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HomeContract ManagementEmployers’ Obligations under FIDIC Red Book (Conditions of Contract for Construction) 2017

Employers’ Obligations under FIDIC Red Book (Conditions of Contract for Construction) 2017

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The employer’s obligations under FIDIC Red Book are defined in clause 2 of the contract which has further been divided into sub clauses 2.1 to 2.6. The brief description of the provisions under sub clauses is given in the following table.

Sub Clause NumberSub Clause NameDescription of the Provision under the  Sub Clause
2.1Right of Access to the SiteThis sub clause states that the employer shall give the Contractor right of access to, and possession of, all parts of the Site within the time (or times) stated in the Contract Data.

The right and possession may not be exclusive to the Contractor. If, under the Contract, the Employer is required to give (to the Contractor) possession of any foundation, structure, plant or means of access, the Employer shall do so in the time and manner stated in the specification.

This clause also states that Employer may withhold any such right or possession until the Performance Security has been received.  

If no such time is stated in the contract data, then the Employer may provide right to access to the contractor in a manner to enable him perform as per the latest work program and if the latest work program is not submitted, then in accordance with the initial work program submitted under sub- clause 8.3 [Programme].

This clause also states that if the Contractor suffers delay and/ or incur costs due to failure by the Employer to give any such right or possession within such time, the Contractor shall be entitled subject to Sub-Clause 20.2 [Claims For Payment and/or EOT] to EOT and/or payment of such Cost Plus Profit.  

However, if the Employers’ failure to provide access to the Contractor is cause by any error or delay by the Contractor, then the Contractor shall not be entitled to such EOT and/or Cost Plus Profit.
2.2AssistanceAccording to this clause, the Employer shall provide assistance to the Contractor to obtain

(a) copies of the Laws of the Country which are relevant to the Contract but are not readily available; and

(b) any permits, permissions, licences or approvals required by the Laws of the Country (including information required to be submitted by the Contractor in order to obtain such permits, permissions, licences or approvals):  

(i) which the Contractor is required to obtain under Sub-Clause 1.13 [Compliance with Laws];
(ii) for the delivery of Goods, including clearance through customs; and
(iii) for the export of Contractor’s Equipment when it is removed from the Site.
2.3Employer’s Personnel and Other ContractorsThe Employer shall be responsible for ensuring that the Employer’s Personnel and the Employer’s other contractors (if any) on or near the Site:  

(a) co-operate with the Contractor’s efforts under Sub-Clause 4.6 [Co-operation]; and

(b) comply with the same obligations which the Contractor is required to comply with under sub-paragraphs (a) to (e) of Sub-Clause 4.8 [Health and Safety Obligations] and under Sub-Clause 4.18 [Protection of the Environment].  

The Contractor may require the Employer to remove (or cause to be removed) any person of the Employer’s Personnel or of the Employer’s other contractors (if any) who is found, based on reasonable evidence, to have engaged in corrupt, fraudulent, collusive or coercive practice.
2.4Employer’s Financial ArrangementsThis sub- clause states that the Employer’s arrangements for financing the Employer’s obligations under the Contract shall be detailed in the Contract Data.  

If the Employer intends to make any material change (affecting the Employer’s ability to the pay the Contract Price) to the financial arrangements, or has to do so because of the Employer’s financial situation, the Employer shall immediately give a Notice to the Contractor with detailed supporting documents.  

This sub- clause further states that, if the Contractor   Receives an instruction to execute a variation of more than 10% of the accepted contract amount,

or the accumulated total variations exceed 30% of the accepted contract amount;

Does not receive any payment in accordance with the Sub- Clause 14.7 [Payment]; or

Becomes aware of a material change in the Contractor’s financial arrangements of which the Contractor has not received a notice under this Sub Clause.  

The Contractor may request and the Employer shall, within 28 days after receiving this request, provide reasonable evidence that financial arrangements have been made and are being maintained which will enable the Employer to pay the part of the Contract Price remaining to be paid at that time (as estimated by the Engineer).
2.5Site Data and Items of ReferenceAs per this Sub- Clause, the Employer shall have made available to the Contractor for information, before the Base Date, all relevant data in the Employer’s possession on the topography of the Site and on sub-surface, hydrological, climatic and environmental conditions at the Site.  

The Employer shall promptly make available to the Contractor all such data which comes into the Employer’s possession after the Base Date.  

The original survey control points, lines and levels of reference (the “items of reference” in these Conditions) shall be specified on the Drawings and/or in the Specification or issued to the Contractor by a Notice from the Engineer.
2.6Employer-Supplied Materials and Employer’s EquipmentAccording to this Sub- Clause, if Employer-Supplied Materials and/or Employer’s Equipment are listed in the Specification for the Contractor’s use in the execution of the Works, the Employer shall make such materials and/or equipment available to the Contractor in accordance with the details, times, arrangements, rates and prices stated in the Specification.  

The Contractor shall be responsible for each item of Employer’s Equipment whilst any of the Contractor’s Personnel is operating it, driving it, directing it, using it, or in control of it.

Conclusion

FIDIC contracts are known for balance provisions for all the parties entering into the contract and therefor these documents are widely accepted. The obligations of each party i.e., the Employer, Engineer and the Contractor are clearly mentioned in the document. The Employer should be aware of their obligations under the contract as per the document and should make every effort to fulfill these obligations fully, to avoid any disputes later on.

Also read: Dispute Resolution Procedure Under FIDIC 2017“>Dispute Resolution Procedure Under FIDIC 2017, Engineer’s Duties and Responsibilities as per FIDIC Red Book (Conditions of Contract for Construction) 2017“>Engineer’s Duties and Responsibilities as per FIDIC Red Book (Conditions of Contract for Construction) 2017

References:

  1. FIDIC Conditions of Contract for Construction, Second Edition, 2017 (FIDIC Red Book)
  2. https://fidic.org/

Disclaimer

  1. The description of sub- clauses given in this article is only a part of the whole clause which is relevant to the Employer’s obligations. For whole provision under the sub clauses refer to FIDIC Conditions of Contract for Construction, Second Edition, 2017.
  2. The content of this article is only for education purpose and it cannot be used as a legal advice. For any legal issue a suitable professional may be consulted
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Rajesh Pant
Rajesh Panthttps://managemententhusiast.com
My name is Rajesh Pant. I am M. Tech. (Civil Engineering) and M. B. A. (Infrastructure Management). I have gained knowledge of contract management, procurement & project management while I handled various infrastructure projects as Executive Engineer/ Procurement & Contract Management Expert in Govt. Sector. I also have exposure of handling projects financed by multi-lateral organizations like the World Bank Projects. During my MBA studies I developed interest in management concepts.
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