Construction Law/Lump Sum contract & BOQ
QUESTION: Dear Mike,
When the main contractor submits a proposed quotation with (priced BOQ) and he mentions this statement
(Any item not found in the BOQ will be a variation )
considering that there is request for proposal issued to the contractor stipulating that the contract type is a lump sum contract and form of contract is fidic first edition 1999.
note: more than a contractor he received the request for proposal and they mentioned same statement even though they knew its a lump sum contract!!
in lump sum contract BOQ is just to evaluate future variations and for interim payments purposes only ... please shade some light on that issue.
ANSWER: Hi Dzale
A fixed price lump sum contract is for a fixed and agreed scope of works.
These are usually defined in two documents:
1. Employers Requirements
2. Contractors proposals
These are usually backed up by drawings and specification.
If the Employer later requires something different then the variation rules in FIDIC apply and there is a process for valuing any changes. These could be an addition or deduction.
I had a case recently when in a Fixed Price Lump Sum contract the Employer instructed a change in the type of doors which were better quality and more expensive than those in the contractors proposal. The adjudicator ruled that the extra cost be paid.
---------- FOLLOW-UP ----------
QUESTION: Many thanks for your feedback
Coming back to this statement ( any item not found on the BOQ will be deemed as a variation ) in lump sum contract and in taking the fact that the particular conditions don't mention anything and we have general condition fidic red book1999
Is that statement stands right?
Thanks and regard
Sorry - I missed that bit in my first answer.
It depends on two factors:
1. Who prepared the BOQ
2. Who takes the quantities risk
Turn the question round - If there was an item in the BOQ that was not needed to be done - would you give the money back?