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FIDIC - Contractor's Responsibility after Suspension of Works

posted Apr 3, 2011, 9:17 PM by Administrator 1   [ updated Apr 4, 2011, 2:03 AM ]

Can a contractor decline any responsibility for the Temporary Works and Permanent Works after the Works have been suspended under sub-clause 16.1?

Although the answer will likely vary from jurisdiction to jurisdiction, the inherent principle has to do with safety. In this, the contractor/s are not released from their responsibilities.  The additional cost of carrying out and maintaining the works as a result of the suspension is reclaimable under Sub-clause 16.1 9(b).

Regardless of whether safety is of an immediate concern, the contractor should try to keep the costs arising from the suspension as low as possible. Works cannot simply be abandoned. Reasonable measures must be put in place by the contractor to protect the Works. However, he carries a duty to not incur unnecessary additional costs, given his right of reimbursement under this clause.

Insurance requirements must also be maintained since it is linked to either the Taking-Over Certificate or the Performance Certificate. The additional cost of premiums can also be reclaimed.

Should termination follow suspension, the contractor’s problems increase. FIDIC moves from 16.1 to 16.2 to 16.4 and then 19.6, which is drafted in the situation of Force Majeure. Hence, costs of suspension are not paid for as a “price….stated in the Contract” [19.6(a)] and possibly may not be considered to be “any other cost or liability .. reasonably incurred…in the contemplation of completing the Works” [19.6(c)].

Where the Temporary works have a direct impact on integrity of part of the Permanent Works, the contractor has a double responsibility:

· He (if the applicable jurisdiction dictates) may be obliged to maintain his Temporary Works to prevent damage to the Permanent Works.  This may not necessarily be a safety requirement.

· If he does decide to pursue compensation, he will have to prove that he fulfilled his obligation with incurring as little cost as possible. In this case, he may be required to remove the Temporary Works if the cost saving is more than the maintenance.

Sub-clause 17.2 – Contractor’s Care of the Works states:

"The Contractor shall take full responsibility for the care of the Works and Goods from the Commencement Date until the Taking-Over Certificate is issued (or is deemed to be issued under Sub-Clause 10.1 [Taking Over of the Works and Sections]) for the Works, when responsibility for the care of the Works shall pass to the Employer. If a Taking-Over Certificate is issued (or is so deemed to be issued) for any Section or part of the Works, responsibility for the care of the Section or part shall then pass to the Employer."
In the Sub-clause, "Works" are defined as being "the Permanent Works and the Temporary Works”.
So, up until the Taking Over, the Contractor is liable and should take care of the Temporary and Permanent Works.

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