fidic conditions

8/13/2019 Fidic Conditions

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By

V R K Murty


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FIDIC(FEDERATION INTERNATIONALE DES

INGENIEURS- CONSEILS)


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History:1909-1957 RIBA Form (Royal Institute of British Architects)1945 - ICE Form (Institution of Civil Engineers) Domestic

Contracts1956 - 1991 ACE Form (Association of Consulting Engineers)1957

Conditions of Contract (International) for works of CivilEngineering by FIDIC & FIEC Red Book 1stedition

1963 - JCT Form (Joint Contracts Tribunal)1969 FIDIC 2ndEdition published1977 FIDIC 3rdEdition published1987

FIDIC 4thEdition published

1999 FIDIC 5thEdition published


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The Romano-Germanic group Law (PresentFrance, Belgium, Western Germany, north

Italy) :The Law is based on the idea that therelationship between those who govern andthose who are governed requires differentapproach from that required for the

relationship between individuals, and that theinterests of the individual cannot be given thesame weight as those of the society.Essentially the lawyer interprets legislative

provisionsPublic LawAdministrative Law deals withrelationship between the administration andpublic. This is used for Public works Contract


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Private Law:A civil code for private contracts.It is based on the principle that a code should

not attempt to provide rules that areimmediately applicable to every conceivableconcrete case, but rather an organized systemof general rules from which a solution for anygiven problem may be deduced by as simple a

process as possible.The written constitution is held at the highestpoint of Authority. The French law was codifiedby legislation ensuring justice freedom and

dignity to the individual in 1789 after Frenchrevolution during rule of Napoleon.


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Common Law Group: This law was mainlycreated by judges appointed by the crown in

the 12th

and 13th

centuries. It is therefore judgemade law, some times referred to as commonlaw. There is no separation between Publicand Private law. The Royal courts accessibleto common citizens. The sources are:

Judicial decisions when they are recognizedas precedents

Equity

Legislation

Regulations or subordinate legislation International treaties

Custom


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Publications:

1. Conditions of contract for

construction

2. Plant design and build3. EPC turnkey

4. Short form of Contract


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GENERAL PROVISIONS MAIN PLAYERS IN A CONTRACT PERFORMANCE OF CONTRACT DEFECT LIABILITY VALUATION AND PAYMENTS DELAYS, SUSPENSION AND TERMINATION RISKS AND RESPOSIBILITIES AND FORCE MAJEURE INSURANCE CLAIMS DISPUTES AND ARBITRATION CASE STUDIES


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General provisions: 1.1.1.7 Schedules- Entitled schedules

compiled by the contractor and submitted

with the letter of tender as included in thecontract. They include bill of quantities,

data, lists and schedules of rates or prices.


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General provisions

1.1.1 Contract- contract agreement, the

letter of acceptance, letter of tender, the

conditions, the specifications, the

drawings, the schedules or any other

documents mentioned in the contract

agreement or the acceptance letter


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General provisions:

1.1.2.1 Party- Employer or contractor

1.1.2.2 Employer- Person named as employer in theappendix to tender and the legal successors in title to

this person 1.1.2.3 Contractor- Named as contractor in the letter of

tender and the legal successors in title to this person(s)

1.1.2.4 Engineer-Appointed by the employer to act asengineer for the purpose of the contract and named in

the appendix to the tender or other person appointedfrom time to time by the employer and notified to thecontractor


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General provisions:

1.1.2.5 Contractors representative-Person named in the contract or

appointed by the contractor from time totime

1.1.2.6 Employers personnel- The

engineer, the assistants and all otherstaff, labour and other employees of theengineer and the employer


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General provisions:

1.1.2.7 Contractors personnel-

Contractors representative, and all

personnel whom the contractor utilizes on

site who may include the staff, labour and

other employees of the contractor and of

each of the sub contractor


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General provisions:

1.1.2.7 Contractors personnel-

Contractors representative, and all

personnel whom the contractor utilizes on

site who may include the staff, labour and

other employees of the contractor and of

each of the sub contractor


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General provisions:

1.1.3.7 Defects notification period-

Period for notifying defects in the works

calculated from the date on which the

works or a section is completed

1.1.3.8 Performance certificate


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General provisions:

1.1.4.1 accepted contract amount: The

amount accepted in the letter of

acceptance

1.1.4.2 Contract price:Accepted

contract amount adjusted in accordance

with contract agreement


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General provisions:

1.1.4.7 Interim payment certificate:

Payment certificate other than final

payment certificate

1.1.4.10 Provisional sum:Sum which is

specified for execution of any part of the

work or for supply of plant, materials or

services


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General provisions:

1.1.4.11 Retention money:The

accumulated retention money which the

employer retains in interim certificates

1.1.6.6 Performance security: The

performance security specified as per

contract for satisfactory completion of the

work


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General provisions:

1.5 Priority of documents:

a) The contract agreement

b) The letter of acceptance

c) The letter of tenderd) The particular conditions

e) The general conditions

f) The specification

g)

The drawingsh) The schedules and any other documents forming partof contract


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General provisions:

1.6 Contract agreement:

To enter into a contract agreement within 28

days after contractor receives letter ofacceptance

Based on the form annexed to the particularconditions

Stamp duties imposed by law to be borne bythe employer


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General provisions:

1.7 Assignment:

Neither party shall assign whole or part ofwork

May assign whole or part of work with prioragreement of the other party at the solediscretion of the other party

May as security in favour of a bank orfinancial institution assign its right to anymoneys due


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General provisions:

1.12 confidential details:Contractor

shall disclose such confidential and

other information as the engineer may

reasonably require in order to verify

contractors compliance with the

contract


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General provisions:

1.13 Compliance with laws:

The employer to obtain planning, zoning or similarpermission for permanent works and shall indemnify

and hold contractor harmless The contractor shall give all notices, pay all taxes,

duties and fees and obtain all permits, licenses andapprovals as required by law and the contractor shallindemnify and hold the employer harmless against andfrom the consequences


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General provisions:1.14 Joint and several liability:

The contractor constitutes a joint venture, consortiumor other unincorporated grouping of two or morepersons

These persons shall be deemed to be jointly andseverally liable to the employer for the performance ofthe contract

These parties shall notify the employer of their leaderwho shall have the authority to bind the contractor andeach of these persons

The contractor shall not alter its composition or legalstatus without prior consent of the employer


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MAIN PLAYERS IN A CONTRACT:

The Employer

The Engineer

The Contractor

The Sub Contractors

Staff and labour


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The Employer (Responsibilities and rights):

2.1 Handing over site:Right of access and

possession to all parts of site to the contractor

within the time specified Grants extension of time for any delay in

handing over site

Payment of any such cost plus reasonableprofit which shall be included in the contract


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2.3 Employers personnel:

Employer responsible for ensuring that his

personnel co-operate with the contractorsefforts on safety procedures and protection of

environment


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2.4 Employers financial arrangements:

Employer shall make financial arrangements

and maintain them to make payment ofcontract price to contractor according to the

terms of contract agreement


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2.5 Employers claims:

Employer if he considers himself entitled for payment

from the contractor, the engineer shall give notice as

soon as practicable in respect of:

-- Determinations

-- Extension of time

-- Extension of defect liability period-- Notice not required in case of payment due for

issue of materials, electricity, water and gas


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3 The Engineer (Duties and Authority)

The employer shall appoint Engineer who shallcarry out duties assigned to him in the contract

Whenever the Engineer exercises a specifiedauthority for which employers approval isrequired the employer is deemed to haveissued the approval

The engineer shall have no authority to amendthe contract


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3 The Engineer (Duties and Authority):

The engineer shall have no authority to relieve

either party of their duties

Any approval, check, certificate, consent,examination, inspection, instruction, notice,

proposal, request, test or similar act by the

engineer shall nor relieve the contractor from

any of his responsibilities he has under the

contract


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The Engineer (Duties and Authority):

3.3 Instructions of the engineer:

The instructions shall be given in writing

If the engineer gives oral instruction, receiveswritten confirmation from the contractor withintwo working days and does not reply by issuingwritten rejection within two working days after

receiving the confirmation the confirmationconstitutes written instruction of the engineer


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3.4 Replacement of the Engineer:

The employer shall give not less than 42 days

notice for replacing the engineer. The employershall not replace the engineer with a person

against whom the contractor raises reasonable

objections in writing


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3.5 Determinations:

The engineer shall consult with each party in

an endeavour to reach an agreement ordetermination in a particular issue after issuing

necessary notices. If agreement is not

achieved he shall make a fair determination in

accordance with contract.


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4 The contractor (Obligations and rights):

4.1 The contractor shall design (to the extent

specified), execute and complete the works in

accordance to contract and with engineersinstructions and shall remedy any defects

The contractor shall provide the plant,

personnel, goods, consumables and services


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4.1 contd.

Stability and safety of site operations

Submit details of arrangements and methodsof execution

Submit design (To the extent specified),

drawings, documents, as built documents,Operation and maintenance manuals


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4.1The contractor shall design (to the extent

specified), execute and complete the works in

accordance to contract and with engineersinstructions and shall remedy any defects

The contractor shall provide the plant,

personnel, goods, consumables and services


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4.1 contd.

Stability and safety of site operations

Submit details of arrangements and methodsof execution

Submit design (To the extent specified),

drawings, documents, as built documents,Operation and maintenance manuals


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4.2 Performance security:

The contractor shall deliver performance

security within 28 days after receiving letter ofacceptance in the form, currency, amount

specified and valid and enforceable until the

contractor has executed and completed the

works and remedied all defects


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4.11 Sufficiency of accepted contract amount

4.12 Unforeseeable physical conditions

4.13 Rights of way and facilities4.14 Avoidance of interference

4.15 Access route

4.16 Transport of goods- 21 days notice

4.17 Contractors equipment- Shall not removefrom site without consent of engineer


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4.18 Protection of environment

4.19 Electricity, water and gas

4.20 Employers equipment and free- issuematerials

4.21 Progress reports

4.22 Security of site

4.23 Contractors operations on site

4.24 Fossils


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5. Nominated sub contractors:5.1 Who is stated in the contract as being

nominated

5.2 Objection of contractor to nomination if

the contractor does not agree due to lack ofcompetence, resources and financial strength

5.3 Payments to nominated subcontractors

as certified by engineer

5.4 Evidence of payments to nominated sub

contractors before issuing payment

certificate


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6. Staff and labour:6.1, 6.3 Contractor shall engage the labour as

required. He shall not employ staff and labourfrom employers personnel

6.2, 6.4, 6.5 Labour laws of the land shall befollowed. Working hours and days of restlocally recognized unless otherwise specified


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6. Staff and labour:

6.6, 6.7Facilities like accommodation,

welfare and precautions first aid health,

safety to staff and labour6.8 Contractors superintendence

6.9, 6.11 Contractors personnel shall be

appropriately qualified, skilled. They will

be removed/ replaced if not suitable and

as directed by the engineer


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Administration of Contract:

1. Handing over sitethe site shall be handed

over to the contractor by the employer withinthe period stated in the contract. Employergives extension of time and compensation forloss of profit and any other losses in case of

delay in handing over site. (2.1)2. Financial Arrangements Employer shall

make necessary financial arrangements andmaintain them for making payments against

contract price as per conditions of contractwithin 28 days of acceptance of contract(2.4)


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3. Performance securityThe contractor shall

deposit performance security within 28 days ofacceptance of contract valid and enforceabletill all works are satisfactorily completed and alldefects rectified . The amount of performance

security shall be in form and currency specifiedin the contract (4.2)

4. Commencement of work:The employer shallgive at least 7 days notice to commence work

after issue of letter of acceptance. Thecontractor shall commence work within 42 daysof acceptance of contract. (8.1)


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5. Programme for constructionThe contractor

within 28 days of acceptance of contract shallgive a detailed programme for sequence andstages of completion, methods of construction,procurement, materials and testing consistentwith period of completion. Revised programme

shall be furnished whenever it is found that theearlier programme submitted is not consistentwith the period of completion (8.2)

6. Details of temporary works - The contractor is

responsible for safety and stability of siteoperations. He shall submit methods ofexecution. He designs the works to the extentspecified in the contract. (4.1)


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7. Extension of time for completion: The

contractor shall be eligible for extension if Variations and substantial changes ordered by

the employer

Due to employers actions causing delays thatgive rise to entitlement of extension of time

Adverse climatic conditions affecting progressof work

Non availability of goods and personnel due tounforeseeable Government actions (8.4)


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7. Extension of time for completion: Extension of

time will be granted by the employer if thefollowing conditions exist:

a) Contractor diligently followed all proceduresstipulated by legally constituted authorities and

delay in progress of work was unavoidableb) These authorities delay or disrupt theprogress of the work which was unforeseeable

c) Any other conditions disrupting the workwhich were beyond the control of thecontractor (8.5)


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8. Rate of progress of work: The contractor shall

pay for any loss incurred by the employer if anytime:

a) Actual progress of work is too slow tocomplete the work within the contract period

b) Progress of work has fallen behind thecontract programme

c) The contractor is required to employadditional resources and employ new methodsfor construction as approved by the engineerinvolving additional cost to the employer tocomplete the work (8.6)


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8. Delay damages: The contractor shall pay delay

damages for every day of delay but notexceeding the sum specified in the contractusually not more than 10% of contract sum(8.7)

Suspension of work:Up to 28 days - Engineer may order suspensiongiving the reasons for suspension. Duringsuspension contractor shall protect the site and

materials. The contractor shall be entitled forextension of time and any such cost. (8.8)


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8. Suspension of work:

Beyond 28 days up to 84 days - The contractorshall be entitled for extension of time andpayment of any such cost thereof and cost ofwork of plant and machinery (8.10)

Prolonged suspension - If the suspensionexceeds 84 days, the contractor shall ask theengineer to allow him to proceed with the work.If the engineer fails to give permission to

proceed within 28 days after being requested,the contractor by giving notice may treatsuspension as omission of the affected portionof work. (8.11)


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9. Tests on completion: Contractor shall give 21

days notice to the engineer and carry out testson completion within 14 days. (9.1)

Delayed tests: If the engineer delays attendingtests extension of time shall be granted. If the

contractor in spite of 21 days notice fails to carryout tests, the engineer shall carry out the tests atthe risk and cost of the contractor. (9.2)

Retesting: The engineer may order retesting if

the tests do not pass, and the contractor shallcarry out the retesting at his cost. (9.3)


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12. Measurement and evaluation:

12.1Works to be measured:

Whenever the engineer requires measurement

to certain part of work he will give notice to thecontractor and contractor shall promptly attend

or depute his representative

Supply any particulars required by the engineer


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12.2 Works to be measured:

Measurement shall be made of the net actual

quantity Method of measurement shall be in

accordance with BOQ and other applicable

schedules


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12.3 Evaluation:

Rate shall be appropriate rate for such item in

the contract and if no rate exists a new rateappropriate to the item of work if:

a) The measured quantity of an item is

changed by more than 10% of BOQb) The change in quantity multiplied by

such specified rate exceeds 0.01% of

the contract amount


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12.3 Evaluation:

c) The change in quantity directly changes the

cost per unit quantity by more than 1%d) The item is not specified in the contract as

fixed rate item

e) The item is ordered as variation, no rate isspecified in the contract and no rate is

appropriate because the item of work is not

similar in nature


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12.3 Evaluation:

f) New rate shall be derived from any relevant

item in the contract, otherwise it shall bederived from actual cost of work, together with

reasonable profit


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13.Variations and adjustments:

13.2 Value engineering:

d) The proposal shall be prepared at the cost

of the contractor and design it if necessarye) The engineer will determine fee @ 50%

between reduction of contract value and

reduction in value in quality, life and

operational efficiency


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13.3 variation procedure:

Engineer requests for a proposal for variation

The contractor responds in writing either by

giving reasons why he cannot comply or

submits

Description of proposed work and aprogramme, time for completion & valuation


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13.3 Variation procedure:

The engineer as soon as practicable respond

with approval or disapproval or comments with

instructions to carry out the variation with any

requirements of costs


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13.4 Payment in applicable currencies:

If the contract provides for payment in

different currencies;

The amount payable in each of the currencies

Expected currency proportions of the cost of

varied work with reference to the proportionsspecified in the contract


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13.5 Provisional sums:

Provisional sum shall be used only for supplies

or services for which the provisional sum relates

Actual amount paid by the contractor

Percentage to cover overheads and profit as

stipulated in the contract


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13.6 Day work: The engineer may order day work

basis for incidental or minor works or for which

no standard data is available. The contractorshall submit daily reports of quantities of plant

and materials used, contractors personnel, type

and time of contractors equipment and

temporary works employed and priced

statements of these resources.


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13.7 Adjustments for changes in legislation:

The contract price shall be adjusted to take into

account any increase or decrease in cost

resulting from changes in the laws of the

country made after the base date.

The contractor is entitled to an extension oftime for any such delay


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13.8 Adjustments for changes in cost:

Contract amounts payable shall be adjusted for

rises or falls in rates of labour, goods or otherinputs to the works by the following formula:

Pn= a + b Ln+ c En+ d Mn +

L0 E0 M0


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Pn Adjustment multiplier to be applied to

estimated contract value

a Fixed coefficient stated in the relevant table of

adjustment data representing non adjustable

portion in contractual payments


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b, c, d are coefficients representing the

estimated portion of each cost element relatedto the execution of work

Ln, En, Mn are the current cost indices

L0, E0, M0 Are the base cost indices onthe base date


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Notes:

If currency of index is not the relevant currency

of payment each index shall be converted into

relevant currency at selling rate of central bank

Engineer shall determine provisional index forinterim payments


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Notes:

If the contractor fails to complete workwithin

stipulated time the price index shall be

considered on the date 49 days prior toexpiry

of the time for completionor the current indexwhich ever is favourable to the employer


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14.Contract price and payment:

14.1 The contract price:

Contract price shall be agreed or determined

and be subject to adjustments in accordancewith the contract

The contractor shall pay taxes, duties and fees

required to be paid by him under the contractand contract price shall not be adjusted except

for changes in legislation


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14.1 The contract price:

Quantities shown in bill of quantities are not to

be taken as actual quantities

The contractor shall submit proposed

breakdown of each lump sum within 28 days

after commencement of work


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14.2 Advance payment: (Mobilization advance)

Employer shall make an advance payment as

interest free loan for mobilization when thecontractor submits a guarantee by an entity

within a country approved by the employer

The advance payment shall be repaid by thecontractor through deductions from interim

payments due >10% of contract sum


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14.2 Advance payment: (Mobilization advance)

Deductions shall be made at the amortization

rate of 25% of the amount of each paymentcertificate

If the advance is not paid prior to issue of taking

over certificate/ termination the whole ofbalance shall become due


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14.3, 14.4 Application for interim payment

certificates & schedule of payments:

Contractor shall submit a statement in 6 copiesat the end of each month in the approved form

showing amount due, progress report and other

supporting documents.


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certificates & schedule of payments (Details to

be attached) Estimated contract value of the works executed

Any amounts to be added or deducted due to

changes in legislation Retention money


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14.3, 14.4 Application for interim paymentcertificates & schedule of payments: (Details to

be attached) Any amounts to be added/ deducted for

advance payment/ repayment

Any amounts to be added/ deducted for plants

& materials intended for the work Any other additions/ deductions (claims)


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certificates & schedule of payments: (Details to

be attached) Deduction of amounts certified in all previous

payments

The contractor shall submit within 42 days aftercommencement estimated installments of

payment in each quarter


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14.5 Plant and materials intended for works:

The contractor shall submit / maintain:

Satisfactory records of orders, receipts, costsand use of plant and materials

Shipped bill of lading, evidence of shipment,payment of freight &insurance charges, bank

guarantees Proper storage of plant & materials at site


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14.6 Issue of interim payment certificates:

The engineer shall within 28 daysafter

receiving statement issue a interim paymentcertificate. Cost of rectification/ non conformingwork/ material shall be withheld

14.7 The employer shall paythe contractor first

installment of advance payment within 42daysafter issue of letter of acceptance or within 21daysafter receipt of statement


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14.7 Issue of interim payment certificates:

Each interim paymentcertificate within 56days

after engineer receives the statement

Final paymentcertificate within 56 daysafter

receipt of payment certificate by the employer


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14.8 Delayed payment: If the contractor does notreceive the payment within specified time he will

be entitled for financing charges at 3% abovecentral bank rate

14.9 Retention money: After issue of taking overcertificate 50% of retention money shall be paid,

balance after expiry of defect notification periodand after withholding rectification cost ofdefects

fidic conditions

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