Leading Edge in Construction Technology, but not Contracts
I recently read a contractual article in one of the major Middle East construction industry magazines. It took me a while to realise what the author was talking about, but it eventually dawned on me that he was using references from the FIDIC 1987 construction contract. The 1987 contract is over 30 years old and was superseded 20 years ago by the FIDIC rainbow suite. Whilst I have to criticise the author for not bringing his subject up to date, it is not an unusual occurrence for construction contracts to be entered into based on the 1987 contract and in fact, over the past couple of years I have been involved with several projects on which this form is still being used.
Given the leading edge of construction design and technology used in the Middle East and particularly the Gulf countries over the past couple of decades, I would suggest that if anyone suggested to an Employer that they should revert to 1980’s construction design and technology they would be laughed at. Why then, do Employers not adopt such an attitude when selecting an appropriate form of contract?
The FIDIC contracts were revised in 1999 to introduce improvements and to keep in line with modern procurement methods and it was also made more equitable by a more balanced sharing of risks between the parties. So why not use the latest version? I have my own theories on this matter.
Firstly, people generally don’t like change, so they are more comfortable remaining with something that they are familiar rather than learning something new. But come on – it’s been 20 years since the rainbow suite was published. Surely that is enough time to become familiar with the latest versions and train staff on its use? Engineers and Project Managers should be advising Employers on such matters.
Secondly, consultants and Employers possibly don’t like the idea of equitable contracts. This is evident due to the propensity to delete the dispute adjudication board requirements from the 1999 FIDIC contracts when they are used and change the balance of risk significantly from the standard FIDIC contracts. In my opinion, the unfair treatment of contractors by Employers and consultants is one of the main reasons why the Middle East has been a hot bed for arbitration for several years.
The FIDIC 1999 suite of contracts were revised again in 2017. It is a disturbing thought for me to consider that, based on past performance, by the time that the latest versions have been adopted in the Middle East, I may no longer be around to see them in use!
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