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Construction Law/Variation for Contractor designed Work under FIDIC 1999 Red

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QUESTION: Dear Sir/ Madam
An MEP contract was awarded as a separate package for a 30 storey apartment building. it included installation of an AC system. after tendering the Client found it was costly. Contractor was selected and asked to give proposals. proposal was accepted.

system included GI pipes for chilled water circulation.while progressing, the Engineer issued a variation changing the GI ti wrought iron to further reduce cost.

few months later from completion and handing over Engineer found that AC system was not working well. it was found that salty ground water resulted in clogging in pipes.

Contractor was asked to rectify. can the Contractor submit a rectification claim, on what grounds he can successfully claim it?

ANSWER: Dear thiwanka,
Thank you for your question,
As i understand from your question, it appear that variation to tendered design was executed under a variation order by changing GI pipes with wrought iron pipes. The first point to be seen here is if the contractor submitted a proposal and then it was approved by the Engineer or was it discussed together and variation order was issued after joint consent? The second point to be seen is if the contractor who was awarded the MEP contract for this 30 story building, made any reservation or disagreement with the proposed change? Such works are given to specialist contractors and so they are primarily responsible if they have not disagreed with a unsuitable design change.
May i have clarification of above points before i can answer your question.
Regards,
Liaqat Hayat

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

QUESTION: after the Contractor was selected, he was requested to give alternative proposal. as per my understanding it became a value engineering effort there after as per SC 13.2

while progressing, the Engineer ordered variation by reducing the quality of chilled water pipes from GI to WI

now the contractor has informed the affect of the change on safety of the system. notwithstanding the information the Engineer ordered the variation.

can the Contractor file a rectification claim? or does he have to do it at his cost?

P.S.

i feel contractor is in a tricky situation because

S.C. 4.1 (c) says the Contractor shall be responsible for this part and it shall, when the Works are completed, be fit for such purposes for which the part is intended as are specified in the Contract

S.C. 3.1 (c) any approval, check, certificate, consent, examination, inspection, instruction,notice, proposal, request, test, or similar act by the Engineer (including absence of disapproval) shall not relieve the Contractor from any responsibility he has under the Contract, including responsibility for errors, omissions, discrepancies and non-compliances

so although Engineer instructed variation, Contractor is still liable? is it? this may not be a actual case, it is a question under Claims Management module of final year civil engineering course

Answer
Dear thiwanka,
Thank you for your further clarification and have following to add to my earlier comments.
Any absence of disapproval or approval does not relieve the contractor if found defective at a later stage. Please note that the Engineer has to take prior consent of the Employer if additional expenses are involved and this provision is normally made in particular conditions. I am not sure about this provision in your scenario. Have you been able to check this scenario although it is a hypothetical situation. It also appears to be a somewhat a contradictory as contractor has a general duty to confirm to the legal instruction of the Engineer but contractors normally ensure that this has been complied with as they would not get money without it. If i had been a contractor in this scenario, i would give notice of claim under clause 20.1 immediately to prevent any possibility of a potential claim being time bared. The response to this claim from the Employer side shall clarify the answers to your three questions as proper solution can only be found if the views of the other side are also known.
I feel that i can only say these few words at this stage to your three questions as data provided is not enough due to being a hypothetical question.
With best 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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