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Fdration Internationale des Ingnieurs-Conseils International Federation of Consulting Engineers Internationale Vereinigung Beratender Ingenieure Federacin Internacional de Ingenieros

Consultores

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Model Representative Agreement E


AGREEMENT PARTICULAR CONDITIONS GENERAL CONDITIONS NOTES FOR GUIDANCE

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AGREEMENT

PARTICULAR CONDITIONS

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Model REPRESENTATIVE AGREEMENT

GENERAL CONDITIONS

Test Edition 2004

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FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE FEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES

COPYRIGHT
Copyright 2004 FIDIC, World Trade Center II, 29 route de Prs-Bois, Geneva Airport, CH-1215 Geneva, Switzerland. All rights reserved. FIDIC is the only Copyright owner of FIDIC publications, which are protected by the Berne Convention for the Protection of Literary and Artistic Works, international conventions such as TRIPS and the WIPO copyright treaty and national intellectual property laws. No part of a FIDIC publication can be reproduced, translated, adapted, stored in a retrieval system or communicated, in any form or by any means, mechanical, electronic, magnetic, photocopying, recording or otherwise, without prior permission in writing from FIDIC. The version in English is considered by FIDIC as the official and authentic text for the purposes of translation. TERMS AND CONDITIONS The widespread dissemination, acceptance and use of FIDIC publications and their translations are important means for accomplishing FIDICs mission and are therefore actively promoted by FIDIC. The sale of FIDIC publications and their translations is an important source of revenue for FIDIC and its Member Associations. It creates resources for providing a wide range of services meeting the business needs of member firms. All steps, starting with the initial drafting of publications, often require considerable effort and expense. FIDIC regularly updates and reissues publications so that users can profit from the state-of-the-art. By supplying publications, FIDIC does not grant any intellectual property rights. The purchase or supply of a FIDIC publication, including forms for completion by a purchaser or authorised user, does not confer authors rights under any circumstances. Users rely on the contents of FIDIC publications, especially FIDIC contracts and agreements, for important business transactions. The use of authentic publications is therefore essential for safeguarding their interests. FIDIC discourages modification of its publications, and only in exceptional circumstances will it authorise modification, reproduction or incorporation elsewhere. Permission to quote from, incorporate, reproduce or copy all or part of a FIDIC publication should be addressed to the FIDIC Secretariat, which will decide upon appropriate terms. A license to prepare a modified or adapted publication will be agreed to under certain conditions. Specifically the modified or adapted publication must be for internal purposes, and not be published or distributed commercially. In the case of FIDIC contracts and agreements, FIDIC aims to provide balanced and equitable conditions of contract by ensuring the integrity of its publications. A purchaser or authorised user of a FIDIC contract or agreement is thus granted the right to: - make a single copy of the purchased document, for personal and private use; - incorporate in other documents (or electronic files) either the original printed document (or electronic file) or pages printed from an electronic file supplied by FIDIC for this purpose; - draw up and distribute internally and/or among partners clearly identified Particular Conditions or their equivalent using text provided in the FIDIC publication specifically for this purpose; - reproduce, complete and distribute internally and/or among partners any forms, in both printed and electronic formats, provided for completion by the purchaser or user.

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DISCLAIMER While FIDIC aims to ensure that its publications represent the best in business practice, the Federation accepts or assumes no liability or responsibilty for any events or the consequences thereof that derive from the use of its publications. FIDIC publications are provided as is, without DOC warranty of any kind, either express or implied, including, without limitation, warranties of TED U LA merchantability, fitness for a particular purpose and non-infringement. FIDIC publications are not exhaustive and are only intended to provide general guidance. They should not be relied upon in a specific situation or issue. Expert legal advice should be obtained whenever appropriate, and particularly before entering into or terminating a contract.
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ACKNOWLEDGEMENTS
The Fdration Internationale des Ingnieurs-Conseils (FIDIC) extends special thanks to the following members of its Representative Agreeement Task Force: Eigil Steen Pedersen (Chair), COWI A/S, Denmark; Dr Jorge Daz Padilla, Systec, Mexico; Mahendra Raj, Mahendra Raj Consultants, India; John Ritchie, Acres International, Canada; Simon Warmerdam, Arcadis, The Netherlands; with Secretariat coordination provided by Dr Peter Boswell. The preparation of the FIDIC Model Representative Agreement was carried out by the task force under the general direction of the Executive Committee.
Drafts were commented on by the following persons: Professor Mark Pieth, Basel Institute of Governance, University of Basel, Switzerland; Jermyn Brooks, Transparency International, Berlin, Germany. Acknowledgement of reviewers does not mean that such persons or organizations approve the wording of all clauses. FIDIC wishes to record its appreciation of the time and effort devoted by all the above. The ultimate decision on the form and content of the publication Model Representative Agreement rests with FIDIC.

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FOREWORD
The terms of the FIDIC Model Representative Agreement have been prepared by the Fdration Intenationale des Ingnieurs-Conseils (FIDIC) and are intended for Consultants wishing to enter into a contract with a Representative for the provision of services in a foreign country. Following the Agreement, the clauses of general application have been grouped together in this publication and are referred to as General Conditions. They are intended for incorporation as printed in the documents comprising the Agreement. The General Conditions are linked with data given in the Particular Conditions, identified by the corresponding numbering of the sub-clauses, and Appendices, so that General Conditions and Particular Conditions (with Appendices) together comprise the conditions governing the rights and obligations of the Parties. Given as Appendices to the Particular Conditions are Scope of Services, Basis for Remuneration, Consultants Code of Conduct and Consultants Business Integrity Policy Statement. To assist in the preparation of an Agreement, Notes for Guidance are included. These Notes will not become one of the documents forming an Agreement. Each of the titles of the clauses of the General Conditions is followed by the phrase PC: [ ] consult [ ] amended, where users are able to indicate if a) the Particular Conditions (PC) should be consulted for data relating to the clause; or b) one or more sub-clauses have been amended by an entry in the Particular Conditions. It may be helpful for users to refer to the other FIDIC publications, details of which can be found in the Bookshop of FIDICs website at www.fidic.org.

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Specific mention is made of FIDICs Client/Consultant Model Services Agreement, 3rd Ed 1998, Joint Venture Agreement, 1st Ed 1992, and Sub-Consultancy Agreement, 1st Ed 1992, which together with this Model Representative Agreement form FIDICs collection of agreements for consulting services.

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CONTENTS
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Particular Conditions . . . . . . . . . . . . . . . . . . . . . . . . . a
A References from Clauses in the General Conditions References from Appendices 3 and 4 Appendices 1 2 3 4 Scope of Services Basis of Remuneration Consultants Code of Conduct Consultants Business Integrity Policy Statement

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General Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1 2 3 4 5 6 7 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SCOPE OF REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 LIMITS OF REPRESENTATION

WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 REMUNERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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CONSULTANTS RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 CURRENCY, EXCHANGE AND TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 4 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

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NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 REGISTRATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARBITRATION AND GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 6 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 CORRUPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 INDEX OF SUB-CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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Notes for Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . I


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Agreement
This Agreement dated this . . . . . . . . . . . . . . . . . . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . between . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [Name and address of Consultant] hereinafter known as the Consultant"

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and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [Name and address of company or Representative] a corporation incorporated under the laws of . . . . . . . . . . [Country] If the Representative (hereinafter referred to as the Representative) is an individual, or acting as a sole proprietor state accordingly . . . . . . . . . . . . . . . . . . . . . . [Individual/Sole proprietor]

hereinafter collectively referred to as Parties and individually as Party.

WHEREAS, the Consultant provides engineering, procurement, project and construction management and associated services; and WHEREAS, the Consultant wishes to establish a relationship with the Representative for the purpose of . . . WHEREAS, the Representative is in the position to facilitate WHEREAS, the Parties wish to record the terms and conditions of their relationship; NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutual covenants and agreements hereinafter set forth, the Parties covenant and agree as follows: The Representative shall be the Consultants Representative for the Projects for a term in years of . . . . commencing this . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The term shall be renewable upon mutual agreement of the Parties. The term shall expire if this Agreement is terminated in accordance with Sub-Clause 9.1 of the General Conditions. IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized officers and their corporate seals to be hereunto affixed. SIGNED BY THE CONSULTANT Signature Name Title Date Seal SIGNED BY THE REPRESENTATIVE Signature Name Title Date Seal

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Agreement

Particular Conditions
A References from Clauses in the General Conditions Name of Consultant . . . . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Home base country . . . . . . . . . . . . . . . . . . . . . . . Email . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telephone number . . . . . . . . . . . . . . . . . . . . . . . . Fax number . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Attention: Name . . . . . . . . . . . . . . . . . . . . . . . . . Position . . . . . . . . . . . . . . . . . . . . . . . .

Name of Representative . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Email . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telephone number . . . . . . . . . . . . . . . . . . . . . . . .

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Fax number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attention: Name . . . . . . . . . . . . . . . . . . . . . . . . . Position . . . . . . . . . . . . . . . . . . . . . . . . References from Appendix 3 (Consultants Code of Conduct) and Appendix 4 (Consultants Business Integrity Policy Statement) I confirm that I have read the Consultants Code of Conduct and Business Integrity Policy Statement and will comply with them. Signed Date Title ................................ ................................. .................................

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Particular Conditions

APPENDICES
These Appendices form part of the Agreement.

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Scope of Services
Normal Services

The Representative services shall be those normally performed by a reputable independent Representative including but not necessarily limited to those specified hereunder. Country where Services performed . . . . . . . .

The Representative shall provide the following services in connection with seeking project opportunities on behalf of the Consultant: A1 Act as an information source in identifying and advising the Consultant on behalf of the business in the Country where Services performed, based on the Representatives experience and information supplied by the Consultant, the Representative believes the services of the Consultant could be used for the purpose of securing and implementing satisfactory projects between the Consultant and client organizations. Inform the Consultant in a timely manner of potential opportunities for providing consulting, project management, and construction management services in the Country where Services performed. Establish and maintain, on behalf of the Consultant, contact with the appropriate government and industry authorities to ensure early and adequate notice of available opportunities and to keep the Consultant promptly informed of the Representatives activities and contacts made on its behalf.

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Collect and forward to the Consultant information on sources, costs, methods and other relevant matters concerning proposals and cost estimates requiring a country component, including advice on the relevant laws and business conditions in the Country where Services performed.

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Identify and recommend a local firm and obtain qualifications and other material to submit to the Consultant when participation is required to undertake a proposal for a firm from the Country where Services performed. Undertake routine administrative functions including, but not limited to, obtaining tender documents, approvals, licenses, permits and visas, etc., which the Consultant may request the Representative to obtain to enable the Consultant to pursue appropriate opportunities. Provide liaison activities in bringing to a successful conclusion those negotiations in which the Consultant agrees to participate. The Representatives support shall include, for example, identification of key personnel in client organisations, advice on proposal presentation and assistance during negotiations as requested by the Consultant.
Model Representative Agreement

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Keep the Consultant informed of general conditions and developments in the Country where Services performed which might affect the Consultants interest in undertaking projects. The Representative shall also register the Consultant with such appropriate authorities in the Country where Services performed as may from time to time be required in accordance with the Consultants instructions. Submit monthly activity reports to the Consultant. Such reports will contain overall market movement, general activities of potential clients, the potential roles of the Consultant, the probability of projects going ahead, and the probability of the Consultant winning such projects, key decision makers, project status, the Clients accessibility, etc. Project Specific Services

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The Representative also agrees to provide the following services to the Consultant in connection with the Projects following contract signature: B1 Undertake routine administrative functions including, but not limited to assistance in obtaining documents, approvals, licenses, permits and visas, etc., which the Consultant may require to enable to execute its responsibilities under the Projects. Provide other periodic support to the personnel of the Consultant in the Country where Services performed as requested, including but not limited to, obtaining reservations in hotels, local transport arrangements and logistics support related to staff travel within the Country where Services performed and on arrival and departure from the Country where Services performed. Provide assistance with local procurement and related activities as well as with customs clearance of project equipment and personal effects of employees. Provide liaison with Clients related to the Projects and report to the Consultant in respect of such liaison, to ensure that the Consultant is kept aware of the Clients concerns regarding the Consultants work on the Projects. Assist as requested with all matters related to submission and payment of the Consultants invoices and reconciliation statements to the Clients. Inform the Consultant in a timely manner of potential opportunities for providing further services in the Country where Services performed related to the Projects. Provide any necessary liaison with the embassy of the Country where Services performed in the country of the Consultant or with respect to the Projects near the Country where Services performed. Keep the Consultant informed of general conditions and developments, including political and security developments in the Country where Services performed. Additional Services [To be listed]

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Particular Conditions

Remuneration

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Basis of Remuneration [The basis for remuneration will need to be specified in an Appendix to the Particular Conditions of the Agreement. They will have to suit the particular circumstances and actual services performed]. The Representative shall be entitled to payment for services rendered in accordance with Services provided per Appendix 1 in the Particular Conditions, based on a percentage of the fees earned and received by the Consultant provided that: the Contract is signed after this Agreement is signed and before this Agreement is terminated subject to Sub-Clause 6.4 of the General Conditions; and the Representative provides services to the Consultant in accordance with the services specified in Appendix 1.

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Fees for engineering type projects are deemed to be net fees received by the Consultant from the Contracts, less that component related to direct expenses. A2 The percentage of fees received by the Consultant per Section A1 above which shall be payable to the Representative shall generally be in accordance with the following payment scale: Consultants fees for engineering projects A3

Up to USD 1 million . . . . . . . . . . . . . . . Over USD 1 million up to USD 5 million . Over USD 5 million up to USD 10 million Over USD 10 million . . . . . . . . . . . . . . .

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In addition, the Representative may be reimbursed for specific major out of pocket expenses provided that they are approved in advance by the Consultant and supported by receipts and other relevant documentation. In recognition of the need for the Representative to incur expenses in advance of the award of any contract for a Project, the Representative shall be entitled to a monthly payment of ................................................... The total amount of such monthly payments shall be deducted from the Representatives invoices over ................................................. months during which the Representative becomes entitled to remuneration under Sections A1 and A2 above, or as otherwise agreed between the Parties.

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The Representative shall submit signed invoices to the Consultant for all amounts owing under the Agreement and on the statement prepared by the Consultant in accordance with Sub-Clause 6.3 of the General Conditions. Such invoices shall clearly state the banking particulars applicable to where the payment is to be made, and shall identify and document ownership of the account.
Model Representative Agreement

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Payment due under the Agreement shall only be made to the Representatives bank account in the country of residence, unless specific agreements to pay outside the country are obtained from relevant authorities. All banking fees in the Consultant's home country or elsewhere associated with such transfers shall be at the expense of the Representative. Scope of Services The Scope of Services is specified in Appendix 1 to the Particular Conditions of the Agreement. Services can be separated into Normal Services, Project Specific Services and Additional Services.

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Particular Conditions

Consultants Code of Conduct


[May be replaced by the Consultants own Code of Conduct]

Social responsibility The firm accepts continuing responsibility for its consulting services before its clients and society.

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The firm shall permanently contribute to the benefit of its clients and society, through sustained personnel training and technology development aimed at improving productivity. The firm will include sustainability as a permanent goal in every project. B Quality of service

The firm shall only undertake project assignments in its areas of expertise, where it has the capabilities to deliver efficient and effective service to its clients. The firm is committed to providing high quality services to clients. The firm will focus on Quality Management as a working methodology, and on permanent improvement as a means to improve the quality of service. The firm is committed to the continuing improvement of its knowledge base, abilities and tools in its area of expertise. The firm will focus on technology management as a working methodology, and shall extend to its clients the benefits of its professional achievements. C Objectivity of the firm

The firm will act with loyalty to its clients, and will maintain the confidentiality of any information from the client that is obtained in the process of performing services. The firm will also keep confidential the documents and reports prepared for the client.

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The firm shall avoid any conflict of interest, and will inform a client beforehand of any potential conflict of interest that could emerge during the execution of consulting services. The firm will only offer its services under contracting terms that do not interfere with its independence, integrity and objectivity. The firm will not accept any remuneration that could encourage the firm to offer a biased opinion.

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Corporate integrity The firm will only solicit consulting work and participate in private or public competitive bidding under the highest standards of corporate ethics and competitive practices, and with total integrity in its transactions. The firm will act at all times for the benefit of clients, and will carry out services with professional integrity, while not jeopardizing the interests of society. The promotional activity of the firm and its services will uphold the dignity and reputation of the industry. Brochures and other formal documents describing

Model Representative Agreement

resources, experience, work and reputation, will affect the firms actual circumstances in a truthful manner. The firm shall manage with integrity its internal and external clients. The firm will focus on Business Integrity Management as a working methodology, consistent with the dignity of the knowledge-based consulting industry. E Competition The firm favours Quality Based Selection for the contracting of its services. If solicited to review the work performed by another consultant, the firm will act in accordance with its business integrity and objectivity policies. The firm will not endorse compensation or contribution arrangements destined to influence or secure consulting work, nor seek commissions from suppliers of equipment and services recommended to the client as part of the firms consulting services. The firm shall not take part in activities that could damage the reputation or the business of others.

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Particular Conditions

Consultants Business Integrity Policy Statement


[May be replaced by the Consultants own Business Integrity Policy Statement]

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The company is committed to business integrity through the implementation of an assessed integrity management system, based on industry standards involving all levels of management and every staff member, so as to: A Actively develop and maintain processes to protect high ethical standards and codes of conduct. Actively fight corruption by associating with organizations which share similar high standards. Prohibit bribery, extortion, fraud, collusion or any other undue business activity in the companys services or in any other activity. Support and promote quality-based selection, competitive tendering procedures and legislation that penalise corrupt practices in general, and reduce the opportunities for corruption in the procurement of services in particular. Ensure that clients are recommended the most appropriate and objective procurement process or delivery system for a specific project, consistent with the demands of the project.

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Model Representative Agreement

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Model REPRESENTATIVE AGREEMENT

Test Edition 2004

General Conditions

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FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS INTERNATIONALE VEREINIGUNG BERATENDER INGENIEURE FEDERACION INTERNACIONAL DE INGENIEROS CONSULTORES

General Conditions
Definitions
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PC: [ ] consult [ ] amended The following words and expressions shall have the meanings assigned to them except where the context requires otherwise: 1.1 Services means the services to be performed by the Representative in accordance with the Agreement and as specified in Appendix 1 to the Particular Conditions. Consultant means the Party named in the Agreement, who is employed as an independent professional firm by a Client to perform the Services, and legal successors to the Consultant and permitted assignees. Representative means the Party named in the Agreement, who is engaged as an individual or a company by the Consultant to perform the Services. Party means either the Consultant or the Representative.

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Project means any project that the Consultant wishes to pursue, and has been identified as such to the Representative. Agreement means the Conditions comprising the Formal Agreement and Conditions of the Representative Agreement comprising the General Conditions and Particular Conditions with the Appendices Scope of Services (Appendix 1), Basis for Remuneration (Appendix 2), Consultants Code of Conduct (Appendix 3) and Consultants Business Integrity Policy Statement (Appendix 4) or otherwise as specified in the Particular Conditions. day means the period between any one midnight and the next. month means a period of one month according to the Gregorian calendar commencing with any day of the month.

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Interpretation
PC: [ ] consult [ ] amended The singular includes the plural, the masculine includes the feminine, and vice-versa where the context requires. If there is conflict between provisions of the Agreement, the last to be written chronologically shall prevail, D D OC otherwise specified in the Particular Conditions. unless TE
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Scope of Representation
PC: [ ] consult [ ] amended 3.1 The Representative shall perform all reasonable services as the Consultant may request from time to time as described in Appendix 1 of the Particular Conditions. The Representative shall obtain the Consultants written approval before hiring any subcontractor, employee, etc. for the specific purpose of performing services for the Consultant.

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3.2

Limits of Representation
PC: [ ] consult [ ] amended 4.1

The Representative shall not, directly or indirectly, solicit or participate, for its own benefit and/or in its own name, the sale of any services, materials, equipment, apparatus or other related items with respect to any of the Projects. The Representative shall neither represent nor perform any services enumerated herein for any person, firm or corporation that is, directly or indirectly, in any way in competition for the Projects. The limitations stated in Sub-Clauses 4.1 and 4.2 may in specific cases be omitted, provided that the Consultant has approved this in writing. The Representative shall not, under any circumstances whatsoever unless duly authorised in writing by an officer of the Consultant: be considered to be the Consultants agent; have any right or authority to create any obligation of any kind on the Consultants behalf; attempt to enter into contracts, agreements or commitments in the name of or on behalf of the Consultant; or bind the Consultant in any respect whatsoever Without limiting the generality of Sub-Clause 4.4, in no event shall the Representative alter in any manner whatsoever any offers, proposals, bids or tenders submitted by the Consultant to the Customers without the Consultants prior written approval, and then only to the extent authorised.

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Warrants
PC: [ ] consult [ ] amended The Representative warrants that: no officer, director or major shareholder is a government employee or a direct relative of a senior government employee and has no official status or that if any such relationship exists, it has been clearly established by way of a written communication acknowledged by the D Consultant, prior to the signature of this Agreement; TED O C U LA it will comply with local laws and regulations; b) c) it shall maintain accurate books and records related to all transactions under this Agreement; d) it shall accept and participate in briefings and training by the Consultant related to anticorruption initiatives.
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Model Representative Agreement

5.2

The Representative warrants that it has not and shall not enter into any contract or arrangement, either directly or indirectly, with any person, firm or corporation that would create a potential conflict of interest, without the Consultants prior written approval. Furthermore, the Representative shall obtain the prior written approval of the Consultant before engaging the specific and significant services of any person, firm or corporation to carry out the services contemplated herein. Such approvals shall not be unreasonably withheld.

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

Remuneration
PC: [ ] consult [ ] amended 6.1 Subject to the payment of amounts expressly specified in the Particular Conditions to this Agreement, the Representative shall bear its own costs and expenses related to the performance of services under this Agreement. Provided the Representative shall have duly performed its obligations hereunder, the representative shall be entitled to remuneration for services provided as specified in the Particular Conditions. Remuneration shall become payable to the Representative only upon the Consultants receipt of payments from the respective clients. Payments to the Representative shall be made within 15 days of receiving payments from the client or from the date of receipt of the signed invoices as specified in the Particular Conditions, whichever is later. If the Consultant enters into a contract within thirty (30) days after the expiry of the term of this Agreement, and if the signing of the Contract would have, during the term of this Agreement, resulted in the Representative earning remuneration, then such Contract shall be deemed to have been signed during the term of this Agreement such that the Representative shall be entitled to remuneration on such Contract; provided that this Sub-Clause 6.4 shall not apply if the expiry of the term of this Agreement occurred pursuant to Sub-Clause 9.1 or if the expiry was a result of Representatives default pursuant to Sub-Clause 9.2.

6.2

6.3

6.4

Consultants Rights

7.1

7.2

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PC: [ ] consult [ ] amended The Consultant reserves the right to reject any order or terminate any negotiations at any time prior to signing of the contracts for any reason whatsoever without incurring any responsibility or liability to the Representative. The Consultant reserves the right to audit or inspect the books and records of the Representative through engagement of an accredited accounting firm in relation to the payments made under this Agreement, if activities or events give rise to the suspicion of corrupt or illicit activities in connection with the services performed under this Agreement. If an audit or inspection is requested, the extent of such activity shall be restricted to confirmation D that payments made under this Agreement do not appear to be used for corrupt or illicit purposes. TED O C U LA No further details shall be provided by the accounting firm. If irregularities are observed they shall be communicated to the Representative by the accounting firm and the Consultant shall only be advised that irregularities have been observed and that the
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General Conditions

Representative has been notified of the details. The Representative must disclose to the Consultants satisfaction that the irregularity has been clarified with the accounting firm. If the Representative does not or is not able to satisfy the Consultants concerns, the Agreement shall be terminated in accordance with Sub-Clause 9.2.

Currency, Exchange and Taxes


Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC
PC: [ ] consult [ ] amended Unless otherwise agreed upon in writing by the Parties, all payments by the Consultant to the Representative under the Agreement shall be in the same currency as the payment terms of the applicable contracts. The Consultant shall not be liable for any taxes, duties, levies or other similar amounts whatsoever levied by any authority whatsoever on payments by the Consultant to the Representative pursuant to this Agreement. All such payments shall be deemed to include all such taxes, duties and levies.

8.1

8.2

Termination
PC: [ ] consult [ ] amended

9.1

If the Consultant or the Representative gives notice to the other Party indicating the other partys default or failure to perform its obligations, and if such default or failure is not remedied within ten (10) days of the said notice, this Agreement shall terminate forthwith and automatically without further notice. Notwithstanding the provisions in Sub-Clause 9.1, this Agreement shall terminate forthwith and automatically without any notice whatever by the mere occurrence of any one or more of the following events, unless the Consultant shall waive termination upon notification by the Representative of such occurrences: a) the Representative files a petition in bankruptcy or is adjudicated and declared bankrupt or insolvent; a receiver, trustee or custodian is appointed for the Representatives assets for the winding up or liquidation of any of the Representatives business operations; the Representative seeks to make a compromise, arrangement or assignment with or for the benefit of its creditors or is discharged from its liabilities; the Representative seeks to assign or purports to have assigned this Agreement; any legal arrangement is made to change the structure of the Representatives business; the controlling interest in the Representative is altered or a change is made in its management; or the legal capacity or status of the Representative is altered; the Representative fails to secure or renew any license or permit required by law for the Representatives business operations or if that license or permit is revoked or suspended; the Representative or any of its employees or agents carrying out its duties hereunder becomes for whatever reason persona non grata in the applicable territory: the Representative or any of its employees or agents carrying out its duties hereunder D becomes unable to carry out the responsibilities under this Agreement or becomes unable TED O C U LA to carry on business in the applicable territory for any reason whatsoever, for a period exceeding ten (10) days; the Representative is in default of its obligations under Clause 4, Clause 14 or Sub-Clauses 15.1 or 15.2 or Appendix 3 of the Particular Conditions of this Agreement.
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9.3

Notwithstanding the provisions in Sub-Clause 9.1, this Agreement shall terminate forthwith and automatically without any notice whatever by the mere occurrence of any one or more of the following events, unless the Representative shall waive termination upon notification by the Consultant of such occurrences: a) The Consultant files a petition in bankruptcy or is adjudicated and declared bankrupt or insolvent; a receiver, trustee or custodian is appointed for the Consultants assets for the winding up or liquidation of any of the Consultants business operations; the Consultant seeks to make a compromise, arrangement or assignment with or for the benefit of its creditors or is discharged from its liabilities; the Consultant seeks to assign or purports to have assigned this Agreement; the Consultant fails to secure or renew any license or permit required by law for the Consultants business operations or if that license or permit is revoked or suspended.

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

b) c)

Notices

10

PC: [ ] consult [ ] amended

10.1

Any and all notices, invoices, statements and other information to be given or forwarded by the Representative to the Consultant or by the Consultant to the Representative shall be deemed to have been properly and adequately given if sent to the addresses detailed in the Particular Conditions by telefascimile or letters signed by the party, postage prepaid or by registered airmail.

Registrations

11.1

11 R O
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PC: [ ] consult [ ] amended The Representative shall register this Agreement in accordance with any laws or regulations of the applicable territory now existing or hereinafter enacted and which require such registration.

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Liability
12.1 12.2
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PC: [ ] consult [ ] amended The Consultant shall not accept responsibility nor indemnify the Representative for any claims, liability, or damages resulting from any acts or omissions of the Representative in the performance of its duties under this Agreement.
D The Representative shall not accept responsibility nor indemnify the Consultant for any claims, TED O C U LA or damages resulting from any acts or omissions of the Consultant in the performance of its liability duties under this Agreement.

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Arbitration and Governing Law


PC: [ ] consult [ ] amended 13.1 This Agreement shall be governed by the laws of the home base country of the Consultant stated in the Particular Conditions. Disputes shall be settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules and venue shall be agreed upon between the Parties.

13 14 15

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

Confidentiality
PC: [ ] consult [ ] amended

14.1

The Representative shall, during and after the term of this Agreement, keep in strict confidence and consider as proprietary, all information disclosed by the Consultant of a commercial nature and technical nature, including business and financial information, agreements and arrangements between the parties (patents, know-how, designs, copyrights, licenses or sub-licenses, trade marks and trade secrets) except such technical information which is in or becomes part of the public domain, or which the Representative already had in its possession.

Corruption

PC: [ ] consult [ ] amended

15.1

T O N
a) b) c) d) e)
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In the performance of obligations under this Agreement, the Representative and agents and employees shall comply with all applicable laws, rules, regulations and orders of any applicable jurisdiction, including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Representative hereby represents, warrants and covenants that it will neither receive nor offer, pay or promise to pay either directly or indirectly, anything of value to a public official (as defined below) in connection with any business opportunities which are the subject of this contract. Furthermore, the Representative shall notify the consultant immediately in writing with full particulars, in the event that the Representative receives a request from any public official requesting illicit payments.

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A public official is: any official or employee of any government agency or government-owned or controlled enterprise; any person performing a public function; any official or employee of a public international organization, such as The World Bank; any candidate for political office; or any political party or an official of a political party.

D Notwithstanding any other provision of this Agreement, the Representative shall indemnify, defend TED O C U LA and hold harmless the Consultant from and against any claim, loss, damage, penalty, liability, expense, attorneys fees and costs of whatever nature arising out of, or related to, or connected with the Representatives failure to comply with the provisions of this Sub-Clause 15.1, to the fullest extent permitted by law.

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Model Representative Agreement

15.2

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

In conjunction of the requirements under Sub-Clause 15.1, the Representative shall demonstrate to the satisfaction of the Consultant, that it adheres to a documented Code of Conduct and associated compliance programme or alternatively, shall annually confirm its specific agreement to the principles of the Consultants Code of Conduct (Appendix 3 of the Particular Conditions) and the Consultants Business Integrity Policy Statement (Appendix 4 of the Particular Conditions) by executing the Particular Conditions. This document may be executed annually throughout the duration of this Agreement.

Miscellaneous
PC: [ ] consult [ ] amended

16

16.1

No waiver, alteration or modification of any of the provisions hereof shall be binding on either party unless the same be in writing and signed by the parties hereto or confirmed by telefacsimile by both parties. This Agreement supercedes and cancels any and all previous understandings, agreements and commitments as may have been reached by the parties. This Agreement is the entire agreement between the parties and there are no collateral, oral or written terms of any kind. The Agreement shall not be deemed to be effective or binding upon the Consultant until signed on its behalf by an Officer of the Company. This Agreement is made with the Consultant and is not applicable in any manner to any of its affiliated or associated companies. The Representative hereby waives any right it had or has under any prior agreement be it contractual or at law. The Representative undertakes to bind, for its own benefit and for the benefit of the Consultant, all of its employees and agents that may participate in the Representatives efforts pursuant to this Agreement, such that all such persons shall have the same obligations to the Consultant that the Representative has to the Consultant hereunder. The Representative further agrees to indemnify the Consultant for all losses and damages suffered by the Consultant as a result of any breach of such obligations by such persons.

16.2

16.3

16.4

16.5

16.6

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INDEX OF SUB-CLAUSES
Clause/Sub-Clause Page

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

Agent Agents Agreement Attorney, fees Assigned Audit Bankruptcy Business integrity Claims Code of conduct Companies, associated Compliance Confidentiality Conflict of interest Consultant Consultants, rights Convention, OECD Corruption Costs Currency Damages Disputes Duties

4.4 9.2 16.6 1.6 15.1 9.3 7.3

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9.2 9.3 15.2

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2 4 7 1 6 5 3 4 5 7

12 15.2 16.4 15.2 14 5.2 1.1 7 15.1 15 6.1 8.1 12 13 8.2 9.2 16.6 6.1 2 7.3 5.1 13 12 9.2 10 9.3 4.4 15.1

5 7 7 7 6 3 1 3 6 6 3 4 5 6 4 4 7 3 1 3 2 6 5 4 5 5 2 6

Employees Expenses Interpretation Irregularities Laws, local Laws, home country Liability License Notices

D Notification TED O C U LA

Obligation Official, public


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Payment Payments Payments, illict Performance Permit Project Records Registrations Regulations Remuneration Representation, scope of Representation, limits of Representative Services Signed Solicit Taxes Territory, applicable Terminate Termination Waiver Waives Warrants

6.3 7.3 15.1 12 8.1 9.2 1.5 5.1 11 5.1 6 3 4 1.3 1.1 16.3 4.1 8.2 9.2 7.1 9 16.1 16.5 5

3 3 6 5 4 4 1 2 5 2 3 2 2 1 1 7 2

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

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Notes for Guidance


[Not forming part of the Agreement]

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

Introduction

Consulting engineering firms often seek affiliation with a foreign firm based in a country in which opportunities exist on the basis of an agent, representative, sub-consultant or joint venture relationship. This is because in the direct exporting of professional services, an indigenous services firm should fully understand the local marketplace and client requirements, including relevant regulations and restrictions, and possess knowledge of the main interested parties, potential clients, competitors, etc. The indigenous firm should also have, or have access to, market research, exposure and contacts that can be used to the advantage by the consulting engineering firm, designated the Consultant in these guidance notes. A Representative that is selected and engaged to use the Consultants marketing materials to present the Consultant to potential clients, to develop business, to assist in obtaining and executing contracts, and to undertake or monitor project activities in foreign countries should not be confused with an Agent. The general practice in developed countries is to use the term Representative and to stop using the term Agent which can imply more than is intended. For instance, an Agent normally has authority, perhaps even a power of attorney, to make commitments on behalf of the Consultant. Thus, a Consultants agreement with Representative should make it clear whether and to what extent the Representative has legal authority to make commitments on behalf of the Consultant. Consultants that operate internationally are generally familiar with the measures needed to protect their commercial interests when engaging a Representative. However, many are often unfamiliar with relevant international best practices related to bribery and corruption that are recognised by the courts. Following the passage in 1997 of the OECD Convention Combating Bribery of Foreign Public Officials in International Business Transactions, countries that signed the Convention have introduced legislation that makes it a crime in the home country to commit an offence as defined in the OECD Convention.

Contracting principles

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The US Foreign Corrupt Practices Act (FCPA), which has been in force since 1977, has served as a legislative model for the OECD Convention. Experience in courts in the United States with the FCPA provides the best available guidance to firms that are now operating under their countrys legislation passed in response to the OECD Convention.

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An Agreement for a definite period of time (renewable by mutual agreement) is usually executed between the Consultant and the Representative following procedures that should not eliminate any requirements related to contracting processes, as set out, for instance, in the Consultants risk management manual and in its commercial policies and procedures. The Agreement defines territory, terms of sale, method of compensation, reasons and procedures for terminating the Agreement and other DOC details. Under the Agreement, a Representative will generally be able to handle U complementary services that do not conflict, and assume risk and responsibility. Carefully scrutinizing potential Representatives is always a wise investment as any problems that arise are often more difficult to address owing to barriers caused by
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distance, language, culture and legal differences. In addition, non-performing Representatives can be costly to terminate and replace. Unless specified otherwise, the ability to terminate an Agreement will be subject to local country laws, which are often different from those in the Consultants country. These may restrict termination options or provide for substantial payments of compensation, and failure to follow local termination laws may result in complete denial of future import privileges by a host country.

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

FIDIC Model Representative Agreement contracting principles A A1 Recommended anti-corruption principles

A2 A3 A4 A5

A6 A7 A8

A9

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A10 A11 A12 A13 A14 A15

D A16 TED O C U LA

Representation that the Representative (or officers, directors, shareholders, key employees) is not a government official and has no official status, or a family relation of senior government official, and that a change in status with respect to the Representative will be grounds for termination of the Agreement. Covenant that the Representative will comply with local laws. Covenant that the Representative will comply with applicable substantive provisions of the Consultants national laws. Covenant each year that the Representative will comply with the relevant portions of the Consultants Code of Conduct. Warranty that the Representative has and will not either directly or indirectly give, pay, offer, receive or authorize any improper payments to government officials in connection with a Project, as defined in the General Conditions of the FIDIC Model Representative Agreement. Covenant that the Representative will notify the Consultant if a government official requests payment from a third party. Provisions regulating the Representatives interaction with government officials in connection with the Project. Covenant that the Representative will obtain the Consultants written approval before hiring any subcontractor, employee, etc for the specific purposes of performing services for the Consultant. Contract provision that any direct reimbursement for expenses is limited to reasonable and legitimate documented expenses (include guidelines). Covenant that the Representative will maintain accurate and complete books and records. Depending on the specific circumstances of the Agreement, contract provision that the Consultant will maintain the right to audit or inspect the books of the Representative in the event of events or circumstances that would give rise to suspicion of corruption, through an accredited firm to ensure payments are not used for illicit purposes. Provisions that the Consultant has the right to terminate the Agreement upon unilateral, good faith concern that there has been a violation of its terms. Provisions describing the scope of the candidates activities, where compensation should be commensurate with activities and scope of work. Provisions requiring the Representative to submit written reports documenting work performed as well as invoices for services rendered. Covenant that the Representative will not exceed its prescribed authority. Covenant that the Representative will accept and participate in briefing and training related to anti-corruption initiatives.

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B B1

Recommended commercial provisions To ensure a conscientious effort from the Representative, the Agreement should include a requirement that it apply the utmost skill and ability to the services provided for the remuneration named in the Agreement. An escape clause in the agreement, allowing the Consultant to end the Agreement safely and cleanly if the Representative does not fulfil the Consultants expectations. Provisions to safeguard the Consultants interests in cases where the Representative proves less than satisfactory. Escape clauses and other provisions to safeguard the Consultant may be limited by the laws of the country in which the Representative is located. Provisions to ensure that the Consultant meets national laws that govern Representative Agreements. Definition of the laws that apply to the Agreement. Provisions not to have business dealings with competing firms. Provisions not to reveal any confidential information in a way that would prove injurious, detrimental, or competitive to the Consultant. Provisions that require all inquiries received from outside the designated or applicable territory to be referred to the Consultant for action.

B2

B3

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B4 B5 B6 B7 B8 B9

General Conditions

4.1, 4.2 Soliciting and Competition Projects are limited to those which the Consultant wishes to pursue, as opposed to those with a large scope such as projects in which the Consultants may have a general interest. The Representative may therefore work for other parties on projects which are of no interest to the Consultant, are not being pursued by the Consultant, and are outside the scope of Consultants projects. Specifically, the Representative is not contravening Sub-Clauses 4.1 (soliciting) and 4.2 (competition) in undertaking work for other clients on other projects. 5.2

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Conflict of interest The Consultants approval in writing is required if the Representative enters into an arrangement with another party that generates a potential conflict of interest. This is because the Consultant may find it acceptable for the Representative to enter into the arrangement under certain circumstances (e.g., when the Consultant has pulled out of a project). Such eventualities are catered for by requiring the Consultants and Representatives mutual agreement to be stated in writing. Furthermore, the phrase the Representative shall obtain the prior written approval of the Consultant before engaging the specific and significant services of any person, firm or corporation to carry out the services contemplated herein is not unnecessarily restrictive, because the written approval only refers to specific and significant services. For these it is reasonable to obtain the Consultants approval. There will of course be services that are less crucial (e.g., obtaining licenses, permits and visas; identifying technical personnel; administrative functions). Here, the Representative may not necessarily need to obtain the Consultants prior permission in writing.

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Notes for Guidance

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Remuneration level Giving precise guidance as to what constitutes a reasonable level of remuneration is extremely difficult. Some argue that a Representatives fees, expressed as a percentage of the contract value for an engineering project

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(see Model Representative Agreement, Particular Conditions, Appendix 2) are excessive and an indication of potential bribery if they exceed 3%. However, the accumulation of tasks in both pre- and post-contract phases may justify a more substantial remuneration. It is important that the Consultant be prepared to demonstrate that the Representatives remuneration is reasonable compensation for services actually provided. This justification can include consideration of the risks incurred by the Representative in pursuing projects on behalf of the Consultant without any certainty of winning.

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

6.3

Remuneration Sub-Clause 6.3 (remuneration) focuses on remuneration to the Representative linked to payments from the Client to the Consultant (that is, after a contract is executed) and once an invoice is paid by the Client. Some would argue that the Sub-Clause 6.3 should recognize payments to the Representative in the case of services not directly related to the procurement of specific projects, in order to make the Agreement more commercially attractive to the Representative (specially for individuals as opposed to firms). In particular, the Agreement should allow a minimum retainer to be paid, regardless of the schedule of payments from the Client, together with an additional amount once an invoice is settled. This would also encourage the Representative to assist the Consultant with securing timely payment of its invoices. Special cases may justify advance payments and the like. However, generally speaking, for Representatives as opposed to Agents, it is advised to use the basic arrangement whereby a Representatives fee is only paid when the Consultant is paid by a Client. Of course, this does not exclude the Representative from receiving payments for out of pocket outlays, travel expenses etc., as and when they are incurred. In the Particular Conditions, the Consultant may also agree to pay a retainer fee to the Representative to cover basic, out-of-pocket expenses together with another component of payment related to procurement of a project (see Model Representative Agreement, Particular Conditions, Appendix 2, Schedule A4).

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Consultants rights In general, Sub-Clause 7.1 allowing the Consultant to terminate the agreement unilaterally may seem to put too much power in the hands of the Consultant. Moreover, it may be difficult to motivate a Representative under such terms, and courts of law may judge Sub-Clause 7.1 to be unbalanced. However, experience has shown that a clear and unambiguous statement of the Consultants rights is necessary in order to avoid disputes. If they have solid evidence, Representatives will often be able to negotiate different terms that are introduced in the Particular Conditions. The Representative is compensated for the effort and time spent only if the Consultant procures a contract with the Representatives help. It is argued that this is an unfair, balanced situation because the Representative risks heavy losses if a project is not procured or the Consultant chooses to reject an order or terminate negotiation without obtaining the Representatives agreement. In particular, it is argued that the Consultant should only be able exercise the right of rejection or termination without consulting the Representative if the Representative is properly compensated for the time and effort spent. FIDIC recommends a no cure-no pay system, since the agreement is

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between two independent parties and not between an employer (the Consultant) and an employee (the Representative), where a different agreement would be used. If the agreement does not lead to a fruitful collaboration, it has to be terminated. Until then both parties run a risk. One should note nevertheless, that under these circumstances, it is important to maintain an open dialogue about the strategies to be used to pursue projects and submit proposals. 7.2 Auditing Sub-Clause 7.2 requires the Representative to allow independently conducted audits of its financial records, since this level of transparency is expected for most internationally funded contracts. If the Representative has several activities and does not work exclusively for the Consultant, SubClause 7.2 may be difficult to implement because it may require the Representative to maintain separate accounts of its dealings with the Consultant. Fortunately, accounts need not involve highly complex processes: simple ledgers are often adequate and within the reach of most firms in countries that do not require audits. Disclosure Sub-Clause 7.4 refers to the outcome of an audit and should be selfexplanatory. Currency Although remuneration is specified according to the schedule in Appendix 2 of the Particular Conditions on the basis of the value of the signed contract, Representatives may have legitimate reasons for wanting to be paid offshore (e.g., business operations outside the country, currency instability, etc.), and some of the Representatives services may not be related to a specific project for which payment may have to be made by the Consultant in the currency of Consultants own country. Sub-Clause 8.1 specifies that all payments by the Consultant to the Representative under the agreement shall be in the same currency as the payment terms of the applicable contracts. However, payment in another currency can be agreed upon in writing by the parties.

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

7.4

8.1

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Payments can only be made to bank accounts outside the Representatives country of residence if the Representative has specific agreements with all relevant authorities. Liability Taxes are the responsibility of each party, and a party cannot transfer this responsibility to the other party. Hence, the Representative must be responsible as stated in Sub-Clause 8.2 for any tax liabilities arising from payments received from the Consultant. For example, taxes or levies which are imposed by a statutory authority on the Representative following signature of an agreement should be paid by the Representative and not separately by the Consultant. Termination Although this clause may appear to be biased in favour of the Consultant, it should be noted that Sub-Clause 9.1 gives the Representative the right to terminate upon giving ten days notice. Arbitration Any agreement requires some basis for resolving disputes. Clause 13 states

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that disputes shall be settled under the Rules of Arbitration of the International Chamber of Commerce (that came into effect on 1 January 1998, with costs scales effective as of 1 July 2003) by one or more arbitrators appointed in accordance with the rules, where the venue for arbitration is decided by both parties. This wording is balanced and realistic, and should be useful in most cases. 15.2 Code of conduct Sub-Clause 15.2 requires the Representative to confirm adherence to the Consultants Code of Conduct at the time of signature of the agreement, and annually (using the sign-off form given in the Model Representative Agreement, Particular Conditions, Section B: References from Appendix 3 Consultants Code of Conduct). Since some Representative agreements will last for several years, an annual signature ensures that the Representative signs off on the most recent Code, and is reminded of it every year. Corruption Sub-Clause 15.7 requires the Representative to notify the Consultant immediately in writing with full particulars, in the event that the Representative receives a request from any public official requesting illicit payments. FIDIC strongly recommends this provision in Representative agreements, since the courts, multilateral development banks and similar agencies will seek these details in the event of an inquiry. To keep the necessary arms length distance between the Representative and the Consultant, the Representative should ideally be a company with a well-defined legal status, and should not hold a status that would allow him or her to be perceived to be an employee of the Consultant. If the Representative is an individual or sole proprietor, this must be specified in the Agreement.

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15.7

Agreement

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R
a) b)

Regarding the form given as the Agreement to the FIDIC Model Representative Agreement: For the article: WHEREAS the Consultant wishes to establish a relationship with the Representative for the purpose : the purpose, for instance, acquiring and/or executing Project(s) should be described briefly and, if necessary, detailed in an Appendix to the Agreement. If the purposes are technical in nature, the FIDIC ClientConsultant, Sub-Consultant or Joint-Venture agreements (see the section Further reading) should be used, depending on the context. For the article: WHEREAS the Representative is in the position to facilitate.: a Consultant offering a broad range of services to several types of clients may not necessarily wish to designate only one Representative for a country, and for large countries, may even wish to have regional delineation. To allow for a specific delineation of scope, the facilitation of say the acquisition and/or execution of projects usually needs to specify a territorial delineation, and possibly a sectoral delineation. Note also that Clause 9.2 of the General Conditions refers to the applicable territory which will be the territory specified in the Agreement. It is envisaged that the Agreement may be established for a single project or for several years. In both cases, there should be a sunset
Model Represenative Agreement

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clause that specifies the (renewable) term of the representation and the starting date.

Further reading

The following FIDIC agreements for consulting services, and their accompanying guides, relate directly to the FIDIC Model Representative Agreement: Client/Consultant Model Services Agreement (The White Book), 3rd Ed 1998 The White Book Guide with other Notes on Documents for Consultancy Agreements, 2nd Ed 2001 Joint Venture Agreement, 1st Ed 1992 Sub-Consultancy Agreement, 1st Ed 1992 Guide to the Joint Venture and Sub-Consultancy Agreement, 1st Ed 1994 Business Integrity Management and procedures for implementing a Business Integrity Management System are detailed in: Guidelines for Business Integrity Management in the consulting industry, FIDIC, Test Ed 2001 Business Integrity Management System training manual, FIDIC, 1st Ed 2002 International Chamber of Commerce rules of arbitration:

Licensed copy: heriotwatt, Heriot Watt University, 07/02/2012, Uncontrolled Copy, FIDIC

Rules of arbitration, International Chamber of Commerce, Paris, France, effective as of 1 January 1998 with costs scales effective as of 1 July 2003, http://www.iccwbo.org/court/english/arbitration/rules.asp Quality Based Selection and the selection of consultants are covered in: Guidelines for the selection of consultants, FIDIC, 1st Ed 2003 Quality Based Selection for procurement of consulting services, FIDIC, 1st Ed 1997

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