fidic contracts overview
DESCRIPTION
fullfill with fidic 1999TRANSCRIPT
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THE FIDIC CONTRACTSAND THEIR USE
Presentation by Daniel Ivarsson
Managing Director of FIDIC
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FIDIC CONTRACTS
CONSTRUCTION
PLANT AND DESIGN-BUILD
EPC/TURNKEY PROJECTS
SHORT FORM OF CONTRACT
CLIENT/CONSULTANT MODEL SERVICES AGREEMENT
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WHICH BOOK TO USE?
STRAIGHTFORWARD PROJECT ? EMPLOYER DESIGN ?
CONTRACTOR DESIGN
plant and/or high unforeseen risks
fixed price - lump sum little employer involvement
no major unforeseen risks
no
no
no
DISCUSS IN DETAIL
Employer ’s requirements with the Contractor, and
negotiate a modified FIDIC contract
no
yesyes
yes yes
SHORT
FORM
CONTRACT
CONDITIONSOF
CONTRACT FOR
CONSTRUCTION
Conditions of
Contract
for EPC
Turnkey Projects
Conditions of Contract forPlant and
Design Build
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FEATURES AND ADVANTAGES
fair apportioning of risks, rights and obligations between the parties
BALANCED
WELL TRIED
long case history for earlier contracts
ACCEPTED
known and recognised; in wide use for international contracts
SUPPORTED
recommended or required by development banks, ISPA, etc.
EFFECTIVE
clear and complete conditions; time limits; provisions for adjudication
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Key points: CONSTRUCTION
• Employer responsible for design
• Engineer, working for the Employer
• Drawings, specifications, Bill of Quantities
• Payments based upon measurements
• Certification of payments by Engineer
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Key points: PLANT & DESIGN-BUILD
• Contractor responsible for design
• Engineer, working for the Employer
• Employer’s requirements
• Lump sum pricing
• Payments according to progress
• Certification of payments by Engineer
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Key points: EPC/TURNKEY PROJECTS
• Contractor responsible for design and takes full responsibility
• Employer may appoint a Representative
• Fixed price, to cover risks taken on by Contractor
• Payments according to progress
• No certification of payments
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Key points: SHORT FORM
• Simple projects
• Design by either party
• Employer may appoint a Representative
• Valuation as appropriate; to be agreed
• Payments according to value of Works executed and Materials and Plant delivered to site
• No certification of payments
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Key points: CLIENT/CONSULTANT
• Agreed Scope of Services: Appendix A
• Normal, Additional and Exceptional Services
• Normal Services priced as agreed
• Additional and Exceptional Services at rates agreed
• Payment schedule as agreed
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STRUCTURE: 3 MAIN CONTRACTS
• General Conditions• Guidance for the Preparation of the Particular Conditions• Letter of Tender• Contract Agreement• Dispute Adjudication Agreements• Twenty main clauses, covering similar matters• Exceptions: Clauses 3, 5 and 12:
Construction: Plant and D-B: EPC/Turnkey:
3. Engineer Engineer Employer’s Admin.
5. Subcontractors Design Design
12. Measurement Tests after Compl. Tests after Compl.
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STRUCTURE: SHORT FORM
• Agreement• General Conditions• Particular Conditions• Rules for Adjudication• Notes for Guidance
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STRUCTURE: CLIENT/CONSULTANT
• Agreement• General Conditions• Particular Conditions• Appendix A: Scope of Services• Appendix B: Personnel, equipment, facilities and services
of others to be provided by the client• Appendix C: Remuneration and payment
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THE 1992 (OLD) AND 1999 (NEW) RED BOOKSSOME DIFFERENCES
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THE 1992 (OLD) AND 1999 (NEW) RED BOOKSSOME DIFFERENCES
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INNOVATIONS FAVOURING THE CONTRACTOR
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INNOVATIONS FAVOURING THE EMPLOYER
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SCHEDULE OF RESPONSIBILITIES: FIDIC 1999
Some major responsibilities EMPLOYER Clause 2.1 Grant access
Clause 2.2 Assist with Permits, Licenses, Approvals
Clause 2.4 Establish and maintain appropriate financial arrangements
- Issue Letter of Acceptance
Clause 3.1 Appoint the Engineer
Clause 3.4 Replace the Engineer
Clause 14.2 Advance Payment
Clause 14.7 Payment
Clause 15.2 Termination
Clause 17.3 Employers Risks
Clause 18.1 Insurance
Clause 20.2 Dispute Adjudication Board – Agree in appointment and pay
costs
Clause 20.1 / 20.5
Settle dispute
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SCHEDULE OF RESPONSIBILITIES: FIDIC 1999
CONTRACTOR
Clause 4.1 Execute and complete the Works in accordance with the Contract (including design to the extent specified).
Clause 4.2 Performance Security
Clause 4.3 Contractors Representatives
Clause 4.4 Sub-Contractors
Clause 4.6 Co-operate
Clause 4.8 Safety Procedures
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SCHEDULE OF RESPONSIBILITIES: FIDIC 1999
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SCHEDULE OF RESPONSIBILITIES: FIDIC 1999
DISPUTE ADJUDICATION BOARD Clause 20.2 Accept Appointment and the obligations pertaining thereto
Clause 20.4 Adjudicate on Disputes – hand down decisions
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SCHEDULE OF RESPONSIBILITIES: FIDIC 1999
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QUALITY OF DESIGN & DOCUMENTATION
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QUALITY OF DESIGN & DOCUMENTATION
Suggestions to Improve:
1. One boss for design / documentation production. 2. Avoid over specification; adopt standards. 3. Take particular care at overlaps between sections
of the work. 4. Identify RISKS and set down formal procedures
for managing these.
5. Quality Management System.
6. Peer Review.
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QUALITY CONTROLQUALITY ASSURANCE
The traditional contract (eg FIDIC 1992) is based on Quality Control (QC) that is, materials and operations are to subject to inspection and acceptance and/or rejection by the Engineer (or his Representative. Clauses 36-39 of FIDIC 1992.
Recent contracts have adopted a Quality Assurance approach, that is, the Contractor is required to put in place a Quality Management System which is designed to assure compliance with Contract requirements; and the Contractor is obliged to ensure that his work so complies; the Engineer only undertakes an auditing role, but nevertheless may reject completed works.
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FIDIC GUIDES
• The FIDIC Contracts Guide
• The White Book Guide
• Guide for the preparation of particular conditions (in the major contracts)
• Notes for Guidance (in the Short Form of Contract)
• Tendering Procedure and Pre-qualification forms
• Quality Based Selection
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USE OF FIDIC CONTRACTS
• Match contract and project
• Decide early
• Appoint DAB early
• Draft by professionals
• Do not touch the General Conditions
• Buy originals
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PREPARATION OF PROCUREMENT• Determination of needs and objectives• Determination of constraints• Identification of parties• Planning, budgeting, financing• Contract type• Selection procedure• Requirements / Specifications / Bills of Quantities /
Terms of Reference• Pre-qualification and evaluation criteria• Particular conditions• Publicity• Tender documents
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CONTRACT ADMINISTRATION
• Supervision
• Enforcement
• Quality and quantity
• Invoice verification
• Payments
• Extensions, variation orders, amendments
• Termination
• Disputes and their resolution