Construction Law/OH & P for Contract Variation
We are currently working in a road project as a Main Contractor and FIDIC 1999 refers. There is a Variation for LED Street lighting which we are going to do with lighting specialized sub Contractor. This sub-Contractor is not a Nominated Sub Contractor and this work is not to be executed under Provisional Sum where 15 % OH & P is specified in the Contract. Now the Engineer recommended 15 % while we have requested 25 % as all other Variations are paid. Please advise how this to be dealt with.
Thank you in advance for your response.
I understand that this item also a Variation and you are getting 25 % OH&P on cost of Variations which this item should be applicable as well. The cost mechanism for Variation is as following;
Each Variation shall be evaluated in accordance with clause 12 (measurement) and in accordance with Sub-clause 12.3, " A new rate or price shall be appropriate for an item of Work if b(I) - the Work is instructed under clause 13. Each new rate or price shall be derived from relevant rates or prices in the Contract with reasonable adjustments to take account. If no rates or prices are relevant for the derivation of a new rate or price, it shall be derived from the reasonable cost of executing the Work together with reasonable profit."
If you can not agree with the Engineer, he may fix a provisional rate till reaching agreement through a way described in the Contract.