FIDIC

What it means

FIDIC conditions are international model contract terms for construction and engineering projects, published by the International Federation of Consulting Engineers. They set out in detail the parties' roles, variations, deadlines, payments, claims and dispute resolution, and are standard on large and public works, including EU-funded projects.

The most widely used are the Red Book for works designed by the employer, the Yellow Book for projects where the contractor designs and builds, and the Silver Book for turnkey projects shifting most risks to the contractor. Simplified conditions exist for smaller contracts.

A key figure is the Engineer, who administers the contract on the employer's behalf, certifies payments, assesses claims and issues instructions. The role overlaps with construction supervision but is broader, with precisely defined powers.

How it works in practice

The contractor must notify claims for extensions of time or extra payment within strict deadlines, typically 28 days after becoming aware of the event. Missing the deadline can mean losing the claim, so thorough records, a site diary and correspondence with the Engineer are essential.

Disputes are first referred to a dispute board, which decides quickly, and only then to arbitration. This allows construction to continue during a dispute and avoids lengthy court proceedings.

In public procurement, FIDIC terms are often amended by particular conditions. Contractors should read these above all, as they change the risk allocation compared with the model terms, and reflect them in the price and in contracts with subcontractors.

What to watch out for

FIDIC requires various securities, such as a performance security in the form of a bank guarantee, retention money or insurance. Their cost and the funds they tie up must be reflected in the bid and in the project's cash flow.

FIDIC terms derive from common law practice, and not all their mechanisms align automatically with Slovak law. In a dispute, a court or arbitrator may interpret some provisions differently, so for large contracts advice from a construction law specialist is wise.