First, the most important thing during the preparation of Tender Documentation is the selection of the right type of the Contract (Red Book, Yellow Book, Silver Book etc.). The second most important thing is to properly define the exact type of the FIDIC Contract in Tender Documents. For example FIDIC Red Book 1999, FIDIC Red Book 1987, FIDIC Yellow Book 1999 etc. Although it is considered a basic thing, it happens often in practice that this rule is not applied. This can cause a lot of unnecessary issues during the Administration of the Contract. Also, it is a potential cause for disputes between the Parties.
What happens when you don’t define FIDIC properly?
Below I will list only some of the cases from practice, where the exact type of Contract in Tender Documents was not defined:
- During the preparation of Tender Documentation, the Employer was selecting the type of the Contract. As the Employer was not quite sure which type of Contract will be used, the Tender Documentation contained ambiguous formulation: “FIDIC Conditions of the Contract”. Whatever that means.
- During the Tendering Phase, the Employer decided to change the type of the Contract. FIDIC Yellow Book is changed to FIDIC Red Book, but the Employer failed to implement this change in the Tender Documents.
- There is a possibility to obtain an exclusive modified copy of FIDIC General Conditions of the Contract. FIDIC can agree to licence your firm or government to adopt the contract. The fee depends on the planned usage and the price for that starts at approximately USD 1000. More information you can find on the FIDIC official site. In general, terms of the General Conditions of a FIDIC Contract should not be modified. The Particular Conditions of Contract should be used for modification of General Conditions of the Contract. For General Conditions of the Contract, it is highly advisable to use only original publications by FIDIC. However, if the Employer includes the modified copy of FIDIC General Conditions of the Contract in Tender Documentation, with a clear reference to the modified version, then that modified version shall be used for Administration of the Contract. Potential Contractors should take into consideration all changes to General Conditions of the Contract and implications on the Contract Price and future Administration of the Contract. In one case from the practice, the Employer included in the Tender Documents modified a copy of General Conditions of the Contract. However, in Tender Documents the reference was made to original General Conditions of the Contract. Therefore, the Administration of the Contract was fully conducted per the original General Conditions of the Contract.
The list of examples is non-exhaustive. To avoid everything above mentioned, the reference in Tender Documentation should be as clear and unambiguous as possible. Therefore, it is highly advisable to use ISBN (International Standard Book Number) which is unique for each FIDIC publication.
Recommendations for a proper definition of FIDIC
If you want to properly define FIDIC Book, below you can find two examples. Here are clear and unambiguous definitions of the most used FIDIC General Conditions of the Contract (Red and Yellow Book):
“Conditions of Contract for Construction (Red Book) published by FIDIC (Fédération Internationale Des Ingénieurs-Conseils), First Edition 1999, ISBN 2-88432-022-9“
“Conditions of Contract for Plant and Design-Build (Yellow Book) published by FIDIC (Fédération Internationale Des Ingénieurs-Conseils), First Edition 1999, ISBN 2-88432-023-7“