This document discusses claims according to the FIDIC Red Book construction contract. It outlines the different types of claims that can be made by both the employer and contractor for circumstances like extensions of time, additional payments, cost recovery, and non-fulfillment of obligations. Specific clauses from the Red Book are cited that allow claims for delays, differing site conditions, suspensions of work, termination, and other events. The document also provides background on FIDIC contract models and the applicability of claims.
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1. Claims according to FIDIC Red Book
By
Naresh Gattupalli,PMP速
B.Tech (Civil), M.Tech (SE), PGD ACM & PGD ADR
2. The International Federation of Consulting Engineers (FIDIC) has devoted itself to the compilation of management
documents for all kinds of projects, among which the FIDIC Conditions of Contract are of the highest influence
and are the most popular Application
The first edition of FIDIC Conditions of Contract for Works of Civil Engineering Construction (use Red Book in the
following) was compiled in 1957, and later its second, third, and fourth edition were issued in 1963, 1977, and
1987 respectively
With the investigation of the governments, employers, contractors and consulting engineers all over the world
about their application of the Red Book, 204 findings reports were returned. According to the findings, the FIDIC
Contract Committee organized a group of experts to compile the new Contract Condition models to be applied in
the 21stcentury
The test edition of these models was published in 1998, and FIDIC solicited opinions throughout the world for
additional time to publish the official texts in 1999.
Now FIDIC condition of contract has been applied worldwide, especially in the projects invested by World Bank,
Asia Development Bank, Africa Development Bank etc.
Background
3. The new models include :
1. FIDIC Conditions of Contract for Construction, the (New Red Book)
2. FIDIC Conditions of Contract for Plant and Design/Build, the (New Yellow Book)
3. FIDIC Conditions of Contract for EPC Turnkey Projects, the (Silver Book)
4. FIDIC Short Form of Contract, the (Green Book)
4. New Red Book --- Any kind of Engineering Construction Contract.
New Yellow Book --- Lump sum contract project where the Contractor takes participation in the design work.
Silver Book --- Turnkey projects of infrastructures or large-scale factories, where the Contractor takes
on more work and risk while the Employers participation is small (private financing or
government financing), but it is strictly defined upon the investment and construction
period.
Green Book --- All kinds of small-scale projects
Gold Book --- Design-Build Operate contract, Published on Sep-2007
Apart from these FIDIC published a Multilateral Development Bank Harmonized Edition in June 2010
Applicability
5. Claims
Claims are generally made by the Parties due to the following circumstances :
Entitlement to an extension of time
Entitlement to additional payments
Entitlement to the recovery of costs
Non fulfilment by one party of an obligation under the contract
Additional payments due to legal entitlement
6. Claims by Employer Clause 2.5
Clauses requiring notice under clause 2 .5 include:
Clause 7.5 Rejection
Clause 7.6 Remedial work
Clause 8.6 Rate of progress
Clause 8.7 Delay damages
Clause 9.4 Tests on completion
Clause 11.3 Extension of defects notification period
Clause 15.4 Payment after termination
Clauses not requiring notice under clause 2.5 include:
Clause 4.19 Electricity water and gas
Clause 4.20 Employers equipment and free issue material
Other services requested by the contractor
7. Claims by Employer Clause 2.5
Other clauses allowing for claims a deduction by the employer include:
Clause 4.2 Performance security
Clause 5.4 Evidence of payments to nominated subcontractors
Clause 9.2 Delayed tests
Clause 10.2 Taking over of parts of the works
Clause 11.4 Failure to remedy defects
Clause 11.6 Further tests
Clause 11.11 Clearance of site
Clause 13.7 Adjustments in legislation
Clause 17.1 Indemnities
Clause 18.1 General requirements for insurances
Clause 18.2 Insurance for works and contractors equipment
8. Claims by Contractor
Clauses which require the contractor to give notice of an event which may cause delay or additional cost:
Clause 1.9 Delayed drawings or instructions
Clause 4.12 Unforeseeable physical conditions
Clause 4.24 Fossils
Clause 16.1 Contractors entitlement to suspend work
Clause 17.4 Consequences of Employers risks
Clause 19.4 Consequences of force majeure
9. Claims by Contractor
Clauses which entitled the contract out to an extension of time and or additional payments:
Clause 1.9 Delayed drawings or instructions
Clause 2.1 Right of access to the site
Clause 4.7 Setting out
Clause 4.12 Unforeseeable physical conditions
Clause 4.24 Fossils
Clause 7.4 Testing
Clause 10.2 Taking over parts of the works
Clause 10.3 Interference with tests on completion
Clause 11.8 Contractor to search
Clause 13.7 Adjustments for changes in legislation
Clause 16.1 Contractors entitlement to suspend work
Clause 17.4 Consequences of Employers risks
Clause 19.4 Consequences of force majeure
10. Claims by Contractor
Clauses which involve valuation or similar requirements:
Clause 12.3 Evaluation
Clause 12.4 Omissions
Clause 15.3 Valuation at date of termination
Clause 16.4 Payment on termination
Clause 18.1 General requirements for insurances
Classes which provide for the Contractor to claim profit as well as costs:
Clause 1.9 Delayed drawings are instructions
Clause 2.1 Right of access to the site
Clause 4.7 Setting out
Clause 7.4 Testing
Clause 10.2 Taking over parts of the works
Clause 10.3 Interference with tests on completion in
Clause 11.8 Contractor to search
Clause 16.1 Contractors entitlement to suspend work
Clause 16.4 Payment on termination
Clause 17.4 Consequences of Employers risks on