Plain-language explanations of key terms — for engineers and project managers, not lawyers.
A panel established under FIDIC contracts (typically comprising one or three independent experts) to adjudicate disputes arising during project execution. DAB decisions are binding and must be complied with immediately, even if challenged. The DAB may be "ad hoc" (appointed only when a dispute arises) or "standing" (in place throughout the project). The 2017 FIDIC suite renames this the DAAB (Dispute Avoidance/Adjudication Board), emphasising its role in avoiding, not just resolving, disputes.
The period following Taking Over during which the contractor is obliged to remedy any defects in the works. Under FIDIC, the standard DNP is 365 days (one year), though this may be extended for defects that are remedied during the period. At the end of the DNP, the Engineer issues the Performance Certificate, which is the final certificate under the contract. During the DNP, the employer may withhold the second half of the retention money.
Pre-agreed amounts payable by the contractor to the employer for each day (or week) of delay in completing the works beyond the contractual completion date. Also known as Liquidated Damages (LD) or Liquidated and Ascertained Damages (LAD). The rate is fixed in the contract and represents a genuine pre-estimate of the employer's likely loss. If the rate is punitive rather than a genuine estimate, it may be unenforceable as a penalty under some legal systems.
A method of valuing work that cannot be properly measured and valued by reference to the contract rates or a bill of quantities. Under daywork, the contractor is paid for the actual labour, materials, and plant used, at rates set in the contract's daywork schedule. Daywork is a fallback valuation mechanism and should not be used where the work can be valued by other means.
A project delivery model where a single contractor is responsible for both the design and construction of the works. FIDIC Yellow Book (Plant and Design-Build) and Silver Book (EPC/Turnkey) are commonly used for D&B projects. The contractor's liability for design error is typically strict (fitness for purpose), which is more onerous than the professional negligence standard that applies to independent designers.