In our daily contract management practice on major projects, we often see the same "pattern": organisations devoting time, energy and money up front, first to choosing the right FIDIC contract model, then to having it drafted and reviewed by a legal department, a law firm or a contract manager, and finally reaching signature with the feeling of a job well done.
In doing so, many organisations feel they have done the bulk of the contractual work, with a fine contract and contractual mechanisms in place, and consider themselves protected. That feeling of a job well done, after several weeks or months spent on the pre-signature phase of the contract lifecycle, is understandable. In practice, however, this self-congratulation quickly gives way to a more or less organised chaos in the post-signature phase.
The FIDIC form: an instinct as healthy as it is insufficient
Choosing a FIDIC form to contract a major project remains one of the best decisions you can take at the start of a project. The questions asked at that point, such as whether to start from a FIDIC base, which book to choose (yellow book? silver book? red book? etc.), or whether to make heavy amendments or instead stay close to the text, are good practice. The contractual vehicle determines much of what will and will not be possible later on, and time spent choosing it is never wasted.
That effort, however, bears exclusively on the pre-signature phase. It secures one segment of the lifecycle, the one that runs from initiation to signature. Yet organisations more rarely put the same effort into shaping the way the contract will then be lived out, day after day, during delivery. And without revisiting the value of contract management during the performance phase, it is at that stage that much of a project's profitability is decided (and not when the contract model is chosen).
To illustrate this blind spot, take the contra proferentem principle, under which an ambiguous clause is construed against the party that drafted it. Applying the analogy to the FIDIC form, the idea is that it can turn against the party that chose it without having the means to make it live. A contractual vehicle must indeed be chosen with delivery in mind rather than signature alone, looking not only at whether it suits your own situation, but also that of your counterparty, and at what will happen once the project is under way.
When protection turns into a penalty
It cannot be said often enough: signature is not the finish line! Many organisations stop there all the same, as if the essential work were behind them, wrongly assuming that what follows is a project management matter.
FIDIC offers real advantages during delivery: claim procedures, escalation mechanisms, and a notice regime that structures the relationship and provides footholds in the event of a dispute. These mechanisms are designed to create channels for dialogue and protection. But they only serve the party that triggers them in the required form and within the required time. The claim regime and its twenty-eight-day notice period, for example, will only help the party that has the means to keep track and to notify in time. During delivery, we too often see claims fail not because of their substance, but because they were not pursued within the agreed time limits or in the agreed form.
That leaves the project manager, of whom a great deal is already asked. They are expected to steer, to arbitrate, to hold a sometimes optimistic schedule inherited from the tender phase, all within budgets that negotiation may have pared back. Sprinkle the complexity of a FIDIC contract over those demands and the project manager is finished off. However competent they may be, a project manager remains a professional, not a magician.
FIDIC: beware of false friends
Then comes a more discreet category of traps: false friends. When arriving on a project, it is not unusual for the contract to be introduced in a single line: "on the contract, it's standard stuff: a FIDIC yellow book. We know it inside out". The first reflex in that situation is to go and look at the particular conditions.
This is indeed one of FIDIC's defining features: a contractual package made up of balanced, tried-and-tested general conditions, to which numerous particular conditions are attached that amend them. Very often, on a closer look at the contract, you realise that the very spirit of the form has been altered, with deadlines you thought you knew or mechanisms you assumed were standard having been reworked by agreement.
This is where contra proferentem regains its full meaning, this time literally. On a standard form there is no real single drafter, and the rule has little bite. But as particular conditions pile up, you become a drafter again, and your own amendments may be construed against you. The false friend is not just a management trap; it is a risk you reintroduce into the contract yourself.
Finally, the role of the Engineer falls into the same category of false friends. It is sometimes mistaken for that of a project supervisor, it is assumed to be neutral, and you discover along the way that not only does the role fail to map neatly onto project supervision (maitrise d'oeuvre) as it is known in French law, but also that, being appointed by the Employer, its neutrality is sometimes open to question.
FIDIC: a question of maturity as much as of form
During negotiation, FIDIC is often seen as a neutral, mutually acceptable solution. But FIDIC is not made for every organisation or for every project. That is precisely why several forms exist, some of them designed for smaller contracts (such as the Green Book), which partly answers the question of project size.
Beyond size, however, comes the question of contractual maturity. Using a FIDIC form assumes a certain rigour, on your own side as much as on your counterparty's. When that rigour demands too great an effort from one of the parties, the contract no longer protects the relationship, it disrupts it. Its formality, raised against a counterparty that had not anticipated it, becomes a source of friction. You invoke the contract, the counterparty is surprised to be met with procedures it had signed without measuring their day-to-day consequences, and what was meant to secure the relationship ends up straining it. FIDIC, and this is not said often enough, presupposes contractual maturity on both sides of the table.
Delivery, an under-used profitability lever
Between the false friends and the maturity issues set out above, you may think that this article is a case against FIDIC! Rest assured, it is nothing of the sort, because FIDIC is an excellent support for a wide variety of projects. What we do want to underline here is that a form remains a form, that is to say a string of characters. Our conviction at Prime Conseil is that value does not come from the document, it comes from the way it is implemented.
In practice, this rests on a few simple principles:
- Understand the contractual package, at least its main mechanisms, before having to endure them.
- Embed those mechanisms in a project or contract management plan, so that the team knows where it stands.
- Extend the effort of support and awareness on the contract and its use, provided by a contract specialist, at least until handover and kick-off, and beyond depending on the size and complexity of the project.
In the end, it is not the form that delivers a project's economic, technical and financial performance, it is the quality of its delivery and monitoring. The best-chosen contract is only worth what you make of it, and it is precisely there, in the gap between what you sign and what you manage, that the contract manager's profession lies.