FIDIC and FIDIC Contracts - Dr. Ahmed H....

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FIDIC CONTRACTS

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What is FIDIC ?

• An international federation of consulting engineers,

founded in 1913 with its headquarters located in

Lausanne, Switzerland, whose objective is to promote the

common interests of the member associations and

disseminate information to its members for the

development of consulting industry.

• What does FIDIC do?

• Arrange seminars and conferences and prepare standard

documents, in the furtherance of its goals.

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FIDIC CONTRACTS

Conditions of Contract for Construction (Red Book)

Conditions of Contract for Plant and Design-Build (Yellow Book)

Conditions of Contract for EPC/Turnkey Projects(Silver Book)

Short Form of Contract ( Green Book)

CLIENT/CONSULTANT MODEL SERVICES AGREEMENT

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The New Red Book

• For Construction of major building or engineering projects

in general

• Employer’s Responsibility for Design

• Unit Price Contract/Remeasurement (monthly payment)

• Administration of Contract by Engineer

• Pro-contractor in terms of risk allocation

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The New Yellow Book

• For provision of mechanical and electrical plant, and for

design and execution of building or engineering projects

• Contractor’s Responsibility for Design(design extent?)

• Lump-sum, with adjustments (stage/milestone or monthly

payment)

• Administration of Contract by Engineer

• Pro-contractor in terms of risk allocation

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The Silver Book

• For provision on a turnkey basis of a process or power

plant, etc.

• Contractor’s Total Responsibility for Design

• Normally fixed Lump-sum, with few adjustments

(stage/milestone or monthly payment)

• Administration of Contract by Employer’s Representative

• Pro-employer in terms of risk allocation

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The Green Book

• For Building or Engineering Works of Small Capital Value

or containing mostly simple or repetitive work

• Contractor’s or Employer’s Responsibility for Design

• Lump-sum, with adjustments (monthly payment)

• Administration of Contract by Employer’s Representative

• Pro-contractor in terms of risk allocation

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CONDITIONS OF CONTRACT

Guide

published 2001

published 1999

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WHICH BOOK TO USE?

STRAIGHTFORWARD

PROJECT ? EMPLOYER DESIGN ?

CONTRACTOR DESIGN

plant and/or high

unforeseen risks

fixed price - lump sum

little employer involvement

no major unforeseen risks

no

no

no

DISCUSS IN DETAIL

Employer ’s requirements

with the Contractor, and

negotiate a modified

FIDIC contract

no

yes yes

yes yes

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FEATURES AND ADVANTAGES

fair apportioning of risks, rights and obligations between the parties

BALANCED

WELL TRIED

long case history for earlier contracts

ACCEPTED

known and recognized; in wide use for international contracts

SUPPORTED

recommended or required by development banks,

EFFECTIVE

clear and complete conditions; time limits; provisions for attribution

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Key points: CONSTRUCTION

• Employer designs

• Engineer, working for the Employer

• Bill of Quantities

• Payments based upon measurements

• Certification of payments by Engineer

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Key points: PLANT & DESIGN-BUILD

• Contractor designs

• Engineer, working for the Employer

• Lump sum pricing

• Payments according to progress

• Certification of payments by Engineer

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Key points: EPC/TURNKEY PROJECTS

• Contractor designs and takes full responsibility

• Employer may appoint a Representative

• Fixed price, to cover risks taken on by Contractor

• Payments according to progress

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Key points: SHORT FORM

• Simple projects

• Design by either party

• Employer may appoint a Representative

• Valuation as appropriate; to be agreed

• Payments according to value of Works executed and

Materials and Plant delivered to site

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Key points: CLIENT/CONSULTANT

• Agreed Scope of Services: Appendix A (the agreed scope

of services)

• Normal, Additional and Exceptional Services

• Normal Services priced as agreed

• Additional and Exceptional Services at rates agreed

• Payment schedule as agreed

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USE OF FIDIC CONTRACTS

• Match contract and project

• Decide the form of contract early

• Appoint Dispute Arbitration Board early

• preparation of the contract should be done by

professionals

• Do not touch the General Conditions

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PRINCIPLES OF PROCUREMENT

• Effectiveness

• Economy

• Efficiency

• Accountability

• Transparency / confidentiality

• Strong competition

• Publicity, wide participation

• Fair and equal conditions

• Standard procedures

• Standard documentation

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PROCUREMENT CATEGORIES

• Goods

• Works

Versus

• Consultant services

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TENDERING PROCEDURES

• Development bank / public procurement procedures

• Open tendering / International Competitive Bidding

• Local tendering / National Competitive Bidding

• Restricted tendering / Limited Bidding

• Two stage tendering

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SELECTION PROCEDURES/CRITERIA

• Criteria defined and published in advance

• Economically most advantageous offer

• Quality based selection for intellectual services

• Quality and cost based selection

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PROCUREMENT STEPS

• Preparation

• Publication

• Pre-qualification / short-listing

• Invitation

• (Submission)

• Evaluation

• Award, contracting

• Supervision, contract administration

• Lessons learned

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PREPARATION OF PROCUREMENT

• Determination of needs and objectives

• Determination of constraints

• Identification of parties

• Planning, budgeting, financing

• Contract type

• Selection procedure

• Requirements / Specifications / Bills of Quantities /

Terms of Reference

• Pre-qualification and evaluation criteria

• Particular conditions

• Tender documents

• Publicity

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CONTRACT ADMINISTRATION

• Supervision

• Implementation of rule

• Quality and quantity

• Invoice verification

• Payments

• Extensions, variation orders, modifications

• Termination

• Disputes and their resolution

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RISKS IN PROCUREMENT

• Wrong goods, works, services

• Bad value for money

• Fraud

• Corruption

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QUESTIONS?

25

Contact:

Ahmed Elyamany

019-4100-824

a2hyamany@yahoo.com