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This project is co-financed by the European Union and the Republic of Turkey

Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey. This project is co-financed by the European Union and the Republic of Turkey.

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This project is co-financed by the European Union and the Republic of Turkey

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  1. Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey This project is co-financed by the European Union and the Republic of Turkey FIDICConditions of Contracts Training12 – 14 April 2011 FIDIC Training 12-14 April 2011

  2. This project is co-financed by the European Union and the Republic of Turkey Agenda - 1 • Day # 1 • Introduction • Objective of the Training & Expectations of the participants • FIDIC (What and Why?) • FIDIC Publications • FIDIC Conditions of Contracts for Works Contracts • FIDIC Contracts Comparison Matrix • 2 exercises FIDIC Training 12-14 April 2011

  3. This project is co-financed by the European Union and the Republic of Turkey Agenda - 2 • Day # 2 • Parties of a Works Contract under FIDIC • Contents of a Works Tender Dossier • Introduction to Particular Conditions • Appendix to Tender • Clauses of the Conditions of Contract related to Volume 3 • Clauses of the Conditions of Contract related to Volume 5 • 2 exercises FIDIC Training 12-14 April 2011

  4. This project is co-financed by the European Union and the Republic of Turkey Agenda - 3 • Day # 3 • Before Contract Signature • Before the Commencement of Works • First 28 days • Project Management Tools under FIDIC Conditions • Financial Management Tools • Limits of Engineer’s Authority in EU-funded Projects • Exercise • Evaluations FIDIC Training 12-14 April 2011

  5. This project is co-financed by the European Union and the Republic of Turkey Agenda • Session # 1 • Day # 1, Morning • Introduction • Objectives of the Training • What is FIDIC? • Why FIDIC? • FIDIC Publications FIDIC Training 12-14 April 2011

  6. This project is co-financed by the European Union and the Republic of Turkey Introduction – 1 • Trainer: • KeremSadıklar • Civil Engineer & MBA • > 15 years of experience including EU & UNDP • kerem.sadiklar@grontmij.com.tr • Participants: • 25 of FCD + TID of RCP – CIC • Knowledge & experience level? FIDIC Training 12-14 April 2011

  7. This project is co-financed by the European Union and the Republic of Turkey Introduction – 2 • Objective of the Training: • By the end of the course, the trainees should; • have a solid understanding of types of FIDIC Contracts • know contents of a Works Contract • know where to find what • be able to identify the external expertise they need • be able to draft an «Appendix to Tender» • be able to identify the important clauses of an PC FIDIC Training 12-14 April 2011

  8. This project is co-financed by the European Union and the Republic of Turkey Introduction – 3 • Therefore the training • will cover • FIDIC’s institutional structure and bookshop • FIDIC contract types and major differences • Identification of the most appropriate contract type • Issues/clauses which need special attention during tendering. • will be interactive; please be participative • will use exercises • will involve team work FIDIC Training 12-14 April 2011

  9. Introduction – 4 This project is co-financed by the European Union and the Republic of Turkey • Please always remember; • Management of FIDIC contracts is a broad and complicated area, • FIDIC experiences improve by execution, • Studying, Implementation and Continues Monitoring are the keys to success. FIDIC Training 12-14 April 2011

  10. This project is co-financed by the European Union and the Republic of Turkey What is FIDIC? - 1 • FédérationInternationale des Ingénieurs-Conseils • International Federation of Consulting Engineers • UluslararasıMüşavirveMühendislerFederasyonu • Established in Switzerland in 1913, HQs is in Genève • First contract is printed in 1957 • FIDIC represents Engineers and Consultants from various countries. E&C Associations from 75 countries are FIDIC members • Under this umbrella 30.000 firms and 1.000.000 professionals are represented FIDIC Training 12-14 April 2011

  11. What is FIDIC? - 2 This project is co-financed by the European Union and the Republic of Turkey • TürkMMMB - TürkMüşavirMühendisveMimarlarBirliği • ATCEA – Association of Turkish Consulting Engineers and Architects • Established in 1980 • ATCEA has 200 members • ATCEA is a member of FIDIC since 1987 • Sells and distributes its own publications as well as FIDIC’s • www.tmmmb.org.tr FIDIC Training 12-14 April 2011

  12. This project is co-financed by the European Union and the Republic of Turkey What is FIDIC? - 3 • Some of the International Institutions using FIDIC; • World Bank (WB) • European Bank of Restructuring and Development (EBRD) • European Investment Bank (EIB) • European Commission (EC) • KfWBankengruppe (KfW) • Islamic Development Bank (IDB) • African Development Bankası (ADB) • Asian Development Bank (ADB) FIDIC Training 12-14 April 2011

  13. This project is co-financed by the European Union and the Republic of Turkey Why FIDIC? – 1 • FIDIC Conditions of Contracts • cover almost all the major issues that needs to be addressed under a contract • have a consistent and easy to follow structure • distribute the risks fairly amongst parties • designed by a third party (Consultant) but not an Employer; therefore conditions are more objective and fair • can be adopted easily for many type of investmentsprojects FIDIC Training 12-14 April 2011

  14. This project is co-financed by the European Union and the Republic of Turkey Why FIDIC? – 2 • FIDIC has committees formed of international members to improve its publications. • Committees do continuous monitoring to improve and/or revise the existing publications (contract types, guidelines, etc.) and to introduce new books. • Very well known by international Contractors and Consultants, therefore creates confidence and encourages tenderers. FIDIC Training 12-14 April 2011

  15. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications - 1 • Types of Contracts; • Client/Consultant Model Services Agreement (White Book) • Joint Venture Agreements • Sub Contracting Agreements • Various Types of Conditions for Works Contracts FIDIC Training 12-14 April 2011

  16. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications - 2 • Other Publications; • Business Integrity • Risk Management • Quality Management • Environment Management • Sustainability Guide • FIDIC Contracts Guide to the Construction, Plant and Design-Build and EPC/Turnkey Contracts FIDIC Training 12-14 April 2011

  17. This project is co-financed by the European Union and the Republic of Turkey • Exercise # 1 • Please go to web site www.fidic.org • list the types of publications available. Note: Based on the availability of internet in the training center, this exercise may be done as a joint activity. FIDIC Training 12-14 April 2011

  18. This project is co-financed by the European Union and the Republic of Turkey Agenda • Session # 2 • Day # 1, Afternoon • Types of FIDIC Conditions of Contracts for Works • Exercise # 2 • Comparison Matrix FIDIC Training 12-14 April 2011

  19. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 3; Conditions of Contracts for Works • Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer; 1999 Edition – RED BOOK • Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant, and for Building and Engineering, Designed by the Contractor; 1999 Edition – YELLOW BOOK • Conditions of Contract for EPC Turn-key Projects (First Edition, 1999) - SILVER BOOK • EPC Turn-key : Engineering – Procurement – Construction • Short Form of Contract 1st Ed (1999 Green Book) – GREEN BOOK FIDIC Training 12-14 April 2011

  20. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 4; Conditions of Contracts for Works • Conditions of Contract for Construction (Multilateral Development Bank Harmonised Ed. Version 3: June 2010). For Building and Engineering Works designed by the Employer. HarmonisedRED BOOK • Conditions of Contract for Design, Build and Operate Projects (1st Ed, 2008) - GOLD BOOK • FIDIC has adopted the scenario, with a 20- year operation period, and has opted for a single contract awarded to a single contracting entity (which will almost certainly be a consortium or joint venture) to optimise the coordination of innovation, quality and performance, rather than award separate contracts for design-build and for operation. The contractor has no responsibility for either financing the project or for its ultimate commercial success. The document, as written, is not suitable for contracts which are not based on the traditional Design-Build-Operate sequence, or where the Operation Period differs significantly from the 20 years adopted. FIDIC Training 12-14 April 2011

  21. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 5; Conditions of Contracts for Works • RED BOOK – 1 • Design and Engineering (incl. BoQs) is done by Employer or Employer’s Representative. • Tenderers fill in their unit prices into the existing BoQs. • Final amount is not fixed, payments are done based on the real amounts executed. (Exceptions are available eg: lump-sum conracts). FIDIC Training 12-14 April 2011

  22. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 6; Conditions of Contracts for Works • RED BOOK - 2 • Employer carries the risk for contractamount increases. • The better the design, the flawless the project implementation. • Tender evaluations are relatively simpler. FIDIC Training 12-14 April 2011

  23. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 7; Conditions of Contracts for Works • YELLOW BOOK - 1 • Employer prepares only the «Employer’s Requirements». • Employer Requirements includes only; Draft layout, Operational Parameters, Technical Specifications and Financial Proposal Format (Schedule of Prices). • Tenderers submit their technical proposals together with their financial proposals. Technical proposals cover at minimum methodology, basic design and drawings, bill of and similar supporting documents. FIDIC Training 12-14 April 2011

  24. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 8; Conditions of Contracts for Works • YELLOW BOOK - 2 • Generally lump-sum price contracts are used. • Price increase and other risks are distributed amongst both parties. • Tender evaluation process is more complicated and requires technical expertise. FIDIC Training 12-14 April 2011

  25. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 9; Conditions of Contracts for Works • SILVER BOOK -1 • Two-party contracts (No Engineer) • Employer defines design parameters, quality measures and functional requirements. • Tenderers submit comprehensive technical proposals supported with designs. • Lump-sum contracts are used and all risk lies with the Contractor. FIDIC Training 12-14 April 2011

  26. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 10; Conditions of Contracts for Works • SILVER BOOK - 2 • More suitable for projects like; refinery, petrochemical facilities, power plants. • Implemented if the employer foresees high risk for the supply and assembly of mechanical and electrical components. • Tender evaluations are very complicated and requires continuous negotiations. • Not suitable for public and EU-funded projects in Turkey. FIDIC Training 12-14 April 2011

  27. This project is co-financed by the European Union and the Republic of Turkey FIDIC Publications – 11; Conditions of Contracts for Works • GREEN BOOK • For low contract values (< 500,000 USD) • Simple but repetitive works • Short term assignments • Usually Employer takes over the design responsibility. FIDIC Training 12-14 April 2011

  28. This project is co-financed by the European Union and the Republic of Turkey Exercise # 2 Please fill in the given table based on your best assumptions. FIDIC Training 12-14 April 2011

  29. Comparison Matrix - 1 This project is co-financed by the European Union and the Republic of Turkey FIDIC Training 12-14 April 2011

  30. This project is co-financed by the European Union and the Republic of Turkey Comparison Matrix - 2 FIDIC Training 12-14 April 2011

  31. This project is co-financed by the European Union and the Republic of Turkey Agenda • Session # 3 • Day # 2, Morning • Parties of a Works Contract under FIDIC • Contents of a Works Tender Dossier • Introduction to Particular Conditions • Exercise # 3 FIDIC Training 12-14 April 2011

  32. This project is co-financed by the European Union and the Republic of Turkey Parties of a Contract- 1 • 3 parties under a typical FIDIC Contract : • The Employer • The Contractor • The Engineer (Supervisor) FIDIC Training 12-14 April 2011

  33. Parties of a Contract - 2 This project is co-financed by the European Union and the Republic of Turkey • Relations in a EU-funded Project • Employer – Contractor • FIDIC Conditions of Contract • Employer – Engineer • Service Contract • EU/PRAG General Conditions • Engineer – Contractor • Engineer supervises the construction and manages the project with limited authority. FIDIC Training 12-14 April 2011

  34. This project is co-financed by the European Union and the Republic of Turkey Parties of a Contract - 3 • Employer • Defines the requirements and specifications • Provides the construction site • Provides the financial resources (usually) • Provides the necessary conditions to the Contractor for the execution of works • Some of these tasks are shared by OPs and ERs (not party to the contract) in EU- funded projects. FIDIC Training 12-14 April 2011

  35. This project is co-financed by the European Union and the Republic of Turkey Parties of a Contract - 4 • Contractor: • Responsible from executing the works • Provides the necessary securities and guarantees • Held responsible from his and/or his sub contractors actions • Responsible from the quality of the executed works as well as the security of the construction site • Prepares the interim payment reports • May use sub contractors as allowed in the conditions of the contract FIDIC Training 12-14 April 2011

  36. Parties of a Contract - 5 This project is co-financed by the European Union and the Republic of Turkey • Engineer: • Assigned by the Employer to represent the Employer • Name, contact information and authorities of an Engineer are stated in relevant parts of the Works Contract • After consulting with the Employer and the Contractor, should proposefair and objective solutions for claims. • Checks the quality of the appropriateness of the workmanship and the materials used • Approves the payment certificates of the Contractor FIDIC Training 12-14 April 2011

  37. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD - 1 • A Works tender dossier comprises of 5 Volumes; • Volume 1: Instructions to Tenderers - PRAG rules apply. Terminology should be adopted in line with FIDIC. • Volume 2: Conditions of Contract – FIDIC • Volume 3: Technical Specifications / Employer’s Requirements • Volume 4: Financial Offer Format, Schedule of Prices • Volume 5: Drawings FIDIC Training 12-14 April 2011

  38. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD - 2 • Volume 1: • Instructions to Tenderers (ITT) • Tender Form and Annexes (Appendix to Tender) • Tender Guarantee Format • Forms • Glossary of Terms • Evaluation Grid FIDIC Training 12-14 April 2011

  39. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD - 3 • Volume 2: • Draft Contract • General Conditions of Contract (RED / YELLOWBOOK)) • Based on the nature and design responsibility. • Particular Conditions of Contract • Security Samples (Pre-finance, Performance & Retention) FIDIC Training 12-14 April 2011

  40. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD – 4 • Particular Conditions – 1 • FIDIC General Conditions of Contracts (RED or YELLOW) for anytype of project anywhere in the world. • Contract will be customized by using the particular conditions of contract. • Particular conditions prevail the General Conditions. • Particular Conditions changes / replaces / revises / deletes the Clauses of the General Conditions. FIDIC Training 12-14 April 2011

  41. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD – 5 • Particular Conditions – 2 • Clauses in Particular Conditions should not be conflicting with the clauses of the General Conditions. • FIDIC Guidelines may be used while drafting Particular Conditions. • Particular Conditions should be in line with the local law and law of the contract. • Any revisions / additions / omissions done by the Particular Conditions should be based on rational reasoning. FIDIC Training 12-14 April 2011

  42. Contents of a Works TD – 6 This project is co-financed by the European Union and the Republic of Turkey • Particular Conditions – 3 • Very complex PCs may harm the completeness and structure of a works Contract. • PCs should be drafted by a team of experts who have relevant works and contract management experience. • PCs should be assessed / evaluated by local lawyers. • Appendix to Tender may be used as control tool. • Clause 1.5 of PCs; «Priority of Documents» is important and should be re-addressed for every project. FIDIC Training 12-14 April 2011

  43. This project is co-financed by the European Union and the Republic of Turkey Contents of a Works TD – 7 • Priority of Documents • the contract, • the Tender Form with its appendix, • the Particular Conditions, • the General Conditions, • the Technical Specifications, • the design documentation (drawings), • the bill of quantities (after arithmetical corrections)/breakdown, • any other documents forming part of the contract FIDIC Training 12-14 April 2011

  44. Particular Conditions – 1 This project is co-financed by the European Union and the Republic of Turkey • Clauses which must be revised / added during the preparation of a PCs • Clause 1.3 Communication • Should be revised in line with all the communication tools allowed for the specific project • Clause 1.4 Law and Language • If different languages will be used under certain circumstances this should be defined here • Clause 1.5 Priority of Documents • Amendments and additions can be made here. Please be extremely careful, and do not change unless you have to. FIDIC Training 12-14 April 2011

  45. Particular Conditions – 2 This project is co-financed by the European Union and the Republic of Turkey • Clause 1.6 Contract Agreement • Contract Agreement will also be referred as «Letter of Acceptance» • Clause 2.1 Right of Access to Site • If there are conditions (time constraints or other) related to this issue, this clause should be drafted accordingly. • Clause 3.1 Engineer’s Duty and Authority • The limits of Engineer’s authority should be clearly defined here. This article is extremely important for EU funded projects where the authority of the Engineer is limited. This article should be in line with the ToRfo the Engineer’s service contract. • Clause 4.1 Contractor’s General Obligations • If the Contractor has additional obligations, these should be clearly defined here. FIDIC Training 12-14 April 2011

  46. Particular Conditions – 3 This project is co-financed by the European Union and the Republic of Turkey • Clause 4.8 Safety Procedures • If there are any additional procedures to be implemented because of EU or local laws they should be defined here • Clause 4.19 Electricity, Water and Gas • This articled defines where and how the Contractor will obtain the necessary infrastructure. • Clause 4.21 Progress Reports • If additional reports other than the ones defined in General Conditions are requested, these should be defined here. • Clause 7 / Sub Clause 7.9 «Rules of Origin». • This sub clause should be added in EU funded projects. Please remember this is only for permanent works. FIDIC Training 12-14 April 2011

  47. This project is co-financed by the European Union and the Republic of Turkey Particular Conditions – 4 • Clause 8.2 – Time for Completion • If there are different milestones for completion and/or taking over parts of the works these should be defined here. • Clause 12.1 – Works to be Measured • Only RED BOOK • If measurements are to be done by records and/or reports, the details should be defined here. FIDIC Training 12-14 April 2011

  48. This project is co-financed by the European Union and the Republic of Turkey Exercise # 3 Please identify the Clauses which are different in RED and YELLOW FIDIC Books. FIDIC Training 12-14 April 2011

  49. Particular Conditions - 5 This project is co-financed by the European Union and the Republic of Turkey • Different Clauses in FIDIC Books: FIDIC Training 12-14 April 2011

  50. This project is co-financed by the European Union and the Republic of Turkey Agenda • Session # 4 • Day # 2, Afternoon • Appendix to Tender • Clauses of the Conditions of Contract related to Volume 3 • Clauses of the Conditions of Contract related to Volume 5 • Exercise # 4 FIDIC Training 12-14 April 2011

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