S 2017 - 6

FIDIC 2017 Conditions of Contract for EPC/Turnkey Projects

• The text discusses provisions for failure to pass tests after completion and the entitlement of the employer to performance damages.
• The Contractor can propose adjustments or modifications to the works if they fail to pass a test after completion.
• The Contractor may be instructed by the Employer to delay access to the works until convenient for the Employer.
• If the Contractor incurs additional cost due to unreasonable delay by the Employer, they are entitled to payment of such costs plus profit.
• The Employer can instruct a variation or request a proposal for changes in cost after the completion of the works.
• There are provisions for adjustments for changes in cost if there are no schedules of cost indexation in the Particular Conditions.
• The Contract Price stated in the Contract Agreement is deemed to cover the contingency of rises and falls in costs to the extent not covered by other clauses.
• Adjustments to the Contract Price are to be calculated for each currency in which the Contract Price is payable.
• No adjustment is applied to work valued on the basis of cost or current prices.
• If the Contractor fails to complete the works within the Time for Completion, adjustment of prices thereafter shall be made using specific criteria.
• Payment for the works shall be made on the basis of the lump sum Contract Price stated in the Contract Agreement, subject to adjustments, additions, and/or deductions.
• The Employer is required to make an advance payment, as an interest-free loan for mobilization and design, as stated in the Contract Data. The Contractor is also required to obtain an Advance Payment Guarantee.

Contractor's Obligations for Advance Payment Guarantee

• The guarantee is issued by an entity within the jurisdiction to which the employer gives consent.
• The guarantee must be based on the sample form in the tender documents or an agreed form by the employer.
• The advance payment guarantee must remain valid and enforceable until the advance payment is repaid.
• If the guarantee specifies an expiry date, the contractor must extend its validity if the advance payment remains unpaid.
• The contractor must submit an application for the advance payment when providing the advance payment guarantee.
• The employer must make the advance payment within 14 days of receiving the performance security and advance payment guarantee.
• The advance payment will be repaid through percentage deductions in interim payments.
• The deductions will commence when the total of all interim payments (excluding the advance payment) exceeds ten percent of the contract price.
• Deductions will be made at an amortisation rate of 25% of each interim payment until the advance payment is repaid.
• If the advance payment is not repaid before the Taking-Over Certificate or termination, the outstanding balance becomes immediately due.
• The contractor must submit a statement to the employer after the period of payment, detailing the amounts to which the contractor is entitled.
• The statement should include various items, such as the estimated contract value of the works executed and any deductions or additions for changes in laws, retention, advance payment, plant and materials, and other due amounts.

Contractor's Obligations for Advance Payment Guarantee

• The guarantee is issued by an entity within the jurisdiction to which the employer gives consent.
• The guarantee must be based on the sample form in the tender documents or an agreed form by the employer.
• The advance payment guarantee must remain valid and enforceable until the advance payment is repaid.
• If the guarantee specifies an expiry date, the contractor must extend its validity if the advance payment remains unpaid.
• The contractor must submit an application for the advance payment when providing the advance payment guarantee.
• The employer must make the advance payment within 14 days of receiving the performance security and advance payment guarantee.
• The advance payment will be repaid through percentage deductions in interim payments.
• The deductions will commence when the total of all interim payments (excluding the advance payment) exceeds ten percent of the contract price.
• Deductions will be made at an amortisation rate of 25% of each interim payment until the advance payment is repaid.
• If the advance payment is not repaid before the Taking-Over Certificate or termination, the outstanding balance becomes immediately due.
• The contractor must submit a statement to the employer after the period of payment, detailing the amounts to which the contractor is entitled.
• The statement should include various items, such as the estimated contract value of the works executed and any deductions or additions for changes in laws, retention, advance payment, plant and materials, and other due amounts.

This quiz covers the provisions for failure to pass tests after completion, entitlement of the employer to performance damages, adjustments to the Contract Price, Contractor's obligations for Advance Payment Guarantee, and other important clauses in the FIDIC 2017 Conditions of Contract for EPC/Turnkey Projects.