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Unit 8:Managing Time: FIDIC Red Book practiceD31PZ: Contracts and Procurement

D31PZ: Contracts and Procurement Unit 8: Managing Time: FIDIC Red Book practice

The Parties

‣ The EmployerDefines the Works and pays the Contractor

‣ The ContractorRegularly and diligently Provides the Works

‣ The EngineerUses the FIDIC Red Book contract to administer construction. Makes decisions to signify events.

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Defining the duration of the Works

‣ Core FIDIC Red Book time-related definitions:

‣ Commencement Date

‣ Time for Completion

‣ Rate of Progress

‣ Tests on Completion

‣ Taking-over

‣ Taking-Over Certificate

‣ Defects Notification Period

‣ Delay Damages

‣ Performance Certificate

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Commencement Date

‣ The FIDIC Red Book form also includes forms to Annex A

structure the invitation to tender and tender Annex B

acceptance processes. Annex C

‣ Once the Letter of Acceptance has been issued... Annex B

‣ ... and the contract executed ... Annex C

‣ the Engineer informs the Contractor of the Commencement Date, not less than 7 days before it. 8.1

‣ The Commencement Date is usually within 42 daysof the Contractor’s receipt of the Letter of Acceptance 8.1

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Commencement Date

‣ After the Commencement Date:

‣ the Contractor must commence the Works “as soon as is reasonably practical” 8.1

‣ Once the Works have been started they must be completed “with due expedition and without delay” 8.1

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The programme

‣ The Contractor must provide the Employer with a programme within 28 days of being told theCommencement Date. 8.3

‣ The programme is not a contract document as it is provided by the Contractor.

‣ The Employer’s Personnel shall “rely upon the programme” when planning their activities.

‣ The programme must contain certain information.It will be rejected if it does not.

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The programme

‣ The programme must define: 8.3

‣ the sequence and stages of the Works

‣ the Contractor’s Equipment that will be used

‣ sequence and timing of tests specified in the contract documents

‣ a supporting report containing:

‣ method statements

‣ estimates of quantities of Contractor’s Personneland Contractor’s Equipment required in each stage

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The programme

‣ On receiving the programme, the Engineer has 21days to reject it. 8.3

‣ The Engineer must notify the Contractor of rejection.

‣ The Engineer must state the missing information.

‣ If the programme is rejected, Contractor has another28 days to submit a revised programme.

‣ No penalties for late provision or no provision.

‣ The Contractor can propose a revised programmein response to a Variation. 13.3(b)

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Time for Completion

‣ FIDIC Red Book does not define a date for completion within the contract documents

‣ Instead, the Time for Completion is defined 8.2

‣ The Contractor and Employer agree how long the Contractor will have to complete the Works.

‣ This is the Time for Completion ( ___ days )

‣ This is entered in the Contract Data (Part A of the Particulars)

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Commencement Date

Time for Completion


Time for Completion

‣ Within the Time for Completion, the Contractor must: 8.2

‣ complete the Works sufficiently for the Employer’s take-over

‣ ensure that the Works pass the Tests on Completion

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Extension of Time for Completion

‣ Extension of Time for Completion is managedusing the claims process 20.1

‣ If the Contractor’s progress is being held up by things it cannot control:

‣ The Contractor can notify the Engineer and askfor an extension of the Time for Completion 8.4

‣ The Contractor must provide notice with 28 daysof becoming aware (or should have become aware) of the delay 20.1

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‣ If the Contractor does not provide notice within 28days, the extension of Time for Completion willnot be granted - even if there are contractual groundsfor doing so.

‣ “The Employer shall be discharged from all liability” 20.1

‣ But:

‣ when did the 28 day period start?

‣ when should it have started?

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‣ After giving notice, the Contractor supports its request for an extension of the Time for Completionwith “contemporary records” 20.1

‣ After receiving notice, the Engineer can: 20.1

‣ inspect the records the Contractor is keeping

‣ instruct the Contractor to keep specific records

‣ The Contractor must submit the final, fully-supportedrequest for an extension of the Time for Completionwithin 42 days of becoming aware of the delay 20.1

‣ If the cause of the delay is continuing, furtherrequests are submitted with additional information at regular intervals

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‣ With 42 days of receiving full claim, the Engineer must respond with a “determination” 3.5

‣ approval / disapproval / comments. 20.1

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21 days

Delay starts

42 days 42 days

Notice given

Claim submitted

Decision given


Grounds for extension of Time for Completion

‣ The Engineer must award an extension of Time for Completionif the Works have been delayed by:

‣ delayed provision of drawings or instructions 1.9

‣ delay in possession of the site 2.1

‣ error in the information by which the Works are set out 4.7

‣ unforeseeable physical conditions 4.12

‣ fossils, antiquities, etc. 4.24

‣ instructions for tests other than the Tests after Completion 7.4

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Grounds for extension of Time for Completion

‣ The Engineer must award an extension of Time for Completionif the Works have been delayed by:

‣ delays caused by authorities 8.5

‣ instructing the Contractor to suspend the Works 8.9

‣ interference with Tests on Completion 10.3

‣ changes in local legislation 13.7

‣ the Contractor’s suspension of the Works 16.1

‣ an Employer’s Risk has occurred (war, etc.) 17.3, 17.4

‣ Force Majeure 19.4

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Rate of Progress

‣ If the Engineer determines that:

‣ the Contractor will not finish the Works within the Time for Completion; or

‣ the Contractor is not keeping to the programme

‣ the Engineer can instruct the Contractor to submita revised programme and supporting report 8.6

‣ The Contractor must adopt the new programme unless the Engineer instructs the Contractor not to

‣ All additional costs are borne by the Contractor.

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Force Majeure

‣ “an exceptional event or circumstance” that neitherparty could control 19.1

‣ If either the Contractor or the Employer is being affected by Force Majeure, it must notify the otherparty within 14 days. 19.2

‣ Both parties are obliged to minimise the impact of Force Majeure on the project. 19.3

‣ If the Contractor requests it, the Engineer will grant 20.1an extension of Time for Completion 19.4 8.4

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Force Majeure

‣ If the Force Majeure continues for 84 days

‣ and progression of the Works is prevented

‣ The Contractor or the Employer can terminatethe contract by providing notice to the other party 19.6

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Employer’s Taking-Over & Tests on Completion

‣ To complete the Works, the Contractor must performthe Tests on Completion defined in the contract 7.4documents. 9.1

‣ The Contractor must give at least 21 days notice oftests to the Engineer. 9.1

‣ If the tests are passed, the Taking-Over Certificate can be issued.

‣ The Contractor applies to the Engineer for the Taking-Over Certificate 10.1

‣ If the tests are failed, the Work can be retested, replaced, or left unchanged (with deduction from theContract Price). 9.1

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Delay Damages

‣ If the Contractor fails to complete the Works within theTime for Completion, then it must pay Delay Damages. 8.7

‣ Delay Damages are paid at the rate agreed. Contract Data

‣ Delay Damages are paid every day between theend of the Time for Completion and the Engineer’sissue of the Taking-Over Certificate. 8.7

‣ The Contractor’s liability for Delay Damages may be limited by the Contract Data, if agreed when executing the contract. Contract Data

‣ If present, the limit is a % of the Contract Price.

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Defects Notification Period

‣ Commences on issue of the Taking-Over Certificate 11.1

‣ One year long. Contract Data

‣ Defects listed on the Taking-Over Certificate must befixed by the Contractor before the end of the Defects Notification Period.

‣ If a defect is not fixed, a deduction from the ContractPrice can be made, or another contractor employed 11.4

‣ At the end of the Defects Notification Period, or 28days from when the last defect was fixed, the Engineer issues the Performance Certificate. 11.9

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Terminology

‣ Commencement Date

‣ Time for Completion

‣ Tests on Completion

‣ Taking-Over

‣ Taking-Over Certificate

‣ Defects Notification Period

‣ Delay Damages

‣ Performance Certificate

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Remember to read the full Unit notes and Appendices, and complete your independent study

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