Organized by:

Zewdu Tefera Worke, Engineering Contracts Lawyer

Rights & Obligations of the Employer & the Contractor

And
The Role of the Engineer
Under the Public Procurement Agency (PPA)
Conditions of Contract
For
International Competitive Bidding (ICB)
(January, 2006)

Clause Subject Matter Description Employer Engineer Contractor Remarks

2 Interpretation Obligation
2.1 Providing instructions clarifying
queries about the General Conditions
of Contract-GCC
3 Language & Law
3.1 Specifying otherwise in the Special Right Right
Conditions of Contract-SCC
4 Engineer’s Decision

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4.1 Deciding contractual matters between Right This shows the representative capacity
the Employer & the Contractor in the of the Engineer. The Engineer is acting
role representing the Employer as the Agent of the Employer
5 Delegation
5.1 Delegating & canceling with notice to Right No delegation to the Adjudicator. The
the Contractor any of his duties & Adjudicator is an independent one both
responsibilities from the Engineer, the Employer & the
Contractor
6 Communications
6.1 Communication in writing Obligation Obligation Obligation
7 Subcontracting
7.1 Subcontracting with the approval of Right/
the Engineer Obligation
Not assigning the Contract without the Obligation/
approval of the Employer Right
8 Other Contractors
8.1 Cooperating & sharing the Site with Obligation
other contractors, public authorities,
utilities, and the Employer
Providing facilities & services to the Obligation

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above mentioned institutions

Modifying the schedules of others Right/
contractors & notifying same to the Obligation
Contractor
9 Personnel
9.1 Employing key personnel named in the Right
Schedule of Key Personnel
Employing other personnel by Obligation
securing approval from the Engineer
Approving any proposed replacement Right
of key personnel
9.2 Ensuring the removal of the personnel Obligation
from the Site, up on request of the
Engineer
10 Employer’s & Contractor’s Risks
10.1 Carrying the risks, which the Contract Obligation
states so
Carrying the risks, which the Contract Obligation
states so
11 Employer’s Risks

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11.1 Specifying otherwise on the allocation Right Right Scope

of risks under the SCC  Related to Personnel, Property,
Works, Plant, Materials &
Equipment;
Timing
 From Start Date – the issuance of
the DLC.

Lists of the Employer’s risks Obligation

11.2 Carrying the risk of loss of or damage Obligation Timing
to the Works, Plant, and Materials  From the Completion date-the
except in the specified cases issuance of the DLC;
Exceptions
 Defects on the Completion date;
 Event occurring before
Completion Date;
 Contractor’s activities after the
Completion Date;
-
12 Contractor’s Risks

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12.1 Carrying the risks, which are not the Obligation Timing
risks of the Employer  From the Start Date – the
issuance of the DLC;
Scope
 The risks are related to Persons,
Works, Plant, Materials &
Equipment;
13 Insurance
13.1 Providing insurance cover for its Obligation Scope
respective risks  Related to Works, Plant &
Materials, equipment, Property
& Personnel;
Timing
 From the Start Date –the end of
the DLP;
13.2 Delivering policies & certificate for Obligation Timing
insurance for the approval of the  Before the Start Date;
Engineer
13.3 Effecting the insurance & recovering Right/
the premium from the Contractor Remedial

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should the latter fail to effect & deliver Right

same
13.4 Altering the terms of an insurance Obligation Obligation
with the approval of the Engineer
13.5 Complying with any conditions of the Obligation Obligation
insurance policies
14 Site Investigation Reports
14.1 Relying on any Site Investigation Obligation
Reports, supplemented by any
information available to the
Bidder(latter the Contractor)
15 Queries about the Special Conditions
of Contract (SCC)
15.1 Clarifying queries on the SCC Obligation
16 Contractor to Construct the Works
16.1 Constructing & installing the Works Obligation
as per the Specifications & Drawings
17 The Works to be Completed by the
Intended Completion Date (ICD)
17.1 Commencing execution of the Works Obligation

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on the Start Date & completing same

by the ICD
18 Approval by the Engineer
18.1 Submitting Specifications & Drawings Obligation
for the Temporary Works(TW) for the
approval of the Engineer
18.2 Taking responsibility for the design of Obligation
the TW
18.4 Obtaining the approval of third Obligation
parties to the design of the TW
18.5 Securing prior approval of the Obligation
Engineer relative to all Drawings
prepared for the execution of the TW
or Permanent Works (PW)
19 Safety
19.1 Taking responsibility for the safety of Obligation
all activities on the Site
20 Discoveries
20.1 Notifying the Engineer about Obligation Discoveries are anything of historical or
discoveries & carrying out the other interest or of significant value

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Engineer’s instructions for dealing

with the discoveries
21 Possession of the Site
21.1 Giving possession of Site to the Obligation If not given that constitutes an initial
Contractor, as defined in the delay & this will be a Compensation
Contractor’s approved Work Event under the Contract (see also sub-
Programme clause 44.1(a) cum Clause 28
22 Access to the Site
22.1 Allowing the Engineer & any person Obligation
authorized by the Engineer access to
the Site
23 Instructions
23.1 Carrying out all instructions of the Obligation See also Clause 3 –Language & Law
Engineer which comply with the
applicable laws
24 Disputes
24.1 Referring the decision of the Engineer Right/ Nature of decision
to the Adjudicator within 14 days of Obligation  Ultra vires decision;
the notification of the Adjudicator’s  Wrong decision;
decision

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25 Procedures for Disputes

25.1 Giving a decision in writing within 28 Right Right This obligation is imposed on the
days of the receipt of the notification Adjudicator
of a dispute
25.2 Paying the Adjudicator its fee & Obligation Obligation Payment & reimbursement obligations
reimbursing its expenses are divided equally between the
Employer & the Contractor
Referring the decision of the Right/ Right/ Effect of non-referring within the
Adjudicator to the Arbitrator within Obligation Obligation prescribed time frame may result the
28 days of the Adjudicator’s written finality & binding effect of the decision
decision of the Adjudicator
25.3 Conducting the arbitration Right Right
26 Replacement of Adjudicator
26.1 Replacing the Adjudicator & Right Right
appointing a new Adjudicator jointly
Requesting the designation of a new Right Right
Adjudicator by the appointing
Authority(in case of disagreement
between the Employer & the
Contractor)

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27 Program
27.1 Submitting a program to the Obligation Contents
Engineer’s approval The Program shall show the general
methods, arrangement order, and
timing for all activities in the Works.
See also for updated program Sub-
clause 27(2);
27.3 Submitting an updated program to the Obligation
Engineer for its approval
Withholding payments to the Right
Contractor until the Contractor
submits the required program
27.4 Revising & submitting the program to Right Content
the Engineer at any time The Revised Program shall show the
effects of Variations & Compensation
events, if any;
28 Extension of the ICD
28.1 Extending the ICD due to the Right Remedial See also Clause 39-Variations;
occurrence of Compensation Event or Right &
a Variation Clause 44-Compensation Events

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28.2 Deciding on the issue of the extension Obligation The effect of not giving early warning &
of the ICD within 21 days after the not cooperating may result in risking by
Contractor’s requests the Contractor of not considereding the
assessment of the Extension of the ICD
Giving early warning of a delay o Obligation
cooperating in dealing with a delay
29 Acceleration
29.1 Obtaining prior approval for Obligation Effects of Acceleration
achieving the necessary acceleration  Extension of the ICD;
from the Contractor  On the Contract Price;
 The acceleration order itself
considered as Variation;

30 Delays Ordered by the Engineer

30.1 Instructing the Contractor to delay the Right
start or progress of any activity within
the Works
31 Management Meetings
31.1 Requiring the other to attend a Right Right Purpose
management meeting The purpose of such meeting shall be to

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review the plans for remaining work &

to deal with matters raised in
accordance with the early warning
procedure;
31.2 Recording the business of Obligation
management meetings & providing
copies of such record to those
attending the meeting & the Employer
32 Early Warning
32.1 Warning the Engineer of the earliest Obligation
opportunity of specific likely future
events or circumstances that may
adversely affect
 The quality of the Works;
 Increase the Contract Price;
 Delay the execution of the
Works;
Requesting the Contractor to provide Right
an estimate of the expected effect of
the future event or circumstances on

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 The Contract Price;

 The Completion Time;
Providing the requested estimate as Obligation
soon as reasonably possible
32.2 Cooperating with the Engineer in Obligation
making
7 considering proposals for how the
effects of such an event can be avoided
or reduced
33 Identifying Defects
33.1 Checking the Contractor’s Work & Obligation
notifying the Contractor of any defects
Instructing the Contractor to search Right
for a defect & to uncover & test any
work that the Engineer considers may
have a defect
34 Tests
34.1 Paying for the test & any samples Obligation This is the case where the Engineer
instructs the Contractor to carry out a
test not specified in the Specifications to

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check whether any work has a Defect &

the test shows that it does
35 Correction of Defects
35.1 Giving notice to the Contractor of any Obligation The effect of non-correcting the defect is
Defects before the end of the Defects extending the DLP;
Liability Period-(DLP)
Correcting the notified Defect within Obligation
the length of time specified in the
Engineer’s notice
36 Uncorrected Defects
36.1 Paying the cost of the uncovered Remedial Obligation
Defect Rights
38 Change in the Bill of Quantities or
Activity Schedule
38.1 Adjusting the rate to allow for the Obligation
change of the BOQ
38.2 Adjusting rate from changes in Obligation
quantities with the approval of the
Employer, if the Initial Contract Price
is exceeded by more than 15%

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38.3 Providing the Engineer with a detailed Obligation

cost breakdown of any rate in the
BOQ
39 Variations
39.1 Including all variations in the updated Obligation In case of BOQ type of Contract;
program
40 Payment for Variations
40.1 Providing the Engineer with a Obligation In case of both ad measurement & Lump
quotation for carrying out the Sum type of Contracts;
variation, as requested by the
Engineer
Assessing the quotation within 7 days Obligation
or within any longer period & in any
event before the variation is ordered
40.3 Ordering the variation & making a Obligation For both ad measurement & Lump Sum
change to the Contract Price types of Contracts;
41 Cash Flow Forecasts
41.1 Providing the Engineer with an Obligation
updated cash flow account
42 Payment Certificates

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42.1 Submitting to the Engineer monthly Obligation

statements of the estimated value of
the Work executed less the cumulative
amount certified previously
42.2 Checking such statement & certifying Obligation
the amount to be paid to the
Contractor
42.3 Determining the value of the works Obligation
executed
42.6 Excluding any item certified in a Right
previous certificate or reducing the
proportion of any item previously
certified in any certificate
43 Payments
43.1 Paying the Contractor the amounts Obligation Right The rate of interest varies according to
certified by the Engineer within 30 the type of currency;
days of the date of each certificate
Paying interest for late payment to the Obligation Remedial
Contractor in the next payment Right
43.2 Paying interest on the delayed Obligation Remedial

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payment ordered by the Adjudicator Right

or an Arbitrator
44 Compensation Events
44.2 Deciding whether & by how much the Obligation
Contract Price shall be increased &
the ICD shall be extended
45 Tax
45.1 Not adjusting the Contract Price if Right
taxes…are changed that subsequently
affect the Contract Price
48 Retention
48.1 Retaining from each payment due to Right
the Contractor the proportion stated
in the SCC
48.2 Releasing half of the Retention Money- Obligation Right This is the case where after the LD have
(RM) on completion of the whole of been paid & the ICD has been extended
the Works latter;
Releasing the other half of the RM Right
when the DLP has passed & all
Defects remedied

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48.3 Substituting the RM with an “on Right

demand” Bank Guarantee on
completion of the whole of the Works
49 Liquidated Damages (LD)
49.1 Paying LD to the Employer, if delay Remedial Obligation
occurs for which the Contractor is Right
liable
Deducting the LD from payments due Right
to the Contractor
49.2 Correcting any over payment of LD by Obligation Remedial
the Contractor by adjusting the next Right
payment certificate
Paying interest on such overpayment Obligation Remedial
Right
50 Bonus
50.1 Paying a Bonus for early completion Obligation Remedial
Right
Certifying that the Works are Obligation
completed
51 Advance Payment

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51.1 Making advance payment to the Obligation No interest to be charged;

Contractor, as specified in the SCC
Providing an unconditional Bank Obligation The said Guarantee shall be in the form
Guarantee for such advance payment & by a bank acceptable to the
Employer;
Keeping the Guarantee effective until Obligation
the advance payment has been fully
repaid to the Employer
51.2 Utilizing the advance money only to Obligation The Contractor is required to submit
pay for Equipment, Plant, Materials & documentation to justify the utilization
Mobilization expenses of the advance money;
52 Securities
52.1 Providing to the Employer Contract Obligation Form of security
Security no latter than 15 days after  Bank Guarantee for others;
receipt of the Letter of Acceptance  Performance Bond for local
Contractors;
53 Day works
53.2 Recording by the Contractor on form Obligation
approved by the Engineer all work to
be paid for as Day work

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Verifying & signing each completed Obligation

form within two days of work being
done
54 Cost of Repairs
54.1 Covering the cost of repairs for which Obligation
the Contractor is answerable
55 Completion
55.1 Requesting the Engineer to issue a Right
Certificate of Completion
Issuing the said Certificate up on Obligation
deciding that the work is completed
56 Taking Over
56.1 Taking over the Site & the Works Obligation
within 7 days of the Engineer’s issuing
the said Certificate
57 Final Account
57.1 Supplying the Engineer a detailed Obligation
account of the total amount that the
Contractor payable under the
Contract before the end of the DLP

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Issuing a DLC & certifying any final Obligation To do so the Contractor’s Final Account
payment that is due to the Contractor shall be correct & complete;
within 60 days of receiving the
Contractor’s account
Issuing, within 60 days, a Schedule Obligation In case the draft Final Account to be not
that stated the scope of the corrections correct & incomplete;
or additions that are necessary
Deciding the amount to be payable to Obligation
the Contractor & issuing a payment
certificate, if still the resubmitted
Final Account is unsatisfactory
58 Operating & Maintenance Manual
58.1 Supplying “as-built” and/or Operating Obligation
& Maintenance Manuals
58.2 Withholding the amount stated in the Obligation
SCC should the Contractor fail to
supply the said Manuals
59 Termination
59.1 Terminating the Contract, if the other Right Right The grounds for termination of the
party causes a fundamental breach of Contract are provided under Sub-clause

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the Contract
59.4 Terminating the Contract for
convenience
59.5 Stopping work immediately, making
the Site safe & secure, and leaving the
Site as soon as reasonably possible
60 Payment up on Termination
60.1 Issuing a certificate for the value of
work done & materials ordered less
certain deductions, in case of
termination due to the default of the
Contractor
60.2 Issuing a certificate to the Contractor
in case of the termination of the
Contract due to the default or
convenience of the Employer
Organized by:
59(2);
Right
Obligation These are the effects of termination;
Obligation Deductions
 Advance Payment, if effected;
 The percentage to apply to the
value of the work not completed;
Obligation Possible Structure of the Certificate
 Value of work done;
 Materials ordered;
 Reasonable cost for the removal
of Equipment;
 Cost of transportation of the
Contractor’s Personnel;
 Cost of protecting & securing the
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Works;
62 Release from Performance
62.1 Certifying that the Contract has been Obligation If the Contract is frustrated by the
frustrated outbreak of war or by any other event
entirely outside the control of either the
Employer & the Contractor; (Force
Majeure)
Making the Site safe & stopping the Obligation
work after receiving the certification
from the Engineer
Paying to the Contractor for all work Obligation Remedial
carried out before the Contractor Right
received the said Certificate & for any
work carried out afterwards to which
a commitment was made

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