1 kaj moller_fidic lithuania_20150416

7/26/2019 1 Kaj Moller_FIDIC Lithuania_20150416

1/17

Kaj Mller,

FIDIC Exec. Comm. 2011 2015.

Liasion FIDIC Contracts Committee

Vilnius

April 16th, 2015

Latest Developments

and Trends of the

FIDIC Contract

Activities


2/17

FIDIC Presentation

Founded in 1913

Headquarters in Geneva

Mission:Work closely with

stakeholders to

improve the business

climate in which

members operate and

enable them tocontribute to making

the world a better

place to live in, now

and in the future

Vision: Enabling

the development ofa sustainable world,

as the recognised

global voice for the

consulting

engineering industry


3/17

Introduction to FIDIC

Representing 1.5 million CE professionals in 97 countr ies


4/17

Introduction to FIDIC

ASPAC Asia-Pacific Group

GAMA Group of Africa Member Associations

with a FIDIC Regional Office in Dar es Salaam, TanzaniaAFRICA

ASIA-PACIFIC

Groups of Member Associations

Regional Federations

FEPAC

EFCA

Pan American Federation of Consultants

European Federation of Engineering

Consultancy Associations


5/17

FIDIC Strategic Objectives

Be the authority on issues relating to business practicePromote the development of a globaland viable consulting engineering industry

Representglobally the consulting engineering

industryEnhance the imageof consulting engineers

Promote quality

Actively promote conformance to a code of ethicsand to integrity

Promote commitment to sustainabledevelopment

What FIDIC does

What FIDIC offers the industry

What are FIDICs governing principles


6/17

Procurement & Business

Quality of ConstructionInformed Purchaser

Consultant SelectionTendering ProceduresConflict of Interest

Scope of Services Definitions

Reviewing the Work of Others

Project Delivery

HIV-AIDSConsultants in Design-Build & PFI

Provision of OMS Services

Project Cost Estimates

Quality Management

Risk Management

Project Sustainability ManagementProfessional Liability Insurance

Insurance of Large Projects

Dispute Resolution

To be the Authority on Procurement and Business Practice


7/17

FIDIC Contracts and Agreements

FIDIC publishes internationally recognised forms of

contract for infrastructure works.

Model agreements forprofessional services:

Client/Consultant

Joint Venture

Sub-Consultant

Representative

Form of contract for works: Construction and Sub-Contractor

Construction (MDB)

Plant, Design & Build

Turn Key (EPC)

Dredging

*Underground works

Form of contract for worksand operations:

Design, Build & Operate

(DBO)

*Operate, Design and Build

(ODB)

More than 40,000

copies supplied

each year


8/17

Its about efficiency for investors/employers

Thus, FIDICproduces forms that are:

.

COMPLETE, FLEXIBLE Range covers most needs.

Readily adaptable to fit

requirements

RECOGNISED Positive FIDIC image.

World-wide acceptance

Tested for more than 50 years.

CLEAR, COHERENT Essential clauses.

Detailed definitions.

Consistent structure.

FAIR, EQUITABLE Essential clauses.

Detailed definitions.

Consistent structure

THIRD PARTY Drafted by consulting

engineers who designand manage projects.

FIDIC Contract and Agreement forms


9/17

Guiding, training and networking

.

Contract Guides

and Policy Papers.Conferences, Work-shops

and Training. Close contact with key -users and partners to fine-

tune and improve quality.



10/17

Procurement & Business Practice Capacity Building

Business Practice Training Manual

- Training modules with resource kits

- Applicable in developed and developing countries

International Training Programme

- Events co-organised with Member Associations

- Based on Guide to Practice manuals

Accredi ted Trainer Development Programme

- Trainers available locally and international

- International standards

Training Suppliers

- Recognised Training Centres: China, India, Jordan- Accredited Training Suppliers


11/17

FIDIC Adjudicators

FIDIC Presidents List of Approved Dispute Adjudicators

- For appointments to Dispute Adjudication Boards (DABs)

- DABs mandatory for the MDB Harmonised Construction Contract

FIDIC organises:

- Assessment Workshop

- Recommended Training Courses

- Appointments from List

FIDIC National Lists of Dispute Adjudicators

FIDIC organises:

- Guidelines to Member Associations for establishing and maintaining lists.

- www.fidic.org links.- Development of accredited national training courses and accredited trainers.


12/17

www.fidic.org


13/17

On the drawing board in the Contracts

Committee:

Task Group 4A Update of Joint Venture Model Agreement and Sub-

Consultant Model Agreement;

Task Group 4B Update of Client / Consultant Model Agreement (White

Book);

Task Group 6 Update of 1999 Rainbow Suite (Red, Yellow and Silver

book);

Task Group 7 Update of Dredgers Contract;

Task Group 9 New Yellow Book / Silver Book Sub-contract Forms

Task Group 10 New Tunnelling/Underground Contract;

Task Group 11 New Operate, Design & Build (ODB) Form of Contract;

Task Group 12 New Contract & Agreement - Glossary of Terms;


Ob ti f th M k t l


14/17

Observations from the Marketplace

What trends do I personally see 1(2):

Undoubtedly, fair and balanced contracts generate healthy

project completions. But, there is mixed understanding by

the Clients of the potential. Experienced procurement vis-

-vis New moneys;

With less and less time for construction (from investment

decision to start of pay-off) the need for accurate project

programing is greater than ever;

The trend for a Turn Key strategy is slowly swinging back

to A choice of contract = project characteristics. But there

are still many projects with questionable programming;

Employers wants stronger focus on Fit for its purpose and

thus, amongst other reasons, operations liability contract

(e.g. DBO) are more and more preferred;

Ob ti f th M k t l


15/17

What trends do I personally see 2 (2):

Over-tweaking of FIDIC based contracts, where the

intention of the forms are lost. Yet, still claimed to be

FIDIC contracts. Golden Clauses together with

authentications of FIDIC based contracts &

agreements may be the solution?

A need for more forms available in multiplelanguages;

Health & Safety, Sustainability, Information

Management (e.g. BIM) and Integrity are areas of

interest which are given more and more attention by

the Employers.

FIDICs dispute resolution process from The

Engineer through Mediation and DABs to final and

binding Arbitration gets more recognition.


Ob ti f th M k t l


16/17

The main characteristics of this case-project were:

- Design and Construction of a mega-sized green

field project over 4 years;

- First ever commercial application of the core

process technology;

- Significant and crucial public permits needed,

adaption to national regulation crucial;

- The project represents a crucial, hazardous risk to

society if implemented incorrectly;

Yet, the project was procured with an EPC deliverymethod and with Lump Sum payment method.

Claims and counter claims at app 100 % of contract

price. Arbitration since 2008. Current completion

forecast 7 years late and 300 % over budget.

A few discouraging examples

Choice of Contract is crucial for project success


Ob ti f th M k t l


17/17

Choice of Contract is crucial for project success

A few discouraging examples

The main characteristics of this case-project were:

- An 8.7 km long tunnel in unknown, but very challenging,

geological conditions. Planned time for completion, 5.5

years;

- Procured on an EPC Lump sum contract bases with very

poor tests and studies of ground conditions;

- 1stEPC contractor bankrupt after 4 years due to sever

progress problems and engineering difficulties. Released

from the contract against an LD penalty of 60 % of the

initial contract value;

- 2ndEPC contractor suspended year 6 by environmental

authorities due to work-methods in breach against nationalenv. legislations. Eventually terminated;

- 3rd contractor procured on a quantity based compensation

model with new tunnel drive method.

Project completion planned for 23 years after

commencement at a final cost at 1 100 % over budget.


1 kaj moller_fidic lithuania_20150416

Documents