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Construction Law/recover re-compensable costs

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Question
Dear sir,

In the local conditions of the contract, as and when the project amount is less or greater by 15%, a remedy measures is set by stating "...the amount of the Contract Price shall be adjusted by such sum as may be agreed between the Contractor and the Engineer or, failing agreement, fixed by the Engineer having regard to all material and relevant factors, including the Contractor's Site and general overhead costs of the Contract...". Would you pls advise me what costs shall I consider to claim, and how to quantify the same.
please also advise me to see literatures relating to recovering of such costs; I have experience only in rate revision in case of quantity decrease or increase, like in FIDIC contracts.
best regards

Answer
Dear Tabor,

In  is not clear whether the Project amount has increased or it has decreased.Generally, in case of increased qty than the specified limit,the overhead cost is considered less as the contractor completed the same work within the same time frame. However if time has also taken more to complete the increased work, the contractor may claim additional overhead. If the contractor has arranged some additional resources to complete the additional qty(additional project cost,ie, greater than 15%) ,he may entitle to claim additional cost. Thus it depends upon the circumstances,resources deployed and the time factor to claim the additional amount which may be;
Site and home office over head cost,Financing cost,enhanced equipment cost and man power, material cost, etc.

However,the contractor has to substantiate that for this increased cost ,he has to incur more cost, otherwise the Engineer may reject the claimed amount and don't adjust the Contract Price.

Regards
Engr Arshad Mahmood

Construction Law

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Arshad Mahmood

Expertise

I may answer to the questions relating to FIDIC 4th as well as FIDIC 2010 MDB Harmonized version,price adjustment ,Variations,Eot and Cost claims,EPC Contract,Bidding Document,consultancy Contracts,certification,Standard Forms, Dispute resolution; and others pertaining to Contract implementation.

Experience

Contract management and Contract Administration, using FIDIC Conditions of 4th Addition as well as Fidic 1999 Red, Yellow and Silver Books including MDB Harmonized Edition 2010. Particularly in the area of Procurement of Contracts, Certification,Price Adjustment, variations,disputes management, EoT and Cost Claims; and other contractual issues arises from time to time during currecy of the Contracts.

Organizations
Member -Pakistan Engineering Council Member -Pakistan Engineering Congress Member -FIDIC Organisation

Publications
Joint Venture and Consortium Agreements for Pakistan Engineering Council,Pakistan

Education/Credentials
BSc Civil Engineering; Basic Management course; Hydro power Projects; and various other on Job Trainings

Awards and Honors
Commendation Certificate for the excellent management qualities and dedication at Ghazi Barotha Hydropower Project; and Certificate of Excellent work performed during Survey Camp.

Past/Present Clients
Water and Power Development Authority (WAPDA),Associate Consulting Engineer(ACE) and National Engineering services Pakistan(Pvt.) Limited (NESPAK)

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