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Under
Zhang Shuibo
School of Management, Tianjin University
March, 2003
Background to FIDIC
What is FIDIC ?
An international federation of consulting engineers, founded in
1913 with its headquarters located in Lausanne, Switzerland,
whose objective is to promote the common interests of the
member associations and disseminate information to its
members for the development of consulting industry.
Before 1996:
1.
2.
3.
4.
5.
1.
2.
3.
4.
(e)
(f)
(g)
(h)
(e)
(f)
(g)
(h)
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(d)
(e)
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12
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2.
3.
4.
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XIAOLANGDI
XIAOLANGDI HYDRO
HYDRO
PROJECT Organization
Ministry of
Ministry of
Water Conservancy
Finance
Designer:
Project Employer
Consultant:
YRCC DI
YRWHDC
CIPM
Supervision Engineer
XECC
Contractor
Lot 1
Dam
Contractor
Lot 2
Tunnel
Contractor
Lot 3 Powerhouse
Subcontractors
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1. Project Organization
2. Construction stages:
3. Tendering Procedure
4. Variations in Xiaolangdi project;
5.
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1. Project Organization
2. Construction stages:
3. Tendering Procedure
4. Contract Documents;
5. Claims and Dispute Resolution
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Feb 1992: in
Project Experience;
BUSINESS DEVELOPMENT
Key Personnel
July, 1992:
Construction Equipment
Financial Status
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Tendering Procedure
March 93
Documents Issue
July 31, 93
Bid Deadline
Extended Deadline
Aug. 31 93
Commencement:
Bid Opening
12/ 09/ 94
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Tendering Procedure
The three successful bidders:
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1. Project Organization
2. Construction stages:
3. Tendering Procedure
4. Contract Documents;
5. XECC Organizational Structure
6. Claims and Dispute Resolution
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Contract Documents:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Contract Agreement;
Letter of Acceptance
Tender and Appendices
Conditions of Contract (Part II: Particular application)
Conditions of Contract (Part I: General, from FIDIC 4th edition)
Special Conditions and Addenda
Specifications
Drawings
Priced BOQ
Schedules
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28
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Measurement Dept
Laboratory
(Project Engineer)
CIPM Consultants
Contract Dept
Contractor Lot 1
Contractor Lot 2
Contractor Lot 3
YRC
CGIC
XJV
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Contractors request
Contractors Offer
Review by Engineer
Arbitration Procedure
Agreement?
Yes
Issue order,
contractor
proceeds
N0
Engineer determines 84 d
Yes
C, E disagree
N0
Variation
Settled
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28 d
Settled
Yes
Contractor notifies
Engineer with copying to
Employer
Two Party
agree?
N0
28 d or agrd. By E
Request for
Engineers
decision
Engineers consultation
with two parties
Engineers
decision(42 d)
Settled
Yes
Agreement?
Engineers
Two Party
agree?
determination
N0
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continued
42 d
DRB
FIDIC Procedure for Claim (53):
DRB
Member
Chairman
Contractor
56 d
Employer
12M + 28d
failed
failed
Settlement
Proposal
Arbitration
Stockholm
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2.
3.
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Contractors Request:
EOT and Additional payment (Total amount (Feb,
1997): 20 million RMB)
Engineers Response:
Additional payment basically honored. EOT dishonored.
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Engineers Response:
Dishonored
(Instead, 1 million should be deducted from the contract price)
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Engineers Response:
Refuting Contractors alleged two reasons;
Instructing Contractor to strengthen shoring and
support while tunneling
Suggestion to hire more experienced subcontractors
for tunneling.
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Contractors Response:
Stop work due to safety reasons (3 months)
Provided detailed grounds for claims, including a
comparison between Geological Foreseeability
Model and Conditions actually encountered
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Current Situation:
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Engineers Determination:
Honoring about 1/7 of the Claim amount
46
Contactors Response:
Dissatisfaction with the determination;
Request for Engineers Decision.
Engineers Response:
A slight increase based on the new evidence from
Contractor
47
Contractors response:
Refer this dispute to DRB
Engineers response:
Agreed
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In DRB Hearings:
Contractors statement:
In the 3400m long tunneling, emerged 1600m long
fault zones, much longer than what had been
expected in the bidding (260m).
Incomplete data
Much more resources were invested to accelerate for
recovery of time.
Personal promise.
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In DRB Hearings:
Employers statement:
Contractor is responsible for interpreting data provided by
employer;
Contractors giving up the chance to inspect the job site carefully
before bidding, resulting in its incorrect estimate of the
geological conditions;
Contractors behaviours (pre-bid and during construction) shows
that it is not an experienced contractor.
Employer provided all information it had before bidding.
The claim amount is incorrect.
Employer has compensated reasonably according to promise.
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Middle Road:
Contractors total cost method is not fully justified.
Employer should take more account of the vast
resources invested by contractor for acceleration.
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?(May, 2001)
Accepted by both parties
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How can they suspend the work for three months out of their
own will!
We now have chances to earn more money.
Xiaolangdi project has the most complex geological conditions
in his opinion, according to a senior Chinese engineer.
They hide some data from you!
The Chinese dont know how to manage international contract!
We have spent 5 million in preparing the claim report!
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Partnering:
The Emperors new clothes?(Probably
(Probably aa cultural
cultural problem)
problem)
Dispute Resolution:
Who are the real winners? (Probably
(Probably DRB
DRB members,
members, lawyers
lawyers and
and
arbitrators)
arbitrators)
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Welcome
Xiaolangdi
Welcome to Xiaolangdi!
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