Construction Law/Claims

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QUESTION: Hi Mr. Peralta,

I am working at a contractor side, and we are dealing with a lot of issues on one of our project. One of which is that related to the thickness of pipe. During our tender, we quote the same rate on the XXS and above XXS category. However, it turns out that while the work is on going the above XXS Category (pipe thickness) is unlimited and for which we suffer a lot because, the above XXS Category rate should be different from the XXS category. The information regarding XXS provided in the Schedule of Rate and Price during the Tender stage failed to provide sufficient information for our proper evaluation  which lead us to have a wrong impression and  misguided judgement  on our effort required to carried out the works.  We talk to the main contractor regarding this issue, but they insisted that that was the rate we quote in our tender. But as far, as we are concern, they did not identify nor clarify to us what "above XXS category", pipe thickness are.

Another issue, is that our schedule included a turn-around, for which we put more people in order to speed the work progress and finish the schedule on time. But again, this adding of manpower become an issue, saying that the main contractor shall not pay any additional cost for this.

Can you tell me what can we do in order to claim our cost.

thanks.

kind regards,
Karina

ANSWER: Hi Karina,


You forgot to mention the form of contract you are using, thus my reply will be limited and general in nature.

During tender stage, information needed by the tenderers to reasonably and accurately provide his tender price should be presented and available. In case of some ambiguity or discrepancy in the tender docs., the matter shall be brought up to make any corrections and clarifications.

In FIDIC 1999, there is a clause wherein the Contractor is deemed to have satisfied himself to the correctness and sufficiency of the Accepted Contract Amount.

I am afraid that this is an error from your end and I cannot give further details due to lack of information about the conditions of your contract.

For your second question, the Contractor has the obligation to execute and complete the Works within the agreed time.   Should there any event and/or circumstances that may or will contribute to the delay of completion of the Works which the Contractor is not responsible of, the Contractor can claim for an extension of time.

In your case, you did not mention the reason for adding up more manpower. Is there any instruction by the Engineer or was it your own decision?

If the completion of the Works is delayed due to the Contractorís fault, the Contractor may add more manpower to prevent him from LD and to finish the Works on agreed time and the Contractor canít claim.

However, if the completion of the Works is delayed due to events and/or circumstances caused by other Parties other than the Contractor himself, then the Contractor is entitled to Extension of Time, but if the Engineer failed to give any Extension of Time to the Contractor, the Contractor has no choice but to accelerate the works by adding more manpower and the Contractor can claim.

Hope the above helps. Good Luck!

Regards,

Jonathan L. Peralta


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

QUESTION: Hi Mr Peralta,

Thank you for your immediate response. Sorry to forgot to mention what contract we are using, for this project the contract is patterned on FIDIC '99. The Contract has Sufficiency of Tender Clause.

During the tender, the ITB documents send to us does not stated that Schedule XXS have above Schedule XXS. Please refer below:

S8:         
Nominal Bore
(mm)    (inch)   Quantity   Unit
75   2-1/2"   RATE ONLY   nr
100    4"   RATE ONLY   nr
150   6"   RATE ONLY   nr
200   8"   RATE ONLY   nr
250   10"   RATE ONLY   nr
300   12"   2          nr
350   14"   RATE ONLY   nr
400   16"   RATE ONLY   nr
450   18"    RATE ONLY   nr
500   20"   RATE ONLY   nr
        
Schedule XXS         
Nominal Bore
(mm)    (inch)   Quantity   Unit
75   2-1/2"   RATE ONLY   nr
100    4"   RATE ONLY   nr
150   6"   117          nr
200   8"   RATE EONLY   nr
250   10"   RATE ONLY   nr
300   12"   3          nr
350   14"   RATE ONLY   nr
400   16"   RATE ONLY    nr
450   18"    RATE ONLY   nr
500   20"   RATE ONLY   nr
I

In the Contract S8 become Schedule XXS and Schedule XXS turns out to be Above Schedule XXS. We assume that because there is no above XXS stated in the ITB, we assume the same rate however, when the contract was already signed and we found out that it differs from what we tender for.

further, in another issue, we add additional manpower because we need to accelerate the works and that the Main Contractor is always changing the drawings. also in this contract, we they don't apply LD.

Thank you.

Kind regards,
Karina

Answer
Hi Karina,

You may try to submit a claim and say that you based your offer on Schedule XXS only and no above XXS rates was included in your bid since such information is not available and mentioned in the Bid Documents.

It is not quite clear why you need to accelerate. You have only mentioned that there's a frequent change in the drawings by the Main Contractor. You should try to check you contract regarding provisions of Extension of Time and timely submission of notice regarding contractor's claim.

If you have not notify the Main Contractor regarding the effects of frequent change in drawings, I suggest you submit a notice to the Main Contractor regarding the effects of frequent change in drawings. Depending on the conditions of contract and your programme and the effect of such action by the Main Contractor you may be entitled to an Extension of Time and/or additional cost.

Hope the above helps and Good Luck!

Regards,

Jonathan L. Peralta  

Construction Law

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Jonathan L. Peralta

Expertise

Questions relating to construction claims, Extension of Time, Variations, Interim Payment and delay analysis under FIDIC Form of Contracts.

Experience

Experience in the following sectors: buildings, residential, infrastructure, civil and marine works. Have worked for different international contractors in Myanmar, Vietnam and the Philippines.

Organizations
AACEI, U.S.A., Dispute Resolution Board Foundation,U.S.A., ASCE, U.S.A., PICE,Philippines

Education/Credentials
Bachelor of Science in Civil Engineering, Registered Civil Engineer in the Philippines

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