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Question
Dear Femi,

Hope you are doing fine. I am always content with your expert advice/guidance. I do not have words to thank you enough.

Again, my question today again relates to a Design and Build project, based on FIDIC 1999.

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

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

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
Dear Alemu,

Thanks once again for your question.

I will answer your question directly and briefly.

1. Adjustment to a contract price as stated in the conditions under clause 14 and 13.3 refers to any cost claim under the contract that has to do with variations and re-measurements of the direct works, additions and omissions and this has a cross reference to clauses 3.5 and 12.3 as well. Any cost claim or cost that has effect on contract but which are not for direct works are payment of claim under clause 20.1. The benefit of this is that, it enable the contract administrator that would analyse the cost of construction after execution of the works to know which cost are direct cost on the works (measured works) and which cost are claims. The cost for claims will not form basis of any analyse of cost indices or cost data to be generated for future similar estimating purposes - like getting cost /m2 etc.So all costs associated with time will be under clause 20.1.

2. Notice time bar under clause 20.1 cannot deprive the cost or time entitlements. Most laws of most countries do not support the fact that, because time bar clause is included then, the contractor will not be entitled to time and cost particularly where it is evident that, he is entitled. FIDIC 1999 also has given flexibility in this clause and you can see that flexibility under last paragraph of clause 20.1 which encourages consideration of contractors claim even when he failed to notify, only that,  if the client has suffered any loss as a result of the failure to notify, he may adjust that lost in the Engineer's recommendation.

Hope this is clear?

Thank you.

Femi

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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