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fidic risk management manual pdf

fidic risk management manual pdf

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fidic risk management manual pdf

The availabilityof this excellent document has greatly reducedthe work that would otherwise have been necessary o produce the Manual. The aimof theediting process has been to createa Manual that would beuseful in all countries in which members of Member Associations of FIDICoperate, irrespectiveof legal codes, applicable legislationand state of develop-ment of theconstructionindustry. Accordingly,as much aspossibleof theDPICpublicationhas been preserved while adjusting some terminologyand aspectsspecific to US construction practises, industrial and professionalorganisation,legislationand legal codes. The Executive Committee and the Risk ManagementCommitteeof FIDICacknowledgethe considerable contribution of the DPIC CompaniesInc. As a consequencedesignprofessionals risk thepossibilityof claims on everycommissionthey undertake.A liability claim, even if successfully defended, can prove a huge distraction andeven disastrousfor a design practice.The deterioration n this working climate has occurred for many reasons.Importantamong these have been a marked change from a one-on-one client-consultantrelation-ships to the committee client with attendant bureaucracy, rapid advances n technology,greatly increased statutory requirements with complex approval processes, and activecommunityconcern about preservationof our environment. It is in the interest of the communityas a whole to reverse adverse trends in theliabilityscene.Participants n theconstruction industrycan assist this process,and them-selves, by practisingsound risk managementprocedures. Riskmanagement n construction work occurs at several levels:It is one of the major purposes of professionaleducation and qualificationto providea pool ofpeople with the technical knowledge and skill to assess and minimise the risks inherent inconstruction.

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It is the major purposeof quality management the monitoringof theprocesses by which designand other professional asks are carriedoutby design professionals,construction is carried outbycontractors and materials and componentsare manufacturedby suppliers,and which shouldalso regulateall the peripheral asks requiredfor successful construction.Systematicrisk management involvesidentification,assessment and mitigation of risk, minimi-sationof potential damageand thesettingupof realistic mechanisms to financethe residual riskona project by project basis.Risk managementalso embraces the managementof society and governmentexpectationsofdesign professionalsand other specialistswhoprovidetheessential services on which modernliving depends. While these specialistsoffer technical expertise, they do not normally possessthe financial resources necessary o absorb their clients' financial troubles.Within this broad context risk management focuses on the management of relationshipsbetween individual clients, the design professionalsand otherparticipants in the constructionprocess. This procedure involves reconciliation between legal relationshipsand the practicalimplementation of those legal obligations. To provide a convenient ready checklist for day-to-day use the followingmajor conclusions from each chapter are here summarised as a series ofGuidelines:- Chapter One - Professionalism As a professional,you have earnedthe right to practice your profession. Along with this right, however, come certain obligationsto society, including the duty to protect publichealth, safetyand welfare. As a professional,you also are expected to performto a certain standardof care and touphold thestandards of your profession. To compete in today's market and to avoid claims, you need to master skills in businessas well as maintain technical competency. Manyclaimsagainst design professionals stem from thenon-technicalaspectsof adesignpractice.

It is fundamental o satisfactory project outcomes,and thereforeto risk management, thatthe client, his professional advisers and all contractors involved in the project applythemselves to creating trust and partnership to prevent misunderstandings andconflicts between them. It is important that the public learn more about the design professions.Each practitionerhas the opportunity- and responsibility to enhance his or her profession. Design professionalshave rules of conduct and codes of ethics which they are requiredto follow. Noncompliance is grounds for disciplinary action by the practitioner'sprofessionalsociety. Chapter Two - Communications Many claims against design professionals result from a breakdown in communication between partiesto theconstruction process. Written communicationsshould be prepared with the receiver in mind, anticipating ikelyquestions and providing appropriate answers. Avoid indiscriminate use of standardletters and check all wording before transmission. Do not rely on memory. Maintainclearand accurate records. Keep close contact with your client. Never make the mistake of believing a clientunderstandsyour duties and procedures. Basic areas: -defining risk management -objectives of risk management -the risk management process -personal risk management Risk Management Series - Faculty discussing risk factors and market risk. Discover everything Scribd has to offer, including books and audiobooks from major publishers. Start Free Trial Cancel anytime.

Report this Document Download Now Save Save Fidic-risk Management Manual For Later 0 ratings 0 found this document useful (0 votes) 38 views 107 pages Fidic-risk Management Manual Uploaded by Nagendra Krishnamurthy Description: Fidic-risk Management Manual Full description Save Save Fidic-risk Management Manual For Later 0 0 found this document useful, Mark this document as useful 0 0 found this document not useful, Mark this document as not useful Embed Share Print Download Now Jump to Page You are on page 1 of 107 Search inside document Browse Books Site Directory Site Language: English Change Language English Change Language. Staff relationships. Assessments and studies. Design? Procurement? Shop drawing review. Construction observation and review. Internal quality audits. Customer satisfaction? 5 Does a quality plan exist for each area of organisational activity or for each assignment? 6 Have the requisite quality control, quality assurance and continuous process improvement and training programmes been identified and are they in place? 7 Is there a method to identify needed improvements. Yes No Risk Management System 1 Are risk and quality management guidelines included in the Organisational Plan? 2 Are significant risks at system, process and product levels identified and addressed? 3 Are the house rules in the FIDIC Risk Management Manual 1997 implemented and maintained in the organisation? 4 Are the standards and procedures given in the CESA Advisory Notes observed. Yes No Commitment 6 Is the CEO committed to ensuring that quality standards are identified? 7 8 Do senior executives provide effective leadership and direction in implementing and maintaining quality standards. Is the responsibility for risk management in the organisation placed with a specific principal. Quality Policy 9 Is a Policy Manual established to serve as gateway into the management system? 10 Is the quality policy clearly defined, implemented and maintained?

11 Does the organisation have a policy or policies demonstrating its commitment to meeting requirements and to establish an overall sense of direction and principles of action? 12 Do the policies provide a framework for setting the organisation s various objectives and targets? 13 Are all employees aware of the quality policy? 14 Are quality objectives established for each employee assignment. Organisational Planning and Structure 15 Are business performance measurement systems included in the Organisational Plan? 16 Are change management guidelines included in the Organisational Plan? 17 Are planned organisational changes conducted in a controlled manner? 18 Are resource management systems included in the Organisational Plan? 19 Are adequate human, infrastructural and financial resources in place. Operational Planning Do the planning arrangements for the operational processes include actions for achieving operational objectives and targets. Is an Operational Procedures Manual for implementation by Functional Managers developed and documented. Are operational management and maintenance of infrastructure, plant, facilities, work environment, finance, etc, included in the Operational Procedures Manual. Are the arrangements for those who supply and contract their services to the organisation formalised. Are arrangements to manage Joint Ventures with other consultants and to manage Construction Contract processes and procedures (including tendering, evaluation and supervision controls, quality systems, health and safety, environmental controls, commissioning, documentation, etc) included in the Operational Procedures Manual. Is the management of documents that are essential to the successful implementation and operation of the management system (including authority, issue, review, backup, record keeping, etc) included in the Operational Procedures Manual.

Organisational Responsibility and Authority 29 Are the responsibility, authority and interrelationships of all who manage, perform and verify work, clearly defined? 30 Is a responsible person(s) to identify and take action on quality problems appointed? 31 Is an authorised person(s) to develop improvement systems appointed? 32 Is a clearly defined way to verify the implementation and results of the proposed systems for improvement available? 33 Is an authorised person(s) to standardise successful improvement systems appointed. Verification Resources and Personnel 34 Are verification requirements identified? 35 Do personnel have adequate training and resources to verify activities? 36 Do verification activities include: Review at designated benchmarks. Checking of the output. Review of the adequacy of the constructed product. Quality Management Staff Has a quality leader been appointed to be responsible for the quality management system. Does the quality leader report directly to senior management or serve as part of the senior management team. Control of Documents Are documented procedures for controlling all documents and data required for the quality management system, including output documents available. Are all documents required for the quality management system reviewed and approved by authorised personnel prior to issue. Are current copies of appropriate documents available at all locations where operations require their use? 13 4 42 Have personnel who review and approve document changes access to pertinent data upon which to base their decisions? 43 Where sets of preliminary or status documents are submitted do these documents have a unique identification? 44 Is there a master control list that identifies the current version of documents. Quality Records 45 Are documented procedures for the identification, collection, indexing, filing, storage, maintenance, and disposition of quality records available? 46 Are quality records being generated and maintained?

47 Do these records demonstrate achievement of the required quality and the effective operation of the quality system? 48 Are quality records easily accessible? 49 Have retention times of quality records been defined and recorded and agreed to by client? 50 Where necessary are quality records available for evaluation by customers. Management Review 51 Is the quality management system periodically reviewed to ensure its suitability, adequacy and effectiveness? 52 Do these reviews include analysis of results of internal quality audits? 53 Does management act on these reviews? 54 Are records of these reviews kept and maintained? 55 Are the organisation s requirements to monitor and measure customer perception and critical processes and procedures included in the review process. Resource Management Employees Is information on an individual s skills and experience recorded, maintained and 1 updated? 2 Is this information communicated. Do employees, whose activities affect quality, have appropriate education, training and 3 experience for the assigned tasks. IT Equipment 8 Is purchased computer software verified prior to use? 9 Are computers and software compatible and standardised? 10 Is it assured that computer files are regularly updated and backed-up? 11 Are bugs in software and workarounds properly handled? 14 5 Item Aspect Compliance Financial Management 1 Does the firm manage its finances properly and assure adequate cash flow? 2 Does the firm have project specific accounting information? 3 Does the firm share accounting information with its department and project managers? 4 5 Is accurate accounting information in the form of profit and loss statements made available within days of closing regular accounting cycles. Does the firm submit its accounts and operations to an independent outside financial audit once a year. Are documented procedures for each of these processes available and do they address 3 these primary process characteristics?

4 Are the procedures up to date and in use. Do procedures ensure qualified personnel to perform the activities constituting a 5 process. Do the procedures ensure that personnel have adequate resources and equipment to 6 adequately perform their jobs? 7 Are formal documented criteria for output requirements and processes available? 8 Are standard check sheets or checklists used to ensure conformance to requirements. Are documented checklists for the following project phases ensuring completeness and 9 compliance with all risk remedies available. Organisational and Technical Interfaces 21 Are organisational and technical interfaces between different groups identified and coordinated? 22 Is the necessary project update information documented, transmitted and regularly reviewed? 23 Are effective lines of communication established between different internal groups and with external parties? 24 Are regular, documented project meetings held. Input 25 Are input requirements identified and documented? 26 Are these input requirements reviewed for adequacy? 27 Are unclear or conflicting requirements resolved? 28 Are the conflict resolutions coordinated with those responsible for establishing the requirements. Output 29 Is output documented in terms of requirements, calculations, and analyses? 30 Is output reviewed for conformance with input requirements? 31 Does the output contain or reference acceptance criteria. Is the output reviewed for conformance to regulatory requirements regardless of whether these are specified in the input information. Are characteristics crucial to the safe and proper functioning of the final product identified. Verification 34 Is it verified that the output conforms to input requirements. Does verification include documented reviews, checking, qualification tests or demonstrations, alternative calculations, or comparisons of the new design with a similar proven design already available.

Are controls in effect assuring applicable drawings, change notices, and specifications in use during production and construction review. Are the checklists for potential risks in the following project phases duly completed and action taken where necessary. Feasibility phase Appointment phase Conceptual design phase 16 7 Design phase Contract award phase Implementation phase Commissioning and post contract phase Changes 38 Are all changes or modifications of the services provided reviewed and approved? 39 Is documentation that changes, or modifications that are made known to all parties affected available. Purchasing 40 Are subcontractors and suppliers evaluated and selected on the basis of their ability to meet contract requirements, including quality? 41 Is the result of this evaluation of subcontractors and suppliers documented? 42 Is the risk assessment and availability of professional liability insurance part of the selection criteria for purchasing. Measurement, Analysis and Continuous Improvement Client Satisfaction 1 Is there an effective an ongoing system of measurement of client satisfaction? 2 Are adequate client satisfaction records maintained by the firm? 3 Have follow-up procedures been developed and effectively implemented. Internal Quality Audits Has a documented, comprehensive system been developed for conducting internal 4 quality audits. Is the internal quality audit system capable of verifying the efficiency and the 5 effectiveness of the quality management system? 6 Are audits scheduled on the basis of importance and tests of the activity? 7 Are audit procedures and follow-up actions defined and documented. Are audit results brought to the attention of the responsible personnel in the area 8 audited? 9 Are audit results documented. Are audit result brought to the attention of the appropriate management so that corrective 10 action may be taken? 11 Is corrective action taken on the deficiencies found in the audits.

Does management review the system to ensure its continuing suitability, adequacy and effectiveness and does management instruct improvements and new directions when found necessary? 18 Question Proc. Ref. Comments 4 Quality Management System 4.1 General Requirements 1 Has the organization established, documented, implemented and maintained a quality Question Proc. Ref. Comments 4.1 Understanding the Organization and its context 1 Has the organization CyberOptics recognizes the importance FIDIC offers two contributions on the question of the role of a construction manager in a construction contract: Controlled Copy Stamp.Safety Management System Standards Quality Manual Quality Manual ISO 9001:2008 Quality Manual ISO 9001:2008 Row Manufacturing 210 Durham Drive Athens, Alabama 35611 Phone:256.232.4151 Fax:256.232.4133 Page 2 of 33 This Page intentionally left Blank Page 3 of Documentation Requirements. General. Quality Manual. Control of Documents Any reproduction of this quality management system or associated documents without the express permission of the company and Therefore, all printed versions of this document are unofficial copies. QUALITY MANAGEMENT SYSTEM MANUAL 6901 Charles Street Towson, Maryland 21204 Manual LEC (Company Audit) Guidance Notes Quality Management System Utilizing this Quality Please verify with Quality Management Representative 16 Dukes Close, West Way, Walworth Industrial Page 2 of 20 Approval Quality Manual Issue 4 Updated April 2012. Authorised by: Managing Director. To use this website, you must agree to our Privacy Policy, including cookie policy. Certainly, such contractual framework depends exclusively on the manner in which the parties understood to negotiate with respect to the contractual rights and obligations, which is embodied in the Special Conditions of Contract agreed upon.

By opposition, the Contractor is not entitled to collect the profit it would have obtained if in the tender period it would have anticipated the occurrence of the event at issue. Therefore, one may conclude that the Contractor will bear all consequences deriving from the lack of availability of the personnel, materials, unless this lack is unforeseeable in nature until the date of the Tender. The overwhelming issue causing delay was the discovery of large deposits of contaminated ground during the excavation works. The actual quantities discovered by OHL significantly exceeded the assumptions included in the Environmental Statement. Had the Contractor conducted such analysis and assessment, it could have anticipated the actual conditions of the land and provided a particularized tender in terms of price and time required for the works; The Romanian Perspective. The new FIDIC forms edition ( 1999 ) are composed by the Conditions of Contract for construction that replace the former Red Book and the Conditions of Contract for Plant and Design-Build that replace the former Yellow and Orange Books. The main motive for publishing new editions of the FIDIC books is to adjust them to significant changes that the construction industry has undergone since the last edition. The new FIDIC forms edition ( 1999 ) are composed by the Conditions of Contract for construction that replace the former Red Book and the Conditions of Contract for Plant and Design-Build that replace the former Yellow and Orange Books. The main motive for publishing new editions of the FIDIC books is to adjust them to significant changes that the construction industry has undergone since the last edition. 2 Additionally, FIDIC has to take into account that multinational development banks (Worldbank, EBRD etc.), have included the FIDIC standard forms into their bidding documents.

Discussions between the MDB s and FIDIC will finally lead to a hopefully harmonized version of the Red Book which is expected to be published in 2005. FIDIC standard forms are generally known as being well balanced because both parties bear parts of the risks arising from the project. However, in the eyes of English contractors and lawyers there is nothing too bad in assuming risk (Pickavance, Delay and Disruption in construction Contracts, ). There are challenged by the tasks to identify the risk retained and to recognize the fact that there is a risk (Pickavance, Delay and Disruption in construction Contracts, ). On the contrary for German contractors risk allocation is an entirely technical problem and not a legal issue because they are not really familiar with using several standard forms providing different risk allocation models. 3 They always rely upon the default rule that the apportioning of risks in standard terms is the one provided for by statutory provisions and within the limits of these provisions. These limits are stated in 307 German Civil Code (BGB). This statue provides that standard terms of Contract are invalid if they put that party to the Contract, which has not drafted these terms, in a position which is unreasonably disadvantageous and this is a result of bad faith of the drafter. If there is doubt, an unreasonable disadvantage is assumed if a standard Contract term cannot be reconciled with essential basic principles of the statutory rule from which the Contract term deviates. Or: if it restricts essential rights or duties resulting from the nature of the Contract in such a way that it endangers the purpose of the Contract to an extent that this purpose will not be achieved. Only within these statutory limits the parties of a construction Contract are free to assume risks in standard business terms. 4 307 BGB has lead to many litigated cases that anybody who drafts standard business terms for the construction industry should be aware of.

Thus, in practice Germans contractors almost always accept the risk allocation modal of the so-called Verdingungsordnung f r Bauleistungen ( Contract rules for governmental projects), part B, as General Conditions for construction contracts which have to be used for all projects of the German state and the municipalities and which are viewed at as being fair and just for private parties as well. Just recently the German legislator has enacted a privilege that partially makes Part B of the contracting rules for governmental contracts immune against judicial review. Thus, the main German law books on construction law do not even treat risk allocation as a topic because it does not seem worth to talk about. This does not mean that Germans are not aware of the risks inherent to a construction Contract. But it does not spring to their mind that risk allocation modals distinct from the default rules are imaginable and sometimes even necessary. 5 There is no doubt that German contractors have to change their minds when they start to compete on the international market. They have to understand that German law and German standard forms are not necessarily the only possible approach in respect to risk allocation. They have to take into consideration different risk allocation philosophies by learning the internationally recognized principles of risk apportionment, such as (1) risks should be allocated to the party that is in the position to control them and (2) risks should not be allocated to a party that is unable to bear the consequences of a potential risk becoming reality. On the other hand: Anglo - American contactors should be aware of some more or less substantial particularities of some civil code systems. In German law specific performance is not a discretionary extraordinary remedy but the general rule. Thus, if a defects occurs the employer can demand supplementary performance under 635 Germany Civil Code (BGB hereinafter).

6 If the employer claims supplementary performance, the contractor may, at his option either remove the defect or produce an entirely new product ( 635 BGB). Additionally, the principle of good faith is generally recognized, meaning that the contractor cannot just follow the orders of the employer without regarding possible consequences. Contrary to English Law liability for breach of Contract means that the party in breach is liable for all losses (including consequential losses) which follow from the breach, provided that there is adequate causation between the breach and the loss. The concept of liquidated damages, well known in common law jurisdictions, is unknown in civil law countries. In these countries penalty-clauses are common and valid as well. Finally, under the Civil Codes the contractors retain all risks until not only substantial completion of the project but until formal acceptance (Abnahme). Insofar acceptance should not be confused with the type of acceptance that is required to form a binding Contract. 7 This is a completely different issue. Acceptance (Abnahme) in respect to construction contracts under the civil code determines the point in time at which the employer confirms that the works conform to the Contract. The Contract price becomes due after this point and the burden to prove defects shifts to the employer as does the risk of loss. If the employer has a claim for the correction of a defect, he may, even after he has accepted the works, refuse to pay a reasonable amount of the Contract price, namely: three times the estimated costs to correct the defect. FIDIC forms are generally recognised as a fair and balanced standard form for construction works. The best example for an internationally recognised fair and balanced standard form is the new Red Book which is drafted for the use in traditional projects of civil engineering, such as the construction of infrastructure facilities (roads, bridges, dams etc.).

The new Silver Book on the contrary is tailored to somehow different types of projects. 8 These new types of projects are based on some trends in the international construction industry: during the recent years there is a certain tendency towards larger and more complex projects at considerably higher costs. Along with this tendency the need for private financing for these undertakings has increased. Likewise, there is a trend preferring direct face to face contracting at an arms length between employers and contractors without of an engineer who is traditionally in charge of administrating and adjudicating the Contract. This kinds of projects typically involve private lenders whose interest not only focus on the financing of the project during the actual construction period, but also extent to some type of secured cash flow subsequent to the actual works going on. They take into account that the construction Contract usually forms just one part of a complex commercial venture, including other concession and financing agreements. Consequently, lenders and concessionaires as well as the employer want Contract terms that ensure an increased certainty that the agreed Contract price will be paid and that time for completion will not be exceeded. 9 Thus, the characteristics of such an agreement are that the contractor without an engineer.The FIDIC Silver Book has adopted most of the wishes of employers and lenders for the above mentioned types of projects. Most of the risks are borne by the contractor including for example (but not limited to them) the risks of unforeseen ground Conditions and the responsibility in respect to design which is completely done by the contractor. German contractors and lawyers are not really familiar with this type of Contract terms. For them they seem to be unevenly balanced or even illegal under 307 (BGB).