Construction Law/Overhead & Profit

Advertisement


Question
Hi Mike,

Thank you for ansewring my previous question.
I have another question ragrding the same FID 1999 contract.
The contractor is asking extra charges for preparing shop drawings for a variation work.

As per the Contract:

" The contractors fee is:
1) eight 8% for work to be executed by the contractor itself
2) six 6% for work to be executed by a subcontractor

For new works which do not form part of the BOQ the Contractors fee shall be applicable

For Provisional sums, allow six percent for overhead and profit, general and special attendance and all asociated builders work associated with this work."

Is it contractually right to pay extra money for the preparation of any shop drawings as the contractor is already getting 6% or 8% (as the case may be)fee against additional works.

thanks & regards,
Kishore

Answer
Hi Kishore
If there are workshop drawings required to process and procure a variation then they should be paid for.
They are normally prepared by the subcontractor and all the main contractor has to do is get approval.
Therefore the subcontractor's cost is to be paid but nothing for the contractor.
Check the value of the 6% of the variation to see how many designer hours it covers.
before payment.

Best regards
Mike Testro

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Mike Testro

Expertise

Anything related to extensions of time and delay analysis.

Experience

45 years in the Construction Industry 15 Years as a consultant delay analyst - I now hold myself to be expert in this field.

Organizations
Society of Construction Law Adjudication Society ex Planning Engineers Organisation

Publications
6 articles on the relevance of the India Contract Act 1872 and its relevance to modern construction in India. Waiting Publication

Education/Credentials
Associate Member of the Institue of Building

Past/Present Clients
Currently employed in India by Punj Lloyd as expert delay analyst. Engaged in ongoing arbitrations and EoT claims. Prior an Indepenent consultant in delay analysis.

©2016 About.com. All rights reserved.