Silver Book. The Silver Book continues to be popular among employers and project financiers (particularly in PPP/project finance situations) where it is seen as transferring significant risks regarding contract price, time and performance to the contractor. The current difficulties in the financial markets seem likely to encourage this trend still further and so we would anticipate the Silver Book’s popularity to continue. We believe, however, that the use of the Silver Book does not always give employers the fixed price, time and performance which they desire. The stark transfer of risk to the contractor can result in disputes which inevitably lead to some form of accommodation with the contractor involving additional time/monies. This is often exacerbated by concessions/amendments made during the negotiation process which introduce ambiguity to the risk transfer process and/or inadequate thought allocated to the development of Employer's Requirements.

While we do believe the Silver Book fulfils a key need we think a more nuanced approach with more time allocated to the technical documents and testing regime may produce a more certain position for the Employer. We think these points should be more clearly set out in the notes at the start of the Silver Book. We also believe that the Silver Book can produce a false economy in that competition over an initial lump sum price can drive the Contractor to try to make savings at a later point in the project. While the "lump sum" price approach is seductive to many employers and financiers it is often used for projects where this approach is not appropriate. The end result is increased cost, arguments and delay.

We also believe that the Silver Book is over-used in situations where the Conditions of Contract for Plant Design-Build may be more appropriate. Indeed, it is a rare employer, and a rare project, which fits exactly with the ideal profile offered by the Silver Book. The use of the Silver Book is most appropriate in circumstances where the Employer produces a bare performance specification, permits the Contractor to properly examine this closely and perform his own investigations and where the Employer has little expert familiarity over the technical nature of the project and permits the Contractor to organise/manage this project in his own way. The Silver Book is naturally at home in situations which involve PFI, PPP and BOT type projects or more traditional projects with significant project financing.

In our experience this "pure" situation is unusual. The Silver Book is often used when the Contractor has little time to properly investigate the performance criteria, the site or any outline design. The Employer may produce rather more than a performance specification and also seek to extend control and interfere with the design process. Often the Employer's team may have detailed experience in the construction of the particular asset and may seek to supervise heavily the construction process.