Introduction To FIDIC Contracts

Construction Law CoTM 4241
Introduction to FIDIC Contracts
What does FIDIC mean? What do they do?

FIDIC stands for ‘Fédération Internationale des Ingénieurs - Conseils’,
which is best translated from French as The International Federation of
Consulting Engineers. FIDIC represents the consulting engineering industry
both globally and domestically.
What are the FIDIC forms of contract?

FIDIC’s Contracts Committee produces standard forms of contract for civil
engineering projects, which are used globally. The purpose of these
standard forms is to define the contractual relationship between the par-ties
and to apportion risks between the contractor and the employer. FIDIC
states that their contracts allocate risks fairly to the party that is best able to
bear and control that risk.
It is important to remember that the FIDIC forms represent a starting point
for the preparation of a construction contract. However, they are routinely
amended to reflect the particular characteristics of each project and the
requirements of the parties.
Choice of FIDIC form of contract

The forms of contract are drafted for use on a wide range of project types.
The main forms are differentiated by the colour of their covers. The choice
of form depends on the type of project being contemplated. In summary:
 Straight forward, quick or cheap project - Green Book
 Employer design (traditional project) - Red Book
 Employer design (Multilateral Development Banks providing
finance) - Pink Book
 Contractor design (traditional project) - Yellow Book
 EPC/Turnkey project - Silver Book
 Design, build, operate project - Gold Book
The Green Book - ’Short Form of Contract’

This is FIDIC’s recommended form of contract for use on engineering and
building works of relatively small capital value or where the construction
time is short. FIDIC has provided guidance that this would probably apply
to contracts with a value of less than US $500,000 or a construction time of
By Andualem E (M.Sc)
Dept. of Construction Technology and Management, Madawalabu University, Nov 2017
less than six months. However, the Green Book may also be suitable for
simple or repetitive work.
Although typically in these types of arrangements the contractor is to
construct the works according to the employer’s design, it does not matter
whether the design is provided by the employer or by the contractor.
There is no engineer and payments are made in monthly intervals.
The Red Book - ’Conditions of Contract for Construction for Building and
Engineering Works Designed by the Employer’ (the construction contract)
In 1956 the first edition of the original form of Red Book was published.
This was updated and amended over four editions. Then in 1999 FIDIC
released a totally new set of standard forms of contract, including a brand
new version of the Red Book, which superseded the original version of the
Red Book. The Red Book is the FIDIC recommended form of contract for
building or engineering works where the employer has been responsible for
nearly all the design. In fact FIDIC claim that the Red Book is the most
widely used international construction contract where most of the works
have been designed by the employer.
A key feature of the Red Book is that payment is made according to bills of
quantities (ie a document in which materials, plant, and labour (and their
costs) are itemized), although payment can also be made on the basis of
agreed lump sums for items of work.
The Red Book is administered by the engineer (a third party) rather than
the contractor or the employer. The engineer will also be responsible for
monitoring the construction work (but still keeping the employer fully
informed so that he may make variations) and certifying payments.
The Pink Book - ’MDB Harmonized Edition’

This is a variant of the Red Book. It is drafted for use on projects that are
funded by certain Multilateral Development Banks (‘MDBs’), which are
supranational institutions such as the World Bank, where the Red Book
would otherwise have been applicable. Where the project is funded by an
MDB but the employer is not responsible for the design, the parties should
not use the Pink Book, but use and amend one of the other FIDIC forms of
contract.
Prior to the publication of the Red Book, where the MDBs had originally
adopted the Red Book for the projects they were funding, they amended
the FIDIC General Conditions. As a result of negotiations between FIDIC
and the MDBs, the Pink Book was drafted which incorporated the
amendments that were commonly inserted by the MDBs.
The Yellow Book - ’Conditions of Contract for Plant and Design-Build for
Electrical and Mechanical Plant and for Building and Engineering Works,
Designed by the Contractor’ (the plant and design/ build contract)
This form of contract is drafted for use on projects where the contractor
carries out the majority of the design (i.e the contractor carries out the
detailed design of the project so that it meets the outline or performance
specification prepared by the employer). The Yellow Book is therefore
traditionally used for the provision of plant and for building or engineering
works on a design/build basis.
The Yellow Book is a lump sum price contract with payments made
according to achieved milestones on the basis of certification by the
engineer (like the Red Book, the engineer administers the contract). The
contractor is also subject to a fitness-for-purpose obligation in respect of
the completed project.
The Silver Book - Conditions of Contract for EPC/Turnkey Projects (the

EPC turnkey contract)
The Silver Book is drafted for use on EPC (Engineer, Procure, Construct)
projects. These are projects that require the contractor to provide a
completed facility to the employer that is ready to be operated at ‘the turn of
a key’. These contracts therefore place the overall responsibility for the
design and construction of the project on the contractor.
The Silver Book is used where the certainty of price and completion date is
important. The Silver Book allows the employer to have greater certainty as
to a project’s cost as the contractor assumes greater time and cost risks
than under the Yellow Book.
The Silver Book may also be used for privately financed BOT (Build,
Operate, Transfer) projects. These are projects where the employer takes
total responsibility for the design, construction, maintenance and operation
of a project and wishes to pass the responsibility in respect of construction
to the contractor.
There is no engineer under the Silver Book as his responsibilities are
assumed by the employer. Similar to the Yellow Book, the contractor is also
subject to a fitness-for-purpose obligation in respect of the completed
project.
The Gold Book - ’Conditions of Contract for Design, Build and Operate
Projects’ (the design build operate contract)
FIDIC states that the Gold Book is drafted to minimize the risk of rapid
deterioration after the handover of a project due to poor design,
workmanship or materials. The Gold Book is therefore suitable where a

long-term operation and maintenance commitment is required along with
design and build obligations. The contractor must operate and maintain the
completed project on behalf of the employer for a period of typically 20
years from the date of the Commissioning Certificate, which is issued at
completion of construction of the project. During this 20 year period the
contractor must meet certain targets and at the end of this period the
project must be returned to the employer in an agreed condition.
Throughout the 20 year period the employer owns the plant but the
contractor operates it at the contractor’s own risk. However, the contractor
has no responsibility for financing the project or ensuring its long-term
success.
The Blue Book - ’Form of Contract for Dredging and Reclamation Works’
FIDIC state that the Blue Book is suitable for all types of reclamation and
dredging works as well as ancillary construction works.
Typically, under such form of contract the contractor constructs the works
in accordance with the employer’s design. However, this form of contract
can also be adapted for contracts that include or consist entirely of
contractor-designed works.
The White Book - ’FIDIC Client/Consultant Model Services Agreement’

This form of contract is not for the provision of construction and engineering
works despite it also being referred to by the colour of its cover. This form
of contract is used to appoint consultants to provide services to the
employer such as feasibility studies, design, contract administration and
project management. The White Book typically forms the basis of the
agreement between the consultant and the employer where the
construction and engineering works are being undertaken pursuant to a
FIDIC contract.
The Conditions of Subcontract for Construction - Conditions of

Subcontract for Construction for Building and Engineering Works Designed
by the Employer
Unlike the above forms of FIDIC contract, no colour is given to this form of
contract. This is the FIDIC recommended form of subcontract for use with
the Red, Yellow, Silver and Gold books referred to above.

Introduction To FIDIC Contracts

Uploaded by

Copyright:

Available Formats

Introduction To FIDIC Contracts

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction To FIDIC Contracts

Uploaded by

Copyright:

Available Formats

Construction Law CoTM 4241

Introduction to FIDIC Contracts

What does FIDIC mean? What do they do?

What are the FIDIC forms of contract?

Choice of FIDIC form of contract

The Green Book - ’Short Form of Contract’

The Pink Book - ’MDB Harmonized Edition’

The Silver Book - Conditions of Contract for EPC/Turnkey Projects (the

workmanship or materials. The Gold Book is therefore suitable where a

The White Book - ’FIDIC Client/Consultant Model Services Agreement’

The Conditions of Subcontract for Construction - Conditions of

You might also like