Page 60 - Civil Engineering Project Management, Fourth Edition

Contract conditions used for civil engineering work
4.3 Conditions published by the International
Federation of Consulting Engineers (FIDIC)
FIDIC ‘Red Book’ Conditions, 4th Edition 45
The FIDIC ‘Red Book’ Conditions, 4th Edition are intended to apply to civil
engineering work worldwide. They take the same form as the ICE conditions,
but with some variations and simplifications to allow for work outside the
UK. Additions can be made to cover local needs and different procedures for
payment including payment in different currencies. The 4th edition – sub-
stantially revising the 3rd – incorporated changes resulting from consult-
ations within the international construction industry and with major
international lending agencies. These conditions were accepted by the major
lending agencies who recommend or require their use together with addi-
tional clauses and amendments proposed by the agencies.
An important requirement in FIDIC4 is that the engineer is specifically
required to consult with both the employer and the contractor before making
a decision on a contractor’s claim for additional payment or extension of the
contract period. Another provision of importance is contained in Clause 52(3)
which allows for adjustments to payment with respect to the contractor’s
overheads if the value of extra works ordered exceeds 15 per cent of the ten-
dered sum excluding dayworks and provisional items.

1999 New forms

In 1999 FIDIC published four new forms. The first is a Contract for Construc-
tion to replace the Red Book. Much of the text and the concepts have remained
but the whole is re-organized into what was considered a more logical
sequence of clauses. The role of the independent engineer is retained who again
has to consult with both parties to try to reach agreement on claims and the
like, but if this is not possible, to ‘make a fair determination in accordance
with the Contract, taking due regard of all relevant circumstances’. The engin-
eer’s duty to make final decisions on disputed matters is replaced, however,
by use of a Dispute Adjudication Board (DAB) selected by the parties.
A second form is for Plant and Design-Build which allows for the contractor
to undertake design in accordance with the Employer’s requirements set out
in the contract. As the title suggests this is intended both for plant supply
and installation and for use where much of the civil works may also be
designed by the contractor. This contract again uses an independent engineer
to monitor design and construction against the requirements and has the DAB
to decide disputes.
Additionally FIDIC produced in 1999 a radically different form for engineer,
procure and construct (EPC)/Turnkey Projects. Under this form the contractor