(You are the Contract Manager of the Employer ' s Representative in a Thermal Power Plant Project under FIDIC Silver Book (edition 2017). The Contractor submits two claims: (1) USD 200,000 for additional costs due to an error in national piling standard NTS-PW-01 referenced in the Employer's Requirements. (2) USD 300,000 for constructing an additional flood wall due to incorrect hydrological data in Site Data (water level miscalculated). What is your determination for the Contractor?)
Correct Answer: B
Under FIDIC Silver Book 2017 (EPC/Turnkey), the Contractor bears extensive risk responsibility, particularly for design, site conditions, and data interpretation. However, there are important exceptions- especially concerning errors in the Employer's Requirements. For the first claim (piling works): The Employer's Requirements explicitly mandated compliance with a specific national standard (NTS-PW- 01), which contained a proven technical error. Under Sub-Clause 1.9 [Errors in the Employer's Requirements] , the Contractor is entitled to claim additional cost and/or time if it suffers due to such errors. Since the Contractor relied on a prescribed standard, the risk remains with the Employer. Therefore, this claim is valid. For the second claim (flood wall): Although the Site Data contained incorrect hydrological information, under the Silver Book (Sub-Clause 4.10 [Site Data]), the Contractor is deemed to have taken full responsibility for interpreting Site Data. The Contractor assumes the risk of inaccuracies unless expressly stated otherwise. Additionally, "Unforeseeable physical conditions" relief is significantly restricted in the Silver Book compared to Red/Yellow Books. Therefore, the Contractor is not entitled to additional payment for this item. Thus, only the piling-related claim is admissible, making Option B correct.
Question 2
Before applying the procurement process of any FIDIC Book, the Employer should always check if there are local procurement rules that also apply. Which one of these responses is correct?
Correct Answer: C
Local procurement laws, regulations, and internal governance rules often apply in addition to or alongside FIDIC contract provisions. Employers, whether public or private, must comply with applicable national or sector-specific rules, which may affect procurement procedures, documentation, and contract award processes. Option C is correct because procurement requirements depend on local legal systems, the nature of the Employer, and applicable governance. Option A is incorrect as FIDIC contracts provide contractual frameworks but do not override local legal obligations. Option B is incorrect because many Employers have procurement policies. Option D is incorrect since private entities may also be subject to procurement laws or internal policies. References: FIDIC Contract Manager Study Guide, Module on Contract Formation and Procurement Strategies World Bank Procurement Guidelines and National Procurement Laws
Question 3
You are the new Contract Manager of the Contractor in a bridge project using FIDIC Yellow Book (edition 2017). The project had been suspended due to a material change in the Employer ' s financial arrangement. You have worked with your team to identify several failures of the Employer in carrying its obligations under the Contract. Which one of the following does NOT allow the Contractor to issue Notice to terminate the Contract?
Correct Answer: C
Option C does NOT, on its own, provide grounds for termination. The Contractor's request for evidence of financial arrangement, without further contractual breach, is insufficient to terminate. Options A, B, and D are valid grounds for termination under FIDIC Yellow Book 2017 due to prolonged suspension, non-payment beyond allowed period, or failure to comply with binding determinations. References: FIDIC Yellow Book 2017 Edition, Sub-Clauses 15.1 (Suspension) and 15.2 (Termination by Contractor) FIDIC Contract Manager Study Guide, Module on Suspension and Termination
Question 4
Which two of the following statements are correct, regarding the Programme under FIDIC Red, Yellow and Silver Books (edition 2017)? Choose all of the correct answers (multiple possibilities).
Correct Answer: A,B
Option A is correct: The Contractor must proceed according to the approved Programme, and the Employer's personnel rely on the Programme for coordinating their activities. Option B is correct: Submission and approval of the Programme do not relieve the Contractor of the obligation to give timely notices for delays or other events as required under the contract (e.g., notices under Sub-Clause 8.4). Option C is incorrect because the Programme is not strictly a contract document binding parties in the legal sense; it is a working tool to manage and monitor progress. Option D is incorrect; the Engineer/Employer must review the Programme and notify the Contractor if it does not comply, per contract clauses. References: FIDIC Red, Yellow, and Silver Books 2017, Sub-Clause 8.3 and 8.4 - Programme and Notices FIDIC Contract Manager Study Guide, Module on Time and Delay Management
Question 5
Which one answer holds two statements that are both correct with regards to risks and key considerations regarding the Golden Principles?
Correct Answer: A
Option A correctly reflects Golden Principles emphasizing the Employer's objective of obtaining value for money and the importance of avoiding disputes as much as possible. Other options either misrepresent the balanced nature of FIDIC principles or promote unfair or unbalanced positions. References: FIDIC Contract Management Guidelines - Golden Principles FIDIC Contract Manager Study Guide, Module on Legal and Ethical Considerations