awareness 2007 fidi1c

8/4/2019 Awareness 2007 FIDI1C

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PT Decorient Indonesia

Contractual Awareness Course

10 December 2007

FIDIC

Federation Internationale des Ingenieurs Counseils

FIDIC FIDIC FIDIC FIDIC FIDIC

FIDIC FIDIC FIDIC FIDIC FIDICFederation Internationale des Ingenieurs Counseils


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PT Decorient Indonesia 2

OBJECTIVE

1. Know where to find FIDIC general conditions in a contract

document.

2. Know what FIDIC is.

3. Know several General Conditions of Contract (GCC).4. Aware that FIDIC GCC can be freely modified.

5. Aware that one can not refer to FIDIC if it is not chosen.

6. Know the principles of risk allocation by FIDIC.


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CONTRACT DOCUMENTS

1. The Agreement;

2. Form of Tender and Attachments;

3. Special Conditions of Contract;

4. General Conditions of Contract;5. Method of Measurement;

6. Bill of Quantities;

7. Drawings;

8. Specifications;

9. Correspondences.


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ORDER OF PRIORITY

1. In case of discrepancy between several documents forming part of theContract Document, an order of priority should be used.

2. Order of priority is set by the Employer.

3. Typical order of priority:

1. The Agreement;2. Letter of Award;

3. Form of Tender;

4. Special Conditions of Contract;

5. General Conditions of Contract;

6. Specification;

7. Drawings;

8. Bill of Quantity.4. A description in low priority document must be checked against

contradicting description in higher priority document, e.g: Thickness of glass is 8 mm in the Bill of Quantity, but is 10 mm in the

Specification 10 mm thick shall be used


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DISCREPANCY VS COMPLIMENTARY

1. If the Specification says 10 mm thick glass and Drawing shows 8

mm thick glass, then this is discrepancy.

2. If the Specification says 10 mm thick glass and Drawing does not

mention anything, then this is not a discrepancy, butcomplimentary.


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GENERAL CONDITIONS OF CONTRACT

Is the rules of the game, contain amongst others:

The rights and responsibility of the Employer;

The authorities of the Engineer (Employers Project Manager);

The rights and responsibility of the Contractor; Allocation of risks;

Procedure for assuring quality;

Procedure for assuring timely execution;

Measurement and payment;

Variation; Insurance;

Dispute resolution;

Etc.


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STANDARD FORMS OF GENERAL

CONDITIONS1. FIDIC (Federation Internationale des Ingenieurs Counseils);

2. JCT (Joint Contracts Tribunal);

3. ICE (Institution of Civil Engineers);

4. SIA (Singapore Institute of Architect);

5. AIA (American Institute of Architect);

6. Standard Form for Use in Hongkong.


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FIDIC

Federation Internationale des Ingenieurs Counseils (FIDIC) means

International Federation of Consulting Engineers.

Founded in 1913 by 3 national associations of independentconsulting engineers within Europe. Today FIDIC membership

numbers 74 Members Associations around the world (1 member

association for each country).

From Indonesia: INKINDO.


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COMMON USEOF FIDIC GCC

Projects with loan from the World Bank.

Private funded building projects in Indonesia where the QS is DLS,

EC Harris, Korra.


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SEVERAL FIDIC GCC

FIDIC GCC for Construction

1st edition 1957

2nd edition 1969

3rd edition 1977

4th edition 1987 amended 1992

5th edition 1999

FIDIC GCC for Design and Build FIDIC GCC for EPC and Turnkey


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FREE CHOICE

The Employer is free to choose which FIDIC he will use. He

can use FIDIC 1969 like Qatar Embassy.

Later version of FIDIC does not automatically overrule earlier

revision.

If a contract does not use FIDIC Conditions of Contract,

parties to the contract can not rely on FIDIC clauses.

However, FIDIC may be appealing to fill out the void left by an

incomplete conditions of contract. Thus FIDIC is not a governing rule, it becomes rules for the

parties who chose it.


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FREE MODIFICATION

FIDIC General Conditions of Contract is freely modified by

the Employer, by the use of Conditions of Particular

Application (or Special Conditions of Contract). e.g:

FIDIC GCC states that Employer shall provide a proof of his

ability to pay the Project.

Particular Application can delete this provision.


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RISK INVENTORY

1. Ambiguity or discrepancy of contract document.

2. Delay issue of drawing or instruction from the Employer.

3. Delay submission of Contractors Documents.4. Employers compliance with planning, zoning and other

permit for Permanent Works.

5. Compliance with any regulation for the execution of the

Works by the Contractor.


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RISK INVENTORY

6. Employers delay in giving right of access to the Site.

7. Non performance of Contractors subs.

8. Interrelationship with other parties in the Project.9. Employer error in giving points of reference or bench

marks.

10. Contractors failure to collect or interpret Site Data.

11. Unforeseeable Physical condition.


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RISK INVENTORY

12. Delay or failure of the Employer to give free issued

materials .

13. Finding of geological or archaeological interest.

14. Nominated Subcontractor.

15. Engineer delaying tests.

16. Retesting of defective workmanship or materials.

17. Variation.

18. Delays caused by authority.19. Suspension of Work.


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RISK INVENTORY

20. Defective design.

21. Defective material or workmanship.

22. Change in legislation.

23. Delayed certification and payment.

24. Fluctuating exchange rate.

25. Fluctuating market price of goods or services.

26. Termination by the Employer.

27. Non payment or bankruptcy of Employer.28. Bodily injury, sickness or death during Construction.


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RISK INVENTORY

29. Damage to property other than the Works.

30. Damage to the Works caused by Employers Risks.

31. Breach of intellectual property.

32. Deductibles of insurance and amount not recovered from

insurance.


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RISK ALLOCATION

WHAT DO YOU THINK IS FAIR AND REASONALBE

FOR THE EMPLOYER AND THE CONTRACTOR IF

THE FOLLOWING RISKS OCCUR??


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RISK ALLOCATION

1. Ambiguity or discrepancy of contract document Ambiguity and discrepancy between contract document is the

risk of the Employer.

The Contractor based his price on the order of priority. If other interpretation is required, the Engineer will issue aVariation order.

2. Delay issue of drawing or further instruction from theEmployer

The Employer must provide drawing or instruction withinreasonable time to enable the Contractor to proceed with theWorks without interruption. If drawing or instruction aregiven late and disrupt the Works, the Contractor can requestadditional cost and or extension of time.


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RISK ALLOCATION

6. Employers delay in giving right of access to the Site

Can result in additional cost and delay. Employer is

responsible .

7. Non performance of Contractors subs

Can result in additional cost and delay. Contractor is

responsible.

8. Interrelationship with other parties in the Project

Employer, employers contractors, authority must be allowedreasonable opportunity to carry out their works. If

Contractor incurs Unforeseeable Cost, he will be reimbursed.


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RISK ALLOCATION

9. Employer error in giving points of reference or bench

marks.

Setting out of the Works by Contractor using points of

reference supplied by the Employer. Contractor must use

reasonable effort to check accuracy. If errors are found afterthat, after reasonable effort of an experienced contractor, then

Employer will reimburse Contractor for additional cost or

delay.

10. Contractors failure to collect or interpret Site Data

If data is supplied by the Employer, then the Employer isresponsible for accuracy of such data, but the Contractor is

responsible for interpretation of such data.

If data is incomplete, Contractor must complete by itself


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RISK ALLOCATION3. Delay submission of Contractors Documents

This can result in additional cost or delay. All to be borne by

the Contractor.

4. Employers compliance with planning, zoning and otherpermit for Permanent Works.

Unavailability of permanent permit can create additional cost

and extension of time. This is to be borne by the Employer.

5. Compliance with any regulation for the execution of the

Works by the Contractor. This is Contractors responsibility


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RISK ALLOCATION

11. Unforeseeable Physical condition

In event of adverse physical conditions which is not

foreseeable by an experienced contractor, delay and

associated cost is compensated by the Employer.

But if unforeseen is more favorable, there will be costreduction, with total reduction shall not reduce Contract

Price.

12. Delay or failure of the Employer to give free issued

materials

Employer is responsible for the delay or additional cost

arising


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RISK ALLOCATION

13. Finding of geological or archaeological interest

Fossils shall be treated as required by the Engineer and

associated cost or delay will be reimbursed.

14. Nominated Subcontractor

Nominated Subcontractor (NSC) is a contractor nominated

by the Employer but enters into subcontract with the

Contractor.

Performance of NSC is Contractors responsibility.

15. Engineer delaying tests Testing of the Works is carried out in the presence of

Engineer with prior appointment. If Engineer delays,

associated cost and delay will be reimbursed.


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RISK ALLOCATION

16. Retesting of defective workmanship or materials

Contractor is responsible.

17. Variation

Contractor gets additional (reduction of) cost and extension

(or reduction) of time for completion.

18. Delays caused by authority

Contractor shall follow formal procedure thoroughly. If there

is a delay, this is considered delay by authority. If this is

considered unforeseeable, additional time for completion(only) will be given.


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RISK ALLOCATION

19. Suspension of Works

Extension of time and additional cost is given, except if the

suspension by Engineer is caused by Contractors default.

20. Defective design

Employer is responsible.

21. Defective materials or workmanship

Contractor is responsible.


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RISK ALLOCATION

22. Change in Legislation

Contract Price will be adjusted, up or down, following

changes in legislation.

If change in legislation causes delay of performance or

additional cost, this shall be reimbursed to the Contractor.

23. Delayed certification and payment

Delay certification entitles the Contractor to suspend the

Works after notification, and to terminate.

Delay in payment entitles the Contractor to suspend the

Works after notification and to terminate. In addition,

Contractor entitles to interest.


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RISK ALLOCATION

24. Fluctuating exchange rate

Contractors risk as far as foreign currency expenses.

25. Fluctuating market price

It is an option to always adjust the Contract Price based on

indices of prices.


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RISK ALLOCATION

26. Termination by Employer

Employer is entitled to terminate the Contract and remove

Contractor from site, if the Contractor is in substantially

breaches the Contract.

27. Non payment or bankruptcy of Employer Contractor can terminate the Contract if Employer not

paying or bankrupt.

Contractor gets payment for works executed plus payment of

loss of expected profit and other losses.


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RISK ALLOCATION

28. Bodily injury, sickness or death

Contractor is responsible for any injuries etc. to any person,

from whatever cause, except caused by Employers willful act,

negligence or breach of Contract.

Thus, sickness of Employers personnel due to unexplainedcause must be all taken care of by the Contractor.

29. Damage to property other than the Works

Employer is responsible for damage to property other than

the Works, from whatever cause, except caused by

Contractors willful act, negligence or breach of Contract.


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RISK ALLOCATION

30. Damage the Works due to Employers Risks (e.g. force

majeure)

Damage to the Works by force majeure is at Employers cost.

31. Breach of intellectual property

The party in breach is responsible.

32. Deductible and amount not recovered by Insurance

Becomes the responsibility of the party where the risk lies.

Thus, in case of force majeure, the Employer will bear the

deductible and any amount not recovered by Insurance