Construction Law/variations


Dear    ,
I have an inquiry regarding a variation
The contractor at the time of tendering gave a discount to the client (1.35%) of the contract price.
And accordingly in previous interim payment we were deducting this percentage periodically from each payment price.

Now the contractor have submitted another interim payment ,this time the whole payment is for variation works ,but he did not deduct the above percentage as mentioned above.

The variations supposed to be covered by the provisional sum stated in the contract .
We are following fidic 1987 reprinted 1992 fourth edition.
Question: shall this discount will be applied for these variations also? Or not.


Dear M.dzaie,

Thank you for your question,

That matter might be indeed debatable, depending on the moment when such VO occurs, eventual conditions/ reservations under which the discount has been granted at the time of tendering, etc.

But indeed, as you indicate, what you actually do, you discount all unit rates and then use them to pay the executed works.

Hence, whatever payment you make using the unit rates, it will automatically bear the discount. Again, providing there is nothing else that may say otherwise.

As well, for items under Provisional Sums, if discount has included them, then whatever comes as a Variation shall be paid at discounted rates.

Hence, unless any above mentioned limitation, VOs are to be paid at discounted rates.

Hope that answer your question.

Construction Law

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Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


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