FIDIC Presentation by Hariprasad

FIDICFédération Internationale Des Ingénieurs-Conseils

International Federation of Consulting Engineers

In French

In English

By

Hariprasad.G

In the Contract for Engineering projects, the function of Conditions of Contract is of greatest importance providing the rights, obligation and responsibility for the parties concerned in the Contract execution.

During the past half century, the International Federation of Consulting Engineers (FIDIC) has devoted itself to the compilation of management documents for all kinds of projects, among which the FIDIC Conditions of Contract are of the highest influence and are the most popular application.

What is FIDIC……?

The fact that the organisation has a French title bears testimony to its foundation in 1913 by three countries each wholly or partly francophone. The founding member countries of the FIDIC were Belgium, France and Switzerland.

History

ObjectiveThe Objectives of forming the federation were to promote in common the professional interests for the member associations and to disseminate information of interests to members of its component national associations.

To be the industry’s recognized global voice

Vision

Mission

To improve the business climate and promote the interests of consulting engineering firms, globally and locally, consistent with the responsibility to provide quality services for the benefit of society and the environment.

As on today nearly 1 million professionals are following FIDIC

in 74 countries

Membership

The first edition of FIDIC Conditions of Contract for Works of Civil Engineering Construction (“Red Book”) was compiled in 1957, and later its second, third, and fourth edition were issued in 1963, 1977, and 1987 respectively.

But these editions were mostly compiled in the reference of the related documents of the Institution of Civil Engineers (ICE). The FIDIC and European International Contractors (EIC) entrusted the University of Reading in 1966 to summarize the experience and to draw lessons from the application of the former documents.

With the investigation of the governments, employers, contractors and consulting engineers all over the world about their application of the “Red Book”, 204 findings reports were returned. According to the findings, the FIDIC Contract Committee organized a group of experts to compile the new Contract Condition models to be applied in the 21stcentury.

FIDIC Books

FIDIC Conditions of Contract for Construction,

(New Red Book) FIDIC Conditions of Contract for Plant and Design/Build,

(New Yellow Book) FIDIC Conditions of Contract for EPC Turnkey Projects,

(Silver Book) FIDIC Short Form of Contract, (Green Book) FIDIC Harmonized Conditions of Contract for

Constructions,

(Pink Book)

The test edition of these models was published in 1998, and FIDIC solicited opinions throughout the world for additional time to publish the official texts in 1999. Now FIDIC condition of contract has been applied worldwide, especially in the projects invested by World Bank, Asia Development Bank, Africa Development Bank etc.

The new models of FIDIC Books

Red Book

Yellow Book

Green Book

Silver Book

FIDIC “New Red Book”

The Conditions of Contract for Construction:

“Which are recommended for building or engineering works designed by the Employer, or by his representative, the Engineer. Under the usual arrangements for this type of contract, the Contractor constructs the works in accordance with a design provided by the Employer. However, the works may include some elements of Contractor – designed, civil, mechanical, electrical and/or construction works”

FIDIC Conditions of Contract - Types of Manuals

FIDIC “New Yellow Book”

The Conditions of Contract for Plant Design – Build:

“Which are recommended for the provision of electrical and mechanical plant, and for the design and execution of building or engineering works. Under the usual arrangements for this type of contract, the Contractor designs and produces, in accordance with the Employer’s Requirements, plant and/or other works; which may include any combination of civil, mechanical, electrical and/or construction works”.


FIDIC “New Silver Book”

Conditions of Contract for EPC (Engineering, Procurement, Construction)/ Turnkey Projects:“Which may be suitable for the provision on a turnkey basis of a process or power plant or factory or similar facility, or of an infrastructure project or other type of development, where

(i) A higher degree of certainty of firm price and time is required, and

(ii) The Contractor takes total responsibility for the design and execution of the project, with little involvement of the Employer.

Under the usual arrangements for turnkey projects, the Contractor carries out all engineering, procurement, and construction EPC: providing a fully equipped facility, ready for operation at the “turn of a key”.


FIDIC “New Green Book” – the “Mini-Red Book”

Short Form of Contract:

“Which is recommended for building or engineering works of relatively small capital value. Depending on the type of work and circumstances, this form may also be suitable for contracts of greater value, particularly for relatively simple or repetitive work or work of short duration. Under the usual arrangements for this type of contract the Contractor constructs the works in accordance with a design provided by the Employer or his representative (if any), but this form may also be suitable for a contract which includes, or wholly comprises, Contractor-designed civil, mechanical, electrical and/or construction works.


FIDIC “Pink Book”

Harmonized Conditions of Contract for Constructions:

Issued after several Multilateral Development Banks (MDB) agreed certain modifications for some Clauses, for better reflecting their financing principles.• Used for construction and engineering works, designed

by the Employer (as in the Red Book)• Allows the Bank to suspend payments to Borrower –

Sub-Clauses 2.4, 14.7 and 16.1• Engineer’s Authority may be unilaterally changed by the

Employer – Sub-Clause 3.1• Modifications concerning selection and activity of DAB


Basic Principles and Selection of New Red Book: Design primarily undertake by Employer or his agent Works are to be

re-measured Employer appoints Engineer to administer contract on his behalf Engineer has power to vary works, but not change contract Disputes Adjudication Board (DAB) appointed within 28 days of

commencement date and has powers to resolve any dispute and change “determinations” of Engineer

Basic Principles and Selection of New Yellow Book:The Employer provides project requirements as defined under item “Employer’s Requirements” (ER)

The “ER” are the basis for the contractor to design and build the project. Errors within the “ER” are the liability of the Employer.

The contract is for a fixed sum and not re-measured. The contract is administered on behalf of the Employer by the

Engineer,Provision is made for variations by the Engineer.

The general conditions (clauses 1 to 20), except clauses 5 & 12, are principally the same as red book.

Principles

All contracts contain risks for both Contracting Authorities/ Employers and Contractors – There is no risk-free contract .

FIDIC attempts to rationalize and allocate responsibilities for main risks.

A key requirement is for the Contract Parties to fully understand the FIDIC General and Particular Conditions of Contract that set out their Responsibilities and Risks within a Project.

Every risk given to the other party has its cost, no Party assumes a risk for free.

Selection of FIDIC Documents – Risk

Management

There are 20 Conditions in Red Book:

1. GENERAL PROVISIONS

2. THE EMPLOYER

3. THE ENGINEER

4. THE CONTRACTOR

5. NOMINATED SUBCONTRACTORS

6. STAFF AND LABOUR

7. PLANT, MATERIAL AND WORKMANSHIP

8. COMMENCEMENT, DELAYS AND SUSPENSION

9. TEST ON COMPLETION

10.EMPLOYE’S TAKING OVER

11.DEFECT LIABILITY

General Conditions of Contracts in

RED BOOK

12. MEASUREMENT AND EVALUATION

13. VARIATIONS AND ADJUSTMENTS

14. CONTRACT PRICE AND PAYMENT

15. TERMINATION BY EMPLOYER

16. SUSPENSION AND TERMINATION BY CONTRACTOR

17. RISK AND RESPONSIBILITY

18. INSURANCE

19. FORCE MAJEURE

20. CLAIMS, DISPUTE AND ARBITRATION

There are 20 Conditions in Red Book:

1. GENERAL PROVISIONS

2. THE EMPLOYER

3. THE ENGINEER

4. THE CONTRACTOR

5. DESIGN

6. STAFF AND LABOUR

7. PLANT, MATERIAL AND WORKMANSHIP

8. COMMENCEMENT, DELAYS AND SUSPENSION

9. TEST ON COMPLETION

10.EMPLOYE’S TAKING OVER

11.DEFECT LIABILITY

General Conditions of Contracts in

YELLOW BOOK

12. TESTS AFTER COMPLETION

13. VARIATIONS AND ADJUSTMENTS

14. CONTRACT PRICE AND PAYMENT

15. TERMINATION BY EMPLOYER

16. SUSPENSION AND TERMINATION BY CONTRACTOR

17. RISK AND RESPONSIBILITY

18. INSURANCE

19. FORCE MAJEURE

20. CLAIMS, DISPUTE AND ARBITRATION

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