The Certified Contract Manager (CCM)

Under FIDIC 2017 editions, the Performance Security protects the Employer against failure by the Contractor to fulfill contractual obligations. The Employer may claim under the Performance Security in the following cases:

Option A: Failure to renew the Tender Security as required during the tendering or contract formation phase can allow Employer to make a claim, since the security guarantees the Contractor’s commitments at this stage.

Option E: Failure to extend the validity of the Performance Security when requested or required breaches contractual obligations and enables the Employer to claim under the security.

Option B is incorrect because abandonment without termination notice does not immediately entitle the Employer to claim under Performance Security; formal termination is usually required first.

Option C is incorrect because submitting a claim under Sub-Clause 20.2 (Employer’s claims) does not directly correlate with claiming under Performance Security.

Option D is irrelevant; instructions to replace works do not relate to Performance Security claims.

Option D correctly captures the difference between Yellow and Silver Books (1999):

In the Yellow Book, the Contractor may raise concerns after contract close.

In the Silver Book, the Contractor must scrutinize and report on Employer’s Requirements during the tender period, and after contract close this duty lapses.

Other options misunderstand timing or scope of scrutiny.

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.

Option C is correct: The Contractor is obligated to rectify any non-compliance with prevailing standards promptly.

Option D is correct: The Contractor carries responsibility for design fitness and correctness, even if the Engineer has approved or not objected to the design.

Option A is incorrect; Engineer approval does not absolve the Contractor from responsibility for defective design or works.

Option B is not necessarily required; only non-compliant parts need correction, not entire varied works.

All main FIDIC contract editions contain provisions that allow the Employer or Engineer to propose or instruct the Contractor to employ certain subcontractors (e.g., nominated subcontractors). The Contractor retains the right to refuse such subcontractors only for reasonable cause, which must be communicated formally.

This mechanism protects the Employer’s interests in subcontractor selection while safeguarding the Contractor’s right to reject subcontractors that may not be competent or suitable.

Therefore, the statement is true.

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) is not 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 D are the appropriate courses of action.

Under FIDIC 1999, Sub-Clause 2.5 [Employer’s Claims] provides that the Employer is entitled to make claims against the Contractor, which may result in deductions from the Contract Price and from Interim Payment Certificates.

Option C is correct. Delay Damages (Sub-Clause 8.7) are a classic example of Employer’s entitlement. If the Contractor fails to complete within the Time for Completion, the Employer is entitled to delay damages, which are typically deducted directly from payments due.

Option A is also correct. Under provisions relating to Nominated Subcontractors (Sub-Clause 5.4), if the Employer pays a nominated subcontractor directly (e.g., due to Contractor default), such payments may be recovered from the Contractor and deducted from the Contract Price via Sub-Clause 2.5.

Option B is incorrect because costs related to reviewing Contractor’s Documents are generally part of the Engineer’s duties and are not recoverable from the Contractor unless explicitly stated.

Option D is incorrect because the use of Employer’s materials is typically accounted for within the contract pricing structure and not treated as a claim under Sub-Clause 2.5.

Thus, Sub-Clause 2.5 serves as a key mechanism for the Employer to recover amounts due through deductions, particularly in cases like delay damages and payments made on behalf of the Contractor.

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.

Option B is correct: The Contractor must obtain approval from the Engineer/Employer before making design changes.

Option C is correct: The Contractor can submit Value Engineering proposals to improve efficiency or reduce costs.

Option A is incorrect; unilateral changes are not allowed.

Option D is incorrect; Value Engineering can be proposed even after initial submission.