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  • Miseon Lee

EPC/Turnkey Contract 2nd Ed (2017 Silver Book)



Description

This Second Edition of the Conditions of Contract for EPC/Turnkey Projects has been published by the Fédération Internationale des Ingénieurs-Conseils (FIDIC) as an update of the FIDIC 1999 Conditions of Contract for EPC/Turnkey Projects (Silver Book), First Edition.

Along with the FIDIC 1999 Red Book (the Conditions of Contract for Construction) and the FIDIC 1999 Yellow Book (the Conditions of Contract for Plant and Design-Build), the FIDIC 1999 Silver Book has been in widespread use for nearly two decades.

These Conditions of Contract for EPC/Turnkey Projects are not suitable for use in the following circumstances:

–    If there is insufficient time or information for tenderers to scrutinise and check the Employer’s Requirements or for them to carry out their designs, risk assessment studies and estimating;

–    If construction will involve substantial work underground or work in other areas which tenderers cannot inspect, unless special provisions are provided to account for unforeseen conditions or

–    If the Employer intends to supervise closely or control the Contractor’s work, or to review most of the construction drawings.

FIDIC recommends that the Second Edition of the FIDIC Yellow Book (Conditions of Contract for Plant and Design-Build) be used in the above circumstances for Works designed by (or on behalf of) the Contractor.

This Second Edition of the FIDIC Silver Book maintains the principles of risk sharing established in the 1999 edition, while seeking to build on the substantial experience gained from its use over the past 18 years. For example, this edition provides:

1)  greater detail and clarity on the requirements for notices and other communications;

2)  provisions to address Employers’ and Contractors’ claims treated equally and separated from disputes;

3)  mechanisms for dispute avoidance and

4)  detailed provisions for quality management, and verification of Contractor’s contractual compliance.

These Conditions of Contract for EPC/Turnkey Projects include conditions, which are likely to apply to the majority of such contracts. Essential items of information which are particular to each individual contract are to be included in the Particular Conditions Part A – Contract Data.

In addition it is recognised that many Employers, especially governmental agencies, may require special conditions of contract, or particular procedures, which differ from those included in the General Conditions. These should be included in Part B – Special Provisions.

It should be noted, that the General Conditions and the Particular Conditions (Part A – Contract Data and Part B – Special Provisions) are all part of the Conditions of Contract.

To assist Employers in preparing tender documents and in drafting Particular Conditions of Contract for specific contracts, this publication includes Notes on the Preparation of Tender Documents and Notes on the Preparation of Special Provisions, which provide important advice to drafters of contract documents, in particular the Employer’s Requirements and Special Provisions. In drafting Special Provisions, if clauses in the General Conditions are to be replaced or supplemented and before incorporating any example wording, Employers are urged to seek legal and engineering advice in an effort to avoid ambiguity and to ensure completeness and consistency with the other provisions of the contract.

This publication begins with a series of comprehensive flow charts which typically show, in visual form, the sequences of activities which characterise the FIDIC EPC/Turnkey form of contract. The charts are illustrative, however, and must not be taken into consideration in the interpretation of the Conditions of Contract.

This publication also includes a number of sample forms to help both Parties to develop a common understanding of what is required by third parties such as providers of securities and guarantees.

Drafters of contract documents are reminded that the General Conditions of all FIDIC contracts are protected by copyright and trademark and may not be changed without specific written consent, usually in the form of a licence to amend, from FIDIC. If drafters wish to amend the provisions found in the General Conditions, the place for doing this is in the Particular Conditions Part B – Special Provisions, as mentioned above, and not by making changes in the General Conditions as published.

FIDIC considers the official and authentic texts to be the versions in the English language.

Table of contents

Acknowledgements

Notes

General Conditions

             Content............................................................................................................................... i

             Clauses 1 to 21................................................................................................................ 1

             Appendix: General Conditions of Dispute Avoidance/Adjudication Agreement       103

             Annex: DAAB Procedural Rules.............................................................................. 112

             Index of Sub-Clauses................................................................................................ 119

Guidance for the Preparation of Particular Conditions

             Contents............................................................................................................................ 1

             Introductory Guidance Notes..................................................................................... 2

             Particular Conditions Part A – Contract Data......................................................... 3

             Particular Conditions Part B – Special Provisions................................................. 8

                        Notes on the Preparation of Tender Documents............................... 10

                        Notes on the Preparation of Special Provisions................................. 14

             Advisory Notes to Users of FIDIC Contracts Where the Project is Using Building Information Modelling Systems........................................................................................................................................... 56

Annexes: Forms of Securities..................................................................................................... 59

Forms of Letter of Tender, Contract Agreement and

Dispute Adjudication/Avoidance Agreement

             Letter of Tender............................................................................................................... i

             Contract Agreement....................................................................................................... ii

                Dispute Avoidance/Adjudication Agreement      iv

About the authors

Fédération Internationale des Ingénieurs-Conseils (FIDIC) extends special thanks to the following persons who prepared, assisted and contributed in the preparation of the Second Edition of FIDIC’s three standard forms of contract (Conditions of Contract for Construction, Conditions of Contract for Plant and Design-Build, and Conditions of Contract for EPC/Turnkey Projects):

FIDIC Contracts Committee Updates Special Group: Zoltán Záhonyi, Z&Partners Consulting Engineers, Hungary; Siobhan Fahey, Consulting Engineer, Ireland (Principal Drafter); Christoph Theune, GKW Consult GmbH, Germany; and William Howard, CDM Smith, USA (Executive Committee liaison).

Initial Update Task Group:  Svend Poulsen, Atkins / COWI, Denmark (Group Leader); Aisha Nadar, Runeland Law, Sweden (task group principal drafter); Robin Schonfeld, SMEC, Australia (task group principal drafter); Darko Plamenac, Consulting Engineer, Serbia; Jan Ziepke, Consulting Engineer, Germany; and Zoltán Záhonyi, Z&Partners Consulting Engineers, Hungary (Contracts Committee liaison).

Second Stage Update Task Group:  Simon Worley, EIA Ltd., UK (Group Leader); John Greenhalgh, Greenhalgh Associates, UK; Leo Grutters, Consulting Engineer, Netherlands; Aisha Nadar, Runeland Law, Sweden; William Godwin, Queens Counsel, UK; Siobhan Fahey, Consulting Engineer, Ireland (Contracts Committee liaison); and Shelley Adams, EIA Ltd., UK (secretary to the task group).

The preparation was carried out under the general direction of the FIDIC Contracts Committee:

Philip Jenkinson, Atkins, UK (past Chairman); Zoltán Záhonyi, Z&Partners Consulting Engineers, Hungary (Chairman); Vincent Leloup, Exequatur, France; Kaj Möller, SWECO, Sweden; Siobhan Fahey, Consulting Engineer, Ireland; Mike Roberts, Mott MacDonald, UK; Des Barry, Consulting Engineer, Ireland; Christoph Theune, GKW Consult GmbH, Germany; Enrico Vink, FIDIC Managing Director; and Christophe Sisto, FIDIC Design & Edition Manager.

together with liaisons to the FIDIC Contracts Committee:  Geoff French, Scott Wilson, UK (past EC liaison); Kaj Möller, SWECO, Sweden (past EC liaison); José Amorim Faria, SOPSEC, Portugal (past EFCA liaison); William Howard, CDM Smith, USA (EC primary liaison); Aisha Nadar, Runeland Law, Sweden (EC secondary liaison; and Pawel Zejer, AECOM, Poland (EFCA liaison).

Advisory Notes to Users of FIDIC Contracts Where the Project is Using Building Information Modelling Systems were provided by: Anthony Barry, Aurecon, Australia (FIDIC Executive Committee), Andrew Read, Pedersen Read Consulting, New Zealand (chairman FIDIC Business Practice Committee) and Stephen Jenkins, Aurecon, New Zealand (chairman FIDIC Risk, Liability and Quality Committee).

Special Advisers to the Contracts Committee provided invaluable and continued support in the various drafting and revision stages: Christopher Seppälä, White & Case LLP, France (legal adviser, assisted by Dimitar Kondev, White & Case LLP, France); Nael G Bunni, Ireland (risk and insurance adviser); Axel-V. Jaeger, Germany; Michael Mortimer-Hawkins, UK / Sweden; and Christopher Wade, UK.

Drafts were reviewed by many persons and organisations, including those listed below. Their comments were duly studied by the FIDIC Contracts Committee’s Updates Special Group and Update Task Groups and, where considered appropriate, have influenced the wording of the clauses.

Mahmoud Abu Hussein, Dolphin Energy, United Arab Emirates; Ihab Abu-Zahra, CRC Hassan Dorra, Egypt; Mushtaq Ahmad Smore, Engineer, Pakistan; Richard Appuhn, Engineer, Italy; Ulrik Bang Olsen, Bang Olsen & Partners Law Firm P/S, Denmark; Hartmut Bruehl, Engineer, Germany; Donald Charrett, MTECC, Australia; Edward Corbett, Corbett & Co International Construction Lawyers Ltd, UK; Cremona Cotovelea, SCPA Tecuci-Paltineanu, Romania; Mark Etheridge, UWP Consulting Pty (Ltd), UK; European International Contractors, Berlin, Germany; Ciaran Fahy, Engineer, Ireland; Stephane Giraud, Egis, France; Karen Gough, 39 Essex Chambers, UK; Sarwono Hardjomuljadi, Special Adviser to the Minister of Public Works, Indonesia; Sebastian Hoek, Kanzlei Dr.Hök Stieglmeier & Kollegen Berlin, Germany; Tomohide Ichiguchi, JICA, Japan; Reza Ikani, Tehran Berkeley Group of Companies, Iran; Levent Irmak, MC2 Modern, Turkey; Gordon Jaynes, Lawyer, UK; Nabeel Khokhar, Driver Group, UK; Humphrey Lloyd, Queen Mary University London, UK; Liu Luobing, Shanghai SICC Planning & Architectural Design, Republic of China; Husni Madi, Shura Construction Management, Jordan; Malith Mendis, ACES, Sri Lanka; Benjamin Mellors, Holman Fenwick Willan LLP, UK; Christopher Miers, Probyn Miers, UK; Henry Musonda, Kiran & Musonda Associates, Zambia; Kjeld B Nielsen, Sweco, Denmark; Patrizia Palmitessa-Savric, Ginder Palmitessa Pty Ltd, Botswana; James Perry, PS Consulting, France; Mikko Pulkkinen, Presentio Oy, Finland; John Ritchie, Consultant, Canada; Munther Sakhet, Allied Planning & Engineering Co, Jordan; Michael Sergeant, HFW, UK; Christian Siemer, Fichtner Consulting Engineers, Germany; Evgeny Smirnov, EBRD, UK; Jakob B. Sorensen,  M Holst, Advokater, Denmark; Benjamin Valloire, Syntec Ingénierie, France; Kitty Villani, Council of Europe Development Bank, France; Ahmed Faty Waly, WALY Arbitration, Egypt.

Acknowledgement of all reviewers above does not mean that such persons or organisations approve the wording of all clauses.

FIDIC very much appreciates the time and effort devoted by all the above persons.

The ultimate decision on the form and content of the document rests with FIDIC.


#EPC, #TurnkeyProjects


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