Construction Law/loss of OH & P

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Question
Hi ,Dear,
We are the Main Contractor for Road construction project to which FIDIC May 2005 MDB Harmonized edition is applicable.it is a re-measured contract.
Original Contract price 600 US $ Million and final contract sum is 450 US $ Million due to reduction in quantities of BOQ at actual execution.
Meantime some of critical items were increased (Asphalt Surfacing Works) and EOT was approved by the Employer.
1. Part of the Overhead (OH) and Profit planned from the Contract has lost due to reduction of Contract price.
2. Additional OH has incurred due to prolongation.
Can you please provide points to handle the proper contractual claim such as loss of overhead and applicability of Cl 12.3 (a) and 12.4 w.r.t this situation.
We have already given the notices(Cl 20.1) for loss of OH and Profit due to reduction in Contract price and additional payment for prolongation.
Thank you
Rohana

Answer
Dear Mr Rohana,
From the way you have narrated the situation, i think you will become eligible for claim provided,
1. you had maintained the documents like notices, EOT given by client with continuity,
2. progress reports and photographs proving that you still could not have completed even if you had made up the delays otherwise accrued,
3. your assumptions made during the bidding stage regarding the profit and overhead distribution, if any

Now it is left you to trace reference from old communications and collate them in order and present them as a claim within the time frame as per FIDIC clause 20
Wish you all the best.
regards,
r sivaraman

Construction Law

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R.Sivaraman

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Member in the Institution of Engineers Member in the Institution of technical arbitrators

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Bachelors in Civil Engineering Masters in Business Administration

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