Conference spotlights USA, Canada and Caribbean use of FIDIC contracts

01 Jun 2021

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The final fourth day of the Official FIDIC Contract Users’ Conference (North America, Latin America and Caribbean time zone event) on 28 May 2021 was a ‘regional day’ focusing on the USA/Canada and Caribbean regions, with keynote speakers and case studies drawn from across the region, writes FIDIC digital marketing and communications executive Nadia van Der Waltova.

Introducing the third day of the event, sponsored by FIDIC global strategic partner, international law firm CMS, FIDIC board member and chief operating officer at Morrison Hershfield Group Catherine Karakatsanis, said that having attended various sessions throughout the four days of the Contract Users’ Conference, she had found the content “relevant, impressive and valuable”, saying that thought that “FIDIC contracts are well established and developed with the support of many stakeholders.” This was a key benefit of using FIDIC forms that was stressed repeatedly by many of the speakers at the conference.

The first speaker in session one was Deryl L. Earsom, FIDIC Contracts Committee member and vice-president for Jacobs Engineering Group, who spoke about the regional overview of FIDIC contracts in USA, Canada and the Caribbean. He highlighted the opportunity for the greater use of FIDIC contracts within the region and showcased the opportunities possible for furthering their use. Earsom said that although FIDIC contracts are valuable forms, they are unfortunately underused in the region and this needed to be improved.

Earsom presented information on FIDIC contracts sales showcasing that 3% of the sales are attributed to the United States, 1% to the Caribbean and 0.8% to Canada. Earsom highlighted the situation in the United States and Canada and attributed the lack of use of FIDIC forms to the fact that “most government agencies have their own forms available and that private/commercial clients tend to use their own forms or one of the other industry forms”.

Cases in which FIDIC contracts are used in the region are generally for projects where the engineering and other professional services will be primarily performed by a US or Canadian firm but constructed in other countries or for private company owners who do not have extensive experience with US or Canadian industry contract forms. Earsom also mentioned the need for further capacity building and highlighted the limited training opportunities and accredited trainers in the region. “We would not be able to replace the current forms available in the region but we would benefit from further promoting FIDIC contracts and training within the region,” Earsom said.  

The next speaker, Mike Long, senior project manager at POWER Engineers, continued the discussion on the users’ perspective and experience with FIDIC from a US-based engineering firm. Long discussed in particular the use of the FIDIC EPC Turnkey Silver Book in his firm’s projects and highlighted the different experience when using the FIDIC EPC contract and non-FIDIC EPC.  

Long went on to discuss the nature of EPC contracting and highlighted key areas including the significant up-front investment by employers, engineers and contractors as well as the conditions necessary to achieve “turn-key” success. Speaking on his experiences, Long mentioned that recent project developers have been slow to incorporate 2017 FIDIC Silver Book and preferred the 1999 version and he also highlighted that recent FIDIC silver contracts have utilised “bespoke” structures with significant modifications. “FIDIC contracts are bankable and appreciated by developing economies and new developers, providing a flexibility that is often needed,” said Long.  

The next speaker was Roberto Laguado-Giraldo, senior procurement specialist at the Inter-American Development Bank (IDB) Argentina country office. Speaking about his experiences and practices using FIDIC Contracts withing IDB projects, Giraldo started off by showcasing the magnitude of funding provided by IDB, broken down by country and sector.  

“At IDB we have used 85 FIDIC contracts in the last five years and 90% of those used the FIDIC Pink Book,” Giraldo said. Highglighting the importance of FIDIC contracts in the region, Giraldo also mentioned the increased use of the FIDIC Yellow and Gold Book contracts in the past four years, specifically in Argentina, Bolivia and Nicaragua. He said that areas that could be improved were  increasing the use of the recently translated Spanish contracts in the region and furthering capacity building.  

The second session of the conference, moderated by FIDIC general counsel, Daduna Kokhreidze was an “Ask the FIDIC Contracts Committee – Open Q&A”. Joining the Q&A session were, FIDIC contracts committee chair, Vincent Leloup, vice-chair Husni Madi and members, Deryl Earsom, Peter Collie, Eoin Cullinane and Siobhan Fahey.   

Introducing the FIDIC contracts committee, Kokhreidze highlighted that the committee is a working committee of FIDIC appointed by the FIDIC board and supported FIDIC by working on the development and updating of the FIDIC forms of contract. Kokhreidze highlighted the expertise of the various members. The Q&A session was well received by attendees, with many interesting points raised, including whether future contracts needed pandemic conditions as a standard and what new publications were scheduled in the pipeline.  

The final session of the conference looked at the use of FIDIC contracts in the region. The first speaker was 39 Essex Chambers barrister, Karen Gough. Speaking about the use of FIDIC contracts in the Caribbean, Gough mentioned that the FIDIC Red Book 1999, FIDIC Yellow Book 1999, FIDIC Red Book 4th Edition 1987 were the predominant contracts used in the region with room for growth for the FIDIC Red and Yellow Books 2017.   

Building on the use of FIDIC contracts in the Caribbean, Gough went on to mention the agreement signed with the Caribbean Development Bank, leading to the use of nine FIDIC standard contracts for the next five years as accepted forms of contract for standard bidding documents. She also highlighted three high profile cases in the Caribbean, NHIC V NIPDEC UKPC 37, Quantum Construction ltd v Newgate Enterprises ltd, High Ct of Trinidad and Tobago and AATT V JUSAMCO pavers limited, High Ct of Trinidad and Tobago.  

The next speaker was Bruce Reynolds, co-managing partner at Singleton Reynolds who continued the discussion from a owners’ perspective. Highlighting the Canadian Construction Contracts, Reynolds described the current use of standard form of contracts in Canada, particularly among common law provinces. Reynolds mentioned the construction contracts (and subcontracts) are often based on standard forms created by the Canadian Construction Documents Committee and the Canadian Construction Association.

Reynolds went on to discuss the impact of Covid-19 on construction and mentioned the many variations based on the nature of the project, including, suspension of work, compliance with safety measures and disruptions and delays in claims. Reynolds said that Covid-19 had led to an increase of disruption and delay claims and this had highlighted the need for adjudication boards, which was a key element in FIDIC contracts.   

The final speaker for the day, Ignacio Palacios, director at Quantum Global Solutions introduced a contractor’s perspective to the topic. Starting his presentation, Palacios brought attention to major challenges and opportunities for contractors in FIDIC contracts in the region. This was followed by an informative discussion on the misunderstanding of legal concepts when using FIDIC contracts and the inconsistencies between local law and the FIDIC conditions of contract.   

Ignacios concluded with some main tips and takeaways including “proper contract administration from day one including a standard DAB from the start, ensuring you understand the law of the country to look for potential inconsistencies, having a thorough understanding of all contract documents and understanding and managing expectations, especially cultural are key,” Ignacios said.

Summing up day four of the conference, FIDIC CEO Dr Nelson Ogunshakin thanked all the speakers for their input and insights which had helped to deliver an excellent event. He highlighted once again that working with the international development banks and local global member associations will be crucial for the promotion of FIDIC contracts going forward and that he was commited to ensuring that FIDIC strengthened and improved its engagement in those areas.  

FIDIC would like to thank global strategic partner, international law firm CMS for their kind support for this event.

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