Transcript Slayt 1
This project is co-financed by the European Union and the Republic of Turkey
Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey
FIDIC Conditions of Contracts Training 12 – 14 April 2011
1 FIDIC Training 12-14 April 2011
This project is co-financed by the European Union and the Republic of Turkey
Agenda - 1
Day # 1
Introduction Objective of the Training & Expectations of the participants FIDIC (What and Why?) FIDIC Publications FIDIC Conditions of Contracts for Works Contracts FIDIC Contracts Comparison Matrix 2 exercises FIDIC Training 12-14 April 2011 2
This project is co-financed by the European Union and the Republic of Turkey
Agenda - 2
Day # 2
Parties of a Works Contract under FIDIC Contents of a Works Tender Dossier Introduction to Particular Conditions Appendix to Tender Clauses of the Conditions of Contract related to Volume 3 Clauses of the Conditions of Contract related to Volume 5 2 exercises FIDIC Training 12-14 April 2011 3
This project is co-financed by the European Union and the Republic of Turkey
Agenda - 3
Day # 3
Before Contract Signature Before the Commencement of Works First 28 days Project Management Tools under FIDIC Conditions Financial Management Tools Limits of Engineer’s Authority in EU-funded Projects Exercise Evaluations FIDIC Training 12-14 April 2011 4
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 1 Day # 1, Morning
Introduction Objectives of the Training What is FIDIC?
Why FIDIC?
FIDIC Publications FIDIC Training 12-14 April 2011 5
This project is co-financed by the European Union and the Republic of Turkey •
Introduction – 1
Trainer:
–
Kerem Sadıklar
– – –
Civil Engineer & MBA > 15 years of experience including EU & UNDP [email protected]
•
Participants:
–
25 of FCD + TID of RCP – CIC
–
Knowledge & experience level?
FIDIC Training 12-14 April 2011 6
This project is co-financed by the European Union and the Republic of Turkey
Introduction – 2
Objective of the Training:
By the end of the course, the trainees should; – – – – – – have a solid understanding of types of FIDIC Contracts know contents of a Works Contract know where to find what be able to identify the external expertise they need be able to draft an «Appendix to Tender» be able to identify the important clauses of an PC FIDIC Training 12-14 April 2011 7
This project is co-financed by the European Union and the Republic of Turkey
Introduction – 3
Therefore the training will cover FIDIC’s institutional structure and bookshop FIDIC contract types and major differences Identification of the most appropriate contract type Issues/clauses which need special attention during tendering. will be interactive; please be participative will use exercises will involve team work FIDIC Training 12-14 April 2011 8
This project is co-financed by the European Union and the Republic of Turkey FIDIC Training 12-14 April 2011
Introduction – 4
Please always remember; Management of FIDIC contracts is a broad and complicated area, FIDIC experiences improve by execution,
Studying, Implementation and Continues Monitoring
are the keys to success.
9
This project is co-financed by the European Union and the Republic of Turkey
What is FIDIC? - 1
Fédération Internationale des Ingénieurs-Conseils International Federation of Consulting Engineers Uluslar arası Müşavir ve Mühendisler Federasyonu Established in Switzerland in 1913, HQs is in Genève First contract is printed in 1957 FIDIC represents Engineers and Consultants from various countries. E&C Associations from 75 countries are FIDIC members Under this umbrella 30.000 firms and 1.000.000 professionals are represented FIDIC Training 12-14 April 2011 10
This project is co-financed by the European Union and the Republic of Turkey
What is FIDIC? - 2
TürkMMMB - Türk Müşavir Mühendis ve Mimarlar Birliği ATCEA – Association of Turkish Consulting Engineers and Architects Established in 1980 ATCEA has 200 members ATCEA is a member of FIDIC since 1987 Sells and distributes its own publications as well as FIDIC’s www.tmmmb.org.tr
FIDIC Training 12-14 April 2011 11
This project is co-financed by the European Union and the Republic of Turkey
What is FIDIC? - 3
Some of the International Institutions using FIDIC; World Bank (WB) European Bank of Restructuring and Development (EBRD) European Investment Bank (EIB) European Commission (EC) KfW Bankengruppe (KfW) Islamic Development Bank (IDB) African Development Bankası (ADB) Asian Development Bank (ADB) FIDIC Training 12-14 April 2011 12
This project is co-financed by the European Union and the Republic of Turkey FIDIC Conditions of Contracts
Why FIDIC? – 1
cover almost all the major issues that needs to be addressed under a contract have a consistent and easy to follow structure distribute the risks fairly amongst parties designed by a third party (Consultant) but not an Employer; therefore conditions are more objective and fair can be adopted easily for many type of investments projects FIDIC Training 12-14 April 2011 13
This project is co-financed by the European Union and the Republic of Turkey
Why FIDIC? – 2
FIDIC has committees formed of international members to improve its publications. Committees do continuous monitoring
to improve
and/or revise the existing publications (contract types, guidelines, etc.) and
to introduce
new books. Very well known by international Contractors and Consultants, therefore creates confidence and
encourages tenderers
. FIDIC Training 12-14 April 2011 14
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications - 1
Types of Contracts; Client/Consultant Model Services Agreement (
White Book
) Joint Venture Agreements Sub Contracting Agreements
Various Types of Conditions for Works Contracts
FIDIC Training 12-14 April 2011 15
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications - 2
Other Publications; Business Integrity Risk Management Quality Management Environment Management Sustainability Guide FIDIC Contracts Guide to the Construction, Plant and Design-Build and EPC/Turnkey Contracts FIDIC Training 12-14 April 2011 16
This project is co-financed by the European Union and the Republic of Turkey
Exercise # 1
Please go to web site www.fidic.org
list the types of publications available.
Note: Based on the availability of internet in the training center, this exercise may be done as a joint activity
. FIDIC Training 12-14 April 2011 17
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 2 Day # 1, Afternoon
Types of FIDIC Conditions of Contracts for Works Exercise # 2 Comparison Matrix
FIDIC Training 12-14 April 2011 18
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 3; Conditions of Contracts for Works
Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer; 1999 Edition –
RED BOOK
Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant, and for Building and Engineering, Designed by the Contractor; 1999 Edition –
YELLOW BOOK
Conditions of Contract for EPC Turn-key Projects (First Edition, 1999) -
SILVER BOOK
EPC Turn-key : Engineering – Procurement – Construction Short Form of Contract 1st Ed (1999 Green Book) –
GREEN BOOK
FIDIC Training 12-14 April 2011 19
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 4; Conditions of Contracts for Works
Conditions of Contract for Construction (Multilateral Development Bank Harmonised Ed. Version 3: June 2010). For Building and Engineering Works designed by the Employer.
Harmonised RED BOOK
Conditions of Contract for Design, Build and Operate Projects (1st Ed, 2008) -
GOLD BOOK
FIDIC has adopted the scenario, with a 20- year operation period, and has opted for a single contract awarded to a single contracting entity (which will almost certainly be a consortium or joint venture) to optimise the coordination of innovation, quality and performance, rather than award separate contracts for design-build and for operation. The contractor has no responsibility for either financing the project or for its ultimate commercial success. The document, as written, is not suitable for contracts which are not based on the traditional Design-Build-Operate sequence, or where the Operation Period differs significantly from the 20 years adopted.
FIDIC Training 12-14 April 2011 20
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 5; Conditions of Contracts for Works RED BOOK – 1
Design and Engineering (incl. BoQs) is done by Employer or Employer’s Representative.
Tenderers fill in their unit prices into the existing BoQs.
Final amount is not fixed, payments are done based on the real amounts executed. (
Exceptions are available eg: lump-sum conracts).
FIDIC Training 12-14 April 2011 21
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 6; Conditions of Contracts for Works RED BOOK - 2
Employer
carries the risk for contract amount
increases.
The better the design, the flawless the project implementation.
Tender evaluations are relatively simpler. FIDIC Training 12-14 April 2011 22
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 7; Conditions of Contracts for Works YELLOW BOOK - 1
Employer prepares only the « Employer’s Requirements ».
Employer Requirements includes only; Draft layout, Operational Parameters, Technical Specifications and Financial Proposal Format (Schedule of Prices).
Tenderers submit their technical proposals together with their financial proposals. Technical proposals cover at minimum methodology, basic design and drawings, bill of and similar supporting documents.
FIDIC Training 12-14 April 2011 23
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 8; Conditions of Contracts for Works YELLOW BOOK - 2
Generally lump-sum price contracts are used.
Price increase and other risks are distributed amongst both parties.
Tender evaluation process is more complicated and requires technical expertise. FIDIC Training 12-14 April 2011 24
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 9; Conditions of Contracts for Works SILVER BOOK - 1
Two-party contracts (
No Engineer
) Employer defines design parameters, quality measures and functional requirements.
Tenderers submit comprehensive technical proposals supported with designs.
Lump-sum contracts are used and
all risk lies with the Contractor
.
FIDIC Training 12-14 April 2011 25
This project is co-financed by the European Union and the Republic of Turkey
SILVER BOOK - 2 FIDIC Publications – 10; Conditions of Contracts for Works
More suitable for projects like; refinery, petrochemical facilities, power plants. Implemented if the employer foresees high risk for the supply and assembly of mechanical and electrical components. Tender evaluations are very complicated and requires continuous negotiations. Not suitable for public and
EU-funded projects
in Turkey. FIDIC Training 12-14 April 2011 26
This project is co-financed by the European Union and the Republic of Turkey
FIDIC Publications – 11; Conditions of Contracts for Works GREEN BOOK
For low contract values (< 500,000 USD) Simple but repetitive works Short term assignments Usually Employer takes over the design responsibility. FIDIC Training 12-14 April 2011 27
This project is co-financed by the European Union and the Republic of Turkey
Exercise # 2
Please fill in the given table based on your best assumptions
. FIDIC Training 12-14 April 2011 28
Comparison Matrix - 1
This project is co-financed by the European Union and the Republic of Turkey Parameters
RED YELLOW
Contractor
SILVER
Employer
GREEN
Employer or Contractor Design Employer Design Approval Financial Proposal Payment Schedules Engineer FIDIC Training 12-14 April 2011 Only Contractor’s Design (If any) Engineer approves or rejects before executions N.a.
Unit Price Measured quantities Yes Only Contractor’s Design (If any Lump-sum Price Payment percentages Yes Lump-sum Price Unit Price / Lump sum Price Payment Calendar Measured / Payment percentages quantities or Percentages Generally No No. Employer representative may assign if needed.
29
This project is co-financed by the European Union and the Republic of Turkey
Comparison Matrix - 2
Parameters
RED YELLOW SILVER
Tests during Construction
GREEN
Significant number of tests Relatively less and simpler Generally no tests Limited or no tests Tests at completion Relatively less and simpler Very detailed and complicated performance tests Very detailed and complicated performance tests. Limited or no tests Risk Distribution Employer carries the design risks FIDIC Training 12-14 April 2011 Distributed Contractor carries the risks Varies 30
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 3 Day # 2, Morning
Parties of a Works Contract under FIDIC Contents of a Works Tender Dossier Introduction to Particular Conditions Exercise # 3 FIDIC Training 12-14 April 2011 31
This project is co-financed by the European Union and the Republic of Turkey
Parties of a Contract - 1
3 parties under a typical FIDIC Contract : The Employer The Contractor The Engineer (Supervisor) FIDIC Training 12-14 April 2011 32
This project is co-financed by the European Union and the Republic of Turkey
Parties of a Contract - 2
Relations in a EU-funded Project Employer – Contractor FIDIC Conditions of Contract Employer – Engineer Service Contract EU/PRAG General Conditions Engineer – Contractor Engineer supervises the construction and manages the project with limited authority. FIDIC Training 12-14 April 2011 33
This project is co-financed by the European Union and the Republic of Turkey
Parties of a Contract - 3 Employer
Defines the requirements and specifications Provides the construction site Provides the financial resources (usually) Provides the necessary conditions to the Contractor for the execution of works Some of these tasks are shared by OPs and ERs (not party to the contract) in EU funded projects. FIDIC Training 12-14 April 2011 34
This project is co-financed by the European Union and the Republic of Turkey
Contractor: Parties of a Contract - 4
Responsible from executing the works Provides the necessary securities and guarantees Held responsible from his and/or his sub contractors actions Responsible from the quality of the executed works as well as the security of the construction site Prepares the interim payment reports May use sub contractors as allowed in the conditions of the contract FIDIC Training 12-14 April 2011 35
This project is co-financed by the European Union and the Republic of Turkey
Engineer: Parties of a Contract - 5
Assigned by the Employer to represent the Employer Name, contact information and authorities of an Engineer are stated in relevant parts of the Works Contract After consulting with the Employer and the Contractor, should propose
objective
solutions for claims.
fair and
Checks the quality of the appropriateness of the workmanship and the materials used Approves the payment certificates of the Contractor FIDIC Training 12-14 April 2011 36
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD - 1
A Works tender dossier comprises of 5 Volumes ; Volume 1 : Instructions to Tenderers - PRAG rules apply. Terminology should be adopted in line with FIDIC.
Volume 2 : Conditions of Contract – FIDIC Volume 3 : Technical Specifications / Employer’s Requirements Volume 4 : Financial Offer Format, Schedule of Prices Volume 5 : Drawings FIDIC Training 12-14 April 2011 37
This project is co-financed by the European Union and the Republic of Turkey
Volume 1: Contents of a Works TD - 2
Instructions to Tenderers (ITT) Tender Form and Annexes (Appendix to Tender) Tender Guarantee Format Forms Glossary of Terms Evaluation Grid FIDIC Training 12-14 April 2011 38
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD - 3
Volume 2:
Draft Contract General Conditions of Contract
( RED / YELLOW
BOOK))
Based on the nature and design responsibility.
Particular Conditions of Contract Security Samples (Pre-finance, Performance & Retention) FIDIC Training 12-14 April 2011 39
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD – 4
Particular Conditions – 1
FIDIC General Conditions of Contracts (
RED or YELLOW
) for any type of project anywhere in the world. Contract will be customized by using the particular conditions of contract. Particular conditions prevail the General Conditions.
Particular Conditions changes / replaces / revises / deletes the Clauses of the General Conditions. FIDIC Training 12-14 April 2011 40
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD – 5
Particular Conditions – 2
Clauses in Particular Conditions should not be conflicting with the clauses of the General Conditions. FIDIC Guidelines may be used while drafting Particular Conditions.
Particular Conditions should be in line with the local law and law of the contract. Any revisions / additions / omissions done by the Particular Conditions should be based on rational reasoning. FIDIC Training 12-14 April 2011 41
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD – 6
Particular Conditions – 3
Very complex PCs may harm
the completeness and structure of a works Contract.
PCs should be drafted by a team of experts who have relevant works and contract management experience.
PCs should be assessed / evaluated by local lawyers. Appendix to Tender may be used as control tool.
Clause 1.5 of PCs; « Priority of Documents » is important and should be re addressed for every project. FIDIC Training 12-14 April 2011 42
This project is co-financed by the European Union and the Republic of Turkey
Contents of a Works TD – 7
Priority of Documents
the contract, the Tender Form with its appendix, the Particular Conditions, the General Conditions, the Technical Specifications, the design documentation (drawings), the bill of quantities (after arithmetical corrections)/breakdown, any other documents forming part of the contract FIDIC Training 12-14 April 2011 43
This project is co-financed by the European Union and the Republic of Turkey
Particular Conditions – 1
Clauses which must be revised / added during the preparation of a PCs Clause 1.3 Communication Should be revised in line with all the communication tools allowed for the specific project Clause 1.4 Law and Language If different languages will be used under certain circumstances this should be defined here Clause 1.5 Priority of Documents Amendments and additions can be made here. Please
be extremely careful
, and do not change unless you have to. FIDIC Training 12-14 April 2011 44
This project is co-financed by the European Union and the Republic of Turkey
Particular Conditions – 2
Clause 1.6 Contract Agreement Contract Agreement will also be referred as «Letter of Acceptance» Clause 2.1 Right of Access to Site If there are conditions (time constraints or other) related to this issue, this clause should be drafted accordingly. Clause 3.1 Engineer’s Duty and Authority The limits of Engineer’s authority should be clearly defined here. This article is
extremely important for EU funded projects
where the authority of the Engineer is limited. This article should be in line with the ToR fo the Engineer’s service contract. Clause 4.1 Contractor’s General Obligations If the Contractor has additional obligations, these should be clearly defined here. FIDIC Training 12-14 April 2011 45
Particular Conditions – 3
This project is co-financed by the European Union and the Republic of Turkey Clause 4.8 Safety Procedures If there are any additional procedures to be implemented because of EU or local laws they should be defined here Clause 4.19 Electricity, Water and Gas This articled defines where and how the Contractor will obtain the necessary infrastructure.
Clause 4.21 Progress Reports If additional reports other than the ones defined in General Conditions are requested, these should be defined here.
Clause 7 / Sub Clause 7.9 «Rules of Origin».
This sub clause should be added in EU funded projects. Please remember this is only for permanent works. FIDIC Training 12-14 April 2011 46
This project is co-financed by the European Union and the Republic of Turkey
Particular Conditions – 4
Clause 8.2 – Time for Completion If there are different milestones for completion and/or taking over parts of the works these should be defined here. Clause 12.1 – Works to be Measured Only
RED BOOK
If measurements are to be done by records and/or reports, the details should be defined here.
FIDIC Training 12-14 April 2011 47
This project is co-financed by the European Union and the Republic of Turkey
Exercise # 3
Please identify the Clauses which are different in
RED
and
YELLOW
FIDIC Books
. FIDIC Training 12-14 April 2011 48
This project is co-financed by the European Union and the Republic of Turkey
Particular Conditions - 5
Different Clauses in FIDIC Books:
RED Book
YELLOW Book
GREEN Book
Clause 3 Clause 5 Clause 12 Engineer Engineer Nominated Sub Contractors Measurement and Evaluation Design Tests for Completion Employer’s Administartion Design Tests for Completion FIDIC Training 12-14 April 2011 49
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 4 Day # 2, Afternoon
Appendix to Tender Clauses of the Conditions of Contract related to Volume 3 Clauses of the Conditions of Contract related to Volume 5 Exercise # 4 FIDIC Training 12-14 April 2011 50
Appendix to Tender – 1
This project is co-financed by the European Union and the Republic of Turkey Appendix to Tender is prepared as a summary table.
Includes Financial and Administrative / Contractual Information Administrative / Contractual Information Contact Details of Parties Contract Duration Law and Language of the Contract Disputes and Arbitration FIDIC Training 12-14 April 2011 51
Appendix to Tender – 2
This project is co-financed by the European Union and the Republic of Turkey
Financial Information:
Security Amounts Delay Penalties Pre-Finance Payments Retention Deductions Minimum Interim Payments Insurance Amounts FIDIC Training 12-14 April 2011 52
This project is co-financed by the European Union and the Republic of Turkey
Appendix to Tender – 3
It includes summary of the information originating from the Particular and General Conditions of Contract. A different AtT should be prepared for each tender. May be used as a tool to check the completeness and consistency of the particular and general conditions.
Numeric values or specific information should be indicated in Appendix to Tender to avoid confusion and mistakes between different values.
Appendix to tender should be used to complement the Particular and General Conditions, not to amend or revise them.
FIDIC Training 12-14 April 2011 53
Volume 3 - 1
This project is co-financed by the European Union and the Republic of Turkey Technical Specifications / Employer Requirements
RED Book
: Technical Specifications Material quality Material properties Workmanship quality Assembly conditions Locations, etc. are defined in detailed.
YELLOW Book
: Employer Requirements Performance criteria is defined for the works which will be designed by the Contractor. FIDIC Training 12-14 April 2011 54
Volume 3 - 2
This project is co-financed by the European Union and the Republic of Turkey
RED Book
; Technical Specifications Every detail (material & workmanship) that can not be shown on drawings should be clearly defined here. Definitions should be clear and net. « shall », « will », « must » to be used, « may » « may be » not to be used Location Forms (Room Lists) should be included.
The more detailed and clear the specifications, the more flawless the project implementation
. FIDIC Training 12-14 April 2011 55
This project is co-financed by the European Union and the Republic of Turkey
Volume 3 - 3
YELLOW Book
; Employer Requirements Employer’s Requirements should define the scope and the objective of the project.
The requirements, parameters, functions, scope and the quality of the completed works should be defined.
All the existing information, relevant technical & administrative regulations and standards should be listed to enable the Contractor to do a proper design. FIDIC Training 12-14 April 2011 56
This project is co-financed by the European Union and the Republic of Turkey
Volume 3 - 4
Clauses of the Conditions of Contract related to Volume 3 - 1
1.9 Errors in the Employer’s Requirements Extension of Time – Contract Amount Increase 1.13 Compliance with Laws (planning vs. construction permits) 4.1 Contractor’s General Obligations Additional security or visibility measures 4.6 Co-operation If other contractors share the site FIDIC Training 12-14 April 2011 57
Volume 3 - 5
This project is co-financed by the European Union and the Republic of Turkey
Clauses of the Conditions of Contract related to Volume 3 - 2
4.7 Setting Out (correct positioning, leveling etc.) 4.14 Avoidance of Interference (interference with third parties) 4.18 Protection of Environment 4.19 Electricity, Water and Gas 8avaliable infrastructure) 4.20 Employer’s Equipment and Free-Issue Material 5.1 General Design Obligations (
yellow
)/ Nominated Sub Contractors (
Red
) FIDIC Training 12-14 April 2011 58
Volume 3 - 6
This project is co-financed by the European Union and the Republic of Turkey
Clauses of the Conditions of Contract related to Volume 3 - 3
5.2 Contractor’s Documents ( Yellow Book ) 5.4 Technical Standards and Regulations 5.5 Training 5.6 As-built Documents 6.6 Facilities for Staff and Labor Facilities for the Employer and Engineer on site 7.2 Samples (material approvals) FIDIC Training 12-14 April 2011 59
This project is co-financed by the European Union and the Republic of Turkey
Volume 3 - 7
Clauses of the Conditions of Contract related to Volume 3 - 4
7.3 Inspection (Manufacturer Tests) 9.1 Contractor’s Obligations (Tests on Completion) 9.4 Failure to Pass Tests
on
Completion 12.1 Tests after Completion (
Yellow Book
) 12.4 Failure to Pass Tests
after
Completion (
Yellow Book
) FIDIC Training 12-14 April 2011 60
This project is co-financed by the European Union and the Republic of Turkey
Volume 5
Clauses of the Conditions of Contract related to Volume 5:
RED
and
YELLOW
Books 1.8 Care and Supply of Documents
RED Book
1.9 Delayed Drawings and Instructions
YELLOW Book
1.9 Errors in the Employer’s Requirements FIDIC Training 12-14 April 2011 61
This project is co-financed by the European Union and the Republic of Turkey
Exercise # 4
Please fill in the missing parts of the attached Appendix to Tender in line with the given Particular Conditions of Contract and the General Conditions of a RED FIDIC Book
FIDIC Training 12-14 April 2011 62
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 5 Day # 3, Morning
Before Contract Signature Before the Commencement of Works First 28 days Project Management Tools under FIDIC Conditions Exercise # 5 FIDIC Training 12-14 April 2011 63
This project is co-financed by the European Union and the Republic of Turkey
Before Contract Signature - 1
Employer gives award notice to the Awardee. Contract Negotiations are done (if necessary). Priority of documents are re-arranged if necessary due to contract negotiations or clarifications during tender period.
Contract is signed by the Employer (
and endorsed by EUD
). Contractor submits the required documents (e.g. performance guarantee) to the Employer together with the signed Contract.
FIDIC Training 12-14 April 2011 64
Before the Construction Works Commerce - 1
This project is co-financed by the European Union and the Republic of Turkey Upon the signature of the Contract certain procedures need to completed before the Contractor can commence the works;
18.2
Submission of All Risk Insurance
20.2
Identification of DAB (Dispute Adjucation Board) member(s). –
done on «Ad hoc» bases. Sometimes identification is
3.1
If not already in the Contract, the Employers informs the Contractor about the details of the Engineer. Communication lines and rules are established.
1.8 & 1.9
Supply of Drawings and Instructions ( RED Book ) Drawings should be an integral part of the Contract and should be provided based on a well structured calendar FIDIC Training 12-14 April 2011 65
This project is co-financed by the European Union and the Republic of Turkey
Before the Construction Works Commerce - 2
3.2
The limits of the authority of the Engineer and its staff should be defined
The authority of the Engineer is limited in projects funded by EU
. Please remember that the phrase
Engineer
not the Consultant ’s Team Leader.
refers to the Consultant Firm
, FIDIC Training 12-14 April 2011 66
This project is co-financed by the European Union and the Republic of Turkey
Before the Construction Works Commerce - 3
The personnel of the Employer, the Contractor and the Engineer to be deployed on the project site is identified. ( 4.3
Contractor’s Representative ) The limits of authority of each personnel is identified and a line of communication is drafted based on this. It is recommended that the line of communication is signed by all parties.
For example: the Team Leader of the Engineer approves the Contractors Interim Payments, but does not have the authority to negotiate amendments on the Consultancy Contract.
FIDIC Training 12-14 April 2011 67
This project is co-financed by the European Union and the Republic of Turkey
Before the Construction Works Commerce - 4
Clause 2.1
Right of Access to Site Employer should give the right to access and possession of the site to the Contractor after the Contract Signature.
Employer should complete his responsibilities and should give the possession of the site free of problems.
Delays in this task may cause extensions in the contract duration and increases in the contract price.
1.13
Contractor should complete all the necessary local procedures and obtain the necessary permits to start construction works.
Clause 8.1
Unless otherwise stated in PCs the commencement date is within 42 days after the contract signature. Engineer shall give the notice not less than 7 days before the Commencement Date. FIDIC Training 12-14 April 2011 68
This project is co-financed by the European Union and the Republic of Turkey
First 28 Days
Clause 4.4
Necessary permissions and procedures are completed for the Sub Contractors.
Clause 4.1
Contractor’s General Obligations. Security of the site and works EU Visibility Rules are secured
Clause 6
Staff and Labour
Sub Clause 6.4
(Local Labour Laws)
Sub Clause 6.5
(Working hours)
Sub Clause 6.7
(Health and safety) Contractor should take all the necessary precautions to avoid accidents and should assign a safety representative. FIDIC Training 12-14 April 2011 69
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools – 1
Notices Instructions Reports Records Certificates FIDIC Training 12-14 April 2011 70
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools – 2
Clause 1.3
Communication The rules stated in this clause should be followed.
Payment certificates, approvals, certifications and similar requests should be processed within the durations stated in the Contract.
A copy of the notices should be shared by the Engineer.
Clause 1.9
Delayed Drawings and Instructions Delays which will cause claims should be avoided as much as possible.
FIDIC Training 12-14 April 2011 71
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools - 3
Clause 3.3
Instructions of the Engineer Engineer should issue instructions in line with its Authority. Instructions can only be issued by the Engineer or its representative.
RED Book
includes verbal instructions by written confirmations. FIDIC Training 12-14 April 2011 72
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools – 4
Reports
Clause 4.21 Progress Reports Unless otherwise stated, the Contractor should issue progress reports in certain intervals. Usually as attachments to the interim payment certificates. Reports compare the physical and financial realization with the planned and propose programmes for the remaining duration. Reports should be supported by pictures and test results. Reports should include information about the production, delivery and assembly schedules of the permanent works.
FIDIC Training 12-14 April 2011 73
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools – 5
Reports
Clause 6.10 Records of Contractor’s Personnel and Equipment Contractor should keep daily site records. The records should include site activities as well as weather conditions. Such information should be summarized in the progress reports. Clause 2.5 ve 20.1 Claims Progress reports should list the Claims of both Parties.
The contractor should give notice in 28 days after he became aware of the event or the circumstances. And shall submit a detailed claim in 42 days. Engineer shall respond within 42 days after receiving a claim. Clause 14 - Contract Price and Payment Progress reports should include sufficient level of information about cash flows in order to allow the Employer to make proper planning. FIDIC Training 12-14 April 2011 74
This project is co-financed by the European Union and the Republic of Turkey
Project Management Tools – 6
Certificates
Clause 10 – Employer’s Taking Over Contractor may apply for Taking Over Certificate 14 days before the works are completed (Notice).
Engineer within 28 days after receiving the application (a) issues the certificate or (2) rejects the application.
Clause 11 – Defects Liability Upon the full satisfaction of Contractor’s duties and responsibilities and within 28 days after the expiry of the Defects Notification Period; Engineer issues the Final Acceptance Certificate. FIDIC Training 12-14 April 2011 75
This project is co-financed by the European Union and the Republic of Turkey
Exercise # 5
Please calculate the maximum number of contract duration for the Project using the attached Annex to Tender.
FIDIC Training 12-14 April 2011 76
This project is co-financed by the European Union and the Republic of Turkey
Agenda
Session # 6 Day # 3, Afternoon
Financial Management Tools Limits of Engineer’s Authority in EU-funded Projects Evaluations FIDIC Training 12-14 April 2011 77
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools- 1
Clause 12 Measurement and Evaluation (
RED Book
) Clause 13 Variations and Adjustments Clause 14 Contract Price and Payment FIDIC Training 12-14 April 2011 78
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools – 2
Clause 12 Measurement and Evaluation
Only valid for
RED Book
Contracts.
YELLOW Book
has «Tests After Completion».
Measurements are done by the Engineer in presence of the Contractor. In certain circumstances records are used instead of measurements. Payments are usually based on net measurements.
Clause 12.3
defines the procedures for defining new rates.
Clause 12.4
defines the compensations payments to be done to the Contractor for omissions . FIDIC Training 12-14 April 2011 79
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools – 3
YELLOW Book;
Payment Conditions Usually lump-sum contracts.
Sub items are defined for interim payments. Payments are based on completion ratios (percentages). Sub items should be arranged carefully in order not to harm the Contractor’s cash flow. Unfair or unreasonable payment conditions are
always reflected to the prices
. 14.4 Schedule of Payments and Volume 4 should be in line with each other. FIDIC Training 12-14 April 2011 80
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools - 4
Clause 13
Variations and Adjustments
13.1
Engineer can instruct a variation
13.2
Value Engineering
13.3
Variation Procedure
13.8
Adjustments for Changes in Cost: Calculates price increases based cost (material, workmanship, energy etc.) increases.
Not implemented in EU funded projects
. FIDIC Training 12-14 April 2011 81
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools - 5
Clause 14
Contract Price and Payment
14.1
Contract Price
14.2
Advance Payment
14.3
Interim Payment Certificates / Sub Clause
4.21
Progress Reports
14.4
Schedule of Payments
14.7 & 14.8
Payment / Delayed Payment FIDIC Training 12-14 April 2011 82
This project is co-financed by the European Union and the Republic of Turkey
Financial Management Tools - 6
Advance payment and deductions should be in line with the nature of the works. Payment conditions should not put the Employer under risk, but at the same time should not harm the cash flow of the Contractor. In EU funded projects, Beneficiaries are requested to approve the interim payments « Read & Approved ». Procedures for Contract Price variations should be clearly defined. And relevant clauses should be drafted accordingly. Payment terms and durations should be calculated after considering the necessary approval procedures. FIDIC Training 12-14 April 2011 83
This project is co-financed by the European Union and the Republic of Turkey
Limits of Engineer’s Authority in EU Funded Projects - 1
The Consultant (Engineer) shall obtain the specific approval of the CFCU (Contracting Authority) and the Beneficiary before taking action on matters affecting contract price and duration including but not limited to the following articles of the FIDIC
Red Book
:
Sub-Clause 3.5:
Agreeing or determining any matter, which will change the Contract Price;
Sub-Clause 4.4:
Giving consent to a Subcontractor for a subcontract for which a different subcontractor is named in the Contract; FIDIC Training 12-14 April 2011 84
This project is co-financed by the European Union and the Republic of Turkey
Limits of Engineer’s Authority in EU Funded Projects - 2
Sub-Clause 8.4
: Agreeing or determining an extension of the Time for Completion;
Sub-Clause 8.8
: Suspension of work,
Clause 13
: Instructing Variations and Adjustments effecting Contract Price or Time for Completion.
Sub-Clause 13.5
: Giving instructions for the use of the provisional sums/contingencies; FIDIC Training 12-14 April 2011 85
This project is co-financed by the European Union and the Republic of Turkey
Thank You / Evaluations
FIDIC Training 12-14 April 2011 86