Construction Law/Valuation of Variation Orders
We are working under amended form of FIDIC 1999.
The contract requires us to provide details of analysis for arriving at a cost including materials, labour, equipment, OH and Profit for a variation order.
We have a subcontractor who is supposed to do the varied work and has quoted us for the same.
In our submission, instead of giving rates for material, labour etc we have included the quotation of the subcontractor and added to it our OH and Profit.
Now, The Engineer is demanding even the breakdown of the quotation of the subcontracted work which we do not have and neither do we want to give.
How far is the Engineer correct is asking for such detail of the breakdown of subcontractor prices and om what grounds should we deny providing the same.
Thank you for this question.
In theory the Engineer cannot demand a breakdown of price from your subcontractor; however he does not have to accept he price you have submitted and can make his own evaluation and certify on that basis. You can then assess whether or not the Engineer's assessment is to your liking.
If you intend to refuse the Engineer the further information required you may not want to give any reasons; the only reason you possibly have is privity between yourself and the sub-contractor.
If the reason for withholding the detail is because you are making a super-normal profit on the work, then you can gamble with the matter n to going to dispute resolution at a later date. If it does, you may have to disclose a lot more than you might wish to now.
I hope that this assists you.
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