This article explains the changes from the first (1999) to the second (2017) edition of the Rainbow Suite (Red, Yellow and Silver Books). FIDIC has put good efforts in making their standard contracts more balanced: dispute avoidance, dealing with delicate issues like variations and programme and further introducing project management best practices.
This is a case study of a multicultural negotiation for a privately developed concession to build and operate a hydro-power plant during 30 years. The discussions came to a win-win subject: the specific advantages for each of the stakeholders brought by early generation. This created a positive atmosphere during the negotiations based on trust, respect, transparency and pro-activity. This atmosphere was also beneficial to resolve other subjects that were not themselves win-win situations.
You have read books, articles, blogs on contract negotiation. Or, even better, you did a real training programme. All have praised the importance of win-win negotiations. There you find yourself in your next tough negotiation. All the discussions are on limits of liability, caps for liquidated damages, rights to terminate the contract etc. Subjects where a bit more protection for one party automatically means a bit less for the other party. You hesitate. Are those articles or training courses not realistic, not worth your time & money?
No doubt, we would all want to hear that, after a long day of negotiations, the best is to go out, eat some delicious food and have some beers in a bar because you deserved it. Negotiation is a challenge that can be compared to professional sports. It requires anticipation, recuperation, communication and these things take a bit of your precious time. This article provides 6 essential things to do after the formal meetings.
Having some data on which the Contractor may rely (reliance data) is a good industry practice and in line with the usual contract standards. The difficulty starts when we want to precisely identify the “reliance data”, “baseline data” or whatever word is defined in the contract to introduce the same concept. This article proposes a “black box” approach.
Unless less you are a contract expert with a solid experience and capacity to compare, in your head, against benchmark contracts, you will have a hard time to give a solid opinion on any contract and identify risk areas after a first reading,
This articles proposes a free tool to analyse contracts. For twenty questions, carefully chosen to cover the whole spectrum, the risk level of the answers is positioned on a scale from 0 to 5.
Based on the report that will be provided, you can then set-up a Risk Review board.
Working on an EPC Contract brings higher risks for the Contractor. He has to face all the circumstances that occur during the Project execution, with few exceptions, and still achieve the expected outcome or intended purpose. Is there anything that can counterbalance this exposure to make the project a success?