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CONSTRUCTION CONTRACTS DOCUEMENTS

CONSTRUCTION CONTRACTS DOCUEMENTS. APPLIED CIVIL ENGINEERING DEPT. BY LECTURER Maha Muhaisen. General Conditions of contract. The conditions are intended to govern and regulate the obligation of formal contract.

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CONSTRUCTION CONTRACTS DOCUEMENTS

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  1. CONSTRUCTION CONTRACTS DOCUEMENTS APPLIED CIVIL ENGINEERING DEPT BYLECTURERMaha Muhaisen

  2. General Conditions of contract The conditions are intended to govern and regulate the obligation of formal contract. Although the headings and topics included within different sets of GCC vary, there is a certain similarity of subject matter

  3. Contents of GCC Definitions Contract documents Rights and responsibilities of owner Duties and authorities of engineer Rights and responsibilities of contractor Sub-contractor, Separate contractors Time Payments and completions Changes in the work Protection of persons and property Insurance and bond Disputes Termination of contract Miscellaneous provisions

  4. FIDIC , AN INTRODUCTION Founded in 1913 Expanded in 1945 to include 40 national associations Published first Conditions of Contract in 1957 In 2004 has 64 member associations Headquarters in Switzerland Web Site : www.fidic.org

  5. FIDIC , AN INTRODUCTION Pre 1957 – no internationally recognised contract conditions First “red book” based on UK ICE conditions FIDIC has international committees to improve contracts

  6. Contract Documents 1999 Conditions of Contract for Construction (Red Book) Conditions of Contract for Plant & Design Build (Yellow Book) Conditions of Contract for EPC Turnkey Projects (Silver Book) Short Form of Contracts (Green Book)

  7. FIDIC Document UsageConditions of Contract for Construction Works designed by Employer or Engineer Contractor Constructs in accordance with designs provided May include some design elements

  8. FIDIC Document UsageConditions of Contract for, Plant & Design Build Electrical & Mechanical Plant May include building and engineering Design & Execution of works Contractor designs and constructs in accordance with Employer’s Requirements Engineer Administers

  9. FIDIC Document UsageShort Form of Contract Small capital value projects Simple content Contractor constructs to Employer’s designs No “Particular Conditions” No “Impartial” Engineer

  10. Typical sequence of Principal Events during Contracts

  11. Typical sequence of Payment Events envisaged in Clause 14(contract price and payment)

  12. Typical sequence of Dispute Events envisaged in Clause 20 DAB: the persons so named in the contract or other persons appointed under sub-clause (appointment of the dispute adjudication board)

  13. FIDIC conditions of contract 1 GENERAL PROVISIONS 2 THE EMPLOYER . 3 THE ENGINEER 4 THE CONTRACTOR 5 NOMINATED SUBCONTRACTORS 6 STAFF AND LABOUR 7 PLANT, MATERIALS AND WORKMANSHIP 8 COMMENCEMENT, DELAYS AND SUSPENSION 9 TESTS ON COMPLETION 10 EMPLOYER’S TAKING OVER . 11 DEFECTS LIABILITY 12 MEASUREMENT AND EVALUATION

  14. FIDIC conditions of contract (cont’d) 13 VARIATIONS AND ADJUSTMENTS 14 CONTRACT PRICE AND PAYMENT 15 TERMINATION BY EMPLOYER 16 SUSPENSION AND TERMINATION BY CONTRACTOR 17 RISK AND RESPONSIBILITY 18 INSURANCE 19 FORCE MAJEURE 20 CLAIMS, DISPUTES AND ARBITRATION

  15. FIDIC conditions of contract 1 GENERAL PROVISIONS 1.1 Definitions 1.2 Interpretation 1.3 Communications 1.4 Law and Language 1.5 Priority of Documents 1.6 Contract Agreement 1.7 Assignment 1.8 Care and Supply of Documents 1.9 Delayed Drawings or Instructions 1.10 Employer’s Use of Contractor’s Documents 1.11 Contractor’s Use of Employer’s Documents 1.12 Confidential Details 1.13 Compliance with Laws 1.14 Joint and Several Liability

  16. FIDIC conditions of contract cont’d 2 THE EMPLOYER . 2.1 Right of Access to the Site 2.2 Permits, Licenses or Approvals 2.3 Employer’s Personnel 2.4 Employer’s Financial Arrangements 2.5 Employer’s Claims 3 THE ENGINEER 3.1 Engineer’s Duties and Authority 3.2 Delegation by the Engineer 3.3 Instructions of the Engineer 3.4 Replacement of the Engineer 3.5 Determinations

  17. FIDIC conditions of contract cont’d 4 THE CONTRACTOR 4.1 Contractor’s General Obligations 4.2 Performance Security 4.3 Contractor’s Representative 4.4 Subcontractors 4.5 Assignment of Benefit of Subcontract 4.6 Co-operation 4.7 Setting Out 4.8 Safety Procedures 4.9 Quality Assurance 4.10 Site Data 4.11 Sufficiency of the Accepted Contract Amount 4.12 Unforeseeable Physical Conditions 4.13 Rights of Way and Facilities

  18. 4.14 Avoidance of Interference 4.15 Access Route 4.16 Transport of Goods 4.17 Contractor’s Equipment 4.18 Protection of the Environment 4.19 Electricity, Water and Gas 4.20 Employer’s Equipment and Free-Issue Material 4.21 Progress Reports 4.22 Security of the Site 4.23 Contractor’s Operations on Site 4.24 Fossils

  19. 5 NOMINATED SUBCONTRACTORS 5.1 Definition of “nominated Subcontractor” 5.2 Objection to Nomination 5.3 Payments to nominated Subcontractors 5.4 Evidence of Payments

  20. 6 STAFF AND LABOUR 6.1 Engagement of Staff and Labour 6.2 Rates of Wages and Conditions of Labour 6.3 Persons in the Service of Employer 6.4 Labour Laws 6.5 Working Hours 6.6 Facilities for Staff and Labour 6.7 Health and Safety 6.8 Contractor’s Superintendence 6.9 Contractor’s Personnel 6.10 Records of Contractor’s Personnel and Equipment 6.11 Disorderly Conduct 6.12 Foreign Personnel 6.13 Supply of Foodstuffs

  21. 6.14 Supply of Water 6.15 Measures against Insect and Pest Nuisance 6.16 Alcoholic Liquor or Drugs 6.17 Arms and Ammunition 6.18 Festival and Religious Customs 6.19 Funeral Arrangements 6.20 Prohibition of Forced or Compulsory Labor 6.21 Prohibition of Harmful Child Labour 6.22 Employment Records of Workers

  22. 7 PLANT, MATERIALS AND WORKMANSHIP 7.1 Manner of Execution 7.2 Samples 7.3 Inspection 7.4 Testing 7.5 Rejection 7.6 Remedial Work 7.7 Ownership of Plant and Materials 7.8 Royalties 8 COMMENCEMENT, DELAYS AND SUSPENSION 8.1 Commencement of Works 8.2 Time for Completion 8.3 Programme 8.4 Extension of Time for Completion 8.5 Delays Caused by Authorities 8.6 Rate of Progress 8.7 Delay Damages

  23. 8.8 Suspension of Work 8.9 Consequences of Suspension 8.10 Payment for Plant and Materials in Event of Suspension 8.11 Prolonged Suspension 8.12 Resumption of Work 9 TESTS ON COMPLETION 9.1 Contractor’s Obligations 9.2 Delayed Tests 9.3 Retesting 9.4 Failure to Pass Tests on Completion 10 EMPLOYER’S TAKING OVER 10.1 Taking Over of the Works and Sections 10.2 Taking Over of Parts of the Works 10.3 Interference with Tests on Completion 10.4 Surfaces Requiring Reinstatement

  24. 11 DEFECTS LIABILITY 11.1 Completion of Outstanding Work and Remedying Defects 11.2 Cost of Remedying Defects 11.3 Extension of Defects Notification Period 11.4 Failure to Remedy Defects 11.5 Removal of Defective Work 11.6 Further Tests 11.7 Right of Access 11.8 Contractor to Search 11.9 Performance Certificate 11.10 Unfulfilled Obligations 11.11 Clearance of Site

  25. 12 MEASUREMENT AND EVALUATION . 12.1 Works to be Measured 12.2 Method of Measurement 12.3 Evaluation 12.4 Omissions 13 VARIATIONS AND ADJUSTMENTS 13.1 Right to Vary 13.2 Value Engineering 13.3 Variation Procedure 13.4 Payment in Applicable Currencies 13.5 Provisional Sums 13.6 Daywork 13.7 Adjustments for Changes in Legislation 13.8 Adjustments for Changes in Cost

  26. 14 CONTRACT PRICE AND PAYMENT 14.1 The Contract Price 14.2 Advance Payment 14.3 Application for Interim Payment Certificates 14.4 Schedule of Payments 14.5 Plant and Materials intended for the Works 14.6 Issue of Interim Payment Certificates 14.7 Payment 14.8 Delayed Payment 14.9 Payment of Retention Money 14.10 Statement at Completion 14.11 Application for Final Payment Certificate 14.12 Discharge 14.13 Issue of Final Payment Certificate 14.14 Cessation of Employer’s Liability 14.15 Currencies of Payment

  27. 15 TERMINATION BY EMPLOYER 15.1 Notice to Correct 15.2 Termination by Employer 15.3 Valuation at Date of Termination 15.4 Payment after Termination 15.5 Employer’s Entitlement to Termination for Convenience 15.6 Corrupt or Fraudulent Practices

  28. 16 SUSPENSION AND TERMINATION BY CONTRACTOR 16.1 Contractor’s Entitlement to Suspend Work 16.2 Termination by Contractor 16.3 Cessation of Work and Removal of Contractor’s Equipment 16.4 Payment on Termination 17 RISK AND RESPONSIBILITY 17.1 Indemnities 17.2 Contractor’s Care of the Works 17.3 Employer’s Risks 17.4 Consequences of Employer’s Risks 17.5 Intellectual and Industrial Property Rights 17.6 Limitation of Liability 17.7 Use of Employer’s Accommodation/Facilities

  29. 18 INSURANCE 18.1 General Requirements for Insurances 18.2 Insurance for Works and Contractor’s Equipment 18.3 Insurance against Injury to Persons and Damage to Property 18.4 Insurance for Contractor’s Personnel 19 FORCE MAJEURE 19.1 Definition of Force Majeure 19.2 Notice of Force Majeure 19.3 Duty to Minimize Delay 19.4 Consequences of Force Majeure 19.5 Force Majeure Affecting Subcontractor 19.6 Optional Termination, Payment and Release 19.7 Release from Performance

  30. 20 CLAIMS, DISPUTES AND ARBITRATION 20.1 Contractor’s Claims 20.2 Appointment of the Dispute Board 20.3 Failure to Agree on the Composition of the Dispute Board 20.4 Obtaining Dispute Board’s Decision 20.5 Amicable Settlement 20.6 Arbitration 20.7 Failure to Comply with Dispute Board’s Decision 20.8 Expiry of Dispute Board’s Appointment

  31. General conditions • The following are main items that include in the general conditions for the tender ( or the construction contract.

  32. Definitions Main definitions related to : Contract : include contract agreement, letter of acceptance, letter of tender, specifications, drawings, schedules, tender, appendix to tender, bill of quantities. parties and persons : party, employer, contractor, engineer, contractor representative, employers' personnel, contractors personnel, sub- contractor, DAB (dispute adjudication board), Fidic. Dates , tests, periods and completion include base date, commencement date, time of completion, test on completion, taking over certificate, defects notification period, performance certificate, day Money and payment: accepted contract amount, contract price, cost, final , interim payment certificate, currency, provisional sum, retention money,

  33. Definitions The main definitions that are included in and repeated in the articles of general conditions, are: • Employer : The party named in the Contract as the "FIRST PARTY" who will enter into contract with the Contractor for the execution of the Works covered by the Contract, or any other party authorized by the Employer to exercise the powers and obligations of the First Party, provided that the Contractor will be informed accordingly in writing . • Contractor : The person, company or joint venture named as Second Party in the Contract whose Tender has been accepted by the Employer and with whom the Employer has entered into Contract, and includes the Contractors personal agents and his legal successors • Engineer: The Consulting office, or Engineering office or Engineer or any other technical body appointed from time to time by the Employer to exercise in whole or in part the powers of the Engineer in accordance with the Conditions of the Contract provided that the Contractor shall be accordingly notified in writing.

  34. Definitions, Cont’d • Engineers Representative - Any resident engineer, or clerk of works appointed by the Engineer from time to time • Contract - The documents constituting these Conditions (Parts I and II), the Specification, the Drawings, the Bill of Quantities, the Tender, the Letter of Acceptance, the Contract Agreement, and such further documents as may be expressly incorporated in the Letter of Acceptance or Contract Agreement (if completed). • Contract Sum - The sum stated in the Letter of Acceptance as payable to the Contractor for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract, subject to such additions thereto or deductions therefore as may be made under the provisions of the Contract. • Equipment is the Contractor’s machinery and vehicles brought temporarily to the Site to construct the Works. • Site - The land and other places provided by the Employer or designated as such where the Works are to be executed, and any other places specifically designated in the Contract as forming part of the Site. • approval (written approval) • time (calendar / working days)

  35. Engineer's Duties and Authority • a) The Engineer shall carry out the duties specified in the Contract . • b) The Engineer shall exercise the authority specified in or necessarily to be implied from the Contract . • Provided, that the Engineer shall obtain the specific approval of the Employer, in compliance with the terms of his appointment, and after submitting his recommendations to the Employer in writing, in the following matters : • issuing variation orders; • deciding on the extension of Time for Completion and applying the Liquidated Damages Clause; • approving the appointment of Subcontractors; • notifying the Contractor on suspension of Works; and any other matters as may be set out in Part II of these conditions). • (c) Except as expressly stated in the Contract, the Engineer shall have no authority to relieve the Contractor of any of his obligations under the Contract

  36. Engineer's Representative • The Engineer's Representative shall be appointed by and be responsible to the Engineer and shall carry out such duties of watching and supervising the execution and workmanship of the Works and to test and examine any materials to be used or workshop employed in connection with the Works. He shall exercise such authority as may be delegated to him by the Engineer

  37. Engineer's Authority to Delegate • The Engineer may from time to time delegate to the Engineer's Representative any of the duties and authorities vested in the Engineer and he may at any time revoke such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy thereof has been delivered to the Employer and the Contractor . • Any communication given by the Engineer's Representative to the Contractor in accordance with such delegation shall have the same effect as though it had been given by the Engineer • Provided that : • any failure of the Engineer's Representative to disapprove any work, materials or Plant shall not prejudice the authority of the Engineer to disapprove such work, material or Plant and to give instructions for the rectification thereof • if the Contractor questions any communication of the Engineers Representative, he may refer the matter to the Engineer who shall confirm, reverse or vary the contents of such communication .

  38. Contractor’s General Obligations • The Contractor shall design (to the extent specified in the Contract), execute and complete the Works in accordance with the Contract and with the Engineer’s instructions, and shall remedy any defects in the Works. • The Contractor shall provide the Plant and Contractor’s Documents specified in the Contract, and all Contractor’s Personnel, Goods, consumables and other things and services, whether of a temporary or permanent nature, required in and for this design, execution, completion and remedying of defects. • The Contractor shall be responsible for the adequacy, stability and safety of all Site operations and of all methods of construction. Except to the extent specified in the Contract, the Contractor : • shall be responsible for all Contractor’s Documents, Temporary Works, and such design of each item of Plant and Materials as is required for the item to be in accordance with the Contract, and • shall not otherwise be responsible for the design or specification of the Permanent Works.

  39. Contractor’s General Obligations, • The Contractor shall, whenever required by the Engineer, submit details of the arrangements and methods which the Contractor proposes to adopt for the execution of the Works. No significant alteration to these arrangements and methods shall be made without this having previously been notified to the Engineer. • If the Contract specifies that the Contractor shall design any part of the Permanent Works, then unless otherwise stated in the Particular Conditions: • the Contractor shall submit to the Engineer the Contractor’s Documents for this part in accordance with the procedures specified in the Contract; • these Contractor’s Documents shall be in accordance with the Specification and Drawings, shall be written in the language for communications

  40. ASSIGNMENT AND SUBCONTRACTINGASSIGNMENT AND SUBCONTRACTING • Assignment of Contract The Contractor shall not, without the prior consent of the Employer, assign the Contract or any part thereof, or benefit or interest therein or thereunder, otherwise than by : • a charge in favor of the Contractor's bankers of any moneys due or to become due under the Contract, or • assignment to the Contractor's insurers of the Contractor's right to obtain relief against any other party liable. • Subcontracting The Contractor shall not subcontract the whole of the Works. Except where otherwise provided by the Contract, the Contractor shall not subcontract any part of the Works without the prior consent of the Engineer. Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and he shall be responsible for the acts, defaults and neglects of any Subcontractor, his agents, servants or workmen as fully as if they were the acts, defaults or neglects of the Contractor, his agents, servants or workmen. • Provided that the Contractor shall not be required to obtain such consent for : • (a) the provision of labor, or • (b) the subcontracting of any part of the Works for which the Subcontractor is named in the Contract.

  41. Assignment of Subcontractor's Obligations In the event of a Subcontractor having undertaken towards the Contractor in respect of the work executed, or the goods, materials, Plant or services supplied by such Subcontractor, any continuing obligation extending for a period exceeding that of the Defects Liability Period under the Contract, the Contractor shall at any time, after the expiration of such Period, assign to the Employer, at the Employer's request and cost, the benefit of such obligation for the unexpired duration thereof.

  42. Language and Law Arabic language shall be the ruling language of the Contract Documents unless stated otherwise in these conditions, and consequently all correspondence, payment statements, and take-over certificates shall be drawn in this language.

  43. Priority of Contract Documents • The several documents forming the Contract are to be taken as mutually explanatory of one another, but in case of ambiguities or discrepancies the same shall be explained and adjusted by the Engineer who shall thereupon issue to the Contractor instructions thereon and in such event, unless otherwise provided in the Contract, the priority of the documents forming the Contract shall be as follows: (1) The Contract Agreement (if completed); (2) The Letter of Acceptance; (3) The Tender; (4) Part II of these Conditions; (5) Part I of these Conditions; and (6) Any other document forming part of the Contract.

  44. Performance Security • The Contractor, upon receiving the Letter of Acceptance, shall obtain and provide to the Employer before signing the Contract, the Performance Guarantee in the value of ten percent of the Contract Sum, as a guarantee of the proper execution of the Works in accordance with the Contract. This guarantee shall be issued by a licensed bank or financial institution acceptable to the Employer. The guarantee shall be prepared in the form included in part B of these conditions. The obtaining of such guarantee shall in all respects be at the expense of the Contractor.

  45. Inspection of Site • The Employer shall have made available to the Contractor, before the submission by the Contractor of the Tender, such data on hydrological and sub - surface conditions as have been obtained by or on behalf of the Employer from investigations undertaken relevant to the Works but the Contractor shall be responsible for his own interpretation thereof. The Contractor shall be deemed to have inspected and examined the Site and its surroundings and information available in connection therewith and to have satisfied himself (so far as time is practicable), before submitting his Tender, as to : (a) the form and nature thereof, including the sub - surface conditions, (b) the hydrological and climate conditions, (c) the extent and nature of work and materials necessary for the execution and completion of the Works and the remedying of any defects therein, and (d) the means of access to the Site and the accommodation he may require and, in general, shall be deemed to have obtained all necessary information, subject as above mentioned, as to risks, contingencies and all other circumstances which may influence or affect his Tender. • The Contractor shall be deemed to have based on his Tender, the data made available by the Employer and on his own inspection and examination, all as aforementioned.

  46. Sufficiency of Tender The Contractor shall be deemed to have satisfied himself as to the correctness and sufficiency of the Tender and of the rates and prices stated in the Bill of Quantities, all of which shall; except insofar as it is otherwise provided in the Contract, cover all his obligations under the Contract (including those in respect of the supply of goods, materials, Plant or services or of contingencies for which there is a Provisional Sum) and all matters and things necessary for the proper execution and completion of the Works and the remedying of any defects therein.

  47. PROGRAMME TO BE SUBMITTED • Within a specified time (in days), after the date of the Letter Of Acceptance, the contractor shall submit a programme to the engineer for his consent in such a way and detail as the engineer shall reasonable prescribe for the execution of the works. It is also required that whenever the engineer requires, the contractor shall provide in writing, for his information, a general description of the arrangement and methods which the contractor proposes to adopt for the execution of the works.

  48. REVISED PROGRAMME • If it appears to the engineer, at any time, that the actual progress of the works does not conform to the progamme to which consent, is given; the contractor at the request of the engineer, is required to produce a revised programme necessary to ensure completion of the works within the Time for Completion.

  49. CASHFLOW ESTIMATE • The contractor shall within time stated in Part II provide a detailed cash flow estimate, in quarterly period, for all payments to which the contractor will be entitled under the contract (to the engineer) and the contractor shall subsequently supply revised cash flow estimates at quarterly intervals, if required to do so by the engineer. • Such cash flow statements do not relieve the contractor of any of this duties or responsibilities under the contract.

  50. CONTRACTOR’S SUPERINTENDENCE • The contractor is needed to provide all necessary superintendence during the execution of the work and thereafter, as long as the engineer consider it necessary for proper fulfillment of the contractor’s obligations under the contract. • If the approval of Contractor’s representative is withdrawn by the Engineer then Contractor shall replace him by any other representative approved by the Engineer. CONTRACTOR’S EMPLOYEES • The contractor shall provide on the site only skilled and experienced technical assistants and foremen to provide proper superintendence to skilled, semiskilled and unskilled labour as is necessary. ENGINEER AT LIBERTY TO OBJECT • The Client’s engineer having objection on the contractor’s worker when they misconduct themselves, or are incompetent or negligent in the proper performance of his duties. Such workers should be replaced as soon as possible. SETTING OUT • The contractor has to look after about the accurate setting out of the works and the provision of all necessary instruments, appliances and labour in connection with the foregoing responsibilities. • The contractor shall rectify any error if caused regarding setting out unless it was caused due to incorrect data provided by Engineer in writing.

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