International Federation of Consulting Engineers Speaker: Richard Kell AM FTSE BE(Hons) HonFIEAust CPEng, Director, Cardno International Pty Ltd

FIDIC MDB Harmonised Construction Contract Conference BILATERAL EXPERIENCE WITH MDB CONTRACT

AusAID

Note: These comments are offered by way of personal observations by the author who is not an AusAID employee, and thus they do not represent an official AusAID position.

AusAID

• • • AusAID holds a FIDIC MDB licence.

Executing Agencies managing projects funded by AusAID are free to make their own selection of the form of Contract.

Executing Agencies are increasingly turning to the FIDIC MDB contract. AusAID supports such a choice.

AusAID

• • AusAID enters into co-funding arrangements with MDBs, and in such cases, the policy of the MDB with respect to the form of contract will prevail, e.g. ADB requires the FIDIC MDB Version AusAID has been entering into contracts where the Consultant undertakes Construction Management: The Consultant would be advised to adopt FIDIC MDB

AusAID and Infrastructure

• • • * Infrastructure contracts: Covering: roads, water and sanitation, disaster mitigation, rail, schools, health clinics, etc.

* AusAID expenditure on infrastructure projected for FY 2012-13 at A$374 million * AusAID focus for infrastructure is in the East Asia and PNG and Pacific Regions.

AusAID- ISSUES I

• • • • • • Quality Assurance FIDIC 1999 and MDB Versions are QA Contracts and not QC Contracts, by S/Clause 4.9; Contractor to provide QA Plan. Contract documents to provide clear statement and outline content of the Contractor’s QAP (S/Cl 4.9); Engineer is to audit the Contractor’s QAS – needs an audit plan and sufficient staff to do this.

AND This aspect of FIDIC Contracts not understood by all Users.

Recommended: * FIDIC to issue a Guide on QAP, and * Clauses for conversion to QC Contract if appropriate.

AusAID Contracts Issues II

• Failure to Understand and/or Apply the Rules.

– Employer interferes on details, overrules Engineer; – Lack of compliance by Contractor is accepted; • • • Recommended action by FIDIC: Standard, separate Agreement between Employer and Engineer, which empowers Engineer.

Guide for reduced payments to Contractor for non-compliance; FIDIC Seminars in the Region (at modest cost).

AusAID

Low Level Bridges - Precast Concrete