Over the past 2 years, our team have been dealing with FIDIC contracts on a far more frequent basis than before – particularly working in the renewable sectors on some new landmark projects. While used relatively commonly internationally, we have observed that in the UK there is some lack of familiarity with the suite (both with Clients/ Employers and Contractors). This is the first in our series of blogs focused on FIDIC as we look at the suite generally and some of the particular FIDIC specific approaches and clauses which are included.

FIDIC, which stands for the Fédération Internationale Des Ingénieurs-Conseils(International Federation of Consulting Engineers), has often been described as the “global benchmark” for construction and engineering contracts. These contracts are used across many infrastructure, energy, transport, and large-scale commercial developments.

The FIDIC Approach 

A central feature of FIDIC is its approach to risk allocation. The contracts are designed so that risk is borne by the party best able to manage and control it. The principle of balanced risk allocation is intended, in practice, to support efficient delivery of the works and minimise the potential for disputes.

Although FIDIC contracts are based on this underlying approach, they are often amended to reflect the specific requirements of a project and the relative bargaining position of the parties. In practice, Employers may seek to transfer additional risk to Contractors (for example, in relation to ground conditions, design responsibility, or programme certainty), while Contractors will try to seek to limit such departures from the default positions. As a result, the agreed contract frequently reflects a negotiated allocation of risk, making it essential to consider not only the standard FIDIC provisions but also how any amendments may alter risk profile and affect project delivery.

The FIDIC "Rainbow Suite"

There is a “Rainbow Suite” of FIDIC contracts, with each colour representing a different procurement model and allocation of responsibilities. Importantly, these contracts are structured around who carries design responsibility and project risk, rather than the specific type of works being carried out.

An overview of the Core Contracts:

  • Red Book 'Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer'

    The Red Book is typically used where the Employer is responsible for the design. The Contractor executes the works in accordance with that design, although limited elements of contractor design may still arise. This form is well suited to traditional design–bid–build procurement.

  • Yellow Book 'Conditions of Contract for Plant and Design Build for Electrical and Mechanical Plant and for Building and Engineering Works, Designed by the Contractor' (the plant and design/build contract)

    Under the Yellow Book, the Contractor takes responsibility for most of the design, developing the project in line with the Employer’s performance requirements (i.e. the Contractor carries out the detailed design of the project so that it meets the outline or performance specification prepared by the Employer). It is commonly used for design and build projects, particularly where technical or process elements are significant. In our team at present, we are most frequently working with the Yellow Book, which seems to be the current form of choice for many Employers.

  • Silver Book ‘Conditions of Contract for EPC/Turnkey Projects’ (the EPC turnkey contract)

    The Silver Book is drafted for use on EPC (Engineer, Procure, Construct) or turnkey projects. Here, the Contractor assumes responsibility for design, construction, and performance, delivering a fully operational facility. This model offers the Employer a high degree of price and programme certainty but transfers a substantial proportion of risk to the Contractor. Notably, there is no independent Engineer role in the same sense as under other FIDIC forms.

  • Green Book (Short Form Contract)

    The Green Book provides a simplified contractual framework for smaller or less complex projects, typically those of short duration or lower value. It is viewed as being more practical and efficient where full-scale contract administration is not required.

  • Other FIDIC Forms

    FIDIC also publishes a number of additional standard forms tailored to specific types of projects and services. These include the Gold Book, which is used for design, build and operate projects; the Blue Book, intended for dredging and reclamation works; and the White Book, which is designed for consultancy services.

Parties should consider how responsibilities are to be allocate when selecting the most appropriate FIDIC form. In particular, the key consideration is which party will be responsible for the design. Where the Employer retains design responsibility, the Red Book will generally be appropriate. Where the Contractor undertakes the design as well as construction, the Yellow Book is typically used. In contrast, where the Contractor assumes full responsibility for design, construction and performance, the Silver Book is usually the preferred option.

That said, the allocation of design responsibility is not the only factor. The nature, value and complexity of the project, the required level of cost and programme certainty, and the parties’ respective risk appetites will all influence the choice of contract.

The Latest Suite - 2017 Updates

The 2017 editions of the FIDIC contracts are the latest editions. They update the earlier 1999 forms, introduced a number of significant changes. They are considerably more detailed and place greater emphasis on active contract management and dispute avoidance. For example, there is a requirement for more detailed programmes at the outset, enabling issues to be identified and addressed at an early stage. The role of the Engineer has also been expanded and more clearly defined, with deeming provisions introduced to address delays in decision-making. In addition, the 2017 suite draws a clearer distinction between claims and disputes, with separate provisions dealing with each.

Despite these developments, the 2017 forms have not been adopted uniformly across all jurisdictions. In some regions, including parts of the Middle East, the 1999 editions remain more commonly used, often alongside bespoke amendments.

Sub-Contracts

While FIDIC has published subcontract forms, these do not yet fully align with the 2017 main contracts. For example, the commonly used subcontract for construction (published in 2011) is based on the 1999 Red Book, and although a subcontract for plant and design-build was introduced in 2019, it is similarly aligned with the 1999 Yellow Book.

As a result, there is often a disconnect between the main contract and subcontract terms on projects using the 2017 suite. This creates a practical challenge in ensuring back-to-back risk allocation and procedural consistency throughout the contractual chain, which is something we will explore in more detail in subsequent blogs.

In our next FIDIC blog, we will begin to examine the key features of the FIDIC contracts in greater detail, focusing on how they operate in practice and the implications for both Employers and Contractors. 

Please reach out to out Construction and Engineering team for any further guidance.

Contributors

Sandra Jurak

Associate

Jane McMonagle

Partner

Kate Morrison

Senior Associate