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Construction Law/Variation Valuation Under FIDIC Yellow Book


We have signed a lump sum contract (FIDIC Yellow Book) as a Contractor for modernization of a railway line including brides, culverts, etc.  It is foreseen that there will be many variations (additions, revisions, ommisions, etc.) during the execution of the Works.
The first sentence of 13.5 is amended as following:
"Provisional sum is a sum included in the contract and so designated for the implementation of works or the supply of goods, materials, plant or services, or for contingencies, which sum may be used in whole or in part, or not at all, as instructed by the Engineer, and the Contract Price shall be adjusted accordingly. Contingencies mean an allowance to provide for additional work, adjustments in cost, or supplies that are not known at the time of tender and shall be treated as a Provisional Sum."
Apart from the lump sum price, % 10 (of lump sum price) as a contingency and 5 million as a Provisional Sum included in the Schedule.  
My question is about the valuation of any Variations (under 13.3) considering we have submitted a summary breakdown of lump sum price to Engineer, indicating that it is just for the purpose of payment.
For Variations (13.3), what type of valuation procedure should be followed. As a Contract, do we have to rely on breakdown of lump sum price (we consider it is not applicable for valuation since it does not include sufficient details) or is there any contractual way to rely on cost plus reasonable profit system.  

Best Regards

Dear Cemil,

For PS, you usually provide the Engineer with documents and evidence e.g. invoice, DR, etc. etc and then include percentage for OHP as indicated in the contract.

Valuation of Variation shall follow the conditions of contract.

You may need to provide additional documents that the Engineer may require.

For LS items, you usually provide breakdown to show how you come up with the LS amount.
All costs relating to each LS items must be included in your breakdown.


Jonathan Peralta

Construction Law

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Jonathan L. Peralta


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


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

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

Bachelor of Science in Civil Engineering, Registered Civil Engineer in the Philippines

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