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Construction Law/Variation Orders in an EPC Contract


We are using the EPC 1st edition (FIDIC Silver Book-1999) Contract for a project. the Employer has instructed the following VO's to the Contractor:
1.Add a new small builing
2. Change the water supply pipe's material withign the project's buildings from PP-RCT into PEX

Now we are being requested to reach an agreement on the additional cost with the Contractor as a result of the above VO's. However, we don't have a detailed design from which we can estimate the cost variance (all we have is a price per building).
For example; we don't know the length of the water supply pipes within the project, nor, we have a rate for the PP-RCT material within the Contract. As such, we cannot reach an accurate estimate of the VO value or the varied quantities.
The question is: given that the FIDIC EPC Contract is a Lump-Sum Contract, can we deal with the VO's as remeasured works? Are we obliged to have the VO as LS or Remeasuerd?

Dear Mitri,

Thank you for your question.

Being a Silver Book Contract, I take the Works were designed by the Contractor.

Since the Employer wants some additional works, under that circumstances, it would be for the Contractor to indicate the sought amount.

Such amount needs to be demonstrated in any way the Contractor considers appropriate, be it upon designing the additional works, or any other acceptable estimation method.

There is no specific prescription/ obligation on how to do it, or not to do it.

Simply identify a way to calculate/ estimate the costs and present it to the Employer.

Hope that helps.

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