The conditions of contract prepared by the Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting Engineers, FIDIC) are nowadays the most widely used sample forms of contracts for construction projects. These sample documents are known as the ‘International Best Practice Documents’ and are enjoying ever growing popularity. This is mainly thanks to significant international lenders who demand generally accepted and proven ‘rules of the game’ in their construction projects. One of the advantages of FIDIC forms is that the user is presented with a complete toolbox of documents. Without these, successful realization of a project would be practically impossible. The documents include a variety of samples and templates ranging from tender forms right up to dispute adjudication issues. Commentary, explanations and user instructions can also be found in individual FIDIC forms.

The International Federation of Consulting Engineers was founded in France in 1913 and is based in Geneva, Switzerland. Following its initial establishment, the organization expanded rapidly thanks to new membership from around the world. FIDIC is a non-government organization recognized by the United Nations, by major global banks, the European Commission and other international institutions. FIDIC was set up to support and promote the overall interests of its member associations. The organization’s growth peaked in the post-WWII era when it started expanding at such a rate that it now unites associations from almost 100 countries on all continents.

The first sample, Conditions of Contract for Works of Civil Engineering Construction were released in 1957. This sample gave rise to the tradition of the ‘FIDIC Red Book’. Due to ever-advancing technological developments in the construction industry, it became clear that contractual conditions would become redundant over time and would need to be revised. In 1999 the latest and the most used volume entitled the ‘First Edition’ came into existence with its Red, Yellow and Silver Books. These are the terms most often used by construction practitioners though the official abbreviations are CONS, P&DB and EPC. To distinguish the 1999 forms from the older versions they are sometimes referred to as the ‘New Red, Yellow and Silver Books’.

According to FIDIC Statutes and By-Laws (October 2011), the Federation’s objectives are:

1. to represent the consulting engineering industry globally;
   
2. to enhance the image of consulting engineers;
   
3. to be the leading authority on issues relating to business practice;
   
4. to promote the development of a global and viable consulting engineering industry;
   
5. to promote quality;
   
6. to actively promote conformance to a code of ethics and to business integrity;
   
7. to promote commitment to sustainable development.

In recent years, FIDIC has experienced growth in its influence on the construction industry worldwide. With the spread of globalization, international organizations are looking for a uniform set of construction project standards independent of countries and governments. Such organizations include the World Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the African Development Bank and the Islamic Development Bank. Various other organizations are cooperating with FIDIC to develop broad, worldwide standards of business practice, ranging from the International Standards Organization, the International Labour Organization and others such as Transparency International or the United Nations Environment Program. Close cooperation with the above-mentioned organizations (and others) is helping the development of widely used best practice standards, not only for consulting engineers, but for the wider construction industry and business in general. Clearly defined, well-known and globally recognized standards are helping to reduce various costs and to develop a predictable legal and business environment. This applies not only to countries in the developing world, but to countries of the developed world as well. FIDIC promotes its objectives through annual meetings and conferences. The first was held in London in 1988 with cities in South-East Asia, the Middle America and North America added to the FIDIC annual program in recent years. Moreover, about 100 training events are held annually worldwide.

The nature and type of organizations who are FIDIC members are diverse. They range from individual members from independent countries to regional federations and broader member associations. For example, the African members of FIDIC associate themselves with the Group of Africa Member Associations (GAMA) with its FIDIC Regional Office in Dar-es-Salaam, Tanzania. Members from the Asia Pacific region are associated with the Asia-Pacific Group (ASPAC). The most important and influential members of FIDIC are regional federations, such the Pan American Federation of Consultants (FEPAC) and the European Federation of Engineering Consultancy Associations (EFCA). The latter closely cooperates with FIDIC in various areas and with international governmental and non-governmental organizations and individual states.

Aware of the growing popularity and support for its activities, FIDIC organizes a number of training events to help local businesses expand globally and to spread FIDIC values. These activities have culminated in the development of the Business Practice Training Manual which is applicable in both the developed and developing world. Moreover, the organization of International Training Programmes (in cooperation with member associations) is ongoing. FIDIC also accredits trainers and training suppliers through its Accredited Trainer and Development Programme. Online training courses are available directly from FIDIC.

FIDIC training is focused on hard skills (such as the mastering of contract conditions and their use) and soft skills (such as the development of managerial skills) required for successful project implementation. The former includes courses on Professional Services Agreements, Practical Use of FIDIC Contracts, Claims and Dispute Resolution, Dispute Adjudication Boards and Contract Management. The latter comprises courses such as Business Development, Business Administration, Risk Management, Quality Management, Business Integrity Management and Project Sustainability Management.

FIDIC influence goes beyond the formalities of international best business practice and commercial relationships. FIDIC’s informal (but significant) influence on the opinions of global leaders and decision-makers is, arguably, even more important. Numerous meetings and events help FIDIC participants from across the globe to build specific professional communities, spread ideas and exchange valuable contacts. Networking and gatherings of consulting engineers, clients, contractors and other professionals are crucial to promoting FIDIC values. Therefore, these events are strongly supported by the organization.

FIDIC currently presents the most common form of contract in large construction projects. These include monumental nation-building efforts such as the re-building of Libya after the Arab Spring revolution, the development of an independent Timor-Leste and the building of infrastructure for the FIFA World Cup in Qatar in 2022.

FIDIC is currently involved in a vast field of global activity. Such worldwide presence and influence also bring with it substantial responsibility and related commitments. Therefore, FIDIC representatives and members decided to use their organizational capabilities to promote values of sustainable development. Consultants participating in development and infrastructure projects can (and are encouraged to) use their experience and knowledge directly in cooperation with project investors and clients. Using valuable know-how from the beginning of every project to realization helps make it more effective and sustainable in every aspect.

At present, the most popular FIDIC sample conditions of contract are those published in the 1999 First Edition. In particular:

1. Conditions of Contract for Construction (abbreviated as ‘CONS’ or the ‘Red Book’), being the conditions with well-balanced risk allocation and intended for projects where the risks associated with the design are to be borne mainly by the employer. CONS are the contractual conditions for the General Contracting (GC) delivery method. It is common in such arrangements that the employer (their designer) prepares a detailed design including the bill of quantities, specifications and drawings for the purpose of the tender (terms of reference). The contractor evaluates the rates and prices of the tender bill of quantities. Works are measured on the basis of actually completed works, using the fixed rates and prices. Contract administration is done by the Engineer.
   
2. Conditions of Contract for Plant and Design-Build (abbreviated as P&DB or the ‘Yellow Book’), being the conditions with well-balanced risk allocation and intended for use in Design-Build (DB) projects where risks associated with design are to be borne mainly by the contractor. Unlike CONS, P&DB does not use the employer’s detailed design for the purpose of the tender (terms of reference). These come from the ‘Employer’s Requirements’ which define, above all, the purpose, scope, standard, performance and other criteria, depending on the employer’s expectations and priorities. The employer’s requirements are not assumed to contain exhaustive details. The contractor shall prepare their proposal based on the employer’s requirements to become part of the contract. Even though the contract price is taken as a lump sum price, it may be subject to modifications through variations and claims raised for additional payments and extensions of time. Contract administration is done by the Engineer.
   
3. Conditions of Contract for EPC/Turnkey Projects (Engineer, Procure and Construct, abbreviated as EPC or EPCT or the ‘Silver Book’) are intended for DB projects where most of the risks are allocated to the contractor. These risks are typically associated with design, site conditions and complications affecting time and price. This form is recommended where entire investment sets (such as nuclear power plants) are to be contracted out and where the requirement is to secure, more reliably, total price and completion time. It also applies to EPC that the price is taken as a lump sum. Works are not measured, but they can become subject to modification through variations and a limited number of claims raised for additional payment and extensions of time. Contract administration is done by the employer or their representative.

It is necessary to be able to distinguish between P&DB and EPC conditions. FIDIC discusses cases and circumstances when it is recommended applying P&DB conditions in practice. These are as follows:

• Insufficient time or information for bidders to scrutinize and check the employer’s requirements or for them to carry out their own designs, risk assessment studies and estimations.
  
• If construction will involve substantial underground work or will take place in other areas which bidders cannot inspect.
  
• If the employer intends to closely supervise or control the contractor’s work, or to review most of the design.
  
• If the amount of each interim payment is to be certified by a contract administrator or other intermediary.

FIDIC has published many other forms of contract and documents including the Short form of Contract or the ‘Green Book’. These are contractual conditions intended for construction works which are of small value or straightforward. Furthermore, there are the ‘Conditions of Subcontract for Construction’, i.e. a Construction Subcontract, issued by FIDIC in 2009 for use in combination with CONS.

For DB projects where an operation period is needed, FIDIC prepared Conditions of Contract for Design, Build and Operate Projects (abbreviated as DBO or the ‘Gold Book’) in 2008 (First Edition). This form reflects the trend that contractors not only construct but also maintain and operate the facility for some time.

FIDIC has also published a Client/Consultant Model Services Agreement in the fourth edition in 2006 (the ‘White Book’) and the Model Representative Agreement in the first edition in 2013 (the ‘Purple Book’).

The terms of the Model Representative Agreement are intended for consultants wishing to enter into a contract with a representative to provide representative services.

The main structure of the contract is defined in Sub-Clause 1.5 (1999 Edition). Documents forming part of the contract are to be taken as mutually explanatory of one another. For the purposes of interpretation, the weights of the individual documents are determined in this Sub-Clause. If any ambiguity or discrepancy is found in the documents, the engineer shall issue any necessary clarification or instruction. The specific parts and details as found in particular forms are described below.

The Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (‘CONS’), or the ‘Red Book’ are the most frequently used of all the FIDIC forms. The abbreviation is a derivative of the word ‘construction’.

Even today, previous versions of this book are still used in practice, for example, the fourth edition (1987) Red Book. This book is significantly out of date and its use is no longer recommended. The CONS were revised and re-published in 2005, 2006 and 2010. Practitioners may come across the ‘CONS MDB’ often referred to as the ‘Pink Book’.