FIDIC Plant and Design‐Build Form of Contract Illustrated

FIDIC Plant and Design‐Build Form of Contract Illustrated

Raveed Khanlari and Mahdi Saadat FardFarab Energy and Water Projects

This edition first published 2015© 2015 by John Wiley & Sons, Ltd.

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Library of Congress Cataloging‐in‐Publication Data

Khanlari, Raveed, author. FIDIC plant and design-build form of contract illustrated / Raveed Khanlari, Farab Energy and Water Projects; Mahdi Saadat Fard, Farab Energy and Water Projects. pages cm Includes bibliographical references and index. ISBN 978-1-118-89621-1 (pbk.)1. Engineering contracts. 2. Architectural contracts. 3. Standardized terms of contract. 4. FIDIC plant and design-build forms of contract. 5. International Federation of Consulting Engineers. I. Saadat Fard, Mahdi, author. II. Title. III. Title: Fédération internationale des ingénieurs-conseils plant and design-build forms of contract illustrated. K891.B8K43 2015 346.02′4--dc23

2015017184

A catalogue record for this book is available from the British Library.

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.

Cover image: © FARAB

Set in 10/13pt Franklin Gothic by SPi Global, Pondicherry, India

1 2015

I would like dedicate this book to:

● My wife, Noushin, whose love and support drove me to start over studying and researching more professionally and decisively.

● My lovely son, Radeen, who shall be rewarded for his patience during the compilation of this book: Radeen, shall we go playing Star Wars?!

● My dad, who is restlessly looking for his children’s – and indeed all his family’s – comfort and prosperity.

● The memory of my late mother, Parirokh Samanipour, the very first person who taught me to read and write and bought me my first book.

RaveedDecember 2014

To my lovely wife, Mehri, and my sweet little Artin.

MahdiDecember 2014

vii

Why is Reading This Book of Value? xiiiAcknowledgements xv

Concept‐flow Diagraming 1Which is Which? Differentiating Among Obligations, Responsibilities and Rights 1Summary Table 12

1P&DB

General Provisions 15P&DB 1.2 Interpretation 15P&DB 1.3 Communications 16P&DB 1.4 Law and Language 18P&DB 1.5 Priority of Documents 19P&DB 1.6 Contract Agreement 21P&DB 1.7 Assignment 22P&DB 1.8 Care and Supply of Documents 23P&DB 1.9 Errors in the Employer’s Requirements 25P&DB 1.10 Employer’s Use of Contractor’s Documents 27P&DB 1.11 Contractor’s Use of Employer’s Documents 28P&DB 1.12 Confidential Details 29P&DB 1.13 Compliance with Laws 30P&DB 1.14 Joint Several Liability 32

2P&DB

The Employer 33P&DB 2.1 Right of Access to the Site 33P&DB 2.2 Permits, Licences or Approvals 37P&DB 2.3 Employer’s Personnel 38P&DB 2.4 Employer’s Financial Arrangements 39P&DB 2.5 Employer’s Claims 40

3P&DB

The Engineer 43P&DB 3.1 Engineer’s Duties and Authority 43P&DB 3.2 Delegation by the Engineer 46P&DB 3.3 Instructions of the Engineer 48

Contents

Contents

viii

P&DB 3.4 Replacement of the Engineer 49P&DB 3.5 Determinations 50

4P&DB

The Contractor 51P&DB 4.1 Contractor’s General Obligations 51P&DB 4.2 Performance Security 53P&DB 4.3 Contractor’s Representative 57P&DB 4.4 Subcontractors 60P&DB 4.5 Nominated Subcontractors 61P&DB 4.6 Co‐Operation 62P&DB 4.7 Setting Out 64P&DB 4.8 Safety Procedures 67P&DB 4.9 Quality Assurance 68P&DB 4.10 Site Data 69P&DB 4.11 Sufficiency of the Accepted Contract Amount 71P&DB 4.12 Unforeseeable Physical Conditions 72P&DB 4.13 Rights of Way and Facilities 75P&DB 4.14 Avoidance of Interference 76P&DB 4.15 Access Route 77P&DB 4.16 Transport of Goods 79P&DB 4.17 Contractor’s Equipment 80P&DB 4.18 Protection of the Environment 81P&DB 4.19 Electricity, Water and Gas 82P&DB 4.20 Employer’s Equipment and Free‐Issue Material 83P&DB 4.21 Progress Reports 86P&DB 4.22 Security of the Site 89P&DB 4.23 Contractor’s Operations on Site 90P&DB 4.24 Fossils 92

5P&DB

Design 94P&DB 5.1 General Design Obligations 94P&DB 5.2 Contractor’s Documents 97P&DB 5.3 Contractor’s Undertaking 102P&DB 5.4 Technical Standards and Regulations 103P&DB 5.5 Training 106P&DB 5.6 As‐Built Documents 107P&DB 5.7 Operation and Maintenance Manuals 108P&DB 5.8 Design Error 109

6P&DB

Staff and Labour 110P&DB 6.1 Engagement of Staff and Labour 110P&DB 6.2 Rates of Wages and Conditions of Labour 111P&DB 6.3 Persons in the Service of Employer 112P&DB 6.4 Labour Laws 113P&DB 6.5 Working Hours 114P&DB 6.6 Facilities for Staff and Labour 115

Contents

ix

P&DB 6.7 Health and Safety 116P&DB 6.8 Contractor’s Superintendence 118P&DB 6.9 Contractor’s Personnel 119P&DB 6.10 Records of Contractor’s Personnel and Equipment 120P&DB 6.11 Disorderly Conduct 121

7P&DB

Plant, Materials and Workmanship 122P&DB 7.1 Manner of Execution 122P&DB 7.2 Samples 123P&DB 7.3 Inspection 124P&DB 7.4 Testing 127P&DB 7.5 Rejection 131P&DB 7.6 Remedial Work 133P&DB 7.7 Ownership of Plant and Materials 135P&DB 7.8 Royalties 136

8P&DB

Commencement, Delays and Suspension 137P&DB 8.1 Commencement of Work 137P&DB 8.2 Time for Completion 139P&DB 8.3 Programme 140P&DB 8.4 Extension of Time for Completion 143P&DB 8.5 Delays Caused by Authorities 145P&DB 8.6 Rate of Progress 146P&DB 8.7 Delay Damages 149P&DB 8.8 Suspension of Work 150P&DB 8.9 Consequences of Suspension 151P&DB 8.10 Payment for Plant and Materials in Event

of Suspension 154P&DB 8.11 Prolonged Suspension 155P&DB 8.12 Resumption of Work 157

9P&DB

Tests on Completion 158P&DB 9.1 Contractor’s Obligations 158P&DB 9.2 Delayed Tests 164P&DB 9.3 Retesting 167P&DB 9.4 Failure to Pass Tests on Completion 168

Employer’s Taking Over 170P&DB 10.1 Taking Over of the Works and Sections 170P&DB 10.2 Taking Over of Parts of the Works 173P&DB 10.3 Interference with Tests on Completion 177P&DB 10.4 Surfaces Requiring Reinstatement 180

10P&DB

Contents

x

11P&DB

Defects Liability 181P&DB 11.1 Completion of Outstanding Work and

Remedying Defects 181P&DB 11.2 Cost of Remedying Defects 183P&DB 11.3 Extension of Defects Notification Period 185P&DB 11.4 Failure to Remedy Defects 186P&DB 11.5 Removal of Defective Work 188P&DB 11.6 Further Tests 189P&DB 11.7 Right of Access 190P&DB 11.8 Contractor to Search 191P&DB 11.9 Performance Certificate 192P&DB 11.10 Unfulfilled Obligations 193P&DB 11.11 Clearance of Site 194

12P&DB

Tests after Completion 196P&DB 12.1 Procedure for Tests After Completion 196P&DB 12.2 Delayed Tests 199P&DB 12.3 Retesting 201P&DB 12.4 Failure to Pass Tests After Completion 202

13P&DB

Variations and Adjustments 206P&DB 13.1 Right to Vary 206P&DB 13.2 Value Engineering 208P&DB 13.3 Variation Procedure 209P&DB 13.4 Payment in Applicable Currencies 211P&DB 13.5 Provisional Sums 212P&DB 13.6 Daywork 214P&DB 13.7 Adjustments for Changes in Legislation 216P&DB 13.8 Adjustments for Changes in Cost 218

14P&DB

Contract Price and Payment 222P&DB 14.1 The Contract Price 222P&DB 14.2 Advance Payment 224P&DB 14.3 Application for Interim Payment Certificates 227P&DB 14.4 Schedule of Payments 229P&DB 14.5 Plant and Materials Intended for the Works 231P&DB 14.6 Issue of Interim Payment Certificates 234P&DB 14.7 Payment 237P&DB 14.8 Delayed Payment 238P&DB 14.9 Payment of Retention Money 239P&DB 14.10 Statement at Completion 241P&DB 14.11 Application for Final Payment Certificate 242P&DB 14.12 Discharge 244

Contents

xi

P&DB 14.13 Issue of Final Payment Certificate 245P&DB 14.14 Cessation of Employer’s Liability 247P&DB 14.15 Currencies of Payment 248

15P&DB

Termination by Employer 251P&DB 15.1 Notice to Correct 251P&DB 15.2 Termination by Employer 252P&DB 15.3 Valuation at Date of Termination 258P&DB 15.4 Payment After Termination 259P&DB 15.5 Employer’s Entitlement to Termination 260

16P&DB

Suspension and Termination by Contractor 261P&DB 16.1 Contractor’s Entitlement to Suspend Work 261P&DB 16.2 Termination by Contractor 264P&DB 16.3 Cessation of Work and Removal of

Contractor’s Equipment 268P&DB 16.4 Payment on Termination 269

17P&DB

Risk and Responsibility 270P&DB 17.1 Indemnities 270P&DB 17.2 Contractor’s Care of the Works 272P&DB 17.3 Employer’s Risks 274P&DB 17.4 Consequences of Employer’s Risks 276P&DB 17.5 Intellectual and Industrial Property Rights 278P&DB 17.6 Limitation of Liability 280

18P&DB

Insurance 281P&DB 18.1 General Requirements for Insurances 281P&DB 18.2 Insurance for Works and Contractor’s Equipment 286P&DB 18.3 Insurance Against Injury to Persons and Damage

to Property 292P&DB 18.4 Insurance for Contractor’s Personnel 294

19P&DB

Force Majeure 295P&DB 19.1 Definition of Force Majeure 295P&DB 19.2 Notice of Force Majeure 297P&DB 19.3 Duty to Minimize Delay 298P&DB 19.4 Consequences of Force Majeure 299P&DB 19.5 Force Majeure Affecting Sub‐Contractor 301P&DB 19.6 Optional Termination, Payment and Release 302P&DB 19.7 Release from Performance Under the Law 304

Contents

xii

20P&DB

Claims, Disputes and Arbitration 305P&DB 20.1 Contractor’s Claims 305P&DB 20.2 Appointment of the Dispute Adjudication Board 312P&DB 20.3 Failure to Agree Dispute Adjudication Board 315P&DB 20.4 Obtaining Dispute Adjudication Board’s Decision 316P&DB 20.5 Amicable Settlement 319P&DB 20.6 Arbitration 320P&DB 20.7 Failure to Comply with Dispute Adjudication

Board’s Decision 322P&DB 20.8 Expiry of Dispute Adjudication Board’s

Appointment 324

Keywords 325

xiii

This book, FIDIC Form of Contract Illustrated, is intended to offer the reader a better understanding of the International Federation of Consulting Engineers’ (FIDIC) Conditions of Contract for Plant and Design‐Build through a series of diagrams. Such diagrams are included in many books, but there is not a single one that is based solely on such a visual method.

In fact, the book takes a different approach to other books on the market about the FIDIC’s Forms of Contract, as it is mainly based on showing how the sub‐clauses of the FIDIC Yellow Book function through the use of quite unique flowcharts. Most of the available publications focus on interpreting some important sub‐clauses’ purposes or the FIDIC’s Forms of Contract as a whole, rather than relying primarily on a visual representation of the text itself. These books are mainly aimed at lawyers and contract professionals, and take a rigorous legal approach, with case citations, etc., that are essential in a legal context. In comparison with the scientific/professional efforts of other relevant books, visualization of the FIDIC Yellow Book is thus the most important advantage of this book, and it is a powerful tool that will reward daily consultation during the administration of a contract.

Engineers are less interested in the theoretical legal background and more interested in how the contracts should be applied in practice. The specific use of flowcharts, termed “the concept flow”, which is a familiar means of representing such matters to this readership, is preferable to other approaches and should be welcomed. As a result, it is anticipated that this book will, for the most part, be read and referred to by engineers involved in contract administration, in the role of the Employer’s Representative, the Contractor’s Representative or the Engineer, rather than by others. In addition, there is a need for this book, particularly among beginners in the field of construction contracts, and it will make a good companion for those seeking to understand the complex language of such an international form of contract. Its greatest technical appeal will be to students and those who do not have a thorough understanding of these conditions of contract.

By glancing at the table of contents, you will see that the book covers all the sub‐clauses of the FIDIC Yellow Book, thus illustrating any part of the text that one may be seeking help to understand.

The FIDIC Yellow Book is a legal document and the precise meaning of its various clauses will depend on each and every word of the contract. In order to avoid any interpretation of the words that may not be consistent with the way a court or arbitral tribunal would construe them, the book uses the exact wordings. But when there has been a necessity to complete the flow of concepts in a given sub‐clause, authors have inserted an addendum that appears between the braces {…} and in grey. We strictly advise that this book be used as a companion to the original text of FIDIC’s Conditions of Contract for Plant and Design‐Build.

Why is Reading This Book of Value?

xiv

Why is Reading This Book of Value?

Different concepts and key issues (e.g. notices, time periods, each party’s obligations or entitlements, etc.) are exhibited through different designated shapes/indicators. The associations of one sub‐clause to other contract documents (e.g. the Particular Conditions, the Appendix to Tender, the Employer’s Requirements, the Schedules, etc.) or other sub‐clauses are clearly mentioned through the use of special indicators as well.

Throughout the book, you will see some other visual representations, such as colour coding, which identify the underlying concept and/or issue. All of these indicators have been deployed to draw the reader’s attention instantly and smoothly to all the important issues in a given sub‐clause.

xv

While we were embarked on the journey of writing this book, a number of people shared with us their experiences and knowledge regarding matters related to it, such that, when we turn the pages, their presence is apparent to us in certain words, phrases and parts of this work in a way that readers will scarcely notice. But such mementos will always remind us of special moments from that journey and we are deeply thankful to those people for making it so unique and memorable.

We would like to thank our colleagues in Farab’s Commercial Department, espe-cially those in the Contracts Division – Kambiz Taheri, Shahnaz Vasheghani and Neda Bahrami – who helped us a great deal in getting a clearer idea of the concepts behind many contractual matters through a series of constructive discussions and question‐and‐answer sessions. We appreciate the positive attitude that Hormoz Shafiani expressed and held towards this project and which encouraged us to make a concerted effort in tackling it. We would also like to thank Mohammad Sadeghi, as a representative of Farab’s management, for his support. We would also like to offer a deep sense of respect to Mahdi Shafeghati whose touch left an indelible mark on some parts of the book. We should express our sincere thanks to Fèdèration Internationale des Ingénieurs-Conseils (FIDIC) and his Commercial Director, François Baillon, for permission to re-use the text of FIDIC P&DB, as it appears in the book. And we give our sincere thanks to Vincent Leloup, the senior advisor to FIDIC, whose very first comments on our work drove our passion to deliver it as a book. And last but not least we thank Wiley’s editorial team in the Construction and Civil Engineering Department – led by Paul Sayer – for the opportunity they gave us to make this work happen.

Acknowledgements

FIDIC Plant and Design-Build Form of Contract Illustrated, First Edition. Raveed Khanlari and Mahdi Saadat Fard. © 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.

1

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‐flow

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ing

This book is an illustration of contractual matters, in the light of an invented technique called “concept-flow diagramming”. The technique applies a range of indicators, varying from colours and punctuation marks to geometrical and compositional shapes, to demys-tify the jargon of contractual matters. By using this range of elements, we have aimed to illustrate a form of contract that is widely applied in a number of infrastructure projects around the globe, in order to help those people insufficiently acquainted with contractual and law‐related content to read and understand it more easily. Although these sorts of elements may appear quite familiar and long‐established, and therefore not require intro-duction and definition yet again, their application in this book is highly specific in order to hallmark a given sub‐clause’s meaning and pace within its textual boundaries.

Among such elements, shapes will play the major role in underlining actions and/or facts through which the concept flow of each sub‐clause emerges. By employing a mixture of geometrical and compositional shapes, these actions and facts are classified in accord-ance with the matters that frequently arise in a given contract (e.g. responsibilities, obligations, entitlements, etc.) to easily identify the one in question.

In this section, you will be introduced to the meaning and application of each shape as well as other indicators, which will help you to get to grips with the idea behind the c oncept‐flow diagramming technique. Getting a good grasp of the technique’s philosophy will guarantee a quick understanding of the flow of concepts, and the implications of any sub‐clauses in the FIDIC’s Conditions of Contract for Plant and Design‐Build (P&DB).* You will then see the degree to which illustration of a contract clause can improve the read-ability of the text, especially when dealing with controversial and debatable issues.

Which is Which? Differentiating Among Obligations, Responsibilities and Rights

Hexagon [INITIATION/PURPOSE]In most cases, a sub‐clause is referred to once an event or circumstance arises (or is anticipated to arise) during the project life cycle. Hexagons are used to show such events or circumstances via which the meaning of a given sub‐clause is practically

Concept‐flow DiagramingAn Idiosyncratic Technique

* International Federation of Consulting Engineers (1999) Conditions of Contract for Plant and Design‐Build: for Electrical and Mechanical Plant, and for Building and Engineering Works, Designed by the Contractor. Geneva: FIDIC.

0

FIDIC Plant and Design-Build Form of Contract Illustrated

2

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‐flow

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ing conveyed. It is mainly intended to show the reason and/or conditions that justify the

existence of any given sub‐clause.

We have chosen an excerpt of the sub‐clause itself that is relevant to such initiation and incorporated this into the hexagon. Where this has not been possible, an alternate wording is included in the hexagon(s) to explain the purpose of that sub‐clause.

Example. Consider the sentences below as the opening parts of two separate sub‐clauses:

1. “The Employer shall provide reasonable assistance to the Contractor at the request of the Contractor.”

Here, the action can be easily recognized by the verb itself. The verb “provide” triggers the concept flow in this example, and the subject of the sentence – the Employer – is the initiator. Thus, the hexagon of such a sub‐clause will embrace the exact wording of the opening sentence, as follows:

Employer shall provide reasonable assistance to

the Contractor at the request of the Contractor.

2. “Unless otherwise stated in the Particular Conditions:

a. the Contract Price shall be lump sum Accepted Contract Amount,

b. the Contractor shall pay all taxes, and

c. any quantities in a statement are estimated quantities.”

The above example is quite different in defining the initiation. The subject of the sen-tence is not an actor, and therefore cannot be regarded as the initiator. In fact, the sub‐clause’s purpose is to define some facts about the Contract Price. In this case, the wording of the text inside the hexagon is an addition to the original text of the sub‐clause to reflect what its purpose might be:

{Contract Price shall be as de�ned

and subject to changes as stated in

this sub-clause.}

Note the grey colour of the text and the brackets, both indicating that the text is not a part of the original transcript.

It is worth remembering that most of the sub‐clauses’ diagrams contain only one hexagon. But there are some exceptions in which the diagram includes two or more hexagons (e.g. the diagram for Sub‐Clause 17.1 [Indemnities]).

Sometimes, you need to ask one or two questions before you can effectuate a sub‐clause’s provisions. In such circumstances, hexagons are not automatically positioned at the beginning of the diagram, and are only inserted as soon as the prerequisites are fulfilled (e.g. the diagram for Sub‐Clause 15.1 [Notice to Correct]).

Rectangle [ACTION]

The main reason for using this kind of geometrical shape is to show an obligation(s) is referred to in a sub‐clause. In most cases, obligations evolve into various forms of action. In other words, it would be possible to have more than one action in a

Concept‐flow Diagraming

3

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‐flow

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ingsub‐clause, so rectangles are used proportionally to represent such actions in the

diagram.

Example. Suppose the sentence below is a part of a paragraph in the middle of a sub‐clause:

“The Employer shall give the Contractor right of access to the Site within the time as required.”

The active form of the verb and the subject of the sentence – which is one of the contract parties – remind the reader of an obligation that shall be taken/assumed by an actor (here the Employer), thus justifying the use of a rectangle to illustrate this part of the text:

Employer shall give the Contractor right of access to

the Site.

Note that the ending of the sentence is not included inside the rectangle as it refers to a time concept. We have devised a separate shape for temporal con-cepts and this is detailed in the “semi‐rectangle semi‐oval” section later in this chapter.

Double‐sided rectangle [ACTION UNDER OTHER CONTRACTUAL PROVISIONS]

This shape also represents an action, but under provisions of another sub‐clause and/or other contract documents (e.g. Particular Conditions of Contract).

Example. The following sentence embodies an action that is due to be followed under the provision of the Particular Conditions of the Contract:

“The Contractor carries out the Tests on Completion in conformity with the Particular Conditions.”

Contractor carries out the Tests on Completion

in conformity with the Particular Conditions.

This shape is intended to signify the linkages of a given sub‐clause to the contract’s other sub‐clauses and/or documents.

Rounded rectangle [ALTERNATE ACTIONS/FRAGMENTATION]

Rounded rectangles represent alternate actions; that is, they are applied to any given action when at least one other option exists that could be followed instead. Note that this option may be a simple action (stated as a simple sentence with an active form) or it may emerge as a separate procedure itself. Here, we use a simplified example to show a simple action.

Example. Consider the following sentence:

“…, the Employer shall reject the Works, issue a Taking‐Over Certificate, or order further repetition of the Tests on Completion.”

As you can see, the Employer here has three options to proceed: (i) reject the Works; (ii) issue a Taking‐Over Certificate; or (iii) order further repetition of the Tests on Completion. We define these three options as simple actions (one of which is to be

FIDIC Plant and Design-Build Form of Contract Illustrated

4

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ing pursued by the Employer) and draw the diagram for this example as shown in the

figure below:

Employer shall reject the Works.

Employer shall issue a Taking-Over Certificate.

Employer shall order further repetition of the Tests on

Completion.

…

OR

The “OR” indicator (you will learn about this in the section on “conjunction shapes”) is also used to attract the reader’s attention to the fact that the procedure could end up with only one of the actions stated in the rounded rectangles.

Note that a separate procedure could itself be considered an alternative action to be inserted into the diagram as an option after the OR indicator. As such, a sub‐process may include several shapes, all to be considered one alternate action instead of the other choices.

Rounded rectangles are also used for another purpose. They highlight the fragments resulting from the breakdown of a paragraph, sentence or phrase. In such cases, the division of the words or phrases is considered to enhance the readability of the text and draw the reader’s attention more closely to such matters.

Example. Read the two examples below:

1. “The Employer shall provide assistance to the Contractor:

a. by obtaining copies of the Laws of the Country, and

b. for the Contractor’s applications for any permits, licences or approvals.”

Employer shall provide assistance to the Contractor:

AN

D

Sub-Paragraph (a)

for the Contractor’s applicationsfor any permits, licences or

approvals.

by obtaining copies of the Laws of the Country.

Sub-Paragraph (b)

Like the OR indicator in the preceding example, the AND indicator is used to under-line the mutual relationships of sub‐paragraphs (please refer to the section on

Concept‐flow Diagraming

5

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‐flow

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ing“conjunction shapes”). The last shape in the figure, the target, affirms that such

fragmentations after the AND indicator shall be considered and construed all together.

2. “The Employer shall give particulars to the Contractor. The particulars shall specify the Clause or other basis of the claim.”

Employer shall give particulars to the Contractor.

Particulars shall specify:

OR

the Clause other basis ofthe claim

The fragmentation indicated in the second example signifies the items that the reader should be more careful about when perusing the text. (For an explanation of the text written on the sides of the arrow drawn from the OR indicator, please refer to the note in the “parallelogram” section.)

Crooked rectangle [FACT RELATING TO PARTIES OR ANOTHER PERSON]

Sometimes a sentence informs you of a fact rather than an action. We use crooked rectangles to divert attention from actions to facts, but only those that are related to persons. Reading about such facts may inform the reader of the rights or responsibilities a party to the contract may have or hold.

The benefit of differentiating between the rectangle and the crooked rectangle is that readers can quickly distinguish obligations (actions/restrictions) from rights/responsibilities (facts) that the parties may have.

Verbs in the sentences that indicate a fact are often in the passive form, although that should not be assumed as a general rule (some verbs, such as “warrant” or “undertake”, convey a responsibility for rather than an obligation to be performed by their subject). You can see such a passive voice in the following example.

Example. Assume the following sentence as an excerpt from a sub‐clause:

“The Contractor shall be entitled to payment of Cost, plus reasonable profit.”

Upon reading this sentence, you do not expect the Contractor to perform a specific task or take a particular action; rather, you could say that it merely refers to a right to receive a payment. This sentence would therefore be shown on the diagram by the crooked rectangle:

Contractor shall be entitled to payment of Cost, plus reasonable

profit.

FIDIC Plant and Design-Build Form of Contract Illustrated

6

Con

cept

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ing In depicting the concept flow of a sub‐clause on a diagram, facts (in some cases) will not

hold a position in the mainstream of that concept, but rather emerge as complementary data to the actions or other existing facts. Consider the following example as the open-ing part of a sub‐clause:

“The Employer considers himself to be entitled to a payment in connection with the Contract.… The Employer shall only be entitled to set off against an amount certified in a Payment Certificate.”

As explained earlier, the first sentence can be directly drawn as a hexagon on the dia-gram to show the initiation or purpose of the sub‐clause. In the case of the second sentence, which states a fact about the Employer, we prefer to place it as a “side‐shape” adjacent to the hexagon and not to show it in the main body of the flowchart – it provides extra information about the fact stated in the first sentence and, in effect, characterizes such a statement. (Note that these kinds of informative sentences/phrases do not nec-essarily come immediately after the relevant sentences and you may need to seek them out within the text of the sub‐clause and make the association between them.)

Employer considershimself to be entitled

to a payment inconnection with the

Contract.

Employer shall only be entitledto set off against an amount

certi�ed in a Payment Certificate.

The crooked rectangle being coloured purple here shows that the notion being dem-onstrated inside the shape is a complementary matter to the main idea depicted in the diagram (this colour will be used for side‐shapes). Side‐shapes, in fact, serve as input data for other shapes. They collect information from the sub‐clause’s text that has a clarifying role in relation to the other sub‐clause’s statements, which, in turn, embody the concept of a such sub-clause. In very special cases that some actions are regarded as complementary to an action from the mainstream of a given sub-clause, these actions will also appear as side-shapes in diagrams.

Parallelogram [GENERAL FACT]

In some circumstances, the facts established in a sentence are not attributed to a party, and state some general information. It may alternatively be intended to lay stress on the matter that a party has taken (or shall take) an action for (usually through sentences in the passive voice). In such cases, parallelograms are used to illustrate sentences (or phrases) that are of this quality. The subject of these sentences is the item or issue that the fact is attached or attributed to.

Example Assume that the sentence used earlier in the rectangle example is the open-ing part of a sub‐clause, and that the ensuing phrase is in the middle of the sub‐clause:

“The Employer shall give the Contractor the right of access to the Site. … Right may not be exclusive to the Contractor.”

The second part establishes a fact about a matter – here “the right” – and not about a party to the contract or a real person. We will therefore represent this sentence in a parallelogram.

Employer considershimself to be entitled

to a payment inconnection with the

Contract.

Right may not be exclusive to the Contractor.

You may again notice the purple colouring of the parallelogram that denotes it as a side‐shape. Parallelograms almost always appear in purple in this book, as they serve

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ingin most cases as complementary information to other statements. General facts are

(in the scope of the FIDIC P&DB) not attributed to any parties or actors (e.g. Contractor, Employer’s Personnel, etc.) and it is therefore preferable in most cases to locate them outside the main structure of the diagram unless the sub‐clause does refer to a general fact, in which case its relevant shape – a parallelogram – will appear in the main body of the diagram.

Note that we have, in some cases, placed the general facts on the sides of the arrows instead of writing them inside a parallelogram (you have seen an example of this in the section on the rounded rectangle). When this happens for such an indicator, it is done to enhance the readability of the diagram.

Document [DOCUMENTS]

Wherever a document is referred to in a sub‐clause, “document” shapes are used to exhibit it. The appearance of this shape will inform the reader that something in the typical layout of a document may be an obligation of a party that should be compiled and/or delivered to another party under the Contract.

Example: In the following example, the Contractor shall deliver test results to the Engineer after obtaining them. Readers will become aware of such a document when examining the diagram:

“The Contractor shall submit a certified report of the results of tests to the Engineer.”

Contractor shall submit to the Engineer:

a certi�ed report of theresults of tests.

Note the way the sentence in the example has been fragmented to bring the test report forcefully to the reader’s attention.

Semi‐hexagon semi‐oval [NOTICE]

We use this type of shape in the diagrams in this book to highlight those parts of sub‐clauses where a notice has been referred to. Usually, claim procedures start with a notice given by the claimant. Having such an arrangement considered in the book in this way allows readers to quickly spot where a notice exists, and thereby to observe conditions that may give rise to a claim.

Example

“The Contractor applies by a notice to the Engineer for a Taking‐Over Certificate.”

Contractor applies for a Taking-Over Certificate.

Notice to the Engineer by the

Contractor {for a Taking-Over Certificate}.

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ing Here, the reader is informed that applying for a Taking‐Over Certificate (by the

Contractor) requires the giving of a notice. (The grey part in the shape is a repeated phrase from the text of the preceding shape to emphasize the subject of the notice.)

Semi‐rectangle semi‐oval [TIME]

The concept of time in these contractual transcripts is captured through the deploy-ment of the semi‐rectangle semi‐oval shape. In a sentence comprising an element of time, we cut the time phrase from the sentence and place it into the semi‐rectangle semi‐oval. By the use of time shapes, readers of the book can be notified of any given time periods, foreseen or expected under the Contract.

Example 1

“The Engineer shall, within 28 days after receiving the Contractor’s application, issue the Taking‐Over Certificate to the Contractor.”

In this example, the time constraint is explicitly indicated: within 28 days of receipt of the Contractor’s application. In such cases, the time period is underlined, for emphasis.

Engineer shall issue the Taking-Over Certi�cate to the

Contractor.

within 28 days after receiving the Contractor’s

application

Example 2

“After receiving the notice by the Engineer, the Engineer shall agree or determine the Cost and profit.”

While the second example also shows a time constraint, it does not expressly state the longest allowable duration for the required action. Here, we again apply the time shape to notify the reader of this unidentified time frame.

Engineer shall agree ordetermine the Cost and profit.

After receiving the {Contractor’s} notice by

the Engineer

“Until” is a word that also carries the concept of time in a sentence, albeit in a conditional way. It refers to a time that will not be met unless something is accom-plished. We also deploy the time shape to those phrases that include words such as this.

Example 3

“Reporting shall continue until the Contractor has completed all work…”

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Until all work has beencompleted

Reporting shall continue {by the

Contractor}.

Rest of the sub-clause

IF THE CONDITION

“Until”, in fact, shows a period during which certain special provisions exist and are applied. We should therefore clearly indicate when such a situation vanishes. To this end, you can see a second arrow, annotated with the words “IF THE CONDITION”, drawn from the time shape and circumscribing such special provisions (here reporting by the Contractor) from one side. You should also note the change of the phrase inside the time shape into the passive form (the colour red indicates this graphically). In some places, we do this conversion to stress the condition that shall be met in order to terminate such special provisions. The time shape will always appear first when illustrating parts of a sentence on a diagram.

Note that time shapes always describe the time constraint for the shape drawn after them.

Diamond [IF CLAUSE / CONDITIONAL CLAUSE]

As in many other flow charts, diamonds are used in the diagrams to represent conditional matters. For conditional sentences that contain the conjunction “if” or “unless”, we have deployed a diamond shape and placed the conditional part of the sentence inside it.

Two arrows lead away from any blue diamonds (diamonds will also appear in mahogany in this book; you can read about this in the section on conjunction shapes): one representing the procedure for the case that the conditional part is not fulfilled (always annotated with a “No”), and the other illustrating the satisfying mode (always annotated with a “Yes”).

Example

“If any part of the Works is to be paid according to work done, the provision for measure-ment and evaluation shall be as stated in the Particular Conditions.”

The clause (second part of the sentence) states a fact that will come into view only when another fact – stated in the conditional clause – exists. The diagram for this example is depicted as follows:

No

Is any part ofthe Works to bepaid accordingto work done?

Yes

Rest of the sub-clause

Provision for measurement and evaluation shall be asstated in the Particular

Conditions.

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ing Note that there are some cases where a conditional sentence gives only additional

information and is not a major part of the concept flow. In these cases, these sen-tences are inserted into side‐shapes and no diamond is applied. Consider the next example for this kind of exception.

Example

“Employer shall indemnify the Contractor against any claim alleging an infringement which is the result of any Work being used by the Employer, unless such use was disclosed to the Contractor.”

Unless such use was disclosed to the Contractor.

Employer shall indemnify the Contractor against any claim allegingan infringement which is the result of

any Work being used by the Employer .

ANDOR

AN

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OR [CONJUNCTION] / Target [MERGING]

Conjunction shapes are widely used throughout the book when a breakdown of a phrase, sentence or paragraph occurs, or some actions are grouped together, replaced or paralleled with each other.

The following example includes items and actions that are in conjunction with each other through the use of words “and” and “or”, and refers to a case whereby two actions could be taken together or alternatively, depending on the Engineer’s decision.

Example 1

“After receiving the test report and inspecting and/or investigating the physical conditions, the Engineer shall proceed to agree or determine if the physical conditions were unforeseeable.”

After receiving the testsreport{by the Engineer}

AN

D

AND

OR

After inspecting the physical conditions {by

the Engineer}

After investigating the physical conditions {by

the Engineer}

Engineer shall proceed:

OR

to agree the physical conditions were

foreseeable.

to determine if the physical conditions were foreseeable.

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ingYou can see how the preceding example has been rearranged in the diagram above

by using the conjunction shapes. You can also see the way these shapes help to distinguish which choices could be taken and which matters should be considered as a whole when pursuing the concept of a sub‐clause.

Notice the way the time constraint (the beginning clause of the sentence) has been split into three semi‐rectangle semi‐oval shapes.

There is another word, “may”, that acts in a similar vein to the word “or” and puts an item or contractual matter into an optional position. For that word, we have deployed the same indicator but with the word “MAY” written inside it to denote such an optional condition.

Example 2

“The Contractor’s Representative may delegate any powers to any competent person. Such a delegation shall not take effect until the Engineer has received prior notice by the Contractor’s Representative. …”

MAY

Contractor’sRepresentative delegates

any powers to any competent person.

Until prior notice by the Contractor’s Representative

has been received by the Engineer

Rest of the sub-clause

NOT

Such a delegation shall not take effect.

IF THE

CONDITION

You can see how the MAY indicator highlights a part of a procedure in a sub‐clause – here the sentence written inside the rectangle shape – that could be bypassed as a result of using the modal verb “may”.

Readers can also obtain a clear idea of the usage of the TARGET indicator (besides the one referred to in the section on the rounded rectangle) by looking at this example: it avoids the diagram becoming cluttered when more than one arrow points to a shape.

END Circle, page and terminator [FACILITATION]

By using this collection of shapes, the diagrams become more readable and are much clearer. Circles are adopted to refer to a shape that is far from the point in the diagram you are on, when drawing direct arrows to the point would clutter up the diagram unnec-essarily. Pages connect a diagram that is split over two or more pages. And the termina-tor shows the end (contingent upon the conditions and matters stated in a sub‐clause, the ending possibly being reached along different paths and not necessarily as a result of just one option).

Blue, purple, mahogany, olive green and grey [CONCEPT FLOW / ADDITIONAL INFORMATION / FACILITATION / DOCUMENTS / NOTES]

Colours are widely used throughout the book to differentiate some important notions:

● How the main concept of a sub‐clause flows from the beginning to the end – this can be traced for each sub‐clause by tracing blue shapes on any given diagrams.

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● If a sentence is stated as a general fact – in the scope of FIDIC P&DB – and serves as additional information to an argument in that sub‐clause, we capture it in a shape adjacent to the one that contains such an argument. These side‐shapes are then illustrated in purple.

● Shapes that help the diagram become more readable and facilitate the compre-hension of a complicated/long piece of text appear in mahogany.

● In addition, thanks to mahogany, the reader can also easily recognise the actor(s) who may perform(s) activities/have obligations in a sub‐clause and/or initiate the concept flow within the text.

● Olive green is another colour that is applied to a part of text that indicates some sort of document in relation to the Contract or the Contract itself overall.

● Some of the diagrams are accompanied by notes or addenda from the authors – they stand out as grey in colour.

Braces [NOTES/ADDITIONAL TEXT]

Authors’ notes or addenda are enclosed with braces to fully guide the reader through the concept. Such notes/addenda may also appear in grey.

Summary Table

Shape/colour/sign Concept represented Description

HexagonInitiation/purpose

Shows the reason or conditions that justify the existence of a given sub‐clause.

Sub‐clauses in most cases have only one hexagon in their diagram, but in some sub‐clauses’ diagrams, you may see more than one.

RectangleAction

Used to show action(s) stated in a sub‐clause.

An action in a sub‐clause can usually be perceived as an obligation being performed by a party.

Double‐sided rectangle

Action under other contract provisions

Like the rectangle, the double‐sided rectangle represents an action, but one that is being performed under provisions of another sub‐clause or a contract document.

The double‐sided rectangle highlights linkages of a given sub‐clause to other sub‐clauses or contract documents.

Rounded rectangleAlternate action

Rounded rectangles may represent actions too, but a group of actions of which only one could be followed in the mainstream of the sub‐clause. In this case, such rounded rectangles are obviously drawn subsequent to an OR shape.

Rounded rectangles are also used when a paragraph, sentence or phrase is divided into smaller phrasal items. Fragmented parts are each shown in a separate rounded rectangle. This type of rounded rectangle could be drawn after any conjunction shape (OR, AND or AND/OR).