FIDIC Silver Book (EPCT) 1999 Contract and Contractors's Claims

Silver Book Contract available on request at cost. This two-day seminar provides a comprehensive review of the FIDIC EPC Turnkey Contract Document, and is designed for those people who already have knowledge of the FIDIC conditions generally, and require more specific information on this difficult contract document. FIDIC Silver Book. Introduction FIDIC – the International Federation of Consulting Engineers – published in September 1999 a suite of four new Standard Forms of Contract. This new suite comprises: Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer: The Construction Contract.

A. GENERAL CLAIMS PROCEDURE ARE LAID IN ( GCC 20.1, 2.5 & 3.5) AND:

i. In ECP Contract disproportionately more risks are allocated to the Contractor under the General Conditions. Before submitting tenders, the tenderers require more data on hydrological, sub-surface and other conditions on the Site, to the extent that this data is relevant to the particular type of works, and more time to review the data and evaluate such risks. No Evaluation & Measurement/Day Work provision exists in this type of Contract, Similarly delay of drawings, if any, etc. rests on the Contractor.

ii. Under this type of Contract, Contractor is more responsible to ensure a higher degree of certainty that the agreed contract price and time will not be exceeded.

iii. Except as stated in the Contract, the risk of Unforeseeable Physical Conditions (GCC 4.12) mainly is shifted to the Contractor, i.e. there is no un-foreseeability clause in EPC Contract and:

a. the Contractor shall be deemed to have obtained all necessary information as to risks,contingencies and other circumstances which may influence or affect the Works;

b. by signing the Contract, the Contractor accepts total responsibility for having foreseen all difficulties and costs of successfully completing the Works; and

c. the Contract Price shall not be adjusted to take account of any unforeseen difficulties or costs

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iv. The Sub-Clause (20.1) regulates claims for additional payment and/or EoT. Sub-Clause 20.1 is the same in all three (Red, Yellow and Silver) Books for major works except that, in the Silver Book (EPCT), there is no Engineer, his role is performed by the Employer. Accordingly, the Claim procedure is laid down as follows:

B. SUB-CLAUSE 20.1:

· THE FIDIC TIME BAR & THE CLAIM PROCEDURE:

The key features of sub-clause 20.1 of the FIDIC form are:

i. If the Contractor considers himself to be entitled to an extension of the Time for Completion and/or additional payment under any clause of the Conditions or otherwise, the Contractor must give notice as soon as practicable and “not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance” giving rise to the claim.

& If the Contractor fails to give such notice of claim within 28 days

“the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim”.

ii. Within 42 days after the Contractor became aware, or should have become aware, of the event or circumstance giving rise to the claim, or within such other period as the Employer, may approve, the Contractor is required to send to Employer “a fully detailed claim” which includes “full supporting particulars of the basis of the claim and of the extension of time and/or additional payment claimed”. If the event or circumstance giving rise to the claim has “a continuing effect”, further procedures need to be complied with:

I.e. the Contractor shall also fulfill the requirements of sub-para’s a/b/c of para 5 of Sub-Clause 20.1

iii. Within 42 days after receiving a claim or any further particulars supporting a previous claim, or within such other period as may be proposed by the Employer and approved by the Contractor, the Employer must respond “with approval, or with disapproval and detailed comments”. He may also request any necessary further particulars “but shall nevertheless give his response on the principles of the claim within such time”.

iv. This is the first time (FIDIC 99) a FIDIC contract has required the Employer to respond to the claim of a Contractor within a given time period or in a given manner.

v. The requirements of Sub-Clause 20.1 are expressly stated to be “in addition to those of any other Sub-Clause which may apply to a claim”. Thus, the Contractor must comply with the claim’s procedure provided for in Sub-Clause 20.1 in addition to the requirements of the other contractual clauses in the contract (e.g. GCC 2.1/2.4 etc.) which may have given him the substantive right to claim. Sub-Clause 20.1 is triggered with Sub-Clause 3.5, which it self is triggered with so many other clauses and determination under GCC 3.5 is determined( using fit for purpose clause 4.1, 7.4(tests during execution), 9(tests on completion) and taking into account the non-performance damages.

Once a notice of claim has been given, the parties can then agree on the particular contemporary records the Contractor must keep, to avoid future argument, and there may still be time for the Employer to instruct alternative measures to reduce the effects of the claim.

C. CONCLUSION

Fidic Silver Book Conditions Of Contract

i. It must be understood that compliance with the notice provisions is intended to be a condition precedent to recovery of time and/or money. This therefore potentially provides the Employer with a complete defense to any claim for time or money by the Contractor if it is not started within the required time-frame. Certainly parties, particularly the Contractor should treat the sub-clause in this way.

ii. Conclusion C(i) above is further strengthened by GCC 3.3(a), which inter alia states, “ The Employer’s Representative including his delegated Persons, unless otherwise stated in the delegated person’s communication relating to such act, it shall not relieve the Contractor from any responsibility he has under the Contract, including responsibility for errors, omissions, discrepancies and non-compliance.

Note: I have derived above view from FIDIC Guide Comparison of Three(Red, Yellow and Silver Books).

Fidic Silver Book Claims

Friend are requested to provide their valuable comments, if any, for my correction Please.

Kind regards,

Engineer Abdul Qayyum