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Construction Law/Variatons in LS Contracts

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Question
Dear Sir,

"In a local form of a Lump sum Contract in uae, a Clause in GCC states: "Accomplished works shall not be re-measured since computation is made on the basis of the lump sum amount as mentioned in the principal contract document. It will not be tied to any increase or decrease in the executed quantities or quantities mentioned in the quantity schedules whether in item description or quantity part so that the prices in quantity lists express the total executed works required to be executed under this contract. Thus, no claims for increase or decrease in quantity of works shall be accepted. The total lump sum price presented by the Contractor shall be inclusive of all items and
quantities necessary for the final design of the works whether items and quantities for same are mentioned in the bills of quantities or not, or mentioned in the in the preamble of the bills of quantities or not."

Despite of this there is another clause in GCC for allowing provision of change orders and vesting the Engineer with absolute right and authority to furnish the Contractor from time to time during the execution of the contract with any other drawings or additional instructions necessary for the Contractor to discharge his commitments accurately and properly.

My questions are:
1. How a variation claim is dealt in a lump sum Contract where the provisions expressly state that the total lump sum price presented by the Contractor shall be inclusive of all items and quantities necessary for the final design of the works whether items and quantities for same are mentioned in the bills of quantities or not.

2. I have quoted two provisions above. To me, both seem to be exactly opposite to each other. The first one states no variation is allowed whereas the second states that change orders are permissible.

Please advise.

Answer
Dear Mohamed,

1. No changes are allowed to the Accepted Contract Amount, provided that there are no changes to the Employer's Requirements. Often, the scope of the works is defined as that included on the drawings and in the specifications.  The BoQ is not relevant in defining the quantity of the works or the payment, except in clearly defined cases.  Thus there can be no claims for extra expense or time which are based on variations to, or omissions in, the quantities given in the BoQ.  However, if the Engineer issues a variation, then the Contractor is allowed to submit a request for reimbursement of extra expenses or an extension to the time for completion.  He must justify his request to the satisfaction of the Employer.    

2. The need for variation clauses is explained on this web site http://www.longworthconsulting.co.uk/news%20construction%20contract%206.htm

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Peter M. Elliott

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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.

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