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FIDIC CONTRACT

CONDITIONS

An

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FIDICTHE FEDERATION INTERNATIONALE DES INGENIEURS CONSEIL

(THE INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS)

ORIGINALLY ESTABLISEHD IN 1913 - SWITZERLAND

WELL KNOWN ORGANISATION – PUBLISHED STANDARD FORM OF CONSTRUCTION CONTRACTS FOR INTERNATIONAL USE

NORMS ARE FAIRLY BALANCED AND EQUITABLE SO FAR AS THE RIGHTS AND OBLIGATION OF BOTH THE PARTIES ARE CONCRNED

CONTRACT CONDITIONS WIDELY USED IN LARGE NO. OF COUNTRIES EITHER DIRECTLY OR ACCEPTED AS REFERENCE POINT FOR

• DRAFTING OTHER STANDARD FORM OF INTL. CONST. CONTRACT

• INDIVIDUALLY DRAFTED CONSTRUCTION CONTRACT

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IN INDIA- FIDIC CONDITIONS ARE USED FOR –ALL PROJECTS AIDED BY INTERNATIONAL FINANCIAL INSTITUTES LIKE, WORLD BANK, ADB , EBRC ETC.

REFERENCE POINT FOR MODIFYING THE OTHER CONTRACT FORMS FOR OTHER MEGA PROJECTS, LIKE NHAI, IRRIGATION PROJETCS (DAMS, CANALS) OR PROJECT WHERE GLOBAL BIDS ARE INVITED

CONSULTING ENGINEERS ASSOCIATION OF INDIA (CEAI) IS THE CENTRAL BODY , REPRESENTS INDIA IN FIDIC

THE USE OF FIDIC CONDITIONS OF CONTARCTS IN INDIA HAS INCREASED VIEW GROWTH OF INFRASTRUCTURE DEVELOPMENT

AND ENTRY OF FDI IN THIS SECTOR

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STANDARD FORMS OF CONTRACTS

CONDITIONS FOR CONTRACT FOR CONSTRUCTION (RED BOOK)

Building or Engineering works designed by the Employer or his representative , the Engineer. Contractor construct the work in accordance the design provided by the Employer.

CONDITIONS FOR CONTRACT PLANT & DESIGN BUILT (YELLOW BOOK)

Provision of Electrical & Mechanical plant and for the design and execution of building or Engineering work. Contractor designs and provides- plant / works in accordance with the employers requirement .

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CONDITION OF CONTRACT EPC/ TURNKEY PROJECTS (WHITE BOOK)Provision on a turnkey basis of a power plant, a factory, an infrastructure project or other type of development with Higher degree of certainty of final price / time. CTR takes full responsibility for design and execution of the project , little involvement of the Employer.CTR carries out all EPC providing a fully –equipped facility , ready for operations (at the “TURN of the KEY”) SHORT FORM OF CONTRACTBuilding and Engineering works of relatively small capital value . Suitable for repetitive/ work of short duration.

ENGLISH IS THE ONLY OFFICIAL & AUTHENTIC TEXT

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CONDITIONS OF CONTRACT GOVERN THE RIGHTS AND OBLIGATION OF EACH PARTIES

GENERAL CONDITIONS OF CONTRACT (GCC) (Known PART-I)

The sub-clauses which were considered to be applicable to many (but not all) contracts have been included in the GC to facilitate incorporation into each contract)

PARTICULAR CONDITIONS OF CONTRACT (PCC) (Known-PART-II)

Sub clauses which must necessarily vary to take account of the circumstances relevant to the particular contract and locality of work.

THE GERENRAL CONDITIONS(PART-I) –LINKED WITH PCC (PART-II), BY A CORRESPONDING NUMBERING OF THE CLAUSES

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FIDIC CONTRACT INVOLVE THREE PARTIES

EMPLOYER (E) – AGENCY/ ORG OR INDIVIDUAL WANTS WORK TO BE EXECUTED

ENGINEER(ER) – PRIMARILY AGENT OF EMPLOYER BUT SUPPOSE TO BE NEUTRAL

CONTRACTOR(CTR) – FIRM / AGENCY EXECUTING WORK

CONDITIONS OF CONTRACT HAS CLEAR DEMARCATION OF DUTIES, RESPONSIBILITIES AND

AUTHORITIES OF ALL THREE PARTIES

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PRIORITY OF DOCUMENTSDocuments forming parts of contracts are mutually explanatory of one another . For interpretation priority , in case of any ambiguity / confusion of the documents , is as follows-

• THE CONTRACT AGREEMENT

• THE LOA

• THE LETTER OF TENDER

• THE PARTICULAR CONDITIONS

• THE GENERL CONDITIONS

• THE SPECIFICATION

• THE DRAWINGS

• THE SCHEDULE ANY OTHER DOCUMENT FORMING PART OF THE CONTRACT.

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CLAUSES UNDER FIDIC CONDITION

TOTAL 20 CLAUSES- These clause and sub-clauses numbers are universal

CLAUSE-1 - GENERAL PROVISISON

Definition of various terms used / applicable , priority of documents, communication, confidential details, care / supply of documents etc.

CLAUSE- 2 – THE EMPLOYER

Employer's obligations like- right of access of site , permits, licenses/Approval, Employer’s personnel, Employers’ Financial arrangement etc.

CLAUSE-3 - THE ENGINEER

Engineer’s duty & Authority , Delegation by the Engineer, Instructions of Engineer, replacement of Engineer, Determinations

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CLAUSE-4 - THE CONTRACTOR

General obligations, Performance Security, Sub Contractors , Safety Procedure, Rights of Way and facilities ,Progress reports, Electricity, water, gas, Protection of environment etc.

CLAUSE- 5 – NOMINATED SUBCONTRACTOR

Definition, Objection to Nomination, Payment to nominated subcontractors. Evidence of payments.

CLAUSE-6 - STAFF AND LABOUR

Engagement of staff & labour, Rates of wages and Conditions of labour, labour law, working hours, health and safety, record of CTR’s equipment and personnel

CLAUSE-7 - PLANT MATERIAL & WORKMANSHIP

Manner of execution, samples, inspection, testing, rejection, Ownership of Plant & material

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CLAUSE- 8 - COMMENCEMENT DELAY & SUSPENSION

Commencement of work, Time of Completion, Programme, EoT, Delays caused by authorities, Rates of Progress, Delay damages, Suspension of work, Consequence of suspension, Resumption of work.

CLAUSE-9 – TESTS ON COMPLETION

Contractors Obligations, Delayed Tests, Retesting, Failure to pass tests on completion.

CLAUSE-10 - EPMLOYER’S TAKING OVER

Taking over of works and sections, parts of the work, Interference with tests on completion

CLAUSE-11 - DEFECT LIABILITY

Completion of Outstanding works and remedying Defects, Cost of remedying defects, Extension of DNP, Performance certificate etc.

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CLAUSE-12 - MEASURMENT & EVALUATION

Work to be measured , Method of Measurement, Evaluation, Omissions

CLAUSE- 13 – VARIATION AND ADJUSTMENTS

Right to Vary, value Engineering, Variation procedure, Adjustment for change in legislation, Provisional sums, Day rates.

CLAUSE-14 - CONTRACT PRICE AND PAYMENT

Contract price, Advance payment, Schedule of payment ,issue of IPC, Delayed payment, Payment of retention money, Statement of completion, Final payment , Currencies of payment

CLAUSE-15 - TERMINATION BY EMPLOYER

Notice to correct, Termination by employer, Valuation at date of termination, Employers, Entitlement to termination.

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CLAUSE- 16– SUSPENSION & TERMINATION BY CTR

CTR’s Entitlement to suspend work, Termination, Cessation of work and Removal of CTR’s Equipment, Payment on termination.

CLAUSE- 17 – RISK AND RESPONSIBILITY

Indemnities, Contractor’s care to work, Employer’s risk, Consequence of employer’s Limitation of liability risk

CLAUSE-18 - INSURANCE

General requirement of Insurance, Insurance of work and CTR’s Equipment, Insurance against injury to persons, and damage to property , insurance of contractor’s personal

CLAUSE-19 - FORCE MAJURE

Definition, Notice, Consequences, Optional termination , Payment & release

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CLAUSE-20 – CLAIMS DISPUTES AND ARBITRATION

Contractor’s claim , Appointment of Dispute Adjudication Board, Failure to agree to DAB, Obtaining DAB Decision Amicable settlement, Failure to comply with DAB Decision.

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SEQUENCE OF KEY EVENTS DURING CONTRACTS FOR CONSTRUCTION

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SEQUENCE OF PAYMENT EVENT CLAUSE- 14

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SEQUENCE OF DISPUTE EVENTS CLAUSE-20

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CONCLUSIONALTHOUGH THE FIDIC CONDITIONS APPEARS TO BE COMPREHENSIVE BUT STILL IT HAS FLAWS.

INSTANCES HAS OCCURRED WHEN ENGINEER WAS NOT IMPARTIAL.

PATICULRALY - DETERMINATION OF EoT , CLAIMS ETC.

MANAGEMENT AND ADMINISTRATION OF CONTARCTS

BASED ON FIDIC CONDITIONS IS REQUIRED “SMART WAY” WHERE PROACTIVE AND TIMELY DECISION ALONG WITH DOMAIN KNOWLEDGE PLAYS CRUCIAL ROLE.

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