Construction Law/Sufficiency of the Accepted Contract Amount
QUESTION: Dear Sir
Refer to the 1999 Red Book, Sub-Clause 4.11, for the re-measurement contract, what is the purpose of the Contractor to satisfy the correctness and sufficiency of the Accepted Contract Amount?
Because he will get payment, according to the actual work done. Any change to the given data/information shall be considered as a variation.
Could you explain how to apply this Sub-Clause both the Client's & Contractor's sides.
ANSWER: Dear Sudantha
In the Sub-clause 4.11 [Sufficiency of the Accepted Contract Amount], the Contract says:
"The Contractor shall be deemed to:
(a) have satisfied himself as to the correctness and sufficiency of the Accepted Contract Amount, and
(b) have based the Accepted Contract Amount on the data, interpretations, necessary information, inspections, examinations and satisfaction as to all relevant matters referred to in Sub-Clause 4.10 [Site Data].
The purpose of this clause is to define sufficiency of "Accepted Contract Amount"... irrespective of the fact that the Contract is re-measured or lump Sum.
The variance due to remeasurements (ie Actual Work Done) and variations/adjustment will be incorporated into Accepted Contract Amount to obtain "Contract Amount" as defined under Clause 14.1.
---------- FOLLOW-UP ----------
QUESTION: Dear Sir
In the re-measurement contract, if the item is shown in the drawing or mention in the specification, however not include in the BOQ, then the client's QS can reject the payment for the same item, base on the Sub-Clause 4.11.
Because the contractor was satisfied the Accepted Contract Amount including this item, although not included in the BOQ.
Sub-clause 14.1 saya:
"It is confirmed that all quantities given in the Bill of Quantities are estimates only and subject to re-measurement in accordance with the requirements of Clause 12 ‘Measurement and Evaluation’."This is where the "Re-measurement" comes into picture.
Sub-clause 4.11, on the other hand, asks the Contractor to ensure "sufficiency of the Items which are included in Drawings and Specification during the time of Tender.
For example, if a Contractor knowingly do not price a bulk item like "Concrete" and it is not noticed by the Consultant and Client team and the project is awarded. Do you think that the re-measurement should be done for such "Concrete Items"....when it is clear that these items were part of Drawings and Specifications during tender....
We should not get confused with "re-measurements" and "sufficiency of contract price" because the later is required at the time of tender and re-measurements are made to pay for the increased/decreased quantities but not for the missed-out items which were obvious during the Tender stage.
Hope this clarifies.