FIDIC Suite of Contracts

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The International Federation of Consulting Engineers (FIDIC, French: Federation Internationale des Ingenieurs-Conseil) drafts and publishes the FIDIC contract suite. The original edition of the FIDIC books dates back to 1957. However, FIDIC has recently published many new contracts to complement the suite of contracts. 

The FIDIC contract suite currently covers many projects and procurement methodologies. As a result, any foreign contractor or consultant operating outside the UK is likely to meet the terms of the FIDIC contract terms.

The FIDIC contract forms are organized around the extent of design and other duties assumed by the Employer and the Contractor. As a result, rather than the nature of the project, the suite is now linked with common procurement techniques.

FIDIC Contract Books

The FIDIC books are differentiated based on common procurement techniques and assigned with a color name that is popularly used around the world.

1. Green Book
2. Red Book
3. Yellow Book
4. Orange Book
5. Silver Book
6. Gold Book

1. Green Book- Short Form of Contract

The first edition of the Green Book was published in 1999. The Short Form of Contract is intended for engineering and construction projects with a small capital value. The Green Book Guidance Notes recommend that it not be employed on projects with a contract value higher than US$500,000.

The Green Book is likely to be best suited for projects which are too simple or include repetitive work or work of short duration that does not necessitate the use of specialized subcontractors.

It's a versatile document that encapsulates all necessary administrative and commercial agreements. In addition, the Green Book's provisions can be readily amended and supplemented with other alternatives integrated via the Appendix.

In this type of contract, the Contractor executes the works following the design provided by the Employer. However, it also has a provision where the design is included partly or wholly in the Contractor's scope.

The Green Book's standard General Conditions are suitable for most projects. However, it is possible to add Particular Conditions to address unique project situations if necessary.

2. Red Book- Conditions of Contract for Construction For Building and Engineering works designed by the Employer  

The first edition of the Red Book was published in 1999. The Red Book provides contract conditions for construction works where the Employer provides the design.

The Red Book is not suitable where most of the projects are to be designed by the Contractor, and for such projects, the Yellow Book or Silver Book shall be referred. 

In Red Book, the administration of the project and supervision of the works is carried out by an Engineer who the Employer employs. The Engineer is in charge of providing directions, validating payments, and assessing completion, among other responsibilities.

The Contract Conditions are made up of the General Conditions and the Particular Conditions. The Red Book contains instructions for preparing Particular Conditions if the General Conditions must be modified. The guideline also includes other types of security, such as a parent company guarantee, an advance payment bond, and a retention guarantee, which may be specified as appropriate to the contract via the Particular Conditions.

This Red Book concludes with standard forms for the Letter of Tender, the Contract Agreement, the Appendix to Tender, and a Dispute Adjudication Agreement. 

Red Book (MDB edition) 

For many years, Multilateral Development Banks (MDBs) have compelled their borrowers or assistance recipients to adopt the FIDIC Conditions of Contract as part of their regular bidding papers.

The FIDIC MDB edition of the Red Book streamlines the FIDIC contract for MDBs, their borrowers, and other project procurement stakeholders such as consulting engineers, contractors, and contract attorneys.

3. Yellow Book- Conditions of Contract for Plant and Design-Build

(For electrical and mechanical plant and building works, designed by the Contractor). The first edition of Red book was published in 1999. 

The Yellow Book provides contract conditions for construction works where the Contractor carries out the design. The Yellow Book applies to the provision of mechanical and/or electrical plants, and for the design and execution of engineering or building or works.

Typically, the Contractor develops and provides the works in line with the Employer's specifications, which may involve civil, electrical, mechanical, and/or construction services.

An engineer employed by the Employer is in charge of project administration and work management. The Engineer is in charge of providing directions, validating payments, and assessing completion, among other things.

4. Orange Book- Conditions of Contract for Design-Build and Turnkey

The first edition of the Red Book was published in 1999. 

The Orange Book is intended for usage in scenarios where the contractor is solely responsible for the design. Such single-point responsibility may be advantageous for the Employer, but the benefits may be countered by having less influence over the design process and greater difficulty implementing different requirements.

The Orange Book is intended to be used on turnkey contracts. The Employer's needs often involve delivering a fully-equipped facility that is ready to go with the turn of a key. Therefore, the specific Employer requirements must be properly documented to specify the design, building, fixtures, fittings, and equipment that the Contractor's design must deliver. 

The Orange Book contains many sub-clauses that FIDIC deemed are generally applicable and included in Part I - General Conditions. Part II - Conditions of Particular Application is included in the Orange Book to modify and supplement the General Conditions.

A part of the Orange Book includes preparing the Part II conditions. Part I and Part II conditions govern the parties' rights and obligations.

5. Silver Book- Conditions of Contract for EPC/Turnkey Projects

The Silver Book is appropriate for use in the process, power, and private infrastructure projects where a Contractor will assume complete responsibility for the project's design and execution. 

The Silver Book transfers the risks of completion in terms of cost, time, and quality to the Contractor; it is only suitable for use by experienced contractors who are conversant with sophisticated risk management procedures.

Construction is merely one aspect of a larger, more difficult commercial effort for many huge projects. Any financial or other failures of the construction project will risk the entire venture. The Silver Book technique may be appropriate for such projects since it provides a higher cost certainty than the more standard FIDIC suite forms.

The Silver Book requires the Contractor to assume a higher level of risk than is common under most other types of contracts to get this increased cost certainty. Therefore, the Contractor accepts the risk of ground conditions under the Silver Book. 

Similarly, the Contractor accepts responsibility for the accuracy of the Employers Requirements, subject to specific exceptions, which significantly differs from typical design and build contracts.

However, not all risk is transferred to the Contractor; the Employer retains risk for war, terrorism, and Force Majeure. Following the award of a project under the Silver Book, the Contractor will be allowed to carry out the work as they see fit, as long as the result meets the Employer's performance standards. 

As a result, the Employer should have only limited control over the Contractor's work. The Silver Book contains conditions pertaining to 'Tests on Completion,' and Taking Over occurs only once the tests have been completed successfully. 

Such conditions are critical for EPC/Turnkey projects when the contract's goal is to provide a working facility for the Employer.

6. Gold Book- Conditions of Contract for Design, Build and Operate Projects

In 2008, the first version of the Red Book was released. It became evident that a contract that combined a design-build responsibility with a long-term operating commitment was in high demand.

The Gold Book adopts a "green-field" DBO scenario with a 20-year operation period and a single contract awarded to a single contracting entity (which will almost certainly be a joint venture or consortium) to optimize the coordination of innovation, quality, and performance.

The Contractor is not responsible for the project's funding or eventual commercial success under the DBO contract.

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