Last Updated: Jun 19, 2026
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1. You are the Contract Manager of the Engineer in a hotel project. In May 2020, the Employer and the Contractor signed a Contract based on the FIDIC Yellow Book (edition 2017), as per which the Contractor will design and build a hotel project with Contract Price of 5,100,000 USD. The Time for Completion for this project is 12 months (May 2021). The Contract also named a nominated Subcontractor (as referred to in Sub- Clause 4.5) who provides mechanical, electrical, and plumbing services for the project (including the fire fighting system), which was accepted by the Contractor without any discussions.
The Project was delayed due to issues with the fire fighting system, and you issued the Taking-Over Certificate in June 2022.
The Employer sent a Notice of Claim to the Contractor on Delay Damages with a maximum value equal to
10% of Contract Price (510,000 USD). The Employer also gave a Notice to the Contractor stating that the Contractor has failed to submit the evidence of payment to the nominated Subcontractor as well as the reason for withholding payment to the nominated Subcontractor. Therefore, the Employer has paid the nominated Subcontractor directly the entire amount due, coming to 100,000 USD. The Employer intends to include this amount as a deduction in the Final Payment to the Contractor.
As Contract Manager of the Engineer, you are tasked to make a fair determination of the Notices of the Employer. In your " Notice of the Engineer ' s determination " , what is your determination for the deduction of the next Interim Payment to the Contractor in relation to the amount directly paid to the nominated Subcontractor?
A) The Employer is entitled to deduct the amount directly paid.
B) The Employer is not entitled to deduct the amount directly paid.
2. (You are the Contract Manager for the Engineer in a highway project using FIDIC Red Book (edition 1999).
There is a Schedule of cost indexation included in the Contract. The project must be completed by 31 December of this year. If the Contractor fails to complete the Works by then, how will the adjustment of prices take place thereafter? (1 correct answer applies))
A) Either the current index/price, or index or price applicable on the date 49 days before the expiry of the Time for Completion of the Works, whichever is more favourable to the Employer.
B) Either the current index/price, or index or price applicable on the date 49 days before the expiry of the Time for Completion of the Works, whichever agreed by Parties.
C) Each index or price applicable on the date 49 days before the expiry of the Time for Completion of the Works.
D) The current index or price.
3. (Which one of the following statements is correct regarding the Employer ' s Representative under the FIDIC Silver Book (edition 1999)?)
A) The Employer must always appoint an Employer ' s Representative to act on his behalf under the Contract.
B) The Representatives of both the Employer and the Engineer have no authority to amend the Contract at all.
C) The Employer may appoint an Employer ' s Representative to act on his behalf under the Contract.
D) The Employer may appoint an Employer ' s Representative to act on his behalf under the Contract but has to consult the Contractor to agree to this Representative.
4. Under the FIDIC Red, Yellow, and Silver Books (both editions), the Contractor has a contractual obligation to submit a Value Engineering Proposal. Such proposal shall be prepared at the cost of the Employer. Are both these statements true or false?
A) False
B) True
5. Under the FIDIC Red, Yellow, and Silver Books (edition 2017), if a Dispute is referred to the Dispute Avoidance and Adjudication Board (DAAB) to obtain its decision, the Parties shall suspend performing their obligations in accordance with the Contract, until they receive further directions from the DAAB. Is this statement true or false?
A) False
B) True
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: A |
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