Construction Contract:
the Ethiopian context
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Administrative Contracts
Introduction
An administrative contract is a special type of contract,
recognized under the Civil Code.
It is separately regulated under Article 3131-Article 3306 of
the Civil Code.
It is a contract to be signed between a public (government)
authority & a private party.
Definition: See Article 3132 for the definition of
Administrative under Civil code.
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Administrative Contracts
Elements
one of the parties should be a public authority; as per Article
3132(a) cum Article 3131 of the Civil Code;
designated as an administrative contract by law (ex. Contract of
concession of public services, contract of public works & contract
of supplies) or qualified as such by the parties; see Article
3132(b) cum Article 1767(2) including Article 3191- Article 3193;
there must be a public interest or service; i.e. general interest
of the public in its mission; an organ charged with carrying it out;
special prerogatives conferred on such organ;
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Administrative Contracts
there must be a permanent (rather direct) participation of
a contracting party;
there must be a clause exorbitant or urgent
consideration for the general interest which is
extraneous to private contracts, which implies the existence
of prerogatives in the hands of the public authority which is
not the case in private contracts;
Not all contracts to be signed between the public authority
& the private contracting party may be categorized under
the administrative contract.
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Administrative Contracts
Basis and Classification
It is up on the recognized powers of eminent domain that the
French division in the field of Administrative Contract is grounded.
The Ethiopian law of administrative contract, which has been based
on the French model, has accepted such sheer distinction between
private contract & that of administrative contract.
There are the following sub-types of Administrative Contracts. These
are:
Concession of Public Services; (Article 3207-Article 3243);
Contract of Public Works; (Article 3244-Article 3296); and
Contract of Supplies; (Article 3297-Article 3206)
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Administrative Contracts
Comparison
The legal effect of a contract being an administrative contract
is that the administrative authority & the private contracting
party are not at equal footing.
The difference between the administrative contract &
private law contract being that:
the private law contracts are made by two equal parties for
two equal interests;
while the administrative contract are entered in to by two
unequal parties for the interest of the general good-
which subordinates the individual interest to that of the
public; 6
Administrative Contracts
Features
The very feature of an Administrative Contract is that the
balance of the said contract is tilted towards the public
authority.
This imbalance of the contract is legally justified on the
basis of public interest.
Therefore, the whole theory of the law of administrative
contract is based on balancing the interest or profit
motive of the individual on one hand, and the interest of the
general good on the other, of which by far the important is
that of the public good. 7
Administrative Contracts
For example, in terms of :-
termination of contract by public authorities for convenience; (see
Article 3180 of the Civil Code)
the non-performance by the public authorities of their obligations
shall not entitle the other (private contracting) party to fail to
perform its obligations; (see Article 3177(1) of the Civil Code)
the administrative authorities may unilaterally impose
certain
modifications of the contract
(see Article 3179 & Article 3283 of
the Civil Code);
the court may not order the administrative authorities to perform
their obligation; (see Article 3194(1) of the Civil Code)
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Administrative Contracts
Key Principles for construction projects
1. Theory of unforeseen (physical) Constraints/Theorie
des sujetions imprevues
The theory permits compensation of a contractor who
encounters exceptional physical constraints which is not
due to any act of the administration (public authority) &
was not foreseen at the time of the contract.
illustrative example Under FIDIC Red Book 4th Edition
Clause 12.2 Adverse Physical Obstructions or Conditions
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Administrative Contracts
2. Theory of want of (non-physical) Foresight/ Theorie de l’imprevision
The theory compensates the Contractor in the event of unforeseeable financial,
economic & political circumstances. (Article 3185 Unforeseen Events)
The following contract clause & legal provisions may be illustrative in this
instance.
Under MoWUD
Clause 20.2 Excepted Risks
Clause 65.2 Special Risks
Clause 70.1 Increase or Decrease of Cost
Under PPA -2006
Clause 10 Employers & Contractors Risks
Clause 11 Employers Risks
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Administrative Contracts
3. Act of government/ Fait du Prince;
The theory provides an opportunity for the Contractor to obtain full reimbursement
where the administration has somehow intervened by changing the law or acting in
a way that alters the economic balance of the contract.
In this context, it is worthy of note that normally for the purposes of Fait du Prince,
the government is regarded as one & indivisible so that an action of one ministry
which affected a Contractor in a contract with another ministry would be a ground
upon which the Contractor would be entitled to rely to obtain compensation.
The act of government may come in to picture in terms of enacting laws or
regulations or orders and other measures.
Such measures are known, under the Civil Code, as General Measures (see Article
3190 & Article 3191) & Particular Measures (see Article 3192 & Article 3193). The
issue of compensation is not automatic in all cases.
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Administrative Contracts
Effects:
the act must directly modify the contract; or
the act must prevent the enforcement of some of the provisions of the
contract;
The following contract clauses & legal provisions may be illustrative to the
understanding of the theory.
Under MoWUD
Clause 51.1 Variations
Clause 70.7 Subsequent Legislation
Under the Civil Code (Acts of Government)
Article 3190 General Measures 1. Affecting Substance of Contract;
Article 3191 2. Making the Performance of the Contract More Onerous;
Article 3192 Particular Measures 1.Taken by Contracting Authorities;
Article 3193 2. Taken by Another (public) Authority;
These theories are not applicable to the contracting parties with equal
footing i.e. within the context of private construction contract.
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Public Procurement Contracts
Historical Background
As the history of our national conditions of contract
indicates the first was published in 1959 by the Ministry of
Housing,
the second in 1987 by Building Transport Construction and
Design Authority,
the third in 1994 by Ministry of Works and Urban
Development and
the fourth and the recent one in 2006 by the Public
Procurement Agency (Revised in 2011 by PPPAA) of the
Ministry of Finance and Development. 13
Public Procurement Contracts
The PPA (PPPAA), under its legal mandate provided under The Public
Procurement Proclamation, it has prepared & issued certain standard
tender & contract documents for the purpose of public procurement.
The conditions of contract are applicable to the procurements of the
federal government.
The Standard conditions of contract cover the following types of
procurement. These are :
Consultancy Services;
Non-consultancy Services;
Works;
Goods;
Including Simple Request for Quotations & Local Purchase Order;
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Procurement of Works
The Standard Bidding Documents for the purpose of the procurement
of Works, goods and Services have been prepared for:
International Competitive Bidding (ICB); and
National Competitive Bidding (NCB), separately.
The Standard Bidding Documents have been also prepared both in
Amharic & English language.
The conditions of contract are based on Design-Bid-Build project
delivery system.
The type of contract could be based on BOQ/ Admeasurement Or
based on Activities Schedule, in which case it becomes lump sum.
The documentation of PPA Bidding Documents is divided in to the
following three parts, namely,
Bidding Procedure;
Schedule of Requirements; and
Contract;
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Procurement of Works
1. Bidding Procedure & Documentation
Section 1 Instruction To Tenderers(ITB);
General; Bidding Documents; Preparation of Bids; Submission of Bids;
Bid Opening & Evaluation; Award of Contract;
Section 2 Bid Data Sheet(BDS)
Section 3 Evaluation & Qualification Criteria (EQC)
Average Annual Volume of Construction Work;
Experience as Prime Contractor;
Acquisition of essential Equipment( by way of ownership, hire or lease);
Personnel;
Liquid Assets and/or Credit Facilities;
The issue of Joint Venture;
Section 4 Bidding Forms
Bid Submission Form; Priced Schedules (BOQ OR Schedule of Activities);
Bid Security; Qualification Information;
Section 5 Eligible Countries
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Procurement of Works
2. Schedule of Requirements & Documentation
Section 6 Schedule of Requirements
Scope of Works;
Technical Specification;
Drawings;
Bill of Quantities or Activity Schedule;
3. Contract
Section 7 General Conditions of Contract (GCC)
The GCC is composed of 62 Clauses. It contains the following parts.
1. General; (Clause 1-Clause 26)
2. Time Control; (Clause 27-Clause 32)
3. Quality Control; (Clause 33-Clause 36)
4. Cost Control; (Clause 37-Clause 54)
6. Finishing the Contract; (Clause 55-Clause 62)
Section 8 SCC
Section 9 Contract Forms
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Procurement of Others
1. Bidding Procedure & Documentation
Section 1 ITB;
Section 2 BDS;
Section 3 Evaluation Criteria;
Section 4 Bidding Forms;
For Consultancy Services
Technical Proposal;
Financial Proposal;
For Non-Consultancy Services
Bid Submission Sheet;
Bid Security;
Price Schedule; and
Qualification Form;
For Procurement of Goods
Bid Submission Sheet;
Price Schedule for Goods & Related Services
Bid Security; and
Manufacturer’s Authorization;
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Procurement of Others
Section 5 Eligible Countries;
2. Schedule of Requirements & Documentation
Section 6
For Consultancy & Non-Consultancy Services
Terms of Reference
For Procurements of Goods
Statement of Requirements
o List of Goods & Related Services;
o Delivery & Completion Schedule;
o Technical Specifications & Compliance Sheet; and
o Drawings;
3. Contract
Section 7 GCC
Section 8 SCC
Section 9 Contract Forms
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Thank you!!
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