CCM Exam Dumps - Certified Contract Manager

Sub-Clause 13.8 of the FIDIC Silver Book (1999) allows the Particular Conditions to specify a formula or indices for adjusting the Contract Price for rises and falls in labour and Goods costs. The method set forth may not fully compensate for actual cost changes — it can be lower than the real fluctuations — reflecting practical and commercial considerations.

Option B is correct because the contract permits this flexibility.

Option A is incorrect; full compensation is not guaranteed.

Option C is incorrect; the adjustment can cover materials and labour but may extend beyond.

Option D is incorrect; adjustments can be calculated from different dates as specified.

Under FIDIC Red Book 2017, Clause 21 (Dispute Avoidance/Adjudication Board), particularly Sub-Clause 21.3, provides for the DAAB’s role in dispute avoidance, including informal assistance during site visits. This is a proactive mechanism designed to resolve issues before they escalate into formal disputes.

Key procedural requirements include: (1) both Parties must agree that they want DAAB involvement (Option A), (2) a joint written request must be submitted to the DAAB before assistance is provided (Option C), and (3) both Parties must be present during any informal discussions to ensure transparency and fairness (Option D). These steps ensure neutrality, equal participation, and procedural integrity.

Option B is incorrect and therefore the correct answer to the question. The Engineer has no formal role in authorizing or issuing a “non-objection letter” for DAAB informal assistance. The DAAB operates independently of the Engineer, and its involvement is strictly based on joint agreement between the Employer and Contractor. Introducing Engineer approval would contradict the independence and dispute avoidance function of the DAAB.

Thus, Option B does not belong to the required steps and is not supported by FIDIC provisions.

The statement is false. Under FIDIC 2017 editions, the referral of a dispute to the DAAB does not automatically suspend the Parties’ contractual obligations. The works and contract performance generally continue while the dispute is adjudicated, unless otherwise agreed or ordered.

Suspension of obligations can disrupt project progress and is not encouraged by FIDIC procedures, which emphasize dispute resolution without delaying the work.

Dayworks refer to works executed on a time basis (e.g., labor and plant) with payment made according to predetermined rates rather than a lump sum or unit rate contract price.

Option A is incorrect. Even if a Daywork Schedule is not initially included, the dayworks Sub-Clause (e.g., Sub-Clause 13.7 in Red and Yellow Books, 13.8 in Silver Book 1999) still applies to dayworks ordered during the contract execution. The schedule facilitates pricing, but the Sub-Clause governs the method and conditions for dayworks.

Option B is correct. The dayworks Sub-Clause is applicable not only to traditional construction works but can also be applied to other types of works, such as variations or additional works that cannot be precisely measured or foreseen and are charged on a time basis.

Option C is incorrect. The dayworks Sub-Clause is used in all FIDIC standard forms (Red, Yellow, and Silver Books), not only for remeasurement in the Red Book. In the Yellow Book (plant and design-build) and Silver Book (EPC/turnkey), dayworks are similarly applicable for certain variations or unforeseen works.

Option D is correct. The Engineer (in Red and Yellow Books) or the Employer (in the Silver Book, where the Engineer’s role is limited) may instruct that a variation be executed on a daywork basis. This instruction is typically used when the scope or quantity cannot be reasonably pre-determined.

The key issue in this question is the allocation of design responsibility and the treatment of unforeseeable physical conditions (particularly relevant for underground works or inaccessible areas).

The Yellow Book 2017 is specifically designed for projects where the Contractor is responsible for both design and execution, while still maintaining a balanced risk allocation. Importantly, Sub-Clause 4.12 [Unforeseeable Physical Conditions] allows the Contractor to claim additional time and/or cost for conditions that could not reasonably have been foreseen. Therefore, for projects involving underground or uninspectable works, the Yellow Book is highly appropriate. Hence, Option A is correct.

The Silver Book 2017 (EPC/Turnkey) also places full responsibility for design and execution on the Contractor. However, it adopts a much stricter risk allocation: the Contractor generally bears the risk of unforeseen physical conditions. This makes it less suitable for projects with significant uncertainty—unless amendments are made. By modifying Sub-Clause 4.12 in the Particular Conditions to reallocate risk (e.g., allowing relief for unforeseeable conditions), the Silver Book can be adapted for such projects. Therefore, Option C is correct.

Option B (Red Book) is incorrect because design responsibility primarily lies with the Employer, not the Contractor.

Option D is incorrect because using the Silver Book without amendment would place excessive and potentially unmanageable risk on the Contractor in cases involving unknown subsurface conditions.

This reflects a core FIDIC principle: selecting the appropriate form depends heavily on risk allocation and the degree of uncertainty in site conditions.

Option B is correct: Deleting critical dispute resolution Sub-Clauses 20.2 - 20.4 contradicts the Golden Principles by undermining fair dispute handling.

Option D is correct: Extending payment release to 180 days violates timely payment principles and fairness in cash flow management.

Option A is generally acceptable as the Contractor often assumes responsibility for nominated subcontractors.

Option C is acceptable in some jurisdictions and contracts to provide finality but can be debated.

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.

Under FIDIC Red and Yellow Books (both 1999 and 2017), once a Section or Part of the Works has been taken over by the Employer, even if a formal Taking-Over Certificate has not yet been issued, the practical effect is that the Works (or relevant Section) are considered completed and under the Employer’s control.

Clause 13 [Variations and Adjustments] allows the Engineer to instruct Variations only before the Works or a Section are taken over. After taking-over, the Contractor’s obligations shift from execution to remedying defects under Clause 11 [Defects Notification Period] . At this stage, the Contractor is no longer required to carry out new work beyond rectification unless separately agreed.

Therefore, once a Section/Part is taken over, the Engineer cannot instruct a Variation to that part of the Works. Any further work would require a separate agreement or contract, not a Variation under Clause 13.

This reflects a key FIDIC principle: Variations relate to the execution phase, not the post-completion (defects liability) phase. Thus, the statement is false.