• Conditions of Contract for Construction for building and engineering works designed by the employer (the new Red 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 new Yellow Book);
• Conditions of Contract for EPC Turnkey Projects EPC being the abbreviation for Engineer - Procure - Construct (the Silver Book); and
• Short Form of Contract for projects of relatively small value) (the Green Book)

• Conditions of Contractfor Works of Civil Engineering Construction, Fourth Edition, 1987 (reprinted in 1988 with editorial amendments and reprinted in 1992 with further amendments) (the old Red Book);
• Conditions of Subcontract for Works of Civil Engineering Construction, First Edition, 1994 (to function with the old Red Book);
• Conditions of Contract for Electrical and Mechanical Works, Third Edition, 1987 (reprinted in 1988 with editorial amendments) (the old Yellow Book); and
• Conditions of Contract for Design-Build and Turnkey, First Edition, 1995 (the Orange Book).

1. a Dispute Adjudication Board (or 'DAB') as an 'acceptable alternative' to the engineer's former role in dispute resolution (the DAB had already been provided for in the General Conditions of the Orange Book published in 1995);
2. optional amendments to the old Red Book to enable payments to be made on a lump sum basis instead of on the basis of a bill of quantities; and
3. an optional amendment to the old Red Book to safeguard the contractor in case the engineer was late in certifying payment (the old Red Book only protected the contractor where the employer paid late, not where the engineer certified late). Similarly, in 1997, FIDIC published a Supplement to the old Yellow Book providing, again, for a DAB as an acceptable alternative to the engineer's former role in dispute resolution.

One of the aims of the new forms was therefore to harmonise clauses, definitions and wording, across all the new forms, whenever this could be justified and, in particular, in the new Red and Yellow Books. With this goal in mind, the old Red and Yellow Books were restructured (and the new Silver Book was structured) so that they would all be based on 20 main clauses, as had been true of the Orange Book published in 1995, and the wording of clauses and definitions were made the same or similar where appropriate. The goal of harmonisation was facilitated by the assignment of the responsibility for the drafting of the new Red, Yellow and Silver Books to a single FIDIC Task Group and by requiring that it coordinate closely with the Task Group responsible for the new Green Book (for small works, as indicated above).

Another structural change is that the new Red and Yellow Books are not broken down strictly into 'civil' and 'electrical and mechanical' forms, as before, but into 'building and engineering works designed by the Employer' (the new Red Book) and 'electrical and mechanical plant, and for building and engineering works, designed by the Contractor' (the new Yellow Book).

In the case of both the new Red and Yellow Books, administration of the contract and supervision of the execution of the works is carried out by the engineer who is employed by the employer as is the case with the old Red and Yellow Books. However, as regards dispute resolution, the DAB is no longer merely an 'acceptable alternative' to the engineer (as indicated in the 1996 Supplement referred to above), but has now firmly replaced the engineer in the General Conditions of both the new Red and Yellow Books. The Orange Book has been effectively replaced by the entirely new Silver Book (as well as by the new Yellow Book). While preparing the new books, FIDIC concluded that there was a market demand for an entirely new standard form of contract for turnkey projects which, while allowing the contractor a correspondingly higher contract price, would provide the employer (so it was believed) with greater certainty of final price and greater assurance that the final completion date would be respected. As stated in the Introductory Note to the First Edition of the new Silver Book:

'During recent years, it has been noticed that much of the construction market requires a form of contract where certainty of final price, and often of completion date, are of extreme importance. Employers on such turnkey projects are willing to pay more - sometimes considerably more - for their projects if they can be more certain that the agreed final price will not be exceeded. Among such projects can be found many projects financed by private funds, where the lenders require greater certainty about a project's costs to the Employer than is allowed for under the allocation of risks provided for by FIDIC's traditional forms of contracts. Often the construction project (the EPC - Engineer, Procure, Construct - Contract) is only one part of a complicated commercial venture, and financial or other failure of this construction project will jeopardize the whole venture. For such projects it is necessary for the Contractor to assume responsibility for a wider range of risks than under the traditional Red and Yellow Books. To obtain increased certainty of the final price, the Contractor is often asked to cover such risks as the occurrence of poor or unexpected ground conditions, and that what is set out in the requirements prepared by the Employer actually will result in the desired objective.'

However, as is well known, merely transferring risks blindly from the employer to the contractor will not necessarily better ensure that the works are done on time or at the agreed price. Instead, this may, at best, cause more claims and disputes and, at worst, bankrupt the contractor, thereby requiring the employer to re-bid the job and, almost inevitably, pay a higher price to get the work done.

Acknowledging this, FIDIC cautions, in its Introductory Note to the Silver Book, that the form is not suitable for use where, among other things, construction will involve substantial work underground or work in other areas which tenderers cannot inspect or if there is insufficient time or information for tenderers to scrutinise and check the employer's requirements or for them to carry out their designs, risks assessment studies and estimates. In such cases, FIDIC accepts, the contractor would be required to assume risks that he cannot reasonably be expected to evaluate, which would not be in the interest of either party Accordingly, in these . situations, FIDIC recommends that the new Yellow Book be used, which provides for balanced risk sharing between the employer and the contractor.

As indicated by the above quotation, the new Silver Book is intended for use as an EPC contract within a BOT (Build-Operate-Transfer) or similar type structure, and also for other types of project where government departments, private developers or others wish to implement a project on a fixed turnkey basis with a strictly two-party approach, that is, without the intermediary of the engineer.

The fourth new book, the Short Form of Contract (the General Conditions are only ten pages long), which is also called the 'Green Book', is entirely new. It is basically intended for building and engineering works of relatively small capital value (typically under US$500,000) or for relatively simple or repetitive work, or work of short duration (typically six months or less). Until the issuance of this Book, there existed no FIDIC short form of contract for use in international construction.

New provisions favouring the contractor
New provisions which may be said to favour the contractor include the following:

1. The employer is required to submit, within 28 days after receiving any request from the contractor, 'reasonable evidence that financial arrangements have been made and are being maintained' which will enable the employer to pay the contract price in accordance with the contract. If the employer intends to make 'any material change' to his financial arrangements, he is required to give notice to the contractor with detailed particulars (Sub-Clause 2.4).
2. If the employer considers himself to be entitled to any payment under or in connection with the contract, and/or to any extension of the Defects Notification Period (the new name for the Defects Liability Period), the employer or the engineer must give 'notice and particulars' to the contractor. The particulars must 'specify the Clause or other basis of the claim ... and ... include substantiation of the amount and/or extension to which the Employer considers himself to be entitled'. The notice must be given as soon as practicable' after the employer became aware of the event or circumstance giving rise to the claim. The employer is expressly denied the right to set off against or make any deduction from a certified amount or otherwise claim against the contractor, except in accordance with this provision (Sub-Cause 2.5).
3. The contractor's right to adjustment of the contract price to take account of any increase or decrease in cost (as defined) resulting from a change in law in the country where the site is located has been extended (beyond 'changes in legislation', as in eg, the Orange Book) to include changes in the judicial or official governmental interpretation of laws made after the base date (as defined), which affect the contractor in the performance of his obligations (Sub-Clause 13.7).
4. If the contractor is not paid on time, the contractor is entitled to receive 'financing charges compounded monthly on the amount unpaid during the period of delay'. Unless otherwise stated in the Particular Conditions, these financing charges are to be calculated at the annual rate of three percentage points above the discount rate of the central bank in the country of the currency of payment and should be paid in such currency (Sub-Clause 14.8). The above provision is derived from the Orange Book. While the old Red Book provided that the contractor was entitled to interest on late payments, it did not specify how this was to be calculated.
5. The contractor is now entitled, after giving notice, to suspend or reduce the rate of work where the engineer fails to certify an interim payment certificate or the employer fails to provide information about the employer's financial arrangements for paying the contract price (see point (1) above) (Sub-Clause 16.1). Under the old Red Book (Sub-Clause 69.4), the contractor was only entitled to suspend or reduce the rate of work where the employer was not paying an amount due under any certificate.
6. Within 42 days after receiving a claim or any further particulars supporting a previous claim of the contractor, the engineer is now expressly required to 'respond with approval, or with disapproval and detailed comments' (Sub-Clause 20.1). Under the old Red Book, there was no express requirement that the engineer respond to the merits of the contractor's claims at all, except in the case of a dispute (Clause 67).
7. Under the General Conditions of the new Books for major works, disputes are now required to be submitted to a DAB for decision. In the case of the new Red and Yellow Books, the DAB must be appointed at the time the contract is signed and remain in place until it is concluded (under the General Conditions of the Silver Book, a DAB is appointed for each dispute and ordinarily only remains in office until that dispute is decided) (Clause 20). Under the old Red and Yellow Books, disputes had to be submitted to the engineer for a decision, as a condition to arbitration. The provision for a DAB to replace the engineer for the settlement of disputes in the General Conditions may be the most favourable of the innovations in the new Books from the contractor's point of view.

1. The employer is now entitled, on not less than 42 days' notice, to replace the engineer provided that the employer may not do so with a person against whom the contractor 'raises reasonable objection' by notice to the employer (Sub-Clause 3.4). Under the old Red Book, the employer had no right to change the engineer (Sub-Clause 1.1(iv)).
2. If the contract specifies the contractor shall design any part of the permanent works (as defined) then such part must, when completed, be 'fit for such purposes for which the part is intended as are specified in the Contract` (Sub-Clause 4.1(c)). Under the old Red Book, there was no requirement that any works designed by the contractor be fit for purpose.
3. Where the contractor makes a claim for adverse 'physical conditions' (as defined) which he considers to have been unforeseeable (as defined), the engineer may review whether other physical conditions 'in similar parts of the Works (if any)' were more favourable than could reasonably have been foreseen. If so, the engineer may reduce the amount of any cost (as defined) claimed by the contractor for adverse physical conditions by the amount of the reduction in cost of such more favourable conditions, so long as the net effect does not result in a reduction in the contract price (Sub-Clause 4.12).
4. The contractor is required to submit detailed monthly progress reports to the engineer, including charts and detailed descriptions of progress, photographs showing the status of manufacture and, of progress on the site, details regarding the manufacture of each main item of plant and materials, records of the contractor's personnel and equipment as well as other information (Sub-Clause 4.21). Such progress reports are required to accompany the contractor's applications for Interim Payment Certificates (Sub-Cause 14.3), implying that payment may be conditional on the receipt of such reports.
5. The employer is expressly entitled to extend the Defects Notification Period for the works or a section of the works for up to two years if it cannot be used for the purposes for which it was intended by reason of a defect or damage (Sub-Clause 11.3).
6. The employer has the right, after notice to the contractor, to terminate the contract at any time for the employer's convenience provided that the employer may not do so in order to execute the works himself or to arrange for them to be executed by another contractor. In the case of such termination, the contractor is paid for work done but is deprived of the right to profit on the balance of the contract (Sub-Clauses 15.5 and 19.6).
7. The contractor is required to give notice to the engineer of any claim for an extension of time or additional payment 'not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance' giving rise to a claim. If he fails to do so, the employer is stated to be discharged from all liability in connection with the claim. In addition, the contractor is required to send to the engineer a fully detailed claim within 42 days after the contractor became aware, or should have become aware, of the event or circumstance giving rise to the claim (unless the engineer approves a longer period). If the contractor should fail to comply with this latter requirement, any extension of time and/or additional payment must be adjusted to take account of the extent to which the failure may have prevented or prejudiced proper investigation of the claim (Sub-Clause 20.1).

Consequently, the present author is convinced that, with time, the new books will be widely accepted and be seen as representing a significant advance over their predecessors. While FIDIC does not presently anticipate issuing a new form of subcontract for the new Red Book (as this is not justified by demand for the existing form of Subcontract for the old Red Book), a Guide to the new books for major works has been prepared and is expected to be published by FIDIC later this year (2000) and should be of assistance to all users of the new books, especially those still unfamiliar with them.