Construction Dispute Resolutions/Changing Variation Clause
Dear Mr. Sivaraman,
In an ongoing Contract, the Variation Clause in Part I- General Conditions of Contract has been made entirely ineffective by introducing a Sub-clause in Part II-Conditions of Contact Particular Applications.
According to which, to qualify to get a new rate,
1.The Quantity of any available BOQ item should be increased or decreased by 25%
2. its original value should be more than 2% of the Contract Price.
There is only 1 item out of thousands of items, which satisfies the above 2nd condition.
The quantity of lot of items have been increased exceeding 25%, but the original value of any item does not satisfy the above 2nd condition. Therefore we were paid only at original BOQ rates for the varied quantities. The Contract is still progressing.
I think, this a very unfair situation for which a redress can be gained through Courts. But the Company to which I am attached, does not willing to follow Court proceedings against the Employer.
I know this is an Extra Contractual situation, as such even the Employer agrees with our complaint, will he be able to delete the adverse clause, even with the approval of either Ministry or Cabinet.
Can we get effective help, if we forward this case to the existing DAB (Dispute Adjudication Board), if we are unable to get a solution direct from the Employer.
I am grateful if an reply is sent early.
I highly appreciate the reply I received from you for my previous problem, according to which I have already presented the case to the Employer.
Some one has very tactfully drafted the contract. This is not a mis representation / mistake / misinterpretation of contract.
This condition was introduced in part 2 knowingly and with a purpose. Since this clause was accepted by you as part of signed contract, now you can't resort to DAB or court which are extreme situations. There is NOT a dispute as such and neither the court nor the DAB will be able to give a direction as of now.
You need to approach the client and ONLY the client to amend the contract (i.e. to relax the 2% of original contract value) to become eligible to claim variation.
The first step is to collate the data to establish that you have incurred loss due to the pre qualifier clause 2 and request to amend the contract by mentioning the cost impact to each party. Request the client to compensate for the direct costs of variation mentioning that you are already bearing the indirect costs (additional establishment costs) due to the variation. As you had mentioned that quantities of many items have increased by more than 25%, there is a possibility that client may consider this genuine case.
Never even think about going to DAB or court until the client is rigid and you have a big NO from client. Only then it would become a dispute and you can resort to dispute resolution.
i think i have clarified your query.
-- r sivaraman