FIDIC Red Book or Yellow Book: How to Choose the Right Form of Contract
The wrong form of contract plants disputes before the first stone is laid. We explain the difference between the Red Book and the Yellow Book in plain terms: who designs, who carries the risk, how payment works — and which book development banks choose in Uzbekistan.
FIDIC forms are known as “books” after the colour of their covers, and the two undisputed bestsellers are the Red Book and the Yellow Book. The choice between them defines the whole architecture of a project: who is responsible for design decisions, who pays for errors in them, and how the parties will count the money. A mistake at this stage plants disputes long before anyone reaches the site.
The Red Book: the Employer designs
The Red Book — Conditions of Contract for Construction — applies where the design is prepared by the Employer (or its Engineer), and the Contractor builds to the issued drawings.
- Design risk stays with the Employer: if the drawings contain an error, the builder does not answer for the consequences.
- Payment by remeasurement: the quantities actually executed are multiplied by the rates in the Bill of Quantities. The final price may differ from the contract price.
- The Employer retains maximum control over technical solutions.
The Red Book is the classic choice for roads, irrigation and water supply — wherever the Employer knows exactly what it wants to build and has its own design capability.
The Yellow Book: the Contractor designs
The Yellow Book — Conditions of Contract for Plant and Design-Build — applies where the Employer defines only its requirements (Employer’s Requirements), and the Contractor both designs and builds.
- Design risk shifts to the Contractor: it warrants that the completed works will be fit for their intended purpose.
- Lump sum price: payments are tied to milestones rather than measured quantities.
- The Employer cares about the result, not the way it is achieved.
The Yellow Book is the standard for power, water treatment and process facilities — wherever the contractor’s equipment and engineering know-how play the key role.
How to choose: three questions
- Who has the design expertise? A strong design institute on the Employer’s side — Red. Counting on the Contractor’s know-how — Yellow.
- What matters more: control or price certainty? Control over every decision — Red. A fixed budget — Yellow.
- Who manages the risk better? Transferring design risk to the Contractor is not free: it prices that risk in. Sometimes it is cheaper to keep the risk yourself.
The Uzbekistan context
Projects financed by ADB and the World Bank most often use the MDB Harmonised Edition of the Red Book (the “Pink Book”) or the 2017 Yellow Book for power and process facilities. The bank’s standard bidding documents fix the choice of form at the procurement stage — so the risks must be assessed before submitting the bid, not after signing.
The bottom line
There is no “good” or “bad” book — only a form that does or does not match the allocation of competence and risk in a specific project. Bridge Consult helps employers and contractors select and adapt the form, draft the Particular Conditions and pass the tender without time bombs buried in the contract.
Planning a project or preparing a bid for an IFI tender? Discuss the choice of form with our expert.