Changes To The Role Of The Engineer Under Clause 3 In The Proposed New FIDIC Yellow Book

Introduction

In December 2016, at its International Users Conference in London, FIDIC issued a "pre-release" second edition of the Yellow Book (Conditions of Contract for Plant and Design-Build) and indicated that it would issue a final second edition during the course of 2017 as part of a wider update to its 1999 Rainbow Suite. We looked at some of the anticipated changes in Issue 21 of International Quarterly. This article focuses on the changes to the role of the Engineer under Clause 3 found in the proposed new Yellow Book.

One of the main intentions behind the new amendments, as FIDIC explained, is to facilitate better project management so that disputes between parties are less likely to escalate. The changes made to Clause 3 of the Yellow Book relating to the Engineer, such as an increased focus on his obligation to encourage the agreement of claims and the requirement that he act "neutrally", reflect this approach. The more notable amendments to Clause 3 are reviewed below.

Qualification Requirements

New Sub-Clause 3.1 introduces certain qualification requirements for anyone acting as the Engineer. Under the new Sub-Clause, the Engineer must be a professional engineer with suitable qualifications, experience and competence in the main engineering discipline applicable to the works (if there is more than one discipline, then in at least one of those). There is no equivalent requirement for the Engineer under the 1999 Yellow Book, although Sub-Clause 3.1 mandates that the Engineer's staff should include suitably qualified engineers and other professionals who are competent to carry out the duties assigned to the Engineer under the Contract.

Under new Sub-Clause 3.1, there is also a new requirement that the Engineer must be fluent in the language of the Contract as defined in Sub-Clause 1.4. The 1999 Yellow Book does not contain any specific language requirement.

If used in their unamended form, these new provisions may, for example, pose difficulties for employers who would ordinarily seek to appoint project managers in that role. The principle behind these new requirements is to ensure that the selection of firms for the role of Engineer by an Employer is made on the basis of qualifications and demonstrated competence, and is perhaps of particular relevance to public works contracts where the provisions may act as an exception to a government's approach of awarding contracts to the lowest bidder. Where the contract is tendered by a government or other public authority, FIDIC suggests that basing the selection of the Engineer on quality may have an impact on return of investment and project life cycle costs.

Introduction of an Engineer's Representative

Under new Sub-Clause 3.3 the Engineer can appoint an Engineer's Representative to whom he can delegate the authority necessary to act on his behalf on site. The Engineer's Representative must be a natural person and remain on site for the whole time that the works are being executed. There is no equivalent provision in the 1999 Yellow Book. This change reflects FIDIC's focus on increased project management to avoid disputes arising in the first...