Construction Dispute Resolutions/Validity Period of Rates and prices Quoted in Tendering, when Possession of Site is Delayed.
Contract: Construction of Reservoir(Water Storage Tank), Valve House and Yard Piping for a Water Rehabilitation Project.
Conditions of Contract:FIDIC General Conditions of Contract for Works of Civil Engineering Construction - Fourth Edition 1987- Reprinted 1992
Date of Award of Contract: 01st January, 2011
Possession of Site: Given on 15th January, 2011 excluding site for Valve House and Yard Piping to be done in the same Contract, due to intervention of Third Party on the ownership of the land.
Completion Date of Contract including that for Valve house and Yard Piping:15th January, 2013
Extensions received : Up to 31st December, 2014
Further Extensions to be Requested: 31st January, 2015.
Possession of site for Valve House and Yard piping is not given to date.
According to the Minutes of Progress Meetings held after 15th January, 2011 to date, the Project Director has stated several times on the dates of possession of the said site but never happened.
Now he says the site will be given on 15th January, 2015. (Today is 08th January, 2015.)
There are valid reasons to claim Time Extension and Additional Expenses.
1. Apart of that, can't we request new rates and prices for all the related items as per current market prices and pricing Preliminary and General Works Bill afresh?
2. Can't we request to Terminate the Contract, without attending to Valve House and Yard Piping?
3. What is the Validity Period of the Rates and Prices quoted by us in Tendering as per the Contract?
4.Is there any date beyond which, that we can mention Contractually, that our Rates and Prices quoted for Valve house and Yard Piping are no more valid and available?
An early reply is highly appreciated.
Dear Mr Basil,
You have a perfect case for all your claims provided, you have track of all commitments by owner and correspondences from your side regarding the impact of delay in handing over the site to you.
Please refer the answers below:
1. You can very well request for new rates and prices for the works related to valve house and yard piping as per current market pricing and general works bill. But you may not claim for preliminary as the mobilisation is already done by you. You are eligible for additional expenses for retaining and maintaining the resources.
2. In the event of your request being rejected, you cannot terminate the contract, but you can request to pre close the contract by de-scoping the valve house and yard piping. This would be the ideal solution under the given situation of continuous uncertainty in handing over the part of site.
3. Unless otherwise stated in particular conditions of contract, the validity of rates and prices is until the completion of scope of works mentioned in the contract. In your case, the validity of rates is up to the original contract completion date i.e. 15th Jan 2013. I presume that an extension up to 31 Dec 2014 was voluntarily given by the owner. However, the owner can still argue that the to be intact until 31 Dec 2014.
4. As an official extension was already given to you, you may assume that 31 Dec 2014 as the date beyond which your rates could be declared as invalid.
I hope I have answered your questions. Wish you all the best.
-- r sivaraman