Plain-language explanations of key terms — for engineers and project managers, not lawyers.
A document (or documents) prepared by the employer that sets out the scope, purpose, and performance criteria for the works under a Design and Build or EPC contract. Under FIDIC Yellow Book, the Employer's Requirements define what the contractor must design and build, without specifying how to do it. Errors or ambiguities in the Employer's Requirements may give rise to claims for additional time and money.
Under FIDIC Red and Yellow Books, the Engineer is the employer's representative responsible for administering the contract. The Engineer issues instructions, approves programmes, certifies payments, and determines claims. Critically, the Engineer must act neutrally when making determinations under FIDIC Sub-Clause 3.5 — a requirement that has caused difficulty in practice when the Engineer is employed and paid by the employer. The 2017 FIDIC editions strengthen the requirement for the Engineer to act neutrally.
A formal decision by the Engineer on a claim or dispute submitted by either party under FIDIC Sub-Clause 3.5. The Engineer must first try to reach agreement between the parties; if agreement is not reached, the Engineer must issue a fair determination. An Engineer's Determination that is not challenged within the required period becomes final and binding. Many practitioners argue that the Engineer, being paid by the employer, cannot in practice act neutrally when making determinations.
A right granted to the contractor to extend the completion date when delay is caused by events that are at the employer's risk or are neutral (force majeure). An EoT grants the contractor additional time to complete without becoming liable for delay damages. Under FIDIC Sub-Clause 8.4, the contractor must give notice and submit a detailed claim within the required timescales. EoT does not automatically entitle the contractor to additional money — that requires a separate claim for prolongation costs.
A project delivery model where a single contractor takes full responsibility for engineering (design), procurement of all materials and equipment, and construction of the complete facility. EPC contracts are typically lump sum, turnkey arrangements. FIDIC Silver Book is the standard form for EPC/Turnkey projects. The EPC contractor accepts greater risk than under other models, including design risk and interface risk.