FIDIC Contracts

The FIDIC contract is the most popular form found among inter­national projects. FIDIC is the abbreviation for "Federation inter­national des ingenieurs conseils," the "International Federation of Consulting Engineers.") The FIDIC union comprises assem­blies of consulting engineers in different countries, established in 1913 through the participation of three European societies, two architects of the French Society of Consultant Engineers (CICF), the Swiss architects consultant engineers (ASIC) and the Belgian Society of Consultant Engineers (CICB). The first conference was held in 1914 in the Swiss capital city of Berne. The consul­tant engineer has been defined in the conference as "the engineer who holds the scientific and technological knowledge and profes­sional and scientific expertise, and who practiced law in his own name independent of any commercial enterprise or government for the client and does not receive any money except from his agent." FIDIC’s operations were suspended for the duration of World War II, but were re-organized in the 1950s and ’60s. FIDIC won international attention, strengthened its relations with the United Nations and World Bank, and penetrated the engineering contract activities of companies beyond Europe such as Japan, America, and some countries of the Third World. Its membership today includes about 65 associations of consulting engineers from around the world, including three Arab countries, Egypt, Tunisia and Morocco.

The Secretariat of the FIDIC is headquartered in Lausanne, Switzerland. From the perspective of the present work, one of its most important activities is its maintenance of contractual standards for international projects. These are encapsulated in a number of volumes distinguished by covers of different colors. A volume with the red cover documents civil engineering services contracts between employer and contractor. Another volume with a yellow cover documents the contract between the owner and the contractor for electrical and mechanical comprehensive installation. The Orange Book covers contracts for turnkey design. The White

Paper presents the standard contractual terms between employer and the consultant engineer.

FIDIC published the first edition of its volume on general condi­tions for the implementation civil construction work in 1957. Some items were added for the work of dredging in the second edition, which was published in 1969 and 1973. The review of the conditions was set forth in the contract with the World Bank and European Union contractors. After this review, the World Bank approved the use of the terms of this contract in its own projects around the world.

The 1996 edition of FIDIC’s standard volume about contracts involving an owner, consulting engineers and contractors sets forth the following outline of contract drafting issues in its Table of Contents as follows:

Contents

Part I – General Conditions Definitions and Interpretations

1- 1 Definitions

1-2 Headings and marginal notes

1-3 Interpretation

1-4 Singular and plural

1- 5 Notices, consents, approvals, certificates and determination Engineer and Engineer’s Representative

2- 1 Duties of the engineer and authority 2-2 Representative of the engineer

2-3 The engineer’s authority to delegate 2-4 The appointment of assistant 2-5 Written instructions

2- 6 Engineer to act impartially

Assignment and Subcontracting

3- 1 Assignment of contract

4- 1 Subcontracting

4- 2 Assignment of subcontractor’s obligation

Contract Documents

5- 1 Language and law

5- 2 Priority of contract documents

6- 1 Custody and supply of drawings and documents

6- 2 One copy of drawings to be kept on site

6-3 Disruption of progress (delay) 6-4 Delays and the cost of delay of drawings

6- 5 Failure of the contractor to submit drawings

7- 1 Supplementary drawings and instructions

7- 2 Permanent works designed contractor

7- 3 Responsibility unaffected by approvals

General Obligations

8- 1 Contractor’s general responsibilities

8- 2 Site operations and methods of construction

9- 1 Contract agreement

10- 1 Performance security

10-2 Period of validity of performance security

10- 3 Claims under the performance security

11- 1 Inspection of site

12- 1 Adverse physical obstructions or conditions

13- 1 Carry out the works in accordance with the contract

14- 1 Program to be submitted 14-2 Revised program

14-3 Submission of cash flow estimates

14- 4 Contractor nor relived of his duties or responsibilities

15- 1 Contractor’s superintendence

16- 1 Contractor’s employees

16- 2 Engineer at liberty to object

17- 1 Setting-out

18- 1 Borings and exploratory excavation

19- 1 Safety and security and protection of the environment

19- 2 Responsibilities of the employer

20- 1 Care of work

20- 2 Responsibility to rectify loss and damage

20- 3 Loss or damage arising from risk employer

20- 4 Employees risk

21- 1 Insurance of works and the contractor equipment

21- 3 Liability for the amounts not recovered

21- 4 Exclusions

22- 1 Damage to persons and property

22- 2 Exceptions

22- 3 Indemnity by the employer

23- 1 Third party insurance (including the employe)7s property)

23- 2 Minimum value for insurance

23- 3 Cross liabilities

24- 1 Accident or injuries to workmen

24- 2 Insurance against accidents to workers

25- 1 Evidence and terms of insurances

25- 2 Adequacy of insurance

25- 3 Remedy on contractors failure to insure

26- 1 Compliance with statues, regulations

27- 1 Fossils

28- 1 Patent rights

28- 2 Royalties

29- 1 Interference with traffic and adjoining properties

30- 1 Avoidance of damage to roads

30-2 Transport of equipment by the contractor or temporary works 30-3 Transport of materials or plant

30- 4 Waterborne traffic

31- 1 Opportunities for other contractors

31- 2 Facilities for other contractors

32- 1 The contractor to keep site clear

33- 1 Clearance of site on completion

Labor

34- 1 Engagement staff and workers

35- 1 Returns of labor and the contractor equipment

Materials, Plant, and Workmanship

36- 1 Quality of materials, plant, and workmanship

36- 2 Cost of the samples

36-3 Cost of tests

36-4 Cost of tests not provided for

36- 5 Engineer’s determination where tests not provided for

37- 1 Inspection of operations

37- 2 Inspection and testing 37-3 Inspection and test dates 37-4 Rejection

37- 5 Independent inspection

38- 1 Examination of work before covering up

38- 2 Uncovering and making opening

39- 1 Removal of improper work materials or plant

39- 2 Default of contractor in compliance

Suspension

40- 1 Suspension of work

40- 2 Engineers determination following suspension 40-3 Suspension lasting more than 84 days

Commencement and Delay

41- 1 Commencement of works

42- 1 Possession of site and access thereto 42-2 Failure to give possession

42- 3 Rights of roads and facilities

43- 1 Time for completion

44- 1 Extension of time to the end the project

44-2 Contractor to provide notifications and detailed particulars

44- 3 Interim determination of extension

45- 1 Restrictions on working hours

46- 1 Rate of progress

47- 1 Liquidated damages for delay

47- 2 Reduction of liquidated damage

48- 1 Taking over certificate

48- 2 Taking over of sections or parts 48-3 Substantial completion of parts

48- 4 Surfaces requiring reinstatement

Liability for Defects

49- 1 Defects liability period

49- 2 Completion of the outstanding work and remedying defects

49-3 Costs of remedying defects

49- 4 Contractor’s failure to carry out instructions

50- 1 Contractors to search

Alteration, Additions, and Omissions

51- 1 Variations

51- 2 Instructions for variation

52- 1 Valuation of variation

52- 2 Power of engineer to fix rate

52- 3 Variations exceeding 15%

52- 4 Workday

Procedure for Claims

53- 1 Notice of claims

53- 2 Contemporary records

53- 3 Substantiation of claims

53- 4 Failure to comply 53-5 Payment of claims

Contractor’s Equipment, Materials, and Temporary Works

54- 1 Contractor equipment, temporary works, and materials exclusive use for the works

54- 2 Employer not liable for damage

54- 3 Customs clearance

54- 4 Re-export of contractor equipment 54-5 Conditions of hire of contractors equipment 54-6 Costs for the proposed of clause 63 54-7 Incorporation of clause in the subcontracts

54- 8 Approval of materials not applied

Measurements

55- 1 Quantities

56- 1 Works to be measured

57- 1 Methods of measurement

57- 2 Break down of lump sum items

Provisional Sums

58- 1 Definition of provisional sums

58- 2 Use of provisional sums

58- 3 Production of voucher

Nominated Subcontractors

59- 1 Definition of nominated subcontractor

59- 2 Nominated sub-contractor objection to nomination

59- 3 Design requirements to be expressly stated

59-4 Payments to payment to be nominated to subcontractors

59- 5 Certification of payments to be nominated to subcontractors

Certificates and Payments

60- 1 Monthly statements

60- 2 Monthly payments

60- 3 Payment of retention money

60-4 Correction of certificates

60-5 Statement at completion

60-6 Final statement

60-7 Discharge

60-8 The final certificate

60-9 Cessation of employer’s liability

60- 10 Time for payment

61- 1 Approval only by defects liability certificate

62- 1 Defects liability certificate

62- 2 Unfulfilled obligation

Remedies

63- 1 Default of the contractors

63-2 Valuation at date of termination 63-3 Payment after termination

63- 4 Waive the agreement gains

64- 1 Urgent remedial work

Special Risks

65- 1 No liability for special risks 65-2 Special Risks

65-3 Damage to works by special risks 65-4 Projectile, missile

65-5 Increased costs arising from special risks 65-6 Outbreak of war

65-7 Removal of contractors equipment on termination

65- 8 Payment if contract is terminated

Release from Performance

66- 1 Payment in event of release from performance Settlement of Disputes

67- 1 Engineer’s decision

67- 2 Amicable settlement

67- 3 Arbitration

67- 4 Failure to comply with engineer’s decision Notices

68- 1 Notice to contractor

68- 2 Notice to employer and engineer

68- 3 Change of address

Default of Employer

69- 1 Default of employer

69- 2 Removal of contractor’s equipment

69- 3 Payments on termination 69-4 Contractor’s entitlement

69- 5 Resumption of work

Changes in Cost Legislation

70- 1 Increase or decrease of cost

70- 2 Subsequent legislation

Currency and Rates of Exchange

71- 1 Currency restrictions

72- 1 Rates of exchange 72-2 Currency proportions

72-3 Currencies of payment for provisional sums