Free FIDIC CCM Practice Exam with Questions & Answers | Set: 3

Comprehensive and Detailed Explanation:

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.

Under the FIDIC Red Book 1999, advance payment is a sum paid to the Contractor to help cash flow early in the project. It must be repaid through deductions from interim payments according to a specified schedule.

Sub-Clause 14.5 (Advance Payment)states that the Contractor must repay the advance payment by installments, typically by the Time for Completion. If the advance payment has not been fully repaid by the Time for Completion, the outstanding balance becomes immediately due and payable by the Contractor (Option A). This ensures the Employer recovers the advance by the time the project completes.

Additionally,upon termination of the Contract(Sub-Clause 15.2 or relevant termination clauses), any outstanding balance of the advance payment becomes immediately due (Option D). This protects the Employer’s financial interest if the Contract ends prematurely.

Option B (before the Performance Certificate is issued) and Option C (before the Taking-Over Certificate is issued) arenotexplicitly linked in FIDIC Red Book 1999 to triggering immediate repayment of the advance payment. The Taking-Over Certificate marks practical completion and may precede the final repayment schedule, while the Performance Certificate is issued after the Defects Notification Period.

Therefore, the correct situations for immediate repayment of outstanding advance payment balance arebefore Time for Completion and upon termination of the Contract.

The Contractor’s obligation to submit progress reports continues until all outstanding work identified in the Taking-Over Certificate has been completed. The Taking-Over Certificate signals substantial completion but may allow for outstanding minor works. Reporting is essential to monitor progress on these outstanding works.

The Performance Certificate relates to final contract completion but reporting usually ends earlier only after all works are completed.

Therefore, Option D is correct.

Comprehensive and Detailed Explanation:

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.

Under FIDIC Red Book 2017, if the Engineer suspends works for more than 84 days and the Contractor notifies the Engineer, but the suspension is not lifted within 28 days, the Contractor may terminate the contract if the suspension affects the whole of the Works (Option A).

Additionally, the Contractor must give a second notice before termination (Option C). This process ensures proper communication and adherence to contractual procedures.

Option B is incorrect; termination is allowed under specified conditions.

Option D is incorrect; omission of work is not generally permitted without formal termination.

Under the FIDIC Red Book 1999 Edition, the Engineer is generally responsible for issuing determinations on claims and contract matters. However, if the Particular Conditions require the Engineer to obtain the Employer’s prior approval before issuing such determinations, the Engineer’s options become limited if that approval is not granted.

Option C (Issuing the determination to the Contractor in the form and with the content agreeable to the Employer, with a remark that it is the Employer’s determination and not the Engineer’s determination)is a practical approach often taken. The Engineer may issue the determination as directed or approved by the Employer but must clarify that it reflects the Employer’s decision rather than the Engineer’s independent determination.

Option D (Informing the Contractor of their inability to issue the determination, due to lack of Employer’s approval)aligns with transparency and procedural correctness. The Engineer should notify the Contractor if they cannot proceed with the determination, explaining the reason to avoid misunderstanding or delay.

Option A (Remain silent and do nothing)isnot appropriate, as it may cause project delays and disputes.

Option B (Referring the matter directly to the Dispute Adjudication Board)without a determination from the Engineer is not standard procedure under the 1999 edition. The Engineer’s determination or failure to determine generally triggers the dispute resolution process, but referral is normally after due process, including issuing or attempting to issue a determination.

Hence,Options C and Dare the appropriate courses of action.

Option C is correct: The Contractor is entitled to financing charges (interest) on late payments, calculated as per the percentage specified in the Contract Data or corresponding Sub-Clause.

Option D is correct: The Contractor can suspend works or reduce progress after giving due notice, usually 21 days, if payments are not made on time.

Option A is incorrect; termination is not automatic right after the payment deadline expires.

Option B is incorrect; suspension requires prior notice rather than immediate action.

Option E is incorrect because the Contractor has additional remedies such as suspension, beyond just financing charges.

Under the FIDIC Silver Book 1999 (Conditions of Contract for EPC/Turnkey Projects), the Employer must specify clearly in the Employer’s Requirements which Contractor’s Documents are to be submitted. Sub-Clause 5.2 states that the Contractor must submit all documents listed in the Employer’s Requirements, ensuring clarity and enabling the Employer to control the documentation process.

Option D is correct because it highlights the need for Employer’s Requirements to define the scope and content of the Contractor’s Documents.

Option A is incorrect; although operation and maintenance manuals are generally required, they are part of the specified Contractor’s Documents, not automatically required without Employer’s direction.

Option B is incorrect as the Contractor’s duty to supply documents is limited to those specified.

Option C is incorrect because documentation obligations are ongoing and not just at completion.

Comprehensive and Detailed Explanation:

Under the FIDIC Red Book 2017 (similar principles apply in other editions), Sub-Clause 4.1 (“Contractor’s General Obligations”) and Sub-Clause 3.4 (“Delay Damages”) require both Employer and Contractor to notify the Engineer in advance about any events or circumstances which maydelay the worksoradversely affect the Contractor’s personnel or progress. This early notification ensures proper management and mitigation of risks that could impact the project timeline or quality.

Option A (Delay the execution of the Works or a Section)is a core reason for notification since delays affect the critical path and programme, requiring possible extensions or adjustments.

Option C (Adversely affect the work of the Contractor's Personnel)is also a valid reason because issues affecting workforce productivity or availability can impact project delivery.

On the other hand:

Option B (Decrease the Contract Price)isnota reason to notify. Changes in contract price usually arise from variations or claims but are not a “known or future event” requiring prior notification unless linked to a variation or compensation event.

Option D (Increase the performance of the Works when completed)is positive and does not negatively affect project progress or cost; therefore, it is not a reason for advance notification under these contract provisions.

Thus, the twonot applicablereasons are B and D.

This statement is true. The Silver Book (EPC/Turnkey contracts) usually involves lump-sum payment, but if part payment is based on quantity or work done, this must be explicitly provided for in the Particular Conditions to avoid ambiguity.

Such provisions ensure clarity on payment terms in line with project specifics.