What You Need to Know About the FIDIC White Book for Consultancy Services
FIDIC White Book: A Guide for Consultants and Clients
Introduction
If you are a consultant or a client involved in engineering or construction projects, you may have heard of FIDIC. FIDIC stands for Federation Internationale des Ingenieurs-Conseils, which is French for International Federation of Consulting Engineers. FIDIC is an international organization that represents the interests of consulting engineers worldwide. FIDIC also publishes standard forms of contracts for various types of projects and services.
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One of these contracts is the Client/Consultant Model Services Agreement, also known as the White Book. The White Book is a model contract that can be used for consultancy services such as feasibility studies, design, project management, supervision and inspection. The White Book is suitable for both domestic and international projects, and for both employer-led and contractor-led design teams.
The main features and benefits of using the White Book are:
It provides a clear and balanced allocation of risks and responsibilities between the consultant and the client.
It defines the scope of services, the remuneration and payment methods, and the procedures for variation, suspension and termination.
It establishes a duty of care for the consultant based on professional standards and best practices.
It limits the liability and compensation of the consultant to reasonable amounts.
It requires adequate insurance coverage for both parties.
It encourages amicable dispute resolution through mediation before resorting to arbitration.
The White Book consists of four main parts: the Agreement, the General Conditions, the Particular Conditions and the Appendices. The Agreement is a short document that identifies the parties, defines the services, states the contract price and refers to the other parts. The General Conditions are clauses that apply to all projects and services. The Particular Conditions are clauses that modify or supplement the General Conditions to suit each specific project and service. The Appendices are documents that provide detailed information on various aspects such as scope of services, personnel, equipment, facilities, remuneration and payment.
In this article, we will explain each part of the White Book in more detail and provide some tips on how to use it effectively. Whether you are a consultant or a client, this article will help you understand what to expect from using the White Book and how to avoid common pitfalls and disputes.
General Conditions of the White Book
The General Conditions are divided into six sections: Definitions and Interpretation; Obligations of the Consultant; Obligations of the Client; Personnel; Liability and Insurance; and Commencement, Completion, Alteration and Termination of the Agreement. We will briefly summarize the main points of each section below.
Definitions and Interpretation
This section defines the key terms used in the contract, such as Consultant, Client, Services, Agreement, Commencement Date, Completion Date, Force Majeure, etc. It also provides some rules for interpreting the contract, such as the order of precedence, the language and the law.
Some of the important definitions to note are:
The Services are the services to be performed by the Consultant as described in Appendix 1 (Scope of Services).
The Normal Services are the services that are normally required for the type of project and service as agreed between the parties.
The Additional Services are the services that are not included in the Normal Services but may be required by the Client or by circumstances beyond the control of the Consultant.
The Exceptional Services are the services that are required due to Force Majeure or due to any default or breach by the Client.
Force Majeure is any event or circumstance that is beyond the reasonable control of either party and that prevents or delays the performance of any obligation under the contract.
Obligations of the Consultant
This section sets out the duties and responsibilities of the Consultant in relation to the performance of the Services. The main obligations of the Consultant are:
To perform the Services with due care, skill and diligence in accordance with professional standards and best practices.
To comply with all applicable laws, regulations and codes of conduct.
To keep the Client informed of the progress and results of the Services and to submit reports, drawings, documents and other deliverables as required by the contract.
To obtain and maintain all necessary licenses, permits and approvals for performing the Services.
To exercise any authority conferred by the Client in a fair and impartial manner.
To respect and protect the property and interests of the Client and to avoid any conflict of interest or corruption.
Obligations of the Client
This section sets out the duties and responsibilities of the Client in relation to the provision of support and cooperation to the Consultant. The main obligations of the Client are:
To provide all necessary information, data, decisions and assistance to enable the Consultant to perform the Services.
To provide all necessary equipment, facilities, personnel and services of others as specified in Appendix 2 (Personnel, Equipment, Facilities and Services of Others to be Provided by the Client).
To pay the Consultant for performing the Services in accordance with Appendix 3 (Remuneration and Payment).
To obtain and maintain all necessary licenses, permits and approvals for carrying out the project.
To respect and protect the property and interests of the Consultant and to avoid any conflict of interest or corruption.
Personnel
This section deals with the supply, replacement and management of the personnel involved in performing the Services. The main points of this section are:
The Consultant is responsible for providing all the personnel required for performing the Services, as specified in Appendix 1 (Scope of Services).
The Consultant must ensure that the personnel are qualified, experienced and competent for their respective roles and tasks.
The Consultant must appoint a Representative who will be in charge of the performance of the Services and who will be the main point of contact with the Client.
The Client may request the Consultant to replace any personnel who are not performing satisfactorily or who are otherwise unsuitable for the project.
The Consultant may replace any personnel who are unable to continue their work due to illness, resignation, termination or other reasons beyond the control of the Consultant.
The Consultant must obtain the prior approval of the Client for any replacement of personnel.
The Consultant must ensure that the personnel comply with all applicable laws, regulations and codes of conduct and that they respect the customs and culture of the country where the Services are performed.
Liability and Insurance
This section defines the extent and limits of the liability and compensation of the parties in case of any breach, default, negligence or damage arising from or in connection with the performance of the Services. It also specifies the insurance requirements for both parties. The main points of this section are:
The Consultant is liable to the Client for any loss or damage caused by any breach, default or negligence of the Consultant or its personnel in performing the Services.
The Client is liable to the Consultant for any loss or damage caused by any breach, default or negligence of the Client or its personnel in relation to the project or the Services.
Both parties must indemnify each other against any claims, liabilities or costs arising from any injury, death or damage to any third party caused by their respective acts or omissions.
The liability and compensation of both parties are limited to reasonable amounts that reflect their respective roles and responsibilities in relation to the project and the Services.
Both parties must obtain and maintain adequate insurance coverage for their respective liabilities and risks under the contract.
The insurance policies must be issued by reputable insurers and must comply with all applicable laws and regulations.
Both parties must provide each other with evidence of their insurance policies upon request.
Commencement, Completion, Alteration and Termination of the Agreement
This section sets out the procedures and consequences for starting, finishing, changing or ending the contract. The main points of this section are:
The contract becomes effective on the date of signing the Agreement by both parties.
The Consultant must commence the Services on the Commencement Date specified in the Agreement or as otherwise agreed by both parties.
The Consultant must complete the Services by the Completion Date specified in the Agreement or as otherwise agreed by both parties.
Either party may request a variation of the Services, the contract price, the time for completion or any other aspect of the contract by giving a written notice to the other party.
Any variation must be agreed by both parties in writing before it becomes effective.
If there is a change in legislation or circumstances that affects the performance of the Services, either party may give a written notice to the other party requesting an adjustment of the contract price, the time for completion or any other aspect of the contract.
If there is a Force Majeure event that prevents or delays either party from performing its obligations under the contract, that party must give a written notice to the other party as soon as possible and take all reasonable steps to mitigate its effects.
If there is a Force Majeure event that lasts for more than 28 days, either party may give a written notice to terminate the contract without liability to the other party.
The Client may terminate the contract at any time by giving a written notice to the Consultant stating its reasons for termination.
The Consultant may terminate the contract by giving a written notice to the Client if the Client fails to pay the Consultant within 56 days of the due date, or if the Client commits any other material breach of the contract and fails to remedy it within 28 days of receiving a written notice from the Consultant.
Upon termination of the contract, the Consultant must stop performing the Services and hand over all deliverables, documents and property of the Client in its possession.
Upon termination of the contract, the Client must pay the Consultant for all Services performed up to the date of termination, plus any reasonable costs incurred by the Consultant as a result of the termination.
Particular Conditions of the White Book
The Particular Conditions are divided into two parts: Part A and Part B. Part A contains references to the clauses in the General Conditions that need to be completed or amended by the parties to suit each project and service. Part B contains additional clauses that may be included by the parties to address specific issues or requirements that are not covered by the General Conditions.
Some of the important clauses that need to be completed or amended in Part A are:
The name and address of the Consultant and the Client.
The description and location of the project.
The Commencement Date and Completion Date of the Services.
The currency and exchange rate for payment.
The language and law governing the contract.
The limit of compensation and indemnity for each party.
The types and amounts of insurance to be obtained by each party.
Some of the examples of additional clauses that may be included in Part B are:
A clause on confidentiality and data protection.
A clause on intellectual property rights and licenses.
A clause on quality assurance and control.
A clause on health, safety and environment.
A clause on taxes and duties.
A clause on dispute resolution methods other than mediation and arbitration.
When drafting the Particular Conditions, the parties should be careful not to contradict or conflict with the General Conditions, unless they intend to do so. They should also avoid introducing unnecessary or unreasonable clauses that may create confusion or disputes. They should consult with legal and technical experts as necessary to ensure that the Particular Conditions are clear, consistent and appropriate for each project and service.
Appendices of the White Book
The Appendices are documents that provide detailed information on various aspects of the contract, such as scope of services, personnel, equipment, facilities, remuneration and payment. The Appendices are an integral part of the contract and must be consistent with the Agreement, the General Conditions and the Particular Conditions. The Appendices must be completed by the parties before signing the Agreement. The main Appendices are:
Appendix 1: Scope of Services
This Appendix describes the Services to be performed by the Consultant in detail. It should include:
The objectives, scope and expected outcomes of the Services.
The tasks, activities and deliverables required for each phase or stage of the Services.
The standards, specifications and methods to be followed by the Consultant.
The time schedule and milestones for performing the Services.
The reporting requirements and formats for the Consultant.
The authority and responsibilities of the Consultant and the Client in relation to the Services.
Appendix 2: Personnel, Equipment, Facilities and Services of Others to be Provided by the Client
This Appendix lists the personnel, equipment, facilities and services of others that are to be provided by the Client to enable the Consultant to perform the Services. It should include:
The names, qualifications, experience and roles of the personnel to be provided by the Client.
The types, quantities, specifications and availability of the equipment and facilities to be provided by the Client.
The names, qualifications, experience and roles of the services of others (such as sub-consultants, contractors, suppliers, etc.) to be provided by the Client.
The terms and conditions under which the personnel, equipment, facilities and services of others are to be provided by the Client.
Appendix 3: Remuneration and Payment
This Appendix specifies the remuneration and payment methods for performing the Services. It should include:
The contract price or fee for performing the Services, either as a lump sum or as a percentage of an hourly or daily rate or as a combination of these methods.
The reimbursable expenses and disbursements that are payable to the Consultant in addition to the contract price or fee.
The payment schedule and the invoicing procedures for the Consultant.
The interest rate and the penalty for late payment by the Client.
The independent audit rights of both parties to verify the accuracy and validity of the invoices and payments.
Conclusion
The FIDIC White Book is a comprehensive and flexible model contract for consultancy services that can be adapted to suit various types of projects and services. It provides a clear and balanced framework for defining the rights and obligations of both the Consultant and the Client. It also offers practical guidance and solutions for managing the risks and challenges that may arise during the performance of the Services.
However, the White Book is not a one-size-fits-all contract that can be used without careful consideration and customization. The parties should always review and amend the General Conditions, the Particular Conditions and the Appendices to reflect their specific needs and expectations. They should also consult with legal and technical experts as necessary to ensure that the contract is legally valid, enforceable and compliant with all applicable laws and regulations.
By using the White Book effectively, both the Consultant and the Client can benefit from a smooth and successful delivery of the Services and a mutually satisfactory outcome of the project.
FAQs
Here are some frequently asked questions about the FIDIC White Book:
What are the differences between the White Book and other FIDIC contracts?
The White Book is designed for consultancy services, whereas other FIDIC contracts are designed for construction works. The White Book covers services such as feasibility studies, design, project management, supervision and inspection, whereas other FIDIC contracts cover works such as building, engineering, electrical, mechanical, dredging, reclamation, etc. The White Book is based on a professional services agreement, whereas other FIDIC contracts are based on a works contract. The White Book allocates risks and responsibilities differently from other FIDIC contracts, depending on the nature and scope of the services.
How can I get a copy of the White Book?
You can purchase a hardcopy or an electronic copy of the White Book from the FIDIC website at https://fidic.org/books/clientconsultant-model-services-agreement-5th-ed-2017-white-book. You can also download a free PDF file of the Golden Principles of FIDIC from the same website. The Golden Principles are general principles that should be followed by both parties when using any FIDIC contract.
How can I resolve a dispute arising from the White Book?
The White Book encourages both parties to resolve any dispute amicably through negotiation and mediation before resorting to arbitration. The dispute resolution procedures are set out in Clause 10 of the General Conditions. The parties can agree on any mediator or arbitrator they prefer, or they can use the FIDIC President's List of Approved Dispute Adjudicators. The FIDIC President's List is a list of qualified and experienced dispute resolution professionals who have been approved by FIDIC. You can find more information about the FIDIC President's List at https://fidic.org/presidents-list.
How often is the White Book updated?
The White Book is updated periodically by FIDIC to reflect changes in industry practices, market conditions and legal developments. The latest edition of the White Book is the Fifth Edition published in 2017. The previous editions were published in 2006 (Fourth Edition), 1998 (Third Edition), 1991 (Second Edition) and 1988 (First Edition). You can find more information about the previous editions at https://fidic.org/books/previous-versions-white-book.
What are the Golden Principles of FIDIC?
The Golden Principles of FIDIC are general principles that should be followed by both parties when using any FIDIC contract. They are intended to ensure that the contract is fair, balanced and reasonable for both parties. They are also intended to preserve the integrity and reputation of FIDIC as a provider of high-quality standard contracts. The Golden Principles of FIDIC are:
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