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Construction Law/Variations FIDIC 1999

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Question
Dear Sir:

In view of Clauses 12 & 13 in FIDIC 1999, I have the following clarifications please:

1- Variations are  issued either by an instruction or by a request for the Contractor to submit a proposal. what is the difference between the two  if it is also required , in case of an instruction, to agree the price of the varied work between the two parties? does Instruction mean that the Contractor proceed with the work before finalizing the financial agreement?

2- If the Engineer, following an order from the Employer, instructed the Contractor to make a variation which it has an express item in the BOQ (e.g. there is a priced item of water supply network and the Emp. wanted to extend a new branch which is out of the Contractor's scope)..in this case:
A- can the Contractor refuse to do or he must comply?
B- is it an obligation that he makes it in the same BOQ rate or he can ask for new price for the increase in the material's price ?
C- what is the situation if the reference in the BOQ is a similar item (not an express item)?

3- Most important to know: when exactly the Contractor should start the varied work? is it a must that he should wait until he gets the approval of the price or the instruction? OR the negotiations and reaching a final agreement should stop his early start of the varied work?

Thank you Sir

Answer
Dear Khaled,


Thank you for your questions.

1. Simple: in the first case, the Engineer issues the instructions, without asking about the time and cost implication. In the second, before issuing the instruction, the Engineer requests the Contractor to provide a time/cost estimation and only then decides if he issues or not the instruction.

2. A. No, Contractor must comply with all instructions of the Engineer, as per Sub-Clause 3.3. Except cases falling under second paragraph of Sub-Clause 13.1

2. B. If the Variation consists in an increase in quantity of a certain existing item, the respective existing rate shall apply. Providing the change in quantity does not lead to meeting the cumulative conditions under second paragraph a), of Sub-Clause 12.3 - in that case, the rate shall be discussed.

If there is a new item, which falls under the cumulative conditions under second paragraph b), of Sub-Clause 12.3, a new rate shall be established as per third paragraph of Sub-Clause 12.3.

2. C. I am not sure I understand what you mean, but I assume the answer is in the paragraph above.

3. Execution of varied works should start as per Engineer instruction and is not conditioned by reaching an agreement for the new rate, or whatever other compensation requested by Contractor, is settled.
Related negotiation will proceed in parallel with execution of varied works.
If such agreement is not reached shortly, Engineer can determine an temporary new rate that shall be used for payment of executed works, until the final new rate is agreed and balance of calculations/ payments is made.

I hope these answers clarify the matter, please read carefully Sub-Clauses 3.3, 12.3 and 13.1.

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Florin NICULESCU

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Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.

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Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Organizations
Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers www.aric.org Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List www.drb.org and of DRBF Chapter for Eastern Europe http://dabdrb.googlepages.com Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List http://www.sidir.pl/sidir/index.php?action=czlonkowie&a2=r Member of “AllExperts.com” volunteers pool http://www.allexperts.com/user.cgi?m=4&expID=85358&catID=914 Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States www.constructiondisputes-cdrs.com

Education/Credentials
- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme (http://www1.fidic.org/resources/adjudicators/pupilage.html) - FIDIC Accredited Adjudicator

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- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at www.abinitio.ro

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