EPC/Turnkey ProjectsiPOSDIES ey FIDIC ic an serotiona todertion of atonal Member Associations of cong svaieer DIC wae founded in 1913 by thre national associations of cenautng enginears within EuDDe, ‘objectives of forming the faceraton ware to promote ia comnon te professional ieress ofthe Ma ‘Associations and to cisceminat information of nore to theie membors. Today, FDIC mamborsp ‘some 99 countree tom al parts of the globe and encompassing most of the private pracie cons engineers Freee Samet pein st nner te cratira erty koa ‘behal of Member Associations, ts sretogic objectives are to: represent werkd-wéss the moja of proving technology babed intellectual servoes forthe bull and natural envronment; assist mes Jace relating to business praction deine and acthaly promote conformance to @ code of ethics the mage of consisting engineers as leaders and wealth creators in sooty; promote the corr ‘enironmertal ustelnabilty, support and promote young professionals as future leaders. IOIG arranges seminars, conference and othr ovents inthe furtherance of is goals: mal high ethical and professional etancards; exchange of ws and infomation; discussion of rr mutual eoncarn amang Membar Associations and representatives ofthe international tac eth and development of the conauting engineering industy in developing countries. IDC members ondoree FIIs stautos and poley statements and comply with FDIC's Cock ‘which calls for protssional cornpetencs, impartial advice anc open anc fair Competition. HIG, fs the hthorance ofits goals, publshesinteational stander forms of contacts for wats Foren, Constuction, Plt and Design Guid, EPC/Turrke) and agreements (fr cionts, consuls, ‘constants, jlat ventures, and representatives), togothor with rlated materias such as stanfac ‘uaieation fom. DIC eso publishes businss practice documents such 8s polcy statements, postion pepe ‘cuidelnes, Uaring manus, and trahing resource its in the areas of management systems menagernent, isk management, integrity management, omvirerment management, sustanati) business procesecs (coneuttant solecton, qualty basod sdecton, tendering, procurement, insurance, technclogy transfer, capacly bud). OIG oxpanises an extensive programme of sarina’s, conferences, capacty bulding worship ‘reining courses. (O10 irs to maintain tigh ethical and professional stancards throughout the consulting Iinduetry through the exchenge of viwa and information, wih discussion of problems of mtu farong Member Assochtions and representalhes of the mutlateral development banks ord ‘ternational fnercainstuttons. "DIC pubeations and deals about vaning courbes end conferences are avalabie rom the in Geneva, Saiteetand, Spectic activities are dataled in an annual business pian and the FIDIO wv. FIDIC.org, gives extansve background information, Published by © Copyright FIDIC 1999 International Federation of Consulting Engineers (FIDIC) World Trade Center I Allights reserved. PO. Box 811 No patt of this publication 1216 Geneva 18 may be reproduced ‘Switzerland or transmitted in any form Phone +41 22 799 49.00 cor by any means without Fax +41 22799 49.01 permission of the publisher. E-mail fidio@idic.org WW hitp/Amweficc.orgGENERAL CONDITIONS GUIDANCE FOR THE PREPARATION OF PARTICULAR CONDITIONS FIDIC® Conditions of Contract ee eee for EPC/Turnkey Projects TENDER, CONTRACT AGREEMENT AND DISPUTE ADJUDICATION AGREEMENT First Edition 1999 ISBN 2-88492-021-0 FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS = (AEN INTERNATIONALE VEREINIGUNG BERATENOER. INGENIEURE FEDERAGION INTERNACIONAL DF INGENIEROS CONSULTORESinter ‘Wort POE 1218 Switz Teleg Fax: E-me COPYRIGHT Copyright © 1996 FDIC, World Trace Center I 29 route de Prés-Bois, Ceneva Airport, CH 215 Gonova, Switzerland, Al rights roserved, FIDIC is the only Copyright owner of FIDIG publoations, which are protected by the tne Convention for the Protection of Literary and Artistic Works, international conventions SUA as TRIPS end the WIPO copyright taty and national intoloctual proporty laws. No part of @ FLIC _nublication can be reproduced, translated, edapted, stored in a etneval system or commmuniaied, In any form or by ary means, mechanical, electronic, magnetic, photocopying, mori or cothenwse, without prcr permisson in witing from FIDIC. The varsion in Engfsh fs considered iy FIDIG as the offi and authentic ext for the purposes of transtaio, “TERMS AND CONDITIONS: “Tho widospread dssomination, acceptance and use of IDC publealions and thor translations Important means for accomplishing FDIC's mission and are therelore actively promoted by FUE, ‘The sale of FIDIC pubfcations and! their translations is an important source of revenue for FIDIGaKd Its Member Assccialions. I creates rasources for providing a wide range of services resting ts business needs of member firns. All steps, starting withthe inal crating of pubtcatins, ein require considerable eflor and expense. FDIC regularly updates and reissues publications so that users can profit from the state f-theat, 8y supplying publeations, FIDIC does not grent any intallsctual property rights. The puchass a supply of a FIDIC publication, inclucing forms for corrpltion by 2 purchaser or auonsect wa, ‘does not confer auther's rights undor any clcumstancas, Users ray on the contents of FIDIC publications, especialy FIDIC contracts and agreements. Important business ensections. The use of authentic publications is therefore essentid be saloquarding their interests. FIDIC discourages modification of its pubications, and ont it ‘exceptional crcumstanges wil It authorise modficaton, reproduction or Incorporation elsowiet. Permission to quoie irom, incorporate, reproduce or copy al or part of a FDIC publiaten stad be adcrossad to the FIDIG Secretarat, which will decide upon appropriate ters. A license to prepare a mocifed or adapted publication wil be agreed to under certain conciins. Specialy he modifed oF adepted publication must be for internal purposes, and not te published or distrouted commercial. In the case of FIDIC contracis and agreements, FIDIC alms to provide balanced and equiste ‘conditions of coniract by ensuring tha integiy ofits publications. & purchaser or authorised wt (fa FIDIC contract or agreement is thus granted the right to: make a single copy the purchased document, for personal and private use; ~ Incorporai in other documents (or electronic fles}elther the orginal printed document ¢r flectronic fi or pages print from an electronic fle supplied by FIDIO for this purpose; ~ draws up and disibute internally ancor among partners clearly identfied! Particular Conchtors Or their equivalent using text provided in the FIDIC publication specifically for this purpose: reproduce, complate and disirbuteinteally and/or among partners any forme, in both printed {and oloctronts formats, provided for comlotion by the purchasor or usar DISCLAIMER Whie FIDIC aims to ensure that ils publications represent the best in business pracice, i Federation accepts or assumes no izilty oF responsibilty for ary events or the corsequenis* thereof trat derive from the use of ts publications, FIDIC publications are provided “as is, witha warranty of ary kind, either exaress oF implied, including, without limitation, warranties rmarchantabity, fitness for a particular purpose and non-infingament, FIDIC publications are at ‘exhaustive and are only intended to provide general guidance. They shauld not be refed! upon in® spect siluation o° issue. Exner! legel advice should be oblained whenever appropriate, a ariculary before entering ito or terminating a contact.Intemationale Veronigung Beratnder ngeniere Faderacion Inemaciral ds Inpeires Consulires FIDIC Guidance Memorandum to Users of the 1999 Conditions of Contract dated 1st April 2013 Purpose: This Guidance Memorandum is designed to make explicit the intentions of FIDIC in relation to the enforcement of the DAB decisions that are binding and not yet final, which is that in the case of failure to comply with these decisions, the failure itself should be capable of being referred to arbitration Under Sub-Clause 20.6 (Arbitration), without Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Daclsion| and Sub-Clause 20.5 [Amicablo Sottiement] being applicable to the reference. This intention hhas been made menifest in the FIDIC Conditions of Contract for Design, Build and Operate Projects, 2008 (‘Gold Book’) by the equivalent Sub-Ciause 20.9. ‘To make FIDICS intention explicit this Guidance Memorandum provides changes to be made to the FIDIC dispute resolution Clause 20 and in particular to Sub-Clause 20.7 and, as a consequence, to 14.6 and 14.8 of the FIDIC Conditions of Contract for Construction, 1999 (the ‘Red Book’), the FIDIC Conditions of Contract for Plant and Design-Build, 1999 (Yellow Book’), and the EPC/Turnkey Projects, 1999 (‘Silver 00K). Compliance with the guidance provided in this Memorandum ishighly recommended when using the 1999 FIDIC Red, Yellow or Silver books. Background: AA substantial number of arbitral tribunals have found Clause 20 to be unclear on the issue of whether a party may refer the tallure of the other Party to comply with a DAB decision that is ‘binding’ but not ‘final’ to arbitration as is explicitly the case of a ‘final and binding’ decision under Sub-Clauso 20.7. A DAB, decision Is ‘binding’ and not ‘final’ when either Party, within 28 days after receiving the DAB decision, gives notice to the other party ofits dissatisfaction with the DAB decision. International arbitral tribunals have been divided over whether, in the event of a failure to comply with a DAB decision issued under Clause 20 of the Red Book, which is ‘binding’ but not ‘final’, the failure itself may be referred to arbitration, without Sub-clause 20.4 [Obtaining Dispute Adjudication Board's Decision} and Sub-Clause 20.5 [Amicable Settlement) being applicable to the reference. This issue was also the subject of the Judgment of the Singapore High Court in PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation [2010] SGHC 202 and the judgment of the Court of Appeal of Singapore dismissing an appeal from that judgment [2017] SGCA 33 (‘Singapore Case’), which sat aside an ICC. award directing enforcement of a DAB decision. ‘The same concern applies to Clause 20 of the Yellow Book, and the Silver Book, as thet Clause is ‘worded in substantially identical termsin them, FIDIC BOOKSHOP POBox 11,1215 Genera 15, Swizedend DaFIDIC's Recommendation: Clause 20: Sub-Clause 20.4 - Insert the following as.@ new penultimate paragraph: if the decision of the DAB requires a payment by one Party to the other Party, the DAB may require the payee to provide an appropriate security in respect of such payment’ Replace Sub-Clause 20,7 inilts entirety with: ‘mn the event that a Party fails to comply with any decision of the DAB, whether binding or final and binding, then the other Parly may, without projudice to any other rights it may have, refer the failure itself to arbitration under Sub-Clauise 20.6 [Arbitration] for summary or other expedited relief, as may be appropriate. Sub-Clause 20.4 {Obtaining Dispute Adjudication Board's Decision] and Sub- Clause 20.5 [Amicable Settlement] shall not apply o this reference.” Clause 14: ‘Sub-Clause 14.6 ~ Insert the following at the end of the last sentence of the first paragraph: ‘_ and shail include any amounts due to or from the Contractor in accordance with a decision by the DAB mado under Sub-Ciause 20.4 [Obtaining Dispute Adjudication Board's Decision" nd’ ‘Sub-Clauso 14.7, paragraph b — insert the following betora ‘including any amounts due in accordance with a decision by the DAB which have been included in the Interim Payment Certificate!CONTENTS Iniroductory Note to First Ecition ‘Acknowledgements, Foreword General Conditions Contents ..... eet Detinitions listed! alphabetically Clauses 1-20 ..... Appendix: General Gordons of Oso Austin Agreement ‘Annex: Procedural Rules a Hee Indox of Sub-Clauses, Guidance for the Preparation of Particular Conditions Contents . 1 Introduction 2 Notes on the Preperation of Tender Documents 38 Clauses... 7 7 fete 18 Annexes: Forms of Security... it id eet ga oH 29. Forms of Letter of Tender, Contract Agreement and Dispute Adjudication Agreement Lotter of Tender Contract Agreament Dispute AAgludcation Agreement fone person) Denia Dispute Adjudication Agreement (three person) cess cvceeccnsee reali Errata to tho First Edition 1999... inside back cover © FI 1668INTRODUCTORY NOTE TO FIRST EDITION FIDIC's Red and Yellow Books (ie. standard forms of contract for works of civil engineering ‘onstruction and for electrical and mechanical works) have bean in widespread use for several decades, and have been recognised - among other things - for their principles of balanced risk sharing between the Employer and the Contractor. These isk sharing principles have been beneficial for both parties, the Employer signing a contract al a lower price and only having further costs when particular unusual risks actually eventuate, and the Contractor avoiding pricing stich Tisks which are not easy to evaluate. The principles of balanced risk sharing are continued in the new "Construction" and “Plant anct Design-Build” Books, During recent years it has been noticed that much of the construction market requires a forrn of contract whera certainty of final price, and often of completion date, are of extreme importance, Employers on such tumkey projects are wiling to pay more - sometimes considerably more - for their project IF they can be more certain that the agreed final price wil not be exceeded. Among such projects can be found many projects financed by private funds, where the lenders require greater cortainty about a project's costs to the Employer than is alowed for under tho allocation of tisks provided for by FIDIC's traditional forms of contracts. Often the construction project (the EPC ~ Engineer, Procure, Construct - Contract) is only one part of @ complicated commercial venture, and financial or other faiture of this construction project will jeopardize the whole venture. For such projects it is necessary for the Contractor to assume responsbbilty for a wider range of risks than under the traditional Red and Yellow Books. To obtain increased certainty af the final price, the Contractor is often asked to cover such risks as the occurrence of poor or unexpected ground conditions, and that whet is set out in the requirements prepared by the Employer actually wil result in the desired objective. If the Contractor is to carry such risks, the Employer obviously must give him the time and opportunity to obtain and consider all relevant information before the Contractor is asked to sign on a fixed contract price. The Employer must also realize that esking responsble contractors to price such risks wil increase the construction cost and result in some projects not being commercially viable. Even under such contracts the Employer does carry certain risks such as the risks of war, terrorism and the like and the other risks of Force Majeure, and it is always possible, and sometimes advisable, for the Parties to discuss other risk sharing arrangements before entering into the Contract. In the case of BOT (Buile-Operate-Transfes) type projects, which are normally negotiated {a8 @ package, the allocation of risk provided for in the turnkey construction Contract negotiated intialy between the Sponsors and the EPC Contractor may nead to be adjusted in order to take into aocount the final alocetion of all risks between the various contrasts forming the total package. Apart from the more recent and rapid development of privately financed projects demanding contract terms ensuring increased certainty of price, time and performance, it has long been apparent that many employers, particuerly in the public sector, in a wide range of countries have demanded similar contract terms, at least for turnkey contracts. They have often irreverently taken the FIDIC Red or Yellow Books and altered the terms so that risks placed on the Employer in the FIDIC Books have been transferred to the Contractor, thus effectively removing FIDIC's tracitionel principles of balanced risk sharing. This need of many empioyets has not gone unnoticed, and FIDIC has considered it better for al parties for this need to be openly recognised and! regularised. By providing a standard FIDIC form for use in such contracts, the Employer's requirements for more tisk to be taken by the Contractor are clearly stated. Thus the Employer does not have to atlempt to alter a standard form intended for another risk arrangement, and the Contractor is fully aware of © FIC 1999GED the increased risks he must bear. Clearly the Contractor will righlly increese his tender price ‘account for such extra risks, This form for EPC/Tumkey Projects is thus intended to be suitable, not only for EPC Contac within @ BOT or similar type vonture, but also for all the many projects, both large and smal particularly E & M (Electrical and Mechanical) and other process plant projects, being carried around the world by all ypes of employers, often in a cll aw environment, where the goverame departments or private developers wish to impiernent their project on a fixed-price turkey bay and with a stritly two party approach. Employers using this form must realise that the “Employer's Requirements" which they prepg should describe the principle and basic design of tho plant on a functional basis. The Tend should then be permitted andl required to verify all relevant information and data and make ay necessaly investigations. He shall also cary out any necessary design and detain of tho speci equipment and plant he is offering, allowing him to offer solutions best suited to his equipment ar ‘oxperience, Therefore the tendering procedure has to permit discussions between the Tenderer a ‘the Empioyer about technical matters and commercial conditions. All such matters, when ages shall then form patt of the signed Contract Theteatter the Contractor should be given freedom to carry out the wor: in hia chosen meng provided the end result meeis the performance criteria specified by the Employer. Consequent tho Employer should only exercise limited control over and should in general not interfere with Contractor's work. Clearly the Employer will wish to know and follow progress of the work and assured that the timo programme is being followed. He will also wish to know thal the work cq 's a8 spocified, that third partios aro not being disturbed, that performence tests are mel, otherwise thal the ‘Employer's Requirements" are being complied with. ‘A feature of this tyoe of contract is that the Contractor has to prove the rellablity and perforrran of his plant and equipment. Therefore special attention is given to the “Tests on Completion’, whic ‘often take place over a considerable time period, and Taking Over shell take place only successful Completion of these tests. FIDIC recognizes that privately-fnanced projects are usually subject to more negotiation # ublicly-financed ones and that therefore changes are likely fo have to be made in any form of contract proposed for projects within a BOT or similar type venture. Among other thi ‘such form may need to be adapted to take account of the special, if nat unique, characteristics each project, as wall as tho requirements of lenders and others providing financing. Neverth such changes do not do away with the need for a standard form, These Conditions of Contract for EPC/Tumkey Projects are not suitable for use in the folonin circumstances: ~ It there fs insufficient time or information for tenderers to scrutinise and check the Employer's Requirements or for them to carry out their designs, risk assessment studies and (taking particular account of Sub-Ciauses 4.12 and 5.1) - If construction wil involve substantial works undorground or work in other areas tendeters cannat inspect. ~ If the Employer intends to supervise closely or control the Contractor's work, of to re\ most of the construction drawings. * Ifthe amount of each interim payment is to be determined by an official or ather interme FIDIC recommends that the Conaltions of Contract for Plant and Design Build be used in the at circumstances for Works designed! by (or on behalf of) the Contractor 2 ANC 1999ACKNOWLEDGEMENTS. Fédération Internationale des ingénieurs-Conseils (FIDIC) extends special thanks to the following members of its Update Task Group: Christopher Wade (Group Leader), SWECO-VBB, Sweden; Peter L Booen (Principal Drafter), GIBB Ltd, UK; Hermann Bayerlain, Fichtner, Germany; Christopher R Seppala (Logal Adviser), White & Case, France; and José F Speziale, IATASA, Argentina. The preparation was carried out under the general direction of the FIDIC Contracts Committee which comprised John B Bowcock, Consulting Engineer, UK (Chairman); Michael Mortimer-Hawkins, SwedPower, Sweden; and Axel-Volkmar Jaeger, Schmidt Reuter Partner, Germany; together with K B (Tony) Nortis as Special Adviser. Dratts were reviewed by many persons and organisations, including those listed below. Their comments were duly studied by the Update Task Group and, where considered appropriate, have influenced the wording of the clauses. Mushtaq Ahmad NESPAK, Pakistan; Pater Batty, Post Buckley International, USA; Roeland Bertrams, Clifford Chance, Netherlands; Charles G Borthwick, SwedPower, Sweden; Manfred Breege, Lahmeyer Intemationel, Germany; Pablo Bueno, TYPSA, Spain, Naol G Bunni, Consulting Engineer, ireland; lan Fraser, Boca Cartor Holings & Ferner, New Zealand; Roy Goode, Oxtord University, UK; Dan W Graham, Bristows Cooke & Carpmael, UK; Mark Griffiths, Griffths & Armour, UK; Geottrey F Hawker, Consuiting Engineer, UK; Hesse & Sieinberger, YDMA, Germany; Poul E Hvilsted, Elsamprojekt, Denmark; Lennart lwar, Lindahl, Sweden; Gordon L Jaynes, Whitman Breed Abbott & Morgan, UK; Tonny Jensen (Chairman of FIDIC Quality Management Committee), COW, Denmark; Martin Klapper, Hopgood and Ganim, Australia; Philip Loots & Associates, South Africa; Neil McCole, Merz and MoLelan, UK; Matthew Needham: Laing, Victoria Russell & Paul J Taylor, Berrymans Lace Mawer, UK; J Gordon Rees, Binnie Black & Veatch, UK; Tim Reynolds, Constant & Constant, UK; David R Wightman & Gerlando Butera, Nabarro Nathanson, UK; the Association of Japanese ‘Consutting Engineers; the Construction Industry Authority of the Philippines; the Dutch Vereniging voor Bouwrecht; the European International Contractors (EIC}; ORGAnisme de Liaison Industries Métaliques Furopéennes (ORGALIME}; the Intemational Association of Dredging Contractors; the International Bar Association; the Asian Development Bank; and the Worki Bank. Acknowledgement of reviewers does not mean that such persons or organizations approve of the wording of all clauses. In particular, EIG and ORGALIME have expressed reservations about some clauses of this EPC Contract. FIDIC wishes to record its appreciation of the time and effort devoted by all the above, The ultimate decision on the form and content of the document rests with FIDIC. © FRIC 1000circumstances relevant to the particular contract. The sub-clauses which were considered to be applicable to many (bul not all) contracts have been inoludodin the Gonoral Conditions, in order to faciitate their incorporation into esch contract. ‘The General Conkitions and the Particular Conditions will together comprise th Conditions of Contract governing the rights and obligations of the parties, It wil necessary to prepare the Particular Conditions for each individual contract, a tq take account of those sub-clauses in the General Conditions which mention the Particular Conditions, For this publication, the General Conditions were prepared on the following bast @ interim payments in respect ofthe lump sum Contract Price, wil be mate as work proceeds, and wil typicaly be based on instaiments spoctiod in ¢ schedule; ifthe wording in the Goneral Conditions necessitates further data which woul typically be prescribed by the Employer, then the sub-clause makes referenc: to this data being contsined in the Particular Conditions or in the Embyer’ Requirements; (ii) where a sub-clause in the General Conditions deals with a matter on whic! cifferent contract terms are likely to be applicable for different contrac, th principles applied in writing the sub-clause were: (@) users would find it more conveniont if any provisions which they dn wnish to apply could simply be deleted or not invoked, than if ackdton {ext had to be wrtten (in the Particular Conditions) because the Gover Conditions did not cover their requirements; or (&) in other cases, where the application of (a) was thought 10 b inappropriate, the sub-clause contains the provisions which we considered applicable to most contracts, For example, Sub-Clause 14.2 [Advance Payment] is included for converienoa, because of any FIDIC poicy in respect of advance payments. This Sub-Clause borane) inapplicable (even i tis not deleted) if itis disregarded by not specifying the amour. the aclvance. I should therefore be noted that some of the provisions contaned th General Conditions may not be appropriate for an apparently typical contract. Further information on these aspects, exemple wording for other amangements, aN} other explanatory meterial and a checklist and example wording to assist inl! preparation of the Particular Conditions and the other tender dooumonts, 24 included within this publication as Guidance for the Preparation of the Pertoul Condltions, Before incorporating any example wording, it must be checked 4 censure that it is wholly suitable for the particular circumstances; if not, it must ©) ‘amended. Where oxample wording is amended, and in all cases where other amendments additions are made, care must be taken to ensure that no ambiguity is created, ith vith the General Conditions or between the clsuses in the Particular Conaitiors essential that all these drafting tasks, and the entire preparation of the tend enc 00documents, are entrusted to personnel with the rolavant expertise, including the contractual, lechnical and procurement aspscts. Tris publication concludes with example forms for the Letter of Tender, the Contract Agreement, and alternatives for ths Dispute Adjudication Agreement. This Dispute ‘Adjudication Agreement provides text for the agreement between the Employer, the Contractor and the person appointed to act either as solo adjudicator or as a member of a three-person dispute adjudication board; and incorporates (by reference) the terms in the Appendix to the General Conditions. FIDIC intends to publish a guide to the use of its Conditions of Contract for Construction, for Plant and Design-Build, and for EPC/Turnkey Projects. In order to clarily the sequence of Contract activities, toferonce may be made to the ‘charts on the next two pages and to the Sub-Clausos listed below (some Sub-Clause numbers are also stated in the charts}, The charts are illustrative and must not be taken into consideration in the interpretation of the Conditions of Contract. 14.3.1 & 18.7 Base Date 4.4.82 & 81 — Commencomont Date 1.1.66 & 42 Perfomance Secunty 1.1.83 & 82 Time for Completion (as extended under 8.4) 4.4.8.4 & 9.1 Tests on Completion 11.85 & 101 Taking-Over Certificate 1.1.8.6 & 121. Tesis after Completion ff any) 14.8.7 & 11.1. Defects Notitication Period (as extended under 11.3) 1.4.88 & 11.9 Performance Gentticate (© 01 1988Issue of the Submission 1.6 Signing of 8.4 10.1 issue of 11.9 teap of Tender ofthe the Contract Commencement Taking-OverPertornace, Documents Tender Agreement Date Certiicate Cantos Detects ‘Notion Pesiod® 82 Time for ‘Comrptetion * <—_—ae <— = Delay atbutabie ala, tothe Contractor? A Remedying —> oF Defects 42 Issue oF 9.1 Tests on Performance Security Completion? 42 Rotumol the Perfor Security Typical sequence of Principal Events during Contracts for EC/Tumkey Projects ir Conditions) as a number of days, to which is ad 1. The Time for Completion is to be stated (in the Parti any extensions of time under Sub-Clauso 8.4. 2, In order to indicale the sequence of events, the above diagram is based upan the example of the Contrast felling to comply with Sub-Clause 8,2 S. The Defects Notification Period is ta be stated (in the Particular Conditions) as a number of days, to which added any extensions under Sub-Clause 11.2. 4. Depending on the type of Works, Tests after Completion may also be required. © FIG 1990143 Contractor 14.0 Employer gives 14.7 Employer submits Contractor notice of makes the Statement to the the amount Payment to the Employor ‘considored duo Contractor Each of the monthly (or otherwise) Interim payments The final Employor vorlioe draft fl statoment, Contractor Payment submits information 44.41 Contractor submits 4-11 Contractor issues raft hal statemont to tho Fel Statement and Employer tho 14.12 dlacharge Typical sequence of Payment Events envisaged in Clause 14 Partygives 20.2 Partias 20.4 A Party rotors 20.4 A Party may ojos ofthe appoint 2 dsspute tothe Jasue a “notice of Intention to DAB, DAB dissatisfaction” rater a dispute toa DAB antes present submnissions to the DAB. <28d Typical sequence of Dispute Events envisaged in Clause 20 © FIC 1909 147 Erphoyer ‘makes payment 206 APary may initiate arbitrationFIDIC® Conditions of Contract for EPC/Turnkey Projects General Conditions FEDERATION INTERNATIONALE DES (NGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS INTERNATIONALE VEREINIGUNG BERATENOER INGENIEURE FEDERAGION INTERNACIONAL DE INGENIEROS CONSULTORES GENERAL CONDITIONS GUIDANCE FOR THE PREPARATION OF PARTICULAR CONDITIONS FORMS OF LETTER OF TENDER, CONTRACT AGREEMENT AND DISPUTE ADJUDICATION AGREEMENT‘Serra Conor 14 42 13 14 18 16 17 18 19 4.10 ia 4.42 1.18 4.14 3 THE EMPLOYER'S ADMINISTRATION 3.1 The Employer's Representative 3.2 Other Employer's Personnel 8 Dolegatod Persons 3.4 Instructions 3.5 Determinations 4 THE CONTRACTOR ....... 4.41 Contractor's Generel Obligations 4.2 Performance Security 4.3 Contractor's Representative 4.4 Subcontractors © ADC 1000 General Conditions CONTENTS GENERAL PROVISIONS . Definitions Interpretation Communications Lew and Language Priority of Documents Contract Agreement Assignment Care and Supply of Documents Confidentiality Employer's Use of Contractor's Documents: Contractor's Use of Employer's Documents Confidential Details Compliance with Laws Joint and Several Liability ‘THE EMPLOYER . Right of Access to the Site Peimils, Licences or Approvals Employer's Personnel Employer's Finencial Arrangements Employer's aimsFID Powe he 48 48 47 48 49 440 ant 4AA2 44a 4t4 4.16 416 AAT 418 4.19 4.20 424 4.22 4.23 424 5 5A 52 53 5.4 55 58 8? 58 64 62 63 64 65 66 67 68 69 6.10 641 7 7 72 73 74 75 78 7 78 Nominated Subcontractors Co-operation Setting Out Safety Procedures Quality Assurance Site Data Sufficiency of the Contract Price Unforeseeable Difficulties Rights of Way and Faciltios Avoidance of Interference Access Route ‘Transport of Goods Contractor's Equipment Protection of the Environment Electricity, Water and Gas Employer's Equipment and Free-Issue Material Progress Reports Security of the Site Contractor's Operations on Site Fossils DESIGN .. General Design Obligations Contractor's Docurnents Contractor's Undertaking Technical Standards and Regulations Training ‘As-Bult Documents Operation and Maintenance Manuals Design Error STAFF AND LABOUR . Engagement of Staff and Labour Rates of Wages and Conditions of Labour Persons in the Service of Employer Labour Laws Working Hours Focilties for Staff and Labour Health and Safety Contractor's Superintendence Contractor's Personnel Records of Contractor's Personnel and Equipment Disorderly Conduct PLANT, MATERIALS AND WORKMANSHIP Manner of Execution Samples Inspection Testing Rejection Remedial Work: Ownership of Plant and Materials, Royalties FOC 190 ‘Constr of Conte or EPCGane Condon a4 82 ag 84 85 86 87 88 89 8.10 att 8.12 ot 92 93 a4 40 10.1 10.2 103 " WA 14.2 13 14 118 14.6 17 11.8 11.9 COMMENCEMENT, DELAYS AND SUSPENSION . . Commencement of Works Time for Completion Programme Extension of Time for Completion Delays Caused by Authorities Rate of Progress Delay Damages ‘Suspension of Work Consequences of Suspension Peyment for Plant and Materials in Event of Suspension Prolonged Suspension Resumption of Work TESTS ON COMPLETION Contractor's Obligations. Delayed Tests Rotosting Fallure to Pass Tests on Completion EMPLOYER'S TAKING OVER ............ ‘Taking Over of the Works and Sections Taking Ovor of Parts of the Works Interference with Tests on Completion DEFECTS LIABILITY . Completion of Outstanding Work and Remedying Defects Cost of Remedying Defects Extonsion of Defects Notification Period Failure to Remedy Detects Removal of Defective Work. Further Tests Right of Access Contractor to Search Performance Certificate 14.10 Untullled Obligations 11.11 Clearance of Site 12 12.1 12.2 123 12.4 13, 138.4 13.2 13.3 13.4 13.5 © AIDC 1090 TESTS AFTER COMPLETION .. Procedure for Tests after Completion Delayed Tests: Rotesting Failure to Pass Tests after Completion VARIATIONS AND ADJUSTMENTS . Right to Vary Value Engineoring Vatiation Procedure Payment in Applicable Currencies Provisional SumsFID Poo Te Sosa et Guanes til FORMS vi 1.1.26 1128 1143 4.1.2.10 1.143 1.1.64 114d 11.5.2 en 1099 Base Date Commencement Date Contract Contract Agreement Contract Price Contractor Contractor's Documents Contractor's Equipment Contractor's Personnel Contractor's Representative Cost Country DAB cay Detects Notification Period Employer Employer's Equipment Employer's Personnel Employer's Representative Employer's Requirements FIDIC Final Statement Foroe Majaure Foreign Currency Goos ions listed alphabetically 14.65 14.45 1158 44.24 14.38 1418 11.67 1.1.48 14.28 14.35 1157 1d 14.3.8 11.34 14.88 1.1.68 1158 11.89 Laws Local Currency Materials Party Performance Cortizate Performance Guamie Performance Secury Permanent Works Pant Provisional Sun Rotention Money ‘Schedule of Paymets Section Sito Statement Subeontractor TTaking-Over Canticle Temporary Works Tender Tests after Completion Tests on Completion Time for Completion Variation Works year (Condon of Cortret or EPGeneral Conditions General Provisions wW Definitions 444 The Contract 44.2 Parties and Persons ene Coens In the Conditions of Contract ("these Conditions"), which in clude Particular Conditions land these General Conditions, the following words and expressions shall have the meanings stated, Words indicating persons or parties include corporations and other togal entities, except where the context requires otherwise. at 1A? 141.3 1d 1S 1424 11.2.2 11.28 11.2.8 14.2.5 11.26 © FIC 1998 “Contract” means the Contract Agreement, these Conditions, the Employer's Requirements, the Tencler, and the further documents ff any) which are listed in the Contract Agreement “Contract Agreement” means the contract agreement referred to in Sub~ Clause 1.6 [Contract Agreement), including any annexed memoranda, “Employer's Requirements" means the document entitled employer's requirements, as included in the Contract, and any additions and modifications to such document in accordance with the Contract. Such document specifies the purpose, scope, and/or design and/or other technical criteria, for the Works. “Tender* means the Contractor's signed otter for the Works and alt other documents which the Contractor submitted therewith (other than these Conditions and the Employer's Requirements, if so submitted), as included in the Contract. "Performance Guarantees" and "Schedule of Payments" mean the documents so named (ff any), as included in the Contract. “Party” moans the Employer or the Contractor, as the context requires. ‘Employer’ means the person named as employer in the Contract ‘Agreement and the legal successors in title to this person. *Contractor’ means the person(s) namad as contractor in the Contract ‘Agreement and the legal successors in title to this person(s). “Employer's Representative’ means the person named by the Employer in the Contract or appointed from time to time by the Employer under Sub-Clause 8.1 [The Employer's Representative], who acts on behalf of the Employer. “Contractor's Representative” means the person named by the Contractor in the Contract or appointed from time to time by the Contractor under Sub-Clause 4.3 [Contractor's Represeniative], who ‘acts on behalf of the Contractor. "Employer's Personnel’ means the Employer's Representative, the assistants referred to in Sub-Ciause 3.2 [Other Empioyor's Personnel] 1FID a FORMS 14.8 Dates, Tests, Periods, and Completion 127 11.28 11.29 4.4.2.10 4484 1482 41.83 Liga 11.88 1.186 1137 enn 1868 and all other staff, labour and other employees of the Emngloy exaicy the Empioyer's Representative; and any othor porsonnel netifieo9 Contractar, by the Employer or the Employer's Representana, Employer's Personnel "Contractor's Personnel’ means the Contractor's Representanea| all personnel whom the Contractor utlises on Site, whe may inclu £ statt, labour and other employees of the Contractor and oi eag Subcontractor; and any other personnel assisting the Contractara t execution of the Works, “Subcontractor” means any person named in the Gontreac = subcontractor, or ary persen appointed as a sudcontracter, forap of the Works; and the legal successors in title to e&ch of ti persone. "DAB" means the person or three persons so named in the Conta, ‘other person(s) appointed under Sub-Clause 20.2 LArpoinimenntay Dispute Adjicication Board.or Sub-Clause 20.3 [Failure to Aye Dispute Adjudication Boarch "FIDIC* means ihe Fédération intornationale des Ingéniews-C the international federation of consulting onginoers. “Base Date’ means the dale 28 days prior to the latest cia submission of the Tender "Commencement Date" means the date notified under Sub-Claust [Commencement of Works|, unless otherwise defined in. the Car Agreement. “Time for Completion” means the time for completing the Works Section (as the case may be) under Sub-Clause 8.2 [Time Completion], as stated in the Particular Coneitions (with any ext under Sub-Ciause 8.4 [Extension of Time for Completion), cal from the Commencement Dato “Tests on Completion" means the tests which are spediied i Contract or agreed by both Parties or instructed as a Vaiation Which are cartied out under Clause 9 [Tests on Completion] befor ‘Works 0° a Section (as the case may be) are taken over by the Er “Taking-Over Certificate’ moans a certificate issued under Clout [Employer's Taking Over “Tests after Completion" means the tests [jf any) which are specifel the Contract and which are carried out under Clause 12 [Tests Completion] after the Works or a Section (as the case may be) are over by the Employer. “Defects Notification Perioa" means the period for noting dees the Works or a Section (as the case may be) under Sub-Cause ! [Completion of Outstanding Work and Remedying Defects), as stat the Partioular Conditions (with any extension under Sub-Clause ! [Extension of Defects Notification Perio}, caloulated from the cali which the Works or Section is completed as ceriffed undar Sub-Cl ‘Conatons of Contact ee Cay114 Money and Payments 141.5 Works and Goods Genre Cention 11.38 1.1.39 14a 1442 114d 14S 1146 147 1.148 115.4 1AB2 1.1.63 114 OFC 1699 40.1 [Taking Over of the Works and Sections). If no such period is stated in the Particular Conditions, the period shall be one year, "Performance Certificate" means the certificate issued under Sub- Clause 11.9 [Performance Certiticate}. "day" means a calendar day and "year" means 366 days. “Contract Price" meens the agreed amount stated in the Contract ‘Agreement for the design, execution and completion of the Works and the remedying of any defects, and includes adjustments (if any) in accordance with the Contract. "Cost means all exnenditure reasonably incurred (or to be incurred) by the Contracts, whether on or off the Site, including overhead and similar charges, but does not include prof. "Final Statement" means the statement detined in Sub-Clauso 14.11 Application for Final Payment). "Foreign Currency" means @ currency in which parl (or all) of the Contract Price is payable, but not the Local Currency. "Local Curreney' means the currency of the Country. ‘sum (it any) which is specified in the Contract 2s a provisional sum, for the execution of any part of the Works or for the supply of Plant, Materials or services under Sub-Clause 18.5 (Provisional Surns| “Retention Money’ means the accumulated retention moneys which the Employer retains under Suo-Ciause 14.3 (Application for intevim Payments] and pays under Sub-Clause 14.9 [Payment of Retention Money|, “Statement means a statement submitted by the Contractor as part of an application for payment under Clause 14 [Contract Price and Payment} “Contractor's Equipment’ means all apparatus, machinery, vehicles ‘and ather things required for the execution and completion of the Works and the remedying of any defects. However, Contractor's Equipment excludes Temporary Works, Employer's Equipment (if any), Pant, Materials and any othor things intended to form or forming part of the Permanent Works, "Goods" means Contractor's Equipment, Materials, Plant and ‘Temporary Works, or any of them as appropriate, “Materials” means things of all kinds (other than Plant] intended to form of forming part of the Permanent Works, including the supply only materials (ff any) to be suppliad by the Contractor under the Contract. "Permanent Works" means the permanent works to be designed and ‘executed by the Contractor under the Contract. 3GUIDANCE 5 116 Other Definitions 120 - —— Interpretation 4.1.5.5 *Plant’ means the apparatus, machinery and vehicles intended! ‘or forming part of the Permanent Works. 1.1.56 ‘Section’ means a part of the Works specified in the Conditions as @ Section (any). | 1.4.5.7 “Temporary Works" means all ternporary works of every kind bh than Contractor's Equipment) required on Site for the executieng completion of the Permanent Works and the remedying dq detects, ] 1.1.58 "Works" mean the Permanent Works and the Temporary Wot! either of them as aopropriate, 41.6.1 ‘Contractor's Documents" means the calculations, com programs and other software, drawings, manuals, models and d documents of a technical nature suppliod by the Contractor und Contract; as described in Sub-Ciause 9.2 [Contractor's Document 1.1.6.2 *Country* means the country in which the Site for most of i) | where the Permanent Works are to be executed, 1.1.8.3 “Employer's Equipment” means the apparatus, machinery end ve (i any) made available by the Employer for the use of the Contra the execution of the Works, as stated in the Employer's Requirey but does nol include Plant which has not been taken ovr by Employer. 1.1.6.4 "Force Majeure is defined in Clause 19 (Force Majeurel, 1.1.65 *Laws" means all national (or state) legisiation, statutes, ordinances: ‘ther laws, and regulations and by-laws of any legaly constitviec authority ry) of 1.1.66 "Performance Security" means the seoutity (or secur Sub-Clause 4.2 (Performance Security) 1.1.6.7 “Site” means the places where the Permanent Works wet executed and to which Plant and Materials are to be delivered, any ather places as may be specttied in the Contract as foming of the Site. 1.1.6.8 "Variation" means any change to the Employer's Requirements of Works, which is instructed or approved as @ variation under Claus [Variations and Acjustments}. In the Contract, except where the context requires othenwise: (@) words indicating one gender include all genders; (©) words indicating the singular aso inctude the plural and words indicating plural also include the singular (©) provisions including the word agree", "agreed" or “agreement require agreement to be recorded in writing, and (@) ‘written or “h writing” means hand-written, type-written, printed or election ‘made, and resulting in a permanent record, ADC 1809 {Cenatons oF Certct tr EPGrmrkey Plnunications nd Language /of Documents ‘The marginal words and other headings shall not be taken into consideration in the Interpretation of these Conditions. ‘Wherever these Conditions provide for the giving or issuing of approvals, certificates, consents, determinations, notices and requests, these communications shall be: @) in writing and delivered by hand (against receipt), sent by mail or courier, oF transmitted using any of the agreed systems of electronic transmission as stated in the Particular Condftions; and (0) delivered, sent or transmitted to the adoress forthe recipient's communications a8 stated in the Contract. However: @ if the recipient gives notice of another address, communications shall thoreafter be doivered accordingly; and (i) ifthe recipfent has not stated otherwise when requesting an approval or consent, il may be sent fo the address from which the request was issued. Approvals, certificates, consents and determinations shall not be unreasonably withheld or delayed. ‘The Contract shall be governed by the law of the country (or other jurisdiction) stated in the Particular Conditions. It there are versions of any part of the Contract which aro written in more than one language, the version which is in the ruling language stated in the Particular Conditions shall prevail ‘The language for communications shall be that stated in the Particular Conditions. tf ro language is stated there, the lenguage for communications shall be the language in which the Contract (or most of it) is written. The documents forming the Contract are to be taken as mutually explanatory of one another. For the purposes of interpretation, tho priority of the documents shall bo in accordance with the following sequence: (2) the Contract Agreement, (0) the Particular Coneitions, (these General Conditions, (©) the Employer's Requirements, (the Tender and any other documents forming part of the Contract. ‘The Contract shalt come into full force and effect on the date stated in the Contract, Agroomont. The costs of stamp duties and similar charges fi any) imposed by law in ‘connection with entry into the Contract Agreement shell be bore by the Employer.FID POBD ek a & EB S. GUIDANCE FORMS 18 - Care and Supply of Documents 19 — Confidentiality 1.10 — Employer's Use of Contractor's Documents 1a Contractor's Use of Employer's Documents (©) may, as securly in favour of a bank or financial institulion, assign ts tt moneys due, or to become due, under the Contract. Each of the Contractor's Documents shall be in the custody and cae o Contractor, unless and until taken over by the Employer. Unless otherwise stat the Contract, the Contractor shall supply to the Employor sb copies of exch Contractor's Documents. ‘The Contractor shall keep, on the Site, a copy of the Contract, publicationsrarn the Employer's Requirements, the Contractor's Documents, and Variationsend « communications given under the Contract, The Employer's Personnol shat hav. Tight of access to all these documents at all reasonable times. Ia Party becomes aware of an error or defect of a technical nature in a dct which was prepared for use in executing the Works, the Party shall promptly notice fo the other Party of such error or defect. Both Patties shall treat the details of the Contract as private and confident, ex lo the extent necessary to carry out obligations under it or to comply with applic Laws. The Contractor shall not publish, permit to be published, or disdose Particulars of the Works in any trade or technical paper or elsewhere witout previous agreement of the Employer. ‘As between the Partias, the Contractor shall retain the copyright and other ine property rights in the Contractor's Documents and other design documentsmacl (or on behalf of the Contractor. The Contractor shal be deemed (by signing the Contract) to give to the Empl on-terminable transferable non-exclusive royalty-free licencs to copy, uso communicate the Contractor's Documents, including making and using modicatl of them. This licence shal: (@) apply throughout the actual or intended working ile (whichever is longa of rejevant parts of the Works, ©) entitle any person in proper possession of the relevant part of the Work copy, use and communicate the Contractor's Documents for the purpos: completing, operating, maintaining, altering, adjusting, repairing demolishing the Works, and (0) in the case of Coniractor’s Docurnents which are in the form of axnp| programs and other software, permit their use on any computer on the Ste other places as envisaged by the Contract, including replacements of computers supplied by the Contractor. ‘The Contractor's Documents and other design documents rade by (or on tohal the Contractor shall not, without the Contractor's consent, be used, om ‘communicated to a third party by jor on behatf of) the Employer for purposes than those permitted under this Sub-Ciause. As between the Parties, the Employer shall retsin the copyright and o1 intellectual property rights in the Employer's Requirements and other docu made by (or on behalf of) the Employer. The Contractor may, at his cost, copy. and obtain communication of these documents for the purposes of the Cont Fc 1090 Goes of Conrat or EPC Tur142 Confidential Details 14138 Compliance with Laws 144 — Joint and Several Liability ‘They shall not, without the Employer's consent, be copied, used or communicated to a third party by the Contractor, except as necessary for the purposes of the: Contract. ‘The Contractor shall not be required to disclose, to the Employer, any information which the Contractor described in the Tender as being confidential. The Contractor shall disclose any cther information which the Employer may reasonably require in carder to verily the Contractor's compliance with the Contract. The Contractor shall in performing the Contract, comply with applicable Laws. Unless otherwise stated in the Particular Conditions: {@) the Employer shall have obtained (or shall obtain) the planning, zoning or similar ‘permission for the Permanent Works, and any other permissions described in the Employer's Requirements as having been (or being) obtained by the Employer; end the Employer shall indemnify and hold the Contractor harmless against and from the consequences of any failure to do so; and (0) the Contractor shall give all notices, pay all taxes, duties and fees, and obtain all permits, licences and approvals, as required by the Laws in relation to tho design, execution and completion of the Works and the remedying of any defects; and the Contractor shail indemnify and hold the Employer harmless against and from the consequences of any failure to do so. If the Contractor constitutes (under applicable Lave) a joint venture, consortium or ‘other unincorporated grouping of two or more persons: (@) these persons shall be deemed Io be jointly and severally lable to the Employer for the performance of the Contract; (6) these persons shall notify the Employer of their leader who shall have authority to bind the Contractor and each of these persons; and (6) the Contractor shall not alter its composition or legal status without the prior ‘consent of the Employer. eS 2a Right of Access to the Site ‘eno Consione The Employer shall give the Contractor right of access to, and possession of, all patts of the Ste within the tine (or times) stated in the Particular Conditions. The right and possession may not be exclusive to the Contractor. , under the Contract, the Employer is required to give (to the Contractor) possession of any foundation, structure, plant or means of access, the Employer shall do so in the time and manner stated in the Employer's Requirements. However, the Employer may withhold any such right or possession until the Performance Security has been reoelved. IF no such time is stated in the Particular Conditions, the Employer shell give the Contractor right of acoess to, and possession of, the Site with effect from the Commencement Date, If the Contractor suters delay snd/or incurs Cost as a result of a failure by the Employer to give any such right or possession within such time, the Contractor shall Het © AKC i000DANCE FoRus 220 Permits, Licences or Approvals 23 — Employer's Personnel 24 Employer's Financial Arrangements 25 Employer's Claims give notice to the Employer and shall be entitled subject to Sub-Claue 2 (Contractor's Claims] to: 2) an extension of time for any such delay, it completion is or wil be diay under Sub-Clause 8.4 [Extension of Time for Completion), and (©) payment of any such Cost plus reasonable profit, which shall be adclaito Contract Price. Attor receiving this notice, the Employer shall proceed in accordance with SubGa 3.5 [Determinations] to agroe or datermine these matiors.. However, and to the extent that tne Employer's failure was caused by anyenor delay by the Contractor, including an error in, or delay in the submissionol, aajef ¢ Contractor's Documents, the Contractor shall not be ented! to such extensor Cost or prot The Employer shail (where he is in a position to do $0) provide reasonalblo asst to the Contractor a the request of the Contractor: fa)__by obtaining copies of the Laws of the Country which aro rakwani b t Contract but are not readily available, and {b} forthe Contractor's applications for any permis, licences or approvals rein by the Laws of the Country: which the Contractor is required to obtain under Suby-Clause | [Comotiance with Laws), (i) for the delivery of Goods, including clearance through customs, and (i) for the export of Contractor's Equipment when it is removed fan Site, ‘The Empioyer shail be responsibie for ensuring that the Employer's Personne! at Employer's other contractors on the Site: {a} co-operate with the Contractor's efforts under Sub-Clause 4.6 [Co-op and (b] take actions similar to those which the Contractor is required to take sub-paragraph (a), (b} and (c) of Sub-Ciause 4.8 [Safely Procedures under Sub-Clause 4.18 [Protection of the Environment The Employer shall subrrit, within 28 days after receiving any request frat Contractor, reasonable evidence that financial arrangements have boon made: ara being maintained which will enable the Employer to pay the Contract Pra! estimated at that time) in accordance with Clause 14 [Contract Price and Payzret the Employer intends to make any material change to his financial arrangemerts| Employer shall give notice to the Contractor with detailed particulars. If the Employer considers himself to be entitled to any payment under any Cl these Gonitions or otherwise in connection with the Contract, and/or © extension of the Defects Notification Period, he shall give notice and particulars Contractor. However, notice is not required for payrenis due under Sub-Claus?! (Bloctricity, Water and Gas], under Sub-Clause 4.20 [Employer's Equjomnent arid Issue Material, or for other services requested by the Contractor. ‘@nDIG 199 Contr of Canin ter EPC}