AGREEMENT GENERAL CONDITIONS SHORT FORM of Contract PARTICULAR CONDITIONS RULES FOR ADJUDICATION Fist Euition 1989 ISBN 2-88492-024-5 NOTES FOR GUIDANCE FEDERATION (NTERNATIONALE DES INGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING: ENGINEERS INTERNATIONALE VEREINIGUNG BERATENDER INGENEURE FEDERACION INTESNAGIONAL DE INGENEROS GONSULTORES12 128 14 18 16 2A 22 28 24 34 32 CONTENTS Agreement .. Offer Acceptance Appendix General Conditions GENERAL PROVISIONS . Definitions The Contract Persons Dates, Times and Periods Money and Payments. Other Definitions Interpretation Prarity of Documents Lew Communications Statutory Obligations ‘THE EMPLOYER .. Provision of Site Permits and Licences Employer's Instructions Approvals EMPLOYER'S REPRESENTATIVES Authorised Person Employer's Representative THE CONTRACTOR ......... General Obligations Contractor's Representative Subcontracting Performance Security5a 52 6A 7A 72 73 74 at 82 et 92 10 10.1 402 103 104 10.8 4" w4 112 13 114 115 116 7 18 2 12.4 12.2 123 12.4 13, 13.1 13.2 © FIG 1990 DESIGN BY CONTRACTOR . Contractor's Design Responsibility for Design EMPLOYER'S LIABILITIES Employer's Liebilities TIME FOR COMPLETION . Execution of the Works Programme Extension of Time Late Completion TAKING-OVER ... Completion Taking-Over Notice REMEDYING EFFECTS ... Remedying Defects Uncovering and Testing VARIATIONS AND CLAIMS Right to Vary Valuation of Variations Early Warning Right to Claim Variation and Ciaim Procedure CONTRACT PRICE AND PAYMENT ... Valuation of the Works Monthly Statements Interim Payments Payment of First Haif af Retention Payment of Second Half of Retention Final Payment Currency Delayed Payment DEFAULT .... Default by Contractor Default by Employer Insolvency Payment upon Termination RISK AND RESPONSIBILITY ...... Contractor's Care of the Works Force Majeure14 14.1 42 143 15 18.1 15.2 153 INDEX INSURANCE Extent of Cover ‘Arrangements. Failure to insure RESOLUTION OF DISPUTES. pane eeeeesapesainesant0) Adjudication Notice of Dissatisfaction Atbitration Particular Conditions Rules for Adjudication Notes for GuidanceAgreement The Employer is The Contractor is _ The Employer desires the execution of certain Works known as OFFER The Contractor has examined the documents listed in the Appendix which forms part of this ‘Agreement and offers to execute the Works in conformity with the Contract for the sur of {in words) (in figures } { ) fr such other sum as may be ascertained under the Contract. ‘This offer, of which the Contractor has submitted two signed originals, may be accepted by the Employer by signing and returning one original of this document to the Contractor before ____ Gate) ‘The Contractor understands that the Employer is not bound to aocept the lowest or any offer, received for the Works. Signature: Date: oe Name: Authorised to sign on behalf of (organizaion name} q Capacity: ACCEPTANCE The Employer has by signing below, accepted the Contractor's offer and agrees thal in consideration for the execution of the Works by the Contractor, the Employer shall pay :he Contractor in accordance with the Contract. This Agreement comes into effect on the date when the Contractor receives one original of this document signed by the Employer. Signature: Date: Name: Authorised to sign on behalf of (organization name Capacity: (0 OE 18 i 6 RULES FOR, GUIDANCES APPENDIX ‘This Appendix forms part of the Agreement. [Note: with the exception of the items for which the Employer's requirements have been inserted, the Contractor shall complete the folowing information before submitting his offer. se Ee tem ‘Sub-Clause Data Documents forming the Contract listed in the order of priority Wat 2 Document {delete if not apoiicab} Document Identification une (a) The Agreement {b) Particular Conditions {ec} General Conaitions {d) The Specification (@) The Drawings 6 ‘The Contractor's tendered design {g) The bil of quantities 5) : secre 0 Time for Completion . 119 iH days Law of the Contract. 14.2... Lawef the Country” Language . . 15 Provision of Site secs 21 vessee On the Commencement Datet Authorised person . 34 Name and address of Employer's representative (fknoWn) se... 82 Performance security if any Amount... ‘a 44. FO eee ceceeeeeeeeeee Ad ___(detals) * Employer to amend as appropriateItem Requirements for Contractor's dasign (if any) Programme: Time for submission Form of programme ‘Amount payable due to failure to complete cence Period for notitying defects Variation procedure Daywork rates . Valuation of the Works" ‘Lump sum Price ‘Lump sum price with schedules of rates ‘Lump sum price with bil of quantities Romeasurement with tender bil of quantities Cost reimbursable Percentage of value of Materials and Piant Sub-Clause Data Bt 72 72 74 B1a1S 102. * Employer to amend as appropriate Specification Clause No's Within 14 days* of the Commence- ment Date. per day up to a maximum of 10%" of sum stated in the Agreement 385 days* calculated from the date stated in the notice urder ‘Sub-Ciause 8.2 {details} (details) (details) (details) (detais) (details) Materials _ 80%" Plant 205%" GENERA Q i SONDITIONS |RULES FOR, GUIDANCE iv Item Sub-Ciause Data Percentage of retention .. 11.8. 5% Currency of payment cee WT Rate of interest... 18 ae 9% per annum Insurances... cere WAM ‘Type of cover* “Amount of covers Exclusions” The Works, Materials, lant The sum stated in the and feos Agreement plus 15% Contractor's Equipment Full replacement cost ‘Third Party injury to persons ‘and damage to property eee ae Workers Other cover" 7 7 Arbitration Rules... - 153 ..... UNCITRAL Arbitration Rules* (details) Appointing authority 2.2... 18:3 President of FIDIC or his nominee" Getails) Place of Arbitration 153 The Country" “Employer to amend as appropriateSHORT FORM of Contract General Conditions First Eaition 1999 FEDERATION INTERNATIONALE DES INGENIEUAS-CONSEILS: INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS VTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE EDERACON INTERNACIONAL DE INGENIEROS CONSULTORES AGREEMENT GENERAL CONDITIONS PARTICULAR CONDITIONS RULES FOR ADJUDICATION NOTES FOR GUIDANCEGeneral Conditions a Provisions tions s, Times and In the Contract as defined below, the words end expressions defined shall have “he following meanings assigned to them, except whore tho contoxt requires others: 144 142 “Contract” means the Agreement and the other documents listed in -he Appendix “Specification” means the document as listed in the Appendix, includng Employer's requirements in respect of design to be carried out by “he Contractor, if any, and any Variation to such document. *Drawings" means the Employer's drawings of the Works as listed in ‘he Appendix, and any Variation to such drawings. “Employer’ means the person named in the Agreement and the legal successors in title to this person, but not (except with the consent of he Contractor) any assignee. *Contractor” means the person named in the Agreement and the legal successors in tile to this person, but not (except with the consent of he Employer) any assignee. Party’ means either the Employer or the Contractor. "Commencement Date" means the date 14 days after the date he Agreernent comes into effect or any other date agreed between the Partias, "day" means a calendar day. “Time for Completion’ means the time for compiating the Works as staed in the Appendix (or as extended under Sub-Clause 7.3), calculated from the Commencement Date, “Cost’ means all expenditure propery incurred (or to be incurred ) by the Contractor, whether on or off the Site, including overheads and sirrilar charges, but does not incude profit, “Contractor's Equipment" means all apparatus, machinery, vehicks, {acilites and other things required for the execution of the Works but does. not include Materials or Plant. “Country” means the country in which the Site is located, “Employer's Liabilities" means those matters listed in Sub-Clause 6.1 “Force Majeure" means an exceptional event or circumstance: which is beyond a Party's control; which such Party could not reasonably have 1 312 Interpretation 13 Priority of Documents 14 Law 15 Communications 16 Statutory Obligations provided against before entering into the Contract; which, having arisen, such Party could not reasonably have avoided or overcome; and, which is not substantially attributaplo to the other Party, 4.1.15 "Materials* means things of all kinds (other than Plant) intended to form or forming part of the permanent work, 1.1.16 ‘Plant means the machinery and apparatus intended to form or forming part of the permanent work. 1.4.17 "Site" means the places provided by the Employer where the Works are to be executed, and any other places specified in the Contract as forming part ‘of the Site, 1.1.18 “Variation" means a change to the Specification and /or Drawings (f any) which is instructed by the Employer uncler Sub-Clause 10.1 1.1.19 "Works" means all the work and design if any) to be performed by the Contractor including temporary work and any Variation Words importing persons or parties shall include firms and organisations. Words importing singular or one gender shalt include plural or the other gender where the ‘context requires. ‘The documents forming the Contract are to be taken as mutually explanatory of one another. If an ambiguity or discrenaney is found in the documents, the Employer shall issue any necessary instructions to the Contractor, and the priority of the documents shall be in accordance with the order as listed in the Appendix. ‘The law of the Contract is stated in the Appendix. Wherever provision is made for the giving or issue of any notice, instruction, or other ‘communication by any person, unless otherwise specified such communication shall be written in the language slated in the Appendix and shall not be unreasonably withheld or delayed. ‘The Contractor shall comply with the laws of the countries where activities aro performed. The Contractor shall give all notices and pay all lees and other charges in Fespeot of the Works. tng2nployer 24 Provision of Site 22 Permits and Licences 2 ‘The Employer shall provide the Site and right of access thereto at the times stated in the Appendix. ‘The Employer shall, if requested by the Contractor, assist him in applying for permits, licences or approvals which ara required for the Works,28 The Contractor shall comply with all instrustions given by the Employer in respect of Employer's Instructions the Works including the suspension of al or part of the Works. 24 Approvals E 34 Authorised Person a2 Employer's Representative No approval or consent or absence of comment by the Employer or the Employer's representative shall affect the Contractor's obligations. er's Representatives One of the Employer's personnel shall have authority to act for him. This authorsed person shall be as stated in the Appendix, or as othenwse noilied by the Employer to the Contractor The Employer may a'so 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. ThéGontractor 44 General Obligations Dontraetor's: Representative Subcontracting Performance Security ve The Contractor shall carry out the Works properly and in accordance with the Contract. The Contractor shall provide all supervision, labour, Materials, Plant and Contractor's Equipment which may be required. Ali Materials and Plant on Site shall ‘bo deemed to be the property of the Employer. ‘The Contractor shall submit to the Employer for consent the name and particulars of the person authorised to receive instructions on behalf of the Contractor. ‘The Contractor shall not subcontract the whole of the Works, The Contractor shall nol subcontract any part of the Works without the consent of the Employer. If stated in the Appendix, the Contractor shall deliver to the Employer within 14 days of the Commencement Date a performance security in 4 form and from a third party approved by the Employer, Design by Contractor Contractor's Design The Contractor shal carry out design to the extent specified, as referred to in the ‘Appendix, The Contractor shall promptly submit to the Employer all designs propared 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 ben 1928 3 ;REEMENT 2 JLES FOR ADAIDI ATION 8submitted to the Employer or where the design for that element has been rejected. Design that has been rejected shal: be promptly amended and resubmitted. The Contractor shall resubmit all designs commented on taking these comments into account as necessary, 52 e Responsibility for ‘The Contractor shail remain responsible for his tendered design and the design under B Design this Clause, both of which shall be ft for the intended purposes defined in the Contract AS and he shall also remain responsible for any infringement of any patent or copyright in oS respect of the same. The Employer shall be responsibie for the Specification and a Drawings. £! 8 2S & er's Liabilities #3 6a Employer's Liabilities In this Contract, Employer's Liabilities mean a] war, hostiities (whether war be declared or not}, invasion, act of foreign enemies, within the Country, b) rebellion, terrorism, revolution, insurrection, miltary or usurped power, or civil ‘war, within the Country, ©) riot, commotion or disorder by persons other than the Contractor's personnel and other employees, affecting the Site and/or the Works, ) ionising raciations, or contamination by radio-activity trom any nuclear fuel, Or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component of such an assembly, except to the extent to which the Contractor may be responsible for the use of any radio-active material, ©) pressure waves caused by aircraft or other aerial devices travelling al sonic or supersonic speeds, 1) use or occupation by the Employer of any part of the Works, except as may be specified in the Contract, ©) design of any part of the Works by the Employer's personnel or by othors for whom the Employer is responsible, and h) any operation of the forces of nature affecting the Site anc/or the Works, which was unforeseeable or against which an experienced contractor could not reasonably have been expected to take precautions. i) Force Majaure, suspension under Sub-Clause 2.3 unless it is attributable to the Contractor's failure, kK) any failure of the Employer, ) physical obstructions or physical conditions other than climatic conditions, encountered on the Site during the performance of the Works, which obstructions or conditions were not reasonably foreseeable by an experienced contractor and wihich the Contractor immediately notified to the Empioyer, mm} any delay or clsruption caused by any Variation, 7) any change to the law of the Contract after the date of the Contractor's offer as stated in the Agreoment, (©) 105888 arising out cf the Employer's ight to have the permanent work executed ‘on, over, under, in or through any land, and to occupy this land for the permanent work, and fr) damage which is an unavoidable result of the Contractor's obligations to execute the Works and to remedy any defects.ssc Ti me for Completion 74 Execution of the Works. Programme Extension of Time te Completion 8 Completion ‘aking-Over Notice oO ‘The Contractor shal commence the Works on the Commencement Date and svell proceed expeditiously and without delay and shal complete the Works within the Tme. for Completion. Within the time stated in the Appendix, the Contractor shall submit to the Employer a programme fer the Works in the form stated in the Appendix, Subject to Sub-Ciause 10.8, the Contractor shall be entitled to en extension to the Time for Completion i he is or wil be delayed by any of the Employer's Liabilities, On receipt of an application from the Contractor, the Employer shall consider all supporting details provided by the Contractor and shall extend the Time for Completion as appropriate. If the Contractor fails to complete the Works within the Time for Completion, she Contractor's only lability to the Employer for such failure shall be to pay che ‘amount stated in the Appendix for each day for which he fails to complete zhe Works. The Contractor may notify the Employer when he considers that the Works are compete. ‘The Employer shall notify the Contractor when he considers that the Contractor has completed the Works stating the date accordingly. Alternatively, the Employer may notify the Contractor that the Works, although not fully complete, are ready for taking over, stating the date accorcingy. The Employer shall take over the Works upon the issue of this notice. The Contractor shall promplly complete eny outstanding work and, subject lo Clause 9, clear he Site Remédying Defects on Romedying Defects ‘The Employer may at any time prior to the expiry of the period stated in the Appendix, ratify the Contractor of any defects or outstanding work. The Contractor shall remedy al no cost to the Employer any defects due to the Contractor's design, Materials, Plant or workmanship not being in accordance with the Contract. 5 AGREEMENT : . rehehAGREEMENT a a8 SBICATION ULES FOR g a Tho cost of remedying defects attributable to any other cause shall be valued as a Variation, Failure to remedy any defects or complete outstanding work within a reasonable time of the Employer's notice shall entitle the Employer to cary out all necessary work at the Contractor's cost. 92 Uncovering and Testing The Employer may give instruction as to the uncavering and/or testing of any work Unless as a result of any uncovering and/or testing it is established that the Contractor's design, Materials, Plant or workmanship are not in accordance with the Contract, the Contractor shall be paid for such uncovering and/or testing as a Variation in accordance with Sub-Clauso 10.2. vai) and Claims 10.4 Right to Vary ‘The Employer may instruct Variations, 10.2 Valuation of Variations Variations shall be valued as follows: @) ata lump sum price agreed between the Parties, or b) where appropriate, at rates in the Contract, or ©) inthe absence of appropriate rates, the rates in the Contract shall be used as the basis for valuation, or failing which }_ al. appropriate new rates, as may 69 agreed or which the Employer considers appropriate, or ©) ifthe Employer so instructs, at daywork rates set out in the Appendix for which the Contractor shall keep records cf hours of labour and Contractor's Equipment, and of Materials used, 103 Early Warning ‘A Parly shall notify the other as soon as he is aware of any circumstance which may delay or disrupt the Works, or which may give rise to a claim for additional payment. The Contractor shall take ail reasonable steps to minimise these effects. The Contractor's entitlament to extension to the Time for Completion or additional payment shal be limited to the time and payment which would have been due if he had given prompt notice and had taken all reasonable steps. 410.4 Right to Claim If the Contractor incurs Cost as a result of any of the Employer's Liabilities, tho Contractor shal be entitled to the amount of such Cost. If as a result of any of the Employer's Liabilities, it is necessary to change the Works, this shall be dealt with as a Variation, 105 Variation and Claim The Contractor shall submit to the Employer an itemised make-up of the value of Procedure Variations and claims within 28 days of the instruction or of the event giving rise to the claim, The Employer shall check and if possible agree the value. In the absence of agreement, the Employer shall determine the value. 6 GROG 1995, ‘Shot Form of Contractcoral Price and Payment na Valuation of the Works ae Monthly Statements. intorim Payments: oe Payment of First Half of Rotention 5 1yment of Second Half of Retention 7 Currency ns yyedi Payment ‘The Works shall be valued as provided for in the Appendix, subject to Clause 10. ‘The Contractor shall be entitled to be paid at monthly intervals: a) the value of the Works executed, b) the percentage stated in the Append of the value of Materials and Plant delivered to the Site at a reasonable time, subject to any adaitions or deductions which may be due. ‘The Contractor shall submit each month to the Employer a statement showing the ‘amounts 10 which he considers himsaif entitled. Within 28 days of delivery of each staiement, the Employer shall pay to the Contractor the amount shown in the Contractor's statement less retention at the rate stated in the Appendix, and less any amount for which the Employer has specified his reasons {or disagreement, The Employer shall not be bound by any sum previously considered by him to be dus to the Contractor. ‘The Employer may withhold interim payments unti! he receives the performance security under Sub-Clause 4.4 lif any), (One half of the retention shall be paid by the Employer to the Contractor within 14 ays after issuing the notice under Sub-Giause 6.2. ‘The remainder of the ratention shail be paid by the Employer to the Contractor within 14 days atter either the expiry of the period stated in the Appendix, or the remedying of notified defects or the completion of outstanding work, all as referred to in Sut~ Clause 9.1, whichever is the later. Within 42 days of the latest of the events listed in Sub-Clause 11.5 above, the Contractor shall submit a final account to the Employer together with any documentation reasonably required to enable the Employer to ascertain the final contract value. Within 26 days after the submission of this final account, the Employer shall pay to the Contractor any amount due. If the Employer disagrees with any part of the Contractor's final account, he shall specify his reasons for disagreement when making payment, Payment shail be in the curroncy stated in the Appendix. The Contractor shall be eniitled to interest at the rate stated in the Appendix for each day the Employer fais to pay beyond the presonbed payment period, 7 "AGREEMENT é 5 8 RULES FOR quioance2 g ES FOR, JUDIGATICN, fe a GUIDANCE £ Default 424 Default by Contractor 12.2 Defauit by Employer 123 Insolvency 12.4 Payment upon Termination If the Contractor abandons the Works, refuses or fails to comply with a valid instruction of the Employer or fails to proceed expeditiously and without delay, or is, lespite a written complaint, in breach of the Contract, the Employer may give notice referring to this Sub-Clause and stating the defaul, IF the Contractor has not taken all practicable steps to remedy the default within 14 days after the Contractor's receipt of the Employer's notice, the Employer may by a second notice given within a further 21 days, terminate the Contract. The Contractor shall then demobilise trom the Site leaving behind Materials and Plant and any Contractor's Equipment which the Employer instructs in the second notice is to be used until the completion of the Works, Hf the Employer fails to pay in accordance with the Contract, or is, despite a written complaint, in breach of the Contract, the Contractor may give notice referring to this Sub-Clause and stating the default. f the detault is not remedied within 7 days after the Employer's receipt of this notice, the Contractor may suspend the execution of all oF parts of the Works. H the default is not remedied within 28 days after the Employer's receipt of the Contractor's notice, the Contractor may by a second notice given within a further 21 days, terminate the Contract. The Contractor shall then demobilise from the Site, Ita Party is declared insolvent under any applicable law, the other Party may by notice terminate the Contract immediately. The Contractor shall then demobilise from the Site leaving behind, in the case of the Contractor's insolvency, any Contractor's Equipment which the Employer instructs in the notice is to be used until the ‘completion of the Works. Alter termination, the Contractor shall be entitled to payment of the unpaid balance of the value of the Works executed and of the Materials and Plant reasonably delivered to the Site, adjusted by the following: 2) any sums to which the Contractor is entitied under Sub-Clause 10.4, b) any sums to which the Employer is entitled, ©) if the Employer has terminated under Sub-Ciause 12.1 or 12.3, the Employer shall be entitled to a sum equivalent to 20% of the value of those parts of the Works not executed at the date of the termination, d)__if the Contractor has terminated under Sub-Ciause 12.2 or 12.3, the Contractor shall be entitled to the Cost of his suspension and demobilisation together with 2 Sum equivalent to 10% of the value of those parts of the Works not executed at the date of termination, ‘The net balance due shall be paid or repaid within 28 days of the notice of termination, FG 1988 Shea Farm ConactSEMENT q @ 15 2A ontractor’s Gare of the The Contractor shall teke full responsiblity for the care of the Works from the works Commencement Date until the date of the Employer's notice under Sub-Ciause 8.2. Responsibility shall then pass to the Employer. If any loss or damage happens to the Works during the above period, the Contractor shall rectify such loss or damage so that the Works conforrn with the Contract. g eee CONDITIONS Unless the loss or damage happens 2s a result of an Employer's Liablity, the Contractor shall indemnify the Employer, the Employer's contractors, agents and ‘employees against ll loss or damage happening to the Works and against all claims or expense arising out of the Works caused by a breach of the Contract, by negligence or by other default of the Contractor, his agents or employees. Majeure {fa Party Is oF will be prevented from performing any of its obligations by Force Majeure, the Party affected shal notify the other Party immediately, If necessary, the Contractor shall suspend the execution of the Works and, to the extent agreed wih the Employer, demobilise the Contractor's Equipment. : 3 If the event continues for @ period of 84 days, either Party may then give notice of termination which shall take effect 28 days after the giving of the notice After termination, the Contractor shall be entitled to payment of the unpaid balance of the value of the Works executed and of the Materials and Piant reasonably delivered to the Site, adjusted by the following: a) any sums to which the Contractor is entitled under Sub-Ciause 10.4, b) the Cast of his suspension and demobilisation, ©} any sums to which the Employer is entitled. ‘The net balance due shal be paid or repaid within 28 days of the notice of termination. ‘The Contractor shall, prior to commencing the Works, effect and thereafter maintan insurances in the joint names of the Parties: a) for loss and damage to the Works, Materials, Plant and the Contractors Equipment, b) for liability of both Parties for loss, damage, death or injury to third parties or ‘their property arising aut of the Contractor's performance of the Contract, including the Contractor's labilty for damage to the Employer's property other than the Works, and ©) for liability of both Parties and of any Employer's representative for death or injury to the Contractor's personnel except to the extent that fabilly arises from the negigence of the Employer, any Employer's representative or ther employees. 9 veto oF14.2 Al insurances shall confarm with any requirements detailed in the Appendix. The Arrangements, policies shall be issued by insurers and in terms approved by the Employer. The Contractor shall provide the Employer with evidence that any required policy is in fore and that the premiums have been paid, “AGREEMENT ‘Al payments received from insurers relating ta loss or damage to the Works shal be hold jointly by the Parties and used for the repair of the loss or damage or as compensation for loss or damage that is not to be repaired 143 Failure to Insure {f the Contractor fails to effect or keep in force any of the insurances referred to in the previous Sub-Ciauses, oF fails to provide satisfactory evidence, poicies or receipts, the Employer may, without prejudice to any other right or remedy, effect insurance for the cover relevant to such defauit and pay the premiums due and recover the same ‘as @ deduction from any other monies due to the Contractor, : a ae PULES FOR ADJUDICATION nodded, of Disputes 154 Adjudication Unless settled amicably, any dispute or difference which arises between the Contractor and the Employer out of or in connection with the Contract, including any valuation or other decision of the Employer, shall be referred by ether Party to adjudication in accordance with the attached Rules for Adjudication (the Rules’), The adjudicator shall be any person agreed by the Parties. In the event of disagreement, the adjudicator shall be appointed in accordance with the Pules, SANK cu 15.2 Notice of Dissatisfaction If a Party is dissatistied with the decision of the adjudicator or if no decision is given within the time set out in the Rules, the Party may give notice of dissatisfaction referring to this Sub-Clause within 28 days of receipt of the decision or the expiry of the time for the decision. If no notice of dissatisfaction is given within the specified time, the decision shall be final and binding on the Parties. If notice of dissatisfaction Is given within the specified time, the decision shal be binding on the Parties who shall give effect to it without delay unless and unti the decision of the adjucticator is revised! by an arbitrator. 15.3 Arbitration A dispute which has been the subject of a notice of cissatistaction shall be finally seitled by a single arbitrator under the rules specified in the Appendix. In the absence of agreement, the arbitrator shall be designated by the appointing authorily specified in the Appendix. Any hearing shall be held at the place specified in the Appendix and in the language referred to in Sub-Clause 1.5, 10 FOI tINDEX OF SUB-CLAUSES Sub-Cluse Page Es S Adjudication 184 10 - Approvals 24 a «EB Asbitration 163 10 Arrangements, Insurance 142 10 z Authorised person a 3 ge Communications 15 2 8 Completion 81 6 #2 Contractor's Care of the Works 13.1 8 Contractor's Design 5A 8 Contractor's Representative 42 3 iy Currency 7 7 1g a Default by Contractor 124 a 8 Default by Employer 122 8 Definitions 1 1 Delayed Payment 118 7 Earty Waming, Ciaims 108 6 Employer's instructions 23 3 Employer's Representative 32 3 Employer's Liabilities 64 4 Execution of the Works nA 5 Extension of Time 78 5 Extent of Cover, insurance 141 9 Failure to Insure 148 10 Final Payment 116 7 Force Majeure 13.2 9 General Obligations, Contractor at 3 Insolvency 12.3 8 interim Payments 118 7 Interpretation 12 2 Late Completion 7 5 law 14 2 Monthly Statements 2 7 Notice of Dissatistaction 182 ° Payiment upon Termination 12.4 8 Performance Security 44 3 Permits and Licences 22 2 Protty of Documents 13 2 1RULES FOR, ae AGREEMENT Coins GUDANOE CATION 12 Programme Provision of Site Remedying Detects Responsibility for Design Retention, First Half Retention, Second Half Right to Claim Fight to Vary Statutory Obligations Subeontracting Taking-Over Notice Uncovering and Testing Valuation of the Works Valuation of Variations Variation and Claim Procedure 72 5 24 2 94 5 52 4 114 7 115 7 10.4 6 40.1 6 18 2 43 a 82 5 9.2 6 Wd 7 10.2 6 108 6 ‘het Fam of ConteSHORT FORM of Contract Particular Conditions Fist Exition 1999 FEDERATION INTERNATIONALE DES INGENIEUAS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS, INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE FEDERAGION INTERNACIONAL DE INGENIEROS CONEULTORES, Fipic AGREE ENERAL CONDITIONS, PARTICULAR CONDITIONS RULES FOR ADJUDICATION NOTES FOR GUIDANCEParticular Conditions Note It is intended that the Short Form of Contract will work satisfactoriy without any Particular Conditions. However, iF the requirement of the project makes it desirable to amend any Clause or to add provisions to the Contract, the amendments and additions should be set out on pages headed Particular Conditions. Care should be taken with the drafting of such Clauses especially in view of the high priority given to the Particular Conditions by Sub-Cause 1.3.SHORT FORM of Contract Rules for Adjudication Fist Ealtion 1999 FEDERATION INTERNATIONALE DES INGENIEUHS:CONSELLS, INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS, INTERNATIONALE VEREIMGUNG BERATENDER INGENIEURE FEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES Erie AGREEMENT GENERAL CONDITIONS PARTICULAR CONDITIONS RULES FOR ADJUDICATIONRules for Adjudication referred to in Sub-Clause 15.1 General Appointment of Adjudicator ‘Terms of Appointment Fs for Aasosion 10 ‘Any reference in the Conditions of Contract to the Rules for Adjudication shall be deemed to be a reference to these Rules. Defintions in the Contract shall apply in these Rules, The Parties shall jointly ensure the appointment of the Adjudicator The Adjudicator shall be a suitably qualified person, IV for any reason the appointment of the Adjudicator is not agreed at the latost within 14 days of the reference of a dispute in accordance with these Rules, then either Party may apply, with @ copy of the application to the other Parry, to any appointing authority named in the Contract or f none, to the President of FIDIC or his nominee, to appoint an Adjucicator, andi such appointment shal ke final and conciusive. The Adjudicator's appointment may be terminated by mutual agreement of tre Parties. The Aojudicaior's appointment shal expire when the Works have been completed or when any disputes referred to the Adjudicator shall have been withdrawn or decided, whichever is the later. ‘The Adluclcator is fo be, andl is to remain throughout his appointment, impartial and independent of the Parties and shall immediately disciose in writing to the of which he becomes aware which could affect his impartiality or indiepenciencs. ior shall not give advice to the Partes or their representatives -ondiuct of the project of which the Works form part other than with these Ries. Acjudicator shall not be called as a witness by the Parties to give evidenca sing any dlspute in connection with, or arising out of, the Contract. once The Adjudicator shall treat the details of the Contract and all activities and hearings of the Adjudicator as confidential and shall not disclose the sama without the prior written consont of the Parties. The Adjudicator shall nor, without the consent of the Parties, assign or delegate any of his work under these Rules or engage lagal or technical assistance. ‘The Adjudicator may resign by giving 28 days’ notice to the Parties. In the evert Cf resignation, death or incapacity, termination ora falure or refusal to perfor the duties of Agjucicator under these Rules, the Parties shall agree upon a replacement Adiucicator within 14 days or Rule 4 shall apply. 9 i ‘AGREEMENT zENT AOR GENERAL GONDIONS a K : ce 2 Payment Procedure for Obtaining Adjudicator's Decision " 12 13 14 15 16 7 18 20 ‘The Agjudicator shall in no circumstances be liable for any claims for anything done or omitted in the discharge of the Adjudicator's duties unless the act or omission is shown to have been in bad faith {i the Adjucicator shall knowingly breach any of the provisions of Rule 6 or act in bad faith, he shail not be entiled to ary fees or expenses hereunder and shall reimburse each of the Partes for any fees and expenses property paid to him it, as @ consequence of such breach any proceedings or decisions of the Adjudicator are rendered void or ineffective, ‘The Adjucicator shall be paid the fees and expenses set out in the Adudicator's Agreomont. The retainer fee, if applicable, shall be payment in ful for (a) being available, on 28 days’ notice, for all hearings and Site visits; (0) allofive overhead expenses such as secretarial services, photacopying and office supplies incurred in connection with his duties; (c)__ all services performed hereunder except those performed during the days referred to in Rule 15. The daily fee shall be payable for each working day preparing for or attending Site visits or hearings or preparing decisions including any associated traveling time. ‘The retainer and daily fees shall remain fixed for the periad of tenure of the Adjudicator. ‘All payments to the Adjudicator shal be made by the Contractor who will be entiled to be reimbursed half by the Employer The Contractor shall pay invoices adcressed to him within 28 days of receipt. The Adlucicator's invoices for any monthly retainer shall be submitted quarterly in advance and invoices, {or daily fees anc! expenses shal be submitted following the conclusion of a Site Visit or heering, All invoices shall contain a brief description of the activities, performed dung the relevant period, The Adjudicator may suspend work ifany invoice remains unpaid at the expiry of the period for payment, provided that 7 days prior notice has been given to both Parties. Ii the Contractor fails to pay an invoice addressed to it, the Employer shall be entitied to pay the sum due to the Adjudicator and recover the sum paid from the Contractor. ‘A dispute between the Partios may be referred in writing by olther Party to the Adjudicator for his decision, with a copy to the other Party. f the Audicator has not been agreed or appointed, the dispute shall be referred in writing to the other Party, together with a proposal for the appointment of an Adiudicator. A reference shall identify the dispute and refer to these Rules. “The Adjudicator may decide to vist the Site. The Adjudicator may decide to conduct a hearing in which event he shail decide on the date, place and duration for the hearing. The Adjudicator may request that written statements, ‘rom the Parties be presented to him prior to, ator after the hearing, The Parties shall promptly provide the Adjudicator with sutficient copies of any docurnentation and information relevant to the Contract that he may request.a 22 23 ‘The Adjucicator shall aot as an impartial expert, not as an arbitrator, and shell have ful authority to condust any hearing as he thinks fit, not being bound by ary rules or procedures other than those set out herein. Without limiting the foregoing, the Adjudicator stall have power to: 2) decide upon the Adiudicator's own jurisdiction, and as to the scope of any dispute referred to him, (0) make use of his own specialist knowledge, if any, (©) adopt an inquisitorial procedure, (@) decide upon the payment of interest in accordance with the Gontract, (©) open up, review and revise any opinion, instruction, determination, ccoriticate or valuation, related to the dispute, refuse admission to hearings to any persons otner than the Employer the Contractor and their respective representatives, and to proceed in the absence of any Party who the Adjudicator is satisfied received notice of the hearing, All communications between either of the Parties and the Adjudicator and al hearings shall be in the language of the Agjudicator's Agreement, All such communications shall be copied to the ather Party, 'No later than the fity-sixth day after the day on which the Adudicator received a reference oy, Ifiater, the day on which the Adudicator’s Agrooment came into effect, the Adjucicator shal give written notice of his decision to the Parties. ‘Such decision shall include reasons and state that itis given under these Rules. e186 iit GENERAL iMONS Te CONS selAGREEMENT 5 2 a pias piste GUDANDE Adjudicator's Agreement Identification of Project: {the "Project") Name and address of the Employer: (the “Empioyer") Name and address of Contractor: (the *Contractor*) Name and address of Adiudicator: (the "Adjudicator) Whereas the Employer and the Contractor hava or Contract’) for the execution of the Project ancl wish to agp as adjudicator in accordance with the Rules for Adjuccat | into @ contract "the the Adjudicator 1o act n [the Rules") The Employer, Contractor and Adjudicator agree as follows: 1 ‘The Rules and the dispute provisions of the Contract shall form part of this Agreement, ‘The Adiudicator shell be paid: A retainer fee of per calendi (where applicable) Addaily fee of Expenses (including the cost of telephone calls, courier charges, ‘= telexes incurred in connection with his duties; all reasonable anc travel exenses, hotel accommodation and subsistence and other ci expenses}. Receipts will be required for all expenses,‘The Adjudicator agrees to act as adjudicator in accordance with the Rules and has disclosed to the Parties any previous or existing relationshio with the Parties or others concerned with the Project. ‘This Agreement shall be governed by the law of The language cf this Agreement shall be SIGNED BY for and on behalf of the Employer in the presence of Witness Name ‘Address Date SIGNED BY for and an behaif of the Contractor in the presence of Whines Name Address Date SIGNED BY for and on behall of the Adjudicator in the presence of witness Name Address. Date 8% vSHORT FORM of Contract Notes for Guidanoe First Edition 1999 FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS, INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS, INTERNATIONALE VEREINIGUNG BERATENDEH INGENEURE FEDERACION INTERNACIONAL, DE INGENIEROS CONSULTORES, AGREEMENT GENERAL CONDITIONS PARTICULAR CONDITIONS RULES FOR ADJUDICATION NOTES FOR GUIDANCENotes for Guidance (not forming part of the Contract) General Agreement ‘The objective of this Contract is to express in clear and simple terms traditional procurement concepts. The Contract is intended to be suitable for works of simple Content and short duration. If it is required that the Contractor should undertake design, this is also provided for. ‘There ate no Particular Conditions, although these Notes contain alternative wording for consideration in particular citcumstances. All necessary addtional information 8 intended to be provided in the Appendix ‘Asingle document is proposed for the form of tender and the agreement. This reflects the simple projects ervisaged. ‘One resuit of the simple form of Contract is that there is an increased burden an the Employer to set out in the Specification and Drawings the full scope of works, including the extent of any design to be done by the Contractor. There is no Engineer or Employer's Representatve in the formal sense used in some other FIDIC Conditions. The Employer takes al! necessary actions. However, the Employer must nominate his authorised spokesman and, if he wishes to engage a consultant to administer the Contract, may appoint @ representative with specific delegated duties and authority. The Contractor also nominates a representative. The Conditons contain no overall mit on the Contractor's lablity. If such a tit required, @ Clause should be inserted in the Particular Consitions, ‘Tho printed form envisages 2 simple procedure of offer and acceptance. In order to void the traps and uncertainties that surround “letters of acceptance” and “letters of intent”, it was thought preferable to promote a clear and unambiguous prectice. It is intended that the Employer will write in the Employer's name in the Agreement. ‘and filin the Appendix where appropriate and send two copies to tenderers together with the Specification, Drawings etc forming the tender package. in respect of both copies, the Contractor is to complete, sign and date the Otter section and complete any remaining spaces in the Appendix. Having decided which tender to accept, the Employer signs the Acceptence section of both copies and returns one copy to the Contractor. The Contract comes into effect upon receipt by the Contractor of his copy If post-tender negotiations are permitted and changes in specification or price ate agreed, then the form can stil be used after the Parlles have made and initialed the appropriate changes to their respective documents. The Contractor thus makes a revised offer in response to the Employer's revised tender documents and the revised offer is accepted by the Employer signing and returning the Accaptance form. ifthe changes are extensive, a new form of Agreement should be completed by the Parties. AGREEMENT c Es a{EEMENT AGE ze ES a6 88 eres Appendix General Provisions ii ‘As the Contract comes into effect upon receipt of the signed Acceptance by the Contractor, the Employer should take steps 10 estabish when receipt ocours, for ‘example by requiring the Contractor to collect and sign for the Agreement. When the applicable law imposes any form of tax such as VAT on the Works, the Employer should make clear whether tenderers should include such taxes in their prices. Similarly, payment is to be made in whole or in part in a currency other than the currency of the Country, the Employer should make this clear to tenderers. See Sub-Clause 11.7. ‘Any Notes for Guidance on the completion of the Appendix are to be found in the Notes to the Clauses concemed. The Employer should complete the Appendix as indicated prior to inviting tenders. Tenderers may be asked to insert a Time for Completion at 1.1.9 if none Is specified. Where tenderers aro requited to suiomit design with their tenders, the documents containing the tendered design should be identified by the tenderer against item 1.1.1(f| of the Appendix. ‘A number of suggestions have been made in the Appendix, such as the time for submission of the Contractor's programme under Sub-Ciause 7.2 and the amount of retention under Sub-Clause 11.3. If these suggestions are adoptad by the Employer, no action is required, Otherwise, they should be deleted and replaced. 1.1 Definitions. The definitions in these Conditions are not all the same as. those to be found in other FIDIC Contracts. This is as a result of the need for simplicity in Conditions of this sort. Significantly different definitions inclucle Commencement Date, Sita, Variation and Works. 1.1.1 "Contract". The list of documents serves two purposes: firstly, to identity which documents form part of the Contract; and secondly, to provide an order of priority in the event of conflict between them, Document identification is necessary to avoid any possible doubt, for example because specifications have been subject to revisions. A complete ist of Drawings is abvays desirable and could be attached on a separate sheet, ‘There is no need for Particular Conditions but if amendments to these Conditions are required, they should be inserted on the sheet headed Particular Conaitions and given priority over the General Conditions. it none, dllete the reference. ‘The Specification should set out in clear terms any design that the Contractor is required to undertake, including the extent to which any design proposals are to be submitted with the tender. If none, the reference to the Contractor's tendered design should be deleted. If there is no bill of quantities, delete the reference, If there are additional documents which are required to form part of the Contract, such as schedules of information provided by tractor, ‘ese should be added by the Employer. Consideration sho given in each case to the required priority Ifa letter of acceptance is used, it should be given high pricey, wits or in place of the Agreement, for exampe. 0 Fog 19081.17 ‘Commencement Dat the date when the Contractor receives the Agreement signed by the The starting date for the Contract is 14 days after, Employer, unless the Parties agree otherwise. g 1.1.14 "Force Majeure" may includ, but is not imited to, exceptional events circumstances of the kind listed below, so long as all of the four conditions stated in the definition have been satisfied: | @) war, hostiities (whether war be declared or not, invasion, act of | #2 foreign enemies, g b) rebellion, terrorism, revolution, insurrection, military or usurped 8 power, oF civil war, <) riot, commotion, disorder, strike or lockout by persons other than the Contractor's personnel and other employees, d) munitions of war, oxpiosive materials, ‘onising radiation or contamination by radioactivity, except as may be attributable to the Contractor's use of such munitions, explosives, radiation ar radio- activity, and ) natural catastrophes such as earthquake, huricane, typhoon or volcanic activity 1.1.19 "Works". The term "Works" is intended to cover all the obligations of the Contractor, including any design and the remedying of defects. 1.5 Communications. The problem of languages is addressed by requiring the important communications such as notices and instructions to be in the language stated in the Appendix. Otherwise there is no “Ruling Language” ‘Any arbitration will be conducted in the specified language 1.6 Changes 10 the low after the date of the Contractor's affer are at the Employer's risk and any dolay cr additional cost are recoverable by the Contractor. I the taw of the Contract isnot the law of the Country, then Sub- Clause 6.1 snould be changed in the Particular Conditions, ‘The Employer 2.1 Unless the Parties have agreed atherwise, the Site must be handed over by the Employer to the Contractor on the Commencement Date, This is 14 days after the Contract has come into effect, which occurs when the signed ‘Agreement has been returned by the Employer to the Contractor (see also ‘Sub-Clause 1.1.7 above) 2.2 if for any reason, permits ete may also be required from places other than the Country, this Sub-Clause could be limited by the ackiion at the end of the words: *...in the Country but not elsewhere.” 24 The term ‘approval’ is only used in the Conditions in relation to the performance securly at Sub-Glause 4.4 and insurances at Sub-Clause 14.1. It is important that risks such a8 those of poor workmanship or Contractor's design are not transferred to the Employer unintentionally. The ‘Sub-Clause is intended to prevent argument. Employer's 3 Two principles guided the crafting of this Clause. Firstly, the Contractor Representatives should know who in an Employer organisation is authorised to speak andact for the Employer at any given time. This is achieved by Sub-Clause 3.1 the authorised individual should be named in the Appendix. Secondly, those Employers who require professional assistance should not be discouraged from doing so and their consuitant should have clearly established delegated powers. This is the object of Sub-Clause 3.2. Once appointed, the Employer's representative acts for and in the interests of the a 2 Employer. There Is no dual role or duty 10 be impartial. fan impartial a8 Employer's Representative is required with a role similar to the tracittonal aS Engineer, then the following words could be used in the Particular BR ‘Conditions: “Replace the final sentence of Sub-Clause 8.2 with the following: "The Employer's Representative shall exercise in a fair and impartial manner the powers of the Employer under or in connection with the following Sub-Clauses: 1.9, 2.3, 4.2, 4.3, 5.1, 7.8, 82, 9.1, 9.2, 10.1, 10.2, 105, 11.1 f0 11.6, 11.8, 12.1, 13.2 and 14.1." ION To the extent that the Employer has delegated powers to an Employer's representative, he should be careful not to exercise such powers himself in order to avoid the risk of conficting instructions, decisions etc. ‘The Contractor 44 Most contracts do not specily the exact standard required far each element of the Works, so some benchmark standard is needed with which the Contractor is to comply. Ifa more specific set of standards could be referred to for a particular project, then an amendment in the Particular Conditions would be desirable, 44 Performance Security. Suggested forms of performance bond (surety bond} or bank guarantee have not been provided. If itis felt that the scale of project warrants security by means of a bond, then local commercial practice should dictate the form. Example forms are included with FIDIC's Conditions of Contract for Construction. The amount and a reference to the desired form of any required security should be set out in the Appendix, Design by Contractor 6.1. As with all design-build contracts it is. essential that the Employer's requirements are set out clearly and precisely. The Appendix shoul indicate to tenderers the Sub-Ciause(s) in the Specification that set out the design requirement. Where the Employer procures any part of the design, the responsibilty for design wil be shared as this Contract makes the Contractor responsible only for design prepared by him. The extent of the Contractor's design obligation should therefore be clearly stated if disputes are 10 be avoided. The Concitions avoid the confusing conoast of approval Of design. Designs are submitted and may be retuned with comments or rejacted, The Employer need not react at all. 8.2 The Contractor's responsibilty for his design remains, as is mace c and in Sub-Ciause 2.4, In the event of conflict between the S) and Drawings and the Contractor's tendered design, the oie: the Appendix makes it clear that the Employer's documents means that if the Employer prefers the Contractor's tendered s: Specification and Drawings should be amended before the C signed by the Parties, iv "2x6 090 1“The Contractor wil have an absolute obligation to ensure that the parts of the Works designed by him are fit for ther purpose, provided that tho intended purposes are defined in the Contract. The Employer must therefore make clear in the parts of the Specification that impose design obigations, the intended purposes of the part of the Works to be designed by the Contractor. This should be done even where this saems obvious in order to avoid argument about whether an intended purpose s defined or not. Ira party wishes to protect the intellectual property in his design, provision. must be made in the Particular Conditions. Employer's Liabilities. 6.1._-_—_This Sub-Ciause gathers togother in one place the grounds for extension of time under Sub-Clause 7.3 and the grounds for claims under Sub-Cisuse 410.4. There is no time oF claim for bad weather although this coukd be adjusted in the Particular Conditions if so required, Timo for Gompletion 7.2. The Appendix should stipulate any particular requirements as to the fom and level of detail of programme 10 be submitted, Where Contractor's design is required, the Appendix could stipulate that the programme shovil show the dates on which itis intended to prepare and submit crawings etc 7.3 Tho test for entitlement to an extension of time is whether itis appropriate, ‘This means thet fan event under Sub-Ciause 6.1 caused crilical delay to the Works and itis fair and reasonable to grant an extension of time, the Employer should do so. An extension of time should not be granted to the extent that any fallure by the Contractor to give an early warning notice Under Sub-Clause 10.3 contributed to the delay. 7.4 There is. @ maximum amount which the Contractor is liable to pay for late completion specified in the Appendix. 10% of the sum stated in the Agreement is suggested. Taking-Over 82 In jine with normal practice, it is not envisaged that the Works need be 100% complete before the Employer may take over. Once the Works ere ready to be used for their intended purpose, the notice should be given. There is no provision for taking-over of only parts af the Works but i this is required, provision should be made in the Particular Conditions. If any tests are required to be completed prior to taking-over, these should bbe specified in the Spaciication, The definition of Works is broad enough to include any such tests, Remedying Defects 9.1 There is no defined Defects Liability Period but during the period - normaly 12 months - ftom the date of taking-over, the Employer may notify the Contractor of defects. The Contractor must remedy such defects within a reasonable time. If he fails to do 80, the Employer may employ others for that purpose at the Contractor's cost. The Employer may also notify defects at any time prior to taking-over “The lability of the Contractor for defects will not normally end with the expiy Cf the period stated in the Appendix. Although he is then no longer obliged : 1G 1999 vNENT 5 Variations and Claims Contract Price and Payment vi 40.1 10.2 10.3 Wa to return to Site to remedy defects, the defect represents a breach of contract for which the Contractor is lable in damages. This liabity remains for as long as the law of the Contract stipulates, often 8, 6 or 10 years from the date of the breach. If this long-term liability is to be reduced or eliminated, a Clause in the Particular Conditions is required. \Vatiation is defined to include any change to the Specification or Drawings included in the Contract. If the Employer requires a change to part of the Works designed by the Contractor either as part of his tender or after the Contract was awarded, thon this is to be done by way of an addition to the Specification or Drawings which by Sud-Clause 5.2 will prevail over Contractor's design, ‘This Sub-Clause sets out allemative procedures for the valuation of Variations, to be applied in the order of priority given. tt applies equally to omissions as to additional works, a) A lump sum should be the first method to be considered! as it can encompass the true cost of a Variation and avoid subsequent disoute over the indirect effect. The Employer can invite the Contractor to suomit an itenised make-up (Sud-Clause 10.5} before instructing the Variation so that an agreed lump sum can form part of the instruction, ») Alternatively, a more traditional approach can be taken by valuing the Variation at rates in the bill of quantities and any schedules, or } using these ratos as a basis, or using now rates. 2) Daywork rates are normally used when the Variation is of an indeterminate nature or is out of sequence with the remaining Works. ‘To ensure reasonable daywork rates, provision should be made for these to be priced competitively in the tender documents. This Sub-Ciause and Sub-Clause 10.5 require the Contractor to notify the Employer of events prompily and to deta any claim within 28 days. If the effects of the event are incteased oF if the abiity of the Employer to verify any laim is affected by the failure to notify, then the Employer is protected, Notrlly only one of the options in the Appendix should be used to indicate how the sum in the offer is be calculated and presented. The following explains what is intended: Lump sum price ‘Alump sum offer without any supporting detals. This would be used for very minor works where Variations are not anticipated and the Works wil be completed in a shott period requiring only one payment to the Contractor. Lume sum price with A lump sum offer supported by schedules of schedule of rates rates prepared by the tenderer. This would be @ larger contract where Variations anc stage payments would be required. if the Employer dos not have the resources to prepare his awn bill of quantities then this altemative woud be suitableLump sum price with A lump sum offer based on bill of quantities billof quantities prepared by the Employer. This would be the same as last but where the Employer has the resources to prepare bis own bill of quantities. A better contract would result with an Employer's bill of quantities. Remeasurement with A sum subject 10 remeasurement al the rales bill of quantities offered by the tenderer in the bill of quantities prepared by the Employer. This would be the ‘same as last bul would suit a contract whore many changes are envisaged to the Works after the Contract has been awarded, Cost reimbursable ‘An estimate prepared by the tenderer which wit be replaced by the actual cost of the Works calculated in accordance with the terms se: by the Employer. This would sult project where the extent of work cannot be ascertained before the Contract is placed. An example of this would be ‘an emergency reconstruction of a building damaged by fre. However, if for some special reason, more than one option is selected, for example there is @ remeasureable elernent in a lump sum Contract, then the details should be carefuly defined. ‘The Foreword indicates that this Short Form of Contract is intended for ‘works of short duration, In the event of a contract for works of long duration, anew clause could be inserted at Sub-Clause 111 to adjust for the rise and fallin the cost of labour, materials and other imports to the Works. Such a Clause could be adapted from the other FIDIC Conditions of Contract. Ifthe Contract is for a lump sum, consideration should be given as to how the work isto be valued for the purposes of interim payments. In completing the Appendix for Sub-Clause 11.1, the Employer may request tenderers to submit a cash flow forecast linked to @ stage payment proposal for agreement. This would be reviewed in the event of an extension of fme made in accordance with Sub-Ciause 7.3. Alternatively interim payment can be based on valuation of the Works which woud also be appropriate for remeasurement and cost reimbursable Contracts. Payment could also be based on the achievement of milestenes or a schedule of activities to which values are assigned. If focal law or practice so dictates, an invaice may also be required, in which case il could be submitted with the staternent. No provision is made for edvance payments. If such a payment is tc be made, there should be provision in the Particular Conditions and for any security to be provided by the Contractor. An example form of advance payment guarantee fs 10 be found In FIDIC’s Conditions of Contract for Construction, ‘The deduction of retention is sometimes replaced by tho provision of security by the Contractor to the Employer. Alternatively, the entire retention vii SENEN AGRE 8 Gy a e caDefault 115 12.4 12.2 123 124 194 18.2 sum deducted is released after taking-over upon the provision by the ‘Contractor of security. In either event, suitable text would be required in the Particular Conditions. n exampie form of retention guarantee is to be found in FIDIC's Conaiions of Contract for Construction, ‘The release of the second part of the retention will serve 4s confirmation that all notiied defects have been remedied. it is assumed that payments will be in a single currency, tf this is not the case, the proportions of different currencies should be stated in the Appendix and provision made in the Specification or the Particular Conditions as to how payment is to be made. The Employer may terminate the Contract ifthe detauiting Contractor does not respond to a formal notice by taking all practicable steps to put right his default. This recognises that not all defaults are capable of correction in 14 days. if termination takes place, the Employer may toke over and use the Contractor's Equipment 10 complete the Works, Care should be taken, however, if the equipment on Site is hired: no specific provision is made to ‘cover this situation and the Employer is unlikely 10 be able to retain such ‘equipment. ‘This provision provides the Contractor's main remedy for non-payment. 7 days alter the Employer's receipt of a default notice, which must refer to Sub-Clause 12.2, the Contractor may suspend al or part of his work. 21 days later the option to terminate arises if the Employer persists with non- payment or other default. The Contractor must use his right to terminate within 21 days or lose it. This is to prevent a porty abusing a right to terminate in his dealings with the other party forthe remainder of the project. if Contractor's Equipment is essential for the safely or stabilly of the Works, the Employer will be obliged to agree terms with the Contractor for the retention of such equipment. Local law wil often protect the Employer from ‘the immediate and reckless removal of essential terns, The sight of the Employer to retain the Contractor's Equipment may clash with the right of a liquidator or receiver to realise the assets of an insolvent Contractor. Reference to the applicable law would be necessary. ‘This Sub-Ciause enables the financial aspects of the Contract to be resolved quickly and without the necessity to await the completion of the Works by thers. By specifying the damages payable to the innocent party for the defaults leading to the termination, much delay, complication and scope for dsoute are avoided. The Employer's costs in oblaining a replacement Cconiractor wil generally be higher than the Contractor's loss of prcft Although the Contractor is responsible for the Works prior to taking-over, he is protected by the obligation to insure the Works under Clause 14 and by ‘nis ability to recover under Clause 6 his Cost if one of tha Employer's Labilties ocours, To qualify as Force Majeure, events must prevent performance of an obligation. See also the definition at Sub-Ciause 1.1.14, Notice must be given at ones.Insurance Resolution of Disputes 144 18.1 153 The Employer should et out his precise requirements in the Append. Third Party, public labilty insurance would normally be mandatory. As smaller contracts are likely to fall within tenderers’ standing Contractors’ All Risk (CAR) insurance policies, tencierers should generally be asked to subrrit details of their insurance cover with their tenders. Any requirements for insurance after the daie of the Employer's notice under Sub-Clause 8.2, or arising from taking-over parts of the Works, should be covered by Particular Conditions. See also Clause 18. If the Employer wishes to take out the insurances instead of the Contracter, the folowing should be used as a Particular Condition in place of Sub- Clause 14.1 "Replace the tex! of Sub-Clause 14.1 with the following: "The Employer shal, prior to the Commencement Date, effect insurance in the joint names of the Parties of the types, in the amounts and with the exciusions stipulated in the Agpenaix. The Employer shal provide the Contractor with evens that any required policy isin force and that the premiums have been paid" Sub-Clauses 14.2 and 14.3 should be dolated if the Employer takes out tre insurances. It should be noted that in the evant of the Employer's failure to insure, the Coniractor may give notice under Sub-Clause 12.2. There are advantages in appointing an adjudicator from the outset even though the adjudicator may not be required to take any action or earn any fae unless and until a dispute is referred to him. Delays wil inevitably oocur if the parties initiate the procedure to appoint an adjudicator only when a Gisputo has arisen. itis therefore recommended that the Employer propose a person to act a8 adjudicator either at tender stage or shortly after the Agreement is signed and that the matter is discussed and agreed as soon) as possible, Care should be taken about whether an acudicator should be local or from ‘a neutral country. Although the adjudicator should be impartial, the costs of employing someone from a thitd country could be disproportionate if itis necessary for the adjudicator to visit or if a hearing became necessary. However, in view of the costs involved in arbitration, even of minor disputes, ary extra cost of ¢ truly impartial adjudicator is a recommondd investment It is intended that a¥ decisions made by the Employer or his representative should be capable of being reviewed by an adjudicator and, if required, by an arbitrator, Arbitration may not be commenced unless the dispute has first been the subject of an adjudication. The Rules of arbitration should be stipulated in the Appendix. The UNCITRAL Rules are recommended. However, if administered arbitration is required, that is arbitration oversesn and administered by an arbitral institution, the ICC Rules could be specified. The IOC Court of Arbitration and its Secretariat in Paris appoints and replaces arbitrators, chooks the form of tarms of reference and awards and generaly monitors progress and the performance of arbitrators. Where alternative x SENT t io SATION egarbitration rules are chosen that include @ procedure for the appointment of an arbitrator, the authority designated in the Appendix to. make the appointment should be changed to reflect this. For example, It ICC Rules are chosen, then the appointing authority should normally be changed to "ICC Court of Arbitration”. The place of arbitration is significant as the arbitration law of the place of arbitration wil apply in such matters as the abiity of a party to apoeel