federation Internationale des
Ingenieurs-Conseils (FIDIC); they also
contain (in addition) the supplements and
amendments of the General Conditions.
1.2.1.3.1 An example of Particular
Conditions
An example is given herein of the
amendments to the General Conditions with
Particular Conditions according to individual
chapters, clauses and sub-clauses.
1 GENERAL PROVISIONS
The following shall be added:
1.1 Definitions
In the Conditions of the Contract (hereinafter
referred to as “these Conditions”) containing
Particular Conditions and the General
Conditions, the terms and expressions shall
convey the meanings as defined below. The
terms designating persons or parties shall be
companies and other legal persons, except
where the context requires otherwise.
1.1.2 Contractual parties and persons
1.1.2.2 “Employer” is the Public enterprise
of Roads of Serbia, Bulevar Kralja
Aleksandra 282, Belgrade
1.1.2.4 “Engineer” is _________
1.1.2.8 “Subcontractor” is a business entity
(legal or physical person) engaged by the
bidder with whom the Employer has
concluded a contract for the execution of
public works in accordance with the Public
procurement act, and which (as such)
supplies goods or provides services i.e.
construction works that are directly
connected with the subject of public
procurement.
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Legislation and Contracts
1.1.2.11 “Joint Venture” is: a consortium
of companies which has agreed to perform
the Works under the Contract and on the
basis of mutual agreement.
1.1.2.1 “Authorized person of the Employer,
of the Bidder i.e. the Subcontractor” is a
person who, according to the law regulating
infractions, is responsible for an infraction
caused by his actions or by an error made by
the Supervising Engineer in charge.
1.1.3 Dates, tests, deadlines and
completion
1.1.3.2 “Commencement Date” is
determined by mutual agreement and is a
signed document between the Contractor,
the Engineer and the Employer, which
defines the date of the commencement of
Works. The Time for Completion is defined
by Sub-Clause 8.2 and it commences with
the date at which the Contract came into
effect.
1.1.4 Money and payment
1.1.4.4 “Discharge” (Clause 14.12) is a
“Record of the final account of executed
works ”.
1.1.4.7 “Interim Payment Certificate” is
created on the data from approved “Book of
quantities”, a document relating to the
determination of the quantity of the Works
carried out.
1.1.4.12 “Unit Price” is the price per unit of
quantity indicated in the bill of quantities of
the bid.
1.1.6 Other definitions
1.1.6.2 “Country” refers to the Republic of
Serbia.
1.1.6.5 “Laws” means the entire national (or
state) legislation, rulebooks, regulations,
decrees, statutory and other laws, as well as
all regulations and the delegated legislation
of any established authoritative body of the
Republic of Serbia.
1.1.6.10 “Construction diary and Inspection
book” are to be kept for the complete period
of the execution of Works in accordance with
the Regulations on the contents and manner
of keeping the construction diary and
inspection book.
1.4 The law and the language
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Serbian Road Supervision Manual
Sub-Clause 14.3 shall be deleted, and the
following shall be added:
(a) The operative law is the legislation of the
Republic of Serbia.
(b) The ruling language for interpretation for
all contractors shall be the Serbian
language.
1.10 Employer’s use of the Contractor’s
documents
The last paragraph has been added and it
reads as follows:
For all eventual variations in the design that
occur during construction, the Contractor is
obliged to suggest measures to be
undertaken, as well as to make a financial
assessment of the measures in accordance
with the Contract.
New Sub-Clause:
1.15 Confidential information
The Contractor shall deem the entire
contents of the Contract as private and
confidential information and will treat it as
such and with such a purpose, and will not
disclose it partly or in its entirety in any
commercial or technical magazine or in other
place without the prior written consent of the
Employer. In the case of a dispute regarding
the necessity of publication or disclosure of
the information for the purposes of the
Contract, this decision shall be made by the
Employer.
3 THE ENGINEER
3.1 Obligations and authority of the
Engineer
At the end of the Sub-Clause the following
shall be added:
The Engineer shall obtain special approval
from the Employer prior to:
(a) Approving the hand-over of any Works
pursuant to Clause 4.4 of the General
Conditions and the Particular Conditions
of the Contract;
(b) Approving additional expenses defined by
Clause 13;
(c) Determining the time extension for
completion of works pursuant to Clause
8.4;
(d) Approving variations (pursuant to Clause
13);
(e) Determining the price pursuant to Clause
12.
If in the opinion of the Engineer an
emergency arises that might bring the lives of
people, the Works or property into danger,
the Engineer is entitled to instruct the
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Serbian Road Supervision Manual
Contractor to perform all the work or activities
which in his opinion may be necessary in
order to eliminate or reduce the risk; at the
same time, the Engineer should not break the
above mentioned obligation of seeking
permission. At the same time, the Contractor
is not relieved of any duty or responsibility
under the Contract. The Contractor shall act
in accordance with all such instructions given
by the Engineer, despite the fact that the
Employer has not given his approval. The
Engineer shall determine the extra amount
for the contractual price regarding his
instructions and pursuant to Clause 12, and
shall inform the Contractor accordingly, and
will deliver a copy to the Employer.
4 THE CONTRACTOR
4.1 Contractor’s general obligations
At the end of Sub-Clause 4.1 the following
shall be added:
The Contractor will immediately notify the
Employer and the Engineer of any error,
omission, deficiency or other defect in the
design, plans, list of works and geodetic data
(markings of the relative height, control points
for the road routes and for objects) as well as
of the other information relating to the Works
which the Contractor would come across
during the review of the Contract or during
the execution of the Works. Should the
Contractor fail to do this, thus causing delays
or other consequential deviations from the
Contract, then the Contractor shall have no
right to submit a request for cost redemption
and shall be deemed responsible for such
consequences on the occasion of the
Employer suffering any damages.
The Contractor shall keep the Book of
quantities and provide the Inspection book.
4.2 Performance Security
The first and the second motions of Sub-
Clause 4.2 have been completely amended
and now read as follows:
The Contractor shall provide the Employer
with Performance Security (fulfilment of the
Contract) within 10 (ten) working days from
the day of the conclusion of the Contract.”
The Performance Security shall be given in
the form of a bank guarantee. A copy of the
guarantee shall be sent to the Engineer.
When the joint bid of a group of contractors
has been selected as the most favourable
one, the group of contractors is obliged to
reach an agreement regarding the
submission of a joint bid for the performance
of works, and to select one of the partners
from the group of contractors as the
employer for the Performance Security.
PE Roads of Serbia
Legislation and Contracts
The Performance Security shall be issued
either:
(a) by a bank in the country of the Employer,
or
(b) by a foreign bank acceptable to the
Employer.
Notwithstanding the limitations of the
previous paragraph, each time the Engineer
determines an increase of the Contractual
Price due to variations in costs and/or due to
legislation, or as a result of discrepancies
exceeding 10% of the share of the agreed
value of the Works, the Contractor shall
immediately increase by a corresponding
percentage the value of the Performance
Security.
Until then the Employer is entitled to retain
security to the amount of 10% of the increase
of the agreed price of the Works.
4.3 Contractor’s representative
The last sentence of Sub-Clause 4.3 shall be
deleted, and the following will be added:
If the Contractor’s Representative or his
managerial staff do not speak fluent Serbian,
the Contractor shall provide an interpreter
who will be at their disposal during work
hours.
4.4 Subcontractors
The first paragraph of Sub-Clause 4.4 has
been amended and now reads as follows:
The Contractor is allowed to assign to the
Subcontractors (for subcontracting) up to a
maximum of __% of the total value of the
Works.
Lines (b), (c) and (d) of the second paragraph
shall be deleted.
Below line (a) a new line (b) has been added
and it reads as follows:
The Contractor needs to have the written
consent of the Employer for all
subcontractors not listed in the Bid and prior
to their engagement on certain Works.
Should the Contractor establish after the
conclusion of the Contract that there is the
need for the engagement of a subcontractor
for the purpose of the execution of Works,
the Contractor shall send this suggestion to
the Employer. The Employer shall, within 14
days from the receipt of the proposal
regarding the new subcontractor (and on the
occasion of the submission of the supporting
documents regarding the fulfilment of
conditions), check both the suitability and
capacity of the subcontractor and decide on
whether he will approve the engagement of
the newly announced subcontractor. The
Employer cannot reasonably reject the
proposal of the Contractor regarding the
15
Legislation and Contracts
engagement of a new subcontractor. The
newly declared subcontractor must fulfil the
same conditions valid for the subcontractor
named by the Contractor in the bid. All
documentation for the new subcontractor
shall be enclosed with the application, as
stipulated by provisions_______________ of
the said public procurement.
In the application the applicant must indicate
the reason that has created the need for the
engagement of the subcontractor at the
Works; the reasons must be fully
corroborated.
The main reasons are:
- Circumstances arising after the signing of
the Contract related to the Works and
which the Contractor was not able to
foresee or was not obliged to foresee in
the phase of the composition and
submission of his Bid;
- The need for additional Works, an
increased number of Works or unforeseen
Works which the Contractor is not able to
execute alone;
- Climatic, organisational or technical
circumstances resulting in the necessity of
engaging a subcontractor in order to have
the contractual Works executed in the
scope, with the quality and within the time
period stipulated by the Contract.
The Engineer is obliged to ascertain as soon
as possible whether the conditions indicated
above have been fulfilled, and to send the
application along with his findings to the
relevant department of the Employer. The
task of the department is to study the
application with the proposal again, and in
the situation where the conditions have been
fulfilled – to issue an approval regarding the
Contractor’s proposal.
The eventual approval regarding the
Contractor’s proposal does not relieve the
Contractor from responsibility taken over
under the Contract; the Contractor is still
solely and entirely responsible for the quality
and timely execution of the contracted
Works.”
4.9 Quality assurance
At the beginning of Sub-Clause 4.9 the
following shall be added:
The Contractor will provide quality in
accordance with the operating laws and
technical regulations as well as in compliance
with the General and Particular technical
conditions.
6 STAFF AND LABOUR
6.8 Contractor’s Superintendence
16
Serbian Road Supervision Manual
At the end of Sub-Clause 6.8 the following
shall be added:
A relevant number of the supervising staff of
the Contractor must have an active
knowledge of the Serbian language or a
sufficient number of interpreters must be at
their disposal on the site during work hours
(as defined in Sub-Clause 1.4).
6.10 Records of the Contractor’s
Personnel and Equipment
At the end of Sub-Clause 6.10 the following
shall be added:
The contractor will provide detailed
information to the Employer and to the
Engineer as to the type of planned Works,
work hours, the anticipated number of the
Contractor’s personnel of each category, as
well as each type of equipment on the site.
This detailed information will be delivered at
least twice a week by email to the Employer
and the Engineer, until the Contractor has
completed all Works known to be unfinished
within the Time for Completion indicated in
the Taking-Over Certificate.
In the situation where for justifiable reasons
the plan does not match the actual situation,
the Contractor is obliged to notify the same
recipients in regards to this as soon as the
changes take place. The Contractor bears
the moral and material responsibility for the
accuracy of the information. The Employer is
entitled to claim for damages caused by
incorrect information and the loss of
reputation.
6.12 Foreign Personnel – additional Sub-
Clause:
The Contractor may engage any personnel
from abroad required for the execution of the
Works. The Contractor shall ensure that the
personnel are provided with the required
residency visas and work permits. The
Contractor is responsible for the return of
these personnel to the place where they were
recruited or to their domicile. In the event of
death in the Country of any of the personnel
or members of their families, the Contractor
shall be responsible for making the
necessary arrangements for their return or
burial.
7 PLANT, MATERIAL AND
WORKMANSHIP
7.1 Manner of Execution
At the end of Sub-Clause 7.1 the following
shall be added:
Prior to Commencement of the Works the
Contractor shall (at his own expense) provide
a laboratory on the Site with the appropriate
PE Roads of Serbia
Serbian Road Supervision Manual
equipment and personnel for the purpose of
performing tests onsite which are necessary
for the execution of the Works specified in
the Contract.
7.4 Testing
The last sentence of Sub-Clause 7.4 is
substituted by the sentence:
In the situation where the Engineer’s
representative was not present during the
testing, the Engineer may deem the results
and records of the testing acceptable, or – in
the case of any doubt – the Engineer may
request retesting.
8 COMMENCEMENT, DELAYS AND
SUSPENSION
8.1 Commencement of Works
The first sentence of Sub-Clause 8.1 is
substituted by the sentence:
The Contractor will commence Works
dependent upon how quickly he is notified by
the Engineer that he may commence Works,
or he commences Works after the signing of
the Access to and Possession of the Site.
The Access to and Possession of the Site will
be performed during the time period indicated
in the Appendix to the Bid, according to the
validity date of the Contract.
8.3 Programme
At the end of item (d) (ii) of the Sub-Clause
8.3, the following shall be added:
The time programme will contain a
harmonised masterplan of progress with the
indication of a clear time frame for the
individual phases of the Works. Along with
the time programme, the Contractor shall
give the Engineer the Plan of equipment,
machinery, building materials and workforce
for the specified time period. If the Works are
assigned to different Contractors, they shall
deliver to the Engineer a mutually
harmonised masterplan of progress. Should
the Contractors fail to unify the progress plan
among themselves in a timely manner, the
harmonisation shall be conducted by the
Engineer at the expense of the Contractors.
In this case the Contractors are not entitled to
variations in the contracted times for
completion and the contract price.
Within ten days of the validity of the Contract,
the Contractor will create a Technical
analysis of the Works that shall be verified by
the Engineer. The analysis will be created in
accordance with the guidelines given in
Chapter____ –Technical Conditions. Time
programme will be created with a computer
programme_____________ and shall include
the number of daily work hours.
PE Roads of Serbia
Legislation and Contracts
8.4 Extension of Time for Completion
Item (a) of Sub-Clause 8.4 has been
amended and reads:
Variations (unless an adjustment to the Time
of Completion has been agreed upon under
Sub-Clause 13.3 (Variation Procedure)) or
other substantial changes in the quantity of
an item of work in the situation where the
value of the added and/or additional Works
exceeds 15% of the contracted value of the
Works.
11 DEFECTS LIABILITY
11.3 Extension of Defects Notification
Period
At the end of Sub-Clause 11.3 the following
shall be added:
According to the laws of the Republic of
Serbia the Contractor is responsible for the
defects and errors defined in Sub-Clauses
11.2 (a), (b) and (c) that could not have been
noticed or which he deems to have been
unnoticeable before the expiration of the
Defects Notification Period pursuant to
Clause 11.3. The general deadline for the
limitation of such a liability is the time period
defined in the Appendix to the Bid and it may
not exceed the period of ____ years for work
on roads, and ____ years for work on bridges
and other structures.
When the joint bid of a group of contractors
has been selected as the most favourable
one, the group of contractors is obliged to
reach an agreement in the form of a legally-
binding legal act regarding the joint
performance of Works, and to select one of
the partners from the group of contractors as
the Employer for the remedy of defects within
the warranty period.
The warranty period commences either from
the day of starting of the structure for use or
from the day of the issuance of the Taking-
Over Certificate, dependent upon which date
is earlier. The expiry period of the warranty
shall be 30 days longer than the warranty
period determined by the Contract.
When removing defects within the warranty
period, the Contractor shall execute the
works required for the remedying of the
defects________hours per day. All defects
that endanger the safety and health of people
must be removed within______hours.
11.9 Performance Certificate
At the end of Sub-Clause 11.9 the following
shall be added:
As a precondition for the issuance of the
Performance Certificate, the Contractor must
deliver to the Engineer _____ copies of the
Design of the constructed facility
17
Legislation and Contracts
____________________ in printed form, and
one copy in electronic form including
inventories, final quantities and other
documents prepared by the Contractor at his
own expense simultaneously with the
completion of the Works and with the
appropriately qualified technical personnel in
order to present the state of the completed
Works. The design documentation must be
submitted to the Employer in 4 (four) printed
copies and 1 (one) copy in electronic form.
The design documentation in electronic form
shall be prepared in the following formats:
Graphics in vector formats .dwg and .dxf;
Text in .doc format;
Spreadsheets will be in .xls format.
12 MEASUREMENT AND
EVALUATION
12.1 Works to be measured
At the end of the last paragraph of Sub-
Clause 12.1 the following shall be added:
All measurements performed in order to
determine the quantity of the completed
Works, shall be entered into the calculation
plans and they constitute a part of the Book
of quantities.
13 VARIATIONS AND ADJUSTMENTS
13.3 Variation Procedure
At the end of Sub-Clause 13.3 the following
shall be added:
The Employer and the Contractor will
conclude (without delay) an Annex to the
basic Contract with the Contractor for the
completion of all additional work, surplus
work, as well as shortages and unforeseen
work in the case of the variation of the
contractual deadlines or in the case of the
replacement of a subcontractor, and within
the time period required for its preparation,
approval and the signing of this Annex.
- Unforeseen works (works not included in
the contract, but must be completed);
- Additional works (works that has not been
contracted and are not necessary for the
fulfilment of the Contract, but the
procuring entity demands its execution);
- Excess works (the quantities of completed
works exceed the contracted quantity of
Work);
- Lacking works (the negative deviation of
completed work in relation to the
contracted quantity of Work).
The Contractor may perform unforeseen
Work without the consent of the Employer, if,
due to the urgency of the Work he is unable
to request such a consent. The Contractor
shall inform the Engineer regarding the
18
Serbian Road Supervision Manual
occurrence and his proposed measures
without delay; during the joint insight into the
report the Engineer enters it into the Record
which the Engineer then submits without
delay to the Employer along with the
proposal of the measures, no later than three
days from his insight into the documents.
In the situation of a variation in contractual
deadlines, both the Employer and the
Contractor shall arrange the time variation by
way of an Annex to the basic Contract, no
later than the expiration date of the related
contractual deadline.
13.8 Adjustments for Changes in Cost
Sub-Clause 13.8 has been completely
amended and reads as follows:
All unit prices from the bill of quantities
supplied in the bid are fixed and are not
subject to variation, except for the
prices________________ which will be
calculated without handling fees according to
verifiable actual costs based on the invoices
of the contractors engaged at the Works of
the road closure.
14 CONTRACT PRICE
14.3 Application for the Interim Payment
Certificates
The first paragraph of the Sub-Clause has
been amended and now reads as follows:
The Contractor shall submit to the Employer
______ of copies of the Interim Payment
Certificate at the end of each month prior to
the ___the day of the following month. The
certificates must be signed by authorised
representative of the Contractor, and the
Engineer must verify them in the format
approved by the Employer. The Engineer will
review the Interim Payment Certificate within
____ days, and the Employer will pay the
undisputed part of the Payment within____
days from the day of completion of the
service.
In the situation where a joint bid of a group of
contractors has been selected as the most
favourable one, the interim and the final
payment certificate will be signed by the
partner who is simultaneously the employer
of the Performance Security. In the situation
where a joint bid of a group of contractors
has been selected as the most favourable
one, the Employer shall pay the undisputed
parts of the Certificates into the account of
the partner who is at the same time the
employer of the Performance Security.
14.6 Issue of Interim Payment Certificates
Sub-Clause 14.6 (c) has been added and
reads as follows:
PE Roads of Serbia
Serbian Road Supervision Manual
The Employer shall retain ____ percent of
the Works price for which the payment has
been approved until the Contractor submits
to the Employer an amended Performance
Security as stipulated by Clause 4.2 of the
Particular Conditions.
14.13 Issue of the Final Payment
Certificate
At the end of Sub-Clause 14.13 the following
paragraph shall be added:
If the Employer and the Contractor in the
Record of the final account of executed
works, Sub-Clause 14.12, establish that due
to deficiencies in the quality of the completed
work that the Employer has the right to a
financial deduction, then such financial
deductions shall be calculated in the Final
Payment Certificate.
14.15 Currencies of Payment
At the end of the last paragraph of Sub-
Clause 14.15 the following shall be added:
The Employer will pay the Contractor the
Contract Price in a payable currency into the
bank account or accounts indicated in the
Contract.
15 TERMINATION BY EMPLOYER
15.2 Termination by Employer
In the first paragraph of 15.2 a new line (g)
shall be added:
(g) if the Contractor without the prior written
consent of the Employer replaces the
management contractor or the subcontractor,
or if he assigns the Works to a subcontractor
which is not indicated in the Contract.
16 SUSPENSION AND TERMINATION
BY CONTRACTOR
16.1 Contractor’s Entitlement to Suspend
Work
The first paragraph shall be deleted and
replaced with the following paragraph:
Should the Engineer fail to issue the
Certificate pursuant to Sub-Clause 14.6
(Issuance of Interim Payment Certificates) or
should the Employer fail to comply with Sub-
Clause 2.4 (Employer’s Financial
Arrangements) and Sub-Clause 14.7
(Payment) for the undisputed part of the
payment, the Contractor will suspend Works
(or decrease the speed of Works) after the
expiration of a minimum of 21 days from the
date of the notification of the Employer until
the Contractor receives the Payment
Certificate or another appropriate certificate
or the payment, all dependent upon the
situation and as described in the notification.
PE Roads of Serbia
Legislation and Contracts
The Contractor is not entitled to suspend
Works in the case of a part of the payment
being disputed by both Parties for which
reason the Engineer has not approved the
part of the payment i.e. the Employer has not
made the payment.
18 INSURANCE
18.1 General Requirements for Insurance
At the end of Sub-Clause 18.1 the following
shall be added:
The Contractor is entitled to enter into all
insurance contracts relating to the Contract
with authorised insurance companies
approved by the Employer and in accordance
with the regulations of the Republic of Serbia.
18.2 Insurance for Works and the
Contractor’s Equipment
At the beginning of Sub-Clause 18.2 the
following shall be added:
According to Sub-Clause 18.2 it is not
required that insurance covers the losses or
risks indicated in Sub-Clause 17.3 in Sub-
Clauses (a), (b), (d), (e), and (f).
18.3 Insurance against Injury to Persons
and Damage to Property
At the end of Sub-Clause 18.3 the following
shall be added:
The minimum insurance amount according to
Sub-Clause 18.3 is _____________ RSD.
18.4 Insurance for the Contractor’s
Personnel
At the end of Sub-Clause 18.4 the following
shall be added:
The insurance shall be in accordance with
the laws and legislation of the Republic of
Serbia and will be conducted through
registration with the relevant agencies of
local authorities and at the expense of the
Contractor. Should the Contractor fail to
comply with these laws, the Contractor shall
be subject to sanctions under the Contract
and according to the laws and regulations of
the Republic of Serbia.
20 CLAIMS, DISPUTES AND
ARBITRATION
Sub-Clauses 20.2 and 20.3 shall be deleted
as well as the second paragraph of Sub-
Clause 20.4. They will be replaced with the
following:
The Engineer acts in the capacity of DAB in
accordance with Sub-Clause 20.4 justly and
impartially and at the expense of the
Employer. Should the Employer intend to
replace the Engineer, the Employer’s
notification in the sense of Sub-Clause 3.4
19
Legislation and Contracts Serbian Road Supervision Manual

shall contain the explained proposal for

replacement.

ADDITIONAL CLAUSES

21 FEES AND DUTIES

21.1 Foreign Duties

The prices offered by the Contractor shall
comprise all taxes, customs fees and other
duties that relate to the production,
processing, sale and transportation of the
Contractor’s equipment out of the Country, as
well as to the installation, materials and
products that will be applied or installed
under the Contract, and to the services
provided under the Contract.

21.2 Local Duties

The prices offered by the Contractor include
all customs fees, import-related customs
fees, taxes, income taxes and other duties
that may be assessed for taxation according
to the laws and regulations that have been in
effect 14 days prior to the opening of the bids
in the Republic of Serbia, and that relate to
the Contractor’s equipment, installations,
materials and products (permanent,
temporary and disposable) which have been
supplied for the needs of the Contract, and
the services provided under the Contract. No
provision of the Contract relieves the
Contractor from the payment of any fees and
duties prescribed in the Country for the profit
obtained on the basis of the Contract.

21.3 Income Taxes pertaining to

Personnel
The Contractor’s team, personnel and
workforce shall be subject to personal
income taxation in the Republic of Serbia in
the respect of the taxation of their personal
incomes in accordance with the laws and
regulations effective at the given time, and
the Contractor shall fulfil all obligations in the
sense of reduction as is stipulated by these
laws and regulations.

1.2.1.4 Contract sample according to

FIDIC

A Contract sample between the Employer

and the Contractor according to FIDIC is
provided below.

20 PE Roads of Serbia
Serbian Road Supervision Manual Legislation and Contracts

CONTRACT AGREEMENT

This Agreement made the______________day of __________20_______________

between__________________________of______________ (hereinafter called “the Employer”) of
the one part
and__________________________of______________ (hereinafter called: “the Contractor”) of the
other part.

Whereas the Employer desires that the Works known as ________________________shall be

executed by the Contractor, and has accepted a Tender by the Contractor for the execution and
completion of these Works and the remedying of any defects therein,

The Employer and the Contractor agree as follows:

1. In this Agreement words and expressions shall have the same meanings as are respectively
assigned to them in the Conditions of Contract hereinafter referred to.

2. The following documents shall be deemed to form and be read and construed as part of this
Agreement:
a. The Letter of Acceptance dated___________
b. The Letter of Tender dated______________
c. The Addenda nos___________
d. The Conditions of Contract
e. The Specification
f. The Drawings, and
g. The completed Schedules

3. In consideration of the payments to be made by the Employer to the Contractor as hereinafter

mentioned, the Contractor hereby covenants with the Employer to execute and complete the
Works and remedy any defects therein, in conformity with the provisions of the Contract.

4. The Employer hereby covenants to pay the Contractor, in consideration of the execution and
completion of the Works and the remedying of defects therein, the Contract Price at the times
and in the manner prescribed by the Contract.

In witness whereof the parties hereto have caused this Agreement to be executed the day and

Signed by: _____________________ Signed by: _____________________

For and on behalf of the Employer in the presence For and on behalf of the Contractor in the presence
of of

Witness: _____________________ Witness: _____________________

Name: _____________________ Name: _____________________

Address: _____________________ Address: _____________________

Date: _____________________ Date: _____________________

PE Roads of Serbia 21
Legislation and Contracts
1.2.2 CONTRACT CONDITIONS
ACCORDING TO MFI
1.2.2.1 Institutions of the MDB and MFI
MDB (Multilateral Development Bank)
institutions are supranational institutions
founded by sovereign states as their
shareholders.
As lenders and donors their objective is to aid
developing countries economically and
socially by providing support to their
economic and social development.
The main members of the MDB are: the
African Development Bank, Asian
Development Bank, European Bank for
Reconstruction and Development (EBRD),
Inter-American Development Bank Group,
World Bank, Black Sea Trade and
Development Bank, Caribbean Development
Bank, Central American Bank for Economic
Integration, Corporación Andina de Fomento,
East African Development Bank and West
African Development Bank.
MFI (Multilateral Financial Institutions) are
similar to MDB institutions, but sometimes
they are classified separately due to the
focus of their financing on certain project
types. The MFI are: the European
Commission, European Investment Bank,
International Fund for Agricultural
Development, Islamic Development Bank,
Nederlandse Financieringsmaatschappij voor
Ontwikkelingslanden NV, Nordic Investment
Bank, OPEC Fund for International
Development.
The following institutions were involved in the
publishing of the FIDIC “Pink Book”: the
African Development Bank, Asian
Development Bank, Black Sea Trade and
Development Bank, Caribbean Development
Bank, European Bank for Reconstruction and
Development, Inter-American Development
Bank, Islamic Development Bank, Nordic
Development Fund, World Bank.
The MDB institutions have agreed that the
“Pink Book” will always be applied in
construction works where designs are
created by the Employer.
Therefore, MDB contracts are basically
similar to the conditions previously described
in the FIDIC contracts. They differ only in
certain provisions.
22
Serbian Road Supervision Manual
Standard documents and rules are applicable
for international and national investment
procedures without the licensing of the
Conditions. The rules are accessible to the
public on the following web-pages:
The WB Group:
http://web.worldbank.org/WBSITE/EXTERNA
L/PROJECTS/PROCUREMENT/0,,contentM
DK:20060840~menuPK:84282~pagePK:842
69~piPK:60001558~theSitePK:84266,00.html
http://web.worldbank.org/WBSITE/EXTERNA
L/PROJECTS/PROCUREMENT/0,,contentM
DK:20060840~menuPK:84282~pagePK:842
69~piPK:60001558~theSitePK:84266,00.html
EBRD:
http://www.ebrd.com/pages/workingwithus/pr
ocurement/project.shtml
EIB:
http://www.eib.org/projects/publications/guide
-to-procurement.htm
EAR:
http://ec.europa.eu/europeaid/tender/geninfo/
index_en.htm
1.2.2.2 The Harmonised MDB version of
the Red Book – the Pink Book4
The Pink Book is the amended version of the
Red Book.
All differences between the Red Book (1999
edition) and the Pink Book have been dealt
with in detail on the web-page:
http://www.fenwickelliott.co.uk/fidic-red-book-
1999-and-mdb-harmonised-edition-pink-
book-compared
1.2.3 OTHER CONDITIONS OF THE
CONTRACT
Tender documentation is usually divided into
chapters. The Employer creates the chapters
serving as a form of preparation for bidders;
the Employer writes down all his
requirements and expectations regarding the
time schedule, quality, method of execution
of the works, the capacity of the contractor
4
Source: Conditions of Contract for Construction, and
Engineering Work designed by the Employer, Multilateral
Development Bank Harmonised Edition, FIDIC; June
2010
PE Roads of Serbia
Serbian Road Supervision Manual Legislation and Contracts

and his employees, the financial 1.2.3.1 Contract sample of the PE Roads
requirements of the contractor and his own of Serbia
resources, selection criteria, etc.
A Contract sample between the Employer
If the Employer does not utilise the FIDIC and the Contractor according to PE Roads of
publication for the General Conditions, then Serbia is given below.
the Employer composes his own conditions
defining his requirements. The requirements
are described in Volume 2 “Construction
Supervision” of the SRSM book (Serbian
road supervision manual) and they relate to
all the construction stages up to the final
statement. With well prepared tender
documentation, problems that frequently
arise during construction may be avoided.
Such problems include: An increase in the
contract price, delays in completion, poor
quality construction, non-compliance with the
relevant legislation, an unnecessary impact
on the environment, etc. Therefore, the
objective of the tender documentation, along
with the contract documents, is to provide the
Employer with a permanent and cost-
effective structure.

The tender documentation should contain the

following:
- Instructions for the execution of the Works
including criteria regarding the level of
quality of construction required i.e. quality
of the installed materials and equipment –
the required measurements, tests and
quality assurance;
- A Programme with the defined
commencement date and time required
for completion;
- Definition of the documents provided by
the contractor i.e. by the employer;
- The methods for the implementation of
the Works including transportation routes,
dump sites, environmental protection and
occupational health and safety;
- Precise criteria and conditions for the
increase of the price;
- Financial security – guarantees and
insurances;
- Payment conditions (advance payments,
premiums, payment certificates, payment
of undisputed portions, penalties);
- Approval of the subcontractors and
responsibility for their work;
- Conditions for taking-over the Works;
- Warranty period – duration, conditions
regarding the quality upon expiration;
- Conditions for the final taking-over and
calculations;
- Dispute resolution.

PE Roads of Serbia 23
 CONTRACT
Entered into by and between the Contractual Parties

(details of the Employer)

and

(details of the Contractor)

SUBJECT OF THE CONTRACT

Article 1

The Contracting Authority assigns and the Contractor accepts and undertakes to execute the works
on......

based on the accepted bid of Contractor No. ..... from ..... year, all in accordance with the Law on
Planning and Construction, the Law on Public Roads, technical documentation and tender
documentation which constitute a part of this Contract.

VALUE OF THE WORKS

Article 2

The Parties state in mutual consent that the total value of the works from Article 1 of this Contract
is:

.…………………………………………RSD excluding Value Added Tax, and including

.…………………………………………RSD of Value Added Tax (18%)
TOTAL:.…………....…………………..RSD

Written in words……………………………………………………………………....

Article 3

The value of the works is fixed.

Article 4

The offered unit prices from the estimated bill of quantities shall not be amended due to the
increase (excess) or decrease (deficit) quantity of works defined in the estimated bill of quantities.

The unit price for any unforeseen and additional works shall be determined based on the analyses
and corrections of the prices’ analysis provided by the Contractor pursuant to the General
Conditions and Appendices enclosed with the bid.

Article 5

The amount of the advance payment is ......% from the total agreed contract value of the works.

24 PE Roads of Serbia
Serbian Road Supervision Manual Legislation and Contracts

Article 6

For the security of the Employer and for the purposes of removal of the defects in the works, the
Contractor shall retain the amount of .....% from the total value of the works (from each monthly
instalment) until the completion of the works.
Upon the completion of the works and upon the positive technical acceptance of the works, a half
of the total retained amount (...%) shall be returned to the Contractor, while the other half shall be
returned to him at the end of the warranty period.

COMPLETION PERIOD

Article 7

The completion period is ....... days.

Article 8

Should the Contractor suggest an amendment or a supplement to the approved design, and should
such a proposal be adopted by the Employer thus attaining a more rational solution and cost-
effectiveness regarding the construction process, the Contractor is entitled to a premium of the
amount of ..... from the sum thus saved.

Article 9

Appendices to this Contract are:

The accepted bid of the Contractor with all Appendices to the bid;
Particular Conditions of the Contract;
General Conditions of the Contract;
Technical documentation;
Bank guarantee for the Performance Security;
Agreement of joint bidding (if two or more partners submitted a joint bid).

Article 10

The Employer and the Contractor agree to resolve all disputes arising from this Contract primarily
in the way defined in the tender documentation and by mutual agreement.

Article 11

This Contract comes into effect on the date it is signed by the Contractor and by the Employer.

The Contract is drawn in .... identical copies of which the Employer keeps .... copies, and
........copies belong to the Contractor.

Contractor Employer

PE Roads of Serbia 25