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Construction Law/lump sum contract and fidic red book 1999 sub-clause 12.3


Dear Florine,

project with
1)form of contract fidic red book (1st edition) 1999,
2) type of contract is Lump-Sum

under sub-clause 12.3 Evaluation

This sub-clause describes the basic method of evaluating the work executed using bill rates and also describes how new rates shall be determined under certain conditions.

My question is as below:
1) In lump sum contract (fixed price contract)  all the items mentioned in the BOQ are fixed nevertheless they have unit rates (unit rates will be guidance for interim payments and evaluation of variation) subsequently the sub-clause is dealing with unit price contract and not applicable for lump sum contract?  ( exception  if there are change orders i.e variation )
Am I Right?


Dear Hadi,

Thank you for your question.

Sounds a bit weird, but if you have fixed quantities, then you will indeed use it as in a regular Red Book Contract. As quantities are fixed, Contract Price will not vary.

That Sub-Clause 12.3 seems indeed only useful for estimating value of interim payments, providing the final payment will be calculated as the balance between Contract Price and payments made till before it.

And indeed, should there be variations, you can use it for, too.

Hope that answers your query.

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