Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için
Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım
This project is co-financed by the European
Union and the Republic of Turkey
Technical Assistance on Institutional Building for the Implementation of RCOP
in Turkey
FIDIC
Conditions of Contracts Training
12 – 14 April 2011
FIDIC Training 12-14 April 2011
1
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
•
Trainer:
–
–
–
–
•
Introduction – 1
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
Introduction – 4
This project is co-financed by the European
Union and the Republic of Turkey
Please always remember;



FIDIC Training 12-14 April 2011
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
Why FIDIC? – 1
FIDIC Conditions of Contracts

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
FIDIC Publications – 10;
Conditions of Contracts for Works
SILVER BOOK - 2


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
Employer or
Contractor
Employer
Design Approval
Engineer approves
Only Contractor’s or rejects before
Design (If any)
executions
N.a.
Only Contractor’s
Design (If any
Unit Price
Unit Price / Lumpsum Price
Payment Schedules
Engineer
FIDIC Training 12-14 April 2011
Measured
quantities
Yes
Employer
GREEN
Design
Financial Proposal
Contractor
SILVER
Lump-sum Price
Lump-sum Price
Payment
percentages
Payment Calendar Measured
/ Payment
quantities or
percentages
Percentages
Yes
Generally No
No. Employer
representative may
assign if needed.
29
This project is co-financed by the European
Union and the Republic of Turkey
Parameters
Comparison Matrix - 2
RED
YELLOW
SILVER
GREEN
Tests during
Construction
Significant number Relatively less and
of tests
simpler
Generally no tests
Tests at completion
Very detailed and
Relatively less and complicated
simpler
performance tests
Very detailed and
complicated
performance tests. Limited or no tests
Risk Distribution
Employer carries
the design risks
Contractor carries
the risks
FIDIC Training 12-14 April 2011
Distributed
Limited or no tests
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 EUfunded projects.
FIDIC Training 12-14 April 2011
34
This project is co-financed by the European
Union and the Republic of Turkey
Parties of a Contract - 4
Contractor:

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
Parties of a Contract - 5
Engineer:



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 fair and
objective solutions for claims.

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

Contents of a Works TD - 2
Volume 1:

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 readdressed 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
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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
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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
This project is co-financed by the European
Union and the Republic of Turkey


Particular Conditions – 3
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
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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
Engineer
Engineer
Employer’s
Administartion
Clause 5
Nominated Sub
Contractors
Design
Design
Clause 12
Measurement
and Evaluation
Tests for
Completion
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
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This project is co-financed by the European
Union and the Republic of Turkey
Appendix to Tender – 2
Financial Information:

Security Amounts

Delay Penalties

Pre-Finance Payments

Retention Deductions

Minimum Interim Payments

Insurance Amounts
FIDIC Training 12-14 April 2011
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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
This project is co-financed by the European
Union and the Republic of Turkey
Volume 3 - 1

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
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This project is co-financed by the European
Union and the Republic of Turkey
Volume 3 - 2
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
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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
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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.)
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4.14 Avoidance of Interference (interference with third parties)
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4.18 Protection of Environment
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4.19 Electricity, Water and Gas 8avaliable infrastructure)
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4.20 Employer’s Equipment and Free-Issue Material

5.1 General Design Obligations (yellow)/ Nominated Sub Contractors (Red)
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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)
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5.4 Technical Standards and Regulations
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5.5 Training
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5.6 As-built Documents
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6.6 Facilities for Staff and Labor
Facilities for the Employer and Engineer on site

7.2 Samples (material approvals)
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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)
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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
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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
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This project is co-financed by the European
Union and the Republic of Turkey
Agenda
Session # 5
Day # 3, Morning
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Before Contract Signature
Before the Commencement of Works
First 28 days
Project Management Tools under FIDIC Conditions
Exercise # 5
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This project is co-financed by the European
Union and the Republic of Turkey
Before Contract Signature - 1
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Employer gives award notice to the Awardee.

Contract Negotiations are done (if necessary).
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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.
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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;
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18.2 Submission of All Risk Insurance
20.2 Identification of DAB (Dispute Adjucation Board) member(s). – Sometimes identification is
done on «Ad hoc» bases.
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
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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 refers to the Consultant Firm,
not the Consultant’s Team Leader.
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This project is co-financed by the European
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Before the Construction Works Commerce - 3
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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.
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This project is co-financed by the European
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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.
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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.
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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.
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This project is co-financed by the European
Union and the Republic of Turkey
Project Management Tools – 1

Notices

Instructions

Reports

Records

Certificates
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This project is co-financed by the European
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Project Management Tools – 2

Clause 1.3 Communication
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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.
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This project is co-financed by the European
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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.
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This project is co-financed by the European
Union and the Republic of Turkey
Project Management Tools – 4
Reports
Clause 4.21 Progress Reports
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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.
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This project is co-financed by the European
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
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.



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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.
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This project is co-financed by the European
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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.
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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.
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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

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This project is co-financed by the European
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Financial Management Tools- 1

Clause 12 Measurement and Evaluation (RED Book)

Clause 13 Variations and Adjustments

Clause 14 Contract Price and Payment
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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.
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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.
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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.
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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
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This project is co-financed by the European
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



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.
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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;
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This project is co-financed by the European
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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;
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This project is co-financed by the European
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Thank You / Evaluations
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