Conditions Of Contract For EPC/Turnkey Projects

Special Advisers to the Contracts Committee provided invaluable and continuedsupport in the various drafting and revision stages:Christopher Seppälä, White & Case LLP, France (legal adviser, assisted by DimitarKondev, White & Case LLP, France); Nael G Bunni, Ireland (risk and insurance adviser);Axel-V. Jaeger, Germany; Michael Mortimer-Hawkins, UK / Sweden; and ChristopherWade, UK.This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgDrafts were reviewed by many persons and organisations, including those listed below.Their comments were duly studied by the FIDIC Contracts Committee’s Updates SpecialGroup and Update Task Groups and, where considered appropriate, have influencedthe wording of the clauses.Mahmoud Abu Hussein, Dolphin Energy, United Arab Emirates; Ihab Abu-Zahra,CRC Hassan Dorra, Egypt; Mushtaq Ahmad Smore, Engineer, Pakistan; RichardAppuhn, 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; CremonaCotovelea, 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; TomohideIchiguchi, 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; BenjaminMellors, Holman Fenwick Willan LLP, UK; Christopher Miers, Probyn Miers, UK; HenryMusonda, Kiran & Musonda Associates, Zambia; Kjeld B Nielsen, Sweco, Denmark;Patrizia Palmitessa-Savric, Ginder Palmitessa Pty Ltd, Botswana; James Perry, PSConsulting, 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 ororganisations 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. FIDIC 2017

NOTESThis Second Edition of the Conditions of Contract for EPC/Turnkey Projects hasbeen published by the Fédération Internationale des Ingénieurs-Conseils (FIDIC) asan update of the FIDIC 1999 Conditions of Contract for EPC/Turnkey Projects (SilverBook), First Edition.Along with the FIDIC 1999 Red Book (the Conditions of Contract for Construction) andthe 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 foruse in the following circumstances:This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.org– If there is insufficient time or information for tenderers to scrutiniseand check the Employer’s Requirements or for them to carry outtheir designs, risk assessment studies and estimating;– If construction will involve substantial work underground or workin other areas which tenderers cannot inspect, unless specialprovisions are provided to account for unforeseen conditions or– If the Employer intends to supervise closely or control the Contractor’swork, or to review most of the construction drawings.FIDIC recommends that the Second Edition of the FIDIC Yellow Book (Conditions ofContract for Plant and Design-Build) be used in the above circumstances for Worksdesigned by (or on behalf of) the Contractor.This Second Edition of the FIDIC Silver Book maintains the principles of risk sharingestablished in the 1999 edition, while seeking to build on the substantial experiencegained from its use over the past 18 years. For example, this edition provides:1) greater detail and clarity on the requirements for notices and othercommunications;2) provisions to address Employers’ and Contractors’ claims treated equallyand separated from disputes;3) mechanisms for dispute avoidance and4) detailed provisions for quality management, and verification of Contractor’scontractual compliance.These Conditions of Contract for EPC/Turnkey Projects include conditions, which arelikely to apply to the majority of such contracts. Essential items of information whichare particular to each individual contract are to be included in the Particular ConditionsPart 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 fromthose included in the General Conditions. These should be included in Part B – SpecialProvisions.It should be noted, that the General Conditions and the Particular Conditions (PartA – Contract Data and Part B – Special Provisions) are all part of the Conditions ofContract. FIDIC 2017

To assist Employers in preparing tender documents and in drafting Particular Conditionsof Contract for specific contracts, this publication includes Notes on the Preparation ofTender Documents and Notes on the Preparation of Special Provisions, which provideimportant advice to drafters of contract documents, in particular the Employer’sRequirements and Special Provisions. In drafting Special Provisions, if clauses in theGeneral Conditions are to be replaced or supplemented and before incorporating anyexample wording, Employers are urged to seek legal and engineering advice in aneffort to avoid ambiguity and to ensure completeness and consistency with the otherprovisions of the contract.This publication begins with a series of comprehensive flow charts which typicallyshow, 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 takeninto consideration in the interpretation of the Conditions of Contract.This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgThis publication also includes a number of sample forms to help both Parties to developa common understanding of what is required by third parties such as providers ofsecurities and guarantees.Drafters of contract documents are reminded that the General Conditions of all FIDICcontracts are protected by copyright and trademark and may not be changed withoutspecific written consent, usually in the form of a licence to amend, from FIDIC. If drafterswish to amend the provisions found in the General Conditions, the place for doing thisis in the Particular Conditions Part B – Special Provisions, as mentioned above, andnot by making changes in the General Conditions as published.FIDIC considers the official and authentic texts to be the versions in the Englishlanguage. FIDIC 2017

This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgTypical Sequence of Principal Events During Contracts for EPC/Turnkey Projects1.The Time for Completion is to be stated (in the Contract Data) as a number of days, to which is added anyextensions of time under Sub-Clause 8.5.2.In order to indicate the sequence of events, the above diagram is based upon the example of the Contractorfailing to comply with Sub-Clause 8.2.3.The Defects Notification Period is to be stated (in the Contract Data) as a number of days, to which is addedany extensions under Sub-Clause 11.3.4.Depending on the type of Works, Tests after Completion may also be required.Issue of theTenderDocumentsSubmission Signing theof ate28d1.1.21Date ofCompletionDefectsNotificationPeriod38.2 Time forCompletion1 28d 21dDelayattributableto theContractor2Tenderperiod11.9 Issue ofPerformanceCertificate4.2.1 Delivery of thePerformance Security9. Tests onCompletion411 Notifyingof DefectsRemedyingof Defects4.2.3 Return ofthe PerformanceSecurity (subject toSub-Clause 11.11) FIDIC 2017

Typical Sequence of Payment Events Envisaged in Clause 1414.3, 14.6.1 Employerreceives Contractor’sStatement andSupporting documents14.6 Employer givesNotice of the amountconsidered due14.7 Employer makesthe payment to theContractor 56dEach of themonthly (orotherwise)interimpaymentsThe finalpayment 28d 56dEmployer verifies thestatement, Contractorsubmits informationThis document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.org 28d14.11.1 Contractor14.11.2 Contractor submitssubmits draft finalFinal Statement and theStatement to the Employer 14.12 discharge14.13 Employer givesNotice of the amountconsidered finally due14.7 Employermakes paymentTypical Sequence of Dispute Events Envisaged in Clause 21Both Parties’signature ofthe ContractAgreement21.1 Partiesappoint theDAAB21.4.1 A Party refersthe Dispute to theDAAB21.4.4 A Partymay issuea “Notice ofDissatisfaction”Parties presentsubmissions to the DAAB 28d* 84d21.5 Amicablesettlement 28dDAAB givesits decision* If not stated otherwise in the Contract Data (Sub-Clause 21.1) FIDIC 201721.6 A Partymay initiatearbitration 28dArbitrator/sappointed

Typical Sequence of Events in Agreement or Determination under Sub-Clause 3.5Scenario 11Employer’s Representative[ER] starts performing dutiesSub-Clause 3.5Parties’ agreementSub-Clause 3.5.1Notice of errorby a Party/ERSub-Clause 3.5.4ER’s Noticeof agreementSub-Clause 3.5.1ER’s Notice ofcorrected agreementSub-Clause 3.7.4Consultations 42d 14d 7dSub-Clause 3.5.3(a), (b) or (c)This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgScenario 22ER starts performingduties Sub-Clause3.5Parties advise the ER:no agreementSub-Clause 3.5.1(b)ER’s Notice ofdeterminationSub-Clause 3.5.2Notice ofDissatisfactionSub-Clause 3.5.5No Noticeof errorConsultationsPeriod for making ER’sdetermintaion 42d 42d 14d 28dSub-Clause 3.5.3(a), (b) or (c)Scenario 33ER startsperforming dutiesSub-Clause 3.5No agreementbetween the PartiesSub-Clause 3.5.1(a)ER’s Notice ofdeterminationSub-Clause 3.5.2Notice of errorby a Party/ERSub-Clause 3.5.4ConsultationsER’s Noticeof correcteddeterminationSub-Clause 3.5.4Notice ofDissatisfactionSub-Clause 3.5.5Period for making ER’sdetermintaion 42d 42d 14d 7d 28dSub-Clause 3.5.3(a), (b) or (c)1.Agreement is reached within 42 days, error found in the ER’s Notice of agreement and corrected.2.The Parties’ early advice that agreement cannot be reached and so ER’s determination is necessary, no errorin ER’s determination.3.No agreement within 42 days, ER determines within 42 days, error found in the ER’s determination andcorrected. FIDIC 2017

This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.org

GENERAL CONDITIONSGUIDANCE FOR THEPREPARATION OFPARTICULAR CONDITIONSAND ANNEXES: FORMSOF SECURITIESFIDIC Conditions of Contract forEPC/TURNKEY PROJECTSThis document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgGeneral ConditionsFEDERATION INTERNATIONALE DES INGENIEURS-CONSEILSINTERNATIONAL FEDERATION OF CONSULTING ENGINEERSINTERNATIONALE VEREINIGUNG BERATENDER INGENIEUREFEDERACION INTERNACIONAL DE INGENIEROS CONSULTORESFORMS OF LETTER OFTENDER, CONTRACTAGREEMENT ANDDISPUTE ADJUDICATION/AVOIDANCE AGREEMENT

This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.org

GENERALCONDITIONSGUIDANCEGeneral ConditionsThis document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgGeneral Conditions1GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15DefinitionsInterpretationNotices and Other CommunicationsLaw and LanguagePriority of DocumentsContract AgreementAssignmentCare and Supply of DocumentsEmployer’s Use of Contractor’s DocumentsContractor’s Use of Employer’s DocumentsConfidentialityCompliance with LawsJoint and Several LiabilityLimitation of LiabilityContract Termination2THE EMPLOYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132.12.22.32.42.52.6Right of Access to the SiteAssistanceEmployer’s Personnel and Other ContractorsEmployer’s Financial ArrangementsSite Data and Items of ReferenceEmployer-Supplied Materials and Employer’s Equipment3THE EMPLOYER’S ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . 153.13.23.33.43.53.6The Employer’s RepresentativeOther Employer’s PersonnelDelegated PersonsInstructionsAgreement or DeterminationMeetings FIDIC 2017FORMSCONTENTSi

GENERALCONDITIONSGUIDANCEFORMSThis document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgii4THE CONTRACTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154.164.174.184.194.204.214.224.23Contractor’s General ObligationsPerformance SecurityContractor’s RepresentativeSubcontractorsNominated SubcontractorsCo-operationSetting OutHealth and Safety ObligationsQuality Management and Compliance Verification SystemsUse of Site DataSufficiency of the Contract PriceUnforeseeable DifficultiesRights of Way and FacilitiesAvoidance of InterferenceAccess RouteTransport of GoodsContractor’s EquipmentProtection of the EnvironmentTemporary UtilitiesProgress ReportsSecurity of the SiteContractor’s Operations on SiteArchaeological and Geological Findings5DESIGN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325.15.25.35.45.55.65.75.8General Design ObligationsContractor’s DocumentsContractor’s UndertakingTechnical Standards and RegulationsTrainingAs-Built RecordsOperation and Maintenance ManualsDesign Error6STAFF AND LABOUR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376.16.26.36.46.56.66.76.86.96.10Engagement of Staff and LabourRates of Wages and Conditions of LabourRecruitment of PersonsLabour LawsWorking HoursFacilities for Staff and LabourHealth and Safety of PersonnelContractor’s SuperintendenceContractor’s PersonnelContractor’s Records FIDIC 2017Conditions of Contract for EPC/Turnkey Projects

This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgGeneral ConditionsPLANT, MATERIALS AND WORKMANSHIP. . . . . . . . . . . . . . . . . . . . . . 407.17.27.37.47.57.67.77.8Manner of ExecutionSamplesInspectionTesting by the ContractorDefects and RejectionRemedial WorkOwnership of Plant and MaterialsRoyalties8COMMENCEMENT, DELAYS AND SUSPENSION . . . . . . . . . . . . . . . . . ncement of WorksTime for CompletionProgrammeAdvance WarningExtension of Time for CompletionDelays Caused by AuthoritiesRate of ProgressDelay DamagesEmployer’s SuspensionConsequences of Employer’s SuspensionPayment for Plant and Materials after Employer’s SuspensionProlonged SuspensionResumption of Work9TESTS ON COMPLETION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499.19.29.39.4Contractor’s ObligationsDelayed TestsRetestingFailure to Pass Tests on Completion10EMPLOYER’S TAKING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5210.110.210.3Taking Over the Works and SectionsTaking Over of Parts of the WorksInterference with Tests on Completion11DEFECTS AFTER TAKING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5311.111.2Completion of Outstanding Work and Remedying DefectsCost of Remedying Defects FIDIC 2017GENERALCONDITIONS7GUIDANCEDisorderly ConductKey PersonnelFORMS6.116.12iii

GENERALCONDITIONSGUIDANCEFORMSThis document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT .11Extension of Defects Notification PeriodFailure to Remedy DefectsRemedying of Defective Work off SiteFurther Tests after Remedying DefectsRight of Access after Taking OverContractor to SearchPerformance CertificateUnfulfilled ObligationsClearance of Site12TESTS AFTER COMPLETION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5812.112.212.312.4Procedure for Tests after CompletionDelayed TestsRetestingFailure to Pass Tests after Completion13VARIATIONS AND ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6113.113.213.313.413.513.613.7Right to VaryValue EngineeringVariation ProcedureProvisional SumsDayworkAdjustments for Changes in LawsAdjustments for Changes in Cost14CONTRACT PRICE AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1214.1314.1414.15The Contract PriceAdvance PaymentApplication for Interim PaymentSchedule of PaymentsPlant and Materials intended for the WorksInterim PaymentsPaymentDelayed PaymentRelease of Retention MoneyStatement at CompletionFinal StatementDischargeFinal PaymentCessation of Employer’s LiabilityCurrencies of Payment FIDIC 2017Conditions of Contract for EPC/Turnkey Projects

This document is restricted for distribution within the Lexis Nexis platform - NOT FOR CONTRACT USE AND NOT PRINTABLE - ORIGINAL FOR SALE AT www.fidic.orgGeneral ConditionsNotice to CorrectTermination for Contractor’s DefaultValuation after Termination for Contractor’s DefaultPayment after Termination for Contractor’s DefaultTermination for Employer’s ConvenienceValuation after Termination for Employer’s ConveniencePayment after Termination for Employer’s Convenience16SUSPENSION AND TERMINATION BY CONTRACTOR. . . . . . . . . . . . . 8116.116.216.316.4Suspension by ContractorTermination by ContractorContractor’s Obligations After TerminationPayment after Termination by Contractor17CARE OF THE WORKS AND INDEMNITIES. . . . . . . . . . . . . . . . . . . . . . 8417.117.217.317.417.517.6Responsibility for Care of th

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