Fidic conditions of contract presentation

FIDIC
Conditions of Contract for
Construction
PRESENTED BY
PROF. KARIM EL-DASH

1.1 Definitions1
1.1.1 The Contract
• “Contract” means the Contract Agreement, the Letter of
Acceptance, the Letter of Tender, these Conditions, the
Specification, the Drawings, the Schedules, and the further
documents (if any) which are listed in the Contract Agreement or in
the Letter of Acceptance.
1.1.2 Parties and Persons
• “FIDIC” means the Fédération Internationale des Ingénieurs-
Conseils, the international federation of consulting engineers.
1.1.3 Dates, Tests, Periods and Completion
• “Base Date” means the date 28 days prior to the latest date for
submission and Completion of the Tender.

1.1 Definitions2
1.1.4 Money and Payments
• “Cost” means all expenditure reasonably incurred (or to be
incurred) by the Contractor, whether on or off the Site, including
overhead and similar charges, but does not include profit.
1.1.5 Works and Goods
• “Goods” means Contractor’s Equipment, Materials, Plant and
Temporary Works, or any of them as appropriate.

1.2 Interpretation
• The word “tender” is synonymous with “bid”
• The expression “Cost plus profit” require this profit
to be 5% of this Cost unless otherwise indicated.

1.3 Communications
Communications shall be:
(a) in writing and delivered by hand (against receipt), sent by
mail, or transmitted using any of the agreed systems of
electronic transmission as stated in the Contract Data; and
(b) delivered, sent or transmitted to the address for the
recipient’s communications as stated in the Contract Data.
However:
(i) if the recipient gives notice of another address,
communications shall thereafter be delivered accordingly; and
(ii) if the recipient has not stated otherwise when requesting
an approval or consent, it may be sent to the address from
which the request was issued.

1.3 Communications
• Approvals, certificates, consents and determinations shall not
be unreasonably withheld or delayed.
• When a certificate is issued to a Party, the certifier shall send
a copy to the other Party.
• When a notice is issued to a Party, by the other Party or the
Engineer, a copy shall be sent to the Engineer or the other
Party, as the case may be.

1.4 Law and Language
• The Contract shall be governed by the law of the
country or other jurisdiction stated in the Contract
Data.
• The ruling language of the Contract shall be that
stated in the Contract Data.
• The language for communications shall be that
stated in the Contract Data.

1.5 Priority of Documents
1. the Contract Agreement ,
2. the Letter of Acceptance,
3. the Letter of Tender,
4. the Particular Conditions,
5. these General Conditions,
6. the Specification,
7. the Drawings, and
8. the Schedules and any other documents forming part of the
Contract.

1.6 Contract Agreement
• The Parties shall enter into a Contract Agreement
within 28 days after the Contractor receives the
Letter of Acceptance.
• The Contract Agreement shall be based upon the
form annexed to the Particular Conditions.
• The costs of stamp duties and similar charges shall
be borne by the Employer.

1.7 Assignment
• Neither Party shall assign the whole or any part of the
Contract or any benefit or interest in or under the Contract.
• However, either Party:
(a) may assign the whole or any part with the prior agreement
of the other Party, at the sole discretion of such other Party,
and
(b) may, as security in favor of a bank or financial institution,
assign its right to any moneys due, or to become due, under
the Contract.

1.8 Care and Supply of Documents
• The Specification and Drawings shall be in the custody of the
Employer.
• Two copies of the Contract and of each subsequent Drawing
shall be supplied to the Contractor.
• The Contractor shall supply to the Engineer six copies of each
of the Contractor’s Documents.
• The Contractor shall keep, on the Site, a copy of the Contract,
publications named in the Specification, the Contractor’s
Documents, the Drawings and Variations and other
communications given under the Contract.

1.9 Delayed Drawings or Instructions
• The Contractor shall give notice to the Engineer whenever the
Works are likely to be delayed or disrupted.
• If the Contractor suffers delay and/or incurs Cost as a result of
a failure of the Engineer to issue the notified drawing or
instruction within a time, the Contractor shall give a further
notice to the Engineer and shall be entitled subject to Sub-
Clause 20.1 [Contractor’s Claims].

1.10 Employer’s Use of Contractor’s Documents
• The Contractor shall retain the copyright and other
intellectual property rights in the Contractor’s Documents and
other design documents made by the Contractor.
• The Contractor shall be deemed to give to the Employer a
non-terminable transferable non-exclusive royalty-free license
to copy, use and communicate the Contractor’s Documents,
including making and using modifications of them.

1.11 Contractor’s Use of Employer’s Documents
• The Employer shall retain the copyright and other
intellectual property rights in the, and obtain
communication of these documents Specification,
the Drawings and other documents made by the
Employer.
• The Contractor may, at his cost, copy, useor the
purposes of the Contract.

1.12 Confidential Details
• The Contractor shall treat the details of the Contract
as private and confidential, except to the extent
necessary to carry out the Contractor’s obligations
under the Contract or to comply with applicable
Laws.
• However, the Contractor shall be permitted to
disclose any publicly available information, or
information otherwise required to establish his
qualifications to compete for other projects.

1.13 Compliance with Laws
The Contractor shall comply with applicable Laws. Unless otherwise
stated in the Particular Conditions:
(a) the Employer shall have obtained the planning, zoning or similar
permission for the Permanent Works; and the Employer shall
indemnify and hold the Contractor harmless against and from the
consequences of any failure to do so; and
(b) the Contractor shall give all notices, pay all taxes, duties and fees,
and obtain all permits, licenses and approvals, as required by the
Laws in relation to the execution and completion of the Works and
the remedying of any defects; and the Contractor shall indemnify
and hold the Employer harmless against and from the
consequences of any failure to do so.

1.14 Joint and Several Liability
If the Contractor constitutes a joint venture of two or more
persons:
(a) these persons shall be deemed to be jointly and
severally liable to the Employer for the performance of
the Contract;
(b) these persons shall notify the Employer of their leader
who shall have authority to bind the Contractor and each
of these persons; and
(c) the Contractor shall not alter its composition or legal
status without the prior consent of the Employer.

1.15 Inspections and Audit by the Bank
The Contractor shall permit the Bank to inspect the Site
and/or the Contractor's accounts and records
relating to the performance of the Contract and to
have such accounts and records audited by auditors
appointed by the Bank if required by the Bank.

2.1 Right of Access to the Site
• The Employer shall give the Contractor right of access to all
parts of the Site within the time stated in the Contract Data
• The Employer may withhold any such right or possession until
the Performance Security has been received
• If no such time is stated in the Contract Data, the Employer
shall give the Contractor right of access to the Site within such
times as may be required to enable the Contractor to proceed
in accordance with the program

2.2 Permits, Licenses or Approvals
The Employer shall provide reasonable assistance to the
Contractor at the request of the Contractor:
(a) by obtaining copies of the Laws of the Country which
are relevant to the Contract but are not readily available,
and
(b) for the Contractor’s applications for any permits,
licenses or approvals required by the Laws of the
Country:
(i) which the Contractor is required to obtain
(ii) for the delivery of Goods, and
(iii) for the export of Contractor’s Equipment

2.3 Employer’s Personnel
The Employer shall be responsible for ensuring that the
Employer’s Personnel and the Employer’s other
contractors on the Site:
(a) co-operate with the Contractor’s efforts and
(b) take actions similar to those which the Contractor is
required for Safety Procedures and Protection of the
Environment.

2.4 Employer’s Financial Arrangements
• The Employer shall submit, within 28 days after receiving
request from the Contractor, evidence that financial
arrangements have been made.
• Before the Employer makes any change to his financial
arrangements, the Employer shall give notice to the
Contractor with detailed particulars.
• If the Bank has suspended disbursements, the Employer shall
give notice of suspension to the Contractor with detailed
particulars, with a copy to the Engineer, within 7 days .
• If alternative funds will be available to continue making
payments to the Contractor beyond a date 60 days after the
date of Bank, the Employer shall provide evidence of the
extent to which such funds will be available.

2.5 Employer’s Claims
• If the Employer considers himself to be entitled to any
payment, and/or to any extension of the Defects
Notification Period, the Employer or the Engineer shall
give notice to the Contractor.
• The notice shall be given as soon as practicable after the
Employer became aware of the event. A notice relating
to any extension of the Defects Notification Period shall
be given before the expiry of such period.
• The particulars shall specify the basis of the claim, and
shall include substantiation of the amount and/or
extension.

3.1 Engineer’s Duties and Authority
• The Engineer shall have no authority to amend the Contract.
• The Engineer may exercise the authority attributable to the
Engineer as specified in or necessarily to be implied from the
Contract.
• Except as otherwise stated in these Conditions:
(a) whenever carrying out duties or exercising authority,
specified in or implied by the Contract, the Engineer shall be
deemed to act for the Employer
(b) the Engineer has no authority to relieve either Party of
any duties, obligations or responsibilities under the Contract

3.2 Delegation by the Engineer
• The Engineer may from time to time assign duties and delegate authority
to assistants.
• The assignment, delegation or revocation shall be in writing and shall not
take effect until copies have been received by both Parties.
• The Engineer shall not delegate the authority to determine
“Determinations”.
• Each assistant shall only be authorized to issue instructions to the
Contractor to the extent defined by the delegation.
• However:
(a) any failure to disapprove any work shall not prejudice the right of the
Engineer to reject the work;
(b) if the Contractor questions any determination of an assistant, the
Contractor may refer the matter to the Engineer.

3.3 Instructions of the Engineer
• Whenever practicable, the instructions shall be given in
writing.
• If the Engineer or a delegated assistant:
(a) gives an oral instruction,
(b) receives a written confirmation of the instruction, from
the Contractor, within two working days after giving the
instruction, and
(c) does not reply by issuing a written rejection and/or
instruction within two working days after receiving the
confirmation,
then the confirmation shall constitute the written instruction of
the Engineer or delegated assistant.

3.4 Replacement of the Engineer
• If the Employer intends to replace the Engineer, the
Employer shall, not less than 21 (42) days before the
intended date of replacement, give notice to the
Contractor.
• If the Contractor considers the intended replacement
Engineer to be unsuitable, he has the right to raise
reasonable objection against him by notice to the
Employer.

3.5 Determinations
• Whenever these Conditions provide that the
Engineer shall proceed to determine any matter, the
Engineer shall consult with each Party in an
endeavor to reach agreement.
• The Engineer shall make a fair determination in
accordance with the Contract.
• The Engineer shall give notice to both Parties of each
determination with supporting particulars.

4.1 Contractor’s General Obligations
1
• The Contractor shall design, execute and complete
the Works in accordance with the Contract and with
the Engineer’s instructions.
• The Contractor shall provide Goods, consumables
and other things and services, whether of a
temporary or permanent nature, required for this
design, execution, completion and remedying of
defects.

2
• The Contractor shall be responsible for the adequacy, stability and
safety of all Site operations.
• Except to the extent specified in the Contract, the Contractor;
(i) shall be responsible for all Contractor’s Documents, Temporary
Works, and such design of each item of Plant and Materials, and
(ii) shall not otherwise be responsible for the design or
specification of the Permanent Works.
• The Contractor shall submit details of the arrangements which the
Contractor proposes to adopt for the execution of the Works.

3
If the Contract specifies that the Contractor shall design any part of the
Permanent Works, then:
(a) the Contractor shall submit to the Engineer the Contractor’s Documents
for this part;
(b) these Contractor’s Documents shall be written in the language for
communications defined in [Law and Language]
(c) the Contractor shall be responsible for this part and it shall be fit for such
purposes for which the part is intended as are specified in the Contract;
and
(d) prior to the commencement of the Tests on Completion, the Contractor
shall submit to the Engineer the “as-built” documents and operation and
maintenance manuals.

4.2 Performance Security
1
• The Contractor shall obtain a Performance Security for proper
performance, in the form, amount and currencies stated in the
Contract Data. If an amount is not stated in the Contract Data, this
Sub-Clause shall not apply.
• The Contractor shall deliver the Performance Security to the
Employer within 28 days after receiving the Letter of Acceptance,
and shall send a copy to the Engineer.
• The Contractor shall ensure that the Performance Security is valid
until the Contractor has completed the Works.
• If the terms of the Performance Security specify its expiry date, and
the Contractor has not become entitled to receive the Performance
Certificate by the date 28 days prior to the expiry date, the
Contractor shall extend the validity of the Performance Security
until the Works have been completed and any defects have been
remedied.

4.2 Performance Security
2
• The Employer shall indemnify and hold the Contractor
harmless against and from all damages, losses and expenses
from a claim under the Performance Security to the extent to
which the Employer was not entitled to make the claim.
• The Employer shall return the Performance Security to the
Contractor within 21 days after receiving a copy of the
Performance Certificate.
• Whenever the Engineer determines an addition or a reduction
more than 25 percent of the portion of the Contract Price, the
Contractor shall at the Engineer’s request promptly increase,
or may decrease value of the Performance Security.

4.3 Contractor’s Representative
• Unless the Contractor’s Representative is named in the Contract, the
Contractor shall submit to the Engineer for consent the name and
particulars of the person the Contractor proposes to appoint as
Contractor’s Representative.
• If consent is withheld or subsequently revoked, or if the appointed person
fails to act as Contractor’s Representative, the Contractor shall similarly
submit the name and particulars of another suitable person for such
appointment.
• If the Contractor’s Representative is to be temporarily absent from
the Site during the execution of the Works, a suitable replacement
person shall be appointed, subject to the Engineer’s prior consent.

4.3 Contractor’s Representative
• The Contractor’s Representative shall receive instructions of
the engineer.
• The Contractor’s Representative may delegate any powers,
functions and authority to any competent person.
• Any delegation shall not take effect until the Engineer has
received prior notice signed by the Contractor’s
Representative.
• The Contractor’s Representative shall be fluent in the
language for communications. Otherwise, the Contractor
shall make competent interpreters available.

4.4 Subcontractors
• The Contractor shall not subcontract the whole of the Works.
• The Contractor shall be responsible for the acts or defaults of any
Subcontractor, his agents or employees, as if they were the acts or
defaults of the Contractor:
(a) the Contractor shall not be required to obtain consent to suppliers
solely of Materials, or to a subcontract for which the Subcontractor is
named in the Contract;
(b) the prior consent of the Engineer shall be obtained to other proposed
Subcontractors;
(c) the Contractor shall give the Engineer 28 days’ notice of the intended
date of the commencement of each Subcontractor’s work; and
(d) each subcontract shall include provisions which would entitle the
Employer to require the subcontract to be assigned to the Employer.

4.5 Assignment of Benefit of Subcontract
If a Subcontractor’s obligations extend beyond the
expiry date of the relevant “Defects Notification
Period” and the Engineer, prior to this date, instructs
the Contractor to assign the benefit of such
obligations to the Employer, then the Contractor
shall do so.

4.6 Co-operation
• The Contractor shall allow appropriate opportunities for carrying
out work to:
(a) the Employer’s Personnel,
(b) any other contractors employed by the Employer, and
(c) the personnel of any legally constituted public authorities.
• Any such instruction shall constitute a Variation if and to the
extent that it causes the Contractor to incur Unforeseeable Cost.
• Services for these personnel and other contractors may include
the use of Contractor’s Equipment, Temporary Works or access
arrangements which are the responsibility of the Contractor.

4.7 Setting Out
• The Contractor shall set out the Works in relation to original points,
lines and levels of reference specified in the Contract or notified by
the Engineer.
• The Employer shall be responsible for any errors in these specified
or notified items of reference, but the Contractor shall use
reasonable efforts to verify their accuracy before they are used.
• If the Contractor suffers delay and/or incurs Cost from executing
work which was necessitated by an error in these items of
reference, and an experienced contractor could not reasonably
have discovered such error and avoided this delay and/or Cost, the
Contractor shall give notice to the Engineer and shall be entitled to:
(a) an extension of time for any such delay, and
(b) payment of any such Cost plus profit.

4.8 Safety Procedures
The Contractor shall:
(a) comply with safety regulations,
(b) take care for the safety of all persons on the Site,
(c) keep the Site and Works clear of unnecessary obstruction,
(d) provide fencing, lighting, guarding and watching of the Works,
and
(e) provide any Temporary Works which may be necessary for the
use and protection of the public and of owners and occupiers of
adjacent land.

4.9 Quality Assurance
• The Contractor shall institute a quality assurance system to
demonstrate compliance with the requirements of the Contract.
• The Engineer shall be entitled to audit any aspect of the system.
• Details of all procedures and compliance documents shall be
submitted to the Engineer for information before each design
and execution stage is commenced.
• When any document of a technical nature is issued to the
Engineer, evidence of the prior approval by the Contractor
himself shall be apparent on the document itself.

4.10 Site Data
• The Employer shall have made available to the Contractor for his
information, prior to the Base Date, all relevant data in the Employer’s
possession on sub-surface and hydrological conditions at the Site,
including environmental aspects.
• To the extent which was practicable, the Contractor shall be deemed to
have obtained all necessary information which may influence or affect the
Tender or Works including:
(a) the form and nature of the Site, including sub-surface conditions,
(b) the hydrological and climatic conditions,
(c) the extent and nature of the work and Goods necessary for completion of
the Works,
(d) the Laws, procedures and labor practices of the Country, and
(e) the Contractor’s requirements .

4.11 Sufficiency of the Accepted Contract Amount
The Contractor shall be deemed to:
(a) have satisfied himself as to the correctness and sufficiency of
the “Accepted Contract Amount”, and
(b) have based the “Accepted Contract Amount” on the data,
interpretations, necessary information, inspections,
examinations and satisfaction as to all relevant matters.
• Unless otherwise stated in the Contract, the “Accepted
Contract Amount” covers all the Contractor’s obligations
under the Contract.

4.12 Unforeseeable Physical Conditions
1
• “Physical conditions” means natural conditions and manmade
and other obstructions and pollutants, which the Contractor
encounters at the Site when executing the Works, including
sub-surface and hydrological conditions but excluding
climatic conditions.
• If the Contractor encounters adverse physical conditions
which he considers to have been Unforeseeable, the
Contractor shall give notice to the Engineer as soon as
practicable.

4.12 Unforeseeable Physical Conditions
2
• However, before additional Cost is finally agreed or
determined, the Engineer may also review whether other
physical conditions in similar parts of the Works were more
favorable than could reasonably have been foreseen when
the Contractor submitted the Tender.
• However, the net effect of all adjustments shall not result in a
net reduction in the Contract Price.
• The Engineer may take account of any evidence of the
physical conditions foreseen by the Contractor when
submitting the Tender, but shall not be bound by any such
evidence.

4.13 Rights of Way and Facilities
• The Contractor shall bear all costs and charges for
special and/or temporary rights-of-way which he
may require.
• The Contractor shall also obtain any additional
facilities outside the Site which he may require for
the purposes of the Works.

4.14 Avoidance of Interference
• The Contractor shall not interfere with:
(a) the convenience of the public, or
(b) the access to and use and occupation of all roads
and footpaths.
• The Contractor shall indemnify and hold the
Employer harmless against and from all damages,
losses and expenses resulting from any such
unnecessary or improper interference.

4.15 Access Route
(a) the Contractor shall be responsible for any maintenance required
for his use of access routes;
(b) the Contractor shall provide all necessary signs or directions along
access routes, and shall obtain any permission which may be
required;
(c) the Employer shall not be responsible for any claims which may
arise from the use or otherwise of any access route;
(d) the Employer does not guarantee the suitability or availability of
particular access routes; and
(e) Costs due to non-suitability or non-availability, for the use required
by the Contractor, of access routes shall be borne by the Contractor.

4.16 Transport of Goods
(a) the Contractor shall give the Engineer not less than 21
days’ notice of the date on which any major item will be
delivered to the Site;
(b) the Contractor shall be responsible for packing,
loading, transporting, receiving, unloading,
storing and protecting all Goods required for the
Works; and
(c) the Contractor shall indemnify and hold the Employer
harmless against and from all damages, losses and
expenses resulting from the transport of Goods.

4.17 Contractor’s Equipment
• The Contractor shall be responsible for all Contractor’s
Equipment.
• When brought on to the Site, Contractor’s Equipment shall
be deemed to be exclusively intended for the execution of
the Works.
• The Contractor shall not remove from the Site any major
items of Contractor’s Equipment without the consent of
the Engineer.
• However, consent shall not be required for vehicles
transporting Goods or Contractor’s Personnel off Site.

4.18 Protection of the Environment
• The Contractor shall take all reasonable steps to
protect the environment and to limit damage and
nuisance to people and property.
• The Contractor shall ensure that emissions, surface
discharges and effluent from the Contractor’s
activities shall not exceed the values prescribed by
applicable Laws.

4.19 Electricity, Water and Gas
• The Contractor shall be responsible for the provision of
all power, water and other services he may require.
• The Contractor shall provide any apparatus necessary for
his use of these services and for measuring the quantities
consumed.
• The quantities consumed and the amounts due for such
services shall be agreed or determined by the Engineer.
• The Contractor shall pay these amounts to the Employer.

4.20 Employer’s Equipment and Free-Issue Material
1
• The Employer shall make the Employer’s Equipment available for the
Contractor in accordance with the arrangements in the Specification:
(a) the Employer shall be responsible for the Employer’s Equipment,
(b) the Contractor shall be responsible for Employer’s Equipment whilst the
Contractor’s Personnel is operating, driving, or directing it or in
possession or control of it.
• The appropriate quantities and the amounts due for the use of Employer’s
Equipment shall be agreed or determined by the Engineer.
• The Contractor shall pay these amounts to the Employer.

4.20 Employer’s Equipment and Free-Issue Material
2
• The Employer shall supply, free of charge, the “free-issue
materials” in accordance with the Specification.
• The Employer shall provide these materials at the time and
place specified in the Contract.
• The Contractor shall then visually inspect them.
• After this visual inspection, the “free-issue materials” shall
come under the care, custody and control of the Contractor.
• The Contractor’s obligations of inspection, care, custody and
control shall not relieve the Employer of liability for any
shortage, defect or default not apparent from a visual
inspection.

4.21 Progress Reports
1
• Monthly progress reports shall be prepared by the Contractor
and submitted to the Engineer in six copies.
• The first report shall cover the period up to the end of the
first calendar month following the Commencement Date.
• Reports shall be submitted monthly thereafter, each within 7
days after the last day of the period to which it relates.
• Reporting shall continue until the Contractor has completed
all work which is known to be outstanding at the completion
date stated in the Taking-Over Certificate for the Works.

2
• Each report shall include:
(a) charts and detailed descriptions of progress, including each stage of
design, Contractor’s Documents, procurement, manufacture, delivery
to Site, construction, erection and testing,
(b) photographs showing the status of manufacture and of progress on
the Site;
(c) for the manufacture of main item, the name of the manufacturer,
manufacture location, percentage progress, and the actual or
expected dates of:
(i) commencement of manufacture,
(ii) Contractor’s inspections,
(iii) tests, and
(iv) shipment and arrival at the Site;

3
• Each report shall include:
(d) the details of Contractor’s Personnel and Equipment;
(e) copies of quality assurance documents, test results and
certificates of Materials;
(f) list of notices of “Employer’s Claims” and “Contractor’s
Claims”;
(g) safety statistics, including details of any hazardous incidents
and activities relating to environmental aspects and public
relations; and
(h) comparisons of actual and planned progress, with details of
any events or circumstances which may jeopardize the
completion.

4.22 Security of the Site
(a) the Contractor shall be responsible for keeping
unauthorized persons off the Site, and
(b) authorized persons shall be limited to the
contractor’s Personnel and the Employer’s Personnel;
and to any other personnel notified to the
Contractor, by the Employer or the Engineer, as
authorized personnel of the Employer’s other
contractors on the Site.

4.23 Contractor’s Operations on Site
• The Contractor shall confine his operations to the Site,
and to any additional areas which may be obtained by
the Contractor and agreed by the Engineer.
• The Contractor shall keep the Site free from unnecessary
obstruction.
• Upon the issue of a “Taking-Over Certificate”, the
Contractor shall clear away from that part of the Site.
• However, the Contractor may retain on Site, during the
“Defects Notification Period”, such Goods as are
required.

4.24 Fossils
• All fossils, coins, articles of value or antiquity, and structures
and other remains or items of geological or archaeological
interest found on the Site shall be placed under the care and
authority of the Employer.
• The Contractor shall take reasonable precautions to prevent
Contractor’s Personnel or other persons from removing or
damaging any of these findings.
• If the Contractor suffers delay and/or incurs Cost from
complying with the instructions, the Contractor shall give a
further notice to the Engineer and shall be subject to
“Contractor’s Claims”

5.1 Definition of “Nominated Subcontractor”
“Nominated Subcontractor” means a Subcontractor:
(a) who is stated in the Contract as being a
nominated Subcontractor, or
(b) whom the Engineer, instructs the Contractor to
employ as a Subcontractor.

5.2 Objection to Nomination
• The Contractor shall not be under any obligation to employ a
nominated Subcontractor against whom the Contractor raises
reasonable objection.
• Unless the Employer agrees to indemnify the Contractor against
and from the consequences of the matter:
(a) believe that the Subcontractor does not have sufficient
competence, resources or financial strength;
(b) the subcontract does not specify that the nominated Subcontractor
shall indemnify the Contractor; or
(c) the subcontract does not specify that the nominated Subcontractor
shall:
(i) enable the Contractor to discharge his obligations and liabilities
under the Contract, and
(ii) indemnify the Contractor against and from all obligations and
liabilities.

5.3 Payments to nominated Subcontractors
• The Contractor shall pay to the nominated
Subcontractor the amounts which the Engineer
certifies to be due in accordance with the
subcontract.

5.4 Evidence of Payments
• Before issuing a Payment Certificate, the Engineer may
request the Contractor to supply evidence that the
Subcontractor has received all amounts due.
• Unless the Contractor:
(i) satisfies the Engineer in writing that the Contractor is
reasonably entitled to withhold or refuse to pay these
amounts, and
(ii) Submits evidence that the Subcontractor has been notified
of the Contractor’s entitlement, then the Employer may pay,
direct to the nominated Subcontractor, part or all of such
amounts previously certified.

6.1 Engagement of Staff and Labor
• The Contractor shall make arrangements for the
engagement of all staff and labor and for their
payment, housing, feeding and transport.
• The Contractor is encouraged to employ staff and
labor with appropriate qualifications and experience
from sources within the Country.

6.2 Rates of Wages and Conditions of Labor
• The Contractor shall pay rates of wages, and observe
conditions of labor, which are not lower than those
established for the trade or industry.
• The Contractor shall inform the Contractor’s
Personnel about their liability to pay personal income
taxes and the Contractor shall perform such duties in
regard to such deductions thereof as may be
imposed on him by such Laws.

6.3 Persons in the Service of Employer
• The Contractor shall not recruit, or attempt to
recruit, staff and labor from amongst the Employer’s
Personnel.

6.4 Labor Laws
• The Contractor shall comply with all the relevant
labor Laws applicable to the Contractor’s Personnel.
• The Contractor shall require his employees to obey
all applicable Laws.

6.5 Working Hours
• No work shall be carried out on the Site on locally
recognized days of rest, or outside the normal
working hours stated in the Contract Data, unless:
(a) otherwise stated in the Contract,
(b) the Engineer gives consent, or
(c) the work is necessary in which case the Contractor
shall immediately advise the Engineer.

6.6 Facilities for Staff and Labor
• The Contractor shall provide and maintain all
necessary accommodation and welfare facilities for
the Contractor’s Personnel.
• The Contractor shall also provide facilities for the
Employer’s Personnel as stated in the Specification.
• The Contractor shall not permit any of the
Contractor’s Personnel to maintain any temporary or
permanent living quarters within the structures
forming part of the Permanent Works.

6.7 Health and Safety
1
• The Contractor shall take precautions to maintain the
health and safety of the Contractor’s Personnel.
• The Contractor shall ensure that medical staff, first aid
facilities, sick bay and ambulance service are available at
the Site and at any accommodation for Contractor’s and
Employer’s Personnel.
• The Contractor shall appoint an accident prevention
officer at the Site, responsible for maintaining safety and
protection against accidents.
• This person shall have the authority to issue instructions
and take protective measures to prevent accidents.

2
• The Contractor shall send, to the Engineer, details of
any accident as soon as practicable after its
occurrence.
• The Contractor shall maintain records and make
reports concerning health, safety and welfare of
persons, and damage to property.
• The Contractor shall conduct an HIV-AIDS awareness
program via an approved service provider, and shall
undertake such other measures as are specified in
this Contract.

3
The Contractor shall:
(i) conduct Information, Education and Consultation Communication
(IEC) campaigns, at least every other month, addressed to all the
Site staff and labor and to the immediate local communities,
concerning the risks, dangers and impact of, and appropriate
avoidance behavior with respect to, Sexually Transmitted
Diseases (STD)-or Sexually Transmitted Infections (STI) in general
and HIV/AIDS in particular;
(ii) provide male or female condoms for all Site staff and labor as
appropriate; and
(iii) provide for STI and HIV/AIDS screening, diagnosis, counseling and
referral to a dedicated national STI and HIV/AIDS program.

4
• The Contractor shall include in the program to be
submitted for the execution of the Works an
alleviation program for Site staff and labor and their
families in respect of STI and STD including HIV/AIDS.
• The program shall include provision of a detailed cost
estimate with supporting documentation. Payment
to the Contractor for preparation and
implementation this program shall not exceed the
Provisional Sum dedicated for this purpose.

6.8 Contractor’s Superintendence
• The Contractor shall provide all necessary
superintendence to plan, arrange, direct, manage,
inspect and test the work.
• Superintendence shall be given by a sufficient
number of persons having adequate knowledge of
the language for communications and of the
operations to be carried out.

6.9 Contractor’s Personnel
• The Contractor’s Personnel shall be appropriately qualified,
skilled and experienced in their respective trades.
• The Engineer may require the Contractor to remove any
person employed on the Site or Works, including the
Contractor’s Representative if applicable, who:
(a) persists in any misconduct or lack of care,
(b) carries out duties incompetently or negligently,
(c) fails to conform with any provisions of the Contract, or
(d) persists in any conduct which is prejudicial to safety,
health, or the protection of the environment.

6.10 Records of Contractor’s Personnel and
Equipment
• The Contractor shall submit, to the Engineer, details
showing the number of each class of Contractor’s
Personnel and of each type of Contractor’s
Equipment on the Site.
• Details shall be submitted each calendar month, in a
form approved by the Engineer.

6.11 Disorderly Conduct
• The Contractor shall prevent any unlawful, riotous or
disorderly conduct by the Contractor’s Personnel,
and to preserve peace and protection of persons and
property on and near the Site.

6.12 Foreign Personnel
• The Contractor may bring in to the country any foreign
personnel.
• Ensure that these personnel are provided with the visas and
work permits.
• The Employer will use his best endeavors in a timely manner
to assist the Contractor in obtaining any local permission
required.
• The Contractor shall be responsible for the return of these
personnel to their domicile.
• In the event of the death of any of these personnel or
members of their families, the Contractor shall be responsible
for making the arrangements for their return or burial.

6.13 Supply of Foodstuffs
• The Contractor shall arrange for the provision of a
sufficient supply of suitable food.

6.14 Supply of Water
• The Contractor shall provide on the Site an adequate
supply of drinking and other water for the use of the
Contractor’s Personnel.

6.15 Measures against Insect and Pest Nuisance
• The Contractor shall protect the Contractor’s
Personnel employed on the Site from insect and pest
nuisance, and to reduce their danger to health.

6.16 Alcoholic Liquor or Drugs
• The Contractor shall not, otherwise than in
accordance with the Laws of the Country, import,
sell, give, barter or otherwise dispose of any
alcoholic liquor or drugs, or permit or allow
importation, sale, gift, barter or disposal thereto by
Contractor’s Personnel.

6.17 Arms and Ammunition
• The Contractor shall not give, barter, or otherwise
dispose of any arms or ammunition of any kind, or
allow Contractor’s Personnel to do so.

6.18 Festivals and Religious Customs
• The Contractor shall respect the Country’s
recognized festivals, days of rest and religious or
other customs.

6.19 Funeral Arrangements
• The Contractor shall be responsible for making any
funeral arrangements for any of his local employees
who may die while engaged upon the Works.

6.20 Prohibition of Forced or Compulsory Labor
• The contractor shall not employ “forced or
compulsory labor” in any form.

6.21 Prohibition of Harmful Child Labor
• The Contractor shall not employ any child to perform
any work that is economically exploitative, or is likely
to be hazardous to, or to interfere with, the child’s
education, or to be harmful to the child’s health or
physical, mental, spiritual, moral, or social
development.

6.22 Employment Records of Workers
• The Contractor shall keep complete records of the
employment.
• The records shall include the names, ages, genders,
hours worked and wages paid to all workers.
• These records shall be summarized on a monthly
basis.

7. PLANT, MATERIALS AND WORKMANSHIP

7.1 Manner of Execution
• The Contractor shall carry out the manufacture of
Plant, the production and manufacture of Materials,
and all other execution of the Works:
(a) in the manner specified in the Contract,
(b) in a proper workmanlike and careful manner, and
(c) with properly equipped facilities and non-hazardous
Materials.

7.2 Samples
• The Contractor shall submit the following samples of
Materials to the Engineer for consent:
(a) manufacturer’s standard samples of Materials and
samples specified in the Contract, and
(b) additional samples instructed by the Engineer as a
Variation.

7.3 Inspection
• The Employer’s Personnel shall at all reasonable times:
(a) have full access to all parts of the Site and to all places from which
natural Materials are being obtained, and
(b) during production, manufacture and construction, 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.
• The Contractor shall give notice to the Engineer whenever any work is
ready and before it is covered up, put out of sight, or packaged for
storage or transport.
• If the Contractor fails to give the notice, he shall, if and when required by
the Engineer, uncover the work and thereafter reinstate and make
good, all at the Contractor’s cost.

7.4 Testing
1
• The Contractor shall provide all apparatus, assistance,
documents and other information, electricity,
equipment, fuel, consumables, instruments, labor,
materials, and suitably qualified and experienced
staff, as are necessary to carry out the specified tests
efficiently.
• The Contractor shall agree, with the Engineer, the
time and place for the specified testing of any Plant,
Materials and other parts of the Works.

7.4 Testing
2
• 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
tested Plant, Materials or workmanship is not in
accordance with the Contract, the cost of carrying out
this Variation shall be borne by the Contractor.
• The Engineer shall give the Contractor not less than
24 hours’ notice of the Engineer’s intention to attend
the tests.

7.4 Testing
3
• If the Engineer does not attend at the time and place
agreed, the Contractor may proceed with the tests.
• If the Contractor suffers delay and/or incurs Cost from
complying with these instructions or as a result of a
delay for which the Employer is responsible, the
Contractor shall give notice to the Engineer and shall
be entitled to Contractor’s Claims.

7.5 Rejection
• If any Plant, Materials or workmanship is found to be
defective, the Engineer may reject it by giving notice
to the Contractor, with reasons.
• If the Engineer requires this Plant, Materials or
workmanship to be retested, the tests shall be
repeated under the same terms and conditions.
• If the rejection and retesting cause the Employer to
incur additional costs, the Contractor shall subject to
“Employer’s Claims”.

7.6 Remedial Work
1
Not withstanding any previous test or certification,
the Engineer may instruct the Contractor to:
(a) remove from the Site and replace any Plant or
Materials which is not in accordance with the
Contract,
(b) remove and re-execute any other work which is not
in accordance with the Contract, and
(c) execute any work which is urgently required for the
safety of the Works, whether because of an accident,
unforeseeable event or otherwise.

7.6 Remedial Work
2
• If the Contractor fails to comply with the instruction,
the Employer shall be entitled to employ and pay
other persons to carry out the work.
• Except to the extent that the Contractor would have
been entitled to payment for the work, the
Contractor shall subject to “Employer’s Claims”.

7.7 Ownership of Plant and Materials
• Each item of Plant and Materials shall become the
property of the Employer at whichever is the earlier
of the following times, free from liens and other
encumbrances:
(a) when it is delivered to the Site;
(b) when the Contractor is entitled to payment of the
its value.

7.8 Royalties
The Contractor shall pay all royalties, rents and other
payments for:
(a) natural Materials obtained from outside the Site,
and
(b) the disposal of material from demolitions and
excavations and of other surplus material.

8. COMMENCEMENT, DELAYS AND SUSPENSION

8.1 Commencement of Works
• The Engineer shall give the Contractor not less than 7
days’ notice of the Commencement Date.
• The Commencement Date shall be within 42 days
after the Contractor receives the Letter of
Acceptance.

8.2 Time for Completion
• The Contractor shall complete the whole of the
Works within the Time for Completion for the Works
including:
(a) Achieving the Tests on Completion, and
(b) completing all work which is stated in the Contract
as being required for the Works for “Taking Over”

8.3 Program
1
• Submit a detailed time program within 28 days after
receiving the notice of “Commencement of Works”.
• Submit a revised program whenever the previous
program is inconsistent with actual progress.

8.3 Program
2
• Each program shall include:
(a) the order in which the Contractor intends to carry out the
Works, including the anticipated timing of each stage of
design, Contractor’s Documents, procurement, manufacture
of Plant, delivery to Site, construction, erection and testing,
(b) each of these stages for work by each nominated
Subcontractor,
(c) the sequence and timing of inspections and tests, and
(d) a supporting report which includes:
(i) a general description of the methods to adopt in the
execution of the Works, and
(ii) details showing the Contractor’s estimate of Contractor’s
Personnel

8.3 Program
3
• Unless the Engineer, within 21 days after receiving a
program, gives notice to the Contractor stating the
extent to which it does not comply with the Contract,
the Contractor shall proceed in accordance with the
program.
• The Contractor shall promptly give notice to the
Engineer of specific probable future events or
circumstances which may adversely affect the work.
• If the Engineer gives notice to the Contractor that a
program fails to comply with the Contract, the
Contractor shall submit a revised program

8.4 Extension of Time for Completion
• The Contractor shall be entitled subject to an extension
of the Time for Completion if any of the following causes:
(a) a Variation in the quantity of an item of work included
in the Contract,
(b) a cause of delay giving an entitlement to extension of
time,
(c) exceptionally adverse climatic conditions,
(d) Unforeseeable shortages of personnel or Goods
caused by epidemic or governmental actions, or
(e) any delay, impediment caused by the Employer’s
Personnel, or the Employer’s other contractors.

8.5 Delays Caused by Authorities
• If the following conditions apply, namely:
(a) the Contractor has diligently followed the
procedures laid down by the relevant legally
constituted public authorities in the Country,
(b) these authorities delay or disrupt the Contractor’s
work, and
(c) the delay or disruption was Unforeseeable

8.6 Rate of Progress
• If, at any time:
(a) actual progress is too slow, and/or
(b) progress has fallen (or will fall) behind the current
program ,
• then the Engineer may instruct the Contractor to submit
a revised program.
• Unless the Engineer notifies otherwise, the Contractor
shall adopt these revised methods at the risk and cost
of the Contractor.
• If these revised methods cause the Employer to incur
additional costs, the Contractor shall pay these costs to
the Employer.

8.7 Delay Damages
• If the Contractor fails to comply with “Time for
Completion”, the Contractor shall pay delay damages
to the Employer for this default.
• The total amount due shall not exceed the maximum
amount of delay damages stated in the Contract.
• These damages shall not relieve the Contractor from
his obligation to complete the Works.

8.8 Suspension of Work
• The Engineer may at any time instruct the
Contractor to suspend progress of part or all of the
Works.
• During such suspension, the Contractor shall protect,
store and secure such part.
• The Engineer may also notify the cause for the
suspension.
• If and to the extent that the cause is notified and is
the responsibility of the Contractor, the following
Sub- Clauses 8.9, 8.10 and 8.11 shall not apply.

8.9 Consequences of Suspension
• If the Contractor suffers delay and/or incurs Cost
from complying with the Engineer’s instructions due
to “Suspension of Work”, the contractor shall be
entitled to “Contractor’s Claims”:
• The Contractor shall not be entitled to an extension
of time for, or to payment of the Cost incurred in,
making good the consequences of the Contractor’s
faulty design, workmanship or materials, or of the
Contractor’s failure to protect, store or secure work.

8.10 Payment for Plant and Materials in Event
of Suspension
• The Contractor shall be entitled to payment, if:
(a) the work on Plant or delivery of Plant and/or
Materials has been suspended for more than 28
days, and
(b) the Contractor has marked the Plant and/or
Materials as the Employer’s property in accordance
with the Engineer’s instructions.

8.11 Prolonged Suspension
• If the suspension has continued for more than 84
days, the Contractor may request the Engineer’s
permission to proceed.
• If the Engineer does not give permission within 28
days after being requested to do so, the Contractor
may, by giving notice to the Engineer, treat the
suspension as an omission of the affected part of the
Works.
• If the suspension affects the whole of the Works, the
Contractor may give notice of termination.

8.12 Resumption of Work
• After the permission to proceed is given, the
Contractor and the Engineer shall jointly examine
the Works and the Plant and Materials affected by
the suspension.
• The Contractor shall make good any deterioration or
defect in or loss of the Works or Plant or Materials,
which has occurred during the suspension.

9.1 Contractor’s Obligations
• The Contractor shall carry out the Tests on
Completion.
• The Contractor shall give to the Engineer not less
than 21 days’ notice of the date after which the
Contractor will be ready to carry out each of the
Tests on Completion.
• Unless otherwise agreed, Tests on Completion shall
be carried out within 14 days after this date, on such
day or days as the Engineer shall instruct.

9.2 Delayed Tests
• If the Tests on Completion are being unduly delayed
by the Employer , “Interference with Tests on
Completion” shall be applicable.
• If the Tests on Completion are being unduly delayed
by the Contractor, the Engineer may by notice
require the Contractor to carry out the Tests within
21 days after receiving the notice.
• If the Contractor fails to carry out the Tests on
Completion within the period of 21 days, the
Employer’s Personnel may proceed with the Tests at
the risk and cost of the Contractor.

9.3 Retesting
• If the Works, or a Section, fail to pass the Tests on
Completion, the Engineer or the Contractor may
require the failed Tests to be repeated under the
same terms and conditions.

9.4 Failure to Pass Tests on Completion
• If the Works fail to pass the Tests on Completion repeated, the
Engineer shall be entitled to:
(a) order further repetition of Tests on Completion;
(b) reject the Works, or
(c) issue a “Taking-Over Certificate”.
• The Contract Price shall be reduced by such amount as shall
be appropriate to cover the reduced value to the Employer as
a result of this failure.
• Unless the relevant reduction for this failure is stated in the
Contract, the Employer may require the reduction to be:
(i) agreed by both Parties and paid before this “Taking-Over
Certificate” is issued, or
(ii) determined and paid under “Employer’s Claims” and
“Determinations”.

10.1 Taking Over of the Works and Sections
1
• The Works shall be taken over by the Employer
when:
(i) the Works have been completed in accordance with
the Contract, and
(ii) a Taking-Over Certificate for the Works has been
issued.
• The Contractor may apply for a Taking-Over
Certificate not earlier than 14 days before the Works
will be complete.

10.1 Taking Over of the Works and Sections
2
• The Engineer shall, within 28 days after receiving the
Contractor’s application:
(a) issue the Taking-Over Certificate to the Contractor,
or
(b) reject the application. The Contractor shall then
complete this work before issuing a further notice
under this Sub-Clause.
• If the Engineer fails either to issue the Taking-Over
Certificate or to reject the Contractor’s application
within the period of 28 days, the Taking-Over
Certificate shall be deemed to have been issued on
the last day of that period.

10.2 Taking Over of Parts of the Works
1
• However, if the Employer does use any part of the
Works before the Taking-Over Certificate is issued:
(a) the part which is used shall be deemed to have
been taken over,
(b) the Contractor shall cease to be liable for the care of
such part as from this date, and
(c) if requested by the Contractor, the Engineer shall
issue a Taking-Over Certificate for this part.

2
• After the Engineer has issued a Taking-Over Certificate
for a part of the Works, the Contractor shall be given the
earliest opportunity to take such steps as may be
necessary to carry out any outstanding Tests on
Completion.
• The Contractor shall carry out these Tests on Completion
as soon as practicable before the expiry date of the
relevant Defects Notification Period.
• If the Contractor incurs Cost as a result of the Employer
taking over and/or using a part of the Works, the
Contractor shall
(i) give notice to the Engineer and
(ii) be entitled to “Contractor’s Claims”.

3
• If a Taking-Over Certificate has been issued for a part
of the Works, the delay damages thereafter for
completion of the remainder of the Works shall be
reduced.
• For any period of delay after the date stated in this
Taking-Over Certificate, the proportional reduction
in these delay damages shall be calculated as the
proportion which the value of the part so certified
bears to the value of the Works.

10.3 Interference with Tests on Completion
• If the Contractor is prevented, for more than 14
days, from carrying out the Tests on Completion, the
Employer shall be deemed to have taken over the
Works on the date when the Tests on Completion
would otherwise have been completed.
• The Engineer shall require the Tests on Completion
to be carried out by giving 14 days’ notice.
• The Contractor may be subject to “Contractor’s
Claims”

10.4 Surfaces Requiring Reinstatement
• A certificate for a Section or part of the Works shall
not be deemed to certify completion of any ground
or other surfaces requiring reinstatement.

11.1 Completion of Outstanding Work and
Remedying Defects
• The Contractor shall:
(a) complete any work which is outstanding on the date
stated in a Taking-Over Certificate, within such
reasonable time as is instructed by the Engineer, and
(b) execute all work required to remedy defects or
damage, as may be notified by the Employer on or
before the expiry date of the Defects Notification
Period for the Works or Section.

11.2 Cost of Remedying Defects
• All remedy work shall be executed at the risk and
cost of the Contractor, if and to the extent that the
work is attributable to:
(a) any design for which the Contractor is responsible,
(b) Plant, Materials or workmanship not being in
accordance with the Contract, or
(c) failure by the Contractor to comply with any other
obligation.

11.3 Extension of Defects Notification Period
• The Employer shall be entitled to an extension of the
Defects Notification Period for the Works if the
Works, cannot be used for the purposes for which
they are intended by reason of a defect or damage.
• However, a Defects Notification Period shall not be
extended by more than two years.

11.4 Failure to Remedy Defects
• If the Contractor fails to remedy any defect, a date may be fixed by
the Employer, on or by which the defect or damage is to be
remedied.
• If the Contractor fails to remedy the defect and this remedial work
was to be executed at the cost of the Contractor, the Employer may:
(a) carry out the work himself or by others;
(b) require the Engineer to determine a reduction in the Contract; or
(c) if the defect or damage deprives the Employer of substantially the
benefit of the Works, terminate the Contract as a whole, or in
respect of such part which cannot be put to the intended use.
The Employer shall then be entitled to recover all sums paid for
the Works or for such part, plus financing costs and the cost of
dismantling the same, clearing the Site and returning Plant and
Materials to the Contractor.

11.5 Removal of Defective Work
• If the defect cannot be remedied and the Employer
gives consent, the Contractor may remove from the
Site for the purposes of repair such items of Plant as
are defective.
• This consent may require the Contractor to increase
the amount of the Performance Security by the full
replacement cost of these items.

11.6 Further Tests
• If the work of remedying any defect may affect the
performance of the Works, the Engineer may require
the repetition of any of the tests.
• The requirement shall be made by notice within 28
days after the defect is remedied.
• These tests shall be carried out at the risk and cost of
the Party liable for the cost of the remedial work.

11.7 Right of Access
• Until the Performance Certificate has been issued,
the Contractor shall have right of access to the Works
except as may be inconsistent with the Employer’s
reasonable security restrictions.

11.8 Contractor to Search
• The Contractor shall, if required by the Engineer,
search for the cause of any defect, under the
direction of the Engineer.
• Unless the defect is to be remedied at the cost of the
Contractor, the Cost of the search plus profit shall be
agreed or determined by the Engineer and shall be
included in the Contract Price.

11.9 Performance Certificate
• The Engineer shall issue the Performance Certificate
within 28 days after the latest of
i. the expiry dates of the Defects Notification Periods, or
ii. as soon as the Contractor has supplied all the
Contractor’s Documents and completed and tested all
the Works, including remedying any defects.
• Only the “Performance Certificate” shall be deemed to
constitute acceptance of the Works.

11.10 Unfulfilled Obligations
• After the Performance Certificate has been issued,
each Party shall remain liable for any unperformed
obligation.
• For the purposes of determining the nature and
extent of unperformed obligations, the Contract shall
be deemed to remain in force.

11.11 Clearance of Site
• Upon receiving the Performance Certificate, the
Contractor shall remove any remaining Contractor’s
Equipment, surplus material, wreckage, rubbish and
Temporary Works from the Site.
• If all these items have not been removed within 28
days, the Employer may sell or otherwise dispose of
any remaining items.
• The Employer shall be entitled to be paid the costs
incurred in connection with such sale or disposal and
restoring the Site.

12. MEASUREMENT AND EVALUATION

12.1 Works to be Measured
1
• Whenever the Engineer requires any part of the
Works to be measured, reasonable notice shall be
given to the Contractor’s Representative, who shall:
(a) promptly either attend or send another qualified
representative to assist the Engineer in making the
measurement, and
(b) supply any particulars requested by the Engineer.

12.1 Works to be Measured
2
• Wherever any Permanent Works are to be measured
from records, these shall be prepared by the
Engineer.
• If the Contractor examines and disagrees the records,
and/or does not sign them as agreed, then the
Contractor shall give notice to the Engineer.
• If the Contractor does not give notice to the Engineer
within 14 days after being requested to examine the
records, they shall be accepted as accurate.

12.2 Method of Measurement
(a) measurement shall be made of the net actual
quantity of each item of the Permanent Works, and
(b) the method of measurement shall be in accordance
with the Bill of Quantities or other applicable
Schedules.

12.3 Evaluation
1
• For each item of work, the appropriate rate or price
for the item shall be the rate or price specified for
such item in the Contract or specified for similar
work.
• Any item of work included in the Bill of Quantities for
which no rate or price was specified shall be
considered as included in other rates and prices in
the Bill of Quantities and will not be paid for
separately.

12.3 Evaluation
2
However, a new rate or price shall be appropriate for an item of work
if:
(a) (i) the quantity of this item is changed by more than 25%,
(ii) this change exceeds 0.25% of the Accepted Contract Amount,
(iii) this change changes the Cost per unit by more than 1%, and
(iv) this item is not specified in the Contract as a “fixed rate item”;
or
(b) (i) the work is instructed under “Variations and Adjustments”,
(ii) no rate or price is specified in the Contract for this item, and
(iii) no specified rate or price is appropriate .

12.3 Evaluation
3
• Each new rate or price shall be derived from any
relevant rates or prices in the Contract.
• If no rates or prices are relevant, it shall be derived
from the reasonable Cost of executing the work,
together with profit.
• Until such time as an appropriate rate or price is
agreed or determined, the Engineer shall determine
a provisional rate or price for the purposes of Interim
Payment Certificates.

12.4 Omissions
• Whenever the omission of any work forms part of a
Variation, the value of which has not been agreed, if:
(a) the Contractor will incur cost which, if the work had not
been omitted, would have been deemed to be covered
by a sum forming part of the Accepted Contract Amount;
(b) the omission of the work will result in this sum not
forming part of the Contract Price; and
(c) this cost is not deemed to be included in the evaluation
of any substituted work; then the Contractor shall give
notice to the Engineer accordingly.

13. VARIATIONS AND ADJUSTMENTS

13.1 Right to Vary
1
• Variations may be initiated by the Engineer at any
time prior to issuing the Taking-Over.
• The Contractor shall execute and be bound by each
Variation, unless the Contractor promptly gives
notice to the Engineer stating that the Contractor
cannot readily obtain the Goods required for the
Variation.

13.1 Right to Vary
2
• Each Variation may include:
(a) changes to the quantities ,
(b) changes to the quality,
(c) changes to the levels, positions and/or dimensions,
(d) omission of any work,
(e) any additional work, or
(f) changes to the sequence or timing.

13.2 Value Engineering
1
• The Contractor may submit to the Engineer a written
proposal which will:
(i) accelerate completion,
(ii) reduce the cost to the Employer,
(iii) improve the efficiency or value to the Employer, or
(iv) otherwise be of benefit to the Employer.
• The proposal shall be prepared at the cost of the
Contractor.

13.2 Value Engineering
2
• If a proposal includes a change in the design of the
Permanent Works:
(a) the Contractor shall design this part,
(b) “Contractor’s General Obligations” shall apply, and
(c) The Engineer shall determine a fee, which shall be
included in the Contract Price.
This fee shall be half (50%) of the difference between:
(i) reduction in contract value, excluding adjustments , and
(ii) the reduction in the value to the Employer.
• However, if amount (i) is less than amount (ii), there shall
not be a fee.

13.3 Variation Procedure
• If the Engineer requests a proposal, the Contractor
shall respond in writing, either by giving reasons why
he cannot comply or by submitting:
(a) a description of the proposed work and a program
for its execution,
(b) the Contractor’s proposal for any necessary
modifications to the program, and
(c) the Contractor’s proposal for evaluation of the
Variation.
• Each Variation, shall be issued by the Engineer to the
Contractor, who shall acknowledge receipt.

13.4 Payment in Applicable Currencies
• If the Contract provides for payment of the Contract
Price in more than one currency, then whenever an
adjustment is agreed, approved or determined as
stated above, the amount payable in each of the
applicable currencies shall be specified.
• For this purpose, reference shall be made to the
actual or expected currency proportions of the Cost
of the varied work, and to the proportions of various
currencies specified for payment of the Contract
Price.

13.5 Provisional Sums
• Each Provisional Sum shall only be used, in accordance
with the Engineer’s instructions.
• For each Provisional Sum, the Engineer may instruct:
(a) Work to be valued under “Variation Procedure”; and/or
(b) Plant, Materials or services to be purchased by the
Contractor, from a nominated Subcontractor:
(i) the actual amounts paid by the Contractor, and
(ii) a sum for overhead charges and profit.
• The Contractor shall, when required by the Engineer,
produce quotations, invoices, vouchers and accounts or
receipts in substantiation.

13.6 Daywork
1
• For work of a minor or incidental nature, the
Engineer may instruct that a Variation shall be
executed on a daywork basis.
• If a Daywork Schedule is not included in the Contract,
this Sub-Clause shall not apply.
• Before ordering Goods for the work, the Contractor
shall submit quotations to the Engineer.

13.6 Daywork
2
• The Contractor shall deliver each day the following :
(a) the names, occupations and time of Contractor’s
Personnel,
(b) the identification, type and time of Contractor’s
Equipment and Temporary Works, and
(c) the quantities and types of Plant and Materials
used.
• The Contractor shall submit priced statements of
these resources to the Engineer, prior to their
inclusion in the next Statement under “Application
for Interim Payment Certificates”.

13.7 Adjustments for Changes in Legislation
• The Contract Price shall be adjusted to take account
of any increase or decrease in Cost resulting from a
change in the Laws of the Country or in the judicial
or official governmental interpretation of such Laws,
made after the Base Date.
• If the Contractor suffers delay and/or incurs
additional Cost as a result of these changes, the
Contractor shall be entitled to “Contractor’s Claims”

13.8 Adjustments for Changes in Cost
1
• “Table of adjustment data” means the completed
table of adjustment data for local and foreign
currencies included in the Schedules.
• The amounts payable to the Contractor shall be
adjusted for rises or falls.
• The Accepted Contract Amount shall be deemed to
have included amounts to cover the contingency of
other rises and falls in costs.

2
• “Pn” is the adjustment multiplier to be applied to the estimated contract
value in period “n”;
• “a” is a fixed coefficient, stated in the relevant table of adjustment data;
• “b”, “c”, “d”, … are coefficients representing the estimated proportion of
each cost element related to the execution of the Works;
• “Ln”, “En”, “Mn”, … are the current cost indices or reference prices for
period “n”, on the date 49 days prior to the last day of the period; and
• “Lo”, “Eo”, “Mo”, … are the base cost indices or reference prices.
.......
o
n
o
n
o
n
n
M
M
d
E
E
c
L
L
baP

3
• If the Contractor fails to complete the Works within
the Time for Completion, adjustment of prices
thereafter shall be made using either:
(i) each index or price applicable on the date 49 days
prior to the expiry of the Time for Completion of the
Works, or
(ii) the current index or price: whichever is more
favorable to the Employer.

14. CONTRACT PRICE AND PAYMENT

14.1 The Contract Price
(a) the Contract Price shall be agreed and subject to
adjustments;
(b) the Contractor shall pay all taxes;
(c) any quantities in the Bill of Quantities are estimated
quantities and are not to be taken as the actual
quantities:
(i) of the Works which the Contractor is required to
execute, or
(ii) for the purposes of “Measurement and Evaluation”;
and
(d) the Contractor shall submit to the Engineer, within 28
days after the Commencement Date, a proposed
breakdown of each lump sum price in the Schedules.

14.2 Advance Payment
1
• The Employer shall make an advance payment, as an
interest-free loan for mobilization, when the
Contractor submits a guarantee.
• The Engineer shall issue an Interim Payment
Certificate for the first installment after receiving a
Statement and after the Employer receives:
(i) the Performance Security, and
(ii) a guarantee in amounts and currencies equal to
the advance payment.

2
• The Contractor shall ensure that the guarantee is
valid until the advance payment has been repaid, but
its amount may be reduced by the amount repaid by
the Contractor as indicated in the Payment
Certificates.
• If the terms of the guarantee specify its expiry date,
and the advance payment has not been repaid by the
date 28 days prior to the expiry date, the Contractor
shall extend the validity of the guarantee until the
advance payment has been repaid.

3
• The advance payment shall be repaid through percentage
deductions from the interim payments determined by
the Engineer, as follows:
(a) deductions shall commence in the next interim Payment
Certificate following that in which the total of all certified
interim payments exceeds 30 percent of the Accepted
Contract Amount less Provisional Sums; and
(b) deductions shall be made at the amortization rate stated
in the Contract Data of the amount of each Interim
Payment Certificate in the currencies and proportions of
the advance payment until such time as the advance
payment has been repaid; provided that the advance
payment shall be completely repaid prior to the time
when 80 percent of the Accepted Contract Amount less
Provisional Sums has been certified for payment.

4
• If the advance payment has not been repaid prior to
the issue of the Taking-Over Certificate for the Works
or prior to termination, “Suspension and Termination
by Contractor” or “Force Majeure”, the whole of the
balance then outstanding shall immediately become
due and payable by the Contractor to the Employer.

14.3 Application for Interim Payment Certificates
1
• The Contractor shall submit a Statement in six copies
to the Engineer after the end of each month,
showing the amounts to which the Contractor
considers himself to be entitled.
• The Statement shall include the following items, as
applicable, in the sequence listed:

14.3 Application for Interim Payment Certificates
2
(a) the estimated contract value of the Works executed;
(b) any amounts to be added and deducted for changes in legislation
and changes in cost;
(c) any amount to be deducted for retention, calculated by applying the
percentage of retention;
(d) any amounts to be added and deducted for the advance payment
and repayments ;
(e) any amounts to be added and deducted for Plant and Materials;
(f) any other additions or deductions which may have become due; and
(g) the deduction of amounts certified in all previous Payment
Certificates.

14.4 Schedule of Payments
• If the Contract includes a schedule of payments :
(a) the installments quoted in this schedule of payments shall be the
estimated contract values;
(b) “Plant and Materials intended for the Works” shall not apply; and
(c) if these installments are not defined by reference to the actual progress
achieved, and if actual progress is found to be less than that on which this
schedule of payments was based, then the Engineer may determine
revised installments.
• If the Contract does not include a schedule of payments, the Contractor
shall submit non-binding estimates of the payments.
• The first estimate shall be submitted within 42 days after the
Commencement Date.
• Revised estimates shall be submitted at quarterly intervals, until the
Taking-Over Certificate has been issued for the Works.

14.5 Plant and Materials intended for the Works
1
• Interim Payment Certificates shall include
(i) an amount for Plant and Materials which have been
sent to the Site for incorporation in the Permanent
Works, and
(ii) a reduction when the contract value of such Plant
and Materials is included as part of the Permanent
Works.

2
• The Engineer shall determine and certify each addition if:
(a) the Contractor has:
(i) kept satisfactory records which are available for inspection, and
(ii) submitted a statement of the Cost of acquiring and delivering
the Plant and Materials;
and either:
(b) the relevant Plant and Materials:
(i) are those listed in the Schedules for payment when shipped,
(ii) have been shipped en route to the Site, in accordance with the
Contract; and
(iii) are described in a clean shipped bill of lading, which has been
submitted to the Engineer together with evidence of payment of
freight and insurance, and a bank guarantee; or

3
(c) the relevant Plant and Materials:
(i) are listed in the Schedules for payment when
delivered, and
(ii) have been delivered.
• The additional amount to be certified shall be the
equivalent of eighty percent of the Engineer’s
determination of the cost of the Plant and Materials.

14.6 Issue of Interim Payment Certificates
• No amount will be certified or paid until the Employer has received and
approved the Performance Security.
• The Engineer shall, within 28 days after receiving a Statement, issue an
Interim Payment Certificate.
• However, prior to issuing the Taking-Over Certificate for the Works, the
Engineer shall not be bound to issue an Interim Payment Certificate in an
amount which would be less than the minimum amount of Interim Payment
Certificates stated in the Contract Data.
• An Interim Payment Certificate shall not be withheld for any other reason,
although:
(a) if any thing supplied or work done by the Contractor is not in accordance with
the Contract; and/or
(b) if the Contractor was failing to perform any work and had been so notified by
the Engineer, the value of this work may be withheld.
• The Engineer may make any correction that should properly be made to any
previous Payment Certificate.

14.7 Payment
• The Employer shall pay:
(a) the first installment of the advance payment within 42 days after issuing
the Letter of Acceptance or within 21 days after receiving the documents,
whichever is later;
(b) the amount certified in each Interim Payment Certificate within 56 days
after the Engineer receives the Statement and supporting documents or,
at a time when the Bank’s loan or credit is suspended, the amount shown
on any statement submitted by the Contractor, within 14 days after such
statement is submitted. Any discrepancy shall be rectified in the next
payment to the Contractor; and
(c) the amount certified in the Final Payment Certificate within 56 days after
the Employer receives this Payment Certificate or, at a time when the
Bank’s loan or credit is suspended, the undisputed amount shown in the
Final Statement, within 56 days after the date of notification of the
suspension.

14.8 Delayed Payment
• If the Contractor does not receive payment
appropriately, the Contractor shall be entitled to receive
financing charges compounded monthly.
• This period shall be deemed to commence on the date
for payment.
• These financing charges shall be calculated at the annual
rate of three percentage points above the discount rate.
• The Contractor shall be entitled to this payment without
formal notice or certification, and without prejudice to
any other right or remedy.

14.9 Payment of Retention Money
1
• When the Taking-Over Certificate has been issued for the Works, the first half of
the Retention Money shall be certified by the Engineer for payment to the
Contractor.
• If a Taking-Over Certificate is issued for a Section or part of the Works, a
proportion of the Retention Money shall be certified and paid.
• This proportion shall be two-fifths (40%) of the proportion calculated by dividing
the estimated contract value of the Section or part, by the estimated final Contract
Price.
• Promptly after the latest of the expiry dates of the Defects Notification Periods,
the outstanding balance of the Retention Money shall be certified by the Engineer
for payment to the Contractor.
• If a Taking-Over Certificate was issued for a Section, a proportion of the second
half of the Retention Money shall be certified and paid promptly after the expiry
date of the Defects Notification Period for the Section.
• This proportion shall be two-fifths (40%) of the proportion calculated by dividing
the estimated contract value of the Section by the estimated final Contract Price.

14.9 Payment of Retention Money
2
• When the Taking-Over Certificate has been issued and the first half of the
Retention Money has been certified, the Contractor shall be entitled to
substitute a guarantee for the second half of the Retention Money.
• On receipt by the Employer of the required guarantee, the Engineer shall
certify and the Employer shall pay the second half of the Retention Money.
• The Employer shall return the guarantee to the Contractor within 21 days
after receiving a copy of the Performance Certificate.
• If the Performance Security required is in the form of a demand guarantee,
and the amount guaranteed under it when the Taking-Over Certificate is
issued is more than half of the Retention Money, then the Retention Money
guarantee will not be required.
• If the amount guaranteed under the Performance Security when the Taking-
Over Certificate is issued is less than half of the Retention Money, the
Retention Money guarantee will only be required for the difference between
half of the Retention Money and the amount guaranteed under the
Performance Security.

14.10 Statement at Completion
• Within 84 days after receiving the Taking-Over
Certificate, the Contractor shall submit six copies of a
Statement at completion, showing:
(a) the value of all work done up to the date stated in
the Taking-Over Certificate for the Works,
(b) any further sums, and
(c) an estimate of any other amounts.
Estimated amounts shall be shown separately in this
Statement at completion.

14.11 Application for Final Payment Certificate
• Within 56 days after receiving the Performance Certificate, the
Contractor shall submit six copies of a draft final statement
showing:
(a) the value of all work done in accordance with the Contract, and
(b) any further sums.
• If the Engineer disagrees with, the Contractor shall make such
changes in the draft as may be agreed between them.
• This agreed statement is referred to in these Conditions as the
“Final Statement".
• However if, following discussions between the Engineer and the
Contractor, it becomes evident that a dispute exists, the Engineer
shall deliver to the Employer an Interim Payment Certificate for the
agreed parts of the draft final statement.

14.12 Discharge
• When submitting the Final Statement, the Contractor
shall submit a discharge which confirms that the
total of the Final Statement represents full and final
settlement of all moneys due to the Contractor
under or in connection with the Contract.

14.13 Issue of Final Payment Certificate
• Within 28 days after receiving the Final Statement and
discharge, the Engineer shall issue the Final Payment
Certificate which shall state:
(a) the amount which he fairly determines is finally due, and
(b) the balance due from the Employer to the Contractor or from
the Contractor to the Employer.
• If the Contractor has not applied for a Final Payment
Certificate, the Engineer shall request the Contractor to do so.
• If the Contractor fails to submit an application within 28 days,
the Engineer shall issue the Final Payment Certificate.

14.14 Cessation of Employer’s Liability
• The Employer shall not be liable to the Contractor for
any matter, except to the extent that the Contractor
shall have included an amount expressly for it:
(a) in the Final Statement ,and
(b) in the Statement at completion.

14.15 Currencies of Payment
• If more than one currency is so named, payments shall be made as follows:
(a) if the Accepted Contract Amount was expressed in Local Currency only:
(i) the fixed rates of exchange shall be as stated in the Schedule of Payment
Currencies;
(ii) payments and deductions shall be made in the applicable currencies and
proportions; and
(iii) other payments and deductions shall be made in the currencies specified in
(a)(i) above;
(b) payment of the damages specified in the Contract Data, shall be made in the
currencies and proportions specified in the Schedule of Payment currencies;
(c) other payments to the Employer shall be made in the currency was expended by
the Employer, or in such currency as may be agreed by both Parties;
(d) if any amount payable by the Contractor in a particular currency exceeds the sum
payable by the Employer to the Contractor in that currency, the Employer may
recover the balance of this amount from the sums otherwise payable to the
Contractor in other currencies; and

15.1 Notice to Correct
• If the Contractor fails to carry out any obligation
under the Contract, the Engineer may by notice
require the Contractor to make good the failure and
to remedy it within a specified reasonable time.

15.2 Termination by Employer
1
The Employer shall terminate the Contract if the
Contractor:
(a) fails to comply with “Performance Security” or
“Notice to Correct”,
(b) abandons the Works,
(c) fails:
(i) to proceed with the Works, or
(ii) to comply with a notice issued under “Rejection”
or “Remedial Work” within 28 days,

2
(d) subcontracts the whole of the Works,
(e) becomes bankrupt or insolvent, goes into liquidation,
has a receiving or administration order made against
him, compounds with his creditors, or carries on business
under a receiver, trustee or manager for the benefit of
his creditors, or
(f) gives or offers to give to any person any bribe, gift,
gratuity, commission or other thing of value, as an
inducement or reward:
(i) for doing or forbearing to do any action in relation to
the Contract, or
(ii) for showing or forbearing to show favor or disfavor to
any person in relation to the Contract,

3
• In any of these events, the Employer may, upon giving 14
days’ notice, terminate the Contract.
• However, in the case of sub-paragraph (e) or (f), the
Employer may by notice terminate the Contract
immediately.
• After termination, the Employer may complete the
Works and/or arrange for any other entities to do so.
• The Employer and these entities may then use any
Goods, Contractor’s Documents and other design
documents made by the Contractor.
• If the Contractor has failed to make a payment due to the
Employer, Contractor’s equipment on site may be sold by
the Employer in order to recover this payment.

15.3 Valuation at Date of Termination
• As soon as practicable after a notice of termination,
the Engineer shall proceed to determine the value of
the Works, Goods and Contractor’s Documents, and
any other sums due to the Contractor.

15.4 Payment after Termination
• After a notice of termination has taken effect, the Employer
may:
(a) Proceed with “Employer’s Claims”,
(b) withhold further payments to the Contractor until the costs
of execution, completion and remedying of any defects,
damages for delay in completion, and/or
(c) recover from the Contractor any losses and damages incurred
by the Employer and any extra costs of completing the Works,
after allowing for any sum due to the Contractor.
After recovering any such losses, damages and extra costs, the
Employer shall pay any balance to the Contractor.

15.5 Employer’s Entitlement to Termination for
Convenience
• The Employer shall terminate the Contract, by giving
notice of such termination to the Contractor.
• The termination shall take effect 28 days after the
later of the dates on which the Contractor receives
this notice or the Employer returns the Performance
Security.
• The Employer shall not terminate the Contract in
order to execute the Works himself or to arrange for
another contractor or to avoid a termination of the
Contract by the Contractor.

15.6 Corrupt or Fraudulent Practices
If the Employer determines that the Contractor has engaged in
corrupt, fraudulent, collusive or coercive practices, then the
Employer may, after giving 14 days notice, terminate the
Contractor’s employment.
For the purposes of this Sub-Clause:
(a) “corrupt practice” means the offering, giving, receiving or
soliciting of any thing of value to influence the action of a
public official.
(b) “fraudulent practice” means a misrepresentation of facts in
order to influence a procurement process.
(c) “collusive practice” means a scheme or arrangement between
two or more bidders, with or without the knowledge of the
Borrower, designed to establish bid prices at artificial, non-
competitive levels.
(d) “coercive practice” means harming or threatening persons or
property to influence them in the procurement process.

16. SUSPENSION AND TERMINATION BY CONTRACTOR

16.1 Contractor’s Entitlement to Suspend Work
1
• If the Engineer fails to “Issue Interim Payment
Certificates” or to make “Financial Arrangements”,
the Contractor may, after giving not less than 21
days’ notice, suspend work.
• If the Bank has suspended disbursements under its
loan, and no alternative funds are available, the
Contractor may suspend work or reduce the rate of
work at any time, but not less than 7 days after the
Borrower having received the suspension
notification.
• The Contractor’s action shall not prejudice his
entitlements to financing charges .

16.1 Contractor’s Entitlement to Suspend Work
2
• If the Contractor subsequently receives such
Payment Certificate, before giving a notice of
termination, the Contractor shall resume normal
working.
• If the Contractor suffers delay and/or incurs Cost as a
result of suspending work, the Contractor shall be
entitled to “Contractor’s Claims”.

16.2 Termination by Contractor
1
The Contractor shall be entitled to terminate the Contract if:
(a) the Contractor does not receive the reasonable evidence within 42
days after giving notice under “Contractor’s Entitlement to Suspend
Work” in respect of a failure to comply with “Employer’s Financial
Arrangements”,
(b) the Engineer fails, within 56 days after receiving a Statement to
issue the relevant Payment Certificate,
(c) the Contractor does not receive the amount due under an Interim
Payment Certificate within 42 days after the expiry of the time
stated in “Payment”,
(d) the Employer substantially fails to perform his obligations and
adversely affect the ability of the Contractor to perform the
Contract,
(e) the Employer fails to comply with “Contract Agreement” or
“Assignment”,
(f) a prolonged suspension affects the whole of the Works , or

16.2 Termination by Contractor
2
(g) the Employer becomes bankrupt or insolvent, goes into liquidation,
has a receiving or administration order made against him,
compounds with his creditors, or carries on business under a
receiver, trustee or manager for the benefit of his creditors.
(h) In the event the Bank suspends the loan or credit from which part
of the payments to the Contractor are being made, if the Contractor
has not received the sums due to him upon expiration of the 14
days, the Contractor may immediately take one or both of the
following actions, namely
(i) suspend work or reduce the rate of work, and
(ii) terminate his employment under the Contract by giving notice
to the Employer such termination to take effect after 14 days.
• In any of these events, the Contractor may, upon giving 14 days’
notice, terminate the Contract.
• However, in the case of subparagraph (f) or (g), the Contractor may
by notice terminate the Contract immediately.

16.3 Cessation of Work and Removal of
Contractor’s Equipment
• After a notice of termination has taken effect, the
Contractor shall promptly:
(a) cease all further work,
(b) hand over Contractor’s Documents, Plant, Materials
and other work, for which the Contractor has
received payment, and
(c) remove all other Goods from the Site, except as
necessary for safety, and leave the Site.

16.4 Payment on Termination
• After a notice of termination has taken effect, the
Employer shall promptly:
(a) return the Performance Security to the Contractor,
(b) pay the Contractor, and
(c) pay to the Contractor the amount of any loss or
damage sustained by the Contractor as a result of
this termination.

17.1 Indemnities
• The Contractor shall indemnify the Employer, the Employer’s Personnel,
and their respective agents, against and from all claims, damages, losses
and expenses in respect of:
(a) bodily injury, sickness, disease or death, of any person whatsoever arising
out of or in the course of or by reason of the Contractor’s design, the
execution and completion of the Works and the remedying of any defects,
willful act or breach of the Contract by the Employer, the Employer’s
Personnel, or any of their respective agents, and
(b) damage to or loss of any property, real or personal, to the extent that such
damage or loss arises out of or in the course of or by reason of the
Contractor’s design, the execution and completion of the Works and the
remedying of any defects, willful act or breach of the Contract by the
Employer, the Employer’s Personnel, their respective agents, or anyone
directly or indirectly employed by any of them.

17.2 Contractor’s Care of the Works
1
• The Contractor shall take full responsibility for the
care of the Works and Goods from the
Commencement Date until the Taking-Over
Certificate is issued for the Works, when
responsibility for the care of the Works shall pass to
the Employer.
• If a Taking-Over Certificate is issued for any Section
or part of the Works, responsibility for the care of
the Section or part shall then pass to the Employer.
• After responsibility has accordingly passed to the
Employer, the Contractor shall take responsibility for
the care.

17.2 Contractor’s Care of the Works
2
• If any loss or damage happens to the Works, Goods
or Contractor’s Documents during the period when
the Contractor is responsible for their care, the
Contractor shall rectify the loss or damage at the
Contractor’s risk and cost.
• The Contractor shall be liable for any loss or damage
caused by any actions performed by the Contractor
after a Taking-Over Certificate has been issued.
• The Contractor shall also be liable for any loss or
damage which occurs after a Taking-Over Certificate
has been issued and which arose from a previous
event for which the Contractor was liable.

17.3 Employer’s Risks
The risks referred to in Sub-Clause 17.4 below, insofar as they directly
affect the execution of the Works in the Country, are:
(a) war, hostilities, invasion, act of foreign enemies,
(b) rebellion, terrorism, sabotage, revolution, insurrection, military or
usurped power, or civil war, within the Country,
(c) riot, commotion or disorder within the Country,
(d) munitions of war, explosive materials, ionizing radiation or
contamination by radio-activity, within the Country, explosives,
radiation or radio-activity,
(e) pressure waves caused by aircraft travelling at sonic or supersonic
speeds,
(f) use or occupation by the Employer,
(g) design of any part of the Works by the Employer’s Personnel, and
(h) any operation of the forces of nature which is.

17.4 Consequences of Employer’s Risks
• If and to the extent that any of the risks above, the
Contractor shall promptly give notice to the Engineer
and shall rectify this loss.
• If the Contractor suffers delay and/or incurs Cost
from rectifying this loss or damage, the Contractor
shall give a further notice to the Engineer and shall
be entitled to “Contractor’s Claims”.

17.5 Intellectual and Industrial Property
Rights
• “Infringement” means an infringement of any patent, registered design,
copyright, trade mark, trade name, trade secret or other intellectual
property right relating to the Works; and
• “Claim” means a claim alleging an infringement.
• Whenever a Party does not give notice to the other Party of any claim
within 28 days of receiving the claim, the first Party shall be deemed to
have waived any right to indemnity under this Sub-Clause.
• The Employer shall indemnify and hold the Contractor harmless against
and from any claim alleging an infringement which is or was:
(a) an unavoidable result of the Contractor’s compliance with the Contract, or
(b) a result of any Works being used by the Employer:
(i) for a purpose other than that indicated by, or
(ii) in conjunction with any thing not supplied by the Contractor.

17.6 Limitation of Liability
• Neither Party shall be liable to the other Party for
loss of use of any Works, loss of profit, loss of any
contract or for any indirect or consequential loss or
damage which may be suffered by the other Party.
• The total liability of the Contractor to the Employer,
shall not exceed the sum resulting from the
application of a multiplier to the Accepted Contract
Amount, as stated in the Contract Data, or, the
Accepted Contract Amount.

17.7 Use of Employer’s Accommodation/Facilities
• The Contractor shall take full responsibility for the
care of the Employer provided accommodation and
facilities.
• If any loss or damage happens to any of the above
items while the Contractor is responsible for their
care arising from any cause whatsoever other than
those for which the Employer is liable, the Contractor
shall rectify the loss or damage to the satisfaction of
the Engineer.

18.1 General Requirements for Insurances
1
• “Insuring Party” means, for each type of insurance, the
Party responsible for effecting and maintaining the
insurance.
• If a policy indemnifies additional joint insured,
(i) the Contractor shall act under the policy on behalf of
these additional joint insured except that the Employer
shall act for Employer’s Personnel,
(ii) additional joint insured shall not be entitled to receive
payments directly from the insurer or to have any other
direct dealings with the insurer, and
(iii) the insuring Party shall require all additional joint
insured to comply with the conditions stipulated in the
policy.

2
• The relevant insuring Party shall, within the
respective periods stated in the Contract Data,
submit to the other Party:
(a) evidence that the insurances described in this
Clause have been effected, and
(b) copies of the policies for the insurances described in
“Insurance for Works and Contractor’s Equipment”
and “Insurance against Injury to Persons and
Damage to Property”.

3
• Neither Party shall make any material alteration to the
terms of any insurance without the prior approval of the
other Party.
• If the insuring Party fails to effect and keep in force any of
the insurances, the other Party may effect insurance for
the relevant coverage and pay the premiums due.
• If the insuring Party fails to effect an insurance which is
available and which it is required to effect and maintain
under the Contract, any moneys which should have been
recoverable under this insurance shall be paid by the
insuring Party.

18.2 Insurance for Works and Contractor’s
Equipment
1
• The insuring Party shall insure the Works, Plant,
Materials and Contractor’s Documents for not less than
the full reinstatement cost including the costs of
demolition, removal of debris and professional fees and
profit.
• The insuring Party shall maintain this insurance to
provide cover until the date of issue of the Performance
Certificate, for loss or damage for which the Contractor is
liable arising from a cause occurring prior to the issue of
the Taking-Over Certificate, and for loss or damage
caused by the Contractor in the course of any other
operations.
• The insuring Party shall insure the Contractor’s
Equipment for not less than the full replacement value,
including delivery to Site.

Equipment
2
• Insurances under this Sub-Clause:
(a) shall be effected and maintained by the Contractor as
insuring Party,
(b) shall be in the joint names of the Parties,
(c) shall cover all loss and damage from any cause not listed
in “Employer’s Risks”,
(d) shall also cover loss or damage to a part of the Works
which is attributable to the use or occupation by the
Employer of another part of the Works, and loss or
damage from the risks listed in (c), (g) and (h) of
“Employer’s Risks”, excluding risks which are not
insurable.

Equipment
3
• If, more than one year after the Base Date, the cover
described in sub-paragraph (d) above ceases to be
available, the Contractor shall give notice to the
Employer, with supporting particulars.
• The Employer shall then
(i) be entitled “Employer’s Claims” to payment of an
amount equivalent to such commercially
reasonable terms, and
(ii) be deemed, to have approved the omission under
“General Requirements for Insurances”.

18.3 Insurance against Injury to Persons and
Damage to Property
• The insuring Party shall insure against each Party’s
liability for any loss, damage, death or bodily injury
which may occur to any physical property or to any
person, which may arise out of the Contractor’s
performance before the issue of the Performance
Certificate.
• Unless otherwise stated in the Particular Conditions, the
insurances:
(a) shall be effected and maintained by the Contractor as
insuring Party,
(b) shall be in the joint names of the Parties,
(c) shall be extended to cover liability for all loss and
damage to the Employer’s property arising out of the
Contractor’s performance of the Contract, and

18.4 Insurance for Contractor’s Personnel
• The Contractor shall effect and maintain insurance
against liability for claims, damages, losses and
expenses arising from injury, sickness, disease or
death of any person employed by the Contractor.
• The Employer and the Engineer shall also be
indemnified under the policy of insurance, except
that this insurance may exclude losses and claims to
the extent that they arise from any act or neglect of
the Employer or of the Employer’s Personnel.

19.1 Definition of Force Majeure
1
“Force Majeure” means an exceptional event or
circumstance:
(a) which is beyond a Party’s control,
(b) which such Party could not reasonably have
provided against before entering into the Contract,
(c) which, having arisen, such Party could not
reasonably have avoided or overcome, and
(d) which is not substantially attributable to the other
Party.

19.1 Definition of Force Majeure
2
• Force Majeure may include:
(i) war, hostilities, invasion, act of foreign enemies,
(ii) rebellion, terrorism, sabotage by persons other than the
Contractor’s Personnel, revolution, insurrection, military
or usurped power, or civil war,
(iii) riot, commotion, disorder, strike or lockout by persons
other than the Contractor’s Personnel,
(iv) munitions of war, explosive materials, ionizing radiation
or contamination by radio-activity, explosives, radiation
or radio-activity, and
(v) natural catastrophes such as earthquake, hurricane,
typhoon or volcanic activity.

19.2 Notice of Force Majeure
• If a Party is prevented from performing its obligations
by Force Majeure, then it shall give notice to the
other Party.
• The notice shall be given within 14 days after the
Party became aware of the relevant event.
• The Party shall be excused performance of its
obligations for so long as such Force Majeure
prevents it from performing them.

19.3 Duty to Minimize Delay
• Each Party shall at all times use all reasonable
endeavors to minimize any delay in the performance
of the Contract as a result of Force Majeure.
• A Party shall give notice to the other Party when it
ceases to be affected by the Force Majeure.

19.4 Consequences of Force Majeure
• If the Contractor is prevented from performing his
substantial obligations under the Contract by Force
Majeure of which notice has been given, and suffers
delay and/or incurs Cost by, the Contractor shall be
entitled subject to “Contractor’s Claims” .

19.5 Force Majeure Affecting Subcontractor
• If any Subcontractor is entitled to relief from force
majeure on terms additional to or broader than
those specified in this Clause, such additional or
broader force majeure events or circumstances shall
not excuse the Contractor’s non-performance or
entitle him to relief under this Clause.

19.6 Optional Termination, Payment and
Release
• If the execution of substantially all the Works in progress is prevented for a
continuous period of 84 days by reason of Force Majeure of which notice
has been given, or for multiple periods which total more than 140 days due
to the same notified Force Majeure, then either Party may give to the
other Party a notice of termination of the Contract.
• In this event, the termination shall take effect 7 days after the notice.
• The Engineer shall issue a Payment Certificate which shall include:
(a) amounts payable for any work carried out;
(b) Cost of Plant and Materials ordered for the Works;
(c) Costs were reasonably incurred by the Contractor;
(d) the Cost of removal of Temporary Works and Contractor’s Equipment and
the return of these items to the Contractor’s works in his country; and
(e) the Cost of repatriation of the Contractor’s staff.

19.7 Release from Performance
• If any event outside the control of the Parties arises
which makes it impossible to fulfill obligations or
entitles the Parties to be released from further
performance, then upon notice:
(a) the Parties shall be discharged from further
performance, and
(b) the sum payable by the Employer to the Contractor
shall be the same as would have been payable
“Optional Termination, Payment and Release” if the
Contract had been terminated .

20. CLAIMS, DISPUTES AND ARBITRATION

20.1 Contractor’s Claims
1
• If the Contractor considers himself to be entitled to any
extension of the Time and/or any additional payment, the
Contractor shall give notice to the Engineer.
• The notice shall be given not later than 28 days after the
Contractor became aware of the event or circumstance.
• If the Contractor fails to give notice, the Employer shall be
discharged from all liability in connection with the claim.
• Otherwise:
– The Contractor shall also submit any other notices which
are required by the Contract, and supporting particulars
for the claim, all as relevant to such event or circumstance.
– Without admitting the Employer’s liability, the Engineer
may, after receiving any notice under this Sub-Clause,
monitor the record-keeping and/or instruct the Contractor
to keep further contemporary records.

2
• Within 42 days after the Contractor became aware of
circumstance giving rise to the claim, the Contractor
shall send to the Engineer a fully detailed claim.
• If the event or circumstance giving rise to the claim
has a continuing effect:
(a) this fully detailed claim shall be considered as
interim;
(b) the Contractor shall send further interim claims at
monthly intervals, giving the accumulated delay
and/or amount claimed; and
(c) the Contractor shall send a final claim within 28 days
after the end of the effects.

3
• Within 42 days after receiving a claim, the Engineer
shall respond with approval, or with disapproval and
detailed comments.
• Each Payment Certificate shall include such amounts
for any claim as have been reasonably substantiated.
• If the Contractor fails to comply with this, any
extension of time and/or additional payment shall
take account of the extent to which the failure has
prevented or prejudiced proper investigation of the
claim.

20.2 Appointment of the Dispute Board
1
• Disputes shall be referred to a DB for decision in
accordance with “Obtaining Dispute Board’s Decision”.
• If the number is not so stated, the DB shall comprise
three persons, one of whom shall serve as chairman.
• If the Parties have not jointly appointed the DB 21 days
before the date stated in the Contract Data and the DB is
to comprise three persons, each Party shall nominate
one member for the approval of the other Party.
• The first two members shall recommend and the Parties
shall agree upon the third member, who shall act as
chairman.

20.2 Appointment of the Dispute Board
2
• The agreement between the Parties and either the
sole member or each of the three members shall
incorporate by reference the General Conditions of
Dispute Board Agreement.
• The terms of the remuneration of either the sole
member or each of the three members, including the
remuneration of any expert whom the DB consults,
shall be mutually agreed upon by the Parties.
• The appointment of any member may be terminated
by mutual agreement of both Parties, but not by the
Employer or the Contractor acting alone.

20.3 Failure to Agree on the Composition of the
Dispute Board
• If any of the following conditions apply, namely:
(a) the Parties fail to agree upon the appointment of the
sole member of the DB,
(b) either Party fails to nominate a member or fails to
approve a member nominated by the other Party, of a DB
of three persons by such date,
(c) the Parties fail to agree upon the appointment of the
third member, or
(d) the Parties fail to agree upon the appointment of a
replacement person within 42 days after the date on
which the sole member or one of the three members
declines to act, then the appointing entity or official
named in the Contract Data shall appoint this member of
the DB.

20.4 Obtaining Dispute Board’s Decision
1
• For a DB of three persons, the DB shall be deemed to
have received such reference on the date when it is
received by the chairman of the DB.
• The DB shall be deemed to be not acting as arbitrator(s).
• Within 84 days after receiving such reference, the DB
shall give its decision.
• The decision shall be binding on both Parties, who shall
promptly give effect to it unless and until it shall be
revised in an amicable settlement or an arbitral award as
described below.
• Unless the Contract has already been abandoned,
repudiated or terminated, the Contractor shall continue
to proceed with the Works in accordance with the
Contract.

20.4 Obtaining Dispute Board’s Decision
2
• If either Party is dissatisfied with the DB’s decision, then
either Party may, within 28 days after receiving the
decision, give notice to the other Party of its
dissatisfaction and intention to commence arbitration.
• If the DB fails to give its decision within the period of 84
days after receiving such reference, then either Party may,
within 28 days after this period has expired, give notice to
the other Party of its dissatisfaction and intention to
commence arbitration.
• If the DB has given its decision as to a matter in dispute to
both Parties, and no notice of dissatisfaction has been
given by either Party within 28 days after it received the
DB’s decision, then the decision shall become final and
binding upon both Parties.

20.5 Amicable Settlement
• Arbitration may be commenced on or after the fifty-
sixth day after the day on which a notice of
dissatisfaction and intention to commence
arbitration was given, even if no attempt at amicable
settlement has been made.

20.6 Arbitration
1
• Any dispute in respect of which the DB’s decision has
not become final and binding shall be finally settled
by international arbitration.
• Unless otherwise agreed by both Parties:
(a) arbitration proceedings shall be conducted as stated
in the Particular Conditions,
(b) if no arbitration proceedings are so stated, the
dispute shall be finally settled by institutional
arbitration under the Rules of Arbitration of the
International Chamber of Commerce, and
(c) the dispute shall be settled by three arbitrators.

20.6 Arbitration
2
• The arbitrators shall have full power to open up,
review and revise any certificate, determination,
instruction, opinion or valuation of the Engineer, and
any decision of the DB, relevant to the dispute.
• Nothing shall disqualify the Engineer from being
called as a witness and giving evidence before the
arbitrators on any matter whatsoever relevant to the
dispute.
• Any decision of the DB shall be admissible in
evidence in the arbitration.
• Arbitration may be commenced prior to or after
completion of the Works.

20.7 Failure to Comply with Dispute Board’s
Decision
• In the event that a Party fails to comply with a DB
decision which has become final and binding, then
the other Party may refer the failure itself to
arbitration.

20.8 Expiry of Dispute Board’s Appointment
• If a dispute arises between the Parties in connection
with the Contract and there is no DB in place,
whether by reason of the expiry of the DB’s
appointment or otherwise:
(a) “Obtaining Dispute Board’s Decision” and “Amicable
Settlement” shall not apply, and
(b) the dispute may be referred directly to arbitration.

QUESTIONS?
THANK YOU
KARIM EL-DASH; PHD, PMP, CCE
PROFESSOR OF CONSTRUCTION MANAGEMENT
BANHA UNIVERSITY, EGYPT
COLLEGE OF TECHNOLOGICAL STUDIES, KUWAIT
K_ELDASH@HOTMAIL.COM
PHONE: +965-99310261
FAX: +965-22314533

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