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# Construction Law/Rates to be used for variations

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Question
Mr. Peter,

I have a query about the rates to be used for variations (additions). I noticed there are many questions regarding this subject, but are mainly related to omissions. Request your guidance.

Contract type : Lump Sum (quantities shall not be remeasured)
Form of Contract : modified FIDIC 1999 Red book
Applicable law : United Arab Emirates law

The quantity of an item in the BOQ is 100 and the rate per item is 1000. Total BOQ amount for this item is 100,000.

Actual quantity as per IFC drawing is 200.

Client issued a Variation Instruction which caused the quantity of the item to increase to 300.

Please advise if the following calculation is conceptually ok:

Option 1
Revised rate based on IFC drawing : 100,000/200 = 500 per item
Additional quantity : 300-200 : 100 (new quantity - IFC quantity)
Additional amount : 500 x 100 = 50,000

Option 2
Revised rate based on IFC drawing : 100,000/200 = 500 per item
Additional quantity : 300-100 : 200 (new quantity - BOQ quantity)
Additional amount : 500 x 200 = 100,000

Option 3
Revised rate based on IFC drawing : 100,000/200 = 500 per item
Overall quantity : 300
Overall amount : 500 x 300 = 150,000
Deletion of BOQ amount : 1000 x 100 = 100,000
Net additional amount : 150,000-100,000 = 50,000

Please advise if any of the above options is valid or if there is some other concept to evaluate this variation.

Thanks & regards,
Krishna

Answer
Dear Krishna,

To include a BoQ in a lump sum contract is dangerous, without very detailed instruction on how the BoQ is to be used. Option 1 would normally be considered valid, on the assumption that the bidder noted the discrepancy between the BoQ and the drawings at bid time and adjusted his rates accordingly.

#### Peter M. Elliott

##### Expertise

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 www.eotprotocol.com before submitting a question.

##### Experience

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')

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

Education/Credentials
B Sc(Hons) in Civil Engineering

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