Training Slides of NATIONAL AUDIT – FIDIC CONTRACTS: BASIS OF FAIR CONTRACT, discussing the importance of Contract. For further information regarding the course, please contact: info@asia-masters.com www.asia-masters.com

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NATIONAL AUDIT – FIDIC CONTRACTS
BASIS OF FAIR CONTRACT
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NATIONAL AUDIT – FIDIC
BASIS OF CONTRACT
1. THE FIDIC CONTRACT FORM IS USED ON NEARLY ALL EU
FUNDED INVESTMENTS.
2. THE FIDIC CONTRACT TERMS HAVE BEEN USED FOR
GENERATIONS IN MULTIPLE LANGUAGES AND LEGAL
CODES
3. FIDIC IS ABSOLUTELY COMMITTED TO HONESTY AND FAIR
CONTRACT, AND THUS LOWEST PRICE. THESE ARE WHY
THE WORLD BANK INSIST ON COMPLETE FIDIC TERMS.
4. IT HAS BEEN USED IN MULTPLE ECONOMIC CYCLES AND
CONTAINS PROVISIONS FOR ALMOST EVERY
EVENTUALITY
5. IT IS INEVITABLE THAT ANY INTRODUCTION OF UNFAIR OR
‘ONE SIDED’ TERMS WILL INCREASE PRICES NOT ONLY TO
EU BUT ALSO THE NATIONAL TAX PAYERS
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NATIONAL AUDIT – FIDIC CONTRACTS
1 THE FEDERATION WAS FOUNDED ABOUT 100
YEARS AGO, AND MEMBERS ARE THE NATIONAL
ENGINEERING ASSOCIATIONS
2 THERE ARE NO REPRESENTATIVES IN ANY
COUNTRY EXCEPT AT HQ IN GENEVA. NO LOCAL
ASSOCIATION REPRESENTS FIDIC
3 THE TERMS OF CONTRACT HAVE BEEN
UPDATED ON FEW OCCASIONS , THE LAST
BEING 1999.
4 THE CHIEF DRAFTER WAS AN EMPLOYEE OF MY
COMPANY, AND I MADE MY LARGE MEETING
ROOMS AVAILABLE FOR THEIR GROUP
MEETINGS.
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NATIONAL AUDIT – FIDIC CONTRACTS
1. THE REVIEW PANELS REPRESENT THE ‘BEST OF
THE BEST’ FROM AROUND THE WORLD, AND
INCLUDED ENGINEERS, LAWYERS, BANKS,
FUNDING AGENCIES, CONTRACTOR
FEDERATIONS, AND GOVERNMENT AGENCIES.
2. IT IS BREATHTAKING THAT THESE CONDITIONS
SHOULD BE SUBJECT TO SUBSTANTIAL
CHANGES ALTERING THE ENTIRE PRINCIPLE OF
FAIR CONTRACT.
3. THE DRAFTING IS PRECISE AND CLEAR,
AVOIDING EXPLANATION AND REPETITION.
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NATIONAL AUDIT - FIDIC
1. THROUGHOUT MY WORK IN LITHUANIA I HAVE
SEEN A LARGE NUMBER OF CHANGES TO THE
PRINCIPLES OF FAIR AND BALANCED
CONTRACT, LEAVING OPENINGS FOR UNFAIR
CONTRACT ADMINISTRATION. THE TEXT
CONTAINS, AT EVERY POINT, EXCEPTIONALY
POOR DRAFTING WITH MULTIPLE FAULTS, SOME
QUITE SERIOUS.
2. THE TEXTS GIVEN TO ME TO REVIEW VARY
WIDELY BETWEEN DIFFERENT GOVERNMENT
AGENCIES
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NATIONAL AUDIT - FIDIC
1. AS PART OF PREPARATIONS FOR AN
IMPORTANT ASSIGNMENT, I COMPARED THE
TERMS USED BY TID (LG AND KLAIPEDA), APVA,
AND IGNALINA.
2. FOR VOLUME 1, ‘THE INVITATION TO TENDER’,
AND IN FIDIC TERMS, ‘THE INSTRUCTIONS TO
TENDER’, ARE WHOLLY DIFFERENT IN CONCEPT,
THOUGH IT WAS POSSIBLE WITH SOME EFFORT
TO BRING THESE TEXTS INTO LINE.
3. THE TENDER, ITS APPENDIX AND THE
CONTRACT CONDITIONS, REVEAL ABOUT 100
DIFFERENCES.
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NATIONAL AUDIT – FIDIC CONTRACTS
1. ABOUT HALF ARE EITHER REPETITIONS, OR
INSERTIONS OF SOME PARTS OF VARIOUS
LAWS, OR EXPLANATIONS OF CLAUSES WHICH
ARE ALREADY CLEAR.
2. THERE ARE MANY CHANGES TO THE
PRINCIPLES OF FAIR CONTRACT, ERRORS,
OMISSIONS, AND SIMPLE BAD DRAFTING.
3. THE RESULTING TEXT IS ONE-SIDED AND WILL
RESULT IH HIGHER PRICES FAR BEYOND ANY
SIMPLE MISTAKES MADE IN THE ENGINEERING
OR FINANCIAL CONTROLS OR AUDITS.

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NATIONAL AUDIT - FIDIC
1. ONE CONSEQUENCE IS ALSO THAT SERIOUS
INWARD INVESTMENT OF EU INFRASTRUCTURE
COMPANIES WILL BE DIMINISHED EVEN MORE
THAN NOW.
2. ALL THE LAWS OF LITHUANIA APPLY. THE TWO
MOST APPLICABLE ARE THE PROCUREMENT
LAW AND THE CONSTRUCTION LAW.
3. THE LATTER CONTAINS DEFINITIONS QUITE
DIFFERENT TO THE FIDIC DEFINITIONS, BUT IS
QUITE EASY TO HARMONISE THESE.

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NATIONAL AUDIT - FIDIC
1. THE ISSUES RAISED ABOVE ARE A VERY SHORT
INTRODUCTION TO THE SUBJECT.
2. A FULL TRAINING COURSE IS USUALLY 2 DAYS
FULL TIME. THERE ARE MORE PLANNED AND
AGREED FOR THE COMING MONTHS.
3. UNFORTUNATELY SENIOR PEOPLE OFTEN FAIL
TO ATTEND AND THE MIDDLE AND JUNIOR
STAFF HAVE LITTLE AUTHORITY TO MAKE MUCH
DIFFERENCE TO THE MAIN POINTS RAISED.
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10. 9
NATIONAL AUDIT - FIDIC
1. THE ISSUES RAISED ABOVE ARE A VERY SHORT
INTRODUCTION TO THE SUBJECT.
2. A FULL TRAINING COURSE IS USUALLY 2 DAYS
FULL TIME. THERE ARE MORE PLANNED AND
AGREED FOR THE COMING MONTHS.
3. UNFORTUNATELY SENIOR PEOPLE OFTEN FAIL
TO ATTEND AND THE MIDDLE AND JUNIOR
STAFF HAVE LITTLE AUTHORITY TO MAKE MUCH
DIFFERENCE TO THE MAIN POINTS RAISED.
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