Construction Law/Relevant Rates

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Question
I am contacting you to inquire about an issue related to derived new  price from  Relevant rates  as clause 12.3 “Evaluation” in Red book of Fidic/1999 , in this case :

In project there is an item about Reinforcement Concrete Slab with an area of 3000M.S in Bill of Quantity of the contract with Unit price of 50 EUR per M.S .

When the contractor proceed to implementation of the work  , Show that the area of Reinforcement Concrete of Slab  on the site only 1500M.S ,

So the contractor ask the Employer  to determinate New Price of this item of slab as Clause 12.3 in the  Fidic  because  The changes in the item “ slab” Check the following :
-(a)    the measured quantity of the item is changed by more than 10% from the quantity of this item in the Bill of Quantities or other Schedule,
-(b)   this change in quantity multiplied by such specified rate for this item exceeds 0.01% of the Accepted Contract Amount,
-(c)   this change in quantity directly changes the Cost per unit quantity of this item by more than 1%,

So as this Clause the new price shall be derived from  relevant rates , the question is :
- how can be that However the reinforcement concrete of slab is specified in the contract , and the price of contractor in this item  (50Eur) is not appropriate , and the responsible cost of this item is (90 EUR ) .
- what is the meaning of “ Relevant rates “ in this Clause .

Best Regards

Answer
Dear Muhannad,

The relevant rate in this instance is the rate quoted in the Contract for 3,000 M.S..  If the Contractor submitted a low rate for this item, that is his problem.  So now you look at the difference in cost between the two quantities.  The lower quantity will have a lower overhead recovery, so that might a reason for an increased rate.  If the technology has changed from mechanical mixers to hand mixing, that could be another reason for a rate change.  You do not recalculate the rate from using the current basic prices.  

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Peter M. Elliott

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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 www.eotprotocol.com before submitting a question.

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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')

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

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B Sc(Hons) in Civil Engineering

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