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Construction Law/Under Value BOQ Item

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Question
Dear Daniel,

I have an item in the BOQ for Chillers, and the one unit is priced for AED 5,000. We believe that either the item is priced wrongly or it is front loaded.

The project have 5 Chiller and one chiller has to be deleted. knowingly that the price is much higher shall we delete based on market price or BOQ price.

Secondly if I need to add 2 more chiller in addition to the BOQ, then can we apply the same BOQ rate as AED 5,000 / Unit or the contractor will opt for new rate as it is an expensive item.

Please consider the Fidic 87.

Regards

harry

Answer
Dear Harry,

Pursuant to Contract conditions you shall make omission based on BOQ rate and any addition based on BOQ rate or prorate from the BOQ rate. So you shall deduct AED 5,000 for the omission and addition based on this AED 5,000.

In your case there is a difference between market rate and BOQ rate which can be proved. The best practice is to negotiate with contractor for their variation for omission and addition to find a mutual solution. There is a mutual fault in your case as Contractor priced it wrong and you have agreed that unit price also.

But I would like to remind that I have faced cases like that, the contractor priced 2m of pipe wrongly very low and variation came to change it to 2000m and Contractor had to the same pipe with that price. The best way is to have negotiation and try to find a solution with that.

Daniel

Construction Law

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Daniel Kazado

Expertise

I can answer questions related with FIDIC contracts.

Experience

10 years as Contract Manager for FIDIC contracts.

Education/Credentials
Mechanical Engineer
Contract Management - Basic Principles Certificate. Construction Contracts and Dispute Resolution Certificate. Contract Administration - FIDIC Certificate.

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