• Title, Summary, Keyword: Turnkey contract

Search Result 18, Processing Time 0.12 seconds

A Study on Some Issues of Business and Law in relation to ICC Model Turnkey Contract - Focusing on ICC Model Contract for Turnkey Supply of Industrial Plant (ICC모델 턴키 계약의 쟁점에 관한 연구 - ICC Model Contract for Turnkey Supply of Industrial Plant를 중심으로 -)

  • Kim, Kyoung-Ok;Kim, Dae-Hwan
    • The Korean Research Institute of International Commerce and Law
    • /
    • v.54
    • /
    • pp.189-209
    • /
    • 2012
  • This Work intends to study on some issues of business and law in relation to Contract for Turnkey Base System. The continuing advance of export system of the plant with the importance for efficient and effective management emphasizes the need for business and legal approach to uniform international model contract. ICC Model Contract for Turnkey Supply of Industrial Plant by ICC covers a particular category of turnkey contract, i.e. contracts for the supply of a plant or production line to be erected within facilities which already exist or which are constructed by the purchaser. Furthermore, the application of the ICC Model Contract for Turnkey Supply of Industrial Plant leaves much to be desired from a business and legal point of view. Therefore, there would appear to be room for compromise between the supplier and purchaser in respect to make a contact for Turnkey supply of industrial plant.

  • PDF

A Study on the FIDIC's Conditions of Contract for EPC/Turnkey Projects (FIDIC의 EPC/Turnkey 프로젝트용 표준약관(標準約款)에 관한 연구(硏究))

  • Choi, Myung-Kook
    • The Korean Research Institute of International Commerce and Law
    • /
    • v.18
    • /
    • pp.189-218
    • /
    • 2002
  • The EPC/Turnkey Contract goes to the extreme in allocating risks to the contractor and depending on the types of project, this may be regarded as unacceptable. It has also gone to the extreme in the extent to which the contractor is responsible for the specification and design of the Works. The employer is not responsible for correctness of any information provided by him nor for correctness of any specification or other matter included in the Employer's Requirements, except the definition of the intended purpose and criteria for testing and performance. With such conditions it is surprising that the employer is entitled to interfere in the contractors performance to an extent that is close to what is norm for a construction contract with employer design and with normal risk allocation. The combination of risk allocation and inappropriate administrative provisions makes the EPC/Turnkey Contract a document that will meet severe resistance from contractors. It is also likely that employers will see the risks and difficulties from their own perspective. It is a fiction that the EPC/Turnkey Contract will give the employer a contact with a certainty of final price and completion date. It is not a fiction that the EPC/Turnkey Contract carries many seeds for disputes between the parties. The Orange Book has become an accepted document even if it clearly contains some weaknesses. Some of these have been corrected in the Plant Contract. In my opinion FIDIC should let users become more familiar with the Plant Contract as a follow up to the Orange Book.

  • PDF

Risk Assessment for the Converted Lump-sum Turnkey Project (전환 정액일괄도급 계약방식 프로젝트의 리스크 분석)

  • Hwang, Duk-Jin;Moon, Seung-Jae;Yoo, Ho-seon
    • Plant Journal
    • /
    • v.7 no.2
    • /
    • pp.39-43
    • /
    • 2011
  • Due to the recent uncertainty of market situations such as the escalation of petroleum prices, increased production capacities of plants, limitations of the available EPC (Engineering, Procurement, Construction) contractors, and the increase of raw material prices, EPC contractors have had a tendency to include a higher reserve contingency in the lump-sum turnkey contract price. In order to overcome the changes in the market, the plant project construction industry has started to apply the converted lump-sum turnkey contract in plant construction market. This study was focused to find the associated risks and to analyse the identified risks on recent trend of application of the new contract type, which is the converted lump-sum turnkey contract. It was recognized from the analysis that quality and cost have more high priority risks than other project objectives. This paper also suggests the mitigation plan for identified risks to achieve project objectives appropriate to the converted lump-sum turnkey project from the viewpoint of an EPC contractor keeping transparency with owner.

  • PDF

A Study on the Practical Suggestions in the Contract for the Turnkey Supply of an Industrial Plant - Focused on the Commentary of ICC Model Contract - (턴키방식 플랜트계약의 실무상 유의점에 관한 연구 - ICC 표본 계약서의 해설을 중심으로 -)

  • Oh, Won-Suk;Lee, Ki-Ok
    • The Korean Research Institute of International Commerce and Law
    • /
    • v.53
    • /
    • pp.3-29
    • /
    • 2012
  • This article examines the Practical Suggestions in the Contract for the Turnkey Supply of an Industrial Plant based on a study focused on the commentary of "ICC Model Contract" clause which is encouraged by ICC. Especially practical issues are inquired into on business and legal perspective as follows. First, in regard to supply of technical documentation, equipment and spare parts, it is important to supplier and purchaser to agree on obtaining technical documents necessary for installing and operating plant, and also components necessary for it's maintenance. Second, it is about erection, testing, taking over and training chapter. Both parties need to agree about the process of the arrival of equipments and assembly conducted by the supplier and following examination and also training purchaser to operate it Third, when it comes to price, payment conditions, bank guarantees, parties are to make decision on the pricing, payment conditions and currency of contract-payment. Lastly, it is necessary to reach an agreement of the issue of whether it is to be defined as delay or non-performance of the contract and also it's consequences about rights and obligation.

  • PDF

Improvement of Turn-key Contract System through the Analysis of Present Ordering Condition in Civil Engineering Projects (토목공사 수주현황 분석을 통한 턴키${\cdot}$대안입찰제도의 문제점 및 개선방안 연구)

  • Lee Yang-Kyoo;Kang Leen-Seok;Park Jong-Hyuk;Jeon Seong-Chul
    • Journal of the Korean Society for Railway
    • /
    • v.8 no.5
    • /
    • pp.460-469
    • /
    • 2005
  • Turnkey contract system is an effective ordering system for the ordering organizations that technical engineers are insufficient for their construction projects. It is possible to reduce project duration and to improve project quality in an integrated contract system between design and construction. However, owners can have a difficulty caused from unitary responsibility system. This study analyzes present situation and problems of turnkey contract system including railway projects. The result includes various methods for improving the system based on the analysis of bid price and selection procedure.

Case Study in Current State of Amount of Order for Turnkey Project (설계 $\cdot$ 시공일괄입찰제도의 수주현황 사례분석)

  • Lee Yang-Kyoo;Kang Leen-Seok
    • Proceedings of the Korean Institute Of Construction Engineering and Management
    • /
    • /
    • pp.197-202
    • /
    • 2004
  • Turnkey contract system is an effective ordering system for the organizations that technical engineers are insufficient in their construction projects. It is possible to reduce project duration and to improve project Quality in an integrated contract system between design and construction. However, owners can have a difficulty caused from unitary responsibility system. This study analyzes present situation and problems of turnkey contract system in our country. The results includes various methods for improving the system based on the analysis of bid price nd selection procedure.

  • PDF

Improvement of Procedures on Design Deliberation System for Turnkey and Alternative-Design Contracts (턴키.대안입찰 설계심의 및 평가제도의 개선방안)

  • Park, Hong-Tae;Lee, Yang-Kyoo
    • Journal of the Korean Society for Railway
    • /
    • v.14 no.1
    • /
    • pp.31-38
    • /
    • 2011
  • Turnkey and alternative-design contracts was introduced operation in the country from january 2004 to February 2010. this was introduced operation. The selecting method of contractor for turnkey projects has being operated by an open forum type that consists of technical committee and appraisal committee in an integrated design approach deliberations. But to improve the operation of the problems, the government is operating design review committee consisting of the central, local and special design advisory committee in march 2010. But this system has also been suggested as still problems, too many contracts by large companies, increasing of design cost and excessive competition. This study is intended to contribute that turnkey and alternative-design contracts can be well operated in domestic construction markets. In this paper suggests some improvement methods and operational problems caused from application of an open forum type for selecting contractor of turnkey project.

Some Practical Issues on the International Construction Contract (국제건설계약(國際建設契約) 실무상(實務上) 유의점(有意點))

  • Kim, Seung-Hyeon
    • The Korean Research Institute of International Commerce and Law
    • /
    • v.25
    • /
    • pp.3-40
    • /
    • 2005
  • Many Korean construction companies have been performing a variety of overseas construction projects since the 1970s. It is unfortunate that in many cases they have had to suffer big losses caused by errors and defects in the design and construction of the projects. In the author's opinion, however, there were losses that could have been avoided if they had understood better the feature and content of the particular construction contract. Few lawyers and scholars in Korea have been interested in the research and study of international construction contracts. This is mainly because they do not have access to practical sources outside of Korea for them to research and study since the contracts undertaken have been dealt with by law firms in other jurisdictions to which the disputes apply. This article is aiming primarily at the introduction of the issues which the practitioners are likely to confront in the process of reviewing and performing the international construction contract. In some cases solutions are sought about these issues based upon the FIDIC standard terms and conditions, the actual experience of practice, and UNIDROIT Principles, etc. It is reasonable to say that all the issues related to the international construction contract cannot be covered in a short article like this. The author wishes this article could induce subsequent studies on international construction contracts for further research. It has to be noted that from time to time Korean construction practices have been compared to the international ones for better understanding. This article mostly includes cases where the Korean construction companies go overseas for their projects, while there are some cases where foreign developers and financial investors participated in domestic projects in which international construction contracts forms were adopted. A few precedent domestic writings about international construction contracts seems to lack emphasis on the points that there are several standard construction contract forms and that they are different. The differences are mainly in accordance with who bears the design responsibility, how the owner has to make progress payments to the contractor and who the funding source for the project is. This article tries to make it clear that there are significant differences between the standard contract forms, e.g. a simple construction form, a design-build form and an EPC/turnkey form of contract. Again, the author hopes that this article can arouse the interest in the international construction contracts from both academic and practical fields, so that many subsequent advanced articles can help our construction industry become much more competitive in the world through awareness of the methods of procurement and administration of the contracts.

  • PDF

Orders Status Analysis on the Successful Bidder Decision Method of Turnkey Alternative Tendering Construction (턴키·대안입찰공사 낙찰자 결정방식에 의한 수주현황 분석)

  • Park, Hong-Tae;Lee, Yang-Kyu
    • Journal of The Korean Society of Civil Engineers
    • /
    • v.33 no.2
    • /
    • pp.771-780
    • /
    • 2013
  • Inspection system which was performed in the past selected the final winning bidder by separating Pre-Qualification, the basic design evaluation and price evaluation. However, turnkey and alternative bidding construction has selected way to determine the successful bidder as the best design and the most low cost method, comprehensive evaluation method (bid price adjustment, design score adjustments, weights standard), the best design and the fixed amount method from january 1, 2010 to the present. Due to these institutional problems, orders institutions were often a way to determine the successful bidder to apply differently for identical or similar construction. Therefore this study winning bidder selection criteria through analysis of construction the number and construction order performance, order performance by work division and institutional orders, the weights bidder order performance and orders status of turnkey alternative tendering construction to civil part performed in domestic.

Identification of Contractual Risk Factors for Application in the Overseas Construction Projects based on FIDIC Red Book 1999 Edition (해외건설공사관련 계약적 리스크 인자에 대한 연구 - FIDIC Red Book 1999년판 기준 -)

  • Hyun, Hak-Bong;Park, Hyung-Keun
    • Journal of The Korean Society of Civil Engineers
    • /
    • v.36 no.6
    • /
    • pp.1153-1160
    • /
    • 2016
  • There have been many studies on the subject of risks in the Construction Industry and many useful results have been produced. However, risk studies on the conditions of contract, which is the most critical contract documents, has not been tried despite of its contractual function in the overseas projects. In this study, various contractual risks are identified for proper and reasonable evaluation of the contractual risks possibly encountered in the Tender and/or Contract stages of the Projects. For development of study, FIDIC Red Book 1999 Edition which is world widely recognised as a standard conditions of contract prepared for the projects designed by the Employer. Contractual risks are divided into three levels and applicable clauses are assigned to each appropriate risk factors. And table of major contractual risk factors are made using the classified levels of each factors with evaluation criteria as a result of this study. As this study is made only for the conditions of contract which is prepared for the construction contracts designed by the Employer, further studies for other types of contracts such as Design-Build (FIDIC Yellow Book), EPC/Turnkey (FIDIC Silver Book) and recently developed Design, Build and Operate type of contract (FIDIC Gold Book) are required to cover various types of projects executed in the world construction markets.