bfc2-071 fidic user guide 250407 final

Funded by the European Union Phare 2004/016-772.05.01.02

Member of COWI Consortium

Romania Ministry of Public Finance Managing Authority for Infrastructure

Transposition of the FIDIC Clauses of Contract in the Romanian Language Employer User Guide for Particular Conditions of Contract

April 2007

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Romania Ministry of Public Finance Managing Authority for Infrastructure

Transposition of the FIDIC Clauses of Contract in the Romanian Language Employer User Guide for Particular Conditions of Contract

April 2007

DISCLAIMER:

The content of this report is the sole responsibility of the Framework Contractor and can in no way be taken to reflect the views of the European Union.

Report no. Employer User Guide for Particular Conditions of Contract

Issue no. A

Date of issue 25.04.2007

Prepared LHM

Checked Andreea Toma/Alexis Gressier

Approved Lars H. Mller

Romania, Transposition of the FIDIC Clauses of Contract in the Romanian Language

Employer User Guide for Particular Conditions of Contract

bfc2-071_fidic user guide_250407_final.DOC

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Table of Contents

1 Introduction and Background 4 1.1 Introduction 4 1.2 Application of the FIDIC Conditions of Contract 4 1.3 Romanian Legislation 5 1.4 Standard Tender Documents 6 1.5 Acknowledgements 7

2 Basic Rules for Works Contracts 8 2.1 Procurement Rules 8 2.2 Tender Procedure and Conditions of Contract 8 2.3 Procurement Rules after Contract Signature 8 2.4 Particular Conditions 9 2.5 Contract Management 9

3 The FIDIC 1999 Documents 10 3.1 The FIDIC 1999 Documents 10 3.2 Choice between the FIDIC Documents 11

4 The FIDIC Red Book 14 4.1 Introduction 14 4.2 FIDIC Guidance 14 4.3 Particular Conditions Clause-by-Clause Guidance 20 4.4 Dispute Adjudication Agreement 61 4.5 Guidance for Appendix to Tender 63

5 The FIDIC Yellow Book 64 5.1 Introduction 64 5.2 FIDIC Guidance 64 5.3 Particular Conditions Clause-by-Clause Guidance 70 5.4 Dispute Adjudication Agreement 111 5.5 Guidance for Appendix to Tender 112

6 The FIDIC Green Book 113 6.1 Introduction 113 6.2 FIDIC Guidance 113 6.3 Clause-by-Clause Guidance 116 6.4 Guidance for the Appendix to Tender 127




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7 Templates for Guarantees 129

8 Templates for Contractual Issues 131

Table of Appendices

Appendix A - PC's for the FIDIC Red Book Appendix B - PC's for the FIDIC Yellow Book Appendix C - PC's for the FIDIC Green Book Appendix D - Templates for Guarantees Appendix E - Templates for Contractual Issues Appendix F - DAB Agreements




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Abbreviations

ANRMAP National Authority for Regulating and Monitoring Public Procurement

ARIC Romanian Association of Consulting Engineers

BCEOM French consulting company

CFCU Central Finance and Contracts Unit

CN ADNR SA National Company for Motorways and National Roads

CONS Conditions of Contract for Construction

COWI Danish consulting company

CV Curriculum Vitae

DAB Dispute Adjudication Board

EC European Commission

EPC Engineering, Procurement, Construction

EPCT Conditions of Contract for EPC/Turnkey Projects

ERDF European Regional Development Fund

EU European Union

EUR Euro

FIDIC Fdration International des Ingnieurs-Conseils

GD Government Decision

GEO Government Emergency Ordinance

GO Government Ordinance

ICC International Chamber of Commerce

ISC State Inspectorate in Construction

ISPA Instrument for Structural Policies for Pre-Accession

MA Infra Managing Authority for Infrastructure, MPF

MEI Ministry of European Integration

MPF Ministry of Public Finance

MTCT Ministry of Transport, Construction and Tourism

OGR Official Gazette of Romania

P&DB Conditions of Contract for Design-Build

RBA Romanian Bank Association

RCC Romanian Chamber of Commerce

RON Romanian Leu

TOR Terms of Reference

UNCITRAL United Nations Commission on International Trade Law

VAT Value added tax




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1 Introduction and Background

1.1 Introduction This Employer User Guide for Particular Conditions of Contract is prepared by BCEOM, a member of the COWI Consortium, under the EuropeAid Benefici-ary Framework Contract - Lot 2 - Transport and Infrastructure.

The Guide was prepared in response to the Terms of Reference under Letter of Contract No. Rosu-13-ter dated 21st June 2006, signed by the CFCU on 13th June 2006 and by the COWI Consortium on 12th July 2006.

In November 2006, the Contract was proposed modified by eliminating activi-ties related to the FIDIC silver book from the TOR. This was accepted by MA Infra and the CFCU, and a contract modification was signed by both parties on 12th January 2007.

1.2 Application of the FIDIC Conditions of Contract Agreement with FIDIC An Agreement was signed on 27th June 2006 between the Romanian Ministry of Public Finance (MPF) and the FIDIC, and became effective upon FIDIC's signature on 12th July 2006.

In this Agreement, FIDIC granted non-exclusive rights to MPF to translate into Romanian language and adopt into legislation the following key documents:

Conditions of Contract for Construction, 1st Edition 1999 Conditions of Contract for Plant and Design-Build, 1st Edition 1999 Short Form of Contract, 1st Edition 1999 Conditions of Contract for EPC/Turnkey Projects, 1st Edition 1999.

According to Clause 4 of the Agreement, the copyright of the translation shall automatically remain with FIDIC, after the publication of the translations of the documents in the Official Gazette of Romania (OGR).

Translation A translation into the Romanian language was carried out - as Task 1 of above Services Contract - during the period of August to December 2006. The transla-tion included the General Conditions of Contract for the first 3 of the above 4 FIDIC documents, i.e. the FIDIC red, yellow, and green books.




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The approved translations will be issued by the MPF for use on infrastructure projects in Romania, after the publication in the Official Gazette of Romania.

1.3 Romanian Legislation Relevant Romanian legislation in force includes the following laws and regula-tions:

Legal framework with regard to construction works:

- Law No. 50/1991 on the authorization of construction works, as re-published in the OGR No. 933 of 13.10.2004 and amended by GEO No. 122/2004, by Law No. 119/2005, by Law No. 52/2006 and by Law No. 376/2006 (hereinafter Law No. 50/1991).

- Application Norms of Law No. 50/1991, as approved by Order No. 1430/2005 of the Minister of Transport, Construction and Tourism, as published in the OGR No. 825 of 13.09.2005.

- Law No. 10/1995 on quality of constructions, as published in the OGR No. 12 of 24.01.1995 and amended by GD No. 498/2001 and by Law No. 587/2002 (hereinafter Law No. 10/1995).

- Regulation on the reception of construction works and of installations related thereto, as approved by GD No. 273/1994, as published in the OGR No. 193 of 28.07.1994 and amended by GD No. 940/2006 (here-inafter GD No. 273/1994).

- Methodology for the issuance by the I.S.C. of the approval as regards technical and economic documentations related to the investments fi-nanced from public funds, as approved by Order of the I.S.C. No. 74/2007, as published in the OGR No. 101 of 09.02.2007.

Legal framework with regard to public procurement:

- GEO No. 34/2006 on granting of public procurement, concession of public works and concession of services agreements, as published in the OGR No. 418 of 15.05.2006, approved and amended by Law No. 337/2006 (hereinafter GEO No. 34/2006).

- Application Norms on the granting of public procurement pursuant to GEO No. 34/2006 as approved by GD No. 925/2006, as published in the OGR No. 625 of 20.07.2006 and amended by GD No. 1056/2006 and No. 1337/2006 (hereinafter GD No. 925/2006).

- Guide for the award of public procurement contracts pursuant to GEO No. 34/2006, as approved by Order of the President of the ANRMAP No. 155/2006, as published in the OGR No. 894bis of 02.11.2006 (hereinafter the Procurement Guide).

- Regulation for surveillance of the awarding of public procurement contracts, as approved by Order of the President of the ANRMAP No. 26/2007, as published in the OGR No. 102 of 09.02.2007.




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Legal framework with regard to public finance:

- Law No. 500/2002 on public finances, as published in the OGR No. 597 of 13.08.2002 and amended by Law No. 314/2003, Law No. 96/2006 and GD No. 1865/2006 (hereinafter Law No. 500/2002).

- GD No. 264/2003 on setting out actions and expense categories, crite-ria, procedures and limits regarding advance payments from public funds, as republished in OGR No. 109din 05.02.2004 and amended by GD Nos. 525/2004, 712/2004, 1451/2004, 728/2006 (hereinafter GD No. 264/2003).

- GO No. 79/2003 regarding the control and recovery of community funds and relevant co-financing funds used in an improper manner, as published in the OGR No. 622 of 30.08.2003, approved with amend-ments by Law No. 529/2003 and amended by GO Nos. 94/2004, 53/2005 and 12/2007 (hereinafter GO No. 79/2003).

- Application Norms of GO No. 79/2003, as approved by GD No. 1510/2003, as published in the OGR No. 914 of 20.12.2003 and amended by GD Nos. 2396/2004 and 1358/2006.

Relevant provisions of the Civil Code, Commercial Code, Fiscal Code (Law No. 571/2003 approving the Fiscal Code, as published in the OGR No. 927 of 23.12.2003, as amended) and of the Fiscal Norms (GD No. 44/2004 approving the methodological norms of implementation of the Fiscal Code, as published in the OGR No. 112 of 06.02.2004, as amended).

1.4 Standard Tender Documents Structure of Standard Tender Document A standard tender document for works contracts shall include the following documents:

Volume 1: Instructions to Tenderers

- Letter of Invitation - Instructions to Tenderers - Letter of Tender and Appendix to Tender - Forms for Tender Guarantees - Questionnaire - Glossary - Evaluation Grid

Volume 2: Conditions of Contract

- Letter of Tender, including Appendix to Tender - Form of Contract Agreement - General Conditions of Contract - Particular Conditions of Contract - Forms for Guarantees

Volume 3: Technical Specifications

Volume 4: Bill of Quantities

Volume 5: Design Documents and Drawing.




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General Conditions of Contract The General Conditions of Contract shall be those prepared as Task 1 of the Services Contract undertaken by BCEOM, on behalf of the COWI Consortium, and approved by the MPF in January 2007 for the following FIDIC documents:

Conditions of Contract for Construction, 1st Edition 1999

Conditions of Contract for Plant and Design-Build, 1st Edition 1999

Short Form of Contract, 1st Edition 1999.

The General Conditions of Contract will in due course be published in the Offi-cial Gazette of Romania for use on infrastructure projects in Romania.

Templates This Employer User Guide for Particular Conditions of Contract provides guid-ance for Romanian employers for the preparation of particular conditions of contract and for the Appendix to Tender.

The Guide provides:

Clause-by-clause guidance for particular conditions of contract

Templates for guarantees

Templates for selected contractual documents.

The remaining parts of the standard tender documents shall not be covered by this Employer User Guide on Particular Conditions of Contract.

1.5 Acknowledgements The Consultants acknowledge the comprehensive assistance provided by the Coordination Committee as well as the Working Group and the counterparts set up by the MA Infra of the MPF.

The draft mandatory and additional particular conditions were discussed in de-tail with the MA Infra counterparts and the Working Group, and later presented for the Coordination Committee. A one-day workshop with all the stakeholders took place on 6th December 2006 in Bucharest.




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2 Basic Rules for Works Contracts

2.1 Procurement Rules In Romania, the procurement rules are defined by the GEO No. 34/2006, as fur-ther approved and modified by Law No. 337/2006. In addition, detailed rules are laid down in the Implementing Norms of the said ordinance, published un-der GD No. 925/2006.

The above mentioned GEO No. 34/2006 transposes into Romanian legislation the relevant provisions of the European Directive No. 18/2004/CE defining the overall procurement rules and procedures for the entire European Union.

2.2 Tender Procedure and Conditions of Contract As such, tender procedure and conditions of contract are different processes and do not really interfere. It is preferable to avoid introducing references to the conditions of contract within the instructions to tenderers, as, in the best case, they just repeat the provisions of the draft conditions of contract attached to the tender dossier and in the worst case, they are in conflict with those.

Furthermore, the tender dossier and the Contractors proposal have no value after the signature of the Contract, unless they are explicitly incorporated as part of the Contract documents. It is therefore recommended to seriously con-sider which documents should form part of the Contract.

It should also be noted that a particular tender procedure ends after the signa-ture of the related contract (or after the cancellation of the procedure). There-fore, in case a contract is terminated, it is not legally possible to revert to the second ranked tenderer of the original procedure.

Finally, it should be understood that tender procedures do not replace adequate and efficient contract management. The criteria used in the tender should be proportional to the requirements of the project, without setting unreasonable constraints. The wish of a Contracting Authority to have a good contractor should not result into distortion of competition or artificial requirements.

2.3 Procurement Rules after Contract Signature Even if the tender procedure ends after contract signature, some rules referring to procurement shall be observed during the entire life of the contract.




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In particular, modifications to the original contract incorporating additional work (including additional quantities) and resulting into an increase of the Ac-cepted Contract Amount are considered as negotiated procedure without prior publication of a contract notice and are legally possible only in one of the situations described in Article 122 of GEO No. 34/2006.

2.4 Particular Conditions The FIDIC Conditions of Contract define a careful balance between the rights and obligations of both parties, the Employer and the Contractor. This balance is one of the elements that made those conditions of contract successful and widely used around the world.

It is therefore recommended that Employers, when drafting particular condi-tions of contract, maintain this balance and refrain from modifying those provi-sions that are seen as favouring the Contractor (such as Sub-Clause 2.4), keep-ing only provisions that favour the Employer.

2.5 Contract Management The FIDIC Conditions of Contract are favouring a modern type of contract management, with the following aspects:

The relationship between the Parties should be oriented towards the execu-tion of the works in a satisfactory manner where conciliation and agree-ment are to be found rather than aggressive attitudes

It is felt as absolutely necessary for an adequate progress of the works that a similarly adequate cash flow be maintained

Claims should be notified and treated in due time. The Parties should avoid, with the assistance of the Engineer, to transform claims into dis-putes but should endeavour to find fair solutions in a reasonable time.




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3 The FIDIC 1999 Documents

3.1 The FIDIC 1999 Documents As stated in the Foreword of the documents, the Fdration Internationale des Ingnieurs-Conseils (FIDIC) published - in 1999 - the First Editions of four (4) new standard forms of contract:

CONS - Conditions of Contract for Construction, which are recom-mended for building or engineering works designed by the Employer or by his representative, the Engineer. Under the usual arrangements for this type of contract, the Contractor constructs the works in accordance with a design provided by the Employer. However, the works may include some elements of Contractor-designed civil, mechanical, electrical and/or construction works.

P&DB - Conditions of Contract for Plant and Design-Build, which are recommended for the provision of electrical and/or mechanical plant, and for the design and execution of building or engineering works. Under the usual arrangements for this type of contract, the Contractor designs and provides, in accordance with the Employer's requirements, plant and/or other works; which may include any combination of civil, mechanical, electrical and/or construction works.

EPCT - Conditions of Contract for EPC/Turnkey Projects, which may be suitable for the provision on a turnkey basis of a process or power plant, of a factory or similar facility, or of an infrastructure project or other type of development, where (i) a higher degree of certainty of final price and time is required, and (ii) the Contractor takes total responsibility for the design and execution of the project, with little involvement of the Employer. Under the usual arrangements for turnkey projects, the Contractor carries out all the Engineering, Procurement and Construction (EPC): providing a fully-equipped facility, ready for operation (at the "turn of the key").

Short Form of Contract, which is recommended for building or engineer-ing works of relatively small capital value. Depending on the type of work and the circumstances, this form may also be suitable for contracts of greater value, particularly for relatively simple or repetitive work or work of short duration. Under the usual arrangements for this type of contract, the Contractor constructs the works in accordance with a design provided by the Employer or by his representative (if any), but this form may also be suit-able for a contract which includes, or wholly comprises, Contractor-designed civil, mechanical, electrical and/or construction works.




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The Forms of Contract are recommended by FIDIC for general use, where the tenders are invited on an international basis. Modifications may be required in some jurisdictions, particularly if the Conditions are to be used on domestic contracts. FIDIC considers the official and authentic texts to be the versions in the English language.

3.2 Choice between the FIDIC Documents The FIDIC Conditions of Contract are prepared as a "matching set" with each topic covered in similarly worded provisions in each of the books. The selec-tion of the appropriate book is critical to the success of the Project.

General guidance is provided in the FIDIC Contracts Guide - issued in 2000 - as summarised below.

Relatively small value contract, short construction time or involving simple or repetitive work

If the price for the contract is relatively small (say under EUR 500,000) or the construction time is short (say less than 6 months), or the work involved is rela-tively simple or repetitive (dredging work might be a good example), then con-sider using the Short Form of Contract, irrespective of whether the design is provided by the Employer or the Contractor, and of whether the project in-volves construction, electrical, mechanical, or other engineering work.

Larger or more complex projects

1. Is the Employer (or the Engineer) going to do most of the design?

- As in traditional projects (e.g., infrastructure, buildings, hydropower, etc.), the Employer did nearly all the design (perhaps not construction details, reinforcement, etc.)

- The Engineer administered the Contract, monitored the construction work and certified payment

- The Employer was kept fully informed, could make variations, etc.

- With payment according to bills of quantities or lump sums for ap-proved work done.

If this is what is wanted - choose the FIDIC Red Book (CONS).

2. Is the Contractor going to do most of the design?

- As in traditional projects (e.g., electrical and mechanical works, in-cluding erection on site), the Contractor did the majority of the design (e.g., the detail design of the plant or equipment), so that the plant met the outline or performance specification prepared by the Employer, and in design-build and turnkey-type projects, the Contractor also did the majority of the design (not only of plant projects, but also of various infrastructure and other types of projects), and the project was re-quired to fulfill an outline or performance specification prepared by the Employer




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- The Engineer (or Employer's representative) administered the Contract, monitored the manufacture and erection on site or construction work and certified payment

- With payment according to achieved milestones generally on a lump sum basis.

If this is what is wanted - choose the FIDIC yellow book (P&DB).

3. Is it a privately Financed (or Public/Private Financed) Project, of the Build-Operate-Transfer or similar type, where the Concessionaire takes the total responsibility for the financing, construction and operation of the Project?

- Then the Concessionaire (the "Employer") probably requires to have a contract with the construction Contractor, i.e., an EPC (Engineering, Procurement, Construction) Contract, where the Contractor takes total responsibility for the design and construction of the infrastructure or other facility, and where there is a higher degree of certainty that the agreed contract price and time will not be exceeded

- The Employer does not wish to be involved in the day-to-day progress of the work, provided the end result meets the performance criteria he has specified

- The parties concerned (e.g., sponsors, lenders and the Employer) are willing to see the Contractor paid more for the construction of the Pro-ject in return for the Contractor bearing the extra risks associated with enhanced certainty of final price and time.

If this is what is wanted - choose the FIDIC silver book (EPCT).

4. Is it a Process Plant or a Power Plant (or a factory or similar) where the Employer (who provides the finance) wishes to implement the Project on a Fixed-Price Turnkey Basis?

- Then the Employer wishes the Contractor to take total responsibility for the design and construction of the process or power facility and hand it over ready to operate "at the turn of a key"

- The Employer wishes a higher degree of certainty that the agreed con-tract price and time will not be exceeded

- The Employer wishes the Project to be organised on a strictly two party approach, i.e., without an "Engineer" being involved


- The Employer is willing to pay more for construction of his Project (than would be the case if P&DB were used) in return for the Contrac-tor bearing the extra risks associated with enhanced certainty of final price and time.





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5. Is it an Infrastructure Project (e.g., road, rail link, bridge, water or sewage treatment plant, transmission line, even dam or hydropower plant) or simi-lar where the Employer (who provides the finance) wishes to implement the Project on a Fixed-Price Turnkey Basis?

- Then the Employer wishes the Contractor to take total responsibility for design and construction

- The Employer wishes a higher degree of certainty that the agreed con-tract price and time will not be exceeded (except that, if underground works in uncertain or difficult ground conditions are likely, the risk of unforeseen ground conditions should be borne by the Employer and P&DB 4.12 would be appropriate)

- The Employer wishes the Project to be organised on a strictly two party approach, i.e. without an "Engineer" being involved


- The Employer is willing to pay more for the construction of his Pro-ject (than would be the case if P&DB were used) in return for the Contractor bearing the extra risks associated with enhanced certainty of final price and time.


6. Is it a Building Project where the Employer wishes to have his building(s) constructed on a Fixed-Price Turnkey Basis generally complete with all furniture, fittings and equipment?

- Then the Employer wishes the Contractor to take total responsibility for design and construction

- The Employer wishes a high degree of certainty that the agreed con-tract price and time will not be exceeded

- The Employer wishes the Project to be organised on a strictly two party approach, i.e. without an Employer's Engineer being involved

- The Employer does not wish to be involved in the day-to-day progress of the construction work, provided the end result meets the perform-ance criteria he has specified

- The Employer is willing to pay more for the construction of his Pro-ject (than would be the case if P&DB were used) in return for the Contractor bearing the extra risks associated with enhanced certainty of final price and time.

If this is what is wanted - choose the FIDIC silver book (EPCT). In the case of a building, or of a building development project, the Employer or his architect may have done some or most of the design, but (with suitable modification regarding design responsibility) EPCT may be used.

7. Is it a reconstruction or refurbishment or other type of Project?

Check the above questions, as applicable, and make your choice accord-ingly.




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4 The FIDIC Red Book

4.1 Introduction This chapter provides guidance for the preparation of the Particular Conditions of Contract and the Appendix to Tender for Works Contracts using the FIDIC Conditions of Contract for Construction, 1st Edition 1999, i.e. the FIDIC Red Book.

The FIDIC General Conditions of Contract were translated into Romanian lan-guage in August to November 2006, and was submitted to the MPF in Decem-ber 2006.

Mandatory and additional particular conditions of contract for the FIDIC Red Book, necessary as to harmonise the contract provisions with the current Ro-manian legislation, were prepared in October 2006 to January 2007, and was submitted to the MPF in January 2007.

The Romanian language version of the General Conditions of Contract and the proposed mandatory and additional particular conditions will, after approval by the MPF, be published in the Official Gazette of Romania for use on infrastruc-ture projects in Romania.

This Guide comprises guidance and proposals for the proposed mandatory and additional particular conditions of contract.

4.2 FIDIC Guidance In the preparation of the General Conditions of Contract for Construction, it was recognized that, while there are many sub-clauses which will be generally applicable, there are some sub-clauses which must necessarily vary to take ac-count of the circumstances relevant to the particular contract. The sub-clauses which were considered to be applicable to many (but not all) contracts have been included in the General Conditions, in order to facilitate their incorporation into each contract.

The General Conditions and the Particular Conditions will together comprise the Conditions of Contract governing the rights and obligations of the parties. It will be necessary to prepare the Particular Conditions for each individual contract, and to take account of those sub-clauses in the General Conditions which men-tion the Particular Conditions.




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For this publication, the General Conditions of Contract were prepared on the following basis:

Interim and final payments will be determined by measurement, applying the rates and prices in a Bill of Quantities

If the wording in the General Conditions necessitates further data, then (unless it is so descriptive that it would have to be detailed in the Specification) the sub-clause makes reference to this data being contained in the Appendix to Tender, the data either being prescribed by the Employer or being inserted by the Tenderer

Where a sub-clause in the General Conditions deals with a matter on which different contract terms are likely to be applicable for different contracts, the principles applied in writing the sub-clause were:

a) Users would find it more convenient if any provisions which they did not wish to apply could simply be deleted or not invoked, than if addi-tional text had to be written (in the Particular Conditions) because the General Conditions did not cover their requirements; or

b) In other cases, where the application of (a) was thought to be inappro-priate, the sub-clause contains the provisions which were considered applicable to most contracts.

For example, Sub-Clause 14.2 [Advance Payment] is included for convenience only, not because of any FIDIC policy in respect of advance payments. This Sub-Clause becomes inapplicable (even if it is not deleted) if it is disregarded by not specifying the amount of the advance. It should therefore be noted that some of the provisions contained in the General Conditions may not be appropriate for an apparently-typical contract.

Further information on these aspects, example wording for other arrangements, and other explanatory material and example wording to assist in the preparation of the Particular Conditions and the other tender documents, are included within the Guidance for the Preparation of the Particular Conditions. Before incorpo-rating any example wording, it must be checked to ensure that it is wholly suit-able for the particular circumstances; if not, it must be amended.

Where example wording is amended, and in all cases where other amendments or additions are made, care must be taken to ensure that no ambiguity is created, either with the General Conditions or between the clauses in the Particular Conditions. It is essential that all these drafting tasks, and the entire preparation of the tender documents, are entrusted to personnel with the relevant expertise, including the contractual, technical and procurement aspects.

This publication concludes with example forms for the Letter of Tender, the Ap-pendix to Tender (providing a check-list of the sub-clauses which refer to it), the Contract Agreement, and alternatives for the Dispute Adjudication Agreement. This Dispute Adjudication Agreement provides text for the agreement between the Employer, the Contractor and the person appointed to act either as sole ad-judicator or as a member of a three-person dispute adjudication board; and in-corporates (by reference) the terms in the Appendix to the General Conditions.




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In addition, FIDIC has published a contracts guide to the use of its Conditions of Contract for Construction, for Plant and Design-Build, and for EPC/Turnkey Projects.

In order to clarify the sequence of Contract activities, reference may be made to the charts on the next two pages and to the Sub-Clauses listed below (some Sub-Clause numbers are also stated in the charts). The charts are illustrative and must not be taken into consideration in the interpretation of the Conditions of Contract.

1.1.3.1 & 13.7 Base Date

1.1.3.2 & 8.1 Commencement Date 1.1.6.6 & 4.2 Performance Security 1.1.4.7 & 14.3 Interim Payment Certificate 1.1.3.3 & 8.2 Time for Completion (as extended under 8.4) 1.1.3.4 & 9.1 Tests on Completion 1.1.3.5 & 10.1 Taking-Over Certificate 1.1.3.7 & 11.1 Defects Notification Period (as extended under 11.3) 1.1.3.8 & 11.9 Performance Certificate 1.1.4.4 & 14.13 Final Payment Certificate

Figure 4-1 Sequence of Principal Events




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Figure 4-2 Sequence of Payment Events

Figure 4-3 Sequence of Dispute Events

4.2.1 Introduction The Conditions of Contract for Construction - the FIDIC Red Book - have been prepared by FIDIC and are recommended for general use for the purpose of the construction (excluding most design) of building or engineering works where tenders are invited on an international basis.

Modifications to the Conditions are required to be fully adapted to the current Romanian legislation.

Under the usual arrangements for this type of contract, the Contractor con-structs the works in accordance with design details provided by the Employer or his representative, the Engineer. Although these Conditions allow for the possibility that the Contractor may be required to design parts of the permanent




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works, they are not intended for use where most of the works are designed by the Contractor. For these Works, it would be more appropriate to utilise FIDIC's Conditions of Contract for Plant and Design-Build or Conditions of Contract for EPC/Turnkey Projects.

The guidance hereafter is intended to assist writers of Particular Conditions by giving options for various sub-clauses where appropriate. Before incorporating any example wording, it must be checked to ensure that it is wholly suitable for the particular circumstances. Unless it is considered suitable, example wording should be amended before use.

In the preparation of the Conditions of Contract to be included in the tender documents for a contract, the following text can be used:

The Conditions of Contract comprise the "General Conditions", which form part of the "Conditions of Contract for Construction" First Edition 1999 pub-lished by the Fdration Internationale des Ingnieurs-Conseils (FIDIC), and the following "Particular Conditions", which include amendments and addi-tions to such General Conditions.

Where example wording is amended, and in all cases where other amendments or additions are made, care must be taken to ensure that no ambiguity is cre-ated, either with the General Conditions or between the clauses in the Particular Conditions.

There are no sub-clauses in the General Conditions which require data to be included in the Particular Conditions. The General Conditions refer to any nec-essary data being contained in the Appendix to Tender or (for technical matters) in the Specification.

4.2.2 Preparation of Tender Documents The tender documents should be prepared by suitably qualified engineers who are familiar with the technical aspects of the required works, and a review by suitably qualified lawyers may be advisable.

The tender documents issued to tenderers will consist of the Conditions of Con-tract, the Specification, the Drawings, and the Letter of Tender and Schedules for completion by the Tenderer.

For this type of contract, where works are valued by measurement, the Bill of Quantities will usually be the most important Schedule. A Daywork Schedule may also be necessary, to cover minor works to be evaluated at cost.

In addition, each of the Tenderers should receive the data referred to in Sub-Clause 4.10, and the Instructions to Tenderers to advise them of any special matters which the Employer wishes them to take into account when pricing the Bill of Quantities but which are not to form part of the Contract.

When the Employer accepts the Letter of Tender, the Contract includes these completed Schedules.




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The Specification The Specification may include the matters referred to in some or all of the fol-lowing sub-clauses:

- 1.8 Requirements for Contractor's Documents

- 1.13 Permissions being obtained by the Employer

- 2.1 Phased possession of foundations, structures, plant or means of access

- 4.1 Contractor's designs

- 4.6 Other contractors (and others) on the Site

- 4.7 Setting-out points, lines and levels of reference

- 4.14 Third parties

- 4.18 Environmental constraints

- 4.19 Electricity, water, gas and other services available on the Site

- 4.20 Employer's Equipment and free-issue material

- 5.1 Nominated Subcontractors

- 6.6 Facilities for Personnel

- 7.2 Samples

- 7.4 Testing during manufacture and/or construction

- 9.1 Tests on Completion

- 13.5 Provisional Sums.

The Appendix to Tender Many sub-clauses in the General Conditions make reference to data being con-tained in the Appendix to Tender, providing a convenient location for the data which is usually required. The example form in Appendix D2 provides a check-list of the data required; but there is no indication, either in the General Condi-tions or in the example Appendix to Tender, that this data is either prescribed by the Employer or inserted by the Tenderer. The Employer should prepare the Appendix to Tender, based on this example form, with the elements completed to the extent of his requirements.

The Employer may require other data from Tenderers, and include a question-naire in the Schedules.

The Instructions to Tenderers The Instructions to Tenderers may need to specify any constraints on the com-pletion of the Appendix to Tender and/or Schedules, and/or specify the extent of other information which each Tenderer is to include with his Tender. If each Tenderer is to produce a parent company guarantee and/or a tender security, these requirements (which apply prior to the Contract becoming effective) should be included in the Instructions to Tenderers: example forms are annexed to this document as Annexes D.1.

The Instructions to Tenderers may include matters referred to in some or all of the following Sub-Clauses:




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- 4.3 Contractor's Representative (name and curriculum vitae)

- 4.9 Quality Assurance system

- 9.1 Tests on Completion

- 18 Insurances

- 20 Resolution of disputes.

4.3 Particular Conditions Clause-by-Clause Guidance This section includes guidance for the preparation of the particular conditions of contract for the FIDIC Red Book, with a clause-by-clause review.

4.3.1 Clause 1 - General Provisions Sub-Clause 1.1 - Definitions It will be necessary to amend some of the definitions, due to Romanian legisla-tion in force, the requirements of the Romanian procurement legislation and for clarification of the general conditions.

The following definitions should be modified:

In Sub-Clause 1.1.1.1 the definition of Contract shall reflect the deletion of Letter of Acceptance. Under Romanian public procurement regulations, the Contract is formed by the execution of the Contract Agreement after lapse of a mandatory minimum time period from the communication of the letter of award by the Employer to the Contractor (Article 205 of GEO No. 34/2006, and Article 94 of GD No. 925/2006). The amendment of such definition is set out in the mandatory particular conditions in Appendix A1.

In Sub-Clause 1.1.1.3 the definition of the Letter of Acceptance shall be deleted.

In Sub-Clause 1.1.3.1 the definition of the "Base Date" may be changed to reflect a particular calendar date.

In new Sub-Clause 1.1.3.10 a definition of the "Taking-Over Minutes on Completion of Works" shall be included to reflect the process of taking-over of works by a commission to be appointed by the Employer in accor-dance with Romanian regulations (Article 15 of GD No. 273/1994). Such definition is set out in the mandatory particular conditions in Appendix A1.

In new Sub-Clause 1.1.3.11 a definition of the "Final Taking-Over Min-utes" shall be included to reflect the process of final taking-over of works by a commission to be appointed by the Employer in accordance with Ro-manian regulations (Article 36 of GD No. 273/1994). Such definition is set out in the mandatory particular conditions in Appendix A1.

In Sub-Clause 1.1.4.1 the definition of the "Accepted Contract Amount" shall be modified in order to reflect the deletion of the Letter of Accep-tance.

In Sub-Clause 1.1.4.6 the "Foreign Currency" should be indicated.




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In Sub-Clause 1.1.4.8 "Local Currency" should be defined as RON (Ro-manian Leu).

New Sub-Clause 1.1.4.13 should be inserted to define the expression "Unit Price" as follows:

Unit Price is the price of a unit quantity in the Bill of Quantities exclud-ing VAT.

In Sub-Clause 1.1.6.2 "Country" should be defined as Romania.

In Sub-Clause 1.1.6.5 Applicable Laws should be defined as all Roma-nian legislation, laws, ordinances, decisions, orders and other laws and regulations and by-laws of any legally constituted public authority having the force of law in Romania.

In Sub-Clause 1.1.6.7 "Site" it has to be mentioned that the Contractors site installation would in many cases not be part of the Site as defined un-der the Contract.

Sub-Clause 1.2 - Interpretation If the references to "profit" are to be more precisely specified, Sub-Clause 1.2 may be varied. Such provision is recommended so as to provide a clear refer-ence during implementation, in particular when evaluating claims, such as:

In these Conditions, provisions including the expression Cost plus reason-able profit require this profit to be one-twentieth (5%) of the respective Cost.

Sub-Clause 1.3 - Communications Attention is drawn on the importance of the requirements of the first sentence of the last paragraph that, although applicable in many sub-clauses, are not re-peated in the General Conditions. Non-compliance might have serious conse-quences.

Sub-Clause 1.4 - Law and Language No need for particular conditions related to this sub-clause.

Sub-Clause 1.5 - Priority of Documents An order of precedence is usually necessary, in case a conflict is subsequently found among the contract documents In Sub-Clause 1.5, the order of prece-dence shall reflect the deletion of the Letter of Acceptance (Article 94(2) of GD No. 925/2006), as well as the fact that, if during the performance of the Con-tract, certain elements of the Contractors technical offer turn out to be non-compliant with the requirements in the Specifications, the latter shall prevail. (Article 95(2) of GD No. 925/2006). A proposed amendment is included in the mandatory particular conditions in Appendix A1.

It is recommendable to integrate as part of the Contract (as documents listed under letter (h) of the present sub-clause, significant components of the Con-tractors proposal (key personnel, key equipment, method of works, outline of quality assurance, traffic management and/or environmental management plans), so as to ensure some enforceability to this proposal. Even if the Contract clearly specifies the priority of documents, consistence of these with the tender documents should be checked and corrections, if needed, should be introduced prior to the Contract signature. Furthermore, in case a Contractors programme




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is included in the Contract documents, it might be recommendable to state that any reference to calendar dates is indicative only, especially if the Contract sig-nature or the Commencement Date occur with delays against initial time sched-ules

Sub-Clause 1.6 - Contract Agreement The first sentence of Sub-Clause 1.6 shall be deleted, in order to reflect the de-letion of Letter of Acceptance.

The form of Contract Agreement should be included in the tender documents as an annex to the Particular Conditions. An example form is included at the con-tractual templates in Appendix D2.

Sub-Clause 1.7 - Assignment If the Contract is concluded pursuant to a public procurement procedure, the assignment of the whole or any part thereof by the Contractor (even with the prior agreement of the Employer) is a sensitive issue, as it may be considered a means of escaping the mandatory legal provisions on public procurement of works. The template for works contracts set out in Form 5 attached to the Pro-curement Guide allows the assignment of the works contract by the Contractor with the prior agreement of the Employer, provided that the Contractor remains liable towards the Employer for the performance of any obligations under the works contract.

Sub-Clause 1.8 - Care and Supply of Documents No need for particular conditions related to this sub-clause.

Sub-Clause 1.9 - Delayed Drawings or Instructions No need for particular conditions related to this sub-clause.

Sub-Clause 1.10 - Employer's Use of Contractor's Documents No need for particular conditions related to this sub-clause.

Sub-Clause 1.11 - Contractor's Use of Employer's Documents No need for particular conditions related to this sub-clause.

Sub-Clause 1.12 - Confidential Details No need for particular conditions related to this sub-clause.

Sub-Clause 1.13 - Compliance with Laws The Employers should specify, when relevant, the particular regulations to be complied with by the Contractor. This should be done under the format:

Applicable Laws of particular relevance for the Contract include, but are not limited to: Law No. xxx

It is recommended to precise the scope of paragraph (b), for example with:

Except for the building permit to be provided by the Employer, authorisa-tions and/or permits required from relevant national/local authorities shall be obtained by the Contractor, at his own expenses. Such permits include inter alia permits for site erection, traffic diversions, route permits, resi-




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dence and work permits, permits for radio communication, permits to relo-cate public utilities, etc.

Within 21 days of the signature of the Contract Agreement, the Contractor shall submit to the Engineer the detailed planning of the Works, together with a list of all necessary permits with the time needed for obtaining those permits in order to properly carry-out the Works in compliance with the programme prepared and updated under Sub-Clause 8.3 [Programme].

Sub-Clause 1.14 - Joint and Several Liability For a major contract, detailed requirements for the joint venture may need to be specified. For example, it may be desirable for each member to produce a par-ent company guarantee. An example form is annexed to this document in the templates of guarantees in Appendix D1.

These requirements, which apply prior to the Contract becoming effective, should be included in the Instructions to Tenderers.

The Employer will wish the leader of the joint venture to be appointed at an early stage, providing a single point of contact thereafter, and will not wish to be involved in a dispute between the members of a joint venture. The Employer should scrutinise the joint venture agreement carefully, and it may have to be approved by the project's financing institutions.

New Sub-Clause 1.15 - Details to be Confidential If confidentiality is required, an additional sub-clause may be added. The word-ing of such Sub-Clause could be as follows:

The Contractor shall treat the details of the Contract Agreement as private and confidential, except to the extent necessary to carry out his obligations there under or to comply with applicable Laws. The Contractor shall not pub-lish, permit to be published, or disclose any particulars of the Works in any trade or technical paper or elsewhere without the prior written agreement of the Employer.

4.3.2 Clause 2 - The Employer Sub-Clause 2.1 - Right of Access to the Site If right of access cannot be granted, both early and thereafter exclusively, de-tails should be given. Employers shall be particularly careful in relation with this sub-clause, as non-compliance with their obligations under the present sub-clause is a substantial failure and may lead to Termination by the Contractor under Sub-Clause 16.2.

In case right of access is to be granted by stages, it could be desirable to define Sections (in the Appendix to Tender) and define in this sub-clause the time for provision of right of access for each Section.

In case right of access and possession is not to be granted exclusively, this should be clearly stated, with all particulars.




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In case right of access and possession will be granted only for limited sections and/or for limited duration (such as in the case of rail rehabilitation works), the Employer should state this and define the procedure that will be applied as well as the main constraint/parameters.

The Site does not include additional working areas that the Contractor might require, as defined under Sub-Clause 4.23. However, in the particular case of temporary diversions specifically required by the Employer (for example in the case of bridge works), the required land should be made available by the same Employer.

It is also recommendable to specify what possession of Site implies as regards operation and maintenance of facilities on Site and as regards traffic.

Sub-Clause 2.2 - Permits, Licences or Approvals With reference to paragraph (a), it is good practice to include in the tender and then contract documents, and particularly in the Specifications, all relevant in-formation. References to laws and standards should be included for formal rea-sons, but the contract documents should be, as much as possible, self-sufficient, so as to facilitate access to the market.

Sub-Clause 2.3 - Employer's Personnel These provisions should be reflected in the Employer's contracts with any other contractors on the Site.

The work to be carried out by these other contractors should be described in the tender documents, and aspects such as co-ordination and safety may need to be specified.

Sub-Clause 2.4 - Employer's Financial Arrangements It is possible, for example for long term contracts, to introduce a more precise definition of what will be considered as reasonable evidence. However, it is recommended not to delete this Sub-Clause entirely, as contractors would be concerned by such cancellation. The anticipation of a risk in this regard would then reflect on the prices.

It has to be noted that this Sub-Clause plays its role mainly when large costs overruns are occurring (including due to Contractors claims), as Employers are generally expected to have secured funding corresponding to the Accepted Contract Amount before the signature of the contract.

Sub-Clause 2.5 - Employer's Claims It has to be underlined that under Sub-Clause 14.7, the Employer is not allowed to make deductions from the amounts certified by the Engineer (the mandatory particular conditions allow however arithmetical mistakes to be corrected). Therefore, the procedure defined in the present Sub-Clause has to be used in case the Employer disagrees with an amount certified or wishes to apply vari-ous penalties (such as delay damages).




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4.3.3 Clause 3 - The Engineer Sub-Clause 3.1 - Engineer's Duties and Authority Any requirements for Employer's approval should be set out in the Particular Conditions.

This list should be extended or reduced as necessary. If the obligation to obtain the approval of the Employer only applies beyond certain limits, financial or otherwise, the example wording should be varied.

It is clear that the Engineer has the role defined in very general terms in Article 21 paragraph d) of Law No. 10/1995. However, the Conditions of Contract provide for several additional duties and authority.

Employers might wish to limit the authority of the Engineer, in order to main-tain control on some of the main features. Such limitations should (i) be spe-cifically detailed in the Particular Conditions and (ii) truly correspond to those mentioned in the Engineers contract.

In addition to those limitations included in the mandatory particular conditions (Appendix A1) and deriving from the applicable Romanian legislation, Em-ployers might want to add, for example:

a) Sub-Clause 4.4: Specific approval of the Employer is required before issuing consent for any Sub-Contractor; (alternatively, this obligation could be limited to major Sub-Contractors, that is those providing more than x% of the Accepted Contract Amount)

b) Sub-Clause 8.4 and/or Sub-Clause 13.1: Specific approval of the Em-ployer is required before instructing or approving any extension of the Time for Completion

c) Sub-Clause 13.1: Specific approval of the Employer is required before instructing or approving the omission of any work.

Attention of the Employers is drawn on the fact that such prior approval trans-fer responsibility from the Engineer to the Employer.

It is also recommendable to add the following precisions, or similar:

Notwithstanding the obligation, as set out above, to obtain approval, if, in the opinion of the Engineer, an emergency occurs affecting the safety of life or of the Works or of adjoining property, he may, without relieving the Contractor of any of his duties and responsibilities under the Contract, instruct the Contrac-tor to execute all such work or to do all such things as may, in the opinion of the Engineer, be necessary to abate or reduce the risk. The Contractor shall forthwith comply with any such instruction of the Engineer. The Engineer shall determine an addition to the Contract Price, in respect of such instruction, in accordance with Sub-Clause 13.1 and shall notify the Contractor accordingly, with a copy to the Employer.

Sub-Clause 3.2 - Delegation by the Engineer No need for particular conditions related to this sub-clause.




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Sub-Clause 3.3 - Instructions of the Engineer Attention is drawn on the following provision of this Sub-Clause:

The Contractor shall only take instructions from the Engineer, or from an as-sistant to whom the appropriate authority has been delegated under this Clause.

Therefore, under the Contract, the designer or other entities are not to issue in-structions directly to the Contractor.

Sub-Clause 3.4 - Replacement of the Engineer No need for particular conditions related to this sub-clause.

Sub-Clause 3.5 - Determinations Attention is drawn on two issues:

- As per Sub-Clause 1.3, determinations should not be unreasonably withheld or delayed. In general, claims should be dealt with in a timely manner. Employers might consider introducing a time limit for issuing determinations.

- Determinations enter into force immediately.

In practice, the Engineer could issue an interim determination before issuing a final one, in order to avoid delays, while waiting for additional supporting par-ticulars.

New Sub-Clause 3.6 - Management Meetings It is recommendable to introduce reference to management meetings, for exam-ple with the following:

The Engineer or the Contractors Representative may require the other to at-tend a management meeting in order to review the arrangements for future work. Such meetings shall take place on a monthly basis. The Engineer shall record the business of management meetings and supply copies of the record to those attending the meeting and to the Employer, within two working days from the meeting. In the record, responsibilities for any actions to be taken shall be in accordance with the Contract.

The agenda for such meetings shall cover a review of progress attained, a re-view of schedules and plants for future activities, the status of staffing, engi-neering, safety, equipment, material supply, payments, current and anticipated difficulties, interface with other Contractors, claims for extras, and other perti-nent topics. Time and place of these meetings shall be mutually agreed taking into consideration the subject to be discussed.

4.3.4 Clause 4 - The Contractor Sub-Clause 4.1 - Contractor's General Obligations Occasionally, there may be an item of Temporary Works for which the Con-tractor will not be fully responsible. For example, the Contract may specify temporary arrangements for river diversion which have been designed by the Engineer. In these cases, the Sub-Clause may require amendment, taking ac-




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count of the type of this item of Temporary Works, and of the extent of the Employer's responsibility.

It has to be understood that the Contractor might be required to design part of the Works even under the conditions of contract for construction. However, if the Contractor is to design a very significant part of the works, Employers should consider using the conditions of contract for plant and design-build.

In case the Contractor is required to provide design of part of the Works, this should be clearly stated, normally in the Specifications. It is important to state the extent of such design work and whether it is relating to full design of a spe-cific part (including Temporary Works, relocation or protection of utilities, etc) or to an increased level of detail (for example production of working drawings for the Permanent Works). In both cases, Employers should specify:

- Whether and to what extent the Engineers consent on the name and qualifications of the designer (individuals, sub-contractor, etc) and de-sign checkers shall be obtained. This might also include definition of possible conflict of interest (with the Employers Personnel, including the Engineers personnel)

- Whether, to what extent and in which time period and according to which sequence, design shall be submitted by the Contractor and ap-proved or reviewed by the Engineer and / or the Employer. Attention is drawn to cases where the Employers Technical-Economic Commit-tees approval would be required

- Whether and to what extent authorisations and permits are required and which Party is responsible to obtain them.

It is also recommendable to specify that any design produced by the Contractor shall be coordinated with existing designs produced by the Employer.

In case the Contractor is to fully design a part of the Works, Employers might consider integrating additional provisions, similar to those of Clause 5 of the conditions of contract for plant and design-build, providing a better definition of the design procedure.

In case the Contractor is to provide refined design (working drawings), it is recommendable to state the following:

The design by the Contractor shall form a coherent technical project together with the Specifications and Drawings provided by the Employer in the Con-tract. In case the Contractors design proposes substantial changes to the Em-ployers design (including but not limited to changes of technical solutions), such proposal shall be deemed to have been made by the Contractor under Sub-Clause 13.2 [Value Engineering].

It is also recommended to state that:

Any approval or consent, as well as any review, under this Sub-Clause or oth-erwise, shall not relieve the Contractor from any obligation or responsibility.




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Sub-Clause 4.2 - Performance Security Sub-Clause 4.2 needs to be amended in order to comply with Romanian public procurement regulations on the submission and release of the Performance Se-curity (Articles 87(b) and 92(4) of GD No. 925/2006). The proposed amend-ments are included in the mandatory particular conditions in Appendix A1.

In order to avoid the risk of termination in case of failure by the Contractor to submit the Performance Guarantee, it is recommended to request submission of the Performance Security at the signature of the Contract Agreement.

The value of the Performance Security is normally based on the Accepted Con-tract Amount. As per the provisions of Article 89 paragraph (2) of GD No. 925/2006, it cannot exceed 10% of the Contract Price VAT excluded. For large projects with possibly important cost-overruns, it is recommendable to add the following text at the end of this Sub-Clause.

Whenever the Engineer determines that the Contract Price exceeds the Ac-cepted Contract Amount or the Contract Price previously determined for the purposes of this Sub-Clause, by more than ten (10%) percent, the Contractor, at the Engineers written request, shall promptly increase the value of the Per-formance Security by an equal percentage.

To avoid difficulties in case of Joint Ventures, it is recommended to include:

The Performance Security of a joint venture or consortium shall specify the name of the joint venture or consortium.

The acceptable form(s) of Performance Security should be included in the ten-der documents, annexed to the Particular Conditions. Example forms are an-nexed to this document in the templates of guarantees in Appendix D1.

They incorporate the Uniform Rules published by the International Chamber of Commerce (the "ICC"), which is based at 38 Cours Albert 1er, 75008 Paris, France), which also publishes guides to these Uniform Rules.

In case the Employer is not prepared to accept another form of security than the one annexed to the Particular Conditions, it should amend the second sentence of the second paragraph of Sub-Clause 4.2 as follows:

The Performance Security shall be issued by an entity and from within a coun-try (or other jurisdiction) approved by the Employer, and shall be in the form annexed to the Particular Conditions.

Sub-Clause 4.3 - Contractor's Representative If the Representative is known at the time of submission of the Tender, the Ten-derer may propose the Representative. The Tenderer may wish to propose al-ternatives, especially if the contract award seems likely to be delayed. If the ruling language is not the same as the language for day to day communications (under Sub-Clause 1.4), or if for any other reason it is necessary to stipulate that the Contractor's Representative shall be fluent in a particular language, a modification of the clause may be made in the particular conditions. A recom-




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mendation is attached in the recommended particular conditions in Appendix A2.

The role of the Contractors Representative should be highlighted. Not only his nomination, but also his revocation has to receive the prior consent of the Engi-neer.

In order to ensure that a properly nominated Contractors Representative is available at all times, it is possible to specify (under Sub-Clause 14.3) that Statements have to be signed by the Contractors Representative so as to be taken into consideration.

It is also recommendable to make reference to the key qualifications required at the time of the Tender.

Sub-Clause 4.4 - Subcontractors The wording in the General Conditions includes the conditions which will usu-ally be applicable.

However, under Romanian public procurement regulations, if parts of the Works are to be performed by Subcontractors, at the signature of the Contract Agreement, the Contractor must provide the Employer with the relevant sub-contracts, which must comply with the terms of the Tender and shall constitute Schedules to the Contract (Article 96(1) of GD No. 925/2006). Moreover, the Contractor may not replace any of the Subcontractors designated in the Tender without the prior consent of the Engineer (Article 96(2) of GD No. 925/2006).

Please also note that, according to the same Article 96(2) of GD No. 925/2006, replacement of Subcontractors nominated in the Tender must not lead to modi-fication of the initial technical or financial offer of the Contractor.

The proposed modification is included in the mandatory particular conditions in Appendix A1.

On a case-by-case basis, Employers might want to define a maximum limit of sub-contracting (for example 50% of the value of the Works). In such case, this amount should be clearly stated, typically in the Appendix to Tender.

Replace the first sentence of Sub-Clause 4.4 with:

The Contractor shall not subcontract a larger value of the Works than the maximum specified in the Appendix to Tender.

Subject to the mandatory provisions of the Romanian public procurement regu-lations, the Engineers prior consent for subcontractors might lead to excessive administration. It is therefore possible to limit such requirement, as follows:

At the end of point (b), add the following:

Such prior consent shall not be required if the value of the subcontract is less than one percent (1%) of the Contract Price.




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Furthermore, it is recommendable, for transparency reasons, to detail on which criteria consent will be given. Such criteria might include:

- Personal situation (no bankruptcy or similar proceedings, no final sen-tence for professional misconduct, fulfilled obligations as per payment of taxes and social contributions)

- Sound financial position

- Experience in similar projects (for the type of works intended to be performed by the proposed Subcontractor), etc.

Sub-Clause 4.5 - Assignment of Benefit of Subcontract No need for particular conditions related to this sub-clause.

Sub-Clause 4.6 - Co-operation In case several contractors are working simultaneously on or near the Site, it is highly desirable that the Specifications describe the resulting constraints and procedures for co-ordination.

Sub-Clause 4.7 - Setting Out No need for particular conditions related to this sub-clause.

Sub-Clause 4.8 - Safety Procedures If the Contractor is sharing occupation of the Site with others, it may not be appropriate for him to provide some of the listed items. In these circumstances, the Employer's obligations should be specified.

The requirements of paragraph (d) of the present Sub-Clause might need to be reviewed in particular cases: it might not be appropriate to ensure fencing and lighting of a road section, for example.

It is recommended to include at the end of this Sub-Clause provisions referring to Traffic Management Plans and similar, when relevant.

Within 28 days of the signature of the Contract Agreement, the Contractor shall submit to the Engineer a detailed traffic management plan.

The traffic management plan shall indicate what measures will be implemented to manage the traffic while Works are underway. Such plan shall describe, in the form of a sketch accompanied by narrative details, the sequence of signs, deviations, lighting, fence, etc, to be applied to each section of road with differ-ent cross profile characteristics (2, 3 or 4 lanes), so that road users and ripar-ian be protected. The traffic management plan shall be approved by the Engi-neer before the start of the Works on any part of the Site.

Approval by the Engineer will be granted only further to the approval by the Road Police and by the Employers specialised services.

In case of default on the part of the Contractor in maintaining or implementing such traffic management plan, as approved by the Engineer, on any part of the Site, the Employer shall be entitled, subject to Sub-Clause 2.5, to payment by




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the Contractor of the Cost of remedy measures or any higher amount depending on actual damages.

Sub-Clause 4.9 - Quality Assurance The wording in the General Conditions imposes the requirement of a quality assurance system in accordance with details specified in the Contract.

In case a description or an outline of the quality assurance system was submit-ted as part of the Tender, this Sub-Clause should establish a link with the documents provided.

Sub-Clause 4.10 - Site Data Under this Sub-Clause, Employers are required to make available all necessary relevant data on sub-surface and hydrological conditions, usually as part of the tender documents.

Sub-Clause 4.11 - Sufficiency of the Accepted Contract Amount No need for particular conditions related to this sub-clause.

Sub-Clause 4.12 - Unforeseeable Physical Conditions In the case of major sub-surface works, the allocation of the risk of sub-surface conditions is an aspect which should be considered when tender documents are being prepared. If this risk is to be shared between the parties, Sub-Clause 4.12 may be amended by deleting sub-paragraph (b) of Sub-Clause 4.12 and substi-tuting by:

(b) Payment for any such Cost, per cent ( %) of which shall be in-cluded in the Contract Price (the balance percent of the Cost shall be borne by the Contractor).

Sub-Clause 4.13 - Right of Way and Facilities No need for particular conditions related to this sub-clause.

Sub-Clause 4.14 - Avoidance of Interference No need for particular conditions related to this sub-clause.

Sub-Clause 4.15 - Access Route This Sub-Clause has to be put in relation with Sub-Clause 2.1 and Sub-Clause 4.13. It is therefore assumed that an access route exists (but its suitability for transport is not guaranteed by the Employer) and that the Contractor is entitled to use it (even if this might imply some costs).

Sub-Clause 4.16 - Transport of Goods No need for particular conditions related to this sub-clause.

Sub-Clause 4.17 - Contractor's Equipment If the Contractor is not to provide all the Contractor's Equipment necessary to complete the Works, the Employer's obligations should be specified: see Sub-Clause 4.20. If vesting of Contractor's Equipment is required, further para-graphs may be added, subject to their being consistent with applicable laws.




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This Sub-Clause refers only to Equipment brought on Site. It might be advis-able to extend it to Equipment brought to the Contractors site installation, if this is not located on the Site.

Furthermore, it is recommendable to refer to the equipment proposed by the Contractor as part of its tender:

The Contractor shall use for the execution of the Works Equipment of not lower quality and capacity than the Equipment proposed in the Tender and listed in Schedule xx to the Contract.

Sub-Clause 4.18 - Protection of the Environment For Works to be executed in particularly environmentally sensible areas, Em-ployers might want to include in this Sub-Clause a provision for indemnifica-tion in case of default. For instance:

In case of default on the part of the Contractor in meeting the requirements of the present Sub-Clause, the Employer shall be entitled, subject to Sub-Clause 2.5, to payment by the Contractor of the Cost of remedy measures or any higher amount depending on actual damages.

Sub-Clause 4.19 - Electricity, Water and Gas If services are to be available for the Contractor to use, the Specification should give details, including locations and prices.

Sub-Clause 4.20 - Employer's equipment and Free-Issue Material For this Sub-Clause to apply, the Specification should describe each item which the Employer will provide and/or operate and should specify all necessary de-tails. With some types of facilities, further provisions may be necessary, in or-der to clarify aspects such as liability and insurance.

In case Employers intend to use this Sub-Clause, for use of Employers Equip-ment or of free issue materials, they should be very careful so as to ensure fair and transparent conditions of competition. The exact conditions and prices for Equipment should be detailed and disclosed to all tenderers, while detailed in-formation regarding the quality and quantity of free issue materials, as well as the time and place where they will be made available should be defined. It is advisable to have those materials surveyed as part of the tender, so as to define their condition and suitability for use.

In case the condition of free issue materials is not known before the execution of the Works (for example when some materials are to be re-used), Employers should ensure that all tenderers base their prices on the same assumptions and that the mechanism for incorporation of such materials does not distort compe-tition.

Sub-Clause 4.21 - Progress Reports The progress report is one of the main supporting documents to be submitted together with the Statements. The level of detail to be provided as part of the progress reports might be adapted to the projects requirements.




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The requirement to provide 6 copies might also be adapted.

Sub-Clause 4.22 - Security of the Site If the Contractor is sharing occupation of the Site with others, it may not be appropriate for him to be responsible for its security. In these circumstances, the Employer's obligations should be specified.

The provisions of the present Sub-Clause should be adapted from one project to another in function of the configuration of the Site.

For example, in the case of a road rehabilitation project, it is recommendable to precise that:

For the purposes of this Sub-Clause, the road users and riparian shall not be considered as unauthorised persons in the normal use of the road and access to riparian properties. Such use and access shall be regulated as part of the Con-tractors traffic management plan.

Sub-Clause 4.23 - Contractor's Operations on Site No need for particular conditions related to this sub-clause.

Sub-Clause 4.24 - Fossils No need for particular conditions related to this sub-clause.

New Sub-Clause 4.25 Works Diary It is recommendable to add a new Sub-Clause [Works Diary] (or integrate these provisions with the ones of Sub-Clause 4.21 [Progress Reports] with subse-quent description in the Specifications):

The Contractor shall draw up a works diary for contemporary records, in a format agreed by the Engineer. The works diary shall be held on Site and the Contractors Representative shall daily record the following information (as a minimum):

1. Atmospheric conditions, the work breaks due to adverse meteorological conditions, the working hours, the number and the qualification of the per-sonnel working on Site, the supplied materials, the materials incorporated into the works, the equipment out of order, the tests completed, the sent samples, the unforeseen events, as well as verbal orders given to the Con-tractor.

2. Attachments with detailed data on all elements which are checked on Site and used for the calculation of the payments to the Contractor, such as completed Works, actual quantities, supplies accepted for incorporation into the Works. These attachments are part of the works diaries, but can be signed, if need be, as separate documents.

3. List of any obstructions and other difficulties encountered by the Contrac-tor in the execution of the Works, during the reported period.

At the Engineers request, the Contractor has to provide all necessary informa-tion for the daily completion of the works diary and attachments.




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The information provided is noted in the works diary and attachments, signed by the Contractors Representative and countersigned by the Engineer or his representative. The Contractor shall be responsible to ensure that adequate back-up of this information is provided.

In case of disagreement on a subject noted in the works diary or attachments, the Contractor has to inform in writing the Engineer about his remarks within 14 days from the date when the notice has been recorded in the works diary or attachments.

New Sub-Clause 4.26 - As-Built Drawings In order to ensure full compliance with the requirements of Law No. 10/1995, it is advisable to introduce provisions similar with those of the conditions of con-tract for plant and design-build (Sub-Clause 5.6).

Furthermore, the Contractor might be required to provide inputs to the Con-struction Book. Such inputs should be clearly defined.

4.3.5 Clause 5 - Nominated Sub-Contractors In most cases under Sub-Clause 4.4, the Contractor selects Subcontractors, sub-ject to any constraints specified in the Contract. Clause 5 provides for the par-ticular situation whereby the Employer may select a Subcontractor, although the Contractor remains responsible for any act or default of Subcontractors, ac-cording to Sub-Clause 4.4.

The sub-paragraphs of Sub-Clause 5.2 indicate some of the problems which may have to be overcome.

If a nominated Subcontractor is to be required, full details should be included in the tender documents. If the Employer anticipates that a Subcontractor is to be instructed under Clause 13 but is not to be a nominated Subcontractor, Clause 5 should be amended, describing the particular circumstances.

The attention of Employers is drawn on the fact that Nominated Subcontractors shall be nominated further to a selection procedure in full accordance with the relevant procurement legislation. Before using this Clause, Employers might also consider the conclusion of a separate contract.

Sub-Clause 5.1 - Definition of "nominated Subcontractor" No need for particular conditions related to this sub-clause.

Sub-Clause 5.2 - Objection to Nomination No need for particular conditions related to this sub-clause.

Sub-Clause 5.3 - Payments to nominated Subcontractors No need for particular conditions related to this sub-clause.

Sub-Clause 5.4 - Evidence of Payments No need for particular conditions related to this sub-clause.




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4.3.6 Clause 6 - Staff and Labour Sub-Clause 6.1 - Engagement of Staff and Labour It is advisable to link key personnel to be employed with the requirements of the tender documents, for instance:

The Contractor shall employ key personnel as proposed in the Tender and listed in Schedule xx to the Contract. Any replacement personnel shall be at least of equivalent qualification and experience.

Sub-Clause 6.2 - Rates of Wages and Conditions of Labour No need for particular conditions related to this sub-clause.

Sub-Clause 6.3 - Persons in the Service of Employer No need for particular conditions related to this sub-clause.

Sub-Clause 6.4 - Labour Laws According to the Procurement Guide, the Employer must clearly indicate in the tender documents the mandatory rules regarding labour conditions and labour safety which must be complied with throughout the performance of the Con-tract. Such obligation is deemed to be complied with if the tender documents indicate the relevant institutions wherefrom detailed information as regards the above mentioned regulations can be obtained.

The Employer should require Tenderers to indicate in the Tender the fact that obligations related to labour conditions and labour safety were taken into con-sideration in the preparation of the Tender.

Sub-Clause 6.5 - Working Hours If the Employer does not wish to specify working hours in the Appendix to Tender, or to restrict them to the times specified by the Tenderer (in order to plan the Engineer's supervision, for example), this Sub-Clause may be deleted.

In some cases, requests of the Contractor to work outside the normal working hours will have an impact on the activity of and required inputs from the Engi-neer. This can be limited with:

The personnel of the Contractor will not be allowed to perform the Works in more than one shift, except for those activities requiring continuous presence on Site, such as traffic management.

Sub-Clause 6.6 - Facilities for Staff and Labour If the Employer will make some accommodation available, his obligations to do so should be specified.

Sub-Clause 6.7 - Health and Safety Additional health and safety requirements might be necessary depending on the type of works and related risks: railway, chemicals, etc.

Sub-Clause 6.8 - Contractor's Superintendence Add the following text at the end of Sub-Clause 6.8:




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A reasonable proportion of the Contractors superintending staff shall have a working knowledge of Romanian language. Otherwise the Contractor shall have a sufficient number of competent interpreters available on Site during all working hours.

Add the following paragraphs at the end of Sub-Clause 6.8:

(a) Foreign Staff and Labour The Contractor may import any personnel who are necessary for the execution of the Works. The Contractor must ensure that these personnel are provided with the required residence visas and work permits. The Contractor shall be re-sponsible for the return to the place where they were recruited or to their domi-cile of imported Contractors Personnel. In the event of the death in the Country of any of these personnel or members of their families, the Contractor shall similarly be responsible for making the appropriate arrangements for their re-turn or burial.

(b) Alcoholic Liquor or Drugs The Contractor shall not, import, sell, give, barter or otherwise dispose of any alcoholic liquor or drugs, or permit or allow importation, sale, gift, bar

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