The New Oman Standard Conditions of Contract
The Standard Form of Construction Contracts in routine use in Oman since 1999 is old viz. the 4th Edition Standard Documents for Building and Engineering Works which dealt mainly with huge government-based infrastructure projects. But in 2019, with aim of taking Oman’s economy forward the Ministry of Finance and the Ministry of Legal Affairs launched new edition of the suite of construction contracts.
The 2019 Edition of the Standard Form Contract for Building and Civil Engineering Works is primarily based on the FIDIC Red Book which includes in itself an employer-design as well as contractor-build risk profile.
This is also noteworthy that 2019 Standard Form is adaptation of the FIDIC Red Book 1999 and not the recent 2017 edition. The notable changes brought by this are:
Liability for the Defects
The Standard Form 1999 mentioned for ‘Period of Maintenance’ total of 365 days but the new regime is words it as ‘Defects Notification Period (DNP and must be agreed between the parties in addition to allowing the employer to provide for extending the DNP.
The old Standard Form provided for submission of disputes to the engineer and in case the matter is unresolved refer arbitration. The new Standard Form provides for court-based litigation.
The variations provisions are improved in the new Standard Form 2019 with principle of “value engineering” merged into the contract thereby providing greater efficiencies and cost-savings to the employer.
The contractor has an option to involve Omani SME Contractors for supply and sub-contracts but when mutually agreed between the parties.
Anti-bribery and corruption
Anti-bribery and corruption clauses in the Standard Form 2019 brings Oman as progressive nation for international best practice.
The Force Majeure provisions and related termination rights are now included with 2019 Standard Form.
These changes would boost international infrastructure investors and project developers to bring world-class infrastructure in Oman.