Contracts: advanced questions MDB Harmonised Construction Contract Question/Answer

Taking-over Certificate

Question

We are make a contract with concrecting entity by FIDIC MDB contract for building and engineering actions, which project concracting entity. We have a problem with interpretation of main point of contract. therefore, I would like to ask explanation for following situation: an engineer has given a taking-over certificate. If term of defects notification period concrecting entity is defined 730 days, then engineer give performance certificate after 730 days too?

Answer

We are not clear about the contract arrangement which you describe. When you refer to a contract with a concreting entity do you mean a subcontract between yourself as main contractor and a concreting subcontractor? The FIDIC MDB Contract is for use in a contract between the Employer and the Main Contractor. FIDIC have not published a Form of Sub-Contract between the Contractor and a Subcontractor for use with the MDB Contract. FIDIC cannot comment on any requirements for an MDB subcontract. In the MDB Contract, after the end of the Defects Notification Period, the Engineer will issue the Performance Certificate when the Contractor has completed the actions required by the second paragraph of Sub-Clause 11.9. Please note that the MDB contract is only for use on projects fianced by the Participating Banks, World Bank etc.
 

Employer's equipment, Documents, Authority and Replacement of Engineer

Question

My queries are not related to any project but came to my mind as I started reading the document in detail. My queries are related to Multilateral Development Bank Harmonized Edition, Version May 2005, prepared by FIDIC (FIDIC MBD Version 2005), which are: a.. Refer to last part of the sentence of 1.1.6.3 'Employer's Equipment'. If the Plant is provided by the Employer, won't it belong to the Employer, even if its not been taken over by the Employer. b. Refer second paragraph of 1.8 'Care and Supply of Document'. Who will pay, if the Engineer wants additional copies of Contractor's Documents. c. Refer fourth paragraph of 3.1 'Engineer's Duties and Authority'. Please explain this part as when an approval is required from the Employer for a specific authority, then hows its deemed that Employer has given approval. d. Refer to first paragraph of 3.4 'Replacement of the Engineer'. If the Contractor can raise objections on the replacement Engineer, then why not on the Engineer initially appointed for the project. Will be obliged if you clear my confusion. Will consult you further for any further clarifications.

Answer

In response to your queries a) to d): a) You are correct that Plant provided by the Employer normally remains the property of the Employer. However Plant (definition 1.1.5.5) is different from Equipment (definitions 1.1.5.1 and 1.1.6.3). The final phrase in 1.1.6.3 just confirms the situation. b) The Contract is between the Employer and the Contractor and any additional copies of Contractor's Documents would be provided from Contractor to Employer and paid for by the Employer. The Engineer is acting on behalf of the Employer. Copies of Contractor's Documents could be passed from the Employer to the Engineer in accordance with Sub-Clause 1.10. c) Again, the Engineer is acting on behalf of the Employer when exercising any authority. Any prior approval which is required is a matter between the Engineer and the Employer. The Contractor is not involved in this approval and, if an approval was required, the Contractor can assume that it has been requested and given. d) The FIDIC intention is that the Engineer was selected and appointed by the Employer and named in the Tender Documents. This would be in the MDB Contract Data or the Appendix to Tender. The Tenderers could take this into account when preparing their Tenders and the successful Tenderer also had the opportunity to comment before signing the Contract.