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Civil Engineering Project Management (4th Edition)

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4.3 Conditions published by the International<br />

Federation of Consulting Engineers (FIDIC)<br />

FIDIC ‘Red Book’ Conditions, <strong>4th</strong> <strong>Edition</strong><br />

The FIDIC ‘Red Book’ Conditions, <strong>4th</strong> <strong>Edition</strong> are intended to apply to civil<br />

engineering work worldwide. They take the same form as the ICE conditions,<br />

but with some variations and simplifications to allow for work outside the<br />

UK. Additions can be made to cover local needs and different procedures for<br />

payment including payment in different currencies. The <strong>4th</strong> edition – substantially<br />

revising the 3rd – incorporated changes resulting from consultations<br />

within the international construction industry and with major<br />

international lending agencies. These conditions were accepted by the major<br />

lending agencies who recommend or require their use together with additional<br />

clauses and amendments proposed by the agencies.<br />

An important requirement in FIDIC4 is that the engineer is specifically<br />

required to consult with both the employer and the contractor before making<br />

a decision on a contractor’s claim for additional payment or extension of the<br />

contract period. Another provision of importance is contained in Clause 52(3)<br />

which allows for adjustments to payment with respect to the contractor’s<br />

overheads if the value of extra works ordered exceeds 15 per cent of the tendered<br />

sum excluding dayworks and provisional items.<br />

1999 New forms<br />

Contract conditions used for civil engineering work 45<br />

In 1999 FIDIC published four new forms. The first is a Contract for Construction<br />

to replace the Red Book. Much of the text and the concepts have remained<br />

but the whole is re-organized into what was considered a more logical<br />

sequence of clauses. The role of the independent engineer is retained who again<br />

has to consult with both parties to try to reach agreement on claims and the<br />

like, but if this is not possible, to ‘make a fair determination in accordance<br />

with the Contract, taking due regard of all relevant circumstances’. The engineer’s<br />

duty to make final decisions on disputed matters is replaced, however,<br />

by use of a Dispute Adjudication Board (DAB) selected by the parties.<br />

A second form is for Plant and Design-Build which allows for the contractor<br />

to undertake design in accordance with the Employer’s requirements set out<br />

in the contract. As the title suggests this is intended both for plant supply<br />

and installation and for use where much of the civil works may also be<br />

designed by the contractor. This contract again uses an independent engineer<br />

to monitor design and construction against the requirements and has the DAB<br />

to decide disputes.<br />

Additionally FIDIC produced in 1999 a radically different form for engineer,<br />

procure and construct (EPC)/Turnkey <strong>Project</strong>s. Under this form the contractor

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