EIC Contractor's Guide to the FIDIC “Pink Book”
Price: € 30,-
(plus shipping via regular mail)
Year of Publication: 2011
Paperback cover; A4; 53 pages
Upon analysing the FIDIC 2010 MDB Harmonised Construction Contract, EIC remained concerned that several clauses, for example, those dealing with the Engineer’s Duties and Authority, the Replacement of the Engineer, the Performance Security, Termination by the Employer in case of corrupt, fraudulent, collusive or coercive practices, Limitation of Liability and Arbitration, represented a move in the wrong direction and might deter experienced international contractors from tendering for MDB financed construction works.
Tenderers for World Bank-financed works contracts should be further aware that the FIDIC 2010 MDB Harmonised Construction Contract has again been modified by the World Bank in August 2010, in particular with respect to Sub-Clauses 1.12 [Confidential Details], 1.15 [Inspections and Audit by the Bank], 6.20 [Forced Labour], 6.21 [Child Labour], 15.6 [Corrupt or Fraudulent Practices], 20.5 [Amicable Settlement] and 20.6 [Arbitration].
This observation extends also to the question of guarantees. Whereas the FIDIC 2010 MDB Harmonised Construction Contract provides in Sub-Clauses 4.2 [Performance Security], 14.2 [Advance Payment] and 14.9 [Payment of Retention Money] that the Performance Security/Advance Payment Guarantee/Retention Money Guarantee shall be “issued by a reputable bank or financial institution selected by the Contractor”, the World Bank in the respective Sub-Clauses still requires that the security shall be “issued by an entity and from within a country approved by the Employer”. The overall impression is that the changes introduced by the World Bank are disadvantageous to the Contractor when compared to the original FIDIC wording. EIC has thus asked the World Bank to revert to the standard FIDIC text.
As a result of this somewhat uncoordinated drafting policy and practice, users must be conscious that there are currently (at least) four standard forms relating to the MDB Harmonised Conditions of Contract, i.e.:
1. The May 2005 MDB Harmonised Construction Contract, published by FIDIC;
2. The March 2006 MDB Harmonised Construction Contract published by FIDIC;
3. The June 2010 MDB Harmonised Construction Contract published by FIDIC; and
4. The World Bank General Conditions of Contract published by the World Bank (in their latest version) in August 2010.
Employers and contractors are well advised to pay particular attention to exactly which version they are dealing with in an individual tender as all four versions vary to some extent from each other. This EIC Contractor’s Guide relates to the FIDIC 2010 MDB Harmonised Construction Contract only.
EIC wishes to make it clear that this document is not exhaustive and is intended for guidance only. Expert legal advice should always be obtained before submitting an offer or making any commitment to enter into a contract. Neither EIC nor the authors of this document accept any responsibility or liability in respect of any use made by any person or entity of this document or its contents which is and shall remain entirely at the user's risk.