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BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

1. Introduction
FIDIC Red Book of 1999 edition has included various provisions for time and money claims for both Employer and for the Contractor. As quantity surveyors it is important to clearly identify the Clauses which give entitlement for Claims. Such provisions are listed and briefly explained below.

2. The Contractors Claims


Most claims are made by the Contractor and may be claim for extension of time for completion of Works and/or reimbursement of money that has been spent or will be spent. Claim for additional time most commonly result in a Claim for additional money as well, which shall be submitted as a separate Claim. Sub Clause Nr 1.9 Clause Title Delayed Drawings Instructions Provisions for Time and/or Money If the Contractor suffers delay and/or incurs Cost as a result of or a failure of the Engineer to issue the notified drawing or instruction within a time which is reasonable and is specified in the notice with supporting details, the Contractor shall give a further notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost plus reasonable profit, which shall be included in the Contract Price. 2.1 Right of Access If the Contractor suffers delay and/or incurs Cost as a result of to the Site a failure by the Employer to give any right or possession within such time, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost plus reasonable profit, which shall be included in the Contract Price. 4.6 Co-operation The Contractor shall, as specified in the Contract or as
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Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title

Provisions for Time and/or Money instructed by the Engineer, allow appropriate opportunities for carrying out work to: (a) the Employers Personnel, (b) any other contractors employed by the Employer, and (c) the personnel of any legally constituted public authorities, who may be employed in the execution on or near the Site of any work not included in the Contract. Any such instruction shall constitute a Variation if and to the extent that it causes the Contractor to incur Unforeseeable Cost. Services for these personnel and other contractors may include the use of Contractors Equipment, Tempo

4.7

Setting Out

If the Contractor suffers delay and/or incurs Cost from executing work which was necessitated by an error in these items of reference, and an experienced contractor could not reasonably have discovered such error and avoided this delay and/or Cost, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub- Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost plus reasonable profit, which shall be included in the Contract Price.

4.12

Unforeseeable Physical Conditions

If and to the extent that the Contractor encounters physical conditions which are Unforeseeable, gives such a notice, and suffers delay and/or incurs Cost due to these conditions, the Contractor shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost, which shall be included in the Contract Price.

Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr 4.24

Clause Title Fossils

Provisions for Time and/or Money The Contractor shall, upon discovery of any such finding, promptly give notice to the Engineer, who shall issue instructions for dealing with it. If the Contractor suffers delay and/or incurs Cost from complying with the instructions, the Contractor shall give a further notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost, which shall be included in the Contract Price.

7.4

Testing

If the Contractor suffers delay and/or cost from complying with Engineers instructions or as a result of a delay for which the Engineer is responsible, the Contractor shall give the notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] and after receiving this notice, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determination] to agree or determine these matters.

8.4

Extension Time Completion

of If the Contractor considers himself to be entitled to an for extension of the Time for Completion, the Contractor shall give notice to the Engineer in accordance with Sub-Clause 20.1 [Contractors Claims].

8.5

Delays Caused by If the following conditions apply, namely: Authorities (a) the Contractor has diligently followed the procedures laid down by the relevant legally constituted public authorities in the Country, (b) these authorities delay or disrupt the Contractors work, and (c) the delay or disruption was Unforeseeable, then this delay or disruption will be considered as a cause of delay under subparagraph (b) of Sub-Clause 8.4 [Extension of Time for Completion].

8.9

Consequences of If the Contractor suffers delay and/or incurs Cost from


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Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title Suspension

Provisions for Time and/or Money complying with the Engineers instructions under Sub-Clause 8.8 [Suspension of Work] and/or from resuming the work, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost, which shall be included in the Contract Price.

8.11

Prolonged Suspension

Contractor may ,by giving notice to the Engineer, treat the suspension as an omission under clause 13[Variation and Adjustment] of the affected part of the work If the suspension affects the whole of the works, contractor may give notice of termination under Sub Clause 16.2 [Termination by Contractor]

10.2

Taking Over of If the Contractor incurs Cost as a result of the Employer taking Parts Works of the over and/or using a part of the Works, other than such use as is specified in the Contract or agreed by the Contractor, the Contractor shall (i) give notice to the Engineer and (ii) be entitled subject to Sub-Clause 20.1 [Contractors Claims] to payment of any such Cost plus reasonable profit, which shall be included in the Contract Price.

10.3

Interference with If the Contractor suffers delay and/or incurs Cost as a result of Tests Completion on this delay in carrying out the Tests on Completion, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost plus reasonable profit, which shall be included in the Contract Price.

11.8

Contractor Search

to The Contractor shall, if required by the Engineer, search for the cause of any defect, under the direction of the Engineer. Unless
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Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title

Provisions for Time and/or Money the defect is to be remedied at the cost of the Contractor under Sub-Clause 11.2 [Cost of Remedying Defects], the Cost of the search plus reasonable profit shall be agreed or determined by the Engineer in accordance with Sub-Clause 3.5

[Determinations] and shall be included in the Contract Price. 12.4 Omissions Whenever the omission of any work forms part (or all) of a Variation, the value of which has not been agreed, if: (a) the Contractor will incur (or has incurred) cost which, if the work had not been omitted, would have been deemed to be covered by a sum forming part of the Accepted Contract Amount; (b) the omission of the work will result (or has resulted) in this sum not forming part of the Contract Price; and (c) this cost is not deemed to be included in the evaluation of any substituted work; then the Contractor shall give notice to the Engineer accordingly, with supporting particulars. Upon receiving this notice, the Engineer shall proceed in accordance with SubClause 3.5 [Determinations] to agree or determine this cost, which shall be included in the Contract Price. 13.2 Value Engineering If a change of design which occurred due to value engineering results in a reduction in the contract value of this part, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine a fee, which shall be included in the Contract Price. This fee shall be half (50%) of the difference between the following amounts: (i) such reduction in contract value, resulting from the change, excluding adjustments under Sub-Clause 13.7 [Adjustments for Changes in Legislation] and Sub-Clause 13.8 [Adjustments for Changes in Cost], and (ii) the reduction (if any) in the value to the Employer of the varied works, taking account of any reductions in quality,
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BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title

Provisions for Time and/or Money anticipated life or operational efficiencies.

13.7

Adjustments for Changes Legislation

If the Contractor suffers (or will suffer) delay and/or incurs (or in will incur) additional Cost as a result of these changes in the Laws or in such interpretations, made after the Base Date, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost, which shall be included in the Contract Price.

14.8

Delayed Payment

Contractor shall be entitled to receive financing charges compounded monthly on the amount on the amount unpaid during the period of delay. The financing charges shall be calculated at the central bank in the country of the currency of payment. *The contractor shall be entitled to this payment without formal notice or certification and without prejudice to any other right or remedy.

16.1

Contractors Entitlement Suspend Works

If the Contractor suffers delay and/or incurs Cost as a result of to suspending work (or reducing the rate of work) in accordance the with this Sub-Clause, the Contractor shall give notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost plus reasonable profit, which shall be included in the Contract Price.

17.4

Consequences of If the Contractor suffers delay and/or incurs Cost from Employers Risks rectifying this loss or damage, the Contractor shall give a further notice to the Engineer and shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to:

Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title

Provisions for Time and/or Money (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) payment of any such Cost, which shall be included in the Contract Price. In the case of sub-paragraphs (f) and (g) of Sub-Clause 17.3 [Employers Risks], reasonable profit on the Cost shall also be included.

19.4

Consequences of If the Contractor is prevented from performing any of his Force Majeure obligations under the Contract by Force Majeure of which notice has been given under Sub-Clause 19.2 [Notice of Force Majeure], and suffers delay and/or incurs Cost by reason of such Force Majeure, the Contractor shall be entitled subject to Sub-Clause 20.1 [Contractors Claims] to: (a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and (b) if the event or circumstance is of the kind described in subparagraphs (i) to (iv) of Sub-Clause 19.1 [Definition of Force Majeure] and, in the case of subparagraphs (ii) to (iv), occurs in the Country, payment of any such Cost.

Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

3. The Employers Claims


Previous FIDIC contracts did not include procedures for claim by the Employer. In practice the Employer probably deducted any money he thought he was entitled to claim and the Contractor had to submit a claim to recover the deduction. This situation inevitably caused problems and disputes, thus procedures for claims are now given in Sub-Clause 2.5. Sub Clause Nr 4.19 Clause Title Electricity, and Gas 4.2 Employer's equipment, and free issue If the Contractor uses Employer's equipment, materials Provisions for Time and/or Money

water Charges for the use of power, water, gas and other services

materials 7.5 Rejection If the rejection and retesting cause the Employer to incur additional cost 7.6 Remedial work If the Contractor fails to comply with Engineer's instruction to comply with the requirement set in the contract (remove from site or replace plant/equipment, execute work) 8.6 Rate of progress If revised method of execution cause the Employer to incur additional costs 8.7 Delay damage If the Contractor fails to comply with time for completion sub-clause 8.2 (liquidated damage) 9.4 Failure to pass test If the Works, or a Section, fail to pass the Tests on on completion Completion repeated under Sub-Clause 9.3 [Retesting], and the Employer takes over the project, the reduced value of work 11.3 Extension Defect notification period of If and to the extent that the Works, Section or a major item of Plant (as the case may be, and after taking over) cannot be used for the purposes for which they are intended by reason taking over) cannot be used for the purposes for which they are intended by reason of a defect or by reason of damage attributable to the Contractor 11.4 Failure to remedy If the Contractor fails to remedy the defects or damage by the
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Department of Building Economics

BE-4605 Claims Management

Provisions for Time and Money Claims in FIDIC Red Book 1999

Sub Clause Nr

Clause Title defects

Provisions for Time and/or Money notified date and this remedial work was to be executed of the cost of the contractor

15.4

Payment after termination

After Termination by employer, the costs of execution, completion and remedying of any defects, damages for delay in completion

18.1

General Insurance

If the contractor fails to effect and keep in force an insurance which is available and which it is required to effect and maintain under the contract, and the Employer neither approves omissions nor effect insurance for the coverage relevant to this default, any money which should have been recoverable under this insurance

18.2

Insurance works and Contractor's Equipment

for If, more than 1 year after the Base date, the insurance cover for the damage to or loss of the works which is attributable to the use or occupation by the Employer, ceases to be available at commercially reasonable terms, the amount equivalent as the Contractor should have expected to have paid

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