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Construction Law/Nominated Sub / Provisional Sum


Type of Contract: FIDIC Red Book 1999
Percentage for Adjustment of PS is x%
Overheads & Profit when valuing Variations under Main Contract is y%

My question is: after expending a PS whereby works are to be executed by a Nominated Subcontractor, which percentage shall be used when valuing variations under the Nominated Subcontract? is it the x% of the y%?

Dear Jihad,

It all depends on the expertise of the parties.  There could be an argument to apply both percentages, which might be a bit excessive as the amounts are meant to reimburse the Contractor for his overheads and profit related to the item.  However, if I was the Engineer, I would ask he Contractor to submit an offer, including the percentages, based on the premise that he can claim for his expenses only once, and issue the VO accordingly.  The drafters did their best to be fair to contractors in all circumstances, as a nominated subcontractor might not be used for an item under a provisional.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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