Construction Law/Similar Items
QUESTION: Dear Sir;
Hope you are OK.
With reference to FIDIC - clause 12.4 (Evaluation) and also as general concept, In case of a work done with no express item in BoQ, we can use the price of a similar item as well as in case of variation (a further scope is requested from the Contractor) we can use a the price of a similar item. My questions are:
1- Please define (with support with example if possible) exactly what conditions should an item have in order to be used as similar.what I know it should be in same nature, character and executed under the same conditions (in order to be under the same cost), however, should it be for the same purpose? i.e. we have an BoQ item for excavation for site grading and meanwhile we have a new work for excavation in the same site but for site improvement (almost same equipment and same level, etc.)
2- is it obligation to use that similar item when we evaluate a Variation? what if we see its price not appropriate, may we ask the Contractor to submit a new break down?
ANSWER: Dear Khaled,
1. You have the essence of it. If you have a price for pouring concrete into wall shutters 300 mm wide, then you must use it as a basis to calculate a price for pouring concrete into shutters 150 wide. If the quantities depth and material are similar then you can use the existing price to calculate the new rate. If one is 1,000 cu. m. and the other is 10 cu. m. then you would use different rates, but based on the bill rate.
2. If there is a similar item, then you must use it as a basis for the new rate. What do mean that it not appropriate? It is too high in your opinion? You are laying the ground for a long and expensive legal case where no one will win, except the lawyers.
---------- FOLLOW-UP ----------
QUESTION: Dear Sir;
(1-A): So, you say that one condition of similarity is to have the same quantity in the two items? .. if we have a price of internal plaster work in a residential building with quantity of 5000 sq. m. then a new room is added in the building with plaster quantity of 50 sq. m , can't we have the same price as similar?
(2-A): Again Sir, is the purpose should be the same? please give me your opinion for the example above. There is also another example; plaster done for painting and plaster done under ceramic tiling .. both are same thickness, same specs , same cement amount, etc. Can they be similar and of the same price?
2- Yes, I meant high price in our opinion and compared with market price. Am I obligated as the Engineer to use it for the variation just because it is similar?
Thank you and sorry for inconvenience .. By the way, our bespoke contract allows only to consider the price of a similar item as the price of BoQ missing item (no mention for adjustment on the basis of it)
My apologies for the lack of clarity in my previous answer.
(1-A) Plastering tends to be done in small discrete units to walls in individual rooms so any increase is unlikely to have a change in working methods so there is no justification for a change in rates. It could be that 1,000 cu m of excavation could be done in one go with heavy machinery, while 10 cu m might be done in small units which have to be done manually so there is a change in working method and justification for a new rate.
(2-A) In my opinion, yes, but it depends on the specification of the work and the finish. The plaster for paint might be specified as smooth while the plaster for tiling might be specified as rough, but the differences are unlike to create a price difference in the real world.
2. I assume that the the contract was awarded to the bidder with the lowest compliant bid. Thus he will have made some mistakes with some items being over priced and some being under priced. If you want to revise some prices, why not revise all prices, some up some down. You will open law suits longer than your life, which will cost the Employer more than the project in lawyer's fees.
That's the problem with bespoke contracts; they often fail to cover the accepted practice and create dissension during implementation. I can advise on the interpretation of FIDIC contracts, not bespoke contracts.