Adding the Best Bits of FIDIC 2017 to the 1999 Forms
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ADDING THE BEST BITS
OF FIDIC 2017 TO THE
1999 FORMS
Edward Corbett
Corbett & Co International Construction
Lawyers, London
Much has been said about the second
editions of the Red, Yellow and
Silver Books launched by FIDIC in
December 2017. The most obvious
comment has been about their size,
almost 50,000 words, which is some 60
per cent longer than the 1999 forms.
Although the 1999 forms were
not perfect, most regular users
seem to agree that 20,000
additional words were not needed
to fix the issues. This consensus led
this author to attempt to cherry-
pick the useful provisions of the
2017 forms and propose
amendments to add these good
ideas to the 1999 forms. The
amendments apply to all three
forms unless otherwise indicated.
Reasonable profit
Any reduction in the number
of occurrences of the word
'reasonable' is to be applauded,
given the scope for argument that
the word introduces. The World
Bank introduced a definition of
reasonable profit into its documents
and the Pink Book Multilateral
Development Bank form.
1.2 Add: '(e) references to
reasonable profit shall mean
the percentage of Cost stated
in the Appendix to Tender.'
Add to Appendix to Tender:
'Reasonable profit... 1.2(e)...
- per cent or, if none is stated,
5 per cent.'
Approval for engineer's actions
The 1999 forms did not make clear
whether the employer could insist on
pre-approving determinations under
Sub-Clause 3.5. Many assumed they
could not, but FIDIC's guide to the
1999 form said otherwise. The 2017
forms put the matter beyond doubt,
introducing a new requirement for
the engineer to act 'neutrally' when
making determinations.
3.1 Add in the third paragraph
after 'undertakes': 'not to
require approval for a
determination under Sub-
Clause 3.5 [Determinations]
and'.
3.5 Red and Yellow only: replace
'the Engineer shall consult'
with 'the Engineer shall act
neutrally and shall consult'.
Prompt notice of variations
The 1999 drafters slipped up by
not explicitly requiring prompt
notice of instructions that the
contractor considers to be
variations. This has led to problems
with unhappy employers blaming
their engineers for inadvertently
incurring additional costs. The
notice requirement gives employers
and engineers an opportunity to
reconsider an instruction.
3.3 Red and Yellow - add after the
second sentence: 'If the
Contractor considers that an
instruction constitutes a
Variation, the Contractor shall
immediately, and before
commencing any work related
to the instruction, give a notice
to the Engineer with reasons.
If the Engineer does not
respond within 7 days
confirming, revoking or
varying the instruction, the
Engineer shall be deemed to
have revoked the instruction.'
3.4 Silver - add after second
sentence: 'If the Contractor
considers that an instruction
constitutes a Variation, the
Contractor shall immediately,
and before commencing any
work related to the instruction,
give a notice to the Employer
with reasons. If the Employer
does not respond within 7 days
confirming, revoking or
varying the instruction, the
Employer shall be deemed to
have revoked the instruction.'
Definition of fitness for
purpose
The 1999 form required the works to
be fit for the purposes as defined in
the contract. This caused problems
when secondary elements of the
work did not function properly. The
primary purpose of the project may
have been defined, but no one will
define the purpose of each and every
element, rendering the fitness for
purpose obligation less than useful.
So some general wording is needed.
4.1 Red - add to (c) after
'Contract': '(and each element
of the part shall be fit for its
ordinary purpose)'.
Yellow and Silver - add at end
of first paragraph after
'Contract': '(and each element
of the Works shall be fit for its
ordinary purpose)'.
Cap on delay damages
It seemed anomalous that the
limitation of liability in Sub-Clause
17.6 should not apply in cases of fraud,
and so on, but that the cap on delay
damages should apply regardless.
Some contractors exploited this when
the delay damages had reached their
maximum, and the employer had
no realistic option of termination:
resources were transferred to other,
more profitable projects and there
was little that the employer could do.
8.7 Add at the end of the first
paragraph: 'other than in the
case of fraud, deliberate
default or reckless misconduct
by the Contractor'.
Enforcement of dispute
adjudication board (DAB)
decisions
It was a major shortcoming of the
1999 forms that there was no clear
sanction where a party, usually the
employer, failed to pay amounts
awarded by the DAB. Despite the
obligation to comply set out in
Sub-Clause 20.4, there was little
that the party winning the DAB
could do; and thus little incentive
CONSTRUCTION LAW INTERNATIONAL Volume 13 Issue 4 January 2019](ViewImageLocal?handle=hein.journals/cnstrcnl13&div=59&collection=&method=preview&ext=.png&size=3)
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Adding the Best Bits of FIDIC 2017 to the 1999 Forms
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