Construction Law/Addtional Work after TOC
We have executed a highway project assisted with Asian Development Bank under FIDIC Multilateral Development Bank Harmonized Edition June 2010 in Pakistan.
Work was completed year ago and Engineer issued taking over certificate under clause 10.10 on 22 May 2013, with a defect liability period of one year i.e. 21 May 2014.
During defect liability period all the outstanding works mentioned TOC and defects arise after TOC was remedying at site. We have applied for issuance of performance certificate on under Clause 11.9 on 21st May 2014, but engineer couldn't issue performance certificate.
Meanwhile Deck Slab of an old bridge (on our reach) was partial collapse after ending of DLP. Now on 1st July 2014 (after 40 days of ending DLP) Engineer issued an instruction to do an additional works (Repair of old bridge) which was not in our original scope of work and also not mention in outstanding works of TOC.
The Engineer has said that we couldn't issue Performance Certificate until you executed this extra / additional work, because this bridge is located on your section & your DLP were extended upto when you complete the additional works.
My question is that is Engineer have any authority to instruct us to do the work which was not mention in TOC or Scope of Work.
Kindly advise us that now what can we do, either there is any binding on us to follow the Engineer instruction.
Thanks & Regards.
Sorry for my late reply, which I was having a vacation in a remote area where there was no internet connection.
First of all, referring to Sub-Clause 11.1, “Completion of Outstanding Work and Remedying Defects” stipulates that; “In order that the Works and Contractor’s Documents, and each Section, shall be in the condition required by the Contract (fair wear and tear excepted) by the expiry date of the relevant Defects Notification Period or as soon as practicable thereafter, the Contractor shall:
(a) complete any work which is outstanding on the date stated in a Taking-Over Certificate, within such reasonable time as is instructed by the Engineer, and
(b) execute all work required to remedy defects or damage, as may be notified by (or on behalf of) the Employer on or before the expiry date of the Defects Notification Period for the Works or Section (as the case may be).
If a defect appears or damage occurs, the Contractor shall be notified accordingly, by (or on behalf of) the Employer.” In accordance with above, you have fulfilled your obligations during Defects Liability Period.
The Sub-Clause 11.2, “Cost of Remedying Defects” which stipulates as “All work referred to in sub-paragraph (b) of Sub-Clause 11.1 [Completion of Outstanding Work and Remedying Defects] shall be executed at the risk and cost of the Contractor, if and to the extent that the work is attributable to:
(a) any design for which the Contractor is responsible,
(b) Plant, Materials or workmanship not being in accordance with the Contract, or
(c) failure by the Contractor to comply with any other obligation.
If and to the extent that such work is attributable to any other cause, the Contractor shall be notified promptly by (or on behalf of) the Employer, and Sub-Clause 13.3 [Variation Procedure ] shall apply.” The above Clause clarifies which defects shall be executed at the risk and cost of the Contractor and the rest shall be evaluated in accordance with Sub-Clause 13.3, as Variation.
However, to do this and issue an instruction to the Contractor, it needs to be in the “ Defects Liability Period”. Even if the Period ends, in accordance with Sub-Clause 11.3, “Extension of Defects Notification Period” which stipulates that “The Employer shall be entitled subject to Sub-Clause 2.5 [Employer’s Claims] to an extension of the Defects Notification Period for the Works or a Section if and to the extent that the Works, Section or a major item of Plant (as the case may be, and after taking over) cannot be used for the purposes for which they are intended by reason of a defect or by reason of damage attributable to the Contractor. However, a Defects Notification Period shall not be extended by more than two years. If delivery and/or erection of Plant and/or Materials was suspended under Sub-Clause 8.8 [Suspension of Work ] or Sub-Clause 16.1 [ Contractor’s Entitlement to Suspend Work ], the Contractor’s obligations under this Clause shall not apply to any defects or damage occurring more than two years after the Defects Notification Period for the Plant and/or Materials would otherwise have expired. The defects notification period is an additional period of time during which the duty to perform the Contract continues to exist. This can clearly be seen in Sub-Clauses 11.1 and 11.2. According to these Sub-Clauses the Contractor is still under the obligation to carry out any work which becomes instructed by the Employer, to the extent that a defect occurs which is not attributable to the Contractor.
Thus in principle the contractor remains liable to perform the Works and he is not released from care for the Works until the employer declares acceptance of the Works. Only the issue of the Performance Certificate shall be deemed to constitute acceptance of the works. By consequence and with regard to Sub-Clause 11.10 any legal defects liability will only start after the issue of the Performance Certificate. The Contractor shall make good all manner of defects irrespective of the question whether the relevant defect is attributable to him or not, must be understood in the sense that all of the Works are still under progress until the Performance Certificate is issued.
If we accept that the Defects Liability Period has been extended and the Engineer has issued an instruction for a Variation. İn this case : Sub-Clause 13.1 “Right to Vary “ stipulates that “Variations may be initiated by the Engineer at any time prior to issuing the Taking-Over Certificate for the Works, either by an instruction or by a request for the Contractor to submit a proposal. The Contractor shall execute and be bound by each Variation, unless the Contractor promptly gives notice to the Engineer stating (with supporting particulars) that
(i) the Contractor cannot readily obtain the Goods required for the Variation, or
(ii) such Variation triggers a substantial change in the sequence or progress of the Works.
Upon receiving this notice, the Engineer shall cancel, confirm or vary the instruction.
In accordance with above, the Variations may be initiated by the Engineer prior to issuing the Taking Over Certificate, therefore you have a case to reject such Variation Order. Also Sub-Clause 13.3, “Variation Procedure”, stipulates that “If the Engineer requests a proposal, prior to instructing a Variation, the Contractor shall respond in writing as soon as practicable, either by giving reasons why he cannot comply…”
Therefore, if the Contractor intends to not to perform such additional work, then he has a case and solid ground.