What is FIDIC Contracts
Choosing suitable FIDIC contract is very important for the smooth execution of a project. FIDIC Contracts are the leading documents used outside the UK. (for forming contacts in the construction industry). International Federation of Consulting Engineers or Fédération Internationale des Ingénieurs-Conseils draft and publish these FIDIC Contracts. Red book and the yellow book are the best known of these contracts. FIDIC issued many contracts to carry out the work recently.
Moreover, this article covers a wide range of methods and projects. So, all the contractors who work outside the UK will meet the conditions of the FIDIC contracts. When the sub-contractors are operating internationally, they will also encounter conditions derived by the same. In addition to this, now we are going to describe the primary forms of contracts.
Green Book(FIDIC Short Form of Contract 1st Ed (1999))
It includes the contents of Agreement, General Conditions, Rules for Adjudication, and Notes for Guidance. According to the guidance notes, it recommends a small value as capital for engineering and building works. Besides, usually, the amount should be higher than the US $500,000. Despite that factor, the green book will be suitable for contracts which have higher values too. However, it will depend on the nature of the work and the circumstance. As well as that, this is a very flexible document. It includes all the necessary arrangements for the administration.
Red Book (FIDIC-Conditions of Contract for Construction For Building and Engineering works designed by the Employer, First Edition (1999) and second edition (2017))
The red book includes details about general conditions and guidance for the preparation of the terms. Furthermore, it discusses forms of tender and dispute adjudication agreement. When the employer carries out the design, Red Book gives the conditions of contracts for its construction works. However, it allows the contractor to design some selected elements of a particular project. But the Red Book is not the most suitable one at such incidences that are created by the contractor.
Yellow Book (FIDIC-Conditions of Contract for Plant and Design-Build For electrical and mechanical plant, and for building works, designed by the Contractor, First Edition (1999) and second edition (2017))
Yellow Book will be used when the contractor carries out the design. So, it will provide the conditions of contracts for the construction works in such cases. As well as that, the Yellow Book will be used for the provision of electrical and mechanical plant. According to the conditions mentioned in the yellow book, the contract is outlined to follow lumpsum payment terms. The contractor will eligible to received payment after completion of each milestone agreed in the contract.
Silver Book(FIDIC Silver Book Conditions of Contract for EPC/Turnkey Projects, First Edition (1999) and second edition (2017))
When the contractor carries out the total responsibility about the design of the private-infrastructure project, the Silver Book will be applicable there. So, the risk of completing the project punctually, ensuring the quality and maintaining the cost will be the responsibility of the contractor. That’s why the silver book is suitable for just experienced contractors.
DBO Contract (FIDIC Conditions of Contract for Design, Build and Operate Projects, First Edition (2008)
DBO Contract is a similar form to the Silver Book. It was published to fulfil the need for a combination contract with design-build obligation and long-term operation commitment. In this DBO Contract, the contractor does not have any obligation about financing. So, the document is applicable for tenders that have an international basis. To achieve a perfect performance, all the participating parties should be fully understood about time framework.
Red Book (MDB edition) (FIDIC Conditions of Contract for Construction For Building and Engineering works designed by the Employer, MDB Edition (2005)
Red Book (MDB edition) also includes the conditions of contracts which are designed by the employer, and it simplifies the operation of the FIDIC contracts for the Multilateral Development Banks (MDB). So, all MDBs who are participating here will adopt the edition in standard bidding documents of them in the future. It will cause to decrease the additions to be adjusted in certain conditions.
Orange Book (FIDIC Conditions of Contract for Design-Build and Turnkey, First Edition (1995))
The Orange Book includes the contents regarding general conditions and guidance for the preparation of the conditions. It was published to give a build option for the current FIDIC suite. When the contractor is the one who carries out the total liability about the design, the Orange Book will be applicable.
This article is written based on a document published by FIDIC & Turner & Townsend.