FIDIC White Book – a brief overview Part 1
This is the first in a four-part series on the FIDIC White Book. In this instalment, we will consider the major differences between the 2006 4th Edition and the 2017 5th Edition.
The FIDIC White Client/Consultant Model Agreement was last updated in 2017. FIDIC also published the 2nd edition of the Sub-Consultancy Agreement to be in line with the new White Book. Through this book, a fair balance of risk is provided between the Client and the Consultant and intends to cover the minimum requirements of a typical appointment contract between Client & Consultant. As you all know, the Consultants get engaged in bankable documents, feasibility studies, detailed design, tender engagement and /or site supervision and project management works for traditional Employer-designed projects or DB projects or EPC and lately in DBO project–FIDIC White Book is suitable for any of these services and is very much used preparing agreements between Client & Consultant.
The story of the White Book starts in 1990 when the first edition was published. Subsequently, the second edition was launched quickly in 1991, followed by the third edition which was published in 1998. The fourth edition of 2006 was a popular one; however, the latest edition of 2017 is the most perfect Client/Consultant model services agreement with a fair balance of risk between the two parties.
Let’s look into the contents of the 2017 5th edition FIDIC White Book, which contains, like any other previous version of the form of agreement, the particular conditions which has two parts: part A is references from clauses in the general conditions and part B is additional or amended clauses.
The 2017 edition has 5 appendices, including the scope of services, personnel, equipment, facilities and services of others to be provided by the Client, remuneration & payment, programme. The fifth appendix which is Rules for Adjudication is newly added in 2017. The last part of the FIDIC White Book is general conditions.
Major Differences in Clauses – 2006 Edition Vs 2017 Edition
The most important thing to note is that the 2006 edition had only 8 clauses with Commencement, Completion, Variation & Termination all within Clause 4. These are properly separated in the 2017 edition into Commencement & Completion, Variation to Services, and Suspension of Services & Termination of Agreement are each separate clauses for a total of 10 clauses in the 2017 edition versus 8 clauses in the 2006 edition.
Clause by Clause Comparisons
While Clause 1 in both editions is General Provisions, there are many new Sub-Clauses like Intellectual Property, Relationship, Amendment of Agreement, Good Faith, etc. added in the 5th edition.
Clause 2 is The Client in both editions where the structure is similar. However, all the Sub-Clauses are elaborated in more detail in the 5th edition. Additionally, Sub-Clause 2.9 (Payment for Services) has been removed from the new version, as it is covered in the payment clause.
Clause 3 is The Consultant in both the 2006 and 2017 editions. However, in the 5th edition, this is enhanced by adding new Sub-Clauses like Safety & Security of the Consultant’s Personnel and Contract Administration.
Clause 4 of the 2006 edition is Commencement, Completion, Variation & Termination packaged together, while in the 5th edition, Clause 4 only deals with Commencement & Completion. In the latest edition, Variation to Services is Clause 5 and has added the impact of variations and the procedure for agreeing the value of variation. Clause 6 in the 5th edition is Suspension of Services & Termination of Agreement: where the newly added sub-clauses Effect of Suspension & Effect of Termination makes it easier for the parties to understand the consequences of such events.
Due to the separation of 2006’s Clause 4 into 2017’s Clauses 4, 5, and 6, the subsequent clause numbers have changed. Clause 5 in the 2006 edition is Payment, whereas it is Clause 7 in the 2017 edition. Although the structure and content are the same in both editions, more time constraints are specified precisely in the 5th edition.
Liabilities is Clause 6 in the 4th edition and Clause 8 in the 5th edition. They are generally similar in structure but the Indemnity Sub-Clause has been replaced in 2017 with Clause 9 as Indemnity Insurance.
Clause 7 of 2006 and Clause 9 of 2017 are Insurance. Insurance of Client’s property was detailed as a Sub-Clause in the 4th edition but this is better explained within the one Sub-Clause of Insurance in the 5th edition.
The final clause is Clause 8 in the 4th edition and Clause 10 in the 5th edition – Disputes & Arbitration. Adjudication is added in the latest edition, reorganizing the dispute & arbitration clause.
Appendices
The previous edition had 4 appendices, whereas the 5th edition has an additional appendix – Rules for Adjudication.
The next post in this series will thoroughly detail the differences between the 4th and 5th editions of the FIDIC White Book clause by clause.
This guest post was written by Mansoor Ali, FICCP and Jishma Joy. Would you like to learn more about the FIDIC White Book? Check out this webinar.
If you would like all of these posts in a single PDF, please email hello@instituteccp.com with the subject line FIDIC White Book.
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