20 Feb FIDIC launches new subcontract for plant and design-build
FIDIC has launched a new Conditions of Subcontract for Plant and Design-Build to add to its popular suite of construction contracts that are used extensively on global infrastructure projects.
The Yellow Book Conditions of Subcontract was launched at FIDIC’s International Contract Users’ Conference being held in London this week and is for use in conjunction with the FIDIC Conditions of Contract for Plant and Design-Build, First Edition 1999.
Commenting on the new subcontract, Dr Nelson Ogunshakin, FIDIC chief executive, said: “We believe that subcontracting deserves greater attention. When a part of the main works contracted based on the FIDIC Conditions of Contract for Plant and Design-Build, First Edition 1999 is sub-contracted, it is equally important for the successful completion of the project that the terms of the sub-contract are properly addressed and drafted. The FIDIC Conditions of Subcontract for Plant and Design-Build should serve this purpose.”
FIDIC lead board member for the contracts committee, Aisha Nadar, said: “FIDIC is known and well regarded for its fair-and-balanced contracts and the new design-build subcontract is no exception. The rights of the contractor under the main contract, as well as the obligations, are passed down to the subcontractor. The general conditions of subcontract are drafted on the basis of pay-when-paid, being the most common commercial arrangement between contractors and subcontractors in general – but not pay-if-paid. The subcontractor will not lose their entitlement to be paid if it transpires that the employer does not pay the contractor under the main contract.
“In those parts of the world where pay-when-paid provisions are not allowed by law, the guidance for the preparation notes of particular conditions at the back of the new subcontract give the example clauses for subcontracts. Additionally, there are example provisions in the guidance at the back of the new subcontract where an engineer’s determination and/or a DAB decision and/or an arbitral award under the main contract concerning a subcontractor’s claim is to be binding under the subcontract.”