FIDIC (International Federation of Consulting Engineers) contracts and NEC
3 (New
Engineering Contract) contracts are both widely used in the construction
industry but
have some fundamental differences. Here are the key distinctions
1. Contract
between the two
Philosophy:
contract o FIDIC Contracts: FIDIC contracts follow a traditional approach
forms:
where
detailed specifications and design are provided upfront,
and the
contractor is responsible for delivering the project in
accordance with
those requirements.
o NEC 3 Contracts: NEC 3 contracts emphasize collaboration,
transparency,
2. Contract
o and
Structure:FIDICshared risk between
Contracts: the parties
FIDIC contracts involved.
typically They
consist of promote
several
a more
separate
flexible and proactive
documents, including management style, with an
the General Conditions emphasis on
of Contract,
project
Particular
management
Conditions, andrather
the than detailed
various specifications.
contract forms. They are known
for their
comprehensive and detailed nature, covering various aspects
of the
project.
o NEC 3 Contracts: NEC 3 contracts are designed to be more
3. Risk
concise
FIDICand
Allocation:
o Contracts: FIDIC contracts often place more risk on the
user-friendly. They consist of three core documents: the
contractor.
Contract
The Data, is responsible for design compliance,
contractor
the Conditions
quality, and of Contract, and the Works Information. The
focus
NEC 3isContracts:
o performance on of the works.
NEC They also
3 contracts typically
promote have more
a more balanced
simplicity and
obligations
allocation for clarity of language.
insurances,
of risk betweenliabilities, and indemnities.
the parties. Risks are identified and allocated to
the party
best able to manage them. The contract encourages early
o warning of
FIDIC Contracts: FIDIC contracts have a more formal and
issues, cooperative problem-solving, and risk reduction
traditional
measures.
approach to change management. They usually include
4. Change Management:
provisions for
NEC 3 Contracts:
o variations and claims,NEC which
3 contracts emphasize
require proactive
detailed documentation and
formal
management of
procedures
changes andfor encourage
approval and valuation
early of changes.
agreement between the
parties. The
contract includes the Compensation Event mechanism, which
allows for
the valuation and implementation of changes in a streamlined
manner.
5. Dispute Resolution:
o FIDIC Contracts: FIDIC contracts typically include detailed
provisions for
dispute resolution, including arbitration or litigation, as the final
step.
o NEC 3 Contracts: NEC 3 contracts encourage parties to resolve
disputes
amicably through negotiation and mediation. If disputes
It's worth noting
cannotthat
be the NEC suite of contracts has been updated, and
the latest resolved, adjudication is often the next step, with a
version is NEC4, whichfor
provision introduced some further changes and improvements
compared arbitration as a final resort.
to NEC3. However, the general philosophy and approach of NEC contracts
When choosing between FIDIC and NEC contracts, it's important to
remain
consider the
similar.
specific project requirements, risk profile, and the preferred management
style of the
parties involved. Consulting legal and industry experts is recommended to
ensure the
appropriate contract choice for a particular project.
