Notices under FIDIC Red, Yellow, and Silver 2017 Editions Part 1

This is part 1 in a multi-part addendum to our previous series on notices under FIDIC Silver Book 2017. This and the next few posts will focus on some major changes to notices between the 2017 editions of the Silver Book compared to the Red and Yellow Books. This post will provide an overview. If a notice is received for an ambiguity or discrepancy in the documents, under Sub-Clause 1.5 (Priority of Documents) in the Silver Book, the Employer shall issue any necessary clarifications or instructions. However, this is the responsibility of the Engineer in the Red and Yellow Books. Whereas, if a notice is received for rectifying an error or defect in the documents prepared for use in the execution of the works, Sub-Clause 1.8 (Care and Supply of Documents) in both the Silver and Yellow Books states that the Contractor shall rectify the error or defect at his cost. However, it is the “other party” in the Red Book. According to Sub-Clause 2.5 (Site Data and Items of Reference), the…

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Advice on Mark-Ups

Change management is crucial to projects proceeding smoothly. It depends on communication, recognition of entitlements as to principles, and evaluation of price adjustment. This article will examine mark-up agreements and their role in change management. Some costs, while undoubtedly arising, are hard to estimate. It could be Head Office overheads, change management costs, margins and profit, or savings share. These are often resolved by making contractual agreements through so-called mark-up clauses. Such clauses make change evaluation easier. The usual method is to relate the mark-up rate with the direct value of change. But this can be complicated. What kind of costs should be included? What should be done with de-scopes or time-extending changes? Examples of Marked-up Costs  Typical categories included in mark-up clauses include profits, head office overheads, site overheads, change management costs, contingencies for risk, and share of savings. Some contracts may add fixed…

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Notices under FIDIC Silver Book 2017 Edition Part 15

This is part 15 in an ongoing series on notices under FIDIC Silver Book 2017. This post covers the provision for notices in Clause 21 (Disputes in Arbitration). Clause 21 (Disputes and Arbitration) Sub-Clause 21.4 (Obtaining DAAB's Decision). If a dispute arises, either Party may refer the dispute to the DAAB for its decision and within 84 days the DAAB shall give its decision in writing in line with Sub-Clause 21.4.3 (The DAAB’s Decision). If the DAAB fails to make a timely decision, either Party may, within 28 days after this period has expired, give a Notice of Dissatisfaction (NoD) to the other party. After the DAAB had given a decision, if either Party is dissatisfied with the decision fully or partly, within 28 days, such Party may give a NoD to the other party with a copy to the DAAB under Sub-Clause 21.4.4 (Dissatisfaction with DAAB’s Decision). If there is no NoD within 28 days, the decision shall become final and binding on both Parties. Except in certain cases, for example,…

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Notices under FIDIC Silver Book 2017 Edition Part 14

This is part 14 in an ongoing series on notices under FIDIC Silver Book 2017. This post covers the provision for notices in Clause 20 (Employer’s and Contractor’s Claims). Clause 20 (Employer’s and Contractor’s Claims) Sub-Clause 20.1 (Claims). If the Employer is entitled to any additional payment from the Contractor or reduction in contract price and or to an extension of the Defect Notification Period (DNP), as well as if the Contractor is entitled to any additional payment from the Employer and or to the Extension of Time, then Sub-Clause 20.2 (Claims for Payments and/or Extension of Time) shall apply. However, where the other Party has: disagreed with the requested entitlement or relief or is deemed to have disagreed if he or she does not respond within reasonable time, a dispute shall not be deemed to have arisen. But the claiming Party may, by giving a notice, refer the claim to the Employer’s Representative and Sub-Clause 3.5 (Agreement or Determination) shall apply.…

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Notices under FIDIC Silver Book 2017 Edition Part 13

This is part 13 in an ongoing series on notices under FIDIC Silver Book 2017. This post covers the provision for notices in Clause 17 (Care of the Works and Indemnity) and Clause 18 (Exceptional Events). Clause 17 (Care of the Works and Indemnities) Sub Clause 17.2 (Liability for Care of the Works). The Contractor shall have no liability whatsoever, whether by way of indemnity or otherwise, for: loss or damage to the works goods, or Contractor’s documents caused by any of the events, like: interference with any right of way, light, air, water, or other easement use or occupation by the Employer of any part of the permanent works, fault, error, defect or omission in any element of the design of the works by the Employer, unforeseeable forces of nature or operation, any of the events or circumstances listed under Sub-Clause 18.1 (Exceptional Events) and/or any act or default of Employer’s personnel or Employer’s other contractors. If any of these events occur and results in damage…

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