Fundamental FIDIC - Updated PDF

The Fundamentals of FIDIC
Presented by Coenraad Snyman

Contracts for Building and Engineering works
FIDIC “Green” Book
Green Book
• Small value (less than USD 250,000)

• Short duration (up to 6 months)
• Straightforward / simple / competitive work
Green Book
Responsibility for design
Most likely to be carried out by the Employer but Contractor can be

made responsible for carrying out the design (or portions thereof)
See Clause 5.1

Green Book
Type of contract
Flexible since it can be
i. re-measurable,
ii. lump sum or
iii. cost reimbursable
The type must be chosen and stated in the appendix

Green Book
• Cl 3.1 Authorised Person

One of the Employer's personnel shall have authority to act for him. This
authorized person shall be as stated in the Appendix, or as otherwise notified
by the Employer to the Contractor.
• Cl 3.2 Employer’s Representative

The Employer may also appoint a firm or individual to carry out certain duties.
The appointee may be named in the Appendix, or notified by the Employer to
the Contractor from time to time. The Employer shall notify the Contractor of
the delegated duties and authority of this Employer's representative.
FIDIC “Red” Book
Red Book
Ordinarily and most likely carried out by the Employer but Contractor can be
made responsible for carrying out a portion of the design
See clause 4.1
Red Book
Type of contract
Re-measurable contract with a Bill of Quantities

(Note that the definition of the “Schedule” also makes reference to a
“schedule of rates and/or prices”)
Measurement proceeds in accordance with clause 12

FIDIC “Pink” Book
Pink Book
• Includes provisions or amendments to the Red Book deemed necessary or

advantageous by various Multilateral Development Banks (MDB’s) including the
World Bank, IMF, European Bank for Reconstruction and Development and the
African Development Bank.
• E.g. Clause 2.4 [Employer’s Financial Arrangements]

FIDIC “Yellow” book
Yellow Book
Carried out [exclusively ?] by the Contractor

Yellow Book
Type of contract
Lump sum / Fixed price contract with schedule of payments and/or prices
(“Milestone” payments)
FIDIC “Silver” Book
• Same as Yellow BUT …..

Silver Book
Type of contract
Lump sum / Fixed price contract with schedule of payments and/or prices
Typically we see a 25% to 30% higher contract price being tendered

Silver Book (Cl 4.10)
SILVER RED/YELLOW
The Employer shall have made available to the Contractor for The Employer shall have made available to the Contractor for
his information, prior to the Base Date, all relevant data in the his information, prior to the Base Date, all relevant data in the
Employer's possession on subsurface and hydrological Employer's possession on sub-surface and hydrological
conditions at the Site, including environmental aspects. The conditions at the Site, including environmental aspects. The
Employer shall similarly make available to the Contractor all Employer shall similarly make available to the Contractor all
such data which come into the Employer's possession after the such data which come into the Employer's possession after the
Base Date. Base Date. The Contractor shall be responsible for
interpreting all such data.
The Contractor shall be responsible for verifying and To the extent which was practicable (taking account of cost and
interpreting all such data. The Employer shall have no time), the Contractor shall be deemed to have obtained all
responsibility for the accuracy, sufficiency or completeness of necessary information as to risks, contingencies
such data, except as stated in Sub-Clause 5.1 [General Design and other circumstances which may influence or affect the
Responsibilities]. Tender or Works. To the same extent, the Contractor shall be
deemed to have inspected and examined the Site, its
surroundings, the above data and other available information,
and to have been satisfied before submitting the Tender as to
all relevant matters, including (without limitation)
(a) form and nature of the Site, including sub-surface
conditions,
(b) the hydrological and climatic conditions,
(c) the extent and nature of the work and Goods necessary for
the execution and completion of the Works and the remedying
of any defects,
(d) the Laws, procedures and labour practices of the Country,
and
(e) the Contractor's requirements for access, accommodation,
Silver Book
• There is no requirement placed on the Employer to appoint an Engineer
• Entirely at his discretion, however, the Employer has the option to appoint an
Employer’s Representative
FIDIC “Gold” Book
Gold Book
• By and large the same as the Yellow Book (i.e. design by contractor and fixed-
price/lump sum in nature).
• At end of the design-build phase, a Commissioning Certificate is issued not a

Take-over certificate
• At the end of the Operation Service, a Contract Completion Certificate is
issued
• The contract must include a document setting out the Operation
Management Requirements
FIDIC Subcontract
Subcontract
• The subcontractor probably will not have any responsibility for design but may
have if so specified or provided in the subcontract
• It is, like the Red Book, re-measurable in nature.
A lump sum subcontract (making

provision for design by the
subcontractor) will most likely be
published soon by FIDIC
FIDIC “Blue” Book
For Dredging and Reclamation Work
“New” FIDIC Contracts
• Updated and revised “Red” and “Yellow” Books
• ODB
• Tunneling Contract
Contracts for the provision of Professional
Services
Professional Services
Client Consultant Model Services Agreement
5th Edition (2017)
Model Joint Venture / Consortium Agreement
2nd Edition (2017)
Sub-Consultancy Agreement
2nd Edition (2017)
Maintenance and contracts for Facilities
Management (FM)
Contract for the Supply of Goods
2017 Editions
• In December 2016, FIDIC presented a pre-release version of

its second edition of Conditions of Contracts for Plant and
Design Build (“the Proposed 2017 Yellow Book”) which is due
to be published during the course of 2017.
• As expected, FIDIC has made substantial amendments to the

dispute resolution provisions in the 1999 Yellow Book, and it
has addressed the provisions relating to “binding but not-
final” Dispute Adjudication Board (“DAB”) decisions which
have been the cause of persistent dispute since the 1999
Yellow Book was released.
2017 Editions
• However, rather than scale back following the controversy

caused by the binding but not-final DAB decision, and the
severe consequences to contractors that have in many
instances resulted in, FIDIC has chosen to affirm this
direction.
• The Proposed 2017 Yellow Book therefore retains the same

core structure of the DAB as a mandatory pre-condition to
arbitration, including that non-final DAB decisions must be
promptly complied with, and it has expanded this concept
through the inclusion of a similar mandatory procedure of
binding but not-final Engineer determinations.
• The Proposed 2017 Yellow Book offers a refurbished dispute
resolution mechanism, which includes some helpful and much
needed revisions to its predecessor, and introduces some
useful new provisions.
• It is an ambitious dispute platform and will, without question,
be subject to dispute and debate.
• At its best, it offers both parties the ability to obtain fast and
inexpensive relief, with three tiers of binding determinations
designed to prevent the need for arbitration. At its worst, it
places two-tiers of mandatory determinations in the way
before a party can begin to obtain a final binding decision in
arbitration.
• Parties will need to think carefully about whether a three-
tiered system of determinations is suitable for their needs.
• Key issues are whether or not these provisions do in fact offer

the system of relief promised, including how non-final
determinations of the Engineer and DAB are likely to be
treated in the jurisdiction that the contract is based as well as
under the governing law of the contract, and attempting so
far as possible to agree in advance between the Parties and
Engineer as to how this mechanism will work.
The proposed new dispute resolution mechanism
• The dispute mechanism in the Proposed 2017 Yellow Book

follows on from a worldwide trend of promoting dispute
avoidance over arbitration.
• The 1999 Yellow Book introduced the now infamous Dispute

Adjudication Board into its contracts for the first time, which
replaced the Engineer’s binding decision in the 1987 FIDIC
Conditions of Contract as a pre-condition to arbitration. The
1999 Yellow Book still requires the Engineer to make a
determination as the first step in the claims process, albeit
under a reduced timescale.
• In the 2008 Gold Book, FIDIC expanded the role of the DAB
further by defining it as a Dispute Avoidance / Adjudication
Board, and including a new clause 20.4 “Avoidance of
Disputes” which permits the parties to agree to request that
the DAB provide informal assistance with any issue or
disagreement between the parties, which shall not bind
either party should they proceed to obtain a formal
determination.
• The Proposed 2017 Yellow Book goes further again. Like the
2008 Gold Book, the DAB is defined as a “Dispute Avoidance /
Adjudication Board”, and it is empowered to provide informal
assistance. In addition, the role of the Engineer has been
increased to play a facilitative role and to issue binding
determinations that will become final unless an NOD is
issued.
• As alluded to above, the Proposed 2017 Yellow Book follows

the same core structure as the 1999 Yellow Book, which can
be broadly divided into the following constituent parts:
• Making a claim;
• The role of the Engineer;
• Avoidance of disputes (new);
• The DAB;
• Amicable settlement; and
• Arbitration.
Making a claim
• The 1999 Yellow Book includes separate provisions for the
Employer and Contractor to make a claim, with a notable
difference being that Contractors must make their claim
within 28 days of becoming aware of the event giving rise to
the claim, and provide a fully detailed claim within 42 days
(Sub-clause 20.1), whereas Employers need only provide
notice “as soon as reasonably practicable (Sub-clause 2.5).”
Making a claim
• The Proposed 2017 Yellow Book includes one consolidated

clause for claims, Sub-clause 20.2, under which both parties
must progress their claims within the 28 and 42 day periods
under Sub-clause 20.1 of the 1999 Yellow Book.
• It also includes a new procedure enabling a waiver of these

time-limits in certain instances, which is clearly designed to
provide some clarity and a mechanism for determining when
a claim will be time-barred.
The role of the Engineer
• The role of the Engineer has been expanded under the

Proposed 2017 Yellow Book, including new functions and
obligations. In relation to claims, the Engineer must:
• Consult with the parties to attempt to reach agreement, and if no

agreement is reach within 42 days;
• Make a “fair determination” within a further 42 days.

• Under the 1999 Yellow Book, the Engineer was required to

consult and ultimately make a fair determination within just
one 42 day period. Under both the Proposed 2017 Yellow
Book and the 1999 Yellow Book, the Engineer may request
that further information be provided before making a
determination.
• The Proposed 2017 Yellow Book also includes an express

requirement that the Engineer act “neutrally” in discharging
the above duties.
• Furthermore, whilst both the Proposed 2017 and 1999 Yellow

Books provide that the Engineer’s determinations shall be
binding on the parties unless and until revised by the DAB or
in arbitration, the Proposed 2017 Yellow Book goes further to
state that unless either party issues an NOD with the
agreement or determination issued by the Engineer within 28
days, that agreement or decision shall become final and
conclusive.
• Parties will therefore need to be conscious of these time
limits.
• The Proposed 2017 Yellow Book has therefore extended the

Engineer’s role in claim resolution from a minimum 42 days to
84 days, with the prospect of its determination becoming final
if neither party issues a valid NOD. The new provisions do not
state how a final Engineer’s determination is to be enforced,
although we expect the intention is that a party would obtain
a DAB decision on the failure to comply followed by an
arbitral award pursuant to Sub-clause 21.7 (discussed further
below).
Avoidance of Disputes
• A new “Avoidance of Disputes” provision has been added

which permits the parties to jointly ask the DAB to informally
discuss and/or provide assistance with any issue or
disagreement.
• The parties will not be bound to act on any advice given in

this process. This provision is taken from the 2008 Gold Book,
and it is in keeping with FIDIC’s promotion of dispute
avoidance, but its practical effect is questionable.
• The issue is that the DAB is, by this clause, being asked to act
as a kind of mediator, whereas in the following clause, it must
act as adjudicator, and these functions are not usually
compatible.
• A mediator will often become privy to confidential and other
commercial considerations of the parties, and is there to
facilitate settlement, and this is plainly not compatible with
the role of adjudicator who must decide the parties’ legal
rights and obligations.
• This dual role scenario has already been met with some
concern in the UK
The DAB
• The DAB procedure under the Proposed 2017 Yellow Book

retains its core aspects, namely that a DAB must issue its
decision within 84 days of a dispute being referred to it, and
that decision shall be immediately binding upon the parties
who shall promptly give effect to it.
The DAB
• However, the new provision includes a number of revisions
designed to clarify and assist in enforcing these obligations,
including:
• DAB decisions are now expressly binding on the Engineer;
• The Parties and Engineer must comply with the DAB’s decision
“whether or not a Party gives a NOD with respect to such decision
under this Sub-clause”; and
• If the DAB awards payment of a sum of money, that amount shall
be immediately due and payable after the payer receives an
invoice, without any requirement for certification or notice. In
addition, the DAB may require an appropriate security to be issued
for payment of the sum awarded.
• Furthermore, Sub-clause 21.7 provides that if either party

fails to comply with a DAB decision, whether final or not-final,
the other party may refer the failure itself directly to
arbitration pursuant to Sub-clause 21.6.
• The above provisions were intended by FIDIC to have already
been provided for in the 1999 procedure, but which as many
contractors have painfully found out, the 1999 wording was
not so clear and has been the subject of fervent debate since
those conditions were released. This debate is captured in the
Persero series of cases in Singapore, which ran for eight years
on the issue of whether a non-final DAB decision issued under
Sub-clause 20.4 could be enforced summarily by an arbitral
award.
• Under both the 1999 and Proposed 2017 wording, either

party can prevent a DAB decision from becoming final by
issuing an NOD within 28 days. However, the Proposed 2017
wording adds that if no arbitration is commenced within 182
days after the NOD is issued, then that NOD shall be deemed
to have lapsed and be no longer valid. This will allow DAB
decisions to become final where arbitration is not pursued,
and that is helpful; however, where finality is relevant to
enforcement, this provision may also be subject to dispute.
For instance, if a party commences arbitration but then allows
it to lapse, will a new 182 day period commence or does that
prevent a non-final DAB from ever becoming final?
• Finally, the new wording includes a revised provision for

when no DAB is in place, which now permits the parties to
proceed directly to arbitration if a dispute arises and there is
no DAB in place14. This is a potentially important revision
compared to its equivalent in the 1999 Yellow Book, Sub-
clause 20.8, which is headed “Expiry of Dispute Adjudication
Board’s appointment15.”
• The 1999 Yellow Book wording was subject to debate before

the Swiss Supreme Court and the UK Technology and
Construction Court, and both courts found that the DAB was a
mandatory pre-condition to arbitration, and that Sub-clause
20.8 would only be used in the exceptional situation where
the mission of a standing DAB has expired before a dispute
arises between the parties, or other limited circumstances
such as the inability to constitute a DAB due to the
intransigence of one of the parties. Although the Swiss Case
ultimately permitted the DAB to be avoided after the
Contractor had spent over 18 months attempting to have it
constituted, the English case refused to allow the litigation to
proceed until the DAB procedure was completed.
• Under the Proposed 2017 Yellow Book, parties will be able to

skip the DAB procedure if it is not in place when the dispute
arises, although once the DAB has been set up or once the
parties begin the process of setting up a DAB, no matter how
frustrating that process may be, the DAB will become
mandatory and the process will not be able to be abandoned.
Amicable settlement
• The mandatory amicable settlement period has been reduced

from 56 days to 28 days under the Proposed 2017 Yellow
Book. Furthermore, where either party fails to comply with a
DAB decision, that failure may be referred directly to
arbitration and the amicable settlement period will not apply.
• This clarifies that the parties’ obligation to “promptly” comply

with a DAB decision means in less than 28 days.
Arbitration
• The arbitration provisions for non-final DAB decisions are

effectively the same under both contracts, namely that where
an NOD has been issued, either party may refer the dispute to
be finally decided in international arbitration.
• The Proposed 2017 Yellow Book also expressly permits an

arbitral tribunal to take account of any non-cooperation in
constituting the DAB in its awarding of costs.
• As noted above, the new wording includes an expanded Sub-

clause 21.7 (Sub-clause 20.7 of the 1999 Yellow Book), which
permits any failure to comply with a DAB decision, whether
final or not-final, to be referred directly to arbitration.
• In relation to non-final DAB decisions, the right to
enforcement by interim relief or award is subject to the fact
that the merits of the dispute are reserved until resolved in a
final arbitral award.
• Although this revised contractual clarification/position will be
welcomed by contractors, there are still likely to be
challenges in many jurisdictions as to whether the
enforcement of non-final DAB decisions via an arbitral award
is supported by the local or governing laws of the contract.
EPC vs EPCM contracts
Price Considerations
(Showing NEC3 ECC Main Options per illustration)
(Max) (Min) Lump Sum (Main Option A)

Level of Flexibility Employer has to
Lump Sum + Variations

Level of certainty about what the
change requirements or needs
(Main Option C or D)
works comprises
Target Cost
Bills of Quantities/Schedules of
Rates
(Main Option B)
Management Contract
(Main Option F)
PSC Term Contract
(Main Option G) Cost plus
(Main Option E)
(Min) (Max)
(Min) Employer’s level of Price Risk (Max)
(Max) Contractor’s Incentive to work (Min)
sparingly
61
Sub-Clause 4.11 of the Red Book
Extent of Contractor’s Price risk
The Contractor shall be deemed to:
a) have satisfied himself as to the correctness and sufficiency of the Accepted

Contract Amount, and
b) have based the Accepted Contract Amount on the data, interpretations,

necessary information, inspections, examinations and satisfaction as to all
relevant matters referred to in Sub-Clause 4.10 [Site Data]. Unless otherwise
stated in the Contract, the Accepted Contract Amount covers all the
Contractor’s obligations under the Contract (including those under Provisional
Sums, if any) and all things necessary for the proper execution and completion
of the Works and the remedying of any defects.
Sub-Clause 4.10 [Site Data]
To the extent which was practicable (taking account of cost and time), the
Contractor shall be deemed to have obtained all necessary information as to risks,
contingencies and other circumstances which may influence or affect the Tender
or Works. To the same extent, the Contractor shall be deemed to have inspected
and examined the Site, its surroundings, the above data and other available
information, and to have been satisfied before submitting the Tender as to all
relevant matters, including (without limitation):
(a) the form and nature of the Site, including sub-surface conditions,
(b) the hydrological and climatic conditions,
(c) the extent and nature of the work and Goods necessary for the execution and
completion of the Works and the remedying of any defects,
(d) the Laws, procedures and labour practices of the Country, and
(e) the Contractor’s requirements for access, accommodation, facilities,
personnel, power, transport, water and other services
Structure of FIDIC contracts
&
Order of Priority
Preparing The Appendix to Tender
• The following sub-clauses require data to be stated in the Appendix to Tender

(in the case of the Red/Yellow Books) or in the Particular Conditions (in the case
of the Silver Book):
• 1.1.3.3 & 8.2 Time for Completion
• 1.1.3.7 & 11.1 Defects Notification Period
• 1.1.5.6 Definition of Section(s)
• 1.3 Electronic Systems for
Communications
• 1.4 Laws and Languages
• 2.1 Time for possession of the Site
• 4.2 Performance Security
• 8.7/12.4/14.5(d) Delay/Performance Damages
• 13.8 Adjustments for changes in Cost
Preparing The Appendix to Tender
• 14.2 Advance Payment(s)

• 14.3(c) Retention
• 14.5 Plant and Materials intended for the Works
• 17.6 Limitation of Liability
• 18.1 Employer’s Insurance.
• 18.2(d) Insurance of Employer’s Risks
• 18.3 Insurance against injury to persons and
damage to property
• 20.2 Number of members of the Dispute Adjudication Board
• 20.3 Appointing body for the establishment of the Dispute
Adjudication Board
Preparing the Specifications/Employer’s
Requirements
There are 3 types of specifications :
• Prescriptive [“Do precisely as I say”],

• Performance Driven [“Give me something that works”] and
• Descriptive [“Defines the scope, design intent, procedures for completing
detailed design, quality control etc.”]
Requirements
• In terms of FIDIC, the document must specify the purpose, scope, design,
technical criteria for the Works (See the definition of Employer’s Requirements
in sub-clause 1.1.1.5).
• It is critical that the document sets out the relevant material standards,
workmanship standards, performance standards, aesthetic intent and
functional requirements etc. clearly.
• Care should be taken (ideally?) not to include method statements and to leave
full responsibility as to the choice of construction methods up to the
Contractor.
Requirements
• The Employer’s Requirements / Specifications should also include or specify

the following (where relevant):
• 1.8 Publications to be kept by the Contractor on Site
• 1.13 Permissions being obtained by the Employer
• 2.1 Phased possession of foundations, structures, plant or means of

access
• 4.1 Intended purposes for which the Works are required

Requirements
• 4.6 Other contractors (and others) on site
• 4.7 Setting-out points, lines and levels of reference
• 4.18 Environmental constraints
• 4.19 Electricity, water, sewage, gas and other services available on

the Site
• 4.20 Employer’s Equipment and “free-issue” material
• 5.1 Design criteria (Yellow/Silver Book only)
• 5.2 Contractor’s Documents required (Yellow/Silver Book only)

Requirements
• 5.4 Technical standards and building regulations (Yellow/Silver

Book only)
• 5.5 Operational training for Employer's personnel (Yellow/Silver

Book only)
• 5.6 Specified number and type of copies of as-built drawings and

other records for the Works (Yellow/Silver Book)
NOTE: A similar requirement appears in clause 4.1 of the Red

Book
• 5.7 Operational and maintenance manuals (Yellow/Silver Book

only)
• 7.2 Samples
Preparing FIDIC contracts
• 6.6 Facilities for Personnel
• 7.3 Off-site inspections requirements
• 7.4 Testing during manufacture and/or construction
• 9.1 Tests on Completion
• 9.4 Damages for failure to pass Tests on Completion
• 12.1 Tests after Completion
• 12.4 Damages for failure to pass Tests after Completion
• 13.5 Provisional Sums

The Particular Conditions
• Establish what may and should be included therein

• Leave out all matters that should not be included therein
Provisions relating to the Contractor’s design of
the works
“By default”, in the case of FIDIC contracts, contractors have and bear the
responsibility for carrying out the design in the case of the lump sum / fixed price /
turnkey contracts only (i.e. in terms of the Yellow. Silver and Gold Books).
Optionally, the Contractor may have some design role in the case of the Green and
Red Books.
Design responsibility (Sub-Clause 5.1)
Yellow & Silver Book
• The Contractor shall carry out, and be responsible for, the design of the
Works. Design shall be prepared by qualified designers who are engineers or
other professionals who comply with the criteria (if any) stated in the
Employer's Requirements. Unless otherwise stated in the Contract, the
Contractor shall submit to the Engineer for consent the name and
particulars of each proposed designer and design Subcontractor.
• The Contractor warrants that he, his designers and design Subcontractors
have the experience and capability necessary for the design. The Contractor
undertakes that the designers shall be available to attend discussions with
the Engineer at all reasonable times, until the expiry date of the relevant
Defects Notification Period.
• Upon receiving notice under Sub-Clause 8.1 [Commencement of Works], the

Contractor shall scrutinize the Employer's Requirements (including design
criteria and calculations, if any) and the items of reference mentioned in
Sub-Clause 4.7 [Setting Out]. Within the period stated in the Appendix to
Tender, calculated from the Commencement Date, the Contractor shall give
notice to the Engineer of any error, fault or other defect found in the
Employer's Requirements or these items of reference.
• After receiving this notice, the Engineer shall determine whether Clause 13
[Variations and Adjustments] shall be applied, and shall give notice to the
Contractor accordingly. If and to the extent that (taking account of cost and
time) an experienced contractor exercising due care would have discovered
the error, fault or other defect when examining the Site and the Employer's
Requirements before submitting the Tender, the Time for Completion shall
not be extended and the Contract Price shall not be adjusted.
Sub-Clause 5.2 [Contractor’s Documents]
The Contractor’s Documents shall comprise the technical documents specified in

the Employer’s Requirements, documents required to satisfy all regulatory
approvals, and the documents described in Sub-Clause 5.6 [As-Built Documents]
and Sub- Clause 5.7 [Operation and Maintenance Manuals].
Unless otherwise stated in the Employer’s Requirements, the Contractor’s

Documents shall be written in the language for communication defined in Sub-
Clause 1.4 [Law and Language].
The Contractor shall prepare all Contractor’s Documents, and shall also prepare
any other documents necessary to instruct the Contractor’s Personnel. The
Employer’s Personnel shall have the right to inspect the preparation of all these
documents, wherever they are being prepared.
If the Employer’s Requirements describe the Contractor’s Documents which are to

be submitted to the Engineer for review and/or for approval, they shall be
submitted accordingly, together with a notice as described below.
In the following provisions of this Sub-Clause, (i) “review period” means the period
required by the Engineer for review and (if so specified) for approval, and (ii)
“Contractor’s Documents” exclude any documents which are not specified as
being required to be submitted for review and/or for approval.
Unless otherwise stated in the Employer’s Requirements, each review period shall
not exceed 21 days, calculated from the date on which the Engineer receives a
Contractor’s Document and the Contractor’s notice. This notice shall state that the
Contractor’s Document is considered ready, both for review (and approval, if so
specified) in accordance with this Sub-Clause and for use. The notice shall also
state that the Contractor’s Document complies with the Contract, or the extent to
which it does not comply.
The Engineer may, within the review period, give notice to the Contractor that a
Contractor’s Document fails (to the extent stated) to comply with the Contract. If
a Contractor’s Document so fails to comply, it shall be rectified, resubmitted and
reviewed (and, if specified, approved) in accordance with this Sub-Clause, at the
Contractor’s cost.
For each part of the Works, and except to the extent that the prior approval or
consent of the Engineer shall have been obtained:
a) in the case of a Contractor’s Document which has (as specified) been

submitted for the Engineer’s approval:
i. the Engineer shall give notice to the Contractor that the Contractor’s
Document is approved, with or without comments, or that it fails (to the
extent stated) to comply with the Contract;
ii. execution of such part of the Works shall not commence until the
Engineer has approved the Contractor’s Document; and
iii. the Engineer shall be deemed to have approved the Contractor’s
Document upon the expiry of the review periods for all the Contractor’s
Documents which are relevant to the design and execution of such part,
unless the Engineer has previously notified otherwise in accordance with
sub- paragraph (i);
b) execution of such part of the Works shall not commence prior to the expiry
of the review periods for all the Contractor’s Documents which are relevant
to its design and execution;
c) execution of such part of the Works shall be in accordance with these
reviewed (and, if specified, approved) Contractor’s Documents; and
d) if the Contractor wishes to modify any design or document which has
previously been submitted for review (and, if specified, approval), the
Contractor shall immediately give notice to the Engineer. Thereafter, the
Contractor shall submit revised documents to the Engineer in accordance
with the above procedure.
If the Engineer instructs that further Contractor’s Documents are required, the
Contractor shall prepare them promptly. Any such approval or consent, or any
review (under this Sub- Clause or otherwise), shall not relieve the Contractor
from any obligations or responsibility.
Design responsibility (Clause 5.3)
The Contractor undertakes that the design, the Contractor's Documents, the
execution and the completed Works will be in accordance with:
a) the Laws in the Country, and
a) the documents forming the Contract, as altered or modified by Variations.

The design, the Contractor's Documents, the execution and the completed Works
shall comply with the Country's technical standards, building, construction and
environmental Laws, Laws applicable to the product being produced from the
Works, and other standards specified in the Employer's Requirements, applicable
to the Works, or defined by the applicable Laws.
All these Laws shall, in respect of the Works and each Section, be those prevailing
when the Works or Section are taken over by the Employer under Clause 10
[Employer's Taking Over].
References in the Contract to published standards shall be understood to be

references to the edition applicable on the Base Date, unless stated otherwise.
If changed or new applicable standards come into force in the Country after the
Base Date, the Contractor shall give notice to the Engineer and (if appropriate)
submit proposals for compliance.
In the event that:
a) the Engineer determines that compliance is required, and

b) the proposals for compliance constitute a variation,
then the Engineer shall initiate a Variation in accordance with Clause 13

[Variations and Adjustments].
Sub-Clause 5.5 [Training]
The Contractor shall carry out the training of Employer’s Personnel in the
operation and maintenance of the Works to the extent specified in the Employer’s
Requirements.
If the Contract specifies training which is to be carried out before taking-over, the
Works shall not be considered to be completed for the purposes of taking-over
under Sub-Clause 10.1 [Taking Over of the Works and Sections] until this training
has been completed.
As-Built Drawings (Sub-Clause 5.6)
The Contractor shall prepare, and keep up-to-date, a complete set of "as-built“
records of the execution of the Works, showing the exact as-built locations, sizes
and details of the work as executed. These records shall be kept on the Site and
shall be used exclusively for the purposes of this Sub-Clause. Two copies shall be
supplied to the Engineer prior to the commencement of the Tests on Completion.
…….
Prior to the issue of any Taking-Over Certificate, the Contractor shall supply to the
Engineer the specified numbers and types of copies of the relevant as-built
drawings, in accordance with the Employer's Requirements. The Works shall not
be considered to be completed for the purposes of taking-over under Sub-Clause
10.1 [Taking Over of the Works and Sections] until the Engineer has received these
documents.
Sub-Clause 5.7
[Operation and Maintenance Manuals]
Prior to commencement of the Tests on Completion, the Contractor shall supply

to the Engineer provisional operation and maintenance manuals in sufficient
detail for the Employer to operate, maintain, dismantle, reassemble, adjust and
repair the Plant.
The Works shall not be considered to be completed for the purposes of taking-
over under Sub-Clause 10.1 [Taking Over of the Works and Sections] until the
Engineer has received final operation and maintenance manuals in such detail,
and any other manuals specified in the Employer’s Requirements for these
purposes.
Sub-Clause 5.8 [Design Error]
If errors, omissions, ambiguities, inconsistencies, inadequacies or other defects are

found in the Contractor’s Documents, they and the Works shall be corrected at the
Contractor’s cost, notwithstanding any consent or approval under this Clause.
The Engineer/Employer’s Representative
Appointment of the Engineer’s/Employer’s Representative’s
• It is mandatory for the Employer to appoint an Engineer in the case of all of the
FIDIC building contracts with the exception of the Green, Silver and Gold Book.
• In the case of the Gold Book, it is mandatory for the Employer to appoint an
Employer’s Representative.
• For all intends and purposes there is no or little difference between the
roles and/or responsibilities of the Engineer and that of the Gold Book’s
Employer’s Representative
• In the case of the Green and Silver Books the Employer has a discretion and
need NOT appoint a representative.
• If the Employer decides to proceed with making such appointment, however,
the contract stipulates that such person is appointed for the purposes of acting
on the Employer’s behalf.
The Engineer’s/Employer’s Representative’s Role
• The Engineer shall carry out the duties assigned to him in the contract
(Red/Yellow Book)
• The Employer’s Representative shall carry out the duties assigned to him, and
shall exercise the authority delegated to him (Silver book)
The Engineer’s/Employer’s Representative’s Role
• Acts as an agent of the Employer

• “Manages” and “administers” the contract
• Issues “consents”, “approvals”, “notices”, “certificates” and “instructions”
• See clause 1.3 and 3.3/3.4 (SB)
• Makes “determinations”
• See clause 3.5 and 3.2
Subcontracting
Subcontractors and subcontracting
• A Subcontractor is defined as “any person named in the contract as a

subcontractor, or any person appointed as a subcontractor, for a part of the
works and the legal successors in title to each of these persons”.
• Sub-Clause 5 of the Red Book and Sub-Clause 4.5 of the Yellow/Silver Book deal
specifically with Nominated Subcontractors
• Clause 4.4 of the contracts deals, in general, with aspects pertaining to ALL
subcontractors.
The Program
The program
• Clause 8.1 – The commencement date is set and specified by the engineer
• Clause 8.2 – Obligations regarding the timeous completion of the works
• Clause 8.3 – Details regarding the program and what it must include
• Clause 4.21 [Progress Reports]

Variations
Variations
• Applicable events/circumstances are:
• Changed conditions and circumstances (e.g. weather, legal conditions, floods,

earthquakes)
• Erroneous presumptions or different conditions from those anticipated (e.g. unforeseen

subsoil conditions)
• Changes due to change in quantities. See clause 12.3(a)
• Technical innovation (e.g. a new product line becomes available which decreases
maintenance cost or which makes earlier completion possible)
Variations
• Applicable events/circumstances are:
• Changed requirements of the Employer (e.g. the intended user of the building wants
extras to be included)
• Errors or defects of a technical nature within the contract documents
• Co-operation with other contractors or staff of the Employer

Variations
• FIDIC empowers the Engineer to initiate variations (a) by instructions or (b) by a

request to the Contractor to submit a proposal
• It can be issued at any time prior to the issue of a Taking-over Certificate but
not thereafter
• Contractor is bound to execute each variation unless he promptly provides

reasons (with supporting particulars) why he is not willing to do so
• Work may be omitted, through variations, but not in order to allow others to
carry it out (“Genuine omission”).
• The engineer must take care not ‘to amend’ the contract as a result of his
instructions.
• Variations must not result in an obligation to carry out work that differs
radically from what the Contractor had originally promised to do – WHY?
Variations
Variations are defined as follows:
Yellow, Silver and Gold Books
“any change to the Employer’s Requirements or the Works”
Red Book
“any change to the Works” and which is, in each instance, instructed or approved
as a variation under Clause 13.
Variations are, therefore, almost exclusively something which is instituted and

instructed by the Engineer, the Employer’s Representative or the Employer by way
of an “instruction” subject to these “limitations”.
Sub-Clause 13.2 [Value Engineering]
• The contractor can ‘initiate’ variations on special grounds (“Value

engineering”) by submitting proposals which, if adopted, will:
• Accelerate completion
• Reduce cost to the Employer of executing, maintaining or operating the Works
• Improve the efficiency or value to the Employer of the completed Works
• Otherwise be of benefit to the Employer
• It is only if the proposals meet these requirements, however, that the

Contractor will be entitled to claim the additional fee that the Red Book allows.
Variations
A variation could thus be one of the following:
• Either an instruction or an approval of a proposal;

• An instruction to cooperate (given in terms of Sub-Clause 4.6);
• An instruction for additional samples (given in terms of Sub-Clause 7.2);
• An instruction to carry out additional tests (given in terms of Sub-Clause 7.4), or
• An instruction of the location or details of specified tests (given in terms of Sub-Clause 7.4),
• Omission of any work (unless it is to be carried out by others);
• Any additional work, Plant ,Materials or services necessary for the Permanent Work,
including associated Tests on Completion, boreholes and other testing and exploratory work,
or
• Changes to the sequence or timing of the execution of the Works
• Changes to the quality and other characteristics of any item of work;
• Changes to the levels, positions and/or dimensions of any part of the work;
A variation may also include (in terms of Sub-Clause 13.1 of the Red Book) changes to the
quantities of any item of work included in the Contract. Such change do not necessarily
constitute a variation, however, and only if it meets the criteria set out in sub-clause 12.3(a).
Variations
• Upon receiving an instruction (constituting a variation) or a request to submit a

proposal the Contractor must proceed with the work or proceed to submit a
proposal unless the contractor decides to give notice to the Engineer stating his
objection thereto.
• The grounds of objection which may be raised are, however, limited to the
following:
• The Contractor cannot readily obtain the Goods required for the variation (all
Books)
• It will reduce the safety or suitability of the Works. (Yellow / Silver Book only) ,
and
• It will have an adverse impact on the achievement of the Schedule of
Guarantees (Yellow / Silver Book only).
Variations
• To deal with the effect of a variation on Contractor’s cost and profit, the
variation procedure described in Sub-Clause 13.3 must be followed
• To deal with the effect of a variation on the Time for Completion of the Works,
the provisions of Sub-Clause 20.1 must be followed
Valuing the Cost of Variations
In the case of the “Lump Sum” contracts, Sub-Clause 13.3 provides as follows:
• Upon instructing or approving a Variation, the Engineer shall proceed in

accordance with Sub-Clause 3.5 to agree or determine adjustments to the
Contract Price and the Schedule of Payments.
• These adjustments shall include reasonable profit and shall take account of the
Contractor’s submissions under sub-clause 13.2 [Value Engineering] if
applicable
Valuing the Cost of Variations
In the case of the ad-measure contract (i.e. the Red Book) Sub-Clause 13.3
provides as follows:
• Each Variation shall be evaluated in accordance with Clause 12 [Measurement

and Evaluation] unless the Engineer instructs or approves otherwise in
accordance with this clause.
Valuing the time impact of variations
A formal claim, complying with the provisions of Sub-Clause 20.1, must be

submitted by the Contractor.
Unlike claims to recover the cost of doing the work that forms the subject matter
of a variations, claims for an extension to the Time for Completion are, therefore,
subject to a time bar (even in countries where time bars will be upheld).
Claims
Claims by the Contractor
• “Claim” is not defined in the contract
• Claims have been defined, amongst others, as “ an assertion of a right to money,

property or a remedy “
• In the case of FIDIC contracts, however, it means something in between a mere

assertion and an actual entitlement to additional money or to an extension of
Time for Completion.
• The claims procedure included in the contract is the method which FIDIC uses
to deal with the consequence and impact that certain risks have on the cost of
executing the works as well as the time necessary for its completion.
CLAIMS SHOULD THUS NOT BE SEEN OR REGARDED AS A CONTENTIOUS OR

ACRANOMIOUS MATTER
Link between risk events and claims
ERE CRE NE
• Entitlement to claim
• 20.1 – If the Contractor considers himself entitled to any Extension of Time for
Completion and/or any additional payment, under any Clause of these
Conditions or otherwise in connection with the contract …..
• e.g. Sub-Clause 8.4, 8.5, 1.9, 17, 19 etc.

Employer’s Risk vs force majeure
• Procedural Rules
• FIDIC aims at the resolution of queries at the time that they arise
• Claims must, therefore, be pursued in accordance with detailed and rigorous

procedures.
• The entitlement to additional money or time is thus subject to the pre-

condition that a formal claim is notified and submitted. Note that this also
applies to claims which the Employer wishes to bring against the contractor –
albeit that the applicable rules are less strict and less onerous.
• Claims may arise at any time until the completion of the Works (and even later)
• Handling of claims require management, legal, technical and economic skills

and experience during the whole contractual period. However, research has
shown that:
• Claims management is still performed in an ad hoc manner
• Contractor’s management information systems are ill designed to support claims
• The products of good management practise, such as diaries, timesheets and programs, are
often inadequate in content even if available
• It is fundamentally important, therefore, FOR BOTH PARTIES, to have an

effective and continuous claims management system in place to identify,
initiate prepare, submit and respond to claims.
CLAIMS MUST NOT BE CONFUSED WITH DISPUTES

Note the following aspect of the wording that is used:
“The Contractor shall give notice ….”

The requirement to given notice is therefore obligatory
“The Contractor ….. shall be entitled”

Entitlement is thus not subject to anyone’s opinion – ESPECIALLY THE ENGINEER’S
“Subject to Sub-Clause 20.1 …”
“An extension … if completion is … delayed”

It must therefore be calculated with reference to the delay in completion of the works.
The Contractor must give notice as soon as practicable, not later than 28 days
after becoming aware of the relevant event or circumstance giving rise to his
claim, of is intention to submit a claim.
In his notice, the Contractor must describe “the event or circumstance giving rise
to the claim”. It is recommended that the Contractor also records the date of the
event or that date when he became aware thereof.
Failure to give notice in accordance with the first

paragraph of Clause 20.1 deprives the Contractor of his
entitlement to an extension of time and/or for
compensation. This is the TIME BAR to be cautious about.
• The Contractor must submit a fully detailed claim to the Engineer within 42
days (calculated with effect from the same date as the “1st notice”) or within
“such other period as may be proposed by the Contractor and approved by the
Engineer”.
NOTE: There is no time bar applicable to the 42-day time period.
• If the event or circumstance has a continuing effect, the aforementioned claim

shall be regarded as interim.
(if necessary)
• Further “interim claims” must be submitted at monthly intervals. These claims

must show the cumulative delay and amount claimed.
• A “final” claim must be submitted within 28 days after the end of the effects
resulting from the event or circumstance or within “such other period as may
be proposed by the Contractor and approved by the Engineer.
• The Engineer must respond to a claim within 42 days, calculated with effect
from the receipt of the claim or of further particulars (in case any were
requested). The Engineer may propose a different period within which to reply
which will apply if accepted by the Contractor.
• The response is either an approval or disapproval of the claim (with detailed

comments).
• Although further particulars may be requested by the Engineer, this response

must contain, at least, the Engineer’s response “on the principles of the claim”.
• The engineer must, if he has not rejected the claim, proceed in accordance with
sub-clause 3.5 to agree or determine (i) the extension of the Time for
Completion that will be granted and (ii) the amount of additional payment to
which the Contractor will be entitled.
Claims by the Employer
• Clause 2.5 sets out the procedure the Employer must follow when claiming
money or an extension of the Defect Notification Period under Clause 11.3.
• One major difference between the procedure applicable to an Employer's claim

and those brought by a Contractor is the absence of any provision imposing
strict time constraints on the Employer. There is also no time bar applicable to
an Employer’s claim.
Claims by the Employer
• The procedure under clause 2.5 must be used if a claim is to be made under the
following sub-clauses:
• 7.5 [Rejection];
• 7.6 [Remedial work];
• 8.6 [Rate of progress];
• 8.7 [Delay damages];
• 9.4 [Failure to pass tests on completion];
• 11.3 [Extension of the DNP];
• 11.4 [Failure to remedy defects];
• 15.4 [Payment after termination];
• 18.1 [General requirements for insurances];
• 18.2 [Insurance for Works and Contractor’s Equipment].
Measurement and evaluation
Payment process – interim
28
56
For 2
reasons
only
Cl 14.6
Payment within 56 days after
reception of statement
130
Payment Process – Final payment
56
28
131
Tests and Defects
Tests and Defects
• 2 Clauses (in the case of the Red, Yellow and Silver books) apply to tests to be
carried out on or before Completion, namely Sub-Clause 7.4 [Testing] and
Clause 9 [Tests on Completion].
• In the case of the Gold Book, Sub-Clause 7.4 [Testing] and Clause 11 [Testing]
must be consulted.
• In the case of the Yellow and Silver Books only, Clause 12 [Tests after
Completion] applies, as it name indicates, to any tests to be carried out after
completion.
Tests and Defects
• Also take note of the provisions of Sub-Clause 11.4 [Failure to Remedy Defects]
Tests and Defects
• Clause 10 [Employer’s Taking over] deals with taking over in the case of the
Red, Yellow and Silver books
• When this certificate is issued, several significant events occur:
• The Defects Notification Period starts

• Half the retention fund becomes payable
• The liability to pay liquidated damages ceases
• The Contractor’s obligation to reinstate the Works if these are damaged by any but the
excepted risks (see clause 17.3) ceases, and
• The period within which the statement at completion must be submitted by the
Contractor starts to run (sub-clause 14.10 = “84 days”)
Also note Sub-Clause 14.14 [Cessation of Employer’s Liability]

Performance Certificate
• Only the issue of a Performance Certificate shall be deemed to constitute

acceptance of the Works
• The Performance Certificate may be withheld until all defects of which the
Contractor has been notified have been remedied
• Remember that legal defects liability commences (subject to local laws) once
and after the contractor has received the performance certificate
Disputes and the DAB
Disputes and the DAB
• The DAB is an independent “panel” of three people or consists of a single

person, who give decisions on any disputes. The DAB acts as a team, not as
representatives of the Parties, so ideally there should be a balance of
experience and professional expertise within the team.
• The DAB’s decision must be implemented but if either party is dissatisfied with
the DAB’s decision, it can refer the original dispute to arbitration.
• The Red Book requires the appointment of a DAB at the start of he project and
this is referred to as a “full term” or “standing” DAB, as opposed to an “ad-hoc”
DAB under the Yellow Book.
NOTE: These contracts must be amended if a different type of DAB (i.e. other than that
specified by default) is required under these books.
• Unlike an ad hoc DAB which deals with singular disputes, the Standing DAB is
kept informed about the project, makes regular visits to site, can provide non-
binding advice and makes a decision on any dispute that may arise arising
during the term of the contract.
Termination
Termination
• “Pacta sunt servanda”

• Material breach
• “Lex commisoria”
• Clause 15 – Termination by the Employer
• Clause 16 – Termination by the Contractor
Thank you
CoenraadSnyman@hillintl.com
coenraadsnyman@hka-global.com
Trainingexcellence@hillintl.com
Clause 5.1 (Green Book)
The Contractor shall carry out design to the extent specified, as referred to
in the Appendix. The Contractor shall promptly submit to the Employer all
designs prepared by him. Within 14 days of receipt the Employer shall notify
any comments or, if the design submitted is not in accordance with the
Contract, shall reject it stating the reasons. The Contractor shall not
construct any element of the permanent work designed by him within 14
days after the design has been submitted to the Employer or where the
design for that element has been rejected. Design that has been rejected
shall be promptly amended and resubmitted. The Contractor shall resubmit
all designs commented on taking these comments into account as
necessary.
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Sub-Clause 4.1 (Red Book)
The Contractor shall design (to the extent specified in the Contract), execute and
complete the Works in accordance with the Contract and with the Engineer’s
instructions, and shall remedy any defects in the Works.
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Sub-Clause 3.3 (YB)
The Engineer may issue to the Contractor (at any time) instructions which may be
necessary for the execution of the Works and the remedying of any defects, all in
accordance with the Contract. The Contractor shall only take instructions from the
Engineer, or from an assistant to whom the appropriate authority has been
delegated under this Clause. If an instruction constitutes a Variation, Clause 13
[Variations and Adjustments] shall apply. The Contractor shall comply with the
instructions given by the Engineer or delegated assistant, on any matter related to
the Contract. These instructions shall be given in writing.
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Sub-Clause 3.3 (RB)
The Engineer may issue to the Contractor (at any time) instructions and additional or modified
Drawings which may be necessary for the execution of the Works and the remedying of any
defects, all in accordance with the Contract. The Contractor shall only take instructions from the
Engineer, or from an assistant to whom the appropriate authority has been delegated under this
Clause. If an instruction constitutes a Variation, Clause 13 [Variations and Adjustments] shall
apply. The Contractor shall comply with the instructions given by the Engineer or delegated
assistant, on any matter related to the Contract. Whenever practicable, their instructions shall
be given in writing. If the Engineer or a delegated assistant:
a) gives an oral instruction,
b) receives a written confirmation of the instruction, from (or on behalf of) the Contractor,
within two working days after giving the instruction, and
c) does not reply by issuing a written rejection and/or instruction within two working days
after receiving the confirmation, then the confirmation shall constitute the written
instruction of the Engineer or delegated assistant (as the case may be).
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Sub-Clause 3.4 (SB)
The Employer may issue to the Contractor instructions which may be necessary for
the Contractor to perform his obligations under the Contract. Each instruction
shall be given in writing and shall state the obligations to which it relates and the
Sub-Clause (or other term of the Contract) in which the obligations are specified. If
any such instruction constitutes a Variation, Clause 13 [Variations and
Adjustments] shall apply. The Contractor shall take instructions from the Employer,
or from the Employer's Representative or an assistant to whom the appropriate
authority has been delegated under this Clause.
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Sub-Clause 3.5
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. The Engineer shall give
notice to both Parties of each agreement or determination, with supporting
particulars. Each Party shall give effect to each agreement or determination unless
and until revised under Clause 20 [Claims, Disputes and Arbitration].
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Sub-Clause 1.3
Wherever these Conditions provide for the giving or issuing of approvals, certificates, consents,
determinations, notices and requests, these communications shall be:
a) in writing and delivered by hand (against receipt), sent by mail or courier, or transmitted
using any of the agreed systems of electronic transmission as stated in the Appendix to
Tender; and
b) delivered, sent or transmitted to the address for the recipient's communications as stated
in the Appendix to Tender. However:
i. if the recipient gives notice of another address, communications shall thereafter be
delivered accordingly; and
ii. if the recipient has not stated otherwise when requesting an approval or consent, it
may be sent to the address from which the request was issued.
Approvals, certificates, consents and determinations shall not be unreasonably withheld or
delayed. When a certificate is issued to a Party, the certifier shall send a copy to the other Party.
When a notice is issued to a Party, by the other Party or the Engineer, a copy shall be sent to the
Engineer or the other Party, as the case may be.
Sub-Clause 3.2
The Engineer may from time to time assign duties and delegate authority to
assistants, and may also revoke such assignment or delegation. These assistants
may include a resident engineer, and/or independent inspectors appointed to
inspect and/or test items of Plant and/or Materials. The assignment, delegation or
revocation shall be in writing and shall not take effect until copies have been
received by both Parties. However, unless otherwise agreed by both Parties, the
Engineer shall not delegate the authority to determine any matter in accordance
with Sub-Clause 3.5 [Determinations].
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Sub-Clause 8.1 (YB)
The Engineer shall give the Contractor not less than 7 days' notice of the
Commencement Date.
Unless otherwise stated in the Particular Conditions, the Commencement Date

shall be within 42 days after the Contractor receives the Letter of Acceptance.
The Contractor shall commence the design and execution of the Works as soon as
is reasonably practicable after the Commencement Date, and shall then proceed
with the Works with due expedition and without delay
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Sub-Clause 8.2 (YB)
The Contractor shall complete the whole of the Works, and each Section (if any),
within the Time for Completion for the Works or Section (as the case may be),
including:
a) achieving the passing of the Tests on Completion, and
b) completing all work which is stated in the Contract as being required for the
Works or Section to be considered to be completed for the purposes of taking
over under Sub-Clause 10.1 [Taking Over of the Works and Sections]
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Sub-Clause 8.3 (YB)
The Contractor shall submit a detailed time programme to the Engineer within 28
days after receiving the notice under Sub-Clause 8.1 [Commencement of Works].
The Contractor shall also submit a revised programme whenever the previous
programme is inconsistent with actual progress or with the Contractor's
obligations. Each programme shall include:
a) the order in which the Contractor intends to carry out the Works, including
the anticipated timing of each stage of design, Contractor's Documents,
procurement, manufacture, inspection, delivery to Site, construction,
erection, testing, commissioning and trial operation.
Sub-Clause 8.3 (YB)
b. the periods for reviews under Sub-Clause 5.2 [Contractor's Documents] and
for any other submissions, approvals and consents specified in the Employer's
Requirements,
c. the sequence and timing of inspections and tests specified in the Contract,
and
d. a supporting report which includes:
i. A general description of the methods which the Contractor intends to adopt, and of
the major stages, in the execution of the Works, and
ii. details showing the Contractor's reasonable estimate of the number of each class of
Contractor's Personnel and of each type of Contractor's Equipment, required on the
Site for each major stage.
Sub-Clause 8.3 (YB)
Unless the Engineer, within 21 days after receiving a programme, gives notice to
the Contractor stating the extent to which it does not comply with the Contract,
the Contractor shall proceed in accordance with the programme, subject to his
other obligations under the Contract. The Employer's Personnel shall be entitled to
rely upon the programme when planning their activities.
The Contractor shall promptly give notice to the Engineer of specific probable
future events or circumstances which may adversely affect the work, increase the
Contract Price or delay the execution of the Works.
The Engineer may require the Contractor to submit an estimate of the anticipated
effect of the future event or circumstances, and/or a proposal under Sub-Clause
13.3 [Variation Procedure].
Sub-Clause 8.3 (YB)
If, at any time, the Engineer gives notice to the Contractor that a programme fails
(to the extent stated) to comply with the Contract or to be consistent with actual
progress and the Contractor's stated intentions, the Contractor shall submit a
revised programme to the Engineer in accordance with this Sub-Clause.
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Sub-Clause 4.21
Unless otherwise stated in the Particular Conditions, monthly progress reports

shall be prepared by the Contractor and submitted to the Engineer in six copies.
The first report shall cover the period up to the end of the first calendar month
following the Commencement Date. Reports shall be submitted monthly
thereafter, each within 7 days after the last day of the period to which it relates.
Reporting shall continue until the Contractor has completed all work which is
known to be outstanding at the completion date stated in the Taking-Over
Certificate for the Works.
Each report shall include:
a) charts and detailed descriptions of progress, including each stage of design,

Contractor's Documents, procurement, manufacture, delivery to Site,
construction, erection, testing, commissioning and trial operation;
Sub-Clause 4.21
b) photographs showing the status of manufacture and of progress on the Site;
c) for the manufacture of each main item of Plant and Materials, the name of the
manufacturer, manufacture location, percentage progress, and the actual or
expected dates of:
(i) commencement of manufacture,
(ii) Contractor's inspections,
(iii) tests, and
(iv) shipment and arrival at the Site;
d) the details described in Sub-Clause 6.10 [Records of Contractor's Personnel and

Equipment];
Sub-Clause 4.21
e) copies of quality assurance documents, test results and certificates of

Materials;
f) list of Variations, notices given under Sub-Clause 2.5 [Employer's Claims] and
notices given under Sub-Clause 20.1 [Contractor's Claims];
g) safety statistics, including details of any hazardous incidents and activities
relating to environmental aspects and public relations; and
h) comparisons of actual and planned progress, with details of any events or
circumstances which may jeopardise the completion in accordance with the
Contract, and the measures being (or to be) adopted to overcome delays.
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Clause 5 (Red Book)
Sub-clause 5.1
In the Contract, “nominated Subcontractor” means a Subcontractor:

a) who is stated in the Contract as being a nominated Subcontractor, or
b) whom the Engineer, under Clause 13 [Variations and Adjustments], instructs the
Contractor to employ as a Subcontractor.
Sub-Clause 5.2
The Contractor shall not be under any obligation to employ a nominated

Subcontractor against whom the Contractor raises reasonable objection by notice
to the Engineer as soon as practicable, with supporting particulars.
Sub-Clause 5.3 (Red Book)
The Contractor shall pay to the nominated Subcontractor the amounts which the
Engineer certifies to be due in accordance with the subcontract. These amounts
plus other charges shall be included in the Contract Price in accordance with
subparagraph (b) of Sub-Clause 13.5 [Provisional Sums], except as stated in Sub-
Clause 5.4 [Evidence of Payments].
Clause 5.4 (Red Book)
Before issuing a Payment Certificate which includes an amount payable to a nominated

Subcontractor, the Engineer may request the Contractor to supply reasonable evidence that the
nominated Subcontractor has received all amounts due in accordance with previous Payment
Certificates, less applicable deductions for retention or otherwise. Unless the Contractor:
a) submits this reasonable evidence to the Engineer, or
b)
(i) satisfies the Engineer in writing that the Contractor is reasonably entitled to withhold or refuse to pay
these amounts, and
(ii) (ii) submits to the Engineer reasonable evidence that the nominated Subcontractor has been notified
of the Contractor’s entitlement, then the Employer may (at his sole discretion) pay, direct to the
nominated Subcontractor, part or all of such amounts previously certified (less applicable deductions)
as are due to the nominated Subcontractor and for which the Contractor has failed to submit the
evidence described in sub-paragraphs (a) or (b) above. The Contractor shall then repay, to the
Employer, the amount which the nominated Subcontractor was directly paid by the Employer.
Clause 4.5 (YB)
In this Sub-Clause, "nominated Subcontractor" means a Subcontractor whom the

Engineer, under Clause 13 [Variations and Adjustments], instructs the Contractor
to employ as a Subcontractor. The Contractor shall not be under any obligation to
employ a nominated Subcontractor against whom the Contractor raises
reasonable objection by notice to the Engineer as soon as practicable, with
supporting particulars.
Clause 4.4 (Yellow book)
The Contractor shall not subcontract the whole of the Works.

The Contractor shall be responsible for the acts or defaults of any Subcontractor,
his agents or employees, as if they were the acts or defaults of the Contractor.
Unless otherwise stated in the Particular Conditions:
a) the Contractor shall not be required to obtain consent to suppliers of Materials, or to
a subcontract for which the Subcontractor is named in the Contract;
b) the prior consent of the Engineer shall be obtained to other proposed Subcontractors;
and
c) the Contractor shall give the Engineer not less than 28 days' notice of the intended
date of the commencement of each Subcontractor's work, and of the commencement
of such work on the Site.
Clause 12.3(b) (Red Book)
Except as otherwise stated in the Contract, the Engineer shall proceed in

accordance with Sub-Clause 3.5 [Determinations] to agree or determine the
Contract Price by evaluating each item of work, applying the measurement agreed
or determined in accordance with the above Sub-Clauses 12.1 and 12.2 and the
appropriate rate or price for the item.
For each item of work, the appropriate rate or price for the item shall be the rate
or price specified for such item in the Contract or, if there is no such item,
specified for similar work. However, a new rate or price shall be appropriate for an
item of work if:
(a) ……
(b) (i) the work is instructed under Clause 13 [Variations and Adjustments],
(ii) no rate or price is specified in the Contract for this item, and
(iii) no specified rate or price is appropriate because the item of work is not of
similar character, or is not executed under similar conditions, as any item in the
Contract.
Clause 12.3(a) Red Book
(a)
i. the measured quantity of the item is changed by more than 10% from the
quantity of this item in the Bill of Quantities or other Schedule,
ii. this change in quantity multiplied by such specified rate for this item exceeds
0.01% of the Accepted Contract Amount,
iii. this change in quantity directly changes the Cost per unit quantity of this item
by more than 1%, and
iv. this item is not specified in the Contract as a “fixed rate item”
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Clause 15 [Termination by the Employer]
The Employer shall be entitled to terminate the Contract if the Contractor:

(a) fails to comply with Sub-Clause 4.2 [Performance Security] or with a notice
under Sub-Clause 15.1 [Notice to Correct],
(b) abandons the Works or otherwise plainly demonstrates the intention not to
continue performance of his obligations under the Contract,
(c) without reasonable excuse fails:
(i) to proceed with the Works in accordance with Clause 8
[Commencement, Delays and Suspension], or
(ii) to comply with a notice issued under Sub-Clause 7.5 [Rejection] or Sub-Clause
7.6 [Remedial Work], within 28 days after receiving it,
(d) subcontracts the whole of the Works or assigns the Contract without the
required agreement;
(e) becomes bankrupt or insolvent, goes into liquidation, has a receiving or

administration order made against him, compounds with his creditors, or carries
on business under a receiver, trustee or manager for the benefit of his creditors, or
if any act is done or event occurs which (under applicable Laws) has a similar effect
to any of these acts or events, or
(f) gives or offers to give (directly or indirectly) to any person any bribe, gift,
gratuity, commission or other thing of value, as an inducement or reward:
(i) for doing or forbearing to do any action in relation to the Contract, or
(ii) for showing or forbearing to show favour or disfavour to any person in relation
to the Contract, or if any of the Contractor’s Personnel, agents or Subcontractors
gives or offers to give (directly or indirectly) to any person any such inducement or
reward as is described in this sub-paragraph (f). However, lawful inducements and
rewards to Contractor’s Personnel shall not entitle termination.
In any of these events or circumstances, the Employer may, upon giving 14 days’
notice to the Contractor, terminate the Contract and expel the Contractor from
the Site. However, in the case of sub-paragraph (e) or (f), the Employer may by
notice terminate the Contract immediately.
Sub-Clause 15.5 [Termination for Convenience]
The Employer shall be entitled to terminate the Contract, at any time for the
Employer’s convenience, by giving notice of such termination to the Contractor.
The termination shall take effect 28 days after the later of the dates on which the
Contractor receives this notice or the Employer returns the Performance Security.
The Employer shall not terminate the Contract under this Sub-Clause in order to
execute the Works himself or to arrange for the Works to be executed by another
contractor.
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Sub-Clause 16.2
Termination by the Contractor
The Contractor shall be entitled to terminate the Contract if:

(a) the Contractor does not receive the reasonable evidence within 42 days after
giving notice under Sub-Clause 16.1 [Contractor’s Entitlement to Suspend Work] in
respect of a failure to comply with Sub-Clause 2.4 [Employer’s Financial
Arrangements],
(b) the Engineer fails, within 56 days after receiving a Statement and supporting
documents, to issue the relevant Payment Certificate,
(c) the Contractor does not receive the amount due under an Interim Payment
Certificate within 42 days after the expiry of the time stated in Sub-Clause 14.7
[Payment] within which payment is to be made (except for deductions in
accordance with Sub-Clause 2.5 [Employer’s Claims]),
(d) the Employer substantially fails to perform his obligations under the Contract
Sub-Clause 16.2
Termination by the Contractor
(e) the Employer fails to comply with Sub-Clause 1.6 [Contract Agreement] or Sub-
Clause 1.7 [Assignment],
(f) a prolonged suspension affects the whole of the Works as described in Sub-
Clause 8.11 [Prolonged Suspension], or
(g) the Employer becomes bankrupt or insolvent, goes into liquidation, has a
receiving or administration order made against him, compounds with his creditors,
or carries on business under a receiver, trustee or manager for the benefit of his
creditors, or if any act is done or event occurs which (under applicable Laws) has a
similar effect to any of these acts or events.
In any of these events or circumstances, the Contractor may, upon giving 14 days’
notice to the Employer, terminate the Contract. However, in the case of
subparagraph (f) or (g), the Contractor may by notice terminate the Contract
immediately. The Contractor’s election to terminate the Contract shall not
prejudice any other rights of the Contractor, under the Contract or otherwise.
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Performance Security
• In terms of sub-clause 4.2 the Employer is entitled to call the performance

security if:
• The Contractor failed to extend the validity thereof, as and if required. The employer may
claim the full amount.
• If the Contractor fails to pay an amount due to the Employer, as agreed or as determined
in terms of sub-clause 3.5 within 42 days of such agreement or determination
• If the Contractor fails to remedy a default within 42 days after receiving the Employer’s
notice requiring remedial action or steps
• If circumstances which entitle the Employer to terminate (under sub-clause 15.2) exist,
irrespective of whether or not a notice of termination has actually given
• Any claim by the Employer under performance security must follow the
procedure set out in sub-clause 2.5
Sub-Clause 1.3
Wherever these Conditions provide for the giving or issuing of approvals,

certificates, consents, determinations, notices and requests, these
communications shall be:
(a) in writing and delivered by hand (against receipt), sent by mail or courier, or
transmitted using any of the agreed systems of electronic transmission as stated in
the Particular Conditions; and
(b) delivered, sent or transmitted to the address for the recipient's
communications as stated in the Contract. However:
(i) if the recipient gives notice of another address, communications shall thereafter
be delivered accordingly; and
(ii) if the recipient has not stated otherwise when requesting an approval or
consent, it may be sent to the address from which the request was issued.
Approvals, certificates, consents and determinations shall not be unreasonably
withheld or delayed.
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Clause 4.4
The Contractor shall not subcontract the whole of the Works. The Contractor shall
be responsible for the acts or defaults of any Subcontractor, his agents or
employees, as if they were the acts or defaults of the Contractor. Where specified
in the Particular Conditions, the Contractor shall give the Employer not less than
28 days' notice of:
(a) the intended appointment of the Subcontractor, with detailed particulars which
shall include his relevant experience,
(b) the intended commencement of the Subcontractor's work, and
(c) the intended commencement of the Subcontractor's work on the Site.
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Clause 8.4 [Extension of time for completion]
The Contractor shall be entitled subject to Sub-Clause 20.1 [Contractor's Claims] to

an extension of the Time for Completion if and to the extent that completion for
the purposes of Sub-Clause 10.1 [Taking Over of the Works and Sections] is or will
be delayed by any of the following causes:
(a) a Variation (unless an adjustment to the Time for Completion has been agreed
under Sub-Clause 13.3 [Variation Procedure]),
(b) a cause of delay giving an entitlement to extension of time under a Sub-Clause
of these Conditions, or
(c) any delay, impediment or prevention caused by or attributable to the
Employer, the Employer's Personnel, or the Employer's other contractors on the
Site. If the Contractor considers himself to be entitled to an extension of the Time
for Completion, the Contractor shall give notice to the Employer in accordance
with Sub-Clause 20.1 [Contractor's Claims]. When determining each extension of
time under Sub-Clause 20.1, the Employer shall review previous determinations
and may increase, but shall not decrease, the total extension of time.
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Clause 8.5 [Delay by Authorities]
If the following conditions apply, namely:

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 Contractor's work, and
c) the delay or disruption was not reasonably foreseeable by an experienced
contractor by the date for submission of the Tender, 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].
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Clause 1.9 (Red Book only)
The Contractor shall give notice to the Engineer whenever the Works are likely to
be delayed or disrupted if any necessary drawing or instruction is not issued to the
Contractor within a particular time, which shall be reasonable. The notice shall
include details of the necessary drawing or instruction, details of why and by when
it should be issued, and details of the nature and amount of the delay or
disruption likely to be suffered if it is late.
If the Contractor suffers delay and/or incurs Cost as a result of 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 [Contractor’s 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.
Clause 1.9 (Red Book only)
After receiving this further notice, the Engineer shall proceed in accordance with
Sub- Clause 3.5 [Determinations] to agree or determine these matters. However, if
and to the extent that the Engineer’s failure was caused by any error or delay by
the Contractor, including an error in, or delay in the submission of, any of the
Contractor’s Documents, the Contractor shall not be entitled to such extension of
time, Cost or profit.
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Clause 17.3 [Employer’s risks]
The risks referred to in Sub-Clause 17.4 below are:

a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies,
b) rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war, within
the Country,
c) riot, commotion or disorder within the Country by persons other than the Contractor’s
Personnel and other employees of the Contractor and Subcontractors,
d) munitions of war, explosive materials, ionising radiation or contamination by radio-activity,
within the Country, except as may be attributable to the Contractor’s use of such munitions,
explosives, radiation or radio-activity,
e) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic
speeds,
f) use or occupation by the Employer of any part of the Permanent Works, except as may be
specified in the Contract,
g) design of any part of the Works by the Employer’s Personnel or by others for whom the
Employer is responsible, and
h) any operation of the forces of nature which is Unforeseeable or against which an
experienced contractor could not reasonably have been expected to have taken adequate
preventative precautions.
Clause 19.1 [Definition of force majeure]
In this Clause, “Force Majeure” means an exceptional event or circumstance:

a) which is beyond a Party’s control,
b) which such Party could not reasonably have provided against before entering into the
Contract,
c) which, having arisen, such Party could not reasonably have avoided or overcome, and
d) which is not substantially attributable to the other Party.
Force Majeure may include, but is not limited to, exceptional events or circumstances of the kind
listed below, so long as conditions (a) to (d) above are satisfied:
i. war, hostilities (whether war be declared or not), invasion, act of foreign enemies,
ii. rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war,
iii. riot, commotion, disorder, strike or lockout by persons other than the Contractor’s
Personnel and other employees of the Contractor and Subcontractors,
iv. munitions of war, explosive materials, ionising radiation or contamination by radio-activity,
except as may be attributable to the Contractor’s use of such munitions, explosives,
radiation or radio-activity, and
v. natural catastrophes such as earthquake, hurricane, typhoon or volcanic activity.
Clause 17.4 [Consequences of Employer’s risks]
If and to the extent that any of the risks listed in Sub-Clause 17.3 above results in
loss or damage to the Works, Goods or Contractor’s Documents, the Contractor
shall promptly give notice to the Engineer and shall rectify this loss or damage to
the extent required by the Engineer. If the Contractor suffers delay and/or incurs
Cost from 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 [Contractor’s
Claims] to:
(a) an extension of time for any such delay, if completion is or will be delayed,
(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 [Employer’s Risks],
reasonable profit on the Cost shall also be included.
After receiving this further notice, the Engineer shall proceed in accordance with
Sub- Clause 3.5 [Determinations] to agree or determine these matters.
Clause 19.4 [Consequences of force majeure]
If the Contractor is prevented from performing any of his 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
[Contractor’s Claims] to:
(a) an extension of time for any such delay, if completion is or will be delayed,
(b) if the event or circumstance is of the kind described in sub-paragraphs (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.
After receiving this notice, the Engineer shall proceed in accordance with Sub-
Clause 3.5 [Determinations] to agree or determine these matters.
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Clause 5.6 As-Built Documents
The Contractor shall prepare, and keep up-to-date, a complete set of “as built”
records of the execution of the Works, showing the exact as-built locations, sizes
and details of the work as executed. These records shall be kept on the Site and
shall be used exclusively for the purposes of this Sub-Clause. Two copies shall be
supplied to the Engineer prior to the commencement of the Tests on Completion.
In addition, the Contractor shall supply to the Engineer as-built drawings of the
Works, showing all Works as executed, and submit them to the Engineer for
review under Sub-Clause 5.2 [Contractor’s Documents]. The Contractor shall obtain
the consent of the Engineer as to their size, the referencing system, and other
relevant details.
Prior to the issue of any Taking-Over Certificate, the Contractor shall supply to the
Engineer the specified numbers and types of copies of the relevant as-built
drawings, in accordance with the Employer’s Requirements. The Works shall not
be considered to be completed for the purposes of taking-over under Sub-Clause
10.1 [Taking Over of the Works and Sections] until the Engineer has received these
documents.
Sub-Clause 2.5 [Employer’s Claims]
If the Employer considers himself to be entitled to any payment under any Clause of these
Conditions or otherwise in connection with the Contract, and/or to any extension of the Defects
Notification Period, the Employer or the Engineer shall give notice and particulars to the
Contractor. However, notice is not required for payments due under Sub-Clause 4.19 [Electricity,
Water and Gas], under Sub-Clause 4.20 [Employer’s Equipment and Free-Issue Material], or for
other services requested by the Contractor. The notice shall be given as soon as practicable after
the Employer became aware of the event or circumstances giving rise to the claim. A notice
relating to any extension of the Defects Notification Period shall be given before the expiry of
such period.
The particulars shall specify the Clause or other basis of the claim, and shall include
substantiation of the amount and/or extension to which the Employer considers himself to be
entitled in connection with the Contract. The Engineer shall then proceed in accordance with
Sub-Clause 3.5 [Determinations] to agree or determine (i) the amount (if any) which the
Employer is entitled to be paid by the Contractor, and/or (ii) the extension (if any) of the Defects
Notification Period in accordance with Sub-Clause 11.3 [Extension of Defects Notification Period].
This amount may be included as a deduction in the Contract Price and Payment Certificates. The
Employer shall only be entitled to set off against or make any deduction from an amount
certified in a Payment Certificate, or to otherwise claim against the Contractor, in accordance
with this Sub-Clause. Back
Sub-Clause 7.4 [testing]
This Sub-Clause shall apply to all tests specified in the Contract, other than the
Tests after Completion (if any). The Contractor shall provide all apparatus,
assistance, documents and other information, electricity, equipment, fuel,
consumables, instruments, labour, materials, and suitably qualified and
experienced staff, as are necessary to carry out the specified tests efficiently. The
Contractor shall agree, with the Employer, the time and place for the specified
testing of any Plant, Materials and other parts of the Works.
The Employer may, under Clause 13 [Variations and Adjustments], vary the
location or details of specified tests, or instruct the Contractor to carry out
additional tests. If these varied or additional tests show that the tested Plant,
Materials or workmanship is not in accordance with the Contract, the cost of
carrying out this Variation shall be borne by the Contractor, notwithstanding other
provisions of the Contract.
The Employer shall give the Contractor not less than 24 hours' notice of the
Employer's intention to attend the tests. If the Employer does not attend at the
time and place agreed, the Contractor may proceed with the tests, unless
otherwise instructed by the Employer, and the tests shall then be deemed to have
been made in the Employer's presence.
If the Contractor suffers delay and/or incurs Cost from complying with these
instructions or as a result of a delay for which the Employer is responsible, the
Contractor shall give notice to the Employer and shall be entitled subject to Sub-
Clause 20.1 [Contractor's Claims] to:
a) an extension of time for any such delay, if completion is or will be delayed,
b) payment of any such Cost plus reasonable profit, which shall be added to the
Contract Price.
After receiving this notice, the Employer shall proceed in accordance with Sub-
Clause 3.5 [Determinations] to agree or determine these matters.
The Contractor shall promptly forward to the Employer duly certified reports of
the tests.
When the specified tests have been passed, the Employer shall endorse the
Contractor's test certificate, or issue a certificate to him, to that effect. If the
Employer has not attended the tests, he shall be deemed to have accepted the
readings as accurate.
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Sub-Clause 9.1 [Tests on Completion]
The Contractor shall carry out the Tests on Completion in accordance with this
Clause and Sub-Clause 7.4, [Testing] after providing the documents in accordance
with Sub-Clause 5.6 [As-Built Documents] and Sub-Clause 5.7 [Operation and
Maintenance Manuals].
The Contractor shall give to the Employer not less than 21 days' notice of the date
after which the Contractor will be ready to carry out each of the Tests on
Completion.
Unless otherwise agreed, Tests on Completion shall be carried out within 14 days
after this date, on such day or days as the Employer shall instruct.
Unless otherwise stated in the Particular Conditions, the Tests on Completion shall
be carried out in the following sequence:
a) pre-commissioning tests, which shall include the appropriate inspections and

("dry" or "cold") functional tests to demonstrate that each item of Plant can
safely under-take the next stage, (b);
b) commissioning tests, which shall include the specified operational tests t

demonstrate that the Works or Section can be operated safely and as specified,
under all available operating conditions; and
c) trial operation, which shall demonstrate that the Works or Section perform
reliably and in accordance with the Contract.
During trial operation, when the Works are operating under stable conditions, the
Contractor shall give notice to the Employer that the Works are ready for any
other Tests on Completion, including performance tests to demonstrate whether
the Works conform with criteria specified in the Employer's Requirements and
with the Performance Guarantees.
Trial operation shall not constitute a taking-over under Clause 10 [Employer's
Taking Over]. Unless otherwise stated in the Particular Conditions, any product
produced by the Works during trial operation shall be the property of the
Employer.
In considering the results of the Tests on Completion, appropriate allowances shall
be made for the effect of any use of the Works by the Employer on the
performance or other characteristics of the Works. As soon as the Works, or a
Section, have passed each of the Tests on Completion described in sub-paragraph
(a), (b) or (c), the Contractor shall submit a certified report of the results of these
Tests to the Employer.
Sub-Clause 9.2 [Delayed tests]
If the Tests on Completion are being unduly delayed by the Employer, Sub-Clause
7.4 [Testing] (fifth paragraph) and/or Sub-Clause 10.3 [Interference with Tests on
Completion] shall be applicable.
If the Tests on Completion are being unduly delayed by the Contractor, the
Employer may by notice require the Contractor to carry out the Tests within 21
days after receiving the notice. The Contractor shall carry out the Tests on such
day or days within that period as the Contractor may fix and of which he shall give
notice to the Employer.
If the Contractor fails to carry out the Tests on Completion within the period of 21
days, the Employer's Personnel may proceed with the Tests at the risk and cost of
the Contractor. These Tests on Completion shall then be deemed to have been
carried out in the presence of the Contractor and the results of the Tests shall be
accepted as accurate.
Sub-Clause 9.3 [Retesting]
If the Works, or a Section, fail to pass the Tests on Completion, Sub-Clause 7.5
[Rejection] shall apply, and the Employer or the Contractor may require the failed
Tests, and Tests on Completion on any related work, to be repeated under the
sameterms and conditions.
Sub-Clause 9.4 [Failure to Pass Tests on
Completion]
If the Works, or a Section, fail to pass the Tests on Completion repeated under Sub-Clause 9.3
[Retesting], the Employer shall be entitled to:
a) order further repetition of Tests on Completion under Sub-Clause 9.3;
b) if the failure deprives the Employer of substantially the whole benefit of the Works or
Section, reject the Works or Section (as the case may be), in which event the Employer shall
have the same remedies as are provided in subparagraph (c) of Sub-Clause 11.4 [Failure to
Remedy Defects]; or
c) issue a Taking-Over Certificate.
In the event of sub-paragraph (c), the Contractor shall proceed in accordance with all other
obligations under the Contract, and the Contract Price shall be reduced by such amount as shall
be appropriate to cover the reduced value to the Employer as a result of this failure. Unless the
relevant reduction for this failure is stated (or its method of calculation is defined) in the
Contract, the Employer may require the reduction to be (i) agreed by both Parties (in full
satisfaction of this failure only) and paid before this Taking-Over Certificate is issued, or (ii)
determined and paid under Sub-Clause 2.5 [Employer's Claims] and Sub-Clause 3.5
[Determinations].
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Sub-Clause 12.1 (Yellow and Silver Book)
[Procedure for Tests after Completion]
If Tests after Completion are specified in the Contract, this Clause shall apply. Unless otherwise
stated in the Particular Conditions:
a) the Employer shall provide all electricity, fuel and materials, and make the Employer's Personnel and Plant
available;
b) the Contractor shall provide any other plant, equipment and suitably qualified and experienced staff, as
are necessary to carry out the Tests after Completion efficiently; and
c) the Contractor shall carry out the Tests after Completion in the presence of such Employer's and/or
Contractor's Personnel as either Party may reasonably request.
The Tests after Completion shall be carried out as soon as is reasonably practicable after the
Works or Section have been taken over by the Employer. The Employer shall give to the
Contractor 21 days' notice of the date after which the Tests after Completion will be carried out.
Unless otherwise agreed, these Tests shall be carried out within 14 days after this date, on the
day or days determined by the Employer.
The results of the Tests after Completion shall be compiled and evaluated by the Contractor,
who shall prepare a detailed report. Appropriate account shall be taken of the effect of the
Employer's prior use of the Works.
Sub-Clause 12.2 [Delayed Tests]
If the Contractor incurs Cost as a result of any unreasonable delay by the Employer to
the Tests after Completion, the Contractor shall (i) give notice to the Employer and (ii)
be entitled subject to Sub-Clause 20.1 [Contractor's Claims] to payment of any such
Cost plus reasonable profit, which shall be added to the Contract Price.
After receiving this notice, the Employer shall proceed in accordance with Sub-Clause
3.5 [Determinations] to agree or determine this Cost and profit.
If, for reasons not attributable to the Contractor, a Test after Completion on the Works
or any Section cannot be completed during the Defects Notification Period (or any
other period agreed upon by both Parties), then the Works or Section shall be deemed
to have passed this Test after Completion.
Sub-Clause 12.3 [Retesting]
If the Works, or a Section, fail to pass the Tests after Completion:
a) sub-paragraph (b) of Sub-Clause 11.1 [Completion of Outstanding Work and Remedying of

Defects] shall apply, and
b) either Party may then require the failed Tests, and the Tests after Completion on any related
work, to be repeated under the same terms and conditions.
If and to the extent that this failure and retesting are attributable to any of the matters listed in
sub-paragraphs (a) to (d) of Sub-Clause 11.2 [Cost of Remedying Defects] and cause the
Employer to incur additional costs, the Contractor shall subject to Sub-Clause 2.5 [Employer's
Claims] pay these costs to the Employer.
Sub-Clause 12.4 [Failure to Pass Tests after
Completion]
If the following conditions apply, namely:
a) the Works, or a Section, fail to pass any or all of the Tests after Completion,
b) the relevant sum payable as non-performance damages for this failure is stated (or its
method of calculation is defined) in the Contract, and
c) the Contractor pays this relevant sum to the Employer during the Defects Notification Period,
then the Works or Section shall be deemed to have passed these Tests after Completion.
If the Works, or a Section, fail to pass a Test after Completion and the Contractor proposes to
make adjustments or modifications to the Works or such Section, the Contractor may be
instructed by (or on behalf of) the Employer that right of access to the Works or Section cannot
be given until a time that is convenient to the Employer. The Contractor shall then remain liable
to carry out the adjustments or modifications and to satisfy this Test, within a reasonable period
of receiving notice by (or on behalf of) the Employer of the time that is convenient to the
Employer. However, if the Contractor does not receive this notice during the relevant Defects
Notification Period, the Contractor shall be relieved of this obligation and the Works or Section
(as the case may be) shall be deemed to have passed this Test after Completion.
Sub-Clause 12.4 [Failure to Pass Tests after
Completion]
If the Contractor incurs additional Cost as a result of any unreasonable delay by the Employer in
permitting access to the Works or Plant by the Contractor, either to investigate the causes of a
failure to pass a Test after Completion or to carry out any adjustments or modifications, the
Contractor shall (i) give notice to the Employer and (ii) be entitled subject to Sub-Clause 20.1
[Contractor's Claims] to payment of any such Cost plus reasonable profit, which shall be added
to the Contract Price.
After receiving this notice, the Employer shall proceed in accordance with Sub-Clause 3.5
[Determinations] to agree or determine this Cost and profit.
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Sub-Clause 11.4 [Failure to remedy defects]
If the Contractor fails to remedy any defect or damage within a reasonable time, a date may be
fixed by (or on behalf of) the Employer, on or by which the defect or damage is to be remedied.
The Contractor shall be given reasonable notice of this date. If the Contractor fails to remedy the
defect or damage by this notified date and this remedial work was to be executed at the cost of
the Contractor under Sub-Clause 11.2 [Cost of Remedying Defects], the Employer may (at his
option):
a) carry out the work himself or by others, in a reasonable manner and at the Contractor's cost,
but the Contractor shall have no responsibility for this work; and the Contractor shall subject
to Sub-Clause 2.5 [Employer's Claims] pay to the Employer the costs reasonably incurred by
the Employer in remedying the defect or damage;
b) agree or determine a reasonable reduction in the Contract Price in accordance with Sub-
Clause 3.5 [Determinations]; or
c) if the defect or damage deprives the Employer of substantially the whole benefit of the
Works or any major part of the Works, terminate the Contract as a whole, or in respect of
such major part which cannot be put to the intended use. Without prejudice to any other
rights, under the Contract or otherwise, the Employer shall then be entitled to recover all
sums paid for the Works or for such part (as the case may be), plus financing costs and the
cost of dismantling the same, clearing the Site and returning Plant and Materials to the
Contractor. Back
Sub-Clause 14.14
The Employer shall not be liable to the Contractor for any matter or thing under or in
connection with the Contract or execution of the Works, except to the extent that the
Contractor shall have included an amount expressly for it:
a) in the Final Statement and also

b) (except for matters or things arising after the issue of the Taking-Over Certificate for the
Works) in the Statement at completion described in Sub-Clause 14.10 [Statement at
Completion].
However, this Sub-Clause shall not limit the Employer's liability under his indemnification
obligations, or the Employer's liability in any case of fraud, deliberate default or
reckless misconduct by the Employer.
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Sub-Clause 20.1
If the Contractor considers himself to be entitled to any extension of the Time for Completion
and/or any additional payment, under any Clause of these Conditions or otherwise in connection
with the Contract, the Contractor shall give notice to the Employer, describing the event or
circumstance giving rise to the claim.
The notice shall be given as soon as practicable, and not later than 28 days after the Contractor
became aware, or should have become aware, of the event or circumstance.
If the Contractor fails to give notice of a claim within such period of 28 days, the Time for
Completion shall not be extended, the Contractor shall not be entitled to additional payment,
and the Employer shall be discharged from all liability in connection with the claim. Otherwise,
the following provisions of this Sub-Clause shall apply.
The Contractor shall also submit any other notices which are required by the Contract, and
supporting particulars for the claim, all as relevant to such event or circumstance.
Sub-Clause 20.1
The Contractor shall keep such contemporary records as may be necessary to substantiate any
claim, either on the Site or at another location acceptable to the Employer. Without admitting
liability, the Employer may, after receiving any notice under this Sub-Clause, monitor the record-
keeping and/or instruct the Contractor to keep further contemporary records. The Contractor
shall permit the Employer to inspect all these records, and shall (if instructed) submit copies to
the Employer.
Within 42 days after the Contractor became aware (or should have become aware) of the event
or circumstance giving rise to the claim, or within such other period as may be proposed by the
Contractor and approved by the Employer, the Contractor shall send to the Employer a fully
detailed claim which includes full supporting particulars of the basis of the claim and of the
extension of time and/or additional payment claimed. If the event or circumstance giving rise to
the claim has a continuing effect:
(a) this fully detailed claim shall be considered as interim;
(b) the Contractor shall send further interim claims at monthly intervals, giving the accumulated delay and/or
amount claimed, and such further particulars as the Employer may reasonably require; and
(c) the Contractor shall send a final claim within 28 days after the end of the effects resulting from the event or
circumstance, or within such other period as may be proposed by the Contractor and approved by the
Employer.
Sub-Clause 20.1
Within 42 days after receiving a claim or any further particulars supporting a previous claim, or
within such other period as may be proposed by the Employer and approved by the Contractor,
the Employer shall respond with approval, or with disapproval and detailed comments. He may
also request any necessary further particulars, but shall nevertheless give his response on the
principles of the claim within such time.
Each interim payment shall include such amounts for any claim as have been reasonably
substantiated as due under the relevant provision of the Contract. Unless and until the
particulars supplied are sufficient to substantiate the whole of the claim, the Contractor shall
only be entitled to payment for such part of the claim as he has been able to substantiate.
The Employer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or
determine (i) the extension (if any) of the Time for Completion (before or after its expiry) in
accordance with Sub-Clause 8.4 [Extension of Time for Completion], and/or (ii) the additional
payment (if any) to which the Contractor is entitled under the Contract.
The requirements of this Sub-Clause are in addition to those of any other Sub-Clause which may
apply to a claim. If the Contractor fails to comply with this or another Sub-Clause in relation to
any claim, any extension of time and/or additional payment shall take account of the extent (if
any) to which the failure has prevented or prejudiced proper investigation of the claim, unless
the claim is excluded under the second paragraph of this Sub-Clause.
Sub-Clause 15.1
If the Contractor fails to carry out any obligation under the Contract, the Employer
may by notice require the Contractor to make good the failure and to remedy it
within a specified reasonable time.

Fundamental FIDIC - Updated PDF

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The Fundamentals of FIDIC

Presented by Coenraad Snyman

• Small value (less than USD 250,000)

Responsibility for design

Most likely to be carried out by the Employer but Contractor can be

See Clause 5.1

Flexible since it can be

The type must be chosen and stated in the appendix

• Cl 3.1 Authorised Person

• Cl 3.2 Employer’s Representative

Responsibility for design

Re-measurable contract with a Bill of Quantities

Measurement proceeds in accordance with clause 12

• Includes provisions or amendments to the Red Book deemed necessary or

• E.g. Clause 2.4 [Employer’s Financial Arrangements]

Responsibility for design

Carried out [exclusively ?] by the Contractor

• Same as Yellow BUT …..

Typically we see a 25% to 30% higher contract price being tendered

• There is no requirement placed on the Employer to appoint an Engineer

• At end of the design-build phase, a Commissioning Certificate is issued not a

• It is, like the Red Book, re-measurable in nature.

A lump sum subcontract (making

• Updated and revised “Red” and “Yellow” Books

• In December 2016, FIDIC presented a pre-release version of

• As expected, FIDIC has made substantial amendments to the

• However, rather than scale back following the controversy

• The Proposed 2017 Yellow Book therefore retains the same

• Key issues are whether or not these provisions do in fact offer

• The dispute mechanism in the Proposed 2017 Yellow Book

• The 1999 Yellow Book introduced the now infamous Dispute

• As alluded to above, the Proposed 2017 Yellow Book follows

• The Proposed 2017 Yellow Book includes one consolidated

• It also includes a new procedure enabling a waiver of these

The role of the Engineer

• The role of the Engineer has been expanded under the

• Consult with the parties to attempt to reach agreement, and if no

• Make a “fair determination” within a further 42 days.

• Under the 1999 Yellow Book, the Engineer was required to

• The Proposed 2017 Yellow Book also includes an express

• Furthermore, whilst both the Proposed 2017 and 1999 Yellow

• The Proposed 2017 Yellow Book has therefore extended the

• A new “Avoidance of Disputes” provision has been added

• The parties will not be bound to act on any advice given in

• The DAB procedure under the Proposed 2017 Yellow Book

• Furthermore, Sub-clause 21.7 provides that if either party

• Under both the 1999 and Proposed 2017 wording, either

• Finally, the new wording includes a revised provision for

• The 1999 Yellow Book wording was subject to debate before

• Under the Proposed 2017 Yellow Book, parties will be able to

• The mandatory amicable settlement period has been reduced

• This clarifies that the parties’ obligation to “promptly” comply

• The arbitration provisions for non-final DAB decisions are

• The Proposed 2017 Yellow Book also expressly permits an

• As noted above, the new wording includes an expanded Sub-

(Max) (Min) Lump Sum (Main Option A)

Lump Sum + Variations

change requirements or needs

The Contractor shall be deemed to:

a) have satisfied himself as to the correctness and sufficiency of the Accepted

b) have based the Accepted Contract Amount on the data, interpretations,

• The following sub-clauses require data to be stated in the Appendix to Tender

• 14.2 Advance Payment(s)