iploca standard form of contract

INTERNATIONAL PIPELINE

&

OFFSHORE CONTRACTORS

ASSOCIATION

STANDARD FORM OF CONTRACT

FOR

ONSHORE CROSS-COUNTRY PIPELINES

First Publication in 1989 Second Publication in 2000 by: International Pipe Line and Offshore Contractors Association c/o Federation Internationale Européenne de la Construction 128 rue de la Boétie 75008 Paris France All correspondence to: International Pipe Line and Offshore Contractors Association (“IPLOCA”) St Pietersnieuwstraat 41 9000 Gent Belgium Copyright IPLOCA All rights reserved. No publication may be reproduced in any material form (including photocopying or storing it in any medium by any electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright owner. Applications for the copyright’s owner’s written permission to reproduce any part of this publication should be sent to the aforementioned address. Warning: The doing of an unauthorised act in relation to a copyright may result in both a claim for damages and criminal prosecution.

ACKNOWLEDGEMENTS The International Pipe Line & Offshore Contractors Association and James R Knowles would herein like to convey their sincere gratitude for the assistance, comments and guidance they have received in the preparation of this document. In particular we would like to thank all those members of the Association who took the time to provide their responses to the Test Edition of the new FIDIC Conditions of Contract for Construction.


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OFFSHORE CONTRACTORS ASSOCIATION


FOR

ONSHORE CROSS COUNTRY PIPELINES PREAMBLE PART 1 CONSTRUCTION OF ONSHORE CROSS-COUNTRY PIPELINES TENDER DOCUMENTS PART 2 FIDIC GENERAL CONDITIONS OF CONTRACT FOR

CONSTRUCTION FIRST EDITION 1999 PART 3 PARTICULAR CONDITIONS OF CONTRACT AND GUIDANCE

NOTES PART 4 AMENDMENTS AND ADDITIONS


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FOR

ONSHORE CROSS COUNTRY PIPELINES

PREAMBLE It is to everyone’s advantage to have a Standard Form of Contract because the advantages to

all concerned include as follows, viz:

• Lawyers do not have to fine toothcomb the Contract Documents to pick out the hidden

pitfalls.

• Tenders can be prepared and accepted more easily and quickly when the contracting

parties are both familiar and conversant with the use of conditions of Contract which

are industry standard.

• Tenderers do not have to qualify their tenders to the extent they do at present, thereby

allowing the tenders to be submitted and evaluated on a “like for like” basis.

• Tender prices tend to be lower because Contractors do not have to include contingent

sums to cover for the unknown risks.

• Disputes and litigation are likely to be considerably reduced.

• The working relationship between the Employer, Engineer and Contractor should

become more constructive and proactive and less adversarial when the conditions of

Contract have been drafted by an independent third party.

There has, in recent years, been an increasing trend favouring the use of more “equitable” and

“user friendly” contracts. Indeed, those familiar with the industry will be aware that the World

Bank’s Form of Contract, the new FIDIC suite of Contracts together with the suite of CRINE

Contracts all endure themselves to more equitable and user friendly Standard Forms of

Contract, and all of which are drafted in a manner to make them suitable for the construction

relationships encountered internationally today. However, notwithstanding the high regard held

for the aforementioned Standard Forms of Contract, a close perusal of the said documents

highlights that they will not suit everyone involved in construction and, in particular, they are not

drafted with onshore cross-country pipeline construction specifically in mind. Notwithstanding

their lack of specific applicability to our industry, the majority of the terms and conditions can be

used as a model upon which particular and more relevant terms can be drafted to cover the

onshore cross-country pipeline construction industry.

It will be recalled that in 1989 the IPLOCA drafted a Standard Form of Contract for Onshore

Pipeline Construction based upon the FIDIC Red Book, 4th Edition, 1987, and in recent years

our Offshore Division had a representative sitting on the CRINE Contracts Committee which

drafted the Marine Construction Contract, (published in 1998).

The Board of IPLOCA has recently decided, following careful consultations, that the time is now

right, as we enter the new millennium, to update the current Standard Form of Contract for

Onshore Cross-Country Pipeline Construction. The Board recently commissioned a study and

comparison of the World Bank Contract, the old and new FIDIC (1987 and 1999 Editions

respectively), and the CRINE suite of Contracts. Following careful consideration, it has been

decided that it would serve the interests of all concerned to continue to utilise the new FIDIC

Conditions of Contract for Construction (First Edition published in 1999) as the General

Conditions of Contract with the Particular Conditions of Contract drafted specifically with

onshore cross-country pipeline construction in mind. The Board has endeavoured, of course,

to take into account the observations and comments made by our members along with a

careful consideration of the contents of the World Bank and CRINE Standard Forms of

Contract, where applicable.

The Form of Tender is a fundamental part of this overall document and is entirely directed

towards onshore cross-country pipeline construction contracts. Notwithstanding that reference

has been made throughout to the Specification(s) and Drawings, neither of these documents is

currently the subject of review or amendment. Finally, it was also decided by the Association

that the Part 3 Particular Conditions should expressly provide that the contract would best be

based on a Fixed Price Lump Sum. Those familiar with the FIDIC Conditions of Contract for

Construction, 1999 Edition, will be aware that this particular Form of Contract does not

envisage a Fixed Price Lump Sum as its basis, therefore, the Part 3 Particular Conditions have

been amended accordingly to take account of this significant requirement.


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FOR


PART 1

TENDER DOCUMENTS CONTENTS Page

Instructions to Tenderer 1 Invitation to Tender 3 Form of Tender 5 Appendix to Tender 6 Form of Tender Security 10 Form of Parent Company Guarantee 11 Form of Performance Security – Demand Guarantee 12 Form of Performance Security – Surety Bond 13 Form of Advance Payment Guarantee 14 Form of Retention Money Guarantee 15 Form of Payment Guarantee by Employer 16 Contract Agreement 17 Dispute Adjudication Agreement (one person) 18 Dispute Adjudication Agreement (three person) 19 Tender Schedules 20 Introduction 21 A Breakdown of the Lump Sum Price 23 B Schedule of Unit Rates 24 C Schedule of Daywork Rates 25 1 Labour 26 2 Contractor’s Equipment 27 3 Materials 29 Tender Information (to be provided by Tenderers) 30 1 Programme 31 2 Contractor’s Organisation 33 3 Schedule of Contractor’s Equipment 34 A Utilisation of Equipment by Operation 35

B Summary of Equipment 39 4 Schedule of Labour 43 A Utilisation of Labour by Operation 44 B Summary of Labour 45 5 Details of Proposed Project Implementation and Logistics 48 6 Safety 48 7 List of Subcontractors 48 8 Proposed Working Times 48 9 Financing Proposal 49 10 Cash Flow Forecast 50 11 Schedule of Price Qualifications 52 12 Rights of Way and Facilities 53 13 Further Particulars 53 14 Copy of Joint Venture or Consortium Agreement 53 15 List of Drawings, Specification(s), Relevant Codes of Practice, etc. 53 16 Environmental Considerations 54 17 Schedule of Payments 54 (Note: Where the Employer drafts additional or amended Schedules the List of Contents should be amended accordingly by the Employer.)


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FOR


PART 2

GENERAL CONDITIONS OF CONTRACT

CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER, AS PUBLISHED BY

FIDIC, FIRST EDITION, 1999


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FOR


PART 3

PARTICULAR CONDITIONS OF CONTRACT

AND

GUIDANCE NOTES


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FOR


PART 4

AMENDMENTS AND ADDITIONS