It’s over a year since the second editions of the Rainbow Suite were published and the recent conferences in London and the Middle East provided a forum to reflect on the changes. Indeed, this was reflected in the respective agendas. There were sessions dedicated to responding to commentary on the second editions and also to comparisons with other “international” standard forms. Errata for the Second Editions were also published in December 2018, picking up on largely typographical points.
One year on, the conversation has changed from considering the changes from an academic, theoretical perspective to whether and how they might be applied in a more practical context. Understandably, given the extent of the changes in the second editions (particularly when compared, for example, to the “light touch” approach adopted by NEC in the NEC4 update, and its subsequent round of amendments), it is still early days. However, there are indications that the first contracts based on the second editions have been awarded – or at least are being seriously considered for new projects. For most, though, the benefits of greater clarity and certainty that the drafters have sought to provide are still being evaluated against the consequential increase in complexity and decrease in flexibility, and the advantages of using the tried-and-tested 1999 forms.
What about the Pink Book?
The FIDIC Middle East Users’ Conference also coincided with the recent announcement that FIDIC has entered into an agreement with the World Bank for a five-year, non-exclusive licence to refer to six major FIDIC contracts, including the second edition of the Rainbow Suite, as part of the bank’s standard bidding documents. FIDIC expects to announce similar agreements with other multilateral development banks (MDBs). This development is a departure from the previous licensing arrangement with the MDBs that resulted in the publication of a standalone MDB harmonised form of contract (Pink Book) based on the FIDIC Red Book 1999 with specific amendments to tailor it to MDB-funded projects. Instead, the World Bank will produce its own set of Conditions of Particular Application (COPA). The agreement also extends beyond only the Red Book to include:
- FIDIC Red Book, second edition, 2017.
- FIDIC Yellow Book, second edition, 2017.
- FIDIC Silver Book, second edition, 2017.
- FIDIC White Book, fifth edition, 2017.
- FIDIC Gold Book, first edition, 2008.
- FIDIC Green Book, first edition, 1999.
It’s been an active few years for FIDIC on the contracts front. 2016 saw the publication of the second edition of the Blue-Green Book (dredging contract). This was followed in 2017 by no less than six new editions: the second editions of the Rainbow Suite (Red, Yellow and Silver Books) and the 2017 suite of agreements (fifth edition of the White Book and the second editions of the Sub-Consultancy and JV Agreement). With no new publications in 2018, there was an opportunity to catch one’s breath. Yet, behind the scenes, the FIDIC Contracts Committee has continued to be as busy and ambitious as ever, with dedicated task groups working on a number of different projects:
- Tunnelling and Underground Works Contract (Emerald Book).
- Operate-Design-Build-Operate Contract (Bronze Book).
- 1999 Yellow Book Subcontract.
- Updated Short Form of Contract (Green Book).
- Standard Particular Conditions “Plug-In” for Yellow Book covering Renewable Energy Projects.
- Contracts Guide to the FIDIC Red, Yellow and Silver Books, second editions 2017.
- Guide to the 2017 suite of agreements.
The Emerald and Bronze Books have been in gestation for a while and “flagged” at conferences in previous years. The current target is for these to be published this year, in 2019. The same is true for the subcontract for the 1999 Yellow Book – and the fact that the first dedicated subcontract for the Yellow Book is to be for use with the 1999, and not the 2017, Yellow Book suggests that the 1999 Yellow Book is expected to continue to be widely adopted.
Updated Green Book
The news of an updated Green Book, the short form of contract, is relatively fresh. Up to now, FIDIC has recommended the Green Book for projects that involve work that is relatively simple, of short duration or of low capital value. In contrast to the 2017 Red and Yellow Books, the Green Book is short and relatively simple: there is no Engineer in the Green Book and the contract management provisions are kept brief.
The publicity surrounding the update would suggest that FIDIC has recognised that the simplicity provided by the Green Book – particularly when compared to the 2017 Red and Yellow Books – may make it a more suitable form for a wider range of projects than simply those of short duration or low capital value. The Green Book is instead being talked about in terms of projects of low perceived risk.
Perhaps, more interestingly, the updated Green Book is being positioned as an alternative to the 2017 FIDIC Red and Yellow Books and also not as a replacement of the 1999 Red, Yellow or Silver Books.
Over the coming months, I will be discussing some of the particular issues that users of FIDIC contracts face in practice.