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Construction Law/BOQ without lot of Relevant Items

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Question
QUESTION: Dear Alina,

General Conditions of Contract : FIDIC MDB June 2010
Contract Type: Measure and Pay

1.   Detailed description of all the items of Bill No: 01 (General Bill) are specified in the document named “Employer’s Requirements”, which is not established as a Contract Document either in the General Conditions of Contract or Particular Conditions of Contract. Lot of items specified therein has not been covered in the BOQ.

2.   Clause 1 of Preamble to BOQ specifies, the documents to be followed in pricing the BOQ, at which the said “Employer’s Requirements” has not been included.

3.   There were 10 Tenderers for this Contract, but nobody has requested clarifications for this issue. In clarifying the other points raised with respect to the BOQ, the Employer has expressed in writing without any request, that there are no corrections in the Preamble to BOQ.  

4.   Due to non availability of required BOQ items and they have been passed unnoticed, our Tender has been heavily under estimated.

5.   Now, we have been awarded this Contract.

6.   Considering the facts indicated above, is it not possible to convince the Employer, the omission of the items in the BOQ has been passed unnoticed and to claim the value of missing items.(If it was admitted, all the Tenderers have not been allowed to Tender on equal basis.)

I am grateful, if you would kindly advise me on some way of getting this problem solved.

Thank you.

ANSWER: Dear Shantha,
I understand your problem. It is encountered more often than you believe, in different projects. The idea is that the BoQ is anyway an estimate and it has a low priority in the list of documents as per the Sub-clause 1.5 of the FIDIC Conditions of Contract.
In the other hand, there is the Sub-clause 4.11 [Sufficiency of the Accepted Contract Amount], which states that "The Contractor shall be deemed to: (a) have satisfied himself as to the correctness and sufficiency of the Accepted Contract Amount".
The idea is that the tenderers should study carefully all the tender documents and their offer has a price to allow finalizing the works, as described in the tender documents, and have also the necessary profit. If there is something to be done and there is no item in the BoQ, a diligent tenderer would spread the cost of that item within the prices of the other items in the BoQ - or ask questions of clarification during the tender.
The Contractor might try to ask money for the item that are missing, but I doubt that the Employer would accept, due to these above and to the reason you mention - equal treatment for all the tenderers.
All the best,
Alina

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

QUESTION: Dear Alina,

Please let me express my gratitude first, for the invaluable service you offer to anybody in the world free of charge.

Kindly allow me request the following clarifications too to get the obscurity I am having cleared.Please do not misunderstand that, I am trying to argue with you.No one can challenge the expert knowledge you bear in this field.

1.0 Ref. para 1 of your above reply.
 1.1 "the BOQ is anyway an estimate"
      As I presume, only the Quantities in a BOQ are Estimated and other parts
      of the BOQ should be reasonably accurate. The deficiency of this BOQ is,
      it has not covered about 20 essential items.

      There is no an item even for "the Contractor's key management staff." In
      the Preamble to BOQ, it has been asked to include the cost of this item in
      the rate of some other item.

      I accept that not pointing these to the Employer before Tendering, is a
      severe error made by us.

      Apart of that, is it not possible to take action Contractually (or
      Extra-Contractually) against the Employer, for their irresponsibility or
      negligence in preparing the BOQ ?

  1.2 "it has a low priority in the list of documents"
      The priority list has been prepared mainly for the purpose of
      interpretation of ambiguities and discrepancies among documents. It does
      not mean necessarily a document having low priority is, not an important
      document.  

  1.3 I wish to refer to the following last para of clause 1.8 on "Care and   
      Supply of Documents".

      "If a Party becomes aware of an error or defect in a document which was
      prepared for use in executing the Works, the Party shall promptly give
      notice to the other party of such error or defect."

      This definitely go against the Contractor.Apart of that is there no any
      way of using it for the advantage of the Contractor ?

      Thank you madam.

Answer
Dear Shantha,
I will answer to you point by point:
1.1 Generally speaking, yes, in terms of quantities the BoQ is an estimate, but, being low in the priority of documents, the Tender Documents should be read as a whole: so, from all the documents the tenderer should understand what and how it is to be done, and because an item it is not in the BoQ, it does not mean that the works should be done without that item (let's say, it is a bridge with concrete slab and the connectors for the concrete slab do not appear in the BoQ, but they are in the specifications and in the drawings and, anyway, any good contractor know that they must be done - of course they should be made, and their price - if there were no clarifications/modifications in the tender time - should be spread among the other items - like you were told for "the Contractor's key management staff", when you were asked to include the cost of this item in the rate of some other item.
Here the negligence of the Contracting Authority is to be put in balance with the (lack of) diligence of the tenderers(s).
You may try to ask the Engineer's instructions as per the Sub-clause 1.9, then, if the answer is not satisfactory, to send a notice 20.1, as described in 1.9, but I've never seen such approach. You may try, though, I do not see any other solution (in my opinion, if there were no clarifications at the tender stage and the tenderer signed the Contract, the Sub-clause 14.11 shall apply, so the price of the tender is considered sufficient by the tenderer when he put his offer, as I said in my first answer).
1.2 Less important - I meant it has lower priority. As you said, the purpose of the Sub-clause  1.5 is the interpretation of ambiguities and discrepancies among documents: if in a document with higher priority it is said that you have to put guardrail, but in BoQ, which has a lower priority, there is no guardrail item, the guardrail should be installed and the price of it is considered to be "hidden" within the prices of the other items.
1.3 In case you got the Contract documents since not so long time (I would say less than 28 days, even it is not written in the Sub-clause 1.8), you may refer to 1.8, too, when you give notice 1.9, but the Employer or the Engineer can refer to the fact that you accepted the tender documents as they were, and signed the contract.
Again, I've told you my opinion in the first answer, but you can use 1.9 and 20.1 to try to get the money for the works you will do, but that don't have items in the BoQ.
Best regards,
Alina

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Alina Valentina Oprea

Expertise

I can answer to questions regarding FIDIC 1999 contracts, including practical use of these conditions of contract, as well as to questions regarding dispute boards, both from theoretical and practical point of view. I cannot answer to questions related to other kind of contracts or to procurement process, except to some (limited) extent.

Experience

Implementation of works contracts (FIDIC 1999) financed by different financial institutions, including European Union; claims and disputes; dispute boards See more on www.alinaoprea.com

Organizations
Dispute Resolution Board Foundation

Publications
see http://alinaoprea.com/publications/ ; DRBF Forum Newsletter; Drumuri si Poduri; Revista Constructiilor; SIDiR Newsletter

Education/Credentials
Graduated the University of Civil Engineering Bucharest, Faculty of Railways, Roads and Bridges (1985-1990); Trained under Mr. Gwyn Owen’s pupilage program for arbitrators/adjudicators under FIDIC mentoring program (2006 – 2007)

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