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Construction Law/Evalution under clause 12.3

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Question
Dear Florin Neculescu
Hello
There are questions regarding evaluation clause 12.3 of FIDIC 1999(red book);
1. How the contractor can claim for new rates?
(i)    the measured quantity of the items are changed by more than 25% from the quantity of these items in the Bill of Quantities.(in our case Quantities three items measured less than BOQ of individual items)
      (ii)The change in quantity of individual item multiplied by BOQ rate for this item exceeds 0.25% of the Accepted Contract Amount,
      (iii)  this change in quantity directly changes the Cost per unit quantity of this item by more than 1%, and
      (iv)   this item is not specified in the Contract as a “fixed rate item”;


In the contract;
1.Contractor had completed only 50% work up to expiry of contract period .
2.The same contract was completed within a period of approved extension of time under clause 8.4.(an EOT was awarded under clause 8.4 for the delay in handing over the town portion stretch which was 5% length of total project length.)
3.Contractor has claimed for the new rates of the BOQ items;which are measured less than BOQ.
Now, Engineer making a counter claim under clause 2.5 for delay in work; on course of that an EOT was awarded only to complete the stretch(delayed in handing over by the Employer) only.In simple words;Engineer forced to withdraw the claim otherwise contractor has to pa delay damages.
Please advise,Engineer's counter claim stands or not at this stage?
Thanks in advance for valuable guidelines from your expertise.
With due regards
Sanjay

Answer
Dear Sanjay,


Thank you for coming back.

I understand you actually have two questions:

- one related to situation described under Sub-Clause 12.3, when unit rates can be changed;

- one related to an Employer's claim

For new unit rates, the Contract only gives you the framework, the conditions that need to be fulfilled for changing them, but how exactly they will vary, will have to be determined by one party or the other.

For example, if you have more excavations, you probably make a better usage of an excavator, and hence you have better conditions, which result I a decrease of your unit rate.

Or the other way around, you incur a cost increase.

Using the breakdown of your unit rates, materials, equipment, labour, transport, overheads and profit, you will modify the input that varies with the quantities and that will lead you to the new unit rate(s).

But again, that is on the Parties to make such calculation, it is not included in the General Conditions of Contract.

As for Employer's claim, please note that EoT is granted for the whole of the Works and not only for a certain section of the Works.

Hence, if you finalized ALL the Works within granted EoT, you should be safe.

If Employer has issued a claim for delay damages for a certain portion of works, not completed within original Time for Completion, unless such right specifically indicated in the Contract, that Claim is frivoulus.

Hope I correctly understood your question, but if not, please do come back to me.

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Florin NICULESCU

Expertise

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.

Experience

Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Organizations
Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers www.aric.org Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List www.drb.org and of DRBF Chapter for Eastern Europe http://dabdrb.googlepages.com Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List http://www.sidir.pl/sidir/index.php?action=czlonkowie&a2=r Member of “AllExperts.com” volunteers pool http://www.allexperts.com/user.cgi?m=4&expID=85358&catID=914 Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States www.constructiondisputes-cdrs.com

Education/Credentials
- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme (http://www1.fidic.org/resources/adjudicators/pupilage.html) - FIDIC Accredited Adjudicator

Past/Present Clients
- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at www.abinitio.ro

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