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NEW QUESTION # 60
You are the Contract Manager of the Engineer and person Y is the Contract Manager of the Employer in a construction project under FIDIC 2017 Red Book. The project is late in schedule and Y has issued Employer's claim on Delay Damages. You have asked Y to consider whether the Contractor's delay to completion is a reflection of cash-flow shortfall from interim payments before making deductions to the Contractor's payment. Y replied that even if the Contractor pays Delay Damages to the Employer, the Contractor is still obliged to complete the Works and is not relieved from its duties and obligations. You warned Y of the risks of further reduction of cash-flow by the deduction of Delay Damages from payments. As this could worsen the situation of the Contractor, leading to further delays to the completion of the Works. Who is right?
- A. Both you and Y are both correct.
- B. Both you and Y are wrong.
- C. You are wrong, Y is correct.
- D. You are correct, Y is wrong.
Answer: A
Explanation:
Both statements are correct:
Y is right that payment of Delay Damages does not relieve the Contractor from completing the Works.
You are also correct that excessive deduction of Delay Damages can reduce the Contractor's cash flow, potentially worsening delays.
This situation requires careful balance between enforcing contractual rights and maintaining project progress.
References:
FIDIC Red Book 2017 Edition, Sub-Clause 8.7 - Delay Damages
FIDIC Contract Manager Study Guide, Module on Claims and Cash Flow Management
NEW QUESTION # 61
In a drafted FIDIC Silver Book (edition 1999), the following sentence has been added to Sub-Clause 3.5:
"In case of an Instruction regarding a pending or proposed Variation, Contractor shall carry out any determination regardless of a possible notice of dissatisfaction." What GP(s) is/are breached?
- A. GP1, GP2 and GP3
- B. GP1 only
- C. GP1 and GP3
- D. GP3 only
Answer: C
Explanation:
This clause breaches Golden Principles (GP) 1 and 3:
GP1 promotes fairness and balanced risk allocation between parties. Forcing the Contractor to carry out determinations despite a notice of dissatisfaction undermines fair dispute resolution and contractual balance.
GP3 emphasizes the importance of clear and unambiguous contract drafting that reflects agreed procedures.
This sentence introduces ambiguity and overrides contractual rights to dispute determinations.
References:
FIDIC Contract Management Guidelines - Golden Principles
FIDIC Contract Manager Study Guide, Module on Contract Administration and Contract Clauses
NEW QUESTION # 62
You are the Contract Manager of the Contractor in a building project. The Contract has been awarded to your firm, but the Engineer has not been selected. The Contract Agreement states that the Commencement Date shall be notified by the Engineer, which must be done within 14 days after the signing of the Contract Agreement. The Employer requested your firm to commence works on the 14th day after signing the Contract Agreement. Your director, Y, wants to wait with commencing the works until the Engineer has been selected or until the 42 days since the date your firm receives Letter of Acceptance. Is Y correct?
- A. Yes
- B. No
Answer: B
Explanation:
Y is not correct. The Contractor's obligation to commence works depends on the Commencement Date notification as per the contract. If the Employer requests commencement on the 14th day after signing, and the contract allows or the Engineer has not yet notified otherwise, the Contractor should comply unless formally instructed otherwise.
Delaying work beyond the contractual or Employer's instruction without valid cause may be considered breach of contract and could lead to claims against the Contractor.
References:
FIDIC Red, Yellow, and Silver Books 2017 Edition, Sub-Clause 8.1 - Commencement of Works FIDIC Contract Manager Study Guide, Module on Contract Formation and Execution
NEW QUESTION # 63
The details of all the matters that have been clarified and agreed between the Employer and tenderers during the tender stage are recorded by, for instance, a memorandum of understanding. The Employer may award the contract to the tenderer through a letter of formal acceptance, signed by the Employer. This process is in compliance with which one of the following Golden Principles (GP's)?
- A. GP 3
- B. GP 1
- C. GPA
- D. GP 2
Answer: B
Explanation:
FIDIC's Golden Principles (GPs) guide good contract management and administration.Golden Principle 1 (GP1)emphasizes"Clear communication and documentation"to avoid misunderstandings and disputes. It specifically promotes thorough documentation of all agreements and clarifications reached during the tender process. The use of a memorandum of understanding or similar record ensures transparency and mutual understanding. Furthermore, the formal award of the contract by a signed letter of acceptance aligns with the principle of clear and formal contract formation.
* GP1ensures that all key matters, changes, and agreements are properly documented during the tender phase and contract award to form an unambiguous contractual basis.
* GP2 and GP3relate more to ongoing contract administration, risk management, and dispute resolution rather than the contract formation process.
* GPA(Golden Principle A) is not a standard FIDIC term associated with contract formation or tender stage documentation.
Therefore, the described process aligns best withGolden Principle 1 (GP1).
References:
FIDIC Contract Manager Study Guide, Section on Golden Principles of Contract Management FIDIC Guidelines for Contract Managers
NEW QUESTION # 64
Which of the following FIDIC contract forms require certification in the payment process? (2 correct answers apply) Choose all of the correct answers (multiple possibilities).
- A. FIDIC Conditions of Contract for Construction ("Red Book").
- B. FIDIC Conditions of Contract for Plant and Design Build ("Yellow Book").
- C. FIDIC Conditions of Contract for EPC/Turnkey Projects ("Silver Book").
Answer: A,B
Explanation:
Comprehensive and Detailed Explanation:
Options A and B are correct: Both the Red and Yellow Books require the Engineer to certify payments before the Employer pays the Contractor.
Option C (Silver Book) typically places the risk on the Contractor and often provides for payment without Engineer certification, reflecting the turnkey nature of the contract.
References:
FIDIC Red and Yellow Books 1999 & 2017 Editions, Clauses on Payment Certification FIDIC Silver Book 1999 & 2017 Editions - Payment Provisions FIDIC Contract Manager Study Guide, Module on Payment Procedures
NEW QUESTION # 65
Under the FIDIC Construction Contract, which one of the following statements is correct?
- A. Payments of a DAB Member's retainer fee is the sole responsibility of the Contractor.
- B. For an ad-hoc DAB, a retainer fee for each DAB Member must be paid to the Member on the first day of each calendar month.
- C. Payment to DAB Members must be certified by the Employer.
- D. A DAB must give its decision in writing on any dispute when requested by one of the Parties.
- E. If all persons nominated to serve as members of an ad hoc DAB do not sign a DAB Agreement, an appointing entity can make appointments.
Answer: D
Explanation:
Under the FIDIC Conditions of Contract (particularly 2017 editions), the Dispute Adjudication Board (DAB) is a standing or ad hoc body that provides binding decisions on disputes. One key requirement is that the DAB must give its decisions in writing upon request by either Party, ensuring clarity and enforceability.
Option E is correct as the DAB's decision must be documented formally.
Option A is incorrect; the cost of the DAB is generally shared by Employer and Contractor as per the contract.
Option B is incorrect because retainer fees can be paid on different schedules, not necessarily monthly on the first day.
Option C is incorrect; payments to DAB members do not require Employer's certification but are agreed as part of the DAB contract.
Option D is partially true but not a standalone correct statement without additional context.
References:
FIDIC Red, Yellow, Silver Books 2017 Edition, Clause 21 - Disputes and DAB Procedures FIDIC Contract Manager Study Guide, Module on Claims and Dispute Resolution
NEW QUESTION # 66
Which one of the following is not a required document to be submitted by the Contractor if the Employer requests a proposal, prior to instructing a Variation, for FIDIC 2017 Yellow Book?
- A. A Programme for execution of the varied work.
- B. Details of the resources and methods to be adopted by the Contractor.
- C. A description of the varied work.
- D. A description of the proposed design.
Answer: D
Explanation:
When the Employer requests a proposal prior to instructing a Variation, the Contractor is typically required to submit:
A description of the varied work (Option A).
Details of resources and methods for carrying out the Variation (Option C).
A Programme showing how the Variation will be executed (Option D).
A description of the proposed design (Option B) is not always required as part of the Variation proposal, especially if the Variation is limited to changes in execution rather than design.
References:
FIDIC Yellow Book 2017 Edition, Sub-Clause 3.4 - Variation Procedure
FIDIC Contract Manager Study Guide, Module on Variations and Change Management
NEW QUESTION # 67
For the FIDIC Red Book (both editions), the Contractor is required to submit a progress report monthly.
When does the Contractor's reporting requirement end?
- A. Until all outstanding works as stated in the Taking-Over Certificate are completed.
- B. After issuance of the Performance Certificate.
- C. After issuance of the Taking-Over Certificate.
- D. At the Date of Completion of the Works (irrespective of whether there is minor outstanding work to be performed).
Answer: A
Explanation:
The Contractor's obligation to submit progress reports continues until all outstanding work identified in the Taking-Over Certificate has been completed. The Taking-Over Certificate signals substantial completion but may allow for outstanding minor works. Reporting is essential to monitor progress on these outstanding works.
The Performance Certificate relates to final contract completion but reporting usually ends earlier only after all works are completed.
Therefore, Option D is correct.
References:
FIDIC Red Book 1999 & 2017 Editions, Sub-Clause 4.21 - Progress Reports FIDIC Contract Manager Study Guide, Module on Communication and Reporting
NEW QUESTION # 68
You are the Contract Manager for the Engineer in a hospital project using FIDIC Yellow Book (edition 2017).
The Employer demands perfection in the project's design and construction quality. There are many Variations initiated by the Employer during design and construction. Which one of the following is considered to be a valid Variation?
- A. The Contractor submits a Value Engineering proposal regarding the lighting system for the operation rooms. The Engineer is positive about the proposal and tells the Contractor they need to look into it.
- B. The Engineer instructs a change in slopes of the access road to the intensive care unit to meet the Employer's Requirement. The Engineer does so with a Notice in accordance with Sub-Clause 3.5.
- C. The Employer verbally instructs a change in the type of doors. The Engineer issued a Notice describing the required change and denying any costs for the Contractor.
- D. The Engineer requests a proposal regarding a change in type of windows and doors. The Contractor submitted the proposal accordingly to the Engineer. The Engineer instructs the Variation.
Answer: B
Explanation:
Comprehensive and Detailed Explanation:
Option B is correct: A Variation is a formal change to the Works instructed by the Engineer via a Notice (Sub- Clause 3.5). This includes changes to design or execution such as slopes on a road.
Option A is a proposal, not yet a Variation. Positive interest does not constitute a Variation.
Option C is partially correct but depends on formal instruction after proposal acceptance; the question specifies the Engineer instructs the Variation, but since it was a request for proposal first, the Variation instruction comes later. Without explicit instruction, this is not yet a Variation.
Option D is invalid as verbal instruction plus a Notice denying cost claims does not constitute a proper Variation.
References:
FIDIC Yellow Book 2017 Edition, Sub-Clause 3.5 - Variation Procedure
FIDIC Contract Manager Study Guide, Module on Variations and Change Management
NEW QUESTION # 69
Which FIDIC Book (edition 2017) should be considered first by an Employer that is an experienced employer who knows exactly what they want from a design & engineering perspective?
- A. Yellow Book
- B. Red Book
- C. Silver Book
- D. Yellow or Silver Book
Answer: B
Explanation:
The FIDIC Red Book (2017 edition) is traditionally used for construction contracts where the Employer provides the design, and the Contractor primarily executes the construction works. This form is suitable for Employers who have detailed and well-defined design and engineering requirements and want to retain control over the design.
* TheRed Bookis ideal for experienced Employers who have a clear and fixed design and require the Contractor to build accordingly.
* TheYellow Bookis typically used where the Contractor is responsible for both design and construction (design & build). It suits Employers who want to delegate design responsibility to the Contractor.
* TheSilver Bookis used for turnkey or EPC contracts where the Contractor takes full responsibility for design, procurement, construction, and commissioning, suitable for Employers seeking minimal involvement in design and execution details.
* Hence, for an Employer whoknows exactly what they wantfrom a design and engineering perspective and wants to maintain control, theRed Bookis the first and most appropriate choice.
References:
FIDIC Red Book 2017 Edition - Conditions of Contract for Construction
FIDIC Yellow Book 2017 Edition - Conditions of Contract for Plant and Design-Build FIDIC Silver Book 2017 Edition - Conditions of Contract for EPC/Turnkey Projects FIDIC Contract Manager Study Guide, Module on Contract Selection
NEW QUESTION # 70
FIDIC Red, Yellow, and Silver Books (both editions) contain a provision for the Engineer or Employer to instruct the Contractor to employ a subcontractor, thereby also permitting the Contractor to refuse to employ such proposed subcontractor on the basis of a reasonable objection by a notice. Is this statement true or false?
- A. False
- B. True
Answer: B
Explanation:
All main FIDIC contract editions contain provisions that allow the Employer or Engineer to propose or instruct the Contractor to employ certain subcontractors (e.g., nominated subcontractors). The Contractor retains the right to refuse such subcontractors only for reasonable cause, which must be communicated formally.
This mechanism protects the Employer's interests in subcontractor selection while safeguarding the Contractor's right to reject subcontractors that may not be competent or suitable.
Therefore, the statement is true.
References:
FIDIC Red, Yellow, and Silver Books 1999 and 2017 Editions, Sub-Clause 4.4 - Subcontractors FIDIC Contract Manager Study Guide, Module on Contract Administration Procedures
NEW QUESTION # 71
In the FIDIC Silver Book (both editions), the Notice of the Commencement Date will be informed by whom?
(1 correct response applies)
- A. The Engineer
- B. The Employer's Representative
- C. The Engineer's Resident Engineer
- D. The Employer
Answer: D
Explanation:
Comprehensive and Detailed Explanation:
In the FIDIC Silver Book (1999 and 2017 editions), which is tailored for EPC/Turnkey contracts, the Employer is responsible for notifying the Contractor of the Commencement Date (Sub-Clause 8.1). Unlike other FIDIC contracts where the Engineer might notify commencement, the Silver Book places more responsibility on the Employer due to the nature of the contract where the Contractor is largely responsible for design and execution with fewer Engineer roles.
The Employer's formal notification of the Commencement Date signals the official start of the Contractor's obligations and triggers timelines under the contract.
The Engineer or Resident Engineer typically does not issue such notice in the Silver Book framework.
References:
FIDIC Silver Book 1999 and 2017 Editions, Sub-Clause 8.1 - Commencement of Works FIDIC Contract Manager Study Guide, Module on Contract Formation and Execution
NEW QUESTION # 72
Which two of the following statements are correct regarding Dispute under the FIDIC Red, Yellow, and Silver Books (edition 2017)?
Choose all of the correct answers (multiple possibilities)
- A. The Dispute must be submitted to the Dispute Avoidance and Adjudication Board (DAAB) within 42 days, otherwise the NOD is deemed to have lapsed and is no longer valid.
- B. If a Party is dissatisfied with the determination and has given Notice of Dissatisfaction (NOD) to the other party within a strict 28-day time limit, a Dispute arises and either Party may proceed under Sub- Clause 21.4 to obtain a DAAB decision on it.
- C. In case the Engineer refuses to issue a Performance Certificate or to issue one with a correct date under Sub-Clause 11.9, and the Contractor has disagreed with the requested entitlement or relief in connection with this refusal, Dispute shall be deemed to have arisen.
- D. Both 'Disagreement' and 'Dispute' are defined terms under the Conditions of Contract.
Answer: B,C
Explanation:
Option A is correct. Under Sub-Clause 11.9 (Performance Certificate) refusal or incorrect issuance by the Engineer, combined with disagreement by the Contractor, may cause a Dispute to arise.
Option B is correct. If a Party is dissatisfied with a determination, it must give a Notice of Dissatisfaction (NOD) within 28 days to escalate the matter to a Dispute, allowing either Party to refer it to the DAAB as per Sub-Clause 21.4.
Option C is incorrect. The contract does not specify a 42-day time limit for submission to DAAB after NOD; timelines vary by contract and stage.
Option D is incorrect. 'Disagreement' is not a formally defined term in FIDIC contracts, whereas 'Dispute' is.
References:
FIDIC Red, Yellow, Silver Books 2017 Edition, Sub-Clause 11.9 and Clause 21 - Claims, Disputes, and Adjudication FIDIC Contract Manager Study Guide, Module on Dispute Resolution
NEW QUESTION # 73
Which one of the following statements is NOT correct in respect of FIDIC Red Book (both editions)?
- A. The Contract typically becomes legally effective when the Employer issues the Letter of Acceptance to the Contractor.
- B. The Letter of Tender may be worded by the Contractor (at its discretion) so as to allow for the alternative of the Contract to become effective when the Employer issues a Letter of Acceptance.
- C. The Contract is administered by the Engineer who is appointed by the Employer. If disputes arise, they are referred to a Dispute Adjudication Board (DAB) for its decisions.
- D. The General Conditions allocate the risks between the parties on a fair and equitable basis.
Answer: B
Explanation:
Comprehensive and Detailed Explanation:
Option A is NOT correct because the wording of the Letter of Tender is usually governed by the tender documents and contract terms; it is not solely at the Contractor's discretion to dictate when the Contract becomes effective. The standard process is that the Contract becomes effective upon the Employer's issuance of the Letter of Acceptance.
Options B, C, and D correctly describe standard FIDIC practices.
References:
FIDIC Red Book 1999 & 2017 Editions - Contract Formation and Tendering
FIDIC Contract Manager Study Guide, Module on Contract Formation
NEW QUESTION # 74
Under the FIDIC Silver Contract (edition 2017), which two of the answers provide for preconditions for certification and payment of the Interim Payment Certificate?
Choose all of the correct answers (multiple possibilities).
- A. Receipt of a statement and supporting documents.
- B. Receipt of a statement via a letter showing the amounts to which the Contractor considers itself to be entitled.
- C. The appointment of the Contractor and receipt of the Advance Payment Guarantee, by the Employer, in the form, and issued by an entity, in accordance with Sub-Clause 14.2.1.
- D. The appointment of the Contractor's Representative and receipt of the Performance Security, by the Employer, in the form, and issued by an entity, in accordance with Sub-Clause 4.2.1.
Answer: A,C
Explanation:
Comprehensive and Detailed Explanation:
Option A is correct: Certification and payment of interim payments are conditional on Employer's receipt of the Contractor's appointment and the Advance Payment Guarantee (Sub-Clause 14.2.1).
Option D is correct: Payment also requires receipt of the Contractor's statement supported by relevant documentation.
Option B alone is insufficient without supporting documents.
Option C relates to appointment and performance security but is not a stated precondition for payment certification.
References:
FIDIC Silver Book 2017 Edition, Sub-Clause 14.6 - Interim Payment Certificates FIDIC Contract Manager Study Guide, Module on Payment Procedures
NEW QUESTION # 75
In which one of the following circumstances is it recommended to select the Contractor after a two-stage procurement procedure (pre-qualification + tender procedure)?
- A. If there is international financing for the project, it is always necessary to conduct a two-stage procurement procedure.
- B. When there is a limited number of capable experienced contractors available and ready to take part in the procurement.
- C. When the works are simple and of short duration.
- D. In case of large scale works, where there are several companies likely to have an interest in submitting an offer.
Answer: D
Explanation:
Two-stage procurement, involving pre-qualification followed by tender, is typically recommended for large- scale projects where many potential contractors might be interested. This process helps to shortlist qualified contractors, thus streamlining the tender evaluation and increasing the quality and competitiveness of submitted offers.
Option C correctly reflects this approach for complex or large projects where competition needs to be managed.
Option A is incorrect since simple, short-duration projects usually do not require complex procurement.
Option B is incorrect because if only a few capable contractors exist, pre-qualification may be less necessary.
Option D is incorrect as international financing does not always mandate two-stage procurement, although it often influences procurement methods.
References:
FIDIC Contract Manager Study Guide, Module on Contract Formation and Procurement Strategies World Bank Procurement Guidelines and Common Industry Practice
NEW QUESTION # 76
When is the Employer obliged to return the Performance Security (PS) under the FIDIC Red Book (edition
1999)?
- A. Without undue delay after the issuance of the Taking-Over Certificate.
- B. Within 21 days after the issuance of the Performance Certificate.
- C. Without undue delay after the issuance of the Performance Certificate.
- D. Within 21 days after the issuance of the Taking-Over Certificate.
Answer: B
Explanation:
Comprehensive and Detailed Explanation:
Under FIDIC Red Book 1999, the Performance Security (or Performance Guarantee) is held to ensure the Contractor's performance during the defects liability period. The security is typically released only after the Employer issues the Performance Certificate, which confirms the completion of defects liability obligations and that the Contractor has fulfilled the contract.
The contract commonly specifies a fixed period (often 21 days) within which the Employer must return the Performance Security after issuance of the Performance Certificate (Option D). The Taking-Over Certificate (Options A and C) marks substantial completion but does not end the Contractor's obligations for defects.
References:
FIDIC Red Book 1999, Sub-Clause 10.2 - Taking-Over Certificate
FIDIC Red Book 1999, Sub-Clause 10.4 - Performance Certificate
FIDIC Red Book 1999, Sub-Clause 10.5 - Release of Performance Security
FIDIC Contract Manager Study Guide, Module on Payment Procedures and Financial Management
NEW QUESTION # 77
Which of the following statements are not correct?
Choose all of the correct answers (multiple possibilities).
- A. Only the Employer can call for a meeting.
- B. The Engineer shall keep records of the Progress Meetings.
- C. Only the Engineer can call for a meeting
- D. The Contractor or the Engineer can request a meeting.
- E. Subcontractors cannot attend management or progress meetings unless the Engineer's approval is obtained.
Answer: A,C
Explanation:
In FIDIC contracts (2017 editions), meetings such as progress or management meetings are key tools for communication and coordination among parties. The contract provisions and practical use reflect flexibility regarding who can request or call for such meetings.
* Option Ais correct: Both the Contractor and the Engineer can request or call meetings as needed to discuss project progress, issues, or coordination. This promotes proactive communication.
* Option Bisincorrect(and therefore included in the answer): It is not only the Engineer who can call meetings. The Contractor can also request meetings.
* Option Cis generally correct: Subcontractors may attend meetings only with the Engineer's approval or if invited. This controls confidentiality and relevance of discussions.
* Option Disincorrect: Only the Employer calling meetings is not correct. The Employer may do so but is not the only party authorized.
* Option Eis correct: The Engineer typically keeps records (minutes) of progress meetings to document discussions, decisions, and agreed actions. This is essential for contract administration.
Hence, theincorrectstatements areBandD.
References:
FIDIC Red Book 2017 Edition, Sub-Clause 4.28 - Progress Reports and Meetings FIDIC Yellow Book 2017 Edition, similar clauses on meetings and communication FIDIC Contract Manager Study Guide, Module on Communication and Reporting
NEW QUESTION # 78
Which of the following form a Contractor's entitlement, in case the Contractor does not receive an interim payment within the allocated contractual deadline for payment? (2 correct answers apply) Choose all of the correct answers (multiple possibilities).
- A. Beyond receiving the financing charges, the Contractor has no further entitlements in such a case.
- B. Right after the expiry of the payment deadline, the Contractor may terminate the contract.
- C. If the payment is not made within the time period required, after the expiry of such period, from the next day onwards, the Contractor is entitled to suspend all his/her activities on Site.
- D. In case the Employer paid the Contractor late, the Contractor becomes entitled to receive financing charges applying the % included in the Contract Data (if this is not stated, then applying the percentage as included under the corresponding Sub-Clause).
- E. The Contractor is entitled to suspend the works or reduce the rate of progress of the work, after giving a due Notice (21 days) about this intention.
Answer: D,E
Explanation:
Option C is correct: The Contractor is entitled to financing charges (interest) on late payments, calculated as per the percentage specified in the Contract Data or corresponding Sub-Clause.
Option D is correct: The Contractor can suspend works or reduce progress after giving due notice, usually 21 days, if payments are not made on time.
Option A is incorrect; termination is not automatic right after the payment deadline expires.
Option B is incorrect; suspension requires prior notice rather than immediate action.
Option E is incorrect because the Contractor has additional remedies such as suspension, beyond just financing charges.
References:
FIDIC Red, Yellow, Silver Books 1999 & 2017 Editions, Sub-Clause 14.8 - Payment of Retention Money and Financing Charges FIDIC Contract Manager Study Guide, Module on Payment Procedures and Remedies
NEW QUESTION # 79
You are the Contract Manager of the Employer's Representative in a Thermal Power Plant Project. The Contract for this project is EPC Turnkey Contract using the FIDIC Silver Book (edition 2017) with a Contract Price of 28 million USD. The Employer's Requirements require that: "the Contractor design in accordance with international and national technical regulations, and standards, [etc.]".
For piling works, the Employer's Requirements state that the Contractor will design according to a specific national standard for piling works NTS-PW-01. After all piles for the jetty have been installed, a pile load test on lateral bearing capacity shows that actual lateral bearing capacity is much lower than the calculated lateral bearing capacity. It was later revealed by the Technical Standard Committee that there was a typo mistake during preparation of the NTS-PW-01 (translated from a foreign standard). The lateral bearing capacity of installed piles had been substantially overestimated as a result of this typo. Contractor submits a claim for
200,000 USD regarding extra costs for installing additional piles as a result of errors in the Employer's Requirements.
In the hydrological information of Site Data provided by the Employer, the annual high water level is 4.0m.
However, during the design stage, with updated data from local stations along the rivers, the Contractor found out there was a mistake in the calculation. The annual high water level should be 4.5m. As a result, the Contractor has to design and build additional flood walls along the river to protect the Plant from flooding.
The Contractor claims an amount of 300,000 USD to construct the flood wall, based on Unforeseeable difficulties.
As the Employer's Representative, after you have consulted with both Parties but failed to reach agreement, you will make a fair determination of the Claims of the Contractor.
In your "Notice of the Employer's Representative's determination", what is your determination for the Contractor?
- A. The Contractor is entitled to the Claim for additional costs in relation to the piling, based on errors in the Employer's Requirement only.
- B. The Contractor is not entitled to either of the Claims.
- C. The Contractor is entitled to the Claim for the additional flood wall based on Unforeseeable difficulties only.
- D. The Contractor is entitled to both Claims.
Answer: D
Explanation:
Both claims are valid under the Silver Book principles:
The error in the Employer's Requirements (typo in NTS-PW-01) leads to entitlement for additional piling costs.
The unforeseen hydrological data causing additional flood protection works qualify as unforeseeable physical conditions entitling the Contractor to compensation.
Hence, Option D is correct - the Contractor is entitled to both claims.
References:
FIDIC Silver Book 2017 Edition, Sub-Clause 4.1 (Employer's Requirements) and Sub-Clause 4.12 (Unforeseeable Physical Conditions) FIDIC Contract Manager Study Guide, Module on Claims and Employer's Requirements
NEW QUESTION # 80
Regarding the FIDIC Silver Book (both editions), if a part of the Works is to be paid according to quantity supplied or work done, appropriate provisions must be included in the Particular Conditions. Is this statement true or false?
- A. False
- B. True
Answer: B
Explanation:
This statement is true. The Silver Book (EPC/Turnkey contracts) usually involves lump-sum payment, but if part payment is based on quantity or work done, this must be explicitly provided for in the Particular Conditions to avoid ambiguity.
Such provisions ensure clarity on payment terms in line with project specifics.
References:
FIDIC Silver Book 1999 & 2017 Editions, Sub-Clause 14 - Payment Provisions FIDIC Contract Manager Study Guide, Module on Payment Procedures
NEW QUESTION # 81
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