Construction Law/variation


QUESTION: Dear Mr. Elliott,
Is is a value engineering,under fidic Yellow book,1999, the case when the contractor intends to change a material, after the design has been approved by the engineer, or the contractor is entitled to propose changes to its design without a reduction of the accepted contract sum until the TOC is issued, provided that the change proposal meets the requirements of the employer?

Best regards

ANSWER: Dear Radoslav,

I am not sure that I understand your question, but here goes.

The relevant clauses are 13.2 and 13.3.  
The Contractor may, at any time, submit to the Engineer a written proposal which (in the Contractor's opinion) will, if adopted,
(i) accelerate completion,
(ii) reduce the cost to the Employer of executing, maintaining or operating the Works,
(iii) improve the efficiency or value to the Employer of the completed Works, or
(iv) otherwise be of benefit to the Employer.

A change in material which does not affect the Accepted Contract Sum is unlikely to qualify as value engineering, merely as contractor's convenience.

---------- FOLLOW-UP ----------

QUESTION: Thank you Mr. Elliott,
In my case, for instance,the contractor's design specifies a 100 mm thermal insulation,but now the contractor intends to install a 50 mm insulation. Both  insulation packages meet the employer's and code requirements, but in the second case the contractor will incur less costs.I think a value engineering procedure must be applied according sub-clause 13.2 (YB.
Best regards

Dear Radoslav,

So how is the reduced insulation beneficial to the Employer?  It certainly will not reduce the cost to the Employer of executing, maintaining or operating the Works, due to increased heating or cooling costs.  I see no benefit and would reject the proposal.  If pushed I would insist on a reduction in the rate for insulation.  

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Peter M. Elliott


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 before submitting a question.


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')

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

B Sc(Hons) in Civil Engineering

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