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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 Girdhar

Please  share the Priority of Documents stipulated in Contract Documents.

Based on current scenario; my response would be as below:

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/=

--- Such situation always arises in many projects. Please let me know how the item was priced.... was it a lump sum or the qty was mentioned. If lumpsum or quantified as "Item" or "1" or "lot"; then the Engineer will attempt to change design and omit the original scope.

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.

---- In my opinion this should be considered as a VE item and the savings should be shared mutually by the Client and 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

----  Why the Contractor didn't ask thickness during the Tender Period? During tender was there any clarification on this Item from any other Tenderer?

If not; the Engineer's requirement need to be fulfilled.

Hope this helps.



---------- FOLLOW-UP ----------

QUESTION: Dear Manish,

Thanks for your advise and I have follow up questions -

1.The priority of documents is as Clause 1.5 (FIDIC 1999) and not modified/amended.
 The skylight is priced as Lump Sum.
2.The Contractors obligation is Design & Build as far as post tension slabs are concerned. Suppose the thickness would have not even mentioned/indicated then what would have been the case.
3.It is not discrepancy but no specific requirement of thickness from the Engineer, what is being asked now should have been mentioned in original scope if this is what is required. What is required should be given and not left to be asked by the Contractor.

Thanks
Girdhar

ANSWER: Dear Girdhar

Please find my response as below:


1.The priority of documents is as Clause 1.5 (FIDIC 1999) and not modified/amended.
The skylight is priced as Lump Sum.
--- NOTED

2.The Contractors obligation is Design & Build as far as post tension slabs are concerned. Suppose the thickness would have not even mentioned/indicated then what would have been the case.
--------– The slabs should be fit for purpose and design should conform to standards as stipulated in the Employer’s Requirement.


3.It is not discrepancy but no specific requirement of thickness from the Engineer, what is being asked now should have been mentioned in original scope if this is what is required. What is required should be given and not left to be asked by the Contractor.

-------– I agree with your thoughts on this. Nonetheless “ Design and Build” route is considered when the Employer is not experienced. In such case the Employer would require adequate questions to be raised by an Experienced Contractor; else he would assume that he is being offered a fit-for-purpose product based within the Bid price.  Therefore in such procurement route the position of the Contractor becomes weaker to certain extent.


---------- FOLLOW-UP ----------

QUESTION: Dear Manish ,

Thanks for response and would like to clarify -
3)It is not "Design and Build" Contract. It is based on FIDIC 1999 ; the design is by Employer. (except Post Tension Slabs which are to be designed and built by the Contractor/specialized sub contractor).

Additional clarification-

4)Aluminium window is changed from fixed to open able type.
The Contractor variation claim is for the difference in the cost and the 10% OHP.
Whereas the Engineer wants evaluate it as Omission of the original(fixed type) and Addition of new item(open able).
The Engineer wants to do this because the price/rate for the fixed window is higher than the market.
who is justified and why.

Answer
Dear Gridhar

Since, mechanism seems to be fully changed it is advisable to perform "Add" and "Omit" exercise to avoid any ambiguities.

Alternatively, you can discuss with the Engineer that only "hinges are added" and "fixing of windows at three sides is omitted" to provide the windows to match revised specification. You may also stress that the variations must be evaluated/analyzed using the rates in BoQ.

BR


Manish Gupta  

Construction Law

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Manish Gupta

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I can answer questions related to Cost Planning, Contract Administration, Construction Law & Other Post Contract QS related areas.

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7 Years with Contractors 12 plus Years with Owners & Consultants

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Calgary Project Consultants, Jacobs International, Turner International, J Ray McDermott Inc. Hindustan Construction Company

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MRICS, MCIArb, BE (Civil), PGDCM LLM-Constuction Law in Arbitration and Adjudication

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