Construction Law/conflict about employer's instruction for change in caracteristics and improvment of works
QUESTION: Dear sir,
Could you please answer my query?
I’ m the Resident Engineer for a Road project.
The contract is the FIDIC fourth edition 1987 reprinted 1988 and 1992.
In the basic design, the wearing for the road is:
- Asphalt concrete hot mix (thickness 5 cm) for the carriage way (7 meter width). Unit price A
- Single seal coat for shoulders (1.50 meter width for both sides). Unit price B.
Total width of the road is 10 meter.
The contract was established according to the above data.
At the start of the project, the Employer requested an asphalt concrete hot mix for the whole road width ‘’carriage way and shoulders’’ ( 10 meter width).
According to clause 52.1 and in my opinion, I don’t see any prejudice on the works of this task , the fact we use the material asphalt concrete hot mix for which the unit price is the contract price A and the works for carriage way and shoulders are done in one go.
Our proposal was to pay the works with the contract price A , and in case, the whole quantity exceeds by more than 30% the contract quantity the contractor has the right to claim a new price for the quantities over 130%.( according to the particular condition added to clause 52.2 of the FIDIC- This particular condition is ‘’ provided further that no change in the rate or price for any item contained in the contract shall be considered unless such item accounts for an amount more than two (2) percent of the contract price and the actual quantity of work executed under this item exceeds or falls short of the quantity set out in the bills of approximate quantities by more than 30 percent’’.
The contractor refuses the employer instruction and stops asphalt works and claims a new price for shoulders. The contractor arguments his decision, saying the contract price A is too low.
According to this , could you please advice what could be the required decision?.
ANSWER: Dear Mohammed,
I am sorry for the late reply. Your case is not a simple measurement case. It is a variation because the section of the road has been changed. It may affect the cost of the Contractor since the width of hot mix increased to 10 m and may be different equipment and/or wider pavers required or cycle may be changed. Since it s a variation, it requires agreement between the Contractor and the Engineer. The Contractor has got a point however it is not a reason to stop the Works. In case of disagreement on the rate, the Engineer fix the rate and contractor may submit his claim.
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QUESTION: Dear Mr IRVALI
Thank you for the answer.
No, there is not any prejudice as those you raised. The fact the implementation of the road should done under traffic, so the asphalt layer is done in two ways.once on the right hand side and after on the other side and no other equipments were required.
The unique prejudice is the price of asphalt hot mix which is too low. ME, THE enginner i know this but according to clause 52.2 the contractor has not the right to claim new price.
now, the contractor refuses to resume works on the asphalt layer right the acceptance of the new price. is there any possible compromise for the interest of the project?
If there is no disagreement on Variation, then I understand that;
1. There is an increase on item represented with unit rate A.
2. There is an omission on item represented with unit rate B.
3. The total affect of the variation is more than 30%.
Sub-clause 52.2 stipulates that" Provided that if the nature or amount of any varied work relative to the nature or amount of the whole of the Works or to any part thereof, is such that, in the opinion of the Engineer, the rate or price contained in the Contract for any item of the Works is, by reason of such varied work, rendered inappropriate or inapplicable, then, after due consultation by the Engineer with the Employer and the Contractor, a suitable rate or price shall be agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such other rate or price as is, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are agreed or fixed, the Engineer shall determine provisional rates or prices to enable on-account payments to be included in certificates issued in accordance with Clause 60".
You have a varied work relative to the amount of the whole of the Works and it is with the Contractor to justify that the rate is in appropriate or inapplicable, then a suitable rate may be agreed.
The Employer can not get the benefit of low rates quoted by the Contractor by increasing quantity of it more than 30%.
Sub-clause 51.1 stipulates that:"The Engineer shall make any variation of the form, quality or quantity of the Works or any part thereof that may, in his opinion, be necessary and for that purpose, or if for any other reason it shall, in his opinion, be appropriate, he shall have the authority to instruct the Contractor to do and the Contractor shall do any
of the following:
(a) increase or decrease the quantity of any work included in the Contract,
(b) omit any such work .....
No such variation shall in any way vitiate or invalidate the Contract, but the effect, if any, of all such variations shall be valued in accordance with Clause 52.
Provided that where the issue of an instruction to vary the Works is necessitated by some default of or breach of contract by the Contractor or for which he is responsible, any additional cost attributable to such default shall be borne by the Contractor."
There is a small room for the Contractor to omit any such work subject to substantiation.
The procedure to be followed is to allow the Contractor to justify his request for rate difference. Otherwise, the road is lengthy and cause more cost to both parties.