The FIDIC Contract is a standard international engineering contract governing multiple aspects of large and complex engineering project construction. This model was designed to minimize potential disputes among its parties to the greatest extent possible, ensuring equitable risk allocation.
These contracts are referred to as the FIDIC Contracts because they are all issued under the auspices of the Fédération Internationale des Ingénieurs-Conseils (FIDIC) – an international organization for contractors, engineers, designers, and construction professionals, established in the 1960s to standardize engineering agreements worldwide. Numerous editions of these contracts have been published, including the Red, Yellow, and White Books (1). The FIDIC contracts were also updated in 2022 (Red, Yellow, Silver, Emerald, Green Books).
Council of Ministers Resolution No. (23), dated 17/1/1428H, was issued to address obstacles facing the contracting sector in the Kingdom. This resolution stipulated the revision of the unified government contract and the preparation of a new form, guided by the provisions of the Conditions of Contract for Construction (FIDIC) (2).
Definition of the Engineer in FIDIC Contracts.
Construction contracts are typically concluded between the Employer and the Contractor. The Employer is the party owning the works and is also referred to as the Owner. The Employer hires the Contractor to execute the works according to specific requirements, an agreed price, and timeframe, all of which are stipulated in the contract.
Although FIDIC contracts are concluded between the Employer and the Contractor – the two signatory parties to the contract agreement – they require the engagement of the Engineer, who is the entity appointed by the Employer or the Owner to supervise the contract (4).
According to the 2017 FIDIC Red and Yellow Books, the Engineer is defined as “the person named in the Contract Data appointed by the Employer to act as the Engineer for the purposes of the Contract, or any replacement appointed…” (5).
This definition addresses the “Consulting Engineer” and not the “Design Engineer,” who is an engineer engaged solely by the Employer to design the works (with another engineer supervising the works during construction). It could also be an engineer engaged by the Contractor if the project is of a design-build or turnkey type.
The “Consulting Engineer” is typically appointed under the FIDIC White Book by the International Federation of Consulting Engineers, and their authority during the construction period – if any – should be specified under the Book. The “Design Engineer,” however, is considered part of the Contractor’s organization and effectively assumes the Contractor’s responsibilities under the design contract (6).
The liability of the Engineer under the FIDIC contract.
- Engineer’s Obligation of Impartiality:
Notwithstanding that the Engineer is remunerated by the Employer, the Engineer is required to maintain an independent stance while preserving equal distance between the Employer and the Contractor, and shall not be partial to either party in any dispute or conflict, except insofar as such actions are within the framework of strict adherence to the Contract (7).
- Execution of the Contract in Good Faith:
The Engineer is obliged to execute the Contract in good faith and in compliance with its terms and conditions, as well as to implement the Employer’s instructions, in accordance with the exigencies of the interest involved (8).
- Engineer’s Obligation to Perform His Contractual Duties and His Responsibility:
a) Monitoring of Work Execution:
The Engineer must monitor the progress of the Works and assess whether the Contractor is capable of completing the scope of the Works in accordance with the timeframes stipulated in the Contract.
Should the progress of the Works prove unsatisfactory, the Engineer may request the Contractor to submit a revised work programme, employing additional resources or a different methodology, to ensure the completion of the Works within the time for completion specified in the Contract. The Engineer must also verify that the Works are executed in compliance with the quality requirements specified in the Contract. For this purpose, the Engineer shall inspect the Works on a regular basis, as specified in the quality plan submitted by the Contractor and reviewed and approved by the Engineer (9).
b) Engineer’s Responsibility Towards the Contractor:
One of the Engineer’s paramount responsibilities under FIDIC contracts is to supervise the Contractor’s works and issue instructions thereto. Such engineering instructions are typically used to instruct the Contractor to carry out works which may fall outside the scope of works defined in the Contract, in which case a Variation must be issued, which would consequently adjust the Contract Price and the Time for Completion.
The Engineer plays a crucial role in approving submissions by the Contractor prior to the execution of works, such as working drawings, documents pertaining to materials required for the project, pre-qualification of Subcontractors, or any other matter the Contractor deems necessary to submit and obtain approval for prior to commencement. The Engineer must also ensure that the Contractor executes the Works in accordance with the applicable rules and guidelines for the protection of the life and health of the workforce.
In this regard, the Engineer reviews and approves the Contractor’s Health, Safety, and Environmental (HSE) Plan (10).
What is the primary purpose of the FIDIC model of contracts in international engineering projects?
The FIDIC model of contracts serves as a standardized framework for international engineering agreements, designed to govern the various complex aspects of large-scale construction projects. Its primary purposes include:
- Standardization: Established to provide a consistent set of engineering agreements worldwide.
- Dispute Minimization: The model is specifically structured to reduce potential conflicts between parties as much as possible.
- Equitable Risk Allocation: It aims to ensure that project risks are distributed fairly among the involved parties
What is the distinction between a “Consulting Engineer” and a “Design Engineer” regarding their appointment and responsibilities?
The distinction between a “Consulting Engineer” and a “Design Engineer” lies primarily in who appoints them and the nature of their involvement in the project’s execution.
Consulting Engineer
- Appointment: This entity is typically appointed by the Employer (or Owner) to supervise the contract and is formally named in the Contract Data. They are generally engaged under the FIDIC White Book.
- Responsibilities: Their primary mandate is to supervise the contract and act as the Engineer for the purposes defined in the Red and Yellow Books. Their specific authority during the construction period is governed by the terms set out in the relevant FIDIC Book.
Design Engineer
- Appointment: The Design Engineer may be engaged solely by the Employer to design the works, or by the Contractor in projects following a design-build or turnkey model.
- Responsibilities: Unlike the supervisor role of the Consulting Engineer, the Design Engineer is considered part of the Contractor’s organization. In this capacity, they effectively assume the Contractor’s specific responsibilities under the design contract
How has Saudi Arabia integrated FIDIC provisions into its unified government contracting sector?
Saudi Arabia integrated FIDIC provisions into its unified government contracting sector through Council of Ministers Resolution No. (23), dated 17/1/1428H.
This resolution was specifically issued to address obstacles facing the Kingdom’s contracting sector. As part of this initiative, the resolution mandated the revision of the unified government contract and the preparation of a new form that was guided by the provisions of the FIDIC Conditions of Contract for Construction.
Overview of the Engineer’s Liability under the FIDIC Contract
The text outlines the FIDIC Contract, a globally recognized framework designed to standardize international engineering agreements and ensure fair risk distribution. Central to these agreements is the Engineer, a specialized entity appointed by the owner to oversee project execution while remaining strictly impartial during disputes. The documentation details various versions of the “Books,” including adaptations influenced by Saudi Arabian regulations to streamline construction processes. Key responsibilities of the Engineer include monitoring site progress, verifying quality standards, and managing necessary contractual variations. Ultimately, the sources emphasize that the Engineer must act in good faith to protect safety, manage timelines, and provide critical technical approvals.
Sources:
- Prof. Dr. Mohamed Mohamed Badran, Construction Contracts in Egyptian Law: (A Study on the Practical Problems of FIDIC Contracts), Dar Nahdet Misr, 2001, p. 2.
- Clause 6 of Council of Ministers Resolution No. (23) dated 17/1/1428H.
- Why Use FIDIC Contracts?, Official FIDIC Website <FIDIC | Why Use FIDIC Contracts? | International Federation of Consulting Engineers>.
- Sub-Clause 3.1 (The Engineer), Red Book, FIDIC 2017.
- Victoria Tyson, The Role of the Engineer in the FIDIC 2017 Contracts, Article published on LexisNexis <FIDIC contracts 2017—the role of the Engineer | Legal Guidance | LexisNexis>.
- The Role of the Engineer in FIDIC Contracts, Official FIDIC Website < FIDIC | International Federation of Consulting Engineers | The Global Voice of Consulting Engineers>.
- Victoria Tyson, The Role of the Engineer in the FIDIC 2017 Contracts, Article published on LexisNexis.
- Eugenio Zoppis, The Role of the Engineer (From the Contractor’s Perspective), Paper presented at the FIDIC Conference on 1/3/2018 < 1.10.Eugenio Zoppis_the Role of the Engineer_ARTICLE_0.pdf>.
- Victoria Tyson, The Role of the Engineer in the FIDIC 2017 Contracts, Article published on LexisNexis.
- Dr. Mohammed Al-Wadaani, The Legal Regulation of Multi-National Industrial Building and Construction Contracts, p. 232.
