FIDIC is an association of national Member Associations and thus individual firms of consulting engineers are not themselves members of FIDIC. Many of these national associations represent other construction professionals such as architects in addition to consulting engineers. In addition FIDIC has Affiliate Members who are not engineers or architects but non-engineering firms who have an interest in the work it undertakes such as lawyers and insurers.

Since its formation, FIDIC has addressed a whole range of professional issues affecting consulting engineers but it has become known outside the profession, particularly amongst client bodies, the international financing institutions, lawyers and contractors, because of its work in preparing and publishing standard forms of contract, often referred to as the "FIDIC rainbow". It has been said that the Red Book in particular has perhaps done more than anything else to give FIDIC the internation pretige which it enjoys today and this document is known to many as the "FIDIC contract". In fact, very often it is just called FIDIC and the acronym is for many parties the name of the contract itself; they often have no idea of the actual meaning of the five capital letters.

In Appendix A I have listed the documents which currently make up the FIDIC rainbow. The documents can be summarised as follows:

• Red Book for civil engineering works, the first edition of which was published in 1957. It is now in the fourth edition published in 1987 and this edition has been reprinted twice, in 1988 and in 1992, with editorial amendments.

• Yellow Book, for mechanical and electrical works, the first edition being published in 1963. The third edition was published in 1987.
• Conditions of subcontract (also red!), the first edition was published in 1994. This document has been drafted primarily for use with the Red Book.
• Orange Book for design - build and turnkey contracts, published in 1995.

• White Book - Model Services Agreement between Client and Consultant. Second edition published in 1991.
• Joint Venture (Consortium Agreement). This is a Model Form of Agreement to be entered into by consultants when forming a joint venture or consortium for a project.
• Sub-consultancy Agreement, for use when one firm of consulting engineers is acting as a sub-consultant to another.

The FIDIC documents have always embodied certain underlying principles which can be summarised as follows:

Origins and legal system
The first edition of the Red Book published in 1957 drew heavily on the fourth edition of the Conditions of Contract published by the United Kingdom Institution of Civil Engineers. The reason for this was that in the years shortly after the Second World War, when a number of international projects were carried out financed by institutions such as the World Bank, consultants working in many countries used the Institution's form departing from it only where it was considered essential because of the international character of the work. When FIDIC came to produce the first Red Book it was natural that they should use the work already done as a basis. The result is that the FIDIC documents tend to be orientated towards a common law approach to contractual matters, although both consultants and contractors from countries more used to a civil law environment do not appear to have had too much difficulty in using the FIDIC forms.

Risk
If the question is asked, why does FIDIC take an interest in publishing Standard Forms of Contract perhaps the most important reason is the fundamental need to ensure fairness in contracts entered into between its clients and the contracting and manufacturing industries. It is in the interest of all sectors of the engineering industry that contractors and manufacturers should be given a fair and just reward for the works they carry out and the goods they supply. In the long run no-one in the industry gains if conditions are such that contractors and manufacturers are driven out of business. Thus fundamental to all the FIDIC Conditions is a fair allocation of risk and responsibilities between the parties to a contract. A basic principle in the FIDIC forms is that a contractor can only be expected to be bound by and to price for conditions which are known to him or which are foreseeable when he prepares his tender.

Payment
In the Standard Forms, FIDIC tries to ensure that contractors and manufacturers will be aware of payment terms, particularly when they can expect to receive their money for work carried out. In these days when casinflow is all important it is essential for contractors and manufacturers to know when they will receive cash due to them.

The Engineer
One of the key areas of the Red and Yellow books has been the presence of "The Engineer". It has been said that in the FIDIC Conditions "The Engineer" is an essential factor and if the power of the engineer is eroded much of the logical system built up in the conditions will cease to make sense. For example, if 1 may quote from Clause 13 in the Red Book:

...the Contractor shall execute and complete the Works in strict accordance with the Contract to the satisfaction of the Engineer".

And from Clause 67:
If any dispute between the Employer and the Contractor arises

...the matter in dispute shall, in the first place, be referred to the Engineer The Engineer shall give notice of his decision to the Employer and the Contractor"

The complete text from which these quotations are taken should be read in order to obtain the full picture. However, the quotations give an indication of the powers of the engineer as stated in the conditions of contract. They also give evidence of the importance of the engineer's integrity and independence as well as the necessity that he be highly qualified and capable of acting as an unbiased solver of disputes on a construction site. FIDIC has always believed that an unbiased qualified engineer, independent of both the employer and the contractor, should act to resolve problems arising during construction in the common interest of all parties involved. However, while this has been accepted by many employers and welcomed by a number of contractors over a long period, there has always been a view from some clients that the system is unfair. Particularly in certain developing countries there has been a view that, with the consulting engineer and the contractor often both coming from the developed world, there was a risk that the employer would not be treated fairly. On the other hand certain contractors have argued that as the consulting engineer is paid by the employer, he will always put the employer's interests before those of the contractor. This topic, that is the role of the engineer, is at present being considered carefully in preparing new revisions of the Red and Yellow books and I will say more about this later in my talk.

Parts 1 and 11
What I believe is a unique feature of the FIDIC forms of contract is the use of Parts 1 and 11. Part 1 - General Conditions are intended to be issued unaltered for all contracts. Part 11 has to be specially prepared to suit the requirements of each contract. Part 11 may include amendments to Part 1 but it is hoped that such amendments will be kept to a minimum. The advantage of this procedure is that recipients of the documents do not have to spend time searching through for minor changes to the text which at a later date might prove to be of major significance. The Parts 1 and 11 procedure has worked well over the years and has many advantages both for those preparing documents and those subsequently having to use them.

While earlier editions of the standard forms included the word International" in the title, this has been dropped from the later editions as FIDIC considers that its documents form a sound basis for domestic as well as international contracts.

In preparing documents, FIDIC has always tried to consult widely with those sectors likely to be involved with the use of the documents. FIDIC has welcomed the active participation of the World Bank and acknowledges the useful comments received from bank officials during the course of drafting documents. FIDIC has in addition involved contractors organisations in preparing its documents.

Today FIDIC works closely with the European International Contractors (EIC) and, while it may not always be possible to adopt all the suggestions made by contractors, FIDIC welcomes their participation particularly in trying to ensure a fair balance on issues involving risk and payment. FIDIC has also drawn heavily on dvice from the International Bar Association (IBA) on the legal drafting of its documents. Finally FIDIC would wish to acknowledge the many experts in specialist fields, such as insurance and project financing, who have been prepared to give their time to the drafting of the documents.

So what of the future?
Firstly, the basic principles described earlier will continue to be applied except, as indicated earlier, the role of the Engineer.

With the publication in 1995 of the Orange Book for design-build and turnkey we feel we have met the needs of the industry for most of the procurement methods which are currently in use. Consideration is being given to producing forms of contract for new types of procurement such as those involving private finance and operation. In addition FIDIC is currently drafting a form of contract for smaller works and is considering preparation of a sub contract document for use with the Orange Book and a contract guide. However, the main task currently in hand is the updating of the Red and Yellow Books.

As I have mentioned earlier, since they were first published, FIDIC has periodically carried out revisions of both the Red and Yellow Books. Amendments have been made in the light of experience and to reflect other changes occurring in the market place. However, today FIDIC faces wider challenges which it needs to meet and to resolve if it is to maintain its pre-eminent position as the originator of standard forms for international contracts. To mention just two of these. Firstly, ENAA (the Engineering Advancement Association of Japan) has produced carefully thought out sets of documentation to cover international contracts for process plant construction and for power plants. Secondly, in 1993 the Institution of Civil Engineers published the first edition of its New Engineering Contract (NEC) , recently re-issued as a second edition with the title "Engineering and Construction Contract" although the acronym NEC has been retained. Both of these documents depart from the FIDIC approach in a number of important respects and FIDIC needs to consider to what extent it should follow some of the principles adopted in these new forms.

In my view, it is important for FIDIC in the new revisions to have a common set of definitions and, wherever appropriate, identical language in both the Red and Yellow forms. In order to achieve this there has been a restructuring during recent years in FIDIC's internal methods for producing its documents. For many years responsibility for the Red Book was delegated by the FIDIC Executive Committee to a Civil Engineering Contracts Committee while preparation of the Yellow Book was the responsibility of an Electrical and Mechanical Contracts Committee. In 1993 a decision was taken to abolish these separate committees and to have a single Contracts Committee. Various task groups were set up under the Contracts Committee for different documents and one of these is the task group with responsibility for updating both Red and Yellow Books. This arrangement should assist in obtaining compatibility between both documents which was not always the case when two separate committees were involved.

As mentioned earlier one of the major topics for consideration in rev documents is the role of the engineer and, closely related to this, the method of dealing with disputes. In the Red Book at present there is a requirement 2.6) for the engineer to act impartially when determining values, granting e of time and making decisions. In addition in the terms of Clause 67 if arises between the parties to the contract the engineer is required to act i arbitral role in deciding how such a dispute is to be resolved. In the Yell there are similar requirements for the engineer to act impartially. A departure from the traditional role of the engineer has been made in the case of the Orang In this case there is no engineer as such. Many of the engineer's duties in and Yellow Books are, in the case of the Orange Book, to be carried ot empioyer's representative, who in many cases may be a consulting enginE difference between the earlier forms, that is the Red and Yellow Books, Orange Book is that the Orange Book does not require the en representative to be impartial, only that in matters involving time and m should act fairly and in accordance with the contract (Clause 3.5).

In the matter of dealing with disputes, in the Orange Book the engineer's role has been delegated to an independent dispute adjudication board (DAB). This board, which may comprise one or three members, is appointed jointly by the employer and the contractor at the beginning of the contract. The Board keeps in touch with the work in progress and can be mobilised at very short notice to adjudicate in the case of a dispute. The DAB is paid for jointly by the employer and the contractor.

It is hoped that the arrangement adopted for the Orange Book, particularly the introduction of the DAB, will deal with some of the criticisms of the role of the engineer which have become evident in recent years and to which I have referred earlier.

The World Bank in its Standard Bidding Document (SBD), while generally adopting the FIDIC Red Book, has made a few significant changes one of the most important being mandatory substitution of a dispute resolution board (DR13) to replace the engineer's role in Clause 67 for all contracts whose value exceeds $50 million.

Partly as a consequence of the World Bank's SBD, and also in response to international trends in the whole area of dispute resolution, FIDIC has decided that the DAB approach to dispute resolution as covered in the Orange Book should be immediately available, as an alternative to the engineer's role, for users of the Red Book. The Red Book Supplement, the first edition of which has recently been published, contains FIDIC's proposed wording for a DAB for use with the Red Book, together with draft Model Terms of Agreement and Procedural Rules for the DAB members. It should be noted that, depending on the size of the contract, the DAB may comprise either three members or one member. A significant difference between FIDIC's DAB and the World Bank's DRB is that the former is to make decisions which are binding, although such decisions may still be reversed in subsequent arbitration or litigation. In the case of the Bank's DRB, the Board arrives at a recommendation which is non-binding.

In addition to the DAB proposals, the Red Book Supplement covers two other topics. Firstly it provides wording for an alternative payment method based an a lump sum instead of the traditional admeasurement. Secondly the document provides an alternative Part II wording to provide additional safeguard to a contractor in the event that the engineer is late in certifying interim payments. We expect to issue the first edition of the Supplement shortly.

Reverting to the updating of the Red and Yellow books, FIDIC has not yet come to a final decision on the way in which the traditional Red and Yellow Book role of the engineer will be changed in the new revisions of these Books. In principle, however, the aim will be to offer the employer options so that the employer can choose between the impartial roles of earlier documents or the non-impartial position similar to the new Orange Book.

I should like to outline the other main principles which the Red Yellow Up group are taking into account in revising the documents.

1. It is intended that common definitions will be used in both documents. Where applicable the list of definitions produced for the Orange Book will form the basis for the new Red and Yellow standard forms. This will assist in harmonising the wording of Red, Yellow and also the Orange Books. Speaking from my own experience, for engineers who work across all engineering disciplines, it will greatly assist to have the same definitions in all three books.
2. Wherever appropriate, that is where the same topic is being covered, then identical wording will be used in both documents.
3. One of the attractions of the FIDIC forms is their familiarity to users. A balance therefore has to be struck between preserving areas with which users are familiar and adapting the new documents to make them both more user friendly and, where appropriate, introducing a more logical sequence. A considerable break has been made in the Orange Book where we decided that the time had come to adopt a more rational layout. Those of you who have seen this document will realise that, while in certain respects the language is identical or similar to that in the Red Book, the structure of the document is radically different. It is probable that the revised Red and Yellow Books will adopt a format similar to the Orange Book.
4. FIDIC receives many requests, particularly from those whose first language is not English, for the wording of its documents to be simplified. One commentator from the other side of the Atlantic has recently referred to FIDIC's 'Victorian prose". While every effort will be made by the drafters to simplify the language in order to make the documents easier to understand, it has to be remembered that the FIDIC Conditions become key legal documents once a contract is entered into. Hence precision of language remains of the utmost importance even although such precision may at times lead to sentences not always easily understood by those who are not fluent English speakers. As in the past, it is hoped that the documents will be translated into other languages.
5. Insofar as it is practicable it is intended that the documents will be suitable for use under both common and civil law regimes.
6. To the extent necessary, special clauses may be included to cover specialist activities such as tunnelling and dredging. Discussions with the International Tunnelling Association and with the International Association of Dredging Companies have already taken place.

In addition FIDIC has canvassed its member associations for their comments on the existing documents and for their views on amendments which should be made for the future. Also EIC and FIDIC appointed Reading University in the UK to undertake research into various aspects of the use of the Red Book. The report on this research has recently been completed. Its findings have endorsed the acceptability of many features of the Red Book by client bodies, contractors and consulting engineers. Where appropriate, the results of the research will be taken is into account in the updating of the Red and Yellow books.

An important conclusion which is emerging from the work done by the task group to date is that the text of the conditions for a particular contract arises primarily from the allocation of risk rather than from the physical type of works. It is therefore probable that the new books will be structured around the allocation of risk.

Adopting this principle, the first new book would cover contracts where the employer bears the risk of quantity variations and is responsible for most or all of the design. Interim and final valuations would be based on measurement and actual quantities. Thus the first new book effectively replaces or becomes the new Red Book. In the second new book, the contractor would bear the risk of quantities and be responsible for most or all of the design; interim payments would be based on a schedule and final valuation based on lump sum pricing. Thus the second new book effectively replaces the Yellow Book. It remains to be seen if the Orange Book becomes redundant with the publication of the second new book as it may effectively cover the design-buiid situation.

In conclusion, I have told you something about the origins of FIDIC and the principles along which its standard forms have developed; a similar basis will be adopted for our future documents. Through its work in this area FIDIC has achieved an eminent position as a provider of standard forms of contract in which both parties to a contract can have confidence and feel assured that their interests are properly protected. I have then told you about FIDIC's plans for the future and how we are adapting to meet changing circumstances in the whole field of engineering. I am confident that FIDIC is proceeding along the right lines for the future and that its standard forms, albeit with some fundamental changes, will be used well into the next century.

Appendix A
LIST OF DOCUMENTS WHICH MAKE UP THE FIDIC RAINBOW (as of March 1997)

1. Conditions of Contract for Works of Civil Engineering Construction (Red Book) Fourth edition 1987. Part 1 - General Conditions with forms of tender and agreement Part 11 - Conditions of particular application with guidelines for preparation of Part 11 Clauses; Reprinted 1988 with editorial amendments; Reprinted 1992 with further amendments

2. Conditions of Contract for Electrical and Mechanical Works including erection on site (Yellow Book) With forms of tender and agreement Part 1 - General Conditions, Part 11 - Special Conditions. Third edition 1987

3. Conditions of Contract for Design-Build and Turnkey (Orange Book). Part 1 - General Conditions, Part 11 - Guidance for the preparation of conditions of particular application Forms of tender and agreement First edition 1995

4. Conditions of Sub-contract for Works of Civil Engineering Construction. Part 1 - General Conditions, Part 11 - Guidance for the preparation of conditions of particular application Forms of offer and agreement First Edition 1994

5. Tendering Procedure, Second edition 1994

6. Client/Consultant - Model Services Agreement (White Book). Part 1 - Standard Conditions, Part 11 - Conditions of particular application. Second edition 1991 (Note - this document replaces the previous three documents IGRA 1979 D and S, IGRA 1979 P1 and IGRA 1980 PM)

7. Joint Venture (Consortium) - Agreement, First edition 1992

8. Sub-consultancy Agreement, First edition 1992