FIDIC, ORGALIME, ABA99, MF/1, SIA and other General Conditions for the Construction Industry
As mentioned in the last article there exists a considerable variety of standardized General Conditions for the Construction Industry. On international level the FIDIC conditions are the mostly used and best known such conditions. In Scandinavia the ABA 99 documents are often applied and in the UK the MF/1 conditions. In Switzerland SIA is well known and used in almost all construction projects.
These (and other) standardized conditions facilitate the international as well as the national collaboration between employers and contractors.
Experience (http://plantconconsult.jimdo.com/), however, shows two “phenomenon”:
- The ORGALIME conditions seem to be applied rather rarely. A lot of contractors do not even know that those conditions exist. Although the ORGALIME conditions are more contractor friendly than most of the other such general conditions. It is in any event worth to study them and to propose them as an alternative (and compromise) to general conditions provided by the employer.
- Many contractors just accept the above mentioned standardized conditions without even trying to negotiate certain articles or clauses. They want to avoid lengthy negotiations and are of the opinion that those conditions are in any event fair and balanced. From a neutral point of view this might be partly correct. However, projects in general are not standardized but custom made and special. Those general conditions in many cases do therefore not fully reflect the interests of the parties. It is again worthwhile to invest some time to read and understand such general conditions and to carefully check whether all articles and clauses do make sense compared to one’s project and the risks involved.
To introduce certain minimum contract standards and to put together a checklist of “killer issues” or “hot topics” contained in standardized General Conditions reduces on one hand time and efforts for negotiations and on the other hand is a striking tool to reduce commercial risks.<-- Back