Different Types of FIDIC Contracts

1. The Red Book: Conditions of Contract for Construction

Overview:

 Used for building and engineering works where the design is provided by the Employer.
 The contractor is responsible for construction according to the design.

Key Features:

 Measurement-based contract (referred to as "re-measurement" or "measure and pay").

 Suitable for traditional contracts where design is separated from construction.

Practical Example:

Scenario: A government plans to build a highway. The Employer provides a detailed design for
the project, and contractors bid based on quantities provided in the Bill of Quantities.
Key Consideration:

 During excavation, the contractor discovers unexpected soil conditions (hard rock
instead of soft soil). The contractor claims additional costs and time under Clause 4.12
(Unforeseeable Physical Conditions).
 The claim is assessed based on records, the baseline program, and actual quantities.

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2. The Yellow Book: Conditions of Contract for Plant and Design-Build

Overview:

 Used for design-build projects where the contractor is responsible for both design and
construction.
 Commonly used in industrial projects, power plants, and turnkey infrastructure.

Key Features:

 Lump-sum contract where the contractor bears greater responsibility for risks related to
design and construction.

Practical Example:

Scenario: A private energy company awards a contract to build a solar power plant. The
contractor is responsible for designing and constructing the plant to meet performance
specifications.
Key Consideration:

 If the performance tests fail, the Employer can withhold payments or request
rectification under Clause 7.5 (Rejection).
 Any delay caused by design errors would be at the contractor’s risk unless there is a
force majeure event.

3. The Silver Book: Conditions of Contract for EPC/Turnkey Projects

Overview:

 Ideal for Engineering, Procurement, and Construction (EPC) or turnkey projects where
the contractor assumes almost all project risks.
 Used for large-scale infrastructure projects, like oil refineries or power plants.

Key Features:

 Fixed-price, lump-sum contract with minimal Employer involvement during execution.

 The contractor is responsible for delivering a fully operational facility.

Practical Example:

Scenario: A multinational company hires a contractor to design, procure, and build a chemical
plant. The Employer specifies the output capacity and key performance criteria.

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Key Consideration:

 During execution, steel prices rise significantly. However, under the Silver Book, the
contractor cannot claim additional costs due to price escalation. They bear this risk as it
is a fixed-price contract.
 If delays occur due to unforeseen events, the contractor may invoke Clause 19 (Force
Majeure) for EOT.

4. The Green Book: Short Form of Contract

Overview:

 Used for small-scale projects or those with simple works and a short duration.
 The focus is on minimizing administrative burdens.

Key Features:

 Simplified contract with fewer provisions.

 Suitable for straightforward construction or repair works.

Practical Example:

Scenario: A local authority awards a contract for repairing a small bridge. The works are
straightforward and expected to last three months.
Key Consideration:

 Any variation is negotiated and agreed upon between the parties with minimal
formalities.
 If there’s a delay due to rain, the contractor can request an EOT with minimal
documentation compared to other FIDIC contracts.

5. The Gold Book: Conditions of Contract for Design, Build, and Operate (DBO)

Overview:

 Combines design, construction, and long-term operation/maintenance into one

contract.
 Used for projects requiring a life-cycle approach, such as water treatment plants.

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Key Features:

 Contractor maintains and operates the facility after completion for an agreed period.

Practical Example:

Scenario: A municipality contracts a company to design, build, and operate a wastewater

treatment plant for 15 years.
Key Consideration:

 The contractor is incentivized to ensure high-quality construction to minimize

maintenance costs during the operation phase.
 If the plant fails to meet operational standards during the operation period, penalties
can be applied under Clause 9 (Tests After Completion).

6. The Blue Book: Conditions of Contract for Dredging and Reclamation

Overview:

 Used for projects involving dredging, reclamation, and marine construction.

 Focused on works measured by volume or area.

Practical Example:

Scenario: A port authority awards a dredging project to deepen the harbor channel to
accommodate larger ships.
Key Consideration:

 The contract specifies payment based on the volume of material dredged.

 The contractor encounters harder-than-expected seabed material and claims additional
costs under Clause 4.12 (Unforeseeable Physical Conditions).

Key Differences Between FIDIC Forms

Contract
Employer’s Role Contractor’s Role Risk Allocation Typical Use Cases
Type
Employer
Executes work as per
Red Book Provides design retains design Highways, buildings
design
risk
Responsible for Contractor
Yellow Specifies output Power plants,
design and bears design
Book requirements industrial facilities
construction risk

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 Contract
Employer’s Role Contractor’s Role Risk Allocation Typical Use Cases
Type
Contractor
Silver Provides Delivers fully Oil refineries, turnkey
bears most
Book performance specs functional facility infrastructure
risks
Green Executes Shared, but
Minimal involvement Small projects, repairs
Book straightforward works simple
Specifies output and Contractor Water treatment
Gold Handles design, build,
maintenance bears life-cycle plants, long-term
Book and operate phases
standards risk infrastructure
Blue Executes marine
Supervises progress Shared Dredging, reclamation
Book works

Understanding the differences between FIDIC forms is essential for selecting the right contract
for your project. Each form shifts risk and responsibility differently, so proper risk assessment is
critical before tendering.

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