Aparna.S 110216251008 Professional Practice and Ethics Assignment - 3

APARNA.
110216251008
PROFESSIONAL PRACTICE AND ETHICS
ASSIGNMENT -3
FIDIC contracts represent agreements in the construction and installation

field, used as standards in the international arena. These contracts have
been drafted by the International Federation of Consulting Engineers
(commonly known as FIDIC, acronym for its French name Fédération
Internationale Des Ingénieurs-Conseils) founded in 1915 by three
European states (Belgium, France and Switzerland).
PURPOSE:
With reference to the construction agreements, the main purpose of

FIDIC was to create standard contracts that may be used for a variety of
construction and installation projects, considering that, in essence,
constructing any project around the world have as foundation the same
main principles (leaving aside the technical and geographical
specificities).
These standard agreements cumulate an experience of decades in
construction and installation projects and represents documents that
take into account, in a balanced manner, the interests of both parties
involved.
FIDIC CONTRACT FORMS
Over the years FIDIC has consistently improved on its contracts. The
organisation has added new forms of contract, replaced previous ones
and updated important terms. The table below gives a brief overview of
FIDIC contracts to date:
GENERAL FEATURES OF FIDIC CONTRACTS
Although the FIDIC family covers a wide range of contracts, there are some common
features:
Presentation
FIDIC is usually divided in two parts: Part I consisting of the general

conditions and Part II concerning the conditions of particular application
(including guidelines for the preparation of Part II clauses). Part I contains
the general terms of the contract, such issues as rights and obligations of
each party, procedure for payment, variation, certification and dispute
resolution.
Part II of the contract is the conditions of particular application and is to

be used to introduce project specific clauses, such as language of the
contract, choice of law, the name of the person or firm appointed to act
as Engineer or Employers representative for the project among other
terms. The Appendix usually contains sample of documents to be used for
the procurement process.
In most FIDIC forms there is a default hierarchy for the documents

forming the contract. The order of priority is as stated below and in the
event of inconsistency the first on the list takes precedence:
1. The Contract Agreement
2. The Letter of Acceptance (this is the formal acceptance of the
contractor's tender and marks the formation of the contract)
3. The Letter of Tender
4. Part II – the conditions of particular application
5. Part I – general conditions of contract
6. The Specification and Drawings (Red Book), The Employer’s
Requirements (Yellow Book), the Schedules (Red and Yellow Books)
7. Further documents (if any), listed in the Contract Agreement or in
the Letter of Acceptance.
The parties are allowed to rearrange the priority of documents or

stipulate that no priority or order of hierarchy will apply to the contract.
This can be done in Part II of the contract.
The contract structure is generally the same:
 General provisions (Clause 1)

 The Employer, Employer's Administration or Engineer, Contractor,
Nominated Subcontractors OR Design (Clauses 2-5)
 Staff and labour, Plant, materials and workmanship (Clauses 6-7)
 Commencement, delays and suspension, Tests on completion,
Employer's taking over, Defects Liability, Tests after completion (Clauses
8-11/12)
 Measurement and Evaluation OR Variations and Adjustments,
Contract Price and Payment (Clauses 12-14)
 Termination by Employer, Suspension and Termination by
Contractor (Clauses 15-16)
 Risk and Responsibility (Clause 17)
 Insurance (Clause 18)
 Force Majeure (Clause 19)
 Claims, Disputes and Arbitration (Clause 20)
A substantial amount. In 1999, FIDIC published a completely new suite of

contracts, the 'Rainbow Suite', various contracts having been updated.
These include:
 The Red Book: Conditions of Contract for Construction for Building
and Engineering Works designed by the Employer (1st Ed 1999).
 The Pink Book: Harmonised Red Book (MDB Edition) Conditions of
Contract for Construction for Building and Engineering Works designed by
the Employer (Version 3 2010) - for use as part of the standard bidding
documents by the Multilateral Development Banks only. The Islamic
Development Bank and the World Bank worked with FIDIC in developing
this contract.
 The Yellow Book: Conditions of Contract for Plant and Design-Build
- for electrical and mechanical plant, and for building works, designed by
the Contractor (1st Ed 1999).
 The Silver Book: Conditions of Contract for EPC/Turnkey Projects
(1st Ed 1999).
 The Orange Book: Conditions of Contract for Design - Build and
Turnkey (1st Ed 1995).
 The Gold Book: DBO Contract - Conditions for Design, Build and
Operate Projects (1st Ed 2008).
 The Green Book: Short form of Contract (1st Ed 1999).
 Sub-consultancy Agreement: (1st Ed 1992)
 The White Book: Client/Consultant Model Services Agreement (4th
Ed 2006)
 The Blue-Green Book: Dredgers Contract (1st Ed 2006)
 Conditions of Subcontract for Construction: Used in conjunction
with the Red Book and The Pink Book (Test Book 2009)

IN INDIA:
CONSULTING ENGINEERS ASSOCIATION OF INDIA
Foundation year: 1980
Member profile:
 Consulting Engineers Association of India (CEAI) is an
apex body of Consulting Engineers in India and represents
the majority of Consulting Engineers.
 CEAI is the Member Association from India representing
the Indian engineering consultancy profession at the
International Federation of Consulting Engineers (FIDIC).
 CEAI has behind it over 48 years of accumulated
knowledge and experience of the two major Consulting
Engineers Associations of India, i.e. The Association of
Consulting Engineers (India) (ACE) and National
Association of Consulting Engineers (NACE).
Why to use FIDIC Contracts have been developed over 50 years as the
international standard for the Consulting Industry.
(source :- https://fidic.org/node/7089)
 The key ingredient for their success as industry standard lies in their
balanced approach to the roles and responsibilities of the main
parties, as well as the allocation and management of risk.
 All FIDIC contracts therefore contain guidance on the preparation of
Particular Conditions, and provide examples of the areas where
special provisions may be required for a specific project.
 To diverge significantly from these guidelines is to increase the risk
of shifting the balanced nature of the contract, and putting into
jeopardy the successful implementation of the project.
Experience in different countries and with different kinds of client,
suggests that changing or upsetting the balance of risk-sharing in FIDIC
contracts typically results in higher tender prices; delays to completion;
additional time and cost claims; and, in the worst cases, major protracted
disputes leading to arbitration, and sometimes to contract termination.
FIDIC contracts do provide guidance on project specific sub-clauses where
Particular Conditions might be used.
Examples of non-project specific clauses (which should not be modified)
include the following:
1. The role and authority of the Engineer (where applicable, otherwise
the Employer’s Representative):
2. Liability for errors in the Drawings/Technical Specifications or
Employer’s Requirements
3. Liability for proving access to and on the Site.
4. Liability for obtaining permits and approvals.
5. Liability for unforeseeable physical conditions.
6. Labour conditions.
7. Delays caused by authorities.
8. Defects liability, including latent defects.
9. Procedures for dispute settlement/resolution.

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APARNA.

PROFESSIONAL PRACTICE AND ETHICS

FIDIC contracts represent agreements in the construction and installation

With reference to the construction agreements, the main purpose of

FIDIC CONTRACT FORMS

FIDIC is usually divided in two parts: Part I consisting of the general

Part II of the contract is the conditions of particular application and is to

In most FIDIC forms there is a default hierarchy for the documents

The parties are allowed to rearrange the priority of documents or

The contract structure is generally the same:

 General provisions (Clause 1)

A substantial amount. In 1999, FIDIC published a completely new suite of

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