FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey, A Test Edition had been published in 1994, and the many reactions to it were reviewed before the first edition was completed.
This FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey (informally titled “the Orange Book Guide”) is intended to assist the users of the fidic Orange Book, namely those who write, and those who administer, contracts based on these Conditions of Contract. This assistance is focused on particular features of the Orange Book: the Guide is not intended to provide complete training material for the expertise required for the preparation of tender documents. Also, the comments are not intended to provide an authoritative legal interpretation of every aspect of each subject, which must depend on the law applicable to the particular contract.
It is envisaged that the FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey can be the basis of all contracts which involve the provision of facilities designed by the Contractor, whether such facilities comprise building, civil engineering, chemical engineering, electrical engineering, mechanical engineering, or any combination. Throughout the drafting, the intention was to incorporate provisions applicable to (for example) housing, roads, refineries, generators, turbines, treatment works, etc. However, the Orange Book is not appropriate for the provision of facilities designed by the Employer or his consulting engineer, or for similar arrangements where the Contractor is not to be responsible for design.
Project Procurement – the Design-Build Option, FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey
Under the Orange Book design-build form of contract, design is the responsibility of the construction organization. This arrangement reduces the problems which may on occasions arise from the division of responsibility between designer and constructor. Design-build may also encourage economies, not only in terms of price, but at the expense of quality. Therefore, it is considered essential that the Employer has (or procures) expert technical services, in order to ensure that his requirements are elaborated in the tender documents and are achieved in practice. If expertise is unavailable, problems may arise, particularly in respect of the need for variations.
FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey, Ideally, variations under a design-build contract should be instructed by reference to requirements (not by a redesign by the Employer); and their costs and other consequences should be agreed in advance, in order to minimize disputes. In practice, these aspects can make the design-build process appear somewhat inflexible. The design-build process is thus less amenable to variations initiated by the Employer, compared with the alternative where the designer is separately employed by the Employer and is independent of the Contractor.
The design-build option prevents the Employer from having a close involvement in the design process. However, it enables him to have the benefits of lump-sum pricing, of the Contractor’s undivided liability for the works (including design), and of the potential savings (in cost and time) due to a degree of overlap of design and construction. The latter overlap may (or may not) lessen the total period between the commencement of the preparation of tender documents and the completion of construction. The saving in time due to this overlap may be offset by the effects of the lack of continuity of the design processes during the pre-contract stages
Project Procurement Options
At the inception stage of a project, procurement options should be reviewed and a decision made as to the most appropriate option; FIDIC’s publication of the Orange Book does not constitute any indication of a preferred option. The Employer should first analyze the project financing arrangements, their consequences, the risks inherent in the type(s) of works and the other factors which affect the procurement process. After that analysis, decisions can be made as to which procurement option is appropriate; and as to which standard form of contract is closest to the Employer’s requirements and will thus require less text in Part 11 than would be the case if another form were to be used. FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey.
FIDIC Orange Book - Conditions of Contract for Design – Build and Turnkey