This is the third in a three-part series on the FIDIC Suite of Contracts. This post will summarise the Green, Gold, Blue-Green, and Emerald FIDIC contracts and outline the benefits of each. The series began by laying out the history and evolution of FIDIC contracts. The previous post in this series covered the Red, Yellow, and Silver Books. Because the Pink and Orange Books are no longer relevant, they will not be discussed in this series.

The Green Book

This is the short form of contract, first published in 1999 and updated in 2021. The Green Book contains the contract agreement, general conditions, rules for education, and notes for guidance. The short form of contract is recommended for Engineering and Building work of relatively small capital value. Depending on the type of works, the Green Book may be suitable for contracts of considerably greater value.

The Green Book is considered most suitable for fairly simple or repetitive work or works of short duration without the need for specialist subcontracts. The main intention is to produce a very flexible document containing essential commercial provisions with a variety of administrative arrangements. Usually for this type of contract, the Contractor constructs work in accordance with the design provided by the Employer.

However, it is also suitable for purely contracted design works as well as civil or mechanical and electrical works. There is no reference to an impartial Engineer. The Employer may appoint an independent Engineer if required. The intention is that all necessary information should be incorporated in the Appendix to the Agreement.

The Gold Book

The Gold Book provides the conditions of contract for Design, Build, and Operate, including the general conditions, particular conditions guidance, and sample forms. It is for contracts combining design-build obligations with a long-term operation commitment. The Gold Book adopts a ‘green field’ design-build operation scenario with a 20-year operation period, or beyond, where the parties intend to extend their cooperation throughout the duration of the project.

This form of contract is intended for a single contract awarded to a single contracting entity which will almost certainly be a consortium or JV. Rather than award separate contracts for design, build, and for operation, the Contractor has no responsibility for either financing or the ultimate commercial success of the project.

The Gold Book begins with a series of comprehensive flow charts which show in visual form the critical sequence of activities that is specified and unique to the Design-Build-Operate form of the contract. Comprehensive guidelines and suggestions on how various issues must be addressed are also provided.

The Blue-Green Book
The second edition of this form of contract, for Dredging and Reclamation Works, was released in 2016. It contains general conditions, particular conditions, the contract agreement, dispute adjudication, and notes for guidance.

The Dredging Contract Book includes all essential commercial provisions which may be used for all types of dredging and reclamation work and ancillary construction with a variety of administrative arrangements. Here the design is provided by the Employer or by its Engineer and the Contractor performs the work in accordance with the design provider.

Although this form may also be suitable for contracts that include, or wholly comprise, Contractor-designed works, it is more suited to the technical requirements of the dredging industry, and aligned with the overall balance of risk of the FIDIC Rainbow Suite of Contracts. It is, however, less suitable for complicated marine constructions or offshore projects, as it lacks the elaborate testing and taking over procedures often required in complex construction jobs.

The Emerald Book

The Emerald Book, which was published in 2019, provides the conditions of contract for underground works. It comprises the general conditions, guidance for the preparation of particular conditions, guidance for the preparation of tendered documents and annexes, the contract agreement, and dispute adjudication/avoidance agreements.

This first edition of the Emerald Book is published by FIDIC as a joint venture with International Tunneling and Underground Space Association. The basis for drafting the general conditions of this contract was the second edition of the Yellow Book.

These conditions include several new concepts in consideration of the risk that is peculiar to underground works.

For example, the risks allocated to the Employer include those arising out of:

  • the unforeseen physical conditions of the ground,
  • obstacles and adverse reaction to the excavation and
  • ground support process

Whereas, the Contractor bears the risks associated with:

  • extension of time and/or
  • reimbursement of cost.

The cost of the excavation and lining works depends on the subsurface physical condition and is to be measured and paid for using the rates and prices set out in the BOQs. All other work, for example, the ancillary surface work, has to be paid on a lump sum basis.

The Golden Principles
Published in 2019, there are five Golden Principles that FIDIC considers to be inviolable. These arose due to exceptional changes made by users to the general conditions through the particular conditions of contract to such an extent that the final contract would no longer represent the FIDIC principles and thus jeopardise the FIDIC brand and mislead the tenders and the public.

  1. The duties, rights, obligations, roles, and responsibilities of all the contract participants must be generally as implied in the General Conditions and appropriate to the requirement of project.
  2. The particular conditions must be drafted clearly and unambiguously.
  3. The particular conditions must not change the balance of risk/reward allocation provided for in the General Conditions.
  4. All time periods specified in the contract for contract participants to perform their obligation must be of reasonable duration.
  5. Unless there is a conflict with the governing law of the contract, all formal disputes must be referred to a DAAB (Dispute Avoidance/Adjudication Board) or DAB (Dispute Adjudication Board) if applicable, for a provisionally binding decision as a condition precedent to arbitration.

This guest post was written by Mansoor Ali, FICCP. This post was originally published as two LinkedIn videos, currently unavailable.

If you would like this complete series as a PDF, please email hello@instituteccp.com with the subject line ‘A Brief History of FIDIC’.

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