Preamble
With the fast and rapidly changing pace of our modern-day era, it is no secret that construction and developmental projects are becoming one of the most important assets that any economy let alone developing countries have, and subsequently contracts pertaining to any of these projects must be handled with adequate care, diligence, and punctuality, to that extent the terms “FIDIC Contracts” and” NEC Contracts” were inferred referring to one of the most complex and detailed forms of contracts currently existent, and throughout this brief, will get to tackle their respective meanings, types, various practices, traditions and customs closely.
Definition:
The Term “FIDIC Contracts” can refer to contracts under strict regulation and supervision of the International Federation of Consulting Engineers and as such they are contracts that usually consist of pre-made mandatory forms subject to little to no modifiability, Such contract forms are widely used in international projects and have a balanced approach to the roles and responsibilities of the parties, as well as the allocation and management of risk, interestingly since these forms are mostly mandatory when recoursing to the scope of projects that they regulate therefore they multiple-colored covers that vary according to the chosen FIDIC form, these colors can be namely, red, yellow, orange, etc. and so Each of these forms has its different features and is suitable for different types of projects.
FIDICs use legal terms a lot and complex language which have specific meanings, so for simple to medium projects of a short tenure. NEC Contracts work best for them, but for more complex and long-tenured ones, FIDIC Contracts shall do the trick.,
Which form is best for your project?
As demonstrated above, both contract forms have plenty of advantages and perks to offer on a case-by-case basis, which begs the question of which form to pursue regarding any potential construction project, To answer that different scenarios must be set forth to identify the best model suitable for the desired project.
For Example:
- NEC Contract is for goods works, or services whereas FIDIC Contract is for procuring works or consultancy services, that means that if the project pertains for example to goods or works-related projects, then NEC is probably the safest and most convenient option.
- NEC attempts to eliminate the use of legal terms and instead provides for simple language and gives words their natural meaning. FIDICs use legal terms a lot and complex language which have specific meanings, so for simple to medium projects of a short tenure. NEC Contracts work best for them, but for more complex and long-tenured ones, FIDIC Contracts shall do the trick.
- NEC has a provision for deductions from payments to the contractor for failure to submit the first program and sanctions of punitive nature thereafter upon continued failure, a provision that FIDIC Contracts don’t have.
- The project manager acts on behalf of the employer in NEC, and The engineer acts on behalf of the employer in FIDIC contracts, so depending on the roles associated with each party, the contract form chosen will differ
Pros and Cons of FIDIC Contracts
FIDIC Contracts can be some of the most complex contracts to negotiate and draft but they do come with a lot of advantages such as Reduced Bid-Based Selection and Clear Definition of Roles and Responsibilities, they also have their shortcomings as their cost can be very lucrative especially for startups and also its litigatory process when phasing out disputes can be very jarring, however, that being said they are still one of the most used forms in construction projects mainly because of their credibility and pre-defined, detailed and punctual clauses.
REFERENCES
- FIDIC VS NEC – LinkedIn
- FIDIC SUITE OF CONTRACTS – FIDIC
- FIDIC Contracts: A Cornerstone of Global Construction Procurement (Document)