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Construction Law/PINK BOOK FODIC 2010

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Question
AOA

SIR HOW ARE YOU

AS PER CLAUSE 12.3 IF VARIED  QUANTITIES  INCREASE OR DECREASE THEN WHAT ABOUT THE UNIT RATE INCREASE OR DECREASE

OVER HEAD  PROFIT INCREASE OR DECREASE IF VARIED QUANTITIES

KINDLY CLARIFY asap

Answer
Dear Imran

Thanks for the question. As a general rule any increase in the quantities of an item will reduce the overhead cost of the contractor. Having said so I will add that it is not always the case so it cannot be used without logic. There may be instances where the contractor has already quoted a lesser rate as strategy but an abnormal increase may create problems for him. Similar is the case where the quantities are reduced. This also do not increase the overheads, rather sometimes the Contractor feels delighted with such decrease in case he had made a mistake by inserting a low rate in his bid. Therefore the Engineer has to make his determination keeping all such facts in mind and after making consultation with the Contractor and Employer, in order to reach a fair conclusion.   

I hope the question is answered.
Regards

Abdul Majid Khan

Construction Law

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Abdul Majid Khan

Expertise

I am interested in questions related to time Extension, Liquidated Damages,variations, price adjustments,payments, disputes and Dispute Board under FIDIC IV, FIDIC 1999 and FIDIC 2006 Harmonized Documents.

Experience

I have been heading the Construction Management Division and Contract Divisions of National Engineering Services Pakistan (PVT) Limited, NESPAK, the largest Consulting Engineering Firm in Pakistan, for more than seven years and two years respectively. I have also worked as "The Engineer" on a number of projects. I have been working in Saudi Arabia for about seven years on a road projects. Additionally I worked as Arbitrator and am member of few Dispute Boards in individual capacity on Asian Development Bank funded projects.

Organizations
Inland and in Middle East. I have worked with National Engineering Services Pakistan (Pvt) Limited (NESPAK)as my Employer for more than 27 years in Pakistan. In Saudi Arabia I worked for Rashid Engineering, Consulting Engineers during 80s. After retirement I provided advisory services to NESPAK on technical and contractual matters to its various divisions and lately I was appointed as Advisor to Managing Director NESPAK on Technical and Contractual matters. Currently I work as Free Lance Contract Specialist on Fidic Form of Contracts.

Education/Credentials
I am a graduate with a B.E (Civil Engineering) degree. My year of graduation is 1970.

Awards and Honors
A few appreciation Letters and Honorariums during my service in NESPAK. I remained member of Administrative Committee and Board of Management of NESPAK. I had been part of the Management Committee in the absence of Managing Director.

Past/Present Clients
Most of the Clients used to be Government Departments, Corporations and Authorities. In Saudi Arabia the Client was Ministry of Communications. As Arbitrator and Dispute Board (DB) member, I provide services to various Government Departments and Contractors.

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