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FIDIC Conditions of Subcontract as a Model for General Conditions of

Subcontract in Pakistan

Article · December 2016

DOI: 10.25046/aj010602

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 Advances in Science, Technology and Engineering Systems Journal Vol. 1, No.6, 5-13 (2016)
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FIDIC Conditions of Subcontract as a Model for General Conditions of Subcontract in Pakistan

Muhammad Umer Zubair*1, Hamza Farooq Gabriel2, Muhamamd Jamaluddin Thaheem1, Muhammad Bilal Khurshid1, Ammara
Mubeen2
1
National Institute of Transportation, National University of Sciences and Technology, Pakistan
2
National Institute of Civil Engineering, National University of Sciences and Technology, Pakistan

ARTICLEINFO ABSTRACT
Article history: Fair allocation of risks in conditions of contract is pivotal for coordination, unhindered
Received: 21 October, 2016 execution, dispute resolution and maintenance of positive relationship among the parties
Accepted: 26 November, 2016 executing the contract. Pakistani construction industry despite subcontracting a large
Online: 25 December, 2016 percentage of construction projects lacks standard conditions of subcontract and they are
primarily based on the will of the prime contractor that is onerous for the subcontractor.
Keywords :
Therefore in order to develop a model for the general conditions of subcontract in
General contractor
Pakistan the conditions proposed by Associated General Contractors of California,
Subcontract
FIDIC in 1994 and 2011, Construction Industry Development Board Malaysia, American
General conditions
Institute of Architects and by the Government of Hong Kong were compared to determine
Subcontract
the similarities and differences among them. Afterwards a questionnaire based on the
significant provisions of these subcontracts was conducted in the construction industry of
Pakistan to determine the appropriate conditions for model subcontract. The results of the
survey were further subjected to discussions with the legal experts. Out of 35 suggestions
made for the general conditions of subcontract 23 originated from FIDIC in which 20 are
recommended by its 2011’s version. It can therefore be implemented in Pakistan with
certain amendments and additions as proposed in light of conditions of other subcontracts
and the results of the survey and discussions with legal experts.

1. Introduction

The construction industry all over the world is realizing that They are the primary tool of risk allocation among the project
an effective risk management can lead to the success of the participants [5]. The risks are bound to occur in the construction
project simultaneously achieving the goals laid out by the projects and the only way out is to distribute the risks among the
organziations. Recent studies have established the fact that parties that are more capable of bearing them through contracts.
effective risk management carry bright prospects not only for They serve as a basic template of defining risks and placing the
the contractor in terms of profit but for the owners as well responsibility of their management to the stakeholder who is in a
through financial control and timely completion [1-3]. However better position to handle them. It establishes a framework that
its implementation has a lot of constraints and hurdles in the nominates that which party bears a particular risk [6]. In
field of construction industry. It is impeded while the project is Pakistan however the risks are not fairly allocated in the
in the infancy stage i.e. when the contracts are executed among contracts.The owner tends to place most of the risks on the
the project participants. Construction contracts define the work contractor. A similar practice has been reported in Main
to be executed by the contractor (or the subcontractor) including Contractor (MC)-Subcontractor (SC) relationship. Choudhry,
the desired quality and time for completion, the amount to be Hinze [7] reported that in Pakistan standardized conditions of
paid to the contractor (mode and timings of payment, any contract are not used by the prime contractor like for example
addition or reduction to payment), roles and responsibilities of those suugested by FIDIC. The owner imposes their own
the parties and the responsibility of unavoiadable events [4]. conditions on the subcontractor that are quiet onerous. The
situation is quiet alarming owing to the propotion of the total
*
Corresponding Author: Muhammad Umer Zubair, National Institute of works assigned to the subcontracters in the construction industry
Transportation, National University of Sciences and Technology, Pakistan,
+923337512765, uzubair.cem6@nit.nust.edu.pk now days. It may constitute a very high percentage of the works
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i.e. 70 % [8] or 85% [10]. A similar situation is observed in the Works of Civil Engineering Construction, 1994” (FIDIC 1994),
construction industry of Pakistan where majority of the works “The Red Book Subcontract--Conditions of Subcontract for
are subcontracted by the main contractor. Actually one of the Construction for Building and Engineering Works, Designed by
main reasons of subcontracting the works by the main contractor the Employer, First Edition 2011” (FIDIC 2011), “Conditions of
is the transfer of risks [11]. But here in Pakistan there is an Subcontract by Construction Industry Development Board CIDB,
exploitation of the subcontractor by using harsh contractual Malaysia” (CIDB), “American Institute of Architects A401-
conditions that transfers majority of the risk to the subcontractor. 2007 Standard Agreement between the Contractor and
Therefore the construction industry of Pakistan definitely needs Subcontractor” (AIA) and “The Government of Hong Kong
standard conditions of Subcontract that can be proposed to special administration region subcontract for building works
Pakistan Engineering Council (PEC) which governs the 2000 edition”(HKG) were compared. Being promulgated by
Engineering projects in the country so that the subcontractors international organizations these conditions are well balanced
performing works in different provinces can be benefitted. The and not biased in favor of any particular party.
bid documents provided to the contractor by the client that as
per the Pakistan Engineering Council should include the FIDIC 1994 was designed to be used in conjunction with
following documents conditions of contract for works of Civil Engineering
construction, Fourth Edition 1987. The general condition
 Instructions to Bidders. consists of twenty two clauses. Despite of formulation of new
 Bidding Data. edition i.e. FIDIC 2011, the one put forward in 1994 have also
 General Conditions of Contract, Part I (GCC). been considered in this study. This is primarily due to prevailing
 Special Conditions of Contract, Part II (SCC). practices of the Pakistani construction industry. Like for
 Specifications example the request for proposals put forward by National
 Form of Bid and Appendices to Bid. Highway Authority, Pakistan (NHA) for the contractors still uses
 Bill of Quantities the Conditions of contract for works of Civil Engineering
 Form of Bid Security. Construction Fourth Edition 1987, by FIDIC. Despite of new
 Form of Agreement. editions this version is still in place and used extensively in
 Form of Performance Security, Mobilization Advance Pakistan. Therefore the old version has also been considered so
Guarantee, security bond and integrity pact. that its applicability can be checked in the construction industry
 Drawings of Pakistan.
General conditions of contracts are those that apply to all
types of contracts.They are generally based on the conditions The new edition i.e. FIDIC 2011 consists of 20 clauses
proposed by PEC that have been formulated in light of instead of 22 in the previous one. Many clauses have been
provisions of FIDIC when it comes to the contract between the amended and new provisions have been added. For example the
owner and the contractor. Particular/Supplementary conditions older version did not have any provision where the contractor
are a tool to ammend the clauses of general conditions of may proceed to claim any payment from the subcontractor or
contract as per the requirement of project. These conditions of where the contractor is given the right to make a fair decision
contract should only be a mean to address the specifics of the regarding their own claim when an agreement is not reached
project and the fundamentals of general conditions of contract with the subcontractor. The new edition places a greater
including the risk allocation should not be disturbed [12]. But as responsibility on the subcontractor by making them responsible
mentioned earlier there are no standard conditions proposed by for the works designed by them. The Subcontractor is given the
PEC to address the subcontracting. This area necessarily needs right to suspend the work in case of nonpayment from the
focus so that the subcontractors may not suffer due to the Contractor in the new edition. The older edition of 1994 gives
exacting contractual conditions imposed by the main contractor. fifty five days to resolve a dispute after which the issue is passed
To deal with this immense issue a comparision of general on to the arbitration process. The new edition refers the issue to
conditions of subcontract by various international organizations Subcontractor’s Dispute Adjudication Board (DAB). If either
has been conducted to propose the appropriate conditions for the party serves a notice of dissatisfaction to the other party, twenty-
general conditions of subcontract in the Pakistani industry. PEC eight days are given to reach an amicable solution after which
can particularly benefit from this paper as it provides a guideline the matter proceeds to the arbitration process.
for the formulation of General Conditions of Subcontract. As per
CIDB was published in 2006. The model contract present
author’s knowledge no study based on such lines has been
conditions to be used in the Subcontracts [13]. They were
conducted in any part of the world.
developed owing to the increasing trend of subcontracting in the
2. Comparison of subcontracts Malaysian industry in lines with Construction industry Master
plan of their country. Various consultation sessions and
The conditions of subcontract prepared by “Associated workshops led to finalization of the first draft of the conditions
General Contractors of California Long Form Standard of contract. It consists of seven clauses in the General conditions
Subcontract (AGC)”, FIDIC Conditions of Subcontract for of the contract.
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AIA contracts are extensively used in the construction together the general conditions consist of 34 provisions. AGC
industry particularly the subcontracts which are relatively was proposed by “Associated general contractors of California”,
inexpensive and widely accepted [14]. The edition of AIA used founded in 1920. The organization comprises of more than 1000
in the study replaced A401-1997 which expired in 2009. The contractors thereby representing a wide horizon of the industry
new edition consists of sixteen articles. HKG was proposed in of California. The organization is one of the largest chapters of
2000 to be used in conjunction with General Conditions of Associated general contractors of America. The organization
Contract for Building Works” (1999 Edition). They were also provides an open access to the contracts proposed by them
formulated by the development bureau of the Hong Kong special on their official website. AGC consists of 7 main clauses. A total
administrative region. The organization is responsible for the of 52 significant matters have been found to be addressed in
planning, management and implementation of public sector these conditions of subcontract by the international
projects. Their official website provides an open access to all the organizations. Some significant provisions have been enlisted in
construction contracts promulgated by them. Hence the Table1.
subcontract proposed by them can be easily retrieved for use. All

Table 1: Comparison of subcontracts

Description FIDIC 1994 FIDIC 2011 CIDB AIA HKG AGC

Entering into N/A Within 28after N/A N/A When called by N/A
subcontract receiving Letter of contractor
acceptance (LOA)
Representative on site Contractor and Contractor and Contract N/A N/A SC
subcontractor subcontractor administrator
Execution of work Within 14 days after N/A N/A N/A N/A N/A
notification
Satisfaction of works N/A N/A N/A N/A Satisfy both MC N/A
and architect
Extensions of time Events for which SC Events for which SC is N/A With the consent of In case of N/A
and additional costs is not responsible and not responsible and the MC provision of notice
submits a notice in 14 submits a notice of event in 21 days
days immediately
Position of Main N/A N/A N/A N/A Main contract will N/A
contract prevail
Access to SC to main Give access except Give access except N/A N/A Give access except N/A
contract price part price part price part
Instructions to Only by MC Only by MC Contractor Only by MC Only by MC N/A
subcontractor administrator
Claims by contractor N/A Fair agreement by MC N/A N/A N/A N/A
in case of non-
agreement
Design of works by N/A Responsible of the N/A N/A N/A N/A
subcontractor works designed by
them
Health and safety N/A SC responsible Both MC and SC SC responsible N/A SC responsible

Performance security Should be provided to Should be provided to N/A N/A No need to Securities should
the MC within 28 the MC within 28 days provide any be provided by SC
days of LOA of LOA security by the
subcontractor
Sub Sub contracting Not without the Not without the N/A Not without the The decision of N/A
consent of MC consent of MC consent of MC architect shall
prevail
Notice prior to N/A Fourteen days prior to N/A N/A N/A N/A
beginning of work start
Notices to contractor Notices regarding Within twenty-one N/A N/A Notice should be Notices should be
delays and other days after the submitted within given to the
issues should be contractor becomes twenty-one days contractor within
given to the aware of issues of an event forty-eight hours
contractor of the event
Schedule of activities SC to submit within SC to submit within 48 MC submits a MC submits a MC submits a SC should submit
48 days of LOA days of LOA detailed work detailed work detailed work
schedule to SC schedule to SC schedule to SC
Progress reports N/A Subcontractor should N/A Subcontractor should N/A N/A
submit submit

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Submission of waste N/A N/A N/A SC should submit N/A N/A

management plan
Suspension of work N/A Reasons should be N/A N/A N/A N/A
by MC provided to the SC
Response to SC’s N/A Within 21 days N/A N/A N/A N/A
notice
SC involvement in N/A Should be involved N/A N/A N/A N/A
measurement of
works
Contractor’s right to N/A Given in case of non- N/A N/A N/A N/A
make fair decision agreement on
measurements
Variations Can be given by MC Can be given by MC Modify action as Given by architect
only only instructed by MC and confirmed by
MC
Acceleration of work N/A Contractor can give Contractor can give N/A N/A N/A
instruction instruction
Statement for Within 7days after At least 7 days before N/A N/A N/A N/A
payment end of each month MC’s submission
Details of Interim N/A Should be provided to N/A Should be provided N/A N/A
payment certificates SC to SC
Delay of payments Explanation should N/A N/A N/A N/A N/A
be given
Withholding N/A N/A N/A N/A N/A Works defective,
payments warranty not
provided
Payment to Within 70 days Within 70 days Within 30 days Within 7 days of Within 7 days of Within 7 days of
subcontractor receiving payments receiving receiving
from the owner payments from the payments from the
owner owner
Retention money At least half should At least half should be At least half should N/A N/A N/A
be paid within 35 paid within 28 days of be paid within
days of handing handing taking over. seven days of
taking over. Rest Rest should be paid practical
should be paid within within 7 days of release completion
7 days of release of of final payment certificate.
final payment
Final payment Within 84 days of Within fifty-six days of N/A Within 7 days of N/A N/A
submission of final defects notification payment from the
payment certificate period. owner

Return of 28 days after defects Within 7 days after N/A N/A N/A N/A
performance security liability certificate is receipt of security from
issued the employer
Termination of N/A Notice should be given In case SC does not If SC does not If SC does not If issue is not
subcontract by due to to the SC 14 days resolve issue within resolve the issue resolve the issue resolved within 10
SC’s default before termination 14 days of notice mentioned in the mentioned in the days
by the contract notice for correction notice within 7
administrator days
Suspension of works N/A In case of non- In case of non- If the payment is not N/A N/A
by subcontractor payments by giving a payments by giving made within seven
notice twenty-one days a notice twenty-one days of agreed date
prior to it days prior to it

Termination of N/A By a notice 14 days In case of non- Upon nonpayment N/A N/A
contract by SC prior to intended date payments by giving within 60 days of due
a notice twenty-one date
days prior to it
Insurance MC and SC should MC and SC should MC and SC should SC should carry out SC should carry
carry out carry out carry out out

Dispute resolution No amicable Subcontract dispute Parties should go If issues are not Matters should be Carry out
settlement within 55 adjudication board will for Adjudication. If resolved, then parties directed to the negotiations which
days of notice than be formed. In case of issue still remains can move ahead with architect. If not if not successful
dispute should be dissatisfaction on its unresolved it can be arbitration. resolved than it than matter can be
passed on to decision the matter is directed to should be directed directed to
arbitration process. directed to arbitration. arbitration. to mediation and arbitration, if
arbitration. desired by the
parties.
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3. Methodology lawyer’s opinions were incorporated. The legal implications can

be best analyzed by the lawyers who have no biasness towards
The provisions of the conditions of subcontract mentioned any party and are familiar about the laws and discrepancies in
in Table 1 were developed into a questionnaire with special the system of Pakistan. The targeted lawyers had an experience
emphasis on those clauses in which there is a difference of in dealing with construction contracts and litigations in the same
opinion. There were certain matters which were addressed in one field. Provisions from different contracts were discussed with
subcontract and not found in others. Many conditions were them and their opinion was asked. Certain provisions were
found similar in all contracts. It was deemed necessary to pretty clear and loud and common in all subcontracts e.g. the
determine that whether these clauses developed by international general obligations of the contractor and subcontractor. Such
agencies fit into the conditions of the construction industry of clauses were not made part of the survey but discussed directly
Pakistan or not. The provisions in the form of multiple choice with the legal experts. Similarly some provisions of purely legal
questions were first subjected to a pilot survey with contracts nature like indemnity, termination of main and subcontract etc.
manager and they were asked to check that are the questions were also part of the discussion with the legal experts only.
adequate to address the formulation of general conditions of
subcontract in Pakistan? As per Hill [15] the sample size The main purpose of the involvement of law professionals
recommended for the pilot survey is between 10 to 30. Based was to secure a balance in the provisions of contract such that
upon the suggestions of experts a final questionnaire survey to the overall subcontract does not favor any particular party.
determine the model provisions for the subcontract was Suggestions given by the first expert were carried forward to the
formulated. The questionnaire consisted of two sections. The next one. The recommendations given by the most of the experts
first section asked the respondents about their personal details. were considered final for the model conditions of subcontract.
The respondents were asked to provide information regarding
their educational background, the type of organization to which 4. Results
they belong and their years of experience. The pilot survey was responded by 11 experts. The
In the second section multiple choice questions consisting of respondents were mainly project and contract managers having
clauses from the subcontracts studied in the earlier part of the an experience of at least 15 years. They found it reasonable and
study and verified by the construction experts were stated. The worth to be carried further for the detailed survey. The
respondents were asked to select the clause they consider to be respondents suggested that an option with a ‘blank’ should be
best suited to the conditions of construction industry of Pakistan left for the respondents in which they can add something to the
and it should be such that it remains balanced for both parties. conditions suggested by international organizations. This
The questions covered all the major provisions of the suggestion was incorporated. In the detailed survey a total of 101
subcontracts studied in the process of comparison. A total of 27 responses were obtained. The main target of the survey was
questions were asked. According to Dillman [16], for a professionals from Contractor and subcontractor organizations.
population size > 30,000, at 10% confidence interval, the The responses obtained from them constitute 83.26% of the total
required sample size for the research is 96. This provided with responses. This shows that an adequate response has been
the target sample size for the survey. The questionnaire was sent received from the targeted organizations. A total of 67 out of 101
to around 175 professionals of the construction industry. The respondents had an experience of at least 10 years. Those having
persons targeted for the study included project managers, 5-10 years of experience were 15 in number. This shows that 82
contract managers, project directors, owners etc. The survey was respondents have at least 5 years of experience which constitutes
mainly sent to contractors and subcontractors. However a limited 81.18% of the total responses. The respondents with 0-5 years of
number of clients and consultants were also involved to obtain a experience were 19 in number. This shows that the targeted
joint perspective of all the parties of the project. In several audience has sufficient experience to give answers to the
questions, different contracts put forward a similar provision, so questions asked in the survey. The respondents hold senior
they are represented to be favored by equal percentage of positions in their respective organizations like project managers,
respondents in Table 2. The provisions selected by the majority contract mangers, construction managers, CEO and owners of
of the respondents, in the exact form they are proposed in the various subcontracting companies.
general conditions of subcontract prepared by the international The maximum numbers of respondents i.e. 48 had an
agencies, were carried forward to the lawyers. In many cases undergraduate degree while those having a Master’s degree were
different subcontracts advocated a similar provision. Like in 41 in number. Diploma holders and those having technical
case of bonds and securities both versions of FIDIC dictate that degrees are also part of the survey and were 12 in number and
it should be provided to the main contractor within 28 days of mainly constituted the subcontracting firms. The results of the
letter of acceptance. To determine that the language of which survey indicating the percentages of respondents voting for a
subcontract among these two and in other cases where similar specific provision of general condition of subcontract are shown
recommendations were stated by more than one subcontract, in Table 2.
could make to the model conditions of subcontract for Pakistan,

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Table 2: Percentages of respondents voting for a specific provision

Description FIDIC 1994 FIDIC 2011 CIDB AIA HKG AGC Other

Entering into subcontract 24.75 66.34 8.91

Representative on site 69.31 69.31 1.98 28.71

Contract administrator deputation 32.67 67.33

Beginning of execution 35.60 64.4

Extensions of time 55.45 25.74 11.88

Satisfaction of works 49.47 50.53

Status of main contract 41 59

Access to main contract 99.99 99.99 0.99

Health and safety 18.81 60.50 18.81 18.81 20.69

Submission of waste management plan 4.95 95.05

Bonds and securities 65.40 65.40 27.70 6.90

Sub Sub contracting 62.83 62.83 62.83 10.89 26.73

Schedule of activities 60.40 60.40 37.62 37.62 37.62 60.40 1.98

Right to suspend works to contractor 68.30 31.70

Response to subcontarctors notice 18.81 76.24

Submission of progress reports 67.32 32.68

Involvement of SC in measurements 74.30 25.70

Variations 85 85 85 85 15

Contractor’s right to make fair decision 78.22 21.78

Instructions to accelerate the work 91.12 91.12 8.88

Withhelding payments 64.32 35.68

Interim payments 60.10 60.10 17.10 15.90 6.90

Final payment 19.80 35.60 31.70 12.90

Explaination for delays in payment 88.11 11.89

Return of performnace security 56.40 35.70 7.90

Termination of subcontract 30.70 53.50 14.81 0.99

Insurance’s responsibility 67.30 67.30 67.30 12.90 19.80

Dispute resolution 11.88 24.75 14.85 13.86 34.65

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The Table 2 shows that provisions given by FIDIC 1994 to the contractor. A legal expert suggested that a time frame of
have been selected in 9/28 questions. FIDIC 2011 has been thirty days should be given to the subcontractor to submit the
opted in 12/28 issues. However in 8 of these questions similar work schedule. However in later discussion with other experts it
provisions has been given by both editions of FIDIC. The was kept fourteen days after letter of acceptance as proposed by
provisions formulated by FIDIC (both 1994 and 2011) are FIDIC 2011. As per FIDIC 1994 and according to the
selected in 15/28 questions. This amounts to an agreement of 53% respondents of the survey the contractor should submit a notice
with the FIDIC Clauses. The conditions promulgated by CIDB to the subcontractor in case the payment is delayed and it should
that were not found in any other subcontract have been selected explain the reason behind it. The legal experts suggested that a
in 2/28 questions while those common with FIDIC are also 2 in time frame for this notice should be provided. Nine experts
number. Only one provision given by HKG and AGC (suggested suggested that notice should be given within seven days. This
by their contract conditions only) was selected by the suggestion was incorporated in the framework developed for the
respondents. The professionals have also been very vocal in subcontractor. Out of 15, eleven legal experts suggested that in
giving their own recommendations. For example in case of order to ensure that subcontractor is not responsible for events in
response to subcontractors notice, the suggestions given by which an extension of time or an additional cost should be
FIDIC 2011 have been overturned and they believe that it should provided or to decide that weather the subcontracted works are
be made within 7 days. The result does indicate that in many defective or not, this power should be given to some neutral
cases the provisions found common in more than one party preferable the architect/engineer. This suggestion was
subcontract have been selected by the professionals. There are incorporated in the recommendations for the development of
certain questions to which no clear answer has been obtained general conditions of subcontract. The legal experts were of the
like in case of dispute resolution procedure, timings for final opinion that variations should only be acted upon by the
payment and weather works executed by the subcontractor subcontractor if instructions are given to them in writing by the
should satisfy the architect/engineer or not. All these factors main contractor. This is in line with the suggestions made in the
mentioned above justify the involvement of legal experts that prior survey with the construction professionals. However legal
could not only validate the results, check if the overall risk is experts added a new dimension to it. According to them
fairly allocated to both parties, define the general obligations of variation orders should be given in a reasonable time such that
the parties as per the international subcontracts and select that changes to work can be made. It should not be such that the
language and terms of conditions for the subcontract that suits works are executed or materials have been procured etc. and it is
the Pakistani industry where same suggestions are put forward not possible to make changes to the works. A suggestion was
by more than one of these contracts. made by an expert that in case of conflict between the main
contract and subcontract, the main contract shall have
Discussions were carried out with 15 legal experts. This precedence. According to him the subcontract is always subject
leads to conceptual saturation, a point where further collection to main contract. If there is any deviation between main and
and analysis of qualitative data does not generate any new data subcontractor the main contract is always followed. However
[17]. Among the legal experts, 8 have more than 20 years of this suggestion was refuted by other experts who believed that
experience. One of them have an experience of 13 years, 4 have after terms and conditions of subcontract are finalized with the
5-10 and 2 have 0-5 years of experience. Out of these 15 legal subcontractor they should be followed. They were of the opinion
experts 5 had been involved in drafting of construction contracts, that it will be very unfair to the subcontractor that the main
2 had experience in dealing with construction claims. This contract is given precedence when subcontractor is only
shows that 7/15 experts had been involved in the construction responsible for the conditions of subcontract. Regarding the
industry in the past. suspension of works by the subcontractor the legal experts were
All experts suggested that the provision that gives the of the opinion that the time period of 21 days for notice after
right to give fair decision to the main contractor in case there is a which the works can be suspended is too long. It was
disagreement on measurement of quantities as proposed by recommended that this period may be reduced to fifteen days. It
FIDIC in 2011 should not be a part of general conditions of was suggested that contractor can give the instructions to
subcontract. As per the legal experts the environment of accelerate the work. This has been maintained by the legal
Pakistani construction industry is not viable that such experts with the addition that architect/engineer will access the
prerogative may be given to the contractor as it will be subject to pace of work first. If it is far behind schedule and there is no
a high degree of misuse. The experts said that “No one should be fault of subcontractor in these delays subcontractor may be
judge in their own cause”. Such authority may be given to some instructed to accelerate the work and additional costs will be
neutral party such as consultant or this provision may entirely be given to them.
eliminated from the contract provisions. Upon consensus of all Based upon the survey and recommendations by the legal
the legal experts this provision was abrogated from the model experts final conditions for the subcontract were formulated. The
conditions of subcontract. As per the previous survey it was index to which is as follows.
suggested that subcontractor should submit schedule of activities

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1. General obligations of contractor and subcontractor: CIDB From a total of 35 suggestions made (including the sub
2. Entering into subcontract: HKG clauses) 20 originate from FIDIC 2011 in which amendments
3. Precedence of Main Contract: Conditions of subcontract have been suggested in 4 of them. FIDIC 1994 is suggested in 3
shall prevail in general contractor-subcontractor relationship clauses and one of them has a modification. CIDB has been
4. Access to main contract: FIDIC 2011 suggested in 5 provisions with changes in one of them. Two
5. Representative on site: FIDIC 2011 clauses each from HKG’s and AGC’s made their way into the
6. Beginning/Starting of works: Mutually agreed date at the model conditions of subcontract. Some new suggestions have
time of contract been made on the basis of survey and discussions with legal
7. Errors in contract documents: FIDIC 1994 experts that constitute 3 recommendations. This indicates that a
8. Health and Safety: CIDB total of 23 suggestions originate from FIDIC (including 1994
9. Performance security: FIDIC 2011 and 2011 edition). This constitutes 65% of the total
10. Sub sub contracting: As per FIDIC 2011 along with recommendations made for the subcontract. FIDIC 2011 alone
verification of the credentials of the sub contractor by the contribute 57% of these suggestions. This indicates that the
contractor. suggestions made by FIDIC best suits the general Contractor-
11. Abiding by the instructions of Main contractor: FIDIC 2011 Subcontractor relationship in Pakistan. In light of the
12. Satisfaction of works: HKG recommendations made, FIDIC 2011 may be implemented by
13. Work Schedule: FIDIC 2011 PEC in Pakistan after incorporating the suggestions made by
14. Progress reports: FIDIC 2011 other subcontracts and amendments made to existing conditions.
15. Acceleration of work: As per FIDIC 2011 but recommended
by architect/engineer. The findings of this study are in line with the
16. Response to subcontractors notice regarding extensions of recommendations made by Murtaja [18] that FIDIC clauses may
time/additional costs: Within 7 days. If assessment requires be implemented by the project parties to improve project
time, provide a notice to the subcontractor. performance. Also Köksal [12] put forward FIDIC as model for
17. Indemnification: FIDIC 2011 construction contracts.
18. Extensions of time: FIDIC 1994 5. Conclusion
19. Liquidated damages: CIDB and the amount/percentage
specified in offer to the subcontractor In order to formulate model for the General conditions of
20. Variations: As per FIDIC 2011, however it should be made subcontract for the Pakistani construction industry,
within a reasonable time such that it may not be burdensome recommendations made by 6 international subcontracts were
to the subcontractor compared and subjected to a questionnaire survey. FIDIC 1994
21. Responsibility of works before taking over: FIDIC 2011 and 2011 was selected in majority of questions by the
22. Payments to the subcontractor professionals. Certain provisions of FIDIC were however
a. Statement of payment by the subcontractor: FIDIC overturned or amended by the legal experts in the next step like
2011 the right to make fair decision given to the contractor was
b. Explanation for delays in payment: As per FIDIC 1994 excluded from the General conditions of subcontract in Pakistan.
within seven days of due date of payment After rigorous discussions with legal experts 35 suggestions
c. Timings for payment: FIDIC 2011 have been made for the General conditions of subcontract out of
d. Involvement of subcontractor’s representative in which 65% originate from FIDIC. This shows that the conditions
measurements: FIDIC 2011 of FIDIC are the best solution when it comes to formulation of
e. With holding payments: AGC conditions of subcontract for Pakistan. They have certain
f. Final payment: FIDIC 2011 limitations that have been overcome by incorporating clauses of
23. Access to site by the subcontractor: FIDIC 2011 other subcontracts and expert opinions. Recommendations that
24. Suspension of works ensure a fair risk allocation between the contractor and
a. By the contractor: FIDIC 2011 subcontractor have been formulated.
b. By the subcontractor: As per FIDIC 2011. In case of
non-payments works can be suspended by the References
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