Explanation of FIDIC Contract

Fédération Internationale Des Ingenieurs-Conseils (International Federation of Consulting

Engineers) is based in Lausanne, Switzerland, and founded in 1913 by France, Belgium and
Switzerland. FIDIC contracts are engineering agreements that govern construction projects with
a large number of technical specifications. They are the leading contracts in global construction
and can be used for all kinds of projects by both the public and private sectors. They have a set of
rules that balance the interests of both parties and provide a way for them to understand their
responsibilities and obligations. They also have a default hierarchy of documents that form the
contract and determine which document takes precedence in case of any conflict. They adopt a
multi-tier dispute resolution process that emphasizes the amicable settlement of disputes.

FIDIC CONRACT ENTRY IN INDONESIA

The Indonesian Construction Law No 18, 1999, has been effective since May 2000, followed
soon thereafter by the government regulation, PP No 29, 2000, both documents provide the legal
base for the construction industry. They promise a relation based on partnership and equality
between the Employer and the Contractor, unfortunately however there is no standard
construction contract based on those regulations in existence in Indonesia at this moment
The purpose of this thesis is to reseach the possibility of applying the FIDIC (1999). Conditions
of Contract for Construction, document as the standard construction contract for Indonesia as
FIDIC, the International Federation of Consulting Engineers, publications have long been in
widespread use in the international construction industry and is well known for their various
publications on contract conditions, which are based on balanced risk sharing principles between
both parties.
The result of the research has proven that the FIDIC document is in accordance with the
Indonesian laws and regulations, is of a general nature and is flexible to be used as a base for the
Indonesian standard form of construction contracts.

Types of fidic contract

FIDIC Red Book (Conditions of Contract for Construction): This contract is typically used
for building and engineering construction projects. It is designed for construction contracts
where the contractor is responsible for the design and execution of the works.
 Purpose: Suitable for construction projects where the contractor is responsible for design
and execution.
 Risk Allocation: Generally balanced risk allocation between the parties.
 Payment: Payment based on completed work and milestones.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.
FIDIC Yellow Book (Conditions of Contract for Plant and Design-Build): The Yellow Book
is suitable for projects where the contractor designs and builds the plant or facility. It is often
used for projects involving mechanical and electrical works, such as power plants or industrial
facilities.
 Purpose: Used for projects where the contractor designs and builds the plant or facility.
 Risk Allocation: Balanced risk allocation but may favor the contractor for design-related
risks.
 Payment: Payment based on completed work and milestones, similar to the Red Book.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.

FIDIC Silver Book (Conditions of Contract for EPC/Turnkey Projects): EPC stands for
Engineering, Procurement, and Construction. The Silver Book is used for projects where the
contractor is responsible for the entire engineering, procurement, and construction process,
delivering a fully functional facility to the employer.
 Purpose: Used for projects where the contractor is responsible for engineering,
procurement, and construction.
 Risk Allocation: Contractor assumes greater responsibility for project risks.
 Payment: Payment based on completed work and milestones, often including lump-sum
pricing.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.

FIDIC Green Book (Conditions of Contract for Design-Build and Operate Projects): This
contract is used for projects where the contractor is responsible for designing, building, and
operating the facility for a specified period. Green Book contracts are often used for public-
private partnership (PPP) projects and concessions.
 Purpose: Used for projects where the contractor designs, builds, and operates the facility.
 Risk Allocation: Balanced risk allocation, considering both construction and operational
risks.
 Payment: Payment structures can include lump-sum, user payment, or a combination.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.

FIDIC Pink Book (Conditions of Contract for Design-Build): The Pink Book is suitable for
projects where the contractor is responsible for both the design and construction of the works. It
is similar to the Red Book but with design responsibilities vested in the contractor.
 Purpose: Suitable for projects where the contractor is responsible for both design and
construction.
 Risk Allocation: Contractor assumes responsibility for design and construction risks.
  Payment: Payment based on completed work and milestones, often with flexibility in
payment structures.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.

FIDIC Gold Book (Design, Build, and Operate Projects): The Gold Book is used for projects
where the contractor is responsible for designing, building, and operating the facility for a longer
period, often extending to the facility's entire lifecycle. It includes both the construction and
operational phases of the project.
 Purpose: Used for projects where the contractor is responsible for designing, building,
and operating the facility for an extended period.
 Risk Allocation: Contractor assumes responsibility for design, construction, and long-
term operational risks.
 Payment: Payment structures can be complex, often including both construction and
operational payments.
 Dispute Resolution: Disputes resolved through amicable settlement, followed by
arbitration.
Each of these FIDIC contracts has specific provisions tailored to the type of project it is intended
for. When entering into a construction project, it's crucial for the parties involved to select the
appropriate FIDIC contract that aligns with the project's requirements and the roles and
responsibilities of the parties involved. Consulting legal and construction professionals with
expertise in FIDIC contracts is advisable to ensure that the chosen contract form is suitable for
the project at hand.
The content of a FIDIC contract typically includes various sections and clauses that outline the
terms and conditions of the agreement between the parties involved in a construction project.
While the specific content can vary depending on the type of FIDIC contract being used (such as
Red Book, Yellow Book, Silver Book, Green Book, Pink Book, or Gold Book), here is a general
overview of what a FIDIC contract might include:

1. Parties Involved: The contract identifies the parties entering into the agreement,
including the Employer (project owner), the Contractor, and often an Engineer or
Employer's Representative who supervises the work.
2. Scope of Work: The contract defines the scope of work in detail, specifying the nature of
the construction, engineering, or design services to be provided by the Contractor. It
includes project plans, specifications, and technical requirements.
3. Contract Price and Payment Terms: The contract stipulates the contract price,
payment methods, and payment milestones. It outlines the procedures for valuing
variations, claims, and additional work and establishes the mechanisms for making
payments.
4. Variations and Changes: The contract addresses variations and changes to the scope of
work. It defines procedures for initiating, valuing, and implementing changes to the
project, ensuring that any alterations are properly documented and compensated.
 5. Time for Completion: The contract sets out the project schedule, including the
commencement date and the time allowed for completion. It outlines the procedures for
granting time extensions and handling delays.
6. Quality and Defects: The contract includes provisions related to the quality of
workmanship and materials. It specifies standards for construction quality and outlines
procedures for rectifying defects during the Defects Notification Period.
7. Insurance and Liability: The contract outlines the insurance requirements for the
project and defines the liability of each party in case of damages, losses, or accidents.
8. Dispute Resolution: The contract typically includes procedures for resolving disputes
between the parties, such as negotiation, mediation, adjudication, or arbitration. It
specifies the steps to be taken to resolve disagreements that may arise during the project.
9. Force Majeure and Termination: The contract addresses unforeseen circumstances
(force majeure events) that may affect the project's progress and defines the procedures
for termination of the contract by either party under certain conditions.
10. General and Special Conditions: The contract contains general conditions that apply to
most construction projects and may include special conditions tailored to the specific
project's requirements.

It's important to note that the actual content and wording of a FIDIC contract can vary based on
the specific version and form of the contract being used. Parties involved in the project,
especially the legal and contractual teams, should carefully review the contract to ensure a clear
understanding of their rights and obligations. Consulting legal professionals with expertise in
construction law is advisable to navigate the complexities of FIDIC contracts effectively.

Layout of the contract

1. The contract agreement
2. The letter of acceptance
3. The letter of tender
4. Part II – the conditions of particular application
5. Part I – general conditions of contract
6. The specification and drawings ( Red Book), The Employer’s Requirements ( Yellow
Book ), The schedules ( Red and Yellow Books)
7. Further documents listed in the contract agreement or in the letter of acceptance.

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Kontrak FIDIC adalah bentuk standar paling umum dari kontrak konstruksi internasional di dunia saat ini.
Kontrak FIDIC standar sering digunakan dalam proyek konstruksi besar dan kecil, dan mereka cocok
untuk pesta dari berbagai negara, berbicara berbagai bahasa dan berasal dari yurisdiksi berbeda.
https://theconstructor.org/wp-content/uploads/2019/05/FIDIC-contracts-forms.jpg
“Particular conditions” dalam bahasa Inggris merujuk pada kondisi-kondisi khusus yang terkait dengan
suatu kontrak atau perjanjian. Dalam konteks konstruksi, “Particular Conditions of Contract” adalah
bagian dari kontrak FIDIC yang mendefinisikan kondisi-kondisi khusus yang berlaku untuk proyek
tertentu dan negara di mana pekerjaan dilakukan. Bagian ini biasanya digunakan untuk menambahkan,
menghilangkan, atau mengubah kondisi-kondisi umum kontrak. Kondisi-kondisi umum kontrak
didefinisikan dalam bagian “General Conditions of Contract”. FIDIC adalah singkatan dari Federasi
Internasional Konsultan Insinyur dan merupakan organisasi yang menerbitkan formulir standar kontrak
internasional.