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Construction Law/Valve claim under FIDIC 1987

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QUESTION: Dear Sir,

I work for the Engineer in a 250M USD project, and we administer a FIDIC 1987 contract between the Employer and the Contractor.

the Contract with the main contractor is a remeasured while the subcontracts with the MEP and generators nominated sub-contractors are lump-sum.

we have bought from the MEP subcontractor a heat recovery unit to be connected with the generator exhaust:
- the BOQ for this item calls for the "complete system including heat exchanger, pipes,... gate valves, balancing valves, sensors.... and all necessary accessories as specified and as shown on the drawings".
- the specs include similar provision.
- the drawings show the system connected to the generator exhaust and include 3 flaper valves.

BUT, it was included in this package the generators package drawings for info, and in one drawing, there is a cloud around the heat recovery unit titled "mechanical lot" and 1 out of the 3 flaper valves is just outside the cloud.

Now the contractor claimed that this means that the generators subcontractor shall provide this valve as an additional scope to its works and he states that drawings prevail specs and BOQ because its subcontract is a lumpsum.

Do you think that his claim is valid based on this drawing, knowing that this drawing is not part of its package?

Please advise

ANSWER: Dear James,
thanks for your question.
What I understand from your question is that the subcontract of mep and generator are not back-to-back arrangement with main contract- main contract on remeasure basis and sub-contracts on lump sum basis.I will normally consider that work shown in 'drawing for info only' in sub-contract is not in the scope of  the sub-contract unless matter clarified specifically with a note to this effect and subcontractor did not object. To sum-up,the main contractor should resolve this with employer if it is an additional work or not .Please come back with more clarity if it do not answer your question
Regards-liaqat hayat

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

QUESTION: Dear Liaqat Hayat,

Thanks for your prompt response.

there is main contract with the main contractor, and we (Engineer/Employer) prepared the subcontract documents for both the generators package and MEP package and asked the main contractor to sign the subcontract with the two nominated subcontractors.

We included for the MEP package some generators drawings to show the interference and the cloud mentioned above is the only basis for the MEP subcontractor to assume that the third valve is not under its scope and it is under the generators package.

As the Engineer, I consider that we have bought the heat recovery unit as a complete system and not 2 out of 3 valves and thus we are going to reject this claim. what do you think?

Answer
Dear James,
Thank you for your elaboration and is now more clear for me to express my views on the subject. I agree that there is a lump sum contract with the MEP Sub-contractor and as such, he has to deliver complete unit and should be "fit for purpose". The MEP Contractor could have raised questions regarding any matter not clear to him and I understand that he sought no clarification and as such, he has to deliver a complete unit. Under these grounds, I am inclined to agree with your views that all 03 valves are in his scope of work and covered in his price. By the way, the contract should have mentioned clearly a list of all the equipment to be supplied under the contract including accessories and may be such a provision could have been counter checked with this list. Any way, not raising a query for clarity at the time signing the contract, the MEP Sub-Contractor is to take-up the responsibility for delivery of the unit in a "fit for purpose condition".

Regards,
Liaqat Hayat

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Liaqat Hayat

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I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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