FIDIC Redbook 2017 vs 99 - Top 11 Changes

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.

How the 2017 FIDIC contracts

compare with the 1999 editions
Let’s look now at some of the main features of the 2017 contracts which distinguish
them from the 1999 editions.
Aims
The first thing to say is that many of the new features of the 2017 updates were driven
by the need to increase clarity and certainty. Contractor, Employer and
Engineer/Employer should know more clearly what was expected of them and when it
was expected. Another important aim was to improve project management and reflect
international best practice. The Contracts have therefore become more detailed and
prescriptive.
New Definitions
Users will find several new definitions, which are now in alphabetical order
(clause1.1). ‘Claim’, ‘Dispute’, ‘Notice’ and ‘Programme’ , for example, are now
defined terms; ‘may’, ‘shall’ and ‘consent’ are also defined, with the particular aim of
assisting users whose first language is not English.
Other important definitions include ‘Particular Conditions’, which is now defined as
comprising Part A – Contract Data, and Part B – Special Provisions. ‘Plus reasonable
profit’, as used in 1999 Contracts, often caused difficulty. A new definition, ‘Cost
Plus Profit’, now applies, and refers to a percentage for Contractor’s profit to be stated
in the Contract Data or, if none is stated, 5%.
Notices
One very important procedural change concerns Notices in the 2017 Contracts.
‘Notices’ are now defined, in a new clause 1.3. They must be in writing and identify
themselves as a Notice, among other requirements. Notices are particularly important
in the 2017 Contracts as
(a) they are required in many more situations than previously and
(b) when given, they trigger time limits.
For example, under new clause 3.5 (Yellow and Red)/3.4 (Silver), if an instruction is a
variation the Engineer (Yellow/Red) or Employer (‘ER’) (Silver) should state
explicitly that it is a variation. If it is not so stated, but the Contractor thinks that the
instruction is a variation, then he must immediately give a Notice to that effect with
reasons. If the Engineer/ER does not respond within 7 days, by giving another Notice
(confirming, reversing or varying the instruction), he is deemed to have revoked the
instruction.
Role of the Engineer
The Engineer/Employer’s Representative’s role in agreeing or determining any claim
or other matter arising under the Contract is also set out in more detail than in the
1999 Books, and in a step-by-step fashion with time limits. Clause 3.7 of the Yellow
and Red Books 2017, for example, requires the Engineer first to consult the parties to
try to reach agreement; if no agreement is reached within 42 days, or the parties give
‘early Notice’ of no agreement, then the Engineer must give a Notice accordingly and
within 42 days (or other agreed time limit) must make his determination. If the
Engineer is late then, in the case of a claim, the Engineer is deemed to have rejected
the claim and, for any other matter, a dispute is deemed to have arisen which may be
referred to the renamed Dispute Avoidance/Adjudication Board (DAAB) for its
decision. Similar provisions apply in clause 3.5 of the 2017 Silver Book.
Managing the project better and avoiding disputes
New procedures designed to promote best practice and improve project management
include requiring the Contractor to prepare and implement a Quality Management
System to show compliance with the Contract requirements (clause 4.9.1) and a
Compliance Verification System to show that the design, materials, workmanship and
certain other matters all comply (clause 4.9.2).There is in general much greater
emphasis on dispute avoidance, including an enhanced role for the DAAB in this
respect, and promoting co-operation between the parties during the project.
Next time we will look at some of the key new contract clauses in more detail.