Construction Law/Variation

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Question
Dear Femi,

According to the FIDIC 1999 first edition in UAE. the causes are below as,

1) The original scope in BoQ's item :- Door type A1 - Rate 3,000.00 AED.
2) The Engineer issued the instruction to contractor as do one more Door type A1 as a Variation with the respective rate of BoQ's (AED 3,000.00)

But the issue is, the contractor quoted price for Door type A1 was very lowest price(AED 3,000.00) and the actual market price is AED 15,000.00. However, the contractor would do the original scope without any compensation.

Meantime, If the contractor wants to do the variation work as instructed by the Engineers, then again the contractor should suffer the cost losses by doing the variation works.

So please advise for, how to defend/avoid the cost losses in variation works and the rights.

Thank you,

Answer
Dear Anwar,

Thank you for your question.

To be honest, i pity any contractor in this situation. If the Contract has no provision for escalation, it will really be hard for the Contractor to be able to use a new price to evaluate the variation.

According to clause 13.3, variations would be evaluated based on the provision of clause 12.3 which means, the BOQ rate would be used for any variation with the item of the BOQ. The language of the Contract understands that the rate the Contractor has included for all the items of the contract is fixed throughout the currency of the contract and cannot not revised except if such condition is specifically mentioned in the contract.

The ways to avoid the losses is to check if there is escalation clause or if the quantity of the variation exceeds the criteria stated in Clause 12.3. Alternatively, the Contractor can propose alternative materials for the door (not on value engineering) but convincing the Engineer to go for alternative materials.

Hope this helps you?

Regards.
Femi

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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