FIDIC Orange Book
Conditions of Contract for
Design-Build and Turnkey
First Edition 1995
Contents of Contract Book
_ General Conditions
_ Guidance for the Preparation of the
_ Forms of Tender and Agreement
The Orange book was published in 1995 to provide a design and build option to the then current FIDIC suite. The Orange Book was the first FIDIC contract to adopt the now current FIDIC style of drafting and was a template for the drafting teams when preparing the 1999 suite of contracts.
When the Orange book was published the Red and Yellow Books were still aimed at procurement of civil engineering and plant installation respectively. At the time it added a clear design and build and turnkey option into the available suite of contracts.
Since the publication in 1999 of the latest Red and Yellow Books there is now less focus on the type of project and more focus on the implementation of different procurement strategies. It is now likely that an Employer requiring a design and build or turnkey project under a FIDIC contract would use a 1999 edition of the Yellow Book for design and build or a Silver Book for Turnkey.
The Orange Book is drafted for use where the Contractor carries total liability for design. For the Employer, such single-point responsibility may be advantageous, but the benefits may be offset by having less control over the design process and more difficulty in imposing varied requirements.
Under the usual arrangements for a design and build contract, the Contractor is responsible for the design and provision of works. The works may include any combination of engineering (including civil, mechanical, electrical, etc) and building works.
The Orange Book is intended for use on turnkey contracts, under which the Employer’s requirements usually include provision of a fully-equipped facility, ready for operation at the turn of a key. The exact Employer requirements will need to be fully detailed to describe the design, construction, fixtures, fittings and equipment required to be provided by the Contractor’s design.
International Federation of Consulting Engineers (FIDIC). This contract form is typically used for design and build or turnkey projects, where the contractor is responsible for both the design and construction of the project.
The FIDIC Orange Book includes provisions for the following:
- General Conditions of Contract (Part 1): This section contains the general terms and conditions of the contract, such as the roles and responsibilities of the parties, contract price, payment terms, variation procedures, and dispute resolution mechanisms.
- Particular Conditions of Contract (Part 2): This section includes specific conditions that are unique to the project and are not covered in the General Conditions of Contract.
- Forms of Tender and Contract Agreement (Part 3): This section contains the forms to be used for submitting tenders and for the contract agreement.
- Contract Forms (Part 4): This section includes forms that are used during the construction phase of the project, such as the Engineer’s Instruction, Contractor’s Claim, and Variation Order.
The FIDIC Orange Book uses a formula to calculate the amount of delay damages that the contractor must pay to the employer in case of delay in completing the project. The formula is:
LD = P x D x R Where: LD = Liquidated Damages P = Contract Price D = Delay in days R = Rate of delay damages per day (expressed as a percentage of the contract price)
For example, if the contract price is $1,000,000, the delay is 10 days, and the rate of delay damages is 0.1% per day, then the liquidated damages would be calculated as:
LD = $1,000,000 x 10 x 0.1% = $10,000
The FIDIC Orange Book also includes provisions for the Engineer’s role in managing the project, including the administration of the contract and the determination of disputes. The Engineer is responsible for issuing instructions, certifying payments, and monitoring progress, among other tasks.
In conclusion, the FIDIC Orange Book is a standard contract form for construction projects that includes general and particular conditions of the contract, forms of tender and contract agreement, and contract forms. The book also includes a formula for calculating delay damages, as well as provisions for the Engineer’s role in managing the project.
Tips for Owners and Contractors on Understanding the FIDIC Orange Book
As a business owner or contractor, you know how important it is to have a clear understanding of your contractual obligations. When it comes to construction projects, this is especially true. The FIDIC Orange Book is a popular choice for many construction contracts, and understanding its contents is essential for success. In this article, we will provide you with some tips on how to navigate the FIDIC Orange Book, so you can ensure a successful project.
Introduction to the FIDIC Orange Book
The FIDIC Orange Book is a standard form of contract used in the construction industry. It was developed by the International Federation of Consulting Engineers (FIDIC) and is designed to be used on contracts for construction projects where the contractor designs and builds the project. The Orange Book is often used for large, complex projects, and it provides a framework for the parties to agree on the terms and conditions of the contract.
Understanding the Contractual Obligations
One of the key elements of the FIDIC Orange Book is the contractual obligations of the parties. As an owner or contractor, it is important to have a clear understanding of your obligations under the contract. The Orange Book sets out specific obligations for both parties, including the scope of the works, the quality of the works, and the timeframe for completion.
As an owner, you are responsible for providing the necessary information and approvals to the contractor, as well as making payments in a timely manner. As a contractor, you are responsible for ensuring that the works are completed to the required standard and within the agreed timeframe. You must also provide warranties and guarantees for the works, as well as obtaining the necessary permits and approvals.
Another important aspect of the FIDIC Orange Book is the management of risks. The construction industry is inherently risky, and the Orange Book provides a framework for managing those risks. The contract sets out the risks and liabilities of the parties, and it provides a mechanism for resolving disputes.
As an owner, you should ensure that the risks are allocated appropriately between the parties. You should also consider obtaining appropriate insurance coverage to protect yourself against any unforeseen events. As a contractor, you should ensure that you have adequate resources and expertise to manage the risks associated with the project.
Resolving Disputes in Construction Projects
No matter how much effort is put in, disputes may crop up during a construction project. In such cases, the FIDIC Orange Book offers a well-structured mechanism for resolving disputes, which involves a step-by-step approach. The first stage is negotiation between the parties involved, followed by mediation and finally arbitration.
To ensure that disputes are resolved in a timely and efficient manner, it is imperative to comprehend the dispute resolution process stipulated in the contract. Furthermore, it is essential to have the requisite resources and expertise to navigate through the process effectively.
EOT Under FIDIC Orange Book
refers to a contract condition for construction projects. The EOT under FIDIC Orange Book refers to the provision that allows for an extension of the agreed-upon construction project completion date due to certain events or circumstances that may occur during the project.
The EOT provision is usually included in the contract as a clause that defines the events or circumstances that can trigger an extension of time. These events or circumstances may include unforeseeable circumstances such as extreme weather conditions, labor strikes, or unanticipated changes in the scope of the project.
The formula for calculating the EOT under FIDIC Orange Book is as follows:
EOT = (T – B) x C/D
where: EOT = Extension of Time T = Time for Completion B = Actual Completion Date C = Prolongation Cost D = Contract Price
This formula calculates the additional time required to complete the project due to the unforeseeable events or circumstances and assigns a value to that time in terms of the prolongation cost. The prolongation cost is calculated as a percentage of the contract price.
For example, let’s say that the Time for Completion for a construction project is 100 days, but due to unforeseeable circumstances, the Actual Completion Date is delayed by 10 days. The Prolongation Cost for the project is 5% of the Contract Price, which is $100,000. Using the formula, we can calculate the EOT as follows:
EOT = (100 – 10) x 5% / $100,000 EOT = 0.005 or 0.5%
This means that the Extension of Time for the project is 0.5% of the Contract Price or 0.5 days. Therefore, the new Completion Date for the project would be 100 + 0.5 = 100.5 days.
In summary, the EOT under FIDIC Orange Book is a provision in construction contracts that allows for an extension of time due to unforeseeable events or circumstances. The formula for calculating the EOT takes into account the Time for Completion, Actual Completion Date, Prolongation Cost, and Contract Price.
What is the Orange Book?
- The Orange Book was published in 1995 as a design and build option to the then-current FIDIC suite.
What was the aim of the Red and Yellow Books when the Orange Book was published?
- At the time the Orange Book was published, the Red and Yellow Books were still aimed at procurement of civil engineering and plant installation, respectively.
What did the Orange Book add to the available suite of contracts?
- The Orange Book added a clear design and build and turnkey option into the available suite of contracts.
What is the focus of the latest Red and Yellow Books?
- Since the publication in 1999 of the latest Red and Yellow Books, there is now less focus on the type of project and more focus on the implementation of different procurement strategies.
What is the purpose of the Orange Book?
- The Orange Book is drafted for use where the Contractor carries total liability for design.
What are the usual arrangements for a design and build contract?
- Under the usual arrangements for a design and build contract, the Contractor is responsible for the design and provision of works.
What is the Orange Book intended for use on?
- The Orange Book is intended for use on turnkey contracts, under which the Employer’s requirements usually include provision of a fully-equipped facility, ready for operation at the turn of a key.
What is FIDIC?
- FIDIC stands for the International Federation of Consulting Engineers. It is a contract form typically used for design and build or turnkey projects, where the contractor is responsible for both the design and construction of the project.