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24 October

2nd EDITION FIDIC BLUE BOOK:


A CONTRACT FOR THE INDUSTRY
BY JOHN GREENHALGH & TIM MADDOCK
GENESIS
1999 2001 (test), 2006 (1st)

1977

1987

2016
THE FIDIC TASK GROUP

• John Greenhalgh (Chair).


• Edward Corbett (Lawyer).
• Roger Maddrell (Engineer).
• Tim Maddock (IADC).
• Marnix Vandenberghe (IADC).

The FIDIC Contracts Committee has the


ultimate decision on the form and content.
GOALS

• To be an industry specific standard form of contract.


• To set a clear and balanced contracting basis.
• To promote efficient procurement, management and execution of
dredging projects.
APPROACH

• Reflect current practice.


• Reinforce its specialist nature.
• Keep it simple and practicable.
• Follow FIDIC terms and styles:
• contract data;
• general risks;
• sub-clause referencing.

But not to make changes


for changes sake
RE-STATEMENT OF ORIGINAL GUIDELINES (1)

• “in dredging and reclamation work, the Contractor is not normally held
responsible for the maintenance of the dredging work after taking-over; and
the areas of dredging are usually taken over in Sections as they are
completed;
RE-STATEMENT OF ORIGINAL GUIDELINES (2)

• the Contractor can only work economically if he is allowed to work continuously by


day and by night; and
• equipment costs (mobilisation, use and demobilisation) form a much higher
proportion of total cost in the case of a dredging contract than is generally the case
with construction contracts. The cost of delays can therefore be significant.”
NOTES FOR GUIDANCE

• Longer than the Conditions (19 pages).


• Detailed industry specific guidance.
• Not part of the final contract.
ESSENTIAL PRE-CONTRACT INFORMATION, SOIL & SITE

• Soils information:
• boreholes with testing;
• vibro cores;
• cone penetration testing;
• bed sampling and relevant testing;
• seismic, side scan & magnetometer surveys.
• Reclamation Information.
• Ordnance and obstructions.
• Environmental studies.
PERMITS & LICENSES: SUB-CLAUSE 2.2

• Employer:
• planning;
• zoning and
• other similar permission required
for the permanent work.
• Contractor:
• all other.
PRICING, MEASUREMENT AND PAYMENT

• Flexibility for lump sum or remeasurement.


• Method of measurement.
• Bill of Quantities.
• Idle rates.
CONTRACT STRUCTURE

Engineer Employer

Contractor
CONTRACT DATA

• A title with meaning.


• An opportunity for the parties.
PROJECT SPECIFIC DATA (1/2)

• Commencement Date.
• Documents forming the Contract.
• Name of the Engineer.
• Time for Completion.
• Dredging Works.
• Law & Language.
• Notices, fees and other charges by Employer.
• Contractor’s design (if any).
PROJECT SPECIFIC DATA (2/2)

• Interruptions for ship movements.


• Climatic / hydrological conditions.
• Delay Damages.
• Working Hours restrictions (if any).
• Currency of payment.
• Valuation type (lump sum, remeasure ..).
• Limitation of Liability.
• Dispute Adjudication Board.
INSURANCE
GENERAL CONDITIONS: 15 CLAUSES
1. General Provisions. 11. Contract Price and Payment.
2. The Employer. 12. Default.
3. The Engineer. 13. Risk and Responsibility.
4. The Contractor. 14. Insurance.
5. Design. 15. Resolution of Disputes.
6. Defined Risks.
7. Time for Completion.
8. Taking-Over.
9. Remedying Defects.
10. Variations and Claims.
DESIGN: CLAUSE 5 RESPONSIBILITY FOR DESIGN (1/2)

• “The Contractor shall be responsible for his tendered design


and design under Sub-Clause 5.1 [Contractor's Design],
every element of which shall be fit for the intended purposes
as specified in the Contract or, where no purposes are
specified, fit for their ordinary purposes.
DESIGN: CLAUSE 5 RESPONSIBILITY FOR DESIGN (2/2)

• The Employer shall be responsible for


the Specification and Drawings.”
DEFINED RISKS: CLAUSE 6.1

One list of Defined Risks:


• Clear allocation of risk and responsibility;
• Promotes effective budget management;
• Straightforward to modify.
Sub-Clause 10.3 - Early Warning:
• Each Party shall notify;
• Entitlement based on had prompt notice been given.
Notice is not a condition precedent.
CHANGES TO DEFINED RISKS

• Munitions. • Ship interruptions.


• Piracy. • Hydrological conditions.
• Exceptional Events.
• Change in law.
ALIGNMENT WITH RAINBOW SUITE

• Performance security.
• Employer’s financial arrangements.
• Limitation of liability:
• exclusion of so called indirect and consequential loss;
• cap on liability.
USAGE OF THE FIRST EDITION

• Widespread in India, Indonesia, Nigeria and the Philippines.


• Growing usage in Central and South America.
• Low usage in UK and Europe.
AIM FOR SECOND EDITION “most beneficial distribution of risks
is to allocate each risk to the party
• Wider usage. that is best able to deal with and
handle that particular risk. Such risk
• Translations in Spanish, Portuguese,
distribution will in general lead to
French, German and Russian. the lowest contract price”

FIDIC Procurement Procedure Guide


TIME FOR QUESTIONS

• We shall try to respond all questions immediately.


• Answers to complicated questions will be sent by e-mail.