Conditions of Contract
for CONSTRUCTION
FOR BUILDING AND ENGINEERING WORKSDESIGNED BY THE EMPLOYER

Multilateral Development Bank Harmonised EditionMarch 2006

General Conditions
This publication is exclusive for use as provided under a Licence
Agreement between a Participating Bank and FIDIC, and, consequently,
no part of this publication may be reproduced, translated, adapted, stored
in a retrieval system or communicated, in any form or by any means,
whether mechanical, electronic, magnetic, photocopying, recording orotherwise, without prior permission in writing from FIDIC. To request suchpermission, please contact: FIDIC, Case Postale 311, CH-1215 Geneva
15, Switzerland; Tel. +41 22 799 49 00; Fax +41 22 799 49 01; E-mail:fidic@fidic.org. FIDIC is not responsible for the accuracy or completenessof translations of this publication unless such translation explicitly
indicates otherwise.

FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILSINTERNATIONAL FEDERATION OF CONSULTING ENGINEERS
INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE
FEDERACION INTERNACIONAL DE INGENIEROS CONSULTORESGeneral Conditions
CONTENTS

Definitions listed alphabetically
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15

Definitions
Interpretation
Communications
Law and Language
Priority of Documents
Contract Agreement
Assignment
Care and Supply of Documents
Delayed Drawings or Instructions
Employer’s Use of Contractor’s Documents
Contractor’s Use of Employer’s Documents
Confidential Details
Compliance with Laws
Joint and Several LiabilityInspections and Audit by the Bank

2THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2.1
2.2
2.3
2.4
2.5

Right of Access to the Site
Permits, Licences or Approvals
Employer’s Personnel
Employer’s Financial Arrangements
Employer’s Claims

3

THE ENGINEER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.1
3.2
3.3
3.4
3.5

Engineer’s Duties and Authority
Delegation by the Engineer
Instructions of the Engineer
Replacement of the Engineer
Determinations

4THE CONTRACTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4.1
4.2

Contractor’s General Obligations
Performance Security© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

iii

4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24

Contractor’s Representative
Subcontractors
Assignment of Benefit of Subcontract
Co-operation
Setting Out
Safety Procedures
Quality Assurance
Site Data
Sufficiency of the Accepted Contract Amount
Unforeseeable Physical Conditions
Rights of Way and Facilities
Avoidance of Interference
Access RouteTransport of Goods
Contractor’s Equipment
Protection of the Environment
Electricity, Water and Gas
Employer’s Equipment and Free-Issue Materials
Progress ReportsSecurity of the Site
Contractor’s Operations on Site
Fossils

5NOMINATED SUBCONTRACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

5.1
5.2
5.3
5.4

Definition of “nominated Subcontractor”
Objection to Nomination
Payments to nominated Subcontractors
Evidence of Payments

6STAFF AND LABOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.96.10
6.11
6.12
6.13
6.14
6.15
6.16
6.17
6.18
6.19
6.20
6.21
6.22

Engagement of Staff and Labour
Rates of Wages and Conditions of Labour
Persons in the Service of Employer
Labour Laws
Working Hours
Facilities for Staff and Labour
Health and Safety
Contractor’s SuperintendenceContractor’s Personnel
Records of Contractor’s Personnel and Equipment
Disorderly Conduct
Foreign Personnel
Supply of Foodstuffs
Supply of Water
Measures against Insect and Pest Nuisance
Alcoholic Liquor or Drugs
Arms and Ammunition
Festival and Religious Customs
Funeral Arrangements
Prohibition of Forced or Compulsory Labour
Prohibition of Harmful Child Labour
Employment Records of Workers© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

7

PLANT, MATERIALS AND WORKMANSHIP . . . . . . . . . . . . . . . . . . . . . . 27

7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8

Manner of Execution
Samples
Inspection
Testing
Rejection
Remedial Work
Ownership of Plant and Materials
Royalties

8COMMENCEMENT, DELAYS AND SUSPENSION . . . . . . . . . . . . . . . . . . 30

8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12

Commencement of WorksTime for Completion
Programme
Extension of Time for Completion
Delays Caused by Authorities
Rate of Progress
Delay Damages
Suspension of Work
Consequences of Suspension
Payment for Plant and Materials in Event of Suspension
Prolonged Suspension
Resumption of Work

9TESTS ON COMPLETION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339.1
9.2
9.3
9.4

Contractor’s Obligations
Delayed Tests
Retesting
Failure to Pass Tests on Completion

10EMPLOYER’S TAKING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

10.1
10.2
10.3
10.4

Taking Over of the Works and Sections
Taking Over of Parts of the Works
Interference with Tests on Completion
Surfaces Requiring Reinstatement

11DEFECTS LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

11.1 Completion of Outstanding Work and Remedying Defects
11.2 Cost of Remedying Defects
11.3 Extension of Defects Notification Period
11.4 Failure to Remedy Defects
11.5 Removal of Defective Work11.6 Further Tests
11.7 Right of Access11.8 Contractor to Search
11.9 Performance Certificate
11.10 Unfulfilled Obligations
11.11 Clearance of Site

© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

iii

12MEASUREMENT AND EVALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

12.1
12.2
12.3
12.4

Works to be Measured
Method of Measurement
Evaluation
Omissions

13VARIATIONS AND ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

13.1
13.2
13.3
13.4
13.5
13.6
13.7
13.8

Right to Vary
Value Engineering
Variation Procedure
Payment in Applicable Currencies
Provisional Sums
Daywork
Adjustments for Changes in Legislation
Adjustments for Changes in Cost

14CONTRACT PRICE AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

14.1 The Contract Price
14.2 Advance Payment
14.3 Application for Interim Payment Certificates14.4 Schedule of Payments
14.5 Plant and Materials intended for the Works
14.6 Issue of Interim Payment Certificates14.7 Payment
14.8 Delayed Payment
14.9 Payment of Retention Money
14.10 Statement at Completion
14.11 Application for Final Payment Certificate
14.12 Discharge
14.13 Issue of Final Payment Certificate
14.14 Cessation of Employer’s Liability
14.15 Currencies of Payment
15

TERMINATION BY EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

15.1
15.2
15.3
15.4
15.5
15.6

Notice to Correct
Termination by Employer
Valuation at Date of Termination
Payment after Termination
Employer’s Entitlement to Termination for Convenience
Corrupt or Fraudulent Practices

16

SUSPENSION AND TERMINATION BY CONTRACTOR . . . . . . . . . . . . . 55

16.1
16.2
16.3
16.4

Contractor’s Entitlement to Suspend Work
Termination by ContractorCessation of Work and Removal of Contractor’s Equipment
Payment on Termination

17RISK AND RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

17.1 Indemnities
17.2 Contractor’s Care of the Works

iv© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

17.3
17.4
17.5
17.6
17.7

Employer’s Risks
Consequences of Employer’s Risks
Intellectual and Industrial Property Rights
Limitation of Liability
Use of Employer’s Accommodation/Facilities

18INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

18.1
18.2
18.3
18.4

General Requirements for Insurances
Insurance for Works and Contractor’s Equipment
Insurance against Injury to Persons and Damage to Property
Insurance for Contractor’s Personnel

19

FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

19.1
19.2
19.3
19.4
19.5
19.6
19.7

Definition of Force Majeure
Notice of Force Majeure
Duty to Minimise Delay
Consequences of Force Majeure
Force Majeure Affecting Subcontractor
Optional Termination, Payment and Release
Release from Performance

20

CLAIMS, DISPUTES AND ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . 65

20.1
20.2
20.3
20.4
20.5
20.6
20.7
20.8

Contractor’s Claims
Appointment of the Dispute BoardFailure to Agree on the Composition of the Dispute Board
Obtaining Dispute Board’s Decision
Amicable Settlement
Arbitration
Failure to Comply with Dispute Board’s Decision
Expiry of Dispute Board’s Appointment

APPENDIX: DISPUTE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
General Conditions of Dispute Board Agreement
Annex: Procedural Rules

INDEX OF SUB-CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

v

Definitions listed alphabetically

1.1.4.1

vi

Accepted Contract Amount1.1.4.7

Interim Payment Certificate

1.1.2.11 Bank

1.1.6.5

Laws

1.1.3.1

Base Date

1.1.1.3

Letter of Acceptance

1.1.1.9Bill of Quantities

1.1.1.4

Letter of Tender

1.1.2.12 Borrower

1.1.4.8

Local Currency

1.1.3.2

Commencement Date

1.1.5.3

Materials

1.1.1.1

Contract

1.1.2.1

Party

1.1.1.2

Contract Agreement

1.1.4.9

Payment Certificate

1.1.1.10 Contract Data

1.1.3.8

Performance Certificate

1.1.4.2

Contract Price

1.1.6.6

Performance Security

1.1.2.3

Contractor

1.1.5.4

Permanent Works

1.1.6.1

Contractor’s Documents

1.1.5.5

Plant

1.1.5.1

Contractor’s Equipment

1.1.4.10 Provisional Sum

1.1.2.7

Contractor’s Personnel

1.1.4.11 Retention Money

1.1.2.5

Contractor’s Representative

1.1.1.7

Schedules

1.1.4.3

Cost

1.1.1.9

Schedule, Payment Currencies

1.1.6.2

Country

1.1.5.6

Section

1.1.2.9

DB

1.1.6.7

Site

1.1.3.9

day

1.1.1.5

Specification

1.1.1.9

Daywork Schedule

1.1.4.12 Statement

1.1.3.7

Defects Notification Period

1.1.2.8

Subcontractor

1.1.1.6

Drawings

1.1.3.5

Taking-Over Certificate

1.1.2.2

Employer

1.1.5.7

Temporary Works

1.1.6.3

Employer’s Equipment

1.1.1.8

Tender

1.1.2.6

Employer’s Personnel

1.1.3.6

Tests after Completion

1.1.2.4

Engineer

1.1.3.4

Tests on Completion

1.1.2.10 FIDIC

1.1.3.3

Time for Completion

1.1.4.4

Final Payment Certificate

1.1.6.8

Unforeseeable

1.1.4.5

Final Statement

1.1.6.9

Variation

1.1.6.4

Force Majeure

1.1.5.8

Works

1.1.4.6

Foreign Currency

1.1.3.9

year

1.1.5.2

Goods© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

General Conditions

1

General Provisions
1.1
Definitions

1.1.1
The Contract

In the Conditions of Contract (“these Conditions”), which include Particular Conditions,
Parts A and B, and these General Conditions, the following words and expressions
shall have the meanings stated. Words indicating persons or parties include
corporations and other legal entities, except where the context requires otherwise.
1.1.1.1“Contract” means the Contract Agreement, the Letter of Acceptance, theLetter of Tender, these Conditions, the Specification, the Drawings, theSchedules, and the further documents (if any) which are listed in theContract Agreement or in the Letter of Acceptance.

1.1.1.2“Contract Agreement” means the contract agreement referred to in SubClause 1.6 [ Contract Agreement ].

1.1.1.3“Letter of Acceptance” means the letter of formal acceptance, signed by
the Employer, of the Letter of Tender, including any annexed memoranda
comprising agreements between and signed by both Parties. If there is nosuch letter of acceptance, the expression “Letter of Acceptance” means theContract Agreement and the date of issuing or receiving the Letter ofAcceptance means the date of signing the Contract Agreement.

1.1.1.4“Letter of Tender” means the document entitled letter of tender or letter ofbid, which was completed by the Contractor and includes the signed offerto the Employer for the Works.

1.1.1.5“Specification” means the document entitled specification, as included in
the Contract, and any additions and modifications to the specification inaccordance with the Contract. Such document specifies the Works.

1.1.1.6“Drawings” means the drawings of the Works, as included in the Contract,and any additional and modified drawings issued by (or on behalf of) theEmployer in accordance with the Contract.

1.1.1.7“Schedules” means the document(s) entitled schedules, completed by theContractor and submitted with the Letter of Tender, as included in theContract. Such document may include the Bill of Quantities, data, lists, andschedules of rates and/or prices.

1.1.1.8“Tender” means the Letter of Tender and all other documents which theContractor submitted with the Letter of Tender, as included in the Contract.

1.1.1.9“Bill of Quantities”, “Daywork Schedule” and “Schedule of Payment
Currencies” mean the documents so named (if any) which are comprisedin the Schedules.

1.1.1.10 “Contract Data” means the pages completed by the Employer entitledcontract data which constitute Part A of the Particular Conditions.
© FIDIC 2006. MDB Harmonised Conditions of Contract for Construction March 2006 - General Conditions.
For participating development bank financed contract use only. No reproduction of this document is permitted.

1