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FIDIC FIDIC FIDIC FIDIC


10 December 2007

FIDIC FIDIC FIDIC FIDIC FIDIC FIDIC FIDIC

Federation Internationale des Ingenieurs Counseils Federation Internationale Course Contractual Awareness des Ingenieurs Counseils

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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. 2. 3. 4. 5. 6. 7. 8. 9. The Agreement; Form of Tender and Attachments; Special Conditions of Contract; General Conditions of Contract; Method of Measurement; Bill of Quantities; Drawings; Specifications; Correspondences.

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ORDER OF PRIORITY
1. In case of discrepancy between several documents forming part of the Contract Document, an order of priority should be used. 2. Order of priority is set by the Employer. 3. Typical order of priority:
1. 2. 3. 4. 5. 6. 7. 8. The Agreement; Letter of Award; Form of Tender; Special Conditions of Contract; General Conditions of Contract; Specification; Drawings; 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, but complimentary.

PT Decorient Indonesia

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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.

PT Decorient Indonesia

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STANDARD FORMS OF GENERAL CONDITIONS


1. 2. 3. 4. 5. 6. FIDIC (Federation Internationale des Ingenieurs Counseils); JCT (Joint Contracts Tribunal); ICE (Institution of Civil Engineers); SIA (Singapore Institute of Architect); AIA (American Institute of Architect); Standard Form for Use in Hongkong.

PT Decorient Indonesia

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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 independent consulting 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 USE OF FIDIC GCC


Projects with loan from the World Bank. Private funded building projects in Indonesia where the QS is DLS, EC Harris, Korra.

PT Decorient Indonesia

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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
Ambiguity or discrepancy of contract document. Delay issue of drawing or instruction from the Employer. Delay submission of Contractors Documents. 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. 1. 2. 3. 4.

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RISK INVENTORY
Employers delay in giving right of access to the Site. Non performance of Contractors subs. Interrelationship with other parties in the Project. Employer error in giving points of reference or bench marks. 10. Contractors failure to collect or interpret Site Data. 11. Unforeseeable Physical condition. 6. 7. 8. 9.

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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.

PT Decorient Indonesia

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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 a Variation order.

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


The Employer must provide drawing or instruction within reasonable time to enable the Contractor to proceed with the Works without interruption. If drawing or instruction are given late and disrupt the Works, the Contractor can request additional 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 allowed reasonable 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 after that, 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 is responsible 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 ALLOCATION
3. 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 other permit 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 cost reduction, 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 unexplained cause 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

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