Construction Law/Value Engineering


QUESTION: Dear Mr. Elliott,

We are working as a Contractor in a road project and the Contract is under FIDIC Red Book 1999. We want to propose the changes at construction of bridges under FIDIC 13.2 Value Engineering. I would like your oppinion on following:

1) By the original design piles of diameter 1200 mm and 1500 mm are to be constructed. We would like to change the design and by the new design all the piles are diameter 1200 mm. Technical specifications that are part of the Contract say that trial loading of piles has to be done and that the Contractor should be paid on the lump sum basis for this work. BoQ does not contain this item and we want to claim the costs for testing of the piles. How does this reflects to our proposal for the changes? Clearly if we construct by the original design we have to test two types of piles and by the new design only one. Are we entitled to the savings for the items that are omitted from BoQ and should we present this in our proposal?

2) We also want to propose the change of span structure of the bridges. The problem is following: we have to apply the unit price from the item from BoQ for the same item that we have in the new design. This unit price is 3 times overrated and if we apply it we actually do not have any savings. In order to make financial benefit we would like to decrease this unit price 3 times but how to justify it to the Engineer?

Thanks in advance

ANSWER: Dear Tina,

1. You calculate the total cost the original work and the total cost of your proposal.  Then you apply the calculation for savings.  I suggest that first you get the rates agreed for the missing items from the BoQ, such as the pile testing.  Then you can calculate the difference in price with agreement.   

2. If you change the span of the bridge, then there should be a saving in the supports, even if there is no saving in bridge beams.  If there is no apparent saving, then do not propose a change.  With a change comes a potential liability for the design and all the problems arising from design liability.  You should do your best to avoid any design liability.

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

QUESTION: Thank You very much for your answer.

For my second question I would like to make it clearer.

Superstructure of the bridges is designed (in original design) as following:

12 bridges with precasted beams which are installed to the top of the piers with cranes (in BoQ we have unit price for m3 of concrete of precast beam and unit price for installation of beam calculated per pcs)

3 bridges are constructed on scaffolding as full concrete deck that is casted in situ (in BoQ we have unit price for m3 of concrete of the deck and unit price for installation of fixed scaffolding per m3 of scaffolding)

We as the Contractor want to change the superstructure of 12 bridges and to construct it using fixed scaffolding as we are doing for the 3 of them (we are not making the bridge shorter, but only change the cross section and methodology of construction). With this change we make lighter superstructure and we can reduce the dimension of piers, foundations and piles in order to make savings. For concrete we use the unit price of the item from BoQ and for installation of scaffolding we should use the unit price of the same item we already have in BoQ for 3 of the bridges. The problem is that now we have big quantity of scaffolding (under 12 bridges additionaly) and the unit price for that item is 28 eur/m3 (which is excelent price, three times higher than the normal price). If we calculate with this unit price we can not prove any savings but we exceed the Contract amount. We want to calculate with unit price of 8 eur/m3 (which is still good price for us) in order to prove savings for the Employer. What should be our justification to the Engineer for using the decreased unit price when we already have the unit price of 28 eur/m3 in BoQ for that item? The problem is that the unit price of scaffolding in our BoQ is abnormally high and we want to decrease it now in the changed design. Consider that the only way to make any profit on this project is if we make this change. Any advise would be very helpful.

Dear Tina,

You could recalculate the unit rates using clause 12.3 if applicable.  I would be careful of proposing any reduction in rates, because I assume that you were the lowest bid, so you must have made an expensive mistake somewhere.  Find that mistake before making any proposals.  

I would be careful as cast in situ beams are likely to be heavier than precast beams, and thus there may not be a reduction in weight. Also they may affect the critical path as precast beams can be cast off site and just lifted, or moved, into position when the supports are ready. I would think deeply before proposing such a change.

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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