FIDIC is a French-language acronym for Fédération Internationale des Ingénieurs-Conseils, which means the International Federation of Consulting Engineers. It was founded in 1913 by France, Belgium and Switzerland. Currently, FIDIC is based in Geneva, Switzerland and has members from more than 100 countries.
Since its founding, FIDIC’s main activity is publishing international standard forms of Contracts. The first standard form of Contract was The Form of contract for works of Civil Engineering construction, published in 1957. It became famous for its cover and called “The Red Book”. Ever since then, it has become the tradition that FIDIC Contracts are known by the colour of their cover.
Due to the broad support it enjoys, FIDIC Conditions of the Contract are widely accepted by Multilateral Development Bank. Therefore, they are the most used types of Contracts on International Projects.
In general, FIDIC Conditions of the Contract consist of two parts: Part A is widely known as General Conditions of the Contract and Part B as Particular Conditions of the Contract.
What are FIDIC General Conditions of the Contract (GCC)?
Part A or General Conditions of the Contract defines risk allocation between the Parties. More precisely, it defines the rights and obligations of each Party, procedures for payments, variations, certifications, disputes resolution etc. They are published by the FIDIC organization and should not be modified.
In conclusion, all changes, additions/ omissions and amendments of General Conditions of the Contract should be done using Particular Conditions of the Contract.
What are FIDIC Particular Conditions of the Contract (PCC)?
In the first place, Part B or Particular Conditions of the Contract defines conditions that are specific to a Project and the Country where the works are executed. Usually, they are used for addition/ omission and change of General Conditions of the Contract. Having in mind that, the purpose of the Particular Conditions of the Contract is to define everything that could not be defined in the General Conditions of the Contract.
However, it is important to highlight that in General Conditions of the Contract there is no provision that defines that Particular Conditions of the Contract should exist. On the other hand, the author is not aware of any FIDIC Contract which is signed without Particular Conditions of the Contract.
What is Appendix to Tender and Contract Data?
Certain information necessary for proper Contact Administration is usually defined in documents called Appendix to Tender or Contract Data. Some of those information refers to fall-back clauses. More precisely, if that information is not defined in the Appendix to Tender or Contract Data, those Sub-Clauses do not apply. For example, in FIDIC Red Book 1999, if the percentage of Advance Payment is not defined in the Appendix to Tender, the Contractor is not eligible to receive the Advance Payment i.e. the Sub-Clause 14.2 [Advance Payment] does not apply.
Why hierarchy of documents is important in FIDIC?
FIDIC is clear that all parts of the Contract should be read together and that their original purpose is to be mutually explanatory. However, if there is a discrepancy between the information provided, the General Conditions of the Contract provide a default hierarchy for the documents forming the Contract. For example, in FIDIC Red Book 1999, the order of priority of contract documents is as stated below:
- the Contract Agreement (if any),
- the Letter of Acceptance (this is the formal acceptance of the contractor’s tender and usually presents the point in time when Contractual Parties enter into the Contract, but this depends on the local regulations),
- the Letter of Tender,
- the Particular Conditions of the Contract,
- the General Conditions of the Contract,
- the Specification,
- the Drawings, and
- the Schedules and any other document forming part of the Contract
In the event of a discrepancy, the document of higher priority takes precedence.
As it can be seen from the list above, the original intention is that documents have priority based on the time of their origin. The reason is the opportunity for the Contractual Parties to exclude or limit the parts of the documents previously produced. For example, in Letter of Tender, the Contractor can exclude certain parts of Tender Documentation. On the other hand, the Employer can accept the Contractor’s Tender with a Letter of Acceptance and impose certain limitations. For example, the Employer can limit the total value of preparation works which can be executed prior to defining Conditions of the Contract and signing the Contract Agreement.
Although in Particular Conditions of the Contract the Parties can change the Priority of Documents, it is highly advisable to keep them as defined in General Conditions of the Contract. However, if there is an intention to change the priority of documents, special attention should be given to the possible consequences of such change.