A CONTRACT FOR THE INDUSTRY - IADC Dredging€¦ · THE FIDIC TASK GROUP • John Greenhalgh...

2nd EDITION FIDIC BLUE BOOK:

A CONTRACT FOR THE INDUSTRY

BY JOHN GREENHALGH & TIM MADDOCK

24 October

GENESIS

1977

1987

1999 2001 (test), 2006 (1st)

2016

THE FIDIC TASK GROUP

• John Greenhalgh (Chair).

• Edward Corbett (Lawyer).

• Roger Maddrell (Engineer).

• Tim Maddock (IADC).

• Marnix Vandenberghe (IADC).

The FIDIC Contracts Committee has the

ultimate decision on the form and content.

GOALS

• To be an industry specific standard form of contract.

• To set a clear and balanced contracting basis.

• To promote efficient procurement, management and execution of

dredging projects.

APPROACH

• Reflect current practice.

• Reinforce its specialist nature.

• Keep it simple and practicable.

• Follow FIDIC terms and styles:

• contract data;

• general risks;

• sub-clause referencing.

But not to make changes for changes sake

RE-STATEMENT OF ORIGINAL GUIDELINES (1)

• “in dredging and reclamation work, the Contractor is not normally held

responsible for the maintenance of the dredging work after taking-over; and

the areas of dredging are usually taken over in Sections as they are

completed;

RE-STATEMENT OF ORIGINAL GUIDELINES (2)

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

day and by night; and

• equipment costs (mobilisation, use and demobilisation) form a much higher

proportion of total cost in the case of a dredging contract than is generally the case

with construction contracts. The cost of delays can therefore be significant.”

NOTES FOR GUIDANCE

• Longer than the Conditions (19 pages).

• Detailed industry specific guidance.

• Not part of the final contract.

ESSENTIAL PRE-CONTRACT INFORMATION, SOIL & SITE

• Soils information:

• boreholes with testing;

• vibro cores;

• cone penetration testing;

• bed sampling and relevant testing;

• seismic, side scan & magnetometer surveys.

• Reclamation Information.

• Ordnance and obstructions.

• Environmental studies.

PERMITS & LICENSES: SUB-CLAUSE 2.2

• Employer:

• planning;

• zoning and

• other similar permission required

for the permanent work.

• Contractor:

• all other.

PRICING, MEASUREMENT AND PAYMENT

• Flexibility for lump sum or remeasurement.

• Method of measurement.

• Bill of Quantities.

• Idle rates.

CONTRACT STRUCTURE

Engineer

Contractor

Employer

CONTRACT DATA

• A title with meaning.

• An opportunity for the parties.

PROJECT SPECIFIC DATA (1/2)

• Commencement Date.

• Documents forming the Contract.

• Name of the Engineer.

• Time for Completion.

• Dredging Works.

• Law & Language.

• Notices, fees and other charges by Employer.

• Contractor’s design (if any).

PROJECT SPECIFIC DATA (2/2)

• Interruptions for ship movements.

• Climatic / hydrological conditions.

• Delay Damages.

• Working Hours restrictions (if any).

• Currency of payment.

• Valuation type (lump sum, remeasure ..).

• Limitation of Liability.

• Dispute Adjudication Board.

INSURANCE

GENERAL CONDITIONS: 15 CLAUSES

1. General Provisions.

2. The Employer.

3. The Engineer.

4. The Contractor.

5. Design.

6. Defined Risks.

7. Time for Completion.

8. Taking-Over.

9. Remedying Defects.

10. Variations and Claims.

11. Contract Price and Payment.

12. Default.

13. Risk and Responsibility.

14. Insurance.

15. Resolution of Disputes.

DESIGN: CLAUSE 5 RESPONSIBILITY FOR DESIGN (1/2)

• “The Contractor shall be responsible for his tendered design

and design under Sub-Clause 5.1 [Contractor's Design],

every element of which shall be fit for the intended purposes

as specified in the Contract or, where no purposes are

specified, fit for their ordinary purposes.

DESIGN: CLAUSE 5 RESPONSIBILITY FOR DESIGN (2/2)

• The Employer shall be responsible for

the Specification and Drawings.”

DEFINED RISKS: CLAUSE 6.1

One list of Defined Risks:

• Clear allocation of risk and responsibility;

• Promotes effective budget management;

• Straightforward to modify.

Sub-Clause 10.3 - Early Warning:

• Each Party shall notify;

• Entitlement based on had prompt notice been given.

Notice is not a condition precedent.

CHANGES TO DEFINED RISKS

• Munitions.

• Piracy.

• Exceptional Events.

• Change in law.

• Ship interruptions.

• Hydrological conditions.

ALIGNMENT WITH RAINBOW SUITE

• Performance security.

• Employer’s financial arrangements.

• Limitation of liability:

• exclusion of so called indirect and consequential loss;

• cap on liability.

USAGE OF THE FIRST EDITION

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

• Growing usage in Central and South America.

• Low usage in UK and Europe.

AIM FOR SECOND EDITION

• Wider usage.

• Translations in Spanish, Portuguese,

French, German and Russian.

“most beneficial distribution of risks is to allocate each risk to the party that is best able to deal with and handle that particular risk. Such risk distribution will in general lead to the lowest contract price” FIDIC Procurement Procedure Guide

TIME FOR QUESTIONS

• We shall try to respond all questions immediately.

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