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Construction Law/FIDIC Red Book 1999 - Appointment of Designer as Engineer

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Question
Dear Rofel,

1- Employer has engaged a Design Firm (X) to Design the Infrastructure works of its Project.
2 - Employer wants to engage with a Contractor to execute the Infrastructure Works under FIDIC 99 Red Book.
3- Can Employer nominate and appoint Design Firm X as the Engineer to the FIDIC contract?
4- I know that under FIDIC 99 the Engineer now works for the Employer and is no longer required to be impartial but wouldn't the Contractor object to the Engineer being the party who designed the Works having to also be the judge when Contractor complains to the Employer about Design issues?

Cheers,

Answer
Dear Walid,

Thank you for raising these sensible questions.

Q1: Can Employer nominate and appoint Design Firm X as the Engineer to the FIDIC contract?

I did not find any restrictions for the appointment of the Designer (i.e. Design Firm X in your case) to act as the Engineer during construction period under FIDIC Red Book (First Edition 1999).

If Design Firm X meets the requirement for the role of Engineer under FIDIC Red Book (First Edition 1999) (i.e. suitable qualified engineers and other professionals who are competent…), then the answer to your question would be: Yes, the Employer has the right to appoint Design Firm X as the Engineer under your Contract.

Q2: Under FIDIC 99 the Engineer now works for the Employer and is no longer required to be impartial but wouldn't the Contractor object to the Engineer being the party who designed the Works having to also be the judge when Contractor complains to the Employer about Design issues?

Raising objection for the appointment of Design Firm X as Engineer due to reason stated in your question (i.e. being the Designer) and without providing supporting particulars is more political than technical. This may be considered as unreasonable objection.

FIDIC Red Book (First Edition 1999) however, protects the right of the Contractor as well as Employer under Sub-Clause 1.8. The Contractor (or Employer) may notify the Employer (or Contractor) for any error or defect whatsoever related to the design:

“if a Party becomes aware of an error or defect of a technical nature in a document which was prepared for use in executing the Works, the Party shall promptly give notice to the other Party of such error or defect.”

Although I recognize that Engineer’s impartiality is not explicitly stipulated under New Red Book aka FIDIC Red Book (First Edition 1999), the Engineer is still under obligation to provide fair determination in accordance with the Contract under Sub-Clause 3.5.

In case of dissatisfaction on Engineer’s Decision, the Contractor may, under applicable clauses of FIDIC Red Book (First Edition 1999), refer the matter to DAB (if agreed by other party) to obtain impartial decision. If dissatisfied with DAB’s decision, the Contractor may thereafter proceed with Amicable Settlement and ultimately to Arbitration.

Conclusion:

On the positive note, the Project may benefit the appointment of Design Firm X as Engineer as they are more aware of the details of the design.

Finally, we have to consider that successful completion of the Project is an utmost important objective by the Employer. The Employer will not sacrifice the quality of work, the timely completion of the Project, the collaborative working environment and the like due to impartial decisions.

I hope that the above clarifications address your questions.

Kind regards,

Rofel Ningal  

Construction Law

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Rofel Ningal

Expertise

Questions related to Construction Law, Conditions of Contract, Contract Terms & Conditions, Claims, Contract Administration, etc.

Experience

Having more than 10 years extensive experience in international companies, including working in the UAE, Qatar and Philippines, both for private and public sectors, such as, Government, Project Management, Consultancy and Construction provide a wider perspective in analyzing the issues related to Construction Law and the like to provide advice in a fair and reasonable manner, in accordance with the applicable Contract Terms and Conditions. The hands-on experience I had for preparing cost proposal for variations; daily correspondences protecting the rights of my organization under contract; preparation and finalization of contract/agreement; preparation, negotiation and finalization of claims for extension of time and associated cost, etc. will be useful to understand the details of every question asked. With experience working in a project administered by FIDIC Form of Contract (Red and Yellow), Public Works Authority (Qatar) Conditions of Contract, etc.

Organizations
Philippine Institute of Certified Quantity Surveyors Philippine Institute of Civil Engineers

Education/Credentials
BSc in Civil Engineering - West Negros University MBA in Construction (Units only) - Manchester Business School Worldwide

Awards and Honors
Licensed Civil Engineer at the age of 20

Past/Present Clients
Public Works Authority (Qatar), Roads & Transport Authority (UAE), Qatar Foundation (Qatar), Qatar Real Estate Investment Co., ALDAR Properties (UAE)

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