FIDIC Redbook 99 is the go to conditions of contract in construction projects of works designed by the Employer in Egypt and perhaps all across the world. The new 2017 edition of the FIDIC contracts is of extreme importance to Employers, Engineers and Contractors as this new edition treats many of the issues of its predecessor.
However, parties in the region are reluctant to ditch the tried and tested 99 edition and adopt the newer editions, which amends almost every clause of the 99 edition. Here is some of the most important changes:
- Increased Size. The new 2017 Redbook has 106 pages of General Conditions, nearly double that of 1999 edition; standing at 62. This clearly underpins that the new editions is much more detailed, rigid and prespective.
- Changed Terminology. The 'Appendix to Tender' is now 'Contract Data', while the 'Force Majeure' has become 'Exceptional Events' which includes the old Force Majeure and Employer Risks. Simlarly, 'DAB' has become 'DAAB' standing for 'Dispute Avoidance / Adjudication Board'.
- New Definitions. 'Claims', 'Notices', 'No-objection', 'Notice of Dissatisfaction' are all some of the new (or amended) definitions.
- Contractor's Profit. Whenever the Contract entitles the Contractor for Cost + Profit, this profit is 5% unless otherwise stated.
- Advance Warning. Advance warning provisions requiring both parties to give advance warnings of 'any know or probable future events' that could negatively affect the other party.
- Programme. More detailed Programme requirements have been included, while a special provision is made for evaluation of concurrent delays.
- Deeming Clauses. Many Clauses now include deeming provisions upon a party's failure to act upon an obligation. One important example is that the Engineer is deemed to have given a Notice of rejection of a Claim if he does not give any agreement or rejection within 42 days after receiving the fully detailed Claim.
- Variations. Variation clauses are much more detailed than that of 1999 edition, while Engineer's instructions which are not stated as Variation and which the Contractor considers a Variation must be confirmed in writing.
- Claims. Claim clause has been entirely overhauled to include Employer's and Contractor's Claims. Of the more important changes is the timeframe to submit a fully detailed Claim, increasing from 42 to 84 days. Failing to submit the fully detailed Claim (which its contents are now described) deems the Notice of Claim invalid, and thus the submission of the fully detailed Claim within the 84 days has become a condition precedent to entitlement to EOT or additional payment.
- Extension of Time. More grounds of entitlement of EOT have been added, most notably delays caused by Variation without the need to send a Notice of Claim, and delays caused by increase of more than 10% in quantites.
- Disputes. Claims evolve to disputes after a party sending a Notice of Dissatisfaction to the other party expressing their dissatisfaction with the Engineer's determination.
The new FIDIC Redbook 2017 appears to be materially amended that the Redbook 1999, and appears to be more rigid and requires proper contract administration from the onset of the project. However, the changes made appear to have addressed the main issues of the FIDIC 1999 Redbook.
If properly implemented and administered, I strongly believe that the average dispute value of $60,000,000 shall quickly plummet.