Construction Law/Scope Change
QUESTION: Client changes scope of work before Letter of Acceptance. but contractor is selected. How to deal with this situation in FIDIC 99 Red book.
also If client changes scope of work after issued Letter of Acceptance, Then it will be variation. But How far client can change? (According to FIDIC 87, there is a clause for Variation over 15% of Accepted Contract Amount)
Is there anything related to contingency sum stated in BOQ (like 10%). Should total variation amount less than contingency?
ANSWER: Dear Mayouran
If the changes occurred before the formal agreement, then the price of the contract shall be if revised to reflect the new changes and as agreed by both parties.
for the other case, the changes came after the LOA but before the agreement. Then the agreement shall reflect the changes without reverting to FIDIC. Ie the owner can do all the changes he wants and the contractor can quote as he likes.
---------- FOLLOW-UP ----------
QUESTION: Do FIDIC 99 Allows Any scope change as client want?
Can you show me relevant provision in FIDIC 99?
In Variation 13.1, Additional works will be allowed only if that work is necessary to permanent Works.
Also can you tell me that, Any connection between contingency allocation and variation?
the Client is the owner of the works and he can change as he likes provided the contractors agrees on the changes. in fidic terms such changes are governed by conditions and %.
please rad below from fidic relevant statement:
For each item of work, the appropriate rate or price for the item shall be the rate or
price specified for such item in the Contract or, if there is no such item, specified for
similar work. However, a new rate or price shall be appropriate for an item of work if:
Works to be Measured
Me1asu2rement and Evaluation
MCC AND MCC ENTITIES - LICENSED USE - FIDIC 2007 - UNTIL END-2009
Right to Vary
(a) (i) the measured quantity of the item is changed by more than 10% 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 0.01% 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”;
(b) (i) the work is instructed under Clause 13 [Variations and Adjustments],
(ii) no rate or price is specified in the Contract for this item, and
(iii) no specified rate or price is appropriate because the item of work is
not of similar character, or is not executed under similar conditions, as
any item in the Contract.
Each new rate or price shall be derived from any relevant rates or prices in the
Contract, with reasonable adjustments to take account of the matters described in
sub-paragraph (a) and/or (b), as applicable. If no rates or prices are relevant for the
derivation of a new rate or price, it shall be derived from the reasonable Cost of
executing the work, together with reasonable profit, taking account of any other
regarding the connection between allocation of contingency and variation I don't see a direct relation