FIDIC (International Federation of Consulting Engineers) contracts and NEC 3 (New

Engineering Contract) contracts are both widely used in the construction industry but
have some fundamental differences. Here are the key distinctions between the two
contract forms:

1. Contract Philosophy:
o FIDIC Contracts: FIDIC contracts follow a traditional approach where
detailed specifications and design are provided upfront, and the
contractor is responsible for delivering the project in accordance with
those requirements.
o NEC 3 Contracts: NEC 3 contracts emphasize collaboration, transparency,
and shared risk between the parties involved. They promote a more
flexible and proactive management style, with an emphasis on project
management rather than detailed specifications.
2. Contract Structure:
o FIDIC Contracts: FIDIC contracts typically consist of several separate
documents, including the General Conditions of Contract, Particular
Conditions, and the various contract forms. They are known for their
comprehensive and detailed nature, covering various aspects of the
project.
o NEC 3 Contracts: NEC 3 contracts are designed to be more concise and
user-friendly. They consist of three core documents: the Contract Data,
the Conditions of Contract, and the Works Information. The focus is on
simplicity and clarity of language.
3. Risk Allocation:
o FIDIC Contracts: FIDIC contracts often place more risk on the contractor.
The contractor is responsible for design compliance, quality, and
performance of the works. They also typically have more obligations for
insurances, liabilities, and indemnities.
o NEC 3 Contracts: NEC 3 contracts promote a more balanced allocation
of risk between the parties. Risks are identified and allocated to the party
best able to manage them. The contract encourages early warning of
issues, cooperative problem-solving, and risk reduction measures.
4. Change Management:
o FIDIC Contracts: FIDIC contracts have a more formal and traditional
approach to change management. They usually include provisions for
variations and claims, which require detailed documentation and formal
procedures for approval and valuation of changes.
o NEC 3 Contracts: NEC 3 contracts emphasize proactive management of
changes and encourage early agreement between the parties. The
contract includes the Compensation Event mechanism, which allows for
the valuation and implementation of changes in a streamlined manner.
5. Dispute Resolution:
 o FIDIC Contracts: FIDIC contracts typically include detailed provisions for
dispute resolution, including arbitration or litigation, as the final step.
o NEC 3 Contracts: NEC 3 contracts encourage parties to resolve disputes
amicably through negotiation and mediation. If disputes cannot be
resolved, adjudication is often the next step, with a provision for
arbitration as a final resort.

It's worth noting that the NEC suite of contracts has been updated, and the latest
version is NEC4, which introduced some further changes and improvements compared
to NEC3. However, the general philosophy and approach of NEC contracts remain
similar.

When choosing between FIDIC and NEC contracts, it's important to consider the
specific project requirements, risk profile, and the preferred management style of the
parties involved. Consulting legal and industry experts is recommended to ensure the
appropriate contract choice for a particular project.