FIDIC CCM Certified Contract Manager Exam Practice Test

In FIDIC Yellow Book (1999), the Contractor is responsible for scrutinizing the Employer's Requirements per Sub-Clause 5.1 and must notify any discrepancies or errors. However, passing this obligation to a Subcontractor, and requiring the Subcontractor to indemnify the Contractor for errors or defects arising from the Employer's Requirements or the Contractor's design, unfairly shifts risk and liability to the Subcontractor. The Subcontractor is likely not in a position to fully review or control the Employer’s Requirements or the overall Contractor’s design. This exposes the Subcontractor to excessive risk, beyond their scope and capacity.

Advice C highlights that the Subcontractor becomes vulnerable to claims for design defects outside their control. This misallocation of risk is generally not recommended and can be challenged during contract negotiation. Good contract management practice and risk allocation principles (FIDIC Contract Manager Study Guide, Module on Claims and Dispute Resolution) support this position.

While Options A, B, and D propose different approaches, only C correctly identifies the fundamental contractual and risk management issue that should prevent the Subcontractor from entering the contract as is.

Y is not correct. The Contractor’s obligation to commence works depends on the Commencement Date notification as per the contract. If the Employer requests commencement on the 14th day after signing, and the contract allows or the Engineer has not yet notified otherwise, the Contractor should comply unless formally instructed otherwise.

Delaying work beyond the contractual or Employer’s instruction without valid cause may be considered breach of contract and could lead to claims against the Contractor.

According to FIDIC Red and Yellow Books (both 1999 and 2017 editions), the advance payment guarantee amount may be progressively reduced as the Contractor repays the advance payment through deductions from interim payment certificates. This means the guarantee is reduced as per amounts repaid, not only upon full repayment.

Option D is correct: The guarantee reduces as partial repayments are certified in Payment Certificates.

Option C is incorrect because the reduction happens gradually, not only after full repayment.

Options A and B do not directly relate to the reduction mechanism of the advance payment guarantee.

The best advice is to verify specific contractual documents such as the Appendix to Tender, Employer’s Requirements, and Particular Conditions, which may specify the required language for Operation and Maintenance Manuals. If no specific provision is made, the default language is that of the Contract as per Sub-Clause 1.4, which in this case is English.

Therefore, the Contractor is generally obliged to provide manuals in English unless otherwise specified.

Options B, C, and D are less comprehensive or may disregard contractual hierarchy or project-specific details.

Option C is correct: The Contractor is obligated to rectify any non-compliance with prevailing standards promptly.

Option D is correct: The Contractor carries responsibility for design fitness and correctness, even if the Engineer has approved or not objected to the design.

Option A is incorrect; Engineer approval does not absolve the Contractor from responsibility for defective design or works.

Option B is not necessarily required; only non-compliant parts need correction, not entire varied works.

Under the FIDIC Red Book 1999 Edition, the Engineer is generally responsible for issuing determinations on claims and contract matters. However, if the Particular Conditions require the Engineer to obtain the Employer’s prior approval before issuing such determinations, the Engineer’s options become limited if that approval is not granted.

Option C (Issuing the determination to the Contractor in the form and with the content agreeable to the Employer, with a remark that it is the Employer’s determination and not the Engineer’s determination)is a practical approach often taken. The Engineer may issue the determination as directed or approved by the Employer but must clarify that it reflects the Employer’s decision rather than the Engineer’s independent determination.

Option D (Informing the Contractor of their inability to issue the determination, due to lack of Employer’s approval)aligns with transparency and procedural correctness. The Engineer should notify the Contractor if they cannot proceed with the determination, explaining the reason to avoid misunderstanding or delay.

Option A (Remain silent and do nothing)isnot appropriate, as it may cause project delays and disputes.

Option B (Referring the matter directly to the Dispute Adjudication Board)without a determination from the Engineer is not standard procedure under the 1999 edition. The Engineer’s determination or failure to determine generally triggers the dispute resolution process, but referral is normally after due process, including issuing or attempting to issue a determination.

Hence,Options C and Dare the appropriate courses of action.

Option C is correct: The Contractor is entitled to financing charges (interest) on late payments, calculated as per the percentage specified in the Contract Data or corresponding Sub-Clause.

Option D is correct: The Contractor can suspend works or reduce progress after giving due notice, usually 21 days, if payments are not made on time.

Option A is incorrect; termination is not automatic right after the payment deadline expires.

Option B is incorrect; suspension requires prior notice rather than immediate action.

Option E is incorrect because the Contractor has additional remedies such as suspension, beyond just financing charges.

Comprehensive and Detailed Explanation:

In the FIDIC Silver Book (1999 and 2017 editions), which is tailored for EPC/Turnkey contracts, the Employer is responsible for notifying the Contractor of the Commencement Date (Sub-Clause 8.1). Unlike other FIDIC contracts where the Engineer might notify commencement, the Silver Book places more responsibility on the Employer due to the nature of the contract where the Contractor is largely responsible for design and execution with fewer Engineer roles.

The Employer’s formal notification of the Commencement Date signals the official start of the Contractor’s obligations and triggers timelines under the contract.

The Engineer or Resident Engineer typically does not issue such notice in the Silver Book framework.

Comprehensive and Detailed Explanation:

Option C is not true because under the FIDIC Silver Book (1999 edition), the delay damages (liquidated damages) specified in the contract are intended as full compensation for the Employer’s loss resulting from late completion. The contract usually excludes other claims for actual losses or extra costs beyond the delay damages.

Option A is true; Variations can include extensions of time.

Option B is true; identifying delay causes is essential for claims and defences.

Option D is true; if the Employer causes suspension not attributable to the Contractor, delay damages claims by the Employer are generally unjustified.

Thus, the Employer cannot claim extra costs over and above delay damages as per typical Silver Book provisions.

Comprehensive and Detailed Explanation:

Option D is NOT correct. The DAAB does not act as a witness or provide support during arbitration. Its role is to avoid and adjudicate disputes early during the project lifecycle impartially and fairly, but it does not serve as witness support in arbitration proceedings.

Comprehensive and Detailed Explanation:

The Employer must provide detailed notice to the Contractor regarding intended changes material to financial arrangements, enabling transparency and allowing the Contractor to assess impacts and prepare claims or adjustments accordingly.

This obligation supports fair risk allocation and project control.

Comprehensive and Detailed Explanation:

Option A is NOT correct because the wording of the Letter of Tender is usually governed by the tender documents and contract terms; it is not solely at the Contractor's discretion to dictate when the Contract becomes effective. The standard process is that the Contract becomes effective upon the Employer’s issuance of the Letter of Acceptance.

Options B, C, and D correctly describe standard FIDIC practices.

Under the FIDIC Red Book (1999), the Tender Documents typically include:

The Bill of Quantities (Option B), which provides detailed quantities for priced items and forms a basis for tender pricing.

The Specifications (Option E), which define the technical requirements for the Works.

The Schedule of Guarantees (Option A) is usually provided later, during contract formation, not as part of tender documents.

Employer’s Requirements (Option C) are more commonly referenced in design-build contracts such as the Yellow Book, not the Red Book which is traditionally a design-bid-build contract.

Schedule of Baselines (Option D) is not a standard tender document in FIDIC Red Book contracts.

Option A is correct: “Notice” is a defined term under FIDIC 2017 Red Book; “Other Communications” is a separate category, also defined but distinct.

Option D is correct: Notices, Notices of Dissatisfaction, and Certificates require delivery to all Parties and the Engineer, whereas other communications may not have such strict requirements.

Option B is incorrect as there are contractual differences.

Option C is partially correct but “Other Communications” and “Notice” are distinct terms, so A is more precise.

Under FIDIC Red Book 1999, retention is calculated as a percentage (stated in Appendix to Tender) of the value of Works executed and Plant and Materials in accordance with Sub-Clause 14.5 that are on or off Site but intended for incorporation.

Option A is correct: Retention applies to the value of executed works.

Option D is correct: It also applies to Plant and Materials under Sub-Clause 14.5.

Option B is incorrect; advance payments and repayments are not part of retention calculations.

Option C is incorrect; changes due to legislation or costs are not included in retention calculation.

Under FIDIC 2017 editions, the Performance Security protects the Employer against failure by the Contractor to fulfill contractual obligations. The Employer may claim under the Performance Security in the following cases:

Option A: Failure to renew the Tender Security as required during the tendering or contract formation phase can allow Employer to make a claim, since the security guarantees the Contractor’s commitments at this stage.

Option E: Failure to extend the validity of the Performance Security when requested or required breaches contractual obligations and enables the Employer to claim under the security.

Option B is incorrect because abandonment without termination notice does not immediately entitle the Employer to claim under Performance Security; formal termination is usually required first.

Option C is incorrect because submitting a claim under Sub-Clause 20.2 (Employer’s claims) does not directly correlate with claiming under Performance Security.

Option D is irrelevant; instructions to replace works do not relate to Performance Security claims.

This statement is true. The Silver Book (EPC/Turnkey contracts) usually involves lump-sum payment, but if part payment is based on quantity or work done, this must be explicitly provided for in the Particular Conditions to avoid ambiguity.

Such provisions ensure clarity on payment terms in line with project specifics.

Comprehensive and Detailed Explanation:

Option B is correct: The Contract Data provides information required by specific Sub-Clauses in the General Conditions to complete the contract.

Option D is correct: If required data is missing in the Contract Data, some Sub-Clauses may not apply.

Option A is incorrect; definitions generally apply throughout the contract including Specifications and Drawings.

Option C is incorrect; case sensitivity of terms can affect contractual meaning.

The Commencement Date is a critical contractual milestone that triggers contractual obligations including the start of time for completion. For clarity and enforceability, it must be specified clearly in contract documents forming part of the formal contract. The Contract Agreement (Option B) and the Particular Conditions (Option C) are the standard places to unambiguously specify the Commencement Date.

Minutes of meetings (Option A) or emails (Option D), while useful for informal communication, do not have the legal certainty or binding contractual effect unless expressly incorporated into the contract documents. Therefore, specifying the Commencement Date solely in meeting minutes or emails is not advised for clarity and risk mitigation.

This statement is true. Under FIDIC Silver Book 1999, Sub-Clause 8.6, the Employer can instruct the Contractor to submit a revised programme to meet the contractual Time for Completion. If, after such instruction, the revised programme still shows the Works will not complete on time, the Employer may claim additional costs (such as delay damages or compensation) due to continued delay.

Thus, the Employer’s right to claim additional costs is contingent on the revised programme not enabling timely completion.

Comprehensive and Detailed Explanation:

Option C does NOT, on its own, provide grounds for termination. The Contractor’s request for evidence of financial arrangement, without further contractual breach, is insufficient to terminate.

Options A, B, and D are valid grounds for termination under FIDIC Yellow Book 2017 due to prolonged suspension, non-payment beyond allowed period, or failure to comply with binding determinations.

Under the FIDIC Red and Yellow Books 1999 editions, the Engineer acts as the Employer's representative with authority delegated under the contract. When an instruction requires the Employer’s prior approval, it is primarily the Engineer’s responsibility to obtain that approval before issuing the instruction to the Contractor.

The Contractor isnot contractually required to verifywhether the Engineer has obtained the Employer’s approval. The Contractor is generally entitled to rely on the Engineer’s instructions as valid and binding unless there is clear evidence to the contrary.

This principle avoids placing an undue administrative burden on the Contractor and maintains the hierarchical contract administration structure, where the Engineer is the primary point of contact and decision-maker.

Under FIDIC terminology, an ad-hoc Dispute Board is known as a DAB (Dispute Adjudication Board), which is appointed for specific disputes as they arise, rather than standing continuously.

The DAAB is a standing board appointed for the project duration, providing continuous dispute avoidance and adjudication.

Option D refers to arbitration, which is a different dispute resolution method.

Discharge under FIDIC Red Book 1999 confirms full and final settlement of all money due to the Contractor. It signifies the Contractor's acceptance of the Final Payment Certificate and releases the Employer from further financial obligations related to the contract.

Options A and C misrepresent the nature of discharge.

Discharge is not a unilateral immediate termination but a financial closure.

FIDIC’s Golden Principles (GPs) guide good contract management and administration.Golden Principle 1 (GP1)emphasizes“Clear communication and documentation”to avoid misunderstandings and disputes. It specifically promotes thorough documentation of all agreements and clarifications reached during the tender process. The use of a memorandum of understanding or similar record ensures transparency and mutual understanding. Furthermore, the formal award of the contract by a signed letter of acceptance aligns with the principle of clear and formal contract formation.

GP1ensures that all key matters, changes, and agreements are properly documented during the tender phase and contract award to form an unambiguous contractual basis.

GP2 and GP3relate more to ongoing contract administration, risk management, and dispute resolution rather than the contract formation process.

GPA(Golden Principle A) is not a standard FIDIC term associated with contract formation or tender stage documentation.

Therefore, the described process aligns best withGolden Principle 1 (GP1).

According to FIDIC Red Book 1999, Sub-Clause 14.2, the Advance Payment Guarantee must be a bank guarantee issued by a reputable bank acceptable to the Employer. This bank guarantee serves as security to ensure that the advance payment made by the Employer will be repaid if the Contractor fails to fulfill contractual obligations. The bank guarantee is a commonly used, reliable instrument providing direct financial assurance to the Employer.

Other instruments like surety bonds or parent company guarantees may be acceptable only if explicitly agreed, but the standard requirement is a bank guarantee.

Declaration of joint and several liability is not a typical form of guarantee for advance payments.

Comprehensive and Detailed Explanation:

Option A is correct: Continuing effect claims (claims where the event’s impact continues over time) require notices like other claims, typically within 28 days of awareness.

Option D is correct: The fully detailed claim submission generally must be within 84 days of becoming aware of the event, allowing the Claiming Party to elaborate on the claim.

Option B is incorrect; Employer claims also require timely notification.

Option C is incorrect; missing a single interim claim does not necessarily result in losing entitlement if the contract allows for correction or continued claims.

Comprehensive and Detailed Explanation:

This statement is true. The Employer administers the contract unless an Employer’s Representative or Engineer is appointed to act on its behalf. The Employer (or its Representative) is responsible for reviewing and negotiating claims in good faith with the Contractor to reach agreement, in line with FIDIC procedures.

Both claims are valid under the Silver Book principles:

The error in the Employer's Requirements (typo in NTS-PW-01) leads to entitlement for additional piling costs.

The unforeseen hydrological data causing additional flood protection works qualify as unforeseeable physical conditions entitling the Contractor to compensation.

Hence, Option D is correct — the Contractor is entitled to both claims.

Two-stage procurement, involving pre-qualification followed by tender, is typically recommended for large-scale projects where many potential contractors might be interested. This process helps to shortlist qualified contractors, thus streamlining the tender evaluation and increasing the quality and competitiveness of submitted offers.

Option C correctly reflects this approach for complex or large projects where competition needs to be managed.

Option A is incorrect since simple, short-duration projects usually do not require complex procurement.

Option B is incorrect because if only a few capable contractors exist, pre-qualification may be less necessary.

Option D is incorrect as international financing does not always mandate two-stage procurement, although it often influences procurement methods.