Construction Law/Omission of work

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Question
Dear Sir,

I am working for a Construction Company in UAE. Our Contract is based on FIDIC  1999 ( red book) and Contract is for construction of  10 story office building but  recently  Engineer  ( as instructed by the Employer )  issue variation  order to  omit 4 floors from the building. It is about 30% of Contract Sum.  Could you kindly mention :
1.   what are the possible claim available for the Contractor and under what Clauses?
2.   Can contractor ask for loss of profit due to huge omission?
Your kind respond is highly appreciated.
Thank  you & best Regards.

Answer
Dear Ruwan,

It is difficult.  You need to prove actual loss.  You could look at the paper by Zack on loss of overheads and profit, which is more focused on extensions of time.  http://cmaanet.org/files/home_office_overhead.pdf he uses different formulae to calculate the amount.  It is interesting.  

1. You claim under clause 20.1
2. You can claim loss of profit, but it is difficult and you have to show auditted accounts for several years.  

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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.

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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