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PLN Fidic Module 1 Day 1

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0% found this document useful (0 votes)

114 views165 pages

PLN Fidic Module 1 Day 1

Uploaded by

Hidayatullah Hidayatullah

We take content rights seriously. If you suspect this is your content, claim it here.

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FIDIC Training Module 1 – Day 1

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)

Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)

Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Universitas Mercu Buana (UMB), Guru Besar Tetap (2017-Dst)
Perkumpulan Ahli Dewan Sebngketa Konstrksi (PADSK), Ketua Umum, (2020-2023)
FIDIC Training Day 1

➢ FIDIC Contract Documents: Introduction & Principles

➢ Responsibilities of the Main Parties

➢ The Management of Projects

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
SESSION 1 IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
FIDIC • Introduction to the FIDIC organisation
Contract • Background to FIDIC Contracts
• Structure of the documents
Documents: • Preparation of Conditions of Contract
Introduction • Risk Analysis
• Which Book to use?
& Principles

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
OUTLINE IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
▪ Founded in 1913.
▪ Composed of national associations of consulting engineers.
▪ Promotes and implements the consulting engineering industry’s strategic goals.
▪ Members endorse FIDIC statutes and policy statements and comply with FIDIC Code
of Ethics.
▪ Develops and promotes business practice: Business Integrity Management; Project
Sustainability Management; Quality Management, Risk Management.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
INTRODUCTION TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
o Organises:
o Extensive programme of seminars and conferences
o International Training Programme (courses; workshops)
o Capacity Development Programme (accredited trainers, training suppliers, programmes and
events).

o Publishes:
o Business practice guides
o International professional services agreements
o Works Contracts.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
INTRODUCTION TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Representation
100 Member Associations representing 40,000 consulting firms
employing 1.5 million CE professionals

Countries with over 6.5bn FIDIC Member Associations Economies range from
population and combined represent an industry are approximately $3bn to over
GDP $30tn worth over $8.5tn $19tn in scale

@FID8IC
FIDIC Global Structure
Global FIDIC

Regional FIDIC Asia Pacific FIDIC Europe FIDIC Latin America FIDIC Africa FIDIC Middle East FIDIC North America

(to be formed) (to be formed)

National Member associations Member associations Member associations Member associations Member associations

Members Firms Firms Firms Firms Firms Firms Firms Firms Firms Firms Firms Firms Firms Firms

@FIDIC

FIDICs members have corporate and social

responsibilities and engage with NGOs, governments etc
FIDIC Board Committees

President

Board
FIDIC
FIDIC
CEO

Board rep

Board Committee
Regi onal

chairs
Chair
Chair of the
Operations Chair of Governance Chair Nominations Chair Risk & Audit
Oversight Committee Committee Committee
Committee
FIDIC FIDIC FIDIC FIDIC FIDIC FIDIC
Africa Asia Pacific South America Europe North America Middle East

Working Committees
Primary
Primary
Advisory Councils
Chair

Chair
Future DNS Regional Diversity and
Leaders Advisory Advisory Inclusion
(FLC) (DNSAC) (RAC) (D&IC)

@FIDIC
FIDIC Business Model
FIDIC Stakeholders

FIDIC
FIDIC Media FIDIC
Advocacy
Engagement

FIDIC Governance, Secretariat & FIDIC

FIDIC Events
Committees Contracts

FIDIC FIDIC
Academy FIDIC Body of Credentialing
Knowledge

FIDIC
Objectives
FIDIC Regions @FIDIC Member firms
FIDIC Member Associations
FIDIC’s Objectives

• Represent the consulting engineering industry globally

• Enhance the image of consulting engineers
• Be the authority on issues relating to business practice
• Advocate for the viability of the global consulting engineering industry
• Drive excellence in quality, risk and project management and leadership
• Combat and condemn bribery and corruption and promote ethics, integrity and
transparency in the industry
• Promote safe, sustainable and resilient development
• Promote diversity, equal opportunity and inclusiveness @FIDIC
• Stimulate development of talent, skill and future leaders for the consulting engineering
industry
We are all in this together …

How do all these activities connect

@FIDIC
FIDICs activities and the sector
Contracts Training Partnerships Membership
Bi-lateral bank
MoUs / MoA
agreements

Multilateral
Key influencers
development banks

Knowledge sharing, procurement, projects, investment, working together, engaging with MAs and Firms all contribute to the delivery of infrastructure

Industry Asset Owners Banks Contractors Developers Governments Industrialists

Users People Communities Business Cities Governments

Policy and Advocacy News Events

@FIDIC

Engagement, sharing information, promoting the industry, addressing tomorrows challenges all ensure FIDIC is visible where engineers can help society
FIDIC activities - G20/OECD Quality infrastructure
Contracts Training Partnerships Membership
Bi-lateral bank
MoUs / MoA
agreements

Multilateral
Key influencers
development banks

P1 P2 P6 P1 P2 P3 P4 P1 P2 P3 P4 P5 P6 P1 P2 P3 P4 P5 P6

Principle 1: Maximizing the positive impact of infrastructure to achieve sustainable growth and development
Principle 2: Raising Economic Efficiency in View of Life-Cycle Cost
Principle 3: Integrating Environmental Considerations in Infrastructure Investments
Principle 4: Building Resilience against Natural Disasters and Other Risks
Principle 5: Integrating Social Considerations in Infrastructure Investment
Principle 6: Strengthening Infrastructure Governance

Policy and Advocacy News Events

@FIDIC

P1 P2 P3 P4 P5 P6 P1 P2 P4 P5 P1 P2 P3 P4 P5 P6
Bi-lateral bank
FIDIC activities and stakeholders
agreements

MoUs / MoA

@FIDIC

Multilateral
development banks
• First FIDIC Works Contract was published in 1957 – “Conditions of Contract
(International) for Works of Civil Engineering Construction” – known as the “Red
Book”.
• Second edition was published in 1969 & reprinted in 1973.
• The 1973 version followed closely the fourth edition of the English “ICE
Conditions of Contract”.
• It was written: “as a general comment, it is difficult to escape the conclusion
that at least one primary object in preparing the present international contract
was to depart as little as humanly possible from the English conditions”.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Thus, as in the UK, an important role was reserved for “The Engineer”, and
the Contractor was to be paid according to the actual quantities executed by
application of unit rates.
• Third edition of the Red Book published in 1977 consisted of General
Conditions and Conditions of Particular Application - suggestions upon
which the Parties were required to make their own agreements.
• As with the English ICE Conditions there was also a Form of Tender and
Appendix to Tender, and a Form of Agreement.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The first three editions of the Red Book assumed that the detailed design
would be provided to the Contractor by the Employer or the Engineer.
• Thus Red Book was unsatisfactory for contracts where major items of
plant and alike were manufactured away from site.
• This led to the first edition of the FIDIC Yellow Book for mechanical and
electrical works in 1963, with an emphasis on testing and commissioning
and more suitable for the manufacture and installation of plant.
• The second edition was published in 1980.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• New editions of both the Red and Yellow Books were published in 1987.
• Red Book 4th Edition 1987 introduced an express term which required the
Engineer to act impartially when giving a decision or taking any action
which might affect the rights and obligations of the Parties.
• A formal decision was required from the Engineer before either Party
moved to the next step in the dispute resolution process (arbitration).
• The 1987 Red Book was reprinted in 1992 with modifications.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• A Red Book 4th Edition Supplement was published in 1996 which gave an
option for a Dispute Adjudication Board, and an option for payment on a
lump sum basis instead of by reference to bills of quantities.
• By this time FIDIC had responded to the increasing popularity of projects
being procured on a design and build or turnkey basis. This resulted in the
“Conditions of Contract for Design-Build and Turnkey” (1995 Orange Book).

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• 1995 Orange Book replaced the traditional “Engineer” by the “Employer’s
Representative”.
• The express requirement to be impartial was also removed, although when
determining value, costs or extensions of time the Employer’s
Representative had to “determine the matter fairly, reasonably and in
accordance with the Contract”.
• Need to submit matters to the Engineer for his “Decision” prior to an ability
to pursue a dispute, was eliminated.
• In its place - an independent Dispute Adjudication Board (DAB).

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Updates of Red, Yellow and Orange Books were published in 1999 as
“Construction”, “Plant and Design-Build” and “EPC/Turnkey” Contracts.
• Aims:
• standardise the terminology;
• make the documents as user-friendly as possible;
• solve the problem of the Engineer not seen as acting impartially while
he was employed and paid by the Employer.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
FIDIC now publishes 5 standard Works
Contracts & distributes 25000 copies
each year
• The Construction Contract (Red Book) is based on design provided by the
Employer and payment is made on a re-measurement basis.
• The Plant Contract (Yellow Book), the Design, Build & Operate Contract (Gold
Book) and the EPC/Turnkey Contract (Silver Book) are based on design by the
Contractor and payment is made on a lump-sum basis.

Prof. Sarwono Hardjomuljadi

There are also guides available to

the main contracts and to the
MDB version.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
BACKGROUND TO FIDIC Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONTRACTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Each standard contract includes:
• General Conditions
• Guidance for the Preparation of the Particular Conditions
• Letter of Tender, Contract Agreement and Dispute Adjudication
Agreements
• Appendix to Tender (giving essential project data)
• Example Forms.
• General Conditions are intended to be used unchanged.
• Changes to suit an Employer’s own requirements are illegal and in breach of
copyright.
• All project- and country-specific info in Particular Conditions.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STRUCTURE OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
DOCUMENTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• General Conditions
• Damage & Injury (to supplies or Works during transport or during erection;
to employees; to third parties; intellectual property);
• Social & Environmental Issues;
• Failure to perform (delay damages; performance damages; default;
termination; security);
• “Boilerplate clauses” (law of the contract; language of the contract; order of
precedence; severability; waiver; assignment; amendment; notices);
• Resolution of Disputes
FIDIC General Conditions, like all other commercial contracts, address
all these issues, largely under the same groupings.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STRUCTURE OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
DOCUMENTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• General Conditions
• Clause 1: General Provisions - subjects which apply to the Contract in general,
e.g. definitions, applicable language and law, priority of documents, use of
various documents.
• Clauses 2 - 5: The Employer; The Engineer; The Contractor; Nominated
Subcontractors - deal with the duties and obligations of the different
organisations that play a part in the execution of the Works.
• Clauses 6 & 7: Staff and Labour; Plant, Materials and Workmanship - deal with
the requirements for the items which the Contractor brings to the site.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STRUCTURE OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
DOCUMENTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The “Appendix to Tender “provides a convenient check-list of all the
essential data required for the various sub-clauses.
• There are example texts for six forms of securities:
✓ Parent Company Guarantee;
✓ Tender Security;
✓ Performance Security (“On Demand” or “Default”);
✓ Advance Payment Guarantee;
✓ Retention Money Guarantee;
✓ Payment Guarantee by Employer.
• “Dispute Adjudication Agreements“ are short, because they refer to
“General Conditions of Dispute Adjudication Agreement “ which are
appended to the General Conditions.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STRUCTURE OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
DOCUMENTS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Preparation of Conditions of Contract
• The Conditions on their own are not complete. Certain information must be
provided in other documents in order to make them complete, notably
“Appendix to Tender”, “Particular Conditions” and “Specifications”.
• Information must be carefully co-ordinated with the other documents in order
to ensure that the contract, as a whole, will serve its intended purpose.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PREPARATION OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONDITIONS OF CONTRACT Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Specifications may include matters which are referred to in the Conditions
of Contract such as:
• Requirements for Contractor’s Documents
• Permissions being obtained by the Employer
• Phased possession of foundations, structures, plant or means of access
• Contractor’s designs
• Work by other contractors on the Site
• Setting out information
• Environmental constraints
• Electricity, water and other services available on Site
• Employer’s equipment
• Nominated Subcontractors
• Facilities for Personnel
• Testing
• Provisional Sums Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PREPARATION OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONDITIONS OF CONTRACT Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
✓ Choose General Conditions (which Book?)
✓ Prepare Particular Conditions to suit the Employer’s requirements.
✓ Check the sub-clauses that refer to
✓ a) information in the Specification or
✓ b) information that may be included elsewhere in the Contract.
✓ Modify standard Contract Agreement to suit the Employer’s requirements.
✓ Decide between a one-person or three-person DAB and whether to nominate
potential members.
✓ Decide on information to be inserted by the Employer in the Appendix to Tender.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PREPARATION OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONDITIONS OF CONTRACT Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Remember that if the Particular Conditions put too much risk on the
Contractor, the following may occur:
• Higher bid price
• Bid failure and disruption of project implementation
• Non-participation in the bid of conscientious and capable contractors
• Contract award to a bidder incapable of estimating risks
• Poor construction quality and delay to the progress of the work
• Undermining the relationship of mutual trust
• Repetition of groundless claims from the Contractor
• Frequent disputes
• In an extreme case, termination of the contract.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PREPARATION OF Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
CONDITIONS OF CONTRACT Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Risk allocation in the 1999 editions has moved slightly in the Contractor’s
favour:
• Definition of “Force Majeure” has broadened.
• Contractor recovers time and money for Force Majeure.
• Greater power of the Contractor in relation to the Employer’s ability to pay
and actual payment.
• Financing charges and suspension for non-payment and suspension for late
Interim Payment Certificates increase the pressure on Employers to have
financing or, where that is not possible, to relieve the Contractor from the
obligation to continue working.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The main participants in a FIDIC contract are :

Name Type
Service agreement with the Engineer
Employer (FIDIC White Book) & Works Contract
with the Contractor
Administers Works Contract on behalf of
Engineer
Employer
Contractor Works Contract with Employer
Initial agreement with Employer –
Nominated Subcontractors
transferred to Contractor
Agreement between
DAB Employer/Contractor and 1 or 3
Members of DAB

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Ensure that the Engineer’s responsibilities as stated in his agreement with the
Employer (e.g. a FIDIC Client/Consultant Model Services Agreement) are identical
with those required under the contract for the Works.
• Discrepancies in respect of the Engineer’s responsibilities and authorities, under
the respective contracts, could lead to contractual disputes and could expose the
Engineer to liability.
• It is not uncommon for the Employer to limit, under the service agreement, the
Engineer’s authorities to vary the Works, issue Variation instructions, determine
unit payment rates for new work items, award Extensions of Time for
Completion, and/or render determinations of Contractor’s claims, etc., without
the Employer’s prior written approval.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• But Clause 3.1 states that whenever the Engineer exercises any authority
under Contract for which he is supposed to obtain prior approval from the
Employer, he is deemed to have obtained that approval before exercising the
authority.
• This means that:
• The Employer is bound by the actions of the Engineer;
• The Contractor does not have to worry about whether or not the
Engineer exceeded his authority;
• The Engineer may find himself sued by the Employer for the additional
expense.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Employer should carefully analyse:
- Allocation of the essential functions found in a construction project
and in particular the design function.
- Allocation of the risks inherent in the project.
- Allocation of the management role.
- Method and timing of remuneration for the Contractor.
• Applicable Law - allocates the risks envisaged in the contract to the
contracting parties.
• Contract - either affirms the allocation or re-allocates risks from one to the
other contracting party or spreads them to third parties.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• If a risk is not allocated to one of the contracting parties either by the
applicable law or by the terms of the contract then courts will ask the
following questions:
• Which party can best foresee the risk?
• Which party can best control the risk?
• Which party can best bear the risk?
• Which party most benefits or suffers if the risk eventuates?
• It is foolish to allocate a risk to a party who cannot bear the risk unless that
party is able to shift the risk to others who can. This shift or spread is
usually done through insurance.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
RISK ANALYSIS Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Project risks are divided into :
• Mainly insurable risks: risks of loss, damage or injury occurring during the
contract, including: consequences of accidents due to defective design,
defective material and defective workmanship; acts of nature; fire; human
error; failure to take adequate precautions
• Mainly uninsurable risks: risks leading to financial and/or time loss with
their impact on the project, including: late possession of the site; delay in
receipt of necessary information; changes in design; variations in the
original contract.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
WHICH BOOK TO USE Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
A. Relatively small value, short construction time or involving simple or repetitive
work: Short Form (Green Book)
B. Larger or more complex projects:
• Employer (or the Engineer) to do most of the design - Construction
Contract (Red Book)
• Contractor to do most of the design – Plant & DB (Yellow Book)
• Contractor to do most of the design & to take responsibility for
operation – DBO (Gold Book)
• The Employer (who provides the finance) wishes to implement the
project on a fixed-price basis with little involvement – EPC/T (Silver
Book)
• Contractor takes total responsibility for the financing, construction and
operation with little supervision from the Employer – EPC/T (Silver
Book)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
WHICH BOOK TO USE Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The MDB Harmonised Edition of the FIDIC Conditions of Contract for Construction,
referred to as the “MDB Harmonised Construction Contract” or “Pink Book”
comprises:
• General Conditions
• Particular Conditions (Part A: Contract Data & Part B: Special Provisions)
• Sample Forms.
• As stated earlier, it is extensively based on the FIDIC Red Book (1999) – which means
that it is intended for use in relation to contracts where:
• the Contractor is provided with the design by the Employer
• he is paid on a re-measurement basis, applying agreed unit rates to the actual
quantities executed.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
SESSION 2 IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• General Provisions
Responsibilities • The Employer
• The Contractor
of the Main • The Engineer
Parties • Nominated Subcontractors
• Design

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
OUTLINE IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
It is necessary to be familiar with some general provisions in the FIDIC
Contracts in order to correctly understand and interpret the specific clauses
found elsewhere in the Contracts.
Most of these provisions are set out under Clause 1 and include several of the
so-called “Boiler-plate” provisions.
1. Definitions:
• Defined terms begin with capital letters. FIDIC Contracts include many.
Although most of the terms are similar in all of the Contracts, there are
some important differences.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
GENERAL IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)

PROVISIONS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
2. Interpretation:
• Clause 1.2 describes how the Contract is to be interpreted.
3. Communications:
• Clause 1.3 sets out the rules for official communications among all of the
parties – care is required in fixing these details.
• Clause 1.3 also includes a very important provision: Approvals, certificates,
consents and determinations are not to be unreasonably withheld or
delayed.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
GENERAL IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)

PROVISIONS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
4. Law & Language:
• The Contract is to be governed by the law of the country stated in the
Appendix to Tender.
• The ruling language of the Contract shall be that stated in the Appendix to
Tender.
• The language for communication can be different from the ruling language
(but better to avoid). If none is stated in the Appendix to Tender, it shall be the
same as the ruling language. (Clause 1.4)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
GENERAL IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)

PROVISIONS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
5. Priority of Documents:
• The documents forming the Contract are mutually explanatory but in the
event of conflict between them, the order of priority (in the Red Book) is :
• The Contract Agreement (if any)
• The Letter of Acceptance
• The Letter of Tender
• The Particular Conditions
• The General Conditions
• The Specification,
• The Drawings,
• The Schedules and any other documents forming part of the
Contract.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
GENERAL IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)

PROVISIONS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
The role of the Employer is covered to a large
extent by five sub-clauses of Clause 2:
• 2.1 Right of Access to the Site;
• 2.2 Permits, Licences or Approvals;
• 2.3 Employer’s Personnel;
• 2.4 Employer’s Financial Arrangements; and
• 2.5 Employer’s Claims.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE EMPLOYER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• However, the Employer’s role and obligations are also mentioned elsewhere
in the Contract and can be summarised in the order in which they appear in
the General Conditions.
• Obtain building permit, etc.:
• The Employer must obtain planning, zoning, building permits or similar permission for
Permanent Works and any permits described in the Specifications as to be obtained by
the Employer. (Clause 1.13)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE EMPLOYER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Assist the Contractor for permits:
The Employer shall provide reasonable assistance to the Contractor to obtain:
• copies of relevant laws, not readily available, &
• any permits, approvals etc. the Contractor needs for the Works, for the
delivery of Goods including customs clearance and for the export of his
equipment. (Clause 2.2)
• Ensure the co‐operation of his Personnel:
The Employer must ensure that his Personnel and his other contractors
cooperate with the Contractor and take actions similar to those required of the
Contractor with respect to safety and protection of the environment. (Clause
2.3)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE EMPLOYER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Provide evidence of financial arrangements:
• The Employer must provide reasonable evidence that financial
arrangements have been made and are being maintained to enable him
to pay the Contractor punctually.
• He must do so before the Commencement Date but also within 28 days
after receiving any request from the Contractor.
• Before making any material change to his arrangements, he must notify
the Contractor and give detailed particulars. (Clause 2.4)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE CONTRACTOR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Obtain the Engineer’s consent to a Subcontractor
• The Contractor must obtain the Engineer’s consent before appointing a
Subcontractor, unless the Subcontractor is to supply materials only or is named in
the Contract.
• He must give the Engineer at least 28 days notice of the intended date of the
commencement of Subcontractor’s work.
• Each subcontract shall permit the assignment of the benefit to the Employer
under given circumstances.
• The Contractor shall not subcontract the whole of the Works.
• He remains liable for the acts and defaults of Subcontractors. (Clause 4.4)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE CONTRACTOR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Cooperate with others:
• The Contractor must allow appropriate opportunities for work by others on or
near the Site, as specified in the Contract or as instructed by the Engineer.
• Any such instruction will be a Variation if and to the extent that it causes the
Contractor to incur Unforeseeable Cost. (Clause 4.6)
• In the MDB Version, such an instruction will also be a Variation if it causes
delay.
• Shall set out the Works:
• He is responsible for the correct setting out unless due to errors in the
information & reference points. (Clause 4.7)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE CONTRACTOR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Satisfies himself regarding access routes to the Site:
• The Contractor is deemed to have satisfied himself as to the suitability and
availability of access routes to the Site at the Base Date.
• He cannot claim for costs due to non-availability or non-suitability of the
access routes. (Clause 4.15)
• He must obtain at his own risk and cost any additional facilities outside the
Site, which the Employer is not obliged to provide. (Clause 4.13)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE CONTRACTOR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Classification of duties by contract phase:
• Pre-contract
• Ensure Employer is aware that he carries the financial risk for unforeseen events
and of the financial, managerial and advisory resources required for the project.
• Warn Employer of decisions and actions required of him, giving programme dates
for finalisation of designs, provision of access, construction and taking over the
Works.
• Design and detail the Works and as far as possible prepare clear working drawings
and a concise specification.
• Prepare accurate bills of quantities, detailing the Works required. Keep provisional
items to a minimum.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Ensure the Employer and his staff understand the role of the
Engineer under the Conditions of Contract, to ensure fair dealings
between the Contractor and the Employer.
• Draw the Employer’s attention to the powers and duties of the
Engineer under the Contract..
• Ensure the Employer and his auditors accept the joint statement of
accounting principles on the Engineer’s and auditor’s relationship.
• Ensure the Engineer has a defined and readily understood method of
selecting contractors and recommend that the number invited
should be limited.
• Ensure all tenderers receive the same tendering information and are
given a sufficient period for the preparation of tenders.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Make all site and service information in the Employer’s and Engineer’s possession
available to those invited to tender.
• Ensure tenders are delivered in specifically marked envelopes to the Employer or
Engineer, by a fixed date and time, and are opened with witnesses at a declared
date.
• Check tenders carefully and correct any errors. Notify tenderer of any resulting
change in the total of the priced bills of quantities and tender sum.
• Review tenders received with particular regard to the proposed construction
methods and degree of risk involved and with the implications of sectional
completion dates on the Employer’s and Contractor’s cash flow, as well as the
anticipated final Contract Price.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Submit a report to the Employer pointing out any rate that is less than the
known cost of carrying out the work and giving a recommendation of a tender
acceptance with reasons. If rates are in doubt recommend a tenderer be
invited to stand by his rates or withdraw.

• Advise the Employer to give tenderers the name of the successful tenderer at
the earliest opportunity. It is also recommended that the list of values of
tenders received should be circulated.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Make decisions on extensions of time at stages and times required under the
Contract.
• Ensure that a site diary and site records are properly kept and agreed where
appropriate with the Contractor and arrange for regular progress photographs to
be taken.
• Ensure site meetings are held at least monthly and that minutes are kept and
agreed.
• Issue certificates for payments after interim measurements promptly.
• Visit the site regularly. Inspect works in progress and review compliance with the
Contractor’s Programme.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Ensure Nominated Subcontractors are properly appointed by the
Contractor and that appropriate Subcontract Conditions of Contract
are used.
• Agree measurements of quantities for completed Works as the work
proceeds.
• Ensure claims are detailed and the sums due are settled as soon as
possible.
• Ensure certification of Taking Over and defects rectification are
issued to the Contractor on time.
• Ensure the Employer is aware of his changed insurance liability when
the Taking Over Certificate and Performance Certificates are issued.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Monitor, through inspection and testing, the work being carried out
to make sure that on completion the Employer has a project
completed in accordance with the Contract and with any
supplementary instructions which may have been given.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
THE ENGINEER Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• A Nominated Subcontractor is someone who is either so-named in
the Contract or who the Engineer has instructed the Contractor to
employ as a Subcontractor.
• A “Subcontractor” can be a supplier of Goods and/or materials.
• There are three potential advantages to the Employer or Engineer of
using a Nominated Subcontractor:
• involvement in the choice of a specialist subcontractor;
• involvement in the choice of plant;
• the avoidance of participation in the co-ordination of the
interface between the nominated sub-contractors and the
Contractors’ Works.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
NOMINATED IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
SUBCONTRACTORS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Disadvantages in using Nominated Subcontractors include:
• Lack of commitment from the Contractor to manage a Subcontractor
that he feels was imposed upon him.
• Nominated Subcontractors are sometimes chosen because of close
links to the Employer’s organisation rather than because of their
ability.
• Delays often occur in the appointment of the Nominated
Subcontractor, thereby delaying completion of the Works.
• If there are to be Nominated Subcontractors, the Employer should make
this clear in the tender documents so that the Contractor can take account
of this in his price.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
NOMINATED IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
SUBCONTRACTORS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Employer and/or Engineer cannot unilaterally impose a subcontractor on the
Contractor as Sub-clause 5.2 provides that a Contractor can raise a reasonable
objection to any proposed appointment .
• An objection is deemed reasonable if it arises from (among other things):
• there are reasons to believe the Nominated Subcontractor lacks
competence or sufficient finances or resources.
• the subcontract does not specify that the Nominated Subcontractor shall
indemnify the Contractor against his negligence or misuse of Goods.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
NOMINATED IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
SUBCONTRACTORS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
if the subcontract does not specify that the Nominated Subcontractor shall
• have similar obligations and liabilities as the Contractor;
• indemnify the Contractor against all obligations and liabilities arising from any
failure by the Subcontractor to perform;
• be paid only if and when the Contractor has received payment from the
Employer for sums due under the Subcontract.
• In respect of this latter point, the Contractor shall pay the Nominated
Subcontractor amounts which are certified by the Engineer as being due.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
NOMINATED IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
SUBCONTRACTORS Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The premise upon which the Red Book (1999) is based is that the Contractor
shall be provided with the design by the Employer.
• The full title of the Red Book (1999) is:
“Conditions of Contract for Construction for Building and Engineering Works
designed by the Employer”
• The Foreword states:
“Under the usual arrangements for this type of contract, the Contractor
constructs the Works in accordance with a design provided by the Employer.
However, the works may include some elements of Contractor-designed civil,
electrical and/or construction works.”

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
DESIGN Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Certain aspects of the method of construction which would be necessary for
the implementation of the project may have to be included, depending on
the project and its design.
• Projected cost of the Project on completion, based on an accurate Bill of
Quantities.
• It is generally accepted that there is a relationship between the quality of the
materials and workmanship selected in the design and the necessity for
maintenance and its frequency.
As part of his role during the post-contract stage (during the execution phase),
the Engineer will normally issue additional or modified drawings and information.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
DESIGN Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Certain aspects of the method of construction which would be
necessary for the implementation of the project may have to be
included, depending on the project and its design.
• Projected cost of the Project on completion, based on an accurate
Bill of Quantities.
• It is generally accepted that there is a relationship between the
quality of the materials and workmanship selected in the design
and the necessity for maintenance and its frequency
In general, the design should normally be very well advanced by the
time of contract award.
However, as part of his role during the post-contract stage (during the
execution phase), the Engineer will normally issue additional or
modified design Drawings and information.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
DESIGN Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• “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” (Sub-Clause 4.1)
• If the Contractor is required to design any part of the Works, the extent of this
design work must be clearly stated in the Contract.
• Otherwise, the Contractor does not undertake design but merely produces his
shop/working drawings in order to show how to build the Works.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
SESSION 3 IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Staff and Labour
• Plant, Material and
Workmanship
The
• Commencement, Delays and
Management Suspension
of Projects • Tests on Completion
• Employer’s Taking Over; Defects
Liability

Prof. Sarwono Hardjomuljadi

• The MDB Version 1st Edition goes much further than the Red Book (1999)
and contains 22 sub-clauses dealing with “social issues” compared to
only 11 in the Red Book (1999).

• The MDB Version 2nd Edition (2010) goes even further with 24 such sub-
clauses. (The two additions deal with the right to belong to trade unions
and with non-discrimination/equal opportunity.)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
These sub-clauses cover:
• Engagement of Staff and Labour
The Contractor must engage and pay the necessary staff and labour and
arrange feeding, transport and when appropriate, housing.

• Rates of Wages & Conditions of Labour

The Contractor must respect local rates of wages .

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Persons in the service of the Employer
The Contractor must not attempt to recruit the Employer’s personnel.
• Labour Laws
He must respect all the relevant labour Laws and shall require his employees to
obey all applicable Laws.
• Working hours
No work is allowed outside normal working hours or on locally recognised rest
days, unless allowed by the Contract, agreed by the Engineer or is necessary for
safety reasons.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Facilities for Staff and Labour
He must provide all necessary accommodation & welfare facilities (including for
Employer’s Personnel if this is stated in the Specification). Accommodating workers
in the Permanent Works is not allowed.
• Health and Safety
He must take all reasonable measures to maintain health & safety of his personnel.
He shall ensure that medical staff, etc are available at all times on Site and at
accommodation provided by him. He must appoint a qualified accident-prevention
officer and give him the necessary authority to take action in order to avoid
accidents. He must maintain records and immediately report any accident.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Contractor’s Personnel
Engineer may require the removal from Site of any person who
• persists in any misconduct or lack of care
• carries out duties incompetently or negligently
• fails to conform with the Contract
• persists in conduct which is bad for safety, health or the environment.
• Records of Personnel & Equipment
Every month the Contractor must provide the Engineer with details of the
number and class of Contractor’s Personnel and of each type of equipment on
Site.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Disorderly Conduct
Contractor must take all reasonable precautions to prevent disorderly conduct
and to prevent damage or injury to property and persons on or near Site.
• Additional Sub-Clauses in MDB Version include:
• Requirement for HIV-AIDS prevention and testing scheme;
• Restrictions on employment of forced & child labour;
• Requirement to submit monthly details of all workers (names, addresses,
sex, age, hours worked, wages paid …)
• Etc.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
STAFF AND LABOUR Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Clause 7 deals with the requirements for the items of Plant and Materials
which the Contractor brings to the Site in order to execute the project.
• It covers the Contractor’s obligations concerning the quality of his work and
the procedures to be followed for tests and in the event that an item of work
fails the test.
• The matter of the time covered at Sub-Clause 7.7 and Royalties are dealt with
at Sub-Claus when an item of Plant or Materials becomes the property of the
Employer is e 7.8.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
The Contractor must carry out his work:
• in the manner specified in the Contract;
• in a workmanlike and careful manner;
• in accordance with recognised good practice;
• with properly equipped facilities and using non-hazardous materials, unless
otherwise specified in the Contract. (Clause 7.1)
• The quality of Materials and standard of workmanship will be specified
elsewhere in the contract documents, which will normally refer to the
national standard specifications of the country of the project.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Contractor is to submit samples of Materials, and relevant information, to the
Engineer for consent prior to using the Materials in or for the Works. (Clause 7.2)
• Samples are:
• manufacturer’s standard samples of Materials and samples specified in
the Contract, all to be provided at the Contractor’s cost, and
• additional samples instructed by the Engineer as a Variation.
• Under Sub-Clause 1.3, the Engineer cannot unreasonably withhold his consent to
the use of Materials. Any decision by the Engineer to reject certain Materials will
thus need to be supported by scientific evidence (e.g., laboratory reports).

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
The Employer’s Personnel shall:
• at all reasonable times have full access to all parts of the Site and to
all places from which natural Materials are being obtained, and
• during production, manufacture and construction (at the Site and
elsewhere), be entitled to examine, inspect, measure and test the
materials and workmanship, and to check the progress of
manufacture of Plant and production and manufacture of Materials.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Contractor must give notice to the Engineer whenever any work is ready and
before it is covered up
• The Engineer shall then either carry out the examination, or testing without
unreasonable delay, or promptly give notice to the Contractor that he does not
require to do so.
• If the Contractor fails to give the notice, he must, if and when required by the
Engineer, uncover the work and then reinstate at his own cost. (Clause 7.3)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Contractor shall provide everything necessary to carry out the tests
specified, unless otherwise stated in the Contract.
• He shall agree with the Engineer, the time and place for the specified testing.
• The Engineer may vary the location or details of specified tests, or instruct the
Contractor to carry out additional tests.
• If these varied or additional tests show that the item is not in accordance with
the Contract, the additional or varied tests shall be at Contractor’s expense.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Engineer must give the Contractor not less than 24 hours’ notice of his
intention to attend the tests. If he does not attend at the time and place agreed,
the Contractor may proceed with the tests unless otherwise instructed by the
Engineer and the tests shall be deemed to have been made in the Engineer’s
presence and to be accurate. (Clause 7.4)

• If any Plant, Material or workmanship is found to be defective, or not in

accordance with the Contract, the Engineer may reject it by notifying the
Contractor. However, again Engineer must not unreasonably withhold approval.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• If the Engineer requires this Plant, Materials or workmanship to be retested, the
tests must be repeated under the same terms and conditions.
• If the Employer suffers additional costs due to the retesting, the Contractor shall
pay these costs to the Employer. (Clause 7.5 & Clause 2.5)
• The Contractor must, within a reasonable time, comply with any Engineer’s
instruction to:
• remove and replace any Plant or Materials which do not conform with the
Contract; or
• remove and re-execute any work which does not conform with the
Contract.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The Engineer should only insist upon removal and replacement when it would
be unreasonable to repair.

• The Contractor must comply immediately with any Engineer’s instruction to

execute works, which are urgently required for the safety of the Works.

• If the Contractor fails to comply with the Engineer’s instruction, the Employer
will be entitled to employ others to carry out the instruction at the Contractor’s
cost. (Clause 7.6)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
PLANT, MATERIAL AND WORKMANSHIP Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Unless the Laws of the Country provide otherwise, items of Plant and Materials will
become the property of the Employer either:
• when they are delivered to Site; or,
• when the Contractor is entitled to be paid for them,
whichever takes place first. (Clause 7.7)
• Note that the provisions of the MDB Version are slightly different, in this respect.
• The Contractor must pay all royalties and similar charges in relation to natural
materials obtained outside the Site and for the disposal of materials arising from
demolition, excavation, etc. (Clause 7.8)

Prof. Sarwono Hardjomuljadi

• Once again, the provisions of the MDB contract are different in this respect.
• In general, the Commencement Date must be within 42 days after the
Contractor receives the Letter of Acceptance.
• After receiving the instruction, Contractor must proceed without delay and
must complete the whole of the Works and any Section within the Time for
Completion of the Works or Section. (Clauses 8.1 & 8.2)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Contractor must submit to the Engineer a Programme within 28 days after receiving
the instruction to commence. The Programme is important because:
- it is the basis for monitoring the Contractor’s progress and planning
Employer/Engineer activities and obligations;
- It becomes a base reference for the Engineer’s determination of
Contractor’s claims for extensions of Time for Completion arising from
alleged disruption or delay.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Programme must show:
• order of execution of the Works, dates for Contractor's Documents,
procurement, off-site manufacture and fabrication, delivery, construction,
erection, and testing;
• sequencing of the Works, taking into account the lead time for obtaining
any approvals;
• detail of works performed by Nominated Subcontractors;
• the sequence and timing of inspections and tests;
• that the Works will be completed within the Time for Completion.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Programme is to be detailed (the Specification may require the Programme to
be computer generated using software and showing the critical path).
• It should be accompanied by a supporting report (Method Statement) setting
out how the Contractor intends to execute the Works and the resources he
intends to use.
• Engineer must:
• give notice to the Contractor within 21 days of how the Programme does
not comply with the Contract;
• not give comment on its attainability (he should only acknowledge
receipt).
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Contractor is required to give advance notice or early warning to the Engineer of
potential events which might adversely affect or delay the Works. There is no
similar obligation on the Engineer or Employer.

• This requirement has a far wider application than just in relation to the
programme. The purpose is to enable the Contractor and Engineer to work
together to minimise the effects of the potential delay event. The notice gives
the Engineer the opportunity to take action to overcome the problem before the
Contractor incurs delay or additional cost.

Prof. Sarwono Hardjomuljadi

• Each report must include charts and detailed descriptions of progress,

photographs, details of the manufacture of each major item of Plant &
Materials, records of Contractor’s Personnel, copies of QA documents, etc., lists
of notices given with respect to Employer’s and Contractor’s claims, safety
statistics and comparisons of planned and actual progress with details of
measures to overcome delays.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The submission of the monthly report is a pre-requisite for issue of the Interim
Payment Certificate for the period covered by the report.

• If any of the circumstances listed under Clause 8.4 occurs, the Contractor shall be
entitled to an extension of the Time for Completion, provided that he complies
with the procedures set out under Clause 8.4 and elsewhere in the Contract.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
The causes listed under Clause 8.4 are:
• A Variation or other substantial change in the quantity of an item of Work;
• A cause of delay giving an entitlement under another Sub-clause;
• Exceptionally adverse climatic conditions;
• Unforeseeable shortages of personnel or Goods caused by epidemic or
governmental actions;
• Any delay, impediment or prevention caused by or attributable to the
Employer, the Employer’s Personnel or the Employer’s other contractors on
the Site.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
IPU, AU, ACPE, PE-MASCE (Professional)
COMMENCEMENT, DELAYS AND SUSPENSION Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
If the Contractor is not entitled to an Extension of Time, and the rate of progress of the
Works is:
• too slow to complete the Works within the Time for Completion; or
• the Contractor has fallen (or will fall) behind the current Programme;
the Engineer can instruct the Contractor to submit a revised programme and
supporting report describing the revised methods he proposes to adopt, at his own risk
and cost, to expedite progress and comply within the Time for Completion.

Prof. Sarwono Hardjomuljadi

• The Employer shall not be entitled to the Delay Damages unless he issues a
notice to the Contractor as stated under Clause 2.5 [Employer’s Claims] and
the Engineer has made a determination in this respect (or the Contractor
agrees).

Prof. Sarwono Hardjomuljadi

• In some countries, the Employer is entitled to Delay Damages even if the delay
does not cause him any loss. In others, he must be able to show some loss
before he can claim Delay Damages.

• In some countries, the right to Delay Damages can be lost if a legal procedure
is not followed (rather than a contractual procedure).

Prof. Sarwono Hardjomuljadi

• Otherwise, he will be so entitled and will also be entitled to payment for Plant
and/or Materials that have not yet been delivered to Site, if :
• the suspension in relation to this Plant and/or Materials has lasted more
than 28 days and
• the Contractor has marked the Plant and/or Materials as the Employer’s
property. (Clauses 8.9 & 8.10)

Prof. Sarwono Hardjomuljadi

The Tests on Completion shall be carried out within 14 days after the above-stated
date, on the day or days chosen by the Engineer. In considering the results, the
Engineer must take account of any adverse effect if the Employer was using the
Works. (Clause 9.1)

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
TESTS ON COMPLETION IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• If the Tests on Completion are unduly delayed by the Employer, the Contractor
is entitled in the first place to an extension of time and/or additional payment.
• If the said delay continues for more than 14 days, the Employer shall be
deemed to have Taken Over the Works on the date when the Tests should
have been completed.
• If the Tests on Completion are unduly delayed by the Contractor, the Engineer
may instruct the Contractor to carry out the Tests within 21 days, on dates
fixed by the Contractor.

Prof. Sarwono Hardjomuljadi

• In such a case, the Tests will be deemed to have been carried out in the
presence of the Contractor and the results will be deemed to be accurate.
(Clause 9.2)

• If the Works fail to pass, the Engineer or the Contractor may require the failed
Tests and Tests on Completion of related work, to be repeated. (Clause 9.3)
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
TESTS ON COMPLETION IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
If the Works fail to pass the repeated Tests on Completion, the Engineer may:
• order further retesting;
• issue a Taking-Over Certificate, if the Employer so requests;
• reject the Works if the failure deprives the Employer of substantially the whole
of the benefit of the Works, in which case, the Employer may terminate the
Contract as a whole or in respect of any major part which cannot be put to the
intended use and recover the amounts paid to the Contractor for the rejected
part, together with financing costs and the cost of dismantling. (Clauses 9.4 &
11.4(c))

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
TESTS ON COMPLETION IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Sequence of Tests on Completion
Contractor
gives notice of If Tests successful –
tests start Taking Over
Scheduled Actual procedure
Date for Date of
Tests Tests
>21d >14d If Tests successful
If Tests – start Taking
unsuccessful - Over procedure
Contractor retest
submits as- If delay due to
built drawings Employer,
& O/M Contractor gets If Tests unsuccessful,
manuals EOT. Engineer may:
If delay >14 d, • Order retest;
Works deemed • Issue TOC if
Taken Over Employer requests;
• Reject Works

Prof. Sarwono Hardjomuljadi

• The notice must be given less than 14 days before the Works are expected to be
complete.

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
EMPLOYER’S TAKING OVER; DEFECTS LIABILITY IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• Issuing of the TOC for the whole of the Works is a significant event. The date
indicated in the TOC is the date from which:
- Employer takes responsibility for care & maintenance of the Works;
- Contractor’s obligation to insure the Works ends;
- part of the Retention Money is paid to the Contractor;
- time begins to run for the Contractor’s submission of a Statement at
Completion.
• The date of completion stated in the Certificate is the date from which the
Employer’s entitlement to Delay Damages ends, and the Defects Notification
Period (DNP) starts to run.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
EMPLOYER’S TAKING OVER; DEFECTS LIABILITY IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
Before issuing the TOC, the Engineer must verify that any pre-conditions have
been satisfied:
- statutory requirements affecting Taking Over;
- Contractor has submitted As-Built Drawings (if required) and
Operating/Maintenance Manuals (if any);
- Works have passed Tests on Completion (if any).

Prof. Sarwono Hardjomuljadi

Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
EMPLOYER’S TAKING OVER; DEFECTS LIABILITY IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The part is deemed to be Taken Over on the date at which it was first used and
from such date:
- responsibility for care & maintenance of part is Employer’s;
- the Contractor’s obligation to insure part ends;
- a proportion of the Retention based on the value of the taken-over works
relative to the total value of the Permanent Works Money, is paid to the
Contractor.
• The date of completion stated in the TOC for the part is the date from which the
Employer’s entitlement to Delay Damages is reduced in proportion to the value
of the part of Works.
• The DNP for that part does not start to run until the TOC is issued for all the
Works (or relevant Section). Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
EMPLOYER’S TAKING OVER; DEFECTS LIABILITY IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• The TOC may be:
• a simple letter of certification to the Contractor;
• some Employers have a standard format of certificate.

• In the event that remaining works and/or defects correction are permitted to
be completed during the DNP, a Snagging List of such works and defects
corrections should be referenced in the TOC and appended thereto.

Prof. Sarwono Hardjomuljadi

Issue TOC with Punch List, or

<14d

Give instructions to rectify

items before reapplying.

<28d
If he does none of these, the Works
are deemed to be Taken Over.

Prof. Sarwono Hardjomuljadi

• Instruction should state the time by which the Contractor is to correct

notified defects (statement may affect the Employer’s remedies in the event
of noncompliance).

Prof. Sarwono Hardjomuljadi

- the Employer executing the remedial works outside the Contract, by

himself or by others.

Prof. Sarwono Hardjomuljadi

• If any Section or Plant cannot be used for a certain time period, then the relevant
DNP should be extended by that time period.
Prof. Sarwono Hardjomuljadi
Dr, Ir, MSc (Civ); MH (Law); MCIArb (Arb); MDBF, FIDSK (DB);
EMPLOYER’S TAKING OVER; DEFECTS LIABILITY IPU, AU, ACPE, PE-MASCE (Professional)
Fédération internationale des ingénieurs-Conseils (FIDIC), Board of Director (2019-2023)
Dispute Resolution Board Foundation (DRBF), Director for Asia (2018-2022) and
DRBF Country Representative for Indonesia (2015-2021)
• If the work of rectifying any defects may have affected the performance of the
Works, the Engineer may require a repetition of any test prescribed in the
Contract, within 28 days after remedying of the defect or damage.

• The cost of performing repeated tests shall be borne by the Party liable for the
cost of rectifying the defects. (Clause 11.6)

Prof. Sarwono Hardjomuljadi

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