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The FIDIC Contracts

A Two - Day Seminar


organised by Cornerstone

The Roles of the Employer


and the Engineer
Nael G.
G Bunni,
Bunni BSc,
BSc MSc,
MSc PhD,
PhD CEng,
CEng FICE,
FICE FIEI,
FIEI
FIStructE, FCIArb, FIAE, RConsEI.
Chartered Engineer, Conciliator/Mediator and Registered Chartered Arbitrator
Telephone: +353 1 8391141 Fax: +353 1 8391167
13th & 14th March 2012
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The FIDIC Contracts

The Roles of the Employer


and the Engineer

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Introduction
It is worth remembering:
“ There are new concepts adopted in the
1999 Books to make them attractive to
the Construction Industry in general;
“ Most important of which are perhaps
related to the position & status of the
Engineer, and the possibility of allowing
the design to be divided by the Employer
& the Contractor.
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Introduction Contd./2

In particular, this leads to consideration


of:
“ the Engineer’s position as an Agent of the
Employer leaving the role of adjudicator
to the DAB who must be independent &
impartial; and
“ The introduction of the document entitled
“Employer’s Requirements”.
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Clauses affecting the roles of the
Employer & the Engineer
With these three p
points in mind, the
following sub-clauses must be
considered:
‰ Sub-Clauses 2.1, 2.2, 2.3, 2.4 and 2.5;
‰ Sub-Clauses
Sub Clauses 33.1,
1 33.2,
2 33.3,
3 33.4
4 and 33.5;
5;
‰ Clause 5 of the Y. & S. Books; and
‰ Sub-Clause 14.7.
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Clause 2: The Role of the Employer

2.1 Right
g to Access to the Site;
2.2 Permits, Licences or Approvals;
2.3 Employer’s Personnel;
2.4 Employer’s Financial
Arrangements; and
2.5 Employer’s Claims.
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Sub-Clause 2.1, 2.2 & 2.3 are similar

g to Access to the Site: 42.1


2.1 Right
& 42.2 of the 1992 Red Book;
2.2 Permits, Licences or Approvals:
54.3 & 54.4 of the 1992 Red B.;
2 3 Employer’s
2.3 E l ’ Personnel:
P l 19.2
19 2 off
the 1992 Red Book.

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Sub-Clause 2.4 & 2.5 are new

2.4 Employer’s
p y Financial
Arrangements; and
2.5 Employer’s Claims.

Note: In the Silver Book, Employer takes


the role of the Engineer!!
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Sub-Clause 2.4: Employer’s Financial
Arrangements
Employer’s Financial Arrangements
p y shall submit,, within 28 days
2.4 The Employer y after
f
receiving any request from the Contractor, reasonable
evidence that financial arrangements have been made
and are being maintained which will enable the
Employer to pay the Contract Price (as estimated at
that time) in accordance with Clause 14 [Contract
P i andd Payment].
Price P ] If the
h Employer
E l intends
i d to make
k
any material change to his financial arrangements,
the Employer shall give notice to the Contractor with
detailed particulars.
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Sub-Clause 2.4: Employer’s Financial


Arrangements
Sub-clause 16.1 provides that if the
employer fails to furnish such evidence
under 2.4, the contractor is entitled to
suspend the work or terminate the
contract under sub-clause 16.1,
Contractor’s
Cont acto s Entitlement
ntitlement to Suspend
Work; and sub-clause 16.2, Termination
by Contractor.

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Sub-Clause 2.4: Employer’s Financial
Arrangements
Note:
) Th meaning
The i off reasonable
bl evidence;
id
) The 28 day period for providing the
information;
) The requirements for a notice if this
clause is to be amended.

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Sub-Clause 2.5: Employer’s Claims

to be discussed later
in the claims session

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Clause 3: The Role of the Engineer
‰ Sub-Clause 3.1 “The Engineer’s Duties and
y ;
Authority”;
‰ Sub-Clause 3.2 “Delegation by the Engineer”;
‰ Sub-Clause 3.3 “Instructions of the
Engineer”;
‰ Sub-Clause 3.4
3 4 “Replacement
Replacement of the
Engineer”; &
‰ Sub-Clause 3.5 “Determinations”.

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Sub-Clauses 3.1 & 3.2 are similar


‰Sub-Clause 3.1 “The Engineer’s Duties
and Authority”: 2.1, 7.3, 14.4 & 37.2 of
the 1992 Red Book;
‰Sub-Clause 3.2 “Delegation by the
Engineer”:: 2.2, 2.3, 2.4 and 37.5 of the
Engineer
1992 Red Book

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Sub-Clauses 3.3, 3.4 & 3.5 are new
‰Sub-Clause 3.3 “Instructions of the
Engineer” is quite different in the
Engineer
various books as it refers to design;
‰Sub-Clause 3.4 “Replacement of the
Engineer” is new, but similar meaning
i in
is i the
h 1992 by
b implication;
i li i &
‰Sub-Clause 3.5 “Determinations” is
entirely new.
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Sub-Clause 3.5: Determinations


3.5 Whenever these Conditions provide that
the Engineer shall proceed in accordance
with this Sub-Clause 3.5 to agree or
determine any matter, the Engineer shall
consult with each Party in an endeavour to
reach agreement
agreement. If …

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Sub-Clause 3.5: Determinations
3.5 …. . If agreement is not achieved, the
E i
Engineer shall
h ll makek a fair
f i determination
d t i ti in i
accordance with the Contract, taking due
regard of all relevant circumstances.
The Engineer shall give notice to both
P ti off each
Parties h agreementt … Each
E h Party
P t
shall give effect .. Unless and until revised
under Clause 20 ..
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Sub-Clause 3.5 –v- Sub-Clause 2.6 of


the 1992 Red Book
2.6 Wherever, under the Contract, the
E i
Engineer is
i required
i d to
t exercise
i his
hi
discretion by: …. …, he shall exercise
such discretion impartially within the
terms of the Contract and having regard
to all the circumstances.
circumstances …

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Under the Yellow & Silver Books
) the design function is allocated to the
Contractor and not the Engineer;
) there are many new provisions attached to such
allocation, the most important of which is the
“Employer’s Requirements”, referred to in 25
Sub-Clauses
Sub Clauses throughout the New Yellow Book.
) The relevant sub-clause is 5.1 “General Design
Obligations”.

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Sub-Clause is 5.1: General Design


Obligations

To be dealt with later

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