Author: Tuna Colgar
Introduction
International Federation of Consulting Engineers that is known by the abbreviation of FIDIC (Fédération Internationale Des Ingénieurs-Counseils) launched updated Red Book (the Conditions of Contract for Works of Civil Engineering Construction), Yellow Book (the Conditions of Contract for Plant and Design-Build)) and Silver Book (the Conditions of Contract for EPC/Turnkey Projects) in the "International Contract Users Conference," organized in London in December of 2017.
Thus, the versions that have been in use since 1999 until today, have been expanded, updated and are more user-friendly contracts, formed by way of reflecting 18 years' of experience of users of the contracts.
What is the Objective of 2017 Updates?
Firstly, as the risk distribution was unbalanced enough in the 1999 versions of the contracts, they were referred to, and used, according to which party they served, rather than their purposes. For example, the Silver Book was referred to as being in favor of the employer, and the Red Book was referred to as being in favor of the contractor, rather than their purposes of publication. In the 2017 versions of the contracts, a more balanced risk distribution was made, and giving prominence to the functions of the contracts, was aimed.
As another novelty, it was aimed to diversify project management mechanisms. In this respect, broader discretion and decision-making powers are given to "Engineers". Uncertainties in project management have been attempted to be abolished by stipulating definitive terms regarding the provisions in which there is no clarity as to the time periods.
Again, in order to reduce ambiguous regulations, the clarity and precision in the writing has increased. Thus, the rights and obligations of the parties have been clarified. In addition, international best practices have been reflected in contracts to create more user-friendly contracts.
Moreover, it is intended that the elements of the newer FIDIC contracts published after 1999 (especially, the Gold Book-2008) have been added to the updated contracts, and the 18-year experiences of the users are reflected in these three revised contracts.
In addition to reflecting the above-mentioned updated reasons of the contracts, the guidelines published for the purposeful use of contracts have also changed. The FIDIC strongly recommends that the following five "Golden Principles" be considered when using all contracts:
1) The duties, rights and responsibilities of the Parties shall remain as they are in the general provisions.
2) Special conditions must be formulated in such a way that ensures clarity and removes contradiction.
3) Special conditions should not disrupt the risk distribution balance.
4) The time to fulfill the obligations of the Convention and to exercise the rights must be reasonable.
5) All disputes must be directed to the Dispute Adjudication / Avoidance Board ("DAAB") before referring to arbitration.
