Construction contracts based on FIDIC standards
03.02.2011
public procurement
Construction contracts, including those used in public procurement projects, are often based on FIDIC terms, which are international, universal and commonly applied.
Contract terms developed by the International Federation of Consulting Engineers (FIDIC) are universally recognised international standards, set forth in FIDIC contract forms. They outline the course of a construction project based on mutual duties and relations of the contracting authority as the investor, the contractor as the builder, and the contract engineer as the administrator of the project.
The specific contract form will depend on the model selected for project implementation, with the most common being the Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (popularly known as the “Red Book”) and the Conditions of Contract for Plant and Design-Build (the “Yellow Book”). The popularity of the FIDIC contract terms are a result of their universal character, which has significantly helped limit risk and facilitate implementation of construction projects in the international arena.
Under Polish law, it is permissible for the parties to frame the mutual relations of the contracting authority and the contractor, pursuant to the principle of freedom of contract set forth in Civil Code Art. 3531. The parties may use FIDIC contract terms in a public procurement context, so long as they do not overstep the bounds of freedom of contract established by provisions of law that are mandatorily applicable, as the FIDIC General Conditions do not exclude application of such provisions as Poland’s Civil Code, Public Procurement Law and Construction Law, or specific laws that apply to the particular type of project. Indeed, Clause 1.4 of the FIDIC General Conditions indicates the necessity to apply national regulations.
In isolation from a specific contract, the FIDIC General Conditions do not constitute an independent source of law, but are only international patterns for the conditions governing implementation of construction projects. In each instance they must be adapted to the requirements arising under mandatorily applicable regulations of the country in question, as well as the nature of each project. The international standards can be adapted to suit the particular national legal system via the specific terms of the contract, which set forth the modifications to the FIDIC General Conditions. The modifications may involve deletion of certain clauses in whole or part, amendment of existing terms, or adding entirely new terms.
Once the contract is signed, the FIDIC General Conditions and the specific terms together make up integral parts of the same agreement. The terms are binding on the contracting authority or investor as well as the contractor, but they cannot violate mandatorily applicable provisions of national law.
Tomasz Michalczyk, Infrastructure, Transport and Public Procurement (PPP) Practice Group, Wardyński & Partners