Construction Law/Contract Queries

Advertisement


Question
We have Lump sum and fixed price contract based on FIDIC 1999. Please advise on the following, referring to the relevant clauses from FIDIC 1999 for the same.

1) Client/Engineer has omitted/deleted the Skylight work. In the BOQ the price is AED 600,000/= whereas the actual market price is AED 300,000/=

Engineer wants to deduct AED 600,000/= on the basis of what is in the BOQ (because if there would have been addition then the Contractor would have asked based on BOQ rate)whereas the Contractor agrees for AED 300,000/= which is the market price  (the Contractor cannot be deprived of his reward/gain if this item would have been deleted)

2) As per the Contract, the post tension slabs are to be designed and executed by the Contractor. The tender/contract drawings show the thickness of the slabs as 380mm whereas after design the thickness works out to be 340mm.

Client/Engineer wants to apply deduction/negative variation for the 40mm reduction in the slab thickness.
The Contractor is not accepting the deduction as there is no change to the original scope which includes the design and the contract is Lump Sum, therefore the thickness shown in the tender drawing is irrelevant (the risk and reward is that of the Contractor).

3) The floor finishes specified to be RUBBER FLOORING (no thickness is mentioned in the contract).
The Contractor made submission of RUBBER FLOORING having thickness of 15mm. The Engineer rejected and asking to submit/use 40mm thickness.
The Contractor is asking for the variation for the additional requirement of thickness which was not specified in the original scope. Whereas the Engineer is not accepting the variation as his stand is that this missing information should have been clarified during the tender stage

Answer
Dear Waheed,

For the item 1, we need to see Variation Clause and if it is exceeding certain limit by deducting 600.000.- if not,and there is no limitation than general practice to deduct 600,000 as omission. However, you also need to consider that it is also a Variation and requires agreement of both parties because some part of overhead of contractor is also included in this rate.

For second item, I understand that it is a lumpsum contract and not measurable. Therefore the thickness is the risk of the Contractor (increase or decrease) and deduction should not be applicable. It is for sure that in case of increase of thickness they would say that the dimensions and details provided at the tender stage are for information only and tenderer should make his verification at the tender stage.

Regarding floor finishes, if there is no any specification or dimensions provided at the tender stage and through his submission, contractor provided that his calculations for thickness is fullfilling criteria and relevant standards, then Engineer should pay the difference of cost for additional thickness.

Best Regards

IRVALI

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


ALI IRVALI

Expertise

FIDIC, Arbitration Procedures, Claim Management, Project Management.

Experience

I have experience of working at 6 countries in MENA region (algeria, Libya, Saudi Arabia, Oman, Pakistan)as the Regional Director and General Manager of a construction company. I have experience on various applications of FIDIC and construction law, arbitration procedures, claim management, project management.

Organizations
CEO of TURCON Construction presently. www.turcon.com.pk

Education/Credentials
M.S. Civil Engineer, Various Courses on Project Management, Seminars on FIDIC.

Past/Present Clients
National Highway Authorities of various countries, Water and Power Development Authorities, Karachi Port Trust, etc.

©2016 About.com. All rights reserved.