On 7 May 2019, FIDIC (International Federation of Consulting Engineers) published its First Edition of the “Conditions of Contract for Underground Works”, otherwise known as the “Emerald Book”, which was produced in conjunction with the International Tunnelling and Underground Space Association.

The General Conditions of Contract in the Emerald Book are based on an earlier FIDIC publication, but the Emerald Book also features a new set of clauses and introduces a new document – the Geotechnical Baseline Report (“GBR”).  These seek to achieve a balanced allocation of the risks arising out of the ground conditions, which for underground works such as tunnelling are not possible to assess with precision at tender stage. The new clauses and the GBR provide a mechanism for adjusting the completion time and the contract price remuneration according to the actual ground conditions encountered, in comparison with those outlined in the GBR.  The GBR provides a model which serves as the sole contractual source of risk allocation related to subsurface physical conditions, and their geotechnical properties, and defines the ground conditions risks assumed at the outset by the Contractor. Hydrogeological, geological and geotechnical properties of the ground, or contamination conditions not addressed by the GBR are considered to be ‘unforeseeable’ and therefore any differences are then deemed to be at the Employer’s risk.  The risks arising out of the foreseen ground conditions, as described in the GBR, are assigned to the Contractor.  It will create a reasonably “level playing field” which will allow the various bidders to base their proposals on a similar risk basis.

Another key document is the Completion Schedule which specifies the “Time for Completion” based on the Contractor’s estimated rates of progress. These are calculated by reference to the ground conditions and working methods as described in the GBR.  The Time for Completion can be extended if the conditions encountered are more onerous than those assumed, and it can also be reduced if conditions are less onerous than those anticipated from the GBR.

The Engineer has a central role in assessing the Contractor’s measurement of excavation and lining works against the baselines set out in the GBR. Adjustments to the Time for Completion and remuneration are based on this assessment.  Appendix A to the Emerald Book provides guidance as to what information the GBR should contain.

Geotechnical Baseline Reports are significantly different from the traditional geotechnical factual and interpretative reports described in British Standards, and from the Ground Investigation Report (GIR) and Geotechnical Design Report (GDR) described in Eurocode 7.  Geotechnical baseline reporting is used to manage the commercial aspects of geotechnical risk, not for geotechnical design, so will  have a different emphasis than those elements more familiar to most geotechnical and geoenvironmental  specialists.

There are currently no UK industry guidelines on how GBRs are prepared, or what they should include. However, the objective is that their use in tunnelling contracts can benefit both the Client and the Contractor by leading to effective and fair risk control.

The Construction Industry Research and Information Association (CIRIA) has a project underway, P3165 – Geotechnical baseline reporting, which aims to provide good practice guidance on geotechnical baseline reporting, provide industry with a consistent approach to producing GBRs, encourage the use of GBRs on smaller scale projects and provide better outcomes for managing geological and geotechnical risk.  The project should be completed in early 2021.  See the CIRIA website for more details.

Unsurprisingly, there are no reported decisions of disputes arising under the Emerald Book as yet, or of disputes that may have been avoided through its use.  The AGS Loss Prevention Working Group will keep this under review and will provide further guidance in due course regarding the opportunities and risks that the Emerald Book and the use of Geotechnical Baseline Reports present for AGS members.

Article provided by Zita Mansi, Senior Associate, Beale & Co