Construction Law/Provisional sum

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Question
Dear Peter,

We have a road project (Fidic 1987 reprinted 1992) we have provisional sum amount specifically dedicated for under ground services with an amount say 100,000 AED my questions as below:

1) If the contractor needs to use the P.S (for above mentioned purpose) and agreed by the engineer does he (contractor) have to submit invoice for this unforeseen work as a variation or just invoice to fix the rates?

2) if the total work (for P.S) exceeds the 100,000 AED (the amount of P.S in the contract) in this case how we will deal with that? it will be considered as a variation and it is the employer responsibility to find budget for that or what is the status contractually?

Thanks

Answer
Dear M.dzaie,

1. Clause 58 is relevant to this question.  The Engineer must issue an instruction for any work covered by a provisional sum.  The Contractor cannot use the Provisional Sum without an instruction from the Engineer.  Payment for this work is calculated in accordance with clause 52.  Justification of the agreed rate is covered by clause 58.3.  

2.  If the cost of the item, which is covered by the Provisional sum, is greater than the sum available under the Provisional sum, it is the Employer's responsibility to find the necessary funds.  The whole procedure must be covered by an instruction and variation order issued by the Engineer.  

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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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