The International Federation of Consulting Engineers (FIDIC) contracts committee has published the second edition of its short-form contract, generally referred to as the Green Book (the 2021 Green Book).
As mentioned previously in Expanding the Rainbow? New FIDIC Contracts and Guidance Notes on the Horizon, the previous edition of the Green Book dates from 1999 and so the revised edition is timely.
The Green Book is typically recommended for engineering and building works of relatively low capital value, works that are not complex or of short duration, or works that include or wholly comprise contractor-designed civil engineering, building, mechanical and/or electrical works.
In publishing the 2021 Green Book, FIDIC aims to meet worldwide industry demands for a straightforward, simple-to-use contract that can be used as an alternative to the FIDIC Red Book and Yellow Book contracts in circumstances where the perceived project risk level is low and the contract does not require significant contract administration.
Customised versions of the FIDIC Red Book and Yellow are often used in Ireland on large infrastructure, industrial, wastewater and renewable energy projects such as wind farms and solar farms. The FIDIC Red Book contract is used on employer designed projects, where the works may include some elements of contractor-designed civil, mechanical, electrical and/or construction works. The FIDIC Yellow Book contract is used in projects where the contractor designs and constructs the works, and may provide plant, in accordance with the employer’s requirements, including any combination of civil, mechanical, electrical and/or construction works.
The 2021 Green Book looks to adopt the terminology of the standard FIDIC Red and Yellow Books but with more concise contractual provisions than those contracts. It contains provisions for employer’s or contractor’s design of works, a wide range of valuation methods, insurance requirements, dispute avoidance/dispute resolution provisions and mechanisms to deal with claims and variations.
New features in the 2021 Green Book, in comparison to the 1999 version, include:
- An engineer will be required to act as contract administrator;
- Liquidated damages will apply to delay, termination, and prolongation costs. A formula is provided to calculate these costs, based on the value of the works certified by the engineer at the time of the delay event and the average value of on-site and off-site overheads.
FIDIC has also published accompanying guidance on the 2021 Green Book, which includes information on employer’s risks, sample contract notices and project insurance requirements.
The FIDIC 2021 Green Book contract and guidance will be of interest to employer clients, funders and public bodies using or intending to use the FIDIC rainbow suite of contracts. This includes where parties make bespoke amendments to the contract. The FIDIC 2021 Green Book contract and guidance will be particularly useful for those active in the ESG sector, and on large infrastructure, industrial, wastewater and renewable energy projects, including wind farms and solar farms.
For more information or advice on the new FIDIC 2021 Green Book contract or similar projects and construction contracts, please contact Cassandra Byrne, Jarleth Heneghan, Liam McCabe or your usual William Fry contact.