Fidic Yellow Book Plant And Design Build Contract Free Download
Rapheal Charlton
Conditions of Contract for Plant and Design-Build, which are recommended for the provision of electrical and/or mechanical plant, and for the design and execution of building or engineering works. Under the usual arrangements for this type of contract, the Contractor designs and provides, in accordance with the Employer's requirements, plant and/or other works; which may include any combination of civil, mechanical, electrical and/or construction works.
Under the usual arrangements for these types of contract, the Contractor is responsible for the design and provision, in accordance with the Employer's requirements, of plant and/or building and/or engineering works.
The Gold Book is the Conditions of Contract for Design, Build and Operate Projects. It is used in projects where the contractor assumes the design and construction works as well as the operation obligations. The Gold Book is recommended for international projects with high capital needs and long operation periods such as 20 years.
The second type of FIDIC Contract, the so-called FIDIC Yellow Book, is a standard contract where the design is carried out by the Contractor. The Yellow Book is also known as a Plant and Design-Build contract. The Contractor is usually paid on a lump sum basis. The Yellow Book was published for the first time in 1963, with subsequent revisions.
Other, less well-known FIDIC contracts include the so-called Green Book, which is a short form contract intended for relatively small projects of a repetitive nature or short duration where the Employer provides the design. Pursuant to FIDIC guidelines, USD 500,000 and 6 months are considered as reasonable limits on capital and duration for projects where Green Book forms are used.
Another form of FIDIC Contract is the so-called Gold Book. The first edition of the Gold Book was published in 2008 and is based on a typical design and build contract form where a period of operation and maintenance has been added. The Gold Book encompasses a complex range of different services and is intended to continue beyond a period of 20 years where the parties intend to extend their cooperation throughout the duration of a project.
Finally, the less well-known so-called FIDIC Blue Book contract was published in 2006 and is a form of contract for dredging, reclamation and ancillary construction work with a large variety of administrative arrangements. Usually, it is the Employer who is in charge of the design and the most important part of the Blue Book contract is the description of the activity itself, defined in detail in the specifications, drawings and design of the work.
The Yellow Book is the recommended "design and build document for projects where the employer wishes to protect its interests by appointing an engineer to supervise the overall construction of the works, notwithstanding that the overall responsibility for design lies with the contractor". In the ordinary course, the contractor designs and provides, according to the client's requirements, plant and/or other works which may include a combination of civil, mechanical, electrical and/or construction works.
The general conditions in the draft FIDIC 2017 Yellow Book increase from 63 pages to 108 pages. The fundamental amendments are:
In construction sector, infrastructure has to be designed in detail before it is built. If the detailed designs are already prepared by an independent engineering team and the contractor only has to follow the designs and carry out the works, the form of contract follows FIDIC Red Book (template for construction contract). If the contractor should also come up with the detailed designs and overall concept how to build the infrastructure by themselves, following basic performance requirements, FIDIC Yellow Book form of contract is often used (template for plant and design-build contract).
Yellow FIDIC based contracts are still better for addressing complex infrastructure challenges where neither the problem nor the solution are fully clear, the client staff is experienced, political climate favorable to the client, and budget constraints are secondary to solving the problem. Otherwise, for straightforward civil works and in situations where budget is tight and political climate unstable, investing into independent engineers to prepare complete design documentation and then tendering a contractor for works only is the safer option.
Whilst existing FIDIC forms, particularly the Yellow Book (design-build contract), are frequently used for both onshore and offshore wind farm projects due to the familiarity of developers and operators with the FIDIC forms, they are traditionally onshore contracts and require significant amendments when used offshore. Particular care must be taken with regard to matters such as weather risk and the relationship with a marine warranty surveyor (often insisted upon by insurance providers in offshore projects). The development of a form of FIDIC contract which is dedicated to the offshore wind farm sector and addresses its specific requirements will be a welcome step for the industry.
Similar formulations of this language are commonly found in international EPC contracts. For example, the following is extracted from the EPC contract for a project financed process plant in the Middle East:
Although the basic nature of the Yellow Book as a lump sum contract on which the contractor designs the works and assumes the risk for quantities is unchanged, the quantity (45 additional pages) and substance of the changes which have been made mean that the Yellow Book as we have known it will now be extensively different.
FIDIC contracts, whose terms and conditions are internationally recognized, serve as indispensable tools for advancing green energy projects in Finland. Through clarity, standardization, risk allocation, adaptability, and familiarity with terms, FIDIC offers several key advantages. It also empowers stakeholders to navigate the complex legal aspects of energy initiatives effectively as they promote a common comprehension of roles and obligations that are not typically addressed in local conditions. Some wind turbine suppliers have tailored their own turbine supply agreements based on the Yellow Book, providing an excellent example of their adaptability, which can also to be used in other energy plant supply and procurement, construction and even installation contracts.
Now, each book shall be discussed in turn, beginning with the Red Book, 2017 Edition. This provides the conditions of contract for the construction of buildings and engineering works where the detailed design is done by the Employer. It also allows some part of the works to be Contractor-designed but it is not suitable if most of the works are designed by the Contractor.
The second edition of the Silver Book, issued in 2017, is a contract condition for EPC/Turnkey projects. It is suitable for process, power, and private infrastructure projects, where full responsibility for design and execution is on the Contractor. It is only suitable for use with experienced Contractors familiar with sophisticated risk management techniques.
The Silver Book is recommended in cases where the Employer is mostly interested in the end results rather than the process and/or the design of the works. By signing the agreement, the Contractor accepts total responsibility for having foreseen all difficulties and costs of successfully completing the works without adjusting the contract price.
At present, approximately $303bn of planned construction and transport projects in the GCC are at the design stage and $107bn at the tendering stage. This indicates a significant increase in market activity given the annual average value of construction contracts awarded in the GCC since 2016 has been $61bn a year2.
A traditional approach typically encompasses the involvement of a client, design team and a contractor who ultimately executes the works. The client will appoint a design/architectural firm to develop the design, which will then be tendered out to a list of prospective contractors.
This approach enables the client to obtain a design to their satisfaction, attribute the risk of the construction phase to the main contractor at a fixed price/lump sum, offering some certainty to the client of the overall cost of the project. Figure 1 above illustrates this process.
To avoid this siloed approach, a two-stage route may be more suitable. Engaging a contractor earlier on allows the professionals employed to develop the design and utilise a contractor's expertise in construction to avoid issues with the project's buildability5.
The client provides high-level drawings that are tendered out with its requirements. The contractor subsequently issues proposals and develops a design that meets the client's requirements and satisfaction; the works are then executed in accordance with those requirements.
This approach results in the client transferring most of the risks of design and construction onto the contractor. However, finalisation and approval of the design may take longer than expected where the client's expectations are not clearly defined and changes to the agreed design will commonly lead to delays.
Central Banks and commercial banks around the world initiate international tenders for the design and implementation of modern state-of-the-art cash centers and vaults/ warehouses. Specialized companies participate in such tenders worldwide with their internationally valued expertise in cash center engineering by means of optimized workflows and their control, automation, cash handling equipment, IT and security systems. In such international projects, both parties are confronted with different forms of contract design and the legal systems in the respective countries.
In order to facilitate international projects in plant engineering and construction, the standard terms and conditions of the FIDIC contract models were created. These contact standards are enjoying increasing acceptance worldwide and are ideally suited for international cash center construction projects. Today, FIDIC contract templates are already used in all public and World Bank-supported construction and plant engineering projects in Central and Eastern Europe, as well as in the Middle East, India, and Africa.