The much-anticipated 2021 update of the FIDIC Green Book has finally been launched by the international engineering federation FIDIC, the International Federation of Consulting Engineers.
The updated Short Form of Contract meets the current demand of the international construction industry for projects where the perceived level of risk is low and/or where construction parties need a contract form that is simple to use and doesn’t require significant contract administration and management resources.
The Green Book 2nd Edition continues FIDIC’s key principles of balanced risk sharing while seeking to build on the substantial experience gained from the original Green Book’s use over the past 22 years. The updated contract captures the essential rights and obligations of the parties and is used as an alternative to the 2017 Red and Yellow Books, resulting in FIDIC providing for a fully-fledged range of contract solutions to meet different project specificities.
The Green Book 2nd Edition includes provisions for employer’s or contractor’s design of the works, appointment of an engineer to administer the contract, wide range of valuation methods, simplified contract machinery, two distinct contractual routes to handle claims and variations, tabulated insurance requirements, use of liquidated damages provisions for delay, omission of work and termination events for a faster and easier management of damages flowing from such events, early appointment of an adjudicator who can provide dispute avoidance services on top of her/his regular dispute resolution services, to name a few.
The Green Book also includes some brand-new features such as the prolongation cost (PGC) mechanism, a tabulated summary of contractor’s entitlement for employer’s risks, the use of an insurance certificate to be signed by an insurer or broker, user-friendly flow charts and 40 communication forms provided as guidance for practitioners. Early signs from the market indicate that the updated contract will be welcomed by users across the global construction industry.
Commenting on the launch of the new Green Book, FIDIC contracts committee chair and principal drafter of the new book, Vincent Leloup, said: “We are delighted to bring the latest edition of the FIDIC Green Book Short Form of Contract to market. The inclusion of new features and essential updates will make for an even more relevant and user-friendly document that builds on FIDIC’s tradition of providing contract forms that are fair to all parties and which advocate balanced risk sharing. I am confident that the updated Green Book will be seen as the natural alternative to a 2017 Red or Yellow Book and warmly welcomed by users around the world.”
Hard copies of the contract will be available from late January 2022.