• William Godwin QC

Let's get to know the new FIDIC Contracts 2017

By our Fidic accredited course leader William Godwin QC- a highly experienced specialist practising barrister (Queen's Counsel) and arbitrator and legal member of the FIDIC Updates Task Group


The 2017 Red, Yellow and Silver Books are 1.5 times the length of the 1999 editions; they seem much more complex and prescriptive. Why is this?

Before we can understand the new contracts, we have to see how they compare with the 'old' 1999, editions.


So let's look at the main features of the 1999 Books :







Construction contract (Red Book)

Employer Design

Under the Red Book, the Employer is responsible for all or most of the design of the Works.

Measurement

The Contractor’s entitlement is to be paid according to the amount of work he executes in accordance with the Contract, applying the contract rates.

Engineer

There is an important role for the Engineer, to administer the contract and determine claims.

‘Even-handed’ risk allocation

The Contract strives to apportion risk according to each party’s ability to manage and control risk (for example, of unforeseeable physical events which delay the Works or result in additional cost).


Plant and Design Build contract (Yellow Book)

Contractor design

Like the Red Book, theContractor is responsible for all or most of the design of the Works.

Fixed price lump sum

Contractor is entitled to be paid the lump sum price stated in the Contract, subject to adjustments for such things as variations.

Engineer

Like the Red Book, there is an important role for the Engineer, to administer the contract and determine claims.

‘Even-handed’ risk allocation

Also like the Red Book, the Contract strives to apportion risk according to each party’s ability to manage and control risk.


EPC/turnkey contract (Silver Book)

Contractor design

Also like the Yellow Book, thContractor is entitled to be paid the lump sum price stated in the Contract, subject to adjustments. (The matters for which the Contractor may be entitled to such an adjustment are however fewer than in the Yellow Book.) ok.)

Fixed price lump sum

Also like the Yellow Book, the Contractor is entitled to be paid the lump sum price stated in the Contract, subject to adjustments. (The matters for which the Contractor may be entitled to such an adjustment are however fewer than in the Yellow Book.)

No Engineer

Unlike the Yellow Book, there is no Engineer in the Silver Book; the Employer is entitled to administer the Contract directly.

Contractor risk

Also unlike the Yellow Book, the Contractor bears nearly all the risk associated with design, procurement and construction. The Silver Book is used in projects in which the sponsors are particularly anxious to ensure completion on time and within budget. The scope for Contractor’s claims is severely reduced, by comparison with the Yellow Book.


Next time, we will start to look at how the new Contracts compare and contrast with the 1999 editions.


Come to one of our seminars on just this topic, and participate in more depth with case studies and plenty of opportunity for clarification and discussion. See our website for details of courses in London (including two nights’ accommodation!) and Dubai.

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