Construction Law/EoT , Site Conditions
QUESTION: Dear Mr. Femi Alofe,
I am managing a D&B (FIDIC 1999 yellow book) contract of Sewerage project.
The contractor has claimed additional time for the following issue:
During the construction, the contractor has claimed that the site allocated for Building the Sewerage Treatment has been excavated and works got delayed as they had to do site back filling to start the works. The contractor claims this is unforeseen and they found out this only after clearing the large vegetation around that area.
Is the employer liable for this and has to give the contractor EoT? What FIDIC clause can be used to tackle this claim?
ANSWER: Dear Maale,
Thanks for your question.
The first thing we need to understand is that design and build contracts are contracted with the contract based on employers requirements and or technical specification (at times performance specification), issued to the contractor forming the basis of his designs, specification, design fees and construction costs. Usually, the employer is not involved in designs except in some instance, the employer could give a guide design (concept or usually lines designs) which now forms the basis of the Contractors full preliminary and detailed designs including shop drawings and other technical details specifications. If there is anything in the employers requirement that did not give accurate information that the subsoil is a made up ground, then, the Contractor can rely on clause 1.9 and hold the employer liable.
According to the principle of D&B contracts, the design responsibility is the responsibility of the Contractor and it is expected that prior to designing - Whether for preluminary or detailed designs, the basis of the design would have been properly investigated which includes the nature of the existing soil and subsoil, there would have been soil reports, geophysical and geotechnical investigations carried out. If these were carried out by the employer and handed over to the Contractor to design and construct and included in the contract as such, and ordinarily, the contractor is not intended to review and double check the investigations and the reports prior to designing and construction, then, the employer may be liable. However, if the Contractor has accepted the contract on the basis of carrying out these investigations and report, it would be unreasonable to believe that he has not provided in his offer (contract sum) for the treatment to be made to the exixting filled (made up) soil before commencing construction. This as per clause 4.10. The contractor is responsible for the site condition including subsurface as he is deemed to have ordinarily and reasonably verified these on it ions before submitting his tenders. This would be taken as such until the Contractor proves otherwise.
The claim of the contractor that he only discovered the matter after clearing will be unreasonable when compared with the procedures for the procurement and construction of Design and build contracts which usually is of lump sum in nature and would only attract variation if the employers requirement changes or not feasible to be achieved.
Except the contractor can prove that there is an express clause or condition in the contract that bar him from carrying out these investigation prior to his commencement of designs and construction otherwise such event you described would not amount to an "unforseen" circumstances. Clauses 1.9, 4.7 and 4.9 will help you.
Hope I sound clear?
I apologise for lateness in responding.
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QUESTION: Dear Mr. Femi,
Thank you for your response. You have given a lot of insights on the issue. Para 2 is in particular helpful. I have a few more queries though;
The initial location identified in the tender for construction of Treatment plant has been changed during the preliminary design due to unavailability of land. so this means it would not have been considered in the bid price. Normally in our projects land is approved and allocated after award of contract and during preliminary design.
In these cases also is the contractor liable to carry out necessary surveys prior to execution of works? Please note that the we (employer) did not provide the contractor any surveys pertaining to soil conditions. 4.10 holds the contractor responsible for carrying out these surveys before tender and include in the bid price as deemed necessary. Is there any other clause relevant to this situation.?
If not what could be done during contract formulation to avoid situations like this.
Much thanks for your guidance,
Thanks once again.
It is amazing that it is after the award of the contract is when you choose and give the land to be used for the construction. The process seems awkward because it means that the offer (tender) of the contractor and the award is not based on the land condition whether physical ground or subsoil conditions. If this Is so, it means what you only gave to the contractor is the employers requirement and specifications and based upon this, all other things (land and it's subsoil and ground conditions) would be provisional items under the contract and therefore would be subject to ammendments or adjustments should there be any variation to whatever the contractors assumptions may have been in his offer for such items.
Summarily, in the case you have described, the contractor Is not liable as he may have assumed unreasonably since there was no approved land prior to award and no survey report or data was given to the contractor to have been able to reasonably forsee the features and conditions of the site whether ground or subsoil conditions.
The only solution to this during contract formulation is to ensure that the land to be used is already finalised prior to the award or rather accept the fact that, the contractor can make assumptions (and expressly state su h assumptions in terms of ground conditions assumptions, subsoil conditions, bearing capacity, soild strata, water levels, spot levels etc) but this would be subject to adjustments if such assumptions become needful to be changed after the award and the land conditions are known and are confirmed by tests as being at variance with the assumptions.
Thanks and regards.