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)?
Correct Answer: B
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
Question 22
In the FIDIC Silver Book (edition 1999), if the Employer has instructed the Contractor as per Sub-Clause 8.6 to provide a revised programme to stay within Time of Completion, the Employer can claim additional costs. This only applies if the revised programme is still too slow to complete the Works within the Time for Completion. Is this statement true or false?
Correct Answer: A
This statement is true. Under FIDIC Silver Book 1999, Sub-Clause 8.6, the Employer can instruct the Contractor to submit a revised programme to meet the contractual Time for Completion. If, after such instruction, the revised programme still shows the Works will not complete on time, the Employer may claim additional costs (such as delay damages or compensation) due to continued delay. Thus, the Employer's right to claim additional costs is contingent on the revised programme not enabling timely completion. References: FIDIC Silver Book 1999 Edition, Sub-Clause 8.6 - Revised Programme FIDIC Contract Manager Study Guide, Module on Claims and Delay Damages
Question 23
In a construction project using the FIDIC Silver Book (edition 1999), if the Parties prefer the dispute board to be appointed on an "ad-hoc" basis instead of as a standing Dispute Avoidance and Adjudication Board (DAAB), what is it called? (1 correct answer applies)
Correct Answer: B
Under FIDIC terminology, an ad-hoc Dispute Board is known as a DAB (Dispute Adjudication Board), which is appointed for specific disputes as they arise, rather than standing continuously. The DAAB is a standing board appointed for the project duration, providing continuous dispute avoidance and adjudication. Option D refers to arbitration, which is a different dispute resolution method. References: FIDIC Silver Book 1999 Edition, Clause 20 - Dispute Adjudication Board FIDIC Contract Manager Study Guide, Module on Dispute Boards and Resolution
Question 24
Under the FIDIC Red Book (edition 1999), as part of the Contractor submission of Statement, any amount to be deducted for retention, will be calculated by applying the percentage of retention stated in the Appendix to Tender to the total of: (two correct answers apply) Choose all of the correct answers (multiple possibilities).
Correct Answer: A,D
Under FIDIC Red Book 1999, retention is calculated as a percentage (stated in Appendix to Tender) of the value of Works executed and Plant and Materials in accordance with Sub-Clause 14.5 that are on or off Site but intended for incorporation. Option A is correct: Retention applies to the value of executed works. Option D is correct: It also applies to Plant and Materials under Sub-Clause 14.5. Option B is incorrect; advance payments and repayments are not part of retention calculations. Option C is incorrect; changes due to legislation or costs are not included in retention calculation. References: FIDIC Red Book 1999 Edition, Sub-Clause 14.5 - Plant and Materials; Sub-Clause 14.6 - Retention FIDIC Contract Manager Study Guide, Module on Payment and Retention Procedures
Question 25
Which one of the following statements regarding drafting contracts based on FIDIC Books is correct?
Correct Answer: D
Option D is correct because contract drafting should strategically allocate risks between parties based on who can best manage them and the Employer's budget for risk and reward. Understanding risk appetite is key to tailoring FIDIC contracts appropriately. Option A is exaggerated; while amendments can introduce issues, careful drafting can preserve benefits of standardization. Option B is partly true but mixing arrangements is complex and not always straightforward. Option C is incorrect; the Employer usually chooses the contract form. References: FIDIC Contract Management Guidelines - Golden Principles FIDIC Contract Manager Study Guide, Module on Contract Drafting and Risk Allocation