Construction Law/EOT-Rate Revision

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Question
Dear Sir/Madam,

EOT

A Variation was instructed for the changing the location and design of a bridge. The Variation caused reduction in the quantities of earthworks and increased quantities related to structural works.

1.   Kindly advise us how we should deal with the extension of time. Should the impact of the reduction in the quantities of earthworks be considered on the Contractor’s Work Programme or only that of the increased quantities to evaluate the Contractor’s entitlement to any extension of time?

Rate Revision

The nature of works resulting from the Variation is similar to that of the Works included in the Contract.  

Would the contract necessitate revision of rates to be made at this stage because of the increase/decrease in the quantities? Or should it be necessary to wait for the final quantities at the completion stage?

Kindly be informed that the Contract is based on FIDIC Multilateral Development Bank Harmonized Edition June 2010.

Being deeply indebted in advance and looking forward to receiving your expert advice, I remain.

Alemu

Answer
Dear Alemu,

1.  As with all EoT matters, I suggest that the parties download and study the SCL Delay and Disruption Protocol www.eotprotocol.com  It is a bit dated now, but it is still the best guide to presenting and agreeing EoT claims. You have to consider both when calculating the EoT, provided that the Contractor had sufficient notice so that he could accommodate the reduced quantities.

2. Normally, the rates would not be revised at this stage, unless clause 12.3 applies.  Perhaps you are thinking of the provision in FIDIC 4 if the Contract Price varied from the Accepted Contract Sum by more than +/- 15%, which does not apply to FIDIC '10.  

Construction Law

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Peter M. Elliott

Expertise

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 www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

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

Education/Credentials
B Sc(Hons) in Civil Engineering

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