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CONTRACTS: ADVANCED QUESTIONS GENERAL

QUESTION/ANSWER
FINAL CERTIFICATE AND DUE PAYMENT DATE

QUESTION
I need some help for the interpretation of Contract Clauses, especially for the Final Certificate and
due payment date.

ANSWER
We should point out that FIDIC is prepared to give some guidance about FIDIC contracts if problems
mainly concern interpretation of a contract document. If you seek more detailed advice that relates to
actual contracts, then we recommend you discuss the matter with experts whom FIDIC can
recommend, on the understanding that they or a colleague would seek remuneration once you
entered into detailed discussions. Essentially, you do not seem to be requesting guidance about
FIDIC contracts, and your problems do not seem to concern the interpretation of a contract
document. Rather, your question seems to be: what do we do next? You give no details whatsoever
of the form of contract, FIDIC or otherwise. Based on the presumption that your contract
incorporates FIDIC's 1992 Conditions of Contract for Works of Civil Engineering Construction, you
seem to be referring to a request for the Engineer's decision under Clause 67, following the lapse in
the Clause 60 procedures. In that case, you should be mindful of other procedures described in
Clause 67, particularly of the period within which to issue a notice of intention to commence
arbitration. If that period has already passed, you may wish to consider taking legal advice.
Arbitration is a lengthy and expensive procedure, so you may wish to consider alternative methods
of dispute resolution, as an attempt at amicable settlement under Sub-Clause 67.2. We would be
pleased to assist you in these endeavours, if appropriate commercial arrangements can be
concluded. Alternatively, an epert proposed by FIDIC could be jointly appointed by the Contractor
and Employer, either as a conciliator or as a member of a dispute board (either the sole member or
one of three members).

APPOINTING AN ENGINEER

QUESTION
Is it recommended to have in a contract based on FIDIC's Electrical and Mechanical Works Contract
an external expert acting as the Engineer? Or is there no problem in recruiting the Engineer from
amongst the Beneficiary (in our case a "public" authority)? We are signing a contract shortly. The
Engineer is according to the Red Book, Clause 2.4 Part I bound to act impartially. The question is if
there is an internal incompatibility in the relationship to his Employer.

ANSWER
The basis upon which the 1987 Yellow Book and Red Book is written is that the Engineer is
appointed by the Employer, but that he is independent of both parties - i.e., he is an independent
third party. In many cases he is required to give impartial decisions - in fact under Clause 2.4 of the
Yellow Book he is required to act impartially at all times when exercising his discretion. If the
Engineer is an employee of the Employer - e.g., someone from the Employer's Engineering Division
- there is a big risk that he will not be in a position to act impartially. Although he may be very
experienced and capable from a technical point of view, and able to handle all technical matters, he
may not be free to make decisions which involve financial arrangements, etc. in a fair and impartial
manner. It is not impossible, nor unknown, for the Employer to nominate himself or one of his own
staff as Engineer, but it is rare and certainly causes problems. The text of any clauses referring to
the impartiality of the Engineer will probably need revising at some stage, as will the provisions for
handling claims and disputes (Clauses 2 and 50). The principle of using an employee of the
Employer as Engineer would be more acceptable if a Dispute Adjudication Board (DAB) was
introduced to replace the principal provisions of Clauses 2 and 50.1 to deal with claims and disputes.

MODEL TERMS OF APPOINTMENT OF A DAB

QUESTION
What we are wishing to locate is the model terms of appointment published by FIDIC, which are
referred to in Clause 20.3(a) of FIDIC's "Conditions of Contract for Design-Build and Turnkey": First
Edition 1995. Please could you clarify this reference. If it is a separate publication, we need to get
hold of it.

ANSWER
Model Terms of Appointment for a Dispute Adjudication Board under the Orange Book were issued
as a loose-leaf insert and reproduced at pages 151-163 of the Guide. FIDIC has moved on since
then, and the best approach would be to base Terms hereafter on those published within the 1999
First Editions of the ne FIDIC Contracts.

BASIS FOR ADVICE

QUESTION

Under what basis does FIDIC offer advice?

ANSWER
As a matter of policy, FIDIC does not give any official interpretation in respect of any wording in the
various documents which it publishes, nor any ruling concerning the rights or wrongs of any actions
taken by any parties operating under the terms of a particular Contract. If there is any disagreement
or potential dispute between the parties which cannot be settled amicably between them, it will
normally be a legal interpretation based on the law of the Contract which will prevail.

HOW TO GET ADVICE

QUESTION
To what extent will FIDIC offer advice on its Contracts and Agreements? And how can I get help?

ANSWER
In general, FIDIC, the International Federation of Consulting Engineers, expects that people using
FIDIC Contracts for bids and tenders are fully conversant with the documents. It is generally
necessary to prepare Special or Particular Conditions to accompany General Conditions (which
remain unchanged). For this one needs to be experienced in drafting contracts. It is not something
that can be done by casual readers.

DEFINITION OF UNFORSEEABLE

QUESTION
Reference is made to the definition of unforseeable (Sub-clause 1.1.6.8), how can a time limit or
date be specified for an event or circumstance that is unforeseeable? Surely what is unforeseeable
before submission of the Tender remains so after it, especially when referred to sub-clause 4.12. It
would surely be appropriate to eliminate the seemingly superfluous last part of the sentence, namely
..by the date...?

ANSWER
We refer to the question "How can a time limit or date be specified for an event or circumstance that
is Unforeseeable? Surely what is unforeseeable before submission of the Tender remains so after it,

especially when referred to sub-clause 4.12." If additional data (on sub-surface or hydrological
conditions at the Site) becomes available on or after the Tender submission date, it might well be
possible thereafter to foresee (based upon such additional data) something which was
unforeseeable before the Tender submission date (based upon the data available at the Base Date).
Therefore, it is essential to define the time at which the question of foreseeability is to be judged.

ROLE OF THE ENGINEER

QUESTION
Please let me know the FIDIC regulations about the role of the Engineer, namely, the terms involving
the Designing Engineer of a dam project during the construction period, where the supervision of
Construction has been assigned to a different Consulting Engineer. Please note that the
International Commission of Large Dams guidlines were significantly involved during construction to
ensure that the design intent was met.

ANSWER
The FIDIC contracts usually involve "the Engineer", who has a defined role to play during
construction - and we assume this is the "different Consulting Engineer" referred to. The "Designing
Engineer" could be an engineer engaged by the Employer just to design the Works (with the other
Engineer taking over to supervise the Works during construction) - or he could be an engineer
engaged by the Contractor if it is a design-build or turnkey type project. In the first case, presumably
he would be engaged under the FIDIC White Book (or something similar) and his terms of reference
under that should define his role (if any) during the construction period. In the second case (if he is
engaged by the Contractor), he will presumably be considered to be a part of the Contractor's
organisation carrying, in effect, the Contractor's responsibilities in the Contract for design.

EXTENSION OF TIME

QUESTION
Please assist us in understanding the Extension of Time (EOT): a) Is it necessary for the Engineer to
determine the EOT prior to the date of completion; b) If the EOT is not granted within the currency of
the contract does it render the time at large and enforcement of liquidated damages as redundant; c)
What will be relevance and validity of EOT if the Engineer does not assign any reason for the grant
of EOT. What happens to prolongation costs.

ANSWER
Regarding your recent enquiry regarding Extension of Time and asked me to send you a short reply.
Normally, an event causing a delay will occur before the contractual Time for Completion and the
Contractor must make his claim within a given time of the event occurring (Red Book Clause 44.2,
Yellow Book Clause 26.1). The Engineer must then respond with a given time (or a reasonable time)
- he cannot wait until completion to see if the Contract actually needs the time extension. If the event
occurs after the contractual time for completion and the Contractor is running late, he may still be
entitled to an extension if the circumstances have caused him even more delay (and it was not his
fault). If the Engineer does not grant a time extension (or reply to the Contractor's claim) within the
currency of the Contract, it would depend very much on the circumstances, and I would suggest that
he cannot call liquidated damages until he has replied to the Contractor's claim and definitely
rejected it. Normally the Engineer will only grant an extension of time if the Contractor applies for
one so I cannot see an Engineer granting an extension "for no reason" - normally it would be in
response to the Contractor's claim. The question of costs will depend on the circumstances. If the
Contractor can prove he has suffered extra cost, then maybe he is entitled to reimbursement - but it
is not an automatic right and will depend on the circumstances.
As you will see, any matters concerning extensions of time depend very much on the circumstances
at the time and it is very difficult to give general answers. The intention of the FIDIC Conditions is
that the matter shall be dealt with as quickly as possible so that the Contractor knows if he will get an
extension and so that he can then plan the rest of his works accordingly. If the Contractor is of the
opinion that the Engineer is unreasonably delaying the matter, he should read Clause 5.1 (both
books) and see if this can help.

STANDARD LETTERS

QUESTION
I am a Civil Engineer, presently working as Contracts Manager. Foreign (non-British nationality)
engineers usually have an understanding of the contract document and the associated
entitlements/obligations, but always express difficulty in composing (or responding to, if they are on
"the other side" , correctly worded "standard" letters to the RE, Engineer or Employer in compliance
with the requirements of the various sub-clauses. Do you have such a publication?

ANSWER

The only book which we can recollect is Musterbriefe in Englisch (ISBN 3-7625-2607-9) although its
standard letters are not such as we would prefer to endorse. Although we will review the situation
with regard to the new FIDIC Contracts Guide, FIDIC lack enthusiasm for the very concept of
standard letters, which seems to be tied up with the concept of avoiding thinking about the situation.
However, we do recognise the validity of concerns expressed by those whose first language is not
English.

DEFINITION OF COST REIMBURSABLE

QUESTION
I am the legal adviser to an oil company. This company has contracted, using FIDIC Conditions of
Contract, with a construction company to perform certain construction works during a refinery
shutdown period. A portion of the contract is "cost reimbursable" and I am seeking some definition of
this phrase as the costs which are to be reimbursed have caused the contract price to increase by
100% due to lack of management by the contractor. Is there an element of "reasonableness" in a
cost reimbursable contract or is the contractor entitled to every penny spent by him?

ANSWER
We refer to your fax to FIDIC, describing how a portion of the contract is "cost reimbursable" and that
you are seeking some definition of this phrase. We regret to advise you that FIDIC is unable to give
advice on specific contracts, although it is prepared to give some elaboration of its publications. It
seems to us that your enquiry solely relates to provisions drafted for the particular contract, and not
to provisions published by FIDIC. You pose the question "Is there an element of 'reasonableness' in
a cost reimbursable We would have thought that such a question cannot be answered in isolation,
but must depend upon the detailed provisions of the contract, the law governing it, the reasons for
any alleged overspend, and (possibly) other matters.

REQUIREMENT FOR A CPM SCHEDULE

QUESTION
We are interested in whether or not the FIDIC documents include a contractual requirement for the
contractor to submit a CPM schedule (or programme) to the project owner. If so what are those
requirements? For example, in Canada the Federal Government's Public Works Department

(PWGSC) includes in its specifications Division 01014 which sets out in detail the schedule
requirements for the project. Are you aware of anything similar to this in Europe?

ANSWER
FIDIC's General Conditions Of Contract typically include a requirement for the Contractor to submit
(and keep up-to-date) a detailed time programme which includes:
a) the order in which the Contractor intends to carry out the Works, including the anticipated timing of
each stage of design, Contractor's Documents, procurement, manufacture, inspection, delivery to
Site, construction, erection, testing, commissioning and trial operation,
(b) the periods for reviews ... and for any other submissions, approvals and consents specified in the
Employer's Requirements,
(c) the sequence and timing of inspections and tests specified in the Contract, and
(d) a supporting report which includes:
(i) a general description of the methods which the Contractor intends to adopt, and of the major
stages, in the execution of the Works, and
(ii) details showing the Contractor's reasonable estimate of the number of each class of Contractor's
Personnel and of each type of Contractor's Equipment, required on the Site for each major stage.
These are the basic requirements, and users (project owners) are expected to put any particular
requirements in their own Special Conditions, Specification or Employer's Requirements. Their
particular requirements may, of course, include CPM.
FIDIC's General Conditions of Contract are the most widely accepted form in use internationally.
They are used for contracts undertaken by a wide variety of contractors, and for a wide variety of
types of work. It would therefore be inappropriate for FIDIC's General Conditions of Contract to
specify CPM, particularly for contractors who do not have staff who are fluent in its use, and also for
work for which linear programming is more appropriate.

ENGINEER'S RESPONSE

QUESTION

What is the relationship between the Engineer's response to the Contractor's claim within 42 days
stated in Sub-clause 20.1 and Engineer's Determination, also stated in Sub-clause 20.1 and defined
in Sub-clause 3.5. I am little bit confused how the Engineer should perform these two tasks, i.e., the
response and determination, in case the Contractor's claim is related to additional cost and/or time
extension. If his response and determination are identical, "Engineer's endeavour to reach
agreement" should be a precursor to his response? Or, if his response is required prior to the
determination, the response can be made at only his discretion and when and on which basis he
should make determination?

ANSWER
Firstly, please bear in mind that the Engineer's (first 42-day) response to the Contractor's claim will
usually be to comment and to detail what matters the Contractor should take into account in his
further particulars to the Engineer. Thus, there may be quite a few sequences of "Engineer's
response" / "Contractor's further particulars" before the Engineer can make a determination.
Eventually the Engineer will have no further comment and will be ready to make a determination in
accordance with Sub-Clauses 1.3 & 3.5. Before making a determination, the Engineer consults with
both Parties in an endeavour to achieve their agreement. Consultation may take such time, so we
haven't constrained it to six weeks but merely forbid unreasonable delay (1.3).
One would usually expect the Engineer's (final 42-day) response to express his detailed comments
immediately prior to commencing consultation under Sub-Clause 3.5. If the Engineer commenced
such consultation with the Parties before making his (final 42-day) response, the Parties wouldn't
have his detailed comments and wouldn't know whether they were agreeable.
One cannot see how the Engineer's (final 42-day) response can be the determination, unless it is the
Engineer's "approval" of the claim and he has obtained the Employer's agreement also. The
response is specified to be either "approval" or "disapproval and detailed comments", but not
"determination".
Sub-Clause 20.1 sets out a detailed framework for resolving each claim unless it becomes
impossible to do so. However, it should be regarded as a practical framework, essentially
comprising:
(a) "Contractor's claim" / "Engineer's response"
(b) "Contractor's further particulars" / "Engineer's response"

(c) maybe another "Contractor's further particulars" / "Engineer's response"

(d) possibly another "Contractor's further particulars" / "Engineer's response"
(e) rarely, yet another "Contractor's further particulars" / "Engineer's response"
(f) "consultation" / "agreement or Engineer's determination".
Frankly, one would think that competent/experienced personnel should be adopting such a practical
framework without it being detailed in the General Conditions. FIDIC has put it in so as to assist
others and to discourage procrastination.

PAYMENT BY A THIRD PARTY

QUESTION
The purpose of this message is to seek clarification as regards an on-going Contract under the am
procedures which presents a peculiarity. Trying to keep it simple:
The Employer is not being payed directly the Contractor;
European Commission is financing this Project and consequently paying the Contract price to the
Contractor, without being a contracting party;
There is a procedure for suspending works to be commenced;
Now my question is which provision if any, regulates such a case where the Employer is not paying
the Contractor?

ANSWER
The direct answer is that the FIDIC General Conditions contain no provisions regulating payment by
a third party. It is the Employer who is required to pay the Contractor, and who has to set up
procedures for making payment. Such procedures typically involve a commercial bank, but may also
involve other third parties (for example, the European Commission). Before suspending works, legal
advice may be desirable.

WHERE TO START TO FIND OUT ABOUT FIDIC CONTRACTS

QUESTION
I am a junior lawyer working at Bangkok, Thailand. I am very interested in the legal area of Project
Financing. I have learnt that the FIDIC Form of Contracts have been used worldwide in the field of
construction.I am wondering, therefore would like to ask you some questions that which book of

contracts published by FIDIC I should read first, e.g. the Red Book or Orange Book or some
guideline?

ANSWER
A good place to start is the "Which Contract?" text on the FIDIC website. If you then go to the
Contracts and Agreements resources you can find many articles and presentations. Then maybe
consider buying the 1999 suite of contracts (Construction, Plant and EPC-Turnkey). Descriptions are
online (Construction, Plant, EPC/Turnkey). Then you should consider buying the FIDIC Contracts
Guide.

FIDIC CONTRACTS ARE COPYRIGHTED

QUESTION
Please advice whether contracting parties can make use of the standard form of FIDIC contracts,
amending portions of the Conditions of Contract and which terms and conditions apply to the use of
FIDIC standard form agreements. I am particularly concerned about questions of copyright.

ANSWER
The FIDIC approach is to leave the General Conditions unaltered and to place all ammendments
and additions in Particular Conditions. FIDIC copyrights the entire contract, but grants legitimate
users the right to make use of Guidance for Particular Conditions that is included in a section of the
published contract. So when you receive a FIDIC contract as a printed docuement or as an
electronic whole-document, you incorporate the General Conditions "as is", (by say printing out the
General Conditions part from an electronic version, or by adding to tender documents the entire
bound contract supplied by FIDIC). You also draw up your Particular Conditions, possibly by copying
text provided by FIDIC in the Guidance for Particular Conditions. This Guidance material is
copyrighted, but is made available to purchasers of authenicated FIDIC contracts. The printed and
electronic contracts also contain forms. Once again, these are subject to copyright, but are made
available to authorised users of the contracts (i.e., those that have purchased an electronic or
printed document). I hope we have not been tedious, but it is perhaps important to understand the
situation since FIDIC guarantees the authenticity of its General Conditions.

I WOULD LIKE TO SCAN A FIDIC CONTRACT

QUESTION

I would like to know if the electronic version of the Plant and Design-Build Contract 1st Ed (1999)
can be converted from PDF to the Microsoft Word. The reason why I am asking this is that we are
thinking of using the electronic file as sort of model form for drafting a contract for customers, but I
heard a scanned PDF file cannot be converted to another file.

ANSWER
We are afraid that what you propose is 100% illegal, and not advised. FIDIC's PDF contracts are
encrypted, and indeed you could print and scan them, but you are then infringing copyright.
However, FIDIC would consider agreeing to licence your firm to adapt the contract. The fee would
depend on the planned usage. It would be at least USD 1000. In general terms, the General
Conditions of a FIDIC contract should not be modified. The Special Conditions are for the changes,
and the contract gives guidance that you can copy, if you purchase a contract.

DIFFERENCES BETWEEN CONTRACTS

QUESTION
I would like to know about FIDIC based contracts: what are they about and their diffrences with other
contracts.

ANSWER
It is suggested that you read the articles kept in the resources site under http://fidic.org/node/149.

PHOTOCOPYING

QUESTION
To order to turn a FIDIC contract such as the EPC/Turney Contract into a form of a contract for a
contractor, I do not want to include certain clauses (minimal), and I do not want to include the Part
called "Guidance for the Preparation of Particular Conditions". Are we allowed to photocopy the
EPC/Turnkey Contract with an appendix for the Particular Conditions but excluding the "Guidance for
the Preparation of Particular Conditions", or may we obtain an electronic copy (from which we would
print up to five copies with certain minimum amendments) and again exclude the Guidance portion?
I have read the explanations at the FIDIC.org Bookshop web-site but I am not clear on extracting the
electronic copy (but I can get help in this task) and I am concerned about breach of copyright.

In short, I want to turn out a well prepared contract agreement, dispute adjudication agreement,
General Conditions and Particular Conditions in a bound form that would keep the FIDIC logo and
full name.

ANSWER
Normally, for a contract based on a FIDIC Conditions of Contract you would leave the General
Conditions untouched, and simply include Particular Conditions and relevant appendices. For
maximum effect, we would urge you to purchase an electronic copy so that you can print out a PDF
file that includes the General Conditions. You are authorised to include this print out of the General
Conditions in your own document. There is no copyright infringement if you have purchased and
installed an authorised, encrypted version of a FIDIC contract. Under the terms of the users
aggreement for an electronic version of a FIDIC contract, you can also print out forms and
appendices which are supplied as a PDF file and/or in word processing formats.

ACCUSATIONS OF IMPARTIALITY

QUESTION
Can you please advise what action can be taken with FIDIC where there is no dispute between the
Contractor and the Employer, but the Engineer (a FIDIC member engaged and funded by a third
party on behalf of the Employer) has acted with apparent (but unrequested) partiality, but whose
actions are leading the Employer towards needless expense and probable arbitration.

ANSWER
It is not whether the question originated from someone who is likely to be the Contractor, or from
someone who is likely to be the Employer/Client. One should bear in mind that serious allegations
are being made, which may not be valid. If the question seems to have originated from a Contractor,
the appropriate course of action would be for a very, very senior member to request a meeting with a
very, very senior member of the Employer, so that the allegations may be discussed in confidence. If
the question seems to have originated from an Employer (which seems unlikely), if he is a member
of a Member Association, the Association would be consulted. The Contractor's Contract MAY (or
may not) constrain the Employer from replacing the Engineer. In either case, NO ACTION CAN BE
TAKEN WITH FIDIC, because the Engineer is not a member of FIDIC as such. If an IFI (e.g., the
World Bank) is providing funds for the project, they could also be appraised of the situation.

PRIME COST ITEMS

QUESTION
I want to ask a question regarding the prime cost items in the tenders which are supposed to be
used by clients. In Dubai the clients asks the consultants to insert the prime cost against some items
espcially for the finishes.
I would like to know the following: for a lumpsum teder where the BOQ is to be prepared by the
contractor based on the quantities worked out from the tender drawings.
The floor tile p.c. rate specified in BOQ is 30.00 per m2 ( for supply only ) and contractor had quoted
50.00 per m2 for supplying fixing the tiles considering supply rate of 30.00 for suppose 2500 m2 of
tiles worked out from the tender drawings ( this quantity might be the adjusted quantity and may not
represant the exact quantity).
Now if the client supplies it @at 25.00 per m2, the contractor has to offer a saving for the item. What
is the criteria for submiting the saving to the client.
a) It is on the BOQ quantity, actual quantity or ordered quantity, which includes the wastage?
b) At what rate the savings is to be submitted? Is it the difference between the p.c. rate specified and
the supplied rate, i.e. 30.00 - 25.00 = 5.00.

ANSWER
The FIDIC Conditions of Contract do not include provision for prime cost items. If an Employer
wishes to include a pc item in the Contract then it is necessary to explain suitable procedures in the
contract documents.

LIEN CONTRACTOR

QUESTION
Does a FIDIC contract have a clause about lien contractor?

ANSWER

The question is not clear what is meant by a 'lien contractor'.This is not a phrase which is used in
FIDIC Contracts.

EXTENSION OF TIME

QUESTION
I would like to ask a question related with a time extension to be given to the contractor as per
Clause 44.1 of the Red Book 4th Edition contract. One of our contractors due to his default has not
completed his works in the contractual time. The contractor has applied us for an extension of time
due to adverse weather conditions occured in the delayed period by stating that if time extension is
not given to him he will be double penaltized due to his own costs in the prolongation period and
penalty deductions.

ANSWER
Clause 44.1 does not specifically refer to further delay causes which may occur after the expiry of
the Time for Completion. The Engineer should consider all the circumstances, including the Contract
and the applicable law, consult with the Employer and the Contractor and decide whether the
circumstances are such as fairly to entitle the Contractor to an extension of time. If no extension is
granted then the Contractor is correct to say that he will be liable for Liquidated Damages/Penalties
in addition to his own costs.

FAILURE DURING THE MAINTENANCE PERIOD

QUESTION
What is responsibility of contractor if a structure like a bridge iha partially failed after 3 years of
maintinace period.

ANSWER
You refer to the situation when there has been a partial structural failure, 3 years after the end of the
maintenance period. The Contractor has completed his work under the Contract, it has been
accepted by the Engineer and Employer and the Defects Liability Certificate should have been
issued. If the Employer thinks that the Contractor is, in some way, to blame for the failure then his

only recourse is through the liability provisions and procedures under the applicable law.

SUBCONTRACTOR CONTRACT

QUESTION
We are employed as main contractor to carry out a 40 story building. The contract used by the
Employer is FIDIC Conditions of Contract 1st edition 1999. The employer has now nominated the
MEP works and instructed us to use the same conditions of contract to administor the subcontractor.
Can you pls advise the legal and administration implications of using the conditions of contract to
administor the subcontractor. The employer is represented by an establised uk based company.

ANSWER
The FIDIC Conditions of Contract are intended to be used for Contracts between the Employer and
the Main Contractor. The wording is not suitable for use as a Subcontract and a considerable
number of carefully prepared Particular Conditions would be necessary. For example the powers
and duties of the Engineer are not appropriate for a Subcontract. The legal postion under the
applicable law, which is presumaby UAE Law, would also need careful consideration. FIDIC can not
comment on legal matters or on the preparation of Particular Conditions.

ROLE FOR SUPERVISION CONSULTANT OR CONSTRUCTION MANAGER

QUESTION
In a FIDIC contract with supplementary conditions, there is a role for supervision consultant for all
technical matters, and a role for construction manager for administrative matters. can we say that
the SC is the "The Engineer", although some of his duties and responsibilities were given to a
costruction manager (CM)? This situation arises in a few cases in the middle-east.

ANSWER
FIDIC The FIDIC position stated in a draft position paper is clear, and clearly the best. It says: "Some
people say that the system (a separate CM) works well, but this is probably a matter of personalities
rather than organisation. There are obvious potential problems of divided responsibility, with
consequences for the efficient management of the project, particularly if there are claims to be
considered. The FIDIC system of an Engineer in charge, with suitably qualified assistants, must be

preferable when the project only has a single construction contract." It says that making the SC the
"Engineer" is the best if there are the are a SC and a CM. But the role of the CM must be clear, and
the SC/Engineer must have all the responsibilities specified in the contract. The SC can of course
delegate. How this delegation of duties to a CM is best done is unclear. One way is a separate
Client-Consultant Agreement with the Client for specified services, and the main contract refers to
this. ........................ QUESTION I still have some ambiguity about the issue. The client needed the
services of the Construction manager ( CM ). In fact, the client already signed an agreement with the
CM. the role of the CM is clearly stated in his contract with the owner, as to take care of the
administrative issues, scheduling and monitoring and cost control and budgeting, also all
correspondence shall be through the CM. The CM shall monitor the coordination between all T.C's
ON SITE. Conduct progress meetings. Furthermore, the client needed the services of the consultant
( Design & Supervision ), and signed an agreement with an engineering firm. The responsibilities of
the DC and SC are clearly mentioned in this contract agreement; responsible for quality and
technical issues and review & comment and approval of shop drawings and other responsibilities,
with a clear emphasis that there will be a CM with specific role(as specified earlier). Still, the
consultant raises the issue of WHO IS THE ENGINEER"? My question: is this a valid issue? If the
special contract agreement specifies the scope of responsibilities of the consultant during design
and supervision phases, which are somewhat different than what is defined in FIDIC as ENGINEER,
is this a legal defect in the contract between the client and the consultant? ........................ FIDIC Any
separation of the duties of the Engineer would need to be thought through very carefully. If the
project only includes a single construction contract then there seems to be no benefit in a separation
of duties. However, if the project includes a number of simultaneous construction contracts, then
there are important issues of co-ordination of contracts. Different designers, and even different
Engineers, may have been appointed for the different construction contracts, so an overall manager
is necessary. If it is desired to separate the roles then the exact responsibilities and authorities of the
different organisations would need to be decided by the Employer and clearly defined in the
Contracts between the Employer and each Party, including the Contracts with the Contractors. The
drafter would also need to consider any statutory supervision requirements in the applicable law. All
this would have implications for a number of different clauses in the FIDIC Contracts and would
certainly require very careful drafting to avoid problems during construction and dispute resolution.

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