Red Book FIDIC Contract Management and Problems

Why FIDIC red book is very essential for contract management especially for ADA funded projects in Vietnam? Mr. Pham Thanh Trung made a case study in the Project of Wastewater Disposal in Provincial Towns, Programme South, Can Tho which 2 primary objectives were to: (1) study FIDIC Red Book contract structure and contract management related; and (2) analyze the problems occurring in the application of FIDIC Red Book contract to this project, with perception looking from Vietnam law system, Engineer and Contractor and finally to propose recommendations.

Conclusions

The fundamental problems occurred during the application of FIDIC Red Book in this case study project include: choosing the wrong contract form, rejecting the main contents in FIDIC Red Book such as measurement and variations, contract price adjustment, and contract volume. In addition, the specific requirement in particular conditions did not clearly defined about responsibilities, procedures, manners and processes.

The study also helped the Employer to understand about their roles in the project’s delivery; involvement in preparing a management team with knowledge and experience, controlling the work of contractor as well as the Engineer, defining conflict between FIDIC Red Book and Vietnam Law system and provide solutions to resolve them.
Recommendation to improve the effectiveness in application of FIDIC Red Book

To apply FIDIC Red Book Conditions effectively in ODA projects in Vietnam, from this case study, the author come-up with the following conclusions:

1. FIDIC Red Book strongly recommends that the complete design shall be prepared by independent and impartial Engineers whom have enough experiences and skills.

2. The General Conditions for every project should be followed strictly from FIDIC Red Book, especially with some important clauses as Clause 12 Measurement and evaluation, Clause 13 Variations and adjustments and Clause 14 Contract price and payment.

3. The Particular Conditions should be included any changes or additional clauses which the parties have decided to include for adaptation of the local and project requirements. The Particular Conditions must ensure clear responsibilities, procedures, manners and processes for all requirements.

4. When any problems occur, all members of construction project should be closely followed to regular basis procedures, such as Sub-Clause 3.5 Determinations, Sub-Clause 2.5 Employer’s claims, Sub-Clause 20.1 Contractor’s claims etc. Besides, they should be considered to all events, circumstances and factors affecting to the problems. For this purpose, the documentation work is very important to timely record, collect and store every information as well as evidences of events.

His thesis abstract is copied and pasted below:

Abstract

In recent years, ODA has become an important resource to help the Vietnamese government develop infrastructure, education and environmental improvements. Many important projects using ODA funds have been completed and operate effectively, contributing to the economic and social development.

Besides the positive aspects of this project model, there are so many limitations and shortcomings during the implementation process which led to ineffective projects. Limitations, shortcomings are source from site clearance, lack of management experience to run the project. Besides, these project models are requiring complying with the Conditions of the sponsors, and these regulations are direct to protect the interest of sponsors.

One of the document are usually apply by sponsors is FIDIC red book contract. In original, this document is an appropriate regulation for every construction contract follow international regular. However, during the applied, the sponsors and their consultant usually adjust and add more sub clause in particular Conditions for their advantage.

Within this writing, I would be analyzed the problems occurred during the project implementing which follow the FIDIC contract. Includes attitude and solutions of the sponsor, the consulting units, the client and the contractor, and the direct effects due to these problems cause. From the standpoint of a project manager, combine with existing management rules, I would like to suggest solutions to process problems to ensure harmony and efficiency of the project.