2015 Fidic Inkindo Bandung

PRACTICAL USE OF FIDIC CONDITIONS OF CONTRACT
Bandung, 2 -3 November 2015
Federation Internationale des Ingenieurs-Conseils (FIDIC)
Indonesian Centre for Arbitration and Alternative Dispute Resolution Sarwono Hardjomuljadi,
for Construction (BADAPSKI) Dr, Ir, MSC (Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb (Arb), ACPE.
sarwonohm2@yahoo.co.id; www.sarwonohm.com
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1 2 3
CONSTRUCTION CONSTRUCTION CONSTRUCTION
CONTRACT CLAIM DISPUTE
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………………we must also remember in those days it was common place to have employers
squeezing main contractors, main contractors squeezing subcontractors and suppliers and so on
down the line.
Justice of Supreme Court, Quentin Loh (2014), Singapore
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1
CONSTRUCTION
CONTRACT
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CONSTRUCTION CONTRACT
An agreement between two
or more parties creating Contract is a legally binding
obligations that are agreement formed when one
enforceable or otherwise CONTRACT party accepts an offer made
recogniseble at law. (Brian by another and which fulfills
Garner et al: Black’s Law the conditions. (Chow, Kok
Dictionary). Fong (2006): Construction
Contract Dictionary)
A variety of factors makes a

Contract is a legally binding construction contract different from
agreement. Agreement arises most other types of contracts. These
as a result of offer and include the length of the project, its
acceptance, but a number of complexity, its size and the fact that
other requirements must be the price agreed and the amount of
satisfied for an agreement to work done may change as it proceeds
be legally binding. (Martin and (John Adriaanse (2010):
Law (2006): Oxford Construction Contract Law)
Dictionary of Law)
Sarwono Hardjomuljadi,
Dr, Ir, MSC (Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb (Arb), ACPE.
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www.themegallery.com
Burgerliches Gesetzbuch (German Civil Code-BGB) dan

juga Verdingungsordung fur Bauleistungen
(Construction Contract Procedurses-VOB) , Kontrak
konstruksi merupakan suatu kontrak yang khusus yang CONTRACT
dikenal sebagai “Werkvertrag” . Perbedaan Werkvertrag
dengan kontrak yang lain adalah karena kontrak bukan
merupakan perjanjian sederhana yang merupakan
pertukaran antara barang dan uang, tetapi pihak
penyedia jasa harus memberikan layanan jasa berupa
“membuat sesuatu” sesuai dengan yang diperjanjikan
dengan kinerja yang akan dinilai sukses atau tidaknya
berdasarkan kriteria yang telah disepakati kedua belah
pihak sebelumnya. dan pihak pengguna jasa memberi
imbalan pembayaran untuk itu.
(Wolfgang Rosener, Gerhard Dorner (2005): An
Analysis of International Construction Contracts,.
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FIDIC Conditions of Contract
for Construction

for Plant and Design Build

for EPC/Turnkey Projects
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Sub-Clause 14.1 The Contract Price
(a) the Contract Price shall be agreed or determined under Sub-Clause 12.3 [Evaluation] and
be subject to adjustment in accordance with the Contract.
(Conditions of Contract for Construction-1999 and MDB Harmonised Edition-2006)

(a) the Contract Price shall be the lump sum Accepted Contract Amount and be subject to
adjustments in accordance with the Contract
(Conditions of Contract for Plant Design Build 1999)

Unless otherwise stated in the Particular Conditions:
(a) payment of the Works shall be made on the basis of the lump sum Contract Price, subject to
adjustments in accordance with the Contract;
(Conditions of Contract for EPC/Turnkey Projects -1999)
The above sub-clause shows that the Contract Price in EPC Contract is “fixed contract price”, means that in
case there are some works necessary to be done on completing the Work (Constructive Change Order), such
cost “shall be added to the contract price” and not “shall be included in the Contract Price” as for the cost of
additional work in the Construction Contract.
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CONSTRUCTION CLAIM
2
CONSTRUCTION
CLAIM
2
CONSTRUCTION
CLAIM
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[1] Martin, Elizabeth A and Law, Jonathan (2006): “Oxford Dictionary of Law”, Oxford University Press, New York
CONSTRUCTION CLAIM
Garner “A demand for
money, property, or a Martin and Law (2006)
legal remedy to which “Claim is a demand for a
one asserts a right”. CLAIM remedy or ascertain of a
Garner, Bryan A (2004): right, especially the right
“Black’s Law Dictionary” to take a particular case
to court”.
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CONSTRUCTION CLAIM
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Faktor RII
A5 0.785714
D05 0.781746
CHANGES IN DESIGN (A05)
A6 0.765873
A7 0.746032
D06 0.742063 DIFFERENT INTERPRETATION OF CONTRACT DOC.(D05)
C10 0.742063
A18 0.738095
A12 0.738095 CHANGES IN SCOPE OF WORKS (A06)
B05 0.734127
A11 0.734127
D02 0.722222 CONTRACTOR’S LATE COMPLETION (A07)
D03 0.718254
D01 0.718254
C07 0.706349
VARIATION ORDER (D06)
A14 0.706349
SLOW DECISION MAKING INVOLVING ALL PARTIES (C10)
EMPLOYER RESPONDENT: 42, VARIABLE: 59

(ANALYSIS BY RELATIVE IMPORTANCE INDEX)
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ENGINEER RESPONDENT: 27, VARIABLE: 59
Factor RII
D05 0.740741 DIFFERENT INTERPRETATION OF CONTRACT DOC.(D05)

B03 0.728395
A19 0.722222
A12 0.722222 SUBSURFACE CONDITIONS OF GEOLOGY (B03)

D04 0.716049
A5 0.716049
A20 0.709877
POSSESSION OF SITE AND AVAILABILITY (A19)
A11 0.709877
A16 0.703704
DESIGN ERROR AND OMMISSION (A12)
Dr, Ir, MSC (Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb (Arb), ACPE
Email: sarwonohm2@yahoo.co.id & info@sarwonohm.com
www.sarwonohm.com
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CONTRACTOR RESPONDENT: 40, VARIABLE: 59
Factor RII
A19 0.829167
A5 0.825
POSSESSION OF SITE AND AVAILABILITY (A19)
D04 0.8125
D02 0.808333
C07 0.804167
CHANGES IN DESIGN (A05)
A6 0.8
DELAYED PAYMENT ON CONTRACT AND EXTRAS (D04)
B05 0.8
A18 0.795833
CONSTRUCTIVE CHANGE ORDER (D02)
E05 0.7875
D05 0.783333 POOR MANAGEMENT AND SUPERVISION (C07)
C10 0.779167
A16 0.775 CHANGES IN SCOPE OF WORKS (A06)
D06 0.770833
A14 0.766667 UNFORESEEABLE PHYSICAL CONDITIONS (B05)
B03 0.7625
D03 0.758333
PROJECT PLANNING AND INTERFACING (A18)
D01 0.758333
GOVERNMENT POLICIES (E05)
A12 0.754167
C02 0.725
DIFFERENT INTERPRETATION OF CONTRACT DOC.(D05)
A17 0.716667
C03 0.7125 SLOW DECISION MAKING INVOLVING ALL PARTIES (C10)
E06 0.708333
A15 0.704167 ORAL CHANGES ORDER BY EMPLOYER (A16)
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CONSTRUCTION CLAIM
Faktor 1.1 Constructive
Change Order Faktor 2.1 Oral Change Order
by Employer
Faktor 1.2 Variation Order
Faktor 2. 2 Possession of Site

and Availability
Faktor 1.3 : Inadequate site

investigation KLAIM
Faktor 3.1 Changes in

Design
Faktor 3.2 Subsurface conditions of

geology
Faktor 3.3 Other Contractors

Interference and Delay
Hasil survey 2009 Faktor 3.4 Inefficiency and

Disruption
Dr, Ir, MSC (Civ), MSBA (Bus), MH (Law),
Sarwono MDBF (ADR), ACIArb (Arb), ACPE.
Hardjomuljadi,
Dr, Ir, MSC sarwonohm2@yahoo.co.id;
(Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb
www.sarwonohm.com
COMPANY (Arb), ACPE.
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CONSTRUCTION CLAIM
Figure 02: Causal Factors of Claims and Disputes in HEPP (2014)

The Latest Development in Civil Engineering (LDCE):
a book is to honor the 80th Birthday of Professor Wiratman Wangsadinata
Jakarta, February 25, 2015.
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CONSTRUCTION CLAIM
Figure 03: Causal Factors of Claims and Disputes in Road Projects (2014)
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CONSTRUCTION CLAIM
Figure 03: Causal Factors of Claims and Disputes in Road Projects (2014)
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION CLAIM
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CONSTRUCTION DISPUTES
Chow, Kok Fo Contracts
Dictionary”. Lord Denning MR (1965) “......... a
”……….. difference in position over a dispute or difference to arise under
matter which is submitted for a construction contract, there must
determination by a tribunal. A dispute DISPUTE be in the first place be a claim by
does crystallise where a party merely the contractor. Until that claim is
requests another party for more rejected, you cannot say that there
information to explain the items is a dispute or difference”
featured in a matter or to allow more
time for a more careful consideration
of the matter”. ng (2006): Ahmad Ali, Kamus Besar Bahasa
“Construction Indonesia,(Jakarta: Balai Pustaka)
Pertentangan atau konflik, konflik berarti
adanya oposisi atau pertentangan antara
orang orang, kelompok-kelompok, atau
Black’s Law Dictionary (2004): organisasi-organisasi terhadap satu obyek
a conflict or controversy, permasalahan”
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CONSTRUCTION DISPUTES CLAIMS
YES
NO
AGREED
DISPUTES
FINISHED
ADR LITIGATION
by negotiation by conciliation
by arbitration
by cosultation by mediation by expert assesment
INDONESIAN LAW No 30/ 1999
assisted
by mediation by conciliation by expert assesor by arbitration
INDONESIAN LAW No 18/ 1999
Act No 29 Year 2000
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CONSTRUCTION DISPUTES
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CASE 1 Silver book,
Contracted USD 10.000 for simple WC type 1 (squatting
closet)
Because of health problem, Employer intend to change the

WC become type 2.
Employer:
Contractor have to follow up the employer’s
request with their own expense, ref Sub Clause
4.12.
Contractor:
Employer have to pay the additional cost
ref 1Sub Clause 13.1; 13.3
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CASE 2
Construction of jetty based on the design prepared by the contractor with reference to document
submitted by the Employer at tender time.
During construction period the Contractor get additional data on the sea water level, which is 20
meter additional length needed to reach the location with the water depth required to allow ship to
enter.
Employer: Contractor:
Contractor have to construct the additional length Employer have to pay the additional cost
with their own expense, ref Sub Clause 4.12. ref 1Sub Clause 13.1; 13.3
Since agreement can not be reached, the Contractor construct the jetty as what their design with
the understanding the design made based on the information to tenderer prepared by the
Employer,
The Jetty completed but not in function
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CASE 3:
Road construction include some bridges Case 1: Yellow
which have beenBook.
designed with the pile foundation. During the
construction stage it was found that the length of the pile needed to reach the hard ground is about 25 meter, 10
Additional length
meter longer than the contractor’s design, which was based on the information given by the Employer as
information to tenderer received by the Contractor .
The Contractor is silent and does not submit any claim concerning neither additional length of the piles, nor the
inaccurate investigation result from the Employer.
Finally the Contractor submit progress payment, attached with working drawing signed by the Engineer on behalf
of the Employer .
Employer: Contractor:
Wrong conduct: Claim on payment rejected Confident with their claim, with the understanding that the
because “design by the contractor and the approval on the working drawings identical with the order or
contract is lumpsum”. Sub-Clause 4.12 the approval on design change, so it could be considered as
variation order. Sub-Clause 13.1 and 13.2
Employer:
The correct rejection based on the Yellow Book
should be: “The Contractor was not submit the
notification of claim in due time as stipulated in
the contract “. Clause 20
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The President and Country Representative of Dispute Resolution Board Foundation (DRBF)
Barcelona, Spain, September 2013
Sarwono Hardjomuljadi
Dr, Ir, MSC (Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb, (Arb) A CPE. (Eng)
FIDIC Affiliate Member , FIDIC Accredited Trainer, FIDIC Adjudicator
DRBF Country Representative for Indonesia
Vice Chairman, Indonesia National Board for Construction Services Development
sarwonohm2@yahoo.co.id & info@sarwonohm.com
www.sarwonohm.com
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Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ), MSBA (Bus), MH (Law), MDBF (ADR), ACIArb (Arb), ACPE (Eng)
FIDIC Affiliate Member

FIDIC Adjudicator
FIDIC International Accredited Trainer
Federation Internationale des Ingenieurs-Conseils
FIDIC - Box 311 - CH-1215 Geneva 15 - Switzerland
SKYPE fidic.secretariat - Tl +41-22-799 49 00 - Fx +41-22-799 49 01 – w
ww.FIDIC.org
Country Representative for Indonesia (MDRBF)

The Dispute Resolution Board Foundation
19550 International Blvd. So Suite 314
Seattle, Washington 98188, USA
Tel.(206) 878-3336, Fax (206) 878-3338
www.drb.org
Corporate Panel Member (MDBF)

The Dispute Board Federation
14, rue du Rhone
1204 Geneva, Switzerland
Tel: +41 22 819 19 68, Fax: +41 44 732 69 95
www.dbfederation.org
Associate Member (ACIArb)

Chartered Institute of Arbitrators
12 Bloomsbury Square
London, WC1A 2LP, UK
Tel: +44 (0)20 7421 7444; Fax: +44 (0)20 7404 4023
www.ciarb.org
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PRACTICAL USE OF FIDIC CONDITIONS OF CONTRACT

Bandung, 2 -3 November 2015

Federation Internationale des Ingenieurs-Conseils (FIDIC)

Federation Internationale des Ingenieurs-Conseils (FIDIC)

Justice of Supreme Court, Quentin Loh (2014), Singapore

Federation Internationale des Ingenieurs-Conseils (FIDIC)

Federation Internationale des Ingenieurs-Conseils (FIDIC)

A variety of factors makes a

Burgerliches Gesetzbuch (German Civil Code-BGB) dan

FIDIC Conditions of Contract

FIDIC Conditions of Contract

Sub-Clause 14.1 The Contract Price

Sub-Clause 14.1 The Contract Price

SLOW DECISION MAKING INVOLVING ALL PARTIES (C10)

EMPLOYER RESPONDENT: 42, VARIABLE: 59

D05 0.740741 DIFFERENT INTERPRETATION OF CONTRACT DOC.(D05)

A12 0.722222 SUBSURFACE CONDITIONS OF GEOLOGY (B03)

DESIGN ERROR AND OMMISSION (A12)

Faktor 1.2 Variation Order

Faktor 2. 2 Possession of Site

Faktor 1.3 : Inadequate site

Faktor 3.1 Changes in

Faktor 3.2 Subsurface conditions of

Faktor 3.3 Other Contractors

Hasil survey 2009 Faktor 3.4 Inefficiency and

Figure 02: Causal Factors of Claims and Disputes in HEPP (2014)

CONSTRUCTION DISPUTES CLAIMS

INDONESIAN LAW No 30/ 1999

Because of health problem, Employer intend to change the

The Jetty completed but not in function

FIDIC Affiliate Member

Country Representative for Indonesia (MDRBF)

Corporate Panel Member (MDBF)

Associate Member (ACIArb)

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