This post is the third of a four-part series on The Typical Sequence of Activities and Events under FIDIC. Parts one and two dealt with the project lifecycle based on FIDIC Red, Yellow, and Silver 2017 editions. In this post and the next, our attention will turn to the FIDIC Gold Book 2008.

Let’s begin with the overall contract period of the Gold Book First Edition 2008. The DBO Contract Period includes the Design & Built plus the Operation Period. This means from [Commencement Date] Sub-Clause 8.1, it stretches to DB Period till Sub-Clause 11.7, [Commissioning Certificate]. This Sub-Clause is like the taking-over certificate in the Red, Yellow, and Silver Books. In the Gold Book, it’s the commissioning certificate. The contract completion certificate (Sub-Clause 8.6) is issued after the completion of the operations period.

The Gold Book has a tender period with a certain base date (Sub-Clause 1.1.5), followed by the tender submission, and then the issue of the Letter of Acceptance (LoA) (Sub-Clause 1.1.48).

Subsequently, the Contractor can claim for advanced payment with an advanced payment guarantee (Sub-Clause 14.2). The performance guarantee (Sub-Clause 4.2) should be issued by the Contractor within 28 days after the issuance of the LoA. The commencement date will be within 42 days unless otherwise stated. This is all the same as the other contract forms.

The Design-Build Period

The Design-Build period includes time for completion plus delays or extensions of time. During the Design-Build period, there is a commissioning period which should be indicated; it’s normally three months before the completion with 14 days notice before completion. This is followed by the commissioning certificate (Sub-Clause 11.7), which will initiate the release of 50% of retention (Sub-Clause 1.1.65).

The retention period is one year and, upon achieving this, the balance of the retention amount is to be paid off (Sub-Clause 1.1.65). Additionally, the performance security is reduced to only cover the operations. This is followed by the operation period and completion certificate.

The Operation Service Period

Along with the issue of the commissioning certificate (Sub-Clause 11.7), a one-man DAB is appointed for the operation service period (Sub-Clause 20.10). An asset replacement fund (Sub-Clause 14.18) and maintenance retention fund of 5% of the agreed value (Sub-Clause 14.19) are initiated.

Two years prior to completion of the operation period, a joint inspection has to be done (Sub-Clause 11.8) including tests (Sub-Clause 11.9). Subsequent to successful completion, the contract completion certificate is issued (Sub-Clause 8.6) with the release of funds remaining in the maintenance retention fund (Sub-Clause 14.19). Within 21 days, the reduced performance security shall be released (Sub-Clause 4.2).
Payments During the Design-Build Period

The Contractor shall submit monthly or interim statements (Sub-Clause 14.3). The Employer’s representative issues the interim payment certificate within 28 days (Sub-Clause 14.7) and the Employer issues payment within 56 days from the Contractor submitting his statement (Sub-Clause 14.8). Advanced payment is also the same.

For final payments, the Contractor first submits the final statement within 28 days of the end of the retention period and the parties agree to the statement. Then, the Contractor submits a final agreed statement with undertakings (Sub-Clause 14.11). Within 28 days, the Employer’s representative issues the final payment certificate (Sub-Clause 14.12). The Employer makes payment within a maximum of 56 days of receiving the final payment certificate from the Employer’s representative (Sub-Clause 14.8).

Payment During the Operation Service Period

Payment during the Operation Service Period is nearly the same as during the Design-Build period: the Contractor submits a statement (Sub-Clause 14.3) including money from the asset maintenance fund (Sub-Clause 14.8).

Within 28 days, the representative issues the interim payment certificate (Sub-Clause 14.7). The Employer makes payment within a maximum of 56 days of the Contractor submitting his statement for final payment (Sub-Clause 14.8).

For final payments, the Contractor submits an application for the final statement certificate (Sub-Clause 14.13) together with the remaining maintenance retention fund (Sub-Clause 14.19) and discharge (Sub-Clause 14.14). The Employer’s representative issues the final payment certificate within 28 days (Sub-Clause 14.15). Subsequently, the Employer pays within 56 days of receipt of the final payment certificate or 56 days after receiving the contract completion certificate (Sub-Clause 14.8).

The final post in this series will conclude this focus on the sequence of activities and events in the Gold Book 2008 edition.

This guest post was written by Mansoor Ali, FICCP. It is the third in a four-part series and was originally published as a LinkedIn video, viewable here. The previous posts can be found here and here.