In December 2021 FIDIC issued its 2nd edition of the Green Book. It is not so much an update to the 1st edition as a new and improved, intermediate form of contract. FIDIC is promoting it as a simpler, user-friendly alternative to the FIDIC 2017 Red and Yellow Books, where significant contract administration and management resources are not needed. The Green Book 2nd edition is recommended to be used by the World Bank for projects up to US$ 10 million. The Green Book 1st edition was originally intended for projects of US $500,000 with no more than a 6-month duration. However, the Green Book 1st was sometimes used for larger projects with a duration of up to two years. The Green Book 2nd therefore takes over from where the Green Book 1st left off. This is to be welcomed. The FIDIC 2017 suite of contracts (Red/Yellow/Silver) is unsuitable for smaller projects where less administration is required. The Green Book 2nd will therefore fill a much-needed gap in the FIDIC rainbow and is likely to be attractive to both Contractors and Employers. This article looks at some of the key features of the Green Book 2nd.
Clause 17 - Care of the Works and Indemnities by
Clause 12 deals with Tests after Completion. It is more
Clause 7 deals with a variety of issues relating to Plant Materials and Workmanship. All sub clauses have been subject to some change – in several cases of significance.
Clause 11 requires that the Works shall be in the condition required by the Contract at the end of the Defects Notification Period. Where the Contractor carries out work in the Defects Notification Period, it is not entitled to receive payment if the work was a result of a defect in the design for which the Contractor was responsible. Similarly, if the Plant, Materials or workmanship are not in accordance with the Contract or there is a failure by the Contractor to comply with any other obligation then it is required to remedy the problem without payment. The Employer may obtain an extension of the Defects Notification Period if the Works, a Section or a major piece of Plant cannot be used during the Defects Notification Period. The Contractor is required to remedy any defect during the Defect Notification Period and, if it does not, the Employer may claim against the Contractor. Rights are given to the Contractor to undertake this work subject to the Employer’s reasonable security restrictions. Once the Defects Notification Period has expired the Engineer is required within 28 days, subject to receipt of the Contractor’s Documents and the completion of any tests, to issue a Performance Certificate. It is the Performance Certificate that is deemed to constitute acceptance of the Works. Sub-Clause 11.10 provides that after the Performance Certificate has been issued, each Party will remain liable for the fulfilment of any obligation which remains unperformed at the time. The extent and meaning of this clause is open to debate.
Clause 10 deals with the Taking-Over of the Works, Sections, or parts of the Works. Sub-Clause 10.1 deals with the Taking-Over of the Works and Sections. Taking-Over by the Employer happens when the Works (a) pass the Tests on Completion; (b) are substantially complete; (c) any contractual requirements relating to Taking-Over have been met; and (d) the Taking-Over Certificate has been issued or is deemed to have been issued. Sub-Clauses 10.2 and 10.3 deal with deemed Taking-Over where the Employer uses part of the Works or interferes with the Tests on Completion for more than 14 days. The failure to issue a Taking-Over Certificate by the Engineer, where the Employer has taken into commercial use the Works, will amount to a breach of contract.