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Joao Pereira , Project Engineer - Project Management , Saudi Aramco
Mainly in Desing and Build contracts (FIDIC Yellow book) when project scope and project deliverables are clear and detailed defined.
The Yellow Book (the Plant and Design-Build Contract) is intended for use where the works are designed by the contractor. Therefore its a lump sum contract, in which the contractor promises to deliver the project for a set price. The contractor, therefore, takes the risk of quantities.