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INTERNATIONAL FEDERATION OF

CONSULTING ENGINEERS (FIDIC)’S


GENERAL CONDITIONS OF CONTRACT
(GCC)
FOR
CONSTRUCTION WORKS CONTRACTS
Introduction

The training program for this session includes the definition of the General
Conditions of Contract for Construction Works prepared by the
International Federation of Consulting Engineers - FIDIC - issued in 1999
and some of the amendments made in 2006 by the World Bank and
multinational development banks. We will review the most important
contrasting points of these conditions with the General Conditions of
Contracts for Civil Engineering Works issued by the Ministry of Planning in
1987.

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Brief History of the International Federation of
Consulting Engineers (FIDIC)

• The International Federation of Consulting Engineers was founded in


1913 by the French.
• It was expanded in 1945 to include 40 national federation of consulting
engineers
• The first edition of the contract terms of the Red Book was published in
1957, followed by the second, third and fourth editions in the years
1963, 1977, and 1987, respectively.
• In 2007, the Federation had 73 members of national associations of
consulting engineers.
• The main headquarters is located in the city of Geneva in Switzerland
and the administrative staff is of five people, who could be contacted on
the number +41 22 7994900

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Brief History of the International Federation of
Consulting Engineers (FIDIC)

• Director of the Federation - Enrico Fink.


• The General Director of the Federation - Peter Boswell.
• The President of the Federation, who is elected by the Executive
Council, composed of seven members of the international federations,
for a presidency lasting for two years.
• The website of the Federation: www.fidic.org
• Publications can be viewed on the website: fidic.org.pub

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Brief History of the International Federation of
Consulting Engineers (FIDIC)

• Before 1957 there were no conditions for a contract for the


implementation of internationally recognized works contracts.
• In 1957, the first edition of the terms of a contract for the
implementation of civil engineering works defined in the Red book was
launched.
• The Red Book adopted the British version of the contracts used by the
Institution of Civil Engineers, which reflected the British traditions, in
terms of language and legal system.
• International Federation of Consulting Engineers maintains committees
to develop the documents.
• Establishing the terms of a new contract in conformity with the
implementation of other works contracts.

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The Main Traditional Terms of the Contract Issued
Prior to 1999:

• The Red Book: the Conditions of Contract for the implementation of


civil engineering works contracts, the fourth edition of 1987 which has
been re-printed in 1992 (parts 1 and 2).
• The White Book: the beneficiaries and the consulting service providers
contracts - Model for advisory services agreements contracts (third
edition of1998).
• The Yellow Book: the conditions for the implementation of electrical and
mechanical works contracts (third edition of 1987).
• The Orange Book: the Conditions of design, work implementation and
turnkey (first edition of 1995).

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Reasons behind the establishment of the
International Federation of Consulting Engineers by
issuing a new collection of documents and as follows:
• The expansion of the types of projects that require to be covered by
terms of the contract, which reflects the need for change by the global
construction sector.
• Attempt to unify the form of documents for major contracts issued by
FIDIC.
• The development of new materials and modernization of some of the
material to suit the modern practices of the construction industry
sector.
• Reinvigorating the role of the engineer and develop the use of dispute
resolution Council.

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The documents of the New contract conditions of
the International Federation of Consulting Engineers
FIDIC the first edition in September 1999 are:
• The Red Book: designated for the general conditions of contracts for
the implementation of work.
General Conditions for Construction Contracts
• The Yellow Book: designated for the general conditions of contracts for
the design and the implementation of the work.
General Condition for Plant, Design and Plant contracts
• The silver book: designated for the general conditions of contracts for
the implementation of work and the manner of turnkey.
General Condition for EPC/ Turnkey Contracts
• The Green Book: designated for the general conditions of contracts for
the implementation of work and small-sized enterprises.
General Condition for Short Form Contracts

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Cooperation between FIDIC and Multilateral
Development Banks and the World Bank

1. The multilateral development banks relied on the General Conditions


of Contract for Construction Works in the contracts entered into the
adoption of funding for its staidness.
2. In 2005, the first edition of the Red Book that was updated in
coordination with the multilateral development banks was issued as
many amendments were carried on it in 2006.

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Cooperation between FIDIC and Multilateral
Development Banks and the World Bank

3. In 2007 the World Bank adopted the terms of the contract in (2)
above in its standard documents adopted contracts financed by it.

4. In 2010 another amendment was carried on the Red Book in


coordination between FIDIC and the multilateral development banks.

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International Federation of Consulting Engineers FIDIC
recommends the use of the Red Book (Conditions of
Contract for the contracts of design and work
implementation):
• For building projects contracts and measurable engineering works
designed by the (Employer), or by his representative (the engineer)
according to the structure of these contracts, the contractor shall
implement the works according to designs provided to him by the
employer. However, the work may include some of the parts that are
being designed by the contractor whether they were mechanical,
electrical, mechanical or design of any of the implementation activities.

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International Federation of Consulting Engineers FIDIC
recommends the use of the Yellow Book (General
Condition for Plant, Design and Plant contracts)

For project contracts to be implemented on the basis of the lump sum


which are used for the implementation of infrastructure projects (power
stations, electric conversion stations and large water filter or heavy water-
treatment plants…etc.), in accordance with the requirements and detailed
standards prepared an employer/Contracting party and technical
specifications and initial designs, if any.

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International Federation of Consulting Engineers FIDIC
recommends the use of The Yellow Book (General
Condition for Plant, Design and Plant contracts)

The contractor's responsibility is to secure the mechanical and electrical


supplies and design and implement buildings and engineering work.
According to the structure of these contracts, the contractor shall make
the designs and issue them in accordance with the employer's
requirements with respect to the mechanical equipment or any other
work that may include any combination of civil, electrical, mechanical or
construction works.

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International Federation of Consulting Engineers
FIDIC recommends the use of The Silver Book
(General Condition for Turnkey Contracts)
Project contracts on the basis of a lump sum designated for the private
industrial processes or produce big energy, plants or similar facilities. Or
for infrastructure projects that the employer had no idea about their
technical requirements when there is need to the following:
1. The high accuracy ensure of the validity of the price and time needed
for the implementation.
2. The Contractor shall be fully responsible for the preparation of
designs and implementation of the project with little interference
from the employer.

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International Federation of Consulting Engineers
FIDIC recommends the use of The Silver Book
(General Condition for Turnkey Contracts)
According to the formula of turnkey contracts the Contractor shall carry
out all of the engineering designs of the operations or production lines,
detailed design of the facilities, mechanical and electrical services, and
providing materials, mechanical fittings, work implementation and thus
providing an integrated origin ready for action when handing the key to
the origin.

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International Federation of Consulting Engineers FIDIC
recommends the use of The Green Book (Terms of the
contract for the implementation of work contracts and
small-sized enterprises):
For the contracts of building projects or small-sized engineering projects.
Depending on the nature of works and the, it is also possible It to use this
book for projects with greater cost whether those projects were of simple
uncomplicated buildings or low-cost, simple projects but frequent or for
short implementation period And pursuant to this structure of these
contracts the contractor shall implement the work according to the
equipped designs by the employer or his representative (if any). But it is
possible to use the terms of this contract for contracts in which, the
responsibility of the contractor is to design partially or totally civil,
mechanical and electrical work or the implementation of the work.

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General: The Implementation of the Work
Implementation Contracts in one of the Following
Contracting Methods
A. General Competitive Bidding
B. Limited Competitive Bidding
C. Direct Invitation
D. Two stage Bidding
E. Single Source Direct Invitation

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Tenders of Contracts of Works are Implemented as
Follows:
The tender method The kind of contract

1. Whether through General Work implementation contracts


competitive Bidding construction Contracts
2. or Limited competitive Bidding
1. Whether through General • Design contracts and work
competitive Bidding implementation
2. or Limited competitive Bidding • Plant, Design and Build Contracts

1. Limited competitive Bidding method


2. or the Two Stage Bidding (that could • Work turnkey contracts
be preceded by prequalification into • EPC/Turnkey Contracts
three stages)

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The Red and the Yellow Book Include the Following
Documents:

• Thanks and appreciation.


• The introduction and attached graphs that illustrate the sequence and
timing of events set out in General Conditions.
• The General Conditions of Contract attached by the general conditions
of the Convention for conflicts resolution.
• The guide designated to the way of preparing special conditions, and
including models of possible dependence guarantees (bid guarantee and
ensure good performance and ensure the down payment and secure the
release of the second batch of cash deductions, etc.)
• The bid form the Convention of the contract model, a modal the
Convention of forming a board for of dispute resolution.
• The contract attachment. (the contract data).

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A Comparative Table that Illustrates the Differences
in the Materials of the Three Conditions

General conditions General conditions General Article


of contracts for of contracts for Conditions of
turnkey work the design and the Contract for
work Construction
implementation Works
Employer's The engineer The engineer 3
representative
Designs Designs Subcontractor 5

The examination at The examination at Measurement 12


the completion the completion

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The Main Principals in the Red Book

• Designs are the responsibility of the employer or his representative.


• It requires to re-measure work after the implementation.
• The employer sets the engineer to manage the contract on his behalf.
• The engineer has the right to make changes in the work, but without the
contract’s modification.
• Dispute resolution board is set after the 28th before the date of
commencement.
As he shall have the power of decision-making in resolving differences and
make an adjustment on the engineer estimates.

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The Main Principals of the Yellow Book

• The employer shall provide the contractor party with works


requirements that are called the requirements of the employer.
• That the employer requirements are the basis to the contractor to
prepare designs and projects implementation. The bugs included in
employer's requirements are the responsibility of the employer.
• The contract is based on the total amount provided by the contractor
and not under the priced quantities tables.
• The contract is managed by the engineer on behalf of the employer.
• The Engineer makes a change proposal.
• The council of disputes resolution is appointed as necessary.

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The Main Principals of the Silver Book

• The employer shall provide the contractor with his general requirements, as it comes
to the required energies and products specifications, automation size and any
preliminary information on the type of raw materials and available services.
• The contract is based on the total amount provided by the contractor in the light of
the technical proposal accepted by the employer.
• The management of the contract is done by the employer.
• No change can be made on the contract unless there was a change in the
requirements by the employer.
• The dispute resolution board is appointed whenever it is necessary
• The responsibility for the provisions of job quality and quality of the material lies
with the contractor.
• The employer may monitor the progress and the quality of the work through his
representatives for the purposes of estimating periodic advances only.

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Traditional Relations Between Members

If there is a contract between the


Employer employer/engineer, then this will
usually be under the White
Paper Presentation Advisory
The contract Services.
between the
employer and the Engineer
contractor the New
or the Precious
Red Book.
The Engineer makes the
contract in the place of
Contractor the Employer.

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The Recent Relations Between the Members

Employer In case there is a relation


between the employer/engineer
then it is usually made
according to the White Book
regarding advisory services.
Dispute resolution
board
Which is made by a
contract between the
employer and the
contractor together Engineer
with one or three
members who make
up this council
Contractor
The Engineer makes the contract in the
place of the Employer.

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Risk Analysis in the Contracts Represented in each of
the Red,Yellow, and Silver Books
The company’s risk - O The contractor’s risk –V The employer’s risk -X
The Silver Book The Yellow Book The Red Book The risk description Article/ Paragraph

- - x Late issuance of schemes and instructions 1.9

v x - Errors in the employer's requirements 1.9


The Yellow Book

x x x Access to the site 2.1

v x x -dimensional installing under main coordination 4.7

v o o Unforeseen circumstances 4.12

x x x Archeology and paleontology at the site 4.24

x x x Delay in the examination of the employer 7.4

v v v Rejection of materials and machine fittings failed at the 7.5


inspection

v v v Repair of defective acts 7.6

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Risk Analysis in the Contracts Represented in each of
the Red,Yellow, and Silver Books
The company’s risk - O The contractor’s risk–V The employer’s risk -X

The Silver Book The Yellow Book The Red Book The risk description Article/
Paragraph
o o o Extend the duration of the contract 8.4
completion
v o o Exceptional adverse weather conditions 8.4

x o o Delays happening because of authorities 8.5

v v v The consequences of delaying the rate of work 8.6


progress
x x x The consequences of work suspension 8.9

v v v Failure to pass the examination at the completion 9.4

v v v Failure to repair defects 11.4

- - x Cancellations (reduction or cancellation clause 12.4


quantities in the bill of quantities) The Red Book

v v - Failure to pass the examination at the completion 12.4


The Yellow Book

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Risk Analysis in the Contracts Represented in each of
the Red,Yellow, and Silver Books
The company’s risk - O The contractor’s risk –V The employer’s risk -X

The Silver Book The Yellow The Red Book The risk description Article/
Book Paragraph
o o o Delays procedures 13.3

o o o Adjustments due to changes in legislation 13.7

v V or x V or x Adjustments due to a raise in the prices 13.8

v x x Late payments 14.8

v v v Payment after the termination of the contract 15.4

o o o The compensation 17.1

x x x The consequences of the risks of the employer 17.4

x x x The consequences of the majeure force 19.4

x x x the contractor demands 20.1

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Comparison of the Major Features of the Three
Contracts
The work turnkey The work design and implementation Work implementation
It is preferred for the industrial projects, It is preferred for the projects of power It is Preferred to adopt of the buildings and
energy production, laboratories, stations or mechanical installations and engineering designs contracts that most of
infrastructure or any other similar projects if: buildings with high engineering services the responsibility for the work designs have
1- it was called upon the control of the cost where responsibility for the work design is been completed by the employer or by an
and the final duration of the project of the contractor or any advisory party which advisory party which represents him.
2- the contractor carry full responsibility for represents him.
the design and implementation of the project

The contract becomes effective when Signing The contract becomes effective when the The contract becomes effective when the
the agreement contract employer issues a transmittal letter to the employer issues a transmittal letter to the
contractor contractor In the case of non-issuance of
Adoption of the transmittal letter, when the The contract becomes effective when the transmittal letter then the permeability of the
tender documents include a reference to the employer issues a transmittal letter to the contract is approved from the date of signing
issuance of transmittal letters contractor the agreement contract

The Contract management will be from the The Contract management will be from the The Contract management will be from the
employer (Unless a representative was named engineer appointed by the employer and if engineer appointed by the employer and if
to do so) who have to seek to resolve any there is a dispute then it shall be forwarded there is a dispute then it shall be forwarded
submitted claims by the contractor. to the Dispute Resolution Council to the Dispute Resolution Council
In the case of a of a dispute, then it shall be The engineer can resolve the conflict on The engineer can resolve the conflict on
referred to the Dispute Resolution Council behalf of the Conflict Resolution Council if it behalf of the Conflict Resolution Council if it
was indicated in the Bidding Documents was indicated in the Bidding Documents

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Comparison of the Major Features of the Three
Contracts
The work turnkey The work design and implementation Work implementation
The Contractor's responsibility will be to The Contractor's responsibility will be to The Contractor's responsibility will be the
provide Mechanism fittings and designs work provide Mechanism fittings and designs implementation of the work under the
implementation fully ready to run under the (except for the ones provided in the contract documents (and what it includes as
contract, which includes the specific technical contract) the implementation of all of the diagrams and specifications) and the
proposal in the its bid and the employer’s work, under the contract, which includes his engineer’s guidance as his responsibility is
requirements. proposal for the implementation and the limited in designs specified in the contract (if
employer’s requirements any)
The disbursements of interim and final interim and final advances shall be endorsed interim and final advances shall be endorsed
advances without any authentication, but by by the engineer , which are determined by the engineer , which are determined
relying on the payments schedule based on the payments schedule based on the real traversed executed work,
prices and the amounts specified in the
In the case of the adoption of other ways of In the case of the adoption of other ways of quantities tables or any other table
calculating then the advances shall be calculating then the advances shall be In the case of the adoption of other ways of
referred to in the Special Conditions referred to in the Special Conditions calculating then the advances shall be
referred to in the Special Conditions
Disproportionately, the general conditions in The General Conditions distributes the risks The General Conditions distributes the risks
the majority of these contracts are put on the between the parties in a fair and balanced between the parties in a fair and balanced
responsibility of the contractor. It requires the foundations taking into consideration foundations taking into consideration matters
employer to provide the bidders with matters such as the lack of clarity and the such as the lack of clarity and the staid
adequate information on all hydrological tests staid foundations in project’s management foundations in project’s management and the
and the nature of the land and any data and the ability of each party to anticipate the ability of each party to anticipate the risks to
related to the nature of the work and give risks to occur before they take place and the occur before they take place and the
them enough time to review such data and treatment of the consequences and the treatment of the consequences and the
information and the consequent risk on them impact of those risks impact of those risks

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First – The General Conditions for the Contracts of
the Implementation of Works Contracts (Red Book)

1. General Provisions
1.1 Definitions
• The Contract
• “Contract Data”
• “Employer”
• “Engineer”
• Dispute Resolution Board
• Base Date
• Time for Completion
• Unforeseeable
• Goods Requirements
• Plant

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The General Conditions of the Contracts

1. General Provisions
1.2 Interpretation
1.3 Communications
1.4 Law and Language
1.5 Priority of Documents
1.7 Assignment
1.9 Delayed Drawings or Instructions
1.10 Employer’s Use of Contractor’s Documents
1.11 Contractor’s Use of Employer’s Document
1.12 Confidential Details
1.13 Compliance with Laws
1.14 Joint and Several Liabilities
1.15 Inspections and Audit by the Employer

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The General Conditions of the Contracts

2. The Employer
2.1 Right to access to the site
2.2 Permits, Licenses or approvals
2.3 Employer’s personnel
2.4 Employer’s financial arrangements
2.5 Employer’s claims

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The General Conditions of the Contracts

3. The Engineer
3.1 Engineer’s Duties and Authority
3.2 Delegation by the Engineer
3.3 Instructions of the Engineer
3.4 Replacement of the Engineer
3.5 Determinations

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The General Conditions of the Contracts

4. The Contractor
4.1 Contractor’s General Obligations
4.2 Performance Security
4.3 Contractor’s Representative
4.4 Subcontractors
4.5 Assignment of Benefit of Subcontract
4.6 Co-operation
4.7 Setting Out
4.8 Safety Procedures
4.9 Quality Assurance
4.10 Site Data
4.11 Sufficiency of the Accepted Contract Amount
4.12 Unforeseeable Physical Conditions
(barriers beyond the control of the contractor)

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The General Conditions of the Contracts

4. The Contractor Continued


4.13 Rights of Way and Facilities
4.14 Avoidance of Interference
4.15 Access Route
4.16 Transport of Goods
4.17 Contractor’s Equipment
4.18 Protection of the Environment
4.19 Electricity, Water and Gas
4.20 Employer’s Equipment and Free-Issue Materials
4.21 Progress Reports
4.22 Security of the Site
4.23 Contractor’s Operations on Site
4.24 Fossils

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The General Conditions of the Contracts

5. Nominated Subcontractors
5.1 Definition of “nominated Subcontractor”
5.2 Objection to Nomination
5.3 Payments to nominated Subcontractors
5.4 Evidence of Payments

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The General Conditions of the Contracts

6. Staff and Labor


6.1 Engagement of Staff and Labor
6.2 Rates of Wages and Conditions of Labor
6.3 Persons in the Service of Employer
6.4 Labor Laws
6.5 Working Hours
6.6 Facilities for Staff and Labor
6.7 Health and Safety
6.8 Contractor’s Superintendence
6.9 Contractor’s Personnel
6.10 Records of Contractor’s and Equipment Personnel
6.11 Disorderly Conduct

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The General Conditions of the Contracts

6. Staff and Labor Continued


6.12 Foreign personnel
6.13 Supply of foodstuffs
6.14 Supply of water
6.15 Measures against Insect and Pest nuisance
6.16 Alcoholic liquor or drugs
6.17 Arms and ammunition
6.18 Festivals and religious rituals
6.19 Funeral arrangements
6.20 Prohibition of forced or compulsory labor
6.21 Prohibition of harmful child labor
6.22 Employment records of workers

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The General Conditions of the Contracts

7. Plant, Materials and Workmanship


7.1 Manner of implementation
7.2 Samples
7.3 Inspection
7.4 Testing
7.5 Rejection
7.6 Remedial Work
7.7 Ownership of Plant and Materials
7.8 Royalties

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The General Conditions of the Contracts

8. Commencement, Delay and Suspension


8.1 Commencement of Works
8.2 Time for Completion
8.3 Work Program
8.4 Extension of Time for Completion
8.5 Delays Caused by Authorities
8.6 Rate of Progress
8.7 Delay Damages

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The General Conditions of the Contracts

8. Commencement, Delay and Suspension Continued


8.8 Suspension of Work
8.9 Consequences of Suspension
8.10 Payment for Plant and Materials
In the Event of Suspension
8.11 Prolonged Suspension
8.12 Resumption of Work

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The General Conditions of the Contracts

9. Tests on Completion
9.1 Contractor’s Obligations
9.2 Delayed Tests
9.3 Retesting
9.4 Failure to Pass Tests on completion

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The General Conditions of the Contracts

10. Employer’s Taking-Over


10.1 Taking Over of the Works and Sections
10.2 Taking over of parts of the Works
10.3 Interference with tests on completion
10.4 Surfaces requiring reinstatement
10.5 Work shall be delivered to its former position.

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The General Conditions of the Contracts

11. Defects Liability


11.1 Completion of Outstanding Work and Remedying Defects
11.2 Cost of Remedying Defects
11.3 Extension of Defects Notification Period
11.4 Failure to Remedy Defects
11.5 Removal of Defective Work
11.6 Further Tests
11.7 Right of Access
11.8 Contractor to Search
11.9 The certificate of the final work delivery (Performance Certificate)
11.10 Unfulfilled Obligations
11.11 Clearance of Site

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The General Conditions of the Contracts

12. Measurement an Evaluation


12.1 Works to be measured
12.2 Method of Measurement
12.3 Evaluation
12.4 Omissions

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The General Conditions of the Contracts

13. Variations and Adjustments


13.1 Right to Vary
13.2 Value Engineering
13.3 Variation Procedure
13.4 Payment in Applicable Currencies
13.5 Provisional Sums
13.6 Day work
13.7 Adjustments for Changes in Legislation
13.8 Adjustments for Changes in Cost

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The General Conditions of the Contracts

14. Contract Price and Payment


14.1 The Contract Price
14.2 Advance Payment
14.3 Application for Interim Payment Certificates
14.4 Schedule of Payments
14.5 The Works Plant and Materials intended for
14.6 Certificates Issue of Interim Payment
14.7 Payment
14.8 Delayed Payment
14.9 Payment of Retention Money
14.10 Statement at Completion
14.11 Application for Final Payment Certificate
14.12 Discharge
14.13 Issue of Final Payment Certificate
14.14 Cessation of Employer’s Liability
14.15 Currencies of Payment

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The General Conditions of the Contracts

15. Termination by Employer


15.1 Notice to Correct
15.2 Termination by Employer
15.3 Valuation at Date of Termination
15.4 Payment after Termination
15.5 Employer’s Entitlement to Termination for Convenience
15.6 Corrupt or Fraudulent Practices

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The General Conditions of the Contracts

16. Suspension and Termination by Contractor


16.1 Contractor’s Entitlement to Suspend Work
16.2 Termination by Contractor
16.3 Cessation of Work and Removal of Contractor’s Equipment
16.4 Payment on Termination

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The General Conditions of the Contracts

17. Risk and Responsibility


17.1 Indemnities
17.2 Contractor’s Care of the Works
17.3 Employer’s excluded Risks
17.4 Consequences of Employer’s Risks
17.5 Intellectual and Industrial Property Rights
17.6 Limitation of Liability
17.7 The Use of Employer’s accommodation/Facilities

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The General Conditions of the Contracts

18. Insurance
18.1 General Requirements for Insurance
18.2 Use of Employer’s Accommodations/Facilities
18.3 Insurance against injury to persons and damage of property
18.4 Insurance for contractor’s personnel

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The General Conditions of the Contracts

19. Force Majeure


19.1 Definition of Force Majeure
19.2 Notice of Force Majeure
19.3 Duty to Minimize Delay
19.4 Consequences of Force Majeure
19.5 Force Majeure Affecting Subcontractor
19.6 Optional Termination, Payment and Release
19.7 Releases from Performance

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The General Conditions of the Contracts

20. Claims, Disputes, and Arbitration


20.1 Contractor’s Claims
20.2 Appointment of the Dispute Board
20.3 Failure to Agree on the Composition of the Dispute Board
20.4 Obtaining Dispute Board’s decision
20.5 Amicable Settlement
20.6 Arbitration
20.7 Failure to Comply with Dispute Board’s Decision
20.8 Expiry of Dispute Board’s Appointment

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Second – Particular Contract Conditions

Particular Conditions are made of two parts:


Part A: includes the Contract Data.
Part B: includes particular conditions, which either have been
developed and need to be added to the contract, any amendment to
any of the terms of the contract requires the resulting of the issuance
of legislations which contradict or limit those terms, which requires
modifying the relevant text of the general conditions in line with the
new legislations.

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A. The Contract’s Data

[insert the name of the bidder] [insert the name of the project]
Determinants Article number in the data
General Terms of the
Contract
[insert the name of the employer] 1.1.2.2 The employer:
[Insert his address including phone And His/her address:
number, e-mail, his location on the 1.3
International Network + Fax]

[Insert the name of the engineer] 1.1.2.4 The engineer


[Insert his address, phone number and e- And His/her address
mail] 1.3

[ ] Days. If the work was divided into 1.1.3.3 The completion period
several parts a table shall be referenced to
as a duration summary of the completion
of each part

Iraq Governance Strengthening Program 56


A. The Contract’s Data

[ ] Calendar days 1.1.3.7 Repair of defects period (maintenance)

If the work was divided into several parts 1.1.5.6 Parts of the work
then a table shall be referenced with
the Work parts
1.3 Giving bids electronically

[Insert the law governing the contract] 1.4 The law governing the contract

[Insert the language (s) approved] 1.4 Approved language in the contract
[Insert the language (s) approved] 1.4 Contact language

Insert the date 1.6 The date of concluding the contract

Iraq Governance Strengthening Program 57


A. The Contract’s Data
The date of the site receipt shall be before 2.1 The date of delivering the site
the date of commencement, with the
exception to the parts set out later (if
applicable So, with a detailed description
of these parts: --------- days after the date
of commencement.

[Insert the date [Insert the Work parts]


of the site
receipt]

Changes that will lead to the increased 3.1.b. (ii) The Engineer’s authorities and duties
contract’s value by (___%) requires the
approval of the employer

Iraq Governance Strengthening Program 58


A. The Contract’s Data
Ensure the proper performance form of a Ensure good performance (technical)
bank guarantee worth] Insert the
percentage represented by the accepted
4.2
value of the contract with the same
currency/es of the accepted value of the
contract
(insert the daily working hours) 6.5 Ordinary work hour

(insert the amount of the delay fine per day) Compensation Delay (The delay fine)
8.7
If the contract included delivery of parts of
And
the project in phases then the table shall
14.15 b
note at the end of the data
% Of the amount of the final contract 8.7 The upper limit for delay fines

(In the case there is the standby amount Standby amounts


insert its value in the contract’s amount) 13.5 b (ii)

The time period to review the prices Adjustments due to cost variants
(insert the appropriate time period to 13.8
review the pricing)

Iraq Governance Strengthening Program 59


A. The Contract’s Data

-----% Of the amount of the contract accepted


currencies and removable parts of the amount of the Upper limit of the advance
14.2
accepted contract] insert the number and date of payment
payments if they were in force.
[Insert the date for the recovery of the first installment]
[insert the Recovery percentage] 14.2b Recover Advance payment
[insert the date to retrieve the latest installment]

%------ The percentage of the monetary


14.3
deductions
The limits of the monetary
-------% Of the amount of the accepted contract 14.3
deductions
In case of adoption of paragraph 14 \ 5
Included a list of equipment and materials to pay for it 14.5b (i)
when charging: ............. Equipment and materials used in
the work
Included a list of equipment and materials to pay for it at
14.5 c (i)
their arrival to the site: ----

Iraq Governance Strengthening Program 60


A. The Contract’s Data

Insert the type of damage covered by the payment in


accordance with the specific payment rates over the 14.15b (i) The payment currencies
currencies
[Insert -----% of the value of the accepted contract] 14.6 Minimum interim payments
The party name that issues the annual
discount rate for purposes of
[insert the name of the financial institution] 14.8 determining the amount of funding
the expenses for the delay in interim
payments disbursement
Choose one of the alternatives described later [The
multiplication of plants, less or more than one [in the The maximum aggregate liability
value of contract accepted, or 17.6 incurred by the contractor towards
] insert the value of the higher-end of the contractor the employer
commitment]
Insert the specified period to provide the special Provide insurance policies
insurance documents, insurance policy. Period ranging 18.1 A- Support for conducting insurance
from 14-28 days B- Insurance policies

Iraq Governance Strengthening Program 61


A. The Contract’s Data
The upper limit for the amount of discounts in
the insurance for the risk for damages caused by
[Insert the upper limit of the amount of discounts] 18.2d
the work of the employer for any part of the
work.
The minimum amount of insurance for the risk
[Insert the amount of insurance for third party] 18.3
of third party
The appointment of dispute resolution board
28 days from the date of commencement 20.2
Period
Either one member [ ]
20.2 The formation of dispute resolution board
Or three members [ ]
Only when the dispute resolution Board is composed
A list of accredited experts of the Council of
of one person Include a list of accredited experts and 20.2
dispute resolution
if more than one person]
[Enter the party that is resorted to for the The body that appoints the members of the
nomination of experts for the Council of dispute 20.3 Board of resolving disputes in the absence of
resolution] agreement between the parties
[Enter the rules adopted in the arbitration] 20.6a Procedural rules for arbitration
[Enter the place of the arbitration ruling and the law] B 20/6 Arbitration

Iraq Governance Strengthening Program 62


Table: Summary Constituent Parts of the Works

The completion date of Part name\its


The fine delay under
the part under description under
paragraph (8\7)
paragraph (1\1\3\3) paragraph (1\1\5\6)

Iraq Governance Strengthening Program 63


B. Particular Conditions

Article 14.1 the contract’s value (Alternative text of paragraph


(h))
In addition to the provisions specified in paragraph (b). The contractor
equipment and the basic backup materials imported exclusively for the
purposes of implementation of the project are subject to a temporary
exemption from tax and customs duties when entering for the first time,
but the Contractor shall entrust the authorities of customs at ports or
border points a bank guarantee with an enforced export guarantee until
the accomplishment of the contract plus a six-month amount equal to the
full amount of payable customs duties and taxes for the equipment and
spare material of failure of the contractor to be export them.

Iraq Governance Strengthening Program 64


B. Particular Conditions

Article 14.1 contract value


Outside Iraq, upon the completion of the contract, the Contractor shall
provide a copy of this sponsorship certified by the Customs Authority to
the employer the moment of entering any of the various implementation
equipment and the spare materials belonging to Iraq , as the contractor
shall in case of re-export of any equipment, materials backup this or upon
completion of the contract provide a manifest with the value of such
equipment and spare materials with its subsequent status to the Customs
Authority to be issued, in accordance with the criteria and other criteria
used by the Customs Authority for this purpose in accordance with the
laws in force.

Iraq Governance Strengthening Program 65


B. Particular Conditions

Article 14.1 contract value


The Contractor shall be charged with the tax and payable customs duties
on the implementation equipment and its spare materials as follows:
A. The difference between the value of the equipment and the spare
materials when entering Iraq for the first time and their value when
exported outside Iraq.
B. the value of the equipment and spare material by placing them upon
their entry to Iraq for the first time in the case of keeping them inside
Iraq and not to export them after the completion of the contract.
C. In case of paying taxes and customs’ duties for any of the equipment
and spare materials required by the Contractor within 28 days of
being claimed by the Customs Authority, the amount of the bank
guarantee shall be reduced to guarantee the export of the equipment
and the spare materials exported outside Iraq , otherwise, the
guarantee amount will be retained in full by the Customs Authority.

Iraq Governance Strengthening Program 66


B. Particular Conditions

Article 6-23 Labor organizations:


(Paragraph added to Chapter VI of the General Conditions of the contract)
The Contractor shall commit and comply with the provisions of the Labor and
enforced Social insurance law in Iraq, including the rights of workers to join
and to choose their professional syndicates.
Article 6-24 Non-discrimination and equal opportunity:
(the paragraph shall be add to chapter VI) The contractor may not issue
employment decisions based on personal specifications that have nothing to
do with professional requirements. The principle of equal opportunity and
justice in the appointment of staff, non-discrimination and nepotism in labor
relations in relation to the determination of wages, incentives, working
conditions, training or entertainment opportunities, termination of contract,
waiver or refinement. And shall act in accordance with national labor laws to
meet the requirements of this paragraph, any measures taken by the
contractor to rectify any prior favoritism shall not be considered a case of
discrimination.

Iraq Governance Strengthening Program 67


Third: Convention on Contract

This agreement is done in [Enter the day, month, year] [between the first
party] Enter the contracting party and its address (which is named the
employer below) and the second party [Enter the name and address of the
contractor] [since the employer wishes the contractor to execute the
works specified in the contract] Enter the name and number of the
contract [The employer has agreed to tender the contractor to carry out
and complete this work and to remedy any defects therein.

Iraq Governance Strengthening Program 68


Third: Convention on Contract

The two parties have agreed that:


The meanings of the words and phrases contained in this Agreement shall
have the same meaning as those contained in the Contract Documents.
Each of the documents listed below is deemed to constitute, be read and
interpreted as an integral part of this Contract Agreement, and this
Contract Agreement shall prevail over all other documents of the
Contract.
1- Particular Conditions of Contract.
2- General Conditions of Contract.
3- Charts.
4- Full tables.
5- Specifications.

Iraq Governance Strengthening Program 69


Third: Convention on Contract
Tender letter
Amendments to the tender letter numbered .............. (if any).
The contractor commits to carry out the work, completing it and treat any
defect in any manner in accordance with the requirements and terms of the
contract, in return for the amounts paid by the employer to him, as specified in
the contract agreement.
The Employer undertakes to pay the contractor for the implementation and
completion of the work and to deal with any defect in the value of the
contract or any other due amount under the provisions of the contract in the
times and methods provided in the contract.
The parties who have held such agreements shall witness their implementation
under the applicable laws [enter the number of laws and date thereof] on the
day, month and year referred to above.
Signature ................................ [Enter the name, title and address of the
Employer's representative
Signature ..............................[Enter the name, title and address of the Employer's
representative ]
Iraq Governance Strengthening Program 70
Fourth: Letter of Acceptance (Notification of the
Assignment)

[Written on paper with the logo of the employer]


[Enter number]
[Enter Date]
To: (Contractor's name and address)
M/assignment works] Enter the number and definition of the contract and
address
We would like to inform you about the approval on your bidding dated in
[Enter the date to execute the works] The name of the contract and its
number as specified in the contract data and the value of the contract
accepted [Enter the amount in numbers and words Enter the currency] as
corrected and amended according to the instructions to bidders which
were accepted.

Iraq Governance Strengthening Program 71


Fourth: Letter of Acceptance (Notification of the
Assignment)

Please take a good look and provide us with a good performance


guarantee within 28 days from the date of the acceptance letter above and
in accordance with the form specified in chapter 9 (attached to the special
conditions for the contract and the contract forms in the tender
documents). We enclose herewith a copy of the contract agreement form.
With respect.
Accompanying
Contract Agreement Form
Authorized Signature: ............................
Name and Title of the Person Signing : ..........................................
Business Owner’s Name : ..................................

Iraq Governance Strengthening Program 72


Main Sequence of the Events During the Works
Contracts
8.1
The date of 9.11 Issuing the
Issue tender Issuance of 10.1
Tender commencement final acceptance
documents Letter of Issuance of the first
delivery receipt certificate certificate
transmittal
8.2 Period of
Time required for maintenance
completion
Basic date

Delay due Notice of


to the defects
Period of contractor
advertisin
g Examinations Maintenance
Issuance of a
on completion period or
good Good
defect repair
implementati implementation
period
on guarantee warranty return

1. The extent of completion of the contract as specified in the contract data in days, and any extensions added by paragraph 8 \ 4
2. The graph is illustrating the sequence of events in case the contractor fails to complete the contract within the completion
period under paragraph 8/2 of the General Conditions
3. Maintenance period must be specified in the contract Banat days, and any extension of it under paragraph 11 \ 2

Iraq Governance Strengthening Program 73


The Sequence of Payment Procedures as Specified in
Article 14

Delivery date of the executed The Engineer issues a The Engineer shall pay the
work for the completed for short-term payment Contractor
interim advances certificate
Interim or
monthly
advances

Final Account
The Engineer shall check the draft
of the final statement of account

Contractor's Contractor's delivery date of the


delivery date draft of the final statement of
for the draft of the account Issue the final account document
the final by the Engineer
statement of
the account Final disbursement
letter

Iraq Governance Strengthening Program 74


The Sequence of Events for Resolving Disputes as
Defined in Article 20

The date of Both parties appoint a A party shall refer its claim to One of the parties submit his One party
commencement conflict Resolution the council of conflict objection to the resolution of requests to go
council Resolution conflicts Council to arbitration

The parties submit their Friendly solution


payments to the council of
conflict resolution

The Board issues a Appointment of


decision regarding the accountants
claim

Iraq Governance Strengthening Program 75


The types of claims and the party who deserves them among the
parties of the contract and the terms of the general conditions in
relation with the contract of the implementation of the three work
(implementation of work, design and implementation of work, turnkey
work)

The subject of the The type of the Article


Employer Claims Contractor Claims
claims contract No:
The Contractor shall be entitled to
extend the contract term and the
amount of compensation for any
Delay issuing plans or implementation of
expenses incurred with a margin profit 9-1
instructions work
in case the Engineer fails to issue the
instructions within an appropriate
period of notice
The Contractor is entitled to extend
the contract term and the amount of
the compensation for any expenses Errors in employer design and
9-1
incurred with a margin profit due to requirements implementation
errors in the employer's requirements
that were not previously discovered

Iraq Governance Strengthening Program 76


The subject of The type of Articl
Employer Claims Contractor Claims
the claims the contract e No:
The Contractor is entitled to
extend the Contract Term and the implementation
amount of compensation for any of work design
expenses incurred with a margin and
Access to the site 2-1
profit due to the failure of the implementation
Employer to deliver the Site to the of work, turnkey
Contractor within the time period work
specified in the Contract.
The procedures to be
followed by the employer implementation
when demanding any of work design
payments from the contractor The Employer’s and
5-2
or his request to extend the claims implementation
maintenance period when the of work, turnkey
contractor fails to repair the work
works in the works
The Contractor shall be entitled to
extend the contract term and the implementation
amount of compensation for any of work design
expenses incurred with a profit and
Install dimensions 7-4
margin due to errors in events and implementation
the basic levels that need to be of work, turnkey
followed and processed by the work
employer.

Iraq Governance Strengthening Program 77


The subject of the The type of Article
Employer Claims Contractor Claims
claims the contract No:
The contractor is entitled to extend
the contract term and the amount of
compensation for any expenses Unforeseen physical implementation of
incurred conditions (obstacles work design and
4-12
If he was subjected to physical beyond the implementation of
conditions that could not reasonably contractor's will) work,
be expected even by an experienced
contractor.
The Employer shall be entitled
for a payment from the
Contractor for the implementation of
Contractor's use of electric work design and
Electricity, Water and
power, water and any other implementation of 19-4
Gas
services provided by the work, turnkey
Employer without a prior work
notice in accordance with
paragraph 5-2.
The employer shall be entitled
implementation of
for a payment from the
Equipment and work design and
contractor for the contractor
materials provided by implementation of 20-4
to use the materials supplied by
the employer work, turnkey
the employer without notice in
work
accordance with paragraph 5-2.

Iraq Governance Strengthening Program 78


The subject of the The type of the Article
Employer Claims Contractor Claims
claims contract No:
The Contractor is entitled to
implementation
extend the contract term and the
of work design
amount of compensation for any
and
expenses incurred with a profit Archaeology 24-4
implementation
margin due to any directives issued
of work, turnkey
by the Employer relating to the
work
ruins discovered on the work site.
The contractor is entitled to extend implementation
the contract term and the amount of work design
of compensation for any expenses and
Examination 4-7
incurred with a profit margin due to implementation
any delay due to the employer or of work, turnkey
any of his representatives. work

The employer shall be entitled implementation


to claim any amounts for the of work design
cost of re-examination of the and
rejection 5-7
equipment Or damaged implementation
material or any acts of creation of work, turnkey
are rejected. work

Iraq Governance Strengthening Program 79


The
The type of the Articl
Employer Claims Contractor Claims subject of
contract e No:
the claims

The Employer shall be entitled to claim


compensatory amounts from the implementation of work
Contractor for the repair of the Reform design and
7-6
Contractor's failure to perform the repair work implementation of work,
work for the work executed by him and turnkey work
he shall not get paid for.

The contractor is entitled to extend implementation of work


Extension of
the contract if the completion date is design and
completion 8-4
delayed for documented reasons (as implementation of work,
period
indicated in paragraphs 8.2 & 10-1). turnkey work

The contractor is entitled to demand


the extension of the contract period
implementation of work
if the completion date was delayed
Delay due to design and
for reasons related to any actions of 8-5
authorities implementation of work,
the authorities in the State of Works
turnkey work
which were not foreseeable by the
employer.

The Employer shall be entitled to claim


any expenses incurred due to the implementation of work
Contractor's failure to adopt any methods Progress design and
8-6
of implementation to avoid delays in rate of work implementation of work,
achieving the achievement on time turnkey work
without any extension.

Iraq Governance Strengthening Program 80


The subject The type of the Article
Employer Claims Contractor Claims
of the claims contract No:

The employer is entitled to claim


implementation of
delay penalties if the contractor fails
work design and
to complete the work on the due Delay fines 8-7
implementation of
date.
work, turnkey work

The Contractor shall be entitled to


request extension of the contract The implementation of
and any expenses incurred as a consequences work design and
8-9
result of instructions issued by the of work implementation of
Engineer to suspend the work for a suspension work, turnkey work
period of time.

The employer is entitled to claim any Failure to pass implementation of


amounts if the work or part of it fails examinations work design and
9-4
to complete the examinations upon when implementation of
completion completed work, turnkey work

The contractor is entitled to claim


The employer is entitled to reduce implementation of
the amounts that he has incurred to
the delay penalty at the cost of what Handover parts work design and
impose a profit margin on the 10-2
that part of the works represents to of works implementation of
employer's request to receive part
the total cost of the work work,
of the work.

Iraq Governance Strengthening Program 81


The
The type of the Article
Employer Claims Contractor Claims subject of
contract No:
the claims

The contractor is entitled to extend the Intervention implementation of


term of the contract and the cost of the in testing work design and
incurred burdens with a margin profit as a when implementation of 10-3
result of the delay of the employer for the completed work, turnkey
examinations upon completion. Extension of work

The employer may claim the


maintenance
extension of the maintenance period implementation of
period
if the works or any part thereof or work design and
(during
any of the mechanical equipment can implementation of 11-3
maintenance
not be used for the purpose for work, turnkey
period)
which it was created due to any work
damages or defects that prevent it.

The Employer shall be entitled to


implementation of
claim any amounts as compensation
Failure to fix work design and
for the repair of any defects in the
defects implementation of 11-4
Works due to the Contractor's
work, turnkey
failure in case the Contractor fails to
work
repair them.

Iraq Governance Strengthening Program 82


The subject of The type of the Article
Employer Claims Contractor Claims
the claims contract No:
implementation
The Contractor shall be entitled to The duty of the
of work design
claim the cost of any charges incurred contractor to
and
with a margin profit if he is directed to search for the 11-8
implementation
investigate the causes of any defects not reasons
of work, turnkey
caused by him.
work
The contractor is entitled to extend the
contract term and the cost of the Work
Delays check
incurred burdens with a margin profit as implementation 12-2
a result of the delay of the employer for and design
the examination upon the completion.
The Engineer has the right to analyze
each paragraph of the work and Value estimation implementation
12-3
determine the unit of measurement, of work
price and amount
The employer is entitled to
claim any amounts for the Work
Re-examination
burdens incurred by the implementation 12-3
repeated failure to inspect the and design
works after completion.
The contractor is entitled to claim the
profits lost as a result of cancellation of implementation
Cancellations 12-4
paragraphs of the quantities table of work
according to the change order.

Iraq Governance Strengthening Program 83


The subject of The type of Article
Employer Claims Contractor Claims
the claims the contract No:
The Contractor shall be entitled to
The employer is entitled to claim claim the cost of any burdens
Failure to succeed
compensation for damages resulting incurred with a profit margin as a Design and work
in post-completion 12-4
from failure to perform the result of the Employer delay in implementation
examinations
examination after the completion. allowing the to enter into the Works
and Machinery.
The contractor is entitled to claim
half of the resulting reduction in the
cost of the contract as a result of re-
designing the proposed design as an
alternative to the design under the Engineering Work
13-2
contract, which was approved estimation implementation
without prior agreement to what
will the cost or the size of the
reduction be that will result in the
amount of the original contract.

implementation of
The contractor is entitled to modify work design and
Change
the contract amount as a result of implementation of 13-3
procedures
the orders change . work, turnkey
work

Iraq Governance Strengthening Program 84


The subject of The type of the Article
Employer Claims Contractor Claims
the claims contract No:
The employer shall be entitled to
The contractor is entitled to implementation
demand payment for any
demand extension of the contract of work design
reduction in the cost of the Amendments due
term and any amounts due to any and
contract resulting from any to change of 13-7
changes in the legislation of the implementation
legislation in the State of Works legislation
State of the Works affecting his of work, turnkey
issued after the signing of the
obligation under the contract. work
contract.
If the interim advances are not in
line with the actual completion implementation
rates in the payments table and the of work design
completion rates are lower than and
Payments table 14-4
those shown in the payment tables, implementation
then the amounts of the payments of work, turnkey
shall be adjusted in the payments work
table.
implementation
The contractor is entitled to claim of work design
the financial benefits arising from and
Late advances 14-8
the late payment of advances under implementation
paragraph 14.7. of work, turnkey
work
implementation
Work, goods and contractor Evaluation at the of work design
documents are evaluated after the date of the and
15-3
contract is terminated by the contract implementation
employer. termination of work, turnkey
work

Iraq Governance Strengthening Program 85


The subject of The type of the Article
Employer Claims Contractor Claims
the claims contract No:
implementation
The employer is entitled to claim of work design
Payment after
compensation for loss and and
termination of 15-4
damage after the termination of implementation
the contract
the contract of work, turnkey
work
The Contractor is entitled to extend the
Contract Term and any amounts with a
implementation
margin profit if the Engineer fails to
of work design
support the advances due to him or if the
Contractor's right and
Employer fails to pay the advances due to 16-2
to suspend work implementation
the Contractor and the Engineer, or if he
of work, turnkey
fails to prove his guarantee of the project
work
allocations and the work shall be
suspended by the contractor.
implementation
The Contractor is entitled to claim of work design
Payment upon
compensation for loss and damage as a and
termination of 16-4
result of termination of the contract by implementation
the contract
the Employer. of work, turnkey
work
implementation
The employer shall be entitled to
The contractor is entitled to claim of work design
claim compensation for the costs
compensation for the costs incurred by and
incurred by him for the causes Fines 17-1
him for the causes of the loss caused by implementation
for which caused loss due to the
the employer. of work, turnkey
contractor.
work

Iraq Governance Strengthening Program 86


The subject of The type of the Article
Employer Claims Contractor Claims
the claims contract No:
The contractor is entitled to extend the implementation
duration of the contract and any of work design
amounts (in some cases) a margin profit The risks facing and
17-4
if the work, goods and contractor the employer implementation
documents were damaged due to the of work, turnkey
employer as specified in paragraph 17.3. work

implementation
The employer is entitled to
The contractor is entitled to claim the of work design
claim the cost of the insurance General
cost of the insurance premium if the and
premium if the contractor fails insurance 18-1
employer fails to activate the insurance implementation
to activate the insurance when requirements
when he is the insuring party. of work, turnkey
he is the insurer
work

The employer is entitled to claim a implementation


reduction in the value of the insurance Insurance of of work design
premium if the contractor's insurance works and and
18-2
against the employer's risks had become contractor implementation
unavailable on reasonable commercial equipment of work, turnkey
terms. work

Iraq Governance Strengthening Program 87


The subject of the The type of the Article
Employer Claims Contractor Claims
claims contract No:

The Contractor shall be entitled to


claim the extension of the term of the implementation of
contract (in some cases) and the cost if The consequences of work design and
19-4
force majeure prevented him from the force majeure implementation of
implementation of its contractual work, turnkey work
obligations.

Works performed and any other costs


Optional termination of
shall be evaluated when the work is implementation of
the contract, payment
terminated for a long period due to work design and
and evacuation of 19-6
Force majeure and after notice has implementation of
performance
been given to terminate the contract work, turnkey work
responsibility
from either party.

Procedures to be followed by the implementation of


contractor when he is required to work design and
Contractor Claims 20-1
extend the contract period and / or implementation of
additional costs. work, turnkey work

Iraq Governance Strengthening Program 88


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987
Terms of contract for civil engineering works for the
General Conditions of Contract under FIDIC 2006
year 1987

The general conditions consist of 20 articles, the stages of


implementation of the contract were gradually reviewed from
the date of commencement to the end of the final Account
The general conditions consist of72 articles do not depend on
Liquidation
the normal sequence of the contract stages.
Indicating the obligations of both parties to the contract and
the responsibility of the engineer in the management of the
contract.

The general conditions included separate articles to define the


There are no separate materials to define the duties and rights
duties and rights of the two parties of the contract and the
of the two parties of the contract and the engineer, but are
jurisdictions and duties of the Engineer with clear timing to
sporadic and without specific timing.
achieve those duties

Iraq Governance Strengthening Program 89


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987
Terms of contract for civil engineering works for the
General Conditions of Contract under FIDIC 2006
year 1987

There are specific timelines to complete any of the events and


Timings are almost non-existent. obligations of either party of the contract and the Engineer for
each stage of the contract.

Permissibility of the contract: Signature of the contract from


the date of the letter of assignment Contract permeability: from the date of signing the contract
The contractor is considered before submitting his bid to The conditions provide for the employer's responsibility to
discover and investigate the site and that he himself was provide the contractor with all data on sub-surface and
convinced of the state and nature of the site and its hydrological conditions at the site, Including environmental
surroundings, and the means of accessing it and the means of phenomena, including the shape and nature of the site,
livelihood that he may need, the quantities and nature of the including soil investigations, hydrological and climatic conditions
work and the necessary materials for the implementation of The laws in force relating to the implementation of the
the work and that he has obtained all of the necessary contract as well as the access to the site, which had been
information concerning the risks, hedges and other conditions obtained before the basic date
that may affect or affect the tender.

Iraq Governance Strengthening Program 90


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987

Terms of contract for civil engineering works for


General Conditions of Contract under FIDIC 2006
the year 1987

There is equity in the distribution of duties and rights, the


adoption of a fair principle in the compensation of any party
There is no equality and almost no compensation. of the contract when the second party fails of to fulfill his
obligations on each stage of the implementation of the
contract.

There is no compensation for the late payment as


The conditions included specific timing for the disbursement
stipulated in the following conditions: If the payment is
of payments to the contractor starting from the down
delayed for more than thirty days due to reasons
payment until the liquidation of the final account and the
attributed to the employer or the engineer, the employer
adoption of the principle of compensation by imposing
and the contractor to discuss the subject in order to agree
interest on the payment amount for the delay period.
on a solution.

Iraq Governance Strengthening Program 91


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987

Terms of contract for civil engineering works for


General Conditions of Contract under FIDIC 2006
the year 1987

The right of the parties of the dispute to suspend the work in


Only the right of the employer case of breaching of the other party's contractual obligations
until the treatment of the breach.
The employer only has the right to withdraw the work and The right of the parties of the contract to terminate the
execute it at the expense of the contractor when the latter contract in case the other party continues to breach the
breaches the contract. contract.
Adopting the resolution of disputes Council,
Appointed from the beginning of the project and until the
It is not applicable termination of the contract, to resolve the differences that
may arise due to any of the risks of the parties after the
failure of the engineer to resolve the dispute

Iraq Governance Strengthening Program 92


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987
Terms of contract for civil engineering works for the
General Conditions of Contract under FIDIC 2006
year 1987

The adoption of the principle of review of the prices


paragraphs of the contract when there is a rise in prices in
It is not applicable
the implementation requirements and those confirmed by
the contract.
Oblige the two parties of the contract to adopt the
The adoption of arbitration is not binding. principle of arbitration instead of the courts to settle
disputes in case of the Council’s failure to resolve disputes.
Approving the principle of cash disbursements fully at the
It is not applicable completion of the work for a bank guarantee of 50% for the
second half.
Accreditation of a fine on the employer when payment of
the interim advances to the contractor is delayed by the
It is not applicable specified times represented by the imposition of financing
expenses for each delay day after the final date of
disbursement.

Iraq Governance Strengthening Program 93


The Differences Between the General Conditions of
the Contract under FIDIC for 2006 and the
Conditions for the Civil Engineering Works of 1987

Terms of contract for civil engineering works for the


General Conditions of Contract under FIDIC 2006
year 1987

The consequences of termination of the contract by the The consequences of termination of the contract by the employer
employer due to breach due to breach
Contractor: Contractor:
If a surplus is achieved in favor of the contractor from the If a surplus is achieved in favor of the contractor from the value
of the contract after deducting the cost of the repair and any loss
value of the contract after deducting the cost of the works
incurred by the employer as a result of terminating the contract
carried out by the contractor prior to the withdrawal of the
and after paying the contractor's dues for the executed work ,
work and the cost of the works carried out by the employer, then it shall be paid to the contractor. If the deficit is achieved
including administrative loading and the cost of the even after the confiscation of the amount of the guarantee of
estimated fines, the surplus shall be returned to the state good implementation, it is used to sell his equipment to
treasury. To sue the contractor for compensation. compensate the deficit and then pay the surplus to the
contractor.

Iraq Governance Strengthening Program 94


THANK YOU

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