“Design and Buildunder the

FIDIC Contracts”
Presentation By-
Ranjit VPatil
M.Tech (Civil- Construction Management)
Rajarambapu Institute of Technology,
Islampur, Maharashtra.
Mob.No. 9503361010
 Introduction

 FIDIC?????

 It is a French short form of…

“Federation Internationale Des Ingenieurs– Counseils”

 In English it is referred as
“ International Federation of Consulting Engineers”

 FIDIC : “ International” Form of contract.

 Used by funders such as World Bank etc.
 Origin:-
Founded in 1913by three national associations of consulting
engineers within Europe.

 FIDIC currently has 99 Members Associations & Associates.

 CONSULTING ENGINEERSASSOCIATION OF INDIA is the

member from India.
 FIDIC Vision:-
Enabling the development of a sustainable world as the recognised
global voice for the consulting engineering industry.

 FIDIC Mission :-
To work closely with our stakeholders to improve the
business climate in which we operate and enable our
members to contribute to making the world a better
place to live in, now and in the future.

 FIDIC Values:
1. Quality
2. Integrity
3. Sustainability
FIDIC LOGO
 Design and Built
 What is Design and Built???
 It is procurement method which has been in use for long time.

 Before the emergence of architecture as profession clients

used to procure building by process of design and built.

 In Nineteenth Century-
It was the separation of responsibility for fabrication
from responsibility for design that led to the emergence
of so called ‘traditional general contracting’.
 The Role

Designers Employer

Other Consultant Traditional

Arrangement
Quantity
Contractor
Surveyor

Subcontractor Subcontractor
 The Role

Employer’s Employer
Representative

Design andBuilt
Arrangement
Contractor

Designer and
Subcontractor Other Subcontractor
Consultants
 Advantages of Design and Built

 Price Certainty

 Single Point Responsibility

 Good For “Non- Expert”clients

 Contractor’s Expertise

 Quicker Build Time

 Disadvantages of using Design and
Built
 Contractor designs and builds to price.

 Employer’s reduced control of design and quality.

 Employer’s reduced control of change cost

 Not Good for complex projects

 Longer tender period

 Expensive to contractor to prepare tender.

 The Employer’s Requirements
 The better the Employer’s requirements, the better the completed
project.
 Consider first of all what are the Employer’s needs??
 What???
What does heneed???
 When?????
When does he needit????
 How?????
How much will/canhe pay?????
 Which????
Which is the best contractual method to meet these needs???

 Is the Design and Built the Best method?? Weigh Up the advantages
and disadvantages.
Procurement methods

 Procurement refers to: the process of obtaining goods and services from another
for some consideration.

 The choice of procurement strategy identifies how the project is structured

 Design and coordination consideration have led to the development of following
procurement methods:
1. Traditional Procurement
2. Design and Build
3. Management Procurement
 Details of The Books for the Major Works:
If we take the conditions of contract for construction as an example:

1. General Provisions 12. Measurement and evaluation

2. The Employer (Tests after completion- P & DB
3. The Engineers (The employers & EPC)
administration- EPC) 13. Variations and adjustments
4. The Contractor 14. Contracts price and payments
5. Nominated subcontractor 15. Termination by Employer
(Design- P & DB & EPC) 16. Suspension and Termination by
6. Staff and Labour Contractor
7. Plant, materials and workmanship 17. Risk and Responsibility
8. Commencement, delays and 18. Insurance
suspension 19. Force Majeure
9. Tests on completion 20. Claims, Disputes and Arbitration
10. Employer’s Taking Over
11. Defects Liability
 Preparing the Tenders:

 The employer should appoint an appropriately experienced and qualified

agent and necessary professional consultants.

 Design responsibility should be clearly defined.

 A standard form of contract should be used.

 The employer’s requirements should be clearly formulated by the time
tenders are invited and set out in the Employer's requirements upon which
the contractor’s proposals will depend.

 Care and attention should be paid to the procedure for the selection of
contractors to be invited to tender.
 Preparing the Design andBuild
Tenders
 Information contained in the preliminary enquiry to prospective tenderers
should be as full and as clear as possible.
 Conditions of tendering should be clear so that all tenders are submitted on
the same basis.
 Adequate time should be given to selected tenderers to prepare their
proposals.
 Tenders should be assessed and adjusted in accordance with the terms of
the formal invitation to tender.
Major Documents In D&B Contracts:

1. Employer’s requirements
2. Contractor’s proposals
3. Contract sum analysis
Employer’s Requirements

 The purpose

 The scope

 The design

 Other technical
criteria
 Factors in deciding which form of
FIDIC form ofContract

1. Relatively small Value, short construction time or involving simple or

repetitive work

2. Large or more complex project

3. Contractor going to Most of design

4. For Process and Power Plant

5. The Infrastructure Project

6. The Privately Financed Project

Overview of FIDIC Conditions of
Contract:

1. Part I: Orange Book ( D&B and Turnkey Contracts)-

1995

2. Part II: The Yellow Book (Plant and D&B Contract)-

1999
 Both the book consists of 20 clauses in each.

 Every clause consist of number of sub clauses.

 Each clause is important to resolve the problems in contract.

 Clauses are grouped as per the their type of work and

requirement
 Clauses in Orange Book:

1. The Contract 11. Test after completion

2. The Employer 12. Defects Liability
3. The Employer’s representative 13. Contract price andpayment
4. The Contractor 14. Variations
5. Design 15. Default of contractor
6. Staff and labour 16. Default of Employer
7. Plant, material and workmanship17. Risks and Responsibility
8. Commencement, delays and 18. Insurance
suspension 19. Force Majeure
9. Test on completion 20. Claims, Disputes andArbitrations
10. Employers taking over
 Clauses in Yellow Book

11. Defects Liability

1. General provision 12. Testes after Completion
2. he Employer 13. Variations andAdjustments
3. The Engineer 14. Contract price andPayments
4. The Contractor 15. Termination by Employer
5. Design 16. Suspension and Terminationby
6. Staff and Labour Contractor
7. Plant, Material and Workmanship 17. Risks and Responsibility
8. Commencement, Delays and 18. Insurance
Suspension 19. Force Majeure
9. Tests on Completion 20. Claims, Disputes andArbitration
10. Employer's Taking Over
 Case Study

 A contract has been awarded to build a new project with

associated services and external works.
 Contract Details are as follow:
 Employer: ABC Development Co.
 Contractor: Buildit ConstructionCo.
 Commencement Date: 15January2014
 Time for Completion: 104Weeks
 Form of Contract: FIDIC 1995 Conditions of Contract for Design-
Build and Turnkey (OrangeBook)
 Situation:

Inconsistency between the Employer’s requirements and the

Contractor’s Proposal becomes apparent part of the way through
the works.
Which takes precedence? How is this dealt with under the
contract?
 Answer:
Clause 1.6 lists the priority of documents, the Employer’s
requirements being third in the list, the contractor’s proposal being
eighth; therefore Employer’s requirements take precedence.
 Situation:

 Which of the contractor’s claim clauses allow the contractor to

claim cost and which allow cost plus reasonable profit?
Answer:
Clauses giving the contractor the right to recover Cost:
 Clause 4.11- Unforeseeable physical conditions
 Clause 4.24- Fossils
 Clause 8.8- Suspension
 Clause 13.16- Changes in legislation
 Clause 17.4- Employer’s Risks
 Clause 19.5- Force Majeure
 Cont’d

Clauses giving the Contractor the right to recover the cost plus
reasonable profit:

 Clause 2.2- Employers failure give access

 Clause 11.4- Employer not permitting access for testing
 Clause 12.8- Contractor instructed to search
 Clause 16.1- Default by Employer

 Reasonable profit is whatever profit the parties agree between

themselves as “reasonable”.
 Situation

 The Employer’s representative has issued a verbal instruction to carry out

additional work

I. Does the contractor have to comply with the instruction?

II. How does the contract deal with verbal instruction?
Answer:
I. No, under clause 1.8, wherever provision is made for the giving of notice,
instruction, etc. unless otherwise specified such communication shall be in writing.
II. The Contract does not provide for the giving of verbal instructions (Note that
most other contracts provide for the contractor issue a written confirmation of verbal
instruction, which if not rejected, becomes an instruction)
 Situation

 ABC Development Co. is late in paying a certified amount due to

Buildit construction.

What are Buildit Construction’s rights regarding this situation?

Answer:
Under clause 13.8, if payment is delayed, the contractor is entitled to
receive financing changes compounded monthly on the amount unpaid during
the delay. Unless part II states otherwise, this is 3% above the discount rate of
the central bank in the country of the currency of the payment. The contractor
is not required to give notice in order to receive this payment.
 Situation

Buildit Construction wishes to be paid for the precast concrete

flooring units held at their subcontractor’s works 20km from the
site awaiting delivery to six weeks later.

Answer:
FIDIC 1995 conditions of contract for Design-Build and
Turnkey (Orange Book) does not provide for payment for materials
held off site.
Thank You