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QUESTION: Dear Florin,

Hope you are doing fine. I am really content with your expert advice/guidance.

My question today again relates to a Design and Build project.

The Employer’s Representative required a change in the starting point of a road project. But he did not consider that he issued a Variation. Within 28 days, the Contractor requested the Employer Representative that it was a Variation and that he should issue a Variation. But the Contractor did not mention about any claim to be made as result. Whilst requesting a Variation to be initiated in line with Clause 14, the Contractor proceeded with the design and works as the Employer’s Representative required.

Raising the number of exchanges made whether the Employer’s Representative has instructed Variation or not, the Contractor submitted, almost a year after, that due to the fact that the Employer’s Representative has thus far failed to comply with his duties under Sub-Clause 14.3, he would thereby give notice in accordance with Sub-Clause 20.1 to claim for an extension of time, associated costs, and any additional costs and profits arising from what can only be termed as a Variation of the Contract.

Later, the Employer’s Representative accepted when the Contractor submitted his claim for Extension of time that a variation was in effect issued and determined adjustment to the Time for Completion.

My questions relate to notice requirement in connection with (1) Adjustment to the Contract Price, and (2”) Extension of time associated costs.

1.   Adjustment to the Contract

Was the Employer’s Representative not automatically required to determine adjustment to the Contract Price too? Would the need to give notice within 28 days arise to comply with Sub-Clause 20.1? If so, can the Contractor be taken as failed in complying with the notice requirement seeing the above?

2.   Extension of time associated costs

What about the Sub-Clause 20.1 notice requirement for the Contractor’s entitlement for extension of time associated costs?  Under the circumstances stated above, would the need to give notice within 28 days arise to comply with Sub-Clause 20.1? If so, can the Contractor be taken as failed in complying with the notice requirement seeing the above?

As usual, I am deeply indebted in advance for your expert advice.

Alemu

ANSWER: Hi again, Alemu,


Thank you for your new question.

Firstly, what kind of Conditions of Contract are you using? You indicate "Employer's Representative", rather than an "Engineer". And then you indicate a Variation, under Clause "14"!!! Ever since '99, all FIDIC books include Variations under Clause 13.

Now, coming to your questions: you say "...  he would thereby give notice". Did the Contractor issued the Notice of Claim, or not?

If yes, did the Contractor include request for Costs and Costs related to EoT?

If yes, then the Employer's Representative (Engineer), have failed to answer all points and Contractor should ask for the costs to be dealt with too.

If not, then the Contractor simply did not ask, hence the Employer's Representative could not give what has not been asked for!

And worse, it is likely the Contractor ruined their chances to get these costs.

Depending on actual circumstances, it is not impossible to still ask for these, but would be better to ask for from the very beginning.

Thus, please have a look at these answers and let me know where you actually are. Based on that, we can further work on your queries, to clarifies all outstanding matters.

Good luck!

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

QUESTION: Dear Florin,

As usual thank you for your prompt reply and expert advice.

My follow question further is:

The Contract as you rightly put it is based on FIDIC 1999 for Design and Build.

What does adjustment to the Contract Price refers to in Sub-Clause 13.3- Is it only about evaluation of cost of variation excluding any time related costs or extension of time associated costs?

Is the Employer’s Representative not automatically required to determine adjustment to the Contract Price despite any notice from the Contractor's side?

I am deeply indebted in advance.

Alemeu

Answer
Hi Alemu,


Thank you for coming back.

It is as simple as that: you don ask for it, you don't get it.

If the Contractor doesn't ask for costs related to EoT, Employer’s Representative / Engineer and indeed, anyone else, is under no obligation to assume you suffered any costs and more, can not assess the quantum for you.

When you ask for time and money, you must make sure you ask for the whole of it.

Otherwise, one can simply assume that whether there was no EoT related costs, it was negligible, or Contractor decided to make a favour to the Employer.

So yes, 13.3 allows you to ask for EoT related costs, but Employer’s Representative / Engineer is under no obligation whatsoever, to do Contractor's homework.

Would you expect the Employer’s Representative / Engineer  to go and count Contractor's staff and equipment, kept idle? And to go in Contractor's accountancy and search for the actual losses? No, it is the Contractor that must do all that.

Conclusion: ALWAYS GIVE IT YOUR BEST SHOT! Ask for all you think you are entitled to, demonstrate your merit and substantiate the quantum.

Trust that clarifies the matter.

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Florin NICULESCU

Expertise

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.

Experience

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

Past/Present Clients
- 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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