1. Procurement and Contract Management Training
FIDIC Contract Documents:
Introduction and Principles
Why guidelines? ADB needs to ensure the appropriate use of its resources therefore EAs and Borrowers should adhere to these Guidelines
These new guidelines are much closer to WB’s guidelines. Are close but not identical. ADB has an eligibility requirement that WB does not have. These guidelines have a new look , new terminology and structure ane were expanded.
There are more option and flexibility and more options in terms of procurement.

2. FIDIC Contract Documents: Introduction
1. Introduction to FIDIC
International Federation of Consulting Engineers
Fédération Internationale des Ingénieurs-Conseils.
Founded in by 5 national consulting firms
At Present FIDIC membership covers 97 countries
Society of Consulting Architectural and Engineering Firms, Nepal (SCAEF ) is also a member
Composed of national associations of consulting engineers.
Promotes and implements the consulting engineering
industry’s strategic goals
Members endorse FIDIC statutes and policy statements
and comply with FIDIC Code of Ethics.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

3. FIDIC Contract Documents: Introduction
1. Introduction to FIDIC
Organises:
Extensive programme of seminars and conferences.
International Training Programme (courses; workshops)
Capacity Development Programme (accredited trainers,
training suppliers, programmes and events).
Publishes:
Business practice contracts
International professional services agreements
Works Contracts
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

4. FIDIC Contract Documents: Introduction & Principles
Background to FIDIC Contracts
First FIDIC Works Contract was published in 1957 – “Conditions of Contract (International) for Works of Civil Engineering Construction” – known as the “Red Book”.
Second edition was published in 1969 & reprinted in
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

5. Introduction & Principles
Background to FIDIC Contracts contd.
Consisted of General Conditions and Conditions of Particular Application - which were suggestions upon which the Parties were required to make their own agreements
As with the English ICE Conditions there was also a Form of Tender and Appendix to Tender, and a Form of Agreement
Red Book contemplated the existence of Drawings, Specification and Bills of Quantities as contract documents
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

6. Introduction & Principles
Background to FIDIC Contracts contd.
3rd Edition published in 1977.
The first three editions of the Red Book assumed that the detailed design would be provided to the Contractor by the Employer or the Engineer.
Red Book unsatisfactory for contracts where major items of Plant were manufactured away from site.
This led to the first edition of the FIDIC Yellow Book for mechanical and electrical works in 1963, with an emphasis on testing and commissioning and more suitable for the manufacture and installation of Plant.
2nd Edition published in 1980
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

7. Introduction & Principles
Background to FIDIC Contracts
New editions of both the Red and Yellow Books were published in 1987
Red Book 4th Edition 1987 introduced an express term which required the Engineer to act impartially when giving a decision or taking any action which might affect the rights and obligations of the Parties
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

8. Introduction & Principles
Background to FIDIC Contracts
By 1995 FIDIC had responded to the increasing popularity of projects being procured on a design and build or turnkey basis. This resulted in the Conditions of Contract for Design-Build and Turnkey (Orange Book)
The Orange Book replaced the traditional “Engineer” by the “Employer’s Representative”
The express requirement to be impartial was removed, although when determining value, costs or extensions of time the Employer’s Representative had to “determine the matter fairly, reasonably and in accordance with the Contract”
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

9. Introduction & Principles
Background to FIDIC Contracts contd.
The requirement to submit matters to the Engineer for his “Decision” prior to an ability to pursue a dispute, was removed
In its place – provision of an independent Dispute Adjudication Board (DAB) was kept.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

10. Introduction & Principles
Background to FIDIC Contracts contd.
A Red Book 4th Edition Supplement was published in 1996 which gave an option for a Dispute Adjudication Board, and an option for payment on a lump sum basis instead of by reference to Bills of Quantities
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

11. Introduction & Principles
Background to FIDIC Contracts contd.
Updates of Red, Yellow and Orange Books were published in as “Construction” (Red), “Plant and Design-Build” (Yellow) and “EPC/Turnkey” Contracts (Silver)
Under the 1999 Red Book, the Contractor is paid on a re- measurement basis for constructing works designed by others
Under the other books, the Contractor is paid on a lump-sum basis for providing works to his own design
In all cases, disputes are to be settled by a DAB – but a key role is still reserved for the Engineer
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

12. Red Book: Conditions of Contract for Construction
Design given to Contractor;
Payment based on re-measurement (rates and prices in BOQ applied to “actual” quantities);
Supervision by the “Engineer”.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

13. Yellow Book: Conditions of Contract for Plant and Design-Build
Detailed Design done by Contractor;
Payment based on lump-sum;
Supervision by the “Engineer”.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

14. Silver Book: Conditions of Contract for EPC/Turnkey Projects
Design done by Contractor;
Payment based on lump-sum;
Supervision by the Contractor – but Employer maintains presence through “Employer’s Representative” if appointed.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

15. Gold Book: Conditions of Contract for Design, Build & Operate Projects
Design done by Contractor;
Payment based on three lump-sums – one for Design & Build; one for Operation and one for Asset Replacement;
Supervision by the Contractor – but Employer maintains presence through “Employer’s Representative”;
Operation phase is supervised by Auditing Body.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

16. Green Book: Short Form of Contract
Intended for projects under US$ and/or <6 months;
Design can be by Employer or by Contractor;
Payment can be by Lump Sum; Remeasurement or a combination;
Supervision by the Authorized Person with possible assistance from Employer’s Representative.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

17. And the PINK BOOK
Since 2005 Multilateral Development Banks use the General Conditions of the MDB Harmonised Edition of the FIDIC Construction Contract (3rd Edition published 2010)
Based on Red Book: Design given to Contractor; Re-measurement; supervision by Engineer;
MDB Supplement to Contracts Guide is also available.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

18. …PINK BOOK
The main areas of difference between the Red Book and the Pink Book include:
The Pink Book is more balanced with respect to periods for taking actions;
The Pink Book includes a role for the Bank;
The Pink Book has a much greater emphasis on “social issues”;
The Pink Book has a much greater emphasis on anti corruption measures.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

19. Which FIDIC Form to Use?

20. Pink Book
The MDB Harmonised Edition of the FIDIC Conditions of Contract for Construction, referred to as the “MDB Harmonised Construction Contract” or “Pink Book” comprises:
General Conditions
Particular Conditions (Part A: Contract Data & Part B: Special Provisions)
Sample Forms.
MDB is extensively based on the FIDIC Red Book (1999) – which means that it is intended for use in relation to contracts where:
the Contractor is provided with the design by the Employer and
he is paid on a re-measurement basis, applying agreed unit rates to the actual quantities executed.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

21. MDB Edition: Pink Book
Clause 1: General Provisions -
subjects which apply to the Contract in general, e.g. definitions, interpretation applicable language and law, priority of documents, use of various documents.
Clauses 2 - 5: The Employer; The Engineer; The Contractor; Nominated Subcontractors –
deal with the duties and obligations of the different
organisations that play a part in the execution of the Works.
Clauses 6 & 7: Staff and Labour; Plant, Materials and Workmanship
deal with the requirements for the items which the Contractor
brings to the site or manufactures or executes.
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

22. MDB Edition: Pink Book
Clauses : Commencement, Delays and Suspension;
Tests on Completion; Employer’s Taking Over; Defects
provisions related to the different stages of work and events
during the construction.
Clauses : Measurement and Evaluation; Variations and Adjustments; Contract Price and Payment
provisions related to measurement , payment and changes
to work .
Clauses 15 & 16: Termination by Employer; Suspension and Termination by Contractor :
provisions related to contract suspension and termination
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

23. MDB Edition: Pink Book Clause 17: Risk and Responsibility
provisions related to Employer’s and Contractor’s risk and responsibilities and their consequences
Clause 18: Insurance
includes important provisions and procedures regarding
insurance requirements during or before Works’ commencement.
Clause 19: Force Majeure
defines Force Majeure and it’s consequences . .
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.

24. MDB Edition: Pink Book
Clause 20: Claims, Disputes and Arbitration –
probably the most frequently used clause in the Conditions of Contract. Includes procedures for :
submission and response to Contractor’s claims for Extension of time of completion or additional payment under any clause of the condition of contract
the appointment of the Dispute Adjudication Board before or during the commencement of the Works
How the guidelines were developed? Based on many documents, international commercial practices and experience of other MDB specially the WB
The most important aspect taken from the ADB’s charter is the eligibility requirement.
The procurement should take place in an ADB’s member country
Goods and services are produced and provided from ADB’s member country
And the guidelines are being revised following ADB’s experience.