FIDIC    International Federation of Consulting Engineers
FIDIC News
July 2010
Online at FIDIC.org/news
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FIDIC
  
Activities
 
Managing Innovation programme shows great depth
The FIDIC 2010 New Delhi Conference business programme, speakers, activities and side events testify to Incredible India's remarkable diversity and achievements.
 
Mexico celebrated 25th anniversary
Central and Latin American countries move closer to FIDIC following participation in CNEC-Mexico and pan-American events.
 
Business
  
Development
 
FEPAC Latin America round-table painted a mixed picture
A pan-American round-table held during the CNEC-Mexico 25th anniversary celebrations highlighted cost-based selection as a severe obstacle.
 
Practice
 
Best practice procurement award launched
An international equivalent of the USIC-Switzerland procurement Best Practice Award is planned.
 
Contracts
 
Interactive bidding documents
The multilateral development banks are implementing web-based form filling systems to improve the consistency of bidding documents.
 
Contracts for advanced project delivery
China's drafting of new national contracts and recent multilateral development bank announcements reflect the growing interest in design-build and turnkey projects.
 
Industry
  
Representation
 
Representing FIDIC in Europe
FIDIC has signed a new agreement with the European federation EFCA that envisages EFCA representing FIDIC in Europe to achieve greater synergy and efficiencies.
 
Image
 
Austria celebrates 150 years of civil engineering
The vital role of engineers was celebrated to mark Austria's 150 years of the formal recognition of civil engineers.
 
Principles
  
Quality
 
Policy on lowest price-based awards released
In response to European Union Directives, the European federation EFCA has issued a policy statement urging clients not to use the lowest price option.
 
Ethics
 
Anticorruption legislation becomes increasingly global
With anticorruption legislation becoming more severe worldwide, legislators and development banks are turning to stronger reporting incentives.
 
Sustainability
 
Sustainable building metrics consolidate
The Sustainable Building (SB) Alliance, the World Green Building Council and the UNEP Sustainable Building and Climate Initiative have signed a MoU to develop metrics.
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Announcements
   
FIDIC Conferences  
FIDIC International Training Programme  
Taking stock at a crucial time
 
 
Executive Committee focuses on staff, subscriptions and conferences  
International cooperation and committee activities reviewed  
Canadian association develops networking opportunities  
Members announcements
 
 
FIDIC - Activities
 
Managing Innovation programme shows great depth [full item: 116Ac]
 
PresidentThe FIDIC 2010 New Delhi Conference (www.fidic2010.org), the consulting engineering industry's premier event, takes place in Incredible India on 19-22 September. Plenary sessions, seminars and workshops over three days will examine how the consulting engineering industry is responding to the need for innovation, how organisations are handling the consequences of innovation, and the approaches being developed to ensure that innovation is managed correctly at all levels, from the project level, through to firms and organisations, up to the industry level and by society as a whole. With the consulting engineering industry facing numerous challenges, it is vital that new trends and new tools are fully understood, and experience shared, to be able to move forward with greater confidence. A broad range of international speakers from both the private and public sectors will share their thoughts and experiences. The business programme starts with a plenary session Delivering Innovation in Projects to set the scene with Dr. Srikumar Banerjee, Chairman, Atomic Energy Commission, India, Harrie Noy, CEO, Arcadis, Netherlands, Heikki Pikkarainen, President, Poyry MC, Finland, Mangu Singh, Director, Delhi Metro Rail, describing how consulting engineers and their partners are responding to the need for innovation.
 
Special conference rates for hotel accommodation have been extended up until the conference, which takes place in the recently refurbished Vigyan Bhawan that is strategically located in Lutyens Delhi, one of New Delhi's most beautiful districts near the President's Estate and India Gate close to the main conference hotels. Special feature of the conference include a special area devoted to explaining FIDIC contracts, an extensive Young Professionals programme and a series of carefully selected excursions for accompanying persons. The Government of India is fully engaged, with Smt. Pratibha Devisingh Patil (see photo), President of India, who is renowned for her support of the underprivileged sections of society, opening the conference.
 
Mexico celebrated 25th anniversary [full item: 114Ac]
 
MexicoThe FIDIC Executive Committee participated in the CNEC-Mexico 25th Anniversary conference that focussed on the role of the engineer in infrastructure development. Newly elected CNEC President Mauricio Jessurun Solomou (shown on the right in the photo with Gregs Thomopulos, FIDIC President) spoke warmly of the close collaboration between FIDIC and its members, and highlighted the growing opportunities in Latin America that offered new options for collaboration, a message that was reinforced by Rene Ureta Quintana from Chile, the newly elected FEPAC President. FIDIC has been working hard to encourage Central and Latin American countries to join, or in some cases re-join, FIDIC, thereby strengthening industry representation in this important region. There were positive responses from Argentina, Chile, Columbia, El Salvador, Paraguay, Peru, and Venezuela and Brazil followed up a few days later with an application for readmission as a Member Association. Other proposed new members announced in the 2010 General Assembly Meeting (New Delhi; 22 September) draft agenda circulated to members in late-July 2010 (see News item) were the Joint Consultative Council for the Construction Industry, Trinidad and Tobago, as an Associate Member and the Uzbekistan Association of Consulting Engineers as a Member Association.
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Business - Development
 
FEPAC Latin America round-table painted a mixed picture [full item: 69De]
 
UreteA round-table organised by the pan-American federation FEPAC reviewed the challenges and strengths of Latin America's consulting engineering industry during the CNEC-Mexico 25th Anniversary celebrations in which FIDIC participated (see News item). Rene Urete Quintana (see photo) from Chile, who was elected FEPAC President during the celebrations, reported that Chile's recent earthquake damage had affected 80% of the population but there were only 486 deaths, thanks to building standards. Contrary to what some might expect, the local industry had not benefited since funding had been diverted for the immediate repair of infrastructure. Angelo Vian, FEPAC President, reported that Brazil envisaged massive capital investment (USD 900 billion) in the coming years, with USD 600 billion needed to maintain infrastructure. The consulting engineering industry turnover was increasing by 10% each year in spite of the tendency to select service providers on the basis of price, a situation that was repeated in Mexico according to the CNEC-Mexico President, Dr. John Del Angel Reyes. Mexico had slipped to 19th best placed country for investment but was expected to return to 9th place with GDP growth of 4%. Notable was the public sector's weakened ability to build infrastructure, and a proposed National Infrastructure Programme was stalled. Similarly, legislation in Colombia did not give priority to the quality of infrastructure projects. In El Salvador, a government deficit increasing to USD 3 billion in 2009 had reduced annual investment by 3.5% as well as the demand for consulting engineering services. Here too, legislation that sought the lowest priced bids needed to be changed. In Peru, GDP growth was expected to rebound to 6% having fallen in 2009 by 1% after a long period of stable economic growth. A significant number of consulting engineering firms had left Venezuela owing to government policies that were accompanied by a 12% inflation rate which was expected to increase to 30%. The country's 144 consulting engineering firms that did not depend on oil exports were seriously affected, and two decades would be needed to recover from the industry's brain drain.
 
Business - Practice
 
Best practice procurement award launched [full item: 85Pr]
 
GlarusUsing procurement procedures that recognise and incorporate best practice is essential for ensuring project quality. USIC-Switzerland awarded its first procurement procedures Best Practice Award in June 2010 to a local authority for the procurement of a bypass around the town of Nafels. In its citation, USIC noted that the Canton of Glaris, famous for its Landsgemeindegeschafte direct voting (see photo), had put in place procurement procedures that ensured selection on the basis of quality. Important were the clarity of the procurement documentation and conformance with industry guidelines for engaging consulting engineers. Peter Rauch, SWR, Switzerland, who chaired the award panel has agreed to help FIDIC's Business Practices Committee establish an international equivalent. The challenge will be to ensure that both private and public sector clients take part.
 
Business - Contracts
 
Interactive bidding documents [full item: 86Co]
 
The Interamerican Development Bank supported the development of Interactive Bidding Documents, an Orbeon Forms (www.oberon.com) web-based system to prepare interactive documents. The Asian Development Bank recently agreed to adopt the tool, which is also being evaluated by the African Development Bank. The application prompts a user with appropriate choices, thus avoiding redundancy and minimising mistakes, and ends with the generation of a Word or PDF document. Other advantages are a reduced preparation time, ease of updating standard clauses and automatic referencing. Authorities wishing to adopt the tool should consult www.rdm46.webs.com. FIDIC is evaluating possible applications. Firstly, as a tool to complete contract forms to generate fully formatted output files that match the layout of the General Conditions of contract. Secondly, to allow users to prepare fully formated Particular Conditions "stitched" to General Conditions to give a single document with a uniform look and feel.
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Contracts for advanced project delivery [full item: 87Co]
 
The FIDIC Construction Contract, both the standard 1st Edition and the more recent Multilateral Development Bank (MDB) Harmonised Edition, is widely used in China for projects funded by international financial institutions. China's equivalent is the Contract for works of building construction, now in its second edition (GF-1999-0201), published by the Ministry of Construction and the China State Administration for Industry and Commerce. There are also modified versions to suit local conditions and other central ministries publish amended versions. Public and private sector clients seeking more advanced project delivery systems use the FIDIC Plant and Design Build Contract and the FIDIC EPC/Turnkey Contract. With the country catching-up with international best practice, design-build and turkey contracts are being prepared. While these national contracts would be expected to integrate directly into China's procurement law, their uptake will depend upon their quality and the balance of risk that is adopted. Meanwhile, the MDB's have also recognised the trend towards the greater use of advanced delivery systems. The European Bank for Reconstruction and Development announced in 2009 (see PDF) that harmonised tender documents for design-build were expected in 2010 and the Asian Development Bank (ADB) has standard bidding documents for design-build and turnkey projects (they use the FIDIC Conditions of Contract for Design-Build and Turnkey Contracts, 1st Edition, 1995). FIDIC has also released Particular Conditions to render the FIDIC Plant and Design-Build Contract equivalent to the MDB Harmonised Construction Contract (see News item). Discussions are on-going with the MDB's for a MDB Harmonised design-build contract.
 
Industry - Representation
 
Representing FIDIC in Europe [full item: 69Re]
 
EFCAThe FIDIC President, Gregs Thomopulos, and Managing Director, Enrico Vink, attended the annual meeting of the European federation EFCA, where the FIDIC President and the EFCA President, Dr Panos Panagopoulos (on the left of the photo, with Gregs Thomopulos), signed a new cooperation agreement (PDF) that had been circulated to Member Associations for comment. The agreement aims to streamline activities in Europe, and enable FIDIC and EFCA to be co-branded, with EFCA representing FIDIC in Europe. It also envisages a closer management of cooperation and a greater representation for FIDIC, notably with the European Commission. The Managing Directors meeting on 22 June 2010 agreed that activities will be coordinated via business and forward plans, with priorities updated by September 2010. Key items were: joint alerting of issues to be addressed; EFCA's role will relate mainly to policies and business practice; cross-representation on committees; the joint planning of meeting with European organisations; detailed reporting at the FIDIC and EFCA annual general assemblies.
 
Industry - Image
 
Austria celebrates 150 years of civil engineering [full item: 51Im]
 
Austria celebrated the 150th anniversary of the formal recognition of civil engineers, possibly the earliest ever, with a conference in Vienna on 17-18 June 2010 as part of several months of special events organised by the Federal Chamber of Engineers and Architects (BAIK), the professional body whose Federal Section of the Chartered Engineering Consultants (BSI) together with the Austrian Consulting Association (ACA) represents the country's consulting engineering industry. Under the theme "Civil engineering - keeps its promise", politicians and members of the public alike recognised the role played by engineers in improving the quality of life. Gregs Thomopulos, FIDIC President, participated on a panel discussion "Future Trends and Challenges" which was introduced by Josef Robl, BAIK Vice-President, BSI Chair and ACA President. Dipl.-Ing Robl, speaking at a press conference held during the conference, noted that successful projects relied on selection of the best consultants, a process which was all too often dominated by considerations of cost at a time when the demand for infrastructure required greater innovation. Nevertheless, the industry's future remained bright despite the current depressed market. The FIDIC President and Dr Panos Panagopoulos, President of the European federation EFCA, shared their experience of other countries that were also struggling to overcome depressed budgets. Easing financial restrictions was seen as crucial to meet the growing global demand for infrastructure.
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Principles - Quality
 
Policy on lowest price-based awards released [full item: 5Qu]
 
EUUnder European Union (EU) Directives the award of a public sector service contract must be based on the most economically advantageous tender or the lowest price. Quality based selection procedures where, for example, the scope of services and price are negotiated, cannot be used. Current procedures replaced a two-envelope system where the financial offers of prequalified firms were considered after technical proposals exceeded an 80-point threshold. To exacerbate the situation, new EU Member States have tended to choose lowest price as the only award procedure. The European federation EFCA in a strongly worded policy statement that has been circulated to members for comment has argued that, under current EU Directives, appropriate quality can only be achieved if clients preselect consultants on the basis of qualifications, use the most economically advantageous tender for the award of services, and give precise descriptions of the criteria used to assess economic advantage. The statement aims to convince "educated" clients that the cheapest consultant will provide neither the highest overall value nor the best possible outcome in terms of the total cost of ownership. FIDIC's Quality Based Selection guide that is presently being updated (see News item) will help reinforce this vital message.
 
Principles - Ethics
 
Anticorruption legislation becomes increasingly global [full item: 52Et]
 
ObamaWith sanctions under the US Foreign Corrupt Practices Act (FCPA) swelling to USD 1200 million in the first few months of 2010 compared to USD 627 million in 2009, more government enforcement is envisaged in the US Financial Reform Act adopted on 15 July 2010 (President Obama is seen in the photo signing the Act into law) that would allow employee whistleblowers to receive up to 30% of fines. Similar stronger incentives for firms to self-report breaches have been announced for late-2010 for the World Bank's anticorruption Voluntary Disclosure Programme. This comes at a time when anticorruption legislation is becoming global and development bank debarment is on the increase (see News item). For instance, the new UK Bribery Act that comes into effect in October 2010 to replace fragmented legislation harmonises with, and goes beyond, the FCPA. If trends continue, firms operating internationally will have to account for every applicable anti-corruption provision to ensure that they are conducting business in accordance with all relevant laws, not just those in their home country. The new UK act also now requires firms to have in place "adequate processes" such as the FIDIC Integrity Management System (FIMS) to prevent offences arising from a failure to prevent bribery.
 
Principles - Sustainability
 
Sustainable building metrics consolidate [full item: 10Su]
 
WGBCThe SB Alliance that groups several green building rating systems has signed a memorandum of understanding with the World Green Building Council (WGBC) and the UNEP Sustainable Building and Climate Initiative (SBCI) to develop common protocols to define methods to report the energy and greenhouse gas emissions from building operations related to the built environment. The first in a series of common metrics for buildings will be a Common Carbon Metric Framework. The US GBC is closely associated with the LEED rating system that has recently been adopted by GBC Italy, the first organisation in the European Union to do so. The cooperation brings together the main rating systems with the UNEP initiative, of which FIDIC is a member, that has been developing carbon and energy metrics.
 
Announcements - Events
 
FIDIC Conferences [full item: 63Ev]
 
4th Biennial IBA Conference Construction Projects, Brussels, 17-18 Sep 10
FIDIC ASPAC Asia-Pacific 2010 Regional Conference, with FIDIC 2010 New Delhi
FIDIC 2010 New Delhi, 19-22 Sep 10
ICC Arbitral Awards Conference, Dubai, 19-20 Oct 10
FIDIC Contracts Users Conference, London, 1-2 Dec 10
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28-30 Sep10
 
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1-2 Dec10
 
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FIDIC International Training Programme [full item: 62Ev]
 
FIDIC-Cornerstone Contracts Workshop (Contracts), Johannesburg, 15-16 Sep 10
FIDIC-Cornerstone Contracts Workshop (Claims and Disputes), Brussels, 30 Sep-1 Oct 10
FIDIC-Tecniberia-Lambal Contracts Intensive Course (Contracts), Madrid, 5-6 Oct 10, in Spanish
FIDIC-ECV Contracts Course (Contracts), Brussels, 11-12 Oct 10
FIDIC-ECV Contracts Course (Contracts), Abu Dhabi 17-18 Oct 10
FIDIC-Cornerstone Contracts Workshop (Contracts), Kazakhstan, 18-19 Oct 10
ICC Arbitral Awards Conference, Dubai, 19-20 Oct 10
FIDIC-ECV Contracts Course (Claims and Disputes), Abu Dhabi, 22-23 Nov 10
FIDIC Contracts Users Conference, London, 1-2 Dec 10
 
Taking stock at a crucial time [full item: 70Ev]
 
The FIDIC 2010 Asia-Pacific Contracts Users Conference in Beijing (23-25 June 2010) allowed FIDIC contracts drafting task groups and experts with considerable "hands-on" experience to update users on the latest developments, notably a new version (June 2010) of the Multilateral Development Bank (MDB) Harmonised Construction Contract (see FIDIC.org/mdb). The event was appropriately timed since China is planning to introduce design-build and turnkey contracts (see News item). Donald Charrett, MTEC Australia, chaired the session on the MDB Edition, briefly describing the changes incorporated in the latest version. Speakers from the Asian Development Bank discussed the Bank's mandatory use of the MDB Edition for all internationally competitively bid projects it funds. They were followed by a senior consulting engineer from Japan who described the use of the MDB Edition for all development projects funded by the Japan International Cooperation Agency (JICA). Of particular interest was a brief introduction to JICA's "Checklist for One Sided Contracts" for use with its sample bidding documents (see JICA). JICA, like FIDIC, believes that risk allocation in construction contracts should be balanced, and not one-sided. Other highlights of the conference were reports on progress in updating the 1999 FIDIC suite of major works contracts and a final roundup of comments on the Test Edition of the FIDIC Construction Subcontract, where the aim was to provide an opportunity for users to share their experience and to express their views on desirable changes. The next Users Conference is in London on 1-2 December 2010 (see website).
 
Announcements - Notices
 
Executive Committee focuses on staff, subscriptions and conferences [full item: 17No]
 
The FIDIC Executive Committee meeting in Mexico City on 23-24 May 2010 in association with the 25th Anniversary of CNEC-Mexico (see News item) focussed on planning for the Secretariat staff with the General Manager's retirement in early 2011, new members, the outcome of the deliberations of the Subscriptions Task Force, the programmes and arrangements for FIDIC conferences, and financial reporting. The 2009 auditors' report, to be presented at the 2010 General Assembly Meeting (GAM) in New Delhi on 22 September 2010, indicating a substantial surplus was accepted and a balanced budget for 2011 agreed. Two staff positions (a commercial director and a practice manager) would be advertised immediately and Member Associations (MA) have been informed via a draft GAM agenda (see News item) of the application for readmission of ABCE-Brazil and an application for Associate Membership from Trinidad and Tobago. Three new Affiliate Members were approved (ECV, Keating Chambers and PS Consulting). The agenda also proposes a minimum annual subscription fee for MA's (Swiss francs 2000 or the Associate Fee for an association in a country, whichever is larger, with no deductions). With an exciting programme established for 2010 New Delhi (see www.fidic2010.org), planning was well underway for the Tunis 2011 conference and a conference theme for 2012 Seoul was agreed. The committee structure for the FIDIC 2013 Centenary Conference in Barcelona had been finalised and ways to promote the event through partner organisations were agreed. The activities and roles of FIDIC's regional groupings for Arabic speaking countries, Africa and the Asia-Pacific remained key issues, with initiatives to reinforce and consolidate Secretariats being the priority. A new cooperation agreement with the European federation EFCA was also confirmed (see News item). Meetings during the CNEC-Mexico celebrations with the pan-American federation FEPAC were expected to lead to a reinforced role for FIDIC in central and Latin America (see News item).
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15-16 Sep10
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28-30 Sep10
 
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1-2 Dec10
 
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International cooperation and committee activities reviewed [full item: 18No]
 
HarmonisedRelations with international organisations and the Multilateral Development Banks (MDB) received the usual close attention at the FIDIC Executive Committee meeting in Mexico City in May 2010, with UNCITRAL (see News item), participation in World Federation of Engineering Organization awards and events and future meetings with the development banks taking priority. Bank representatives have been invited to participate in the FIDIC 2010 New Delhi Conference.
 
Committee reports indicated a continued high level of activity with Contracts, Business Practice, Integrity Management, Risk and Liability, and Sustainable Development task groups currently drafting or updating several documents including the 1999 Works contracts suite, Construction Subcontract, Design-Build-Operate Contract Guide, Procurement Procedure Guide, Joint Venture and Sub-Consultant Agreements, Definition of Services Guide, Design for Safety Guide, Quality Based Selection brochure, FIDIC Integrity Management System Guidelines, a limitation of liability policy, Project Sustainability Management Guidelines, and a climate change industry strategy.
 
It was agreed that the growing need to regulate licences to amend FIDIC General Conditions of Contract and to accredit trainers and training suppliers called for the greater involvement by committees in the form of special panels. Special items coming before the Executive Committee were the release of a new version (June 2010) of the FIDIC MDB Harmonised Construction Contract (see News item), agreement in principle to establish a client "best practice award" (see News item) and a capacity development sponsorship agreement with Keating Chambers (see News item).
 
Canadian association develops networking opportunities [full item: 19No]
 
ACEC-Canada has shown how the FIDIC conference offers an ideal opportunity for Member Associations (MA's) to support member firms' export endeavours. Specifically, given the Indian government's significant infrastructure investments, the New Delhi 2010 conference provided unique possibilities for Canadian firms interested in doing business in India. ACEC-Canada is working with Export Development Canada and Canada's Department of Foreign Affairs and International Trade to arrange exclusive information and networking sessions for ACEC-Canada member firms attending the conference. Events include an information seminar Doing Business in India (16.00 -18.00; 20 September 2010) and an informal networking reception and dinner in cooperation with the Canadian High Commission in India on Tuesday evening, 21 September 2010. FIDIC and the host association CEAI-India is able to help other MA's identify appropriate times and venues for similar networking opportunities.
 
Members announcements [full item: 5No]
 
Updates Task Group; Paris, 18 Aug 2010
Contracts Committee Meeting; Budapest, 24 Aug 2010
Executive Committee Meeting; New Delhi, 16-17 Sep 2010
Directors and Secretaries Meeting; New Delhi, 18 Sep 2010
Presidents Meeting; New Delhi, 19 Sep 2010
FIDIC GAM, New Delhi; 22 Sep 2010
Committee Meetings; New Delhi, 22 Sep 2010

MA Letter 03/10: Draft GAM Agenda PDF
FIDIC 2010 New Delhi Registration Brochure
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15-16 Sep10
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