IChemE Conditions 'Green Book' 4th Edition
Produced in partnership with Peter Jansen of Keystone Law
IChemE Conditions 'Green Book' 4th Edition

The following Construction guidance note Produced in partnership with Peter Jansen of Keystone Law provides comprehensive and up to date legal information covering:

  • IChemE Conditions 'Green Book' 4th Edition
  • Nature of cost reimbursable contracts
  • Co-operation
  • Design and fitness for purpose
  • Purchaser and Project Manager
  • The Works
  • Changes and variations
  • Sub-contractors
  • Care of the works and insurances
  • Completion and testing
  • more

Following publication of the Conditions of Contract for Process Plants for Lump Sum Contracts in 1968, the Institute of Chemical Engineers (IChemE) in 1976 published a reimbursable form of contract known as the 'Green Book'. Second and third editions of the Green Book were published in 1992 and 2001 respectively.

This Practice Note covers the 2013 4th Edition of the Green Book and focuses on the nature of cost reimbursable contracts.

As with all IChemE contracts, the Green Book has detailed provisions for testing on completion and commissioning making it well suited to the process engineering industries including nuclear, water, petrochemicals, steel and food.

The Green Book follows a virtually identical format to the Red Book in its clauses, layout and schedules. The drafting is very similar departing from the text of the Red Book only where necessary to reflect the implications of using a cost reimbursable contract and this Practice Note should be read in conjunction with IChemE Conditions 5th Edition—'Red Book'.

Nature of cost reimbursable contracts

The IChemE lists some advantages and disadvantages of cost reimbursable contracts compared to lump sum. Bids can be prepared quickly with freedom for the purchaser to develop and modify the scope during the engineering phase. It is easier for the contractor to carry out feasibility studies for this purpose although it has no financial incentive