International Construction Law Review
EMPLOYER’S REQUIREMENTS IN DESIGN-BUILD CONTRACTS UNDER FIDIC—A COMPARATIVE STUDY
DR GÖTZ-SEBASTIAN HÖK
Kanzlei Dr Hök, Stieglmeier & Kollegen, Berlin
1
Employer’s Requirements, though not a legal term, are usually used in design-build contracts in order to describe and determine the result to be achieved by the contractor (see, for example, FIDIC Yellow Book, Silver Book, and Gold Book). They are also referred to as Performance Specifications (United States) or Leistungsverzeichnis Funktionale Leistungsbeschreibung (Ger-many) or Cahier des Charges (France). Their common purpose in the engineering and construction industry is to specify the project requirements in terms of performance parameters.2 As such, the Employer’s Requirements can be pre-contractual (as bidding criteria), they may become a part of a design-build construction contract (by reference) and they may form part of a design-build contract.3
Undoubtedly Employer’s Requirements not only establish an objective for the purposes of a construction contract. They are also required in order to establish competition among those who are interested to carry out the intended works. In this respect, the specifications establish criteria which enable the employer to single out the best or most competitive contractor. Though this need cannot be denied, it creates problems because quite often the need to establish clear and comparable criteria contradicts the desirability of involving contractors (bidders) early. Moreover, competition and procurement law have particular policies which affect the preparation of Employer’s Requirements in various ways. However, these issues are not discussed here, as they are beyond the scope of this article.
Notwithstanding any legal definition of a contract for works it is helpful to emphasise the characteristic elements of a design-build contract. It is an entire and reciprocal contract under which the contractor’s entitlement to payment may be either pre-determined (lump-sum) or at least determinable (measurement), even if not subject to a third party’s determination (engineer or judge). The entitlement to payment depends on the contractor’s performance. In practice, the parties to a construction (design-build) contract define a goal to be achieved without exactly knowing the
1 Many thanks to Philip Jenkinson, current Chairman of the FIDIC Contract Committee, for his diligent review of this article and his very helpful comments and support. Also many thanks to Axel Volkmar Jaeger, former past Chairman of the Contracts Committee for his advice.
2 See Allen/Martin, Construction Law Handbook, §8.03 (E); see also Labarthe/Noblot, Le contrat d’entreprise, note 300; see Ausschuss der Verbände und Kammern der Ingenieure und Architekten für die Honorarordnung, AHO Leaflet, 10 and 11.
3 Ibid. note 298.
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