Construction Law/Client reluctant to pay the B.O. Q item
We are laying the Sewer line in Muscat. Wherever the road crossing are coming there is thrust boring or micro tunneling to be done. The microtunneling is paid on the dia of the pipe laid. i.e. if a the sewer line is 300mm dia we are only paid on this basis. Whereas due to the length of the drive, or due to soil condition or due to the expressway crossing we have used a larger diameter casing pipe (1000mm or 1200mm dia) for safety purpose. There is FOC ducts also running parallel to the sewer line.
Case:- As per the B.O.Q F.O.C duct when passing under road crossing is to be done by HDD or Auger boring, and separate B.O.Q items is mentioned. As we are doing the micro tunneling for sewer or Irrigation line, client took the advantage of our larger dia casing pipe and instructed us to lay the F.O.C ductís through the same casing.
We claimed the F.O.C duct for road crossing under the prevailing B.O.Q item (HDD/Auger Boring), Client refused paying this item saying that we have not done any separate HDD or Auger boring for passing of F.O.C Duct instead we used the same larger duct which we had done for Sewer line.
Is this fare?? Can you please support me with so cases where the contractor has won similar cases. Ours is a FIDIC(Red Book) based contract.
My dear Suresh,
Thank you for your question.
Your issue is an interesting one. And i guess, you may be finding it difficult to justify your case if proper documentation has not be done. I could understand that; you (as the contractor) decided to adopt the principle of value engineering which in principle would not result to additional cost to the employer. From your question:
1. it appears when you were planning to carry out the use of the larger casing (than the one specified; you did not demonstrate to the employer that; this is the additional cost you are bearing and that you are absrobing the cost just for safety and value addition to the project. 2. It appears as well that; you did not carry out due diligence on your value engineering to see the implication it may have on other part of the works and to plan properly to advise the employer regarding the cost that you are willing to bear and showing all the items and their costs compared with the cost of the larger casing used and shown glaringly a total of cost benfits or value additions acrruing to the employer on the project. This is very good for contractor's goodwill to be referred to anytime anyday. Any waiver from the contractor side must be properly documented and carried over as part of the contract figures to final account for records purposes as it would be part of what the contractor can use to negotiate in times of difficulty like this.
3. It is difficult to reach a decision as well as to confirming if you (contractor)has not also benefited in time saving on the works. The Client may also have it at the back of his mind that; the instruction he issued to you to drop the F.O.C ducts and used same largerb casing, is also of immense benefit to you as you would save a lot of time in doing the F,O,C ducts.
4. I could not also be sure on whether you are on schedule or you are on delay in your time schedule for the job and if this is the case; the employer would also feel; he is doing you favour to escape penalty by allowing you to use the larger casing to house the irrigation pipes ,,etc
Summarily, under FIDIC, to the best of my knowledge, there is nothing we can apply to this case other than to logically treat it as a variation under clause 51. If this is the case, your arguments can be:
a. Request for written S.I to pass the irrigation pipes through contractor's larger pipe.
b. Prepare the cost of the larger pipe compared with the contract 300mm pipe and get the total cost to the contractor which he is not claiming (value engineering# because he is doing it to protect his image and do a quality good job. #This is Contractor's pain# - The question here is that, is there any area related to this work for which contractor is also enjoying gain or benefit? like; duration of execution?
c. Prepare the cost of the F.O.C ducts as in the BOQ which is being saved by the Client's intention from the S.I issued in 1 above. Demonstrate to show the cost the employer wish to save by enjoying from contractor's pain.#employer's benefit)-- The question here is that, is there any area related to this work for which contractor is also enjoying gain or benefit? like; duration of execution?
d. Adjust the Contractor's pain against the Employer's benefit and then, demonstrate to show if the Contractor still suffers pain or not? If yes, then, you can make a case under the law but not under the contract - FIDIC red book CoC;
I am aware that; most laws in the world do not support unjust enrichment and profiting from another party's pain without the party's agreement or consent. I may need some time to check what the Omani civil code say about unjust enrichment and then, i can finally conclude.
Let me know if you also have time gains for the two items of the works and if yes, please, i am afraid, it may not worth it to continue to contest this with the Employer as All contract must be esecuted with fairness and justice. Both parties cannot eliminate the TRUST requirement and transparency with credible goodwill.