You are here:

Construction Law/Design & Build Lump Sum Contract


QUESTION: We are a subcontractor in a FIDIC Design & Build Lump Sum Contract.

The BOQ's included in the Sub-Contract Agreement is an itemised material breakdown with models, quantities, unit prices, etc instead of Schedule of Prices.

During execution of the project, the designed has changed significant and all the materials included in the Sub-Contract BOQ's are irrelevant. Based on the actual material used, we have developed new BOQ's with the same total which have the same format as the original BOQ's but new models, quantities, unit prices have been introduced.Is it required to substantiate the new unit prices with material invoices, mark-ups for profit and overheads.

Shall we consider these changes as a variation to our Sub-Contract Work?

ANSWER: Dear Nick,

Do you have an instruction for all these changes?  If not, then you ignore any new drawings which have been issued without an instruction and variation order, or you risk the new work being rejected, without payment.  

What is the purpose of the BoQ, if the total is unchanged?  If it is used as a basis for payment or for variations, then you need the approval of the Contractor, and possibly the Engineer, to your proposals.  He will decide what substantiation he needs to approve your proposals.  If he approves, then he will issue a variation order.  

---------- FOLLOW-UP ----------

QUESTION: The  new BoQ will be used for payment and variation purposes.
So, can the contractor or engineer consider the new quanitties/models as variation and asked for cost saving?

Dear Nick,

Everyone always asks for cost savings, but they must follow the signed Contract.  If the new design truly allows cost saving, say due to value engineering, then the cost savings are passed on.  Requests for lower prices, because the Contractor or Employer have made a mistake in their funding, must be resisted.  

Construction Law

All Answers

Answers by Expert:

Ask Experts


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

©2016 All rights reserved.