Entitlement to Extension of Time and Additional Payment under

FIDIC Conditions of Contract

D. Ilter1, S. Alp2, V. Akturk2, B. Yagci2

1
Department of Civil Engineering, ITU, Istanbul, Turkey, artande@itu.edu.tr
2
BSc Student, Civil Engineering Department, ITU, Istanbul, Turkey

Abstract
FIDIC is recognized as the most widely used standard form of contract for internationally procured construction
projects worldwide. This also applies to Turkey, where an important portion of public investments is financed by
international institutions with the provision that FIDIC based contracts are used. As public agencies who act as
the employer in these projects, as well as the consultants and contractors, face the challenge of administering
increasing numbers of projects on FIDIC contracts, studies show that there is a serious deficit of knowledge in
the construction sector regarding these contracts and their various procedures such as used when claiming for
extension of time and additional payments. This paper reports a qualitative study into comparative analysis of the
rights, responsibilities and risks of contractors in the most frequently used FIDIC contracts, namely the Red
(Construction), Yellow (Plant and Design Build) and Silver (EPC/Turnkey) contracts. For this purpose, the
situations that raise contractor‟s entitlement to extension of time and additional payment are identified based on
the FIDIC contract type, and associated procedures as well as related contract clauses are identified. Results
reveal the importance of the contract type in allocation of risks between the employer and the contractor. While
the employer is responsible for most of the high risk contractual situations in the Red Book and the contractor is
entitled to extension of time and additional payment in majority of these situations, in Yellow Book some and in
Silver Book most of these responsibilities are transferred to the contractor, which results in the lack of
entitlement of the contractor to extension of time or additional payment. This paper will help contractors,
consultants and public agencies better understand the fundamental principles governing FIDIC contracts and
protect their contractual rights in the construction projects.

Keywords: Contract administration; International Federation of Consulting Engineers (FIDIC); Extension of

time (EOT); Additional payment.

1 Introduction
FIDIC is an institution that drafts and maintains standard form of construction contracts that are used by parties
throughout the world who engage in international commercial construction (Seifert, 2005), and FIDIC contracts
are the most widely used standard form of contracts for internationally procured construction (Ndekugri et al.
2014). The use of FIDIC contracts in Turkey goes back to the late 1970s, and from the late 1990s FIDIC based
contracts, including the World Bank Contracts, have been widely used in Turkey particularly for the
infrastructure and investment projects funded by the international institutions (Ilter and Alpkökin, 2012).
Recently, FIDIC Silver Book Engineering Procurement and Construction (EPC) type of contracts have also been
used in some large scale projects, which set wider responsibilities over the contractor compared to the traditional

1
ACE2014

design-bid-build contracts (Huse, 1997). Yet, the Turkish contractors and consultants are relatively less familiar
with this method of contracting (Ilter and Alpkökin, 2012). Therefore, guidance is needed on the duties and
responsibilities of the parties regarding important contractual issues, comparing different approaches of various
FIDIC contracts in particular. FIDIC contracts provide a system of entitlements in issues carrying high risk for
parties involved in a construction project. „Extension of time‟ and „additional payment‟ rank high in the risky
contractual issues, as they are found to be the two most frequent dispute categories in construction projects (Ilter,
2012). This paper compares the entitlement of the contractor for extension of time and additional payment in the
most frequently used FIDIC contract types (Ilter and Alpkökin, 2012), namely the Red (Construction), Yellow
(Plant and Design Build) and Silver (EPC/Turnkey) contracts.

2 Extension of time in (EOT) FIDIC

Erdem (2009) draws attention to the importance of the accomplishment of the work within the agreed time for
both the contractor and the employer, and defines EOT as “additional time granted to the contractor for the
performance of the work in case the work is not completed and delivered in due time (delays)”. FIDIC contains
detailed provisions regarding both the reasons and consequences of delays, and the responsibilities of the parties
with regards to such delay. These responsibilities, however, differ vastly in different types of FIDIC contracts.
An analysis of the situations which the contractor is entitled to EOT in FIDIC books is given in Table 1.

Table 1. Analysis of situations which the contractor is entitled to EOT in FIDIC books.

Situations which the Yellow (Plant and Design Silver (EPC/Turnkey)

Red (Construction)Book
Contractor is entitled to EOT Build) Book Book

1 Engineer's delay of Drawings In Red Book, Contractor is Employer's delay of Drawings is not a matter of discussion due
or Instructions entitled to EOT under 1.9 to the fact that Design is executed by the Contractor in both
(Delayed Drawings or Yellow and Silver Books.
Instructions)

2 Errors in the Employer's N/A: In Red Book beyond In Yellow Book, Contractor is In Silver Book, Errors in
Requirements Employer's Requirements, entitled to EOT under 1.9 Employer's Requirements are
Employer prepares the whole (Errors in Employer's in Contractor's liability and
project and is responsible for all Requirements) Contractor can not claim EOT.
errors in the projects.
3 Employer's delay in handing Contractor is entitled to EOT under 2.1 (Right of Access to the Site) in Red, Yellow and Silver
over the Site to the Contractor Books.

4 Delays as a result of any
errors in items of reference for
the correct positioning of all
parts of the Works, which are
provided by the Employer
5 Appearance of Unforeseeable
Physical Conditions
6 Finding Fossil in the Site
7 Employer/Engineer's claim for
additional tests and test results
being in accordance of with
the Specifications
Sub clause 4.7 (Setting Out) Sub clause 4.7 (Setting Out)
In Red and Yellow Book, The Employer shall be responsible for In Silver Book, Contractor
any errors in these specified or notified items of reference. shall be responsible for the
Contractor is entitled to EOT for the delays that result from errors correct positioning of all parts
in specified items of reference. of the Works, and shall rectify
any error in the positions,
levels, dimensions or
alignment of the Works.
Contractor can not claim EOT
for the delays that are caused
by the errors in specified items
of reference.
Contractor is entitled to EOT under 4.12 (Unforeseeable Physical In Silver Book, sub clause 4.12
Conditions) in Red and Yellow Book. is titled as 'Unforeseeable
Difficulties‟. By signing the
Contract, the Contractor
accepts total responsibility,
risk for having foreseen all
difficulties and the Contract
Price shall not be adjusted to
take account of any unforeseen
difficulties or costs.
Contractor is entitled to EOT under 4.24 (Fossils) in Red, Yellow and Silver Books.
Contractor is entitled to EOT under 7.4 (Testing) in Red, Yellow and Silver Books.

8 Employer/Engineer's giving Contractor is entitled to EOT under 8.4 (EOT for Completion) in Red, Yellow and Silver Books.
Variation Order

2

9 Exceptionally adverse climatic
conditions
10 Unforeseeable shortages in the
availability of personnel or
Goods caused by epidemic,
changes in legislation or
governmental actions
11 Any delay, impediment or
prevention caused by or
attributable to the Employer,
the Employer‟s Personnel, or
the Employer‟s other
contractors on the Site
12 Delays caused by authorities
13 Engineer/Employer's
suspending or holding the
Works
14 delay from carrying out the
Tests on completion by a
cause for which the Employer
is responsible
15 Delays caused by Changes in
Legislation or in current Laws
of the Country
16 Delays resulted by
Contractor's suspending work
(or reducing the rate of the
work) which is caused by the
delayed payments of the
Employer
17 Delays which take place
during Contractor‟s rectifying
the damage existing as a result
of the situations listed in Sub
clause 17.3 (Employer‟s
Risks)
18 Delays which take place as a
result of Force Majeure
defined in Sub clause 19.1 and
notified by the Contractor
D. Ilter, S. Alp, V. Akturk, B. Yagci
Contractor is entitled to EOT under 8.4 (EOT for Completion) in Contractor can not claim EOT
Red and Yellow Book. in Silver Book.
In Red and Yellow Books, Contractor is entitled to EOT under In Silver Book, Contractor is
Sub clause 8.4 (EOT for Completion) not entitled to EOT for these
circumstances under Sub
clause 8.4. 'Adjustments for
Changes in Legislation' is
gathered separately under Sub
clause 13.7 in Red, Yellow and
Silver Books. According to
this, for the delays due to the
Changes in Legislation after
the Base Date, Contractor is
entitled to EOT.
Contractor is entitled to EOT under 8.4 (EOT for Completion) in Red, Yellow and Silver Books.
Contractor is entitled to EOT under 8.5 (Delays Caused by Authorities) in Red, Yellow and Silver
Books.
Contractor is entitled to EOT under 8.9 (Consequences of Suspension) in Red, Yellow and Silver
Books.
Contractor is entitled to EOT under 10.3 (Interferences with Tests on Completion) in Red, Yellow
and Silver Books.
Contractor is entitled to EOT under 13.7 (Adjustments for Changes in Legislation) in Red, Yellow
and Silver Books.
Contractor is entitled to EOT under 16.1 (Contractor's Entitlement to Suspend Work) in Red, Yellow
and Silver Books.
Contractor is entitled to EOT in the consequences of war, hostilities (whether war be declared or
not),invasion, act of foreign enemies in Red, Yellow and Silver Books.
Contractor is entitled to EOT in the consequences of rebellion, terrorism, revolution, insurrection,
military or usurped power or civil war within the country in Red, Yellow and Silver Books.
Contractor is entitled to EOT in the consequences of the damages resulted by riot, commotion or
disorder within the Country by persons other than the Contractor's Personnel and other employees of
the Contractor and Subcontractors in Red, Yellow and Silver Books.
Contractor is entitled to EOT in the consequences of the damages resulted by munitions of war,
explosive materials, ionising radiation or contamination by radio-activity, within the Country except
as may be attributable to the Contractor's use of such munitions, explosives, radiation or radio-
activity in Red, Yellow and Silver Books.
Contractor is entitled to EOT in the damages consisting of pressure waves caused by aircraft or other
aerial devices travelling at sonic or supersonic speeds in Red, Yellow and Silver B.
Contractor is entitled to EOT in the damages consisting of use or Contractor can not claim EOT
occupation by the Employer of any part of the Permanent Works in Silver Book.
except as may be specified in the Contract.
Contractor is entitled to EOT in the damages that are consisting of Contractor can not claim EOT
design of any part of the Works by the Employer's Personnel or in Silver Book.
by others for whom the Employer is responsible.
Contractor is entitled to EOT as a result of any operation of the Contractor can not claim EOT
forces of nature which is Unforeseeable or against which an in Silver Book.
experienced contractor could not reasonably have been expected
to have taken adequate preventative precautions.
Contractor is entitled to EOT under 19.4 (Consequences of Force Majeure) in Red, Yellow and
Silver Books.
3
ACE2014
3 Additional payment in FIDIC
According to Erdem (2009), “even though an EOT and an additional payment are most often granted together,
always thinking of these relevant rights together may lead to mistakes. Granting the contractor an EOT does not
automatically mean the right to additional payment. Conversely, in cases when the work is completed on time
without any time extension, the right to additional payment may be entitled”. An analysis of the situations which
the contractor is entitled to additional payment in FIDIC books is given in Table 2.
Table 2. Analysis of situations which the contractor is entitled to additional payment in FIDIC books.
Situations which the Contractor is
entitled to additional payment
1 Incurring cost as a result
Engineer's delay in issuing
Drawings or Instructions
2 Errors in the Employer's Requirements
3 Incurring cost as a result Employer's
delay in handing over the Site to the
Contractor
4 Incurring cost as a result any errors in
items of reference for the correct
positioning of all parts of the Works,
which are provided by the Employer
5 Appearance of Unforeseeable Physical
Conditions
6 Finding Fossil in the Site
7 Employer/Engineer's claim for
additional tests and test results being
in accordance of with the
Specifications
8 Engineer/Employer's suspending or
holding the Works
9 Employer's taking over and/or using a
part of the Works, other than such use
as is specified in the Contract or
agreed by the Contractor
Red Yellow (Plant and Silver
(Construction)Book Design Build) Book (EPC/Turnkey) Book
Contractor is entitled to Employer's delay of Drawings is not a matter of
additional payment under discussion due to the fact that Design is executed by the
1.9 (Delayed Drawings or Contractor in both Yellow and Silver Books.
Instructions)
N/A: In Red Book beyond In Yellow Book, In Silver Book, Errors in
Employer's Requirements, Contractor is entitled to Employer's Requirements
Employer prepares the additional payment under are in Contractor's
whole project and is 1.9 (Errors in Employer's liability and Contractor
responsible for all errors Requirements) cannot claim additional
in the projects. payment.
Contractor is entitled to additional payment under 2.1 Right of Access to the Site in
Red, Yellow and Silver Books.
Contractor is entitled to additional payment under 4.7 In Silver Book,
(Setting Out) Contractor shall be
responsible for the correct
positioning of all parts of
the Work. Contractor
cannot claim additional
payment for the costs that
are caused by the errors in
specified items of
reference.
Contractor is entitled to additional payment under 4.12 In Silver Book, sub clause
(Unforeseeable Physical Conditions) 4.12 is titled as
''Unforeseeable
Difficulties''. By signing
the Contract, the
Contractor accepts total
responsibility for having
foreseen all difficulties
and the Contract Price
shall not be adjusted to
take account of any
unforeseen difficulties.
Contractor is entitled to additional payment under 4.24 (Fossils) in Red, Yellow and
Silver Books.
Contractor is entitled to additional payment under 7.4 (Testing) in Red, Yellow and
Silver Books.
Contractor is entitled to additional payment under 8.9 (Consequences of Suspension)
in Red, Yellow and Silver Books.
Contractor is entitled to additional payment under 10.2 (Taking Over of Parts of the
Works) in Red, Yellow and Silver Books.
If the Contractor incurs Cost as a result of the Employer "Parts of the Works shall
taking over and/or using a part of the Works, other than not be used by the
such use as is specified in the Contract or agreed by the Employer, except as may
Contractor, the Contractor shall (i) give notice to the be stated in the Contract
Engineer and (ii) be entitled subject to Sub-Clause 20.1 or as may be agreed by
[Contractor‟s Claims] to payment of any such Cost plus both Parties." In Silver
reasonable profit, which shall be included in the Book, it is not stated
Contract Price. clearly as to whether the
Contractor is entitled to
additional payment or not.
4

10 Cost as a result of a delay from
carrying out the Tests on Completion
by a cause for which the Employer is
responsible
11 The cost of the search, if the
Contractor search for the cause of any
defect, under the direction of the
Employer and is understood that the
defect is not caused by the Contractor
12 Incurring cost as a result delays in
tests, caused by the employer
13 The cost as a result omissions of any
works as part of a variation
14 Incurring cost as a result of any
unreasonable delay by the Employer
in permitting access to the Works or
Plant by the Contractor, to investigate
the causes of a failure to pass a Test
after Completion
15 Changes related to the Contractor's
proposal within 'Value Engineering'
16 Incurring cost as a result of Changes
in Legislation or in current Laws of
the Country after the Base Date
17 Incurring cost as a result of
suspending work (or reducing the rate
of the work) which is caused by the
delayed payments of the Employer
18 Costs incurred during Contractor‟s
rectifying the damage existing as a
result of the situations listed in Sub-
Clause 17.3 (Employer‟s Risks)
19 Costs incurred as a result of Force
Majeure defined in Sub -Clause 19.1
and notified by Contractor
D. Ilter, S. Alp, V. Akturk, B. Yagci
Contractor is entitled to additional payment under 10.3 (Interferences with Tests on
Completion) in Red, Yellow and Silver Books.
Contractor is entitled to additional payment under 11.8 (Contractor to Search) in Red,
Yellow and Silver Books.
In Red Book, this clause In Yellow and Silver Books, Contractor is entitled to
is titled Method of additional payment under 12.2 (Delayed Tests)
Measurement and does
not refer to any additional
payment.
Contractor is entitled to Sub Clause 12.4 is related to another subject.
additional payment under
12.4 (Omissions)
Sub Clause 12.4 is related Contractor is entitled to additional payment under 12.4
to another subject. (Failure to Pass Tests After Completion)
According to Sub-Clause There is not any additional payment because of the
13.2 (Value Engineering) design is in responsibility of the Contractor.
Contract Price can be
arranged in consequence
of changes of design.
Contractor is entitled to additional payment under 13.7 (Adjustments for Changes in
Legislation) in Red, Yellow and Silver Books.
Contractor is entitled to additional payment under 16.1 (Contractor's Entitlement to
Suspend Work) in Red, Yellow and Silver Books.
Contractor is entitled to additional payment in the consequences of war, hostilities
(whether war be declared or not), invasion, act of foreign enemies.
Contractor is entitled to additional payment in the consequences of rebellion,
terrorism, revolution, insurrection, military or usurped power or civil war within the
country.
Contractor is entitled to additional payment in the consequences of the damages
resulted by riot, commotion or disorder within the Country by persons other than the
Contractor's Personnel and other employees of the Contractor and Subcontractors.
Contractor is entitled to additional payment in the consequences of the damages
resulted by munitions of war, explosive materials, ionizing radiation or contamination
by radio-activity, within the Country except as may be attributable to the Contractor's
use of such munitions, explosives, radiation or radio-activity
Contractor is entitled to additional payment in the damages consisting of pressure
waves caused by aircraft or other aerial devices travelling at sonic or supersonic
speeds.
Contractor is entitled to additional payment in the Contractor cannot claim
damages consisting of use or occupation by the additional payment in
Employer of any part of the Permanent Works except as Silver Book.
may be specified in the Contract.
Contractor is entitled to additional payment in the Contractor cannot claim
damages that is consisting of design of any part of the additional payment in
Works by the Employer's Personnel or by others for Silver Book.
whom the Employer is responsible.
Contractor is entitled to additional payment as a result Contractor cannot claim
of any operation of the forces of nature which is additional payment in
Unforeseeable or against which an experienced Silver Book.
contractor could not reasonably have been expected to
have taken adequate preventative precautions.
Contractor is entitled to additional payment under 19.4 (Consequences of Force
Majeure) ) in Red, Yellow and Silver Books.
5
ACE2014

4 Discussions

As stated by Erdem (2009) although the main responsibility of a contractor is the accomplishment of the work
that is the subject of the contract, delays may cause extra direct as well as indirect costs (damages) for all parties,
and may even cause a project to become unfeasible. The rights and responsibilities of the parties regarding these
damages arising from delays are regulated in the construction contracts. FIDIC offers a detailed system of
entitlement for EOT, which differs vastly according to the risk allocation between the parties depending on the
contract type used. Although timely completion of the project is in the benefit of both the contactor and the
employer, an important portion of the construction projects are completed with delays. At this point, it becomes
important which party causes this delay and which party suffers the consequences of delayed completion. If the
conditions listed in Table 1 occur, an EOT may be granted to the contractor, which is added to the time agreed in
the contract. At the end of the revised contract period, the employer is entitled to charge the contractor for
damages resulting of the delays, as delays caused by the employer is already taken out of the equation. Thomas
(2001) also argues that EOT provision is inserted in the contract for the benefit of both the employer as well as
the contractor because without such a provision, once the employer had caused delay, the contractor would no
longer be bound to complete the works on time and the employer would no longer be able to rely on the
liquidated damages clauses.

Another benefit of EOT and additional payment provisions and transfer of controlled risks to the employer is
reduction in the contract price. If the contractor is held liable for damages for every type of delay and costs
incurred, contractors have to increase the mark up value in their bids to cover all such risks. Table 1 and Table 2
show the allocation of risks and responsibilities in various situations which the contractor is entitled to EOT
and/or additional payment in at least one type of the FIDIC contracts. The Red Book allocates most of the risk to
the employer in these situations, and entitlement to EOT and additional payment for the contractor is more
common. In the Yellow and Silver Books, however, the risk is transferred to the contractor incrementally and
entitlement options decrease significantly. Contractors have to be extra careful in the situations with changing
allocation of risk and entitlement according to the contract type.

5 Conclusions
This paper presents and compares the entitlement of the contractor for extension of time and additional payment
in the most frequently used FIDIC contract types, namely the Red (Construction), Yellow (Plant and Design
Build) and Silver (EPC/Turnkey) contracts. Results reveal the importance of the contract type in allocation of
risks between the employer and the contractor. While the employer is responsible for most of the high risk
contractual situations in the Red Book and the contractor is entitled to extension of time and additional payment
in majority of these situations, in Yellow Book some and in Silver Book most of these responsibilities are
transferred to the contractor, which results in the lack of entitlement of the contractor to extension of time or
additional payment. Efficient administration of contracts and successful management of time and money in
construction projects is only possible with being aware of these critical situations prone to disputes. This paper
will help contractors, consultants and public agencies better understand the fundamental principles governing
FIDIC contracts and protect their contractual rights in the construction projects.

References
Erdem, H. E. (2009). Türk Hukuku ve FIDIC Kapsamında Ek Süre. http://www.erdem-erdem.com/articles/turk-
hukuku-ve-fidic-kapsaminda-ek-sure/ (last access on 10.05.2014)
Huse, J.A. (1997). Understanding and Negotiating Turnkey Contracts. Thompson Reuters Limited, London.
Ilter,D. (2012). Identification of the Relations between Dispute Factors and Dispute Categories in Construction
Projects. International Journal of Law in the Built Environment. Vol. 4, pp. 45-59.
Ilter, D. and Alpkökin, P. (2012). Türk İnşaat Sektöründe FIDIC Sözleşmelerinin Kullanımını Etkileyen
Faktörler. İkinci Proje ve Yapım Yönetimi Kongresi, PYYK 2012, September 12-16, pp. 295-307, Izmir,
Turkey.
Ndekugri, I., Chapman, P., Smith, N. and Hughes, W. (2014). Best Practice in the Training, Appointmrnt, and
Remuneration of Memebers of Dispute Boards for Large Infrastructure Projects. Journal of Management in
Engineering. Vol. 30, pp. 185-193.
Seifert, B.M. (2005). International Construction Dispute Adjudication under International Federation of
Consulting Engineers Conditions of Contract and the Dispute Adjudication Board. Journal of Professional
Issues in Engineering Education and Practice Vol. 131, pp. 149-157.
Thomas, R. (2001). Construction Contract Claims. Palgrave. New York.