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.
PT Decorient Indonesia
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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.
PT Decorient Indonesia
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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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PT Decorient Indonesia
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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.
PT Decorient Indonesia
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PT Decorient Indonesia
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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.
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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.
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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 .
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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.
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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.
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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.
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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.
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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.
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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.
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RISK ALLOCATION
24. Fluctuating exchange rate
Contractors risk as far as foreign currency expenses.
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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.
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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.
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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.
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