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Claims according to FIDIC Red Book
By
Naresh Gattupalli,PMP®
B.Tech (Civil), M.Tech (SE), PGD ACM & PGD ADR
 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
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)
 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 Employer’s 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
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
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 Employer’s equipment and free issue material
 Other services requested by the contractor
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
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 Contractor’s entitlement to suspend work
 Clause 17.4 Consequences of Employer’s risks
 Clause 19.4 Consequences of force majeure
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 Contractor’s entitlement to suspend work
 Clause 17.4 Consequences of Employers risks
 Clause 19.4 Consequences of force majeure
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 Contractor’s entitlement to suspend work
 Clause 16.4 Payment on termination
 Clause 17.4 Consequences of Employers risks on

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Ppt on fidic claims

  • 1. Claims according to FIDIC Red Book By Naresh Gattupalli,PMP® 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 Employer’s 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 Employer’s 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 Contractor’s entitlement to suspend work  Clause 17.4 Consequences of Employer’s 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 Contractor’s 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 Contractor’s entitlement to suspend work  Clause 16.4 Payment on termination  Clause 17.4 Consequences of Employers risks on