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Construction Law/New rate under FIDIC 2002 red book


Dear Peter M.Elliott
I have a question for you.In one of the FIDIC red book 2002 agreement , The one BOQ item of construction of cement concrete drains is included in BOQ wrongly the quantities are very much less than required to execute at site as per drawings (unit of quantity denoted as meter in place of Kms in the BOQ).The contractor has quoted the rate at very much higher side and the BOQ item is not satisfying the conditions of Sub clause 12.3 of FIDIC red book 2002 for new rate of the BOQ item.The drawings and specifications are on priority of Schedule of items(BOQ) in the contract.
1. Please clarify that;If the contractor has executed the work as per drawings which is very much more than BOQ. Then contractor is asking for the payment as per quoted rates.
a.   Whether contractor has the right to ask the payment on the basis of of quoted rates or not?
b.   Engineer has denied to pay the amount and ask to the contractor for new rates of the Item. Action of Engineer is correct or not as per the provisions of FIDIC documents as the item is not satisfying the provisions of sub clause 12.3 of contract agreement.
The provisions are;
"Any item of work included in the Bill of Quantities for which no rate or price was specified shall be considered as included in other rates and prices in the Bill of Quantities and will not be paid for separately.

However, a new rate or price shall be appropriate for an item of work if:
(a)    (i)    the measured quantity of the item is changed by more than 25% from the quantity of this item in the Bill of Quantities or other Schedule,
      (ii)    this change in quantity multiplied by such specified 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
Thanks in advance for your great services
with best regards


The ruling case on valuation of variations is Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2000]CA BLR247 and [1999]TCC BLR123.  However, the ruling was based on ICE conditions of contract, not FIDIC. A couple of web sites on the subject:-

I must admit to being surprised that a 1000 fold increase in quantities does not meet the requirements of clause 12.3. Assuming that clause 12.3 does not apply, then:-

a. The Contractor has the right to ask for payment on the basis of the quoted rates.  
b. Action of the engineer is incorrect, if the variation does not comply with all the conditions a.i - iv of clause 12.3.  Costing of variations must be based on existing similar rates.  

I would ask the Engineer to provide the contractual basis for his request.  The Employer might like to ask his professional advisers for the reason for the incorrect quantities in the BoQ.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
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Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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