FIDIC Contracts

Training to Volker Stevin (1 October 2015)

Mark Castell Regional Managing Director

mark.castell@drivertrett.com
www.drivertrett.com
 What we do

Our dispute and advisory team, delivering high-level

commercial and contract management, procurement
advice, planning and programming services, dispute
resolution support and training and seminars.

Our project controls team, delivering commercial

management, quantity surveying, and planning services
throughout the project lifecycle.

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delay, and technical experts for litigation and provision of
internationally experienced adjudicators, arbitrators, and
mediators.

Provision of project management alongside transaction

advisory services to clients for the delivery of concession
projects using PFI, PPP and DBFO procurement options.
GROUP OVERVIEW

Driver Group is a global construction consultancy, providing

construction and engineering focused services since 1978

Stock exchange listed plc. AIM (2005)

Driver Trett established in 2012 when Trett Consulting became

part of the Driver Group.

Market leader in expert witness, planning, commercial and

disputes.

Nearly 500 global staff. >40m turnover.

Network of offices across Europe, Africa,

Americas, Asia Pacific, and the Middle East.

Global reach with projects undertaken

worldwide.
DRIVER GLOBAL PRESENCE
Some questions to start with
 Q: What is common to every project?

A: Contracts, whether with a client, a

supplier or a subcontractor.

Q: What is a Contract?

A: Simply speaking, it is an agreement.

Q: What is the objective of a contract?

A: To define the relationship and how the

parties act the rules of the game.
6
Q: When should the management of
contracts begin?

A: At the conception of a contract.

Q: When should the management of

contracts end?

A: At the finalisation of all matters.

7
Contracts involve a process from conception to grave

Understanding the clients needs and the risks involved

Making an offer, or tender
Forming a legal agreement
Understanding the parties obligations under the agreement
Monitoring the parties actions against these obligations
Identifying any variance
Invoking the terms of the contract according to the
circumstances
Issuing and / or receiving requests for payment and additional
time
Agreeing financial and other matters

8
Q: Is it true (or fair) to say that a bad
contract is the fault of those involved
at the tender stage?
A: No. Why?

Q: Is it true (or fair) to say that an

unprofitable project is the fault of those
involved at the execution stage?

A: No. Why?

9 9
Q: Who is involved in managing a contract?

Revised Q: Who should be involved in

managing a contract?

A: Everyone within the business...

10
 FIDIC Contracts Workshop Objectives

The objective of today is to increase your awareness and

understanding of:

The philosophy of the FIDIC standard forms of contract and

what their use means.
The broad differences between the various FIDIC standard
forms of contract and the particularities of the Yellow Book.
The obligations and liabilities the parties take on when using
the Yellow Book.
Typical revisions made to the Yellow Book by Employers and
the consequences of them.
The practical implications of using the Yellow Book in both
tender and execution stages. 11
Introduction to FIDIC

12
 FIDIC
(Fdration Internationale des
Ingnieurs-Conseils)
Federation of national associations of consulting engineers
Based in Geneva
Founded in 1913 with original founding members from France,
Belgium and Switzerland
UK joined 1949, USA joined 1958
Seen as international from 1970s and members from about 70
counties
Amongst other things, FIDIC produces Standard Forms of
Contract
General principles of FIDIC Standard Forms
of Contract - 1

Often known by their colour i.e. red, yellow, silver, blue.

Historically based on Anglo Saxon type contracts. So, more

reliance on documentation.

Drafted for general use on an international basis. So,

applicable law and ruling language needs to be stated.

Modifications may be required in some jurisdictions. These

should be included as revisions.

Drafted for use on construction and engineering projects but

often used for offshore projects. Revisions are therefore
needed for this too.
General principles of FIDIC Standard Forms
of Contract - 2

FIDIC standard forms are generally accepted to be well-written

and capable of being understood by users.

They recognise there will be problems and potential for conflict

and dispute on projects but set out processes to resolve them
including:
Placing a significant administrative burden on the parties
and;
Requiring the parties to deal with issues at the time.
 The Current FIDIC
Standard Forms of Contract

16
 Current FIDIC Main Standard Forms of Contract

Blue (2006) Green (1999) Red (1999) Pink (2010)

Yellow (1999) Silver (1999) Gold (2008)

Current FIDIC Main Standard Forms of Contract

Blue book. Red book.

Dredgers Construction
Contract Contract

Green book. Pink book.

Short Form MDB
Construction
Contract
Current FIDIC Main Standard Forms of Contract

Yellow book.
Plant and
Design-Build
Contract

Gold book.
DBO Contract

Silver book.
EPC/Turnkey
Contract
When do you use which standard form?

For dredging & reclamation works, the Blue book

Otherwise, which contract should be used?
STRAIGHTFORWARD EMPLOYER
PROJECT ? DESIGN ?
no yes
< $500K or < 6 months
no
yes
CONTRACTOR DESIGN
All types of project with
potential for high unforeseen
no risks
yes
Little employer involvement Ongoing
no major unforeseen risks operation no
yes
yes
Overview of FIDIC
Red and Yellow
Books

22
An overview - 1

FIDIC 20 clauses in Particular Appendix to Tenderers issued

Red book the General Conditions Tender contains with
Construction Conditions anticipated project specific Specification,
Contract data Drawings &
Schedules
(includes BoQ);
and site data

FIDIC 20 clauses in Particular Appendix to Tenderers issued

Yellow book the General Conditions Tender contains with Employers
Design build Conditions anticipated project specific Requirements
Contract data and site data
An overview - 2

FIDIC Generally no Generally re- Contractor responsible

Red book Contractor design measurable for completing Works
Construction responsibility in Time for
Contract Completion. Failure
means delay damages
paid

FIDIC Design responsibility Generally lump sum Contractor responsible

Yellow book (and fitness for for completing Works
Design build purpose) with in Time for Completion
Contract Contractor including Tests on
Completion. Failure
means delay damages
paid
So, in summary:

Red book The Contractor constructs the Works in accordance with a

Construction Contract design provided by the Employer. However, the Works
may include some elements of Contractor designed civil,
mechanical, electrical and / or construction works.

Yellow book The Contractor designs and provides, in accordance with

Design build Contract the Employers Requirements, Works, which may be any
combination of civil, mechanical, electrical and / or
construction works.
An overview - 4

FIDIC Responsibility for Contractor entitled Contractor entitled

Red book unforeseen to extension of to recovery of
Construction conditions with time for Employer- additional costs for
Contract Employer risk delays Employer breaches
or risk events

FIDIC Responsibility for Contractor entitled Contractor entitled

Yellow book unforeseen to extension of to recovery of
Design build conditions with time for Employer- additional costs for
Contract Employer risk delays Employer breaches
or risk events
An overview - 4

FIDIC Employer Engineer can Engineer has Engineer can

Red book appoints delegate duties authority to vary the Works
Construction Engineer to act and authority to instruct the without
Contract on its behalf assistants Contractor, and agreement of
Contractor shall effects.
comply with
instructions.

FIDIC Employer Engineer can Engineer has Engineer can

Yellow book appoints delegate duties authority to vary the Works
Design build Engineer to act and authority to instruct the without
Contract on its behalf assistants Contractor, and agreement of
Contractor shall effects.
comply with
instructions.
An overview - 5

FIDIC Contractor Contractor Contractor and / Contractor

Red book responsible for responsible for or Employer to indemnifies
Construction care of the safety of take out Employer
Contract Works operations and insurance against claims,
security of the policies damages and
Site losses

FIDIC Contractor Contractor Contractor and / Contractor

Yellow book responsible for responsible for or Employer to indemnifies
Design build care of the safety of take out Employer
Contract Works operations and insurance against claims,
security of the policies damages and
Site losses
Red Book General Conditions

Clause 1 - General Provisions

Clauses 2 to 4 The Employer, the Engineer and the Contractor
Clause 5 Nominated Subcontractors
Clauses 6 and 7 - Staff, labour, plant, materials and workmanship
Clause 8 Commencement, delays and suspension
Clauses 9 and 10 Tests on Completion and Employers Taking Over
Clause 11 - Defects Liability
Clause 12 Measurement and Evaluation
Clause 13 Variations and Adjustments
Clause 14 Contract Price and Payment
Clauses 15 and 16 Termination and suspension
Clauses 17 to 19 Risk, Insurance and Force Majeure
Clause 20 Claims, Disputes and Arbitration 29
Yellow Book General Conditions

Clause 1 - General Provisions

Clauses 2 to 4 The Employer, the Engineer and the Contractor
Clause 5 Design
Clauses 6 and 7 - Staff, labour, plant, materials and workmanship
Clause 8 Commencement, delays and suspension
Clauses 9 and 10 Tests on Completion and Employers Taking Over
Clause 11 - Defects Liability
Clause 12 Tests after Completion
Clause 13 Variations and Adjustments
Clause 14 Contract Price and Payment
Clauses 15 and 16 Termination and suspension
Clauses 17 to 19 Risk, Insurance and Force Majeure
Clause 20 Claims, Disputes and Arbitration 30
Example Contract

31
Wikinger Offshore Wind Farm Conditions

Clause 1 - General Provisions

Clauses 2 to 4 The Employer, the Engineer and the Contractor
Clause 5 Design and Execution of the Works
Clauses 6 and 7 - Staff, labour, plant, materials and workmanship
Clause 8 Commencement, delays and suspension
Clauses 9 and 10 Tests on Completion and Employers Taking Over
Clause 11 - Defects Liability
Clause 12 Tests after Completion
Clause 13 Variations and Adjustments
Clause 14 Contract Price and Payment
Clauses 15 and 16 Termination and suspension
Clauses 17 to 19 Risk, Insurance and Force Majeure
Clause 20 Claims, Disputes and Arbitration
Clause 21 - Miscellaneous 32
The tender stage

Photograph credits to FreeDigitalPhoto.net & Grant Cochrane

Tender stage Yellow Book

Employer normally stipulates the General Conditions and

produces separate Particular Conditions setting out revisions.
Sometimes however, the Conditions are combined into one
document (as Wikinger Offshore Wind Farm).

What is the effect of this?

Appendix to Tender is usually used to contain project-specific

information.
Not used on Wikinger Offshore Wind Farm.

What is the effect of this?

Tender stage Yellow Book

Tenderers issued with Employers Requirements.

According to Clause 1.1.1.5, Employers Requirements must specify

(cannot imply) for each part of the works:
The purpose
The scope
The design
Other technical criteria

(Similar wording in sub-clause 1.1.42 for Wikinger Offshore Wind

Farm)
Importance of Employers Requirements

Contractor to design and construct the Works so they are fit for
the purposes for which the Works are intended as defined in
the Contract (sub-clause 4.1).
The obligation for fitness for purpose is more onerous that
designing with due skill and care
i.e. Suitability of end product versus design process
Responsibility for fitness for purpose cannot be passed to
anyone else or insured

Sub-clause 4.1 for Wikinger Offshore Wind Farm says:

The Contractor shall design (only to the extent explicitly laid down in Part
D.5.4 (Employers Requirements, Transport), Part D.5.5 (Employers
Requirements, Installation Works) and Part E.8 (Contractors Schedules,
Design Works)), execute and complete the Works in accordance with the
Contract and Good Industry Practice
Sub-clause 1.1.48 is definition of Good Industry Practice.
Errors in the Employers Requirements

Treatment of errors in the Employers Requirements provided

for by the experienced contractor test (sub-clause 5.1).
Should an experienced contractor exercising due care
found it pre submitting its tender?
Resolution could be as a Variation or a claim if deemed not.
Otherwise Contractor liability.

Sub-clause 5.1 for Wikinger Offshore Wind Farm is similar but

omits the period of time that differentiates between a Variation or
a claim.
Tender stage Yellow Book

Tenderers issued with Site Data.

Sub- clause 4.10 says:

The Employer shall have made available all relevant data in
its possession.
The Contractor shall be responsible for interpreting such data.
The Contractor to the extent which was practicable (taking
account of cost and time), shall be deemed to have obtained
all necessary information which may influence or affect the
Tender or Works.
The Contractor shall be deemed to have inspected and
examined the Site the above data and other available
information, and to have been satisfied
See also sub-clause 4.11 sufficiency of Accepted Contract Amount

Sub-clause 4.10 for Wikinger Offshore Wind Farm is revised.

Contractors offer

Yellow Book Letter of Tender

Contains statements including:

We accordingly offer to design, execute and complete the Works

and remedy any defects therein, in conformity with this
Tenderfor the lump sum of..

We agree to abide by this Tender until [] and it shall remain

binding upon us and may be accepted at any time before that
date.

If this offer is accepted, we will provide the specified Performance

Security, commence the Works ... and complete the Works
within the Time for Completion. We guarantee that the Works will
then conform with the Schedule of Guarantees.

Unless and until a formal Agreement is prepared and executed,

this Letter of Tender, together with your written acceptance
thereof, shall constitute a binding contract between us.
39
Formation of a Yellow Book contract

Letter of Acceptance signifies a contract has been entered into.

Contract Agreement to be put into place after contract entered

into if Letter of Acceptance used (sub-clause 1.6).
Otherwise, it signifies contract entered into.

There is no Letter of Acceptance for Wikinger Offshore Wind

Farm. Sub-clause 1.6 says that the Contract shall come into full
force and effect upon the signature of the Contract Agreement by
the Parties.
What happens post award
within Volker Stevin?

41
Do you?

Have a process for transferring knowledge internally; from

tender to execution personnel?
If so, what is discussed? Who is involved?

Do you review your contract to identify obligations and the

need for project-specific systems?
What issues need to be addressed?

Do you have a kick off meeting with the client

What is discussed?
What opportunities does this present?
Employer & Engineer

43
Employers role Yellow Book

Employer means a person named as Employer (sub-clause

1.1.2.2)
Employer has a limited role after contract is signed.
Gives Contractor access to Site and possession of it as
described in the Contract (sub-clause 2.1).
Provides assistance to Contractor for applications for
permits, licences etc (sub-clause 2.2).
Pays Contractor sums certified by Engineer (sub-clause
14.7).
Employer can make claims against the Contractor (sub-clause
2.5) and set-off amounts against payments.
For example, delay damages (sub-clause 8.7), failure to
pass Tests on Completion (sub-clause 9.4), failure to put in
place insurance (sub-clauses 18.1 and 18.2)
Employer appoints the Engineer (sub-clause 3.1).
Engineers role Yellow Book

Engineer means a person appointed by the Employer (sub-

clause 1.1.2.4)
Engineer appointed as representative of Employer acting after
contract is signed (sub-clause 3.1).
Except as otherwise stated in these conditions:

Whenever carrying out duties or exercising authority, specified in or

implied by the Contract, the Engineer shall be deemed to act for the
Employer.

Sub-Clause provides the exception

Whenever these Conditions provide that the Engineer shall proceed in
accordance with this Sub-Clause 3.5 to agree or determine any matter,
the Engineer shall consult with each Party in an endeavour to reach
agreement. If agreement is not achieved, the Engineer shall make a
fair determination in accordance with the Contract, taking due regard
of all relevant circumstances.
Engineers delegation Yellow Book

Engineer can delegate specific duties and authority to

assistants (sub-clause 3.2).

In the Wikinger Offshore Wind Farm contract, other persons

are defined:
Marine Warranty Surveyor (sub-clause 1.1.68)
Project Certification Agency (sub-clause 1.1.81)
On offshore projects, it is common to have an Employers
Representative on-board the vessel.

Do these persons have delegated duties and authority ?

Contractor

47
Some of the obligations Yellow Book

Contractor appoints Contractors Representative who is the

only person authorised to receive instructions (sub-clause 4.3).

Contractor shall comply with instructions in respect of the

Works given by the Engineer (sub-clause 3.3).

Contractor shall obtain consent to sub-contract works (sub-

clause 4.4):
Contractor shall not subcontract the whole of the Works.
shall be responsible for the acts and defaults of any Subcontractors as
if they were the acts and defaults of Contractor.
shall not be required to obtain consent for suppliers of Materials, or a
subcontract named in the Contract.
The prior consent of the Engineer shall be obtained to other proposed
Subcontractors.
shall give the Engineer not less than 28 days notice of the intended
date of commencement of each Subcontractors work
Some of the obligations Yellow Book

Communications shall be in writing, transmitted using specific

methods and to the addresses stated in Appendix to Tender.
Allowable electronic systems of transmission also stated in
Appendix to Tender (clause 1.3).

There is no Appendix to Tender for Wikinger Offshore Wind Farm.

Sub-clause 1.3 sets out the requirements:
Whilst emails can be used, some notices and communications
are required to also be delivered by hand or mail or courier.
All communications shall be marked Wikinger Offshore Wind
Farm/Foundation Installation Agreement
Addresses given for Employer, Engineer, Contractor and
Contractors Representative
Exercise

50
Exercise

Assuming a longer duration Yellow Book project, list:

The documents that the Contractor should expect to submit

within a period of say 28 days of Contract Award

The things that the Contractor should expect to receive from

the Employer and/or the Engineer within say 28 days of
Contract Award

51
Exercise - answers

The documents that the Contractor should expect to submit within a

period of say 28 days of Contract Award:

Sub-Clause 1.6 [Contract Agreement] says that the Employer and

Contractor shall enter into a Contract Agreement within 28 days of the
Contractor receiving the Letter of Acceptance.
Sub-Clause 4.2 [Performance Security] states that the Contractor shall
provide to the Employer Performance Security.
Sub-Clause 4.3 [Contractors Representative] provides for the Contractor to
appoint a Representative who will have the authority to act for the
Contractor (including issuing and receiving communications).
A detailed time programme (and separate report) under sub-clause 8.3
[Programme].
If Sub-Clause 14.4 [Schedule of Payments] applies and the Contract does
not contain a schedule of payments, the Contractor shall submit to the
Engineer within 42 days of the Commencement Date, non-binding
estimates of the expected payments during each quarterly period.
If Sub-Clause 14.2 [Advance Payment] applies, the Contractor shall provide
to the Employer an advance payment guarantee.
Sub-Clause 18.1 [General Requirements for Insurances] requires that the
relevant insuring Party shall provide to the other Party evidence that the
insurances have been effected, copies of policies and evidence of payment
of premiums; and give notice of such to the Engineer.
Exercise - answers

The things that the Contractor should expect to receive from the
Employer and/or his representative within say 28 days of Contract
Award:

Sub-Clause 1.6 [Contract Agreement] says that the Employer and

Contractor shall enter into a Contract Agreement within 28 days of the
Contractor receiving the Letter of Acceptance.
Sub-Clause 2.1 [Right of Access to Site] says that the Employer shall
give the Contractor right of access to, and possession of parts of the
Site as stated in the Appendix to Tender.
Sub-Clause 3.2 [Delegation by the Engineer] allows the Engineer to
assign duties and / or delegate authority to Assistants; this would
include authority to communicate with the Contractor on certain
matters.
Not less than 7 days notice of the Commencement Date (sub-clause
8.1).
If Sub-Clause 14.2 [Advance Payment] applies, the Employer shall pay
the advance payment in accordance with Sub-Clause 14.7 [Payment].
Sub-Clause 18.1 [General Requirements for Insurances] requires that
the relevant insuring Party shall provide to the other Party evidence
that the insurances have been effected, copies of policies and evidence
of payment of premiums; and give notice of such to the Engineer.
Design issues
Design

Procedure for the Engineer to review and / or approve

submitted documents (sub-clause 5.2).

Engineers criteria is whether proposals conform to the

contract or not
Review and / or approval removes no responsibility from
the Contractor
Time Issues

56
Time and planning

Contractor to commence Works on the Commencement Date

and complete within the Time for Completion (sub-clauses 8.1
and 8.2).

Contractor to issue a detailed programme (including method

statement and envisaged resources) under sub-clause 8.3
Engineer has a 21 day period to give notice whether it does
not comply with the contract
Otherwise, Contractor shall proceed in accordance with it.
Revised programmes to be submitted in various situations
Progress reports

Sub-clause 4.21 says that they shall be submitted monthly

until completion of all work
Comprehensive - shall include:
a) Charts & descriptions of progress for each stage
b) Photographs
c) Manufacture report
d) Contractors personnel & equipment
e) QA documents, test results etc
f) Notices of claims
g) Safety statistics
h) Comparisons planned versus actual progress, risks and
mitigation measures
58
Rate of progress 1

Sub- clause 8.6 says:

If, at any time:

a) Actual progress is too slow to complete within the Time for
Completion, and / or
b) Progress has fallen (or will fall) behind the current programme under
Sub-Clause 8.3

other than as a result of a cause listed in Sub-Clause 8.4 [Extension of

Time]

59
Rate of progress 2

then the Engineer may instruct the Contractor to submita revised

programme

Unless the Engineer notifies otherwise, the Contractor shall adopt these
revised methods, which may require increases in the working hours and /
or in the numbers of Contractors Personnel or Goods, at the risk and cost
of the Contractor

If these revised methods cause the Employer to incur additional costs, the
Contractor shall subject to Sub-Clause 2.5 [Employers Claims] pay these
costs to the Employer, in addition to delay damages (if any) under Sub-
Clause 8.7 below.

60
Valuation &
Payments
Contract Price and Payments

Clauses 14.1 and 14.2 refer

Contract Price is lump sum (option for remeasurement)
Any quantities are estimated but may not be measurable (see
particular conditions)
Any advance payment is subject to a guarantee and is progressively
reduced as works proceeds
First interim payment also subject to issue of Performance Security
Clause 14.3 Contractor submits Statement at end of stated period 6
copies in approved form and including supporting details (including
progress report)
Clause 14.4 - Schedule of payments may apply. Payments may be
adjusted for actual progress.

62
Payment Procedure

Clause 14.5 - Payment for plant and materials may apply certain
conditions attached
Clause 14.6 Engineer issues Interim Payment Certificate within 28
days of receipt of Statement
Certificate does not indicate acceptance or approval
Clause 14.7 Employer pays within 56 days of receipt of Statement
(different for advance payment)
Clause 14.8 - Contractor entitled to interest for late payments without
giving notice
Clause 16.1 Engineer failure to certify or Employer failure to pay also
gives rights for Contractor to slow down and / or suspend Works
(notice needed)

63
Payment Procedure

Clause 14.9 half retention release at issue of Taking Over certificate

and passing Tests on Completion (plus success in the Tests after
Completion if appropriate)
Clause 14.9 remainder of retention release at expiry of Defects
Notification Period unless still works to be done
Clause 14.10 Contractor issues Statement at Completion within 84
days of Taking Over certificate. Engineer certifies as Interim Payment
Certificate
Clause 14.11 Contractor submits draft final statement within 56 days
of receipt of Performance Certificate (issued under Clause 11.9 and
confirms Contractor has met all obligations and works accepted)
When agreed, Contractor issues Final Statement
Clause 14.12 At same time Contractor also issues discharge that
amount is in full and final settlement
Clause 14.13 Engineer issues Final Payment Certificate within 28
days of receipt of above
Clause 14.7 Employer pays within further 56 days
64
Variations
Generally

Only the Engineer (or delegated assistants) can vary the Works
(sub-clause 13.1).
Variations is a defined term and a change to the Employers
Requirements.
A Contractors proposal to be requested prior to an variation
being instructed (sub-clause 13.1)
Contractor shall comply with instructions from the Engineer
(sub-clause 3.3)
Contractor has limited rights to object to a variation, but
can be over ruled (sub-clause 13.1)
Contractor is entitled to recover the time and money effects of
a Variation
Adjustments to the Contract Price are to be agreed or
determined by the Engineer
Reasonable profit is to be included
Contractors Claims
Notice

Notice shall be issued by Contractor whenever it considers it to

be entitled to more time and / or money and within 28 days of
being aware (or should have been aware).

Notice in writing to the Engineer.

Must make the potential for a claim clear and state event
Failure to comply means a loss of rights to claim (sub-
clause 20.1).

Subsequent procedure for submission of any claims also

subject to timescales (sub-clause 20.1).
Procedure - Contractor

According to sub-clause 20.1, records shall be kept and

Engineer permitted to view
Fully detailed claim to be submitted within 42 days of any
event or circumstance that gives rise to entitlement including
full supporting particulars
Further claims to be submitted on a monthly basis if on-going
Late submission of details may prejudice Contractors position
Final submission within 28 days of end of effects

69
Procedure - Engineer

Engineer to respond with 42 days of submission

May request further particulars but must respond on principles
of claim
Interim payments allowed for amounts substantiated
Engineer to agree / fairly determine (clause 3.5)

DAB appointed to resolve disputes (sub-clause 20.2).

Entitlement

Claims can be submitted for:

Delayed drawings or instruction clause 1.9
Late access or possession clause 2.1
Setting out reference point errors clause 4.7
Adverse unforeseeable conditions clause 4.12
Extension of Time clause 8.4
Interference with tests clause 10.3
Variations clause 13.3
Change in law clause 13.7
Force Majeure clause 19.4

71
Completion and
Taking Over

72
Tests and Taking Over

Provision for Tests on Completion (clause 9) and Tests after

Completion (clause 12).
Contractor to have issued as-builts and O & M manuals (sub-clause
4.1) prior to Tests on Completion
Contractor gives not less than 21 days of notice of Tests on
Completion

Contractor may apply for Taking-Over Certificate (sub-clause 10.1)

Employer issues Taking Over Certificate to signify Works, a Section
or a part, are ready for taking over but are not necessarily
complete (sub-clauses 10.1 and 10.2).
Taking over deemed to have happened if Employer uses any
part of the Works
Upon Taking Over 1

Of the Works and Sections under sub-clause 10.1, they include:

Delay damages (sub-clause 8.7) may be levied by the Employer

for late completion
Amount as agreed between the parties and whether Employer
has suffered damage is not relevant
Subject to reduction for partial completion
Refers to sub-clause 2.5 (procedure)
Comprises Contractors entire liability for delay
Defects Notification period starts
Period for undertaking outstanding work and remedying
defects stated in the Appendix to Tender (sub-clause 11.1).

74
Upon Taking Over 2

Of the Works and Sections under sub-clause 10.1, they include:

Test after Completion, if required, start (sub-clause 12)

Engineers right to initiate Variations ceases (sub-clause 13.1)
Contractor entitled to receive part retention release (sub-clause
14.9)
Procedure for claiming interim payments changes (sub-clause
14.10)
Contractors responsibility for care of the Works ceases (sub-
clause 17.2)
Contractors requirement for certain insurances cease (sub-clause
18.2)

75
End of the Defects Notification

Performance Certificate issued at the end of Defects

Notification period and confirms Employer acceptance of the
Works (sub-clause 11.9)
Dispute resolution
Resolution of Disputes under Yellow Book

If not agreed, Engineer to fairly determination (cl. 3.5).

Any dispute can be referred to the procedure in cl. 20:

Adjudication by a Dispute Adjudication Board (DAB) in accordance with

the rules in the standard form
If any Party dissatisfied or decision not made when it should, Notice of
Dissatisfaction issued within 28 days
Arbitration in accordance with the Rules of Arbitration of the
International Chamber of Commerce (ICC)

78
Yellow Book typical sequence of dispute
events envisaged in clause 20

Parties present submissions to DAB Amicable settlement

<28d <84d <28d >56d

 FIDIC Contracts Workshop Objectives

The objective of today was to increase your awareness and

understanding of:

The philosophy of the FIDIC standard forms of contract and

what their use means.
The broad differences between the various FIDIC standard
forms of contract and the particularities of the Yellow Book.
The obligations and liabilities the parties take on when using
the Yellow Book.
Typical revisions made to the Yellow Book by Employers and
the consequences of them.
The practical implications of using the Yellow Book in both
tender and execution stages. 80
 Mark Castell
Regional Managing Director
mark.castell@drivertrett.com

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Photograph credits to FreeDigitalPhoto.net & David Castilo Dominici